-3-
Adjustments to Ordinary,
Distributable Net, or
Year Taxable Income
1990 $3,730,862
1991 123,596
The issues remaining for decision are:
(1) Did respondent abuse respondent's discretion in
determining that Consolidated's method of reporting certain raw
materials, labor, and overhead on the LIFO inventory method and
certain other raw materials on the FIFO inventory method does not
clearly reflect income because it contravenes the requirements of
section 472 and the regulations thereunder and that therefore
Consolidated's election to use that method should be terminated?
We hold that respondent did not.
(2) Did respondent abuse respondent's discretion in
determining that Consolidated's method of valuing certain raw
materials does not clearly reflect income because it did not
reflect the proper amounts for those raw materials under the FIFO
inventory method and the LCM basis of valuation permitted by
section 471? We hold that respondent did not.
FINDINGS OF FACT2
Most of the facts have been stipulated and are so found.
2 Unless otherwise indicated, our Findings of Fact and
Opinion pertain to 1990 and 1991, the years at issue.
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