Nicholas loaned Lyle (a friend) $30,000 in 2004, with the agreement that the loan would be repaid in two years. In 2005, Lyle filed for bankruptcy and Nicholas learned that he could expect to receive $0.50 on the dollar. In 2006, final settlement was made and Nicholas received $16,000. Assuming the loan is a non-business bad debt, how should Nicholas account for the bad debt?