diff --git a/artiq/gateware/test/rtio/test_sed_lane_distributor.py b/artiq/gateware/test/rtio/test_sed_lane_distributor.py
index b369d711b..488d914a9 100644
--- a/artiq/gateware/test/rtio/test_sed_lane_distributor.py
+++ b/artiq/gateware/test/rtio/test_sed_lane_distributor.py
@@ -9,9 +9,11 @@ from artiq.gateware.rtio.sed import lane_distributor
 LANE_COUNT = 8
 
 
-def simulate(input_events, wait=True):
-    dut = lane_distributor.LaneDistributor(LANE_COUNT, 8, [("channel", 8), ("timestamp", 32)], 
-                                           [0]*256, 3)
+def simulate(input_events, compensation=None, wait=True):
+    layout = [("channel", 8), ("timestamp", 32)]
+    if compensation is None:
+        compensation = [0]*256
+    dut = lane_distributor.LaneDistributor(LANE_COUNT, 8, layout, compensation, 3)
 
     output = []
     access_results = []
@@ -122,3 +124,30 @@ class TestLaneDistributor(unittest.TestCase):
         output, access_results = simulate(input_events)
         self.assertEqual([o[0] for o in output], [x % LANE_COUNT for x in range(9)])
         self.assertEqual([ar[0] for ar in access_results], ["ok"]*9)
+
+    def test_regular_lc(self):
+        N = 16
+        output, access_results = simulate([(n, 8) for n in range(N)],
+                                          compensation=range(N), wait=False)
+        self.assertEqual(output, [(0, n, n, (n+1)*8) for n in range(N)])
+        self.assertEqual(access_results, [("ok", 0)]*N)
+
+    def test_lane_switch_lc(self):
+        N = 32
+        compensation = [n//2 for n in range(N)]
+        output, access_results = simulate([(n, 8) for n in range(N)],
+                                          compensation=compensation, wait=False)
+        self.assertEqual(output, [((n-n//2) % LANE_COUNT, n, n, 8*(1+n//2)) for n in range(N)])
+        self.assertEqual([ar[0] for ar in access_results], ["ok"]*N)
+
+    def test_underflow_lc(self):
+        N = 16
+        compensation = [0]*N
+        input_events = [(n, (n+1)*8) for n in range(N)]
+        compensation[N-2] = -input_events[N-2][1]//8
+        output, access_results = simulate(input_events, compensation=compensation)
+        self.assertEqual(len(output), len(input_events)-1)  # event with underflow must get discarded
+        self.assertEqual([ar[0] for ar in access_results[:N-2]], ["ok"]*(N-2))
+        self.assertEqual(access_results[N-2][0], "underflow")
+        self.assertEqual(output[N-2], (0, N-2, N-1, N*8))
+        self.assertEqual(access_results[N-1][0], "ok")