IRS Revenue Ruling
1998-9

Code Sec. 472

<<FULL TEXT>>

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

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


REV. RUL. 98-9

The following Department Store Inventory Price Indexes for December
1997 were issued by the Bureau of Labor Statistics on January 13, 1998.
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, 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 fron
Dec. Dec. Dec. 1996 to
Groups 1996 1997 Dec. 1997 <1>
------ ---- ---- -------------
1. Piece Goods 538.7 522.7 -3.0
2. Domestics and Draperies 636.6 620.8 -2.5
3. Women's and Children's Shoes 646.0 661.6 2.4
4. Men's Shoes 894.2 894.5 0.0
5. Infants' Wear 616.8 620.2 0.6
6. Women's Underwear 527.1 548.7 4.1
7. Women's Hosiery 287.2 297.0 3.4
8. Women's and Girls' Accessories 556.4 541.1 -2.7
9. Women's Outerwear and Girls' Wear 404.4 406.4 0.5
10. Men's Clothing 610.8 606.0 -0.8
11. Men's Furnishings 578.6 598.6 3.5
12. Boys' Clothing and Furnishings 483.5 505.4 4.5
13. Jewelry 965.3 948.3 -1.8
14. Notions 779.4 797.8 2.4
15. Toilet Articles and Drugs 904.3 922.4 2.0
16. Furniture and Bedding 664.6 662.6 -0.3
17. Floor Coverings 574.8 581.1 1.1
18. Housewares 806.1 806.6 0.1
19. Major Appliances 245.3 241.7 -1.5
20. Radio and Television 78.1 73.9 -5.4
21. Recreation and Education <2> 110.8 108.6 -2.0
22. Home Improvements <2> 132.2 133.4 0.9
23. Auto Accessories <2> 107.3 108.0 0.7

Groups 1 - 15: Soft Goods 589.8 594.5 0.8
Groups 16 - 20: Durable Goods 466.6 460.9 -1.2
Groups 21 - 23: Misc. Goods <2> 112.9 111.7 -1.1

Store Total <3> 547.4 548.2 0.1

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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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