C & R handguns

[Mad-B-Man]

There are many threads discussing this topic already and ATF has even responded in writing saying that they don't much care for cherry picking group buys, as it falls under enhancing your collection. There have also been many group buys on calguns as well, most organized in the classified, but some organized here on the c&r forums as well.

ATF probably would become suspicious if you dispose of every single firearm that you come in to possession or if you import in massive quantities. But then again, there is also that one group buy invovling crates and crates of mosins and the organizer hasn't seem to have been audited by ATF yet.

I appreciate the concern, but I do believe that my intent does not qualify as engaged in business. If it would, then I imagine that GB buys would have been cracked down upon by the ATF years ago.

[BigJ]

Are you certain those group buys are run by a seller who used his C&R to obtain the firearms? Remember, anyone can buy as many guns as they want; its when you involve a C&R license in the purchase where things get tricky.

[Mad-B-Man]

Of the group buys I've seen, yes, they were obtained using 03 FFL.

While I have not contacted the ATF myself, others on other forums have. This is part of reply from ATF from one of the inquiries.

http://www.mdshooters.com/showthread.php?t=25374

http://ns2.md-shooters.net/showthread.php?t=1090

Licensed collectors of curios and relics may transfer firearms to other licensees. A licensed collector selling or otherwise disposing of curios or relics, to another licensee shall verify the identity and licensed status of the transferee prior to making the transaction. Verification shall be established by the transferee furnishing to the transferor a certified copy of the transferee’s license and by such other means as the transferor deems necessary. In addition, you are required to record the receipt and disposition of the firearm in your record of acquisition and disposition as prescribed by 27 C.F.R.478.125.

In addition, you may transfer firearms to non-licensee, however, 27 CFR 478.99 states, in part: ‘a licensed collector shall not sell or deliver any firearm to any person not licensed under this part and who the licensee knows or has reasonable cause to believe does not reside in the State in which the licensee’s place of business or activity is located…’ or falls within a prohibited category. Those categories can be found at: http://www.atf.gov/firearms/how-to/iden ... rsons.html. Again, you are required to record the receipt and disposition of the firearm in your record of acquisition and disposition as prescribed by 27 C.F.R.478.125.

The term “engaged in business” as applied to a dealer in firearms refers, in part, to a person who devotes time, attention, and labor to engaging in such activity as a regular course of trade or business with the principal objective of livelihood and profit. Therefore, any person intending to “engage in the business” of selling firearms, including firearms defined by ATF as Curios or Relics, must first obtain a dealer’s license. If you are acquiring curios or relics for the purpose of sale rather than to enhance a collection, the you would have to be licensed as a dealer in firearms under the GCA.

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If the firearms are being purchased in bulk and distributed to other C & R Holders, it would be a licensee to licensee transfer therefore there should not be any problems unless you are acquiring curios or relics for the purpose of sale rather than to enhance a collection, the you would have to be licensed as a dealer in firearms under the GCA.

[BigJ]

Well, I guess if you're set on it, I get where you're coming from.

But this guy (from your link) pretty well summed up what I was thinking as I read your link...

Basically they just read the law back to you. I would take it as KEEP YOUR RECCORDS PERFECT. Make sure you keep copies of the checks and invoice to prove you did not earn any profit in case it becomes an issue, and of course you have to reccord every single gun from the group buy in your bound book, and record every transfer with every person in on it's C&R license, and they would have to do the same with your license, basically everyone would have a copy of your FFL, and you would have a copy of everyone else's FFL. The juice may not be worth the squeeze to save $5 per Mosin or whatever other C&Rs you are looking at getting.

I take it as technically you can earn a profit from selling, as long as you do not devote much time, labor or attention to it, and prove it is generally infrequent(with no specific definition of "infrequent"), or you can devote a lot of time, labor an attention frequently, as long as you can prove you do not earn a profit, so basically you have to be able to prove that the terms "time labor and attention" and "often making a profit, or livelyhood" cannot be used simoutaneously in reference to your C&R collecting activities if you ever get audited.

Having said all that, let me know what you've got in mind for the GB. I would be willing to be a buyer depending on the gun(s), if it helps get numbers up with a wholeseller or the like. I would, however, prefer to pick it up from Timber myself since I can (as a C&R holder) and that would for sure keep me out of any group buy related potential issues (I'm up in Reno pretty often anyway).

[Mad-B-Man]

I'm really only considering it at this point. I'm not looking for volume discount or anything, I just wanted to get most of the 20 dollar transfer fee worth and be able to cherry pick out of a few guns.

I do understand that some might not want to risk it for such small benefit though. It is better to be safe than sorry, especially with CA and ATF.

[Mustang]

This is the key quote ...

"...unless you are acquiring curios or relics for the purpose of sale rather than to enhance a collection, then you would have to be licensed as a dealer in firearms under the GCA. "

What you are describing is acquiring curio and relics for sale, rather than to enhance your collection. Really not a gray area.

And don't be lulled into a false sense that this OK because it has been done before or because people on this forum express interest in buying something from you if you go through with this. Remember, you will be the one taking all the risk.

[emcon5]

This is the key quote ...

"...unless you are acquiring curios or relics for the purpose of sale rather than to enhance a collection, then you would have to be licensed as a dealer in firearms under the GCA. "

What you are describing is acquiring curio and relics for sale, rather than to enhance your collection. Really not a gray area.

[Mustang]

I understand the argument, but the reality of the transaction is that the C&R holder is acquiring weapons for resale...for profit or not. I do not believe that is allowable.

So, emcon, would you argue that you can use a C&R to acquire guns for your friends, as long as you keep the best one and do not profit from the resale?

[emcon5]

Like I mentioned, It is not something I would do, although I have advised friends to get 03 FFLs,

It is really hard to say, I think it boils down to intent, which is a difficult thing to prove.

Even if the intent was to try and get the best example for your collection, the perception would be that you were making the purchase to get your friend a deal.

If you did the same thing and put the lesser example for sale on the trader at your cost, it doesn't look the same.

The laws do not really say what you can do, just what you can't, and I can't find anything in the code that says buying multiple examples of a firearm in order to enhance your collection is not allowed.

You are allowed to sell firearms from your collection.
There is no limit that I can find that specifies how long an item needs to be in your collection before you can sell it.
There is nothing that says you cannot make a profit from selling items from your collection, provided you are not "engaged in the business"

(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;

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:

If there is something in there that says this is illegal, I will certainly change my view, but I have looked and can't find it.

[Mustang]

There are a lot of things to ponder.

One thing that I think would raise red flags are multiple examples of acquiring C&R firearms followed by quickly reselling them (before having to register them in California), as the OP was suggesting. That would look kinda fishy in your bound book.

There is also the issue with "straw buying"...when you buy a bunch of firearms, knowing that you intend to immediately resell them to others.

I'm with you...why risk it to save a few pennies.

[Quiet]

C&R FFLs must report within 5 days of importing a C&R handgun into CA.

C&R FFLs report the importation via sending in a completed Curio or Relic Handgun Report with applicable fees ($19 per handgun).

When selling handguns in CA, it is not legal to do more than five transaction within a calendar year without being a CA FFL dealer.

[BigJ]

When selling handguns in CA, it is not legal to do more than five transaction within a calendar year without being a CA FFL dealer.

Just a quick side note: can you link up a source to the CaDOJ/ATF that says this? I've heard it repeated, but I don't recall seeing it in writing. I just checked the ATF FAQ and it doesn't mention a limitation either, other than to use the word "infrequent".

Thanks!

[Powerkraut]

I understand the argument, but the reality of the transaction is that the C&R holder is acquiring weapons for resale...for profit or not. I do not believe that is allowable.

So, emcon, would you argue that you can use a C&R to acquire guns for your friends, as long as you keep the best one and do not profit from the resale?

For-profit is the defining factor:

Originally Posted by 18USC44 921 a (21)
(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;

[eightmd]

I'm not sure profit is that important. You can't use a C&R to buy and sell guns for your livelihood. If you make a little money on purchases and sales, that doesn't mean it is a business and your livelihood.

This is just my understanding.....

I think the problem here is that you are talking about buying a weapon for someone else. That is a straw purchase and it is against the law. Now if you were to buy 3 or 4 C&R guns pick through them and decide to sell the rest at a later date, that is OK (don't think making extra money on this matters). You just can't buy a gun for someone. I know it is a somewhat fine line and a straw purchase is usually for getting around the law and registration so this isn't really your typical straw purchase, but it technically is, if you are buying that gun specifically for another person.

[paul0660]

Just a quick side note: can you link up a source to the CaDOJ/ATF that says this? I've heard it repeated, but I don't recall seeing it in writing. I just checked the ATF FAQ and it doesn't mention a limitation either, other than to use the word "infrequent".

Thanks!

It used to be 12070. Now it is 16960. The text is:

(c)(1) As used in this section, "infrequent" means: (A) For pistols, revolvers, and other firearms capable of being concealed upon the person, less than six transactions per calendar year. For this purpose, "transaction" means a single sale, lease, or transfer of any number of pistols, revolvers, or other firearms capable of being concealed upon the person. (B) For firearms other than pistols, revolvers, or other firearms capable of being concealed upon the person, occasional and without regularity.

Highlighted by me, an important point.

Hello Jason!