26 U.S.C. § 530A — Trump accounts

(a) General rule. Unless this section or regulations or guidance established by the Secretary provides otherwise, a Trump account is treated under this title in the same way as an individual retirement account under section 408(a). (b) Trump account. (1) In general. “Trump account” means an individual retirement account, as defined in section 408(a), that is not designated as a Roth IRA and meets these requirements: (A) The account— (i) is created or organized by the Secretary for the exclusive benefit of an eligible individual or that eligible individual’s beneficiaries; or (ii) is created or organized in the United States for the exclusive benefit of an individual who has not reached age 18 before the end of the calendar year, or that individual’s beneficiaries, and is funded by a qualified rollover contribution. (B) The account is designated as a Trump account, in the way the Secretary prescribes, when the account is established. (C) The account’s written governing instrument provides that: (i) no contribution will be accepted before the date 12 months after this section was enacted, or, for a contribution made before the calendar year in which the account beneficiary reaches age 18, if that contribution would make total contributions other than exempt contributions for that calendar year exceed the limit in subsection (c)(2)(A); (ii) except as subsection (d) provides, no distribution will be allowed before the first day of the calendar year in which the account beneficiary reaches age 18; and (iii) before that day, no account funds will be invested in an asset other than an eligible investment. (2) Eligible individual. “Eligible individual” means an individual— (A) who has not reached age 18 before the end of the calendar year in which the election under subparagraph (C) is made; (B) for whom a Social Security number, as section 24(h)(7) defines that term, was issued before the election under subsection (C) is made; and (C) for whom either— (i) the Secretary makes an election under this subparagraph, at a time when the Secretary determines from tax-return information or otherwise that the individual meets subparagraphs (A) and (B), and no earlier election has been made for that individual under clause (ii); or (ii) a person other than the Secretary makes an election under this subparagraph, at the time and in the way the Secretary prescribes, to establish a Trump account, and no earlier election has been made for that individual under clause (i). (3) Eligible investment. (A) In general. “Eligible investment” means a mutual fund or exchange-traded fund that— (i) tracks the returns of a qualified index; (ii) does not use leverage; (iii) has annual fees and expenses of no more than 0.1 percent of the investment’s balance in the fund; and (iv) meets any other criteria the Secretary considers appropriate for this section. (B) Qualified index. “Qualified index” means— (i) the Standard and Poor’s 500 stock market index; or (ii) another index that— (I) consists of equity investments primarily in United States companies; and (II) has regulated futures contracts, as section 1256(g)(1) defines that term, traded on a qualified board or exchange, as section 1256(g)(7) defines that term. “Qualified index” does not include an industry-specific or sector-specific index, but may include an index based on market capitalization. (4) Account beneficiary. “Account beneficiary” means the individual on whose behalf the Trump account was established. (c) Treatment of contributions. (1) No deduction allowed. Section 219 does not allow a deduction for a contribution made before the first day of the calendar year in which the account beneficiary reaches age 18. (2) Contribution limit. For a contribution made before that calendar year: (A) In general. Total contributions other than exempt contributions for that calendar year may not exceed $5,000. (B) Exempt contribution. “Exempt contribution” means— (i) a qualified rollover contribution; (ii) a qualified general contribution; or (iii) a contribution provided under section 6434. (C) Cost-of-living adjustment. (i) In general. For a taxable year after 2027, the $5,000 amount in subparagraph (A) increases by an amount equal to that dollar amount multiplied by the cost-of-living adjustment under section 1(f)(3) for the calendar year in which the taxable year begins. For that calculation, “calendar year 2026” is substituted for “calendar year 2016” in section 1(f)(3)(A)(ii). (ii) Rounding. If an increase under this subparagraph is not a multiple of $100, it is rounded down to the next lower multiple of $100. (3) Timing of contributions. Section 219(f)(3) does not apply to a contribution to a Trump account for a taxable year ending before the calendar year in which the account beneficiary reaches age 18. (d) Distributions. (1) In general. Except as this subsection provides otherwise, no distribution is allowed before the first day of the calendar year in which the account beneficiary reaches age 18. (2) Tax treatment of allowable distributions. When section 72 is applied to an amount distributed from a Trump account, the investment in the contract does not include— (A) a qualified general contribution; (B) a contribution provided under section 6434; or (C) a contribution excluded from gross income under section 128. (3) Qualified rollover contributions. Paragraph (1) does not apply to a distribution that is a qualified rollover contribution. The amount of that distribution is not included in the beneficiary’s gross income. (4) Qualified ABLE rollover contributions. (A) In general. Paragraph (1) does not apply to a distribution that is a qualified ABLE rollover contribution. The amount is not included in the beneficiary’s gross income. (B) Qualified ABLE rollover contribution. This means an amount paid during the calendar year in which the account beneficiary reaches age 17 in a direct trustee-to-trustee transfer from a Trump account for that beneficiary to an ABLE account, as section 529A(e)(6) defines that term, for that beneficiary. The amount must equal the entire balance of the Trump account from which it is paid. (5) Distributions of excess contributions. For a contribution made before the calendar year in which the account beneficiary reaches age 18 that exceeds the limit under subsection (c)(2)(A): (A) paragraph (1) does not apply to a distribution of the excess; (B) the distribution is not included in the account beneficiary’s gross income; and (C) the tax imposed by this chapter on the distributee for the taxable year of the distribution increases by 100 percent of the net income attributable to the excess, determined without regard to subparagraph (B). (6) Treatment of death of account beneficiary. If the account beneficiary dies before the first day of the calendar year in which the beneficiary reaches age 18 and another person acquires the beneficiary’s interest in the Trump account: (A) paragraph (1) does not apply; (B) the account stops being a Trump account on the date of death; and (C) an amount equal to the account’s fair market value on that date, reduced by the investment in the contract, is included— (i) in the acquiring person’s gross income for the taxable year that includes the date, if that person is not the beneficiary’s estate; or (ii) in the beneficiary’s gross income for the beneficiary’s last taxable year, if that person is the beneficiary’s estate. (e) Qualified rollover contribution. This means an amount paid in a direct trustee-to-trustee transfer from a Trump account for the account beneficiary to another Trump account for that beneficiary, but only if the payment equals the entire balance of the Trump account from which it is paid. (f) Qualified general contribution. (1) In general. “Qualified general contribution” means a contribution that— (A) the Secretary makes under a general funding contribution; (B) is made to the Trump account of an account beneficiary in the qualified class specified in the general funding contribution; and (C) equals the general funding contribution divided by the number of account beneficiaries in that qualified class. (2) General funding contribution. “General funding contribution” means a contribution that— (A) is made by— (i) an entity described in section 170(c)(1), other than a United States possession or political subdivision of one, or an Indian tribal government; or (ii) an organization described in section 501(c)(3) and exempt from tax under section 501(a); and (B) specifies the qualified class of account beneficiaries to whom the contribution will be distributed. (3) Qualified class. (A) In general. “Qualified class” means any of the following: (i) All account beneficiaries who have not reached age 18 before the end of the calendar year in which the contribution is made. (ii) All account beneficiaries who have not reached age 18 before the end of that calendar year and who live in one or more States or other qualified geographic areas specified by the general funding contribution. (iii) All account beneficiaries who have not reached age 18 before the end of that calendar year and who were born in one or more calendar years specified by the general funding contribution. (B) Qualified geographic area. “Qualified geographic area” means a geographic area where at least 5,000 account beneficiaries live and that the Secretary designates as a qualified geographic area under this subparagraph. (g) Trustee selection. For a Trump account created or organized by the Secretary, the Secretary must consider these criteria when selecting the trustee: (1) the trustee’s history of reliability and regulatory compliance; (2) the trustee’s customer-service experience; and (3) the costs the trustee imposes on the account or account beneficiary. (h) Other special rules and coordination with individual retirement account rules. (1) In general. The rules of subsections (k) and (p) of section 408 do not apply to a Trump account. The rules of subsections (d) and (i) of section 408 do not apply to a Trump account for a taxable year beginning before the calendar year in which the account beneficiary reaches age 18. (2) Custodial accounts. For a Trump account, section 408(h) applies by substituting “a Trump account described in section 530A(b)(1)” for “an individual retirement account described in subsection (a).” (3) Contributions. For a taxable year beginning before the first day of the calendar year in which the account beneficiary reaches age 18, a contribution to a Trump account is not counted when applying a contribution limit to any individual retirement plan other than a Trump account. (4) Distributions. Section 408(d)(2) applies separately to Trump accounts and other individual retirement plans. (5) Excess contributions. For applying section 4973(b) to a Trump account for a taxable year beginning before the first day of the calendar year in which the account beneficiary reaches age 18, “excess contributions” means the sum of— (A) the amount by which the amount contributed for the calendar year in which the taxable year begins exceeds the amount allowed under subsection (c)(2); and (B) the amount determined under this paragraph for the preceding taxable year. The excess contributions for a taxable year are reduced by distributions to which subsection (d)(5) applies that are made during the taxable year or by the legal deadline for filing the account beneficiary’s return for that year, including extensions. (i) Reports. (1) In general. The trustee must report about the Trump account to the Secretary and the account beneficiary at the times and in the way the Secretary requires. The reports must include information about— (A) contributions, including the amount and source of any contribution over $25 made by someone other than the Secretary, account beneficiary, or the beneficiary’s parent or legal guardian; (B) distributions, including qualified rollover contributions; (C) the account’s fair market value; (D) the investment in the contract for the account; and (E) other matters the Secretary requires. (2) Qualified rollover contributions. No later than 30 days after a qualified rollover contribution, the trustee of the Trump account receiving it must report to the Secretary. The report must include— (A) the account beneficiary’s name, address, and Social Security number; (B) the trustee’s name and address; (C) the account number; (D) the trustee’s routing number; and (E) other information the Secretary requires. (3) Period of reporting. This subsection does not apply to a period after the calendar year in which the beneficiary reaches age 17.