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Problen 6-11 (Algorithmic) (L0,1) Monty loaned his frend Ned $25,000 three-years ago, Ned signed a...

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Problen 6-11 (Algorithmic) (L0,1) Monty loaned his frend Ned $25,000 three-years ago, Ned signed a note and made payments on the loan. Last year, when the remaining balance was \$21,250, Nod faled for bankruptcy and notified Monty that he would be unable to pay the balance on the loan. Monty treated the 521,250 as a nonbusiness bad debt. Last year, before considering the tax inplications of the nonbusiness bad debt, Monty had capital gains of 56,500 and taxable income of 531,500 . During the current year, Ned paid Manty 519,125 in satisfaction of the debt. Determine Monty's tax treatrment for the $19,125 received in the current year. The nontusiness bad debt of $21,250 would have been reported as a be included in Monty's gross incosne this year. * ched My Woik A nonbusiness bad debt is a debt qnielated to the taxpayer's trade or businass either when at wis creatud or whict it became worthless

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