Clint, your client, owns a life insurance policy on his own life. He has paid $6,800 in premiums, and the cash surrender value of the policy is $30,000. Clint borrowed $30,000 from the insurance company, using the cash surrender value as collateral. He is considering canceling the policy in payment of the loan. Clint would like to know the Federal income tax consequences of canceling his policy. Summarize your findings in a brief research memo.