[Code of Federal Regulations]
[Title 26, Volume 10]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.927(e)-2T]

[Page 124]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.927(e)-2T  Temporary regulations; effect of boycott participation 
on FSC and small FSC benefits.

    (a) International boycott factor. If the FSC (or small FSC) or any 
member of the FSC's (or small FSC's) controlled group participates in or 
cooperates with an international boycott within the meaning of section 
999, the FSC's (or small FSC's) exempt foreign trade income as 
determined under section 923 (a) shall be reduced by an amount equal to 
the product of the FSC's (or small FSC's) exempt foreign trade income 
multiplied by the international boycott factor determined under section 
999. The amount of the reduction will be considered as non-exempt 
foreign trade income.
    (b) Specifically attributable taxes and income method. If the 
taxpayer clearly demonstrates that the income earned for the taxable 
year is attributable to specific operations, then in lieu of applying 
the international boycott factor for such taxable year, the amount of 
the exempt foreign trade income as determined under section 923(a) that 
will be reduced by this section shall be the amount specifically 
attributable to the operations in which there was participation in or 
cooperation with an international boycott under section 999(b)(1). The 
amount of the reduction will be considered as non-exempt foreign trade 
income.

[T.D. 8126, 52 FR 6465, Mar. 3, 1987]