Property Valuation
Depreciation in real estate appraisal is best defined as:
AA reduction in value from any cause✓ Correct
BPhysical wear and tear only
CThe annual decrease in market value mandated by tax law
DThe loss of value due to functional obsolescence only
Explanation
Depreciation in appraisal refers to any loss in value from any cause, including physical deterioration, functional obsolescence, and external obsolescence. This is different from accounting depreciation, which is a tax deduction based on a schedule.
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