Question

Assalamu, Alaykum

1) If I have purchased a real estate deal to sell, and it has not sold yet as we don’t know what price it will close at, do I pay on it now or wait until it sells? Since the profit has not been “realized”, yet, I question whether I should pay now or once it sells

2) Similar question on my Stocks and 401(k)? these are long-term stocks that I am not touching the money, and they are either going up or down in Value

3) Additionally, I am an e-commerce business, Do I pay zakat On my current inventory? If so, is it calculated based on my cost or on the Market value? A follow-up to that is, what if I have to lower prices if it does not sell?

Answer

Waʿalaykum al-Salām wa Raḥmat Allah wa Barakātu-h.

In the Name of Allah, The Gracious, The Merciful.

You will pay zakat on items for sale based upon the selling market price.

1.⁠ ⁠You will pay zakat on the selling market price of the home. After it is sold, you do not need to pay zakat on the money you earned until your next zakat year.

2.⁠ ⁠For stocks: you will pay zakat upon the zakatable value of the stock. You would determine this by contacting the company and checking their balance sheets. For example, a stock may be valued at $100, but $80 of the stock equates to the value of the machinery in the factory which you are not obligated to pay zakat for. Thus, you will only have to pay zakat on the $20. In any case, if you choose to give zakat for the full $100, your zakat will be more than fulfilled. For 401Ks: you will also pay zakat on a yearly basis. You may choose to pay zakat on 401k funds before or after withdrawal. If you choose to pay after withdrawal, you must make sure to pay for the previous years also.

3.⁠ ⁠You will pay zakat based upon the selling market price regardless of how high or low it is. Keep in mind that if you sell the item before your zakat year, you will only need to pay zakat on the liquid money you earned.

And Allah knows best.