Cash deal, or borrow? (tax differences?)

[CL Ziegler]

I've asked this before, and came away MORE confused. So let me try again.

Another poster on here in an older thread said: "In a few years when my units are paid off, I can keep the full rents as profit." (paraphrasing)

Is this true?

I thought carrying a note on the unit knocks down your tax burden on the rental revenue? (income tax)

I don't hear many people here talking about income taxes. (maybe I'm in the wrong threads). But, seems to me that no matter what the thread, if taxes play such a huge role then they should be mentioned regularly, regardless. To me taxes shouldn't be a gray area; either you can or can't (by law) deduct this or that expense.

So once more, as a pointed question:

If you are able to fully pay off a rental unit, -VS- keeping a note with interest on it, which one is more appealing?

As a sub-question, is it true that ALL interest on a bank note is considered business expense, VS the percentages deducted for interest on a home mortgage?

Thanks!