Tan Corporation paid interest expense on a debt incurred in financing a redemption of its stock. The interest expense is not deductible since it was incurred in connection with a stock redemption.

Question

Quizplus · Accepted Answer

Interest expense on debt incurred to finance a redemption of stock can be deductible under the Internal Revenue Code, as long as it meets the general criteria for interest deductibility, such as being an ordinary and necessary business expense.

Tan Corporation Paid Interest Expense on a Debt Incurred in Financing