Who is the T776 tax form designed for?
This form, Statement of Real Estate Rentals, is where you can declare income and expenses related to rental income. It usually represents income from property, where you rent space and provide basic services only (heat, light, parking, and laundry facilities).
Could rental income be considered business income?
You are probably getting business income if you provide additional services like cleaning, security, and meals to your tenants. In that case, use the T2125 tax form instead.
Am I a co-owner or a partner?
If you own the rental property with one or more persons, you are a co-owner. In that case, you may or may not be in a partnership. For clarification, consult Interpretation Bulletin IT-90 before filling out the form.
How do I calculate rental income?
Use the accrual method, where you include income in the year it is due and expenses in the year you incur them, no matter when you pay them. Or use the cash method if you only have received practically all your income and paid all your expenses at the end of the year.
What types of expenses can I include?
Use the form to list current expenses. Also called operating expenses, they are recurring and offer a short-term benefit (like paying your electricity bill). Use the form to report capital expenses as well. Capital expenses provide a benefit that lasts several years (like paying for extensive renovations or buying computer equipment). Capital expenses cannot be directly deducted; instead, they are entered as an addition to the applicable Capital Cost Allowance class.
Are any rebates available to landlords?
As a home tax deduction available in Canada, you may qualify for the GST/HST tax rebate (new housing rebate) for landlords. For more information, please consult the RC4231 guide.
How do I complete the T776 form?
You need to fill in the 4 main parts, and Area A if you are claiming a Capital Cost Allowance (CCA):
- Part 1 – Identification
- Part 2 – Details of other co-owners and partners
- Part 3 – Income
- Part 4 – Expenses
- Area A – Calculation of capital cost (CCA) claim
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