US tax law imposes exit tax provisions on individuals relinquishing a 'long-term' green card, which is defined as one held for eight years or more. If classified as a 'covered expatriate,' an individual may face significant tax implications based on their net worth, income tax liability, or tax compliance. Specifically, if an expatriate has a net worth of $2 million or more, an average annual US income tax liability exceeding $211,000, or fails to certify tax compliance, they are classified as a covered expatriate. This classification triggers a 'deemed sale' mechanism, treating worldwide assets as sold at fair market value prior to expatriation, potentially resulting in taxable gains. Furthermore, gifting to US residents changes the tax landscape; the recipient may be liable for up to 40% tax on the gift's value exceeding the $19,000 annual exclusion threshold for 2026. Given that the recipient is a US resident, these rules would apply, emphasizing the need for careful planning around gifting and relinquishing green card status.