The petitioners, a married couple, built a residence on a lot that they had purchased. They paid cash for the lot and for the residence. A year later, the petitioners borrowed approximately $1.75 million from a bank, pledging the house as collateral. The bank transferred the loan funds directly to the husband's wholly-owned C corporation. The loan was later refinanced for $2.5 million with the residence securing the debt. In 2008 and 2009, over $150,000 of interest was paid on the loan in each year. In 2008, the petitioners deducted approximately $7,000 of interest paid on the loan as home mortgage interest, carrying the remaining $166,000 forward as investment interest to 2009. In 2009, the petitioners deducted $60,000 of the interest paid as mortgage interest and $97,835 as an investment interest expense deduction. The IRS denied in full the investment interest deduction and made an adjustment to the home mortgage interest deduction. The court agreed with the IRS because the petitioners did not show that the funds were used for investing as required by Treas. Reg. Sec. 1.163-8T. Simply depositing the funds in the C corporation's bank account was insufficient. The corporation's general ledger account treated the mortgage proceeds as a personal loan to the corporation from the husband. Minchem International, Inc. v. Comr., T.C. Memo. 2015-56.