IRS Revenue Ruling
1998-6

Code Sec. 472

<<FULL TEXT>>

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

LIFO; PRICE INDEXES; DEPARTMENT STORES. The November 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,
November 30, 1997.


REV. RUL. 98-6

The following Department Store Inventory Price Indexes for November
1997 were issued by the Bureau of Labor Statistics on December 16, 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, November 30, 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
Nov. Nov. Nov. 1996 to
Groups 1996 1997 Nov. 1997 <1>
------ ---- ---- -------------
1. Piece Goods 55.9 524.6 -5.6
2. Domestics and Draperie 634.7 628.2 1.0
3. Women's and Children's Shoes 656.1 661.7 0.9
4. Men's Shoes 903.7 906.9 0.4
5. Infants' Wear 614.8 618.2 0.6
6. Women's Underwear 535.4 552.9 3.3
7. Women's Hosiery 287.4 298.8 4.0
8. Women's and Girls' Accessories 562.5 543.7 -3.3
9. Women's Outerwear and Girls' Wear 415.9 428.4 3.0
10. Men's Clothing 633.0 621.2 -1.9
11. Men's Furnishings 591.5 604.0 2.1
12. Boys' Clothing and Furnishings 495.1 513.1 3.6
13. Jewelry 1020.6 978.9 -4.1
14. Notions 740.7 807.7 9.0
15. Toilet Articles and Drugs 903.4 917.8 1.6
16. Furniture and Bedding 667.8 665.8 -0.3
17. Floor Coverings 585.6 580.1 -0.9
18. Housewares 804.5 811.7 0.9
19. Major Appliances 244.2 241.0 -1.3
20. Radio and Television 78.1 74.2 -5.0
21. Recreation and Education <2> 111.3 108.3 -2.7
22. Home Improvements <2> 130.6 133.2 2.0
23. Auto Accessories <2> 107.1 107.9 0.7

Groups 1-15: Soft Goods 602.1 606.5 0.7
Groups 16-20: Durable Goods 466.5 462.6 -0.8
Groups 21-23: Misc. Goods <2> 113.0 111.4 -1.4

Store Total <3> 555.1 555.9 0.1

----------
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>>

TO CONTACT
DON FITCH CPA

Phone Don Fitch CPA Toll Free at (877)CPA-Help or (877)272-4357 or on our Direct Line at (760)674-1722.