Schedule E and form 1116

I have a foreign rental property. This year due to renovation expenses and depreciation I had an income loss. Nevertheless I paid income taxes abroad because there I could not deduct the renovation costs as deduction.

When I fill the form 1116 to get a foreign tax credit, if I copy the values from schedule E (adding the renovation expenses and the depreciation) I end up with zero foreign credit, which does not seem correct to me, since I did pay taxes abroad.

I get confused on the Line 2 of Form 1116, where it asks for the "definitely related" expenses. Should I include the renovation expenses and the depreciation?

If I do so, the foreign tax credit becomes zero, which is counter-intuitive to me since the renovation costs are effective costs I sustained and I don't understand why it reduces my foreign tax credit.

Thanks