Roger had a terminal illness which would require constant nursing care. His doctor certified that Roger had less than one year to live. Roger owned a life insurance policy with a face amount of $50,000. Roger had paid $10,000 of premiums on the policy. The insurance company has offered to pay him $40,000 to cancel the policy, although its cash surrender value was only $12,000. He accepted the $40,000.  He used $5,000 to pay his medical expenses. He made a miraculous recovery and lived for many more years. As a result of cashing in the policy, find out how much he gross, lose, gain or exclude income?