A Blog About Tax Savings for Building Owners

Tag: Sheet Rock

Boost Tax Savings & Efficiency with Green Zip Tape: The Smarter Drywall Solution for Large-Scale Construction

We’ve clarified the pricing to use Green Zip Tape dry wall tape. The cost is $3/SF for the tape and we will guarantee you’ll see at least a 30% tax benefit.

Example: 40,000 SF hotel. Costs to build are $10MM.
👷 GZT Cost: $120,000 ($3/SF x 40,000 SF) – this is deductible (expense) so the net after tax cost is $75,600.
👷 We will guarantee you’ll see at least a $30/SF tax benefit at a 37% tax rate
👷 Tax Benefit is $1,200,000 guaranteed – that’s 32-33% of the cost basis accelerated but it’s quite possible the actual results go much higher. Using Green Zip Tape it would not be out of the question to see 40%+ reclassified.

GZT goes on 2x faster than regular dry wall tape. We have a special applicator gun that we will let you use. One man typically can knock out huge space. It’s lighter and easier to use. Less skilled finishers are needed saving on labor. It’s green so it helps with your sustainability initiatives and may help your pitch with city/county councils. It can help with LEED credits if you are chasing those.

When you go to sell the building, you’ll have the proof, the receipts as to how this building performs from an accelerated depreciation standpoint and it should be something that you market because the next owner will get bigger tax benefits from your building that he buys than he does from a comparable building NOT built with Green Zip Tape. There are a number of other benefits but I won’t put them all here.

This is for projects of about $10MM+ or more in new construction. Must have a big dry wall application so think multi-family, senior or college housing, hotels, hospitals and medical facilities. Non-profit might like it for the flexibility it provides with removable sheet rock panels or for the green building benefits but they can’t take advantage of the tax benefits and the tax benefits are not transferable like they are with 179D. But that might be coming…we’ll see.

The Secret to Making Office-to-Residential Conversions Financially Viable: How Green Zip Tape Can Unlock Massive Tax Savings

Green Zip Tape

Office to residential conversions are continuing to happen but maybe not at the pace many of us expected as we started to come out of the morass of the Corona lockdowns. They are progressing but the costs to convert these buildings are enormous. We have a product that might make these projects a lot more doable.

We know there are many projects that are sitting on the shelf and are not moving forward because the proformas don’t work. But what if a most of that interior cost associated with the renovation could be reclassified as 5 year class life instead of 27.5 years? That would be a game changer for many of these projects.

Office to residential conversions do not qualify for QIP – Qualified Improvement Property. QIP gets 15 year class life and it’s what many are used to when they are doing interior renovations on commercial buildings. Those improvements, if not structural and aren’t part of an elevator or escalator, automatically get a 15 year class life. Now we study a lot of these projects because they want to properly identify everything, but let’s look at the buildout of an office conversion to apartments.

Depending on where these conversions are happening, those costs might be $300-$500/SF. Those costs generally will get depreciated over 27.5 years. Perhaps 15-20% of it can get reallocated to 5 year life with a cost segregation study. But what if 60-80% of those costs could get 5 year class life. That’s a game changer because it opens up a lot more of the building costs to be able to be taken as either bonus depreciation or accelerated depreciation. You can do this if you spec in and use our patent protected drywall tape called Green Zip Tape. It allows for more of the building to be accelerated. Everything that touches the Green Zip Tape gets a 5 year life – the sheet rock, the paint, the studs in the wall, the electrical, plumbing and cable in the walls. It’s a massive game changer.

The costs for the Green Zip Tape run $3/SF. We guarantee you’ll see a $30/SF tax benefit by using our tape. No other tape or product frankly can do this. If you are working on an adaptive reuse project with a significant sheet rock application, Green Zip Tape might be right for you. Want to learn more? Reach out and lets have a conversation about it.

John Murphy CSSI

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