The key phrase is "deductible activity". It has to be something that funds tax deductible amounts. A loan to a family member is not an investment unless the family member is making you a part owner in a business they are starting with your "investment".
In your example, if the amount was funded by money other than your HELOC, there would be no deduction available. Therefore, even if you use HELOC funds, the funds are not invested in a "deductible activity" and cannot be deducted from your return.
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