Capital Gains?

Let's say I buy a stock for $100. Then sell it at $110. Then buy it again at $108. I do this a few times. How does the capital gains tax work? Is it on each trade? Or the sum of all your trades? For example, if the capital gains tax was on each trade, you would have to factor that in to your strategy, right? I've already factored in the commission rate.

How do you guys factor in capital gains tax?

Sorry, very new to this. And plan on doing this a few times a month. Maybe once or twice a week -- not day trading I know, but what better people to ask.

Short term capital gains are essentially ordinary income, but BEWARE the wash sale rules for your losses. You may want to elect the mark to maket treatment if...

This is the best start to look for your tax situation:

http://www.irs.gov/taxtopics/tc429.html

IRS Publication 550, page 59:

Wash Sales
You cannot deduct losses from sales or trades of stock or securities in a wash sale unless the loss was incurred in the ordinary course of your business as a dealer in stock or securities. A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you:

1.Buy substantially identical stock or securities,
2.Acquire substantially identical stock or se-curities in a fully taxable trade,
3.Acquire a contract or option to buy sub-stantially identical stock or securities, or
4.Acquire substantially identical stock for your individual retirement account (IRA) or Roth IRA.
If you sell stock and your spouse or a corporation you control buys substantially identical stock, you also have a wash sale.

If your loss was disallowed because of the wash sale rules, add the disallowed loss to the cost of the new stock or securities (except in (4) above). The result is your basis in the new stock or securities. This adjustment postpones the loss deduction until the disposition of the new stock or securities. Your holding period for the new stock or securities includes the holding period of the stock or securities sold

http://www.irs.gov/pub/irs-pdf/p550.pdf

Tax treatment (gain or loss from a 1256 Contract is treated for tax purposes as 40% short-term gain and 60% long-term gain) is why I (and possibly many of us) trade futures.