Missouri taxes capital gains as ordinary income — up to 4.7% — stacked on top of federal tax, so selling appreciated real estate can cost roughly ~28.5% of the gain. A 1031 exchange into a Delaware Statutory Trust lets Missouri investors defer that combined bill and trade active landlording for passive institutional real estate.
The Missouri tax math
Here's the tax stack on a long-held rental sold for a $1.5M gain (excludes depreciation recapture, taxed separately at up to 25%):
| On a $1.5M gain | Tax |
|---|---|
| Federal long-term capital gains (20%) | $300,000 |
| Net investment income tax (3.8%) | $57,000 |
| Missouri income tax (4.7%) | $70,500 |
| Total if you simply sell | $427,500 |
| Tax if you 1031 into a DST | $0 deferred |
In Missouri's top bracket, roughly the combined rate above goes to tax if you sell outright — versus $0 now with a qualifying 1031 exchange. Run your Missouri numbers →
Missouri 1031 rules
Rules summarized as of 2026 — verify with your tax advisor.
Conforms to federal §1031
Missouri conforms to IRC §1031, so a qualifying exchange defers Missouri tax as well as federal tax.
Withholding at sale
Missouri may require nonresident withholding at closing; a qualifying 1031 exchange generally defers it. Confirm specifics with your closing agent.
How gains are taxed
Taxed as ordinary income — up to 4.7%.
Missouri market snapshot
Illustrative — wire to a market-data feed; refreshed quarterly.
Baker 1031 in Missouri
Realized (acquired, held, sold) programs on Missouri assets. Joined from full-cycle-deals.csv; sponsor-reported, net-to-investor, not independently verified; past performance ≠ future results.
| Program | Sponsor | Avg annual | Equity × | Hold |
|---|---|---|---|---|
| Riverstone Apartments — Kansas City | Syndicated Equities | 13.12% | 1.50x | 3.29 yr |
| Mimi's Café — Kansas City | AEI | 5.15% | 1.04x | 11.76 yr |
| KinderCare — Ballwin | AEI | 7.15% | 1.45x | 8.78 yr |
| Gingham's — St. Charles | AEI | 9.18% | 2.27x | 23.29 yr |
| Walgreens Center — Sullivan | Syndicated Equities | -1.12% | 0.90x | 9.31 yr |
| Jared — Hazelwood | AEI | 6.86% | 1.22x | 15.71 yr |
See every Missouri deal in the Data Center →
Current offerings for Missouri investors
| Offering | Sponsor | Type | Status |
|---|---|---|---|
| BR Diversified Industrial Portfolio 7, DST | Bluerock | Industrial | Available |
| Griffin Capital (Union – Kansas City, MO) DST | Griffin Capital | Multifamily | Available |
DST sponsors based in Missouri
Learn more
Missouri FAQ
What is the capital gains tax rate in Missouri?
Missouri taxes capital gains as ordinary income, up to 4.7%, with no separate long-term rate. Combined with the federal 20% rate and the 3.8% net investment income tax, a high-bracket Missouri seller can face roughly ~28.5% on a real estate gain.
Does Missouri recognize 1031 exchanges?
Yes. Missouri conforms to IRC §1031, so a properly structured exchange defers Missouri tax as well as federal tax.
Why use a 1031 exchange in Missouri?
To defer the tax on a large gain (up to about ~28.5% combined) and move from active landlording into passive, professionally managed real estate while keeping your full equity invested. These are Regulation D offerings for accredited investors.
Disclosures
This page is educational and is not investment, tax, or legal advice, or an offer to sell or a solicitation to buy any security. State tax and 1031 rules summarized here are general, current as of 2026, and not tax advice — verify with your CPA and attorney. For accredited investors only. Representatives may transact business only in states where registered or exempt. Securities offered through Aurora Securities, Inc., member FINRA/SIPC; Baker 1031 Investments, LLC is independent of Aurora. Performance shown is sponsor-reported, realized programs only, net of fees, not independently verified, and not indicative of future results.