This is Part IV of the six-part series where we discuss real estate, investments, retirement, and insurance. Please remember that my only goal is to help you think through your view of paying a full tithe.
Here are some scenarios with the questions that each raises.
You own a home.
- Do you pay tithing on:
- The full value of the home when you sell it?
- The equity you have at the time of the sale?
- The equity in excess of the amount by which you had paid down the principal with post-tithing money?
- Your net profit? (i.e. your equity after paying closing costs and realtor fees)
- Only cash that you keep out to pay for something else?
- What if the cash you take out of equity is less than the amount by which you already paid down the mortgage with post-tithing money?
- What if you roll all the equity over into your new house
- Does your answer to any of the above change if you buy and sell real estate for income?
- What if you’ve passed through periods of high inflation and the dollar has lost much of its buying power, does that factor into your tithing calculations in any way?
Stocks go up and down in value, so do you pay tithing:
- At each change in the market?
- When you receive dividends?
- Does your answer to the above question change if you reinvest your dividends rather than taking them as cash?
- Only when you sell your stock?
- When you sell your stock, do you calculate your basis (what you paid for the stock) so you’re only paying tithing on the profit and not on what you paid for the stock with post-tithing money?
You have money in a bank account earning interest, but the inflation rate is very high, so you’re actually losing purchasing power. Do you owe tithing despite the quantifiable loss?
You pay into retirement accounts and later cash out. Do you owe tithing:
- As your accounts increase in value?
- Only on the money when you withdraw it?
- Only on the net increase (you calculate the amount you paid in with post-tithing money) when you withdraw the money?
You pay into Social Security and later receive benefits. Do you owe tithing:
- On everything you receive from Social Security, even though you had always paid tithing on your gross income?
- On some amount that’s determined by how much you paid in? The dollar amount you receive is probably greater than what you paid in due to inflation and cost of living increases, so do you owe on the absolute dollar amount or the difference?
- On nothing because you paid tithing on your gross income?
- On nothing because the money you receive has less purchasing power than the amount that you paid in, despite the fact that the actual numbers are higher?
You receive an insurance check for something that was damaged. Do you pay tithing on:
- The full amount of the check?
- Nothing if the check is the same amount as the damages you incurred (and had to pay for)? That is, the insurance restored your item to its prior condition.
- Nothing if the check is less than the premiums you’ve paid into the policy?
- The amount of the check less any expenses such as lawyer’s fees, health care lien, etc.?
- The amount of the check less the amount received for pain and suffering because it’s an attempt to compensate you for lost time with your family, etc. and not really an “increase”?
Continue on to read the other parts in the series: