47Allocating capital costs to a year of tax

47  Allocating capital costs to a year of tax  (1) For the purposes of step 10 of the residual pricing method, this section applies to an included capital cost for the taxpayer that was incurred in a year of tax (the cost year) in relation to a unit of property (the unit) and has, if appropriate, been augmented, reduced or indexed under section 44, 45 or 46. Note: If the taxpayer does not know whether or not an election under section 48 has been made in relation to the unit of property, or does not know the details of such an election, the taxpayer may be unable to apply the residual pricing method (see subsection 33(1)) and it may be necessary to use section 29 to determine an RPM price for the taxpayer.  (2) The annual allocation for the capital cost is allocated to the cost year and to each subsequent year of tax during the remainder of the capital allocation period for the unit.  (3) If the capital allocation period for the unit is 15 years or less, the annual allocation for the capital cost is:  N means the number of calendar years in the capital allocation period for the unit.  (4) If the capital allocation period for the unit is more than 15 years, the annual allocation for the capital cost is:   (5) If no election is made under section 48 for the unit of property, then:  (a) the capital allocation period for the unit of property is the period of calendar years between:  (i) the start date for the capital cost; and  (ii) the 31 December of the last year of tax that is within the estimated operating life of the operation and during which the unit of property is expected to be used for the operation; and  (b) the method set out in subsection (4) of this section must be used to work out the annual allocation for capital costs incurred in relation to the unit of property.  (6) Despite subsection (5) and section 48, a cost that is a capital cost only because of subparagraph 40(1)(c)(i) is taken to have been incurred in relation to a unit of property that has a capital allocation period that is the estimated operating life of the operation.