In the Case of a Change from the Lower-Of-Cost-Or-Market FIFO

question 40

Multiple Choice

In the case of a change from the lower-of-cost-or-market FIFO to the LIFO inventory method:

• A) The taxpayer may make the change when the tax return is filed without seeking the IRS's permission for the change.
• B) The taxpayer must revalue the beginning inventory from lower-of-cost-or-market to actual FIFO cost.
• C) The adjustment due to the change in accounting method must be spread over 3 years, the year of change and the two subsequent years.
• D) All of the above.
• E) None of the above.

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