The sale of inherited real estate would be reported under investment property.
See the following instructions:
But this was not a second home. My wife's mother died in 2012 (the inherited date) and the place sat empty until it was finally sold for less than FMV in 2015. Is the loss deductible?
The IRS considers this a second home because it is not your primary residence. If this was a rental, the loss may be deductible. If the house sat empty waiting to be sold, the loss is not deductible. Gains are taxable on personal property.
Personal-use property: Generally, property held for personal use is a capital asset. Gain from a sale or exchange of that property is a capital gain. Loss from the sale or exchange of that property is not deductible. You can deduct a loss relating to personal-use property only if it results from a casualty or theft.
Investment property. Investment property (such as stocks and bonds) is a capital asset, and a gain or loss from its sale or exchange is a capital gain or loss.
Per IRS Publication 544, chapter 4, Reporting Gains and Losses: Loss from the sale or exchange of property held for personal use is not deductible. But if you had a loss from the sale or exchange of real estate held for personal use for which you received a Form 1099-S, report the transaction on Form 8949 and Schedule D, as applicable, even though the loss is not deductible.