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Income Taxes | 9 Months Ended | 12 Months Ended
--- | --- | ---
Sep. 30, 2023 | 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. 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 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 subject to income taxes under the laws of Canada. The following is a summary of our income tax expense (benefit) for the three and nine months ended September 30, 2023 and 2022:
|  | For the three months ended September 30, 2023 |
|  | Federal |  |  | State |  |  | Canadian |  |  | Total |
Current |  | $ | 116,507 |  |  | $ | 20,536 |  |  | $ | 155,044 |  |  | $ | 292,087 |
Deferreds |  |  | (2,619 | ) |  |  | (399 | ) |  |  | (1,339,119 | ) |  |  | (1,342,137 | )
Total |  | $ | 113,888 |  |  | $ | 20,137 |  |  | $ | (1,184,075 | ) |  | $ | (1,050,050 | )
|  | For the three months ended September 30, 2022 |
|  | Federal |  |  | State |  |  | Canadian |  |  | Total |
Current |  | $ | 82,097 |  |  | $ | 9,666 |  |  | $ | 134,113 |  |  | $ | 225,876 |
Deferreds |  |  | (2,619 | ) |  |  | (399 | ) |  |  | (120,625 | ) |  |  | (123,643 | )
Total |  | $ | 79,478 |  |  | $ | 9,267 |  |  | $ | 13,488 |  |  | $ | 102,233 |
|  | For the nine months ended September 30, 2023 |
|  | Federal |  |  | State |  |  | Canadian |  |  | Total |
Current |  | $ | 209,234 |  |  | $ | 38,124 |  |  | $ | 373,293 |  |  | $ | 620,651 |
Deferreds |  |  | (7,858 | ) |  |  | (1,197 | ) |  |  | (1,518,220 | ) |  |  | (1,527,275 | )
Total |  | $ | 201,376 |  |  | $ | 36,927 |  |  | $ | (1,144,927 | ) |  | $ | (906,624 | )
|  | For the nine months ended September 30, 2022 |
|  | Federal |  |  | State |  |  | Canadian |  |  | Total |
Current |  | $ | 201,384 |  |  | $ | 31,690 |  |  | $ | 280,020 |  |  | $ | 513,094 |
Deferreds |  |  | (496,457 | ) |  |  | (75,651 | ) |  |  | (343,228 | ) |  |  | (915,336 | )
Total |  | $ | (295,073 | ) |  | $ | (43,961 | ) |  | $ | (63,208 | ) |  | $ | (402,242 | )
The major sources of temporary differences that give rise to the deferred tax effects are shown below:
|  | September 30, 2023 |  |  | December 31, 2022 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Intangible contract assets |  | $ | (21,129 | ) |  | $ | (30,184 | )
Canadian real estate |  |  | (9,569,543 | ) |  |  | (10,123,376 | )
Total deferred tax liability |  |  | (9,590,672 | ) |  |  | (10,153,560 | )
Deferred tax assets: |  |  |  |  |  |  |  |
Other |  |  | 143,173 |  |  |  | 90,563 |
Canadian non-capital losses |  |  | 7,349,482 |  |  |  | 7,935,309 |
Total deferred tax assets |  |  | 7,492,655 |  |  |  | 8,025,872 |
Valuation allowance |  |  | (2,429,852 | ) |  |  | (4,077,932 | )
Net deferred tax liabilities |  | $ | (4,527,869 | ) |  | $ | (6,205,620 | )
The Canadian non-capital losses expire between 2032 and 2042. The valuation allowance is associated with the Canadian non-capital losses. | 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.

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