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Repurchase of ESOP stock at Plan Termination


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I don't think Section 162(k) applies to interest deduction. See (b)(1), below.
 
§ 1.162(k)-1 Disallowance of deduction for reacquisition payments.

(a)In general. Except as provided in paragraph (b) of this section, no deduction otherwise allowable is allowed under Chapter 1 of the Internal Revenue Code for any amount paid or incurred by a corporation in connection with the reacquisition of its stock or the stock of any related person (as defined in section 465(b)(3)(C)). Amounts paid or incurred in connection with the reacquisition of stock include amounts paid by a corporation to reacquire its stock from an ESOP that are used in a manner described in section 404(k)(2)(A). See § 1.404(k)-3.

(b)Exceptions. Paragraph (a) of this section does not apply to any -

(1) Deduction allowable under section 163 (relating to interest);

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