IRS Revenue Ruling
1998-29

Code Sec. 472

<<FULL TEXT>>

26 CFR 1.472-1; Last-in First-out inventories.

LIFO; price indexes; department stores. The April 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,
April 30, 1998.


REV. RUL. 98-29

The following Department Store Inventory Price Indexes for April 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, April 30, 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
Apr. Apr. Apr. 1997 to
Groups 1997 1998 Apr. 1998 <1>
------ ---- ---- -------------
1. Piece Goods 533.0 547.3 2.7
2. Domestics and Draperies 653.6 642.9 -1.6
3. Women's and Children's Shoes 661.3 663.6 0.3
4. Men's Shoes 904.8 902.5 -0.3
5. Infants' Wear 640.6 628.1 -2.0
6. Women's Underwear 546.3 586.1 7.3
7. Women's Hosiery 294.4 305.5 3.8
8. Women's and Girls' Accessories 561.0 550.1 -1.9
9. Women's Outerwear and Girls' Wear 439.8 431.7 -1.8
10. Men's Clothing 622.2 633.6 1.8
11. Men's Furnishings 598.9 609.6 1.8
12. Boys' Clothing and Furnishings 498.6 498.8 0.0
13. Jewelry 1026.2 1001.8 -2.4
14. Notions 799.2 793.7 -0.7
15. Toilet Articles and Drugs 912.5 936.7 2.7
16. Furniture and Bedding 667.5 675.9 1.3
17. Floor Coverings 586.9 603.7 2.9
18. Housewares 815.9 821.4 0.7
19. Major Appliances 241.9 239.4 -1.0
20. Radio and Television 76.6 73.0 -4.7
21. Recreation and Education <2> 110.2 105.7 -4.1
22. Home Improvements <2> 131.4 134.0 2.0
23. Auto Accessories <2> 107.3 106.8 -0.5

Groups 1-15: Soft Goods 614.6 615.3 0.1
Groups 16-20: Durable Goods 466.9 464.9 -0.4
Groups 21-23: Misc. Goods <2> 112.4 109.5 -2.6

Store Total <3> 562.6 560.8 -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, 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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