Choice "D" is correct. If a corporation owns 80% or more of another corporation, the dividends received deduction is 100% as the dividend income is eliminated in consolidation. Therefore, the net amount of dividend income is $0.
Choice "c" is incorrect. 100% of the dividend is eliminated, not included in the consolidated tax return.
Choice "a" is incorrect. This answer is 80% of the dividend received. In a consolidated return, 100% of the dividend is eliminated.
Choice "b" is incorrect. This answer is 70% of the dividend received. In a consolidated return, 100% of the dividend is eliminated.
