do you happen to know where that rule comes from?
IRS publication 535 Chapter 4 at https://www.irs.gov/pub/irs-pdf/p535.pdf
A bit of a synopsis:
Allocation of Interest
The rules for deducting interest vary, depending on whether the loan proceeds are used for business, personal, or investment activities. If you use the proceeds of a loan for more than one type of expense, you must allocate the interest based on the use of the loan's proceeds.Allocate your interest expense to the following categories
•Nonpassive trade or business activity interest
.•Passive trade or business activity interest.
•Investment interest.
•Portfolio interest.
•Personal interest.
