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Ancestry DNA says:

Predicted relationship: Close Family–1st Cousin
Shared DNA: 1,768 cM across 68 segments

But how does it distinguish between an uncle and a grandparent?

It appears that the shared cMs is the exact same range for both types of relationships!

I know typically grandparents would show up as immediate family but again how is that if the shared cMs is the same range as an uncle/aunt which show up as close family?

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One possible way to distinguish between an uncle and a grandparent is to look at the number of segments shared with the person. Uncles will tend to share more segments (30 to 60). Grandparents will tend to share less (15 to 40). See for example this diagram from a 2012 paper by Henn, et al. and compare the yellow and orange areas.

enter image description here

In your case, this person shares 68 segments, so it is likely an uncle.

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    I may be missing something but why does 68 segments make it more likely to be a grandparent? That doesn't seem to match up with the graph and you said grandparents tend to share less segments (15 to 40). Isn't it more likely to be an uncle based on this data?
    – Harry V. ♦
    Jul 28, 2019 at 15:25
  • Whips. Everything was correct except that last line. I'll edit it.
    – lkessler
    Jul 29, 2019 at 13:30
  • Also, I'm not sure why you have so many segments (68), which seems to be above the 60 or so maximum from the paper.
    – lkessler
    Jul 29, 2019 at 13:34

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