Missouri does not have an inheritance tax
Missouri has no state inheritance tax. When someone dies and leaves you money, property, or other assets, you do not owe Missouri a tax on what you receive. This applies whether you are a spouse, child, relative, or unrelated beneficiary.
The federal government does have an estate tax, but it only applies to estates worth more than a certain threshold — $13.61 million for deaths in 2024, though this amount changes yearly. Most Missouri residents never encounter it. If you are inheriting from someone in Missouri or receiving assets from a Missouri resident's estate, Missouri itself will not tax that inheritance.
Key Takeaways
- Missouri has no state inheritance tax on money, property, or assets you receive from someone's estate.
- The federal estate tax only affects estates larger than $13.61 million (for 2024), and most people do not pay it.
- You do not owe Missouri income tax on inherited money itself, though income generated by inherited assets (like rental property or investment accounts) may be taxable.
- If you inherit a vehicle or real estate in Missouri, you may owe transfer fees or property taxes, but these are not inheritance taxes.
What you might owe instead of an inheritance tax
Even though Missouri has no inheritance tax, you may still owe money related to what you inherit. The most common is property tax on real estate. If you inherit a house or land, you become responsible for annual property taxes on that property going forward. This is not an inheritance tax — it is a tax on owning property in Missouri — but it is a cost tied to inheriting.
If you inherit a vehicle, you will owe Missouri's standard sales tax when you register it in your name, unless the vehicle came from a spouse or direct descendant. You may also owe a transfer tax on real estate in some Missouri counties, though the state itself does not charge one. Check with your county assessor's office to learn what applies where the property is located.
Income generated by inherited assets is taxable. If you inherit a rental property and collect rent, that rent is Missouri taxable income. If you inherit a brokerage account and receive dividends or interest, those are taxable. But the inheritance itself — the initial transfer of the asset to you — carries no Missouri tax.
How the federal estate tax works, and whether it affects you
The federal estate tax is separate from any state tax. It applies to the total value of everything a person owned when they died. For 2024, the threshold is $13.61 million. If the estate is smaller than that, no federal estate tax is owed. If it is larger, the executor of the estate (usually a family member or attorney) pays the tax from the estate before distributing assets to heirs.
The threshold is high enough that fewer than one in 500 estates pay federal tax. Unless the person who died was very wealthy — owned a large business, significant real estate holdings, or substantial investments — the estate likely falls below the threshold and owes nothing.
It is important to know that you as the heir do not pay the federal estate tax directly. The estate itself pays it before you receive your inheritance. Your inheritance is not reduced by federal income tax, either. You receive the assets tax-free from a federal income perspective.
What happens when you inherit money or investments
When you inherit cash or a brokerage account, you receive it without owing Missouri or federal tax on the amount itself. However, if that account generates income after you inherit it, you owe tax on that income. For example, if you inherit $50,000 in a savings account earning interest, the interest you earn going forward is taxable income.
Inherited investments receive what is called a step-up in basis. This means if someone bought stock for $10,000 and it was worth $50,000 when they died, you inherit it at the $50,000 value. If you sell it when ready for $50,000, you owe no capital gains tax. This is a federal rule that benefits heirs and applies in Missouri as well.
If you hold the inherited investment and it grows further, any gains beyond the stepped-up value are taxable when you sell. Keep records of the value on the date of death so you can calculate gains correctly.
Inherited real estate and property taxes
Real estate you inherit in Missouri becomes your responsibility for property taxes when ready, even if you have not yet registered the deed in your name. You do not owe a tax for inheriting the property, but you owe annual property taxes for owning it, just as the person who died did.
Some Missouri counties offer a homestead property tax exemption that reduces the assessed value of a primary residence. If you inherit a house and live in it as your primary home, you may be able to claim this exemption. Contact your county assessor's office to learn the important date for filing and what documents you need.
If you inherit property and later sell it, you may owe capital gains tax on the difference between the stepped-up value (the value on the date of death) and the sale price. This is a federal tax, not a Missouri tax, but it is worth understanding before you sell.
Transferring the deed and registering ownership
To legally own inherited real estate, you must transfer the deed from the deceased person's name to yours. This is usually done through the probate process, where a court oversees the distribution of the estate. If the estate goes through probate, the court will issue an order allowing you to record a new deed.
If the estate avoids probate — for example, because the property was held in a trust or had a transfer-on-death deed — you can transfer ownership directly by recording the appropriate document with the county recorder. Either way, you do not owe Missouri a tax for recording the deed, though the recorder's office charges a small filing fee.
Once the deed is in your name, you are responsible for property taxes. If you plan to sell the property, consult a tax professional about capital gains and whether you owe federal income tax on the sale.
Frequently Asked Questions
Do I owe Missouri income tax on money I inherit?
No. Inherited money itself is not taxable income in Missouri or federally. However, if that money earns interest, dividends, or other income after you inherit it, that income is taxable.
What if the person who died lived in another state?
Missouri has no inheritance tax regardless of where the deceased lived. If the other state had an inheritance tax, you might owe that state tax, but Missouri will not tax you. Check the laws of the state where the person died to see if you owe anything there.
Do I have to report inherited assets to Missouri?
You do not report the inheritance itself to Missouri. If the inherited assets generate income (rent, interest, dividends), you report that income on your Missouri tax return like any other income. The executor of the estate files a final federal return for the deceased person.
Is there a important date to transfer inherited property into my name?
There is no Missouri important date for transferring a deed, but delaying can create problems. Property taxes remain due on the property regardless of whose name is on the deed. If the estate goes through probate, the court process itself sets the timeline. If you avoid probate, transfer the deed as soon as you have the required documents.
What if I inherit a business or farm?
Missouri has no inheritance tax on a business or farm. You inherit it tax-free. However, if the business generates income, that income is taxable. If you later sell the business, you may owe federal capital gains tax on the difference between the stepped-up value and the sale price. Consult a tax professional or accountant for guidance on running or selling an inherited business.