Rev. Rul. 96-39
1996-2 C.B. 39, 1996-34 I.R.B. 4

INTERNAL REVENUE SERVICE
Revenue Ruling

LIFO; PRICE INDEXES; DEPARTMENT STORES

Published: August 19, 1996

Section 472. - Last-in, First-out Inventories, 26 CFR 1.472-1: Last-in, first- out inventories.
LIFO; price indexes; department stores. The June 1996 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, June 30, 1996.

The following Department Store Inventory Price Indexes for June 1996 were issued by the Bureau of Labor Statistics on July 16, 1996. The indexes are accepted by the Internal Revenue Service, under § 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, June 30, 1996.

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, foods, liquor, tobacco, and contract departments.

BUREAU OF LABOR STATISTICS, DEPARTMENT STORE INVENTORY PRICE INDEXES BY DEPARTMENT GROUPS
(January 1941 = 100, unless otherwise noted)

Groups June 1995/June 1996/Percent Change from June 1995 to June 1996 [Fn1]
1. Piece Goods 522.9 551.1 5.4
2. Domestics and Draperies 646.7 641.0 -0.9
3. Women's and Children's Shoes 624.2 649.3 4.0
4. Men's Shoes 919.3 895.4 -2.6
5. Infants' Wear 587.9 627.1 6.7
6. Women's Underwear 515.1 535.4 3.9
7. Women's Hosiery 283.3 288.0 1.7
8. Women's and Girls' Accessories 549.5 545.5 -0.7
9. Women's Outerwear and Girls' Wear 416.3 401.1 -3.7
10. Men's Clothing 597.5 612.2 2.5
11. Men's Furnishings 562.4 584.5 3.9
12. Boys' Clothing and Furnishings 477.8 485.7 1.7
13. Jewelry 1004.9 1011.5 0.7
14. Notions 758.7 774.1 2.0
15. Toilet Articles and Drugs 859.9 877.8 2.1
16. Furniture and Bedding 663.1 673.6 1.6
17. Floor Coverings 577.0 576.4 -0.1
18. Housewares 771.8 808.7 4.8
19. Major Appliances 247.2 245.5 -0.7
20. Radio and Television 82.1 79.3 -3.4
21. Recreation and Education [fn2] 114.0 112.8 -1.1
22. Home Improvements [fn2] 122.6 127.4 3.9
23. Auto Accessories [fn2] 106.8 107.5 0.7
Groups 1 - 15: Soft Goods 587.8 592.4 0.8
Groups 16 - 20: Durable Goods 462.8 469.7 1.5
Groups 21 - 23: Misc. Goods [fn2] 113.9 113.7 -0.2
Store Total [fn3] 545.8 550.3 0.8

FN1 Absence of a minus sign before percentage change in this column signifies price increase.
FN2 Indexes on a January 1986=100 base.
FN3 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).

Rev. Rul. 96-39, 1996-2 C.B. 39, 1996-34 I.R.B. 4