Treasury Provides Investment Guidance on Trump Accounts

The Department of Treasury and Internal Revenue Service (IRS) have released a proposed rule governing eligible investments for Trump accounts. According to a Treasury press release, the rule focuses on keeping costs low, promoting broad diversification, and helping children's savings grow over the long term. Treasury previously announced that State Street SPDR Portfolio S&P 500 ETF (SPYM) would be the default investment for all Trump accounts and provided four additional low-cost index ETFs that may be chosen for investment by a parent or other responsible party.

The proposed rule details how to determine whether an investment is an eligible investment as well as Trustee procedures regarding eligible investments. Additionally, comments are requested regarding stock contributions as part of a philanthropic contribution, as well as trustee fees. The regulations are proposed to apply to taxable years beginning on or after January 1, 2026, except for paragraph (g) of the regulations related to trustee procedures of eligible investments, which is proposed to apply to taxable years beginning on or after the date the final regulations are published in the Federal Register, with comments due within 60 days of publication.