Business home use expenses

Client is a yoga instructor and she uses her basement as a studio.  She had a washroom built in the basement for her clients to use.  Can the cost to build the washroom be deducted or would this be considered as being a capital expense?

The same client also had water leak into her basement.  I believe that these costs can be included as maintenance and repairs and are therefore deductible business expenses.

Any advice would be appreciated.  

Answer

Yes, the washroom is a capital expenditure (but be careful of applying CCA).

Yes, the costs for the leak are maintenance and repairs - of the house - not necessarily a pure  business expense.  It would form a part of the maintenance of the house and would therefore be deductible based on the area of the house used for business purposes, proportionally.

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