Tithing the Increase in a Home Sale
Question: My husband and I have a difference in the definition of "increase" as it applies to the sale of our home. In the FAQ, you said, "For those who are in business for themselves, they must first deduct their business expenses or the cost of doing business." My husband thinks that means the "increase” is the net amount that we received for the sale minus the estimated amount (he's using the last assessed price of the home we sold) it will cost to rebuild another home comparable to what we sold. I thought the increase is the price we paid for the house seven years ago minus the amount we received for the sale of the house. We are both committed to returning a faithful tithe.
ANSWER: Thank you for this honest question and your intent to follow scripture. From your email, I see you both already believe in returning tithe on the increase as taught from scripture. Your faithfulness is to be commended. Your question is, how to calculate what an increase is?
"You shall truly tithe all the increase of your grain that the field produces year by year. Deuteronomy 14:22 NKJV.
The planted seeds have already been tithed from the harvest increase in past years; the grain grown in the current year is considered to be increased and not yet tithed.
Bring all the tithes into the storehouse, That there may be food in My house, And try Me now in this," Says the LORD of hosts, "If I will not open for you the windows of heaven And pour out for you such blessing That there will not be room enough to receive it. Malachi 3:10 NKJV
Personal finance is not the same as business finance in that there is no increase until all the business expenses are paid (cost of inventory or operating). Our personal income (blessing) is the increase usually from a paycheck in personal finance. After tithe and offerings, we then pay our personal expenses of living.
May I reframe the question? What portion of the proceeds from the house sale had already been tithed, and what portion has no tithe been returned yet?
Let me set up a hypothetical scenario.
Seven years ago, a home was purchased for A. $300,000 (cost basis). The home is sold for B. $500,000 (sale price after selling expenses). The gain over the price paid is C. $200,000 (gain for income tax purposes). The question is now to determine which portion of each number has been tithed and which has no tithe been returned. I have labeled the three numbers "A, B, C."
1. NO MORTGAGE If you used savings of already tithed money to purchase the home (no mortgage), then the cost basis has been tithed.
A. has been tithed C. has not been tithed
2. MORTGAGE The down payment and all your principal payments were tithed if you had a mortgage. For the mortgage scenario
If the down payment was $60,000 (from savings), principal payments over 7 years were $35,000 (from tithed income), and the interest paid is an expense like utilities or taxes. The tithed basis on the home is $95,000. If the loan balance at the time of sale is $205,000, your family's net proceeds or increase is $195,000. That is calculated as follows $500,000 minus $205,000 minus $95,000 equals a $195,000 increase that has not been tithed.
I am sure that many people do not even ask the question that you are asking and do not think about returning tithe on the sale of their home. As you can see it is rather complicated to find the amount on which tithe is to be returned. God says to test him in the returning of tithe and the giving of offerings. I know that God is faithful.
Dennis R. Carlson
GC Planned Giving and Trust Services
