Document ID: chunk:federal_register_of_legislation:C2025C00029:section:10:p3
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 10 (pt 3/5)
Character Range: 6619727–6622326

if the interest has been trading stock of yours ever since the start of the income year in which that time occurs—its *value as trading stock at the start of the income year; or
 (b) otherwise—its cost.
Note 1: If an interest has been affected by an earlier direct value shift during the same income year, it will be treated as having already been sold and repurchased (because of an earlier application of section 725‑310). As a result, the cost on repurchase becomes its adjustable value immediately before the decrease time or increase time for the later direct value shift.
Note 2: The adjustable value of an interest that is an up interest because it was issued at a discount is worked out under paragraph (b).

725‑320  Consequences for down interest or up interest as a revenue asset
 (1) The consequences of the *direct value shift for your *revenue assets are of one or more of these 3 kinds:
 (a) the *adjustable values of *down interests of which you are an *affected owner are reduced (see subsection (2));
 (b) the adjustable values of *up interests of which you are an affected owner are uplifted (see subsection (3));
 (c) one or more *taxing events generating a gain for down interests of which you are an affected owner (see subsection (5)).

Effect of reduction or uplift of adjustable value
 (2) If the *adjustable value of a *down interest that is your *revenue asset is decreased under section 725‑335, you are treated as if:
 (a) *immediately before the *decrease time, you had sold the interest to someone else for its *adjustable value immediately before the decrease time; and
 (b) immediately afterwards, you had bought the interest back for the reduced adjustable value; and
 (c) from the time when you bought it back, the interest continued to be a revenue asset, for the same reasons as it was a revenue asset before you sold it.
 (3) If the *adjustable value of an *up interest that is your *revenue asset is uplifted under section 725‑335, you are treated as if:
 (a) *immediately before the *increase time, you had sold the interest to someone else for its *adjustable value immediately before the increase time; and
 (b) immediately afterwards, you had bought the interest back for the uplifted adjustable value; and
 (c) from the time when you bought it back, the interest continued to be a revenue asset, for the same reasons as it was a revenue asset before you sold it.
 (4) However, the uplift in *adjustable value is taken into account only to the extent that the amount of the uplift is still reflected in the *market value of the interest when it is disposed