Sale of inherited real property at a loss. Not my main home. Is the loss deductable?

It depends.

If you used the inherited real estate for personal use after inheriting it, then the loss is not allowed by the IRS because it would be considered a personal capital loss.

However, if you did not use the inherited property for personal use after your inherited (only held as an investment), the you would be able to claim a capital loss on this property.

If you held the property for investment, then you will enter this sale as the sale of a capital asset.

Click this link for further information about reporting the sale of a capital asset

To enter the sale of a inherited real property in TurboTax Online or Desktop, please follow these steps:

1. Once you are in your tax return, click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
2. Next click on “Wages & Income” ("Personal Income" in TurboTax Home & Business)
3. Next click on “I’ll choose what I work on” (jump to full list)
4. Scroll down the screen until to come to the section “Investment Income”
5. Choose “Stocks, Mutual Funds, Bonds, Other” and select “start’ (or “update” is you have already worked on this section)
6. The first screen will ask if you sold any investments during the current tax year (This includes any sale of real property held as an investment property so answer “yes” to this question)
7. Since you did not receive a 1099-B, answer “no” to the 1099-B question
8. Choose type of investment you sold - select everything else
9. Some basic information:
1. Description –  Usually the address of the property sold
2. Sales Proceeds – Net proceeds from the sale 
3. Date Sold – Date you sold the property
10. Tell us how you acquired the property - inheritance
11. Enter the date inherited
12. Enter the your fair market value - Fair Market Value of the property at the time of inheritance plus any capital improvements since inheriting it 
13. If you had a loss, on the question of "Did you use this property for business or investment?" If the inherited house was not used for any personal use (no family member lived in it or used it between the time of inheritance and the sale), you will answer that this was for investment (screenshot)

Click IRS answers on Gifts and Inheritance for more information from the IRS on the sale of an inherited house