It was an investment property. How is the depreciation tax calculated?
Am I to assume this was residential rental real estate? If so, you should have been depreciating the property the entire time it was classified as a rental. The program (not you) takes care of the depreciation for you.
And can the loan interest be added as expense to be deducted from the proceeds to determine the capital gains tax I owe?
Mortgage interest on rental property is a SCH E expense. You "should" have been claiming that every year, assuming the property was acquired with a mortgage. It's not treated any differently in the year you sell the property.
If you report the sale in the SCH E section of the program, then the program (not you) will take care of the depreciation recapture for you. Recaptured depreciation is added to your AGI, and is taxed anywhere from 0% to a maximum of 25%.
