Calulating AGL to stay within FAA guidelines

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I was wondering how you all interpret AGL. While it sounds simple enough, if you are flying in the proximity of hills/mountains does the point of measurement change based on where the aircraft is and where "ground" is? I have attached a visual aid because "I am not a smart man, Jenny." (Forrest Gump reference).

Just wondering if you assure a gradual ascent and decent on the hill, could you theoretically climb well above 400' from original T/O point and still meet the intent of the FAA's 400' suggestion?

What do you think?
 

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I think yes. But it is swings and roundabouts. If you take off and fly over a 500' valley you are above 400'.
 
I would have to agree with you, IMO
 

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