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New Tax Legislation Preserves Capital Gains Rates, Introduces Trump Account for Kids

KVIA•Saturday, January 24, 2026 at 9:19 AM•Stacker

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The recently enacted One Big Beautiful Bill Act by President Trump maintains existing capital gains tax rates at 0%, 15%, and 20%, while introducing a new savings vehicle called the Trump Account aimed at children. This account allows for annual contributions up to $5,000, which grow tax-deferred but are taxed as ordinary income upon withdrawal. Although proposals to change capital gains taxation were discussed, they were not included in the final legislation. The Trump Account is designed to encourage long-term savings for children and has specific rules regarding contributions and withdrawals, including a penalty for excess contributions. This legislation is significant for investors and families looking to leverage tax-advantaged savings options.

Key Details: • Annual contributions to a Trump Account are capped at $5,000 per beneficiary under age 18. • Withdrawals from the Trump Account are taxed as ordinary income, not capital gains. • Contributions must be made with after-tax dollars and are not deductible. • Withdrawals are prohibited until the beneficiary turns 18, with some exceptions. • Excess contributions incur a 100% penalty on net income attributable to the excess amount.

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