Individual: itemized interest deduction on Schedule A of Form 1040. Interest can be only for the taxpayer's own debt and not for that of another individual. The taxpayer can deduct interest on a home mortgage for the principal residence and, within limits, for a second residence. Interest on a margin account with a broker is also deductible to the extent it offsets investment income.
Corporation: interest expense for business purposes that is tax deductible. Prepaid interest, however, is not deductible in the year of payment but has to be allocated over the period to which the interest amounts relate, irrespective of whether the cash basis or accrual basis is used.
deduction allowable for certain types of interest expense, such as for interest on a home mortgage or interest on a margin account.
