This example is very confusing. If you buy a bunch of stuff to sell and don't sell it, then there is no income to pay taxes on. If you sell and make a profit, y

This example is very confusing. If you buy a bunch of stuff to sell and don't sell it, then there is no income to pay taxes on. If you sell and make a profit, you pay tax on the profit. If you lose money you don't have profits to pay tax on.