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Income Taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes

Note 8. Income Taxes

As a REIT, we generally will not be subject to U.S. federal income tax on taxable income that we distribute to our stockholders. However, certain of our consolidated subsidiaries are taxable REIT subsidiaries, which are subject to federal, state and foreign income taxes. We have filed an election to treat our TRS as a taxable REIT subsidiary effective January 1, 2014. In general, our TRS performs additional services for our customers and provides the advisory and property management services to the Managed REITs and otherwise generally engages in any real estate or non-real estate related business. The TRS is subject to corporate U.S. federal and state income tax. Additionally, we own and operate a number of self storage properties located throughout Canada, the income of which is generally subject to income taxes under the laws of Canada.

 

The following is a summary of the Company's income tax expense (benefit) for the years ended December 31, 2022, 2021, and 2020:

 

 

 

For the year ended December 31, 2022

 

 

 

Federal

 

 

State

 

 

Canadian

 

 

Total

 

Current

 

$

170,874

 

 

$

27,020

 

 

$

320,639

 

 

$

518,533

 

Deferreds

 

 

(499,077

)

 

 

(76,050

)

 

 

(498,191

)

 

$

(1,073,318

)

Total

 

$

(328,203

)

 

$

(49,030

)

 

$

(177,552

)

 

$

(554,785

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended December 31, 2021

 

 

 

Federal

 

 

State

 

 

Canadian

 

 

Total

 

Current

 

$

182,034

 

 

$

32,559

 

 

$

—

 

 

$

214,593

 

Deferreds

 

 

(1,750,248

)

 

 

(266,704

)

 

 

(8,916

)

 

 

(2,025,868

)

Total

 

$

(1,568,214

)

 

$

(234,145

)

 

$

(8,916

)

 

$

(1,811,275

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended December 31, 2020

 

 

 

Federal

 

 

State

 

 

Canadian

 

 

Total

 

Current

 

$

30,713

 

 

$

69,760

 

 

$

—

 

 

$

100,473

 

Deferreds

 

 

(3,071,502

)

 

 

(915,804

)

 

 

(1,939,425

)

 

$

(5,926,731

)

Total

 

$

(3,040,789

)

 

$

(846,044

)

 

$

(1,939,425

)

 

$

(5,826,258

)

 

Income tax expense (benefit) is reconciled to the hypothetical amounts computed at the U.S. federal statutory income tax rate for the years ended December 31, 2022, 2021, and 2020:

 

 

Year Ended
December 31, 2022

 

 

Rate

 

Expected tax at statutory rate

$

4,434,080

 

 

 

21.0

%

Non-taxable REIT (income) loss

 

(4,610,750

)

 

 

-21.8

%

State and local income tax expense - net of federal benefit

 

(38,734

)

 

 

-0.2

%

Foreign income taxed at different rates

 

47,180

 

 

 

0.2

%

Change in valuation allowance

 

(416,953

)

 

 

-2.0

%

Other

 

30,392

 

 

 

0.1

%

Total income tax expense (benefit)

$

(554,785

)

 

 

-2.6

%

 

 

 

 

 

 

 

Year Ended
December 31, 2021

 

 

Rate

 

Expected tax at statutory rate

$

(4,489,427

)

 

 

21.0

%

Non-taxable REIT (income) loss

 

2,655,349

 

 

 

-12.4

%

State and local income tax expense - net of federal benefit

 

(185,137

)

 

 

0.9

%

Foreign income taxed at different rates

 

(69,318

)

 

 

0.3

%

Change in valuation allowance

 

400,146

 

 

 

-1.9

%

Other

 

(122,888

)

 

 

0.6

%

Total income tax expense (benefit)

$

(1,811,275

)

 

 

8.5

%

 

 

 

 

 

 

 

Year Ended
December 31, 2020

 

 

Rate

 

Expected tax at statutory rate

$

(11,976,943

)

 

 

21.0

%

Non-taxable REIT (income) loss

 

8,553,281

 

 

 

-15.0

%

State and local income tax expense - net of federal benefit

 

(788,915

)

 

 

1.4

%

Foreign income taxed at different rates

 

47,180

 

 

 

-0.1

%

Change in valuation allowance

 

(1,939,425

)

 

 

3.4

%

Other

 

278,564

 

 

 

-0.5

%

Total income tax expense (benefit)

$

(5,826,258

)

 

 

10.2

%

 

 

The major sources of temporary differences that give rise to the deferred tax effects are shown below:

 

 

 

December 31,
2022

 

 

December 31,
2021

 

Deferred tax liabilities:

 

 

 

 

 

 

Intangible contract assets

 

 

(30,184

)

 

 

(605,473

)

Canadian real estate

 

 

(10,123,376

)

 

 

(10,166,453

)

Total deferred tax liability

 

 

(10,153,560

)

 

 

(10,771,926

)

 

 

 

 

 

 

 

Deferred tax assets:

 

 

 

 

 

 

Other

 

 

90,563

 

 

 

—

 

Canadian non-capital losses

 

 

7,935,309

 

 

 

6,717,033

 

Total deferred tax assets

 

 

8,025,872

 

 

 

6,717,033

 

 

 

 

 

 

 

 

Valuation allowance

 

 

(4,077,932

)

 

 

(3,664,367

)

 

 

 

 

 

 

 

Net deferred tax liabilities

 

$

(6,205,620

)

 

$

(7,719,260

)

 

The Canadian non-capital losses expire between 2032 and 2042. The valuation allowance is associated with the Canadian non-capital losses.