It is somewhat confusing (for me). I hold a mortgage on real property and is not a personal loan. would the interest still be entered on line 2a? 

Thanks

No, it would be on 2b as it is taxable interest income. The mortgage interest will still be entered under investment income as regular interest income. 

To enter your interest from a seller owned finance you will click the following:

• Federal 
• Income
• Scroll down to Interest and Dividends then click Show More
• Start next to Interest from Seller-Financed Loans

OK - similar situation.

Since the property was previously a rental, the portion of capital gains from the principal payments (principal payment minus portion of the basis for that payment) need to be reported - how / where do I do this?

Thanks!

You need to report income received over more that one year as installment sale income in TurboTax. To find that section, use the SEARCH icon on the top right of your screen and search for Installment sales and you will see a Jump to installment sales option that will take you to the correct section in TurboTax. Once there, choose the Sales of business or rental proprty that you haven't already reported option. Answer the questions in that section to report you installment sale income in TurboTax.

I am trying to determine which TurboTax product I need so I can report income from principal and interest on a seller financed mortgage on a rental property I sold 2 years ago. Will basic TurboTax be adequate?

Yes. You may report this in your Turbo Tax Basic program without being asked to upgrade.

@DGold