(Dan Kitwood, Getty Images)

AIG has been selling off bits and pieces of its once-great empire in an effort to chip away at what it owes the American taxpayer and the Federal Reserve. Until it repays that debt, the company will remain in the awkward position of having the government as its largest shareholder.

But press accounts have often been vague when putting a price tag on AIG’s bailout. We decided to parse the complicated transactions and lay out how much AIG would have to repay to get out from under the government’s thumb.

The most frequently used figure (including by us) is around $180 billion, but that figure is the maximum that’s been offered by the government. Combined, the Federal Reserve and Treasury Department have actually extended only about $134 billion to bail out AIG through a mixture of loans, purchases of toxic assets, and purchases of preferred stock (see the table below for a breakdown).

The government hasn’t handed over the full $180 billion because AIG has yet to fully tap two “lines of credit,” which are like credit cards with really, really big credit limits. One line of credit is from Treasury (with a $30 billion limit) and the other is from the Fed ($60 billion). The company has drawn only $1.5 billion from the Treasury, and $43.5 billion from the Fed, for a subtotal of $45 billion.

Take away the money in the credit line AIG has yet to tap, and you’re left with the total government outlay of $134 billion. But AIG does not actually have to repay all that. Instead it would have to shell out $85 billion, smaller because it excludes two large purchases by the Federal Reserve of toxic assets that were crippling AIG. The Federal Reserve (through a specially created legal entity) owns those assets outright.

So, what about that $85 billion? That’s composed of $40 billion in taxpayer dollars the Treasury Department used to buy preferred shares in AIG, plus money AIG has drawn from the two credit lines: $1.5 billion more from the Treasury and $43.5 billion from the Fed.

AIG recently announced one way to cut down on what it owes the Fed: by giving the Fed a $25 billion stake in two of its crown jewel subsidiaries. According to an AIG spokeswoman, Christina Pretto, the deal, announced last month, would reduce the company’s outstanding debt with the Fed from $43.5 billion down to less than $18 billion.

If that deal were to go through, AIG’s total debt would fall to about $59 billion, a much smaller sum than is typically used to describe AIG’s troubles. That’s not to minimize the complexity of AIG’s entanglement with the government, which in addition to all these billions has also received a nearly 80 percent equity stake in AIG. But we hope that provides some clarity on the true extent of the AIG bailout — at least the bailout so far.

The AIG Bailout (in billions)

Sources: Federal Reserve, Treasury Department, AIG.