IRS Revenue Ruling
1998-16

Code Sec. 472

<<FULL TEXT>>

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

LIFO; price indexes; department stores. The January 1998 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,
January 31, 1998.


REV. RUL. 98-16

The following Department Store Inventory Price Indexes for January 1998
were issued by the Bureau of Labor Statistics. 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, January 31, 1998.

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,
food, 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
Jan. Jan. Jan. 1997 to
Groups 1997 1998 Jan. 1998 <1>
------ ---- ---- -------------
1. Piece Goods 536.5 536.7 0.0
2. Domestics and Draperies 648.0 627.9 -3.1
3. Women's and Children's Shoes 636.8 656.3 3.1
4. Men's Shoes 895.6 890.5 -0.6
5. Infants' Wear 622.7 619.0 -0.6
6. Women's Underwear 522.0 558.3 7.0
7. Women's Hosiery 291.3 304.6 4.6
8. Women's and Girls' Accessories 539.6 544.1 0.8
9. Women's Outerwear and Girls' Wear 404.3 395.6 -2.2
10. Men's Clothing 614.3 614.6 0.0
11. Men's Furnishings 580.0 584.2 0.7
12. Boys' Clothing and Furnishings 478.5 504.4 5.4
13. Jewelry 993.2 981.2 -1.2
14. Notions 773.4 803.3 3.9
15. Toilet Articles and Drugs 906.5 929.7 2.6
16. Furniture and Bedding 658.4 662.8 0.7
17. Floor Coverings 579.1 583.9 0.8
18. Housewares 818.0 811.8 -0.8
19. Major Appliances 246.8 241.8 -2.0
20. Radio and Television 78.4 73.5 -6.3
21. Recreation and Education <2> 111.7 108.3 -3.0
22. Home Improvements <2> 132.9 134.0 0.8
23. Auto Accessories <2> 107.6 107.8 0.2

Groups 1 - 15: Soft Goods 592.0 593.1 0.2
Groups 16 - 20: Durable Goods 469.9 461.9 -1.7
Groups 21 - 23: Misc. Goods <2> 113.6 111.5 -1.8

Store Totals 550.0 547.5 -0.5

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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, food, 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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