-40-
those regulations to be misplaced.11 The latter regulation,
section 1.472-1(a), Income Tax Regs., merely provides that a
taxpayer who is allowed or required to use the inventory
accounting method as provided by section 471 and the regulations
thereunder may elect the LIFO inventory method under section 472,
but only "with respect to those goods specified in his
application and properly subject to inventory". The cross-
reference in section 1.472-1(a), Income Tax Regs., to all the
regulations promulgated under section 471, including section
1.471-3(c), Income Tax Regs., that were extant when section
1.472-1(a), Income Tax Regs., was promulgated is of no relevance,
let alone significance, in deciding whether section 472(a) and
the regulations thereunder mean what they say when they permit a
taxpayer to elect the LIFO inventory method in inventorying goods
specified in an application filed by such taxpayer.
The former regulation, section 1.471-3(c), Income Tax Regs.,
on which petitioner relies and to which section 1.472-1(a),
Income Tax Regs., inter alia, refers, merely defines the term
"cost", one of the two commonly used bases of inventory valuation
11 We also find petitioner’s reliance on Rev. Rul. 60-321,
1960-2 C.B. 166, to be misplaced. Petitioner argues that,
because that ruling permitted a dealer in securities, which are
intangibles, to account for such securities under the LIFO
inventory method, Consolidated should be permitted to elect the
LIFO inventory method for the inventoriable costs of its labor
and overhead, which also are intangibles, even though they are
not goods. Rev. Rul 60-321, supra, holds only that a taxpayer is
permitted to elect the LIFO inventory method for the intangible
goods, securities.
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