How to give jakah | All Things Zakat_ From Stocks to Livestock

How to give jakah | All Things Zakat_ From Stocks to Livestock

Bismillah al-rahman al-rahim Salam alaikum warahmatullahi wabarakatuh hamdulillahi rabbil alameen wa sallahu wa salam ala sayyidina muhammad wa ala aalihi wa sahbihi woman to be our home base and in illa you mean I’m a bird I began in the name of Allah most gracious most merciful.

 I bear witness that there is none worthy of worship except Allah and that his beloved nabiyeen Prophet Muhammad sallallahu alayhe wassallam peace and blessings of Allah be upon him is his last and final messenger we began by praising Allah Subhanahu WA Ta’ala asking Allah Subhanahu WA Ta’ala for his help his protection his mercy his blessings as sustenance and praying and begging Allah Subhanahu WA Ta’ala to make us amongst the most successful individuals both in this life.

 and hereafter Amenia valhalla mean brothers and sisters once again assalamualaikum warahmatullahi wabarakatu this is your brother mm tahoe anwar coming to you live from Zaytuna College in Berkeley California I am honored to be a faculty member at the college and in sha allah in the next few moments that we have together we’ll be going through this session that has been titled or very beautifully titled all things zakat from stocks to livestock.
How to give jakah | All Things Zakat_ From Stocks to Livestock

 now to be honest with you in sha allah we will be discussing stocks I’m not sure if we will be discussing livestock this afternoon as most people in the Western world don’t have to deal with livestock when it comes to zakat issues inshallah the text that I will be following for a portion of this presentation this evening is noodley law a primarily Hanafy text that is generally taught and it’s a text that.

 I teach here to the students the freshman class at Zaytuna College Zeca what is zakah zakah literally has two meanings first of all at the Hara purity Allah Subhanahu WA Ta’ala mentions in the quran Hoodman an wali him sadaqat on total hero jambe ha what a total hero home what was a key him be Allah Subhanahu WA Ta’ala says take from their wealth sadaqa take from their wealth a portion of wealth that you may purify total hero home.

 you may purify what was a king him be huh and that you may sanctify them so the first meaning of zakah is purification the second meaning literal meaning of zakah is zyada zyada increase and that’s why in the Arabic language there’s a term that’s used Zeca Zahra Vimanas ad right that the plants have grown the plants have increased in other words that they have become larger .
How to give jakah | All Things Zakat_ From Stocks to Livestock

they have become bigger and so that these two are literal meanings of the word zakah zakah in Islamic terminology according to Islamic law is the ownership of a certain amount of wealth my ownership is a certain amount of a certain amount of wealth by by law which Islam says that now you are become you have become wealthy and to take that wealth and pass it along to those that happen to be in need as far as.

 and then there are certain rules in laws around this and will slowly be discussing those in the next few moments that we have the guy is obligatory upon an individual who fulfils five conditions in other words if you don’t fulfill any of these conditions zakah is not an obligation on you first of all you must be a Muslim a Muslim is required to give zakah .

so that’s the first condition the second is that a person must be free if you are a free individual you’re not a slave you’re not bound in in that case you are obligated to give zakah in other words you have a right on your own wealth and you have the ability to exercise whatever change you want in your own wealth thirdly you must be mature in other words if you have .

if a young child under the age of puberty has an amount of wealth and it could be in the hundreds of thousands or the middle of dollars as long as it belongs to a child that child is not obligated to pay Zeca nor is the parent obligated to pay Zika on the wealth for that child is as long –

as that money belongs to that child and it doesn’t belong to the adult number for sanity an individual must be sane must be must have the intellect intellectual capacity in order to ensure that that person can pay Zeca according to other methods such as according to Imam Imam Shafi or imam malik rahmatullahi he mine all according to Imam Ahmed as well that if a person is not saying then that person’s guardians or the people that look after that individual must pay .
How to give jakah | All Things Zakat_ From Stocks to Livestock

the Sekou on behalf of that individuals wealth according to a member Hanif a sanity is a condition condition and if that condition is not fulfilled one is not required to pay zakah and last but not least one must be in possession of nisab nisab we will translate here as a minimum amount of wealth right so what is nisab nisab is a portion of wealth a minimum amount that a person owns that requires for that person to pay zakah if a person possesses this nisab this minimum amount for a complete lunar year then the poor now owns this portion and the owner is obliged to pay that zakah .

so that’s what the nisab is in other words you have to be Malik Kunisada the owner of nisab the owner of a certain amount of minimum wealth which obligate in other words if you have that much wealth and you’ve had it for one complete lunar year you are now required to pay zakah and if you have less than that amount less than the minimum amount less than the nisab.

 then in that specific case you are allowed to receive zakah if you wish to take and a lot of people despite being individuals who are legal recipients of Zika may decide or may choose not to take Zika and rather live on whatever little income that they make with their own hands and not want to take someone else’s acai despite the fact that it’s completely permissible for them to do .

so one of the things that I want to mention is that when we give Zeca Zika must be intended Zeca must be intended when that wealth is given now when an individual give zakah the recipient does not need to know that this is akka though though it is an obligation on the giver to ensure that the recipient is one who can receive zakah who has a lot of times it’s a very very common question you know an email or a phone call that says my cousin my relative .

my friend a family member so-and-so happens to you know is going through a certain situation are they eligible to receive zakah that’s a very common question the simplest answer is that if they have the nisab the minimum amount they are not it’s not permissible for them to receive zakah and if they have below the nisab then.
How to give jakah | All Things Zakat_ From Stocks to Livestock

 it’s permissible for them to receive zakah but at the same time one thing that we should keep in mind is that when we give zakah it must be intended in other words if an individual gave an X amount because the guy has something that can be given in advance as well once you know you as long as you make the intention so for example Ramadan is about to begin insha’Allah very soon may Allah make this month a blessed one for all of us a menial banana mean but as the month of Ramadan begins say in the last few weeks.

 or say between now and tomorrow or between now and whenever you calculate your Zuka someone comes to you and says you know there’s a cause there’s an individual who is eligible and would you like to give some zakat to this individual and say you give a hundred dollars or ten dollars or whatever it is that you choose to give although you haven’t calculated because most Muslims do calculate in the month of Ramadan though you haven’t actually calculated you know how much Lika you need to give this year but when you do give.

 even if it’s giving in advance the intention must be made in other words if an individual gave an X amount of dollars last week and the next week decides to calculate and say well now I’ve calculated that I need to pay $500 in Zika but last week I gave 200 I’m going to count that towards my Zika it would not be permissible the intention must be there when giving Zeca either on time either delayed or even advance because giving advance occur before it’s actually due is permissible but the intention must be there if the intention is not there you can’t go back in hindsight .

and say that was my Zika or I’m going to calculate that amount that I gave towards my Zika is very common very common question there’s a number of things that an individual needs to give Zeca on of course your assets so basically when we refer to assets we are referring to things such as cash whether it’s in your hand or in the bank or wherever else it is stocks gold and silver retirement plans and there’s a number of plans we’ll come to that in a moment that fall into that category loans.

 and advances if you’ve given any one alone you must pay Sekou on that as well business inventory if an individual runs a business you have a restaurant or you have a store and you sell shoes or whatever it is that you sell if you have any inventory that belongs to you then zakah must be paid on that as well and livestock of course as our title today reminds us from stocks to livestock livestock is something that the guy needs to be given on as well and there’s a set of rules around that maybe what we can do now is discuss the actual nisab so what is nisab .
How to give jakah | All Things Zakat_ From Stocks to Livestock

or how do you calculate the value of nisab Oh learning to shower according to Islamic law we are required to calculate the nisab based on a specific amount of gold or silver as taught to us by the messenger mohammad sallallahu alayhi wa sallam peace and blessings of Allah be upon him so as long as an individual has either an X amount of gold or it’s value doesn’t have to be specifically gold it could be the value in the form of any assets as I mentioned earlier business inventory stocks cash assets jewelry as long as you reach that Nissab based on a specific amount of gold .

that the prophet alayhi salaatu wa sallam has prescribed or silver and you can use either to calculate and you know for those of us that might not have calculated may not know what I mean but I’ll explain that in a moment so zakah is calculated based on the current value of gold and silver in other words not based on the value of what you might have purchased that purchased it at if you are actually calculating your gold and silver some 5 10 15 years ago it’s on the current market value .

you can either use silver or gold to determine the value of nisab but also keep in mind that the value of silver will be far less than the value of gold that’s why the ulama that the the scholars of the tradition are of the opinion that in in terms of determining whether or not you should give zakah use the lower threshold right which is the nisab according to silver and in determining.

 whether you should or you can receive zakah use the higher threshold which is the threshold or than a Saab of gold so that more people would benefit from the zakah let’s take let’s take a silver before we discuss gold or actually let’s do it the other way around go before we do silver as far as gold um you know the the nisab according to gold is 87 grams okay there’s there’s a lot more that goes into this but very simply put it’s actually 87 grams if an individual has the equivalent of assets that are worth eighty seven grams of gold or more and they’ve had it for one complete lunar year than in that.

 specific case that individual is liable is obligated to give zakah so eighty seven grams today’s value of gold is close to thirty eight dollars a gram right thirty-eight dollars a gram and that brings you to three thousand three hundred and six dollars so again it’s all based on the value of gold that’s the way it’s determined I have a file in front of me that one of my in fact the first first year Zaytuna College students who have now graduated this young student prepared a file for me and in on June 27 2012.

How to give jakah | All Things Zakat_ From Stocks to Livestock

 so about three years ago the value or the nisab was four thousand eight hundred and forty two dollars but because the value of gold has dropped in today’s into the according to them is according to the value of gold today 87 grams times thirty eight dollars is three thousand three hundred and six dollars which basically means if you have thirty three hundred dollars worth of assets or more and you’ve had them for one lunar year you are obligated to give zakah or if you have less than .

than you sob less than thirty three hundred dollars you are eligible to receive zakah it is permissible for you to take zakah so always remember eighty-seven grams of gold is the new Saab the current market value of gold grams you can go to gold price org and always get the value of that and you would be able to figure that out as far as silver silver is calculated again according to shut out there’s a number of miss calls and based on that but essentially for our purposes .

it’s 24 ounces of silver right 24 ounces of silver according to today’s market $16 an ounce okay $16 an ounce so 24 times 16 brings us to 384 dollars so if one were to be calculating the nisab the minimum amount the threshold based on silver then as long as you have 384 dollars worth of assets you must pay Zuka and if you have less than three hundred and eighty four dollars then you must then you are eligible to receive Zeca I hope I’ve made that clear now .

now I’ll mention something I mentioned a few moments ago there is a disparity between the numbers there’s an amazing disparity a lot and most people in the West probably it really doesn’t matter but there’s a lot of people in the world that actually fall between these two numbers they have their wealth their total wealth Falls between three hundred and eighty four dollars and three thousand three hundred dollars so the question now is the people that fall in between do they give zakah or do they receive zakah and there’s a number of individuals in the world that fall between that those two numbers the question is can they receive Zuka or.

 do they not receive zakah so that’s the golden rule that I mentioned earlier that in determining whether you should give zakah or not the ulama are of the opinion that use the lower threshold the the threshold the nisab according to silver so more people would give all those that fall between three hundred and eighty four dollars and thirty three hundred dollars would also become givers all right so more people would give zakah and as far and this is this is not a general rule per se this is what the aroma this is what the scholars they give an opinion based on tawa although technically.
How to give jakah | All Things Zakat_ From Stocks to Livestock

 if someone chose to not give zakah that would be fine as well and in terms of receiving zakah the ulama are of the open that you should use the higher threshold that of gold so that more people would would benefit in terms of receiving Zika so that’s the nisab in a nutshell one of the things that we’ve been mentioning time and again is that passing of one year okay the passing of one year one lunar year a lot of people generally misunderstand this it’s one lunar year from the time your wealth reached the nisab okay not one lunar year based on when you made that money or not so one thing that we should clarify and maybe you know Muslims in America may identify this more than others but in the United States we pay taxes based on our annual income as it is in most parts of the world

you pay taxes based on your annual income in Islam we pay zakah based on our annual savings we don’t pay based on our annual income you could be making a million dollars you could be making a few million dollars but at the end of the loonie lunar year depending on what you have left is what you would pay your Zeca on not necessarily on what you made all here in other words if someone liquidated all their assets or spent it all up or did whatever it is that .

they wanted to they could have made a few million during the course of the year but at the end of the lunar year they have absolutely nothing left in that specific case they have no syke that they need to pay but one thing that I do want to clarify that I was about to say a few moments ago is that your lunar year is calculated from the time that you became the owner of nisab became the owner of that threshold became the owner of that minimum amount in other words let’s argue and.

 say that we are going to take the silver as our minimum amount because we want to be amongst those who give so you happen to be a student you have absolutely no money all the money that you do have is your parents money that you’re using and .

so on and so forth or whatever it is and all of a sudden you go to work you went to work and you made an X amount of dollars the moment you made that money and let’s just argue for a moment and say that your first paycheck was $800 right at that point in time you became the owner of nisab you became the owner of that amount which is the minimum amount the threshold you’ve surpassed the threshold that’s when you become the owner of nosov your year that’s.
How to give jakah | All Things Zakat_ From Stocks to Livestock

 when your lunar year begins one year from that day if you have any amount of wealth that happens to be above the threshold above the nisab you will give your zakah now what that basically means is let’s argue and say that last year on the 1st of Ramadan I was the owner of nisab I was the owner of new saab fast forward almost one year on the 15th of Shaban 15 days 14 days before Ramadan I was I had a business or I was working and I got a bonus and someone put $50,000 into my account which belongs to me however I made it it’s now $50,000 that .

I now have whether it be in the form of cash savings jewelry stocks whatever it may be but it’s $50,000 I now own come the first of Ramadan the question is and this is a very common question do I pay Zika on that 50,000 that I just made two weeks ago or not and a lot of people misunderstand this and say well I’ve only had this amount of wealth the 50,000 for two weeks and it’s not an entire year because it’s not an entire year.

 I don’t have to pay zakah on it wrong right you as long as you become the owner of nisab on the first of ramadan last year then fast forward one year on the 1st of ramadan the next year whatever amount of wealth you have whether that wealth was with that entire amount of wealth was with you for one year or not as long as you were above the nisab at the beginning of the year and above the nisab at the beginning of the next year you will pay zakah on.

 whatever you have in terms of assets on that date otherwise otherwise the problem then would be that you would have to be calculating zakah every single day and say well last year on this day I only had this much last year on this day I only had this much last year on this day .
How to give jakah | All Things Zakat_ From Stocks to Livestock

I only had this much and we’d have a different amount every day so as long let’s understand this correctly as long as you happen to be at the baguette the beginning of the year above the nisab and at the beginning of the next year above the nisab whatever amount you have whatever assets you have that you have access to you will pay Zeca on that even if you know even if you haven’t had that large amount for an entire year you’ve been you’ve had the nisab for an entire year and you must pay zakah on it so there’s there’s a lot more laws and I’m going to speak about a few more things before.

 I continue with with questions but one thing I want to mention and hopefully if if you have time I would urge you to go online and type in the inner dimensions of zakah if you go to google and type in inner dimensions of zakah and read the few points that Imam Ghazali rahmatullahi Ali has authored on this you know in Islam we’re encouraged to give the one very important thing with zakah is that we must calculate a lot of times people just randomly give and said.

 just say this is a few hundred dollars a few thousand dollars and this is my zakah and feel that they’ve you know they’ve they’ve fulfilled their obligation of giving zakah just by just by having given zakah whenever they wanted to one must at the end of that lunar year sit down and calculate all their assets and at that point in time find out how much zakah they need to give the amount of zakah one needs to give is two-and-a-half percent right.

 so divide it by 40 which is the easiest way or get your calculators and figure out the two-and-a-half percent and that’s what you need to give but one must calculate and know exactly what they need to give in terms of their zakah you can’t randomly just write a few checks and say this is my zakah without ever having calculated it yet at the same time one must calculate and the olam are of the opinion that give a little more give a little more than.

 what you really need to in sha Allah and as Imam al-ghazali Liholiho he mentions that the more you give in the path of allah subhanahu wata’ala the moral loss of Hanna what the Allah would give back to you in return think of the seas iike that there’s economy’s impurity as.

 I mentioned earlier in other words that wealth that two-and-a-half percent upon zakat becoming an obligation on you is no longer yours does no longer belongs to us that is someone else’s Huck and that is someone else’s right and if we don’t take that portion away from our wealth that’s Haram for us that’s Haram wealth touching our wealth Haram for us.
How to give jakah | All Things Zakat_ From Stocks to Livestock

 I’ll add for someone else how do we expect Baraka in our wealth in our assets in whatever we have when there’s Haram that’s part of it right when it doesn’t belong to us to begin with Islam says that is no longer yours that must be taken and be given away to those that are valid recipients and when we do give in the path of allah subhanahu wa’ta’ala allah subhanahu wa ta’ala protects us our families our jobs our institutions and and allah subhanahu wa’ta’ala continues to bless us .

with more and more and more so Zeca should be mambas allah mentions and these are lengthy topics but very briefly zakah mentions that Imam Ghazali mentions that zakah should be given at its proper time in other words when the lunar year is up one should give it most people do calculate their zakah in Ramadan and then they give it give it in secret give it quietly give it in the open give it so that people can see that you’re giving and hopefully inspire others to give.

 if you’re going to give to someone who happens to be poor be humble avoid taunting others avoid hurting other in fact the opinion the predominant opinion of the ulama is that the the recipient of Zika can be a relative in fact giving to a relative is more praiseworthy is of more reward than giving to someone who’s not a relative also the recipient does not need to know that it’s Zika the recipient doesn’t you could give it to them however it is is a gift or however and they don’t need to know that it’s azúcar if if you are if you’re amongst the givers the ulama mentioned that give your best right give the best that you can don’t don’t look at the cheat and now in most of our cases we actually give cash and hard money but in certain cases people actually gave gold and.

 so on and so forth but the Altima mentioned that give your best and seek the worthy and deserving seek the worthy and deserving that’s why in in the Hanafi school one of the opinions is that the actual the the recipient must become the owner right there there has to be Tom Leake that’s a condition in the Hanafi school that when you give your zakah if you have an X amount of dollars or whatever it is that you have a hundred dollars you must take that hundred and make someone else the owner of that only then is your zakah fulfilled and if you don’t make someone .

the owner then your zakah is not fulfilled and so that’s once so you know seek those that are worthy and deserving that’s why in the Hanafy school giving zakah to institutions who may utilize those funds for their institution building is actually not permissible the predominant opinion in in the case of institutions that are educational institutions we can and should give our zakat to institutions because those institutions will then in turn take that money and utilize.
How to give jakah | All Things Zakat_ From Stocks to Livestock

 it for their students who happen to be needy right who happened to be recipients of zakah but there is an opinion that simply masjid building or works where that the the general population benefits from one zakah that would not be permissible it has to be specific now as far as as the recipients and I’m going to come to your questions in a few moments in child law as soon as I’m done with this there are a number of types of recipients that can’t that Zuka can be given to and the quran mentions this in the methodically Favara Yamazaki nee will hire me Lina ila Allah Subhanahu WA Ta’ala says-

 the first individual the first recipient happens to be a fakir an individual who pizzette possesses wealth but is below the nisab Amal masakeen in the Masada hospital for awhile Messiah keen the Messiah keen are those that are extremely destitute helpless they don’t own anything in other words they don’t even own a basic amount of minimum wealth they are of a lower category than the for fara the first category Amala Molina alaihe as far as just the third category are those individuals who are employed to collect Zika the predominant opinion again here is that .

only if that appointment is by the head of the Islamic state if that appointment happens to be by an employer by just any nonprofit employer there are opinions of the ulema that that would not fulfill that category I love a typical uber home those hearts who have who those people whose hearts have been recently reconciled new Muslims to Islam and to bring them closer to Islam warfare table that’s another category slaves purchasing their freedom a slave.

 who has made an agreement with their master and says if I pay you an X amount of dollars then you can be freed that slave can be given the Zuka well Hadi mean those who are in debt extreme debt people who happen to be in debt can be given zakah well feasable Allah and striving in the path of allah subhanahu wa’ta’ala this is a category web Nisa Beale and and the traveler that’s.

 the last category but well feasibility library want to speak about this in the West nowadays every act every act of good Muslim deeds is considered to be feasted being Allah and people say well the masjid falls into feasable allah this service falls into feasable allah this service falls into feasible Allah the predominant opinion is here is that those individuals who are physically fighting in the path of allah subhanahu wa’ta’ala those are individuals .

who can become recipients of that otherwise the feasibility lack category is understood today is generally not what has been understood for generations and traditionally but clad ultimately you know we ask everyone to ensure that they consult with their Imams and their show you and ensure that they give there’s a gap based on whatever categories they are most comfortable with I think what we’re going to do is we’re going to segue into .
How to give jakah | All Things Zakat_ From Stocks to Livestock

we don’t have a lot of time left we’re going to segue into certain questions I want to I want to thank I’d like to thank those individuals who proactively ensured that they sent in their questions well in advance there’s a number of individuals who actually sent in their questions and we’re going to try to get through those the the most common question that we get are those around 401 KS right 401 KS shares stocks that people end up having there are multiple opinions available.

so the question is is that guy do on your 401 K people are a little confused around this issue there are although there are a number of opinions there are three primary opinions on the case of giving zakah on your 401 K s number one pays akka on the total value of the 401 K the day you’re doing your calculation so first of all Madan third of Ramadan I’m doing my calculations whatever the value is of your 401 K on that day including the employer match that has vested so whatever portion belongs to you on that day you will take that amount say your 401 K.

 your are a your retirement account is at $150,000 you calculate zakat based on $150,000 and you take two and a half percent of that and you give it the second opinion is that you pay Zeca annually again and you leave this is very similar to the first one on the amount that you have – any penalties and taxes that you would have to pay if you way through that money.

 so say your 401k is worth $150,000 and your if you were to cash out that 401k on that specific day then whatever penalties you would have to pay you would deduct that whatever text is you would have to pay based on your tax bracket you would detect that .

and let’s just argue and say that you were left with a hundred and fifteen thousand dollars you would pay Zeca on $115,000 that’s the second opinion the third opinion is that you pay Zeca on your 401k at the time of retirement in other words whenever you actually get you have access to that entire 401k at the age of 60 61 when you have access to that you would pay Zeca on it at that time again the predominant opinion there is that you would pay Zeca for each year not just once okay .
How to give jakah | All Things Zakat_ From Stocks to Livestock

some people are a falsely believe that you just have with the day the year you receive it you just pay Zeca on it that year no when you receive it you would have to pay your Zuka on it for each year that you actually had it and you were above the nisab and you were paying your zakah and so you would have to do it for each year and so you’d have to go back into your accountancy well if on you know year one I had 5,000 you would pay zakah on 5,000 your to my 401k.

 went up to 15,000 you would pay zakah on 15,000 not just a 10,000 that was increased your 3 I now have 25,000 your increase was 10,000 between the 15 and 25 but your zakah will actually be on the entire 25 and not just the 10 that it created that increased because Zeca is paced is based on the total value of all your assets not just the increase in that last year right I mean we I explained this earlier that when you pay your zakah you pay your zakat based on the value of the complete assets that you have not just what was increased in that one year so that’s the one that’s the one thing that I want to mention a lot of people get confused when it comes to zakah and 401k .

so since we’re talking about stocks I’ll try I’ll attempt to answer a few questions around stocks stocks so stocks include stocks purchased in the open market in one’s brokerage account you may have a brokerage account you may have a company granted rsu’s restricted stock units company granted stock options and company sponsored employee stock purchase options or purchase plant ESP PS how do you calculate Zuka on those you calculate Zeca based on the market value not based on the value of the day you receive them you pay zakah based on the market value.

 the day you are calculating your Zeca as far as calculating Zeca on rsu’s you would calculate it based on those RS use that are vested again based on the market value you wouldn’t pay zakat on those that have not vested as far as Zeca on stock options we won’t get into the legal permissibility of that we’re just referring to giving zakah on stock options you would pay Zeca on that which is vested and on the profit right on the profit that you have as far as your es PPS employee stock purchase plans you would have to you would you know you would pay zakah on the amount that .
How to give jakah | All Things Zakat_ From Stocks to Livestock

so of course the amount that’s been withheld for the purchase of those options you would pay zakah on that and if you’ve actually bought those stocks of those shares than you would pay stock you would pay zakah on the market value you don’t pay Zika I know I didn’t mention this earlier you don’t pay you pay Sakai on gold and silver you don’t pay Zeca on diamonds and platinum and rubies etc etc as far as another form of wealth that we generally don’t we either don’t calculate or .

we tend to forget to calculate happens to be your retirement plans and health saving plans and so on and so forth so Zeca is you must pay Zeca on all retire on all retirement and savings plans because essentially that money is yours and it’s an asset that you own although it happens to be an asset in a different format it happens to be sitting in some account and not necessarily just a savings account but you must pay Zuka on it and I mentioned earlier your 401ks.

 you must pay Zeca on that IRAs right zakat must be paid on that roth iras 5 to 5 that 529 college savings plan health savings plan your HSPs a lot of people tend to forget when we’re calculating flexible spending accounts all of these all of these one-page Zeca on and the rule is that which I mentioned earlier right either you pay Zeca on the actual value of what you have today in the bank or sorry what you have today market value of what you own or you pay Zeca

 – based on what you would have minus penalties and taxes if you were to take those out of those accounts if and if you’re not allowed to take those take those out of those accounts at that given time bazooka must be given a lot of times people have for one case they have a large amount of money sitting in their 401ks but they don’t have the liquid assets to pay there’s a gap a lot of times women have or men anyone for that matter may have a lot of gold or jewelry but.

 they don’t have the cash to give Zeca on that so this opens up another question that when you calculate your Zeca must Zeca be paid immediately or not no you don’t have to pay immediately but you are required to calculate you’re required to calculate so say on the first of ramadhan you calculate that I have all of these accounts I have my cash savings 401k IRA HSP es PPS whatever else it is that I have all of this I put all this together and I come or.
How to give jakah | All Things Zakat_ From Stocks to Livestock

 I come around and my net worth is whatever half a million dollars Zeca on a half a million dollars would come up to twelve and a half thousand dollars say you don’t have twelve and a half thousand dollars to get you to have liquid assets of twelve and a half thousand dollars you would give whatever you can and then you would write it down somewhere make a note of it and spend the next few months ensuring that that obligation has actually been fulfilled with the liquid assets as you receive them so you don’t have to give immediately in fact many a-time individuals sort of calculate their Zuka leave it aside and spend seven eight nine months slowly distributing that zakah so that they actually have enough money to distribute during the course of the year.

 and when they actually run out of their zakah before the month of Ramadan comes in and before they can begin calculating they start giving in advance and maybe they’ve already given say five thousand dollars by the time they calculate their zakat they find out they need to give twelve and a half thousand dollars they’ve already given five thousand in advance with the intention of zakah at the time of giving then they can deduct that five thousand from the twelve and a half thousand and have seven and a half thousand that they need to give as far as people .

who may have jewelry but don’t have the liquid assets to give zakah on that it’s still in obligations again it still needs to be given on that gold on that jewelry in other words I like to tell people that if you need if you have two earrings and a whole lot of other jewelry and you’re Zuka that your happens to be one earring equivalent of one earring that earring needs to go or you need to take some other portion of that gold and make it a liquid asset in order for you to be able to give your zakat bazooka must be paid in the case of individuals if.

 if a wife gives zakah on behalf of the husband for his assets or if the husband gives zakah on behalf of the for her assets that she may have because either of them isn’t working or they are but one chooses to give zakah on behalf of the other that would be permissible that obligation is fulfilled and that obligation is lifted at that time.
How to give jakah | All Things Zakat_ From Stocks to Livestock

 now there’s another question the question is do you pay Zeca if you have loans so when it’s time to give zakah one of the things that you do is you deduct the loans you deduct your payments that you have to make and then so let’s just say that your assets are worth $50,000 and you have given loans of an X amount of dollars or you need to make payments of an X amount of dollars that in that specific case do you detect that loan from your full asset or not most Muslims in the West if we began to deduct the loans that we have to pay the loans that we have to pay the loans .

that we have taken on on ourselves your house payments if you own your house and you have an institution that you are paying your zakat to sorry you’re paying making payments too and you owe them an X amount of dollars or car payments for example if Muslims in the West started deducting their loans from their assets then most Muslims in the West would actually not be paying zakah and the reason they would pay their zakat is because the amount of money that .

they owe is far greater than the amount of money that they have the ulama the contemporary Earlham are of the opinion that if you have debts if you have loans on which you are simply making monthly installments or monthly payments those loans will not be deducted from your assets so for example you have three hundred thousand dollars that you need to pay zakah on but you have a mortgage of five hundred thousand dollars well you can’t say well.

 if I haven’t have a mortgage of five hundred thousand which means I’m negative of $200,000 so I don’t pay zakat if that’s the case most Muslims in the West not all maybe not most but many Muslims in the West wouldn’t pay their zakah or car payments or student loans and so on and so forth so any the general rule is that any any long-term loan that you have would not be deducted from your assets at the time of calculating years ago this is the exact same stipulation in regards to Hajj as well.

 because a lot of times people actually have tens of thousands of dollars put away to go on vacation or whatever else but then they have a loan of a few hundred thousand dollars and say well I can’t go for Hajj or I can’t pay zakah because I have a loan of an X amount of dollars and they may utilize those liquid assets that they have to go on vacation and so on and so forth the Rollem are of the opinion that unless an otherwise you are going to take that savings of yours and pay off your loans .

with it if you’re not going to do that then you must pay zakah on those assets that you have and I hope I’ve actually clarified that I mentioned earlier any any money that belongs to the children and that if you are investing you’re doing it for the children then there is no zakah obligated on it if you have given someone alone if you’ve given someone alone the person who has given the loan must pay Zeca on the money that has been given you could give it when you receive the loan back you don’t have to give it at that time if you don’t have the assets if that loan is considered to be a bad debt a bad loan and you realize that that person is probably never going to pay you back.
How to give jakah | All Things Zakat_ From Stocks to Livestock

 then in that specific case you would actually not pay azúcar on it as far as Zeca on inventory say you own a bakery say you own a shoe store in all those specific cases you would calculate your assets you would calculate your inventory on the day you’re calculating your Zuka and then you would give your Zeca on that given day to based you would calculate you calculate all that inventory put it all together whatever amount you come up with two and a half percent of that is is that which needs to be given land and homes land in homes rental properties.

 there is no Zeca on the actual rental property there is Zeca on the income of the rental property if you have money left at the end of the year so say you have a rental property you have your own house then you have a second or third or fourth house let’s just assume that you have one extra house and the house is worth $100,000 you do not have to pay Zeca on that actual property you would pay Zeca on the income of that property so let’s assume that you’re getting $1,000 in rent from that property times that by 12 in the course of one year you receive $12,000 but let’s again so if that 12 that $12,000 is considered your income do you pay the kahan income you don’t pay Sakai on income you pay Zeca on your savings which basically means that if you don’t have anything left of those $12,000 at the end of the lunar year then you will pay no zakah on it.

 if you have some money left from that 12,000 at the end of the year and that’s what you would pay your zakah on unless unless an otherwise you purchased a home with the intention of reselling it if you purchased a home with the intention of reselling it then that is an inventory and zakah must be paid on that you may not have the money to pay zakah on that home because you’ve put all your money into that but whenever that house is sold then you would pay zakah you would go back and pay zakah whatever you owed on that as soon as you receive the liquid assets to do .

so the same case goes with land a lot of individuals buy land with the intention that someday they may build a house on it someday they may sell it but it’s not necessarily an inventory they haven’t specifically purchased it with the intention of selling it and making money if that’s the case then you do not have to pay Zeca on it though clearly if an individual has purchased a piece of land with the intention of reselling it and making money on it then that becomes business inventory and you would pay Zeca on the market value of that property not purchase value on the market value of the property and.

 again similarly if an individual actually purchases a property just purchases it and then later on decides to make it business inventory then at that point in time that person in that individual begins to pay Zeca on it or a person decided to purchase it with the intention of reselling it and making money on it but later on decided that I plan to live in it and so on and so forth when the intention changes whether it becomes the cuttable or not changes as well .
How to give jakah | All Things Zakat_ From Stocks to Livestock

there’s there’s a number of other stipulations but very quickly how much is that guy should you give to an individual some volum are of the opinion that you should not give them more than this all that obligates them at that point to give Zeca as well but keep in mind that that will just put them above the threshold above the nisab they won’t actually pay Zeca on it unless an otherwise they actually are above the new Saab a year from then so they don’t immediately become the owners of new Saab one of the things in member cazali mentioned and I mentioned earlier find those that are that are deserving find those that are that are worthy of receiving and alhamdulillah.

 we have many institutions now in the United States of America that are taking our zakat funds and very carefully distributing them amongst those individuals that need those funds right so for example in this institution of ours like Zaytuna College when the generous community around the country gives their zakah the tuna College ensures that Zeca eligible recipients are actually given that zakah and not just utilized for building or construction or maintenance and.

 so on and so forth or you may know individuals you may have leader your community friends in your community or people just people in your community who may know destitute helpless homeless people people who are respectable in our communities and may not necessarily be able to put their hands out and ask us for assistance but there are people in the community that no one I’m saying this for my experience as an imam of a message where i’ve been al hamdulillah for a number of years for over a decade now alhamdulillah .

where i know a lot of people in the community that are very respectable you know people know them very well but internally i know that these are people that are almost paycheck to paycheck and many of them may not even be paycheck to paycheck and if that happens to be the case go to your local a man’s or teachers or leaders or whoever it is and ask them are there people in our communities that are worthy of mizuka and yes it is permissible to make a tax-deductible donation when you are giving years ago one shouldn’t feel guilty about it it’s perfectly permissible to do .
How to give jakah | All Things Zakat_ From Stocks to Livestock

so so can you give someone more than the nisab in terms of zakah yes you can but at the same time find worthy individuals in your community that you should give to then the second stipulation is is it permissible to send your zakah overseas or not there are multiple opinions on this in fact in the in the text that I was using a few moments ago mmm honey phenomenal Ali is of the opinion is that the zakah of that land should be distributed in that land unless and otherwise there was a dire need elsewhere where people could actually give the way the Muslim community is set up today is that .

because of the number of immigrants that we continue to have in our communities a lot of ours that God dollars continues to go overseas and there’s absolutely nothing wrong with that that’s perfectly fine our zakah is being fulfilled and worthy individuals are receiving the assistance and they’re able to make their lives a little better than what they were before Allah Subhanahu WA Ta’ala facilitated for us to give that zakat to them but at the same time if we happen to be of a category of individuals where a hundred percent of our Chicago’s overseas that we need to reevaluate our priorities we need to reevaluate evaluate .

how we distribute hours ago always try to ensure don’t just randomly give zakah to institutions find out how are they utilizing your zakah are they utilizing it to pay light bills are they utilizing it for you know utilities and so on and so forth or is that money going to the poor and needy because zakah is from the rich to the poor zakah is from the rich Muslim to the poor Muslim zakah is from those who have wealth to those who do not have wealth and .

so be conscious of that but at the same time when you are among when you own your calculating and your distributing years ago I like to tell people that always try to ensure that your family right your family is a priority you can give zakah to your brother your sister your nephew your niece these are people that you can give your zakat to you cannot give your zakah to any individual whom you are obligated to look after such as your wife your children your spouse and so on and so forth but at the same time you can give your zakat your brother sister nephew needs a relative’s come first and then after that as you distribute your zakah always ensure that you make room for national institutions as you make your contributions to international institutions .

we have Zeca eligible Muslims right here in the United States of America we have homeless Muslims right here in the United States of America we have Muslims who do not have a meal right here in the United States of America so for those individuals who are under this deception that every Muslim in America is rich and all the poor Muslims are overseas we need to rethink that there are a lot of Muslims right here in this community of ours that happen to be in need as well .
How to give jakah | All Things Zakat_ From Stocks to Livestock

how do you account for error in the sukkah that’s that you calculate always try to give a little extra zakah you know it should pinch you a little it’s meant to pinch you Lent inaudible rahat atone film in Madurai boon you haven’t attained any goodness until you’ve spent out of that which you love if if if our contribution if our giving doesn’t pinch us then we haven’t received the full reward it should be a little difficult for us put your trust and promise in allah subhanahu wata’ala the more if you.

 I mentioned this last week in my hope but if you count your money it is because you count your money I give without hey sab within your capacity right give without ASAP within your capacity and Allah Soprano what the ANA will bless us without hey Sam the moment we start you know you still have to calculate you still have to calculate don’t get me wrong used to have to calculate all your assets once you’ve done your calculations now don’t nickel and dime a lots of Hannah Witton ila well this I can give away this I should do away with this .

I can do no you know it’s okay a few hundred dollars that you may have to give extra and some in some cases a few thousand dollars I remember last year I was asked a question and then I did not know the answer so I consulted with a few friends of mine and one of them responded and said though technically you don’t have to give your zakah on this amount but if you have and the question was around two hundred and fifty dollars right a very specific question that.

 I got asked last year and so one of the scholars commented to my to my question and said you know if an individual has ten thousand dollars of assets giving away two hundred fifty shouldn’t be so difficult especially when you’re thinking eh by giving this to 50 Allah will protect the ten thousand that I have and by giving this to 50 Allah Subhanahu WA that .

How to give jakah | All Things Zakat_ From Stocks to Livestock

I will increase this ten thousand dollars that I have so always try to keep that in mind when we’re giving always try to give extra and inshallah what I’m going to do is I’m going to stop there inshallah based on our promise that we will end at six o’clock you can continue sending in your questions to the website or the web address that happens to be on on our page I think it’s marketing at Zaytuna dot edu you can continue asking your questions and we will attempt and shot a lot to answer those questions over the course of Ramadan but if we’re unable to then please do forgive us and .

we ask that you continue to keep this College of ours in your drawers and in your prayers during the course of this month keep our students and our graduates in your doors keep our administration our faculty our students in your drawers and your prayers during the course of this month and that you keep these buildings that you have generously contributed towards purchasing in your prayers and.

 we invite all of you during the course of this summer if you have a moment we invite you to come to California to Holy Hill and Berkeley to see that what your dollars have done and what your doors have done in you know making sure that we are able to have these facilities we begin very soon .

our Arabic intensive summer program in sha Allah we ask you for your doors and your success in the success of this program and we invite you in the future to come yourself and send your children to this program of ours may allah subhanahu wata’ala make this month of ramadan a blessed one for all of us may allah subhanahu wata’ala make this month of ramadan a blessed one for all of you and from all of us here as a tuna College in Berkeley California we wish you all a Ramadan Mubarak assalamu alaikum wa rahmatullahi ta’ala wa barakato you