Rev. Rul. 98-48, 1998-39 I.R.B. 6.

INTERNAL REVENUE SERVICE
Revenue Ruling

LIFO; PRICE INDEXES; DEPARTMENT STORES

Published: September 28, 1998

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

The following Department Store Inventory Price Indexes for July 1998 were issued by the Bureau of Labor Statistics. 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, July 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 July 1997/July 1998/Percent Change from July 1997 to July 1998 [Fn1]
1. Piece Goods 539.8 547.7 1.5
2. Domestics and Draperies 656.1 626.7 -4.5
3. Women's and Children's Shoes 641.6 642.3 0.1
4. Men's Shoes 902.6 906.5 0.4
5. Infants' Wear 637.9 606.8 -4.9
6. Women's Underwear 543.5 573.1 5.4
7. Women's Hosiery 297.8 307.6 3.3
8. Women's and Girls' Accessories 544.5 539.3 -1.0
9. Women's Outerwear and Girls' Wear 395.0 389.3 -1.4
10. Men's Clothing 621.6 613.4 -1.3
11. Men's Furnishings 585.9 589.3 0.6
12. Boys' Clothing and Furnishings 495.9 489.4 -1.3
13. Jewelry 1003.9 981.5 -2.2
14. Notions 797.5 767.3 -3.8
15. Toilet Articles and Drugs 905.7 947.6 4.6
16. Furniture and Bedding 662.8 683.7 3.2
17. Floor Coverings 598.2 602.1 0.7
18. Housewares 807.2 825.5 2.3
19. Major Appliances 243.1 238.3 -2.0
20. Radio and Television 75.9 71.6 -5.7
21. Recreation and Education [fn2] 109.8 104.3 -5.0
22. Home Improvements [fn2] 132.7 131.2 -1.1
23. Auto Accessories [fn2] 108.6 107.5 -1.0
Groups 1 - 15: Soft Goods 594.9 592.1 -0.5
Groups 16 - 20: Durable Goods 464.2 464.9 0.2
Groups 21 - 23: Misc. Goods [fn2] 112.5 108.4 -3.6
Store Total [fn3] 549.8 545.9 -0.7

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. 98-48, 1998-39 I.R.B. 6