What wealthy donors will gain if stock donations are allowed in Trump accounts

A version of this article first appeared in CNBC’s Inside Wealth newsletter by Robert Frank, a weekly guide for high-net-worth investors and consumers. Sign up to receive future editions directly to your inbox.

As the Trump administration considers whether to allow stock donations to Trump Accounts for U.S. children, the potential expansion raises questions about legal options and highlights strong tax incentives for doing so.

“We all want to maximize billions more in gifts to our children’s accounts. Gifts can be cash or stocks!” Brad Gerstner, a hedge fund manager who pioneered investment accounts, wrote in a post on X last week after the New York Times first reported on the debate.

The move marks a notable change to the program, which currently requires cash contributions. For example, Michael and Susan Dell pledged $6.25 billion to plant Trump accounts in 25 million children in their ZIP code under the age of 10 and with a median income of less than $150,000.

This structure already includes tax benefits, allowing donors to use their pre-tax funds as a charitable gift to benefit a qualified beneficiary group. But by allowing stock donations to the account, donors can offload appreciated stock without paying capital gains taxes. As with other charitable contributions, you can also deduct the fair market value of your stock from your income.

The double taxation benefits are similar to gifts of appreciated stock to donor-advised foundations or other charities.

“This is a common practice, especially for high-income taxpayers who would otherwise pay higher tax rates,” said Will McBride, chief economist at the Tax Foundation. “I think it makes sense that they would try to expand the laws that apply here.”

“Since President Trump’s name is on this initiative, they will try to make this as taxpayer-friendly as possible,” he added.

A White House official told CNBC in an email that the administration “remains open to finding new ways to build on the tremendous success of the Trump account,” but said there was no latest information to share.

A Treasury spokeswoman declined to comment on the possibility of accepting stock donations.

“The U.S. Department of the Treasury is committed to maximizing the impact of Trump Accounts, encouraging the enrollment of all eligible children, and achieving our goal of ensuring every American child has a Trump Account,” a Treasury Department spokesperson said in an email.

McBride said the changes will greatly incentivize donors to seed their accounts.

“We know that many of the top billionaires have a lot of their wealth in highly valued stocks and therefore have large amounts of unrealized gains,” he said.

Still, Joseph Rosenberg, a senior fellow at the Urban-Brookings Tax Policy Center, said the practice is nothing new and offers no unique benefits to Trump accounts.

“My sense is that it’s not like a game changer in that sense, because people already have the ability to do that through private foundations and other means,” he said.

Additionally, the deduction for these contributions would likely still be subject to the 30% adjusted gross income (AGI) cap that applies to capital gain real estate that appreciates over time. Tax benefits for charitable giving to high earners were also reduced in last year’s tax and spending bill.

Manoj Viswanathan, a law professor and co-director of the San Francisco Tax Law Center at the University of California, said further changes would be needed to make Trump accounts more attractive from a tax perspective, such as raising the AGI limit for deducting contributions to investment accounts.

Ellen April, a senior fellow at the UCLA School of Law, said raising the cap won’t make a big difference because the incomes of the ultra-wealthy pale in comparison to their assets.

However, by donating stocks, individuals can minimize or even eliminate their inheritance tax burden, she said. Unlike income taxes, gift and estate tax charitable deductions are unlimited.

“The gift tax deduction is very important for the ultra-wealthy,” she says. “When you make a charitable gift, you take property out of the estate and still avoid taxes on built-in capital gains.”

Lawyers and tax experts who spoke to CNBC were divided on whether allowing stock donations would require legislative action or could be done through Treasury guidance or executive order.

Viswanathan said he didn’t think a parliamentary resolution was needed unless the Treasury Department allowed holding individual stocks in the account.

In a post to

But the account’s X account, from the nonprofit advocacy group Invest America, said in another post: “Wouldn’t it be great if every kid in America had a stake in SpaceX, Berkshire Hathaway, or Open AI?!”

McBride said expanding tax benefits for donors to Trump accounts would face an uphill battle in Congress, where Republicans have a razor-thin majority.