Folks, clients have residential property overseas which they rent out.  I report the income on a Schedule E, correct?  

In the state field, do I enter "US" to indicate that the income was not local?

And how do I report the income as foreign-source so that a larger portion of foreign-source tax payments can be claimed?  It looks like if I add it to the Form 1116 by adding a new entry in Window 35.1 it double-counts the income.

Thanks!

Thanks.

Micah