2022 Auto Dealer IPIC LIFO Case Study
Download PDF Guide Auto Dealer LIFO Submethods Comparisons Alternative LIFO method (ALM): Measures inflation based on comparing current & prior period’s invoice costs; Item definition is specific to each vehicle/VIN, meaning inflation must be calculated for each vehicle, not just by make or type (car, truck, SUV) Pros Historically created more inflation & tax deferral […]
View full articleElection Requirements & Method Alternatives
Although LIFO is the biggest inventory-related tax savings tool for companies with inflation, it’s important to understand the requirements & sub methodology options available related to LIFO elections. This blog outlines the most important LIFO election requirements, provides a comprehensive list of LIFO method alternatives & breaks down the pros & cons of each alternative. […]
View full articleSuperior LIFO Solutions at a Fraction of Competitor’s Costs
LIFOPro is the most trusted provider for turnkey outsourcing solutions & LIFO software. We offer the most comprehensive documentation & reporting packages, and also provide a full range of LIFO services for both financial reporting and tax. Numerous clients outsource both their book & tax LIFO calculations in order to simplify & streamline the reporting […]
View full articleComparing the Pros & Cons of Internal & External Indexes
The vast majority of companies on LIFO use a method called dollar-value LIFO. Under this method, the calculation of the LIFO reserve occurs as a side-calculation that occurs in two distinct steps, the first being the current year inflation calculation (front end) & the LIFO reserve calculation (back end). The front end of the LIFO […]
View full articleIRS Auditing More LIFO Calculations than Before
History of IRS LIFO Resources & Audits 1990s – 2000s The frequency & level of scrutiny being given to LIFO by the IRS has varied widely over the past 30 years that LIFOPro has been in business. When LIFOPro begun in 1992, the IRS Chief Counsel’s office employed multiple LIFO experts, and also employed many […]
View full article2022 LIFO Lookout & Opportunities Guide
Download PDF Guide Recent LIFO Developments LIFO Related Congressional Updates No current general threats to LIFO on Capitol Hill H.R. 7832/S. 4105 – Supply Chain Disruptions Relief Act This bill was drafted to provide tax relief to new motor vehicle dealerships using the LIFO method who had qualified inventory liquidations solely attributable to supply chain […]
View full articleLIFO Tax Savings Calculator
Instructions: Identify the year to date & 20 year average annual historical inflation rates for your company using the tables shown below the calculator Enter the following values into the blue-colored cells: Prior year end inventory balance at cost Current year inflation rate 20 year average annual inflation rate: used to calculate the 20 year […]
View full articleMachinery & Equipment Dealer LIFO Case Study
Machinery & Equipment Dealer LIFO Overview Many machinery & equipment dealers use LIFO because of the consistent long-term historical inflation Majority of machinery & equipment dealers on LIFO have use external indexes & Bureau of Labor Statistics Producer Price Indexes (BLS PPI), which is also known as the IPIC method IPIC method most predominantly used […]
View full articleHow to Easily Implement LIFO
LIFOPro offers turnkey outsourcing solutions to allow companies to outsource all LIFO-related work to us! Listed below are the key steps to streamlining the analysis, calculation & implementation steps required to elect LIFO in the year of adoption. With our outsourcing model, companies can obtain material tax benefits from electing LIFO in the following four […]
View full articleHow to Identify the Best LIFO Candidates
How can CPA firms easily identify clients that could be good LIFO candidates? Top LIFO Candidates List Excel File Two separate Excel sheets containing a list of the best industries, commodities & items to recommend LIFO elections for your clients Top LIFO candidates by Industry – List of 34 Industry-based candidates. Includes year to date […]
View full articleLIFO Q & A: First-time LIFO Elections
Why Should Companies Elect LIFO in 2021? LIFO remains to be the most valuable inventory-related tax savings tool In 2021, unprecedented inflation has created once in a lifetime LIFO tax savings opportunities in a wide range of industries There has been extreme inflation measured across the board so far this year. In metals and metal […]
View full articleWhy Companies Should Always use Dollar-Value & not Unit LIFO
For companies considering adopting the use of the LIFO method, there are many options available to chose from in order to implement LIFO & perform the calculation. One of the most fundamental options is the LIFO index computation method chosen. The two options available are as follows: Dollar value method – A shortcut cost flow method […]
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