Every active LDS member pays tithing. It's one of the most clearly defined financial obligations in the church, required for temple attendance and central to LDS practice. But what exactly counts as income when you're an investor? Do you tithe on dividends? Capital gains? Unrealized gains? Retirement account growth? Let me walk through the actual math with specific examples.

The Scripture

Doctrine and Covenants 119 is the founding revelation on tithing, received by Joseph Smith in 1838. The key verses are:

D&C 119:3-4: "Verily, thus saith the Lord, I require all their surplus property to be put into the hands of the bishop of my church in Zion, for the building of mine house, and for the laying of the foundation of Zion and for the priesthood, and for the debts of the Presidency of my Church. And this shall be the beginning of the tithing of my people. And after that, those who have thus been tithed shall pay one-tenth of all their interest annually; and this shall be a standing law unto them forever."

The word "interest" in the King James English of 1838 meant "increase" or "gain," not specifically interest in the modern financial sense. The church has consistently interpreted D&C 119:4 to mean a tenth of one's annual increase or income.

D&C 64:23 adds: "Behold, now it is called today until the coming of the Son of Man, and verily it is a day of sacrifice, and a day for the tithing of my people; for he that is tithed shall not be burned at his coming."

The scripture is clear on the principle: one tenth of annual increase. What's not specified is how to calculate that increase when your "income" includes dividends, capital gains, retirement account growth, and other modern financial complexities.

The Official Church Guidance

The church's official guidance on tithing is deliberately brief. The definition typically provided is "one-tenth of all your income," with the specific calculation left to individual conscience.

The current church handbook guidance on tithing (published in Handbook 1 and Handbook 2 in various editions, now consolidated in the General Handbook) says members should pay one-tenth of their income, with income understood as the member's interpretation of what constitutes their annual increase.

This deliberate flexibility means that different faithful LDS families can calculate tithing differently and all be doing it correctly. The church doesn't audit, doesn't prescribe a specific methodology, and doesn't dictate how to handle investment complexities. That's left between you and the Lord, with your bishop available for guidance if you want it.

Three Common Interpretations

In practice, most active LDS members use one of three interpretations for calculating income:

Interpretation 1: Gross income
Ten percent of all money received before any deductions. This is the simplest calculation. If you earn $100,000 in salary, you tithe $10,000. If you also receive $5,000 in dividends, you tithe an additional $500 on that.

Interpretation 2: Net income after taxes
Ten percent of take-home pay and after-tax investment income. This reduces the tithing amount by the percentage of your income going to taxes.

Interpretation 3: Profit or increase
Ten percent of your net increase in wealth. This approach tries to capture the true economic gain rather than gross receipts or take-home amounts.

All three are in use among active LDS members. The church doesn't endorse one over the others. A bishop's personal advice might vary depending on the individual's circumstances and preferences.

Stock Dividends

Dividends are cash distributions from companies to shareholders. They're clearly income under any reasonable interpretation.

If you own 100 shares of Apple (AAPL) and Apple pays a quarterly dividend of $0.25 per share, you receive $25 each quarter or $100 per year. You tithe $10 on that.

Most active LDS investors calculate dividends on a cash-received basis. When the dividend hits your account, it's income, and 10% is owed.

Gross vs net doesn't usually matter much for dividends in tax-advantaged accounts because dividend reinvestment happens pre-tax there. In taxable accounts, the dividend is taxable whether you reinvest or take the cash, so the gross vs net distinction becomes relevant depending on your interpretation.

Capital Gains

Here's where it gets more interesting. Capital gains occur when you sell an investment for more than you paid for it. If you bought Microsoft (MSFT) for $10,000 and sold it for $15,000, you have a $5,000 capital gain.

Do you tithe on capital gains? Most active LDS members say yes, based on the scriptural concept of "increase." A capital gain is clearly an increase in your wealth.

The question is whether you tithe on gross gains or net gains (gains minus losses), and whether you tithe in the year of realization or the year of receipt.

Gross approach: Tithe 10% of each individual gain, without offsetting losses. If you have $10,000 in gains and $3,000 in losses, you tithe $1,000 on the gross gains.

Net approach: Tithe 10% of net gains after offsetting losses. With $10,000 in gains and $3,000 in losses, net is $7,000, and you tithe $700.

Year of realization: Tithe when you actually sell and trigger the gain, not when the gain accrues.

Most LDS investors use the net approach realized in the year of sale. This aligns with how taxes work and makes practical sense: you pay taxes on net gains at realization, and you tithe on the same amount.

Real Example

Let me walk through a concrete example. Sarah is a 35-year-old LDS investor with a taxable brokerage account. Here's her 2025 activity:

Started the year with $150,000 in account
Contributed $12,000 in new money over the year
Received $3,200 in dividends across the year
Sold Apple stock: cost basis $8,000, sale price $12,000, gain of $4,000
Sold Nvidia stock: cost basis $6,000, sale price $9,000, gain of $3,000
Sold Intel stock at a loss: cost basis $5,000, sale price $3,500, loss of $1,500
Ended the year with $180,000

Tithing calculation (net realized approach):
- Dividends: $3,200
- Net realized gains: $4,000 + $3,000 - $1,500 = $5,500
- Total investment income: $3,200 + $5,500 = $8,700
- Tithing owed: $870

Sarah would pay $870 in tithing on her investment income for the year, on top of whatever she pays on her salary.

Tithing calculation (gross approach):
- Dividends: $3,200
- Gross gains: $4,000 + $3,000 = $7,000
- Total: $10,200
- Tithing owed: $1,020

The gross approach yields a higher tithing obligation because it doesn't offset losses.

Tithing calculation (net wealth increase):
- End of year: $180,000
- Start of year: $150,000
- Contributions: $12,000
- Actual increase: $180,000 - $150,000 - $12,000 = $18,000
- Tithing owed: $1,800

The net wealth approach yields the highest number because it captures unrealized gains in addition to dividends and realized gains.

Sarah and her husband should pick an approach, apply it consistently, and discuss it with their bishop if they're uncertain.

Retirement Accounts

Retirement accounts (401(k), IRA, Roth IRA, Roth 401(k)) create a special timing question. The accounts grow tax-deferred (traditional) or tax-free (Roth), and the growth isn't realized as taxable income until withdrawal.

Most LDS members tithe on retirement account growth at the time of withdrawal, not at the time of growth. This aligns with the cash-received principle: you haven't actually received the money until it leaves the account.

For traditional 401(k) and IRA contributions made from pre-tax dollars, the contributions themselves typically aren't tithed at the time of contribution because the money went directly from employer to account without passing through your hands. When you withdraw in retirement, you pay tax and tithe on the full amount (contributions plus growth).

For Roth accounts, the contributions were after-tax money that you may have already tithed on. The question of whether to tithe on Roth withdrawals varies. The most common approach is to tithe on the growth portion (the earnings) at withdrawal but not on the contribution portion that was already tithed.

This creates record-keeping complexity because you need to track basis (what you contributed) separately from growth (what you earned). Most retirement account custodians can provide this information if you ask.

Simpler alternative: Some LDS members simplify by tithing on the full retirement withdrawal amount regardless of pre-tax vs post-tax origin. This slightly overpays on Roth accounts but eliminates the accounting complexity. It's a personal choice.

Rental Income and REITs

Rental income from real estate is calculated like business income. You tithe on net rental income (gross rent minus expenses, taxes, maintenance, and typically mortgage interest and depreciation).

For REITs held in a brokerage account, distributions come in a mix of ordinary dividends, return of capital, and sometimes capital gains. The 1099-DIV form from your brokerage breaks this out. You tithe on the ordinary dividend portion. The return of capital portion isn't income (it's your capital coming back) so it's not tithed. Capital gain distributions are tithed like other realized gains.

Interest Income

Interest on savings accounts, CDs, bonds, and money market funds is straightforward income. Tithe 10% of interest received. No thresholds or complexity.

For bond funds held in brokerage accounts, the distributions are mostly interest and should be tithed at 10%.

Timing and Practical Management

Most LDS members manage tithing in one of two ways:

Monthly payment: Calculate income during the month and pay tithing at month-end or with a specific payday. Simple to track, requires monthly attention.

Annual settlement: Track income throughout the year and make a bulk tithing payment near year-end or at "tithing settlement" (a traditional LDS practice where members meet with their bishop to review tithing status and declare themselves full tithe payers). This approach requires careful record-keeping.

For investors with regular dividend income, monthly or quarterly calculations align with dividend payment schedules. For investors who trade less frequently, annual settlement may be simpler.

Tithing and Stock Value Volatility

One thing to keep in mind: the stock market fluctuates. If your portfolio was up $20,000 on paper at mid-year but ended the year up only $5,000, the unrealized gain approach would calculate tithing on $5,000 (the year-end increase), not $20,000 (the peak). But investors who pay tithing monthly on peak values might feel they're overpaying relative to year-end reality.

The realization-based approach (tithing when you sell) avoids this problem because you only tithe on actual realized gains that have been locked in. This is another reason most LDS investors prefer realization-based calculation.

Bottom Line

Tithing on investment income for LDS members is clear in principle (one-tenth of increase) but flexible in practical application. The church doesn't dictate exact methodology, leaving it between each member and the Lord. Most active LDS investors use a combination of:

10% of dividends as received
10% of net realized capital gains in the year realized
10% of interest income as received
10% of retirement account withdrawals (with basis tracking for Roth)
10% of rental income (net)
Optionally, 10% of net wealth increase including unrealized gains (the strictest approach)

The specific choice matters less than the consistent application. Pick a method, stick with it year after year, and make adjustments only when you've thought through why. Discuss with your bishop if you're uncertain.

For investors using FaithScreener, we provide tools to help track dividends and realized gains for tithing calculation purposes. The goal is to make the arithmetic easier so the spiritual practice can stay focused on what it's actually about: grateful giving back to the Lord from the increase He has allowed you to receive.

Tithing and Stock Investments: The 10% Calculation