If Elon Musk uses Trump Accounts, his SpaceX stock gift comes with a catch

Tesla, X and SpaceX CEO Elon Musk speaks to reporters as US President Donald Trump looks on outside the White House on Tuesday, Sept. 29, 2026 in Washington, D.C.

Tierney L. Cross | The Washington Post | Getty Images

Elon Musk said Monday he will give every kid in America a share of SpaceX next year. He suggested the gift could land in Trump Accounts, thanking Brad Gerstner—an architect of the program—for “helping enable this” in a post on X.

However, if the shares are distributed through the new child investment accounts, the gift comes with significant strings attached.

The announcement follows weeks after the U.S. Treasury issued guidelines for stock donations to Trump Accounts, also known as 530A accounts. Those rules impose a five‑year selling restriction: children generally cannot sell donated stock for five years, even if the company faces financial trouble.

The Treasury’s temporary regulations, which are subject to revision after public comment, aim to encourage stock gifts but also give donors unusual influence over children’s investments, according to lawyers and philanthropy experts who spoke with CNBC.

What stock sale restrictions mean for children

Trump Account beneficiaries have limited flexibility to sell gifted shares. Under the new rules, families cannot refuse the stock and generally cannot sell it until the earlier of five years or the end of the calendar year in which the beneficiary turns 17. Early sales are permitted only in narrow circumstances, such as certain corporate transitions or formal delisting—not when financial or legal problems arise.

“Giving families more choices and more ability to hold the assets that they think are best for them and their kids’ future … would be a good thing,” said Adam Michel, director of tax‑policy studies at the Cato Institute. “But this is not really that, because you have no choice in the asset that is being deposited into your child’s account, and then you also have no ability to sell it for the five‑year holding period.”

The temporary regulations also require that if any gifted stock is sold prematurely, the trustee must repurchase the same number and class of shares “as soon as practicable.” This can expose beneficiaries to loss if the share price rises before the repurchase, according to Schenck.

“If the fiduciary makes an investment mistake, then the focus is typically restoring value to the beneficiary. But here, the focus seems to be restoring the specific security itself,” said Carolyn Schenck, a former IRS fraud counsel now at Caplin & Drysdale.

Donor incentives behind the holding rule

The Treasury text cites donor interests, noting that “Donors are attracted by the hope that a stock contribution with a five‑year holding period may lead recipients and their families to feel that they have a stake in the fate of the corporation.”

Restricting sales virtually eliminates the risk that Trump Account recipients will dump gifted shares en masse, which could depress prices, according to Jane Ditelberg, chief tax strategist at Northern Trust.

“Certainly, for people who have highly concentrated wealth in a company, and the assets are sitting in their own personal pockets, this makes it a lot easier to give,” she said.

Generally, donors receive a larger tax benefit by gifting appreciated stock to charity than by donating cash, as they can claim the charitable deduction and avoid capital‑gains tax on the appreciation.

A Treasury official told CNBC the rules are designed to build long‑term wealth for children, especially lower‑income families, and to encourage donations. “The major donors we’ve engaged are motivated by a desire to help children build generational wealth and get a head start on their financial future,” the official said in a written statement.

Treasury has said it is in discussions with Trump Account donors ranging from “small to mega,” but has not identified additional stock pledges beyond SpaceX President Gwynne Shotwell’s earlier commitment of roughly 2 million shares, which has not yet been distributed.

CNBC identified fewer than a dozen pledges from philanthropists, though about four dozen major employers have committed to seed accounts for their employees’ children.

In documents explaining the temporary rules, Treasury highlighted Michael and Susan Dell’s $6.25 billion cash pledge and “similar donations,” while noting uncertainty about the sustainability of such giving as Trump accounts launch.

Legal questions around stock gifts

Trump Account funds may be invested only in low‑cost index funds and ETFs. The Treasury said directly contributed stock is an exception because it does not use account funds for the purchase.

However, Ditelberg warned that a court could view the requirement to hold individual shares as an investment decision, especially after the Supreme Court’s 2024 overturn of Chevron deference, which limits agencies’ interpretive authority.

“These accounts are going to have to stay invested in those stocks, and the question is whether that’s directly contradicting the terms of the statute,” she said. “I can’t tell you how a court would rule, but there’s room for a challenge here.”

State law grants the right to disclaim an asset, but it is unclear how Trump Account donation procedures would accommodate that right, Ditelberg added.

Schenck noted that Treasury has broad authority to set the terms of Trump Accounts and that it is Treasury—not the original donor—who formally imposes the holding requirement.

The arrangement differs from traditional charitable giving. For example, donors to donor‑advised funds can recommend management but the sponsoring charity retains ultimate control, including the ability to sell shares, to satisfy IRS standards for deductibility.

“A key principle is that the charity must have genuine control over the donated assets, including the ability to determine when to sell them, for the gift to qualify as a completed charitable contribution,” said Gil Nusbaum, chief administrative and legal officer of the National Philanthropic Trust.

Experts say the broader question is whether Treasury’s approach aligns with the law Congress enacted.

“Musk’s gift would be incredibly generous, but it doesn’t change the fact that Congress intended these accounts to be diversified,” Michel said. “It wouldn’t be a bad innovation for Congress to allow tax‑free gifts of appreciated assets, but changes to the law should come from Congress, not by administrative fiat.”

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