Client is selling their business. Sale allocation has some being allocated to personal property & inventory as well as goodwill, covenant not to compete and customer list.
I'm not asking about the personal property or inventory. I understand that goodwill is taxed at capital gain rate and the non compete is taxed at ordinary tax rates (but not subject to SE tax).
But what about customer lists? I had thought they were also taxed at capital gain rate but I found something about changes due to the new tax law that was not very clear.
Are the customer lists sold taxed at capital gain rate or ordinary rate?