Demountable walls present business owners with an embarrassment of riches. They’re beautiful, timeless, contemporary design immediately elevates any office to what athletes would call “elite status”, their incredible durability means years or even decades of savings on maintenance and reconfiguration and their complete recyclability means no more adding to the landfill every time you want to move a wall. In addition they’ll help reduce your monthly utility bills, increase staff loyalty and productivity and help you save on your taxes. In this post we’re going take a look at those tax benefits available to businesses who purchase demountable wall systems.
Demountable Wall Systems: The Mobile Tax Advantage
Demountable wall systems are in a different class from drywall both design wise and as far as the tax man (or woman) is concerned. Whereas drywall-based walls are considered structural elements of a building demountable walls fall under an entirely different category that allows them to be depreciated faster.
- The Law: IRS Section 179 in the USA federal tax code allows for accelerated depreciation of demountable walls under asset class 00.11. Basically any large components of the office milieu that are not structural elements as mentioned above fall into this classification for tax purposes. That includes demountable walls. Because they’re considered furniture they can be depreciated over a mere 7 years providing you generous tax relief.
- Claiming the Credit: By now demountable wall systems are familiar territory for tax officials from coast to coast. In 99% of cases no one will bat an eyelash when you claim your demountable wall system Section 179 depreciation allowance. There is that 1% of tax officials however, who may hold you to a higher standard of proof so it pays to be prepared.
- What’s the Problem? There is no problem per se but some tax officials may want to see proof that you plan at some point to actually move your movable walls. In other words, they want to make sure you’re not setting up permanent walls and claiming they’re mobile just to get the accelerated depreciation. It makes sense and there’s an easy way to respond to such concerns.
- The Right Response: Most of our clients will wind up moving their demountable walls many times over the course of their long life so of course they legitimately qualify as Section 179 assets. However, just to fend off any challenges from officials it’s probably a good idea to have an architect or engineer prepare a design brief that indicates a future configuration that is planned for your demountable wall system. Keep it on hand in case the issue ever arises.
Demountable Walls vs Drywall
While demountable wall systems qualify as a type of non-structural office component and therefore qualify for 7 year depreciation the same is not true for drywall. Drywall already has the disadvantage of being:
- Disruptive: If you need to build a new private office using drywall you’re looking at weeks of disruption to your business. If you need to demolish old drywall before building new walls you’re also looking at piles of debris in your office, clouds of choking dust and noise to beat the band.
- Dirty: When you have the drywall guys in for a demolition party those floating clouds of drywall dust don’t stay confined to the work area. Everything in the office that’s not stowed away is going to get a coating of drywall dust, including your lungs.
- Environmentally hazardous: Drywall uses primary resources in its production and it’s not recyclable either. You’ll wind up paying to have the construction company cart any old drywall debris off to a landfill where it will take decades to rot without ever adding anything valuable to the soil.
- Inflexible: Even though you’ll be putting up with weeks of disruption, dirty air and expenses at the end of the process you’ll still have inflexible walls. When you need to move another wall later on you’ll need to go through the whole circus once again.
And here’s the real kicker: in contrast to demountable walls that can be depreciated over a scant 7 years you’re looking at a 39 year depreciation process for drywall.
Demountable Walls from I-M-T: The Simple, Elegant, Tax Friendly Office Solution
At I-M-T we provide a host of modular office solutions for companies all across the USA. It’s been our experience over the years that one of the most convincing selling points of these incredible architectural systems is the ability of the customer to enjoy accelerated depreciation.
Isn’t it time you freed yourself from the drywall trap? By remaking your office with stylish, beautifully functional, movable demountable wall systems you can. The future of the office is with us today and it’s brought handsome tax benefits along with it. Call I-M-T for more information on how demountable wall systems are changing business in the USA.