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 $175,000 $175,000 Accounts receivable 0 315,000 Inventory 87,500 218,750 From Myers: Land 758,750 708,750 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 1231 asset. Within 30 days of formation, FM collects the receivables. Two years later, FM sells the inventory contributed by Fenton for $218,750 cash. After three years, FM sells the land for $708,750. FM realized the following income in the current year from these transactions: of $ from collecting cash basis accounts receivable. of $ from sale of inventory. For the land sale, FM recognizes a $ property between themselves and alter the inherent These rule exists to ensure that a partner and partnership character of the underlying deferred income, gain, loss, or deduction