When Missouri recently removed its state capital gains tax, it sparked a lot of buzz — and for good reason. For small business owners, investors, and anyone considering the sale of appreciated assets, this is a big deal.
To break it down, two of our favorite problem-solvers: Kyle Johnson, RICP®, Owner and Senior Wealth Advisor at Link Wealth Strategies, and Todd Beemer, CPA, of Navigator CPA sat down to answer some questions. If you’ve ever wondered what it looks like when a financial advisor and CPA team up for their clients, consider this your inside look.
Q: First things first — what does Missouri’s capital gains tax repeal actually mean?
Todd (CPA): In plain English, if you sell an asset in Missouri — say stock, real estate, or even your business — you no longer owe state capital gains tax. Before this, Missouri’s top rate was 4.95%. Now, you’re only dealing with federal capital gains tax.
Kyle (Advisor): Translation? More money stays in your pocket. That’s a win for business owners who might be looking at succession planning, selling real estate, or even just diversifying their portfolios.
Q: Who benefits the most from this change?
Todd: Business owners are at the top of the list. If you’ve been thinking about selling your company, this change makes Missouri one of the most favorable states to do so.
Kyle: And that’s where Todd and I tag-team. He’s looking at the tax implications, while I’m looking at the long-term planning side. For example, if you sell your business and free up a few million dollars, what’s next? How do we allocate those funds so they not only lower your tax burden, but also support your retirement and your family’s future?
Q: Can you give us an example of how this advisor-CPA partnership creates value?
Todd: Sure. I recently had a client who was preparing to sell a business. Normally, I’d focus on the tax return, depreciation schedules, the numbers. But because I work with Kyle, I was able to say, “Hey, let’s think bigger — what happens after the sale?” That’s not something I would have done on my own.
Kyle: Exactly. And on my side, I rely on Todd to uncover tax-saving opportunities I might not see from a planning perspective. We joke that he finds the money, and I make sure it works hard for the client.
Q: Are there still pitfalls people should watch for?
Todd: Definitely. Just because Missouri isn’t taxing capital gains doesn’t mean Uncle Sam won’t. Federal capital gains rates still apply, and depending on your income, you could face 15%–20% tax — plus the 3.8% net investment income tax for some filers.
Kyle: And from a planning perspective, if you suddenly come into a large windfall from a sale, without a strategy, you can end up with missed opportunities — or worse, decisions that don’t align with your long-term goals. That’s why having us both at the table matters.
Q: So, what’s the bottom line for Missouri business owners?
Todd: If you’ve been considering selling, now’s the time to take another look at your numbers.
Kyle: And don’t do it alone. Having a CPA and financial advisor working together gives you a clear picture — not just of the tax savings, but how to maximize those dollars for your future.
Final Thoughts
At Link Wealth Strategies, we believe the power of partnership is one of the greatest assets we offer our clients. Missouri’s repeal of the capital gains tax is just one example of how a proactive CPA–advisor team can help uncover opportunities and create a strategy that truly works in your favor.
Thinking about a sale, or just curious how this new law affects you? Let’s talk.
Sources:
- Missouri Department of Revenue – SB 190: Capital Gains Exemption
- Tax Foundation – Missouri Tax Changes 2024
- Internal Revenue Service – Capital Gains Tax Rates