Question: 1. Briefly explain the difference between tax deductions, exclusions, and credits. How are they similar? How are they different? Use examples of each to illustrate

1. Briefly explain the difference between tax deductions, exclusions, and credits. How are they similar? How are they different? Use examples of each to illustrate your point.

2. Jan is considering a career in real estate. She has the opportunity to invest in an apartment complex with a group of friends, but has not yet determined how involved she will be in management. Briefly explain to Jan how rental activity is treated on a tax return, making sure to explain how level of involvement will influence the treatment of the activity on her return. You can assume her AGI before rental income is $80,000.

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