Yung is the sole owner of Southern Hills Insurance Agency. His primary business is the sale of fire and casualty policies. He has recently expanded his business by selling life insurance policies. Under his agreement with Heart Life Insurance Company, he receives a basic commission on each policy he sells. The basic commission is equal to the cost of the insurance minus the first year's premium. Under the agreement, Yung collects the cost of the insurance policy and remits the first-year premium to the com- pany. He is also entitled to an override commission, which is paid on subsequent years' premiums. To build up his life insurance business, Yung enters into separate contracts with clients in which he agrees to act as an insurance consultant for a fee that is equal to the first-year premium. The client pays Yung the fee, which he remits to Heart Life. This contract effectively waives Yung's basic commission and offers the insurance at a discounted price, a practice that is illegal under state law. During the current year, Yung sold policies that had a cost of $50,000 and first-year premi- ums of $18,000 (which were remitted to Heart Life). He also received $11,000 in override commissions from policies sold in previous years. How much income must Yung report from the life insurance policies in the current year? Explain.