- 34 -
The Code and the regulations do not define the term “item”.
Amity Leather Prods. Co. v. Commissioner, 82 T.C. at 739-740;
Wendle Ford Sales, Inc. v. Commissioner, 72 T.C. at 455.
However, we have previously addressed the definition of the term
for purposes of the dollar-value LIFO method. See Hamilton
Indus., Inc. & Sub. v. Commissioner, supra; Amity Leather Prods.
Co. v. Commissioner, supra; Wendle Ford Sales, Inc. v.
Commissioner, supra.20
In our prior cases, we have found that the proper definition
of an item for dollar-value LIFO purposes depends on the specific
facts and circumstances of the case. Wendle Ford Sales, Inc. v.
Commissioner, supra at 459, 461. Furthermore, we have found that
we must examine the facts and circumstances of the case in light
of the objectives of the dollar-value LIFO method. See Hamilton
Indus., Inc. & Sub. v. Commissioner, supra at 135-136; Amity
Leather Prods. Co. v. Commissioner, supra at 733-734; Wendle Ford
Sales, Inc. v. Commissioner, supra at 458-459.
A major objective of the LIFO method is to eliminate from
earnings any artificial profits resulting from inflationary
increases in inventory costs. Amity Leather Prods. Co. v.
Commissioner, supra at 732. Consequently, the dollar-value
method is designed to ensure that any increase in the cost of
property passing through the inventory during the year is
reflected in the cost of goods sold. Hamilton Indus., Inc. &
20 See supra note 14.
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