A taxpayer loaned $2,000 to her best friend in 2017. The friend filed for bankruptcy in 2018 at which time the taxpayer was told to expect to receive $.60 on the dollar on this personal loan. On February 2, 2019, the taxpayer received a final settlement of $950. How much can the taxpayer deduct in 2018 and 2019, and how will the loss be treated on the return?

Question 16 options:

1)	2018: $800 short-term capital loss; 2019: $250 short-term capital loss

2)	2018: $0; 2019: $1,050 short-term capital loss

3)	2018: $800 long-term capital loss; 2019: $250 long-term capital loss

4)	2018: $0; 2019: $1,050 long-term capital loss

5)	None of the above