TP-1086: costs incurred in carrying out work on a building

What does the TP1086 consist of?

Form TP-1086, Expenses Incurred to Carry Out Work on an Immovable, is a form used by any person who, during a taxation year, incurred expenses to carry out renovation, improvement, maintenance or repair work on a building, structure or land located in Quebec.

Targeted work:

An expense, whether of a current or capital nature, taken into account in calculating income or loss from a business, rental or profession.

Examples of work covered: Landscaping, building work, demolition, snow clearance, electrical work, fence installation, swimming pool installation, painting work, plumbing work, work on farmland.

Work not covered: Work on the construction of a new building

Information required:

The form requires the following information to be entered about the people who carried out the work:  

• The name, address, social insurance number or QST registration number, if applicable

• The amount paid to each person who carried out, during the taxation year, renovation, improvement, maintenance or repair work on the immovable or contiguous land including the amount of materials

The taxpayer is not required to enter this information if the payment is made to: one of its employees, an operator of a gas, telecommunications or electricity network, or a government agency.

A company whose assets (including those of any company with which it is associated) for the previous tax year were $25 million or more does not have to file this form, just like a tax-exempt company.

For what period?

Even if you do not have to file a tax return for the year, you must file the form by the day on which you would have to file such a return if you had tax to pay.

How to produce?

The TP-1086 can be attached to the tax return.

Who must file in the case of co-owners and partnerships?

In the case of work carried out on an immovable held in co-ownership, each co-owner is required to attach the form to his or her income tax return for the tax year in question.

In the case of a partnership, it is possible that one member of the partnership may be designated to file the form. If no member is designated, each member of the partnership is required to do so.  

Omission to produce

The TP-1086 information return was introduced to combat undeclared work and the black economy, and the tax authorities wanted the penalties for non-compliance to be severe.

Failure to provide the required information will result in a penalty of $200 for each person in respect of whom the information is not provided. The person who fails to provide the information is liable to a penalty of $500.

The penalty will not apply if it can be shown that the taxpayer made reasonable efforts to obtain the requested information from the person required to provide it; or in the case of a social insurance number or corporate tax identification number, the person required to provide it did not receive it but requested it.