Order for Enforcement of the Income Tax Act

The deduction, under Article 33, paragraph (3) (Capital Gains) of the Act, of the amount equivalent to the shortfall prescribed in that paragraph is to be made in sequence from the remaining amount pertaining to the income set out in item (iii) of that paragraph, the remaining amount pertaining to the income set out in item (i) of that paragraph, or the remaining amount pertaining to the income set out in item (ii) of that paragraph.

The assets specified by Cabinet Order prescribed in Article 40, paragraph (1) (Inclusion of Inventory Given as a Gift or Similar Transfer in Gross Revenue) of the Act are the assets prescribed in the preceding Article, Securities that give rise to business income, and cryptoassets prescribed in Article 48-22, paragraph (1) (Calculation of Costs of Cryptoassets Transferred and Valuation Methods) of the Act, item (xvi) (Definitions) of the Act that give rise to business income.

The valuation method that may be selected for calculating, under Article 48-2, paragraph (1) (Calculation of Costs of Cryptoassets Transferred and Valuation Methods) of the Act, the assessed value of the cryptoassets prescribed in that paragraph Article 2, paragraph (1), item (xvi) (Definitions) of the Act that are held on December 31 of that year (if the Resident referred to in that paragraphArticle 48-2, paragraph (1) of the Act dies or becomes Absent From Japan in the middle of a year, at the time of that death or the start of that Absence From Japan; the same applies in item (ii)) (hereinafter in this paragraph referred to as "year-end cryptoassets") is a method of calculating the acquisition price of the year-end cryptoassets by any of the following methods and taking the acquisition price so calculated as the assessed value of those year-end cryptoassets.

The total average method (meaning a method that distinguishes cryptoassets (meaning cryptoassets prescribed in Article 48-22, paragraph (1), item (xvi) of the Act; the same applies hereinafter in this Subsection) by each different type and, for those of the same type, takes as the acquisition price per unit the price calculated by dividing the sum of the total acquisition price of the cryptoassets of the same type held on January 1 of that year and the total acquisition price of the cryptoassets of the same type acquired during that year by the total quantity of those cryptoassets);

The provisions of Article 101, paragraphs (2) through (5) (Procedures for Changing Inventory Valuation Methods) apply mutatis mutandis to the case referred to in the preceding paragraph. In this case, the phrase "amount of business income" in paragraph (3) of that Article is deemed to be replaced with "amount of business income, amount of capital gains, or amount of miscellaneous income".

In the case where a Resident did not make a valuation by the valuation method the Resident selected for cryptoassets (including the valuation method prescribed in the preceding paragraph that a Resident who has not notified a valuation method is to use; the same applies hereinafter in this paragraph), if a district director finds that the valuation method the Resident used falls under a valuation method prescribed in Article 119-2, paragraph (1) other than the valuation method the Resident selected, and that the Resident's amount of business income , amount of capital gains, or amount of miscellaneous income for each year can be properly calculated even by the valuation method the Resident used, the district director may make a Reassessment or determination on the basis of the amount of business income, amount of capital gains, or amount of miscellaneous income for each year calculated by the valuation method the Resident used.

For the calculation of the amount of the depreciation allowance prescribed in Article 49, paragraph (1) (Calculating Depreciation Allowances for Depreciable Assets; Depreciation Methods) of the Act that a Resident to whom the provisions of Article 58, paragraph (1) (Special Provisions on Capital Gains if the Resident Exchanges Fixed Assets) of the Act have applied is to make with regard to the acquired asset prescribed in that paragraph (hereinafter in this Article referred to as the "acquired asset"), and for the calculation of the amount of capital gains in the case where that person transfers the acquired asset, that person is deemed to have acquired the acquired asset for the amount listed in each of the following items according to the category of cases set out in those items. In this case, for the determination of which of the income listed in the items of Article 33, paragraph (3) (Amount of , item (i) or (ii) (Capital Gains) of the Act the income from that transfer falls under, that person is deemed to have owned the acquired asset continuously since the time of acquiring the transferred asset prescribed in Article 58, paragraph (1) of the Act (hereinafter in this Article referred to as the "transferred asset").

First, theThe amount of those losses is to be an amount to be deducted in calculating the sequence in calculating, for the year that includes the date on which they arose, the amount of the income set out in Article 33, paragraph (3), item (i)(iii) (Capital Gains) of the Act for the year that includes the date on which they arose, and where there is an amount of losses that cannot be fully deducted in calculating the amount of that income, it is to be an amount to be deducted in calculating, the amount of the income set out in item (i) of that paragraph, or the amount of the income set out in item (ii) of that paragraph for that year;

where there is still an amount of losses that cannot be fully deducted under the provisions of the preceding item, it is to be an amount to be deducted in calculating the amount of the income set out in Article 33, paragraph (3), item (i) of the Act for the year following the year that includes the date on which they arose, and where there is still an amount of losses that cannot be fully deducted, it is to be an amount to be deducted in calculating sequence in calculating, for the year following the year that includes the date on which they arose, the amount of the income set out in Article 33, paragraph (3), item (iii) of the Act, the amount of the income set out in item (i) of that paragraph, or the amount of the income set out in item (ii) of that paragraph for that following year.

in the case referred to in item (i), if there is an amount of loss that still cannot be fully deducted even after the deduction under the provisions of that item, it is deducted in order from the amount of capital gains or the amount of occasional income (where the deduction under the provisions of the preceding item is made, the amount after the deduction under the provisions of that item). In this case, if the amount of capital gains includes a portion pertaining to the income set out in Article 33, paragraph (3), item (i) (Amount of or (iii) (Capital Gains) of the Act and a portion pertaining to the income set out in item (ii) of that paragraph, it is first deducted from the amount of capital gains of the portion pertaining to the income set out in item (i) or (iii) of that paragraph.

if the amount of capital gains for that year includes both a portion pertaining to income listed in Article 33, paragraph (3), item (i) or (iii) of the Act and a portion pertaining to income listed in item (ii) of that paragraph, the amount to be deducted is calculated for each of them by applying the provisions of paragraph (1), item (ii) or item (ii) of the preceding paragraph;