"Paul Barrone is a graduate student at State University. His 10-year-old son, Jamie, lives with him, and Paul is Jamies sole support. Pauls wife died in 2019, and Paul has not remarried. Paul received $320,000 of life insurance proceeds (related to his wifes death) in early 2020 and immediately invested the entire amount as shown below.ItemDate AcquiredCostDate SoldSelling PriceDividends/Interest1,000 shares Blue01/23/20$14,00012/03/20$ 3,500$0400 shares Magenta01/23/2023,000750600 shares Orange01/23/20230,0002,300100 shares Brown06/23/142,80001/23/2014,0000Green bonds01/23/2023,0001,200Gold money market account01/23/2030,000600Paul had $42,000 of taxable graduate assistant earnings from State University and received a $10,000 scholarship. He used $8,000 of the scholarship to pay his tuition and fees for the year and $2,000 for Jamies day care. Jamie attended Little Kids Daycare Center, a state-certified child care facility. Paul received a statement related to the Green bonds saying that there was $45 of original issue discount amortiza-tion during 2020. Paul maintains the receipts for the sales taxes he paid of $735.Paul lives at 1610 Cherry Lane, Bradenton, FL 34212, and his Social Security number is 111-11-1111. Jamies Social Security number is 123-45-6789. The university withheld $2,000 of Federal income tax from Pauls salary. Paul is not itemizing his deductions.Part 1Tax ComputationCompute Pauls lowest tax liability for 2020.Part 2Tax PlanningPaul is concerned because the Green bonds were worth only $18,000 at the end of 2020, $5,000 less than he paid for them. He is an inexperienced investor and wants to know if this $5,000 is deductible. The bonds had original issue discount of $2,000 when he purchased them, and he is curious about how that affects his investment in the bonds. The bonds had 20 years left to maturity when he pur-chased them. Draft a brief letter to Paul explaining how to handle these items. Also prepare a memo for Pauls tax file"