My understanding is that the OP is trying to report the sale on form 4797, but if the asset is placed in service and removed in the same year it would not be subject to depreciation and would then be reported on Sch. D and entering "inherited" to force long term treatment. Form 4797 does not lend itself to an "inherited" entry. If the rental does not sell in a timely manner then form 4797 with an adjusted date for LT treatment does seem to work.