Schedule A (Form 5713) (Rev. 12-2010)
Page 2
General Instructions
References are to the Internal Revenue
Code.
Who Must File
Complete Schedule A (Form 5713) if:
• You participated in or cooperated
with an international boycott and
• You are using the international
boycott factor to figure the loss of tax
benefits.
You must use the international
boycott factor to figure the reduction
to foreign trade income qualifying for
the extraterritorial income exclusion.
To figure the loss of all other
applicable tax benefits, you may either
use the international boycott factor or
you may specifically attribute taxes
and income by operation on Schedule
B (Form 5713).
Boycott Operations
All your operations in a boycotting
country are considered to be boycott
operations, unless you rebut the
presumption of participating in or
cooperating with the boycott (as
explained below). In addition, your
operations that are not in a boycotting
country are boycott operations if they
are connected to your participation in
or cooperation with the boycott.
Rebutting the presumption of
boycott participation or
cooperation. One act of participation
or cooperation creates the
presumption that you participate in or
cooperate with the boycott unless you
rebut the presumption. The
presumption applies to all your
operations and those of each member
of any controlled groups (defined in
section 993(a)(3)) to which you belong,
in each country that helps carry out
the boycott.
You can rebut the presumption of
participation in or cooperation with a
boycott for a particular operation by
demonstrating that the operation is
separate from any participation in or
cooperation with an international
boycott. The presumption applies only
to operations in countries that carry
out the boycott. Therefore, you do not
need to rebut the presumption for
operations that are related to those
countries if the operations take place
outside of those countries.
International Boycott Factor
Your international boycott factor
reflects boycott purchases, boycott
sales, and boycott payroll.
Controlled groups. All members of a
controlled group generally share one
international boycott factor, which
reflects all their purchases, sales, and
payroll. However, if you belong to two
or more controlled groups, your
international boycott factor will reflect
the purchases, sales, and payroll of all
the controlled groups to which you
belong.
Partnerships and trusts. You are
deemed to have a prorated share of
the purchases, sales, and payroll of
each partnership in which you are a
partner and of each trust of which you
are treated as the owner under section
671. As a result, your international
boycott factor may also reflect
purchases, sales, and payroll of
partnerships or trusts.
Specific Instructions
Compute a separate boycott factor
and a separate schedule for each
international boycott you participated
in or cooperated with. Include your
own operations and, if applicable, the
operations of partnerships, trusts, and
members of your controlled group.
See the instructions for lines 8
through 13, in the Instructions for
Form 5713, to determine the years for
which you should report purchases,
sales, and payroll for partnerships,
trusts, and controlled groups.
Columns (1) Through (4)
In completing columns (1) through (4),
show all boycott purchases, boycott
sales, and boycott payroll from one
operation on one line.
Partnerships. Complete only lines a
through o, the total of columns (2), (3),
and (4), and line 2. Do not complete
line 3. Give this information to all
partners so they can compute their
own international boycott factor.
Column (1). Enter the name of the
country that requires participation in or
cooperation with an international
boycott as a condition of doing
business in that country. The country
named in column (1) is not necessarily
the country in which the operation
takes place. For example, if you have
an operation in Country Z that is not a
boycotting country and the operation
relates to Country X that is a
boycotting country, enter the name of
Country X in column (1). The Secretary
maintains a list, under section
999(a)(3), of countries that require
participation in or cooperation with an
international boycott. See the
Instructions for Form 5713 for the
current list of boycotting countries.
Column (2). Enter all purchases that
are made from boycotting countries
that are attributable to the operation
reported on each line.
Column (3). Enter the sales that are
made to or from boycotting countries
and that are attributable to the
operation reported on each line.
Column (4). Enter the total payroll that
was paid or accrued for services
performed in boycotting countries and
that are attributable to the operation
reported on each line.
Lines 1 Through 3
Line 1. Add the totals of columns (2),
(3), and (4). This amount is the
numerator of your international
boycott factor.
Do not include amounts attributable
to operations for which you rebutted
the presumption of participating in or
cooperating with the boycott.
Line 2. The denominator of the
international boycott factor reflects all
your purchases, sales, and payroll in
or related to all countries other than
the United States. If applicable, the
denominator also reflects these items
for your controlled groups,
partnerships, and trusts. Include the
amounts that are attributable to
operations for which you rebutted the
presumption of participating in or
cooperating with the boycott.
Line 3. Enter the international boycott
factor from line 3 of this form on the
appropriate line of Schedule C
(Form 5713) as follows.
IF you . . .
THEN enter the
international
boycott factor
on . . .
Are required to reduce
your foreign tax credit,
Line 2a(2).
Are denied a tax deferral
on subpart F income,
Line 3a(4).
Are denied a tax deferral
on IC-DISC income,
Line 4a(2).
Are denied an exemption
of foreign trade income of
a FSC,
Line 5a(2).
Are required to reduce
foreign trade income
qualifying for the
extraterritorial income
exclusion,
Line 6b.
