For example, say you buy 100 ABC for 1,000 and you buy 100 XYZ for 2,000.

During the tax year, you sell ABC for 700, and sell XYZ for 2,500.

If those were your only trades for 2003, then here is your breakdown:

ABC 700 - 1,000 = -$300
XYZ 2,500 - 2,000 = $500
500 - 300 = $200

So your net result for trading in 2003 was $200, which if those stocks were held less than 1 year, that 200 would be taxed at your personal income tax level.

Mind you, this is a very simplified explanation. You need to be aware of many other things, such as potential "wash sales", you need to figure out the cost basis due to commissions, etc.