The short answer: Demountable walls are furniture and fixtures in the eyes of the IRS, so a NxtWall project can usually be written off in full in the year it goes in. For 2026 the Section 179 limit is $2,560,000 and 100% bonus depreciation is permanent again. The catch is a single word in the rules: The walls have to be placed in service by December 31, which means installed, not ordered. Work the calendar backward from that date and the decision needs to be made in the next few weeks.
What Changed for 2026
The One Big Beautiful Bill Act of 2025 rewrote both halves of this. Section 179 now lets a business deduct up to $2,560,000 of qualifying purchases in the year they are placed in service, with the deduction phasing out dollar for dollar once total purchases pass $4,090,000. Above that, 100% bonus depreciation applies with no dollar cap. The old schedule that stepped it down each year is gone. Bonus depreciation is now permanent for property acquired and placed in service after January 19, 2025. Between the two, the full cost of almost any office project can be deducted in the first year.
Two rules still apply. Section 179 cannot take your business income below zero (unused amounts carry forward), and bonus depreciation is not limited that way. States set their own rules, so the state benefit depends on where you file. Check both points with your CPA.
Why Demountable Walls Qualify and Drywall Does Not
Drywall is a structural component of the building. It gets depreciated over 39 years, which on a $150,000 office project is under $4,000 of deduction a year. NxtWall walls attach to the building without becoming part of it. They anchor to the floor and ceiling track, unbolt, and move with you to the next floor or the next lease. That makes them tangible personal property, the same class as the desks and chairs in front of them, and that classification is what opens Section 179 and bonus depreciation.
The practical difference on the same $150,000 project, assuming a 30% combined federal and state rate for illustration:
| Drywall | NxtWall demountable walls | |
|---|---|---|
| Tax classification | Structural component, 39 year | Furniture and fixtures, 7 year |
| First year deduction | About $3,850 | $150,000 (Section 179 and bonus) |
| First year tax savings | About $1,150 | About $45,000 |
| When the space changes | Demolition, dumpster, rebuild | Unbolt, reconfigure, reuse |
Whether the project is paid for in cash or financed does not change the deduction. A wall system financed in December and installed before the 31st is deductible in this tax year on the full price.
The Calendar Is the Whole Game
Ordering by December 31 is not enough; the walls have to be in service. Here is how the timeline runs on a typical project:
- Layout and quote: Sketch the space in Build and Price for a budgetary number in minutes; a NxtWall designer returns a formal quote within 24 hours.
- Manufacturing: Flex Series and View Series run 3 to 5 weeks from a signed order.
- Installation: A single trade, usually days, not weeks. No demolition, no drywall dust, no repainting.
Put those together and a project ordered in the first half of November is installed and in service with room to spare. Orders placed in December can still make it, but the margin gets thin, and the deduction depends on the install date, not the invoice date. If the tax savings are part of the plan for this year, the safe target is a signed order by the middle of November.
If You Lease Your Space
This is where demountable walls separate most from construction. Improvements a tenant builds into a leased space usually stay with the landlord when the lease ends, and the tenant paid for something they cannot take. NxtWall walls are the tenant's property. They come down, move to the new address, and go back up. You take the deduction now and keep the asset later. Landlords like it for the same reason in reverse, since the next tenant gets a clean floor plate instead of the last tenant's layout. There is more on that in Demountable Walls are a Win-Win for Landlords and Tenants.
What to Do This Week
- Sketch the layout in Build and Price and get the budgetary range in front of whoever approves the spend.
- Send the plan to our designers for a formal quote, back within 24 hours.
- Take the quote to your CPA with one question: With 2026 Section 179 and bonus depreciation, what does this project cost after tax?
- Sign in November. We schedule manufacturing and installation so the walls are in service in December.
The figures above are the federal limits for tax years beginning in 2026 and are general information, not tax advice. Eligibility, timing, and state treatment depend on your business. Talk to your tax professional before you make the purchase.
Frequently Asked Questions
Do demountable walls qualify for Section 179?
Yes. Demountable walls are classified as furniture and fixtures (tangible personal property) rather than a structural component of the building, so they qualify for the Section 179 deduction and for bonus depreciation. Drywall does not.
What is the Section 179 limit for 2026?
For tax years beginning in 2026 the Section 179 deduction limit is $2,560,000, phasing out dollar for dollar above $4,090,000 of total qualifying purchases. 100% bonus depreciation applies beyond that with no dollar cap.
Do the walls have to be installed by December 31?
Yes. The deduction applies in the year the property is placed in service, which means installed and ready to use, not ordered or delivered. Plan for a signed order by the middle of November to be safe.
Can I finance the walls and still take the deduction?
Yes. Section 179 and bonus depreciation apply to the full purchase price whether the project is paid in cash or financed, as long as the walls are placed in service in the tax year.