Rev. Rul. 98-20, 1998-15 I.R.B. 7.

INTERNAL REVENUE SERVICE
Revenue Ruling

LIFO; PRICE INDEXES; DEPARTMENT STORES

Published: April 13, 1998

Section 472. - Last-in, First-out Inventories, 26 CFR 1.472-1: Last-in, first- out inventories.
LIFO; price indexes; department stores. The February 1998 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, 1998.

The following Department Store Inventory Price Indexes for February 1998 were issued by the Bureau of Labor Statistics. 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, February 28, 1998.

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, food, liquor, tobacco, and contract departments.

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

Groups February 1997/February 1998/Percent Change from Feb. 1997 to Feb. 1998 [Fn1]
1. Piece Goods 526.4 535.8 1.8
2. Domestics and Draperies 650.4 639.3 -1.7
3. Women's and Children's Shoes 640.2 656.9 2.6
4. Men's Shoes 897.7 886.5 -1.2
5. Infants' Wear 617.7 612.6 -0.8
6. Women's Underwear 534.2 565.2 5.8
7. Women's Hosiery 296.5 308.1 3.9
8. Women's and Girls' Accessories 546.9 548.2 0.2
9. Women's Outerwear and Girls' Wear 417.6 408.9 -2.1
10. Men's Clothing 615.4 624.0 1.4
11. Men's Furnishings 585.1 590.4 0.9
12. Boys' Clothing and Furnishings 469.9 499.3 6.3
13. Jewelry 1004.9 1001.0 -0.4
14. Notions 772.0 802.0 3.9
15. Toilet Articles and Drugs 912.3 926.5 1.6
16. Furniture and Bedding 662.0 668.3 1.0
17. Floor Coverings 581.2 583.7 0.4
18. Housewares 817.0 810.3 -0.8
19. Major Appliances 246.1 242.0 -1.7
20. Radio and Television 78.6 73.6 -6.4
21. Recreation and Education [fn2] 111.1 107.7 -3.1
22. Home Improvements [fn2] 133.3 134.0 0.5
23. Auto Accessories [fn2] 107.9 107.7 -0.2
Groups 1 - 15: Soft Goods 598.9 601.1 0.4
Groups 16 - 20: Durable Goods 470.0 462.4 -1.6
Groups 21 - 23: Misc. Goods [fn2] 113.3 111.0 -2.0
Store Total [fn3] 554.2 552.3 -0.3

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, food, 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. 98-20, 1998-15 I.R.B. 7.