Brett,a Single Taxpayer with No Dependents,earns Salary of $500,000 and Dividend

question 147

Essay

Brett,a single taxpayer with no dependents,earns salary of $500,000 and dividend income of $50,000.Itemized deductions for home mortgage interest,property taxes and charitable contributions total $35,000.Calculate Brett's total federal income tax liability for 2017.

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Definitions:

Long-run Average Total Cost

The per-unit cost of production when all inputs, including those typically fixed, can be varied, showing economies of scale if downward sloping.

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, as the average cost of production falls with increasing output.

Constant Returns to Scale

A situation in production where increasing the input of all resources by any proportion yields an increase in output by the same proportion.

Long-run Average Total Cost

The per unit cost of production when all inputs, including capital, are variable, assuming optimal efficiency.