Selling guns legally
I live in Alabama and bought several guns through Gunbroker, I bought several new guns at very good prices. There are no gun dealers close that can offer prices at close to what I paid, my question is can I sell these guns and make a profit and still be legal? I understand that I need to sell only to interstate and may be a good idea to get copy of drivers license but what does the ATF say about selling for a profit and how many can you sell for a profit?
Thanks in advance for your help ...........Brad
Thanks in advance for your help ...........Brad
0
-
There is no set number of firearms an unlicensed individual can sell before the BATF considers him to be engaged in the business. The reasoning behind this is simple- if the BATF had a regulation that stated flat out that if you resold 10 firearms per years you needed an FFL, you would simply have thousands of people selling 9 firearms per year and skirting the regulation entirely. You can resell your guns to a resident of your home state or to someone out of state if the transfer is made through an FFL or the firearm is a Curio and Relic and the buyer has a valid C&R license.
My own obervations on this is that the BATF frowns on non licensed people buying and then reselling new firearms. This does not mean that it is illegal, but it raises attention to you and it indicates that you are probably engaged in the business and should be licensed. Of course you can sell as many firearms as you wish to FFL holders, but when you get into private party transfers these become retail sales and I'd begin to think twice about selling several guns that way in one year. The entire reason behind doing the private party sales is that you expect to receive more money for your firearms than a dealer like myself would offer you. This should indicate a desire for selling at a profit and not due to a loss of interest in a few firearms or a financial hardship that forces a sale- things the BATF looks for.
My own tax man who is an old friend, customer, and firearms lover breaks this all down into four catagories: Dealer, investor, speculator, and collector. I am a dealer, I make my living buying and selling firearms for (what I hope) profit. At the other end
is the collector, these fellows just want to have a nice collection of firearms and simply buy, sell, or trade in order to improve their collections. Any profit a collector would make on a sale would go right back into buying another gun for their collection. An invester is generally in for the long haul and won't take his profits for many months or even years. You sound more like a speculator to me. You buy cheap on auction and then hope to cash in quickly with retail sales. My own opinion is that you should have an FFL to be doing what you are planning, but that is only my opinion.
Mark T. Christian0 -
As usual, very helpful advice from Mark.
The only thing that I can add is to recommend that you read the advice to sellers on the Gunbroker website. One critical thing that you must do is get a signed photocopy of the receiving dealer's FFL, and verify it on the ATF website. I would also be cautious in selling a gun directly to an unlicensed individual within my own state, since you won't be able to do the "Brady check" that dealers normally do. Think about the possible consequences if something went wrong, and a gun you sold ended up in the hands of some moron who was a serial sniper, terrorist, or shot up a school. Trust me, everyone in the chain of possession of such a gun gets close scrutiny, and you don't want to end up in the jail cell next to the moron.
Dealers like Mark must know the law well, and, hopefully, carry liability insurance. You have to balance making a couple of hundred dollars profit against the possibility of thousands of dollars of legal fees & several years in federal prison.
Neal0 -
Personally I would always transfer any firearm from your local FFL. CYOA.
Remember Ruby Ridge.0 -
I also live in Alabama and know a fellow that started out small doing what you want to do. He unfortunately kept getting bigger and did it at the smaller gunshows around here. We kept telling him to watch what he was doing, but he didn't. The ATF arrested him last year and he is waiting to go to trial for selling without an FFL. Dealers that I know have told me that the ATF is currently on the lookout for private sellers here in Alabama. 0 -
I am no expert. I'm on this board with a visitor license! There seems to be a great difference from state to state on just what the rules are. In Indiana, I can buy from a private party and have no record of the transaction. I can sell, though I rarely do, with the same rules. When I do sell, to offer some level of protection to me, I ask for an IN carry permit. Some guys will just ask for a drivers license. Some won't ask for anything. As far as I know, I could sell a million firearms to IN residents and have no record of any of the transactions. Try that in Chicago!
cbxjeffIt's too late for me, save yourself.0 -
Jeff, I am sure Pearyw's buddy in Alabama said the exact same thing- no one will ever know or find out how many guns I sell. Since there is very little point in having the BATF look into dealings in states like California where all private sales must go through dealers and the number of private handgun transfers is limited to 5 per year (there are a few exceptions) the ATF can concentrate its efforts on states like Alabama where private sales are pretty much unregulated.
While you could probably get by for years selling hundreds firearms to private individuals, just because you are not caught does not make it legal and bahkrlhl's post indicated that he wanted to know if what he was planning on doing was legal under the law. My opinion is that it is not lagal and I think Peary's friend will second that from his jail cell. I am of the belief that if you want to be a gun dealer then pay the money and get yourself a license. Once you have your FFL you can do exactly what bahkrlhl is talking about doing with no problem. If he can find good guns at such low prices on auction he could probably become a big success in this business.
Mark T. Christian0 -
Mark,
Certainly, I agree with your comments. I used the word "million" somewhat is jest. My point was that in IN, and I would think some other states, there is little difference in private gun transactions compared to used cars or garage sales. There comes a time, however, that a person is over the line. I believe years ago I looked into the IRS thoughts on profits from a hobby. Actually, there is good reason to become a legit business. Gun sales might not be the best example, because of the record keeping, but profits from a hobby do not have the advantages of business expense deductions. Sure the profits are tax free, that is until Mr. Auditor calls you. Then, room and board is free!
cbxjeffIt's too late for me, save yourself.0 -
OK if you say what bahkrlhl wants to do is illegal then why was it ok for the LEO (that posted here a few months ago) to buy several cheap handguns with the intent to sell them to a gun buy back for profit? 0 -
Are you speaking of the same LEO who gave the handguns in question to his wife who then handed them in and collected the cash? The last I heard he was forced to return the money, was docked an equal dollar amount from his paid leave, and was given a letter of reprimand which went into his jacket (although I understand the last two items were under appeal by his union). It does sound like he made any kind of profit on that firearms deal to me at all! In fact, a couple of more transactions like that one and he'd be broke. The point of the question was making a profit on the sale of the firearms and the LEO clearly did not profit in the least. Unless you would consider a deal like that a money maker?
Mark T. Christian0 -
Mark Nailed it.
"Lead, Follow, Or Get Out Of The Way."
Charlie0
Please sign in to leave a comment.
Comments
10 comments