Yes, you will report the income as foreign earned income and the capital gains in the investment portion of your return as you suggest. The reason why your Foreign Tax credit may appear low is that your US tax liability may have been less than your Foreign Tax. If this is the case, then the full amount of your foreign tax was not utilized this year and the remainder is a carryover for the next ten years.
The foreign tax withheld is reported as a foreign tax and will be reported in the foreign tax credit section. There is no other special treatment afforded to you other than to try to reclaim it as a foreign tax credit. From what you have already told me, I gather that you haven't reported this yet. Once reported, it seems that it will add to the carryover amount for the next ten years.
@Daph3
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