Trump Account stock gifts get their tax break from the foundation step, Shotwell's SpaceX pledge shows
Gwynne Shotwell's SpaceX share pledge to 2 million-plus Trump Accounts, now worth about $330 million, is the first big test of Treasury's Sept. 30 stock rules. Its tax savings come from an old step, giving appreciated stock to a foundation first, while the new rules supply a place to send one company's shares.
The Investor · Invest desk
Shotwell's SpaceX gift is worth about $330 million at Thursday's share price, and each child's one-share stake is worth at most about $165. Treasury has opened accounts for about 60 million children. Donors can generally deduct foundation stock gifts up to 20% of adjusted gross income each year.
| Figure | Value | Note | Claim |
|---|---|---|---|
| Shotwell's gift at Thursday's share price, about | $330,000,000 | 1 | |
| Each child's stake, at most | $165 about | 21 | |
| Accounts opened, about | 60,000,000 children | 4 | |
| Yearly deduction for foundation stock gifts, up to | 20% | of adjusted gross income, per the IRS | 12 |
What happened
- Only governments, tribal governments and charities may make these stock gifts, so a founder has to move shares into a charity first.
- Shotwell's gift targets children aged 11 to 17 in lower-income areas, with extra emphasis on those near her central Texas home.
- By Oct. 1, Treasury had opened a Trump Account for nearly every eligible child under 18, about 60 million children.
- The Wall Street Journal reported that Shotwell is the only donor to announce a major stock gift, though Treasury notes show others have expressed interest.
Why it matters
- cost Giving shares instead of selling them leaves the gain untaxed; in Gentry's example of a $1 million stake now worth $100 million, $99 million of gain is never realized.
- exposure Recipients carry single-stock risk their families did not pick, and Treasury's rules concede they "will bear some additional risk in the form of increased portfolio concentration."
- precedent Because every stock gift now needs Treasury's sign-off, the department decides case by case whose company shares go into children's accounts.
Shotwell wrote on X that she and her husband, Robert, would "gift a share of our SpaceX stock to a Trump Account for each of more than two million children across our great nation" [2]. That means one share each. President Trump put the gift at $325 million when it was announced in July, and Fortune puts it at about $330 million at Thursday's share price [1]. At that value each child's stake comes to at most about $165 [21]. It is a ceiling because "more than two million" is a floor. Those children are about 3.3% of the accounts Treasury has opened [24].
Donors cannot deduct anything for the account step. "There is no tax deduction for giving either stock or money to Trump Accounts," Scott Hanson, cofounder of Allworth Financial, told Fortune [9]. "The tax play is the stock they transfer to a foundation prior to gifting to a kid's Trump account," Hanson said [11].
That transfer brings two benefits, and they differ in how certain they are. Giving stock away is not a sale, so "there is no taxable gain to tax," Sherman Standberry, a CPA and chief executive of My CPA Coach, told Fortune [13]. The deduction is harder to use in full. Under IRS rules, publicly traded stock held more than a year and given to a private foundation is generally deductible at full market value [12]. The cap is 20% of adjusted gross income a year, and any excess carries forward for up to five years [12]. Deducting $330 million in one year would take $1.65 billion of adjusted gross income [22]. Spread across the gift year and all five carryforward years, it takes about $275 million of income every year [23]. A donor with less income than that loses part of the deduction.
Fortune notes that none of these perks are new; what is new is where the stock can end up [15]. Trump Account money otherwise goes into low-cost index funds, and the rules make an exception for donated stock [5]. A founder can now move appreciated shares, unsold and undiversified, from a foundation into children's accounts. Kevin Gentry, chief executive of TenX Strategies, told Fortune that one upside for donors is a whole new class of shareholders [16]. Treasury wrote that donors hope the five-year holding period "may lead recipients and their families to feel that they have a stake in the fate of the corporation" [17].
I think the rules change founders' shareholder registers more than their tax bills, because the foundation route and its tax treatment existed before the rules took effect on Sept. 30 [15] [3]. Gentry puts the case for the route more strongly. "For a founder sitting on billions of dollars of appreciated stock, this could be an extraordinarily attractive way to give," he said [19]. Other founders may follow Shotwell, or Treasury, whose approval each gift needs, may let few through [7]. A fall in the share price would shrink the $165 for children whose families did not choose the stock [18]. The view is wrong if founders start sending large gifts into the accounts that they would not have made to a foundation at all.
What to watch
- Whether Treasury approves stock gifts from the donors its notes say have expressed interest, and how quickly it does so.
- Whether Elon Musk, whom Fortune calls the world's first trillionaire, routes SpaceX shares into the accounts.
- SpaceX's share price over the five-year holding period; each child's stake started near $165.
Clarity's read
What the record supports and how the coverage leans. The claims behind it follow.
Reality
- Evidence60
- Adoption15
- Hype gap+30
- Incentives55
- Confidence55
Claim ledger
Ranked by verification strength, evidence, and original report placement.
- [1]
President Trump valued Shotwell's gift at $325 million at the time of the July announcement; at Thursday's share price it would be worth about $330 million.
- [2]
Shotwell wrote on X that she and her husband Robert would "gift a share of our SpaceX stock to a Trump Account for each of more than two million children across our great nation."
- [3]
Treasury rules that took effect Sept. 30 let wealthy donors, working through charities such as private foundations, put shares of publicly traded U.S. companies directly into Trump Accounts, tax-advantaged investment accounts for children that launched July 4.
- [4]
As of Oct. 1, Treasury had opened an account for nearly every eligible child under 18, about 60 million children.
- [5]
Previously, money in Trump Accounts went into low-cost index funds; the new rules make an exception for donated stock.
- [6]
Shotwell's gift targets children ages 11 to 17 in lower-income areas, with extra emphasis on those near the couple's central Texas home.
- [7]
Shotwell announced her pledge before Treasury finalized the rules, which now require stock gifts to come through a charity and win Treasury's approval.
- [8]
Shotwell has been the only donor to announce a major stock gift, the Wall Street Journal reported, but Treasury notes show others have expressed interest in similar donations.
- [9]
"There is no tax deduction for giving either stock or money to Trump Accounts," Scott Hanson, cofounder of Allworth Financial, told Fortune.
- [10]
Only governments, tribal governments and charities can make these stock gifts, so billionaires have to move their shares into a charity first.
- [11]
"The tax play is the stock they transfer to a foundation prior to gifting to a kid's Trump account," Hanson said.
- [12]
Donors who give a private foundation publicly traded stock they have owned for more than a year can generally deduct its full market value, up to 20% of adjusted gross income each year, with any excess carried forward for up to five years, according to the IRS.
- [13]
Because giving stock away is not a sale, "there is no taxable gain to tax," Sherman Standberry, a CPA and CEO of My CPA Coach, told Fortune.
- [14]
Gentry's example: a founder who paid $1 million for stock now worth $100 million would generally realize $99 million in gains by selling it, and likely owe significant taxes on that.
- [15]
None of the tax perks of giving appreciated stock to a foundation are new; what is new is where the stock can end up.
- [16]
Another potential upside for donors is a whole new class of shareholders, Kevin Gentry of TenX Strategies said.
- [17]
Treasury wrote in its rules that donors hope a five-year holding period "may lead recipients and their families to feel that they have a stake in the fate of the corporation."
- [18]
The rules acknowledge that children "will bear some additional risk in the form of increased portfolio concentration" when donations come as stock rather than cash; families cannot choose the stock.
- [19]
"For a founder sitting on billions of dollars of appreciated stock, this could be an extraordinarily attractive way to give," Kevin Gentry, founder and CEO of TenX Strategies, told Fortune.
- [20]
Fortune raised the question of whether Elon Musk, whom it calls the world's first trillionaire, would participate; Musk has criticized other philanthropists and hinted at giving his wealth away.
- [21]
Each child's one-share stake is worth at most about $165 at the current valuation.
- [22]
Deducting a $330 million stock gift in a single year under the 20% cap would require $1.65 billion of adjusted gross income.
- [23]
Using the full $330 million deduction across the gift year plus five carryforward years requires about $275 million of adjusted gross income each year.
- [24]
Shotwell's recipients are about 3.3% of the Trump Accounts Treasury has opened.
Sources
1 independent publisher whose own reporting we read for this story.
Topics and entities
Follow any of these and your For You feed starts watching them — no settings page required.
Topics
Entities
- TenX StrategiesFollow
- Elon MuskFollow
- Gwynne ShotwellFollow
- Internal Revenue ServiceFollow
- Trump AccountsFollow
- Allworth FinancialFollow
- My CPA CoachFollow
- SpaceXFollow
- US Department of the TreasuryFollow