You survived a turbulent stock market, making a little profit on a couple of stocks and dumping some dogs just in time. Well, the ride isn't over yet. Buckle up and get ready to report your transactions to the Internal Revenue Service.

In this tax tip: • Timing is everything   • Detailing your transactions   • Totaling your transactions   • Figuring the tax on your gains!

If you sold a stock or other property, regardless of whether you made or lost money on it, you have to file Schedule D. This two-page form, with all its sections, columns and special computations, looks daunting and it certainly can be.

Your extra work, however, will likely be rewarded by tax savings. If you lost money, this form will help you use those losses to offset any gains or a portion of your ordinary income. And if you profited from your transactions, it will help ensure you don't overpay Uncle Sam for your gains.

Timing is everything
When you make money on a sale, Schedule D requires you to report the transaction using some basic information, including when you bought the asset and when you sold it. This is critical, because how long you hold the property determines its tax rate.

If you owned the security for a year or less, any gain will cost you more in taxes. These short-term assets are taxed at the same rate as your regular income, which could be as high as 35 percent on your 2006 return. Short-term sales are reported in Part 1 of the form.

However, if you held the property for 366 days or more, it's a long-term asset and is eligible for a lower capital gains tax rate: 15 percent or 5 percent, depending upon your income level. Sales of these assets are reported in Part 2 of the form.

Detailing your transactions
Once you determine whether your gain or loss is short- or long-term, it's time to enter the transaction specifics in the appropriate section of Schedule D. All transactions require the same information, entered in either Part 1 (short-term) or Part 2 (long-term), in the appropriate alphabetically designated column:

(a) The name or description of the asset you sold,
(b) When you obtained it,
(c) When you sold it,
(d) For what price,
(e) The asset's cost or other basis, and
(f) Your gain or loss.

The gain or loss that you enter in column (f) for each asset sold is figured by subtracting your basis, the amount in column (e), from the sales price entered in column (d). The total goes on line 2 (for short-term sales) and line 9 (for long-term transactions).

In addition to asking for your total gain or loss amount in each category, the next line of the form (3 for short-term; 10 in the long-term section) asks you to enter your total sales amounts. This allows tax return examiners to more easily compare the sales amount you enter with the figures that your broker or asset manager reported to the IRS.