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The residence of the payor (also referred to as debtor) determines the source of interest income. Interest payments from U.S. residents and U.S. corporations are generally characterized as U.S. source income. Interest paid by foreign corporations and nonresidents, including U.S. citizens residing abroad, will generally be characterized as foreign source income. The residence of the payor is determined at the time the payment is made. In determining the source of an interest payment, the place of payment, the place the debt is located, the recipient’s location, and the currency used to make the payment all are irrelevant factors. See Page 6