Since the foreign tax is less than $300, TT by default implements the exemption. This means that TT automatically inserts the tax on line 48 off the 1040 wks. The problem is that the amount on 11b has to be at least that amount to use the tax. Since it is zero, there is no tax credit. Since the exemption was utilized even though it didn't do any good, the rule is that the unused tax is "utilized." That means it cannot be carried forward. If you want to carry it forward, you have to elect not to use the exemption. If you want to carryforward, then advise and I'll forward the method.
