### Question
How is the term post-1986 undistributed U.S. earnings defined?


### Answer
The term **post-1986 undistributed U.S. earnings** is defined in *26 U.S.C. § 245* as the following:

> the portion of the post-1986 undistributed earnings which is attributable to—


(A) income of the qualified 10-percent owned foreign corporation which is effectively connected with the conduct of a trade or business within the United States and subject to tax under this chapter, or


(B) any dividend received (directly or through a wholly owned foreign corporation) from a domestic corporation at least 80 percent of the stock of which (by vote and value) is owned (directly or through such wholly owned foreign corporation) by the qualified 10-percent owned foreign corporation

#### Citation:
  - *26 U.S.C. § 245*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter B-Computation of Taxable Income > PART VIII-SPECIAL DEDUCTIONS FOR CORPORATIONS**

