Need some NFA advice please

[srstaff]

I expect to receive my FFL 01 Dealer liscense within the next couple of weeks and will sooner or later seek the SOT 3. I have created an LLC for my firearms related business.

Eventually I plan to have an FFL Type 07 and an SOT 2 and focus a good part of my business around that, but here is my question.

Given the result of the election and the potential for new anti-gun legislation being greater now than it would have been, I'm wondering what the best/ shortest way would be to obtain an NFA firearm for my personal use, as my first NFA-related goal.

Should I use my LLC to register it? Should I go ahead and pay now (even with half the term for this SOT year being gone already) for an SOT 3 and buy it as an NFA dealer? Should I go the Trust route even though my LLC is already in place and I could probably have my SOT 3 by mid-December?

I obviously have more research to do on my own, but I would really appreciate any advice from those of you who already understand NFA and personal use vs business owned and all that kind of stuff from personal experience.

Thank you in advance for your time and advice.

[Evil Bert]

If you plan on having NFA items held privately and separately from your LLC, then you best bet would be go the NFA Trust route. http://mynfatrust.net for only $100

[srstaff]

Thanks for the trust pointer, but assuming i can still transfer an NFA to my personal collection as an FFL, like I can with a non-NFA firearm, why would I want to spend extra money on a trust when I already have an LLC?

Is it that you must have SOT 3 to be able to transfer NFA to personal collection so from where i am currently at it would be the $500 SOT liscence vs a $100-$350 trust? Or is the SOT 3 not required to buy an NFA as an FFL 01, and is not required to transfer to personal collection?

[Evil Bert]

you have to pay the tax to transfer to your personal collection regardless, however, I assume you are aware of the advantages of using a Trust verses the personal route. As for the SOT 3 I would argue no you do not. There is no special requirement or license to own an NFA item. You just have to pay the tax. Simply fill out the Form 4, pay the tax and you are done. Transferring from your dealership to your private collection would done exactly the same way you would with a customer.

Just do a quick google search to compare the advantages and decide for yourself if the Trust is worth it.

[Iraqgunz]

Why do people assume that because Barry won there is going to be some major assault on NFA items? If you are concerned about it I recommend staying away from them altogether because there is no guarantee that NFA items will be protected.

[srstaff]

Why do people assume that because Barry won there is going to be some major assault on NFA items? If you are concerned about it I recommend staying away from them altogether because there is no guarantee that NFA items will be protected.

Because he publicly stated he was in favor of tighter gun control laws and looking at another assault weapons ban.

Because he supports the UN arms control treaty.

Thanks for your recommendation, I understand the risk. My questions remain. Let me try a different angle.

Is there an advantage to a Trust over using an LLC for the vehicle by which to register an NFA item?

[Iraqgunz]

There is plenty of information here about trusts vs. LLC's. Take the time to read.


Because he publicly stated he was in favor of tighter gun control laws and looking at another assault weapons ban.

Because he supports the UN arms control treaty.

Thanks for your recommendation, I understand the risk. My questions remain. Let me try a different angle.

Is there an advantage to a Trust over using an LLC for the vehicle by which to register an NFA item?

[Evil Bert]

Generally LLC require annual fees and/or annual meetings and you have to file tax returns with an LLC. A trust you do not have to do any of that. Seriously, like IG says, just some searching here on the forum and you will find just about everything you want to know.

Perhaps you should explain in more certain terms exactly what you are wanting with your FFL and your SOT 3. Are you doing that in an effort to obtain NFA items? If so, I think you are going about it all wrong. If you are doing that to start a business, then continue. But I am friends with the largest dealer in MO (Mike's Guns in St. Luis) and any dealer who has any sense will keep his personal collection entirely separate from his FFL collection. The ATF has limitations on an FFL's transfers to and from his/her personal collection.

In any case, if you want to have NFA items and allow family friends, etc to have access to those items as if they were the owners, then an NFA Trust is the best course of action. However, if you don't then just transfer the item via form 4 to yourself.

[Evil Bert]

Oh by the way, the only way to prevent the government from taking your firearms away via legislation, etc is by buying from a private party and burying it in the back yard - lol

[Hydguy]

If the LLC is your business that will be holding the various FFL licenses, then you do not own the items, and if the business goes under, you must dispose of the items or transfer them to yourself, or another entity.

The business I used to work at had an 01 & 03, and the owner would just take what he wanted as 'his' and put it in his safe. Since he was listed as the FFL holder, he didn't have to transfer anything into his name, as it was purchased under his FFL, and as long as the firearm could be available for inventory if necessary, the bound book did not have to have a disposition, as it was still owned by the FFL. Same for Class 3 items.

However, if the business goes under or he sells, then he MUST do the appropriate paperwork and log the disposition if he desires to keep those firearms.
Same for NFA. If he buys it as a dealer, there is no transfer fee. But if the business goes under, or he sells it, he must do the Form 4 and the tax must be paid to transfer it to himself or another entity.

The ONLY exception to this is if you are using a C&R, as it is strictly a collector's license. As a C&R item, you must still pay the NFA transfer tax when purchasing an eligible NFA item, but you do not have to go through another SOT to facilitate the transfer. And C&R licenses are only issued to individuals, not to corps, LLC's, or trusts.