Steve Gifted Shares in a Public Corporation Which Cost $10,000

Steve gifted shares in a public corporation which cost $10,000 to his fifteen year old son, Simon. During the year, Simon received $500 in dividends. Simon then sold the shares for $12,000. Which of the following tax situations is true for Steve and Simon?

A) Simon will have to claim the dividends and capital gain on his tax return.
B) Simon will have to claim the dividends on his tax return and Steve will have to recognize the capital gain on his tax return.
C) Steve will have to claim the dividends and a capital gain on his tax return.
D) Steve will have to claim the dividends on his tax return and Simon will have to recognize the capital gain on his tax return.