Wealthy Donors Could Double Tax Breaks Using Trump Accounts for Stock Gifts

White House and Treasury officials are discussing whether to let Trump Accounts accept direct stock donations, a change that would hand wealthy donors two tax breaks at once: avoidance of capital gains taxes on appreciated shares and a charitable deduction based on the stock’s full market value.

No legislation has passed, and no formal proposal has been introduced. Treasury Secretary Scott Bessent is overseeing the rollout of the child savings program, while IRS Notice 2025-68, issued on Dec. 2, 2025, keeps contributions cash-only for now.

The tax appeal is straightforward. A donor who gives appreciated stock directly, instead of selling it first and donating cash, avoids the tax bill that normally follows a sale and still deducts the current fair market value of the shares.

Under current IRS rules for appreciated stock donations to qualified charities, top earners can bypass a combined federal long-term capital gains tax rate of up to 23.8% and claim a deduction for the stock’s current market value. Ben Henry-Moreland, a certified financial planner at Kitces.com, cited those rules in analyzing how the same structure would work if Congress expands the Trump Accounts rules to permit noncash gifts.

Congress created the accounts under the One Big Beautiful Bill Act as tax-deferred IRAs for children under 18 under Section 530A. Private contributions open on July 4, 2026, the country’s 250th anniversary, through trumpaccounts.gov or on 2025 tax returns using Form 4547.

All U.S. citizen children under 18 can hold the accounts. The federal government provides a $1,000 seed deposit for children born from Jan. 1, 2025 through Dec. 31, 2028, with 1.2 million eligible as of May 2026 and roughly 5–5.5 million expected to enroll in total.

Current law limits annual aggregate contributions from individuals and employers to $5,000, with employers capped at $2,500 on a pre-tax basis. Government and charitable contributions face no cap, and the contribution limits rise with inflation after 2027.

Money stays locked up until Jan. 1 of the year the child turns 18. After that, traditional IRA rules apply.

If Congress allows stock transfers, the donated shares would not remain in the child’s account as individual securities. An intermediary such as BNY Mellon or Robinhood would sell the stock and convert it to cash for investment in low-cost index funds tied to the S&P 500 or broader U.S. equities, with at least 90% U.S. exposure and an expense ratio below 0.1%.

That structure addresses one concern inside Treasury: volatility. Officials have debated the risk of letting children’s accounts hold single-company stock directly rather than broad index funds, which spread risk across the market.

Henry-Moreland’s example shows why the proposal has drawn attention from large donors. A billionaire who gives $1 billion in appreciated stock would avoid selling it first, sidestepping about $238 million in capital gains taxes at a 23.8% rate, while also claiming a $1 billion deduction.

The result is a larger net contribution than a cash gift built from selling the same asset. A donor who sells first must pay tax before giving; a donor who transfers shares directly does not.

Brad Gerstner, chief executive of Altimeter Capital, backed the idea on X on May 6, 2026, saying businesses and philanthropists could donate shares to increase funding for the accounts. A White House official also said the administration is “open” to the idea as part of a broader wealth-building push.

Those discussions come as the administration and private firms prepare the program’s opening. BNY Mellon is serving as the financial agent, and Robinhood will act as brokerage platform and trustee.

Several large pledges are already attached to the initiative. Michael and Susan Dell committed $6.25 billion for 25 million children, while Ray and Barbara Dalio pledged $250 each for 300,000 children in Connecticut. JPMorgan Chase, BlackRock and Intel also made corporate commitments.

Allowing stock donations would tilt the economics even more toward donors who hold large unrealized gains. A family contributing cash from wages gets the account’s growth potential; a billionaire contributing appreciated shares gets that plus relief from capital gains taxes and a deduction tied to the stock’s full value.

Supporters see that asymmetry as a way to attract much bigger sums into the accounts. The program already permits unlimited contributions from government and charities, so changing the contribution type from cash to stock could open a new channel for foundations, corporations and wealthy individuals sitting on heavily appreciated holdings.

Critics question whether the accounts need another tax preference when other savings vehicles already exist. Adam Michel of the Cato Institute said the accounts offer fewer benefits and more restrictions than 529 plans and Roth IRAs.

Spencer Williams, chief executive of Retirement Clearinghouse, warned that the funding rules may already confuse families because different contributors receive different tax treatment. Individual contributions are post-tax, while employer and charitable contributions can receive pre-tax treatment, and stock donations would add another layer to that mix.

That split matters to how the accounts are marketed and understood. Parents making small yearly deposits face one set of tax consequences, employers offering payroll-based support face another, and charities or large donors using appreciated shares would face yet another if Congress changes the law.

The policy debate also sits at the center of a broader question about who benefits most from the program’s design. Trump Accounts were promoted as a universal wealth-building tool for children, but the stock-donation proposal would deliver the largest tax rewards to donors with large appreciated portfolios, not to families making ordinary annual deposits.

Even without the change, the program’s funding structure already separates private and public money. Individuals and employers face annual limits, while government and charitable money does not, creating room for very large outside infusions into accounts that begin with the same $1,000 federal seed deposit.

No action has changed the rules as of May 14, 2026. Congress must amend the law before custodians can accept noncash contributions, and until that happens, Trump Accounts remain cash-only, with their first private deposits scheduled to begin on July 4, 2026.

If lawmakers approve the switch, the mechanics are already clear enough to sketch the winners. Donors with appreciated stock would avoid a tax hit, claim a charitable deduction on the full value, and send more money into the accounts than a cash sale would allow.