On January $1,$ Genola Company purchased investment securities for $$1,000.$ The securities are classified as trading. By December $31,$ the securities had a fair value of $$1,800$ but had not yet been sold. For financial reporting purposes, the $$800$ unrealized gain is reported in the income statement this year. For income tax purposes, the $$800$ unrealized gain is not reported until the securities are sold some time in the future. Before including the $$800$ unrealized gain on the trading securities$,$ income before taxes for the year was $$10,000.$ Assume that there are no other book$-$tax differences. The income tax rate is $35\%$ for the current year but the enacted tax rate for all future years is $42\%.$

What is the income tax expense for the year?

$$4,536$

$$3,500$

$$3,836$

$$3,780$