Federal Tax Research 10th Edition by Steven Gill, Gerald Whittenburg, Roby Sawyers, Debra Sanders, William Raabe

Exercise 9

King Knight is a personal service corporation that has been in existence for five years. In the current year, it makes a § 444 election to have its year end become October 31. King Knight incurs a net operating loss (NOL) for the current year amounting to $100,000. How should King and Knight treat this NOL for tax purposes