I am incorporated (one man corporation).I am going to take legal action against another corporation in relation to my business.

The general rule is that legal expenses that were incurred to produce or collect taxable income or that you pay in connection with the determination, collection, or refund of any tax are deductible. The IRS publication (see Legal Expenses) is a good first place to start your review http://www.irs.gov/publications/p17/ch28.html.

You should contact your accountant and maintain records on all legal expenses and then you can later determine if they are deductible or not. Good luck.

DISCLAIMER—This answer is for informational purposes only and discusses general legal principles, trends, and considerations and is not intended as specific legal advice regarding your question. This answer does not establish an attorney client relationship. For legal advice, you should retain legal counsel in your state for advice regarding your specific circumstances.