You can’t claim a home sale exclusion on an inherited house because it was not your principal residence (I’m assuming you did not move into the house).
You can only exclude the gain if you owned and used your home as your main home for at least two years out of the five years prior to its date of sale.
See Topic No. 701 Sale of Your Home.
The sale of personal property, including a home not held for business or investment purposes, is not deductible. If you believe the inherited home was an investment property, as Tax Champ tagteam stated, you can claim a loss.
You don’t say what TurboTax product you are using. You probably entered the sale as a “second home.” If you believe it’s an investment, use Other as your category.
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