The IRS Chief Just Gave $250 to Brooklyn Kids’ Trump Accounts. Here’s How the Tax Code Treats That Gift

Some Brooklyn parents just found money in their kids’ Trump Accounts. The Bisignano Family Fund gave $250 each to the Trump Accounts of eligible children ages 2 to 8 living in ZIP code 11234, the IRS announced Thursday, according to CNBC.

The donor’s name makes the tax questions hard to ignore. Frank Bisignano is the IRS’s chief executive officer, and CNBC reports he was tasked in July with leading the effort to expand access to Trump Accounts. Here’s how federal tax law handles his gift for the children, their parents and the donor.

A Hometown Gift From the Head of the IRS

Bisignano called the donation “an investment in the children of Brooklyn, giving them a boost in their personal wealth building journeys”. The money goes into a diversified index fund.

A Trump Account is “a type of traditional individual retirement account (IRA)” created under section 530A for children under 18. The IRS says nearly 70 million accounts are open and 27 million have already received funds.

How a Charity Gift Becomes a Qualified General Contribution

The tax code has a special provision for gifts to whole groups of kids. Under 26 U.S.C. section 530A(f)(2), a “general funding contribution” must come from “an entity described in section 170(c)(1)” (essentially a governmental unit), an Indian tribal government, or “an organization described in section 501(c)(3) and exempt from tax under section 501(a)”. It must also specify “a qualified class of account beneficiaries”.

Treasury then deposits the money. Each child receives an amount “equal to the ratio of” the total gift to the number of children in the class, under section 530A(f)(1)(C). Every child gets an equal share, and that deposit is a “qualified general contribution.”

Why One ZIP Code and an Age Band Can Qualify

The statute lists geography and birth year as separate class options: children residing in “one or more States or other qualified geographic areas”, or children “born in one or more calendar years specified” by the donor.

The Treasury temporary regulations called “Trump Accounts,” published in the Federal Register on September 30, 2026, let donors combine age and geographic criteria in an “approved class,” provided it contains at least 5,000 account beneficiaries. The rules state that “An approved class will receive the same tax treatment and Treasury facilitation as a qualified class.”

CNBC’s analysis of Census Bureau estimates found fewer than 10,000 U.S. citizens under 10 live in the ZIP code, per CNBC. An age 2 to 8 portion of one ZIP code is closer to the regulatory floor than most readers would guess.

Tax-Free Going In, Taxable Coming Out

For the child, the deposit is invisible at tax time. Section 139J(a) says gross income “shall not include any qualified general contribution”.

It also leaves the family’s own room intact. Contributions are capped at $5,000 a year under section 530A(c)(2)(A), but qualified general contributions count as “exempt contributions” under section 530A(c)(2)(B)(ii). Parents and grandparents can still contribute the full limit. They get no deduction, because section 530A(c)(1) bars one before the year the child turns 18.

The catch comes later. Section 530A(d)(2)(A) excludes qualified general contributions from the account’s “investment in the contract,” so the gift carries no tax basis. The gift and its growth are taxed as ordinary income when withdrawn, just like a traditional IRA. And “no distribution shall be allowed before the first day of the calendar year in which the account beneficiary attains age 18”.

Donor’s Tax Break Hinges on an Unanswered Question

Neither the IRS announcement nor CNBC said what kind of entity The Bisignano Family Fund is. Two cases follow.

• If the fund is a 501(c)(3): the payments qualify as qualified general contributions. Any charitable deduction would have occurred when the donor funded the charity. The charity’s payment into the accounts creates no second deduction.
• If it is not a 501(c)(3): the payments are ordinary contributions that count toward each child’s $5,000 limit. A gift to an individual isn’t deductible, and gift tax rules apply.

For individual donors writing checks, Rev. Proc. 2026-25 offers a safe harbor. The contributions are handles as completed present-interest gifts covered by the annual exclusion, and no gift tax return is required, if all of these hold:

1. The donor is an individual.
2. The donor’s only taxable gifts for the year are cash contributions to Trump Accounts, made before the year each child turns 18.
3. Total gifts to each child, including the account contribution, stay within the $19,000 annual exclusion for 2026.
4. No gift or generation-skipping tax liability results.
5. No gift tax return is otherwise required or filed for the year.

Miss one condition and the IRS example says you must file a gift tax return and report the contributions as “gifts of future interests”.

Giving to Trump Accounts in Your Own Community

Grandparents have two routes. Giving directly lets you pick the child, but it uses up part of that child’s annual limit and yields no deduction. Giving through a 501(c)(3) can reach a whole class of children without touching anyone’s limit, though Treasury requires an acceptance agreement identifying the donor, the funding amount, age and geographic criteria, and record dates.

Either way, families must activate their child’s Trump Account to receive contributions. Comments on the proposed version of the regulations are due November 30, 2026, so the details could still shift. State income tax treatment may also differ from the federal rules. Before putting serious money, run the charitable and gift math with a CPA.

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