You report them as the cost of goods sold.
- Your beginning inventory is your ending inventory from last year.
- Any purchases of leggings in 2019 is added as purchases.
- Then ending inventory, (if any), is subtracted to arrive at the cost of goods sold.
If you already deducted the cost of the leggings in a prior year, then your beginning inventory is zero. You can't deduct the expense twice.
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