MO HB2945

Expands the definition of "capital gain" for Missouri state income tax purposes beginning January 1, 2026, to include income that would be treated as capital gain but for the application of 26 U.S.C. Sections 1245 and 1250 (depreciation recapture provisions that recharacterize gains as ordinary income under federal law)

Applies this expanded capital gains treatment to individual taxpayers, entities subject to corporate tax (once the top individual rate reaches 4.5% or below), and resident estates and trusts

Allows 100% subtraction of capital gains from Missouri adjusted gross income for individuals starting January 1, 2025, and extends this 100% subtraction to estates and trusts starting January 1, 2026

Creates a new subtraction for resident estates and trusts beginning January 1, 2026, excluding income that would not be taxable if the estate or trust were treated as a nonresident

Repeals and replaces sections 143.121 and 143.341 of the Missouri Revised Statutes relating to income tax modifications