(a) an entity is a * foreign hybrid in relation to an income year (the hybrid year ); and
(b) the entity was in existence at the end of the preceding income year (which may be the income year before this Division first applies to the entity); and
(c) the entity was not a foreign hybrid in relation to that preceding income year.
(2) For the purposes of applying an * asset - based income tax
regime for the hybrid year and each later income year in relation to which the
entity continues to be a foreign hybrid, the * tax cost is set at the start of
the hybrid year, for each asset of the * foreign hybrid in which each partner
has an interest at that time.