The Department of the Treasury and IRS released proposed regulations on August 20, 2026 (IR-2026-96) defining eligible investments for “Trump Accounts,” a new traditional IRA variant established under the Working Families Tax Cuts (WFTC) legislation. These accounts, created by WFTC Section 102, allow eligible individuals to contribute up to $5,000 annually (indexed) with tax-deferred growth and qualified distributions for first-time home purchase, education, or retirement. The proposed regulations under IRC Section 408A(c) specify permitted asset classes—broadly aligning with existing IRA rules but explicitly excluding collectibles, life insurance, and S corporation stock—while introducing novel provisions for digital asset custody and private equity access through qualified custodians. Comments are due 90 days after Federal Register publication.
Key Takeaways
- Expanded Investment Menu with Guardrails: The rules permit publicly traded securities, certain crowdfunding securities under Reg CF, and approved digital assets held by qualified custodians, but maintain prohibitions on collectibles, life insurance, and disqualified person transactions under Section 4975.
- Custodial Requirements for Alternative Assets: Non-traditional assets require a qualified custodian meeting enhanced capital and cybersecurity standards, addressing custodial risk concerns for retail investors accessing private markets.
- Coordination with Existing IRA Limits: Trump Account contributions share the overall IRA contribution limit ($7,000/$8,000 for 50+ in 2026), requiring aggregation tracking across Traditional, Roth, and Trump Accounts to avoid excess contribution penalties under Section 4973.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement