SCHEDULE C

(Form 5713) Tax Effect of the International Boycott Provisions

© OMB No. 1545-0216 Attach to Form 5713. (Rev. January 1997)

Department of the Treasury

Internal Revenue Service © For Paperwork Reduction Act Notice, see page 1 of Instructions for Form 5713.

Name Identifying number

1 Method used to compute loss of tax benefits under sections 908(a), 952(a)(3), 995(b)(1)(F)(ii) and 927(e)(2) (check one):

a International boycott factor from Schedule A (Form 5713). See items 2a, 3a, 4a, and 5a below ©

Identification of specifically attributable taxes and income from Schedule B (Form 5713). See items 2b, 3b, 4b, and 5b

below ©

b

2 Reduction of foreign tax credit (section 908(a)):

a International boycott factor. Complete if you checked box 1a above and answered “Yes” to foreign

tax credit question on line 7d, Form 5713—

(1) Foreign tax credit before adjustment from Form 1116 or 1118. See instructions

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

Reduction of foreign tax credit. Multiply line 2a(1) by line 2a(2). Enter here and on Form 1116 or

1118. See instructions

(3)

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

b Specifically attributable taxes and income. Complete if you checked box 1b above and answered

“Yes” to foreign tax credit question on line 7d, Form 5713. Enter the amount from line o,

column (4), Schedule B (Form 5713)

Enter the appropriate part of this amount on Form 1116 or 1118. See instructions.

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

International boycott factor. Complete if you checked box 1a above and answered ‘‘Yes’’ to

controlled foreign corporation question on line 7b, Form 5713—

a

(1) Prorated share of total income of controlled foreign corporations (See instructions.)

Prorated share of income attributable to earnings and profits of controlled foreign corporations

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), 952(a)(5), and 952(b)

(2)

(3) Subtract line 3a(2) from line 3a(1)

(4) International boycott factor from Schedule A (Form 5713), line 3

(5) Prorated share of subpart F international boycott income. Multiply line 3a(3) by line 3a(4). Enter

here and on Worksheet A of the Form 5471 instructions. See instructions

Specifically attributable taxes and income. Complete if you checked box 1b above and answered

“Yes” to controlled foreign corporation question on line 7b, Form 5713. Enter the amount from

line o, column (5), Schedule B (Form 5713). Enter this amount here and on Worksheet A. See

instructions

b

4 Denial of IC-DISC benefits (section 995(b)(1)(F)(ii)):

a International boycott factor. Complete if you checked box 1a above and answered “Yes” to IC-DISC

question on line 7c, Form 5713—

(1) Prorated share of section 995(b)(1)(F)(i) amount. See instructions

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

(3) Prorated share of IC-DISC international boycott income. Multiply line 4a(1) by line 4a(2). Enter

this amount here and on Form 1120-IC-DISC. See instructions

b Specifically attributable taxes and income. Complete if you checked box 1b above and answered

“Yes” to IC-DISC question on line 7c, Form 5713. Enter amount from line o, column (6),

Schedule B (Form 5713). Also enter this amount on Form 1120-IC-DISC. See instructions

Cat. No. 12070O Schedule C (Form 5713) (Rev. 1-97)

5 Denial of exemption of foreign trade income (section 927(e)(2)):

International boycott factor. Complete if you checked box 1a above and answered “Yes” to FSC

question on line 7i, Form 5713.

a

(1) Add amounts from columns (a) and (b), line 10, Schedule B (Form 1120-FSC). See instructions

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

(3) Exempt foreign trade income of an FSC attributable to international boycott operations. Multiply

line 5a(1) by line 5a(2). Enter here and on Form 1120-FSC. See instructions

Specifically attributable taxes and income. Complete if you checked box 1b above and answered

“Yes” to the question on line 7i, Form 5713. Enter amount from line o, column (7),

Schedule B (Form 5713). Enter this amount here and on Form 1120-FSC. See instructions

b
Schedule C (Form 5713) (Rev. 1-97) Page 2

Instructions

Section references are to the Internal

Revenue Code.

Note: Complete Schedule C (Form

5713) if you are a partner or an

IC-DISC shareholder. Partnerships do

not complete Schedule C.

Line 3a(1).—Enter your share of the

income of the controlled foreign

corporation on line 3a(1).

A person who applies the

international boycott factor to one

operation must, however, apply the

factor to all that tax year’s operations

under section 908(a), 952(a)(3),

995(b)(1)(F)(ii), or 927(e)(2). Nonexempt foreign trade income of

a foreign sales corporation (FSC) that

was computed without regard to the

administrative pricing rules is subject

to the subpart F rules. Enter your

share of these types of income on

line 3a(1).

A person who identifies specifically

attributable taxes and income under

section 999(c)(2) must use that

method for all that tax year’s

Line 4a(1).—Enter the prorated share

of section 995(b)(1)(F)(i) amount on

line 4a(1).

Controlled groups.—Unless a

controlled group (described in section

993(a)(3)) files a consolidated return,

each member may independently

choose to apply either 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.

Shareholder that is not a

C corporation.—Enter the pro rata

share of section 995(b)(1)(F)(i) amount

(e.g., for 1996, the pro rata share of

line 8, Part I, Schedule J, Form

1120-IC-DISC).

An IC-DISC whose tax year differs

from the common taxable year of the

controlled group of which it is a

member does not need to amend its

return to show on Schedule J (Form

1120-IC-DISC) the amount of IC-DISC

benefits lost because of boycott

participation. Because the IC-DISC

benefits are lost at the shareholder

level, the shareholder must include in

income the prorated share of income

attributable to boycott operations

shown on line 4a(3).

Shareholder that is a 

C corporation.—Enter the pro rata

share of the excess amount of section

995(b) (1)(F)(i) multiplied by 16/17

(e.g., for 1996, the pro rata share of

line 8, Part I, Schedule J, Form

1120-IC-DISC multiplied by 16/17).

For example, a member that

chooses to use the international

boycott factor must apply it to

determine its loss of the section 902

indirect foreign tax credit on a

dividend 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.

Purpose.—Schedule C (Form 5713) is

used to compute the loss of tax

benefits attributable to participation in

or cooperation with an international

boycott. Complete Schedule C if you

completed either Schedule A or

Schedule B of Form 5713.

Line 2a(1).—Enter the foreign tax

credit before adjustment on Form

1116 or 1118 (e.g., individual filers,

enter the amount from line 30, Part IV,

of the 1996 Form 1116. Corporate

filers, enter the amount from line 10,

Part III, Schedule B, of the July 1994

revision of Form 1118).

Line 2a(3).—Enter the reduction of

foreign tax credit from this line on

either Form 1116 or 1118 (e.g.,

individual filers, enter this amount on

line 31, Part IV, of the 1996 Form

1116. Corporate filers, enter this

amount on line 11, Part III, Schedule

B, of the July 1994 revision of Form

1118).

Line 2b.—Enter the reduction of

foreign taxes available for credit from

line 2b on Form 1116 or 1118 (e.g.,

individual filers, line 12, Part III, of the

1996 Form 1116. Corporations, enter

this amount on line D, Part II,

Schedule G, of the July 1994 revision

of Form 1118).

Line 3a(5).—Enter the prorated share

of subpart F international boycott

income on Worksheet A in the Form

5471 Instructions (e.g., on line 24 of

the June 1995 revision of Worksheet

A).

Line 3b.—Enter this amount on

Worksheet A in the Form 5471

Instructions (e.g., on line 24 of the

June 1995 revision of Worksheet A).

Line 4a(3).—Enter this amount on

Form 1120-IC-DISC (e.g., on line 10,

Part I, Schedule J, of the 1996 Form

1120-IC-DISC).

Line 4b.—Enter the specifically

attributable taxes and income on Form

1120-IC-DISC (e.g., amount on line

10, Part I, Schedule J, of the 1996

Form 1120-IC-DISC).

Line 5a(1).—Enter the exempt foreign

trade income from Form 1120-FSC

(e.g., add columns (a) and (b), line 10,

Schedule B, of the 1996 Form

1120-FSC).

Line 5a(3).—Enter this amount on

Form 1120-FSC (e.g., line 2, Schedule

F, of the 1996 Form 1120-FSC).

Line 5b.—Enter this amount on Form

1120-FSC (e.g., line 2, Schedule F, of

the 1996 Form 1120-FSC).

operations under section 908(a),

952(a)(3), 995(b)(1)(F), or 927(e)(2).