A bond had an issue price of $1,000, a redemption price of $1,000, a coupon rate of 8%, and pays semiannual interest on Feb 1 and Aug 1. On Oct 1, 2017, an investor buys the bond for $1,040. The investor sells the bond on May 1, 2019 for $1,050.

a. What is the investors basis in the bond?

b. If the investor is a cash basis taxpayer how much interest income must the investor include in income in 2017, 2018 and 2019?

c. If the investor is an accrual basis taxpayer how much interest income must the investor include in income in 2017, 2018 and 2019?

d. How much capital gain or loss would the investor realize in 2019?