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Tithing - What to say and NOT to say

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Tithing is:

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‘one-tenth of all their interest annually,’ which is understood to mean income. No one is justified in making any other statement than this.

Every member of the Church is entitled to make his own decision as to what he thinks he owes the Lord and to make payment accordingly .

(First Presidency letter, 19 Mar. 1970)

Such language makes people believe that we are actually sinning if we give any further guidance than this.  This doesn't really make sense when there are so many talks given on the topic, both at our meetinghouses and in general conference that go into some more detail than this.

The major problem I have with this "silent" approach is that often times we get question on tithing that aren't about the principle.  It is about math or business or taxes or whatever.  People basically don't know what "interest" means when applied to their situation.  They want to be a full tithe payer.  But they don't really know what it means.

Recently we had a question about a person selling their home who received money for it.  To me it didn't seem to be a question about tithing, but about what "income" really means.  He simply didn't know.  So, to say that he just needed to determine what he thought... that didn't seem appropriate since he apparently didn't know what to think.

So, how do we approach giving advice on tithing when people ask us about it with these types of questions?

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Well let's take the sale of the home as an example, I buy a home for 250,000. I sell 10 years later for $650,000.  My gain is what?

If I am married I have a 500,00 exclusion, plus improvements and closing, so add in 20k closing costs, 75k improvements over 10 years totals $595,000. My gain on the sale of the home is $55,000. If you wanted to tithe the sale of your home you could pay $5,500.

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Why in all these discussions of houses does everyone say they paid [some amount] which is clearly the market value, and later sold it for [some other amount] which is clearly the new market value, and never mention the interest paid on the loan, which, at the end of the day, is how much you really paid for the house?  (Just curious.)

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I personally always give the standard, 'it's between you and the Lord' (because if I don't someone will inevitably come in and say, 'hey it's between them and the Lord! <_<).  However, I always follow after that with exactly how I would personally pay tithing in that situation.

Interestingly on this topic, ". . .'interest annually' which is understood to mean income" is not always accurate.  If you review the historical interpretation even in the Latter-Days, tithing was initially assumed to be on a person's surplus.  In the 1828 Dictionary with definitions as would have been understood in Joseph Smith's time interest is listed as profit, or surplus advantage (Webster 1828).  Even the early brethren expressed that tithing was to be paid on surplus (sources provided if requested).  That is also the revelation Joseph Smith received regarding Abraham in the inspired translation of the Bible:

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Wherefore, Abram paid unto him tithes of all that he had, of all the riches which he possessed, which God had given him more than that which he had need. (JST Genesis 14:39)

That being said, I personally pay on my gross rather than net or surplus, but I subtract what I pay into my 401K and retirement accounts and Social Security because it will be easier to pay tithing on it as I receive/withdraw it than to calculate how much I put in vs how much I'm taking out when I retire and start withdrawing.

I think we should share with others how we pay it while also ensuring they understand that after they take the information that they receive from many sources they should still evaluate for themselves thoughtfully and prayerfully.

Edited by person0

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For me I find peace in knowing that my full tithe paying status is between me and Heavenly Father which I always pay tithing right when I get my paycheck every 2 weeks.

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General principle: I try to not find ways to get out of paying tithing. It's not taxes. It is a blessing to pay tithing. If I overpay, great. It's all the Lord's anyhow. That being said, it would be unwise to be totally stupid about it.

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59 minutes ago, zil said:

Why in all these discussions of houses does everyone say they paid [some amount] which is clearly the market value, and later sold it for [some other amount] which is clearly the new market value, and never mention the interest paid on the loan, which, at the end of the day, is how much you really paid for the house?  (Just curious.)

By that math a 250k house at 3.25% after 30 years will cost you $391,687.20. 250k in principle and $141,687.20 in interest. (if you bought it today)

The buyer typically does not care how much interest YOU paid for your home and in most parts of the country you won't get it back because homes don't appreciate in value. 

Individually you should care and budget accordingly.

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1 hour ago, zil said:

Why in all these discussions of houses does everyone say they paid [some amount] which is clearly the market value, and later sold it for [some other amount] which is clearly the new market value, and never mention the interest paid on the loan, which, at the end of the day, is how much you really paid for the house?  (Just curious.)

 Because I've moved around so much, I am very conscious of everything I pay for a house.  I usually deduct the interest on the house each year precisely because I buy and sell so much.  But if I didn't move around so much I think I'd deduct it the year I sold the house.

Edited by Guest

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1 hour ago, person0 said:

Interestingly on this topic, ". . .'interest annually' which is understood to mean income" is not always accurate.  If you review the historical interpretation even in the Latter-Days, tithing was initially assumed to be on a person's surplus.  In the 1828 Dictionary with definitions as would have been understood in Joseph Smith's time interest is listed as profit, or surplus advantage (Webster 1828).  Even the early brethren expressed that tithing was to be paid on surplus (sources provided if requested).  That is also the revelation Joseph Smith received regarding Abraham in the inspired translation of the Bible

That was a different meaning of tithing that you're referring to.  Those references were to "all free will offerings".  Such was NOT limited to 10% since it was about the United Order.  And it is clearly not Tithing as we know it today.  Today, we do not follow the UO.  We still practice the Law of Consecration.  And tithing (as practiced today) is one practice that shows we still observe the Law of Consecration -- just in a different way.

Edited by Guest

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1 hour ago, Carborendum said:

So, how do we approach giving advice on tithing when people ask us about it with these types of questions?

I would say to help them come to a conclusion about what "interest annually" means to them; that is, whatever enters into their personal scope of stewardship during a year's period.

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1 hour ago, Zarahemla said:

Do you guys pay tithing on tax refunds?

No. I already paid on my gross income, so already paid on that money.

Edit: In theory. I haven't gotten a tax refund in years.

Edited by The Folk Prophet

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1 hour ago, omegaseamaster75 said:

By that math a 250k house at 3.25% after 30 years will cost you $391,687.20. 250k in principle and $141,687.20 in interest. (if you bought it today)

The buyer typically does not care how much interest YOU paid for your home and in most parts of the country you won't get it back because homes don't appreciate in value. 

Individually you should care and budget accordingly.

My point is, when calculating your "income" from the sale of a house, you cannot say, I bought it for 250k, sold it for 350k and therefore got 100k in income.  You have to say, I paid 391k, sold it for 350k and ate 41k.  Now whether you still pay tithing on the 100k, or on some amount of cash you walked away with after buying your next home, or whatever, may be a whole nuther story, but I don't think you can take the initial prices and use those to determine "income".

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1 hour ago, Zarahemla said:

Do you guys pay tithing on tax refunds?

If you pay tithing on gross, you've already paid tithing on whatever you get back.  If you pay tithing on net, then you haven't yet paid tithing on whatever you get back.  As for whether you should pay tithing on any of that, see the quote in the OP. ;)

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1 hour ago, Zarahemla said:

Do you guys pay tithing on tax refunds?

No. I tithe my gross income (I'm essentially a wage-earner), so increasing my net doesn't change my tithing.

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1 hour ago, The Folk Prophet said:

...it would be unwise to be totally stupid...

Self quote!!

This may be one of the more brilliant things I have ever said.

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3 minutes ago, zil said:

My point is, when calculating your "income" from the sale of a house, you cannot say, I bought it for 250k, sold it for 350k and therefore got 100k in income.  You have to say, I paid 391k, sold it for 350k and ate 41k.  Now whether you still pay tithing on the 100k, or on some amount of cash you walked away with after buying your next home, or whatever, may be a whole nuther story, but I don't think you can take the initial prices and use those to determine "income".

The IRS does not care how much you paid in interest when they calculate gain on the sale of a home. 

Everyone has their own idea on what their "increase/interest" is which is why is is so vague.

You could argue that a house sold has no "increase" because there is no effective gain.  The house sold at market value and if I went to buy a similar home I would pay Market prices effectively having no gain at all.

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1 hour ago, Carborendum said:

We still practice the Law of Consecration.  And tithing (as practiced today) is one practice that shows we still observe the Law of Consecration -- just in a different way.

Note that, even under the united order, one still tithed. Tithing is an eternal law.

According to my understanding of the united order (whichever one you lived under -- there were several), when you counted your profits at the end of the year, whether it was harvest or tools produced or whatever, you paid a tenth for tithing if you hadn't already tithed, then paid off your outstanding debts, and gave the rest to the bishop to be divided up as he saw fit.

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At the end of the day if you are a w-2 wage earner tithing is simple.  You only have to worry about whether you pay Gross or net.  

The internet should not be your weather vane for the how's whys, what's and where's of how to pay your tithing.

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12 minutes ago, zil said:

My point is, when calculating your "income" from the sale of a house, you cannot say, I bought it for 250k, sold it for 350k and therefore got 100k in income.  You have to say, I paid 391k, sold it for 350k and ate 41k.  Now whether you still pay tithing on the 100k, or on some amount of cash you walked away with after buying your next home, or whatever, may be a whole nuther story, but I don't think you can take the initial prices and use those to determine "income".

Nope, I disagree. The interest you pay is not part of the price of the house; it is the cost of purchasing the loan on the house. You are paying for a service -- namely, the service of someone allowing you to borrow hundreds of thousands of dollars to buy your house. No different from buying catering for your daily meals. I completely disagree with the idea that somehow interest paid should be "deducted" from tithable income. This is not taxes and the IRS we're talking about.

Edited by Vort

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49 minutes ago, Vort said:

Nope, I disagree. The interest you pay is not part of the price of the house; it is the cost of purchasing the loan on the house. You are paying for a service -- namely, the service of someone allowing you to borrow hundreds of thousands of dollars to buy your house. No different from buying catering for your daily meals. I completely disagree with the idea that somehow interest paid should be "deducted" from tithable income. This is not taxes and the IRS we're talking about.

This makes sense.  Mostly (in addition to being curious why it never comes up), I figured this was an example of why the church doesn't get specific when explaining the law of tithing - it's like the gross / net debate, or whether to pay tithing on money (items?) received as a gift, or how to handle things when you own a business, "price of house" vs "cost of buying a house"...  .  Things start getting fuzzy and contentious when you get down to the nickles and dimes, so it's better to let people decide for themselves than to try dictating every little detail (the "law of tithing" would start looking like the tax code ::shiver::).  

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1 hour ago, Vort said:

Nope, I disagree. The interest you pay is not part of the price of the house; it is the cost of purchasing the loan on the house. You are paying for a service -- namely, the service of someone allowing you to borrow hundreds of thousands of dollars to buy your house. No different from buying catering for your daily meals. I completely disagree with the idea that somehow interest paid should be "deducted" from tithable income. This is not taxes and the IRS we're talking about.

Yes and no.  Since most people borrow to buy a house, the ability to borrow money inflates housing prices, i.e. if no one could borrow to buy a house, housing prices would collapse like a rock.  People would still buy homes, but their prices would not be so high.  This is self-evident with the housing bubble in 2008 and the echo-bubble of today.  More people with access to credit = higher prices.  

That is why with inflation it gets harder to actually calculate what your increase is. If you buy for 100k and sell 10 years later for 300k and all you did was just live there, did you really get a increase or did the cost of everyone's home increase buy 200%. If everyone's home increased by 200% then unless you either downsize or sell your house to rent you have no increase. 

That's why things get tricky.  Quite frankly, the natural order of things is for housing prices to decrease.  A house gets old, it needs repairs, it is no different than a vehicle.  No one buys a vehicle for an "investment", they buy it b/c they need it.  A house actually depreciates in cost, it is why if you own a rental home you get to deduct depreciation costs from the house.

The only reason you really make a nominal increase on a house is, a) you improved it somehow, b) you bought in an area that has seen lots of development and the demand in that particular area has now increased . . . 

Housing, unlike most things is directly tied to two things, incomes and credit. If both of those is not increasing, housing nominal prices will fall, if they are increasing then prices will rise.

Edited by yjacket

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5 hours ago, Carborendum said:

 

Recently we had a question about a person selling their home who received money for it.  To me it didn't seem to be a question about tithing, but about what "income" really means.  He simply didn't know.  So, to say that he just needed to determine what he thought... that didn't seem appropriate since he apparently didn't know what to think.

So, how do we approach giving advice on tithing when people ask us about it with these types of questions?

Sometimes, we don't know what we don't know. I know that for me, my idea of what constitutes tithing has changed over the years. And my opinion changed because of my study of tithing, discussions with bishops, discussions with trusted friends, and what I believe was the Spirit teaching me. 

Typically, I like when people approach these type of discussions with an explanation of their understanding but with the added caveat, "it's ultimately between you and the Lord." Because that is a very true statement. But, answering the question also allows us another perspective to consider and possibly take to the Lord. 

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