Income Taxes

6 Months Ended

Jun. 30, 2024

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 taxable REIT subsidiaries (“TRSs”), which are subject to federal and state income taxes.

For the three and six months ended June 30, 2024, the Company incurred income tax expense of $1,108 and $1,412, respectively. The Company did not incur any income tax expense for the three and six months ended June 30, 2023.

The components of income tax expense for three and six months ended June 30, 2024 were as follows:

Current Expense	Three Months Ended June 30, 2024		Six Months Ended June 30, 2024
U.S. Federal	$	74	$	112
U.S. State	32		73
Foreign	906		906
Total current expense	$	1,012	$	1,091
Deferred Tax Expense
U.S. Federal	$	62	$	219
U.S. State	34		102
Total deferred tax expense	$	96	$	321
Total income tax expense, net	$	1,108	$	1,412

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 June 30, 2024, the Company had a net deferred tax liability of $247 related to its DST program included within Other liabilities in the Condensed Consolidated Balance Sheets, comprised of a deferred tax asset of $397 for organization expenses and a deferred tax liability of $644 for basis differences in real property. As of December 31, 2023, the Company had a net deferred tax asset of $71 included within Other assets in the Condensed Consolidated Balance Sheets, comprised of a deferred tax asset of $390 for organization expenses and a deferred tax liability of $319 for basis differences in real property.

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. 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.