Tax code limitations on investment interest expenses. How does the interest tracing rules

apply in the following scenario?

Scenario:

A taxpayer owns real estate that is leased to tenants. Over the last $10$ years, the taxpayer

used collected rents to pay off his mortgage. The taxpayer now would like to access

the equity in his property and use it for investments. If the taxpayer borrows money to

buy another rental property, can the taxpayer deduct the related interest expense on

Schedule E$?$ What about if the taxpayer borrows money to $1)$ buy stock and bonds; or $2)$

buy a personal residence? Will the related interest be deducted on Schedule E$?$ Please

analyze each purchase above and describe the tax outcome$($s$).$

Additionally:

Cite and summarize the U$.$S$.$ Code sections $($USC$)$ or regulations $($CFR$)$ for the

interest tracing rules; and

Find, cite, and summarize a relevant court case.