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Question - Sharon transfers to Russ a life insurance policy with a cash surrender value if $32,000 and a face value of $96,00 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 $14,000 in premiums, and he collects the $96,000 face value.
How much of the proceeds, if any, is taxable to Russ?
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