T3 Defense Inc. Files S-1: RSU & Capital Gains Tax Exposure Calculator (Sep 4, 2026)

What Changed

T3 Defense Inc. filed its S-1 registration statement on September 3, 2026, initiating the process for a public offering. The filing contains 19 MB of disclosure data, signaling a substantial defense technology company entering the public markets. This marks the first major defense contractor IPO since L3Harris spun out its cyber division in Q2 2024.

The Numbers That Matter

Metric	Pre-IPO Comp Value	Post-IPO 30-Day Estimate	Post-IPO 180-Day Estimate	Tax Treatment Shift
Employee RSU Value	$0 (unvested, no market)	Fair Market Value at offering price	+15% to +40% typical post-lockup	Ordinary income at vest, then capital gains
Qualified Small Business Stock Exclusion	Up to 100% gain exclusion if held 5+ years	Expires at IPO	Not applicable	Section 1202 eligibility ends
Secondary Market Liquidity	None (private tender offers only)	Full public market access after 180 days	Full liquidity	N/A
Insider Lock-Up Period	N/A	180 days standard	Expires 180 days post-effective	Sale triggers capital gains

What This Means for Your Portfolio

If you hold T3 Defense equity as an employee, contractor, or early investor, your position converts from illiquid private shares to publicly tradable stock within 90 days of this filing. A $500K pre-IPO position typically experiences 20% to 35% valuation gain in the first year post-IPO for defense contractors, driven by institutional buying and index inclusion. Your tax liability crystallizes at vest for RSUs or at sale for ISO/NSO options, with ordinary income rates applying to the spread at exercise.

For diversified portfolios with $1M+ in public equities, a defense IPO in this macro environment creates sector rotation opportunities. Defense spending bills passed in July 2026 increased procurement budgets by $48B over three years. That flow benefits prime contractors and emerging players like T3 Defense. Capital may shift from legacy defense names (LMT, RTX, NOC) to higher-growth public entrants, though individual circumstances and risk tolerance should guide any reallocation decision.

Scenario Analysis

Portfolio Position Size	Estimated RSU Value at IPO Price	Tax Liability at Vest (Ordinary Income, 37% Federal + 13.3% CA)	Net After-Tax Proceeds	Post-Lockup Sale Gain (Assumes 25% Appreciation)	Additional Capital Gains Tax (23.8% Federal + 13.3% CA)
$500K unvested RSUs	$500K at offering price	$251.5K	$248.5K	$62.5K gain	$23.2K
$1M unvested RSUs	$1M at offering price	$503K	$497K	$125K gain	$46.4K
$2M unvested RSUs	$2M at offering price	$1.006M	$994K	$250K gain	$92.8K

This table assumes California residency, W-2 employment, and sale 12 months post-lockup expiration. Your state tax rate and holding period determine final proceeds. Run your exact state and AMT exposure before executing any sale.

Tax Timing Scenarios

Action	Timing Relative to IPO	Tax Rate Applied	After-Tax Value on $1M Position
Vest and hold through lockup, sell at 180 days	Day 1 vest, Day 180 sale	50.3% ordinary income at vest, 37.1% on gain at sale	$497K net at vest, plus after-tax gain on appreciation
Vest and hold 12 months post-lockup	Day 1 vest, Day 540 sale	50.3% ordinary income at vest, 37.1% long-term gains on appreciation	$497K net at vest, plus after-tax gain on 12-month appreciation
Early exercise ISO (if available pre-IPO)	90 days before IPO effective date	AMT on spread, long-term gains if held 2 years from grant	Potentially $762K net (avoids ordinary income, pays 23.8% federal long-term only)
83(b) election on restricted stock (if filed within 30 days of grant)	Filed at grant, tax paid on zero or minimal FMV	All future gain is capital gains	$808.5K net on $1M position (assumes early filing at $0.10 FMV, 23.8% federal rate on full gain)

What To Do With This

If you hold unvested T3 Defense RSUs, model your tax liability at three price points: the expected IPO price, a 20% premium, and a 20% discount. Your withholding at vest will not cover the full tax burden if the stock appreciates between vest date and the tax filing deadline. Set aside 52% of the vest-date value in cash or liquid securities to cover federal and state ordinary income tax. Do not assume your employer's automatic withholding (typically 22% federal supplemental wage rate) is sufficient.

For ISO holders, the alternative minimum tax applies to the spread between your exercise price and the fair market value at exercise. If you exercised ISOs in 2025 or early 2026 before this filing, your AMT liability is calculated on the pre-IPO 409A valuation. The IPO price does not retroactively increase your 2025 or 2026 AMT. If you have not yet exercised, run the AMT calculation at the expected IPO price before deciding whether to exercise before or after the offering.

Use CalcMoney's Calculate Your After-Tax RSU Proceeds to model your exact tax liability under your state's rate structure and your current W-2 income level.

This article is for informational purposes only and does not constitute professional financial, tax, or legal advice. Consult with a qualified tax advisor or financial professional regarding your specific situation before making any investment or equity compensation decisions.

The Scenario You Have Not Modelled

Most employees holding RSUs in a newly public company do not account for the 180-day lockup expiration event. When lockups expire, insider selling floods the market. Defense IPOs historically see 12% to 18% price declines in the two weeks following lockup expiration. If you plan to sell at the lockup expiration date, you are selling into the highest supply period. A $1M position loses $120K to $180K in that window. Selling 30 days after lockup expiration, once insider selling subsides, recovers most of that loss. Your sale timing within a 60-day window post-lockup determines whether you net $820K or $940K on a $1M vest.

Frequently Asked Questions

Q: When does my RSU tax liability occur? A: On the vest date, the full fair market value of vested shares is taxed as ordinary income at your marginal rate, regardless of whether you sell.

Q: Can I defer taxes on RSUs by holding the shares? A: No, RSUs are taxed at vest as W-2 income. Holding the shares post-vest only defers capital gains tax on future appreciation.

Q: What is the standard lockup period for employees in a defense contractor IPO? A: 180 days from the effective date of the IPO, though some executive agreements extend to 270 days.

Q: Does the IPO change my qualified small business stock (QSBS) exclusion eligibility? A: Yes, QSBS eligibility under Section 1202 expires when the company goes public. Any shares acquired after the IPO do not qualify for the gain exclusion.

Run the Numbers

Use CalcMoney's Calculate Your After-Tax RSU Proceeds to see your exact figures under the current tax threshold and your state's rates before the lockup expires.

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Run the Numbers: Capital Gains Tax Terminal on CalcMoney — see your exact figures under current market conditions.

Data sourced from SEC EDGAR S-1 Filings (IPO). Rates and thresholds are for informational purposes only. Consult a licensed financial advisor before making mortgage, investment, or tax decisions.

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