-33-
generally were permitted to elect the LIFO inventory method for
raw materials not yet included in goods in process or in finished
goods, i.e., for unprocessed raw materials, 1938 Act, sec.
22(d)(1) and (2), 52 Stat. 459, and tanners generally were
allowed to elect the LIFO inventory method for "raw materials
(including those included in goods in process and in finished
goods)", 1938 Act, sec. 22(d)(3), 52 Stat. 459. Section 22(d)(1)
through (3) of the 1938 Act was reenacted as section 22(d)(1)
through (3) of the 1939 Code. 1939 Code, ch. 2, sec. 22(d)(1)
through (3), 53 Stat. 11.
Congress amended section 22(d) of the 1939 Code, effective
for taxable years that began after December 31, 1938, to provide
in pertinent part:
(d)(1) A taxpayer may use the following method
* * * in inventorying the goods specified in the
application required under paragraph (2):
(A) Inventory them at cost;
(B) Treat those remaining on hand at the
close of the taxable year as being: First,
those included in the opening inventory of
the taxable year (in the order of
acquisition) to the extent thereof, and
second, those acquired in the taxable year;
and
(C) Treat those included in the opening
inventory of the taxable year in which such
method is first used as having been acquired
at the same time and determine their cost by
the average cost method.
(2) The method described in paragraph (1) may be
used--
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