It depends on the status of your Rental Property while it was listed for sale.
If the property was available to be rented (even if you had listed the property for sale), you would report those costs (including mortgage interest and depreciation) under Rental Expenses.
However, if the property was not available to be rented (or you had no plans to rent it again), any holding costs you incurred before you sold the property increase the basis of the property and reduce any gain on the sale. You can enter these costs as a separate Rental Asset (improvements), although no depreciation expense will be reported for additions in the year of the sale. (See IRS Pub 527 - Vacant Property.)
In this situation, the mortgage interest would be considered Investment Interest Expense. This is an Itemized Deduction on Schedule A.
Any repairs or costs needed in order to close the sale may be included in Selling Expenses.
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