The markets have just taken a serious hit in response to Trump’s aggressive new tariffs. Stock portfolios are down across the board, and while this isn’t good news for most investors, it presents a rare opportunity for a very specific group: U.S. citizens and long-term residents who just crossed the $2 million net worth line and were classified as “covered expatriates.”
If you were holding off on renouncing because your net worth had crept over $2 million, the market just did you a favor. Thanks to the recent plunge, you may now be under that threshold — and that means you may be able to renounce without triggering the exit tax.
Why This Matters
If you’re considered a “covered expatriate” when you renounce U.S. citizenship, the IRS hits you with an exit tax — a pretend sale of all your assets at market value the day before you renounce. That tax bill can be enormous, especially if you have appreciated stock, real estate, or business interests.
But one of the three tests to determine if you’re a covered expatriate is the Net Worth Test. If your net worth is under $2 million at the time of expatriation, and you meet the other compliance requirements, you’re not subject to the exit tax.
So let’s be clear: if your portfolio has taken a beating and you’re temporarily under $2 million, this could be your window.
What You Should Do Right Now
Run a current net worth valuation – Today. Don’t wait. The market could bounce back quickly, pushing you back over the $2 million threshold.
Check your tax compliance – You must certify full compliance for the past five years. If you’re not up to date, don’t panic — our team can get you compliant in as little as 2 weeks.
Read our step-by-step guide – We’ve put together everything you need to know in our comprehensive article: Renunciation of U.S. Citizenship Abroad
Talk to an expatriation expert – Timing, paperwork, and strategy all matter. Contact us through the guide above — we’ll make sure you get it done right, and on time.
We don’t know how long this opportunity will last. If you missed the chance to renounce before because your net worth was just over $2 million, you may now be under — but markets move fast. If renouncing is part of your long-term plan, the time to act is right now.
