Dia and Ry were married on January 1 of last year. Ry has an eight-year-old son, Joe, from his previous marriage. Dia works as a computer programmer at Datafile Incorporated (DI) earning a salary of $96,000. Ryan is self-employed and runs a day care center. The couple reported the following financial information pertaining to their activities during the current year.

1. Dia earned a $96,000 salary for the year.
2. Dia borrowed $12,000 from DI to purchase a car. DI charged her 2 percent interest ($240) on the loan, which Dia paid on December 31. DI would have charged Dia $720 if interest had been calculated at the applicable federal interest rate. Assume that tax avoidance was not a motive for the loan.
3. Ry received $2,000 in alimony and $4,500 in child support payments from his former spouse. They divorced in 2016.
4. Ry won a $900 cash prize at his church-sponsored Bingo game.
5. The couple received $500 of interest from corporate bonds and $250 of interest from a municipal bond. Ry owned these bonds before he married Dia.
6. The couple bought 50 shares of ABC Incorporated stock for $40 per share on July 2. The stock was worth $47 a share on December 31. The stock paid a dividend of $1.00 per share on December 1.
7. Ry's father passed away on April 14. He inherited cash of $50,000 from his father and his baseball card collection, valued at $2,000. As the beneficiary of his father's life insurance policy, Ry also received $150,000.
8. The couple spent a weekend in Atlantic City in November and came home with gross gambling winnings of $1,200.
9. Dia received $400 cash for reaching 10 years of continuous service at DI.
10. Dia was hit and injured by a drunk driver while crossing a street at a crosswalk. she was unable to work for a month. She received $6,000 from her disability insurance. DI paid the premiums for Dia, but it reported the amount of the premiums as compensation to Dia on her year-end W-2.
11. The drunk driver who hit Dia in part (j) was required to pay her $2,000 medical costs, $1,500 for the emotional trauma she suffered from the accident, and $5,000 for punitive damages.
12. For meeting her performance goals this year, Dia was informed on December 27 that she would receive a $5,000 year-end bonus. DI (located in Houston, Texas) mailed Dia's bonus check from its payroll processing center (Tampa, Florida) on December 28. Dia didn't receive the check at home until January 2.
13. Ry is a 10 percent owner of MNO Incorporated, a Subchapter S corporation. The company reported ordinary business income for the year of $92,000. Ry acquired the MNO stock two years ago.
14. Ry's day care business collected $35,000 in revenues. In addition, customers owed him $3,000 at year-end. During the year, Ry spent $5,500 for supplies, $1,500 for utilities, $15,000 for rent, and $500 for miscellaneous expenses. One customer gave him use of their vacation home for a week (worth $2,500) in exchange for Ry allowing their child to attend the day care center free of charge. Ry accounts for his business activities using the cash method of accounting.
15. Dia's employer pays the couple's annual health insurance premiums of $5,500 for a qualified plan.

Required:

1. Assuming the couple file a joint tax return, determine their gross income minus expenses on the day care business (this is called total income on the Form 1040).

3. Assuming the couple live in California, a community property state, and that Dia and Ry file separately, what is Dia's gross income minus expenses on the day care business?