If the bond can be treated as a mortgage, then you can deduct the interest portion of the payment, if you can prove how much that was. The bond can be treated as a mortgage if it is a lien against your property such that you could be foreclosed and lose your home if you failed to make the bond payment.
Because it was used for property improvements, the principal portion of the bond payment can be included in your cost basis and may reduce your capital gains tax when you sell.
