I received when I was younger a $10K life insurance policy from my grandmother as gift. Once I turn 30, the policy starts accruing. As of today there is just over $11K in this policy. I have decided I would like to cash this policy out and use it to invest to make it grow faster. Since this is a gift would it be subject to a federal income tax or the gift tax. If it is subject to a tax which amount is taxed. The full amount or the accrued amount above $10K.