In determining AGI, what is included in the calculation?

The calculation of Adjusted Gross Income (AGI) includes all taxable profits after deductions, which encompasses a broad range of income sources. This includes wages, salaries, interest, dividends, capital gains, rental income, and any other taxable income, minus certain deductions or adjustments allowed by the IRS.

This means that while salary and wages are components of AGI, they are not the only sources that count towards it. For instance, business income and capital gains also contribute to AGI, as do other forms of income that are taxable. Essentially, AGI reflects a more comprehensive measure of an individual’s income than just salary or various singular sources.

The other options suggest limitations on what constitutes AGI. For example, only considering salary income would ignore other critical sources of income. Exempt income sources, by definition, do not factor into AGI because they are not taxable. Lastly, only taxable investments would exclude other significant areas of income like wages and business income, leading to an inaccurate calculation of AGI. Thus, option B captures the essence of AGI's inclusiveness regarding taxable profits after relevant deductions.