How much income does fm recognize from the transactions

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Reference no: EM133927851

Problem

On January 2 of the current year, Fenton and Myers form FM, LLC. Their contributions to the LLC are as follows. From Fenton: Adj Basis FMV Cash $ 50,000 $ 50,000 Accounts Receivable - 90,000 Inventory 5,000 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 § 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 2 sells the land for $200,000. Get the instant assignment help. How much income does FM recognize from these transactions, and what is its character?

Reference no: EM133927851

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