Multiply Your Impact: A Tax-Smart Way to Invest in Masonry's Future

Masonry's Future Is Big, Start Investing In It Now

By Dan Kamys

Investing in the future of the masonry industry is crucial for its continued growth and success. The Masonry Foundation, a registered 501(c)(3) charitable organization, plays a key role by supporting beneficial projects and initiatives within the field. While traditional cash donations are always valuable, there's another powerful method, especially if you hold investments like stocks: donating appreciated assets directly. This approach can significantly boost the impact of your gift while offering potential tax advantages for you.

Understanding Capital Gains Tax on Investments

Many people invest in stocks, mutual funds, or ETFs. Over time, if these investments do well, their value increases. This increase in value is called appreciation, or a "capital gain." When you decide to sell these investments for cash, the government typically requires you to pay taxes on the profit (the gain) you realized. This is known as the capital gains tax. This tax reduces the total amount of cash you receive from the sale.

The Problem with Selling First, Donating Later

Let's look at a common scenario. Suppose you have stock now worth $10,000 that you originally bought for much less, and you want to donate that amount to support the Masonry Foundation's mission. If you sell the stock first to get the $10,000 cash, you'll likely owe capital gains tax on the appreciation. The example in the Foundation's materials suggests this tax could be around $2,547 for a $10,000 gain. This means you'd actually need to sell more than $10,000 worth of stock (over $12,500 in the example) just to have $10,000 left over to donate after paying the tax. The tax effectively shrinks the amount available for your intended charitable gift.

The Solution: Donate Appreciated Assets Directly

Here’s the smart alternative: Instead of selling the stock, you can donate the shares directly to The Masonry Foundation. When you transfer appreciated stocks, mutual funds, or ETFs you've held for over a year directly to a qualified charity like the Foundation, you can often eliminate the capital gains tax you would have owed if you'd sold them first.

Unpacking the Benefits

Choosing this direct donation method offers several advantages:

Eliminate Capital Gains Tax: By donating the asset directly, you bypass the sale, and therefore, you typically bypass the capital gains tax on the appreciation.
Maximize the Foundation's Gift: Because no taxes are immediately taken out on the gain, the Foundation receives the full value of the donated assets. Your $10,000 worth of stock means $10,000 directly supporting masonry initiatives.
Receive a Potential Tax Deduction: If you itemize deductions on your tax return, you may be eligible to claim a charitable deduction for the full fair market value of the donated assets at the time of the gift.
Preserve Your Cash: This strategy allows you to make a significant contribution without needing to use cash from your savings or checking accounts. You're using the value already built up in your investments.
Directly Fuel Masonry's Future: Your donation directly supports the Foundation's mission to fund programs and projects that benefit and advance the entire masonry industry.

Is This Strategy Right for You?

This approach is often most beneficial for individuals who hold investments (like stocks, bonds, mutual funds, or ETFs) that have significantly increased in value over time (held for more than one year).

Making It Happen

Donating stock isn't overly complicated. The Masonry Foundation indicates they can help donors navigate the transfer process.

By considering a donation of appreciated assets, you can make your support for the masonry industry go further. It’s an effective way to multiply your impact and invest wisely in the future of our field.

Disclaimer: The Masonry Foundation is a 501(c)(3) organization. This information is for educational purposes only. The Foundation does not provide tax, financial, or legal advice. Please consult with your own qualified tax, financial, and/or legal professional to determine if donating appreciated assets is appropriate for your individual financial situation.

Interested in learning more? Contact Paul Magovern at Guyasuta Investment Advisors, Inc. pjm@guyasuta.com, 412.447.4543 for information on facilitating a transfer.