In the filing of a consolidated tax return for a corporation and its wholly owned subsidiaries, intercompany dividends between the parent and subsidiary corporations are Group of answer choices Not taxable. Included in taxable income to the extent of 35%. Included in taxable income to the extent of 65%. Fully taxable.

Answer A

Explanation:

There are several rules of dividends deductions from income making taxable income significantly smaller. Deductions are generally 70% of the dividends received. Second if the company owns a stake in other company larger than 20%, but smaller than 80% dividend deduction from income is 80% of the dividend received and if the other entity is fully owned deductions from the dividend received are 100%