Property Valuation
In a New York appraisal using the cost approach, 'depreciation' refers to:
AThe reduction in value for income tax purposes under IRS schedules
BAny loss in value from any cause, including physical deterioration, functional obsolescence, and external obsolescence✓ Correct
COnly physical wear and tear on the building
DThe difference between the land value and total value
Explanation
In appraisal, depreciation is the loss in value from any cause: physical deterioration (wear and tear), functional obsolescence (outdated features), or external/economic obsolescence (negative conditions outside the property). All three forms are considered in the cost approach.
Related New York Property Valuation Questions
- Reconciliation in the appraisal process refers to:
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