-49-
Section 1.472-1(c), Income Tax Regs., is consistent with section
472(a) and section 1.472-1(a), Income Tax Regs., which require a
taxpayer who wants to elect the LIFO inventory method to make
that election with respect to a good or goods, which are subject
to inventory and specified in a Form 970, and with respect to
such entire good or goods. When a manufacturer or processor
elects the raw material content LIFO inventory method under
section 1.472-1(c), Income Tax Regs., the good or goods specified
in a Form 970 to which that method applies are one or more raw
materials, and not the goods produced or processed by such a
taxpayer, and that method must be applied to such entire raw
material goods. See sec. 1.472-1(c), (j), Income Tax Regs.
Respondent also points to section 472(b) in support of
respondent’s position that Consolidated's LIFO method is contrary
to the requirements of section 472 and the regulations
thereunder. We agree. Section 472(b) states: "In inventorying
goods specified in the application described in subsection (a),
the taxpayer shall * * * (2) Inventory them at cost". Section
472(b) thus requires a taxpayer who has elected the LIFO
inventory method under section 472(a) to inventory the good or
goods specified in a Form 970 at cost. That section does not
permit, and we do not construe it to allow, a taxpayer to
inventory at cost (1) other than such a good or goods or (2) a
portion of such a good or goods.
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