How Much Is Capital Gains Tax in Missouri: Federal Rates and NIIT

For a Missouri resident, the capital gains tax in Missouri is now a purely federal question: the state no longer taxes individual capital gains at all. Under House Bill 594, signed July 10, 2025, individuals subtract 100% of federally reported capital gains when figuring Missouri taxable income, effective for tax years beginning on or after January 1, 2025.¹ The federal bill is what remains, and it ranges from 0% to 23.8% depending on how long you held the asset, how much you earn, and whether the Net Investment Income Tax applies.

What Missouri Taxes Now

The subtraction covers both short-term and long-term gains, with no cap on the amount. You take the capital gains figure from Line 7a of your federal Form 1040 and report it on Form MO-A, which attaches to your Missouri Form MO-1040. If Line 7a is negative because your losses exceeded your gains, you enter zero.² After the subtraction, the gain is gone from your Missouri taxable income.

Any other income you earn still runs through Missouri’s progressive brackets, topping out at 4.70% for 2026 once taxable income exceeds $9,191.³ But the gain itself carries no state tax.

One boundary worth knowing: this is an individual benefit. Corporations become eligible for the 100% subtraction only after Missouri’s top individual rate drops to 4.5% or below.¹ Since the 2026 top rate is 4.70%, corporate taxpayers still include capital gains in their Missouri taxable income.

Short-Term Federal Rates

If you held the asset for one year or less, the profit is a short-term capital gain.⁴ It is taxed at your ordinary federal income tax rate, which runs from 10% to 37% based on your total taxable income and filing status.⁵ The IRS treats a short-term gain exactly like wages.

Long-Term Federal Rates

Assets held more than a year qualify for the preferential long-term rates. For the 2026 tax year, three tiers apply based on your taxable income:⁶

0% rate: taxable income up to $49,450 single, or $98,900 married filing jointly.
15% rate: taxable income from $49,451 to $545,500 single, or $98,901 to $613,700 married filing jointly.
20% rate: taxable income above $545,500 single, or above $613,700 married filing jointly.

Head-of-household filers get the 0% rate up to $66,200, and the 20% rate begins above $579,600.⁶

Collectibles and Depreciated Real Estate

Two categories of long-term gain fall outside the standard brackets. Gains from selling collectibles like coins, art, antiques, or stamps are taxed at a maximum 28% rate. And when you sell rental or business property on which you’ve claimed depreciation, the portion of your gain attributable to that depreciation (unrecaptured Section 1250 gain) is taxed at a maximum 25% rate. Both rates apply only to the portion of the gain in each category; any remaining gain on the same asset uses the standard long-term rates.⁵

The 3.8% Net Investment Income Tax

Higher earners face an additional 3.8% federal surtax on investment income, including capital gains. The Net Investment Income Tax applies to the lesser of your net investment income or the amount your modified adjusted gross income exceeds these thresholds:⁷

$250,000 for married filing jointly or qualifying surviving spouse
$200,000 for single or head of household
$125,000 for married filing separately

The thresholds are not indexed for inflation and haven’t moved since the NIIT took effect in 2013. Stacked on top of the 20% long-term rate, the surtax can push the effective federal rate on a capital gain to 23.8%.

Selling Your Home

If the asset is a home you’ve lived in, a federal exclusion often wipes out most of the gain. Single filers can exclude up to $250,000 in profit; married couples filing jointly can exclude up to $500,000.⁸ Three tests must be met within the five-year period ending on the sale date:

Ownership: you owned the home for at least two years. For joint filers, only one spouse needs to meet this test.
Use: you used it as your primary residence for at least two years. Both spouses must meet this test individually for the full $500,000 exclusion.
Look-back: you haven’t excluded gain from another home sale within the prior two years.

The 24 months of ownership and use don’t need to be consecutive; any 24 months inside the five-year window will do.⁹ Surviving spouses who sell within two years of a spouse’s death, haven’t remarried, and met the joint-return requirements before the death can still claim the full $500,000.⁸

Any gain beyond the exclusion is taxable federally at the applicable rate. Missouri still subtracts it on the state side.

Inherited Property and Stepped-Up Basis

Inheriting an asset resets its cost basis to the fair market value on the date of the original owner’s death.¹⁰ If a parent bought stock for $20,000 and it’s worth $200,000 at their death, your basis is $200,000. Sell for $205,000 and you report $5,000 in gain, not $185,000. Decades of appreciation during the parent’s lifetime go untaxed.

Inherited assets also automatically count as long-term, regardless of how long the deceased owner actually held them, so you get the preferential rates even on a quick sale.

This step-up applies to inheritances, not gifts. If someone transfers an asset to you while alive, you take their original basis.

Offsetting Gains With Losses

Capital losses offset capital gains dollar for dollar. A $30,000 gain and a $20,000 loss in the same year leave you with $10,000 in net taxable gain. When losses exceed gains, you can deduct up to $3,000 of the net loss against ordinary income ($1,500 if married filing separately) and carry the rest forward to future years.

Tax-loss harvesting exploits this, but the wash sale rule puts guardrails on it. Sell a security at a loss and buy the same or a substantially identical security within 30 days before or after the sale, and the loss is disallowed.¹¹ That creates a 61-day restricted window around the sale during which you can’t repurchase what you sold if you want to keep the deduction. The rule covers stocks, bonds, ETFs, and mutual funds, but not cryptocurrency under current law. “Substantially identical” isn’t precisely defined in the statute, so facts matter.

Estimated Payments After a Large Gain

A big gain mid-year can trigger an underpayment penalty if your withholding doesn’t keep up. The IRS expects taxes paid as income is earned, and if you’ll owe $1,000 or more after withholding and credits, quarterly estimated payments are generally required.¹²

You avoid the penalty if you pay at least the lesser of 90% of your current-year tax or 100% of last year’s tax. If your prior-year adjusted gross income was over $150,000 ($75,000 if married filing separately), the 100% threshold rises to 110%.¹³

You don’t have to spread the extra payment across all four quarters. The IRS lets you annualize income and bump the estimated payment for the quarter when the gain actually occurred, using the Annualized Estimated Tax Worksheet in Publication 505 and filing Form 2210 with your return.¹²

A Worked Example

A single Missouri resident with $80,000 in salary and a $100,000 long-term capital gain in 2026 pays federal tax on the gain at the 15% rate, assuming total taxable income stays under the $545,500 threshold. That’s roughly $15,000 in federal capital gains tax. Missouri tax applies only to the $80,000 in salary. The $100,000 gain carries zero state tax. Before HB 594, that same gain would have added about $4,700 to the Missouri bill.¹

1
Missouri Revisor of Statutes. Missouri Revised Statutes RSMo Section 143.121
2
Missouri Department of Revenue. Missouri Individual Income Tax Instructions
3
Missouri Department of Revenue. 2025 Individual Income Tax Year Changes
4
Office of the Law Revision Counsel. 26 USC 1222 – Definitions
5
Internal Revenue Service. Topic No. 409, Capital Gains and Losses
6
Internal Revenue Service. Rev. Proc. 2025-32
7
Office of the Law Revision Counsel. 26 USC 1411 – Imposition of Tax
8
Office of the Law Revision Counsel. 26 USC 121 – Exclusion of Gain From Sale of Principal Residence
9
Internal Revenue Service. Publication 523 (2025), Selling Your Home
10
Office of the Law Revision Counsel. 26 USC 1014 – Basis of Property Acquired From a Decedent
11
Office of the Law Revision Counsel. 26 USC 1091 – Loss From Wash Sales of Stock or Securities
12
Internal Revenue Service. Large Gains, Lump Sum Distributions, Etc.
13
Internal Revenue Service. Underpayment of Estimated Tax by Individuals Penalty