Alfred owned a term life insurance policy at the time he was diagnosed as having a terminal illness. After paying $28,100 in 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 $196,700. When Alfred died 18 months later, the company collected the face amount of the policy, $236,040.

Alfred owned a term life insurance policy at the time he was diagnosed as having a terminal illness. After paying $28,100 in 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 $196,700 When Alfred died 18 months later, the company collected the face amount of the policy, $236,040 Alfred is required to include ,in his gross income as a result of the sale of the policy. $0 $28,100 $168,600 $196,700 $236,040