Adam Corporation,an S corporation,owns 100% of the stock of a C corporation and 100% of the stock of another S corporation that qualifies as an electing QSUB.In preparing its tax return,Adam Corporation

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Adam Corporation will include the income, deductions, and credits of the QSUB because a QSUB is treated as a disregarded entity for tax purposes, meaning its activities are treated as those of the parent S corporation. However, the C corporation is a separate taxable entity, so its income, deductions, and credits are not included in Adam Corporation's tax return.

Adam Corporation,an S Corporation,owns 100% of the Stock of a C