guidance on "other deductible purposes" for mortgage interest deduction

[DENNYCARR]

Publication 936 says you can deduct mortgage interest on a home other than main/second home if loan proceeds used for business, investment, or "other deductible purposes".  But there's no further discussion on that last condition.  Does anyone have know how/where that phrase is defined?

My example may distract from my question... Parents refinance house to pay off kid's student loans - kid now pays mortgage on parent's house - can kid deduct mortgage interest as student loan interest or mortgage interest or neither?

[sjrcpa]

Neither. It's not a qualified student loan.

Kid neither owns the house nor he is liable on the mortgage so no mortgage interest deduction.

[DENNYCARR]

Thanks, I figured as much as far as the student loan refinance.  But you've perfectly demonstrated why I hesitated to mention my example - what about my initial question on the guidance on "other deductible purposes"? 

[Just-Lisa-Now- · Accepted solution]

What other situations would interest be a deduction?

The one I see from time to time, is if you can trace the money back to being used for a rental property purchase/improvements, it could be deductible as interest on the rental property even if the loan is secured by the principal residence

[sjrcpa]

Investment interest expense, purchase of an interest in an S Corp or Partnership