Let's say you purchased 100 shares of Beachfront Corporation which owned a lease on beachfront property in Costa Rica. The question is what is your basis in those 100 shares. Your basis includes what you paid for the stock in 2021. If you made additional capital contributions to Beachfront Corporation to make improvements or to otherwise support the business, those payments may in fact increase your basis in your ownership position in Beachfront Corporation.
The fundamental equation for the sale of stock is Proceeds minus Basis equals Gain or Loss.
So you have $250,000 minus your Basis which is a number that you need to determine based on what financial transactions have happened over last 20 plus years.
