@sbs11 , I am not sure that I am understanding your comments / issue and therefore , please can you tell more of what you are trying to do.
As back-ground:
(a) form 1116 is really a computation mechanism to allocate/ identify US taxes on your foreign income ( because while tax treaties require US to give credit for Foreign Taxes paid, US chooses to recognize the full amount but allow ONLY that amount imposed by US on the doubly taxed income) and allow a max of that amount.
(b) It uses a ratio of foreign source income to world income to allocate your deductions ( standard or per Schedule--A ) and adjustments ( Per schedule- 1 /1A ) to Gross income from foreign sources.
(c) Thus you end up with allocated "taxable income" on world income and foreign source income (s).
(d) Now you can get a ratio of foreign source taxable income (s) to world source taxable income.
(e) This ratio(s) is now used to allocate the taxes imposed on the foreign source income(s).
The resultant available credit ( limited), is now available for use for the current year. However, note that FTC being a Non-Refundable credit, actual used amount may be further limited by available tax liability ( before application/use of FTC).
Given the above, I seek to understand your comments about FTC computation. I do not think SE adjustment is good example because SE adjustment should really be based on tax-home ( SE income is always where your tax-home is at the moment ). So please help me understand your issue.
pk
