The following information relates to Perry Somer’s financial affairs in 2022:

1. Perry is employed as a salesperson and is remunerated by commissions. He must pay all of his own expenses. During the year, he earned commissions of $58,000. His expenses were as follows: 

The personal-use portion of his automobile expense is 20%. The UCC of his automobile at the end of the previous year was $5,000. 

2. He made the following capital transactions: 

3. In 2021, Perry acquired the following two residential rental properties: 

Maximum capital cost allowance was claimed in 2021. In 2022, the city expropriated property Y for $77,000 (land – $17,000; building – $60,000). Perry was pleased because property Y was vacant for part of the year after a tenant vacated unexpectedly. In 2022, net rental income from both properties (after all expenses but before capital cost allowance) was $1,000. 

4. Perry’s other income and expenses are as follows: 

5. During the year, Perry contributed $1,000 to a registered pension plan, which was matched by his employer. In addition, he contributed $2,000 to his RRSP.

6. Perry currently lives in rented premises but is considering moving into rental property X and occupying one-half of the building sometime in 2023.

Required:

(a) Calculate Perry’s 2022 net income in accordance with the aggregating formula for determining net income for tax purposes.

(b) What would be the tax consequences, if any, if Perry occupied rental property X?

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Automobile (operating costs) Entertainment (meals) Convention (related to his employment) Donations Cell phone basic plan (related to his employment) $3,000 1,000 500 200 800