A corporation ("Bidco") assumes the third-party debt of an income fund (the "Fund") whose units it has acquired as consideration for the subscription for additional units in the Fund, and then had the Fund's assets (principally, limited partnership units of the subsidiary partnership) transferred to Bidco in consideration for a note of Bidco, with the Fund then distributing the note to Bidco in satisfaction of a capital distribution and capital gains distribution declared by the trustees of the Fund.
Interest deductibility ruling given respecting the interest on the debt so assumed by Bidco.