Monty loaned his friend Ned $24,000 three years ago. Ned signed a note and made payments on the loan. Last year, when the remaining balance was $19,200, Ned filed for bankruptcy and notified Monty that he would be unable to pay the balance on the loan. Monty treated the $19,200 as a nonbusiness bad debt. Last year, before considering the tax implications of the nonbusiness bad debt, Monty had capital gains of $7,680 and taxable income of $33,250. During the current year, Ned paid Monty $17,280 in satisfaction of the debt. Determine Monty's tax treatment for the $17,280 received in the current year.

The nonbusiness bad debt of $19,200 would have been reported as a short-term capital loss, and __________ would be included in Monty's gross income this year.

I correctly selected this would be a short-term capital loss, but what would be included in his gross income and why?