What the form reports
The T776 is a statement of income and expenses for rental real estate. Rent you earned in the year goes on one line, and the value of anything you receive in kind, such as services from a tenant, goes on another at its fair market value. You then list the reasonable expenses you incurred to earn the rent. The result is a net income or a net loss for the year, which is carried to your return along with the gross rental income.
The CRA accepts other financial statements but encourages the use of the T776. The form also lets you work out capital cost allowance, the claim for the wear on a building. A later sale can bring recapture or a terminal loss back onto the form, so see the entries on capital cost allowance and recapture.
An illustrative example with co-owners
Suppose two siblings each own half of a rented duplex. This example is illustrative and uses round numbers. The property earns $24,000 in rent for the year and has $10,000 of deductible expenses before any capital cost allowance. The net income before capital cost allowance is $14,000, so each sibling’s share is $7,000.
The way the numbers are entered matters. The CRA’s instructions have a co-owner enter the gross rental income for the whole property rather than a share of it, and then enter their own share of the net income before capital cost allowance based on their ownership share. Each co-owner files their own return, so each completes their own T776.
Where landlords go wrong
Renting part of your home is a common source of confusion. You can claim expenses for the rented area, and shared costs such as property tax and insurance are generally split by floor area or by number of rooms. If you rent 4 of 10 rooms, for instance, 40% of whole-building costs is a reasonable starting point, plus all of the costs that relate only to the rented rooms.
You cannot claim expenses for renting part of a property if you have no reasonable expectation of making a profit. Capital cost allowance on a rented part of your home is allowed only if it does not create or increase a rental loss, and you are not designating the building as your principal residence.
What to discuss with your accountant
Bring the rent records for each unit, a list of expenses with receipts, the purchase documents, and the prior year’s capital cost allowance schedule if you have one. Say whether you co-own the property, whether any part is for your own use, and whether any rent was paid in services rather than money.
Ask which expenses are current and which are capital, how the ownership share was determined, and whether a loss can be claimed. The rental expense checklist can help you collect what the form will need.
Sources & editorial notes
Sources checked October 24, 2026. The examples are illustrative and provide general information. Discuss how the guidance applies to your circumstances with your accountant.
- T776 Statement of Real Estate RentalsCanada Revenue Agency
- Completing Form T776, Statement of Real Estate RentalsCanada Revenue Agency
Rules and guidance can change. Use the current official source and confirm the treatment for your facts. To flag an error, contact Sora.