On January 2 of the current year, Fenton and Myers form the FM LLC. Their contributions to the LLC are as follows:

	Adjusted Basis	Fair Market Value
From Fenton:
Cash	$50,000	$50,000
Accounts Receivable	-0-	90,000
Inventory	25,000	60,000
From Myers:
Land	250,000	200,000

FM originally intended to hold the inventory as investment property. Myers held the land as long-term investment property, but FM will use it in its business as a Section 1231 asset.

Within 30 days of formation, FM collects the receivables. Two years later, FM sells the inventory contributed by Fenton for $60,000 cash. After three years, FM sells the land for $200,000. How much income does FM recognize from these transactions, and what is its character?

Please show all work and explain your calculations. Thank you.