I am upgrading my bathroom by removing the faux brick linoleum and replacing with ceramic tile. Should I also remove the baseboard all around the room or can i leave it in place and butt the tile up against it?
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Either way will work.
However if you do not remove the base you will need to make more accurate perimeter cuts. If you leave the base in place, by the time you install the backer board and the tile, if the base is already a little small it will look a bit funny. The preferred method in new construction is to remove the base but in remodeling it gets a bit hazey, - it's up-to-ya.
Another reason to remove the base: If someone (like your wife) in the future decides they want wall tile the base will have to come off, and it'll be a pain removing it with the floor tile in place.
I want to tile up the wall on my project! You can get some really nice looks.
Another option that I didn't see mentioned was putting 1/4 round or a smaller base on the existing base.
If you have a large plain baseboard (some older homes), putting a smaller one on can fancy it up and hide the tile edge (can be good depending on your tile skills).
Caveats from above post apply.