1. Lucy Companys pretax accounting income is $66,000 and has the following information:

Compensation expense for incentive stock options is $19,000.

Interest on municipal bonds is $11,000.

Unrealized gain on AFS securities is $1500.

Taxable income is

1. $66,000 + $11,000 + $19,000 - $1500.
2. $66,000 + $11,000 - $19,000 + $1500.
3. $66,000 - $11,000 + $19,000.
4. $66,000 - $11,000 - $19,000 .