H & W sold business assets of a corporation for cash and liquidated the corporation in 2016. In 2019 Buyer sues H & W alleging misrepresentation of sales (claim is bogus) and H & W have to hire attorney and they pay him $30,000 in 2019 for defending them. Case is still going on in 2020.

Can they deduct the legal fees as an expense on schedule C or as a capital loss in 2019? Any help is appreciated.