The following information relates to Perry Somer€™s financial affairs in 20X1:
1. Somer is employed as a salesman and is remunerated by commissions. He must pay all of his own expenses. During 20X1, he earned commissions of $28,000. His expenses were as follows:
Automobile (operating costs)€¦€¦€¦€¦€¦€¦€¦€¦. $3,000
Entertainment €¦€¦€¦€¦€¦€¦€¦€¦.€¦€¦€¦€¦ 1,000
Convention (related to his employment)€¦€¦€¦€¦€¦ 500
Donations €¦€¦€¦€¦€¦€¦€¦€¦€¦€¦€¦€¦€¦€¦€¦€¦€¦€¦€¦. 500
Telephone long-distance charges (personal use was 80%). 1,000
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 20X0, Somer acquired two residential rental properties.

Maximum capital cost allowance was claimed in 20X0. In 20X1, 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 20X1, net rental income from both properties (after all expenses but before capital cost allowance) was $1,000.
4. Somer€™s other income and expenses are as follows:

5. During the year, he made a contribution to a registered pension plan of $1,000, which was matched by his employer. In addition, Somer contributed $2,000 to his RRSP.
6. Somer currently lives in rented premises but is considering moving into rental property X and occupying one-half of the building sometime in 20X2.
Required:
1. Calculate Somer€™s minimum 20X1 net income in accordance with the aggregating formula for determining net income for tax purposes.
2. What would be the tax consequences, if any, if Somer occupied rental property X?

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Property Property Y 10,000 $15,000 70,000 60,000 Land Building 80000 $75.000 Income Taxable dividends-Canadian public corporations Interest on foreign bonds (net of 15% withholding tax) $2,000 let 1,700 Expenses Interest on a loan used to acquire the foreign bonds 1.300 Investment counsel fee 800