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To support his position that Mountain State Ford's method of
using replacement cost to determine the current-year cost of its
parts pool qualifies as any other proper method under section
1.472-8(e)(2)(ii)(d), Income Tax Regs., which in his view does
not require the use of actual cost, petitioner contends (1) that
Mountain State Ford elected in the Form 970 to use any other
proper method in determining that current-year cost13 and
(2) that Mountain State Ford's use of replacement cost qualifies
as such a method. We disagree on both counts. Mountain State
Ford did not elect in the Form 970 to use any other proper
method. Instead, Mountain State Ford elected in that form to
"determine the cost of * * * [parts] in the closing inventory" on
the basis of "most recent purchases". On the record before us,
we find that Mountain State Ford elected to determine the
current-year cost of its parts pool pursuant to the most recent
purchases method described in section 1.472-8(e)(2)(ii)(a),
13 In support of his position that Mountain State Ford
elected in the Form 970 to use any other proper method, peti-
tioner points out that Mountain State Ford "attached to the Form
970 a description of its method that clearly indicated * * *
[that Mountain State Ford] was basing its index of computations
on Ford's latest weekly price lists for parts". We note ini-
tially that Mountain State Ford used replacement cost (viz., the
prices reflected in the respective manufacturers' computerized
price update tapes in effect as of the date of Mountain State
Ford's physical inventory) in determining the current-year cost
of its parts pool; it did not use all of the various "latest
weekly price lists" to which Mountain State Ford referred in the
Form 970 and which it indicated in that form it intended to use
in calculating its price indices under its link-chain method. It
is also noteworthy that in the Form 970 Mountain State Ford
stated that it intended to take inventory "at actual cost regard-
less of market value".
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