If I gift assets before expatriating and bring net worth below $2 million, does that automatically keep me out of covered expatriate status?
I am from Israel and I am reviewing a possible expatriation from long-term resident status. My current net worth is slightly above $2 million. A planning adviser floated the idea of making gifts before expatriation so that the balance sheet on the actual exit date falls below the threshold. That sounds too simple to me.
I am not asking whether gifts are legal. I am asking whether the IRS just looks at the final-day net worth and moves on, or whether Form 8854 expects a disclosure if assets changed significantly during the years before expatriation.
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