Sharon transfers to Russ a life insurance policy with a cash surrender value of $36,800 and a face value of $110,400 in exchange for real estate. Russ continues to pay the premiums on the policy until Sharon dies 7 years later. At that time, Russ has paid $16,560 in premiums, and he collects the $110,400 face value.

How much of the proceeds, if any, is taxable to Russ?

$