foreign tax carryforward

[Kea]

Client invests in a few mutual funds that contain foreign stocks and pay foreign taxes. I usually just let this carry directly to the credit section of the 1040 since they are generally small amounts.

Last year this client had itemized deductions (medical) in excess of her income. No taxable income, no foreign tax credit. I did not really pay attention to this at the time. When I did her return this year and printed it for her signature, I saw the 1116 and all the worksheets. I thought, "I don't need this for $9 in foreign taxes" and removed the forms. Poof, her refund was different. It seems the software carried forward the $26 from last year. At this point I couldn't figure out how to get the carryforward back into the return & re-did it. (Fairly simple return.) When reviewing the computations on the 1116 I saw it was including all dividends from that broker. I changed it to just the dividends from the mutual fund that paid the tax. (I'll check with client to see if other funds are invested in foreign stocks.) Anyway, due to the small amount of dividends from that one fund, the 1116 form calculates a credit of just $5.

I know these are small amounts, so I'm mainly asking for education purposes. I assume the election to not use the 1116 is made by removing the form. And I know I can't carryforward the $26 if I elect out of the 1116 for this year. How can I elect to take the whole $9 this year (no 1116) and still carryforward the $26 from 2008?

Thanks