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:

Cash 200,000 200,000

Within 30 days of formation, FM collects the receivables and sells the inventory for $60,000 cash. How much income does FM recognize from these transactions, and what is its character?