Prep kitchen in home

[Margaret CPA in OH]

A client has begun a growing business by preparing custom drinks, alcoholic and non.  She uses cut fruit and other added ingredients which she has been preparing in her home kitchen.  She is located for 9 months of the year in the farmer's market which supports her in an outdoor stand.  As the business has grown to include private parties, she is having a prep kitchen area installed in her basement including a sink, refrigerator, and freezer along with counter space and storage area.

I believe this is akin to having a home office, business workshop or other strictly business workspace.  She wants to segregate her business from her personal space.  Anyone see objections to this arrangement and proper deductions, depreciation, etc.?  Please share your thoughts.

[Abby Normal]

It's actually called 'business use of home', not home office, so I don't see any problems.

[Randall]

You might think about segmentation too.  Equipment that can removed and is used 100% business from structural additions that are part of the house. 

[Patrick Michael]

They may want to check with the  local Health Department also.  Had a client who did the same thing and was shut down by the Health Department for several weeks until their basement kitchen passed inspection.