First of all, thank you both for your time and input. I truly appreciate it!

In the end, the goal is to be able to deduct as much interest from the loan as possible. The $800K can only be deposited into one account. If it's deposited into the individuals account, he should be able to deduct the interest from the Scrop share purchase on schedule E. The 50% interest in the partnership is primarily the partner's equity in the building. I'm assuming he can deduct the interest from that as well as the $300K refi on schedule E. The $70K to the Scorp would be a loan from the shareholder with the Scorp deducting interest according to the note and the shareholder claiming as interest income on the 1040. I believe the only way to deduct the interest on the $70K would be as investment interest on the schedule A.