Rev. Rul. 96-50
1996-2 C.B. 41, 1996-42 I.R.B. 4

INTERNAL REVENUE SERVICE
Revenue Ruling

LIFO; PRICE INDEXES; DEPARTMENT STORES

Published: October 15, 1996

Section 472. - Last-in, First-out Inventories, 26 CFR 1.472-1: Last-in, first- out inventories.
LIFO; price indexes; department stores. The August 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, August 31, 1996.

The following Department Store Inventory Price Indexes for August 1996 were issued by the Bureau of Labor Statistics on September 13, 1996. The indexes are accepted by the Internal Revenue Service, under s 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, August 31, 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 August 1995/August 1996/Percent Change from Aug. 1995 to Aug. 1996 [Fn1]
1. Piece Goods 534.7 524.3 -1.9
2. Domestics and Draperies 663.1 642.6 -3.1
3. Women's and Children's Shoes 622.3 640.3 2.9
4. Men's Shoes 923.8 895.9 -3.0
5. Infants' Wear 620.6 610.3 -1.7
6. Women's Underwear 519.0 525.8 1.3
7. Women's Hosiery 287.5 287.5 0.0
8. Women's and Girls' Accessories 550.4 546.2 -0.8
9. Women's Outerwear and Girls' Wear 404.5 381.2 -5.8
10. Men's Clothing 604.6 611.7 1.2
11. Men's Furnishings 542.4 567.9 4.7
12. Boys' Clothing and Furnishings 477.3 485.4 1.7
13. Jewelry 1011.2 1023.8 1.2
14. Notions 868.8 770.0 -11.4
15. Toilet Articles and Drugs 861.5 885.1 2.7
16. Furniture and Bedding 659.2 669.2 1.5
17. Floor Coverings 572.4 588.7 2.8
18. Housewares 783.4 810.6 3.5
19. Major Appliances 247.7 244.8 -1.2
20. Radio and Television 82.1 78.8 -4.0
21. Recreation and Education [fn2] 114.2 112.1 -1.8
22. Home Improvements [fn2] 122.2 125.9 3.0
23. Auto Accessories [fn2] 107.1 107.2 0.1
Groups 1 - 15: Soft Goods 585.2 582.9 -0.4
Groups 16 - 20: Durable Goods 465.3 469.2 0.8
Groups 21 - 23: Misc. Goods [fn2] 114.1 113.1 -0.9
Store Total [fn3] 544.9 544.0 -0.2

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. 96-50, 1996-2 C.B. 41, 1996-42 I.R.B. 4