diff --git a/lib/coffee-script/lexer.js b/lib/coffee-script/lexer.js
index 5c97c7fb..916e9cc2 100644
--- a/lib/coffee-script/lexer.js
+++ b/lib/coffee-script/lexer.js
@@ -17,7 +17,6 @@
         opts = {};
       }
       this.literate = opts.literate;
-      code = this.clean(code);
       this.indent = 0;
       this.indebt = 0;
       this.outdebt = 0;
@@ -26,6 +25,7 @@
       this.tokens = [];
       this.chunkLine = opts.line || 0;
       this.chunkColumn = opts.column || 0;
+      code = this.clean(code);
       i = 0;
       while (this.chunk = code.slice(i)) {
         consumed = this.identifierToken() || this.commentToken() || this.whitespaceToken() || this.lineToken() || this.heredocToken() || this.stringToken() || this.numberToken() || this.regexToken() || this.jsToken() || this.literalToken();
@@ -47,10 +47,11 @@
       if (code.charCodeAt(0) === BOM) {
         code = code.slice(1);
       }
+      code = code.replace(/\r/g, '').replace(TRAILING_SPACES, '');
       if (WHITESPACE.test(code)) {
         code = "\n" + code;
+        this.chunkLine--;
       }
-      code = code.replace(/\r/g, '').replace(TRAILING_SPACES, '');
       if (this.literate) {
         lines = (function() {
           var _i, _len, _ref2, _results;
diff --git a/src/lexer.coffee b/src/lexer.coffee
index 93aa762d..39b4d5e6 100644
--- a/src/lexer.coffee
+++ b/src/lexer.coffee
@@ -35,7 +35,6 @@ exports.Lexer = class Lexer
   # unless explicitly asked not to.
   tokenize: (code, opts = {}) ->
     @literate = opts.literate  # Are we lexing literate CoffeeScript?
-    code      = @clean code    # The stripped, cleaned original source code.
     @indent   = 0              # The current indentation level.
     @indebt   = 0              # The over-indentation at the current level.
     @outdebt  = 0              # The under-outdentation at the current level.
@@ -47,6 +46,7 @@ exports.Lexer = class Lexer
         opts.line or 0         # The start line for the current @chunk.
     @chunkColumn =
         opts.column or 0       # The start column of the current @chunk.
+    code = @clean code         # The stripped, cleaned original source code.
 
     # At every position, run through this list of attempted matches,
     # short-circuiting if any of them succeed. Their order determines precedence:
@@ -80,8 +80,10 @@ exports.Lexer = class Lexer
   # by removing all lines that aren't indented by at least four spaces or a tab.
   clean: (code) ->
     code = code.slice(1) if code.charCodeAt(0) is BOM
-    code = "\n#{code}" if WHITESPACE.test code
     code = code.replace(/\r/g, '').replace TRAILING_SPACES, ''
+    if WHITESPACE.test code
+        code = "\n#{code}"
+        @chunkLine--
     if @literate
       lines = for line in code.split('\n')
         if match = LITERATE.exec line
diff --git a/test/location.coffee b/test/location.coffee
index d15002ff..1d9d6a18 100644
--- a/test/location.coffee
+++ b/test/location.coffee
@@ -38,6 +38,26 @@ test "Verify location of generated tokens", ->
   eq numberToken[2].last_line, 0
   eq numberToken[2].last_column, 5
 
+test "Verify location of generated tokens (with indented first line)", ->
+  tokens = CoffeeScript.tokens "  a = 83"
+
+  eq tokens.length, 6
+  [IndentToken, aToken, equalsToken, numberToken] = tokens
+
+  eq aToken[2].first_line, 0
+  eq aToken[2].first_column, 2
+  eq aToken[2].last_line, 0
+  eq aToken[2].last_column, 2
+
+  eq equalsToken[2].first_line, 0
+  eq equalsToken[2].first_column, 4
+  eq equalsToken[2].last_line, 0
+  eq equalsToken[2].last_column, 4
+
+  eq numberToken[2].first_line, 0
+  eq numberToken[2].first_column, 6
+  eq numberToken[2].last_line, 0
+  eq numberToken[2].last_column, 7
 
 test "Verify all tokens get a location", ->
   doesNotThrow ->