How do we treat money invested in shares of stock for the calculation of Zakat?
Though owning a share of stock of any business is like having a share in the ownership of the business; we have categorized it as “Personal wealth”. Therefore, the lower of the value of stock at the beginning and the end of the year should be added in the category of “Personal wealth”. This is categorized as “Personal wealth” because of two reasons. 1. For the most people who own stock it is held as a saving with expectations that it will grow in value over time. In fact it is readily traded for money. Considering it as a readily redeemable asset, we have treated it as another form of saving. Therefore, we suggest using its fair market value in calculating Zakat. 2. Calculating Zakat on stock treating it as a share in ownership is normally not very convenient. There are literally millions of shares owned by general public. A stockholder will need to know his/her share of cash on hand, profit, and inventory, in order to use those values in the calculation of Zakat. This information is o
