{"id":891858,"date":"2026-10-23T10:44:21","date_gmt":"2026-10-23T10:44:21","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/891858\/"},"modified":"2026-10-23T10:44:21","modified_gmt":"2026-10-23T10:44:21","slug":"elon-musks-10-5b-spacex-gift-to-kids-has-a-catch-families-cant-say-no-and-may-need-to-wait-5-years-to-cash-out","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/891858\/","title":{"rendered":"Elon Musk\u2019s $10.5B SpaceX gift to kids has a catch: Families can\u2019t say no \u2014 and may need to wait 5 years to cash out"},"content":{"rendered":"\n

Close to 70 million American kids<\/a> are now beneficiaries of tax-advantaged investment accounts courtesy of President Donald Trump, complete with $1,000 invested in index funds<\/a> for those eligible based on date of birth \u2014 along with, if promises come to fruition, individual stocks including Elon Musk’s SpaceX. <\/p>\n

Musk declared on Oct. 19 that he’ll be giving $10.66 billion<\/a> to “every kid in America,” and much more down the line, in the form of one SpaceX share per child<\/a>. <\/p>\n

Must Read <\/p>\n

In a response to a question on X regarding whether the donations would be made via Trump accounts, Musk simply said, “Yes.” Posts from Trump and Treasury Secretary Scott Bessent also indicate that these shares will land in Trump accounts, with Trump lauding Musk for his “incredible generosity<\/a> in giving SpaceX Stock to millions of American children.” <\/p>\n

But there is a catch to these seemingly benevolent contributions. <\/p>\n

Free equity, but with a catch <\/p>\n

Why would anyone even think to complain about free assets? Part of it comes down to the potential motivations, and who may be benefiting from the rollout aside from recipients. <\/p>\n

If shares are donated through an appropriate vehicle, like a foundation, then donors could reap the appropriate charitable deduction benefits. Adding SpaceX (NASDAQ:SPCX) shares into Trump Accounts also allows the company to avoid a chunk of capital gains taxes<\/a> on their growth. <\/p>\n

Then there are the caveats on the complimentary capital. <\/p>\n

For one, account holders may be subject to a minimum holding period of five years<\/a> or until the end of the calendar year in which the beneficiary turns 17, whichever is earliest. This means they can’t sell it in most circumstances, other than rare events such as the formal delisting of a stock, even if the value is plummeting. A report from CNBC points out that these restrictions generally help donors<\/a> by, for one, avoiding large liquidating events of stock from their company. <\/p>\n

In a written statement, a Treasury official told CNBC, “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.” <\/p>\n

Story Continues <\/p>\n

Along with not being able to instantly sell their shares, families can’t select or refuse<\/a> stocks like SpaceX even if they wish to do so, and aren’t able to opt out of the program completely once signed up. <\/p>\n

That said, the Treasury is positioning the recent automatic enrollment as a way to provide all children the chance to own a stake in particularly successful American brands, like SpaceX, and invest in America generally. <\/p>\n

As one Washington policy advisor told the New York Times<\/a>, “the research was overwhelmingly clear that auto enrollment is the way to get to full participation, especially for low-income folks, and I think the Treasury listened.” <\/p>\n

The bulk of the holdings in the accounts, which are technically a special type of IRA known as a Section 530A account, will remain in low-cost exchange-traded funds rather than individual stocks. <\/p>\n

Read More: Vanguard reveals what’s coming for U.S. stocks \u2014 and it could be bad news for this group of investors<\/a> <\/p>\n

What parents need to know about Trump accounts <\/p>\n

To maximize the benefit of a Trump Account, parents need to claim the fund, which enables them to receive the $1,000 federal seed deposit (if they meet the criteria), add more holdings themselves and garner contribution matches from employers. <\/p>\n

Thus far, pledged endowments vary, and include Musk’s recent vow, as well as the $250 per-child gift from Michael and Susan Dell<\/a> (of Dell Technologies), which targets children who did not meet the birth date requirements of the $1,000 grant and prioritizes low-income areas. <\/p>\n

Before the systematic registration en masse this month, the parents of only about 7 to 10 million kids had chosen to join the program, partially because, experts have said<\/a>, lower-income households may have been unaware of it or more confused by it, and thus more cautious overall. <\/p>\n

As of late October, there is also talk<\/a> of extending the plan to Americans up to 39 years old. <\/p>\n

What To Read Next <\/p>\n

Want more Moneywise? Join 250,000+ readers<\/a> who get our best stories and exclusive interviews in their inbox each week. <\/p>\n

This article originally appeared on Moneywise.com<\/a> under the title: Elon Musk’s $10.5B SpaceX gift to kids has a catch: Families can’t say no \u2014 and may need to wait 5 years to cash out<\/a> <\/p>\n

This article provides information only and should not be construed as advice. It is provided without warranty of any kind. <\/p>\n","protected":false},"excerpt":{"rendered":"Close to 70 million American kids are now beneficiaries of tax-advantaged investment accounts courtesy of President Donald Trump,…\n","protected":false},"author":2,"featured_media":891859,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27],"tags":[5097,28,122,101,939,2993,2994,32455,2995,932,32456,20112,147,9323,1170,1666,6480,2996,2997,923,19533,3733,32457],"class_list":["post-891858","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-401k","tag-business","tag-business-news","tag-economy","tag-finance","tag-financial-information","tag-investing","tag-investment-tools","tag-investor","tag-market-news","tag-mortgage","tag-mutual-funds","tag-personal-finance","tag-quote","tag-real-estate","tag-retirement","tag-stock","tag-stock-research","tag-stock-valuation","tag-stocks","tag-suze-orman","tag-tax","tag-track-portfolio"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/891858","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=891858"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/891858\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/891859"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=891858"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=891858"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=891858"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}