A rental is one story told on one form. Rent comes in, expenses go out, and your share of what is left rides onto your return. Form T776 tells that story — and the hardest question it asks is whether a cost was a repair or an improvement.
Rent in, expenses out
T776, the Statement of Real Estate Rentals, is a page of arithmetic. You list the rent the property earned, subtract what it cost to earn that rent, and the result — profit or loss — flows onto your T1. You file it whether the year made money or lost it.
Renting is usually property income, not a business. The line matters when you offer more than the space. Heat, light, parking, a laundry machine — that is still rent. Meals, cleaning, security — services to the person rather than the space — start to look like a business, which is reported on T2125 instead. The more you do for tenants, the closer you drift.
The income side gets audited too
Expenses get the attention, but the rent itself needs a record. A payment is income however it arrives: e-transfer, cheque, or cash. Keep a note of every payment received — who paid, when, for which month — and keep the lease behind it. Cash leaves no trail of its own, so make one.
The expense side runs on the same fuel. Behind every cost, keep the invoice, the receipt, or the contract — the CRA can refuse an expense that has no paper behind it. None of it is sent with the return; it waits, for six years, for the asking.
In Dossier, that evidence lives beside the property with everything else. The lease, the bills, the invoices: one place, one year, one story.
Repair or improvement?
One question decides more on T776 than any other. Fixing something back to what it was is a current expense — it comes off this year's rent in full. Making the property better than it was, or longer-lasting, is a capital expense — claimed slowly, a little each year, over many years.
The CRA's tests are questions you can ask standing next to the work:
- Did it restore, or improve? Rebuilding rotted wooden steps in wood is a repair. Rebuilding them in concrete, because concrete outlasts wood, is an improvement.
- Does it give a lasting benefit? Repainting a wooden house is a current expense — paint recurs. Putting vinyl siding on it is capital, because the siding stays.
- Is it a part, or a separate asset? Rewiring repairs a part of the building — current. A new refrigerator for the unit is an asset of its own — capital.
- Was the work done to put a just-bought used property into shape? Those repairs are part of acquiring it — capital. The same maintenance on a property you already had is current.
- How big is the job next to the property itself? Patching a roof maintains the building. Work whose cost rivals the building changes it.
- Is the work done to sell? The same repairs, made to get the property ready for sale or as a condition of the sale, lean capital.
And one invoice can hide both. The contractor fixes the leak — a repair — and adds a skylight while the ladder is up — an improvement. When a bill lands in Dossier, the app reads it and suggests a category, but it never decides this question for you. Capture the invoice, flag the doubt, and settle it at filing time with the paper in hand.
Whose result is it?
A shared property still produces one result. Co-owners each report their own share of that same net figure, set by how much of the property they own — not by who happened to pay a bill.
Renting out part of your home works the same way in miniature. A basement suite or a spare room earns rent, and only the rental share of the house's costs counts against it — the portion of heat, insurance, and property tax that serves the suite. Your personal share never does. The split is settled at filing time; the bills behind it are what you keep now.
One gentle caution. If the property is also your home, claiming capital cost allowance — depreciation — on it can affect the principal-residence exemption when you eventually sell. The rules live on the CRA pages below. Know the question exists before you claim.
The year, kept beside the property
Through the year, capture each document the day it arrives: the rent record, the plumber's invoice, the insurance renewal. Dossier reads each one, suggests its T776 category under the property, and you confirm. Anything unresolved wears a flag instead of blocking you. At year end, Export builds one package — totals by category, one row per document, every original image — so the story T776 asks for is already told.