Document ID: chunk:federal_register_of_legislation:C2025C00029:section:10:p15
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 10 (pt 15/17)
Character Range: 897784–900325

hold it.
Note 1: If paragraph (e) is not satisfied, subsection (4C) may apply to the depreciating asset.
Note 2: You can require the associate to tell you the relevant time that applied to the associate under subsection 40‑102(3): see section 40‑140.
 (4C) For a *depreciating asset that you start to *hold if:
 (a) the former holder is an *associate of yours; and
 (b) the associate has deducted or can deduct an amount for the asset under this Division; and
 (c) section 40‑102 applied to the asset immediately before you started to hold it; and
 (d) one of the following applies:
 (i) no item in the tables in subsections 40‑102(4) and (5) applies to the asset when you start to hold it;
 (ii) subsection (4B) would apply to the asset but for paragraph (e) of that subsection not being satisfied;
you must use:
 (e) if the associate was using the *diminishing value method for the asset—the *effective life determined by the Commissioner for the asset under section 40‑100 that the associate would have used if section 40‑102 had not applied to the asset; or
 (f) if the associate was using the *prime cost method—an effective life equal to any period of the effective life determined by the Commissioner for the asset under section 40‑100 that:
 (i) the associate would have used if section 40‑102 had not applied to the asset; and
 (ii) is yet to elapse at the time you start to hold it.
Note: You can require the associate to tell you which effective life the associate would have used if section 40‑102 had not applied to the asset: see section 40‑140.

Exception: holder changes but user same or associate of former user
 (5) For a *depreciating asset that you start to *hold where:
 (a) the former holder or another entity (each of which is the former user) was using the asset at a time before you became the holder; and
 (b) while you hold the asset, the former user or an *associate of the former user uses the asset;
you must use:
 (c) if the former holder was using the *diminishing value method for the asset—the same *effective life that the former holder was using; or
 (d) if the former holder was using the *prime cost method—an effective life equal to any period of the asset's effective life the former holder was using that is yet to elapse at the time you started to hold it.
 (5A) Subsection (5) does not apply to a *depreciating asset if subsection (5B) or (5C) applies to the asset.
 (5B) For a *depreciating asset that you start to *hold if:
 (a) paragraphs (5)(a) and (b) apply; and
 (b) section 40‑102 applied to