I have 2 clients that sold a bread truck distribution route and purchased another one last year. It was required by the bread company that all there routes by bought back and then new ones sold to the operators. No other assets were sold as part of the transactions.

These routes have been treated as amortized intangibles. Should the sale and depreciation recapture be treated as Ordinary income or Capital Gains? Capital Gains results in a significant savings to both of them but I want to make sure that is correct. Thanks in advance for the help. Please let me know if you need other details