SCHEDULE C
(Form 5713) Tax Effect of the International Boycott Provisions

(May 1977)
Doperinen ofthe Treasury > Attach to Form 5713. > See Instructions on Back.

Internal Revenue Service

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)(ii) (check one):
(a) International boycott factor. 2 6 6 ke ee ee Oo
(b) Identification of specifically attributable taxes and income. . . . . 2 + e+ © we we ee

2 Reduction of foreign tax credit (section 908(a)): Y
(a) International boycott factor method (to be completed by persons checking box 1a) above and

answering “‘Yes,”’ to foreign tax credit question (line 6(d), Form 5713))—
(1) Foreign tax credit before adjustment (line 6, Part Ill, Schedule B, Form 1118 (corporations); or
line 6, Schedule D, Form 1116 (individuals)... . ee ee ee ee ee

(2) International boycott factor (from Schedule A (Form 5713), line5). . + . + + ee ee
(3) Reduction of foreign tax credit (multiply line 2(a)(1) by line 2(a)(2)). Enter here and on line 7,
Part II, Schedule B, Form 1118 (corporations); or enter here and on line 7, Schedule D, Form
1116 (individuals)... ee

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

(b) Specific identification of taxes and income method (to be completed by persons checking box 1(b)

above and answering “Yes,” to foreign tax credit question (line 6(d), Form 5713)). Enter the amount

of foreign taxes paid, accrued, or deemed paid (other than foreign taxes otherwise disallowed by

reason of the provisions of sections 901-907, 911, 1503(b), or 6038) that has not been clearly

demonstrated to be attributable to operations in which there was no participation in or cooperation Ve
with an international boycott. (See instructions). 2... 6 6 ee ee ee
Note: Enter the appropriate amount of disallowed boycott taxes on line 3, Part II, Schedule B, of all
applicable Form(s) 1118 (corporations); or enter the appropriate amount of disallowed boycott

taxes in column 5, Schedule B, of all applicable Form(s) 1116 (individuals). We
3 Denial of deferral under Subpart F (section 952(a)(3)): Y
(a) International boycott factor method (to be completed by persons checking box 1(a) above and
answering “Yes,” to controlled foreign corporation question (line 6(b), Form 5713))— Ui

(1) Pro rata share of total income of controlled foreign corporation (line 9, Schedule H, Form 3646). |__-_E
(2) Less pro rata share of income attributable to earnings and profits of the controlled foreign corpo-
ration 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). we ee
(3) Subtract line 3(a)(2) from line 3(a)(1). ee ee
(4) International boycott factor (from Schedule A (Form 5713), line5). . . + 2 2 6 2 ee

(5) Pro rata share of Subpart F international boycott income (section 952(a)(3) amount) (multiply
line 3(a)(3) by line 3(a)(4)). (Enter here and on line 5, Schedule B, Form 3646). . . . . +

(b) Specific identification of taxes and income method (to be completed by persons checking box 1(b) Y
above and answering “‘Yes,” to controlled foreign corporation question (line 6(b), Form 5713)). Enter
pro rata share of total income of the controlled foreign corporation (other than income attributable

to earnings and profits of the foreign corporation included in gross income under section 951 (other
than by reason of section 952(a)(3))) that has not been clearly demonstrated to be attributable to
operations in which there was no participation in or cooperation with an international boycott. (See
instructions.) (Also, enter this amount on line 5, Schedule B, Form 3646). . . . . . «+

4 Denial of DISC benefits (section 995(b)(1)(F)(ii)): WY
(a) International boycott factor method (to be completed by persons checking box 1(a) above and

answering “Yes,” to DISC question (ine 6(c), Form 5713)—
(1) Pro rata share of section 995(b)(1)(F)(i) amount. (Pro rata share of line 10, Part I, Schedule J,

Form 1120-DISC) . 6 6 1 6 ew we ee ee ee ee ee he
(2) International boycott factor (from Schedule A (Form 5713), line5). . - - 2 ee eee
(3) Pro rata share of DISC international boycott income (multiply line 4(a)(1) by line 4(a)(2)).

(Enter here and on line 11, Part 1, Schedule J, Form 1120-DISC). . . . . . . se

(b) Specific identification of taxes and income method (to be completed by persons checking box 1(b) |Z
above and answering “‘Yes,"" to DISC question (line 6(c), Form 5713)). Enter pro rata share of one-half
of the excess of the taxable income of the DISC for the taxable year, before reduction for any distribu-
tions during the year, over the sum of the amounts deemed distributed for the taxable year under
subparagraphs (A), (B), (C), (D), and (E) of section 995(b)(1), that has not been clearly demon-
strated to be attributable to operations in which there was no participation in or cooperation with an I,

international boycott. (See instructions.) (Also, enter this amount on line 11, Part 1, Schedule J, Form
1120-DISC)_ . et

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General Instructions

(Partnerships and DISCs need not complete Schedule C (Form 5713). However,
partners and shareholders in DISCs must complete Schedule C (Form 5713).)

Application of the International Boycott Factor and
Specifically Attributable Taxes and Income As Applied
to Controlled Groups.—Once an international boycott
factor has been computed for a controlled group (within
the meaning of section 993(a)(3)), that international
boycott factor is applied separately under sections 908
(a), 952(a), and 995(b)(1) to each member of the con-
trolled group.

Further, if a person applies the international boycott
factor to one operation during the taxable year, the factor
must be applied to all operations during the taxable
year under each of sections 908(a), 952(a), and 995(b)
(1).

If a person identifies specifically attributable taxes
and income under section 999(c)(2), that method must
be applied to all operations during the taxable year
under sections 908(a), 952(a), and 995(b)(1).

However, unless a consolidated return is filed, each
member of a controlled group (within the meaning of
section 993(a)(3)) may independently choose either to
apply the international boycott factor under section
999(c)(1) or to identify specifically attributable taxes
and income under section 999(c)(2). The method chosen
by each member for determining the loss of tax benefits
must be applied consistently to determine the loss of
tax benefits of that member.

For example, if a member chooses to use the inter-
national boycott factor, then it must apply the interna-
tional boycott factor to determine its loss of the section
902 indirect foreign tax credit in respect of a dividend
paid to it by another member of the controlled group,
even if that other member determines its loss of tax
benefits by identifying specifically attributable taxes and
income.

Specific Instructions
(Numbered to correspond with line numbers on Schedule C (Form 5713).)

2(b). If your taxable year included November 3,
1976, enter the amount from line 26, Schedule B (Form
5713).

If your taxable year did not include November 3,
1976, enter the amount from column 4, line 22, Sched-
ule B (Form 5713).

3(b). If your taxable year included November 3,
1976, enter the amount from line 27, Schedule B (Form
§713).

‘Yr US, GOVERNMENT PRINTING OFFICE : 1977—-O-218-296

If your taxable year did not include November 3,
1976, enter the amount from column 5, line 22, Sched-
ule B (Form 5713).

4(b). If taxable year of the DISC included November
3, 1976, enter the amount from line 28, Schedule B
(Form 5713).

If your taxable year did not include November 3,
1976, enter the amount from column 6, line 22, Sched-

ule B (Form 5713).
218-296-2