Gary Sanders owns his own real estate business. He has

Gary Sanders owns his own real estate business. He has a reputation within the community for honesty and integrity and believes that this is one of the reasons his firm has been so successful. Gary was a 30 percent shareholder in an unsuccessful fast-food restaurant, Escargot-to-Go. Although he personally thought the business had great food and was well run, escargot never appealed to the local community. Early this year the corporation filed for bankruptcy.
Many of the creditors of Escargot-to-Go were also clients of Gary's real estate business. After Escargot declared bankruptcy, Gary's real estate business began to suffer. Gary felt that the decline in his real estate business was related to the bankruptcy of Escargot, so Gary used income from his real estate business to repay all the creditors of Escargot-to-Go. Within a few months, Gary's real estate business began to pick up. Gary has asked you to determine if his real estate business can deduct the expenses of repaying Escargot-to-Go's creditors.
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...