How to tithe an investment return

[Guest]

2 minutes ago, prisonchaplain said:

Subversive question:  Is tithing on investment returns an obligation? Like LDS, my church teaches that tithing is appropriate, and most of our churches expect those who become members to tithe. However, my understanding is that tithing is done on earned income, not investments. The reason is that investments are made with money that has already been tithed upon. In addition, we'd look askance at someone who deducted investment losses from their overall tithing, so why would we expect them to tithe on their gains? On the other hand, doing so is a good thing. I'd just categorize it as offering, rather than tithe. Am I thinking wrong here?

I think that if you're consistent, that is a key element.  If you don't deduct your losses AND don't include your gains, then that is at least consistent.

But in our faith (assuming we're talking about things like stocks and bonds) the general practice is that the losses and the gains are both added or subtracted (as the case may be) to arrive at a total for the year.

From a practical financial perspective what is the difference between the money you spend/gain in the running of a business vs. the money spent/received by owning stock?

The one rule for me is that you add or subtract when you "realize" your gain or loss -- usually after you sell the stock.

[zil]

9 minutes ago, prisonchaplain said:

Subversive question:  Is tithing on investment returns an obligation? Like LDS, my church teaches that tithing is appropriate, and most of our churches expect those who become members to tithe. However, my understanding is that tithing is done on earned income, not investments. The reason is that investments are made with money that has already been tithed upon. In addition, we'd look askance at someone who deducted investment losses from their overall tithing, so why would we expect them to tithe on their gains? On the other hand, doing so is a good thing. I'd just categorize it as offering, rather than tithe. Am I thinking wrong here?

"...one-tenth of all their interest annually..."  Beyond that, you'll have to figure out for yourself what it means.    I suspect there are at least 2 schools of thought among active Mormons on whether to pay tithing on investment income.  And at least one of them is wrong.

[prisonchaplain]

I'm still stuck on the idea that investments are generally made with monies that have already been tithed on. Then again, in my family's case, we'll most certainly tithe on our social security payments and our IRA pay-outs, so I suppose that's when this comes in to play. AND, I do suppose there are those who earn the lion's share of their income through investments--perhaps with inheritance money, or wise earning earlier in life.  I'm not against tithing on such monies gained. It just may be that there will be added blessings when such do amount to a kind of double-tithe. 

[Guest]

25 minutes ago, prisonchaplain said:

I'm still stuck on the idea that investments are generally made with monies that have already been tithed on.

I'm not sure what you mean by this.  I may be thinking something different.  Here's what I'm saying:

If I make $50k/year and I choose to invest $1000 of that into stocks, I've already tithed on that $1000 because I tithed on the full $50k already.  True.

When I go sell it, I sell it for $1100.  I've just made $100 profit.  I don't tithe on the $1000 that I previously made because that was the cost of the transaction.  I only tithe on the $100 which is the increase.

Edited July 19, 2017 by Guest

[NeuroTypical]

We point directly to scripture here, which talks of amounts in terms of "one-tenth", and "increase" or "interest".  As we see there is a lack of clear, unambiguous definition here, we figure it's a bit vague for a reason.

If you ask any of us for specifics, we'll probably say "the details are between you, the Lord, and the bishop".  And if you ask a bishop, he'll likely say "the details are between you and the Lord.".   At the end of the day, we do tithing settlement, which consists of answering the question "are you a full tithe payer", and we either say yes or no.  I hear critics claiming we need to like bring in tax statements and bank records and "prove" it, but I've never seen that happen in three decades of paying tithing.

[prisonchaplain]

@Carborendum I see the distinction between tithing on the increase and tithing on the whole amount. In the past I've always assumed that I just tithe on my earned income (i.e. from labor). At the same time, I always assumed I would tithe on my Social Security and IRA pay-outs when I retire. In a sense, the latter is tithing on investment income. So, it does make sense to tithe on investment increases (subtracting losses). If someone came and said, "I earned $50K this year, but lost $10K in the stock market), would the counsel be to tithe $5K or $4K?

[Guest]

15 minutes ago, prisonchaplain said:

@Carborendum I see the distinction between tithing on the increase and tithing on the whole amount. In the past I've always assumed that I just tithe on my earned income (i.e. from labor). At the same time, I always assumed I would tithe on my Social Security and IRA pay-outs when I retire. In a sense, the latter is tithing on investment income. So, it does make sense to tithe on investment increases (subtracting losses). If someone came and said, "I earned $50K this year, but lost $10K in the stock market), would the counsel be to tithe $5K or $4K?

$4k.

[prisonchaplain]

@Carborendum, You've sold me on tithing on the increase on investments. I realize I've always believed in it, but since all my investments are geared towards retirement, I didn't realize it. Also, that investors are expected to subtract lost investment income from their total earnings strikes me as wise--it encourages investing over consumption by treating losses as acceptable risk. Who says no one gets their opinions changed at Mormonhub? 

[Guest]

1 hour ago, prisonchaplain said:

Who says no one gets their opinions changed at Mormonhub? 

Well, I guess I did. 

[mrmarklin]

Many economists agree that there is no increase in the intrinsic value of something like gold, and any "profits" should not be subject to tax. Profit on commodity transactions is currently taxed by the U S government, but it's not truly profit IMHO. 

Logically, it should not be tithed either.