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I have a mortgage of $300,000.00 on the house I am living in and I have $100,000 in 401(K) plus $5000.00 worth of gold jewelry. I want to know if mortgage amout should be deducted from the total assets i.e. $100,000.00 from 401(K) + $5000.00 = $105,000.00 which will be Negative balance of $195,000.00, so there should be no Zakat because the house loan is more than the total assets.

الجواب حامداومصليا
Loans that are due immediately should be deducted from the calculation of Zakah. Those loans which are not due immediately, rather they are due over a long period of time should not be deducted from the calculation of Zakah. This includes home loans, auto loans, business loans etc...
And Allah knows best.
Mufti Ikram ul Haq
Fatwa Center of America