Jing has a business making coffee tables, which he sells to both wholesale and retail clients. In July 2020 his factory was destroyed after faulty electrical wiring caused an uncontrollable fire. Nothing could be recovered from the fire. Jing had insurance policies which provided for compensation as follows: $750,000 for the loss of the factory; $200,000 for loss of trading stock; and $40,000 to Jing for loss of income while the business was not operating. Required A: (15 marks)

Advise Jing of the tax consequences of each of the amounts above. In your response give reasons and refer to sections of legislation and cases, where relevant