Noelle’s diamond ring was stolen in November 2017. She originally paid $8,000 for the ring, but it was worth considerably more at the time of the theft. Noelle filed an insurance claim for the stolen ring, but the claim was denied. Because the insurance claim was denied, Noelle took a casualty loss deduction for the stolen ring on her 2017 tax return. In 2017, Noelle had AGI of $40,000, and her itemized deductions exceeded her standard deduction by $7,000. After Noelle threatened legal action, in early 2021, the insurance company had a “change of heart” and sent Noelle a check for $5,000 for the stolen ring. Determine the proper tax treatment of the $5,000 Noelle received from the insurance company in 2021.