Many self-storage facilities have trucks that tenants may use to move their goods. Whether the trucks are leased or are purchased by the facility’s owner, there are both tax and financial consequences. There are also several strategies for reducing the out-of-pocket cost of this tenant incentive or secondary income stream.
The owners and managers of self-storage facilities and businesses are usually well aware of the many tax write-offs that help reduce the out-of-pocket cost of acquiring and operating vehicles used in or by the business. First year expensing and “bonus” depreciation allowances create immediate tax deductions equivalent to deductions available for other business equipment and systems. Few owners or managers are, however, fully aware of the many tax pitfalls awaiting them when it comes to vehicles provided by the self-storage operation, rather than used by it.
Automobiles and other forms of transportation that our lawmakers believe might lend itself to personal use (such as airplanes, trucks, boats, etc.) are “listed” property. With listed property, unless used more than 50 percent for business, the depreciation deductions are restricted.