Joan purchases 100 shares of Coleman Enterprises Inc., a publicly traded company, for $1,000 in January, earns a $10 dividend in March, and sells them in June for $6,000. What effect will this have on her taxes?

A. She will not pay tax on the gain because she purchased the shares with the intention of earning a dividend.

B. She will not pay tax on the gain if she has not yet used up her lifetime capital gains exemption.

C. Her taxable income will be increased by $2,500 plus a grossed-up dividend amount.

D. Her taxable income will be increased by $5,000 plus a grossed-up dividend amount.