Proposed regulations: Dollar-value LIFO inventory pools, IPIC pooling method

U.S. proposed regulations

The U.S. Treasury Department and IRS today released for publication in the Federal Register proposed regulations (REG-125946-10) concerning the establishment of dollar-value last-in, first-out (LIFO) inventory pools by certain taxpayers that use the inventory price index computation (IPIC) pooling method.

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The proposed regulations [PDF 228 KB] provide rules regarding the proper pooling of manufactured or processed goods and wholesale or retail (resale) goods, and thus may affect taxpayers that use the IPIC pooling method and that have inventory for a trade or business consisting of manufactured or processed goods and resale goods. The proposed regulations amend the IPIC pooling rules to clarify that those rules are applied consistently with the general LIFO pooling rule that manufactured or processed goods and resale goods may not be included in the same dollar-value LIFO pool.

The regulations are proposed to apply for tax years ending on or after the date the regulations are published as final regulations in the Federal Register.

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