Cost Segregation Case Study: Distribution Center
Case Studies Cost Segregation for a Distribution Center A Comprehensive Source Advisors Case Study Cost Segregation for Distribution Centers In
Source Advisors
October 10, 2023
In the complex world of data center taxation, due to their intricate infrastructure, specialized knowledge is key. This case study highlights how Source Advisors effectively leveraged construction costs of a data center to realize notable tax savings.
The subject property is a, relatively small, two story data center colocation facility that was built in an existing structure. The construction costs Source Advisors examined were $7,100,000 and it was placed-in-service in 2015.
The interior finish out was 25,000 square feet. It is currently leased to five tenants with two vacant spaces. Interior finishes consist of vinyl tile, carpet, ceramic tile, drywall partitions finished with paint, and window coverings.
The specialized infrastructure of data centers – from individual tenant generators to specific cooling systems – meant that accurate cost classification was intricate.
Furthermore, considering the property was a blend of a new construction inside an existing structure, it was vital to ensure precise allocation of costs to the new elements without incorporating the costs of the building shell.
The Source Advisors Cost Segregation engineers analyzed the construction costs, in the form of contractor invoices and allocated the cost detail to various trades and building components.
Our engineers conducted detailed estimates from the construction drawings and augmented those findings with additional estimates performed during the site visit of the property. Key property personnel were also interviewed, and a detailed report was delivered, identifying and documenting all of the components that qualify for a shorter tax life.
Don’t leave money on the table. Contact Source Advisors to find out how Cost Segregation can work wonders for your bottom line.
Our industry experience with cost segregation has helped businesses claim billions of dollars in tax credits and incentives.
Our engineers excel at delineating construction costs to yield the highest tax benefits.
Our 40-year history of achieving substantial tax credit savings for clients across various industries is a testament to our commitment and expertise.
Our thorough reporting ensures every qualifying cost is adeptly reclassified.
Our dedicated support team is readily available to guide you through every step of the process, ensuring a smooth and stress-free experience.
Our recommendations stand in full compliance with tax legislations, offering clients unmatched peace of mind.
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