Storage Units - Sch C or Sch E?

What does "being there" have to do with it?  The guy who owns a duplex and rents out the half where he doesn't live, is certainly "there" a lot of the time. 

In a 1998 Tax Court case (Harris), IRS argued that the $25,000 limit on passive activity losses applied to a self-storage building.  The judge agreed.  If you aren't going to let me take a loss, I'm not going to pay you SE tax if I show a profit.  

I think one way to look at it is, what is the tenant buying?  Is he paying for a service, or is he paying for the use of property?  Is he paying you to do any work for him, or is the work you do incidental to your ownership of rental property?  

Self-storage rentals are related to trailer parks in about the same way that Airbnb rentals are related to trailer parks. That is to say, not by much, but that doesn't prevent some people from seeing an analogy.  There's an interesting Tax Court case, Bobo, where IRS argued that a 1972 Revenue Ruling applied, even though it contradicted the Regulations.  Some of the opinion could be applied to the self-storage issue:

Respondent [IRS] cites Rev. Rul. 72-331, 1972-2 C.B. 513, in support of his position which holds:

“Since the trailer park owner in the instant case cleans and maintains the grounds and maintains city sewerage, electrical connections, laundry, bath, and toilet facilities, the roadway into the trailer park, and facilities for the use of water by the owners of the trailers, he provides services other than those usually or customarily provided in connection with the rental of space only for occupancy.”

Respondent therefore argues that the following services provided by petitioners disqualify their mobile home income from the excluded real estate rental payments category: utility hookups, sewage facilities, laundry facilities and the weekly maintenance thereof, and cleaning of vacant trailers. Petitioners contend that since California law requires most of these services, they are "those usually or customarily rendered in connection with the rental of rooms or other space" within the meaning of section [pg. 710] 1.1402(a)-4(c)(2), Income Tax Regs., and are therefore excluded rental payments. We do not entirely agree with either party.

First, we consider Rev. Rul. 72-331, 1972-2 C.B. 513, to be inconsistent, in part, with the language and intendment of section 1.1402(a)-4(c)(2), Income Tax Regs. Clearly, many of the services relied upon in Rev. Rul. 72-331, supra, to disqualify the taxpayer's reliance upon section 1.1402(a)-4(c)(2), Income Tax Regs., in excluding the payments as rentals from real estate are approved in the regulation itself, such as: "the furnishing of heat and light, the cleaning of public entrances, exits, stairways and lobbies, the collection of trash, and so forth, are not considered as services rendered to the occupant."