By Kevin Matz, CPA, JD, LLM

On Jun. 29, 2026, the IRS released Rev. Proc. 2026-25, which provides a transfer tax safe harbor for certain—but not all—contributions to Trump accounts. Where the safe harbor contained in section 4 of this revenue procedure is available, it generally cures the problem that certain commentators (including the American College of Trust and Estate Counsel (ACTEC)) had previously identified in its comment letters that contributions to Trump accounts are properly considered completed gifts of future interests in property that would not qualify for the gift and generation-skipping transfer (GST) tax annual exclusions. Instead, for taxpayers within the scope of section 4 of this revenue procedure, contributions to Trump accounts will be treated as completed gifts that are not future interests in property, and to which the gift and GST tax annual exclusions apply, thereby dispensing with the need for such taxpayers to file a gift tax return.  This is undeniably helpful for those taxpayers within the scope of this safe harbor (and also to the IRS—which would otherwise be deluged with potentially several million gift tax returns each year as a result of Trump account contributions). However, it provides disparate treatment concerning taxable gifts for all other taxpayers, and requires donors to Trump accounts that do not come within the safe harbor to file a gift tax return to report the contribution to the Trump account as a taxable gift (and potentially also as a transfer subject to GST tax).

Trump Accounts

The One Big Beautiful Bill Act (P.L. 119-21) (the Act), enacted on Jul. 4, 2025, created “Trump accounts” via a new IRC section 530A. These new tax-advantaged savings accounts are broadly modeled after traditional individual retirement accounts (IRA) and aim to encourage long-term savings and investment on behalf of American children who have not attained age 18 before the close of the calendar year in which an election to open an initial Trump account is made. 

Importantly, the account beneficiary for whom a Trump account is established is subject to significant restrictions on the ability to receive distributions from the Trump account during the “growth period”—which is the period ending before January 1 of the calendar year in which the account beneficiary attains age 18. During the growth period, no distributions may be made from a Trump account, except for qualified rollover contributions, a qualified ABLE rollover contribution, distributions of excess contributions, and distributions upon the death of the account beneficiary. 

Relevant Tax Rules

Section 530A is silent concerning the gift and GST tax treatment of a contribution to a Trump account. As the revenue procedure acknowledges, this poses a problem for gift and GST tax purposes. 

Absent an exclusion, a gift tax is imposed on the transfer of property by gift. Exclusions from gift tax treatment are described in section 2503. In particular, section 2503(b) describes the annual exclusion, which is $10,000 per donor per donee as adjusted for inflation. For gifts made in 2026, the annual exclusion is $19,000 per donor per donee. The annual exclusion applies only to gifts that are gifts of “a present interest in property.” Section 2503(b)(1).

In addition, absent an exception, a GST tax is imposed on the transfer of property by gift to a skip person (generally a person assigned two or more generations below the transferor such as a grandchild). Section 2642(c) provides an exception from the GST tax for gifts that are excludable gifts under section 2503(b). For gifts made in 2026, the amount potentially protected from the GST tax is $19,000 per donor per donee.^[1]

The revenue procedure further observes that gifts of a future interest in property are required to be reported on a gift tax return because they are not eligible for the gift tax annual exclusion.  According to the revenue procedure, in FY 2025, the IRS received approximately 300,000 Form 709 gift tax returns. In contrast, because nearly 6,000,000 elections to open Trump accounts have already been received, the number of gift tax returns filed annually could be expected to increase from roughly 300,000 to several million. 

The Revenue Procedure’s Safe Harbor

Against this backdrop, Revenue Procedure 2026-25 provides a safe harbor for taxpayers within the scope of section 4 of this revenue procedure. To come within the safe harbor, all of the following requirements must be met for a particular calendar year:

1) The taxpayer is an individual;

2) The only taxable gifts made by the taxpayer during the calendar year are cash contributions (in the form of cash, check, money order, or electronic funds transfer) to one or more Trump accounts, each made before the calendar year in which the account beneficiary attains age 18;

3) The taxpayer’s total gifts during the calendar year to each individual who is an account beneficiary, including contributions to that account beneficiary’s Trump account, do not exceed the annual exclusion amount under section 2503(b) ($19,000 for 2026);

4) Such contributions to Trump accounts made during the calendar year do not generate for that calendar year either a gift or GST tax liability, after application of the taxpayer’s remaining applicable credit amount against the gift tax, or remaining GST tax exemption; and

5) Disregarding the Trump account contributions described in item (2) above, no gift tax return is required to be filed, and no gift tax return is otherwise filed, for that calendar year by or on behalf of the taxpayer, whether for GST tax, portability, or other purposes.

If each of the foregoing requirements is satisfied, then each Trump account contribution made by the taxpayer during that calendar year will be treated as a completed gift to the account beneficiary that is not a future interest in property, and to which the annual exclusion applies for purposes of gift tax, GST tax, and gift tax reporting. As a result, taxpayers within the scope of section 4 of this revenue procedure will not be required to file a gift tax return reporting such contributions.

In contrast, the revenue procedure provides that falling outside the safe harbor of section 4 will trigger gift tax (and potentially GST tax) reporting obligations on a gift tax return. Section 6 of the revenue procedure illustrates this with the following example: 

In calendar year 2026 individual donor (Taxpayer) contributes $5,000 cash to each of three Trump accounts established for account beneficiaries A, B, and C, and makes an additional gift to C of $13,000 cash. Taxpayer makes no other gifts during the calendar year and is not required to, and does not, file a gift tax return for the calendar year for any other purpose.

The $15,000 in contributions to Trump accounts do not generate a gift or GST tax liability, after taking into consideration the Taxpayer’s remaining lifetime applicable exclusion amount or remaining GST exemption. Under these facts, the requirements of section 4.02 of this revenue procedure are met and Taxpayer’s 2026 Trump account contributions will be treated as completed gifts to A, B, and C that are not future interests in property. If instead Taxpayer’s cash gift to C in 2026 is $14,500, the requirement in section 4.02(3) of this revenue procedure is not met because Taxpayer’s total gifts to C during calendar year 2026 exceed the annual per-donee gift tax exclusion under section 2503(b) of $19,000. Accordingly, Taxpayer must file a gift tax return for calendar year 2026 reporting all 2026 gifts, and must report the Trump account contributions to A, B, and C as gifts of future interests.

Presumably, Treasury and the IRS did not believe that they possessed the authority to grant additional relief based on the statutory language of section 530A. Congress should therefore consider a technical correction to section 530A so that this disparate treatment can be eliminated.

Kevin Matz, CPA, JD, LLM, is a private clients, trusts and estates partner in the New York City office of the law firm of ArentFox Schiff LLP, where he co-chairs its Family Office Group. Kevin is the immediate past president of the New York State Society of CPAs (NYCPA). He is a past chair of both the NYCPA Estate Planning Committee and the NYCPA Trust and Estate Administration Committee, and is a former president of the Foundation for Accounting Education (FAE). 

^[1] In its comment letters to both various congressional committees and the US Department of the Treasury (“Treasury”) dated November 10, 2025, ACTEC recommended that language similar to that in section 529(c)(2)(A)(i) be added to section 530A as a technical correction to provide that, for purposes of chapters 12 and 13 of the Internal Revenue Code, contributions to Trump accounts “shall be treated as a completed gift to such beneficiary which is not a future interest in property.” Alternatively, Treasury and the IRS could issue guidance under section 530A providing that, for purposes of chapters 12 and 13, contributions to Trump accounts “shall be treated as a completed gift to such beneficiary which is not a future interest in property.”  See https://www.actec.org/wp-content/uploads/2025/11/25.11.10_JCT_SFC_HWM_ACTEC_Comments_OBBBA.pdf