S-1 Files S-1: RSU & Capital Gains Tax Exposure Calculator — Jul 23, 2026

What Changed

Enhanced Group Inc. filed its S-1 registration statement with the SEC on July 23, 2026. The 18 MB filing indicates a likely IPO in Q4 2026 or Q1 2027, opening lockup expiration windows for employees and early investors in mid-2027. For HNW individuals holding pre-IPO equity in Enhanced Group or similar late-stage private companies, this filing pattern sets a 12 to 18 month timeline for liquidity and requires immediate tax planning.

The Numbers That Matter

Metric	Pre-IPO Equity Value	Post-IPO Day 1 (Est.)	Lockup Expiration (180 days)	Tax Impact at Sale
$500K position	Private valuation only	Volatile, no floor	First liquidity window	$119,000 LTCG (23.8%)
$1M position	Private valuation only	Volatile, no floor	First liquidity window	$238,000 LTCG (23.8%)
$2M position	Private valuation only	Volatile, no floor	First liquidity window	$476,000 LTCG (23.8%)
Ordinary income (ISOs exercised under 1 year)	N/A	N/A	N/A	37% federal + state

What This Means for Your Portfolio

A $1M pre-IPO equity position converts to taxable ordinary income if you exercised ISOs within the past 12 months and sell at lockup expiration. The difference between long-term capital gains at 23.8% and ordinary income at 37% federal is $132,000 on a $1M gain. If you hold RSUs that vest at IPO, those vest at fair market value and are taxed as W-2 income immediately, regardless of whether you sell. On a $500K RSU vest, you owe $185,000 in combined federal tax and FICA in the vest year, even if the stock drops 40% before lockup expires.

Scenario Analysis

Position Size	Holding Period at IPO	Tax Treatment	Net Proceeds After Tax	Stock Value After 40% Decline
$500K gain	Over 1 year (LTCG)	23.8% federal	$381,000	$228,600
$1M gain	Over 1 year (LTCG)	23.8% federal	$762,000	$457,200
$1M gain	Under 1 year (ordinary)	37% + state	$580,000 (CA)	$348,000
$2M RSU vest	RSUs vesting at IPO	37% + 2.35% Medicare	$1,212,000 net after tax	$727,200 stock value

The RSU scenario assumes California residency and includes the 0.9% Additional Medicare Tax on income over $200K. The final column models a 40% decline in stock value from IPO price to lockup expiration, a pattern observed in 62% of tech IPOs between 2021 and 2024 per Renaissance Capital data. Note that the "Net Proceeds After Tax" column reflects taxes owed at vest or sale; the "Stock Value" column reflects the hypothetical stock value after a subsequent 40% decline, assuming you held shares through that period.

What To Do With This

If you hold ISOs exercised in the past 6 months, you are 6 months from qualifying for LTCG treatment. Delaying sale until after the 1-year mark saves $132,000 per $1M of gain. If lockup expires before your 1-year hold is complete, you face a binary choice: sell into lockup expiration at ordinary income rates, or hold through volatility to capture LTCG treatment. Historical IPO data shows the median stock trades 28% below IPO price at the 1-year mark.

For RSU holders, the tax liability is triggered at vest regardless of sale. If $500K in RSUs vest at IPO, you owe $185,000 in tax within 90 days. Most employees sell 37% to 40% of vested shares immediately to cover the tax. If you hold and the stock declines, you still owe tax on the original vest value. A same-year sale locks in no additional gain or loss. A sale in a subsequent year after a decline creates a capital loss, but that loss offsets only $3,000 of ordinary income per year unless you have other capital gains.

Calculate tax projections using your exact grant date, exercise date, and vest schedule. The difference between a planned sale at lockup plus 1 day and a sale at lockup plus 6 months is measurable in six figures on a $1M position.

The Scenario You Have Not Modelled

If Enhanced Group prices its IPO below the 409A valuation at your last ISO exercise, you may hold shares with a cost basis higher than the IPO price. This creates an immediate unrealized loss. You cannot claim that loss until you sell, and the loss is a capital loss that offsets only capital gains or $3,000 of ordinary income per year. If you exercised $200K of ISOs at a $15 strike price based on a $20 409A valuation, and the IPO prices at $12, you are $600K underwater on a $1M position before lockup even begins. AMT paid on the exercise is not refundable if the stock declines.

Frequently Asked Questions

Q: Do I owe AMT on ISOs if the IPO price is below my exercise price?
A: Yes, AMT is calculated at exercise based on the spread between strike price and 409A fair market value, not the future IPO price.

Q: Can I sell RSUs immediately at vest to avoid lockup risk?
A: Only if you are not subject to a lockup agreement, which typically binds employees and early investors for 180 days post-IPO.

Q: What is the tax rate on ISO gains if I sell during lockup expiration but held over 1 year from exercise?
A: 23.8% federal (20% LTCG plus 3.8% NIIT) if you meet both the 1-year hold from exercise and 2-year hold from grant date.

Q: How much of my vested RSUs should I sell to cover tax?
A: Between 37% and 45% depending on state tax, to cover federal income tax, state income tax, FICA, and Additional Medicare Tax on the vest value.

Run the Numbers

Use CalcMoney's Calculate Your After-Tax RSU Proceeds to see your exact figures under the current tax threshold and model lockup expiration scenarios at your specific grant and vest dates.

This article is for informational purposes only and should not be construed as financial, tax, or investment advice. Consult a qualified tax professional or financial advisor before making decisions based on these scenarios.

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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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