@Tschurin thank you for the clarification.
You are exactly right about how a bypass trust works after the death of surviving spouse. There is no stepup but there is also no estate tax.
I would suggest you do not answer inherited. Rather put in the date of your father's passing for those shares (with a basis as reported on his estate tax return) and the date of each reinvestment lot for the rest. Or summarize as allowed.
I think the reason TT does this is because with the estate tax exclusion amount of about $11M there are very few people who are in your situation and many of them will be hiring professionals to prepare their taxes. TT has enough trouble keeping up with all the tax changes and probably doesn't prioritize that small segment of the market. for 99.999% of people inheriting a capital asset TT will handle it correctly. Explaining the difference would be complicated and would confuse most people. I know that isn't a satisfying answer and it's just my guess (I'm not a TT employee and this is a volunteer forum). And even if "Inherited" isn't right the tax calculation will be correct as long as you enter the correct (once but not twice stepped up) basis
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