Can I open a solo 401K after selling business that has employees

[Katzilla]

We're selling our business next year in March (hopefully). We're an S corporation with 14 employees, 4 of whom are full time. After taxes, we hope to net around $500K. I'd like to put as much of this as possible into a retirement fund. Can I open a solo 401K after the sale, since I technically won't have any employees then?

The rules regarding a simple and SEP IRA and past employees is very clear. Can't find anything regarding solo 401ks and past employees.

[Miss Piggy]

So, are you saying your goal is to move $500K that was never in a retirement fund into a retirement fund?

I recently rolled over money from a former employer 401k into my solo 401k, but that was retirement fund money to begin with. Seems like your scenario/goal wouldn't be allowed, but then again, I'm no CPA.

PTF.

[maizefolk]

Are you selling your ownership stake in the business itself? Or is the S corp selling its assets/brand/operations (employment contracts, etc) but you are retaining your shares in the original legal entity?

If the first, I think the answer is certainly no, because you won't have employees, but you also won't have a business anymore either. If the second, it's unfortunately a question for someone with more tax experience than me.

[Katzilla]

It will be an asset sale so we would still own the S Corp shares. I know I can't put in all $500k...the max is around $53k.

Will check with my accountant! Just thought I'd give it a try here. Thanks!