Are expense related to the purchase of the rental property allowed on T776 ?

Please see this Canada Revenue Agency (CRA) link to review Rental expenses you can deduct.

As per our TurboTax FAQ: What types of legal fees can I claim as deductions on my tax return?

If you own rental property, you might be able to deduct the following types of accounting and legal fees:

• Fees for services rendered to prepare leases or collect overdue rents, to cover bookkeeping services, audits of your books and records, and preparation of financial statements; or
• Fees for advice and help to prepare the tax return and any related information returns required related to the operation of the rental property.

Legal fees paid to buy a rental property can't be deducted from gross rental income. However, these legal fees may be added to the cost of the land, the building(s), or both.

Thank you for choosing TurboTax.

@katsamour    If you are asking about the legal costs on the purchase itself (not ongoing legal expenses), then CRA very clearly states that you don't expense it---that it is added to the purchase price---.

"If you incur legal fees to buy your rental property, you cannot deduct them from your gross rental income. Instead, divide the fees between land and building and add them to their respective cost."

More info:  Expenses at purchase/sale