Article 135Special Provisions on Calculation of Depreciation Allowance Where Non-Business Assets Are Put to Business Use

Where a Resident puts a house or other asset that the Resident holds, which depreciates through use or the passage of time and has not been used for business that is to generate real property income, business income, timber income or miscellaneous income, to use for that business (excluding a case that falls under the provisions of the following Article), the amount of the depreciation allowance of that asset after it is put to use for that business is to be calculated by treating, as the value of that asset after depreciation on the day on which it was put to use for that business, the amount equivalent to the amount that would be treated as the acquisition cost of that asset if that asset were deemed to have been the subject of a transfer of assets on that day and the provisions of Article 38, paragraph (2) (Acquisition Costs Deducted to Calculate Capital Gains) of the Act were applied, and the amount equivalent to the difference between the acquisition price of that asset calculated in accordance with the provisions of Article 126 (Acquisition Price of Depreciable Assets) and Article 127, paragraph (2) (Special Provisions on Acquisition Price of Capital Expenditure) and that value after depreciation is, for the application of the provisions of Article 134 (Special Provisions on Depreciation Allowance Based on Cumulative Amount of Depreciation of Depreciable Assets) and the preceding Article, deemed to be an amount that has been included in necessary expenses as the depreciation allowance of that asset in calculating the Resident's amount of real property income, amount of business income, amount of timber income or amount of miscellaneous income for each year.