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Schedule C (Form 5713) (Rev. 12-2010)

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

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

a Enter amount from line 49 of Form 8873 .

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

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

line 50 .

Instructions

by identifying specifically attributable

amount from line 27, Part IV, of Form

taxes and income.

1116. Corporate filers, enter the

Section references are to the Internal

amount from line 4, Part III, Schedule

Revenue Code unless otherwise

Other Requirements

B, of Form 1118.

noted.

Line 2a(3). Enter the reduction of

• A person who applies the

Purpose of Form

foreign tax credit from this line on

international boycott factor to one

either Form 1116 or 1118. Individual

Schedule C (Form 5713) is used to

operation must apply the factor to all

filers, enter this amount on line 28,

compute the loss of tax benefits

that tax year’s operations under

Part IV, of Form 1116. Corporate filers,

attributable to participation in or

section 908(a), 952(a)(3), 995(b)(1)(F)(ii),

enter this amount on line 5, Part III,

cooperation with an international

or 927(e)(2).

Schedule B, of Form 1118.

boycott.

• A person who identifies specifically

Line 2b. Enter the reduction of foreign

attributable taxes and income under

taxes available for credit from this line

Who Must File

section 999(c)(2) must use that

on Form 1116 or 1118. Individual

method for all that tax year’s

Complete Schedule C (Form 5713) if

filers, include this amount on line 12,

operations under section 908(a),

you completed either Schedule A or

Part III, of Form 1116. Corporations,

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

Schedule B of Form 5713.

enter this amount on line C, Schedule

• An IC-DISC whose tax year differs

G, of Form 1118.

Partnerships. Each partner must

from the common tax year of the

complete a separate Schedule C

Line 3a(1). Enter your share of the

controlled group of which it is a

(Form 5713). Partnerships do not

income of the controlled foreign

member does not need to amend its

complete Schedule C (Form 5713).

corporation on line 3a(1).

return to show on Schedule J (Form

Controlled groups. Unless a

Nonexempt foreign trade income of

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

controlled group (described in section

benefits lost because of boycott

a foreign sales corporation (FSC) that

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

participation. Because the IC-DISC

was computed without regard to the

each member may independently

benefits are lost at the shareholder

administrative pricing rules is subject

choose to either (a) apply the

level, the shareholder must include in

to the subpart F rules. Include your

income the prorated share of income

international boycott factor under

share of these types of income on line

attributable to boycott operations

section 999(c)(1) or (b) identify

3a(1).

shown on line 4a(3).

specifically attributable taxes and

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

• A person excluding extraterritorial

income under section 999(c)(2). Each

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

income must reduce qualifying foreign

member must consistently use a

line 4a(1) as follows:

trade income using the international

single method to figure the loss of tax

• Shareholder that is not a C

boycott factor computed on

benefits.

corporation. Enter your pro rata

Schedule A.

Example. A member that chooses

share of line 8, Part I, Schedule J,

to use the international boycott factor

Lines 2 through 6

Form 1120-IC-DISC.

must apply it to determine its loss of

• Shareholder that is a C

Note. All line references are to 2010

the section 902 indirect foreign tax

corporation. Enter your pro rata

forms unless otherwise noted.

credit on a dividend that another

share of line 8, Part I, Schedule J,

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

member of the controlled group paid

Form 1120-IC-DISC, multiplied by

before adjustment from Form 1116 or

16/17.

to it, even if the other member

1118. Individual filers, enter the

determines its own loss of tax benefits

Schedule C (Form 5713) (Rev. 12-2010)

Instructions For Schedule C (Form 5713) - Tax Effect Of The International Boycott Provisions - Internal Revenue Service

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