[[I am a fairly new investor and at this point am floundering.]]

Ah Ha!! A prime candidate for The Motley Fool Investment Tax Guide. You might enjoy this book, since it deals with many of the "basic" issues that you may have questions on. In addition, it will get you on your way be becomming a more sophisticated investor when dealing with tax matters. I'll tell you more about that later.

[[ This will be my first year to claim gains
from the sale of stock, which I turned around, into other stocks which are now losses, not good.]]

Not good is correct. Why? Because you'll have to claim any gain on the sale of your prior stock, and you'll not benefit from the "holding" of your current stock. Remember that there is no provision to "rollover" the gain from the sale of stock into other stock. So you might want to consider selling off some of your losers of offset some of your gains. This is discussed in the Investment Tax Guide, as well as the Wash Sale Rules (that you want to make sure that you avoid should you sell your shares for a loss).

[[I have a couple of questions. According to William O'Neill of IBD fame, you should always sell at
the top of a market and keep your gains, rather than what I did which was to watch my portfolio
drop by 50%. How in the world can you make any money when you are constantly taking profits,
but then turning over large chunks to Uncle Sam?]]

With all due respect to Mr. O'Neill, next time he knows when we reach "the top of the market", make sure he rings a bell loud enough for me to hear it. And, since he can predict the top, I'm sure he can also predict the bottom. Tell him to ring a bell then also. Please know that I say this with my tongue firmly planted in my cheek. But lets move on.

When you say "large" chunks, I'm not sure that you definition of "large" and my definition of "large" may be quite the same. As the tax law currently stands, if you hold a stock "long term" (more than one year), your maximum federal tax on the gain would be 20% (and it could be as low as 10% depending on your personal circumstances)...a very reasonable tax when all things are considered.

The problem comes when you are short term trading in a higher tax bracket. Then your tax on the gain would be at your "normal" tax rate...which could be as high as 39.6%, or as low as 15%. Which is why I'm a long term investor. The 20% federal rate is substantially less than my normal tax rate. This is explained in greater detail in the Investment Tax Guide.

[[ If you take your short term gains and then
reinvest them, is that still considered a gain?]]

Sorry, but the answer is yes. As noted above, there are no provisions to take your stock gains and "re-invest" them into other shares of stock. In fact, this "re-investment" is specifically prohibited by Uncle Sammy.

[[ I feel like these are probably stupid questions but I
need some answers, or perhaps a referral to a good tax book, or website. Thanks.]]

As far as a tax book, start with The Motley Fool Investment Tax Guide. I've given you a location below where you can read the summary of what is in the book. You might want to check it out.

With respect to other tax issues, check out the Taxes FAQ area. I write a weekly article on various tax issues...some basic, and some not so basic. But the infomration is there for you to read about and learn much, much more about tax issues. Make sure to check out the "archives" section of the Taxes FAQ area for my prior weekly posts. Finally, you might want to check out (http://www.fairmark.com). This is an excellent site, but may be a bit more sophisticated for you at this point in time. But certainly something that you can grow into.

I hope that this helps...
TMF Taxes
Roy

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