IRS Revenue Ruling
1997-28

Code Sec. 472

<<FULL TEXT>>

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

LIFO; price indexes; department stores. The May 1997 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, May
31, 1997.


REV. RUL. 97-28

The following Department Store Inventory Price Indexes for May 1997
were issued by the Bureau of Labor Statistics on June 17, 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, May 31, 1997.

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
May May May 1996 to
Groups 1996 1997 May 1997 <1>
------ ---- ---- ------------
1. Piece Goods 545.1 529.2 -2.9
2. Domestics and Draperies 649.3 649.3 0.0
3. Women's and Children's Shoes 659.7 663.7 0.6
4. Men's Shoes 906.5 918.8 1.4
5. Infants' Wear 631.2 642.0 1.7
6. Women's Underwear 534.1 537.7 0.7
7. Women's Hosiery 286.8 296.7 3.5
8. Women's and Girls' Accessories 550.8 566.2 2.8
9. Women's Outerwear and Girls' Wear 417.9 435.1 4.1
10. Men's Clothing 626.1 630.2 0.7
11. Men's Furnishings 593.3 601.9 1.4
12. Boys' Clothing and Furnishings 493.3 500.2 1.4
13. Jewelry 1020.1 1004.9 -1.5
14. Notions 773.8 755.8 -2.3
15. Toilet Articles and Drugs 883.8 907.2 2.6
16. Furniture and Bedding 668.0 673.4 0.8
17. Floor Coverings 576.1 592.7 2.9
18. Housewares 803.9 806.3 0.3
19. Major Appliances 245.1 242.0 -1.3
20. Radio and Television 79.2 76.7 -3.2
21. Recreation and Education <2> 112.8 109.8 -2.7
22. Home Improvements <2> 127.2 132.4 4.1
23. Auto Accessories <2> 107.4 107.2 -0.2

Groups 1 - 15: Soft Goods 603.0 612.3 1.5
Groups 16 - 20: Durable Goods 467.6 465.4 -0.5
Groups 21 - 23: Misc. Goods <2> 113.7 112.2 -1.3

Store Total <3> 556.3 560.7 0.8

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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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