Check out http://www.irs.gov/
I did a keyword search on home office and came up with quite a list of helpful articles: home office
I was interested myself so I looked at Publication 535 for Business Expenses. It says: Capital Expenses
You must capitalize, rather than deduct, some costs. These costs are a part of your investment in your business and are called “capital expenses.” Capital expenses are considered assets in your business. There are, in general, three types of costs you capitalize.

Business start-up costs.
Business assets.
Improvements.

Improvements
The costs of making improvements to a business asset are capital expenses if the improvements add to the value of the asset, appreciably lengthen the time you can use it, or adapt it to a different use. Improvements are generally major expenditures. Some examples are: new electric wiring, a new roof, a new floor, new plumbing, bricking up windows to strengthen a wall, and lighting improvements.

Now what the heck capitalization is compared to deduction is too much for my brain. But, I'm sure the answer is on the IRS website somewhere.