Green Zip® demountable drywall partition technology can:

• Accelerate depreciation and Net Present Value
• Reduce near-term tax liability
• Increase Cash Flow
• Reduce retrofitting costs

The IRS has ruled that moveable and removable GreenZip Partitions classify as personal property.  This qualifies them for shorter life depreciation than conventionally installed drywalls — 5 years, or less, as opposed to 27.5 years for residential rental property or 39 years for commercial buildings.  Installation of removable drywall partitions using the patented Green Zip® technology – in both new construction and renovation projects – has, since 2008, provided commercial real estate investors with improved cash flow and lower remodel costs.

Yes.  The same financial benefits (accelerated depreciation) can be applied to renovation projects.  Once used, Green Zip® can help reduce the cost of future renovations. In 2010, Chevron installed 88 floors of GreenZip and two years later relocated the GreenZip Partitions on 18 of those floors. Also, In 2013, Turner Construction (an international construction firm known for embracing new technologies) documented a retrofitting case study for British Petroleum that substantiates and endorses the projects effectiveness.  Turner estimated that the cost savings achieved with Green Zip® amounted to $110 per linear foot when a wall is relocated.  Green Zip is a dream come true for tenant and facility managers.

Any commercial or residential rental property constructed or purchased after 1986. Green Zip been approved by the IRS as Asset Class 57.0 personal property.  Refer to IRS Private Letter Ruling PLR 110197-13, buildings that fall within Business Activity Asset Class 57.0 – Distributive Trades and Services. Asset Class 57.0 includes commercial building assets used in wholesale and retail trade and personal and professional services; this encompasses office buildings, hotels, motels, medical office facilities, hospitals, assisted living, and any professional services buildings, such as banks, small businesses, and wholesale/ retail merchants and more. Refer to 2018 letter from Huffman, a developer of apartments and hotels with a decade of Green Zip use, when subject to a routine IRS audit that passed muster with IRS without any GreenZip questions or adjustments. Green Zip has never triggered an audit.

Yes. The U.S. Senate, the author and superior authority of our tax law, succinctly clarified the tax law in Senate Report #95 stating, “a movable and removable partition is tangible personal property and not a structural component.” The issue turns exclusively on is it “movable and removable” with no restrictions as to what type of building contains the movable and removable partitions. Also, IRS Private Letter Ruling PLR 110197-13 specifically addresses our zip-type demountable drywall partitions referencing Senate Report #95 as support for its personal property classification.  Refer to letter from Huffman, a developer of apartments and hotels with a decade of Green Zip use, when subject to a 2018 routine IRS audit that passed muster with IRS without any GreenZip questions or adjustments.  Also reference the letter from Americare Assisted Living with over a decade of employing Green Zip in its projects.

Only Green Zip® Tape is recognized by the IRS to allow for the accelerated depreciation associated with the potential demounting and reuse of gypsum drywall.  In a 2008 video audit conducted by the IRS, Green Zip® Tape was the only drywall joint tape out of 20 plus competitive brands that performed to IRS specifications and allowed the drywall joints to be “unzipped,” successfully exposing the seam and drywall screws.  There is no other way to get these added tax benefits other than using our patented process and tape.

Yes, for the Cash Tax Benefit (CTB), however there are many non-tax benefits including Facility Operation and ESG/ Environmental.   The benefit CTB we provide is considered the added time value of money from receiving tax deductions sooner, not simply the amount of the deductions.

Yes.  You don’t ever have to move the walls to qualify for the tax benefit; The U.S. Senate, the author and superior authority of our tax law, succinctly clarified the tax law in Senate Report #95 stating, “a movable and removable partition is tangible personal property and not a structural component.” The issue turns exclusively on is it “movable and removable” with no restrictions as to having to move the partitions. Also, IRS Private Letter Ruling PLR 110197-13 specifically addresses our zip type demountable drywall partitions referencing Senate Report #95 as support for its personal property classification.

Yes. Both U.S. Senate Report #95 and Whiteco address the “property” not the owner, nor the owner’s intent. The U.S. Senate, the author and superior authority of our tax laws, wisely realized that even if a current owner may not initially intend to move the partition, circumstance may require that the property may or will need to be moved.  Moreover, a subsequent owner may need to move or remove them. Architects have provided a list of over a dozen such circumstances where the property—the movable and removable partition—may or will need to be moved. A copy of that list can be obtained from GreenZip.

In 1978, the U.S. Senate, the author and superior authority of our tax law, succinctly clarified prior tax law (the 1975 tax law of Whiteco Industries and Revenue Rule 75- 178) in Senate Report #95 stating, “a movable and removable partition is tangible personal property and not a structural component.” The issue turns exclusively on is it “movable and removable” with no restrictions as to having to move the partitions. Also, IRS Private Letter Ruling PLR 110197-13 specifically addresses our zip type demountable drywall partitions referencing Senate Report #95 as support for its personal property classification. [Robin please begin the new paragraph here n

Notably, 1975, the US Tax Court criteria (under Whiteco Industries, Inc. v. Commissioner) to define assets as “tangible personal property.” Whiteco must be used for assets not listed in Senate Report #95. Whiteco Criteria #3 defines “ . . . intended lengths of affixation, that is, are there circumstances which show that the property may or will have to be moved?”  In the event your CPA’s comfort lies in Whiteco, we have a list of over a dozen circumstance where the property may need to be moved for you to provide to them.  Contact Matt Rader of CBRE or Frank.Little@GreenZip.com for a detailed analysis of relevant tax law.

Under US Tax laws and accounting rules, a cost segregation analysis identifies and reclassifies personal property assets from real property assets to shorten their depreciation time for tax reporting purposes; this reduces current income tax obligations.  A cost segregation study is needed to determine the value of the assets, including demountable drywall partitions, which can be treated as personal property under the federal tax code and depreciated over a five-year period as opposed to 27.5 years for residential rental property or 39 years for commercial buildings. Green Zip does not perform Cost Segregation Studies; however, we are happy to recommend the very best ones.

Yes.  Green Zip® is the only drywall tape that will successfully remove mud compound after it has cured to full hardness.   This was demonstrated for – and captured on video by – senior IRS attorneys to get their validation and acceptance of the product and to prove that our patented construction method qualifies for a reclassification of assets.  It is the only brand of drywall tape that passed the IRS test; the other drywall tapes failed to meet the IRS requirements necessary to treat drywall as personal property for the monetary incentives.

In 2008 a Fortune 100 company funded a IRS Pre-File Audit study that validated GreenZip as personal property. In 2014, the IRS issued Private Letter Ruling PLR 110197-13 confirming the accelerated depreciation classification for removable walls installed with Green Zip® technology.  In 2018, Huffman, a developer of apartments and hotels with a decade of Green Zip use, was the subject of a routine IRS audit that passed muster with IRS without any GreenZip questions or adjustments.  Also reference the letter from Americare Assisted Living with over a decade of employing Green Zip in its projects, and Turner Construction  vetted the process in a cost savings case study done for British Petroleum.  Awards given by the EPA and the AIA all further validate the product claims.  Green Zip® simply combines innovative architecture with cost segregation accounting practices and is considered brilliant by those who understand both of these aspects.

No, we have NEVER caused an audit.  We have fortune 100 companies with full time IRS auditors that have used our product and supported the depreciation during their normal audit.  We have also had companies pay to have a pre-file audit that was completely affirmed by the IRS and we have a pre-file private letter ruling [ PLR 110197-13 ] that supports all of our claims.  The DOJ (Attorney General, Janet Reno) worked with the founder to give benefit to businesses to encourage the only environmentally sustainable solution for keeping drywall out of landfills.  The Treasury isn’t trying to stop us from doing this – they approved the design of the benefit.

Yes.  In February of 2014, Price Waterhouse Coopers (PWC) highlighted the IRS accelerated depreciation classification ruling (regarding our patented technology) on their website and featured it in their monthly Accounting Methods Spotlight.  That same year, in an article published in Bloomberg BNA Daily Tax Report, David Burton, a tax attorney and partner at Akin Gump Strauss Hauer & Feld, affirmed the IRS ruling.  And, after a year long vetting process, RSM (formerly McGladrey) issued a ringing endorsement in 2015 and used Green Zip on its Dallas office expansion.

While CPA’s are great at what they do, there can still be some things that are outside of their areas of expertise. It is not realistic to expect them to be experts in the details of construction for example. We’ve occasionally found that reclassification of assets through the use of our Green Zip System sometimes falls into an area that they don’t understand well enough to be comfortable. Combine that with the fact that they may not want to bring in another accountant or competitor who does understand it well and you can get some initial hesitation or resistance.  We have several accounting and cost segregation experts that will be happy to help your CPA come to a place of feeling comfortable with getting you these benefits.

Yes.  The construction method creates a loss that can be carried forward and used in future years—and or carried back. There is great cash flow value in still getting the benefit earlier than you normally would even if you have to delay a year or two.  It can also increase the sales value of the property. There are strategies to sell the tax benefit to a party or parties that can use the tax benefit.

Yes, it is still just depreciation, and the depreciation can follow the profits to lower taxable income, wherever the profits end up.

Yes.  This makes it more advantageous for you through a 704(b) special allocation, where the depreciation can be allocated to the parties that stand to benefit most from it.

Yes:

• The ability to create carry forward—and or back—losses
• The ability to pass losses up to a larger corporate sponsor with other sources of income
• The ability to transfer the benefit to the financial partners in the project
• The increased sale value

These can all eliminate the need for a property to generate enough income as the only way to justify – and benefit from – using Green Zip®.

Not necessarily.  The ordinary income tax rate is higher than the long-term capital gains rate, thus creating benefit even after the sale by reducing income at a higher tax rate and recapturing it at a lower rate.  Also, the construction method can provide an increased sales price of a building in that the new owner can also benefit from the moveable walls and the same accelerated depreciation and cash flow. Contact GreenZip for more details.

Not necessarily. Bob Montes of accounting firm RSM (formerly McGladrey) explains ways to eliminate recapture on personal property that is reusable material by allocating the gains to “assets that are not subject to depreciation recapture, such as MACRS real property, non-depreciable property (land) or other intangibles.”

Buildings constructed with our technology can increase re-sale values and provide the seller with a competitive market advantage.  The new owner will again be able to claim the total amount of the accelerated depreciation identified in the cost segregation study, including the demountable drywall partitions, recalculated against the property’s new purchase price.

Any business, such as a non-profit, that isn’t paying income taxes can’t benefit from the Cash Tax Benefits provided by Green Zip®. However, there are so many benefits in addition to the tax benefits that additional consideration should be made