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Income Taxes
 12 Months Ended
Dec. 31, 2023
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 primary 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 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 domestic and international components of income (loss) before income taxes are presented for the years ended December 31, 2023, 2022, and 2021:

 

 

For the year ended

 

 

2023

 

 

2022

 

 

2021

 

Domestic

$

6,993,316

 

 

$

20,546,466

 

 

$

(19,784,397

)

Foreign

 

2,057,588

 

 

 

568,201

 

 

 

(1,591,596

)

Income (loss) before income taxes

$

9,050,904

 

 

$

21,114,667

 

 

$

(21,375,993

)

 

The following is a summary of our income tax expense (benefit) for the years ended December 31, 2023, 2022, and 2021:

 

 

 

For the year ended December 31, 2023

 

 

 

Federal

 

 

State

 

 

Canadian

 

 

Total

 

Current

 

$

191,115

 

 

$

33,326

 

 

$

480,391

 

 

$

704,832

 

Deferred

 

 

(10,477

)

 

 

(1,596

)

 

 

(3,288,615

)

 

 

(3,300,688

)

Total

 

$

180,638

 

 

$

31,730

 

 

$

(2,808,224

)

 

$

(2,595,856

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended December 31, 2022

 

 

 

Federal

 

 

State

 

 

Canadian

 

 

Total

 

Current

 

$

170,874

 

 

$

27,020

 

 

$

320,639

 

 

$

518,533

 

Deferred

 

 

(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

 

Deferred

 

 

(1,750,248

)

 

 

(266,704

)

 

 

(8,916

)

 

 

(2,025,868

)

Total

 

$

(1,568,214

)

 

$

(234,145

)

 

$

(8,916

)

 

$

(1,811,275

)

 

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, 2023, 2022, and 2021:

 

 

Year Ended
December 31, 2023

 

 

Rate

 

Expected tax at statutory rate

$

1,900,690

 

 

 

21.0

%

Non-taxable REIT (income) loss

 

(1,243,204

)

 

 

-13.7

%

State and local income tax expense - net of federal benefit

 

25,066

 

 

 

0.3

%

Foreign income taxed at different rates

 

132,010

 

 

 

1.5

%

Change in valuation allowance

 

(3,410,418

)

 

 

-37.7

%

Total income tax expense (benefit)

$

(2,595,856

)

 

 

-28.7

%

 

 

 

 

 

 

 

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

%

 

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

 

 

 

December 31,
2023

 

 

December 31,
2022

 

Deferred tax liabilities:

 

 

 

 

 

 

Intangible contract assets

 

$

(18,111

)

 

$

(30,184

)

Canadian real estate

 

 

(9,887,050

)

 

 

(10,123,376

)

Total deferred tax liability

 

 

(9,905,161

)

 

 

(10,153,560

)

 

 

 

 

 

 

Deferred tax assets:

 

 

 

 

 

 

Other

 

 

1,267,292

 

 

 

90,563

 

Canadian real estate and non-capital losses

 

 

7,561,373

 

 

 

7,935,309

 

Total deferred tax assets

 

 

8,828,665

 

 

 

8,025,872

 

 

 

 

 

 

 

Valuation allowance

 

 

(667,514

)

 

 

(4,077,932

)

 

 

 

 

 

 

Net deferred tax liabilities

 

$

(1,744,010

)

 

$

(6,205,620

)

 

The Canadian non-capital losses expire between 2032 and 2043. As of December 31, 2023 and December 31, 2022, the Company had Canadian non-capital loss carry forwards of approximately $24.9 million and $27.4 million, respectively. As of December 31, 2023 and 2022, we had a valuation allowance of approximately $0.7 million and $4.1 million, respectively, related to non-capital loss carry-forwards at certain of our Canadian properties.

As of December 31, 2023 and 2022, we had no interest or penalties related to uncertain tax positions. The tax years 2019-2022 remain open to examination by the major taxing jurisdictions to which we are subject.