-42-
class of such goods (e.g., remanufactured automobile engines).
Although Consolidated’s new parts, labor, and overhead enter into
the production, and thus are components, of those goods, another
raw material, indeed the principal raw material, that enters into
the production, and thus is a component, of the goods produced by
Consolidated is the customer cores. The labor and overhead
involved in this case are not goods. The new parts, labor, and
overhead involved in this case, when taken together but without
customer cores, do not constitute goods. However, the new parts,
labor, overhead, and customer cores involved in this case, when
taken together, do constitute goods and are included in and
comprise Consolidated's inventories for goods in process and for
finished goods.
Section 472(a) allows a taxpayer to elect the LIFO inventory
method in inventorying goods specified in the taxpayer's
application. That section does not state that a taxpayer may
elect the LIFO inventory method in inventorying other than a
good. Nor does that section state that a taxpayer may elect the
LIFO inventory method in inventorying a portion of a good. The
labor and overhead involved here are not a good, let alone the
entire good, of Consolidated subject to inventory, even though
they (1) enter into the production of Consolidated’s finished
goods (viz, remanufactured automobile parts) by transforming
Consolidated’s customer cores and new parts into such goods and
(2) are included, along with customer cores and new parts, in
Page: Previous 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 NextLast modified: May 25, 2011