Which deduction is allowed after the regulatory agency compliance notice has been issued?

The correct answer is the deductions for substandard property expenses. In California real estate tax law, when a regulatory agency compliance notice is issued, property owners may be permitted to take deductions related to expenses incurred in bringing a property up to code or into compliance with regulatory standards. These expenses can include repairs or modifications required to meet safety, health, or environmental regulations, which are typical examples of substandard property expenses.

This stands in contrast to the other options. Deductions on personal property typically involve assets that do not pertain to real estate and would not directly relate to compliance efforts for a property in a regulatory situation. General business expenses can be deducted by businesses but don’t specifically address compliance costs related to real estate. Standard deductions for individuals relate to personal tax filings rather than to property-specific compliance issues. Therefore, the targeted nature of substandard property expense deductions is what makes it the correct answer in this context.