Did the corporation buy the shares?  And did it pay for the shares?

What are the circumstances that led to $20,000 in legal fees to purchase stock? 

What reasoning do you have that this would be a business expense for the corporation?

I will agree with TaxGuyBill but add - if the transaction is between the two brothers then it has no effect on the company books.  Example - prior to sale 100 shares outstanding, owned 50 and 50 by each brother.  Brother A sells his 50 shares to Brother B.  On the company books there is still 100 shares outstanding.  No change in the equity section of the balance sheet.  Just owned by different parties then before.

If the above example fits then your question is does the buying brother have a different outside basis in the stock versus the inside basis?  We need more facts of this situation.

Sorry, I realize my question was a bit vague. I will get some more information

Thanks

My client is going to get a breakdown of the legal fees. It sounds like a large portion was for restructuring the lease agreement with the landlord. In my mind, some of that should be deductible. The other part is for the purchase of the shares, which in my mind, is probably not deductible.