Trump accounts, the new §530A children’s IRAs created by the One Big Beautiful Bill Act (P.L. 119-21), began accepting contributions on July 4, 2026. In the first month, more than seven million accounts were opened and roughly $1.5 billion invested, per Treasury figures. Two developments arrived in the same week – the accounts went live, and news on stock contributions was released. One is real, published guidance on which you can rely. The other is a Treasury press release. First though, let’s look at the basics, and then what each development actually says.
What are Trump Accounts?
A Trump account is a new kind of traditional IRA for children. A parent or guardian opens one for any U.S. citizen child under 18 who has a Social Security number, one account per child, using Form 4547 or the portal at trumpaccounts.gov, and children born from 2025 through 2028 receive a one-time $1,000 federal seed contribution.
What sets the account apart is the growth period, which runs until January 1 of the year when the child turns 18. During that window contributions from parents, grandparents, and anyone else are capped at $5,000 a year in the aggregate, indexed after 2027, are made with after-tax dollars and are not deductible, and must be invested in low-cost mutual funds or ETFs that track a broad U.S. equity index. An employer may add up to $2,500 within that cap, excluded from the employee’s income under §128. The $5,000 limit is not reduced by exempt contributions (§530A(c)(2)(B)): the $1,000 federal seed, qualified rollover contributions, and qualified general contributions, the equal per-child gifts a government entity or §501(c)(3) charity makes to a qualified class of children. The Dells’ $250 deposits for qualifying children age 10 and under are the working example; they land on top of the family’s $5,000, not inside it, and are excluded from the child’s income (§139J).
Nothing comes out before the growth period ends. Once it does, the account is treated like any other traditional IRA, with ordinary-income tax on distributions, the 10% penalty on early withdrawals before age 59 1/2 subject to the usual exceptions, required minimum distributions, and the option to roll to a traditional IRA or convert to a Roth. The pitch is a tax-deferred foothold in the market from childhood; whether that beats a 529 or a custodial bank or stock account for a given family is a separate and often more useful conversation.
Tax practitioner planning. For many clients, the answer is probably to use all three investment vehicles for the kids. Each does a different job. The Trump account collects the free money, with tax-deferred growth but ordinary income on the way out; the 529 wins for education because qualified withdrawals come out tax free; the custodial account stays reachable before age 18, taxed at capital gain rates subject to the kiddie tax. Claim the seed and any qualified general contribution first, since opening the account costs nothing and those dollars do not use up the family’s $5,000, and confirm any §128 employer amount before the family’s own year-end contribution, since employer dollars do.
The Gift Tax Question has a Safe Harbor Answer
Start with the problem. A Trump account locks the money up: no distributions are permitted before January 1 of the year the beneficiary turns 18. Under ordinary transfer tax principles, a gift the donee cannot presently enjoy is a gift of a future interest, and a future interest does not qualify for the §2503(b) annual exclusion. Strip away the exclusion and every grandparent who wires $2,000 into a grandchild’s account is looking at a Form 709. Multiply that across more than seven million accounts and you have a compliance mess for taxpayers and the Service alike.
Rev. Proc. 2026-25 (June 29, 2026), released alongside IR-2026-80, fixes this with a safe harbor. If the requirements are met, a contribution to a Trump account is treated as a completed gift that is not a future interest, the annual exclusion applies, and no gift tax return is required.
Five Safe Harbor Requirements
The safe harbor in section 4.02 applies for a calendar year only if all five conditions are satisfied
- The donor is an individual
- The donor’s only taxable gifts for the year are cash contributions (cash, check, money order, or electronic transfer) to one or more Trump accounts, each made before the year the beneficiary turns 18.
- Total gifts to any one beneficiary, counting the Trump account contribution, do not exceed the annual exclusion, $19,000 for 2026.
- The contributions generate no gift or GST tax after the donor’s remaining applicable credit and GST exemption are applied.
- And, disregarding the Trump account contributions, the donor neither is required to file nor files a Form 709 for the year, whether for GST, portability, or any other purpose.
The revenue procedure’s own example (section 6) is worth walking a client through. A donor puts $5,000 in each of three grandchildren’s accounts (A, B, and C) and gives C an additional $13,000 in cash. C’s total is $18,000, under the $19,000 exclusion, so all three contributions qualify and no return is due. Raise the extra gift to $14,500 and C’s total hits $19,500. Requirement three fails, and it fails for everyone: the safe harbor is all or nothing, so the donor reports every contribution that year, including those to A and B, as future interests.
Tax practitioner note. The revenue procedure does not address gift-splitting. It doesn’t need to. If a married couple elects to split gifts, they file a Form 709 to make the election, which trips requirement five and pushes the Trump account contributions back into future-interest territory. Couples who want the safe harbor should think twice before splitting. Two more recommendations. First, requirement three counts every gift to the beneficiary, so a Trump account contribution stacked on a year-end 529 gift or a birthday check can forfeit the safe harbor for every beneficiary; tally aggregate per-donee gifts before funding, not after. Second, a client who will file a Form 709 for any reason, portability or a GST allocation, loses the safe harbor for the year and reports the Trump account contributions as future interests; build that into the engagement.
Stock Donation Announcement
Now the item that has generated more headlines than clarity. On July 2, 2026, Treasury announced that it would accept large philanthropic contributions of publicly traded stock to support Trump accounts (Treasury and IRS to Accept Philanthropic Stock Contributions for Trump Accounts, July 2, 2026). Under the described process, an eligible contributor transfers approved shares to Treasury, and Treasury contributes them to accounts for eligible children consistent with the donor’s instructions and forthcoming guidance.
Stock Pledges Started Immediately
In the days after launch, SpaceX president Gwynne Shotwell and her husband pledged SpaceX shares, reported at roughly $320 million, to accounts for more than two million children through the Invest America program, the first marquee stock gift under the new process. Expect more of these, and expect clients to ask what the tax treatment is.
Where Are the Rules?
As of this writing no published guidance carries it into effect, and the release itself says the stock will be contributed “consistent with the donor’s instructions, applicable law, and Treasury guidance,” pointing to rules that have not yet appeared. Do not cite it as authority.
Look at the Structure
The shares go to Treasury, not into a child’s account directly. That is not an accident. A Trump account is a §408(a) IRA by operation of §530A(a), and §408(a)(1) permits an IRA to accept contributions only in cash, rollovers aside. Nobody, individual or corporation, can hand appreciated SpaceX stock straight into a child’s Trump account. The workaround is to route the shares through Treasury, which takes the stock and then funds accounts after liquidating the shares and reinvesting the proceeds in the eligible investments the growth-period rules require. Treasury confirmed on July 2 that the initial lineup is a low-cost S&P 500 index fund, the State Street SPDR Portfolio S&P 500 ETF, with additional index options to follow. So the child does not end up owning the founder’s stock; the child owns index fund shares bought with the proceeds.
The Appeal for Donors? Appreciated-Property story
A gift is not a sale, so transferring low-basis stock is not a realization event, and the donor sidesteps the capital gains tax, up to 20% plus the 3.8% net investment income tax, that a sell-then-donate approach would trigger. That is real, and it is why the very large donors are interested. Run the Dell Family pledge to see the size of it. The Dell Family funds a $6.25 billion pledge with founder stock carrying a basis near zero, so essentially all of the value is gain. Selling first realizes close to $6.25 billion of gain and roughly $1.5 billion of federal tax at the 23.8% combined rate (ignoring state tax). Gifting the shares realizes nothing, and the charitable deduction is the same $6.25 billion fair market value either way; the deduction is not the differentiator, the avoided tax is. The deduction is also the softer half of the story. Whether §170 allows one for contributions destined for individual children’s accounts depends on the route, a private foundation intermediary (§170(e)(5), 20% of AGI) or a direct transfer to Treasury (§170(c)(1)), and at this scale the AGI percentage limits, with only a five-year carryover, mean most of any deduction expires unused – unless you are the Dell Family. Nonrecognition, not the deduction, is what the very large donors are buying.
What to Watch
For the ordinary client funding a grandchild’s account with cash, Rev. Proc. 2026-25 is the whole story, and it is good news: stay under the annual exclusion, avoid an otherwise-required 709, and skip the gift tax return. For clients with appreciated stock and philanthropic ambitions, counsel patience. The safe harbor is guidance on which you can rely. The stock donation route is a press release, and press releases are not authority. Patience covers the donor’s side of the ledger too. A gift to the United States can qualify for a charitable deduction under §170(c)(1), but whether that treatment applies here, and what appraisal and substantiation rules attach to a large stock transfer to Treasury, are open questions. A client who transfers stock before the rules exist is taking the tax treatment on faith, and that is the advice to give: wait for the guidance, then decide.
Where to learn more
Primary sources for practitioners and clients who want the detail behind the summary above:
- IRC §530A, the statute: uscode.house.gov (Title 26, §530A)
- Notice 2025-68, the foundational IRS guidance on how the accounts work: irs.gov (Notice 2025-68)
- Rev. Proc. 2026-25, the gift tax safe harbor: irs.gov (Rev. Proc. 2026-25)
- Proposed regulations on opening an account (REG-117270-25): federalregister.gov (Trump Accounts)
- Treasury press release on stock contributions: home.treasury.gov (July 2, 2026)
- Consumer overview and enrollment: trumpaccounts.gov
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