Capital Gains Subtraction FAQs

The capital gains subtraction, effective for the 2025 tax year, permits eligible individuals to subtract 100% of their federally reported capital gains from their federal adjusted gross income on their Missouri income tax return.

To qualify for the subtraction, you must be a resident or nonresident individual and you must have a reported capital gain on your federal income tax return.

The subtraction can be claimed by filing Form MO-A with your MO-1040 individual income tax return.

The subtraction applies to tax years beginning on or after January 1, 2025, and all subsequent tax years. You can first claim this on your 2025 individual income tax return, filed in 2026.

No. A trust or estate in not "an individual subject to tax pursuant to section 143.011", as required by legislation's change to Section 143.121, RSMo.

Where a grantor trust is involved, if the deemed owner of the grantor trust is an individual who must report the capital gains of the grantor trust on his or her own individual federal income tax return (Form 1040), that individual may claim the subtraction when calculating Missouri individual income tax on the individual’s Form MO-1040.

No. A pass-through entity (PTE) that elects to be subject to PTE tax is neither "an individual subject to tax pursuant to section 143.011" nor is it "an entity subject to tax pursuant to section 143.071".

Not at this time. However, corporations can deduct 100% of capital gains from their federal taxable income after the top individual income tax rate in Missouri falls to 4.5% or lower. The corporate subtraction will take effect for all tax years beginning on or after January first of the tax year following the tax year in which this rate reduction occurs. For tax year 2025, the top individual income tax rate is 4.7%.

The Department of Revenue does not accept physical gold, silver, or privately minted precious metal coins for payment. An exception is for coins officially minted as currency by the U.S. federal government. Pursuant to Missouri statute (Section 408.010.2, RSMo), if you attempt to pay with an electronic representation of gold or silver through a custody agent or other entity, the attempted payment must be converted to U.S. dollars by the custody agent or other entity that received the payment request before being sent to the Department.