Buying A Gun To Resell?

[IcemanUnlimited]

I was wondering.. Is it still a straw purchase if you're buying a gun to resell it in a business aspect? (For profit).

For example: I want to make some extra money.. I buy 10 rifles from an FFL with the intention of selling them over time at a profit to nobody specific (in private trade). Sorta like small-time retailing. Legal or illegal?

Totally hypothetical.. Just a thought that popped in my head so I was curious.

 

[DMF]

If you have an FFL it's legal. If not it's illegal.

 

[SMMAssociates]

Iceman:

Actually, the law is more "don't make a habit out of it", and use the gun for a bit first....

TEN might get somebody's attention, even so, especially if purchased at the same time, unless you're a Mexican drug dealer.

If you buy a couple of "Super Master Blaster 5000"'s and get bored with them in a month or two, selling them, even if you made a profit, wouldn't be a problem if the Criminal and Terrorist Friendly folks currently running the country don't get their way, and it's anybody's guess if you'd get caught while selling more of them, but it gets illegal real fast. The whole thing seems to be based on intent. Buy a gun (or two) for your own use, and then dispose of it, and you're fine. Buy some for immediate sale, and you're toast....

(IANAL, and I think that this is kinda silly, but....)

Regards,

 

[jimmyraythomason]

I buy 10 rifles from an FFL with the intention of selling them over time at a profit to nobody specific (in private trade).

I don't see much profit margin (if any). Buying new at retail from a dealer and then re-selling at used prices doesn't add up to profit.

 

[TexasRifleman]

Probably illegal.

They have attempted to prosecute people for fewer firearms than you are talking about here.

It wouldn't be a straw purchase, it would be dealing firearms without a license because your primary motivation is profit, not "enhancing a personal collection" or some of the other things that are mentioned in the law.

Read Section 921 "Definitions" for what the law says "in the business" means.

http://law.onecle.com/uscode/18/921.html

(21) The term "engaged in the business" means (C) as applied to a dealer in firearms, as defined in section
921(a)(11)(A), a person who devotes time, attention, and labor to
dealing in firearms as a regular course of trade or business with
the principal objective of livelihood and profit through the
repetitive purchase and resale of firearms, but such term shall
not include a person who makes occasional sales, exchanges, or
purchases of firearms for the enhancement of a personal
collection or for a hobby, or who sells all or part of his
personal collection of firearms;

(22) The term "with the principal objective of livelihood and
profit" means that the intent underlying the sale or disposition of
firearms is predominantly one of obtaining livelihood and pecuniary
gain, as opposed to other intents, such as improving or liquidating
a personal firearms collection

Since your primary, and it seems only, goal is to make money that puts you square in the middle of trouble it would seem to me.

 

[Art Eatman]

Generally, prosecutions have resulted at gunshows where a non-licensed guy with a table bought a gun from a person and then resold it at the show. That sort of deal, anyway. He was "engaging in business" without having an FFL.

If a person buys a gun and keeps it for some length of time (with or without shooting it) and then sells it at some other venue and this is a "J. Random Occasional" event, it's not considered to be engaging in business.

 

[TexasRifleman]

If a person buys a gun and keeps it for some length of time (with or without shooting it) and then sells it at some other venue and this is a "J. Random Occasional" event, it's not considered to be engaging in business.

Generally I would agree with you, for most of us gun owners and shooters who do this stuff as a hobby because we simply like guns. My personal opinion though is that the OP would get caught in (22) above :

the intent underlying the sale or disposition of
firearms is predominantly one of obtaining livelihood and pecuniary
gain, as opposed to other intents, such as improving or liquidating
a personal firearms collection

I once bought 10 K-31 rifles, kept the nicest one and sold the other 9 at a profit over the course of a year or so. This got me one free K31. This is clearly legal because it was done to enhance a collection. By buying 10 rifles I got to pick the best, so my collection was enhanced and my motive was not profit. That I happened to make a profit did not matter, since the profit itself was not the predominant intent, just a nice side benefit.

The OP here seems to have one intent only, profit, and that's where I think he would have a very hard time if it came under ATF scrutiny. The question for a jury would be; Does 10 firearms qualify as "regular course of trade or business with
the principal objective of livelihood and profit?. I fear the answer would be yes in the case of profit as the sole intent. 1 or 2 might not be "regular course of trade" but some number crosses that threshold and only a jury can say where that number is. 10 rifles would probably do it.

 

[IcemanUnlimited]

Heh, interesting.. Not something I'd do anyway because I saw no potential profit to be made. I was just curious and felt like learning something lol. I actually sell non-firearm weapons and tactical gear as a "hobby business".

 

[dogtown tom]

TexasRifleman Quote:

I once bought 10 K-31 rifles, kept the nicest one and sold the other 9 at a profit over the course of a year or so. This got me one free K31. This is clearly legal because it was done to enhance a collection. By buying 10 rifles I got to pick the best, so my collection was enhanced and my motive was not profit. That I happened to make a profit did not matter, since the profit itself was not the predominant intent, just a nice side benefit.

Seriously?
You bought and sold nine rifles to earn a PROFIT. What you bought with that money is immaterial. You were engaging in the buying and selling of firearms to earn a profit..........that requires an FFL.

If you bought 1,000 K-31's.....and sold all but one do you think you are still enhancing your collection?
I don't and neither would ATF. The not so nice "side benefit" would be jail time for dealing without a license.

 

[Kman]

I agree,,TR that's a tough one to swallow,,10 K31's!?? The law is so written as to be a matter of opinion to the jury in which state you reside. Around here the only time the ATF will nail you is when they catch someone selling across state lines FTF,,or find you actively reselling in the same day. I visit lots of shows in the area and have witnessed verbal warnings to people and a bust of a guy who was selling handguns out of state. General rule of thumb is if you buy it,,,take it home, and always check for ID.

 

[tyeo098]

I bought a roughed Remmy 700 from a pawn shop down in Orlando. $150 OTD (It was pretty rough, somebody had camotaped the wood stock, and some chunks were missing). But I knew that since it was a 700, and since all the metal was good, I could resell it at any time for a nice profit.

Some 8th grade woodshop woodwork on the stock, some polishing here and there, a stipped and restained the stock, and BAM (after a year of bright flashes with russian .30-06 "hunting" fmj's) sold it for $400.

I was very proud of myself for fixing up that rifle.

Moral of the story: If youre looking to make a profit, buy a "deal" on something that looks like it rolled around in the back of a truck for a couple years, fix 'er up, play with it for a while, and sell it for something better.

 

[TexasRifleman]

You bought and sold nine rifles to earn a PROFIT. What you bought with that money is immaterial. You were engaging in the buying and selling of firearms to earn a profit..........that requires an FFL.

I agree,,TR that's a tough one to swallow,,10 K31's!??

No, it does not require an FFL, and I have a letter from ATF showing their opinion that it's well within the confines of "enhancing a collection" to do just that since the primary intent, as the law clearly says, is not profit.

If you buy 1000 rifles to keep 1 you have a hard time arguing that profit is not the intent.

I purchased 10 K31's with my C&R, which was the minimum order from the source I found. I kept the nicest one, thereby enhancing my collection. A profit of less than $100 is clearly not "predominantly one of obtaining livelihood and pecuniary gain" as the law states is required before it's a prohibited act.

If I did it several times a month, maybe. Once in 4 years is simply not something that requires an FFL. Yes I know a C&R is sort of an "FFL" but it is subject to the same requirements as far as not engaging in the business.

ATF agreed with me, and they have agreed with several folks who have asked the same question. It's not particularly uncommon for folks with C&Rs to do.

The difference here is the OP has NO intent other than profit, which removes his coverage under the rest of the law.

 

[medalguy]

That's the problem with our current laws, there's no hard and fast interpretation of just what is legal and what is not. I would think that buying ten guns, knowing you were going to resell 9 of them, would certainly qualify for the profit motive. Doesn't matter if you were planning on using that profit to increase your collection or pay a doctor's bill. You ended up with more money that you had invested in the 9 guns. Hence, a profit.

Your ATF agent may have agreed with your reasoning but the next agent might not have. I think intent is, or should be, the deciding factor. If you buy a gun at a show, walk around with it, and someone offers to buy it from you, that should not be considered as buying for the purpose of selling, with profit as a motive. You bought it for your collection, but someone else wanted it worse than you did, and this should not be an issue but it clearly has been for some agents.

But to get back to your original question about whether it's a straw purchase, no it is not. However I do think I would NOT buy 10 guns and expect to sell 9 of them for a profit, and not run afoul of BATF. Any time you buy a gun expecting to sell it for a profit, and in fact do, that is dealing with the intent of making a profit. Lacking the profit, why would you buy the guns in the first place? Just my .02.

 

[fbernar]

Trading/Selling Guns

Anyone here trade for or buy guns just to sell them for a small profit? I understand no one will get rich doing this, but does anyone here do it?

 

[Ala Dan]

Nope, against the law if you don't have a Federal Firearms License (FFL)~!

 

[Shadow 7D]

what he said...

 

[pa4445]

Glad I never made money at it or I would be a criminal.

I guess being a poor trader is a blessing in disguise.

 

[The Lone Haranguer]

There is a distinction between selling your personal collection, of which some individual guns may sell for more than you paid for them, and making an actual business, even "on the side," of it. For that, you need a FFL or you will be in violation of the law.

 

[Shadow 7D]

trade for or buy guns just to sell them for a small profit?

UM
NO
read the law, as we here at THR try to follow it,
and that helps promote the gun culture and shooting sports as responsible people, not rednecks

NOW
that said, I have bought what I thought was a good deal
mostly cause I couldn't let it pass, and if I never found a good use for it, I knew I wouldn't loose money.

BUT, I didn't buy it TO SELL TO SOMEONE ELSE, as that's dealing, and you need a FFL for that.

 

[fbernar]

Sorry, I meant occasionally doing this. This would allow me to play with guns I don't really want to keep longterm.

The law states that it is illegal if:


a person who devotes time, attention, and labor to dealing in firearms as a regular course of trade or business with the principal objective of livelihood and profit through the repetitive purchase and resale of firearms, but such term shall not include a person who makes occasional sales, exchanges, or purchases of firearms for the enhancement of a personal collection or for a hobby, or who sells all or part of his personal collection of firearms;

Now let’s take in one more step and see what they mean by ““with the principal objective of livelihood and profit” as defined in US Code Title 18 Chapter 44 921 (a) (22):

(22) The term “with the principal objective of livelihood and profit” means that the intent underlying the sale or disposition of firearms is predominantly one of obtaining livelihood and pecuniary gain, as opposed to other intents, such as improving or liquidating a personal firearms collection: Provided, That proof of profit shall not be required as to a person who engages in the regular and repetitive purchase and disposition of firearms for criminal purposes or terrorism.

I don't mean doing this weekly or monthly. I just mean occasionally to play with a gun I wouldn't want to keep otherwise for longterm. Sorry, I should have been more clear.

 

[Bubbles]

Anyone here trade for or buy guns just to sell them for a small profit?

Yup. If you're going to do it, get a license.

 

[M-Cameron]

Sorry, I meant occasionally doing this. This would allow me to play with guns I don't really want to keep longterm.

The law states that it is illegal if:


a person who devotes time, attention, and labor to dealing in firearms as a regular course of trade or business with the principal objective of livelihood and profit through the repetitive purchase and resale of firearms, but such term shall not include a person who makes occasional sales, exchanges, or purchases of firearms for the enhancement of a personal collection or for a hobby, or who sells all or part of his personal collection of firearms;

Now let’s take in one more step and see what they mean by ““with the principal objective of livelihood and profit” as defined in US Code Title 18 Chapter 44 921 (a) (22):

(22) The term “with the principal objective of livelihood and profit” means that the intent underlying the sale or disposition of firearms is predominantly one of obtaining livelihood and pecuniary gain, as opposed to other intents, such as improving or liquidating a personal firearms collection: Provided, That proof of profit shall not be required as to a person who engages in the regular and repetitive purchase and disposition of firearms for criminal purposes or terrorism.

I don't mean doing this weekly or monthly. I just mean occasionally to play with a gun I wouldn't want to keep otherwise for longterm. Sorry, I should have been more clear.

if you buy a gun with the intent to sell it for profit......its illegal

it doesnt matter how often you do it

it doesnt matter how long you hold it for

and it doesnt matter what you do with it in the mean time.

period.

 

[TexasRifleman]

I would think that buying ten guns, knowing you were going to resell 9 of them, would certainly qualify for the profit motive. Doesn't matter if you were planning on using that profit to increase your collection or pay a doctor's bill. You ended up with more money that you had invested in the 9 guns. Hence, a profit.

But you are not reading the law. The law clearly says that profit alone is not an indicator of whether or not you need an FFL. You're picking and choosing what part of the law you read. Read it all, in it's entirety, not just phrases picked here and there.

I think intent is, or should be, the deciding factor.

And it is, if you read the law. There is no question that it's about intent. It specifically says it's all about intent.

Any time you buy a gun expecting to sell it for a profit, and in fact do, that is dealing with the intent of making a profit. Lacking the profit, why would you buy the guns in the first place?

And again, profit alone is NOT the quantifier of whether or not an act is prohibited. You're hung up on profit and that's simply not what the law says.


In the case of the OP here you are correct because profit is his ONLY intent or at the very least his PRIMARY intent, therefore he needs a license. In my case, I did not INTEND to make a profit, I INTENDED to pick the nicest rifle from a crate of 10 so I could have a nice K-31 in my collection. I waited a while to decide and in the mean time the price of K31's went up and when I sold the other 9 I happened to make about 12 bucks each on them. That was not my INTENTION in buying the guns, it just worked out that way. And the law is VERY clear that it's a perfectly legal thing to do, if you will actually read it.

This isn't that complicated. Read it again. it's only a prohibited act if:

the intent underlying the sale or disposition of
firearms is predominantly one of obtaining livelihood and pecuniary
gain, as opposed to other intents, such as improving or liquidating
a personal firearms collection

That does NOT say you can't make a profit if you improve or liquidate your collection. It says if your PRIMARY goal is profit it's a prohibited act.

As far as gun laws go frankly that one's about as clear as they get.

 

[Jim K]

BATFE has been looking at multiple purchases under a C&R license because to many folks do exactly what TR is doing, buying a quantity of guns, picking the best and selling the rest. They consider that being a dealer. Because the law is (deliberately) vague, they don't usually prosecute for one instance, but if the pattern repeats (say ten guns every week for months) they definitely will take action, and at the least revoke the buyer's C&R license.

The real heat comes on if one of those guns turns up at the wrong place at the wrong time, with maybe a VIP involved. Then, even a legitimate dealer who has followed all the rules can have problems; an "unlicensed dealer" will go to jail.

Jim

 

[Guillermo]

It says if your PRIMARY goal is profit it's a prohibited act

the way I understand the law

and I am not an attorney

you can't buy a gun with the idea of selling it for a profit. That requires an FFL.

Buying a group of guns to get one (selling those you didn't want) is legal because getting the one was the reason. If you make a profit...so be it.

The only way that they can prove intent to make a profit (if you keep your mouth shut) is if you repeatedly do it.

After all, if you buy a gun and then 10 seconds later change your mind you are legal. BUT it sure looks suspicious. Like the unlicensed guy at the show that guys a gun then sets it on his table with a higher-than-he-just-paid-for-it price tag.

In this situation I would advise you not to do the deal.

Why? Mostly because you talked about it on the internet and your intentions make the act illegal.