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Business, 09.03.2020 23:53 Candieboo6939

ABC Corporation is the object of a hostile takeover bid by XYZ Corporation. ABC incurs a total of $400,000 in attorneys’ fees, accounting fees, and printing costs for information mailed to ABC shareholders in its effort to defeat the XYZ takeover bid. XYZ finally concedes, and ABC remains a separate corporation.

What is the appropriate tax treatment of the $400,000 in fees? Would that treatment be different if XYZ succeeds in acquiring ABC? Tax authorities you should consult include the following:

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