Trump accounts

(a) In general Subchapter F of chapter 1 is amended by adding at the end the following new part: IX Trump accounts 530A. Trump accounts (a) General rule A Trump account shall be exempt from taxation under this subtitle. Notwithstanding the preceding sentence, such account shall be subject to the taxes imposed by section 511 (relating to imposition of tax on unrelated business income of charitable organizations). (b) Trump account For purposes of this section— (1) In general The term Trump account means a trust created or organized in the United States for the exclusive benefit of an individual and which is designated (in such manner as the Secretary shall prescribe) at the time of the establishment of the trust as a Trump account, but only if the written governing instrument creating the trust meets the following requirements: (A) The individual establishing the account shall provide to the trustee the social security number of such individual and of the account beneficiary. (B) Except in the case of a qualified rollover contribution described in subsection (e), no contribution will be accepted— (i) before January 1, 2026, (ii) unless it is in cash, (iii) unless the account beneficiary has not attained age 18, and (iv) if such contribution would result in aggregate contributions for the taxable year exceeding the contribution limit specified in subsection (c)(1). (C) No distribution (other than a distribution of a qualified rollover contribution) will be allowed— (i) before the date on which the account beneficiary attains age 18, or (ii) in the case of such an account the account beneficiary of which has not attained age 25, if the aggregate distributions from such account exceeds the amount that is ½ the cash equivalent value of the account on the date on which the account beneficiary attains age 18. (D) The account beneficiary has not attained age 8 on the date of the establishment of the account. (E) The trustee is a bank (as defined in section 408(n)) or another person who demonstrates to the satisfaction of the Secretary that the manner in which that person will administer the trust will be consistent with the requirements of this section or who has so demonstrated with respect to any individual retirement plan. (F) The interest of an individual in the balance of his account is nonforfeitable. (G) The assets of the trust shall not be commingled with other property except in a common trust fund or common investment fund. (H) No part of the trust funds will be invested in any asset other than eligible investments. (2) Eligible investments The term eligible investments means stock of a regulated investment company (within the meaning of section 851) which— (A) tracks a well-established index of United States equities (or which invests in an equivalent diversified portfolio of United States equities), (B) does not use leverage, (C) minimizes fees and expenses, and (D) meets such other criteria as the Secretary determines appropriate for purposes of this section. (3) Account beneficiary The term account beneficiary means the individual on whose behalf the Trump account was established. (c) Treatment of contributions (1) Contribution limit The contribution limit for any taxable year is $5,000. (2) Contributions from tax exempt sources and rollover contributions The amount contributed to a Trump account for purposes of paragraph (1) shall be determined without regard to— (A) a qualified rollover contribution, (B) any contribution from the Federal Government or any State, local, or tribal government, or (C) any contribution made through the program established under subsection (l). (3) Cost-of-living adjustment (A) In general In the case of any taxable year beginning in a calendar year after 2026, the $5,000 amount under paragraph (1) shall be increased by an amount equal to— (i) such dollar amount, multiplied by (ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year, determined by substituting calendar year 2025 for calendar year 2016 in subparagraph (A)(ii) thereof. (B) Rounding If any increase under subparagraph (A) is not a multiple of $100, such amount shall be rounded to the next lower multiple of $100. (d) Distributions (1) Amounts allocable to investment in the contract A distribution from a Trump account of an amount allocable to the investment in the contract shall not be includible in the gross income of the distributee. (2) Amounts allocable to income on the contract used for qualified expenses A distribution from a Trump account of an amount allocable to income on the contract and which is used exclusively to pay for qualified expenses shall be includible in net capital gain of the distributee under section 1(h)(12). (3) Amounts includible in gross income Any distribution from a Trump account which is not described in paragraph (1) or (2) shall be includible in the gross income of the distributee. (4) Qualified expenses For purposes of this subsection, the term qualified expenses means any of the following expenses paid or incurred for the benefit of the account beneficiary: (A) Qualified higher education expenses (as defined in section 529(e)(3)) determined without regard to section 529(c)(7). (B) Qualified post-secondary credentialing expenses (as defined in section 529(f)). (C) Under regulations provided by the Secretary, amounts paid or incurred with respect to any small businesses for which the beneficiary has obtained any small business loan, small farm loan, or similar loan. (D) Any amount used for the purchase (as defined in section 36(c)(3)) of the principal residence (as used in section 121) of the account beneficiary if such account beneficiary is a first-time homebuyer (as defined in section 36(c)(1)) with respect to such purchase. (5) Exceptions Paragraphs (2) and (3) shall not apply to any distribution which is a qualified rollover contribution. (6) Additional tax on certain distributions In the case of a distributee who has not attained age 30, the tax imposed by this chapter on the account beneficiary for any taxable year in which there is a distribution from a Trump account of such beneficiary which is includible in gross income under paragraph (3) shall be increased by 10 percent of the amount which is so includible. (e) Qualified rollover contribution For purposes of this section, the term qualified rollover contribution means an amount which is paid in a direct trustee-to-trustee transfer from a Trump account maintained for the benefit of the account beneficiary to a Trump account maintained for such beneficiary. (f) Treatment after death of account beneficiary Rules similar to the rules of section 223(f)(8) shall apply for purposes of this section. (g) Determinations of aggregate distributions and investment in contract in the case of certain rollover contributions In the case of a qualified rollover contribution which is described in subsection (e)(2), any determination required under this section of the amount of the investment of the contract or of aggregate distributions from the Trump account shall be determined with respect to the aggregate of such amounts for all Trump accounts of the same account beneficiary. (h) Custodial accounts For purposes of this section, a custodial account shall be treated as a trust under this section if— (1) the custodial account would, except for the fact that it is not a trust, constitute a trust which meets the requirements of subsection (b)(1), and (2) the assets of such account are held by a bank (as defined in section 408(n)) or another person who demonstrates, to the satisfaction of the Secretary, that the manner in which he will administer the account will be consistent with the requirements of this section. For purposes of this title, in the case of a custodial account treated as a trust by reason of the preceding sentence, the person holding the assets of such account shall be treated as the trustee thereof. (i) Termination (1) Age 31 Upon the date on which the account beneficiary attains age 31, a Trump account shall cease to be a Trump account and the amount in such account shall be treated as distributed for purposes of subsection (d). (2) Multiple accounts of one beneficiary (A) In general In the case of any duplicate Trump account of any account beneficiary other than a Trump account which is established by the deposit through a qualified rollover contribution of the entire amount of another Trump account of the account beneficiary— (i) such duplicate Trump account shall cease to be a Trump account and the amount in such account shall be treated as distributed for purposes of subsection (d), and (ii) there is imposed an excise tax on the account beneficiary in an amount equal to so much of cash value of the account as is allocable to income on the contract. (B) Withholding requirement In the case of an account terminated under subparagraph (A), the trustee shall deduct and withhold upon the amount to be distributed the amount in excess described in subparagraph (A)(ii). (C) Notification The Secretary, upon determining that a duplicate account exists, shall provide a notice to the account beneficiary of such duplicate account (and the account custodian, in the case of a custodial account) and to each trustee of any Trump account of the account beneficiary of such duplicate account which identifies each Trump account of such beneficiary and the trustee of each such account. (D) Duplicate account For purposes of this paragraph, the term duplicate account means— (i) in the case of an account beneficiary for the benefit of whom an account was established by the Secretary under section 6434, any other Trump account of such account beneficiary, or (ii) in the case of any other account beneficiary, any Trump account established after the first Trump account established for the benefit of such account beneficiary. (j) Investment in the contract For purposes of this section, rules similar to the rules applied to a qualified tuition program (as defined in section 529(b)) under section 72(e)(9) shall apply for purposes of determining the investment in the contract, except that such amount shall be determined without regard to any contribution which is described in subsection (c)(2). (k) Reports The trustee of a Trump account shall make such reports regarding such account to the Secretary and to the beneficiary of the account with respect to contributions, distributions, the amount of investment in the contract, and such other matters as the Secretary may require. The reports required by this subsection shall be filed at such time and in such manner and furnished to such individuals at such time and in such manner as may be required. (l) Contributions to predominately unrelated children The Secretary shall establish a program through which contributions may be made to the Trump accounts of a large group of account beneficiaries if— (1) the contribution is made by any person described in any paragraph of section 501(c) and exempt from taxation under section 501(a), (2) such accounts are selected on the basis of the location of the residence of the account beneficiaries, the school district in which such beneficiaries attend school, or another basis the Secretary determines appropriate, and (3) all individuals who are account beneficiaries of such an account who meet the selected criteria receive an equal portion of the contribution.. (b) Distribution taxed at same rate as net capital gains Section 1(h) is amended by adding at the end the following new paragraph: (12) Distributions from Trump account taxed as net capital gain For purposes of this subsection, the term net capital gain means the net capital gain (determined without regard to this paragraph) increased by the amount includible in net capital gain under this paragraph by reason of section 530A(d)(2).. (c) Tax on excess contributions (1) In general Section 4973(a) is amended by striking or at the end of paragraph (5), by inserting or at the end of paragraph (6), and by inserting after paragraph (6) the following new paragraph: (7) a Trump account (as defined in section 530A(b)),. (2) Excess contribution Section 4973 is amended by adding at the end the following new subsection: (i) Excess contributions to a Trump account For purposes of this section, in the case of Trump accounts (within the meaning of section 530A), the term excess contributions means the sum of— (1) the amount by which the amount contributed for the calendar year to such account (other than qualified rollover contributions (as defined in section 530A(e))) exceeds the contribution limit under section 530A(c)(1) (determined without regard to contributions described in section 530A(c)(2)), and (2) the amount determined under this subsection for the preceding calendar year, reduced by the excess (if any) of the maximum amount allowable as a contribution under section 530A(c)(1) (as so determined) for the calendar year over the amount contributed to the account for the calendar year (other than qualified rollover contributions (as so defined)).. (d) Disclosure of return information to facilitate certain contributions Section 6103(l) is amended by adding at the end the following new paragraph: (23) Disclosure of return information to enable certain contributions to Trump accounts Upon written request signed by the head of the bureau or office of the Department of the Treasury requesting the inspection or disclosure, the Secretary may disclose the following return information with respect to a Trump account (as defined in section 503A(b)) to officers and employees of such bureau or office to the extent that such disclosure is necessary to carry out section 530A(l): (A) Information necessary to identify the account holders in a particular class of beneficiaries identified by a donor as the intended recipients. (B) The name, address, and social security number of a beneficiary. (C) The account custodian and the address of such custodian. (D) The account number. (E) The routing number. (F) To the extent determined by the Secretary in regulations, such other return information as the Secretary determines necessary to ensure proper routing of funds Return information disclosed under this paragraph may only be used to identify account holders in a particular class of beneficiaries or for the proper routing of funds and may not be redisclosed by the Secretary.. (e) Failure to provide reports on Trump accounts Section 6693(a)(2) is amended by striking and at the end of subparagraph (E), by striking the period at the end of subparagraph (F) and inserting, and, and by adding at the end the following new subparagraph: (G) section 530A(h) (relating to Trump accounts).. (f) Conforming amendment The table of parts for subchapter F of chapter 1 is amended by adding at the end the following new item: Part IX. Trump accounts. (g) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2024.