@FuzzBuzz taxpayers can deduct interest paid on a mortgage if they are the legal or equitable owners of the mortgaged real estate even if they are not directly liable on the debt IRS reg 1.163-1(b)
Interest paid by the taxpayer on a mortgage upon real estate of which he is the legal or equitable owner, even though the taxpayer is not directly liable upon the bond or note secured by such mortgage, may be deducted as interest on his indebtedness.
