Rev. Rul. 85-78

1985-1 C.B. 176, 1985-24 I.R.B. 12.

LIFO; PRICE INDEXES; DEPARTMENT STORES

Published: June 17, 1985

Section 472.-Last-in, First-out Inventories, 26 CFR 1.472-1: Last-in, first-out inventories.

  LIFO; price indexes; department stores. The February 1985 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, 1985.

  The following price indexes for February 1985 were issued by the Bureau of Labor Statistics on March 26, 1985, for use by department stores, and are accepted by the Internal Revenue Service, under section 1.472-1(k) of the Income Tax Regulations and Rev. Proc. 72-21, 1972-1 C.B. 745, 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, 1985.

  Indexes are prepared on a national basis for the store total, for 20 major groups of departments, and for two special combinations - soft and durable goods. The store total index covers all departments, including some not listed separately, with the following exceptions: candy, foods, liquor, tobacco, paints, and wallpaper, as well as contract departments.

                 BUREAU OF LABOR STATISTICS, DEPARTMENT STORE
                 INVENTORY PRICE INDEXES BY DEPARTMENT GROUPS
                             (January 1941 = 100)
-------------------------------------------------------------------------------
                                                                    Percentage
                                                                   Change from
                                          February     February      February
                                                                     1984 to
                                            1985         1985       1985 [FN1]
-------------------------------------------------------------------------------
     I.  Piece Goods ...................... 399.2        393.5             -1.4
    II.  Domestic and Draperies ........... 532.0        555.1              4.3
   III.  Women's and Children's Shoes ..... 537.5        542.3              0.9
    IV.  Men's Shoes ...................... 688.6        697.3              1.3
     V.  Infants' Wear .................... 475.6        492.2              3.5
    VI.  Women's Underwear ................ 413.1        428.7              3.8
   VII.  Women's and Girls' Hosiery ....... 231.7        233.6              0.8
  VIII.  Women's and Girls Accessories .... 423.5        437.2              3.2
    IX.  Women's Outerwear and Girls
           Wear ........................... 324.3        334.4              3.1
     X.  Men's Clothing ................... 445.8        459.3              3.0
    XI.  Men's Furnishings ................ 455.8        468.0              2.7
   XII.  Boys' Clothing and Furnishings ... 422.3        425.7              0.8
  XIII.  Jewelry .......................... 689.7        687.7             -0.3
   XIV.  Notions .......................... 470.7        481.5              2.3
    XV.  Toilet Articles and Drugs ........ 612.2        630.0              2.9
   XVI.  Furniture and Bedding ............ 509.5        526.2              3.3
  XVII.  Floor Coverings .................. 445.7        459.3              3.1
XVIII.  Housewares ....................... 727.0        715.4             -1.6
   XIX.  Major Appliances ................. 239.7        245.7              2.5
    XX.  Radio and Television ............. 113.4        107.7             -5.0
         Groups I-XV: Soft Goods .......... 458.5        471.3              2.8
         Groups XVI-XX: Durable Goods ..... 442.1        443.9             -0.4
         Store Total ...................... 453.9        463.6              2.1
FN1. Absence of a minus sign before percentage change in this column signifies
  price increase.

Rev. Rul. 85-78, 1985-1 C.B. 176, 1985-24 I.R.B. 12.