Term: 10 years, no balloon.Specifically, how would the taxes be applied and would only a portion or all of the acquisition and rehab expenses be able to be deducted?

I'm no tax accountant, but I believe either choice, the shade or the gift card, is tax deductible.

You can write off the investment related interest even if it is funded by the Heloc.But if you will take standard deduction, it doesn’t matter.If your itemized deduction were greater than standard deduction (24k if married in 2018), you could deduct the interest you paid on the heloc to the extent of your net investment income. 

Sec 199A deduction might come into play for you as well on your personal tax return.Seems like it might accomplish much of what you want. 

I'd write a response letter with what you believe to be are fair deductions and send it certified, return receipt. 

Any way I can deduct the interest?

Don’t forget to deduct the 6-12% in fees.

Your mortgage interest can be deductible on your taxes too. 

@Courtney M.Lot's of great suggestions on the forum:Seller carry/finance: Seller may benefit from deferral of gainsHELOC: if for investment, tax-deductible even post reform401(k)Loan: up to the lesser of: (a) 50k and (b) 50% of account value.

One of the accounts covers almost all of my bills which are all automatically deducted.