SCHEDULE B

(Form 5713) Specifically Attributable Taxes and Income (Section 999(c)(2))

omy, mon thet (To be completed only by persons not computing loss of tax benefits by the international boycott factor on Schedule A (Form 5713).)
Internal Revenue Service” > Attach to Form 5713. D> See Instructions on Back.
Name

Taxpayer identifying number

HEU Specifically Attributable Taxes and Income By Country (Use a separate line for each country)

Foreign tax credit, Subpart F income DISC income
Name of country Total taxable income Foreign taxes atinibutale 16 Boycott Earnings and profits interottonal boycott Export gross receipts avirbutable fo Boyeot
@ 3) @) @ O} ©) A) @)
1
2
3
4
5
6
7
8
9
10
11 Total ee
Specifically Attributable Taxes and Income By Operation (Use a separate line for each operation)
Principal business activity ae tax credit Subpart F income DISC income
Name of Country Code Description attributatle to boycott | international boycott | attributable to boveott
operations income operations
a @ io) 2) (6) ©)
12
13
14
15
16
17
18
19
20
21
22 Total. . : : soe ae
i Part Il _| Adjustment Factor (To be used only Ty your wr taxable 3 year included November 3, 1976) Gee Instructions)
23 Enter date of last day of the taxpayer's taxable year that included November 3,1976 . . . . 1... 4.

24 Enter number of days for the period after November 3, 1976 to the end of the taxpayer's taxable year... 2 +e ee ww

line 2
25 Adjustment factor (—sramperof ays n taxable Your

26 Foreign tax adjustment (multiply total from line 22, column (4) by line 25). (Enter here and on line 2(b), Schedule C (Form 5713) fae
27 Subpart F adjustment (multiply total from line 22, column (5) by line 25). (Enter here and on line 3(b), Schedule C (Form 5713))
28 DISC adjustment (multiply total from line 22, column (6) by line 25). (Enter here and on line 4(b), Schedule C (Form 5713). .

Note: If you are involved in more than one international boycott, use a separate Schedule B (Form 5713) to compute the specifically ‘attributable taxes and income for each boycott.

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General Instructions
A. General Information

Schedule B (Form 5713) is to be com-
pleted only by persons not computing the
loss of tax benefits by the international boy-
cott factor on Schedule A (Form 5713).
Taxpayers using the specifically attributable
taxes and income method for computing the
loss of tax benefits are to report taxes and
income for the period covered by their own
income tax return. Under the specific attri-
bution method, taxes and income are re-
ported on this schedule on an individual
basis and not for all members of the con-
trolled group.

B. Effective dates for tax sanctions.—

1. Generally.—The sanctions of the in-
ternational boycott provisions apply to
agreements to participate in or cooperate
with an international boycott, made after
November 3, 1976, and to agreements made
on or before November 3, 1976, that con-
tinue in effect thereafter.

Example 1, Calendar Year.—If a person who re-
ports his tax liability on a calendar year basis made
an agreement, for example, on November 20, 1976, to
participate in or cooperate with an international boy-
cott, all operations of the person during the entire
1976 taxable year (including pre-November 20, 1976,
operations) in or related to a boycotting country or
with the government, a company, or a national of
‘such country will be included in the amount of taxes
or income specifically attributable to operations in
which there was participation in or cooperation with
an international boycott for the taxable year. How-
ever, under section 999(c)(2), the tax benefits spe
ically attributable to specific operations for which
‘the presumption of participation in or cooperation
with the boycott has been rebutted will not be denied.

The sanctions are applied to the year 1976 on a
pro rata basis. If a person identifies specifically
attributable taxes and income, the tax benefits denied
under sections 908, 952(a), and 995(b)(1) are com-
puted by first ascertaining the tax benefits of the
foreign tax credit, deferral, and DISC respectively
for the taxable year attributable to operations for
which the presumption of boycott participation has
not been rebutted, and then multiplying that amount
by 58/366. For purposes of this example, 58 repre-
sents the number of days after November 3, 1976
through the end of the taxpayer's taxable year.

Example 2. Renunciation of an Agreement—If
under a contract made, for example, after Decem-
ber 31, 1976, a person agreed to refrain from an
activity described in section 999(b)(3), and later
renounced the agreement and communicated such
renunciation to the government or person with which
the agreement was made, all operations of the per-
son during the entire taxable year within which the
agreement was renounced (including post-renuncia-
tion operations) in or related to a boycotting country
or with the government, a company, or a national of
such country will be included in the amount of taxes
or income specifically attributable to operations in
which there was participation in or cooperation with
an international boycott for the taxable year. How-
ever, the tax benefits specifically attributable to
specific operations for which the presumption of
participation in or cooperation with the boycott has
been rebutted will not be denied. There is no pro-
ration between the pre-renunciation and post:
renunciation portions of the taxable year.

2. Exception.—In the case of operations
which constitute participation in or coop:
eration with an international boycott and
are carried out in accordance with the terms
of a binding contract entered into before
September 2, 1976, the tax sanctions of the

international boycott provision shall apply
to such participation or cooperation only
after December 31, 1977.

Specific Instructions

PART |.—Specifically Attributable
Taxes and Income By Country

Column 1. Enter the name of the boycot-
ting country. In reporting with respect to
operations of a controlled foreign corpora-
tion (CFC), enter the name of the country
in which the principal place of business of
the CFC is located (Form 3646, line H,
page 1).

Column 2. Enter, by country, the amount
of taxable income or (loss) from sources out-
side the U.S. (total of column(s) 16, Sched-
ule A from all applicable Form(s) 1118
(corporations); or total of column(s) 4,
Schedule A from all applicable Form(s) 1116
(individuals).

Column 3. Enter, by country, the amount
of foreign taxes paid, accrued, or deemed
paid before adjustment (total of lines 1 and
2, Part Il, Schedule B, from all applicable
Form(s) 1118 (corporations); or total of
line(s) 1, Schedule C from all applicable
Form(s) 1116 (individuals).

Column 4. Enter, by country, 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 with
an international boycott.

Column 5. Enter, by country (principal
place of business of the CFC), the amount of
earnings and profits for the taxable year
(after reduction for any income, war profits,
and excess profits taxes) as’ determined
under section 902 or section 964 (see
Form 3646, Schedule H, line 9).

Column 6. Enter, by country, your pro
rata share of the 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 participa-
tion in or cooperation with an international
boycott.

Column 7. Enter, by country, the total
amount of export gross receipts of the
DISC (from Schedule N (Form 1120-DISC),
Part 1, Section A, column 2).

Column 8. Enter, by country, your pro
rata share of one-half of the excess of the
taxable income of the DISC for the taxable
year, before reduction for any distributions
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 demonstrated to be attributable
to operations in which there was no par-
ticipation in or cooperation with an inter-
national boycott. The taxable income of the
DISC attributable to such operations is
gross income of the DISC for the taxable
year specifically attributable to such opera-
tions minus the deductions which are prop-

‘Ye US. GOVERNMENT PRINTING OFFICE : 1977—~O-218-295

erly apportioned or allocated to such
income.

PART II.—Specifically Attributable
Taxes and Income By Operation

Column 1, Enter, by operation, the name
of the boycotting country. In reporting with
respect to operations of a controlled foreign
corporation (CFC), enter the name of the
country in which the principal place of busi-
ness of the CFC is located (Form 3646, line
H, page 1).

Column 2. Enter, by operation, the prin-
cipal business activity code (see page 4 of
instructions for Form 5713) for each boycott
operation.

Column 3. Enter, by operation, a brief de-
scription of the principal business activity.

DISC’s.—Enter, by operation, in parenthe-
ses, the product code and description. (See
Instructions for Schedule N (Form 1120—
DISC).)

Column 4. Enter, by operation, the
amount of foreign taxes paid, accrued, or
deemed paid (other than foreign taxes other-
wise 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 with
an international boycott.

If your taxable year did not include No-
vember 3, 1976, enter this amount on line
2(b), Schedule C (Form 5713).

Column 5. Enter, by operation, your pro
rata share of the income of the controlled
foreign corporation (other than income at-
tributable to earnings and profits of the for-
eign 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 opera-
tions in which there was no participation in
or cooperation with an international boycott.

If your taxable year did not include No-
vember 3, 1976, enter this amount on line
3(b), Schedule C (Form 5713).

Column 6. Enter, by operation, your pro
rata share of one-half of the excess of the
taxable income of the DISC for the taxable
year, before reduction for any distributions
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 demonstrated to be attributable to
operations in which there was no participa-
tion in or cooperation with an international
boycott. The taxable income of the DISC at-
tributable to such operations is gross in-
come of the DISC for the taxable year specif-
ically attributable to such operations minus
the deductions which are properly appor-
tioned or allocated to such income.

If your taxable year did not include No-
vember 3, 1976, enter this amount on line
4(b), Schedule C (Form 5713).

PART Ill.—Adjustment Factor

All operations of the taxpayer must be re-
flected in determining specifically attributa-
ble taxes and income. However, for taxable
years including November 3, 1976, specifi-
cally attributable taxes and income must be
adjusted to reflect the effective date of sec-
tion 999 (November 3, 1976). Complete Part
IIL if your taxable year includes November 3,
1976.

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