Valeria and Trey are married and file a joint tax return. For 2021, they have $23,750 of nonbusiness capital gains, $9,500 of nonbusiness capital losses, $2,375 of interest income, and no itemized deductions. The standard deduction for married filing jointly is $25,100 for 2021.

Based on these transactions, to arrive at the NOL, Valeria and Trey's taxable income must be adjusted by $fill in the blank 1

Monty loaned his friend Ned $30,000 three years ago. Ned signed a note and made payments on the loan. Last year, when the remaining balance was $25,500, Ned filed for bankruptcy and notified Monty that he would be unable to pay the balance on the loan. Monty treated the $25,500 as a nonbusiness bad debt. Last year, before considering the tax implications of the nonbusiness bad debt, Monty had capital gains of $10,200 and taxable income of $31,500. During the current year, Ned paid Monty $22,950 in satisfaction of the debt. Determine Monty's tax treatment for the $22,950 received in the current year. , and $ X would The nonbusiness bad debt of $25,500 would have been reported as a short-term capital loss be included in Monty's gross income this year