Property Valuation
In Vermont, 'accrued depreciation' as used in the cost approach represents:
AThe amount of depreciation claimed for tax purposes
BThe total loss in value from all causes (physical deterioration, functional obsolescence, external obsolescence) since the improvement was built✓ Correct
CThe building's remaining economic life
DThe annual depreciation expense
Explanation
In the cost approach, accrued depreciation is the total loss in value of improvements from all causes since construction: physical deterioration (wear and tear), functional obsolescence (outdated features), and external/economic obsolescence (neighborhood factors). It is subtracted from replacement cost to arrive at depreciated value of improvements.
Related Vermont Property Valuation Questions
- In Vermont, which factor most strongly differentiates property values between ski resort communities (like Stowe) and non-resort rural areas?
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