Property Valuation
The effective age of a building is:
AAlways equal to its chronological age
BThe age indicated by the building's condition and utility, which may be less or greater than its actual age✓ Correct
CThe age used for depreciation calculation under IRS rules only
DThe number of years since the last major renovation
Explanation
Effective age reflects the building's apparent condition and utility rather than its actual (chronological) age. A well-maintained 20-year-old building may have an effective age of 10 years, while a poorly maintained 15-year-old building may have an effective age of 25 years. Effective age is used in appraisal to estimate remaining economic life.
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