IRS Revenue Ruling
1998-20

Code Sec. 472

<<FULL TEXT>>

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

LIFO; price indexes; department stores. The February 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,
February 28, 1998.


REV. RUL. 98-20

The following Department Store Inventory Price Indexes for February
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, February 28, 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
Feb. Feb. Feb. 1997 to
Groups 1997 1998 Feb 1998 <1>
------ ---- ---- ------------
1. Piece Goods 526.4 535.8 1.8
2. Domestics and Draperies 650.4 639.3 -1.7
3. Women's and Children's Shoes 640.2 656.9 2.6
4. Men's Shoes 897.7 886.5 -1.2
5. Infants' Wear 617.7 612.6 -0.8
6. Women's Underwear 534.2 565.2 5.8
7. Women's Hosiery 296.5 308.1 3.9
8. Women's and Girls' Accessories 546.9 548.2 0.2
9. Women's Outerwear and Girls' Wear 417.6 408.9 -2.1
10. Men's Clothing 615.4 624.0 1.4
11. Men's Furnishings 585.1 590.4 0.9
12. Boys' Clothing and Furnishings 469.9 499.3 6.3
13. Jewelry 1004.9 1001.0 -0.4
14. Notions 772.0 802.0 3.9
15. Toilet Articles and Drugs 912.3 926.5 1.6
16. Furniture and Bedding 662.0 668.3 1.0
17. Floor Coverings 581.2 583.7 0.4
18. Housewares 817.0 810.3 -0.8
19. Major Appliances 246.1 242.0 -1.7
20. Radio and Television 78.6 73.6 -6.4
21. Recreation and Education <2> 111.1 107.7 -3.1
22. Home Improvements <2> 133.3 134.0 0.5
23. Auto Accessories <2> 107.9 107.7 -0.2

Groups 1 -- 15: Soft Goods 598.9 601.1 0.4
Groups 16 -- 20: Durable Goods 470.0 462.4 -1.6
Groups 21 -- 23: Misc. Goods <2> 113.3 111.0 -2.0

Store Total <3> 554.2 552.3 -0.3

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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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