Schedule C (Form 5713) (Rev. 9-2018)
Page 2
6 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Future Developments
For the latest information about
developments related to Schedule C
(Form 5713) and its instructions, such
as legislation enacted after they were
published, go to www.irs.gov/forms-
pubs/about-schedule-c-form-5713.
Instructions
Section references are to the Internal
Revenue Code unless otherwise
noted.
Purpose of Form
Schedule C (Form 5713) is used to
compute the loss of tax benefits
attributable to participation in or
cooperation with an international
boycott.
Who Must File
Complete Schedule C (Form 5713) if
you completed either Schedule A or
Schedule B of Form 5713.
Partnerships. Each partner must
complete a separate Schedule C
(Form 5713). Partnerships do not
complete Schedule C (Form 5713).
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.
Other Requirements
• 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).
• 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).
• 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).
• A person excluding extraterritorial
income must reduce qualifying foreign
trade income using the international
boycott factor computed on
Schedule A.
Lines 2 through 6
Line 2a(1). Enter the foreign tax credit
before adjustment from Form 1116 or
1118. Enter the amount from line 30,
Part IV, of Form 1116 and/or the
amount from line 7, Part III, Schedule
B, of Form 1118.
Line 2a(3).
Enter the reduction of
foreign tax credit from this line on
either Form 1116 or 1118. With respect
to Form 1116, enter the reduction on
line 32, Part IV, and with respect to
Form 1118, enter the reduction on line
8, Part III, Schedule B.
Line 2b. Enter the reduction of foreign
taxes available for credit from this line
on Form 1116 or 1118. With respect to
Form 1116, include this amount on line
12, Part III. With respect to Form 1118,
enter this amount on line C,
Schedule G.
Line 3a(1). Enter your share of the
income of the controlled foreign
corporation on line 3a(1).
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).
Line 4a(1). Enter your pro rata share
of section 995(b)(1)(F)(i) amount on
line 4a(1) as follows.
• Shareholder that is not a
C corporation. Enter your pro rata
share of line 8, Part I, Schedule J,
Form 1120-IC-DISC.
• 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.
Schedule C (Form 5713) (Rev. 9-2018)
