Loss on Sale of Note Receivable
I was member of an LLC and in 2013 we dissolved the partnership. As part of the distributions, I received my portion of a note receivable worth about $100,000. We never owned the property but were hard money lenders. Then in 2014 the person was not paying their note, so I was was going to start the foreclosure process, but instead of dealing with all that, I took a buyout of $75,000 for my portion of the note that was worth $100,000.
How do I record the $25,000, as a capital loss or ordinary loss?