I am concerned about the possibility of being required to pay penalties for underpayment of Federal Taxes for this year (1999) due to significant short term capital gains. Here's the situation:

Last year (1998)
Wages: $70k (fairly level throughout the year)
Capital Gains: $20k (mostly long term)
Taxes Owed: $606 (made some large end of year additional withholding payments)

This year (1999)
Estimated Wages: $85k (fairly level throughout the year)
Short Term Capital Gains: $88k (not a very Foolish investor, but lucky nevertheless with initial investment of $60,000)

Distribution of 1999 Short Term Gains
Apr: $10K (Long on I2 Technologies)
May: $4K
Jul: $60K (Long on Oracle $30K (bought in mid 20s) then Oracle Calls for another $30K)
Sep: $7K
Oct: $7K

Questions: 1) Was I suppose to pay taxes on the capital gains as they were realized. I had assumed that I could wait until the end of the year, since I could have losses that would offset the gains. 2) If I pay 105% of the taxes that I paid in 1998, then have I found a Safe Harbor?