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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.
Also see e.g. page 17 of the 1116 instructions for part I, line 2:
https://www.irs.gov/pub/irs-pdf/i1116.pdf
Line 2
Enter your deductions that definitely relate to the gross
income from foreign sources shown on line 1a. For example,
if you are reporting foreign business income on line 1a,
include on line 2 business expenses such as supplies and
advertising incurred as part of operating the foreign business
Unless you find more specific instructions for rental real estate, I think it is the same as a business for 1116 purposes.
The instructions of form are clear that Line 1 is the gross income. So you need to enter line 2 expenses to get to your net foreign income. (And then later TT will also take of a share of the standard deduction.)
Remember the 1116 is not giving you back the foreign taxes. Rather it is giving you back (at best) the US tax on the income the foreign country is taxing. Since US tax rates are so low, you almost always wind up paying more to the foreign country. But at least you don't pay twice. (Usually, but this is a very complex area.)
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