Property Valuation
Depreciation for appraisal purposes is:
ACalculated using IRS tax depreciation schedules
BThe loss in value from any cause, including physical deterioration, functional obsolescence, and external obsolescence✓ Correct
CThe annual reduction in assessed value for tax purposes
DApplicable only to commercial properties
Explanation
Appraisal depreciation is the loss in value from any cause — physical deterioration (wear and tear), functional obsolescence (outdated features), or external/economic obsolescence (outside factors). It differs from tax depreciation, which follows IRS rules for accounting purposes.
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