IRS Revenue Ruling
1997-8

Code Sec. 472

<<FULL TEXT>>

26 CFR 1.472-1: Last-in, first-out inventories.

LIFO; price indexes; department stores. The December 1996 Bureau of
Labor Statistics price indexes are accepted for use by department stores
employing the retail inventory and last-in, first-out inventory methods
for valuing inventories for tax years ended on, or with reference to,
December 31, 1996.


REV. RUL. 97-8

The following Department Store Inventory Price Indexes for December
1996 were issued by the Bureau of Labor Statistics on January 14, 1997.
The indexes are accepted by the Internal Revenue Service, under section
1.472-1(k) of the Income Tax Regulations and Rev. Proc. 86-46, 1986 2 C.B.
739, for appropriate application to inventories of department stores
employing the retail inventory and last-in, first-out inventory methods
for tax years ended on, or with reference to, December 31, 1996.

The Department Store Inventory Price Indexes are prepared on a national
basis and include (a) 23 major groups of departments, (b) three special
combinations of the major groups - soft goods, durable goods, and
miscellaneous goods, and (c) a store total, which covers all departments,
including some not listed separately, except for the following: candy,
foods, liquor, tobacco, and contract departments.


BUREAU OF LABOR STATISTICS, DEPARTMENT
STORE INVENTORY PRICE INDEXES BY DEPARTMENT GROUPS

(January 1941 = 100,
unless otherwise noted)

Percent
Change from
Dec. Dec. Dec. 1995 to
Groups 1995 1996 Dec. 1996 <1>
------ ---- ---- -------------
1. Piece Goods 532.6 538.7 1.1
2. Domestics and Draperies 633.5 636.6 0.5
3. Women's and Children's Shoes 625.6 646.0 3.3
4. Mem's Shoes 891.0 894.2 0.4
5. Infants' Wear 635.6 616.8 -3.0
6. Women's Underwear 521.6 527.1 1.1
7. Women's Hosiery 290.2 287.2 -1.0
8. Women's and Girls' Accessories 559.9 556.4 -0.6
9. Women's Outerwear and Girls' Wear 407.1 404.4 -0.7
10. Men's Clothing 602.1 610.8 1.4
11. Men's Furnishings 561.6 578.6 3.0
12. Boys' Clothing and Furnishings 481.8 483.5 0.4
13. Jewelry 978.1 965.3 -1.3
14. Notions 773.6 779.4 0.7
15. Toilet Articles and Drugs 870.8 904.3 3.8
16. Furniture and Bedding 669.0 664.6 -0.7
17. Floor Coverings 564.5 574.8 1.8
18. Housewares 782.3 806.1 3.0
19. Major Appliances 246.1 245.3 -0.3
20. Radio and Television 79.1 78.1 -1.3
21. Recreation and Education <2> 112.8 110.8 -1.8
22. Home Improvements <2> 123.7 132.2 6.9
23. Auto Accessories <2> 107.5 107.3 -0.2

Groups 1 - 15: Soft Goods 585.1 589.8 0.8
Groups 16 - 20: Durable Goods 462.2 466.6 1.0
Groups 21 - 23: Misc. Goods <2> 113.3 112.9 -0.4

Store Total <3> 543.7 547.4 0.7

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1/ Absence of a minus sign before percentage change in this column
signifies price increase.
2/ Indexes on a January 1986 = 100 base.
3/ The store total index covers all departments, including some not
listed separately, except for the following: candy, foods, liquor,
tobacco, and contract departments.


DRAFTING INFORMATION

The principal author of this revenue ruling is Stan Michaels of the
Office of Assistant Chief Counsel (Income Tax and Accounting). For further
information regarding this revenue ruling, contact Mr. Michaels on (202)
622-4970 (not a toll-free call).

<<END RULING>>

 

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