Exercise 10-18 (Algorithmic) (L0. 3) On January 2 of the current year, Fenton and Myers form the FM LLC. Their contributions to the LLC are as followi, FM originally intended to hold the inventory as investment property. Myers hold the land as long-term investment property, but FM will use It in its business as a 51231 asset. Within 30 days of formation, FM coliects the receivabies. Two years latec, FM sells the inventory contributed by Fenton for $181,250 cash. After three years, FM selis the land for 5587,250 . FM realized the following income in the current year from these transactions: - of 5 from collecting cash basis accounts receivable. of s from sale of inventory. For the land sale, FM recognizes as These rule exists to ensure that a parther and partnership property between themselves and alter the inherent character of the underlying deferred income, gain, loss, or deduction