IRS Hands Trump Accounts a Gift Tax Safe Harbor
The worry about Trump contributions requiring a Form 709 is eliminated
Trump accounts — the new IRAs for kids created by the One Big Beautiful Bill Act under Section 530A — arrived with a nagging gift tax question. When a parent or grandparent funds a child’s Trump account, is that a completed gift, and if so, does it qualify for the annual gift tax exclusion?
The worry was real. During the “growth period” of the years before the child turns 18 any distributions out of a Trump account are generally locked down. A gift the child can’t touch for years looks a lot like a gift of a future interest, and future interests don’t qualify for the annual exclusion. If that were the answer, every funding contribution would require a gift tax return (Form 709), even for a few thousand dollars per child.
The IRS just put the issue to rest. Revenue Procedure 2026-25 establishes a transfer tax safe harbor for contributions to Trump accounts. Within its scope, the Service will treat a contribution as a completed gift that is not a future interest, and to which the annual per-donee exclusion applies. The payoff is simple: no Form 709 required for those contributions.
Two practical notes. First, the safe harbor applies where the donor’s only taxable gifts for the year are cash contributions to Trump accounts. Second, these contributions still count toward your annual exclusion under Section 2503(b); they qualify for it, but they use part of it. Since Trump account contributions are capped at $5,000 per year, you’re comfortably inside the annual exclusion either way.
Bottom line: fund the kids’ and grandkids’ Trump accounts without sweating a gift tax return.