I've tried to enter in Rental Properties section, but no ability to enter as inherited, so Turbotax considers it as a short term loss / ordinary loss (which is incorrect).
I've tried to enter under Investment Income "Stocks, Mutual Funds, Bonds, Other" but at the end when answering as business instead of personal non-business use, Turbotax asks to delete the information and tells me to enter under "Sale of Business Property".
When entering under "Sale of Business Property", Turbotax asks to delete the information when no gain, and removes the sale.
See answer below.
Therefore you will want to enter this rental sale under the rental section. Please note that when you sell a property that was used as a rental, you must pay 25 percent recapture tax (also referred to as Section 1250 recapture) as well as regular state income tax on the depreciation you claimed. (Remember the IRS will assume that you claimed the correct amount of depreciation every year—this is true regardless of whether you actually claimed any depreciation on your tax return).
Inherited property is ALWAYS long term. To get that result, you enter INHERITED in date acquired.
TurboTax tax won’t allow you to enter Inherited instead of a date.