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Tested Income and Tested Loss
                                                                                                                        1











             Tested                                    Gross 
                                        Allocable

            income                  =
       tested income
                         less
           deductions














            •	  Tested income and tested loss
                                                                             are CFC-level items, the pro
                 rata shares of which flow up to the US
                                                                                            shareholder.

            •	  Tested income is  not limited to the CFC’s current E&P.





            •	  CFC tested income (or loss) is calculated according to US
                 taxable income principles (see Treas. Reg. §1.952-2).




                                                        and Treas. Reg. §1.951A-2(b)(1).
            Section 951A(c)(2)(A)


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