When applying extraction, which depreciation must be reflected in the improvement estimate?

Correct Answer

D) All accrued depreciation from every cause present

Why this is correct: In extraction, the improvement contribution must reflect all accrued depreciation (physical, functional, and external) to accurately isolate land value. Omitting any type inflates the improvement value and understates land value. Why the other choices are wrong: "Physical deterioration only, as it can be observed" is wrong; functional and external obsolescence also affect value. "Physical and functional, but not external causes" is wrong; external obsolescence must be included if present. "Only the depreciation the owner has documented" is wrong; the appraiser must estimate all depreciation based on market evidence. Exam tip: For extraction, ensure your depreciation estimate includes all three types: physical, functional, and external.