Rental records for a T776: what actually gets typed
Rent received, a property tax notice, insurance, repairs and a mortgage statement — none of it on a slip, none of it reachable by Auto-fill. The mortgage statement is where the money is lost: only the interest is deductible, and the statement prints the payment, the principal and the interest next to one another.
What actually arrives
A T776 is assembled, not issued. Nobody files any of it with the CRA, so Auto-fill My Return has nothing to give you and every figure is typed by a person off paper. What a client hands over is usually:
- Rent received — a ledger, a spreadsheet, or bank deposits they expect you to interpret.
- A property tax notice, annual, from the municipality.
- An insurance renewal.
- Repair and maintenance invoices, loose, in no order.
- A mortgage statement.
- Condo or strata fees, if there are any.
- Utility bills, where the landlord pays them.
The mortgage statement is where the money goes
Only the interest is deductible. Every preparer knows that. The trap is not the rule, it is the document: a mortgage statement prints the total payment, the principal portion and the interest portion within a centimetre of each other, and the payment is usually both the largest number and the one set most prominently.
The figure you want is neither the biggest nor the boldest. On a statement where the annual payment is in display type at the top and the interest is one line of a small table underneath, taking the obvious number overstates the claim by most of its value — and the return computes perfectly with the wrong figure in it.
Some lenders print an annual interest summary separately from the statement. If the client has one, use it: it carries one number and it is the number.
Personal use reduces expenses, not income
A property that is not wholly rented — a cottage let part of the year, a duplex where the owner lives upstairs, a basement suite — carries a personal-use fraction, and it applies to the expenses. The rent received goes in whole.
That is why the number of units and the personal-use percentage are established before any expense is entered rather than after: every figure below depends on them, and going back to apportion a set of expenses already typed is how a property ends up half apportioned.
Three properties look like one
A client with several rentals hands over several sets of paperwork of identical shape. The commonest sorting error on a rental return is not a misread figure, it is a repair invoice filed against the wrong address — which nothing downstream catches, because both properties are the same client’s and the total across them is unchanged.
Sort by address before reading anything. An invoice with no address on it belongs to the property the client says it belongs to, and that is a question worth asking while the pile is still in front of you.
What is not on this page
Whether a particular cost is a current expense or a capital one, how capital cost allowance works on a rental, and what counts as rental income rather than business income are judgement calls with rules attached, and they are the CRA’s to state — see T4036, the rental income guide. This page is about getting the right number off the right piece of paper, which is the part that is ours.
What we do about it
KeyGlance reads rental paperwork as it arrives, splits a scanned bundle into its separate documents, and takes the interest off a mortgage statement rather than the payment. Every figure stays linked to the spot on the page it was read from, so you check it against the statement instead of retyping it. It never files anything with the CRA.
What KeyGlance does · Every T776 line we read · The same job on a T2125
Questions we get asked about this
Which figure from a mortgage statement goes on a T776?
The interest only. A mortgage statement prints the payment, the principal portion and the interest portion close together, and the payment is usually the largest and most prominent. Principal repayment is not an expense, so taking the payment overstates the claim by most of its value.
What does the personal-use percentage change?
It reduces every expense on the property, not the income. A cottage rented for half the year, or a duplex where the owner lives in one unit, has expenses claimable only in proportion to the rented use — which is why the number of units and the personal-use fraction are asked for before any expense is entered.
Do I need a separate T776 for each property?
Each property has its own statement. A client with three rentals hands over three sets of paperwork that look alike, and the most common sorting error is a repair invoice filed against the wrong address.