Would Sale of Practice be LTCG or Ordinary Income ?

[RWG1950]

I am 70 now and considering full retirement.
My solo practice "book" consists of mostly investment clients but also incudes a fair amount of 1040 tax preparation customers.
I'm an independent contractor with my securities broker/dealer & have been filing one schedule "C" and combining both business segments on it.
Would a sale of my accounts to another financial professional be considered a sale of a capital asset (LTCG) with a zero cost basis or be ordinary income ?
Thanks for comments.

[Rapid Robert]

I'm going to assume that by "accounts", you mean a client list. The client list you propose to sell is classified as goodwill, which is intangible personal property. Assuming a holding period of more than one year, this would be LTCG reported on Form 4797 (Section 1231 tax treatment), with zero basis (assuming you did not purchase the goodwill from someone else).

[ttbtaxes]

I agree except would ask whether you plan to stay on and work with the purchaser. If so, you would need to be paid a fair market value for your services. A consultant who sold his business learned the hard way (Kennedy v Commr, TC Memo 2010-206).

I haven't researched this issue but I would think new clients, taken on in the past 12 months, might be considered a short-term capital gain.