In most instances, interest can be deducted only by the person or entity that is legally responsible for the debt. However, a potential exception appears in Regs. Sec. 1.163-1(b), which states:
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 the mortgage, may be deducted as interest on his indebtedness.
https://www.thetaxadviser.com/issues/2012/jan/tpp-jan12-story-01.html
There have been numerous Tax Court cases since then, affirming this concept, of which your CPA should be aware.
