The interest you paid on a loan to purchase the property does not facto in to the amount of gain or loss you have on the sale of the property. If it was investment property you would deduct the interest in the year it was paid on Schedule A as investment interest. In order to deduct the interest you must itemize your deductions and the amount of your deduction is limited to the amount of taxable investment income earned in the same year. Form more information on investment interest see the following TurboTax article: What Are Deductible Investment Interest Expenses?
If you made improvements to the property, you would add the cost of those improvements to your cost basis. To report the sale in TurboTax Online:
- In the income section, Select Investments and Savings....
- On the page "Did you have investment income in 2024?" Answer Yes
- On the page "Let's Import your tax info" click on "Enter a different way"
- Select "Land" and then click on "Continue"
- Enter the sale information and click Continue
- Continue and enter the details of your sale. Be sure to adjust your sales proceeds by the amount of any sales expenses, such as commission, advertising, closing costs paid, etc. Also be sure to adjust your cost basis for any improvements you made to the property.
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