NFA Question

[damien]

Sorry if this is not the correct forum. I did not see an NFA forum. Please move this if I made a mistake. If this is not the right board, please suggest a different board and I will go over there and ask.

I live in Illinois and have a pretty good collection. For some time I have been itching to pick up something full auto to complement the collection. Obviously, this is frowned on in Illinois. I live near the border with Indiana. Additionally, I visit both Nevada and Texas twice a year.

So it dawns on me that NFA weapons are expensive and keep going up. Some day I am going to move out to Texas to escape the hellhole that is Illinois. Texas has the sort of high tech jobs in Dallas and Austin that I do and the political climate suits me better. But I can't make this move yet.

What I want to do is buy a Class-3 gun in another state and keep it there. I want to do everything legally. I own a subchapter-S Illinois corporation. How can I set this up?

I know the GCA prohibits purchasing handguns in states other than your residence. There is no prohibition on long guns. If I could find a shop willing to store a gun for me (or a bank safe deposit box - some are 24" deep which is more than enough for an AR-15 lower), would it be possible, feasible, and legal to use the corporation to buy a long gun in a NFA state and simply store it there?

Once purchased, what does it take to move an NFA gun to a different NFA state?

Any ideas would be greatly appreciated. Thank you.

 

[shark3-1]

My only advice would be to NOT use the corporation to acquire the MG.

1. The corporation needs to be paid yearly
2. The MG will be a part of the corporation's assets.
3. Any liability that the MG incurs will effect the corporation.
4. When the corporation dissolves, the MG will have to be re-registered, or confiscated.
5. In the event of your untimely death, your MG cannot be transferred to your family without re-registering it (if that is even possible).

Go with a transferrable living trust. Your NFA dealer can help you, but it is much simpler and better.

As to buying it and keeping it out of state, I believe that you COULD keep it on a form 3 with your dealer until you move, but I have no idea how long you can keep it there.

 

[RNB65]

TFL has a dedicated NFA forum --

http://www.thefiringline.com/forums/

Also, visit AR15.com.

 

[damien]

More Questions

As to buying it and keeping it out of state, I believe that you COULD keep it on a form 3 with your dealer until you move, but I have no idea how long you can keep it there.

I am giving thought to storing it with a dealer as I mentioned in the original post. But I am not sure this is the best idea. I think there may be a risk to keep it with a dealer. The dealer could go out of business or it could be stolen. That was why I was thinking that keeping the lower receiver in a safe deposit box might be a good idea.

As for the company route, I am not sure many of the enumerated issues are really problems other than inheritance. The company is a continuing enterprise for my consulting work that I pay the franchise fee on every year anyway - it is not going to be dissolved any time soon. As for the company being assigned liability, that seems to me to be a huge plus, not a huge minus. Ditto for the company having the MG as an asset. It has my computers and a car as assets too. In the end, it doesn't matter as I control the company and by proxy, all its assets. But I will look at the trust idea, so thank you.

Does anyone see any legal problems with an Illinois resident buying a MG in Texas via either a trust or an S-corp?

 

[wdlsguy]

See the posts by tony_k in this thread. It sounds like the corporation would need someone living in the NFA friendly state to sign the 4473.

 

[damien]

Thinking...

wdlsguy,

You may be right. I was sort of going under the idea that "Even though I live in Illinois and have to obey Illinois laws while here, I can travel to another state and obey that state's laws while there". This is true in general, of course. I can go to Indiana and buy fireworks. I can go to certain states and drive a little faster than legal in Illinois. I can buy any type of property in any other state whether or not it is legal in Illinois. But the one exception seems to be guns. First of all, you can't buy a handgun in a different state, NFA handgun or otherwise. Now I am getting the impression from here and over at TheFiringLine that the ATF is going to require an street address in the other state also, even for long guns. So this may well be impossible, without getting a full blown second residence.

Maybe I will have to expedite my move to Texas, or at least move to Wisconsin (which would not really change my commute that much anyway!)

 

[shark3-1]

Yes, I understand that you have a successfull corp, and that right now it works fine. I was trying to let you know that the Trust has ALL the same benefits, but NONE of the negatives.

 

[damien]

OK

OK, I will certainly look into that with an NFA dealer and probably a lawyer, after I relocate unless I can figure out how to do this now as a non-resident purchase in an NFA state.

 

[Bartholomew Roberts]

1. The corporation needs to be paid yearly

Depends on the state law.

2. The MG will be a part of the corporation's assets.

3. Any liability that the MG incurs will effect the corporation.

Yes, these two things are the same regardless whether you go the trust route or the corporation route. An MG would be part of the trust assets and liability occuring from the MG may affect the trust assets.

4. When the corporation dissolves, the MG will have to be re-registered, or confiscated.

Corporations are perpetual in most states and only dissolve if you fail to pay your taxes, submit paperwork or fail to meet some other state regulatory law; but they are almost always more work to maintain than a trust.

5. In the event of your untimely death, your MG cannot be transferred to your family without re-registering it (if that is even possible).

You should definitely talk to a lawyer; but if you have done things correctly, this issue would never come up in the first place. In any case, an MG can be transfered to heirs tax-exempt on a Form 5.

I was trying to let you know that the Trust has ALL the same benefits, but NONE of the negatives.

A trust has the follwoing benefits over a corporation:

1) Easier to establish (in most states you just have it notarized)
2) Less expense to establish it and maintain it (usually no filing fees or annual paperwork)
3) Trust stays alive without any additional work on your part
4) Trust automatically disposes of your property in the event of untimely death

A corporation has these benefits over a trust:

1) It is perpetual (subject to paperwork and tax requirements). It exists as long as these requirements are met.
2) Officers of the corporation may legally possess machine guns that are property of the corporation. This is practically the only way I know of to allow multiple people to possess the same NFA item legally without the direct supervision of the registered NFA owner.

For most people a trust is superior to a corporation; but each has its own tradeoffs. It is probably worth the few hundred dollars to talk to a lawyer and see which one is best suited for you.