Question on the impact of foreign taxes on NCTI

Hey there.

I am desperately trying to figure out whether a US company's net inclusion is reduced by foreign taxes paid by a foreign subsidiary. I know that this reduction occurs functionally for Subpart F income based on the Earnings & Profits limitation, but I cannot figure out for the life of me whether the definition of "tested income" for NCTI purposes includes or takes out foreign taxes paid. The definition says that it is the "excess of gross income over allocable deductions (INCLUDING TAXES)", but I am not sure whether that actually means foreign taxes paid that are going to be credited later are also taken out. For example, say our Italian subsidiary makes $1000 in income. It pays $250 in tax in Italy. Do we take that 250 out of our inclusion up front and then gross it right back up to 250 under Section 78? Or do we keep it at $1000 and gross up to $1250?

I understand the whole 960/904 credit concepts that come in later, just unclear as to inclusion before we move to below the line.

Thank you.