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Dr Doogie Howser (age 47) and Dr John Trapper (age 51) are eye doctors who both own 50% each of Lazy Eye, Inc (an S-Corp). They have 7 employees and don't own any other businesses. They currently in 2020 sponsor a 401(k) Safe Harbor with a Basic Match. In 2021, they will be selling their business (it's a stock sale) to another entity and the expected proceeds from the sale will be $5 Million. The doctors are expected to stay on as employees for the forseeable future. They want to add a Cash Balance (CB) for 2020 (before the stock sale), so that will be Year 1 of the CB. For 2021, they will amend the Safe Harbor 401(k) to the 3% Non-Elective and it will be year 2 of the CB. In 2021, they expect the Stock Sale to go through. They would like to take advantage of the transition rule under 410(b)(6)(C) for the 401(k) and to let the CB run through 2021 and 2022. At the end of 2022, they would like to terminate the CB. Of course, in the negotiations, the Buyer would most likely have to agree to all of this and it would most likely effect the $5 Million purchase price of the business. For example, lets say it's sold for $4.2 Million instead. By doing this, the doctors would be able to shelter some money away and not have to pay taxes right away on the sale of the business. What challenges or issues do you see with this strategy of adding the CB (assuming the Buyers are ok with this format)? In regards to the CB, do you think the IRS would disapprove of it being used in this fashion? This seems like a great strategy and way to take advantage of the transition rule. Am I missing something?