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Schedule B (Form 5713) (Rev. 12-2010) Page 2
General Instructions cooperation with an international Enter the column (4) total on line 2b,
boycott. The presumption applies only Schedule C (Form 5713).
Section references are to the Internal to operations in countries that carry Column (5). Enter your prorated share
Revenue Code unless otherwise noted. out the boycott. Therefore, you do not of the controlled foreign corporation’s
Who Must File need to rebut the presumption for income that is attributable to the
operations that are related to those boycott operation. (This includes your
Complete Schedule B (Form 5713) if: countries if the operations take place share of the non-exempt income of a
• You participated in or cooperated outside of those countries. FSC. See section 923(a)(2), as in effect
with an international boycott and before its repeal.) This amount is not
• You figure the loss of tax benefits by Specific Instructions
eligible for tax deferral. Omit the
specifically attributing taxes and File Schedule B (Form 5713) for the foreign corporation’s income
income. period covered by your income tax attributable to earnings and profits
If you do not specifically attribute return. Report only your own taxes that are included in gross income
taxes and income for this purpose, and income; do not include the taxes under section 951 (except by reason
you must compute the international and income of other members of any of section 952(a)(3)). Also omit
boycott factor on Schedule A (Form controlled groups to which you amounts excluded from subpart F
5713). belong. income by section 952(b). In figuring
Do not use Schedule B (Form 5713) Columns (1) through (7) the amount to enter in column (5), you
are allowed a reasonable amount for
to figure the reduction to foreign trade In completing columns (1) through (7), deductions (including foreign taxes)
income qualifying for the show all specifically identifiable taxes allocable to that income.
extraterritorial income exclusion. and income in each appropriate
Instead, use Schedule A (Form 5713). column from one operation on one Enter the column (5) total on line 3b,
Certain shareholders. IC-DISC line. Schedule C (Form 5713).
benefits, certain FSC benefits, the Column (6). An IC-DISC’s taxable
“deemed paid” foreign tax credit under Column (1). Enter the name of the income attributable to boycott
section 902, and the deferral of country that requires participation in or participation or cooperation is not
subpart F income are lost at the cooperation with an international eligible for deferral.
shareholder level. Shareholders in an boycott as a condition of doing
IC-DISC, certain FSCs, or a foreign business in that country. The country If you are a shareholder in an IC-
corporation must report their prorated named in column (1) is not necessarily DISC, follow these steps for each
share of the tax benefits denied. The the country where you have boycott operation and enter the result
denial of these benefits is discussed in operations. For example, if you have in column (6).
the specific instructions for columns operations in Country Z that is not a 1. Determine the portion of the
(4) through (7). boycotting country and the operation amount on Form 1120-IC-DISC,
relates to Country X that is a Schedule J, Part I, line 7, that is
Boycott Operations boycotting country, enter the name of attributable to the boycott operation.
Country X in column (1). See the
All of your operations in a boycotting 2. Subtract that amount from the
Instructions for Form 5713 for a list of
country are considered to be boycott IC-DISC’s taxable income attributable
boycotting countries. to the boycott operation for the tax
operations, unless you rebut the
presumption of participation in or Column (2). Enter the principal year, before reduction for any
cooperation with the boycott (as business activity code of the boycott distributions.
explained below). In addition, your operation from the list in the 3. If you are a C corporation,
operations that are not in a boycotting Instructions for Form 5713. determine your pro rata share of the
remainder and multiply that amount by
country are boycott operations if they Column (3). Briefly describe the 16/17. If you are not a C corporation,
are connected to your participation in principal business activity of the determine your pro rata share of the
or cooperation with the boycott. boycott operation. For IC-DISCs, enter remainder.
Rebutting the presumption of the major product code and
boycott participation or description in parentheses. See the 4. Enter the result in column (6).
cooperation. One act of participation Instructions for Schedule N of Form Enter the column (6) total on line 4b,
or cooperation creates the 1120-IC-DISC for a list of the codes. Schedule C (Form 5713).
presumption that you participate in or Column (4). Enter the foreign taxes Column (7). A FSC’s taxable income
cooperate with the boycott unless you paid, accrued, or deemed paid that attributable to boycott participation or
rebut the presumption. The are attributable to the boycott cooperation is not eligible for
presumption applies to all of your operation. These taxes are not eligible exemption from income tax. Enter in
operations and those of each member for the foreign tax credit. Omit foreign column (7) the taxable income
of any controlled groups (defined in taxes otherwise disallowed under attributable to foreign trade income of
section 993(a)(3)) to which you belong, sections 901 through 907, 911, and a FSC for each boycott operation that
in each country that helps carry out 6038. For more information, see Part N would have been exempt had there
the boycott. of the Treasury Department’s not been boycott participation or
You can rebut the presumption of International Boycott Guidelines. cooperation.
participation in or cooperation with a Enter the column (7) total on line 5b,
boycott for a particular operation by Schedule C (Form 5713).
demonstrating that the operation is
separate from any participation in or
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