Property Valuation
In the cost approach to value, 'depreciation' is best defined as:
AThe annual tax deduction for income-producing property
BLoss in value from any cause✓ Correct
CThe decrease in mortgage balance over time
DThe reduction in rental income due to market conditions
Explanation
In the cost approach, depreciation means any loss in value from any cause — physical deterioration, functional obsolescence, or external/economic obsolescence.
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