The alternative minimum tax (AMT) is designed to ensure that taxpayers with high economic income pay a minimum level of tax, even when regular tax benefits significantly reduce their tax amounts. The AMT is calculated as the excess of the tentative minimum tax over the regular tax and is owed only if it exceeds the regular tax. To compute the tentative minimum tax, taxpayers must adjust their taxable income by eliminating or reducing certain exclusions and deductions, subtract the AMT exemption amount, apply AMT tax rates, and subtract the AMT foreign tax credit. Although some tax credits reduce regular tax, they may not affect AMT liability. The AMT has its own set of exemption amounts and tax rates, and taxpayers can apply special capital gain rates if they are more favorable than AMT rates.