Final answer:
A nonbusiness bad debt may or may not be treated as a short-term capital loss, depending on various factors.
Step-by-step explanation:
A nonbusiness bad debt is not always treated as a short-term capital loss.
In taxation, a nonbusiness bad debt refers to a debt that is not related to a taxpayer's trade or business. Nonbusiness bad debts are considered as short-term capital losses only if they are completely worthless.
For example, if a person loans money to a friend and the friend is unable to repay the loan, the person may claim a short-term capital loss for the nonbusiness bad debt. However, if the person receives partial payment or there is a reasonable chance of repayment in the future, the debt is considered partially or wholly non-deductible. In these cases, the debt would not be treated as a short-term capital loss.