What can be said about the dividend income received by a U.S. citizen from a foreign corporation?

The correct answer is that the dividend income received by a U.S. citizen from a foreign corporation is considered foreign sourced income. This classification is based on the principle that the source of income is determined by the residence of the payer, which, in the case of dividends, is the corporation that pays out the dividends. Since the dividends are coming from a foreign corporation, they are classified as foreign sourced income for U.S. tax purposes.

This distinction is important because it may affect how the income is taxed and whether the taxpayer can claim any foreign tax credits or utilize other provisions related to international taxation. Understanding the concept of sourced income is crucial for tax compliance and for leveraging potential benefits.