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Sometimes referred to as cost of inventory on hand, the inventoriable cost will include not only the cost of purchasing the items that are found in the inventory, but also all expenses that are related to using those items in the creation of products that are ultimately offered for sale.
In the case of any property to which this section applies, any costs described in paragraph (2)â. (A) in the case of property which is inventory in the hands of the taxpayer, shall be included in inventory costs, and. (B) in the case of any other property, shall be capitalized.