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As with a lot of people I suspect, this year has brought a bit more confusion than normal to filling out my tax return. I apologize for the length of this letter.

1. Unfortunately, I learned some big lessons early in 1999 by daytrading (I know, I know). Am I right to assume that although for the most part I bought and sold (daily) the same stock, the wash sale rules do not apply or are moot since I sold off all of my accounts in June of 1999 (at a $6K loss)? But I can only claim a $3K loss, correct? How do I make sure the rest rolls over to next year?

2. I live in Las Vegas and did a fair amount of gambling throughout the year. There is no doubt I lost WAY more than I won, but I am not sure how to attack the issue, if at all. Do I not even bother or do I report that my losses outweighed my gains? I did not keep accurate track of my losses, and never received anything from a casino for loss or gain.

However, in July, I did cash out $26,000 once and a week later, another $14,000 or so. I know that I was reported for such a big transaction. How does that figure in? I lost all but $10K the following week, but only $3000 or so at a time, so there is no record of the losses.

With the $10K remaining in July, I bought a motorcycle for $8995 (just over $10K after taxes and title). I paid in cash. Was this transaction also reported? Even considering the $10K spent and the other amounts won, I am still down on the year (gambling problem has since been resolved thankfully!). Do I need some sort of log or journal to verify my losses. If I am unable to remember everything, will it be enough that I remember enough to zero my gains, or will I need everything?

3. My wife worked for an internet company. She was paid by the company for the sales she made, although the company says she was neither an employee nor an independant contractor. We just got her 1099, reporting about $18K. We did not pay quarterly although we did set aside some money for the taxes due. This may be a dumb question, but do we need to pay some sort of social security and/or other stuff like that, apart from the fed taxes. There is no state tax here in Nevada, but I don't know where or how much or even if I pay something to social security.

Some people have told us we will have a penalty for not paying quarterly on the $18K. Does that matter? It will be a HUGE tax check as it is.

4. We did not have health insurance, and with my wife's diabetes, we incurred some rather high medical expenses throughout the year. How much of it is deductible? In December we began paying approx. $300 a month for group covergae under the chamber of commerce plan here. Is any of that deductible?

Thanks for your answers. It is greatly appreciated.

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