Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company has elected to be taxed as a REIT under the applicable provisions of the Code for every year beginning with the year ended December 31, 2022. The Company has also elected for some of its subsidiaries to be treated as TRSs, which are subject to federal and state income taxes.

For the year ended December 31, 2023, the Company incurred income tax expense of $230 related to its DST Program through its TRS. The components of income tax expense for the year ended December 31, 2023 were as follows:

Current Expense
Federal	$	222
State	79
Total current expense	$	301
Deferred Tax Benefit
Federal	$	52
State	19
Total deferred tax benefit	$	71
Total income tax expense, net	$	230

Income tax expense is higher than expected pretax book income of the TRS at the 21% federal statutory rate as a result of basis differences on intercompany transfers of property to the TRS and state and local tax expense.

Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for GAAP purposes and the amount used for income tax purposes. As of December 31, 2023, the Company had a net deferred tax asset of $71 included within Other assets in the Consolidated Balance Sheets, comprised of a deferred tax asset of $390 for organizational expenses and a deferred tax liability of $319 for basis differences in real property.

Although the Company intends to continue to operate in a manner that will enable it to qualify as a REIT, such qualification will depend on the Company’s ability to meet, on a continuing basis, various distribution, stock ownership and other tests. Our tax treatment of distributions per common share for the year ended December 31, 2023 and the period from Inception through December 31, 2022 were 100% nondividend distributions.

Generally, the Company is subject to audit under the statute of limitations by the Internal Revenue Service (“IRS”) for the year ended December 31, 2022 and subsequent years, and is subject to audit by state taxing authorities for the year ended December 31, 2022 and subsequent years. The Company is subject to audit under the statutes of limitation by the Canada Revenue Agency and provincial authorities with respect to its Canadian entities for the year ended December 31, 2022 and subsequent years.