On January 1, Year 2, Kinney, Inc., an electing S corporation, has $4,000 of AEP and a balance of $10,000 in AAA. Kinney has two shareholders, Erin and Maine, each of whom owns 500 shares of Kinneys stock. Kinneys Year 2 taxable income is $5,000. Kinney distributes $6,000 to each shareholder on February 1, Year 2, and distributes another $3,000 to each shareholder on September 1. How is Erin taxed on this distribution?

A.	$500 dividend income.

B.	$1,000 dividend income.

C.	$1,500 dividend income.

D.	$3,000 dividend income.

E.	None of the above.