You, in effect, have two properties. One that acts as a storage for your business and one that acts as a rental property. You will need to split them and treat them as completely separate, dividing common expenses such as mortgage interest and property taxes. This will be depreciated on Schedule C.
The other is pure rental. You are receiving rent, just in the form of services. If, as described below, you are renting a Full Rental Value, you can take your expenses.
Property or services.
If you receive property or services as rent, instead of money, include the fair market value of the property or services in your rental income.
If the services are provided at an agreed upon or specified price, that price is the fair market value unless there is evidence to the contrary.
Example.
Your tenant is a house painter. He offers to paint your rental property instead of paying 2 months rent. You accept his offer.
Include in your rental income the amount the tenant would have paid for 2 months rent. You can deduct that same amount as a rental expense for painting your property.
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