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What is the conformity requirement and can a taxpayer use different book and tax LIFO methods?

April 26, 2017book Conformity different lifo methods requirement tax taxpayer

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What is the conformity requirement and can a taxpayer use different book and tax LIFO methods?

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Taxpayers electing LIFO for tax purposes must elect LIFO for book purposes. This is called the conformity requirement. The LIFO method used for book purposes need not be the same as the LIFO method used for tax purposes. It is very common for taxpayers to elect the IPIC LIFO method for tax purposes and an internal LIFO method for book purposes.