Trump Account and Gift Tax: Is Form 709 Really Unnecessary? What Japanese Families Need to Know in 2026

“Will I owe gift tax if I contribute money to my child’s Trump Account?”

For parents and grandparents who want to help build a child’s financial future, this is an important question.

And for Japanese families in the United States, the issue can become even more complicated.

For example:

• Grandparents living in Japan may want to contribute money
• The parents may be Japanese corporate expatriates
• The family may eventually return to Japan
• The child and parents may have financial or tax connections to both countries

These situations require a broader perspective than a family whose finances are entirely within the United States.

On June 29, 2026, the IRS and U.S. Treasury released Revenue Procedure 2026-25, providing an important gift-tax reporting safe harbor for certain individual contributions to Trump Accounts.

In this article, I will explain how Trump Account contributions interact with:

• U.S. gift tax
• The $19,000 annual gift-tax exclusion
• Form 709
• Gift splitting
• Generation-Skipping Transfer Tax
• Gifts from grandparents living in Japan
• Form 3520
• Japanese tax considerations

The rules can become technical, but the basic framework is easier to understand once each issue is separated.

The most important point is this: A contribution may be treated as a gift without actually creating gift tax.

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Are Contributions to a Trump Account Considered Gifts?

When a parent, grandparent, or another individual contributes money to a child’s Trump Account, that contribution may be treated as a gift to the child.

Revenue Procedure 2026-25 provides a safe harbor under which qualifying contributions are treated as:

• Completed gifts to the child
• Gifts that are not future interests
• Gifts eligible for the annual gift-tax exclusion

This is important because the annual gift-tax exclusion generally applies to gifts of present interests rather than future interests.

A Trump Account is a type of traditional IRA established under IRC Section 530A and owned by the account beneficiary.

During the growth period, however, the child generally cannot freely withdraw the account assets.

That raises an important gift-tax question:

If the child cannot immediately access the funds, does a contribution qualify for the annual exclusion?

Revenue Procedure 2026-25 was designed to provide certainty for qualifying contributions.

But there is an important distinction:

Being treated as a gift does not automatically mean that gift tax is actually due.

For 2026, the federal annual gift-tax exclusion is $19,000 per recipient, per donor.

However, simply keeping a Trump Account contribution below $19,000 does not automatically eliminate a Form 709 filing requirement.

The safe-harbor requirements must also be considered.

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The Trump Account Contribution Limit and the ,000 Gift-Tax Exclusion Are Different Rules

This is probably one of the easiest points to misunderstand.

The annual federal gift-tax exclusion for 2026 is $19,000.

That does not mean:

“I can contribute $19,000 to a Trump Account.”

During the Trump Account growth period, ordinary individual contributions and qualifying employer contributions that are subject to the statutory limit are generally subject to an aggregate annual limit of $5,000 for 2026 and 2027, with cost-of-living adjustments applying after 2027.

Certain other categories—including the government pilot contribution, qualified general contributions, and qualified rollover contributions—may be treated separately from that $5,000 limit.

The $19,000 gift-tax exclusion serves an entirely different purpose.

It is used in determining the federal gift-tax treatment of gifts made by one donor to one recipient during the year.

Example

Suppose a parent gives the child:

• $5,000 through the child’s Trump Account
• $10,000 as a separate cash gift

The parent has made $15,000 of total gifts to that child during the year.

The Trump Account contribution limit and the federal gift-tax annual exclusion must therefore be analyzed separately.

Trump Account contribution limits determine how much may be contributed under the account rules. Gift-tax exclusions determine the transfer-tax treatment of gifts from a donor to a recipient.

They are not the same rule.

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What Is the Revenue Procedure 2026-25 Safe Harbor?

Because a Trump Account is a type of traditional IRA owned by the child, but distributions are restricted during the growth period, the account creates an unusual gift-tax issue.

The federal annual gift-tax exclusion generally applies only to gifts of a present interest.

A gift of a future interest normally does not qualify for the annual exclusion.

Revenue Procedure 2026-25 addresses this issue by establishing a safe harbor for certain Trump Account contributions.

If all applicable conditions are satisfied, the qualifying contribution is treated as:

A completed gift that is not a gift of a future interest.

As a result, the contribution may qualify for the annual gift-tax exclusion.

If all safe-harbor requirements are satisfied, Form 709 generally is not required merely to report the qualifying Trump Account contribution.

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Main Requirements for the Safe Harbor

Revenue Procedure 2026-25 generally requires the following conditions to be satisfied.

1. The Donor Must Be an Individual

The safe harbor applies to individual donors.

This may include:

• Parents
• Grandparents
• Other relatives
• Other individual donors

2. The Contribution Must Be a Qualifying Cash Contribution

The safe harbor applies to monetary contributions made by:

• Cash
• Check
• Money order
• Electronic funds transfer

A contribution of appreciated stock or other property is not the type of cash contribution contemplated by this safe harbor.

In addition, because a Trump Account is an IRA, non-rollover contributions generally must be made in cash rather than by contributing securities or other property directly.

3. The Contribution Must Be Made Before the Calendar Year the Child Turns 18

The qualifying contribution generally must be made before the calendar year in which the beneficiary reaches age 18.

4. Total Annual Gifts to the Child Must Stay Within the Annual Exclusion

The donor must consider all gifts made to the same child during the year—not just the Trump Account contribution.

For 2026, the annual exclusion is $19,000 per donor, per recipient.

For example, if a grandparent contributes $5,000 to the Trump Account and separately gives the child another $14,000 in qualifying present-interest gifts, the total is $19,000.

If additional gifts push the total above the applicable annual exclusion, the safe-harbor analysis changes.

5. Other Gift- and GST-Tax Requirements Must Be Satisfied

The contribution must not create a gift-tax or Generation-Skipping Transfer Tax liability after taking into account the donor’s remaining applicable credit amount or available GST exemption.

The applicable credit amount is generally associated with the donor’s lifetime gift- and estate-tax exemption.

6. The Donor Generally Must Not Otherwise Be Required to File Form 709

Disregarding the qualifying Trump Account contributions, the donor generally must not otherwise be required to file a gift-tax return for the year.

The donor also generally must not actually file Form 709 for another reason, such as:

• Gift splitting
• Certain GST elections
• GST exemption allocations
• Other gift-tax reporting purposes

This condition is especially important.

The safe harbor is not simply:

“Under $19,000 = no Form 709.”

It is more specific than that.

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Does “Only Taxable Gifts Are Trump Account Contributions” Mean You Cannot Make Any Other Gifts?

Not necessarily.

“Taxable gift” is a technical tax term.

A donor may still make other qualifying present-interest gifts during the year.

For example, if all gifts to the child remain within the annual exclusion and there is no other reason to file Form 709, the safe harbor may still be available.

The analysis should include:

• How much the donor gave the child in total
• Whether the other gifts are present-interest gifts
• Whether any Form 709 filing is otherwise required
• Whether gift splitting is being elected
• Whether GST issues exist
• Whether all other safe-harbor requirements are satisfied

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What if Several Family Members Contribute?

A child may receive Trump Account contributions from multiple individuals, such as:

• Father
• Mother
• Grandfather
• Grandmother

The gift-tax annual exclusion and Revenue Procedure 2026-25 safe harbor are generally analyzed separately for each donor.

For example, if both parents contribute, the father’s gift-tax position is analyzed separately from the mother’s.

For the father, you would consider:

• The father’s total annual gifts to the child
• Whether the father otherwise has a Form 709 filing requirement
• Whether the father satisfies the safe harbor

You would then perform the same analysis separately for the mother.

However, there is another limit that must not be forgotten:

The Trump Account’s Own Aggregate Contribution Limit

Gift-tax exclusions are generally donor-specific, but the Trump Account contribution rules impose a separate aggregate annual limit on contributions that are subject to the statutory $5,000 cap.

Multiple donors do not multiply that limit.

Two parents do not automatically receive two separate $5,000 Trump Account contribution limits merely because each parent has a separate gift-tax annual exclusion.

For 2026 and 2027, ordinary individual contributions and qualifying employer contributions that are subject to the statutory limit are generally capped at $5,000 in the aggregate for the beneficiary.

The Trump Account contribution limit and the federal gift-tax annual exclusion operate independently.

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Keep Good Records

Even when Form 709 is not required, good recordkeeping is extremely important.

If you rely on the Revenue Procedure 2026-25 safe harbor, consider keeping records showing:

• Date of each Trump Account contribution
• Amount contributed
• Method of contribution
• Name of the donor
• Name of the beneficiary
• Bank or transfer records
• Other gifts made by the same donor to the child
• Total annual gifts to the child
• Trump Account statements
• Documentation showing that the contribution was accepted by the account provider

Why keep this documentation if no return is filed?

Because years later, the donor may need to establish why the contribution qualified for the safe harbor.

No filing requirement does not mean no recordkeeping responsibility.

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Is Form 709 Really Unnecessary?

You may see statements online such as:

“You don’t need Form 709 for Trump Account contributions.”

That statement is too broad.

The more accurate version is:

If all requirements of the Revenue Procedure 2026-25 safe harbor are satisfied, Form 709 generally is not required merely to report the qualifying Trump Account contribution.

There are still situations in which Form 709 may be required.

For example:

• Total annual gifts to the same child exceed the annual exclusion
• The donor elects gift splitting
• The donor needs to allocate GST exemption
• A GST election is required
• The donor has other reportable gifts
• Another independent Form 709 filing requirement exists
• The Revenue Procedure 2026-25 safe-harbor requirements are not satisfied

So the real rule is:

Form 709 is not automatically unnecessary simply because the gift went into a Trump Account. Both the normal gift-tax rules and Revenue Procedure 2026-25 must be reviewed.

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What Happens if the Safe Harbor Does Not Apply?

If the Revenue Procedure 2026-25 safe harbor is unavailable, the donor cannot rely on that Revenue Procedure for its special gift-tax reporting relief.

The donor must then separately analyze:

• Whether Form 709 must be filed
• Whether the contribution is a future-interest gift
• Whether the annual gift-tax exclusion is available
• Whether any gift tax is actually payable
• Whether any GST-tax consequences arise

Revenue Procedure 2026-25 includes an example in which a donor’s total annual gifts to the beneficiary exceed the annual exclusion.

In that example, the safe harbor is unavailable and the Trump Account contributions are reported as future-interest gifts on Form 709.

However, that example should not automatically be applied to every contribution outside the safe harbor.

If the safe harbor does not apply, the contribution must be analyzed under the normal federal gift- and GST-tax rules based on the specific facts.

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What Is Gift Splitting?

Gift splitting is another area that is easy to misunderstand.

It does not mean spreading a gift over several years.

Under federal gift-tax law, gift splitting is an election under which a married couple may generally treat a gift made by one spouse as though each spouse made one-half of the gift.

Example

Suppose one spouse gives a child $30,000.

If the applicable requirements are met and the spouses elect gift splitting, the gift may be treated as:

• $15,000 from Spouse A
• $15,000 from Spouse B

However, electing gift splitting generally requires Form 709.

That creates a problem for the Revenue Procedure 2026-25 safe harbor because the safe harbor generally requires that no gift-tax return otherwise be filed for that year.

Therefore:

Gift splitting and the Revenue Procedure 2026-25 safe harbor are generally incompatible for the same year.

Families considering gift splitting should analyze the Form 709 consequences separately.

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The Government’s ,000 Contribution Is a Different Category

Qualifying children may receive a one-time $1,000 Pilot Program Contribution from the federal government.

This government contribution should not be confused with contributions made by parents or grandparents.

Revenue Procedure 2026-25 addresses certain contributions by individual donors.

The government’s $1,000 contribution falls into a separate contribution category.

When considering tax treatment, it is therefore important to distinguish among:

• Government pilot contributions
• Parent contributions
• Grandparent contributions
• Employer contributions
• Qualified general contributions
• Other eligible contributions

They do not necessarily receive identical tax treatment.

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Special Issues for Japanese Families

This is where the analysis becomes particularly important for Japanese-American and expatriate families.

A purely domestic U.S. family may primarily focus on U.S. federal transfer-tax rules and any applicable state-law considerations.

A Japanese family may also need to consider:

• U.S. gift tax
• Japanese gift tax
• The donor’s U.S. transfer-tax status
• The child’s U.S. tax status
• Form 3520
• Future residence in Japan
• International transfers
• Account-provider restrictions

Let’s look at some common situations.

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1. Grandparents Living in Japan Want to Contribute

Suppose grandparents living in Japan want to help fund their grandchild’s Trump Account.

A common assumption might be:

“They live in Japan, so they are automatically nonresident aliens for U.S. gift-tax purposes.”

That conclusion may be too simplistic.

U.S. transfer-tax residency does not necessarily follow the same rules as U.S. income-tax residency.

For gift-tax purposes, domicile can be highly important.

Relevant factors may include:

• U.S. citizenship
• Green-card status
• Actual place of residence
• Domicile
• Intent regarding permanent residence
• Type of property transferred
• Location, or situs, of the property

A green card is an important fact, but it does not automatically determine domicile for U.S. transfer-tax purposes.

Living in Japan does not automatically mean someone is a nonresident not a citizen for U.S. gift-tax purposes.

If the grandparent is not a U.S. citizen and is domiciled outside the United States for transfer-tax purposes, U.S. gift-tax exposure may be more limited and may depend on the type and situs of the transferred property.

Another oversimplification should also be avoided:

“If the money is wired from Japan, there can never be U.S. gift-tax consequences.”

The treatment can depend on the facts, including what property is transferred and how the transfer is structured.

And even if there is little or no U.S. gift-tax exposure for the donor, Japanese gift-tax consequences may still need to be considered.

The Japanese gift-tax analysis may depend on factors including:

• The donor’s status under Japanese inheritance and gift-tax rules
• The recipient’s status under those rules
• Address or residence
• Nationality
• Relevant prior periods of residence in Japan
• Location or situs of the gifted property
• Nature of the property transferred

Cross-border gifts should therefore be reviewed under both systems.

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2. Form 3520 May Still Be Required

U.S. federal gift tax is generally imposed on the donor.

But when a U.S. person receives a large gift from a foreign person, the recipient may have an information-reporting obligation.

This is where Form 3520 becomes important.

Generally, if a U.S. person receives more than $100,000 during the year from a nonresident alien individual or foreign estate and treats the amount as a gift or bequest, reporting on Form 3520 Part IV may be required.

The aggregation rules require special attention.

Gifts from multiple foreign donors are not necessarily aggregated simply because they are all foreign persons.

Aggregation may be required when, for example:

• The recipient knows the foreign donors are related
• The recipient has reason to know they are related
• One donor is acting as another donor’s nominee or intermediary

Foreign Corporations and Partnerships Have a Lower Threshold

Purported gifts from foreign corporations and foreign partnerships are subject to a different, much lower reporting threshold.

For 2026, reporting is generally triggered when the aggregate amount exceeds $20,573.

The IRS may also examine whether a transfer from a foreign corporation or partnership is truly a gift.

What if the Japanese Grandparent Contributes Directly to the Trump Account?

This can become more complicated.

Depending on the structure of the transfer, questions may include:

• Who is treated as the recipient for Form 3520 purposes?
• Is the child treated as receiving the gift?
• Does a direct payment to the Trump Account count toward the foreign-gift reporting threshold?
• Who legally owns the account assets?
• How was the money transferred?

These questions may require a facts-and-circumstances analysis.

The key point is:

Whether U.S. gift tax is due and whether Form 3520 must be filed are two different questions.

Revenue Procedure 2026-25 and Form 3520 are also separate regimes.

Satisfying the gift-tax safe harbor does not automatically eliminate a Form 3520 reporting obligation, and satisfying Form 3520 reporting requirements does not determine the gift-tax treatment.

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3. Japanese Expatriate Families Returning to Japan

For Japanese corporate expatriate families planning to return to Japan in a few years, gift tax is only one part of the picture.

They should also consider:

• Whether the Trump Account can remain open after returning to Japan
• Whether a Japanese residential address can be registered
• Whether contributions can continue after the move
• How Japan may tax investment income inside the account
• How future distributions may be taxed in Japan
• Japanese gift- and inheritance-tax implications
• Currency risk
• The financial institution’s policies for non-U.S. residents

A major principle to remember is:

Tax-deferred treatment in the United States does not automatically mean Japan will provide the same tax treatment.

The U.S. and Japanese tax consequences should generally be analyzed separately.

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4. Families Planning Large Gifts

Another important situation arises when grandparents or parents plan to transfer substantial assets to a child.

Remember that the Trump Account contribution limit and the gift-tax annual exclusion are different rules.

Even if the Trump Account contribution itself is within the applicable account limit, the donor may have made other gifts to the same child.

Those gifts could cause the donor’s total annual transfers to exceed the $19,000 annual exclusion.

For larger family transfers, consider reviewing:

• Trump Account contributions
• Other gifts to the same child
• Each donor’s annual gift-tax exclusion
• Whether multiple donors are involved
• Whether gift splitting is being considered
• Whether Form 709 is required
• GST-tax consequences
• Whether Revenue Procedure 2026-25 applies
• Whether Form 3520 may apply to foreign gifts
• The Trump Account’s applicable aggregate annual contribution limit
• Japanese gift-tax implications

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Frequently Asked Questions

Are Contributions From Parents Considered Gifts?

Potentially, yes.

Contributions made by an individual parent to a child’s Trump Account may be treated as gifts to the child.

If all Revenue Procedure 2026-25 safe-harbor requirements are met, the contribution is treated as a completed gift that is not a future interest and may qualify for the annual gift-tax exclusion.

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Can Grandparents Contribute?

Yes.

Trump Accounts may generally receive contributions from individuals such as grandparents, subject to applicable contribution limits and administrative rules.

Families should review:

• The account’s applicable annual contribution limit
• Each donor’s gift-tax position
• Revenue Procedure 2026-25
• Form 709
• Form 3520 for foreign gifts
• Japanese gift tax
• The custodian’s procedures for third-party contributions

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Can Both Parents Contribute?

Multiple individuals may contribute to the same child’s Trump Account.

Gift-tax exclusions and safe-harbor requirements are generally analyzed separately for each donor.

However, the Trump Account’s statutory aggregate contribution limit does not multiply simply because more than one person contributes.

So:

Two parents do not automatically get two separate $5,000 Trump Account contribution limits.

For 2026 and 2027, ordinary individual contributions and qualifying employer contributions subject to the general statutory limit are generally capped at $5,000 in the aggregate.

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Can Grandparents Send Money Directly From Japan?

Whether a Trump Account provider accepts direct international transfers depends on the institution and its transfer procedures.

Tax considerations may include:

• The donor’s U.S. gift-tax status
• Domicile
• Type and situs of the transferred property
• Revenue Procedure 2026-25
• Form 709
• Form 3520
• Japanese gift tax
• International-transfer documentation and identity verification

The banking question and the tax question should be analyzed separately.

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If the Gift Is Under ,000, Is Form 709 Automatically Unnecessary?

No.

The $19,000 figure is the 2026 annual gift-tax exclusion.

It is not an automatic Form 709 exemption for every situation.

Form 709 may still be required because of:

• Gift splitting
• GST exemption allocation
• GST elections
• Other reportable gifts
• Other independent filing requirements

If all Revenue Procedure 2026-25 safe-harbor conditions are satisfied, Form 709 generally is not required merely to report the qualifying Trump Account contribution.

Also remember:

$19,000 is the gift-tax annual exclusion—not the Trump Account contribution limit.

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What Happens if the Safe Harbor Does Not Apply?

If the safe harbor does not apply, the special Form 709 reporting relief under Revenue Procedure 2026-25 is unavailable.

The donor must then separately analyze:

• Whether Form 709 is required
• Whether the contribution is a future-interest gift
• Whether the annual exclusion is available
• Whether any tax is actually payable
• Whether GST-tax consequences arise

Revenue Procedure 2026-25 includes an example involving total gifts exceeding the annual exclusion in which Trump Account contributions are reported as future-interest gifts.

That example should not automatically be applied to every situation outside the safe harbor.

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Is the Government’s ,000 Contribution Subject to the Same Gift-Tax Rules?

The federal government’s $1,000 Pilot Program Contribution is a different contribution category from an individual contribution made by a parent or grandparent.

Revenue Procedure 2026-25 focuses on certain individual donors.

The government contribution and private family contributions therefore should not automatically be treated as though they were the same transaction.

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My Perspective as a U.S. CPA

Trump Accounts are interesting because they allow families to begin long-term investing for a child at a very early age.

But I would not recommend making large contributions simply because:

“The government gives the child $1,000.”

The more important question is:

Where does the Trump Account fit within the family’s overall financial strategy?

Different accounts serve different purposes.

For example:

• Education: 529 plan
• Child’s long-term asset accumulation: Trump Account
• Parents’ retirement: 401(k), IRA, and HSA
• Flexible investing: Taxable brokerage account
• Emergency fund: Cash and savings accounts

Before contributing significant amounts to a child’s account, I would also review:

• Emergency savings
• High-interest debt
• Life and disability insurance
• Parents’ retirement savings
• Future housing and living costs
• Financial needs after returning to Japan

A Trump Account should not be analyzed in isolation.

For international families, the broader picture includes:

• Family cash flow
• Education plans
• Retirement planning
• Future country of residence
• U.S. taxation
• Japanese taxation
• Currency risk
• Estate and gift planning

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Key Takeaways

Individual contributions to a Trump Account may be treated as gifts to the child.

Revenue Procedure 2026-25 provides an important safe harbor for certain qualifying contributions.

If all applicable requirements are satisfied, the contribution is treated as:

• A completed gift
• Not a future-interest gift
• Eligible for the annual gift-tax exclusion

The most important points to remember are:

• The 2026 annual gift-tax exclusion is $19,000 per recipient, per donor
• The $19,000 exclusion is not the Trump Account contribution limit
• For 2026 and 2027, ordinary individual and qualifying employer Trump Account contributions subject to the general statutory limit are generally subject to a separate $5,000 aggregate annual limit, with inflation adjustments after 2027
• Revenue Procedure 2026-25 has specific safe-harbor requirements
• If those requirements are met, Form 709 generally is not required merely to report the qualifying Trump Account contribution
• Gift-tax rules and the safe harbor are generally analyzed separately for each donor
• Multiple donors do not multiply the Trump Account’s applicable aggregate contribution limit
• Gift splitting and certain GST-tax elections may trigger Form 709 and may prevent use of the safe harbor
• If the safe harbor is unavailable, the special Revenue Procedure 2026-25 reporting relief is unavailable, and the contribution must be analyzed under the normal gift- and GST-tax rules
• A grandparent living in Japan is not automatically treated as a nonresident not a citizen for U.S. gift-tax purposes
• A U.S. person who receives more than $100,000 of qualifying foreign gifts from a nonresident alien individual or foreign estate may have a Form 3520 reporting obligation
• Gifts from multiple foreign donors are aggregated for the $100,000 test when the applicable related-person, nominee, or intermediary rules require aggregation
• Purported gifts from foreign corporations and partnerships have a separate, lower reporting threshold; for 2026, reporting generally applies when the aggregate amount exceeds $20,573
• Revenue Procedure 2026-25 and Form 3520 foreign-gift reporting are separate regimes
• Japanese families must consider Japanese gift tax and future Japanese taxation in addition to U.S. tax rules
• Good documentation should be maintained even when no Form 709 is filed

Trump Accounts are still a relatively new part of the U.S. tax and financial landscape, and additional IRS and Treasury guidance may continue to be released.

For Japanese and international families in particular, the account should be viewed as one part of a larger cross-border financial plan—not simply as a new savings account for children.

I will continue following new developments and explaining how they affect Japanese families living in the United States.

Disclaimer: This article is provided for general informational purposes only and does not constitute individualized tax, legal, financial, or investment advice. The treatment of Trump Accounts, Form 709, Form 3520, U.S. gift tax, Japanese gift tax, and cross-border transfers depends on the specific facts and circumstances. Review the latest IRS and U.S. Treasury guidance and consult appropriate U.S. and Japanese tax professionals when necessary.