Monty loaned his friend Ned $13,000 three years ago. Ned signed a note and made payments on the loan. Last year, when the remaining balance was $11,700, Ned filed for bankruptcy and notified Monty that he would be unable to pay the balance on the loan. Monty treated the $11,700 as a nonbusiness bad debt. Last year before considering the tax implications of the nonbusiness bad debt, Monty had capital gains of $4,680 and taxable income of $33,250. During the current year, Ned paid Monty $10,530 in satisfaction of the debt. Determine Monty's tax treatment for the $10,530 received in the current year. and $ 11,700 X would be The nonbusiness bad debt of $11,700 would have been reported as a short-term capital loss included in Monty's gross income