Are Trump accounts good for real estate and taxes?

Question

Do people feel Trump accounts are worth it. Will there be more benefits to real estate and taxes in general? Is anyone close to this?

Diana Khan · Answer

@James Carter, from the estate planning side, I would look at this as one piece of a much bigger plan.

I work with families who are trying to build something for their children, and one thing I’ve learned is that the account itself is only part of the question. I also want to know what the family is already doing. Do they own real estate? Do they have a trust? Are they saving for education? Are they building a business or other investments for the next generation?

A Trump Account may be useful for some families, especially if the child qualifies for the government contribution. But I would not treat it as a real estate strategy by itself.

For me, the better question is: how does this account fit with everything else you are already building for your child?

That is where I think the real planning comes in.

Kaaren Hall · Answer

Trump Accounts can be worth opening for eligible children because of the federal seed money and long-time horizon, but they are limited to index funds and are not a substitute for a self-directed IRA or real-estate strategy. Families should compare the tax treatment and flexibility of a 529, Roth IRA, and other savings options with their tax adviser.

James Carter · Answer

Great advice Michael, that helps me think about it much differently.

James Carter · Answer

Appreciate all the responses, and makes sense. I guess my question should have been--if I only have an extra $2000/year that I could save for my kids. Is it smarter to save that for a real estate purchase of some kind? Or just plug away in a Trump account.

Ashish Acharya · Answer

James, Trump Accounts are real, but they’re probably being misunderstood if you’re thinking of them as a new real estate investing or real estate tax strategy.

They’re a new type of IRA for eligible children under 18. Parents, guardians, and others can contribute, and eligible children born from 2025 through 2028 can qualify for a one-time $1,000 federal contribution. Contributions generally can’t exceed $5,000 per year from individuals/employers, subject to the specific rules.

The important part for real estate investors is that, during the child’s growth period, Trump Account investments are generally limited to qualifying low-cost U.S. equity index mutual funds or ETFs. So this is not an account you’d use to directly buy rental property, fund a flip, or hold an LLC interest in the way some self-directed retirement accounts can.

Where I do think they’re interesting is as part of a broader family wealth plan. If you’re already building wealth through real estate, a Trump Account could be another bucket for long-term, tax-deferred investing for your children—but I wouldn’t confuse that with the tax strategies available inside the real estate portfolio itself, like depreciation, cost segregation, 1031 exchanges, entity planning, or passive-loss planning.

As for whether there will be additional real estate tax benefits going forward, I’d plan based on current enacted law, not on what may or may not be proposed later.

Feel free to DM me, I’d be happy to send over a few resources on real estate tax planning that might be helpful.

Laurence J. · Answer

Does the existence of a trump accounts have a macroeconomic effect on real estate? Will more money go into Trump accounts and therefore reduce the overall availability of funds for real estate? That feels like the question being asked. Not sure that I have an answer, but just wanted to help reframe the question.

Are Trump accounts good for real estate and taxes?

Are Trump accounts good for real estate and taxes?

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