Sequence of NFA purchase

[Hasaf]

I have two basic questions:

Firstly is the sequence. As I understand it, I need to first establish the firearms trust. Then, after that is approved, the trust purchases the NFA item. Is that the correct order?

Next, is each item a Separate item. In particular, I am thinking of purchasing an MP5 trigger assembly. So, the trust purchases the MP5 trigger assembly (with NFA stamp), then I purchase an MP5 pistol, then the trust purchases (or can I make that purchase) a stock. Does that stock require a separate NFA stamp?

 

[Theohazard]

Firstly is the sequence. As I understand it, I need to first establish the firearms trust. Then, after that is approved, the trust purchases the NFA item. Is that the correct order?

No, that’s not correct.

First, you don’t need to have a trust, but many people use one to give them more flexibility with their NFA items.

Here’s the way it works: The following is sent to the ATF: ATF Copy 1 & 2 of the Form 4, a Responsible Person Form per each “responsible person” on the trust with a passport photo attached to each, a copy of the trust (make sure it’s a copy, you won’t get it back), and payment for the tax stamp (usually $200) and it can either be a check or money order or you can enter your credit card info on the Form 4. You also need to submit two completed FD-258 fingerprint cards per responsible person. Then the wait begins. The CLEO copies of the Form 4 and the Responsible Person Forms are sent to the appropriate CLEO, but this isn’t needed to begin the wait.

Submitting as an individual is exactly the same process except there are no Responsible Person Forms, there’s no trust to send in, and you need to attach a passport photo to both ATF Copy 1 & ATF Copy 2 of the Form 4.

This process is for buying an existing NFA item. If you’re making one yourself then just substitute a Form 1 for a Form 4 and do the exact same process (though it looks like you’re buying a full-auto trigger pack, and you can't Form 1 those). And if you’re buying from a dealer, they’re going to help you with a lot of this. Some help more than others, though.

 

[Theohazard]

Next, is each item a Separate item. In particular, I am thinking of purchasing an MP5 trigger assembly. So, the trust purchases the MP5 trigger assembly (with NFA stamp), then I purchase an MP5 pistol, then the trust purchases (or can I make that purchase) a stock. Does that stock require a separate NFA stamp?

Each NFA item requires a separate tax stamp. But only one of those items you mentioned is an NFA item. The full-auto trigger assembly is an NFA item (specifically a machine gun), so buy it and do the process I mentioned in my previous post. Buy the MP5 pistol like you would any other pistol, and buy the stock like you would buy any other over-the-counter accessory. The stock is never an NFA item by itself. However, if it’s installed onto a pistol that isn’t properly registered as an SBR or as a machine gun, it turns that pistol into an illegal unregistered SBR.

 

[pjeski]

Everything Theohazard said. Plus:

Just going to inject an opinion here: if you are going to invest in a sear or pack, see a local attorney who really knows the NFA and also firearms law and trust law in your state. That attorney can draft a trust that will meet your needs and can advise you on any legal matter related to the trust. Then you won’t have to ask on an internet message board.

In my case, while I was waiting for the stamp for the sear, I submitted a form 1 for the host gun so that I would never have to worry about its configuration while the sear might be in another host.

 

[AlexanderA]

There's really no advantage to using a trust unless you're using it for estate planning purposes, or in certain other limited situations. Trusts began to be used as workarounds for non-signing CLEO's, but that problem has gone away.

If you have a registered machine gun (and that includes an MP5 trigger pack), you don't need another stamp to make it an SBR. Machine guns can have any barrel length or overall length. You would need another stamp for a suppressor though.

 

[greyling22]

I disagree alexander. With a trust I can loan my can to by brother (who is on the trust) Without it, it has to stay in my hot little hands.

 

[AlexanderA]

I disagree alexander. With a trust I can loan my can to by brother (who is on the trust) Without it, it has to stay in my hot little hands.

It's an individual choice. Personally, I wouldn't loan my machine guns to anyone. As a matter of fact, I once let a Vietnam veteran fire my M60 (I was standing right there), and he messed it up. Lesson learned.

 

[Hasaf]

For me the trust makes sense. I travel a lot for work related reasons and am home less than half of the year. My adult daughter lives at my house and, of course, has access to my gun safe. As such, I think a trust with her on it would work best.

 

[dogtown tom]

There's really no advantage to using a trust unless you're using it for estate planning purposes.....

Nonsense.
"Estate planning" for a individual is essentially the same, the decedents property being disposed of by the executor. A tax free Form 5 to the beneficiary can be filled out and kept with your will.
-An NFA trust allows any member of the trust to possess the firearm. An NFA firearm on an individual stamp means the possessor must be there with the shooter. Want to go hunting with your buddy and let him use one of your silencers? If he isn't in your immediate presence then he (and you) are in violation of Federal law. Add him to your trust five minutes before you leave home and all is good.
-An NFA trust allows multiple people to share the expense of a single NFA firearm AND each trust member can have use of it independently.
-An NFA trust eliminates any fear of your spouse, children, etc from being in constructive possession by simply having access to your safe.
-An NFA trust allows you to transfer ownership of an NFA firearm without needing another $200 tax stamp. If you have each of your NFA firearms in its own trust (ala Silencer Shops "Single Shot Trust") all you need to do is add the buyer to your trust, take his $$$, hand him the silencer, tax stamp and trust. He can then remove you as a member of the trust. As the trust is the legal possessor it remains the legal possessor. ATF only cares if the responsible persons that are trust members are not otherwise prohibited from possessing firearms.
-An NFA firearm transfer from an individual to another individual, trust or corporation will always require another Form 4 and a $200 tax stamp.......and a wait.

That $200 stamp doesn't mean much to a guy who has a $25000 machine gun, but it sure as heck matters with an $800 silencer. Not to mention the wait.

That $24.95 Single Shot Trust from Silencer Shop may be the best $24.95 you'll ever spend in the NFA game.

 

[MachIVshooter]

-An NFA trust allows any member of the trust to possess the firearm. An NFA firearm on an individual stamp means the possessor must be there with the shooter. Want to go hunting with your buddy and let him use one of your silencers? If he isn't in your immediate presence then he (and you) are in violation of Federal law. Add him to your trust five minutes before you leave home and all is good.

Not how I understand it. Anyone can be added or removed at any time as a trustee or beneficiary, but 41F requires each person who would possess the NFA item in question to have submitted pics & prints on that particular form 1 or 4.

 

[Theohazard]

Not how I understand it. Anyone can be added or removed at any time as a trustee or beneficiary, but 41F requires each person who would possess the NFA item in question to have submitted pics & prints on that particular form 1 or 4.

Tom is correct. 41F simply requires anyone who is a “responsible person” at the time a Form 1 or 4 is submitted to submit fingerprints and a photo along with a responsible person form. You’re free to add people to the trust later and they can have full access to all items on the trust, whether or not they were part of the trust when the paperwork for those items was submitted.

My trust lawyer says that the only restriction is that you can’t add anyone while waiting for a submitted Form 1 or 4.

For example, if you submit a Form 4 and just you and your wife are on the trust, you can’t add Uncle Joe to the trust until after that competed Form 4 comes back. I’ll bet the reason for this is to make sure the copy of the trust they’re approving for that specific form is up-to-date. If you add someone while the ATF is processing your paperwork, that means the copy of the trust they have isn’t the same as the actual trust.

 

[Elkins45]

-An NFA trust allows you to transfer ownership of an NFA firearm without needing another $200 tax stamp. If you have each of your NFA firearms in its own trust (ala Silencer Shops "Single Shot Trust") all you need to do is add the buyer to your trust, take his $$$, hand him the silencer, tax stamp and trust. He can then remove you as a member of the trust. As the trust is the legal possessor it remains the legal possessor. ATF only cares if the responsible persons that are trust members are not otherwise prohibited from possessing firearms.
-An NFA firearm transfer from an individual to another individual, trust or corporation will always require another Form 4 and a $200 tax stamp.......and a wait.

This had not occurred to me until just now. How did they not anticipate this? More to the point, what’s to stop an unscrupulous person from setting up a business selling NFA items essentially over the counter?

Say I buy 20 cans, each on an individual trust. Then once all are approved and I take possession I open the “No Wait Silencer Store.” You can walk in with a wad of cash and walk out with a brand new can, along with the tax stamp and a trust with your name added in ink that isn’t even dry yet. The end buyer was going to have to pay the $200 anyway, so it just gets tacked onto the retail price. Essentially the dealer is doing all the waiting for the consumer...and the consumer is never fingerprinted or photographed.

 

[dogtown tom]

This had not occurred to me until just now. How did they not anticipate this? More to the point, what’s to stop an unscrupulous person from setting up a business selling NFA items essentially over the counter?

Federal law.....and you really had to ask?
If you engage in the business of dealing in firearms (of any kind) you are required to hold a Federal Firearms License, licensed as a dealer, manufacturer or importer.

Say I buy 20 cans, each on an individual trust. Then once all are approved and I take possession I open the “No Wait Silencer Store.” You can walk in with a wad of cash and walk out with a brand new can, along with the tax stamp and a trust with your name added in ink that isn’t even dry yet. The end buyer was going to have to pay the $200 anyway, so it just gets tacked onto the retail price. Essentially the dealer is doing all the waiting for the consumer...and the consumer is never fingerprinted or photographed.

If you aren't a licensed dealer and engaging in this activity you are in violation of Federal law, because you lied on the Form 4473 and committed a straw purchase.
If you ARE an FFL/SOT then you are violating the NFA and GCA. When any firearm is transferred from an FFL/SOT to a nonlicensee a Form 4473/NICS is required. Further, if the FFL is immediately transferring silencers in his possession to evade regulations he's in violation. Even further, Federal law requires the dealer to keep personally owned firearms separate from his business inventory unless tagged as such. If he is transferring the silencer to a trust and keeping the silencers on display at his premises he isn't doing that.

 

[Elkins45]

There are dozens of guys I see at every gun show selling a couple of tables full of guns. They have folding racks and glass covered display cases. They also don’t have FFLs. They are clearly engaged in the business but appear to be moving a low enough volume they are flying under the radar.

If a guy buys 8-10 silencers in a year “to try them out” but then decides to move them down the road to his friends he could probably deny being engaged in the business. So forget the storefront and lets just call it a kitchen table business. Kinda like a pot dealer. “Joe can get you a sawed off shotgun, no paperwork. And it’s legal.”

Wonder how often someone could pull that off before the NFA branch would take notice?

 

[dogtown tom]

There are dozens of guys I see at every gun show selling a couple of tables full of guns. They have folding racks and glass covered display cases. They also don’t have FFLs. They are clearly engaged in the business but appear to be moving a low enough volume they are flying under the radar.

Not necessarily. ATF believes "engaging in the business" means the person is performing the repetitive buying and selling of firearms for profit.

The term “dealer” is defined at 18 U.S.C. § 921(a)(11)(A) to include any person engaged in the business of selling firearms at wholesale or retail. The term “engaged in the business” as applied to a dealer in firearms means 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. A dealer can be “engaged in the
business” without taking title to the firearms that are sold. However, the term does 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. 18 U.S.C. § 921(a)(21)(C).

There is no minimum number or a time frame that must be observed. It could be a little as ONE.........as in a nonlicensee buying a gun at a gun show and immediately trying to resell it for profit.

If a guy buys 8-10 silencers in a year “to try them out” but then decides to move them down the road to his friends he could probably deny being engaged in the business. So forget the storefront and lets just call it a kitchen table business. Kinda like a pot dealer. “Joe can get you a sawed off shotgun, no paperwork. And it’s legal.”

It doesn't matter where the "business" is located, it's still a business and would require an FFL/SOT.
A guy can buy 500 silencers and use a trust, there's nothing to prohibit him from adding as many members of his trust as he wants.
And BTW, possession of marijuana remains illegal under Federal law.
"No paperwork"? Not hardly. Anyone so dimwitted to sell NFA firearms as a business without an FFL likely won't care about trust documents or silly Form 4's.

Wonder how often someone could pull that off before the NFA branch would take notice?

NFA Branch wouldn't know until the local ATF Enforcement Agent called them up to say guess how stupid this guy is?

 

[Elkins45]

Not necessarily. ATF believes "engaging in the business" means the person is performing the repetitive buying and selling of firearms for profit.

Yep, that’s what they are doing.

There is no minimum number or a time frame that must be observed. It could be a little as ONE.........as in a nonlicensee buying a gun at a gun show and immediately trying to resell it for profit.

How about a few dozen at every show?


It doesn't matter where the "business" is located, it's still a business and would require an FFL/SOT.
A guy can buy 500 silencers and use a trust, there's nothing to prohibit him from adding as many members of his trust as he wants.
And BTW, possession of marijuana remains illegal

I used pot dealers as an example of an under the table, word of mouth business model. Except if you do the trust swap silencer sale just a couple of times it isn’t technically illegal unless it could be proven it was done for the purpose of making a profit.

Responses in bold above. iPad makes it a pain to quote.

I bought a gun from a dealers table at a gun show last month. He had a few set aside in a separate section of the table with a sign that said “personal firearms, sales to KY residents only”. So he was intermingling his FFL inventory and his personal guns, but identifying the two as separate. What’s to stop him from having a couple of ”trust owned cans” on the table beside the little sign?

I hope you don’t think I’m trying to be argumentative. It’s just that the idea of transfer via trust reassignment had never entered my mind until it was raised in this thread.

 

[dogtown tom]

Responses in bold above. iPad makes it a pain to quote.

I bought a gun from a dealers table at a gun show last month. He had a few set aside in a separate section of the table with a sign that said “personal firearms, sales to KY residents only”. So he was intermingling his FFL inventory and his personal guns, but identifying the two as separate. What’s to stop him from having a couple of ”trust owned cans” on the table beside the little sign?

He's abiding by ATF regs by indicating which firearms are personally owned and which are business guns. If he wants to put a couple of personally owned silencers on the table that doesn't change anything.

You are changing the question/scenario throughout this thread however. If the dealer is putting silencers in a trust and then selling the trust possessed silencer as a course of business then he's in violation.

While legal, comingling personal guns and business guns either at your premises or at a gun show will most certainly invite scrutiny from ATF. Even if marked as required or separated, there are still requirements for recording the disposition of personally owned firearms. It's not a good business practice.

 

[dogtown tom]

Not necessarily. ATF believes "engaging in the business" means the person is performing the repetitive buying and selling of firearms for profit.

Yep, that’s what they are doing.

There is no minimum number or a time frame that must be observed. It could be a little as ONE.........as in a nonlicensee buying a gun at a gun show and immediately trying to resell it for profit.

How about a few dozen at every show?

They need an FFL.

 

[Elkins45]

He's abiding by ATF regs by indicating which firearms are personally owned and which are business guns. If he wants to put a couple of personally owned silencers on the table that doesn't change anything.

You are changing the question/scenario throughout this thread however. If the dealer is putting silencers in a trust and then selling the trust possessed silencer as a course of business then he's in violation.

While legal, comingling personal guns and business guns either at your premises or at a gun show will most certainly invite scrutiny from ATF. Even if marked as required or separated, there are still requirements for recording the disposition of personally owned firearms. It's not a good business practice.

Well, I’m thinking out loud about the line between “course of business” and selling a few silencers without the wait.

They need an FFL.

I know that. You know that. Everybody knows that. Even they know that. I am continually amazed a couple of these guys haven’t been marched out in handcuffs.