The mechanics of Form 8854

If you are late filing Form 8854 you will be a covered expatriate.
Someone who expatriated in 2013 would have a filing deadline for Form 8854 sometime in 2014 – the same filing deadline as applies to the final income tax return filed for 2013.
Part II applies to people who expatriated on a date between June 3, 2004 and June 17, 2008.

If the only thing you are doing in the United States is buying stocks, bonds, and holding cash than you are merely an investor but you are not engaged in a U.S. trade or business. Since you are not engaged in a U.S. trade or business, your income cannot possibly be effectively connected with a U.S. trade or business.

The upshot of finding that income is “effectively connected with the conduct of a U.S. trade or business” is that the income is taxed at the normal income tax rates (income minus allowable deductions, multiplied by the appropriate tax rate). If income is NOT “effectively connected with the conduct of a U.S. trade or business” it is taxed at a flat 30% rate, with no deductions.

In both cases, income tax treaties can alter the result. And in both cases, but people are only at risk for U.S. income taxation if the income is received from sources in the United States.