Finance

Dell Technologies Delivers First Quarter Fiscal 2025 Financial Results

Published

2 years ago

May 30, 2024

Press Room

News summary

First quarter revenue of $22.2 billion, up 6% year over year
Infrastructure Solutions Group (ISG) revenue of $9.2 billion, up 22% year over year, with record servers and networking revenue of $5.5 billion, up 42%
Client Solutions Group (CSG) revenue of $12.0 billion, flat year over year, with commercial client revenue at $10.2 billion, up 3%
Diluted earnings per share of $1.32, up 67% year over year, and non-GAAP diluted earnings per share of $1.27, down 3%

ROUND ROCK, Texas, May 30, 2024 /PRNewswire/ —

Full story

Dell Technologies (NYSE: DELL) announces financial results for its fiscal 2025 first quarter. Revenue was $22.2 billion, up 6% year over year. Operating income was $920 million and non-GAAP operating income was $1.5 billion, down 14% and 8% year over year, respectively. Cash flow from operations was $1.0 billion. Diluted earnings per share was $1.32, and non-GAAP diluted earnings per share was $1.27, up 67% and down 3% year over year, respectively.

Dell returned $1.1 billion to shareholders through share repurchases and dividends and ended the quarter with $7.3 billion in cash and investments.

“We again demonstrated our ability to execute and deliver strong cash flow, with AI continuing to drive new growth,” said Yvonne McGill, chief financial officer, Dell Technologies. “Revenue was up 6% at $22.2 billion, servers and networking revenue was up 42%, and we generated $7.9 billion of cash flow from operations over the last 12 months.”

First Quarter Fiscal 2025 Financial Results

	Three Months Ended
	May 3, 2024	May 5, 2023	Change Advertisement
	(in millions, except per share amounts and percentages; unaudited)

Net revenue	$ 22,244	$ 20,922	6 % Advertisement
Operating income	$ 920	$ 1,069	(14) %
Net income Advertisement	$ 955	$ 578	65 %
Change in cash from operating activities	$ 1,043 Advertisement	$ 1,777	(41) %
Earnings per share – diluted	$ 1.32	$ 0.79 Advertisement	67 %

Non-GAAP operating income	$ 1,474	$ 1,598	(8) % Advertisement
Non-GAAP net income	$ 923	$ 963	(4) %
Adjusted free cash flow Advertisement	$ 623	$ 687	(9) %
Non-GAAP earnings per share – diluted	$ 1.27 Advertisement	$ 1.31	(3) %

Information about Dell Technologies’ use of non-GAAP financial information is provided under “Non-GAAP Financial Measures” below. All comparisons in this press release are year-over-year unless otherwise noted.

Infrastructure Solutions Group (ISG) delivered first quarter revenue of $9.2 billion, up 22% year over year. Servers and networking revenue was a record $5.5 billion, up 42%, with demand strength across AI and traditional servers. Storage revenue was flat at $3.8 billion. Operating income was $736 million.

Client Solutions Group (CSG) delivered first quarter revenue of $12.0 billion, flat year over year. Commercial client revenue was $10.2 billion, up 3% year over year, and Consumer revenue was $1.8 billion, down 15%. Operating income was $732 million.

“No company is better positioned than Dell to bring AI to the enterprise,” said Jeff Clarke, vice chairman and chief operating officer, Dell Technologies. “Servers and networking hit record revenue in Q1, with our AI-optimized server orders increasing sequentially to $2.6 billion, shipments up more than 100% to $1.7 billion, and backlog growing more than 30% to $3.8 billion.”

Dell Technologies World

On May 20, Dell expanded the industry’s broadest AI solutions portfolio from desktop to data center to cloud with innovations designed to accelerate AI adoption and innovation:

The Dell AI Factory combines Dell infrastructure, solutions and services optimized for AI workloads with an open ecosystem of partners including NVIDIA, Meta, Microsoft and Hugging Face.
The Dell AI Factory with NVIDIA includes the new PowerEdge XE9680L server, which offers direct liquid cooling in a 4U form factor and can support 72 NVIDIA Blackwell GPUs in a single rack – 33% more GPU density per node compared to the XE9680.
Dell PowerStore software updates give customers up to a 66% performance boost, native sync replication for file and block and improved multicloud data mobility capabilities.
New AI PCs are Copilot+ and powered by Qualcomm Snapdragon® X Elite and Snapdragon® X Plus processors, delivering exceptional battery life and AI performance.

Operating Segments Results

	Three Months Ended
	May 3, 2024 Advertisement	May 5, 2023	Change
	(in millions, except percentages; unaudited)
*Infrastructure Solutions Group (ISG):*
Net revenue: Advertisement
Servers and networking	$ 5,466	$ 3,837	42 %
Storage Advertisement	3,761	3,756	— %
Total ISG net revenue	$ 9,227 Advertisement	$ 7,593	22 %

Operating Income:
ISG operating income	$ 736 Advertisement	$ 740	(1) %
% of ISG net revenue	8.0 %	9.7 % Advertisement
% of total reportable segment operating income	50 %	45 %

*Client Solutions Group (CSG):*
Net revenue: Advertisement
Commercial	$ 10,154	$ 9,862	3 %
Consumer Advertisement	1,813	2,121	(15) %
Total CSG net revenue	$ 11,967 Advertisement	$ 11,983	— %

Operating Income:
CSG operating income	$ 732 Advertisement	$ 892	(18) %
% of CSG net revenue	6.1 %	7.4 % Advertisement
% of total reportable segment operating income	50 %	55 %

Conference call information

As previously announced, the company will hold a conference call to discuss its performance and financial guidance on May 30 at 3:30 p.m. CDT. Prior to the start of the conference call, prepared remarks and a presentation containing additional financial and operating information prior to financial guidance may be downloaded from investors.delltechnologies.com. The conference call will be broadcast live over the internet and can be accessed at https://investors.delltechnologies.com/news-events/upcoming-events.

For those unable to listen to the live broadcast, the final remarks and presentation with financial guidance will be available following the broadcast, and an archived version will be available at the same location for one year.

About Dell Technologies

Dell Technologies (NYSE:DELL) helps organizations and individuals build their digital future and transform how they work, live and play. The company provides customers with the industry’s broadest and most innovative technology and services portfolio for the AI era.

Copyright © 2024 Dell Inc. or its subsidiaries. All Rights Reserved. Dell Technologies, Dell, EMC and Dell EMC are trademarks of Dell Inc. or its subsidiaries. Other trademarks may be trademarks of their respective owners.

Non-GAAP Financial Measures:

This press release presents information about non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income, non-GAAP net income attributable to Dell Technologies Inc., non-GAAP earnings per share attributable to Dell Technologies Inc. – diluted, free cash flow, and adjusted free cash flow, all of which are non-GAAP financial measures provided as a supplement to the results provided in accordance with generally accepted accounting principles in the United States of America (“GAAP”). A reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure is provided in the attached tables for each of the fiscal periods indicated.

Special Note on Forward-Looking Statements:

Statements in this press release that relate to future results and events are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933 and are based on Dell Technologies’ current expectations. In some cases, you can identify these statements by such forward-looking words as “anticipate,” “believe,” “confidence,” “could,” “estimate,” “expect,” “guidance,” “intend,” “may,” “objective,” “outlook,” “plan,” “project,” “possible,” “potential,” “should,” “will” and “would,” or similar words or expressions that refer to future events or outcomes.

Dell Technologies’ results or events in future periods could differ materially from those expressed or implied by these forward-looking statements because of risks, uncertainties, and other factors that include, but are not limited to, the following: adverse global economic conditions and instability in financial markets; competitive pressures; Dell Technologies’ reliance on third-party suppliers for products and components, including reliance on single-source or limited-source suppliers; Dell Technologies’ ability to achieve favorable pricing from its vendors; Dell Technologies’ execution of its strategy; social and ethical issues relating to the use of new and evolving technologies; Dell Technologies’ ability to manage solutions and products and services transitions in an effective manner; Dell Technologies’ ability to deliver high-quality products, software, and services; cyber attacks or other data security incidents; Dell Technologies’ ability to successfully execute on strategic initiatives including acquisitions, divestitures or cost savings measures; Dell Technologies’ foreign operations and ability to generate substantial non-U.S. net revenue; Dell Technologies’ product, services, customer, and geographic sales mix, and seasonal sales trends; the performance of Dell Technologies’ sales channel partners; access to the capital markets by Dell Technologies or its customers; material impairment of the value of goodwill or intangible assets; adverse economic conditions and the effect of additional regulation on Dell Technologies’ financial services activities; counterparty default risks; the loss by Dell Technologies of any contracts for ISG services and solutions and its ability to perform such contracts at their estimated costs; loss by Dell Technologies of government contracts; Dell Technologies’ ability to develop and protect its proprietary intellectual property or obtain licenses to intellectual property developed by others on commercially reasonable and competitive terms; disruptions in Dell Technologies’ infrastructure; Dell Technologies’ ability to hedge effectively its exposure to fluctuations in foreign currency exchange rates and interest rates; expiration of tax holidays or favorable tax rate structures, or unfavorable outcomes in tax audits and other tax compliance matters; impairment of portfolio investments; unfavorable results of legal proceedings; expectations relating to environmental, social and governance (ESG) considerations; compliance requirements of changing environmental and safety laws, human rights laws, or other laws; the effect of armed hostilities, terrorism, natural disasters, or public health issues; the effect of global climate change and legal, regulatory, or market measures to address climate change; Dell Technologies’ dependence on the services of Michael Dell and key employees; Dell Technologies’ level of indebtedness; and business and financial factors and legal restrictions affecting continuation of Dell Technologies’ quarterly cash dividend policy and dividend rate.

This list of risks, uncertainties, and other factors is not complete. Dell Technologies discusses some of these matters more fully, as well as certain risk factors that could affect Dell Technologies’ business, financial condition, results of operations, and prospects, in its reports filed with the SEC, including Dell Technologies’ annual report on Form 10-K for the fiscal year ended February 2, 2024, quarterly reports on Form 10-Q, and current reports on Form 8-K. These filings are available for review through the SEC’s website at www.sec.gov. Any or all forward-looking statements Dell Technologies makes may turn out to be wrong and can be affected by inaccurate assumptions Dell Technologies might make or by known or unknown risks, uncertainties, and other factors, including those identified in this press release. Accordingly, you should not place undue reliance on the forward-looking statements made in this press release, which speak only as of its date. Dell Technologies does not undertake to update, and expressly disclaims any duty to update, its forward-looking statements, whether as a result of circumstances or events that arise after the date they are made, new information, or otherwise.

DELL TECHNOLOGIES INC. Condensed Consolidated Statements of Income and Related Financial Highlights (in millions, except percentages; unaudited)

	Three Months Ended
	May 3, 2024 Advertisement	May 5, 2023	Change
Net revenue:
Products	$ 16,127 Advertisement	$ 15,036	7 %
Services	6,117	5,886 Advertisement	4 %
Total net revenue	22,244	20,922	6 % Advertisement
Cost of net revenue:
Products	13,766	12,375	11 % Advertisement
Services	3,672	3,529	4 %
Total cost of net revenue Advertisement	17,438	15,904	10 %
Gross margin	4,806 Advertisement	5,018	(4) %
Operating expenses:
Selling, general, and administrative	3,123 Advertisement	3,261	(4) %
Research and development	763	688 Advertisement	11 %
Total operating expenses	3,886	3,949	(2) % Advertisement
Operating income	920	1,069	(14) %
Interest and other, net Advertisement	(373)	(364)	(2) %
Income before income taxes	547 Advertisement	705	(22) %
Income tax expense (benefit)	(408)	127 Advertisement	(421) %
Net income	955	578	65 % Advertisement
Net income attributable to Dell Technologies Inc.	$ 960	$ 583	65 %

Percentage of Total Net Revenue: Advertisement
Gross margin	21.6 %	24.0 %
Selling, general, and administrative	14.1 % Advertisement	15.6 %
Research and development	3.4 %	3.3 %
Operating expenses Advertisement	17.5 %	18.9 %
Operating income	4.1 %	5.1 % Advertisement
Income before income taxes	2.5 %	3.4 %
Net income	4.3 % Advertisement	2.8 %
Income tax rate	(74.6) %	18.0 %

Amounts are based on underlying data and may not visually foot due to rounding. Advertisement

DELL TECHNOLOGIES INC. Condensed Consolidated Statements of Financial Position (in millions; unaudited)

	May 3, 2024	February 2, 2024 Advertisement
ASSETS
Current assets:
Cash and cash equivalents	$ 5,830	$ 7,366 Advertisement
Accounts receivable, net of allowance of $66 and $71	8,563	9,343
Short-term financing receivables, net of allowance of $86 and $79	4,660 Advertisement	4,643
Inventories	4,782	3,622
Other current assets Advertisement	10,792	10,973
Total current assets	34,627	35,947 Advertisement
Property, plant, and equipment, net	6,237	6,432
Long-term investments	1,293 Advertisement	1,316
Long-term financing receivables, net of allowance of $109 and $91	5,941	5,877
Goodwill Advertisement	19,640	19,700
Intangible assets, net	5,538	5,701 Advertisement
Other non-current assets	6,914	7,116
Total assets	$ 80,190 Advertisement	$ 82,089

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term debt	$ 6,098 Advertisement	$ 6,982
Accounts payable	20,586	19,389
Accrued and other Advertisement	6,016	6,805
Short-term deferred revenue	15,034	15,318 Advertisement
Total current liabilities	47,734	48,494
Long-term debt	19,382 Advertisement	19,012
Long-term deferred revenue	13,116	13,827
Other non-current liabilities Advertisement	2,681	3,065
Total liabilities	82,913	84,398 Advertisement
Stockholders’ equity (deficit):
Total Dell Technologies Inc. stockholders’ equity (deficit)	(2,822)	(2,404)
Non-controlling interests Advertisement	99	95
Total stockholders’ equity (deficit)	(2,723)	(2,309) Advertisement
Total liabilities and stockholders’ equity	$ 80,190	$ 82,089

DELL TECHNOLOGIES INC. Condensed Consolidated Statements of Cash Flows Advertisement (in millions; unaudited)

	Three Months Ended
	May 3, 2024	May 5, 2023
Cash flows from operating activities: Advertisement
Net income	$ 955	$ 578
Adjustments to reconcile net income to net cash provided by operating activities:	88 Advertisement	1,199
Change in cash from operating activities	1,043	1,777
Cash flows from investing activities: Advertisement
Purchases of investments	(39)	(15)
Maturities and sales of investments	119 Advertisement	19
Capital expenditures and capitalized software development costs	(596)	(701)
Other Advertisement	60	13
Change in cash from investing activities	(456)	(684) Advertisement
Cash flows from financing activities:
Proceeds from the issuance of common stock	—	2
Repurchases of common stock Advertisement	(700)	(240)
Repurchases of common stock for employee tax withholdings	(521)	(306) Advertisement
Payments of dividends and dividend equivalents	(336)	(276)
Proceeds from debt	2,992 Advertisement	2,521
Repayments of debt	(3,477)	(3,698)
Debt-related costs and other, net Advertisement	(35)	(5)
Change in cash from financing activities	(2,077)	(2,002) Advertisement
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(55)	(58)
Change in cash, cash equivalents, and restricted cash	(1,545) Advertisement	(967)
Cash, cash equivalents, and restricted cash at beginning of the period	7,507	8,894
Cash, cash equivalents, and restricted cash at end of the period Advertisement	$ 5,962	$ 7,927

DELL TECHNOLOGIES INC. Segment Information (in millions, except percentages; unaudited; continued on next page) Advertisement

	Three Months Ended
	May 3, 2024	May 5, 2023	Change
*Infrastructure Solutions Group (ISG):* Advertisement
Net revenue:
Servers and networking	$ 5,466	$ 3,837	42 % Advertisement
Storage	3,761	3,756	— %
Total ISG net revenue Advertisement	$ 9,227	$ 7,593	22 %

Operating Income:
ISG operating income Advertisement	$ 736	$ 740	(1) %
% of ISG net revenue	8.0 % Advertisement	9.7 %
% of total reportable segment operating income	50 %	45 %

*Client Solutions Group (CSG):* Advertisement
Net revenue:
Commercial	$ 10,154	$ 9,862	3 % Advertisement
Consumer	1,813	2,121	(15) %
Total CSG net revenue Advertisement	$ 11,967	$ 11,983	— %

Operating Income:
CSG operating income Advertisement	$ 732	$ 892	(18) %
% of CSG net revenue	6.1 % Advertisement	7.4 %
% of total reportable segment operating income	50 %	55 %

Amounts are based on underlying data and may not visually foot due to rounding. Advertisement

DELL TECHNOLOGIES INC. Segment Information (in millions, except percentages; unaudited; continued)

	Three Months Ended
	May 3, 2024 Advertisement	May 5, 2023
Reconciliation to consolidated net revenue:
Reportable segment net revenue	$ 21,194	$ 19,576 Advertisement
Other businesses (a)	1,049	1,343
Unallocated transactions (b)	1 Advertisement	3
Total consolidated net revenue	$ 22,244	$ 20,922

Reconciliation to consolidated operating income: Advertisement
Reportable segment operating income	$ 1,468	$ 1,632
Other businesses (a)	6 Advertisement	(36)
Unallocated transactions (b)	—	2
Amortization of intangibles (c) Advertisement	(168)	(203)
Stock-based compensation expense (d)	(210)	(225) Advertisement
Other corporate expenses (e)	(176)	(101)
Total consolidated operating income	$ 920 Advertisement	$ 1,069

_________________
(a)	Other businesses consists of: 1) Dell’s resale of standalone VMware, Inc. products and services, “VMware Resale,” 2) Secureworks, and 3) Virtustream, and do not meet the requirements for a reportable segment, either individually or collectively.
(b) Advertisement	Unallocated transactions includes other corporate items that are not allocated to Dell Technologies’ reportable segments.
(c)	Amortization of intangibles includes non-cash purchase accounting adjustments that are primarily related to the EMC merger transaction.
(d)	Stock-based compensation expense consists of equity awards granted based on the estimated fair value of those awards at grant date. Advertisement
(e)	Other corporate expenses consist primarily of severance expenses, payroll taxes associated with stock-based compensation, facility action costs, transaction-related expenses, impairment charges, and incentive charges related to equity investments.

SUPPLEMENTAL SELECTED NON-GAAP FINANCIAL MEASURES

These tables present information about the Company’s non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income, non-GAAP net income attributable to Dell Technologies Inc., non-GAAP earnings per share attributable to Dell Technologies Inc. – diluted, free cash flow and adjusted free cash flow, all of which are non-GAAP financial measures provided as a supplement to the results provided in accordance with generally accepted accounting principles in the United States of America (“GAAP”). A detailed discussion of Dell Technologies’ reasons for including these non-GAAP financial measures, the limitations associated with these measures, the items excluded from these measures, and our reason for excluding those items are presented in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Non-GAAP Financial Measures” in our periodic reports filed with the SEC. Dell Technologies encourages investors to review the non-GAAP discussion in these reports in conjunction with the presentation of non-GAAP financial measures.

DELL TECHNOLOGIES INC. Advertisement Selected Financial Measures (in millions, except per share amounts and percentages; unaudited)

	Three Months Ended
	May 3, 2024	May 5, 2023 Advertisement	% Change
Net revenue	$ 22,244	$ 20,922	6 % Advertisement
Non-GAAP gross margin	$ 4,947	$ 5,164	(4) %
% of net revenue Advertisement	22.2 %	24.7 %
Non-GAAP operating expenses	$ 3,473	$ 3,566 Advertisement	(3) %
% of net revenue	15.6 %	17.1 %
Non-GAAP operating income Advertisement	$ 1,474	$ 1,598	(8) %
% of net revenue	6.6 % Advertisement	7.6 %
Non-GAAP net income	$ 923	$ 963	(4) % Advertisement
% of net revenue	4.1 %	4.6 %
Non-GAAP earnings per share – diluted	$ 1.27 Advertisement	$ 1.31	(3) %

Amounts are based on underlying data and may not visually foot due to rounding.

DELL TECHNOLOGIES INC. Reconciliation of Selected Non-GAAP Financial Measures Advertisement (in millions, except percentages; unaudited; continued on next page)

	Three Months Ended
	May 3, 2024	May 5, 2023	% Change Advertisement
Gross margin	$ 4,806	$ 5,018	(4) %
Non-GAAP adjustments: Advertisement
Amortization of intangibles	60	79
Stock-based compensation expense	38 Advertisement	38
Other corporate expenses	43	29
Non-GAAP gross margin Advertisement	$ 4,947	$ 5,164	(4) %

Operating expenses	$ 3,886 Advertisement	$ 3,949	(2) %
Non-GAAP adjustments:
Amortization of intangibles	(108) Advertisement	(124)
Stock-based compensation expense	(172)	(187)
Other corporate expenses Advertisement	(133)	(72)
Non-GAAP operating expenses	$ 3,473	$ 3,566 Advertisement	(3) %

Operating income	$ 920	$ 1,069	(14) % Advertisement
Non-GAAP adjustments:
Amortization of intangibles	168	203
Stock-based compensation expense Advertisement	210	225
Other corporate expenses	176	101 Advertisement
Non-GAAP operating income	$ 1,474	$ 1,598	(8) %

Net income Advertisement	$ 955	$ 578	65 %
Non-GAAP adjustments:
Amortization of intangibles Advertisement	168	203
Stock-based compensation expense	210	225 Advertisement
Other corporate expenses	170	98
Fair value adjustments on equity investments	30 Advertisement	15
Aggregate adjustment for income taxes (a)	(610)	(156)
Non-GAAP net income Advertisement	$ 923	$ 963	(4) %

____________________
(a) Advertisement	Beginning in Fiscal 2025, our non-GAAP income tax is calculated using a fixed estimated annual tax rate.

DELL TECHNOLOGIES INC. Reconciliation of Selected Non-GAAP Financial Measures (unaudited; continued)

	Three Months Ended Advertisement
	May 3, 2024	May 5, 2023	% Change
Earnings per share attributable to Dell Technologies, Inc. — diluted	$ 1.32 Advertisement	$ 0.79	67 %
Non-GAAP adjustments:
Amortization of intangibles	0.23 Advertisement	0.28
Stock-based compensation expense	0.29	0.30
Other corporate expenses Advertisement	0.24	0.13
Fair value adjustments on equity investments	0.04	0.02 Advertisement
Aggregate adjustment for income taxes (a)	(0.84)	(0.21)
Total non-GAAP adjustments attributable to non-controlling interests	(0.01) Advertisement	—
Non-GAAP earnings per share attributable to Dell Technologies, Inc. — diluted	$ 1.27	$ 1.31	(3) % Advertisement

____________________
(a)	Beginning in Fiscal 2025, our non-GAAP income tax is calculated using a fixed estimated annual tax rate.

DELL TECHNOLOGIES INC. Reconciliation of Selected Non-GAAP Financial Measures Advertisement (in millions, except percentages; unaudited; continued)

	Three Months Ended
	May 3, 2024	May 5, 2023	% Change Advertisement
Cash flow from operations	$ 1,043	$ 1,777	(41) %
Non-GAAP adjustments: Advertisement
Capital expenditures and capitalized software development costs, net (a)	(586)	(698)
Free cash flow	$ 457 Advertisement	$ 1,079	(58) %

Free cash flow	$ 457	$ 1,079 Advertisement	(58) %
Non-GAAP adjustments:
Financing receivables (b)	165	(367) Advertisement
Equipment under operating leases (c)	1	(25)
Adjusted free cash flow	$ 623 Advertisement	$ 687	(9) %

____________________
(a)	Capital expenditures and capitalized software development costs is net of proceeds from sales of facilities, land, and other assets. Advertisement
(b)	Financing receivables represent the operating cash flow impact from the change in DFS financing receivables.
(c)	Equipment under operating leases represents the net change of capital expenditures and depreciation expense for DFS leases and contractually embedded leases identified within flexible consumption arrangements.

SOURCE Dell Technologies

Finance

Why investing in a Trump Account could complicate your taxes

Published

7 minutes ago

December 21, 2025

Press Room

Why investing in a Trump Account could complicate your taxes

Julie Zauzmer
| The Washington Post

Parents who put money into their children’s “Trump Accounts” might face a headache come tax time: Even the smallest contributions may require them to fill out a little-used gift tax form that can take hours to complete.

Several tax experts have raised concerns about the new savings vehicles, which were created in Republicans’ massive tax and spending bill this summer, and have urged Congress to pass a new law so that families who use it won’t have to file gift tax returns.

“It’s going to create a compliance nightmare,” said Amber Waldman, senior director for estate and gift tax for RSM US, a tax and consulting firm.

Under the terms of the One Big Beautiful Bill law that created it, the federal government will seed each Trump Account with $1,000 for every U.S. citizen born from 2025 through 2028. Much like an individual retirement account, the money will be invested in funds that track the stock market. The idea is that children’s growing pot of money will eventually help them pay for education or a home purchase when they become adults.

Parents, relatives, employers and nonprofits also can contribute to the accounts. Businessman Michael Dell and his wife Susan have pledged to put $250 in each of the accounts of 25 million children who are younger than 10 today.

But some tax experts think lawmakers overlooked a tax requirement that could make the accounts too burdensome for most parents.

A contribution to a child’s Trump Account is a taxable gift, which requires the giver to fill out one of the IRS’s more complicated tax forms, Form 709. The 10-page document takes the average filer or their accountant more than six hours to complete, and the government has only accepted mailed submissions; that changes this coming tax season, when e-filing will become available.

It’s used by fewer than 225,000 households a year, federal data show, and is so obscure that commercial tax software like TurboTax doesn’t include it.

“If you want to apply for the $1,000 because your kid was born within the time period, fine. If your employer wants to make a contribution or you qualify for a contribution from a charitable organization … fine. But don’t put your own money in until this is clarified,” said Susan Bart, a lawyer who specializes in estate and gift tax.

Most gifts aren’t nearly this complicated. Under long-standing law, most people can give cash gifts to one another tax-free. But if it’s a sizable amount – more than $19,000 – the IRS requires the donor to file Form 709. Over time, if those gifts add up to more than $15 million in the giver’s lifetime, they need to pay certain taxes. The whole system is meant to prevent very wealthy people from doling out large cash gifts during their lifetimes so their heirs can avoid estate taxes later.

But because there’s no provision for contributions to Trump Accounts to count as exempt gifts under current tax law, donors would have to declare every contribution, several tax experts say. This applies whether the donation is $25 or as much as the $5,000 annual cap. That’s because to be considered a tax-exempt gift, the recipient has to be able to access the money right away. Trump Account beneficiaries cannot withdraw the money until they turn 18.

Asked whether Trump Account contributions are required to be reported, an IRS spokesman referred questions to the Treasury Department, where several officials did not answer questions from The Washington Post.

The American College of Trust and Estate Counsel, a lawyers group, sent a letter raising the issue to the congressional tax-writing committees last month. The group’s Washington affairs chair Kevin Matz said his group received no answer beyond acknowledgment that the letter was received.

Congress has dealt with a problem like this before. Lawmakers approved a clause exempting 529 accounts – the tax-advantaged savings accounts for a child’s education – from the requirement that the recipient have present use of the gift. That means parents, grandparents and others can put money in 529 accounts without filing gift tax returns.

The experts who raised the issue are calling on Congress to make the same legislative fix for Trump Accounts.

“It seems like legislators accidentally left that out,” Waldman said.

The 10-page tax form asks a series of questions that are nearly indecipherable to the uninitiated. It distinguishes gifts that are “generation-skipping” – such as a grandparent giving money to a grandchild. When a married couple makes a gift, it probes whether the amount can legally be considered split between them, or attributable to just one.

Even experts scratch their heads. “Not all accountants necessarily have the experience and background to be able to complete it without extensive study,” Matz said.

Bart agreed: “It’s not a DIY form by any means.”

She said she’s seen lawyers befuddled by Form 709 before. “Sometimes my partners in other practice areas who are very, very smart people, they think: I can do this for my own kid or grandchild. They come running back after they look at the form a while. You need to be a specialized attorney with a lot of experience in the area.”

Many people might contribute to Trump Accounts without knowing that they are supposed to file Form 709, and aren’t likely to file it. But experts believe that skipping the form could create problems for the parents if they’re ever audited. Or if tax software like TurboTax starts including Trump Account questions, the taxpayer might not be able to submit their returns through the software if they indicate that they gave to the accounts.

Parents can still create Trump Accounts for their children to receive money from the government and charities like Dell’s without triggering the tax form problem.

“Of course if the government’s giving you a free $1,000, go ahead and take it. That’s not going to hurt you,” Waldman said. “If you’re thinking about personally contributing, consider your other options.”

Even without the tax-filing complications, Trump Accounts might not be the best way for most parents to save money for their children, experts say. The 529 plans offer much better tax benefits – unlike Trump Accounts, parents can often take some state tax deductions when they put money into the account, and if the child uses the money to pay for education, the earnings inside the account are never taxed.

If parents want a multipurpose savings vehicle for their kids that is not just limited to education spending, an ordinary taxable brokerage account might also be a better choice, tax professionals say. Trump Accounts are untaxed during the beneficiary’s childhood, when the money is growing in the account, unlike a brokerage account that could require paying taxes on any dividends. But the tax treatment when the child does withdraw the money could be much more favorable on the brokerage account – that money gets the lower capital gains tax rate, while Trump Account withdrawals are taxed at the same rate as ordinary income, and even come with a 10 percent tax penalty if the child doesn’t use the money for a qualified purpose. And the brokerage account offers a much wider range of investment options.

“As a tax-advantaged account, it’s a terrible tax-advantaged account,” said Greg Leierson, senior fellow at New York University’s Tax Law Center.

Finance

Israel’s Cabinet approves 19 new settlements in West Bank, finance minister says

Published

12 hours ago

December 21, 2025

Press Room

Israel’s Cabinet approves 19 new settlements in West Bank, finance minister says

Israel’s Cabinet approved a proposal for 19 new settlements in the occupied West Bank, the far-right finance minister said on Sunday.

The settlements include two that were previously evacuated during a 2005 disengagement plan, according to Finance Minister Betzalel Smotrich, who has pushed a settlement expansion agenda in the West Bank.

It brings the total number of new settlements over the past two years to 69, Smotrich wrote on X.

The approval increases the number of settlements in the West Bank by nearly 50% during the current government’s tenure, from 141 in 2022 to 210 after the current approval, according to Peace Now, an anti-settlement watchdog group. Settlements are widely considered illegal under international law.

The approval comes as the U.S. is pushing Israel and Hamas to move ahead with the new phase of the Gaza ceasefire, which took effect Oct. 10. The U.S.-brokered plan calls for a possible “pathway” to a Palestinian state — something Smotrich says the settlements are aimed at preventing.

The Cabinet decision included a retroactive legalization of some previously established settlement outposts or neighborhoods of existing settlements, and the creation of settlements on land where Palestinians were evacuated, Peace Now said.

Israel captured the West Bank, east Jerusalem and Gaza — areas claimed by the Palestinians for a future state — in the 1967 war. It has settled more than 500,000 Jews in the West Bank, in addition to over 200,000 more in contested east Jerusalem. About 15% of settlers are Americans.

The United Nations calls the settlements, which are scattered inside the West Bank and East Jerusalem, illegal.

Israel’s government is dominated by far-right proponents of the settler movement, including Smotrich and Cabinet Minister Itamar Ben-Gvir, who oversees the nation’s police force.

According to the U.N., settler expansion has been compounded by a surge of attacks against Palestinians in the West Bank in recent months.

During October’s olive harvest, settlers across the territory launched an average of eight attacks daily, according to the United Nations humanitarian office, the most since it began collecting data in 2006. The attacks, the U.N. reported, continued in November, with the agency recording at least 136 more by Nov. 24.

Palestinian officials said settlers burned cars, desecrated mosques, ransacked industrial plants and destroyed cropland. Israeli authorities have issued condemnations of the violence, but made few arrests.

Finance

Banks Could Favor A Higher XRP Price, Finance Expert Says

Published

1 day ago

December 20, 2025

Press Room

Banks Could Favor A Higher XRP Price, Finance Expert Says

XRP has continued to trade lower as crypto prices weaken across the board, with the total market shedding more than $1.3 trillion since October.

During the past three months, XRP has dropped more than 30%, keeping pressure on sentiment even as some commentators argue the token’s purpose goes far beyond short-term price moves.

Retail Vs. Institutional Viewpoint

According to health and finance commentator Dr. Camila Stevenson, much of the debate around XRP misses how large financial players judge settlement tools.

Everyday traders tend to focus on charts and quick exits. Banks do not. They look at whether a system can handle stress, move large sums, and keep working when conditions worsen. Stevenson compared it to infrastructure testing, where strength and capacity matter more than the initial cost.

XRP Was Built For Flows

Based on reports from her recent video discussion, XRP was structured to act as a bridge for moving value, not as a speculative chip. With a fixed supply, the token cannot expand in quantity to meet higher transaction demand.

Stevenson said that leaves price as the only way to support larger volumes. Analyst XFinanceBull echoed this view, encouraging market watchers to think in terms of flows rather than daily price action. Price Alone Does Not Prove Use

Even so, market behavior still plays a major role. XRP trades in open markets, and speculation continues to influence price direction.

A higher price may improve efficiency, but it does not guarantee adoption. Stevenson pointed out that many institutions position through custodians, OTC desks, and private agreements.

These transactions often happen quietly and may not show up as sharp moves on public charts. Sudden spikes during positioning, she warned, would suggest instability rather than healthy use. Why Higher Price Helps

Stevenson argued that banks moving billions would rather use fewer units that each represent more value. Fewer tokens can mean simpler settlement and less risk of slippage during busy periods.

Large financial systems tend to fail when money cannot move or when settlement slows, not when prices fall. In that context, a higher XRP price could support smoother transfers if volumes rise enough to test the system.Market Reality Remains Mixed

Despite the theory, clear proof of large-scale institutional demand remains limited. Regulation, liquidity depth, and reliable access still shape whether banks commit real volume.

XRP’s 33% slide over recent months shows how quickly sentiment can shift, even as long-term use cases are debated. The idea that banks prefer a higher XRP price rests on future scale, not current trading patterns.

Featured image from Unsplash, chart from TradingView