In Year 1, Exeter Trust had taxable interest of $2,000, capital gains of $6,000, and a fiduciary fee of $1,000. The trust instrument allocates capital gains to income. At the end of Year 1 , the fiduciary retains $3,000 and distributes $4,000. What is the distributable net income (DNI) of Exeter Trust for Year 1 ? A. $7,000 B. $7,375 C. $4,000 D. $4,375