A deferral is like an exclusion in that it does not have a current tax effect, but it differs in that an exclusion is never subject to taxation, whereas a deferral will be subject to tax at some point of time in the future.

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A deferral allows for a delay in paying taxes, but eventually the deferred amount will be subject to taxation in the future. In contrast, an exclusion is not taxed at any point in time.

A Deferral Is Like an Exclusion in That It Does