Self-storage operators who wish to employ a self-service kiosk by OpenTech Alliance Inc. and the new ILock door-locking system by PTI Security Systems Inc. can enjoy an additional tax deduction under the IRS Tax Code Section 179, but only if the system is in operation by Dec. 31.
Because the tax code allows businesses to deduct the full purchase price of qualifying equipment and software on purchased or financed lease plans, the deduction effectively reduces the cost of a kiosk by 35 percent, according to an OpenTech press release. The limit on equipment purchases is $560,000 and includes a bonus depreciation at 50 percent. However, the tax savings are scheduled to expire at the end of the year.
"Section 179, better known as 'Let's write it off this year,' is a great deal for self-storage owners," said Jerry Jones, a Reno, Nev.-based CPA who has worked in the self-storage industry for 25 years. "If you are considering a kiosk or any type of automated equipment, what better ROI can you have than being able to write it off 100 percent in the current year and collecting rents up front?"
The allowance is very useful when an owner is very useful when a facility owner is using cost segregation and the property he is using is not "original use," Jones added. "Taking advantage of this tax savings may just be the best financial decision you make in 2012."
OpenTech's INSOMNIAC kiosks range in price from $1,500 to $18,000. Under Section 179, an operator can save as much as $6,300 per kiosk. There are guidelines property owners must follow to take advantage of the tax savings. Information can be found at www.section179.org.
OpenTech is a Phoenix-based provider of INSOMNIAC self-storage kiosks, self-storage cloud services, INSOMNIAC Online Web and mobile applications, the INSOMNIAC Live! call center, and the INSOMNIAC Self Storage Network for online storage reservations and rentals. The company recently became the exclusive distributor of PTI's electronic door-lock system for self-storage. Now branded the INSOMNIAC ILock, the wireless, battery-powered lock automatically secures the door on individual storage units.