How to deduct interest?

QUESTION: My 23 year old son bought a condo in coquitlam for 170k. He had 30k as a down deposit and he borrowed the rest from me. I lent him 140k through my home owner's line of credit. He just got a real job that might last him awail, so he hasen't been there long enough to qualify for financing just yet.
My question:

1. when it's tax time, how does he claim the interest, and do i need to do anything with my taxes?

2. Is it the same as if he had a conventional mortgage?

3. Do you think it is more advantagous for my son to get a convention mortgage as soon as he qualifies?

thank you, and sorry for all those questions in one.
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david ingram replies:

1. If it is a rental, he would just put the interest he pays you down on line 8710 of the schedule T776 he has to file to report the rental income. If he is living in the unit, there is nothing for him to do. It is not deductible.

At the same time, you have to report the interest he has paid you on schedule 4 and line 121 of YOUR tax return. It is taxable to you. At the same time, you will report the interest you have paid out on the appropriate line in Section IV on schedule 4. I imagine that you are charging him what you are paying and it will be a wash.

2. Depends upon what the interest rate is.

3. Depends upon what the interest rate is. However, if he gets his own mortgage, it can stop family conflicts and frees up your own credit.