Completing Form T776, Statement of Real Estate Rentals
If you received income from renting real estate or other real property, you have to file a statement of income and expenses. On your statement of income and expenses, report the rental income you earned in the calendar year (from January 1 to December 31).
Form T776 will help you calculate your rental income and expenses for income tax purposes. Even though we accept other types of financial statements, we encourage you to use Form T776.
To calculate your rental income or loss as well as your capital cost allowance (CCA), complete the areas of the form that apply to you.
For more information on how to fill out Form T776, go to Guide T4036, Rental Income.
Fill in this part to identify yourself and your real estate rentals. Write down your name and your social insurance number (SIN).
In the "from" area, enter the year, month, and day your rental operation began, if this is the first year of operation. Otherwise, enter January 1 of the current year.
In the "to" area, you only need to enter the current tax year, since all rental properties have a December 31 year-end.
Was this the final year of your rental operation?
If this is the last year of your rental operation, please tick the Yes box.
Tax shelter identification number
If you have a tax shelter, enter your tax shelter identification number (8-digit number found on your T5013 slip) on the proper line.
Partnership business number
If you are a partner in a partnership, enter your percentage of the partnership and provide the partnership business number. For more information on partnership, go to Income Tax Folio S4-F16-C1, What is a partnership?
Name and address of person or firm preparing this form
If someone else prepared Form T776, Statement of Real Estate Rentals, enter the name and address of the person or firm that prepared it for you.
Business number or account number
Enter your 15-character RZ account number, if you have one.
If you are a member of a partnership, enter your 15-character RZ business or account number.
You can receive rental income in the form of:
- cash or cheques
- kind (goods or commodities instead of cash)
On Form T776, list the addresses of your rental property and the number of units you rented.
Report the rental income in the "Income" section of Form T776 in the following order:
Line 8141 – Gross rents
If your tenant pays you in cash or by cheque, include the total rents you earned in the year on line 8141.
Line 8230 – Other income
If the tenant pays you in kind or with services, report its fair market value on line 8230.
Enter, on this line, the total income you received from other sources. Some examples of other income are:
- premiums and leases – You may receive an amount for one of the following:
- granting or extending a lease or sublease
- permitting a sublease
- cancelling a lease or sublease
- sharecropping – You can earn income from renting farmland either in cash or as a share of the crop. Report any cash payments on line 8141. Report the fair market value of any crop share you earn on a sharecrop basis on line 8230
Glenn is a tenant in an apartment building. He owns a truck with a plough on it. His landlord, Sonya, asked him to plough the parking lot after every snowfall. Sonya does not pay Glenn cash for his work, but she reduces his monthly rent accordingly.
Sonya reports the rent she charges Glenn at line 8141 as "Gross rents," and the fair market value of Glenn's services as "Other income," at line 8230. She then claims the fair market value of Glenn's snowplowing services as an expense that relates to her rental operation.
Air quality improvement tax credit
This credit is received immediately before the end of the tax year to which it relates and is considered government assistance. Government assistance is generally included in income. When you receive government assistance for the acquisition of a depreciable property, reduce the capital cost of that property by the amount of the assistance. For more information on government assistance, see Grants, subsidies and other incentives or inducements and Interpretation Bulletin IT-273, Government Assistance – General Comments.
To calculate your credit for 2022, fill in Form T2039, Air Quality Improvement Tax Credit.
Line 8299 – Total gross rental income
Your gross rental income is your total "Gross rents" on Form T776. Enter this amount at line 12599Footnote 1 of your income tax and benefit return.
If you are a co-owner of the rental property or a partner in a partnership that does not need to provide you with a Slip T5013, Statement of Partnership Income, enter the gross rental income for the entire property at line 12599Footnote 1 of your income tax return. Do not split the gross income according to your ownership share.
You can deduct any reasonable expenses you incur to earn rental income. For information on which rental expenses you can and cannot deduct, go to Rental expenses you can deduct.
Line 9949 – Total for personal portion
If you rent part of the building where you live, you can claim the amount of your expenses that relate to the rented area of the building. You have to divide the expenses that relate to the whole property between your personal part and the rented area.
You can split the expenses using square metres or the number of rooms you are renting in the building.
For example, if you rent 4 rooms of your 10-room house, you can deduct:
- 100% of the expenses that relate only to the rented rooms, such as repairs and maintenance of the rooms, plus
- 40% (4 out of 10 rooms) of the expenses that relate to the whole building, such as taxes and insurance
If you rent rooms in your home to a lodger or roommate, you can claim all of the expenses for the part you are renting.
You can also claim a portion of the expenses for the rooms in your home that you are not renting and that both you and your lodger or roommate use. You can use actors such as availability for use or the number of persons sharing the room to calculate the allowable expenses. You can also calculate these amounts by estimating the percentage of time the lodger or roommate spends in these rooms (for example, the kitchen and living room).
Fill in “Part 4 – Expenses” on Form T776 as follows:
- enter the full amount of each expense under “Total expenses”
- enter the part of each expense that was for personal use under “Personal portion”
- add up the amounts in each column and enter the result for “Total Expenses” on amount A, and enter the “Personal portion” on line 9949
- subtract the personal portion total from the total expenses to get your total deductible expense. Enter this result on amount 4
If you are a co-owner or partner in a partnership, enter the personal portion of the expenses for all co-owners or partners on this line.
You cannot claim the expenses for renting part of your property if you have no reasonable expectation of making a profit.
For more information on renting part of your personal residence, go to Changing part of your principal residence to a rental or business property or vice versa.
Rick rents out 3 rooms of his 12-room house. He is not sure how to split the expenses when he reports his rental income. Rick's expenses were property taxes, electricity, insurance, and the cost of advertising for tenants in the local newspaper.
Rick can claim the part of his expenses that relate to the area of the property he rented in the current tax year. Since Rick rented 25% of his residence (3 out of 12 rooms), he can deduct 25% of his property taxes, electricity and insurance costs from his rental income. He can deduct the full amount of the advertising expense, since this expense relates only to the rented area.
When he completes Form T776, Rick enters the full amount of each expense in the "Total expenses" column. Then, in the "Personal portion" column, he shows the part of each expense that relates to his personal use. In this case, he enters 75% of the property taxes, electricity and insurance costs for the property. He will not enter anything for advertising in the "Personal portion" column.
Rick can also claim capital cost allowance (CCA) on the rented area of the property if it does not create or increase a rental loss and he is not designating the building as his principal residence.
Enter on this line the gross income minus the deductible expenses (line 8299 minus amount 4) on Form T776.
This amount is the net rental income of all co-owners or partners before claiming CCA for rental property.
If you are a co-owner, enter your share of the amount from line 9369 on amount 5 of Form T776. This amount is based on your share of ownership of the rental property.
If you are a co-owner or partner, also complete Part 2 – Details of other co-owners and partners on Form T776.
Line 9945 – Other expenses of the co-owner
Enter the amount of deductible expenses you have as a co-owner that you did not deduct elsewhere on Form T776, Statement of Real Estate Rentals.
- the undepreciated capital cost (UCC) of the class at the start of the year
- the capital cost of any additions during the year
If you have a recapture of CCA (the amount in column 7 – UCC after additions and dispositions (column 2 plus column 3 minus column 5) of Area A is negative), enter it on this line.
If you are a co-owner, enter your share of the recapture.
If the amount in column 7 – Undepreciated capital cost (UCC) after additions and dispositions (column 2 plus column 3 minus column 5) of Area A is positive and you no longer own any property in that class, you have a terminal loss. More precisely, you may have a terminal loss when, at the end of a fiscal period, there is no longer any property in the class, but there is still an amount you have not deducted as capital cost allowance (CCA).
You can usually subtract this terminal loss from your rental income in the year you disposed of your depreciable property. If the loss is more than your rental income, you can create a rental loss.
Enter any terminal loss you had on the sale of rental property on this line.
If you are a co-owner, enter your share of the amount.
Enter the amount of your total capital cost allowance (CCA) for the year calculated in Area A of form T776.
If you are a partner in a partnership, that does not need to issue you a slip T5013 SUM, Summary of Partnership Income, enter the total CCA allocated on the financial statements the partnership gave you.
Do not use the amount at line 9936 if you are a member of a partnership that has to file form T5013 Summary, Information Return of Partnership Income. Your CCA amount is already included in box 110 of your T5013 slip.
Line 9974 – GST/HST rebate for partners received in the year
If you received a GST/HST rebate for partners, report the amount of the rebate that relates to eligible expenses other than CCA on line 9974 of Form T776, Statement of Real Estate Rentals, for the year you receive the rebate.
Line 9943 – Other expenses of the partner
Enter the amount of deductible expenses you have as a partner in a partnership that you did not deduct elsewhere on Form T776, Statement of Real Estate Rentals.
This is the amount of your net income or loss for the tax year. Enter the amount from line 9946 on line 12600Footnote 2 of your income tax return. If you have a loss, enter the amount in brackets.
You may have to adjust the figure from line 9946 before entering it on your income tax return. You may have filed Form T1139, Reconciliation of 2021 Business Income for Tax Purposes, with your 2021 income tax return. If so, you may have to fill in the same form for 2022. To find out if you have to file Form T1139 and calculate the amount of income to report on your 2022 income tax return, see Form T1139, Reconciliation of 2022 Business Income for Tax Purposes.
To find out how to fill in Area A, go to How to complete the capital cost allowance (CCA) charts.
- Form RC1, Request for a business number and certain program accounts
- Form T5004, Claim for Tax Shelter Loss or Deduction
- Slip T5003, Statement of Tax Shelter Information
- Information Circular IC89-4, Tax Shelter Reporting
- T1 Income Tax Package
- Income Tax Folio S3-F4-C1, General Discussion of Capital Cost Allowance
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