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accounting explanation needed



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if i have an account with say $5000
i buy $5000 worth of stock & sell the stock with a profit of $500. i
reinvest the $5500 in another stock, which i sell for a loss of $500.
the actual account is now back @ $5000.
here is the question:
why does the broker report to the IRS that i have $5000+ $5500= $10500.
( i noticed this last year already & don't quite understand )
all explanations are welcome

mike