Inside my car that got written off as a total loss was a baby car seat,. It was lent to me (didn’t belong to me). It got covered in the claim when the car was written off from the accident. I didn’t keep the money that ICBC paid me for this - I bought a new car seat that technically belongs to someone else, and gave them the leftover funds of the value, since it was never mine to begin with.

Do I need to report this as income?

If so, where? And how do I show that I got no benefit from it?

They included the taxes in the compensation - do I separate that?