### Question
Can you define what undistributed earnings means?


### Answer
**Undistributed earnings** is defined as the following in *26 U.S.C. § 245A*:

> the amount of the earnings and profits of the specified 10-percent owned foreign corporation (computed in accordance with sections 964(a) and 986)—


(A) as of the close of the taxable year of the specified 10-percent owned foreign corporation in which the dividend is distributed, and


(B) without diminution by reason of dividends distributed during such taxable year

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

