IRS Revenue Ruling
2002-7

 Code Sec. 472

<<FULL TEXT>>

Status: Corrected by Ann. 2002-13


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

LIFO; price indexes; department stores. The December 2001 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, 2001.


REV. RUL. 2002-7

The following Department Store Inventory Price Indexes for December
2001 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, December 31, 2001.

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
Dec. Dec. Dec. 2000 to
Groups 2000 2001 Dec. 2001 <1>
------ ---- ---- -------------
1. Piece Goods 489.0 484.4 -0.9
2. Domestics and Draperies 614.5 591.0 -3.8
3. Women's and Children's Shoes 647.4 639.8 -1.2
4. Men's Shoes 901.8 889.1 -1.4
5. Infants' Wear 631.7 623.4 -1.3
6. Women's Underwear 567.2 569.0 0.3
7. Women's Hosiery 342.9 352.9 2.9
8. Women's and Girls' Accessories 533.8 557.4 4.4
9. Women's Outerwear and Girls' Wear 381.8 365.4 -4.3
10. Men's Clothing 584.0 564.3 -3.4
11. Men's Furnishings 618.3 595.3 -3.7
12. Boys' Clothing and Furnishings 487.8 473.6 -2.9
13. Jewelry 910.2 895.8 -1.6
14. Notions 795.1 817.8 2.9
15. Toilet Articles and Drugs 984.4 975.7 -0.9
16. Furniture and Bedding 692.8 625.9 -9.7
17. Floor Coverings 628.7 625.2 -0.6
18. Housewares 769.3 758.9 -1.4
19. Major Appliances 229.6 226.7 -1.3
20. Radio and Television 57.1 51.9 -9.1
21. Recreation and Education <2> 91.8 87.9 -4.2
22. Home Improvements <2> 129.3 124.2 -3.9
23. Auto Accessories <2> 108.2 110.4 2.0

Groups 1-15: Soft Goods 589.8 575.7 -2.4
Groups 16-20: Durable Goods 433.9 417.1 -3.9
Groups 21-23: Misc. Goods <2> 100.0 97.3 -2.7

Store Total <3> 531.7 517.2 -2.7

----------
1/ Absence of a minus sign before the percentage change in this column
signifies a 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 Michael Burkom of the
Office of Associate Chief Counsel (Income Tax and Accounting). For further
information regarding this revenue ruling, contact Mr. Burkom at (202)
622-7718 (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.