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've determined 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 versions of TurboTax software for detailed instructions:
TurboTax Online (Premier)
Open a new tax file in TurboTax Online Premier. Complete the following steps:
- Indicate 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 other income (but don't check any boxes)
- Select Yes when asked if you received any income from investments
- Select Yes when asked if you had any income or expenses from a rental property
- On the Rental Income step, ensure the following are indicated: date (to and from), final year in business, and co-ownership
- On the Rental Profile, check the Details of Other Owners and Rental Income boxes (and any others that may be applicable)
- On the T776 Partner Details Statement, enter the details for your spouse and indicate their percentage partnership share (or the percentage of co-ownership if it's a co-ownership)
- On the T776 Partner Rental Income step, enter your rental property address information and the amount of gross rent income
- Review the information on your Rental Summary, then select Done with Rental Income
TurboTax CD/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
- On the What happened for you? step, select Yes when asked if you have income from investments
- Select Yes when asked if you have employment, rental, or other income. Then select the option for rental property
- Select Yes for your spouse when asked if they have income from investments, but indicate No for all following investment questions (as rental income isn't listed)
- Repeat Step 3 above for your spouse
- On the Rental Income step, select the option for Co-ownership, then fill in the partnership percentage (or percentage of co-ownership, if applicable)
- On the Rental Profile step, select the check boxes that apply to your situation
- On your T776 Partner Details Statement #1, indicate the percentage partnership share (or percentage of co-ownership, if applicable)
- On your T776 Rental Income, make sure to enter 100% of the gross rental income, and not 50%
- 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 all required information, based on your previous answers
- Select all the boxes that apply to your spouse in your Rental Profile # 1 section
- Enter your name and indicate a 50% partnership share (or the percentage of co-ownership, if applicable) on your T776 Partner Details Statement # 1
- Your spouse's T776 Rental Income will then auto-populate with all required information, based on your previous answers
- When asked if you wish to complete another rental statement, select No
- On the Rental summary step, select Done With Rental Income
- Your information should now be accounted for on your Total income summary
TurboTax CD/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? Then, input your percentage of ownership and select co-ownership (or partnership, if applicable)
- On your T776 - Part 2 form, enter your spouse's name and address, then input their ownership share at 50%
- 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 No to the question Was this the final year of rental operation?, then enter the percentage of ownership, and select co-ownership (or partnership, if applicable)
- Repeat steps 7-9 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 to confirm the correct rental income amounts reported for both you and your spouse (optional)
