I absolutely appreciate your response. But I'm still confused. :(
"All you are doing is in the year you buy something include it on your return that year for tax purposes then totally forget that you spent that money the next year and then in the year you sell something include that income on your return and don't think about what you spent the year before. Your supply costs and your income do not need to be reported in the same year. They are reported when you spend the money or when you earn the money. If it is in the same year, then you will report both in the same year, but they are not linked to each other when it comes to tax reporting when you are not using an inventory method."
So if this is the case, then how to I account for the money I spent on something LAST year, if this is the first year I'm reselling? For example, I knew I'd be starting my reselling business in 2025, so in 2024, I bought thousands of dollars of inventory. When I sell something for $20.00 that I spent $10.00 on last year, I should only be paying taxes on the $10.00 profit, right? But according to what you've said above, I'll be paying taxes on the entire $20.00, which doesn't seem right. And what if I purchase $3000 of goods in 2025, but don't sell any of it? It seems like apples an oranges if what I'm purchasing and what I'm selling don't match up.
I just don't get why I'm keeping track of what I'm selling, what I paid for it (in previous years) and all of the fees...if none of this matches up in the end. Again, I'm obviously missing some important component here.
