On January 1, 2018, John made a loan of $6,000 to his neighbor. The loan was evidenced by a written promise to repay the principal within three years and was to bear interest at a rate of 6% per annum. John’s neighbor paid interest for the first year only and then his financial condition deteriorated.

In 2019, John learned that he would only be able to recover $3,000 of the loan. The loan was not made in the course of John’s business. May John deduct $3,000 of the loan on his tax return?