Intelligence doesn't pass reliably. You may be slightly more likely to get one smart pup in a litter from smart parents. Any given litter is likely to show the standard range of variation for the breeds.
It's my observation that lots of people have dogs who are smarter than the person appreciates. People don't listen to their dogs, they just talk at them.
I'd say it passes reliably enough that some breeds are smarter than others. Over generations, I see no reason you wouldn't be able to consistently breed intelligent dogs.
legally really changes the vibe of your comment
Not allowed for humans. You can only breed yourself. :-)