So here's the best practice answer. Take the Foreign Earned Income Exclusion to reduce your overall global taxable income. Then, use the Foreign Tax credit to assess the total percentage of your foreign income against that reduced global income amount and take the credit for the remainder of your foreign income.
This approach pulls double duty in the sense that the exclusion reduces your global income, so the tax credit becomes more valuable because the denominator in the equation used to calculate FTC is smaller.
I've had 3 HRBlock advisors do work for me. 2 of them used this approach to perfection. The 3rd was completely out of his depth, got our taxes wrong (said we owed $17k, and had to be rescued by one of the other advisors who got that number down to $5k using the approach described above).
