Basis in stock purchased through ESPP with loan

[jasdlm]

Client sold all shares of Walgreen's stock this year. Client is an employee of Walgreens. The shares date back to the late 90s/early 00-01 and were purchased through an Employee Stock Purchase Plan. There was a loan component to this purchase plan. The statements show a starting balance (the cost of the # of shares) and then a payment every time the employee got paid. There is an interest charge identified for every transaction.

Would I add the interest to the basis of the stock, or would it have been somehow deductible as investment interest in the year paid, which would require me, I assume, to request very old tax returns to see if the deduction was taken.

Am I on the right track here? This is the first time I have seen something like this. (It's probably really common and I'm just uninformed.)

Thanks very much.

[jasdlm]

Bump.