In the phrase "ATMはビルの1階にあります" Can i say ATMはビルの1階であります? Someone told me it doesn't sound natural. But i didn't understand why
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You cannot use で in this case. The following page lists several examples of what makes で and に different: https://www.kanshudo.com/grammar/%E3%81%A7_%E3%81%AB
In particular, first section mentions:
For location, で is used to mark the location where an event occurred (ie, a focus on action). に is used to indicate object locations, destinations or directions (in the absence of a specific 'event').
I think this applies well to your sentence.

wip
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In a comment on my (now deleted) answer, @naruto pointed out that ATMはビルの1階です is perfectly reasonable Japanese. This question is a little tricky because the answer to "can で be used with ある in this way?" is really "no" from a pure grammar standpoint, but the sentence works anyway because the copula in Japanese is so flexible. Consequently, "you can't use で here" is not true. – Mindful Apr 21 '20 at 05:34
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Thanks for pointing this out, I did not think about this interpretation. Indeed it does not sound natural to me to use であります for the location of an object (while です does indeed). I can only think of examples using であります to refer to the state of something/someone (like 吾輩は猫である). – wip Apr 21 '20 at 06:33
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1Yeah, I made the exact same mistake. The である really throws you off here. I feel the same way about である sounding very weird, but I'm not entirely sure it actually changes the meaning/is ungrammatical or wrong. It's just very weird. – Mindful Apr 21 '20 at 17:46