SCHEDULE C . is OMB No. 1545-0216
(Form 5713) | Tax Effect of the International Boycott Provisions

(Rev. January 1982)

Department of the . Expires 10-31-84
Internal Revenue Service.” > Attach to Form 5713. b> See instructions on back.
Name Taxpayer identifying number

1 Method used in computing loss of tax benefits under sections 908(a), 952(a)(3) and 995(b)(1)(F) (check one):
(a) International boycott factor from Schedule A (Form 5713). See items 2(a), 3(a), and 4(a) below. . . . . . 1m

(b) Identification 0 of specifically attributable taxes Sand i income from Schedule B (Form 5713). See it items 2(b), 30), and an)
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2 Reduction of foreign tax credit (section 908(a)): [ 7
(a) International boycott factor. Complete if you checked box 1(a) above and answered “Yes,” to foreign _
tax credit question on line 7(d), Form 5713— Ws

(1) Foreign tax credit before adjustment (line 6, Part III, Schedule B, Form 1118 (corporations); or
line 5, Part IV, Form 1116 (individuals)). . . ~ ee

(2) International boycott factor (from Schedule A (Form 5713), line3). 2s oe
(3) Reduction of foreign tax credit (multiply line 2(a)(1) by line 2(a)(2)). Enter here and on line 7,

Part Ill, Schedule B, Form 1118 (corporations); enter here and on line 6, Part IV, Form 1116
(individuals)... ee Le

(4) Adjusted foreign tax credit (subtract line 2(a)(3) from line 2(a)(1)). .. al

(b) Specifically identifying income and taxes. Complete if you checked box 1(b) above and answered ‘7/7 7

“Yes,"" to foreign tax credit question on line 7(d), Form 5713. Enter the amount from line 15, col- Yj

umn (4), Schedule B (Form 5713)... . . Le he

Enter the appropriate part of this amount on line 3, Part Il, Schedule B, of all 11 applicable Form(s) 1118 V/////
(corporations); or on line 4, Part Ill, of all applicable Form(s) 1116 (individuals).

3 Denial of deferral under Subpart F (section 952(a)(3)): _ a

(a) International boycott factor. Complete if you checked box 1(a) above and answered “Yes,” to con-
trolled foreign corporation question on line 7(b), Form 5713—
(1) Prorated share of total income of controlled foreign corporations (line 9, Schedule H, Form 3646)
(2) Prorated share of income attributable to earnings and profits of controlled foreign corpora-
tions included in income under sections 951(a)(1)(A)(ii), 951(a)(1)(A)(iii), 951(a)(1)(B), 952
(a)(1), 952(a)(2), 952(a)(4), and 952(b). . ee
(3) Subtract line 3(a)(2) from line 3(a)(1)- ee
(4) International boycott factor (from Schedule A (Form 5713), line3). . . . 2...
(5) Prorated share of Subpart F international boycott income (multiply line 3(a)(3) by line 3(a)(4)),
Enter here and on line 5, Schedule B, Form 3646. . . . . 2. 1. Lae
(b) Specifically identifying taxes and income. Complete if you checked box 1(b) above and answered Y/ Wy
“Yes,"’ to controlled foreign corporation question on line 7(b), Form 5713. Enter the amount from Y 4
line 15, column om Schedule B (Form 5719). Also enter this amount on line 5, Schedule B, Form _ Uy W Uj

3646. 5

4 Denial of DISC benefits (section 995(b) (1) (F)): _
(a) International boycott factor. Complete if you checked box 1(a) above and answered “Yes,” to DISC
question on line 7(c), Form 5713—

(1) Prorated share of section 995(b)(1)(F)(i) amount. (Prorated share of line 10, Part I, Schedule J,
Form 1120-DISC). . . Ce

(2) International boycott factor (from Schedule A (Form 5713), line 3)... . toe

(3) Prorated share of DISC international boycott income (multiply line 4(a)(1) by line 4(a)(2)) -
(See instructions). 6 6 ee ee eh

(b) Specifically identifying taxes and income. Complete if you checked box 1(b) above and answered V7 Uy
“Yes,” to DISC question on line 7(c), Form 5713. Enter amount from line 15, column (6), Schedule B_|// V/s
(Form 5713). Also enter this amount on line 11, Part |, Schedule J, Form 1120-DISC. . . .
For Paperwork Reduction Act Notice, see page 1 of the Instructions for Form 5713.

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77,



Instructions

(References are to the Internal Revenue Code.)

You do not need to complete Schedule C (Form 5713)
for a partnership or DISC. You must complete it, how-
ever, if you are a partner or DISC shareholder.

Controlled Groups.—Unless a controlled group (de-
scribed in section 993(a)(3)) files a consolidated return,
each member may choose independently either to ap-
ply the international boycott factor under section 999
(c)(1) or to identify specifically attributable taxes and
income under section 999(c)(2). Each member must
consistently use a single method to figure the loss of tax
benefits.

For example, a member that chooses to use the inter-
national boycott factor must apply it to determine its loss
of the section 902 indirect foreign tax credit on a divi-
dend that another member of the controlled group paid
to it, even if the other member determines its own loss

of tax benefits by identifying specifically attributable
taxes and income.

Thus, a person who applies the international boycott
factor to one operation must apply the factor to all that
tax year’s operations under section 908(a), 952(a)(3),
or 995(b)(1)(F).

A person who identifies specifically attributable taxes
and income under section 999(c)(2) must use that
method for all that tax year’s operations under section
908(a), 952(a)(3), and 995(b)(1)(F).

A DISC whose tax year differs from the common tax-
able year of the controlled group of which it is a member
does not need to amend its return to show on Schedule
J the amount of DISC benefits lost because of boycott
participation. Since the DISC benefits are lost at the
shareholder level, the shareholder must include in in-
come the prorated share of income attributable to boy-
cott operations shown on line 4(a)(3).