Property Valuation
Depreciation in the cost approach is defined as:
AThe tax deduction allowed for a rental property
BThe loss in value from all causes relative to the cost of the structure✓ Correct
CThe decrease in assessed value over time
DAnnual straight-line reduction in the mortgage balance
Explanation
In appraisal, depreciation is the total loss in value of an improvement from all sources: physical deterioration, functional obsolescence, and external obsolescence.
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