Selling guns you don’t like

[Boxcar68]

Hey guys. Thanks for the info. It’s been very helpful!

 

[tomrkba]

It depends upon the cost to you. If you really hate the gun, then the "cash flow" to get something else is all that matters. Calculate the loss and decide if you can stomach it. Consider yourself fortunate if you break even; today's market is definitely a seller's market, so you should not have too many problems.

But, this is also a good lesson: only buy one and test it first. I tend to use gun classes as my way of proofing a gun.

 

[dogtown tom]

Hey guys. I was reading the legal section here and it seemed informative so I signed up to post a question. Let’s say you sold off your collection of firearms that you’ve had for years, and shipped them to FFLs of the buyers, so the correct paperwork could be done for the transfers. Nothing private , all have 4473’s done on them.

You then see a type of rifle you’ve wanted for a long time come in stock. They never are in stock and the price is amazing. With the election coming up You panic buy 3 using the profits from selling your old collection. Figuring you can shoot two and save one in the closet for your son. You get them, and realize the stock sucks and cannot be changed out. You take one to the range and hate the length of pull. You site it in and accuracy sucks. You are just really disappointed with your purchase. And you have three! You sell them all. One on gunbroker (and make a few hundred dollars) and sell the other two on a forum specifically taking a loss, so you make zero net profit. You only ship them to FFLs again and form 4473’s are done.

You then buy several guns you like and keep them and don’t sell anything more. Would selling your collection and buying those three rifles of same make model and caliber, and then realizing you made a huge mistake and getting your money back out of them to buy what you want be a problem? Would no longer having them just a week and a half later, be a major issue?

Buying one gun and being "disappointed" is one thing, buying several guns of the same kind or type and being disappointed in all of them? Yeah, good luck on that.
https://www.atf.gov/file/100871/download

 

[Boxcar68]

Buying one gun and being "disappointed" is one thing, buying several guns of the same kind or type and being disappointed in all of them? Yeah, good luck on that.
https://www.atf.gov/file/100871/download

Hmm. I was reading some case law and it seems like a lot of folks need to have intent to buy and sell and make a business out of it. Not a one time decision with a make model they think they will like and don’t. Being disappointed with all Of them makes sense because they are the same make model and the ergonomics is not compatible for the guy. If someone wants to buy them and the guy can get his money back and move on with life and he never sells anything again, you would vote that he can’t? And If you were a juror you feel he should serve hard time in federal prison over this situation and have his life permanently ruined for doing so?

 

[tomrkba]

"dogtown tom" is just babbling. People are allowed to buy and sell guns if they are not in the business of doing so. Even in California, where the limit is five per year, selling three rifles is not a problem.

 

[Outlaw75]

Hmm. I was reading some case law and it seems like a lot of folks need to have intent to buy and sell and make a business out of it. Not a one time decision with a make model they think they will like and don’t. Being disappointed with all Of them makes sense because they are the same make model and the ergonomics is not compatible for the guy. If someone wants to buy them and the guy can get his money back and move on with life and he never sells anything again, you would vote that he can’t? And If you were a juror you feel he should serve hard time in federal prison over this situation and have his life permanently ruined for doing so?

I'm not a lawyer or an expert on gun law, but from what I remember reading there is an element of regularity to it. Like say, you're doing that two or three times a month for a year. Then it might be considered you're dealing in firearms without a license. I wouldn't think one instance would cause any trouble. Hopefully @Spats McGee or @Frank Ettin will be along and set everybody straight.

 

[Frank Ettin]

....People are allowed to buy and sell guns if they are not in the business of doing so. ....

Now you're babbling.

The question is whether one is in the business of dealing in firearms, and that's not necessarily an easy question to answer. Of course a seller without a license is going to claim he's not, but he won't have the final say. If he's really unlucky, the question will wind up being answered by the jury at his trial.

Under federal law, one needs an FFL to engage in the business of a dealer in firearms. "Engaged in the business" is defined at 18 USC 921(a)(21)(C), emphasis added:

(21) The term “engaged in the business” means—

(A)...

(B) ...

(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;...

The operative concepts are (1) devoting time, attention and labor; (2) doing so regularly as a trade or business; (3) the repetitive purchase and resale of guns; and (4) intending to make money.

"Livelihood" simply means:

1: means of support or subsistence

Nothing in the statutory definition of "engaged in the business" requires that it be one's only business or means of support. It could be a side business, a secondary business or one of several ways you have of bringing money into the household. What matters is that you're doing it regularly to make money. You don't even necessarily need to make a profit to be "engaged in business." People go into business all the time and wind up not making money. It's not that they're not engaged in business; it's just that they're not very good at it.

But an occasional sale is not being "engaged in the business." Where is the the line between an occasional sale and the repetitive purchase and resale? That's not clear from the statutes, so let's look at some case law.

1. The Third Circuit, in upholding a conviction of dealing in firearms without a license noted (U.S. v. Tyson, 653 F.3d 192 (3rd Cir., 2011), at 200-201, emphasis added):

   ...By the statute's terms, then, a defendant engages in the business of dealing in firearms when his principal motivation is economic (i.e., “obtaining livelihood” and “profit”) and he pursues this objective through the repetitive purchase and resale of firearms. Palmieri, 21 F.3d at 1268 (stating that “economic interests” are the “principal purpose,” and “repetitiveness” is “the modus operandi ”). Although the quantity and frequency of sales are obviously a central concern, so also are (1) the location of the sales, (2) the conditions under which the sales occurred, (3) the defendant's behavior before, during, and after the sales, (4) the price charged for the weapons and the characteristics of the firearms sold, and (5) the intent of the seller at the time of the sales. Id. (explaining that “the finder of fact must examine the intent of the actor and all circumstances surrounding the acts alleged to constitute engaging in business”). As is often the case in such analyses, the importance of any one of these considerations is subject to the idiosyncratic nature of the fact pattern presented...

   
   
2. And the Fifth Circuit noted (United States v. Brenner (5th. Cir., 2012, No. 11-50432, slip opinion), at 5-6, emphasis added):

   ...the jury must examine all circumstances surrounding the transaction, without the aid of a "bright-line rule". United States v. Palmieri, 21 F.3d 1265, 1269 (3d Cir.), vacated on other grounds, 513 U.S. 957 (1994). Relevant circumstances include: "the quantity and frequency of sales"; the "location of the sales"; "conditions under which the sales occurred"; "defendant's behavior before, during, and after the sales"; "the price charged"; "the characteristics of the firearms sold"; and, "the intent of the seller at the time of the sales". Tyson, 653 F.3d at 201.

   
   
3. The Sixth Circuit noted (United States v. Gray (6th Cir., 2012, No. 11-1305, slip opinion), at 8):
   

   ...However, "a defendant need not deal in firearms as his primary business for conviction." United States v. Manthey, 92 F. App'x 291, 297 (6th Cir. 2004)....

   
   
4. And in upholding Gray's conviction the Sixth Circuit also noted (Gray, at 8-9):
   

   ...We have previously held that evidence was sufficient to support a conviction under § 922(a)(1)(A) where it showed (1) that the defendant frequented flea markets and gun shows where he displayed and sold guns; (2) that the defendant offered to sell guns to confidential informants on multiple occasions and actually sold them three different guns on two different occasions; (3) and...that the defendant bought and sold guns for profit. See United States v. Orum, 106 F. App'x 972, 974 (6th Cir. 2004)...

   
   
5. In affirming a conviction of dealing in firearms without a license, the Ninth Circuit stated (U.S. v. Breier, 813 F.2d 212 (C.A.9 (Cal.), 1987), at 213-214, emphasis added):
   

   ...Courts have fashioned their own definitions of the term. For example, we have previously stated "that where transactions of sale, purchase or exchange of firearms are regularly entered into in expectation of profit, the conduct amounts to engaging in business." United States v. Van Buren, 593 F.2d 125, 126 (9th Cir.1979) (per curiam). In United States v. Wilmoth, 636 F.2d 123 (5th Cir. Unit A 1981), the Fifth Circuit stated that to prove the status of the accused as one engaged in the business of dealing in firearms, "the Government must show a greater degree of activity than the occasional sale of a hobbyist." Id. at 125. "It is enough to prove that the accused has guns on hand or is ready and able to procure them for the purpose of selling them from time to time to such persons as might be accepted as customers." Id.; accord United States v. Carter, 801 F.2d 78, 82 (2d Cir.), cert. denied, --- U.S. ----, 107 S.Ct. 657, 93 L.Ed.2d 712 (1986); United States v. Burgos, 720 F.2d 1520, 1527 n. 8 (11th Cir.1983)....

So whether or not one is engaged in the business of a dealer in firearms is inferable by a trier of fact based on the totality of the circumstances based on the factors outlined by the courts. That means there is no bright-line test -- no clear safe harbor, i. e., a set of specific, clearly defined conditions which, if satisfied, definitely get you off the hook.

 

[deadin]

Years ago an acquaintance was busted for dealing without benefit of license.
He advertised "Buy and Sell" with a permanent ad in the local paper.
He kept detailed records of profit and loss.
He took trade-ins (which he immediately resold)
and he was set up with a strawman sting.
(The agent bought a gun "for a friend" and then returned it for a refund because the "friend" didn't like it.)

I never could understand why George didn't just get a FFL. They were easy to get at the time.....

 

[Spats McGee]

@Frank Ettin has laid this out, so I'll just stop in to say Welcome to THR, @Boxcar68 !

 

[Boxcar68]

Interesting. Thanks.

 

[JJFitch]

Delete

Smiles,

 

[CapnMac]

So I wonder if anyone’s ever sold 3 they didn’t like

Well, given the expense, most people are going to buy one, and not a box full of something they have no experience with.
Now, if the three with different, a .32-20, a .31RF, and a .32short, that could just suggest gtting out of oddball revolvers.
Buying three of the same .327mag revolvers and flogging them all off, especially for a profit, is not going to look like a "hobbyist."

The only situation where I can imagine this being a "thing" would be if one bought an entire box of Ravens, back in the day when they were $40 each or box of 5 for $150. Such times were rare back then, and rarer still today. What a person was planning to do with 5 identical .25acp pot metal pistols would be a pointed question repetitively asked.

 

[CapnMac]

"dogtown tom" is just babbling.

Our @dogtown tom is, A, not given to babbling, and B, in the business as an actual FFL, with extensive experience in the trade.

 

[Hookeye]

Am no lawyer, and don't care what others do.
But gun flippers ............seem to be just asking for trouble.
Wonder how many Walmart Brickseek specials the last 2 weeks were bought not for personal use.

 

[jonnyc]

I keep hearing about these guys who buy 10 of the same firearm, pick the best for their collection, and then sell the other 9. That never sounded "kosher" to me. I have sold out of my collection, mainly to buy other items to add. I figured that was the purpose of a C&R.....still do.

 

[dogtown tom]

Hmm. I was reading some case law and it seems like a lot of folks need to have intent to buy and sell and make a business out of it. Not a one time decision with a make model they think they will like and don’t. Being disappointed with all Of them makes sense because they are the same make model and the ergonomics is not compatible for the guy. If someone wants to buy them and the guy can get his money back and move on with life and he never sells anything again, you would vote that he can’t? And If you were a juror you feel he should serve hard time in federal prison over this situation and have his life permanently ruined for doing so?

Whatever you do DO NOT READ the link in my post above! It links to a document written by nitwits.

 

[dogtown tom]

"dogtown tom" is just babbling. People are allowed to buy and sell guns if they are not in the business of doing so. Even in California, where the limit is five per year, selling three rifles is not a problem.

ATF disagrees.
From page 1:https://www.atf.gov/file/100871/download

Courts have identified several factors relevant to determining on which side of that line your activities may fall, including: whether you represent yourself as a dealer in firearms; whether you are repetitively buying and selling firearms; the circumstances under which you are selling firearms; and whether you are looking to make a profit. Note that while quantity and frequency of sales are relevant indicators, courts have upheld convictions for dealing without a license when as few as two firearms were sold, or when only one or two transactions took place, when other factors were also present.

"Babbling" is what you are doing. You have no substance, only noise.

 

[dogtown tom]

I keep hearing about these guys who buy 10 of the same firearm, pick the best for their collection, and then sell the other 9. That never sounded "kosher" to me. I have sold out of my collection, mainly to buy other items to add. I figured that was the purpose of a C&R.....still do.

It's not kosher.
While it was popular for some to buy a crate of Mosins, keep the one they liked best and sell off the rest.......thats not collecting, thats dealing in firearms. Several years ago on AR15 a member emailed ATF and they responded that that would not be allowed for someone with an 03FFL Collector.

 

[dogtown tom]

The only situation where I can imagine this being a "thing" would be if one bought an entire box of Ravens, back in the day when they were $40 each or box of 5 for $150. Such times were rare back then, and rarer still today. What a person was planning to do with 5 identical .25acp pot metal pistols would be a pointed question repetitively asked.

When a buyer acquires more than one handgun from the same dealer in any five day period the dealer is required to send ATF and the local CLEO a copy of a "Multiple Sale of Pistols & Revolvers" form. The five days is calculated by the days that licensee is open for business. If he's only open Mondays, the five business days would be the five consecutive Mondays. A buyer could buy on Monday, come back and buy another handgun three weeks late....dealer sends in a multiple sale report. If he's open seven days a week a buyer could buy om Monday, return on Saturday....no report. For dealers in the border states we have to report the sale of "certain rifles" as well.

I mention that because a sure fire way to get a visit by ATF is buying multiples of the same firearm at the same time. ATF knows what firearms are recovered by police most often and it isn't Colt Pythons.