For business (including rental) you should deduct those schedule E expenses on the 1116 as expenses directly related. Enter $10k foreign income and $6k in 1116 deductions directly related to the $10k income.
What's happening is that that section of the 1116 is figuring out your net foreign income. You get to subtract the expenses directly related to the income (schedule E in your case but could be schedule E or perhaps investment fees or something else in other cases) and a proportional share of the standard deduction. The standard deduction is not directly related to any income so the 1116 is allocating it some to the rental income and some to the rest of your income.
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