Final answer:
Mijo realized a capital gain of $2,200 on the sale of stock he inherited from his father Shen. The gain is characterized as a long-term capital gain (LTGC) because the stock was held for more than one year.
Step-by-step explanation:
Shen purchased corporate stock for $20,000 and upon his death, the stock was inherited by his son Mijo at a fair market value of $12,000. Later, Mijo sold the stock for $14,200. The gain or loss for Mijo is calculated based on the inherited value, not the original purchase price. Since Mijo sold the stock for more than the inherited value, he realized a capital gain. The amount of the gain is the difference between the selling price and the value of the stock when he inherited it, which is $14,200 - $12,000 = $2,200. The character of the gain is a long-term capital gain (LTGC) because the stock was held for more than one year by Shen and then Mijo upon inheritance, thus the holding period is considered long-term.