### Question
Can you define what qualified subsidiary means?


### Answer
**Qualified subsidiary** is defined as the following in *26 U.S.C. § 860E*:

> any corporation—


(i) all the stock of which, and substantially all the indebtedness of which, is held directly by the corporation to which section 593 applies, and


(ii) which is organized and operated exclusively in connection with the organization and operation of 1 or more REMIC's

#### Citation:
  - *26 U.S.C. § 860E*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter M-Regulated Investment Companies and Real Estate Investment Trusts > PART IV-REAL ESTATE MORTGAGE INVESTMENT CONDUITS**

