@Opus 17 --
26 U.S. Code 163 (g)(3) (A)(i) - the law governing deductible interest - states that "qualified residence interest" is interest "paid or accrued during the tax year on acquisition interest with respect to any qualified residence of the taxpayer."
26 U.S. Code § 163 - Interest | U.S. Code | US Law | LII / Legal Information Institute (cornell.edu)
Hence the "ownership interest " phrasing in Publication 936.
In this particular thread, the home in question is clearly not a qualified residence of the parents.
**Answers are correct to the best of my ability but do not constitute tax or legal advice.
