High-taxed income
The term “high-taxed income” means any income which (but for this subparagraph) would be passive income if the sum of—
(i)#
the foreign income taxes paid or accrued by the taxpayer with respect to such income, and
(ii)#
the foreign income taxes deemed paid by the taxpayer with respect to such income under section 902 1 or 960,
exceeds the highest rate of tax specified in section 1 or 11 (whichever applies) multiplied by the amount of such income (determined with regard to section 78). For purposes of the preceding sentence, the term “foreign income taxes” means any income, war profits, or excess profits tax imposed by any foreign country or possession of the United States.