If you received a 1099-S or had a taxable gain on the sale you would report the sale. Your mortgage interest payments and real estate taxes are itemized deductions.
You don't report buying a house. You may be able to deduct Property Tax and Mortgage Interest paid. But you might need to enter the Sale.
Enter a primary house sale under
Federal Taxes or Personal (Home & Business version)
Wages and Income
Then scroll down to the last section - Less Common Income
Sale of Home - Click the Start or Update button
For a primary home, if you owned and lived in your house for 2 out of the last 5 years when you sell you can exclude the gain up to $250,000 for single or 500,000 for married from tax. You can not take a loss on your tax return. If you made more than a 250,000 (500,000 for joint) gain then the amount over it is taxed. Doesn't matter what you did with the proceeds like buy another house or pay off the mortgage
IRS pub 523 house sale. Figuring Gain or Loss on page 8.
http://www.irs.gov/pub/irs-pdf/p523.pdf
Purchasing the house doesn't go on your tax return.
Only the sale of the home goes on the tax return.
the only mortgage information that goes on the tax return is the interest paid.