Son, Inc., and Clef, Inc., are both taxable domestic C corporations. Using the information in the exhibits, enter either the correct amount or holding period (in number of months) for each item below. For each item, enter the appropriate amounts in the associated cells. If the amount is zero, enter a zero (0).

1. Loss recognized by Clef, Inc., on the distribution of the computer

2. Gain recognized by Clef, Inc., on the distribution of the concert piano

3. Son, Inc.s basis in the building

4. Son, Inc.s basis in the computer

5. Dawns gain or loss recognized on the distribution of the piano, keyboard, and cash

6. Dawns holding period for the piano on December 31, 2019

7. Dawns holding period for the keyboard on December 31, 2019

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Adjusted Basis as of August 31, 2019, immediately before the distribution
Asset	Clefs Adjusted Basis	Date of Purchase
Building*	$250,000	August 31, 2015
Computer	30,000	August 31, 2015
Piano	10,000	August 31, 2015
Keyboard	4,000	August 31, 2015

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Dear Shareholders,

It is with sadness that I announce that we will have finished the complete liquidation of Clef, Inc., later today. After sustaining unexpected hardships over the past few months, we were finally able to pay all of our liabilities to our third party creditors on July 4 earlier this year. Today, the continued unexpected adversity has officially won the war, and we will be locking our doors for the last time this evening.

The details of the liquidation have been finalized, and the following distributions will occur before the end of today:

1. Son will receive a building and a computer.
2. Dawn will receive a concert grand piano, an electronic keyboard, and $82,000 in cash.

After these distributions have been made, Clef will have no other assets other than an amount reserved for taxes.

Thank you both for your dedication and perseverance to Clef; we could not have operated for this long if it was not for the two of you. The rest of us here at Clef wish you nothing but the best in both of your respective future endeavors.

Sincerely,

George Casio, CEO

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Fair Market Value as of August 31, 2019, immediately before the distribution
Asset	Fair Market Value
Building	$550,000
Computer	25,000
Piano	15,000
Keyboard	3,000

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The following balances are as of January 1, 2019

Party	# of Clef Shares Owned	Basis in Clef Shares	Accumulated Earnings and Profits
Son, Inc.	800	$200,000
Dawn*	200	$50,000
Clef, Inc.			$10,000

*Dawn owned none of the outstanding shares of Son.