Norman v. Commissioner, T.C. Memo. 2012-360

(petitioner bought two properties, one for investment and one as a principal residence, for total price of $1.8 million, under a single loan and allocated $1,000,000 to debt on primary residence and $800,000 to debt on investment property;  no investment interest deduction allowed for 2005 because petitioner did not have any net investment income; for 2006, no mortgage amount to be allocated to investment property and, hence, no investment interest deduction principal residence interest deduction limited to interest attributable to $1.1 million loan; properties financed with single credit line deed of trust note).