You only report it when you sell the home ...
purchase price + cost of purchase + improvements + holding costs = basis
sales price - (basis + closing costs) = profit or loss to be reported in the year of sale.
The only item you can deduct in 2017 would be the property taxes paid in 2017 on the Sch A and only if you itemize deductions. If you don't then you can roll that into the holding costs for the basis total.