1. Bernard owned 25% of an S corporation's stock (a capital asset) for the first three months of the S corporation's tax year. During the year, the S corporation had $16,000 of ordinary income and $32,000 of long-term capital gain. He started the year with a basis of $50,000 in his S corporation stock and sold the stock for $56,000 on April 1 of the year. Assuming all months have 30 days, how much gain/loss must Bernard report on the sale of the stock and what is its character?