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
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.