Rise Of Income Comes Higher Chance Of Audit:The more you make, the higher chance it is you will be audited, example being if you make $200,000 or more per year your chance of being audited doubles from 0.85% to 1.75% according to the IRS report.

I have found that residential properties don't mix well with commercial entities, especially if you will be owner-occupying @Melissa Kaatman-Boettge.First, you will potentially mess up the biggest gift the IRS will ever give you : tax-free gain on sale.  

Still to go back to your question, it IS deductible.If you are having trouble sleeping, here is a link to the IRS Publication 936, which is all about the deductability of interest:    https://www.irs.gov/publications/p936/ar02.html   Jim Kennedy, CPA

So, my question is: Does the amount of earned 1099 income determine the amount the IRS allows me to contribute into an SDIRA?

You may also want to look at the solo 401k plan.Following are the similarities and differences between the solo 401k and the self-directed IRA.The Self-Directed IRA and Solo 401k Similarities Both were created by congress for individuals to save for retirement;Both may be invested in alternative investments such as real estate, precious metals tax liens, promissory notes, private company shares, and stocks and mutual funds, to name a few;Both allow for Roth contributions;Both are subject to prohibited transaction rules;Both are subject to federal taxes at time of distribution;Both allow for checkbook control for placing alternative investments;Both may be invested in annuities;Both are protected from creditors;Both allow for nondeductible contributions; andBoth are prohibited from investing in assets listed under I.R.C. 408(m).The Self-Directed IRA and Solo 401k DifferencesIn order to open a solo 401k, self-employment, whether on a part-time or full-time basis, is required;To open a self-directed IRA, self-employment income is not required;In order to gain IRA checkbook control over the self-directed IRA funds, a limited liability company (IRA LLC) must be utilized;The solo 401k allows for checkbook control from the onset;The solo 401k allows for personal loan known as a solo 401k loan;It is prohibited to borrow from your IRA;The Solo 401k may be invested in life insurance;The self-directed IRA may not be invested in life insurance;The solo 401k allow for high contribution amounts (for 2016, the solo 401k contribution limit is $53,000, whereas the self-directed IRA contribution limit is $5,500);The solo 401k business owner can serve as trustee of the solo 401k;The self-directed IRA participant/owner may not serve as trustee or custodian of her IRA; instead, a trust company or bank institution is required;When distributions commence from the solo 401k a mandatory 20% of federal taxes must be withheld from each distribution and submitted electronically to the IRS by the 15th of the month following the date of each distribution;Rollovers and/or transfers from IRAs or qualified plans (e.g., former employer 401k) to a solo 401k are not reported on Form 5498, but rather on Form 5500-EZ, but only if the air market value of the solo 401k exceeds $250K as of the end of the plan year (generally 12/31);When funds are rolled over or transferred from an IRA or 401k to a self-directed IRA, the amount deposited into the self-directed IRA is reported on Form 5498 by the receiving self-directed IRA custodian by May of the year following the rollover/transfer.Rollovers (provided the 60 day rollover window is satisfied) from an IRA to a Solo 401k or self-directed IRA are reported on lines 15a and 15b of Form 1040;Pre-tax IRA contributions on reported on line 32 of Form 1040;Pre-tax solo 401k contributions are reported on line 28 of Form 1040;Roth solo 401k funds are subject to RMDs;A Roth 401k may be transferred to a Roth IRA (Note that from a planning perspective, it may be advantageous to transfer Roth Solo 401k funds to a Roth IRA before turning age 70 ½ in order to escape the Roth RMD requirement applicable to Roth 401k contributions including Roth Solo 401k contributions and earnings.)

My brother currently has a decent balance (~$10K) on one of his credit cards that is charging 16% interest, so I figured I would help him out and provide him with a loan to payoff the debt and refinance with a loan from me at a much lower rate (within IRS limits, of course!).

If you have a business plan that says you will flip properties until you build up enough cash to invest and hold, and if you in fact do that, then the IRS will consider you an investor, not a flipper.  

The IRS only considers your intent.  

Regardless of if he has deprecated the rental properties he will owe the depreciation recapture when he sells. it's mandatory from the irs, they assume you have and there's no way around that.But more importantly, to the OP what are your goals?

There's obviously multiple factors to consider when working with lenders, so feel free to reach out with any questions - I'm always happy to hop on the phone.