This is a very basic question, but I've managed to thoroughly confuse myself:

If an s-corp employer forms a leveraged ESOP, what portion of the employer contributions will be deductible? If some portion of the contributions are not deductible, are they still permissible if within the 415 limitations?

any help is appreciated!

25% of eligble compensation including interest on the loan is deductible. If the deductible limit is exceeded the 10% penalty still applies.