don't know if this IRS webpage helps
https://www.irs.gov/individuals/international-taxpayers/foreign-tax-credit-how-to-figure-the-credit
Foreign Tax Credit limit
Your foreign tax credit cannot be more than your total U.S. tax liability multiplied by a fraction. The numerator of the fraction is your taxable income from sources outside the United States. The denominator is your total taxable income from U.S. and foreign sources.
I take taxable income to mean your net schedule E for this foreign property (after conversion to US $) and also an allocation of the standard or itemized deduction, whichever you used.
since this will be a loss no FTC would be allowed. This seems consistent with the reading of IRS PUB 514.
the purpose of the FTCis to avoid taxation by two countries on the same income. However, since you have a loss for US purposes, there is no double-taxed income.
you could opt to deduct the foreign taxes on line 6 of schedule A. Line 6 is not subject to the $10K on taxes.
you might also want to see IRC code sec 904 which is the one that details the computation of the fTC
https://www.law.cornell.edu/uscode/text/26/904
