Family Attribution:

Section 318: Constructive Ownership of Stock(a) 

General rule: (1) Members of family (A) An individual shall be considered as owning the stock owned, directly or indirectly, by or for-- (i) his spouse (other than a spouse who is legally separated from the individual under a decree of divorce or separate maintenance), and (ii) his children, grandchildren, and parents. 

(B) Effect of adoption For purposes of subparagraph (A)(ii), a legally adopted child of an individual shall be treated as a child of such individual by blood. 

Example: We can call this 2-up and 1-down. i.e. I own 100% of my corporation. Therefore, my spouse, my children, my parents and my grandparents are also treated as owning 100% of the corporation (but not my grandchildren).