Problem 7-33 (Algorithmic) (LO. 1) Monty loaned his friend Ned $17,000 three years ago. Ned signed a note and made payments on the loan. Last year, when the remaining balance was $13,600, Ned filed for bankruptcy and notified Monty that he would be unable to pay the balance on the loan. Monty treated the $13,600 as a nonbusiness bad debt. Last year, before considering the tax implications of the nonbusiness bad debt, Monty had capital gains of $5,440 and taxable income of $29,750. During the current year, Ned paid Monty $12,240 in satisfaction of the debt. Determine Monty's tax treatment for the $12,240 received in the current year. would be included in The nonbusiness bad debt of $13,600 would have been reported as a and $ Monty's gross income this year. short-term capital loss long-term capital loss ordinary loss