A business with income would trigger the SE tax. This is not a business in your opinion, it was just a flip. The IRS may disagree with you. See Earning side income: Is it a hobby or a business?
Here are the options if not a business:
- Mortgage interest is deductible on Sch A for your main home and a second home. If used as a second home.
- Mortgage interest is deductible as interest paid on a business return.
- Investment interest, see What Are Deductible Investment Interest Expenses
The property was held over a year, long term gain.
As for the basis, the cost to purchase plus improvements plus cost of sale all add together.
The IRS does not allow a deduction for mortgage interest paid in the basis.
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