Rev. Rul. 98-26, 1998-21 I.R.B. 4.

INTERNAL REVENUE SERVICE
Revenue Ruling

LIFO; PRICE INDEXES; DEPARTMENT STORES

Published: May 26, 1998

Section 472. - Last-in, First-out Inventories, 26 CFR 1.472-1: Last-in, first- out inventories.
LIFO; price indexes; department stores. The March 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, March 31, 1998.

The following Department Store Inventory Price Indexes for March 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, March 31, 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 March 1997/March 1998/Percent Change from Mar. 1997 to Mar. 1998 [Fn1]
1. Piece Goods 539.0 538.9 0.0
2. Domestics and Draperies 644.2 636.1 -1.3
3. Women's and Children's Shoes 646.1 658.7 2.0
4. Men's Shoes 900.0 898.3 -0.3
5. Infants' Wear 630.6 620.5 -1.6
6. Women's Underwear 544.0 576.3 5.9
7. Women's Hosiery 296.7 308.1 3.8
8. Women's and Girls' Accessories 557.3 556.8 -0.1
9. Women's Outerwear and Girls' Wear 430.0 429.5 -0.1
10. Men's Clothing 617.9 636.5 3.0
11. Men's Furnishings 587.7 608.1 3.5
12. Boys' Clothing and Furnishings 479.9 501.4 4.5
13. Jewelry 1025.2 993.0 -3.1
14. Notions 801.5 796.7 -0.6
15. Toilet Articles and Drugs 910.8 932.4 2.4
16. Furniture and Bedding 667.5 673.0 0.8
17. Floor Coverings 583.5 583.1 -0.1
18. Housewares 813.2 818.3 0.6
19. Major Appliances 244.9 237.4 -3.1
20. Radio and Television 78.5 73.4 -6.5
21. Recreation and Education [fn2] 111.8 106.7 -4.6
22. Home Improvements [fn2] 131.9 134.5 2.0
23. Auto Accessories [fn2] 107.7 107.5 -0.2
Groups 1 - 15: Soft Goods 606.4 612.2 1.0
Groups 16 - 20: Durable Goods 469.2 463.0 -1.3
Groups 21 - 23: Misc. Goods [fn2] 113.6 110.4 -2.8
Store Total [fn3] 558.8 558.9 0.0

1. Piece Goods .............................

2. Domestics and Draperies .................

3. Women's and Children's Shoes ............

4. Men's Shoes .............................

5. Infants' Wear ...........................

6. Women's Underwear .......................

7. Women's Hosiery .........................

8. Women's and Girls' Accessories ..........

9. Women's Outerwear and Girls'

Wear ......................................

10. Men's Clothing ..........................

11. Men's Furnishings .......................

12. Boys' Clothing and Furnishings ..........

13. Jewelry ................................

14. Notions .................................

15. Toilet Articles and Drugs ...............

16. Furniture and Bedding ...................

17. Floor Coverings .........................

18. Housewares ..............................

19. Major Appliances ........................

20. Radio and Television .....................

21. Recreation and Education [FN2] ..........

22. Home Improvements [FN2] .................

23. Auto Accessories [FN2] ..................

Groups 1-15: Soft Goods .....................

Groups 16-20: Durable Goods .................

Groups 21-23: Misc. Goods [FN2] .............

Store Total [FN3] ..........................

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. 98-26, 1998-21 I.R.B. 4.