Background facts:

Patty Wicker, a resident taxpayer purchased a house on 30 June 2012 which she used as her main residence for 1 year until 30 June 2013. During this time she moved her furniture into the property, had all of the services connected and updated her address with relevant organizations. She then leased the property to tenants for 7 years until the property was sold on 30 June 2020.

The house was originally purchased for $420,000. The market value of the property on 30 June 2013 was $475,000. The house was sold for $705,000.

Patty did not dispose of any other assets during the 2019/20 tax year.

Issues to address in your letter:

1. Is twelve months of residing in the property sufficient for the property to be classified as a primary residence?
2. Calculate Patty's net capital gain in respect of the 2019/20 tax year.
3. Would you answer change if Patty had lived in another home that he purchased on 30 June 2013? Are there any choices that Patty could apply?
4. Would your answer change if Patty became a non-resident for the entire 2020 income year?

Each one of your answers should include a discussion of the relevant law, including case and legislative references.