T776
Statement of Real Estate Rentals
T776 is the CRA form attached to every Canadian landlord's T1 personal return — one form per rental property — reporting gross rents, deductible expenses, and net rental income that flows to T1 line 12600. For Canadian residents with US rental property, T776 is also where the cross-border rental income gets reported (in CAD, converted at Bank of Canada annual average rate).
⚠️ Important Disclaimer
This content is for informational purposes only and does not constitute legal, tax, or financial advice. Tax laws change frequently — always verify with the CRA and IRS or consult a qualified cross-border tax accountant before making decisions.
April 30 (or June 15 if self-employed) — attached to T1 return
Anyone receiving rental income from Canadian real property, including residents and non-residents filing a Section 216 election
Key Takeaways
- T776 is the CRA Statement of Real Estate Rentals — one form per property attached to your T1 return. Due April 30 (June 15 if self-employed).
- Gross rents on line 8141; deductible expenses on lines 8521-9270; net rental income on line 9369 flows to T1 line 12600.
- For US rental property, convert every USD line to CAD using the Bank of Canada annual average rate for the tax year (2025 = 1.3978 CAD/USD). Apply consistently.
- Capital Cost Allowance (CCA) is optional — most cross-border landlords skip it because recapture at sale wipes out the cumulative savings.
- Security deposits are NOT income on T776 — they're held in trust. Only report when applied to unpaid rent or property damage in the year applied.
Line by line — T776 walkthrough
T776 has four parts plus a CCA appendix. The lines that actually drive your tax:
Part 1 — Identification. Property address, year first available for rent, your ownership percentage, and personal-use percentage.
Part 2 — Income
- Line 8141 — Gross rents. Total rent received during the calendar year (cash basis).
- Line 8230 — Other income. Late fees, laundry coin income, parking fees billed separately.
- Line 8299 — Total gross rental income.
Part 3 — Expenses (most common):
- Line 8521 — Advertising
- Line 8690 — Insurance
- Line 8710 — Interest (mortgage interest, not principal)
- Line 8810 — Office expenses
- Line 8860 — Legal, accounting, professional fees
- Line 8871 — Management and administration fees
- Line 8960 — Maintenance and repairs
- Line 9180 — Property taxes
- Line 9220 — Utilities (where landlord pays)
- Line 9270 — Other expenses
Part 4 — Net rental income or loss. Gross rental income minus total expenses minus your share of CCA (if claimed) equals net rental income on line 9369, which flows to T1 line 12600.
Deductible expenses — what counts
Expenses must be reasonable, incurred to earn rental income, and either current expenses (deducted in the year paid) or capital expenses (depreciated via CCA). Common deductible items:
- Mortgage interest (line 8710) — interest only, not principal
- Property taxes (line 9180)
- Insurance premiums (line 8690)
- Maintenance and repairs (line 8960) — fixing what's broken, not capital improvements
- Property management fees (line 8871)
- Utilities (line 9220) — when landlord pays
- Professional fees (line 8860) — accountant, legal
- Advertising (line 8521) — listing fees, tenant search
- Travel (line 9270) — when primary purpose is the rental
See our T776 Complete Guide for the full line-by-line walkthrough and per-category examples.
CCA — how it works and why most landlords skip it
Capital Cost Allowance (CCA) is the Canadian depreciation regime. For residential rental buildings, you use Class 1 at 4% declining balance on the building portion (not the land).
How it reduces tax today: CCA shows up as an expense on T776, reducing net rental income and current-year tax. On a $400,000 building (excluding land) in the first year of rental, max CCA is roughly $8,000 (4% on the half-year-rule reduced base).
The catch — recapture on sale: when you sell, the difference between the depreciated basis and the sale price (up to the original cost) is added back to your income as recaptured CCA, taxed at your full marginal rate as ordinary income. This often wipes out the cumulative tax savings in a single year.
Default for cross-border landlords: skip CCA on T776. Claim only with explicit accountant advice tied to a specific sale-timing strategy.
Foreign rental income on T776 — the US property case
Canadian residents with US rental property file one T776 per US property, just like Canadian properties. The mechanics are identical with two wrinkles:
- All amounts in CAD. Convert every line from USD using the Bank of Canada annual average rate for the tax year (2025 = 1.3978 CAD/USD).
- US tax becomes a foreign tax credit, not a T776 expense. US federal income tax (from 1040-NR) and US state tax become a foreign tax credit on T1 line 40500 — not an expense on T776.
See our CRA Exchange Rate Guide for the conversion rules and consistency requirements.
Frequently asked questions
Who must file T776?
Any Canadian resident earning rental income from real estate — Canadian or foreign — files T776 with their T1 personal return. One T776 per property. Co-owners (e.g., spouses on title) each file their own T776 for their ownership share. Corporations file T2 instead.
Can I deduct mortgage payments on T776?
Only the interest portion. Principal repayment is not deductible. Your year-end statement from the lender breaks both out. Mortgage interest goes on line 8710; principal payments are treated as a reduction of debt, not an expense.
Should I claim CCA on my rental property?
Most Canadian individual landlords skip CCA. While it reduces tax in the year claimed, recapture on sale often wipes out the cumulative savings in a single tax year. Claim CCA only with explicit accountant advice tied to a specific sale-timing strategy.
How do I report US rental income on T776?
File one T776 per US property. Convert every line (gross rent, mortgage interest, property tax, repairs, etc.) from USD to CAD using the Bank of Canada annual average rate for the tax year. US tax paid (federal + state) goes on T1 line 40500 as a foreign tax credit — not as an expense on T776.
Are security deposits income on T776?
No — not when received. Security deposits are held in trust for the tenant. You report deposit income on T776 only in the year you actually apply the deposit against unpaid rent or property damage. Last-month-rent deposits are reported when applied to the final month of tenancy.
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