Rev. Rul. 89-88

1989-2 C.B. 92, 1989-27 I.R.B. 7.

                       Internal Revenue Service

                                 Revenue Ruling

                     LIFO; PRICE INDEXES; DEPARTMENT STORES

                            Published: July 3, 1989

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

  LIFO; price indexes; department stores. The April 1989 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, 1989.

  The following price indexes for April 1989 were issued by the Bureau of Labor Statistics on May 22, 1989, 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. 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, 1989.

  Indexes are prepared on a national basis for the store total for 23 major groups of departments, and for three special combinations -- soft goods, durable goods and miscellaneous goods. The store total index covers all departments, including some not listed separately, with the following exceptions: candy, foods, liquor, tobacco, as well as contract departments.

        BUREAU OF LABOR STATISTICS DEPARTMENT STORE INVENTORY
                 PRICE INDEXES BY DEPARTMENT GROUPS
             (January 1941 = 100 unless otherwise noted)
                                                    Percent Change
                                    April  April  from April 1988 to
               Groups                1988   1989    April 1989 [FN1]
____________________________________________________________________
1. Piece Goods                     410.4  432.8         5.5
2. Domestics and Draperies         596.6  610.9         2.4
3. Women's and Children's Shoes    566.0  593.6         4.9
4. Men's Shoes                     792.6  823.7         3.9
5. Infants' Wear                   555.1  582.1         4.9
6. Women's Underwear               451.4  474.3         5.1
7. Women's Hosiery [FN2]           240.4  241.7         0.5
8. Women's and Girls' Accessories  487.4  526.5         8.0
9. Women's Outerwear and Girls'
    Wear                            403.9  403.5        -0.1
10. Men's Clothing                  519.6  543.4         4.6
11. Men's Furnishings               512.7  531.4         3.6
12. Boys' Clothing and Furnishings  441.5  448.9         1.7
13. Jewelry                         762.6  795.1         4.3
14. Notions                         496.7  524.1         5.5
15. Toilet Articles and Drugs       700.1  732.8         4.7
16. Furniture and Bedding           577.6  577.4         0.0
17. Floor Coverings                 492.1  486.2        -1.2
18. Housewares                      735.9  724.6        -1.5
19. Major Appliances                246.7  244.0        -1.1
20. Radio and Television             95.3   93.0        -2.4
21. Recreation and Education [FN3]  104.7  107.8         3.0
22. Home Improvements [FN3]         104.2  109.1         4.7
23. Auto Accessories [FN3]          101.7  103.7         2.0
Groups  1 - 15: Soft Goods          525.9  541.7         3.0
Groups 16 - 20: Durable Goods       452.2  446.0        -1.4
Groups 21 - 23: Misc. Goods [FN3]   104.0  107.2         3.1
     Store Total                    500.1  509.9         2.0
____________________________________________________________________
DRAFTING INFORMATION

  The principal author of this revenue ruling is Kevin M. Curran of the Office of Assistant Chief Counsel (Income Tax and Accounting). For further information regarding this revenue ruling contact Mr. Curran on (202) 566-3024 (not a toll-free call).

Rev. Rul. 89-88, 1989-2 C.B. 92, 1989-27 I.R.B. 7.