Sales of multiple firearms from a collection - dangers

I write this article to warn of possible dangers with ATF on multiple sales of firearms from a collection.  While normally totally legal,  where you are regularly selling on sites such as Gunbroker.com  -- you may attract the attention of ATF.  The problem,  obviously -- is that while it is perfectly legal to buy and sell to enhance your collection -- once you start doing it as a "business" -- that is with the motive that you will be doing it for primarily as a profit making venture vs. the long term -- you are walking a very thin line between what is legal -- and what is a federal felony.  In order to sell firearms as a "business" -- you need to be licensed by the feds as an FFL  (federal firearms licensee).   So --  while I understand that larger collectors are buying multiple guns looking for ones they consider "perfect" for their collection -- and selling the ones that don't meet those expectations -- that constant selling off of the rejected ones -- "looks" like a business.

So -- how do you handle this from a practical side -- because sooner or later -- ATF may zero in on you, and check you out.

Well -- my first suggestion is that you keep a list of the firearms you buy -- with the date, make and model, and purchase price.   You also mark the quality as "acceptable",  "fine", or "not acceptable".   You also mark whether you shoot the firearm.  You note the date you sell it -- and where you ship it to -- and if it's out of state -- it better be to an FFL!    And . . .  one other suggestion you're not gonna like -- you keep each firearm you purchase for at least one year.

Why?

Well . . .  if you're making a profit on each of the guns you sell -- even if they don't live up to the expectations of your collection -- it may look like a business.  However,  if you're primarily or equally selling for a loss or break even -- that doesn't look like a "business" to me!!!   With a list, as I've suggested,   you have a comparison on how many guns you sold for a profit vs. a loss (even a very slight loss) or break even.   If you figure in shipping -- maybe it's more of a loss.  But, overall -- selling off crap (pardon the expression) should not be something where you're making an appreciable profit over the course of a year.  The closer you are to a loss -- or break even -- the more it looks like a "collector" -- and the less it looks like a "business for profit".

Likewise,   if you have fired a firearm -- you've affected the value in a negative way.  So,  the more you're testing your collection -- the less it looks like a business.  You "look like" a collector.  You  look like someone who enjoys the item.  In fact,  just taking it out once and putting ten rounds thru it is enough.  It shows you were interested in the firearm as a "piece" vs. as "merchandise" -- because you're making a personal evaluation, and also having fun with it.  The more you shoot it -- the less likely it's anything but part of a "collection".   That's why that can be an important part of the "list" I suggested.

And,  the thing about a year?   Well . . .  that's because where a dealer takes a gun out of inventory for at least a year -- and puts it into their personal collection -- that's the "approved" time per the federal statutes.  So, it can be argued -- if that's OK for an FFL -- it should be OK for you,  too.

Now,  I'm not saying you need to follow this article word-for-word.  I'm just saying that the more concerned you are about ATF misunderstanding what you're doing -- and the more concerned you are about preserving your Second Amendment rights (cause a felony conviction in federal court ends that real quick) -- the more you should try to adopt at least some of my suggestions.

Last, but not least -- how is ATF really gonna zero in on you?

The likelihood is that they will already have looked at the volume of sales,  prices,  and likely profit or loss.  They'll have an agent or confidential informant set up a buy of a firearm or firearms from you on a face-to-face transaction.  When you meet--  the buyer will have a friend with him,  or maybe just themself.  At the last minute the friend or the agent will let it slip that he or she  "may have" or "does have" a felony conviction,  or domestic violence conviction,  or got convicted once for hitting his wife, etc.   DANGER!!!!!

All of these facts are trying to set you up for a felony sale to a "prohibited person".   Selling to a prohibited person is a federal felony!   They're testing your honesty -- and trying to set you up!   If you go thru with the sale -- you're gonna be spending some time in federal prison unless you get very, very lucky -- with a really good lawyer.  (and still be -- very, very lucky)   So -- don't do it!

I tell everyone that when selling a firearm (or even ammo) -- you should ask the other person if they are a "convicted felon or have any other legal prohibition on firearms ownership".   If they say they "don't know" -- DON'T SELL IT!    They're either working for ATF -- or you're likely committing a crime, anyway -- and sooner or later -- it may be tracked back to you.   It just isn't worth the chance!  Typical private attorney fees on a simple federal case start at not less than ten grand -- and that's cheap!

So -- that's the scoop.   Of course,  if you're only selling maybe five to ten guns a year --  ATF could probably care less -- but still -- following my advice couldn't hurt.

Hope that answers some questions

jhg


copyright 2011 by jon gutmacher