Interest deduction on real property sold overseas.
So I have quite a doozy.
My parents bought land overseas back in 2006 to eventually build a house there. They got a mortgage for that land. Needless to say that didn't happen and in 2017 they moved to the states. Kept paying the loan on it.
Now in 2021 they finally sold it. With a substantial gain. I understand that is a long term capital gain but is there anyway to deduct the mortgage interest or add it to basis ?
I been reading Pub 550 and investment interest seems to be deductible but only for the year accrued or paid. Now it doesn't really make sense for this situation.
What is the right way to deduct this interest?