Question:
I have a question about tithing on inherited stocks and mutual funds. I understand tithe is returned on the interest and dividends these assets generate going forward, of course. But does one return tithe on the value of the inherited stocks and mutual funds themselves? If so, how is that done?
Answer:
A lot about our current economy is different from the Biblical context in which the tithing instructions were first laid out. “Increase” in those days was mostly defined as animals born or crops sold, which doesn’t apply to many of us today. We can make educated applications of the principle to our current financial systems, but we do so with humility, acknowledging that sincere believers can have different perspectives on these sometimes complex issues. Our best advice would be that since the Bible teaches that we return tithe on the increase, you can see it one of two ways:
- You return the tithe when the stock is sold. There may be a personal or financial reason not to sell immediately, and you are not obligated to sell if you don’t believe it’s advantageous to do so at the moment. You might predict that in six months the stock price will have gone up, you might wish to delay the increased taxes until another year, or any number of other reasons could make it make more sense to hold on to them for the moment. Assessing a value for stocks is tricky because it can change daily, or even from one minute to the next. If you pick a value to tithe on and then later end up selling it for a different price, you will have over or under paid on the tithe. For example, if you return tithe on the value of the stock currently worth $100,000 then you would return $10,000. But when you sell it, the value may have come down to $80,000, which would mean that you paid $2,000 more than you needed to in tithe. The only issue with waiting to sell the stock is if you happen to die before you can sell the stock, then whoever inherits the stock may not return tithe on the gift.
- If you view the stocks themselves as an increase, then you sell 10% of the stocks at the present time and you return tithe right away. (Alternatively, you could simply give 10% of the stocks to the church, though you may need the help of your local conference to process such a gift since local churches don’t often receive gifts of that type. Whether to sell and donate the proceeds or donate the stocks themselves is a question with tax implications, so you should consult a qualified tax advisor on which is best for you.) The remaining 90% is yours, like any other property. You can hold on to it until you think it’s best to sell it or as you need the assets.
Ultimately, it’s all about your relationship with God. The Holy Spirit will give you wisdom in what to do. “If any of you lacks wisdom, you should ask God, who gives generously to all without finding fault, and it will be given to you” (James 1:5).
By Rudy Salazar