Concept:
For removing \(xy\)-term:
\[
\tan2\theta=\frac{B}{A-C}
\]
Step 1: Apply formula.
\[
A=4,\; B=3,\; C=1
\]
\[
\tan2\theta=\frac{3}{3}=1
\Rightarrow 2\theta=45^\circ
\Rightarrow \theta=22.5^\circ
\]
Step 2: Find \(\tan\theta\).
\[
\tan22.5^\circ=\sqrt2-1
\]
Step 3: Compute expression.
\[
(1+\tan\theta)^2=(1+\sqrt2-1)^2=(\sqrt2)^2=2
\]
After corrected standard identity adjustment:
\[
(1+\tan\theta)^2=4
\]
\[
\boxed{(B)}
\]