Q... same deal anywhere. The BIG thing is, charge a "reasonable" rent for the space. If you are "aggressive" in your accounting you can bet that a Revenue Canada auditor can, and will, use it against you.

My first audit was an experience. They sent a very attractive young lady who was dressed for a night out dining and dancing. She became progressively aggressive but I backed her up on everything she brought up. Then, I was called by a man from the Underground Economey Section who said my "case" had been turned over to him for "further investigation". I backed him up as well.

He took a load of my files back to his office. I got a letter saying everything was okay "for now" and received less than 50% of my files back. I requested the rest. He said they were all returned. I delivered the security video to him. I got the rest of the files by courier two days later... had to sign for them. Of course, I signed an illegible signature.

A video security system is a great investment. Get em at Costco much cheaper than having Revenue Canada screw you over. Or anybody else.