Ksaz, does Islam teach that the soul resides in the heart?
I supposed you are referring to the heart in a metaphysical way. In that case, the soul is much more than the heart. However, it is the heart that drives the soul. The Prophet spoke about the heart that when it is good, the rest of the body is good and when it is bad, the rest of the body is bad. He also said that in whatever you do, follow your heart. In my own experience, I am on the right course following my heart until my mind kick in. For example, if I stop at the light and someone approach the car for help, I would without thinking reach over and give them some money. If I pause for even a split second, I start thinking if I should or not or if they deserve/need it or not. Muhammad advise was intended to keep me from filling my thoughts with all the whys and why nots.
I like your answer. Two nights ago, a young untrained Brahmin, at a wake, was preaching about the soul and he was pointing to his heart and emphasizing that the soul resides in here and when it stops, that means the soul has departed. So I asked him the question, that if I get a heart transplant, whose soul now resides in my body and what happens to our respective karmas? Needless to say, he was stumped. On the question of giving, look up the story on Sudama and Krishna. 