Paste Special function does not work when I copy formulas in Excel

I am using Excel 2007 and I can't seem to copy and paste formulas from one workbook to another. Instead I get a dialogue box asking me if I want to use paste or paste link and to chose from a list of formats. Does anyone know if there is something that I can change in Excel to fix this problem.

It sounds like you have the workbooks open in separate instances of excel. Close one of the workbooks (and its instance of excel) and then back to the first workbook/excel. Hit ctrl-o and open your second workbook and try the copy|paste.

Are both workbooks open in the same instance of Excel. I find it difficult to know when that it is actually the case. To be sure, I use File > Open to open the second workbook instead of clicking on the file icon.