11 March 1991 T.I. (Tax Window, No. 1, p. 5, ¶1155)

Where a partnership has agreed to pay out the capital account of a partner which has withdrawn over a period of time plus interest thereon, the interest will not be payable on "borrowed money" or on an amount payable for property and, accordingly, will not be deductible.

Where a corporation which has withdrawn from a partnership has the right to receive the amount in its capital account over time plus interest thereon, the interest will not represent a share of the partnership's income or capital, and will not be added to the ACB of the corporation's partnership interest.