Missouri Capital Gains Tax: What You'll Actually Owe
There is no Missouri capital gains tax. Missouri still has a state income tax, but individuals now subtract 100% of the capital gains reported on their federal return, which zeroes out the state tax on the gain itself. What is left is federal, and that is the layer most sellers underestimate.
Missouri capital gains tax calculator
Enter your sale and see the 2026 tax in Missouri: federal capital gains tax, the 3.8% net investment income tax and Missouri state tax, then the same sale spread over the years the buyer pays you. It runs on the same engine as our capital gains tax calculator, in your browser. Rental property, your home, land, a business, stock or collectibles.
You keep $1,435,851 after selling costs and tax. The tax is 24.6% of your gain.
Your gain
- Sale price less selling costs$1,692,000
- Less your basis$650,000
- Your taxable gain$1,042,000
- Depreciation, taxed at up to 25%$220,000
- Long-term gain at 0%, 15% or 20%$822,000
The tax, line by line
- Federal income tax (incl. $17,740 AMT)$219,973
- Net investment income tax (3.8%)$36,176
- Missouri tax$0
- Total tax$256,149
- You keep$1,435,851
Get the REAL numbers
Talk to capital gains expert Hans Goldstein, EA.
These are estimates. Have a qualified tax professional run your real numbers in a 15-minute scope call.
Why now: the year you close and how the buyer pays you are set before closing, and they decide how much of this Missouri tax you keep.
Book my 15-minute callThis is an estimate. Getting it right down to the tee takes your actual tax forms (returns, K-1s, depreciation schedules), a consult and a paid analysis. The first 15-minute scope call is free.
Worked example (computed October 13, 2026)
A married couple in Missouri sells a duplex portfolio for $1,800,000 with $108,000 of selling costs and a $650,000 basis after $220,000 of depreciation; other income is $160,000. The gain is $1,042,000. All in one year the tax is $256,149: $219,973 federal, $36,176 net investment income tax and $0 Missouri tax, or 24.6% of the gain. Spread over 10 years on a note, the tax on the gain is $178,891, so they keep $77,258 more (interest on the note is taxed separately).
What a Missouri seller actually pays
federal capital gains tax (0%, 15% or 20%) plus the 3.8% net investment income tax; no Missouri tax on the capital gain itself, but recapture taxed as ordinary income stays taxable in Missouri.
What is the tax bill on your Missouri sale going to be?
Send me the sale price and rough basis. Within one business day I'll email you the actual number and the Seller's Guide to §453. If it doesn't fit your deal, I'll tell you that plainly.
No retainer · no obligation. Hans Goldstein, a licensed insurance agent (CA Insurance License #4273294), will contact you and may discuss insurance products, including annuities.
Go deeper: Missouri capital gains tax on a business, real estate or farm sale (2026) on Big Sale Tax.
How Missouri treats capital gains
Missouri became the first state to repeal its capital gains tax. Individuals subtract 100% of capital gains reported on the federal return from Missouri taxable income, which eliminates the state tax on qualifying gains. Missouri still levies an ordinary income tax, so how a sale is characterized matters more here than in most states.
Because the state layer is gone on the gain, everything comes down to federal treatment. That makes the timing of the sale, the 3.8% net investment income tax and depreciation recapture the whole game. It also makes classification matter: income that is NOT a capital gain is still taxed by the state at ordinary rates.
The three layers on a Missouri sale
Most sellers budget for one tax and get hit with four:
- Federal long-term capital gains at 0%, 15% or 20% depending on total taxable income for the year.
- Net investment income tax of 3.8% once modified AGI passes $200,000 single or $250,000 married filing jointly. Those thresholds are not indexed for inflation, so more sellers cross them every year.
- Depreciation recapture, if the asset was a rental or business property. The real-property portion is taxed at up to 25% as unrecaptured Section 1250 gain, and equipment is recaptured as ordinary income. See depreciation recapture.
- Missouri state tax: none on the gain. Missouri allows a 100% subtraction of federally reported capital gains.
The result on a large sale is 23.8% federal, including the net investment income tax.
Why the year matters more than the rate
Every one of those layers is triggered by income landing in a single tax year. The federal rate steps from 0% to 15% to 20% based on taxable income. The 3.8% surtax switches on at a fixed threshold. For sellers 65 and older, the new $6,000 senior deduction begins phasing out at $75,000 of modified AGI ($150,000 joint) and is fully gone by roughly $175,000 ($250,000 joint), so a single large sale wipes it out completely.
Spreading the same gain across several years keeps each year's income lower, and each layer is calculated on that lower number. That is the entire mechanism behind an installment sale under IRC §453, and it is why two sellers with identical gains can pay very different totals.
Recapture is the exception: under §453(i) it is recognized in the year of sale regardless of how payments are structured.
What this actually costs: Missouri numbers
Take a $500,000 long-term gain, on top of $200,000 of other income, married filing jointly.
That is roughly 24% of the gain, all federal. Missouri takes nothing on the capital gain, so the federal timing levers are the only ones you have, and they matter more, not less.
If the asset was ever a rental or business property, add depreciation recapture: up to 25% on the real-property portion and ordinary rates on equipment.
The four layers, in the order they hit you
1. Federal capital gains. 0%, 15% or 20%, decided by your total taxable income for the year, including the gain itself. That is why one large sale lands people in the 20% bracket who normally sit far below it.
2. The 3.8% net investment income tax. Switches on above $200,000 modified AGI single, $250,000 married filing jointly. Those thresholds have never been indexed for inflation, so each year quietly captures more sellers.
3. Depreciation recapture. Only if you depreciated the asset. The real-property portion is unrecaptured Section 1250 gain at up to 25%; equipment is Section 1245 recapture at ordinary rates. The §1245 piece cannot be spread: §453(i) puts it in the year of sale. Unrecaptured §1250 gain on a building is spread with the payments.
4. Missouri tax. None on the gain. Missouri allows a 100% subtraction of federally reported capital gains.
Who Missouri can tax, and on what
- Real property is Missouri-source income. A nonresident selling Missouri property still reports it to Missouri. The 100% subtraction is written for individuals taxed under RSMo §143.011, so a nonresident seller should confirm with a preparer how it applies.
- Everything else generally follows residency on the date of sale: business interests, stock, collectibles.
Missouri still has an income tax (top rate 4.7%), so the gain goes on your Missouri return and comes back out through the subtraction on Form MO-A. Anything the federal return does not treat as capital gain stays taxable in Missouri, including §1245 depreciation recapture and the interest on an installment note.
Does spreading the sale help in Missouri?
Yes, for federal reasons rather than state ones. There is no Missouri tax on the gain to reduce, but the 3.8% surtax threshold and the step from the 15% to the 20% federal bracket are both annual tests. Spreading a $500,000 gain over five years can hold a seller in the 15% bracket and under the surtax in each of them, worth roughly $44,000 on these numbers.
An installment sale under IRC §453 spreads the gain across the years you actually receive payments, so every threshold above is tested annually instead of once.
The trade-offs deserve stating plainly: you need a buyer willing to pay over time, you carry collection risk, recapture still lands in year one, and large installment balances can trigger an interest charge under §453A. It fits some sales and not others, which is exactly what a conversation before closing is for.
Find out what your sale is really going to cost you in tax, and what you can do about it
No retainer. On a funded structure, the insurer pays a one-time commission of about 4% of the amount structured to the brokerage firm that places it (Hans’s share is about 2.4%; no trail). It is built into the annuity pricing, not a separate fee.
Find out what your tax bill actually looks like before you sell, including the parts your CPA may not raise until the return is already being prepared.
Most people find out what they owe after the sale closes, when nothing can be changed. A short conversation now tells you the number, which layers apply to your situation, and which options are still open while the sale is still in front of you.
- What you will actually owe: federal, the 3.8% surtax, recapture and your state
- Which of those layers you can still do something about
- Whether spreading the sale changes the number in your case
Hans Goldstein · 213-414-2808 · Hans Goldstein: Tax & Exit Planning · This is an educational conversation, not tax advice. Bring your CPA in before you file.
Hans Goldstein, a licensed insurance agent (CA Insurance License #4273294), will contact you and may discuss insurance products, including annuities.
Frequently asked
Q: What is the Missouri capital gains tax rate? A: Zero on qualifying capital gains. Missouri has a state income tax, but individuals subtract 100% of the capital gains reported on the federal return. Ordinary income is still taxed normally.
Q: Does Missouri have a lower rate for long-term capital gains? A: There is no Missouri tax on qualifying capital gains. Because the subtraction is tied to what the federal return reports as a capital gain, how a sale is characterized matters more here than in most states.
Q: How do I calculate capital gains tax in Missouri? A: Start with your sale price minus your adjusted cost basis, which is what you paid plus improvements minus any depreciation you took. That gain is then subject to federal capital gains rates, potentially the 3.8% net investment income tax, depreciation recapture if it was a rental, and Missouri tax. The calculator on this site layers all four.
Q: Can I avoid Missouri capital gains tax by moving before I sell? A: Residency changes are scrutinised closely and the facts matter a great deal, including where you lived at closing and whether the asset is real property physically located in the state. Real estate is generally taxed by the state where it sits regardless of where you live. Talk to a CPA before relying on this.
Selling something specific in Missouri?
- Selling real estate: tax deferral guide
- Selling a business: tax deferral guide
- Selling a mobile home park: tax deferral guide
- Selling a self-storage facility: tax deferral guide
- Selling a dental practice: tax deferral guide
- Selling a veterinary practice: tax deferral guide
- Selling a SaaS business: tax deferral guide
- Selling an insurance book of business: tax deferral guide
Run your specific numbers
The calculator runs your sale through real 2026 federal + state tax brackets and shows §453 savings vs lump sum side-by-side.
Run the calculator → 213-414-2808