v3.25.4
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes

Note 10. 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 following table summarizes the domestic and international components of income (loss) before income taxes for the periods presented (in thousands):

 

For the years ended December 31,

 

 

2025

 

 

2024

 

 

2023

 

Domestic

$

697

 

 

$

(3,917

)

 

$

6,993

 

Foreign

 

(533

)

 

 

(486

)

 

 

2,058

 

Income (loss) before income taxes

$

164

 

 

$

(4,403

)

 

$

9,051

 

 

The following is a summary of our income tax expense (benefit) for the periods presented (in thousands):

 

 

For the year ended December 31, 2025

 

 

 

Federal

 

 

State

 

 

Canadian

 

 

Total

 

Current

 

$

-

 

 

$

76

 

 

$

779

 

 

$

855

 

Deferred

 

 

361

 

 

 

-

 

 

 

685

 

 

 

1,046

 

Total

 

$

361

 

 

$

76

 

 

$

1,464

 

 

$

1,901

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended December 31, 2024

 

 

 

Federal

 

 

State

 

 

Canadian

 

 

Total

 

Current

 

$

18

 

 

$

41

 

 

$

580

 

 

$

639

 

Deferred

 

 

258

 

 

 

4

 

 

 

583

 

 

 

845

 

Total

 

$

276

 

 

$

45

 

 

$

1,163

 

 

$

1,484

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended December 31, 2023

 

 

 

Federal

 

 

State

 

 

Canadian

 

 

Total

 

Current

 

$

191

 

 

$

33

 

 

$

480

 

 

$

704

 

Deferred

 

 

(10

)

 

 

(2

)

 

 

(3,288

)

 

 

(3,300

)

Total

 

$

181

 

 

$

31

 

 

$

(2,808

)

 

$

(2,596

)

 

The following is a summary of our income taxes paid by jurisdiction for the year ended December 31, 2025 (in thousands):

 

Year Ended
December 31, 2025

 

United States:

 

 

Federal tax payments

$

49

 

State and local

 

22

 

Canada:

 

 

Federal tax payments

 

226

 

Ontario provincial tax payments

 

173

 

Total taxes paid

$

470

 

 

Income tax expense (benefit) is reconciled to the hypothetical amounts computed at the U.S. federal statutory income tax rate for the periods presented below (dollars in thousands):

 

Year Ended
December 31, 2025

 

 

Rate

 

Expected tax at statutory rate

$

35

 

 

 

21.0

%

Non-taxable REIT loss

 

474

 

 

 

285.5

%

State and local income tax expense, net of federal benefit

 

60

 

 

 

36.1

%

Canadian tax effects:

 

 

 

 

 

Federal statutory tax rate difference

 

18

 

 

 

10.9

%

Ontario provincial income tax

 

13

 

 

 

7.8

%

Other Canadian provincial income tax

 

1

 

 

 

0.6

%

Change in valuation allowance:

 

 

 

 

 

Canadian federal

 

744

 

 

 

448.2

%

Ontario provincial

 

502

 

 

 

302.4

%

Other Canadian provincial

 

65

 

 

 

39.2

%

Other

 

(11

)

 

 

-6.6

%

Total income tax expense

$

1,901

 

 

 

1145.1

%

 

 

 

 

 

 

 

Year Ended
December 31, 2024

 

 

Rate

 

Expected benefit at statutory rate

$

(925

)

 

 

21.0

%

Non-taxable REIT loss

 

1,134

 

 

 

-25.7

%

State and local income tax expense, net of federal benefit

 

36

 

 

 

-0.8

%

Foreign income taxed at different rates

 

(12

)

 

 

0.3

%

Change in valuation allowance

 

1,223

 

 

 

-27.8

%

Other

 

28

 

 

 

-0.7

%

Total income tax expense

$

1,484

 

 

 

-33.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended
December 31, 2023

 

 

Rate

 

Expected tax at statutory rate

$

1,901

 

 

 

21.0

%

Non-taxable REIT income

 

(1,243

)

 

 

-13.7

%

State and local income tax expense, net of federal benefit

 

25

 

 

 

0.3

%

Foreign income taxed at different rates

 

131

 

 

 

1.5

%

Change in valuation allowance

 

(3,410

)

 

 

-37.7

%

Total income tax benefit

$

(2,596

)

 

 

-28.7

%

 

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

 

 

December 31,
2025

 

 

December 31,
2024

 

Deferred tax liabilities:

 

 

 

 

 

 

Intangible contract assets

 

$

(1,181

)

 

$

(6

)

Canadian real estate

 

 

(9,538

)

 

 

(9,163

)

Total deferred tax liability

 

 

(10,719

)

 

 

(9,169

)

 

 

 

 

 

 

Deferred tax assets:

 

 

 

 

 

 

Other

 

 

1,951

 

 

 

1,687

 

Canadian real estate and non-capital losses (1)

 

 

8,580

 

 

 

7,729

 

Total deferred tax assets

 

 

10,531

 

 

 

9,416

 

 

 

 

 

 

 

Valuation allowance

 

 

(3,189

)

 

 

(1,891

)

 

 

 

 

 

 

Net deferred tax liabilities

 

$

(3,377

)

 

$

(1,644

)

 

 

(1)
Such amount includes deferred tax assets from Canadian real estate basis differences, Canadian non-capital loss carryforwards, and Canadian non-deductible interest expense carry-forwards, which represented approximately $1.4 million, $5.2 million, and $2.0 million as of December 31, 2025, respectively, and approximately $1.1 million, $5.5 million, and $1.1 million as of December 31, 2024, respectively.

The Canadian non-capital losses expire between 2032 and 2045, and the non-deductible interest expense carry-forwards have no expiration. As of December 31, 2025 and December 31, 2024, we had Canadian non-capital loss carry forwards of approximately $19.7 million and $20.8 million, respectively. As of December 31, 2025 and 2024, we had a valuation allowance of approximately $3.2 million and $1.9 million, respectively, related to non-capital loss carry-forwards, non-deductible interest expense carry-forwards, and basis differences at certain of our Canadian properties.

As of December 31, 2025 and 2024, we had no interest or penalties related to uncertain tax positions. In the United States, the tax years 2021-2024 remain open to examination, and in Canada, the tax years 2021-2024 remain open to examination, with possible extensions under certain conditions that would allow the years 2018-2024 to be open to examination.