Is the rental operated under an LLC or S-Corp? If so, the interest is not deductible to the company since the mortgage is held in the name of a member/shareholder.
If instead, this is an informal shared activity, you have options. You can choose to split the interest expense between the two tax returns, most likely using the same percentage that you allocate income and other expenses. You might consider writing up a formal joint venture agreement to document the allocation of this activity to protect both owners for the future.
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