Tim loaned a friend $4,000 to buy a used car. In the current year, Tim's friend declares bankruptcy and the debt is considered totally worthless. What amount may Tim deduct on his individual income tax return for the current year as a result of the worthless debt, assuming he has no other capital gains or losses for the year?
a. $4,000 ordinary loss
b. $2,000 short-term capital loss
c. $4,000 short-term capital loss
d. $3,000 ordinary loss
e. $3,000 short-term capital loss
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