IRS Tax Law » Revenue Ruling 2004-113

Rev. Rul. 2004-113
Rev. Rul. 2004-113, 2004-52 I.R.B. 1024

Internal Revenue Service (I.R.S.)
Revenue Ruling

LIFO; PRICE INDEXES; DEPARTMENT STORES
Published: December 27, 2004

Section 472.–Last-in, First-out Inventories, 26 CFR 1.472-1: Last-in, first-out inventories.

LIFO; price indexes; department stores. The October 2004 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, October 31, 2004.

The following Department Store Inventory Price Indexes for October 2004 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, October 31, 2004.

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                  Oct. 2003     Oct. 2004       Percent
                                                                   Change from
                                                                    Oct. 2003
                                                                     to Oct.
                                                                   2004 [FN1]
——————————————————————————-
1. Piece Goods ……………………….. 487.3         491.6            0.9
2. Domestics and Draperies …………….. 556.5         539.0           -3.1
3. Women’s and Children’s Shoes ………… 657.4         665.8            1.3
4. Men’s Shoes ……………………….. 844.9         832.1           -1.5
5. Infants’ Wear ……………………… 609.1         584.3           -4.1
6. Women’s Underwear ………………….. 520.2         513.0           -1.4
7. Women’s Hosiery ……………………. 352.3         337.6           -4.2
8. Women’s and Girls’ Accessories ………. 578.0         597.3            3.3
9. Women’s Outerwear and Girls’ Wear ……. 387.8         385.5           -0.6
10. Men’s Clothing ……………………. 552.3         542.7           -1.7
11. Men’s Furnishings …………………. 592.1         578.7           -2.3
12. Boys’ Clothing and Furnishings ……… 441.9         430.6           -2.6
13. Jewelry ………………………….. 883.7         892.6            1.0
14. Notions ………………………….. 786.9         793.7            0.9
15. Toilet Articles and Drugs ………….. 984.0         995.6            1.2
16. Furniture and Bedding ……………… 618.8         608.5           -1.7
17. Floor Coverings …………………… 589.4         581.7           -1.3
18. Housewares ……………………….. 714.3         714.6            0.0
19. Major Appliances ………………….. 210.2         202.8           -3.5
20. Radio and Television ……………….. 44.4          41.1           -7.4
21. Recreation and Education [FN2] ………. 82.1          79.8           -2.8
22. Home Improvements [FN2] ……………. 125.3         131.0            4.5
23. Automotive Accessories [FN2] ……….. 111.8         113.1            1.2
Groups 1-15: Soft Goods ……………….. 574.9         569.9           -0.9
Groups 16-20: Durable Goods ……………. 390.0         382.5           -1.9
Groups 21-23: Misc. Goods [FN2] …………. 93.8          93.1           -0.7
     Store Total [FN3] ………………… 507.8         502.4           -1.1
FN1. Absence of a minus sign before the percentage change in this column
signifies a 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.