Monty loaned his friend Ned $27,000 three years ago. Ned signed a note and made payments on the loan. Last year, when the remaining balance was $24,300, Ned filed for bankruptcy and notified Monty that he would be unable to pay the balance on the loan, Monty treated the $24,300 as a nonbusiness bad debt. Last year, before considering the tax Implications of the nonbusiness bad debt, Monty had capital gains of $9.720 and taxable income of $45,500. During the current year, Ned paid Monty $21,870 in satisfaction of the debt Determine Monty's tax treatment for the $21,870 received in the current year. The nonbusiness bad debt of $24,300 would have been reported as a short-term capital loss , and would be included in Monty's gross income this year