If you enjoy this podcast, you're going to love all the many different resources waiting for you at Faithfi.com and the Faithfi app. You'll find powerful wisdom, free podcasts, articles, videos, and more from leading voices such as Randy Alcorn, Howard Dayton, Ron Blue, and our own Rob West. Grow in wisdom and knowledge by connecting with a community of thousands of Christians striving to be good and faithful stewards at Faithfi.com or by downloading the Faithfi app. You will receive power when the Holy Spirit comes on you and you will be my witnesses to the ends of the earth.
Hi, I'm Rob West. Those were Christ's words to the apostles after his resurrection. The fulfillment of that promise began a few days later on Pentecost and continues in believers to this day. We'll explain what that has to do with your finances. Then we'll take your calls at 800-525-7000.
That's 800-525-7000. This is Faith and Finance, biblical wisdom for your financial journey. Christmas and Easter are Christianity's most visible holy days, so much so that our secular society has turned them into commercial events. Well, I haven't seen any Pentecost greeting cards recently, but for Christians, Pentecost is one of the most significant days in the church calendar. Two words can help us explain the importance of Pentecost for believers, power and proclamation. Today we're going to explain how the power and proclamation of Pentecost can touch every financial decision you make.
First, Pentecost is about power. After the resurrection, Jesus spent 40 days teaching his followers how to live in the kingdom of God. Then just before he returned to heaven, Acts 1, 4-8 tells us that Christ promised the apostles they would soon be filled with God's Holy Spirit. Do not leave Jerusalem, but wait for the gift my Father promised, which you have heard me speak about.
For John baptized with water, but in a few days you will be baptized with the Holy Spirit. You will receive power when the Holy Spirit comes on you, and you will be my witnesses in Jerusalem, in all Judea and Samaria, and to the ends of the earth. Jesus promised believers that the Holy Spirit would fill them, not just for a moment but always, providing them with the power to live and serve God and others in his kingdom on earth.
This power would transform their hearts and lives. Now the second key to Pentecost is proclamation. The power of the Holy Spirit enables believers to proclaim the good news of salvation and new life in Jesus. Pentecost is the Greek name for the Jewish feast of harvest, and it occurs 50 days after Passover. The Bible tells us that 50 days after the resurrection, Jews from all over the Roman world, including Christ's followers, gathered in Jerusalem for this celebration.
Here's what it says in Acts 2. Suddenly a sound like the blowing of a violent wind came from heaven and filled the whole house where they were sitting. They saw what seemed to be tongues of fire that separated and came to rest on each of them. All of them were filled with the Holy Spirit and began to speak in other tongues as the Spirit enabled them. This miraculous event soon drew a large crowd, and each one heard about Jesus, the Risen King, in his own language. Peter stood up to tell them about repentance and the gospel of Christ, and by the end of the day, 3,000 people believed. The church was born in power that day, and that's why we celebrate Pentecost.
So what does all of this have to do with how you handle your money? Well, first of all, God made his church with a purpose, to proclaim Jesus everywhere and represent God's character to the world. The church is called the body of Christ, and as a member of the body, you are responsible for your Christian witness. You are not your own, it says in 1 Corinthians 6, 19-20, for you were bought with a price, so glorify God in your body. You see, everything you do has spiritual significance, including your financial choices. Your godly character will show in your business decisions, spending choices, work ethic, and generosity toward others. Also, when you have a Pentecost perspective about your finances, your priorities change, from focusing on yourself to serving others. Ezekiel prophesied the words of God in chapter 36, verse 26, And I will give you a new heart and a new spirit I will put within you, and I will remove the heart of stone from your flesh and give you a heart of flesh. As a believer, this is the power of God's Holy Spirit in you, a new spirit, new motivations, new thoughts, and a new love for others.
Are you plugging into that source for wisdom and peace in your financial decisions, or are you trying to manage everything in your own strength? Let me make one more observation about the power of Pentecost. The Holy Spirit is at work in his church here in the U.S. He has blessed us with resources beyond what most nations can imagine. I believe that we have the means and the responsibility to send the gospel to the whole world.
That's part of the equation, and there's no time like the present. As we approach Pentecost Sunday this year, remember its power and proclamation. Christ did not leave you to deal with life alone, but he sent his Holy Spirit to help you.
In him, believers have power to live godly lives, serving the Lord and those around us. All right, your calls are next. The number 800-525-7000. We'll be right back. Like social media, but better. Ask a question, get an answer, and share what you're learning about money and investing. So, why don't you grab your phone right now and download the Faithfi app? We are grateful for support from Soundmind Investing in the Faith and Finance Program. For more than 30 years, they've been helping Christians reach their financial goals with step-by-step guidance for investors at every stage, from those just getting started to those getting ready for retirement. Through scriptural principles and practical suggestions, SMI offers financial wisdom for living well.
More information, including the short video webinar on profit and peace of mind, no matter what's happening in the market, is available at soundmindinvesting.org. Well, I'm so thankful to have you with us today on Faith and Finance. You remember those words of Jesus? He says, where your treasure is, there your heart will be also. Our heart follows our money.
That's right. Our heart is really anchored to where we place God's treasure, the resources that have been entrusted to us, which just simply says every spending decision is a spiritual decision. And we need to look at not just the symptom, the outward expression of how we handle God's money, but the underlying values and priorities that really inform those spending decisions. And when we think through that, what's important to us? Where is God taking us? And how can money be a tool to accomplish all of that?
Well, I feel like that's why we put ourselves in a position to really use this incredible tool we have called money in a way that's God honoring. We want to help you do that on this program every day in light of your practical questions in your financial life. So call right now 800-525-7000. We've got lines open.
Let's head to Texas. Dan, you will be next up, sir. Go ahead. Yes, sir. Thank you for taking my call. Sure.
I've got some questions for you. We're selling our home plus two properties, 27 acres. We're selling at $400,000. We're looking at possibly $340,000 of capital gain. And five acres, we're selling at $92,000. We're looking at maybe $81,000 of capital gain. And we wanted to know how do we save on that?
Can we do anything to affect the capital gain or just help us out, please? Yeah, sure. So let me just make sure I understand.
These are parcels of land that you're not living on, is that right? Yes, sir. Okay. And you have a very low cost basis.
Is that also true, meaning that you bought them a long time ago? Yes. Okay. And so you think your gain is going to be somewhere around how much for the 27 acres, the profit on it? Profit is $340,000.
Okay. So you think that perhaps your cost basis, your original purchase price was down around $60,000, if my math is correct. Is that right? Yeah. We bought it for $2,000 and they're selling for $15,000 or something like that.
Per acre. Yeah, makes sense. All right. Yeah, the only way to, well, first question is, are you going to have any capital gains?
And that has to do with your adjusted gross income. And so are you selling these properties this year at 2024? Hopefully, yes. Okay. All right.
Let's say you did. Is your income, well, let me ask, are you married filing jointly? Yes. Okay. And is your adjusted gross income somewhere between $94,000 and $580,000 or is it below $94,000? Below. Below.
Okay. So, and you'd always want to check with your CPA just to make sure that everything is in fact accurate for your situation. But just so you understand, if this is a long-term capital gain, meaning you've held this for more than a year and you're married filing jointly, the capital gains rate is zero percent, nothing, until you get above $94,000 in income, in adjusted gross income.
So if your income is between zero and $94,000 for 2024, your capital gains rate will be zero. Oh my God. Thank you.
Okay. Does that include the price of the money we make from selling the land? Yeah, that's completely separate. That's a capital gain. That's not income. And so the capital gains rate, and it's a little confusing because we're talking about two different things. The capital gain is the profit you made on the asset sale.
That's the property. The capital gains rate is determined by your adjusted gross income, which does not factor in capital gains. So now, again, always a good idea based on your specific situation to check with a CPA, especially in a year like this one where you're going to have something unusual happening. But so long as your income is below $94,000, married filing jointly for 2024, you're not going to have any capital gain, which would mean if that's the case, then you could take 100 percent of these proceeds and do whatever you want with it because you don't have any tax, right? You could give a portion of it. You could plow it into another property. You could take it and boost your savings, pay down debt, anything like that. What do you all think you're going to do next with this money? Are you wanting to continue to invest in real estate or do you have some other thoughts? Well, personally, we live in Texas.
We're going to buy a home in West Virginia, someplace close to my daughter. Oh, great. And so we're in the process of doing that now. And we're not sure what we're going to do with the excess money.
Okay, good. Well, a couple of thoughts. One is make sure you have a fully funded emergency fund. That's three to six months expenses in liquid savings. I'd use an online savings account for that.
You can get some good interest on it. I'd think about what the Lord might be leading you to do in the way of giving. This is clearly an increase. The increase on this, which is often how we think about our giving, at least as a starting point, is equal to what is your capital gain. Because it's the profit and that's your increase that the Lord has provided. So you could give off of that. You could invest it.
And if you're looking for an advisor to help you invest it, you could go to our website and find a certified kingdom advisor at faithfi.com. But hopefully that's helpful to you, Daniel, and some good news to you and your wife. And we appreciate you calling today. Please call anytime. If you have other questions today, we'd be delighted to help you. Thanks so much for being on the program.
Let's go to Florida. Hi, Karen. Thanks for your patience. How can I help? Thank you for your time. I appreciate it. Yes, ma'am. So I received capital gain from property that I had put through probate from my deceased brother, and I need to know if I need to pay taxes on that capital gain if it was from a deceased family member. Yeah. So you inherited the property as a result of the family member's death. Is that right? Yes, to be totally honest, it was willed to his daughter, but she couldn't take it. She lives in Maine. And so I put it through probate and became the successor of the property.
Okay. So as long as you received it as a result of passing through the succession process and the court was involved in that and you're the legal owner of it, then you got the stepped up cost basis. So the new cost basis was as of the date of death. And then are you immediately selling it or did you hold it for a period of time? Yes, I had it for a period of time because it took time and I was paying the mortgage and everything on it, but it took like almost a year to put it through probate. And then I just sold it last year. So I had it since 2019, I want to say.
Yeah. So you probably have some gains on it. And so you just need to establish that cost basis. Maybe you could have a get a broker's price opinion or, you know, some other way of establishing what was the market value as of the date of death.
Maybe that was done as a part of the probate process. And then you can compare that to what you sold it for and determine how much gain you have. Now, whatever that gain is, is going to be subject to long term capital gains rates as long as you held it for more than a year, which you did. And what year did you sell it? Was it 23?
Yeah, I sold it, I believe February of 23. All right. And do you file taxes as a single person or married?
Single. All right. And do you have income, adjusted gross income, not the gain, but your income more than $44,000? No. Okay. So if it's less than $44,626, your adjusted gross income for 2023, your capital gains rate is zero.
You don't get to the 15% rate, which is the next one up from zero until you get over $44,625 in income. Okay. I got you.
That makes sense. Thank you so much. I appreciate it.
They took a look off my mind. Okay, good. Well, thanks for your call today. We appreciate you being on the program. All right, folks, we're going to take a break. When we come back, more of your questions. Lines are open.
I'm ready for them. 800-525-7000 with whatever's on your mind. Again, 800-525-7000.
We'll be right back. Every day we hear life changing stories from listeners just like you who see money and possessions as tools to invite more people into God's kingdom. Instead of chasing wealth, you've chosen to embrace God as your source of love and provision. At FaithFi, we're passionate about meeting people where they live and work through our national radio program, app, resources and website to influence widespread positive change in our culture. Please consider becoming a monthly partner at faithfi.com slash give. We are grateful for support from the Eventide Center for Faith and Investing.
ECFI is an educational initiative of Eventide Asset Management that seeks to help Christians understand and practice biblically faithful investing. They do this through their podcast and online journal featuring articles from industry thought leaders and their course called Discover God's Story for Investing. More information is available at faithandinvesting.com. That's faithandinvesting.com. Hey, thanks for joining us today on Faith and Finance. I'm Rob West. We're taking your calls and questions today. We've got some lines open.
800-525-7000 is the number to call. Let's go to Connersville, Indiana. Hi, Randy. Go right ahead. Thank you, sir.
Take my calls. I sold my mom's house yesterday. Wasn't very much money, but there never was a former will. She put it in mine and hers name years ago and then passed away and then I went into my name and my wife's name and my brother lived in it for the last 12 or 15 years under a life estate.
And he passed away about a month ago and come back to my name. So we went ahead and sold the house. But I have another brother that were splitting this money down the middle. And my concern was capital gain tax. And I was just wondering how that worked.
Yeah, very good. Well, you have a stepped up in basis that happens at the date of death. So the new cost basis to determine capital gains is stepped up to the market value as of the date of death. And then from that point forward, if you turn around and sell it, you really wouldn't have any capital gains. If you hang on to it, and it appreciates in value, then you certainly would.
And that would be both at the federal and the state level, depending on where you live. But that, you know, are you selling it right on the heels of receiving this through the inheritance? My mother's been passed for 10 years now. We're selling it on the heels of getting my brother off of the life estate.
Okay. Like I said, there never was really a formal will. But the amount of money I sold this whole house for 75,000. And I'm splitting this with my middle brother, which would be 3536, whatever. And I think the threshold for gain is like 44,000 here in Indiana, I don't know. And I was advised just to put the check in the bank for the house and write my brother a personal check and put in the memos section, proceed half of this house.
And I shouldn't have anything to worry about. Yeah, so the life estate helped me understand that. So it was obviously that's a joint form of ownership where it was your mother and your brother on the life estate.
Is that right? It was my mother's and I put him on a life estate. I had a lawyer draw it up in a whole nine yards, where he could live there as long as his natural life.
Let him live there. Okay, and he passed away about a month ago, and then I had to go to the courthouse and get an affidavit that I remove it back to where it would pass back to me. Okay. And so he was the owner solely of the property during his life? No, he never did. He never did own it. Okay.
Yeah. So what we've got to determine is what portion of the capital gain you're responsible for. And it sounds like and this is what you need to confirm with the CPA. It sounds like you're going to be responsible for the gain in the property from the date of her death, which you said goes back 10 years. And so if this property is sold in 2024, depending on do you file taxes as a single person or married? My wife and I do.
Okay, yeah. So, you know, married filing jointly, you know, between 94,583,000 and in taxable income, you'll have a 15% capital gain rate on any of the gains that you have, assuming that's calculated back as of your mom's date of death, you know, a decade or so ago. If you have less than 94,000 and income for 2024, the capital gains rate is zero. And if you have more than 583,000 and income, it goes up to 20%. So it sounds like for you, at least your portion of the property that you owned, you would be responsible for the capital gains on the gain from her date of death to the sale. That's what I was asking because the house sold for 75,000.
I'm splitting it right down the middle with my brother, which would leave us like 35,000, 6,000, 7,000 a piece. And that's why I say I don't know where the threshold is for capital gains starting. It doesn't have anything to do with there is no threshold starts on the first dollar of the gain. It has to do with your income. And then you apply the appropriate capital gains rate based on your income to whatever that gain is starting with dollar one. So what was the value of this property that you just sold for 75,000 when your mom passed?
Do you have any idea? I would say 75,000. So it hasn't appreciated at all in 10 years? Not really, because you know, they were old, they just lived there and they'd done their day one improvements, this, that and the other, but there never was any capital improvement in it. Right, but the capital gain is the appreciation of the market value of the property itself. So I mean, real estate is up dramatically over the last 12, 10 years. I'd be hard pressed, even if you did nothing to it, unless it was in the state of disrepair, that it hasn't appreciated regardless of whether they put a lot of money in it. Okay, I understand what you're saying there.
Yeah. So what I what you would need to do is go back and establish the market value as of the date of death. And then assuming your CPA says yes, you're responsible for all the capital gains, you would subtract the selling price from the purchase or from the market value as of her date of death. And that's going to help you determine how much capital gain do we really have between that market value as of the date of death and our selling price, and then you would apply your appropriate capital gain rate to the portion that you own.
And if you owned it all, and you're given half of it to your brother, well, he'd have to pay, you know, you'd have to discount how much you give him by the amount of the taxes that he's responsible for, for 50% of the property. But it starts on the first dollar. It just has to do with how much gain has occurred since the step up in basis if you follow me. Right. I got you. That's what I was wondering. Yep, very good.
So I would check with your your CPA on that. Yes, sir. Glad to take it, Randy. And thanks for your kind remarks.
Quickly to a Youngstown. Lynn, thanks for your patience. Go ahead.
Hi, thanks. A couple questions from mobile banking. Kind of do you like having the app and working through the banks and mobile mobile banking and also cash transfers like Zenmo versus Zelle or PayPal?
Yeah, you know, I really I mean, they're all about the same. They're generally considered as long as you stay with the big brand name, Zelle, Venmo, PayPal, Cash App. They're generally considered safe to use. I mean, they all use data encryption and security measures to protect your account transactions. A lot of them share, you know, an aggregator in terms of when you're logging into your bank, you're using a third party. So, for instance, I know Venmo and perhaps one other uses Plaid, which is one of the biggest in the world. And so they don't store your personal information and they have all the latest safety features. So I think for that reason, I'm comfortable with it. But with any of these, you need to keep up with your logging into the account and watching the transactions just to make sure nobody compromises your account, which can happen at your bank or in one of these payment apps like Venmo or Zelle.
And so that's where you're just always looking for potential fraudulent transactions, things that you don't recognize. Does that make sense? Yep. Great. Thank you. Yeah, you're welcome, folks. That's going to do it for us. I'm Rob West. And on behalf of my team today, Laura, Tahira, Amy and Jim, plus everybody else here at FaithFi, have a wonderful weekend and we'll see you next time. Faith and Finance is provided by FaithFi and listeners like you.
