Property Valuation
Depreciation in real estate appraisal refers to:
AThe tax deduction allowed for income-producing property
BA loss in value from any cause, including physical deterioration, functional obsolescence, or external obsolescence✓ Correct
CThe decrease in the loan balance over time
DA reduction in assessed value granted by the municipality
Explanation
In appraisal, depreciation is a loss in property value from any cause. Physical deterioration includes wear and tear; functional obsolescence includes outdated features; external (economic) obsolescence is caused by factors outside the property.
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