When you own rental property with your spouse, it'll likely be a co-ownership or, under certain conditions, a partnership. If you're unsure, the CRA advises seeking out the partnership law for your province or territory, or referencing Income Tax Folio S4-F16-C1, What is a Partnership?
Once you determine which situation applies to you, the steps for entering spousal co-owners' rental property income in TurboTax will vary depending on the software edition (and view) you're using.
To get started, choose one of the following editions of TurboTax:
TurboTax Online (Premier)
Open a new tax file in TurboTax Online Premier. Complete the following steps:
- Indicate that the return is for My spouse/partner and me, then enter your personal information, making sure to choose the option for filing your return at the same time.
- On the Let's build your tax profile step, indicate Yes for did you have income from rental property or investments? for yourself, and then again for your spouse/partner.
- Select Yes when asked Did you have income or expenses from a rental property?
- If you are not yet using TurboTax Self-Employed, select Upgrade to Self-Employed and Confirm Upgrade.
- On the Rental Profile, check the Details of Other Owners and Rental Income boxes and any other applicable boxes.
- On the Real Estate Rentals Statement (for spouse 1), enter the details, including the Type of ownership.
- At T776 Partner Details Statement for spouse 1, At Details for your spouse- Partnership share %, indicate spouse 2's percentage interest, regardless of whether it is a co-ownership or a partnership.
- On the T776 Partner Rental Income (spouse 1) step, enter your rental property address information and the amount of gross rent income'
- If you have rental expenses, enter them at T776 Rental Expenses.
- If you have capital cost allowance to consider, select Enter UCC Balances from Prior Year or Enter Additions / Dispositions in Current Year as applicable, otherwise select Done.
- Review the information on your Rental Summary, then select Done with Rental Income.
TurboTax Download (Easy Step mode)
Open a new tax file in TurboTax Online Premier. Complete the following steps:
- In the Marital Status section of your personal profile, select Married, then choose to prepare your returns together
- Select Yes when asked if you have employment, rental, or other income. Then check the box for I have rental property...
- Repeat Step 2 for your spouse
- On the Real Estate Rentals Statement #1 (for you), select Co-ownership or Partnership as applicable, then provide your ownership interest percentage
- On the Rental Profile step, check the boxes that apply to your situation
- At your T776 Partner Details Statement #1, if the only partner or co-owner is your spouse, disregard this and select Continue
- On your T776 Rental Income, make sure to enter 100% of the gross rental income, do not allocate a portion of the income based on ownership
- For your spouse, select the property address from the dropdown on the T776 Rental Identification step
- Your spouse's Real Estate Rentals Statement # 1 will then auto-populate with required information. Indicate your spouse's co-ownership or partnership %
- At Rental Profile # 1, select all the boxes that apply to your spouse
- Disregard T776 Partner Details Statement # 1 for your spouse if there are no other partners or co-owners, select Continue
- Your spouse's T776 Rental Income will then auto-populate with all required information, based on your previous answers
- Answer the question at Multiple Rental Activities
- On the Rental summary step, select Done With Rental Income
Your information should now be accounted for separately on your Total income summary
TurboTax Download (Forms mode)
Open a new tax file in TurboTax Online Premier. Complete the following steps:
- On the TurboTax Personal Information form, enter your information, then check the box for Process spouse's return as well?
- Choose whether you'd like to Auto-fill My Return (by selecting the applicable button), or select Close to decline.
- On the T1 General form, complete the required information.
- Select Forms in the ribbon at the bottom of the screen.
- Select Form Lookup, then enter T776 in Keyword to search for, and select OK.
- On your T776 - Part 1 form, select Yes or No (as applicable) to the question Was this the final year of rental operation?
- Enter your percentage of ownership and select co-ownership (or partnership, if applicable).
- On your T776 - Part 3 form, enter the rental property address, number of units, and 100% of your gross rent amount.
- Review the information on your T776 - Income form to make sure it's accurate.
- Select your spouse's name in the ribbon at the bottom of the screen. TurboTax will automatically generate the T776 for the spouse.
- On the T776 - Part 1 (for your spouse), answer the question Was this the final year of rental operation?
- Enter the percentage of ownership, and select co-ownership (or partnership, if applicable).
- Repeat steps 8 above, entering your spouse's information.
- If rental income is the only income you've entered into TurboTax so far, you can review the Quick Graphs summary on the left, to confirm the correct rental income amounts reported for both you and your spouse (optional).
