Understand Statement of Real Estate Rentals (T776 and TP-128-V)

If you earn income by renting out property—whether in Canada or abroad—the CRA and Revenu Québec require you to report it in detail each year. The main tools used are the Statement of Real Estate Rentals (Form T776) for federal returns, and Form TP-128-V for Quebec returns.

These forms provide the structure for reporting gross rental income, eligible expenses, capital cost allowance (CCA), and your share of ownership if you co-own the property.

This matters whether you rent out a secondary home in your city, own foreign real estate, or split property income with family. Filing these forms correctly helps ensure you deduct every eligible expense while complying fully with tax rules.

What Is Form T776?

Form T776 is the CRA’s required form for all Canadian tax residents who receive rental income. It is used to report:

• The location and type of each property

• Total gross rental income received in the year

• Operating expenses such as insurance, property taxes, and maintenance

• Optional capital cost allowance (CCA) to depreciate the value of the property

• The taxpayer’s share of income or loss, if the property is co-owned

You must file a separate T776 for each property unless the properties are similar in nature and location (such as multiple rental condos in one city).

What Is Form TP-128-V?

Quebec residents must also complete Form TP-128-V (Income and Expenses Respecting the Rental of Immovable Property) when filing their provincial tax return. It closely mirrors Form T776 but applies to your Quebec tax return.

TP-128-V is used to report:

• All rental income from real estate located in or outside of Quebec

• The same set of eligible expenses allowed federally

• CCA claims for provincial purposes

• Personal use percentages, if you live in the property part-time

Keep in mind that Revenu Québec may request copies of your federal T776 to reconcile amounts with your TP-128-V.

Comparing Form T776 and TP-128-V

What Rental Income and Expenses Do You Report?

Both forms require you to list:

Rental Income:

• Gross rent received from tenants

• Income from parking, storage, or laundry (if part of rental activity)

• Any prepaid rent or damage deposits forfeited and kept

Expenses (claimable if directly related to rental use):

• Mortgage interest only (not principal)

• Property taxes and insurance

• Repairs and maintenance (not renovations that add lasting value)

• Advertising and property management fees

• Utilities paid by the owner

• Office or administrative supplies, if applicable

If the property is partially rented or shared with family, you must prorate the expenses and income accordingly.

Should You Claim Capital Cost Allowance (CCA)?

CCA is an optional deduction that allows you to depreciate the cost of the building (not the land). Claiming CCA can reduce your rental income—but it also reduces your property's tax cost base, increasing the capital gain when you sell.

It’s best to consider CCA if:

• You’re facing a high tax year and need to reduce your rental income

• You don’t plan to sell the property for many years

• You want to defer taxes, knowing you may pay more later when selling