SCHEDULE C

(Form 5713) Tax Effect of the International Boycott Provisions

 Attach to Form 5713. OMB No. 1545-0216

(Rev. December 2005)

Department of the Treasury

Internal Revenue Service  Use with the December 2004 revision of Form 5713.

Name Identifying number

1 Method used to compute loss of tax benefits (check one):

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

Identification of specifically attributable taxes and income from Schedule B (Form 5713). See lines 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 the

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 the 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 the

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 line 22 of Worksheet A in the Form 5471 instructions

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

“Yes” to the question on line 7b, Form 5713. Enter the amount from line o, column (5), Schedule B

(Form 5713) here and on line 22 of Worksheet A in the Form 5471 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 the

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 the IC-DISC will include it on line 10, Part I, Schedule J, Form 1120-IC-DISC

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

“Yes” to the question on line 7c, Form 5713. Enter the amount from line o, column (6), Schedule B

(Form 5713) here and the IC-DISC will include it on line 10, Part I, Schedule J, Form

1120-IC-DISC

Cat. No. 12070O Schedule C (Form 5713) (Rev. 12-2005)

5 Denial of exemption of foreign trade income (section 927(e)(2), as in effect before its repeal):

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

question on line 7i, Form 5713.

a

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

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

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

line 5a(1) by line 5a(2). Enter here and on line 2, Schedule F, Form 1120-FSC

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

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

Schedule B (Form 5713) here and on line 2, Schedule F, Form 1120-FSC

b

 See instructions on page 2.

For Paperwork Reduction Act Notice, see Instructions for Form 5713.
Schedule C (Form 5713) (Rev. 12-2005) Page 2

Instructions

Section references are to the Internal

Revenue Code unless otherwise

noted.

Partnerships. Each partner must

complete a separate Schedule C

(Form 5713). Partnerships do not

complete Schedule C (Form 5713).

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 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. Include 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

operations under section 908(a),

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

Line 4a(1). Enter your pro rata share

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

line 4a(1) as follows:

Controlled groups. Unless a

controlled group (described in section

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

each member may independently

choose to either (a) apply the

international boycott factor under

section 999(c)(1) or (b) 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 your pro rata

share of line 8, Part I, Schedule J,

Form 1120-IC-DISC.

● An IC-DISC whose tax year differs

from the common tax 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 your pro rata

share of line 8, Part I, Schedule J,

Form 1120-IC-DISC, multiplied by

16/17.

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

Purpose of Form

Line 2a(1). Enter the foreign tax credit

before adjustment from Form 1116 or

1118. Individual filers, enter the

Line 2a(3). Enter the reduction of

foreign tax credit from this line on

either Form 1116 or 1118. Individual

filers, enter this amount on line 32,

Part IV, of Form 1116. Corporate filers,

enter this amount on line 10, Part III,

Schedule B, of Form 1118.

Line 2b. Enter the reduction of foreign

taxes available for credit from this line

on Form 1116 or 1118. Individual

filers, include this amount on line 12,

Part III, of Form 1116. Corporations,

enter this amount on line C,

Schedule G, of Form 1118.

Schedule C (Form 5713) is used to

compute the loss of tax benefits

attributable to participation in or

cooperation with an international

boycott.

Note. All line references are to 2005

forms unless otherwise noted.

Lines 2 through 6

Schedule C (Form 5713) (Rev. 12-2005)

Reduction of foreign trade income qualifying for the extraterritorial income exclusion. Complete if

you answered “Yes” to the question on line 7j, Form 5713.

6

a

b

c

5

Complete Schedule C (Form 5713) if

you completed either Schedule A or

Schedule B of Form 5713.

Who Must File

Other Requirements

● A person excluding extraterritorial

income must reduce qualifying foreign

trade income using the international

boycott factor computed on

Schedule A.

Enter amount from line 49 of Form 8873

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

Reduction of qualifying foreign trade income. Multiply line 6a by 6b. Enter here and on Form 8873,

line 50

by identifying specifically attributable

taxes and income.

amount from line 31, Part IV, of

Form 1116. Corporate filers, enter the

amount from line 9, Part III,

Schedule B, of Form 1118.