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No, the instructions to Schedule E line 12 would be good place to start your research. No business purpose means no business (or rental) deduction under section 162. Suggest you research the definition of "acquisition debt".

If you are not licensed, you cannot legally give investment advice. Series 6, 66, 63, and 7 licensures (or some combination of those). However, as Judy says, the tax benefits (or detriments) of IRAs or other investments is something we can - and should discuss. Start out with "not investment advice; tax consequences only) and reiterate that at the end, too. Along with "talk to your investment advisor." Also remind the client that any tax advice from the investment advisor is suspect. I do wish we could get the licenses of investment "advisors" who give tax advice yoinked the way ours can be for investment advice. I've heard - heck, we've all heard - preposterous and expensive and generally horrible "advice" our clients blithely followed from their "stock guy" that blew up in their faces come tax time. And far too often, we've been hit with the blame and/or the anger.

Ahh, the good old scent of nasty volatile organics. We refer to them here collectively as "methyl ethyl death."

I still have two paper tape calculators, and paper, and save the check tapes in the client folder (don't save paper returns anymore). Yes, your SC electric is now an antique. As are we all! Anyone remember income averaging? Some good circular loops in those calculations.

The IRS encourages tax professionals to register now for the 2025 IRS Nationwide Tax Forum, coming this summer to Chicago, New Orleans, Orlando, Baltimore and San Diego. https://www.irs.gov/newsroom/tax-pros-register-now-for-the-2025-irs-nationwide-tax-forum

It's not acquisition debt because your client hasn't acquired anything.

Perhaps the payment was misposted.

Just wondering if the LLC involved more members, such as children of the taxpayers, and the LLC borrowed money to buy the property from the original taxpayers, then it would be acquisition debt. Of course, the taxpayers would have to pay taxes on any gain on the sale of the property. And since it would be a related party sale, they could not deduct any loss due to the reduced market values in Memphis. I am NOT recommending this - more like thinking of possibilities.