Tax and tax related asset management strategies create a significant impact on the total cost of ownership of DCPI. Modular, scalable UPS systems, PDUs, and computer room air conditioners have not only created technological benefits, but provide entirely new DCPI tax and asset management opportunities with direct and measurable financial benefits.
WHAT IS COST SEGREGATION?
Cost Segregation is a strategic tax savings tool that allows companies and individuals, who have constructed, purchased, expanded, or remodeled any kind of real estate to increase cash flow by accelerating depreciation deductions and deferring federal and state income taxes.
WHAT ARE THE BENEFITS OF A COST SEGREGATION STUDY?
- Generates immediate increase in cash flow through accelerated depreciation deductions.
- Reduces income taxes and can also reduce real estate property taxes.
- Provides an easy opportunity to claim ‘catch up’ depreciation on previously misclassified assests.
- Provides an independent third-party analysis that will withstand IRS review.
Cost segregation, is an exercise in recognizing and separately accounting for the costs of 5, 7, 10, 15, and 20 year property from the 30-39 year property classifications. The property in each of the classes from 5-20 years, once properly identified, are eligible for accelerated depreciation. This allows a business, institution or organization paying corporate income tax to further increase deductions during the early life of the equipment.
Organizations that own high technology assets can benefit the most from exercising cost segregation strategies, so long as each asset can pass the function and use test and the inherent permanency test. Modular, scaleable, factory built Data Center Physical Infrastructure (DCPI) performing the mission of a business routinely pass both tests with ease.
Tax and tax related asset management strategies create a significant impact on the total cost of ownership of DCPI. These savings are entirely separate to gains in energy efficiency. Successful implementation of cost segregation strategies involves a financial professional along with the IT professionals, and facility managers involved in the deployment of DCPI.
