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The capital improvements made in 2020, before the sale, would be added to the 'Asset and/or Land Sales Expenses'.  Any depreciable asset, or capital improvements, placed in service and removed from service in the same year are not entered as an asset, but would be part of the cost basis.  Placing them in sales expense will account for this basis adjustment and therefore reduce the overall gain or loss. See the entry fields in the attachment below.

The Form 4797 is the only place and the absolute appropriate place for this sale to be reported on. It will appear in Part II assuming it is an overall loss as you indicated. From there it will flow to the 1040 directly.

Form 8949 is not part of this sale and it should not be included with your tax return unless you have other sales such as stock or other investment property.