A business is required to relocate to new commercial premises. A prospective landlord offers the following lease incentive and no other options:

Cash $10,000

Free fitout with carpet, furniture, etc $25,000

Three months rent-free occupancy $12,000

How much will treated as ordinary income?

a. $10,000 cash

b. Nil, it is all capital

c. $35,000 cash & property

d. $47,000 cash, property & occupancy