You have to make an election each year under IRC 1.266-1 to capitalize the interest and taxes. I use ProSeries, and they have a worksheet for that. If you like here is a irs link:
https://www.govinfo.gov/content/pkg/...sec1-266-1.pdf
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Capitalized costs on sale of real property
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Capitalized costs on sale of real property
When a taxpayer buys real estate and holds for investment purposes, can the mortgage interest and
property taxes paid on it in the year of sale be included in their cost basis when sold ?
This was not a primary or second residence and the customer does not itemize.
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