RE: Why can't a 620-2175 be dire

[D.BALE@xxxxxxxxxxxxx]

Do these tax issues need to be considered when the equipment is being leased?

- Dan (I tried accounting in college, but fell asleep...)
Dan Bale says "BAN DALE!"
IT - AS/400
Handleman Company
248-362-4400  Ext. 4952
D.Bale@Handleman.com
  Quiquid latine dictum sit altum viditur.
  (Whatever is said in Latin seems profound.)

-------------------------- Original Message --------------------------
I have participated in some upgrades where the frame remained intact and
where memory or some significant chunk of meaningful hardware stayed on the
system.  While the tax issues are significant (and have inspired me to place
a call to our finance department) I don't think they pertain to the upgrade
path.

<snip>

Jim,

I think you are mostly correct.  However, there is an accounting issue.
Since you retained the serial number the AS/400 is still the same asset on
your books.  If you replace the AS/400 then you get a new serial number and
a new asset on the books.  I believe the IRS has rules on how much of the
old hardware must exist in the new system to be considered the same asset.
If there are any CPA's in the group they could probably give a better
description, but from my understanding this is a tax/depreciation issue
that can impede you from doing an "upgrade."  However, I do not know if
this specific upgrade would be affected by this.
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