Business, 03.05.2021 19:40 jordan84546

Monty loaned his friend Ned $23,000 three years ago. Ned signed a note and made payments on the loan. Last year, when the remaining balance was $16,100, Ned filed for bankruptcy and notified Monty that he would be unable to pay the balance on the loan. Monty treated the $16,100 as a nonbusiness bad debt. Last year, before considering the tax implications of the nonbusiness bad debt, Monty had capital gains of $6,440 and taxable income of $35,000. During the current year, Ned paid Monty $14,490 in satisfaction of the debt. Determine Monty's tax treatment for the $14,490 received in the current year. The nonbusiness bad debt of $16,100 would have been reported as a , and $fill in the blank 2 would be included in Monty's gross income this year.

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Monty loaned his friend Ned $23,000 three years ago. Ned signed a note and made payments on the loan...

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