Trump Accounts: Gift Tax Guidance Under Revenue Procedure 2026-25

Established under the One Big Beautiful Bill Act (OBBBA), Trump Accounts offer a new tax-advantaged savings opportunity for children and future generations. In our earlier advisory article, Trump Accounts: A Tax-Advantaged Way to Save for Your Child’s Future, we discussed the account structure, eligibility requirements, and contribution rules. Since then, the IRS has issued Revenue Procedure 2026-25, providing important guidance on the gift tax treatment of contributions to Trump Accounts. This guidance addresses a key area of uncertainty by establishing a safe harbor for certain contributions and clarifying when gift tax reporting may be required. Below, we examine the new guidance and its implications for taxpayers considering contributions to Trump Accounts.

Background: The Gift Tax Question

Before the issuance of Revenue Procedure 2026-25, there was uncertainty regarding the gift tax treatment of contributions to Trump Accounts. Specifically, it was unclear whether these contributions would be treated as complete gifts or as gifts of future interest.

A complete gift occurs when a donor permanently transfers property and relinquishes control over the asset, meaning they can no longer take it back or change who ultimately receives it. Once a gift is complete, its value is generally subject to the federal gift tax rules.

By contrast, a gift of future interest occurs when the recipient’s right to use, possess, or enjoy the property is postponed until a future date or event. Because the recipient does not have a present right to use, possess, or enjoy the property, gifts of future interest generally do not qualify for the annual gift tax exclusion (currently $19,000 per recipient for 2026) and are reported on Form 709. Consequently, the value of the gift will either reduce the donor’s available lifetime gift and estate tax exemption (currently $15 million per individual for 2026) or, if that exemption has already been fully utilized, may result in a gift tax liability.

The uncertainty surrounding Trump Accounts arose because account beneficiaries generally cannot access the funds during the account’s growth period, raising concerns that contributions could be viewed as gifts of future interest. If that treatment applied, contributors would generally be required to file a gift tax return, even if no gift tax was ultimately owed.

Revenue Procedure 2026-25: Safe Harbor

Recognizing that such reporting requirements could create a significant administrative burden for both taxpayers and the IRS, Treasury and the IRS issued Revenue Procedure 2026-25. The guidance establishes a safe harbor under which qualifying contributions to Trump Accounts are treated as completed gifts rather than gifts of future interest. As a result, these contributions are eligible for the annual gift tax exclusion and generally do not require reporting on Form 709.

Safe Harbor Requirements

The safe harbor applies for a calendar year only if the taxpayer satisfies each of the following requirements:

1. The donor is an individual.
2. The donor’s only taxable gifts during the year are cash contributions to one or more Trump Accounts, made before the year in which the applicable account beneficiary turns age 18.
3. The donor’s total gifts during the year to each account beneficiary, including Trump Account contributions and any other gifts made to that beneficiary, do not exceed the IRC Section 2503(b) annual exclusion amount ($19,000 per recipient for 2026).
4. The contributions do not create gift tax or GST tax liability after applying the donor’s remaining applicable credit amount or GST exemption.
5. The donor is not otherwise required to file, and does not file, a gift tax return for any other reason (e.g., GST elections, portability-related issues, or other reportable gifts).

Effect of Safe Harbor

If all of the requirements above are satisfied, contributions receive the following favorable treatment under Revenue Procedure 2026-25:

• The contribution is treated as a complete gift.
• The contribution is not treated as a gift of future interest.
• The annual gift tax exclusion is applicable.
• Form 709 is not required solely because of the Trump Account contributions.

When Safe Harbor Does Not Apply

If a donor’s contributions for a beneficiary exceed the annual gift tax exclusion amount, or if the donor has another Form 709 filing requirement, the safe harbor’s favorable treatment is unavailable. As a result, the contributions must be reported on Form 709 as gifts of future interest. The value of those contributions will reduce the donor’s remaining lifetime gift and estate tax exemption and, if that exemption has already been fully utilized, may result in gift tax liability.

We Are Here to Help

As with any tax-advantaged savings strategy, the benefits and reporting requirements associated with Trump Accounts will vary based on your individual circumstances. If you have questions about how these accounts may fit into your family’s financial, tax, or estate planning objectives, please contact your BMF advisor. We can help you evaluate the planning opportunities, assess any potential gift tax and reporting implications, and ensure your contributions are structured in a way that aligns with your overall goals.