Effective January 1, 2025, individuals can deduct 100 percent of capital gains reported for federal income tax purposes when calculating their Missouri adjusted gross income. This applies to both short-term and long-term capital gains. Capital gains generally include income from investments such as stocks and real estate.
In the future, if revenue goals are met and the Missouri top individual income tax rate becomes 4.5 percent or lower, corporations will be eligible for a 100 percent capital gains tax deduction as well, starting with the following year. For example, in 2025, the top individual income tax rate is 4.7 percent, and corporations are not eligible for the 100 percent capital gains exclusion in 2026. State revenues have experienced a growth slowdown, however, so it may be several years before the individual rate is reduced to 4.5 percent.
Please reach out to your RubinBrown representative with any questions or concerns.
Published: 08/21/2025
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