Two years ago, Pam loaned Brian $50,000. Brian signed a note the terms of which called for monthly payments of $2,000 plus 6% interest on the outstanding balance. Last year, when the balance owing on the loan was $18,000, Brain defaulted on the note. As of the end of last year, there appeared to be no reasonable prospect of Pam recovering the $18,000. As a consequence, Pam claimed the $18,000 as a nonbusiness bad debt. Last year, Pam had AGI of a negative $6,000 which included $5,000 net long-term capital gains and $4,000 of qualified dividends. Pam did not itemize her deductions. During the current year, Brain paid Pam $13,000 in final settlement of the loan. How should Pam account for the payment in the current year? File an amended tax return for last year. Report no income for the current year. Report $8,000 of income for the current year. Report $12,000 of income for the current year. None of the above