# 26 U.S.C. § 951A: Net CFC tested income included in gross income of United States shareholders Source: OLRC release point 119-134 . Cite pinpoints as 26 U.S.C. § 951A(a)(1). ## § 951A(a) In general Each person who is a United States shareholder of any controlled foreign corporation for any taxable year of such United States shareholder shall include in gross income such shareholder’s net CFC tested income for such taxable year. ## § 951A(b) Net CFC tested income For purposes of this section— **§ 951A(b)(1) In general.** The term “net CFC tested income” means, with respect to any United States shareholder for any taxable year of such United States shareholder, the excess (if any) of— **§ 951A(b)(1)(A)** the aggregate of such shareholder’s pro rata share of the tested income of each controlled foreign corporation with respect to which such shareholder is a United States shareholder for such taxable year of such United States shareholder, over **§ 951A(b)(1)(B)** the aggregate of such shareholder’s pro rata share of the tested loss of each controlled foreign corporation with respect to which such shareholder is a United States shareholder for such taxable year of such United States shareholder. **§ 951A(b)(2) Tested income; tested loss.** For purposes of this section— **§ 951A(b)(2)(A) Tested income.** The term “tested income” means, with respect to any controlled foreign corporation for any taxable year of such controlled foreign corporation, the excess (if any) of— **§ 951A(b)(2)(A)(i)** the gross income of such corporation determined without regard to— **§ 951A(b)(2)(A)(i)(I)** any item of income described in section 952(b), **§ 951A(b)(2)(A)(i)(II)** any gross income taken into account in determining the subpart F income of such corporation, **§ 951A(b)(2)(A)(i)(III)** any gross income excluded from the foreign base company income (as defined in section 954) and the insurance income (as defined in section 953) of such corporation by reason of section 954(b)(4), **§ 951A(b)(2)(A)(i)(IV)** any dividend received from a related person (as defined in section 954(d)(3)), and **§ 951A(b)(2)(A)(i)(V)** any foreign oil and gas extraction income (as defined in section 907(c)(1)) of such corporation, over **§ 951A(b)(2)(A)(ii)** the deductions (including taxes) properly allocable to such gross income under rules similar to the rules of section 954(b)(5) (or to which such deductions would be allocable if there were such gross income). **§ 951A(b)(2)(B) Tested loss.** **§ 951A(b)(2)(B)(i) In general.** The term “tested loss” means, with respect to any controlled foreign corporation for any taxable year of such controlled foreign corporation, the excess (if any) of the amount described in subparagraph (A)(ii) over the amount described in subparagraph (A)(i). **§ 951A(b)(2)(B)(ii) Coordination with subpart F to deny double benefit of losses.** Section 952(c)(1)(A) shall be applied by increasing the earnings and profits of the controlled foreign corporation by the tested loss of such corporation. ## § 951A(c) Determination of pro rata share, etc. For purposes of this section— **§ 951A(c)(1) In general.** The pro rata shares referred to in subsections (b)(1)(A) and (b)(1)(B), respectively, shall be determined under the rules of section 951(a)(2) in the same manner as such section applies to subpart F income and shall be taken into account in the taxable year of the United States shareholder determined under section 951(a)(3). **§ 951A(c)(2) Treatment as United States shareholder.** A person shall be treated as a United States shareholder of a controlled foreign corporation for any taxable year of such person only if such person owns (within the meaning of section 958(a)) stock in such foreign corporation on any day in such taxable year. **§ 951A(c)(3) Treatment as controlled foreign corporation.** A foreign corporation shall be treated as a controlled foreign corporation for any taxable year if such foreign corporation is a controlled foreign corporation at any time during such taxable year. ## § 951A(d) Treatment as subpart F income for certain purposes **§ 951A(d)(1) In general.** **§ 951A(d)(1)(A) Application.** Except as provided in subparagraph (B), any net CFC tested income included in gross income under subsection (a) shall be treated in the same manner as an amount included under section 951(a)(1)(A) for purposes of applying sections 168(h)(2)(B), 535(b)(10), 851(b), 904(h), 959, 961, 962, 993(a)(1)(E), 996(f)(1), 1248(b)(1), 1248(d)(1), 6501(e)(1)(C), 6654(d)(2)(D), and 6655(e)(4). **§ 951A(d)(1)(B) Exception.** The Secretary shall provide rules for the application of subparagraph (A) to other provisions of this title in any case in which the determination of subpart F income is required to be made at the level of the controlled foreign corporation. **§ 951A(d)(2) Allocation of net CFC tested income to controlled foreign corporations.** For purposes of the sections referred to in paragraph (1), with respect to any controlled foreign corporation any pro rata amount from which is taken into account in determining the net CFC tested income included in gross income of a United States shareholder under subsection (a), the portion of such net CFC tested income which is treated as being with respect to such controlled foreign corporation is— **§ 951A(d)(2)(A)** in the case of a controlled foreign corporation with no tested income, zero, and **§ 951A(d)(2)(B)** in the case of a controlled foreign corporation with tested income, the portion of such net CFC tested income which bears the same ratio to such net CFC tested income as— **§ 951A(d)(2)(B)(i)** such United States shareholder’s pro rata amount of the tested income of such controlled foreign corporation, bears to **§ 951A(d)(2)(B)(ii)** the aggregate amount described in subsection (b)(1)(A) with respect to such United States shareholder. ## Regulations - [Treas. Reg. § 1.951A-1](/26/reg/1.951A-1.md): General provisions. (interprets § 951A) - [Treas. Reg. § 1.951A-2](/26/reg/1.951A-2.md): Tested income and tested loss. (interprets § 951A) - [Treas. Reg. § 1.951A-3](/26/reg/1.951A-3.md): Qualified business asset investment. (interprets § 951A) - [Treas. Reg. § 1.951A-4](/26/reg/1.951A-4.md): Tested interest expense and tested interest income. (interprets § 951A) - [Treas. Reg. § 1.951A-5](/26/reg/1.951A-5.md): Treatment of GILTI inclusion amounts. (interprets § 951A) - [Treas. Reg. § 1.951A-6](/26/reg/1.951A-6.md): Adjustments related to tested losses. (interprets § 951A) - [Treas. Reg. § 1.951A-7](/26/reg/1.951A-7.md): Applicability dates. (interprets § 951A) ## Forms named in the regulations - [Form 1065](https://www.irs.gov/pub/irs-pdf/f1065.pdf) - [Form 5471](https://www.irs.gov/pub/irs-pdf/f5471.pdf) ## Final rules - [89 FR 82160](https://www.federalregister.gov/documents/2024/10/10/2024-23132/section-367d-rules-for-certain-repatriations-of-intangible-property) (2024): Section 367(d) Rules for Certain Repatriations of Intangible Property - [87 FR 3648](https://www.federalregister.gov/documents/2022/01/25/2022-00066/guidance-under-section-958-on-determining-stock-ownership) (2022): Guidance Under Section 958 on Determining Stock Ownership - [87 FR 276](https://www.federalregister.gov/documents/2022/01/04/2021-27887/guidance-related-to-the-foreign-tax-credit-clarification-of-foreign-derived-intangible-income) (2022): Guidance Related to the Foreign Tax Credit; Clarification of Foreign-Derived Intangible Income - [86 FR 52971](https://www.federalregister.gov/documents/2021/09/24/2021-20615/guidance-on-the-treatment-of-qualified-improvement-property-under-sections-250b-and-951ad-and) (2021): Guidance on the Treatment of Qualified Improvement Property Under Sections 250(b) and 951A(d) and Guidance Related to the Foreign Tax Credit - [85 FR 76960](https://www.federalregister.gov/documents/2020/12/01/2020-26074/coordination-of-extraordinary-disposition-and-disqualified-basis-rules) (2020): Coordination of Extraordinary Disposition and Disqualified Basis Rules - [85 FR 71998](https://www.federalregister.gov/documents/2020/11/12/2020-21819/guidance-related-to-the-allocation-and-apportionment-of-deductions-and-foreign-taxes-foreign-tax) (2020): Guidance Related to the Allocation and Apportionment of Deductions and Foreign Taxes, Foreign Tax Redeterminations, Foreign Tax Credit Disallowance Under Section 965(g), Consolidated Groups, Hybrid Arrangements and Certain Payments Under Section 951A - [85 FR 44620](https://www.federalregister.gov/documents/2020/07/23/2020-15351/guidance-under-sections-951a-and-954-regarding-income-subject-to-a-high-rate-of-foreign-tax) (2020): Guidance Under Sections 951A and 954 Regarding Income Subject to a High Rate of Foreign Tax - [84 FR 69022](https://www.federalregister.gov/documents/2019/12/17/2019-24848/foreign-tax-credit-guidance-related-to-the-tax-cuts-and-jobs-act-overall-foreign-loss-recapture-and) (2019): Foreign Tax Credit Guidance Related to the Tax Cuts and Jobs Act, Overall Foreign Loss Recapture, and Foreign Tax Redeterminations - [84 FR 29288](https://www.federalregister.gov/documents/2019/06/21/2019-12437/guidance-related-to-section-951a-global-intangible-low-taxed-income-and-certain-guidance-related-to) (2019): Guidance Related to Section 951A (Global Intangible Low-Taxed Income) and Certain Guidance Related to Foreign Tax Credits ## Leading cases - [Keysight Technologies v. United States (Fed. Cl. 2026)](https://www.courtlistener.com/opinion/10917147/keysight-technologies-inc-subsidiaries-v-united-states/) ## Proposed regulations (not in force) - [Prop. Treas. Reg. § 1.951A-2](/26/prop/1.951A-2_2024-27227.md): Tested income and tested loss. (REG-105479-18, proposed 2024-12-02) - [Prop. Treas. Reg. § 1.951A-1](/26/prop/1.951A-1_2026-17365.md): General provisions. (REG-115646-25, proposed 2026-08-26) - [Prop. Treas. Reg. § 1.951A-7](/26/prop/1.951A-7_2026-17365.md): Applicability dates. (REG-115646-25, proposed 2026-08-26) ## Connections Cites: § 907 Special rules in case of foreign oil and gas income; § 951 Amounts included in gross income of United States shareholders; § 952 Subpart F income defined; § 953 Insurance income; § 954 Foreign base company income; § 958 Rules for determining stock ownership Cited by: § 250 Foreign-derived deduction eligible income and net CFC tested income; § 904 Limitation on credit; § 951B Amounts included in gross income of foreign controlled United States shareholders; § 960 Deemed paid credit for subpart F inclusions ## Amendments - 2017-12-22: [Pub. L. 115-97](/26/act/115-97.md), 131 Stat. 2208 - 2025-07-04: [Pub. L. 119-21](/26/act/119-21.md), 139 Stat. 203