Reduction of taxes or credit due to international boycott operations.
In general, if you agree to participate in, or cooperate with, an international boycott, you must file Form 5713, International
Boycott Report, and attach all supporting schedules. In addition, you must reduce either the total taxes available for credit or the credit otherwise allowable by your foreign taxes resulting from boycott activities.
If you can figure the taxes specifically attributable to boycott operations, do not include the foreign taxes resulting from these activities when figuring out the foreign tax credit.
If you cannot figure the amount of taxes specifically attributable to boycott operations, multiply the credit otherwise allowable by the international boycott factor (figured on Schedule A (Form 5713), International Boycott Factor) and enter the result on as a reduction of foreign tax credit on Form 1116.
For more information, refer to Instructions for Form 1116.