Due to the pandemic and supply chain issues, many automobile dealerships are anticipating significant decreases in inventories when compared to the same time last year. This has left many dealerships that use the LIFO method of accounting for inventory concerned about LIFO recapture. Dealers using the LIFO method of accounting for inventories, in years of increasing inventory levels and prices, have benefited by being able to consider the last units acquired to be the first ones sold. Over time this benefit builds up as a LIFO reserve and as inventories decrease the reserve is recaptured. Some dealerships are experiencing decreases of 60% to 70% or more in inventories when compared to their prior year-end. Under those circumstance, dealerships on LIFO could face a significant tax burden from LIFO recapture. Read More
- 2023 Fuel Economy Guide Now Available December 2, 2022
- Coral Springs Nissan Declared the Automaker’s Largest-Volume Dealership Worldwide December 1, 2022
- FCC declares ringless voicemails illegal without consent December 1, 2022
- Rise in EV Registrations Reinforces Trust Between Consumers, Legacy Automakers, and Local Dealership November 30, 2022
- FADA President Ted Smith continues to advocate for dealer members November 23, 2022
Information provided on the flada.org website is designed to be accurate and authoritative, with respect to the subject matter covered. It is provided with the understanding that FADA is not engaged in rendering legal services. If legal advice or other expert assistance is required, the services of a competent professional should be sought.