In the current year,Loon Corporation made a distribution in redemption of some of its shares.Loon incurred expenditures in connection with the redemption totaling $30,000 (accounting fees of $10,000,legal fees of $15,000,and brokerage fees of $5,000).The distribution was a qualifying stock redemption.How much of the $30,000 is deductible in the current year?

Question

Quizplus · Accepted Answer

In a qualifying stock redemption, expenditures such as accounting, legal, and brokerage fees are considered capital expenditures and are not deductible in the current year.

In the Current Year,Loon Corporation Made a Distribution in Redemption