Rev. Rul. 86-22

1986-1 C.B. 240, 1986-7 I.R.B. 4.

LIFO; PRICE INDEXES; DEPARTMENT STORES

Published: February 18, 1986

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

  LIFO; price indexes; department stores. The October 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, October 31, 1985.

  The following price indexes for October 1985 were issued by the Bureau of Labor Statistics on November 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, October 31, 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
                                        October       October      October 1984
                                          1984          1985         to October
                                                                     1985 [FN1]
-------------------------------------------------------------------------------
       I.  Piece Goods ..................... 393.6         396.2            0.7
      II.  Domestic and
           Draperies ....................... 559.8         549.7           -1.8
     III.  Women's and Children's
           Shoes ........................... 559.4         549.3           -1.8
      IV.  Men's Shoes ..................... 709.2         717.8            1.2
       V.  Infants' Wear ................... 480.9         496.9            3.3
      VI.  Women's Underwear ............... 424.9         442.4            4.1
     VII.  Women's and Girl's
           Hosiery ......................... 233.4         233.9            0.2
    VIII.  Women's and Girl's
           Accessories ..................... 446.4         453.5            1.6
      IX.  Women's Outerwear
           and Girls' Wear ................. 356.3         367.6            3.2
       X.  Men's Clothing .................. 474.6         481.5            1.5
     XII.  Boys' Clothing
           and Furnishings ................. 443.8         458.3            3.3
    XIII.  Jewelry ......................... 693.7         671.6           -3.2
     XIV.  Notions ......................... 479.3         491.1            2.5
      XV.  Toilet Articles
           and Drugs ....................... 623.3         648.0            4.0
     XVI.  Furniture and
           Bedding ......................... 536.1         540.5            0.8
    XVII.  Floor Coverings ................. 454.1         452.1           -0.4
   XVIII.  Housewares ...................... 706.9         706.6            0.0
     XIX.  Major Appliances ................ 242.3         247.3            2.1
      XX.  Radio and Television ............ 108.9         101.8           -6.5
           Groups I-XV: Soft Goods ........ 480.00         488.2            1.7
           Groups XVI-XX:
           Durable Goods ................... 444.2         443.2           -0.2
           Store Total ..................... 469.7         475.7            1.3
FN1. Absence of a minus sign before percentage change in this column signifies
  price increase.

Rev. Rul. 86-22, 1986-1 C.B. 240, 1986-7 I.R.B. 4.