Question: E has a $ 1 0 , 0 0 0 traditional whole life policy with a $ 4 , 0 0 0 cash value. Premiums

E has a $ $10, 000$ traditional whole life policy with a $ $4, 000$ cash value. Premiums paid to date are $ $3, 500 .$ If the policy lapses with a $ $4, 000$ loan outstanding, what amount will be taxable as income to $E ? Calculate.$

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