Alfred owned a term life insurance policy at the time he was diagnosed as having a terminal illness. After paying $61, 850 m premiums, he sold the policy to a company that is authorized by the state of South Carolina to purchase such policies. The company paid Alfred $432, 950. When AMied died 18 months later, the company collected the face amount of the policy, $519, 540. Alfred is required to include in his gross income as a result of the sale of the policy