Water Heaters - Hot water heater in a closet. What is the code?

We have a giant closet that used to house the HAVC furnance and blower in addition to the hot water heater. We moved the HVAC stuff into the attic and want to turn that side of the giant closet into a linen or storage closet. I'm wondering how much space I need to leave on the hot water heater side and if I need to cut an intake in the floor for it.

Have you ever considered moving the water heater out to the garage instead? Reason for asking is because I have seen two homes in my neighborhood get flooded when their water heater sprung a leak during the middle of the night and flooded the carpeted living room and kitchen. I was called at 5am a few days ago from the widow down the street because she did not know what to do to stop the leak. I do not know where you live, climate wise, or if it is even feasible to move your water heater, but I thought I'd mention it. Codes vary in different locals. See link below.

Building Codes and Inspections: residential gas water heater closet framing and ventilation codes, residential gas water heater, gas water heater (http://en.allexperts.com/q/Building-Codes-Inspections-3546/residential-gas-water-heater.htm)

Gas or electric WH?? (It sounds like you are talking gas.)

If it's gas, you don't cut a hole in the floor. You cut 2 holes in the access door to it -- one low and one high. Each are about 6" high and 18" wide, but check with your local bldg. dept. to find out the exact sizes that they require. Both need to be louvered.

If it's electric, no intake or vent is needed.

Moving it to the garage makes sense, for the reason given by gilloz. But if you decide to do that, remember it will then have to be 18" off of the floor and protected so a vehicle can't run into it.