10-14) Several years ago, L loaned his old-high school friend B $5,000 to help him start a new business. Things did not go as well as B planned, and late in 2016 B declared bankruptcy. L expects to collect 40 cents on the dollar. In 2017 all of Bs affairs were settled and L received $1,000. What are the tax consequences to L in 2016 and 2017?