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IRS.gov Website
Publication 334
taxmap/pubs/p334-027.htm#en_us_publink100025357

Interest(p35)

rule
You can generally deduct as a business expense all interest you pay or accrue during the tax year on debts related to your business. Interest relates to your business if you use the proceeds of the loan for a business expense. It does not matter what type of property secures the loan. You can deduct interest on a debt only if you meet all of the following requirements.
You cannot deduct on Schedule C or C-EZ the interest you paid on personal loans. If a loan is part business and part personal, you must divide the interest between the personal part and the business part.
taxmap/pubs/p334-027.htm#en_us_publink100025358

Example.(p35)

In 2010, you paid $600 interest on a car loan. During 2010, you used the car 60% for business and 40% for personal purposes. You are claiming actual expenses on the car. You can only deduct $360 (60% × $600) for 2010 on Schedule C or C-EZ. The remaining interest of $240 is a nondeductible personal expense.
taxmap/pubs/p334-027.htm#en_us_publink100025359

More information.(p35)

rule
For more information about deducting interest, see chapter 4 in Publication 535. That chapter explains the following items.