Using my C&R to improve another person's collection

D

Dabull

New member
I have a C&R, which I use to build my personal collection. I understand I am not allowed to use it as a traditional FFL (to buy and sell for profit). The laws are pretty specific about NOT using the C&R to engage in business for profit and livelihood.

A friend wants to buy an old C&R rifle. He wants me to use my C&R to receive it from the out of state dealer and then transfer it to him. Put simply, he wants me to be the transfer agent and NOT make a profit...simply do the transfer using my record. He suggests that since I am not profiting from the deal, it does not violate the law. I am concerned that while I am not profiting from the deal, the transfer clearly does NOT indicate I am using the C&R to build my collection.

Anybody have any advice or opinion on this? (Non-lawyerly advice is appreciated).
 
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I am not purchasing it for him. I would be the transfer agent (receiving it into my inventory, and then transferring it to him and out of my inventory). Traditional FFLs do this all the time for profit, which I am not able to do...so my question is, am I able to do this NOT for profit, or does the C&R only permit me to build my own personal collection?
 
I have a C&R, which I use to build my personal collection. I understand I am not allowed to use it as a traditional FFL (to buy and sell for profit). The laws are pretty specific about NOT using the C&R to engage in business for the profit and livelihood.

A friend wants to buy an old C&R rifle. He wants me to use my C&R to receive it from the out of state dealer and then transfer it to him. He suggests that since I am not profiting from the deal, it does not violate the law. I am concerned that while I am not profiting from the deal, the transfer clearly does indicate I am using the C&R to build my collection.

Anybody have any advice or opinion on this? (Non-lawyerly advice is appreciated).
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I am an 01-FFL. You as a C&R and your non licensed friend are both subject to the Federal GCA and any applicable State or local laws. Curios and Relics are still firearms. Curio and Relic firearms may be transfered in interstate commerce only to licensed collectors or other licensee.

A licensee may sell a firearm from his or her personal collection, subject
only to the restrictions on firearm sales by unlicensed persons, provided
the firearm was entered in the licensee’s bound book and then transferred
to the licensee’s private collection at least 1 year prior to the sale.When
the personal firearm is sold, the sale must be recorded in a "bound
book" for dispositions of personal firearms, but no ATF Form 4473 is
required
[27 CFR 478.125a]

The above regulation applies to all licensees including Dealers and C&R license holders.

B. UNLICENSED PERSONS

(B1) To whom may an unlicensed
person transfer firearms under the
GCA?

A person may sell a firearm to an unlicensed resident of his State, if he
does not know or have reasonable cause to believe the person is prohibited
from receiving or possessing firearms under Federal law. A person
may loan or rent a firearm to a resident of any State for temporary use
for lawful sporting purposes, if he does not know or have reasonable
cause to believe the person is prohibited from receiving or possessing
firearms under Federal law. A person may sell or transfer a firearm to a
licensee in any State. However, a firearm other than a curio or relic may
not be transferred interstate to a licensed collector.
[18 U.S.C 922(a)(3) and (5), 922(d), 27 CFR 478.29 and 478.30]

(B2) From whom may an unlicensed
person acquire a firearm
under the GCA?

A person may only acquire a firearm within the person’s own State,
except that he or she may purchase or otherwise acquire a rifle or shotgun,
in person, at a licensee's premises in any State, provided the sale
complies with State laws applicable in the State of sale and the State
where the purchaser resides. A person may borrow or rent a firearm in any State
for temporary use for lawful sporting purposes.
[18 U.S.C 922(a)(3) and (5), 922(b)(3), 27 CFR 478.29 and 478.30]

(B3) May an unlicensed person
obtain a firearm from an out-of-
State source if the person arranges
to obtain the firearm through a
licensed dealer in the purchaser’s
own State?

A person not licensed under the GCA and not prohibited from acquiring
firearms may purchase a firearm from an out-of-State source and obtain
the firearm if an arrangement is made with a licensed dealer in the
purchaser's State of residence for the purchaser to obtain the firearm from
the dealer.
[18 U.S.C 922(a)(3) and 922(b)(3)]
 
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Mr Lucky said:
A licensee may sell a firearm from his or her personal collection, subject
only to the restrictions on firearm sales by unlicensed persons, provided
the firearm was entered in the licensee’s bound book and then transferred
to the licensee’s private collection at least 1 year prior to the sale.When
the personal firearm is sold, the sale must be recorded in a "bound
book" for dispositions of personal firearms, but no ATF Form 4473 is
required
[27 CFR 478.125a]

The above regulation applies to all licensees including Dealers and C&R license holders.
Click to expand...

According to paragraph (a) of 27 CFR 478.125a (2008), the regulation applies specifically to manufacturers, importers and dealers.

This makes sense because, by definition, any firearm entered into an 03FFL's bound book is automatically part of the licensee's personal collection.

Now, that being said, the OP's question regarding whether or not he can use his 03FFL to improve his friend's collection strikes me as running awfully close to that gray area of what constitutes business versus collecting.

My, admittedly coarse, test of answering a question like that is that if I have to ask, I probably shouldn't do it.

EDIT:

I thought about this subject a little bit and at least one scenario came to mind: What if some person was selling a package deal of two or three guns. Say that out of that group, there was one that you really wanted for your collection, but the other three were nothing special. So, you make the deal and get three C&R guns, even though you were really only after the one. Since you don't want the other two for your collection, you turn around and sell them.

This is the gray area that I was talking about. You bought all three as part of your collecting activity and you're selling two of them as part of that activity. That doesn't seem wrong to me. What would seem wrong to me is buying a gun that has no relation to your collecting activity - such as buying one to transfer to a friend. What I'm getting at, and I think that what most others in this thread are getting at, is intent. And if an ATF agent were to take a look at your book and ask why there was such a quick turnaround on a gun, I'd much rather be in a position to cite the example above than have to say that I bought it for a friend (or make up a lie.)

I've had a couple of buddies ask if I'd transfer an old rifle for them and they all were understanding when I explained why I couldn't.
 
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Is there any reason your friend can't just cough up the $25 to get a transfer through a normal 01FFL dealer?
I mean, I'm all about getting around the system when possible (and legal), but sometimes it just doesn't seem worth it.
I am curious as to the answer though, since I keep wanting to get my 03FFL (which I've been putting off for over a year now).
 
Something about this is Stinky I'm with KL I too would like to know why your friend cannot come up with $25 and that is dirt cheap for a transfer. I wouldn't do it if I were you. If he's truly your friend He won't ask you to jeopardize your license that way
 
Hi, Dabull,

I sense you are uncomfortable with the deal but don't want to lose a friend. Mr. Lucky has given you the perfect response in that "one year" business, since I doubt your friend wants to wait a year.

Also, if you do a special deal for your friend, you will suddenly have a lot of friends wanting you to buy stuff for them, demanding you take back what they don't like, asking you to return stuff and pay the shipping, asking you to repair broken guns, etc., etc., all at no charge of course since they are "friends" and (they will be happy to remind you) you can't engage in business.

Jim
 
Is there any reason your friend can't just cough up the $25 to get a transfer through a normal 01FFL dealer?
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Or alternately coughing up the $30 to get a 03 for himself?

Would be easier in the long run for him, as we all know how these C&R critters tend to multiply.:D

Joat
 
@Jim Keenen

Hardcase pointed out that the 1 year rule applied to licensed dealers (which I did quote) and I am a licensed collector. So, I think I can do what Hardcase states in his edit.

@all

I told my friend I would only use my C&R to improve my collection. He didn't seem happy but I'm sticking with my gut and the spirit of the law. I'll mention the minor difference in transfer cost relative to C&R license fee. Strange he doesn't have one already considering what he likes to collect.
 
Hardcase Wrote:

According to paragraph (a) of 27 CFR 478.125a (2008), the regulation applies specifically to manufacturers, importers and dealers.

This makes sense because, by definition, any firearm entered into an 03FFL's bound book is automatically part of the licensee's personal collection.

Now, that being said, the OP's question regarding whether or not he can use his 03FFL to improve his friend's collection strikes me as running awfully close to that gray area of what constitutes business versus collecting.

My, admittedly coarse, test of answering a question like that is that if I have to ask, I probably shouldn't do it.

See my note 1 & 4 below


EDIT:

I thought about this subject a little bit and at least one scenario came to mind: What if some person was selling a package deal of two or three guns. Say that out of that group, there was one that you really wanted for your collection, but the other three were nothing special. So, you make the deal and get three C&R guns, even though you were really only after the one. Since you don't want the other two for your collection, you turn around and sell them.

This is the gray area that I was talking about. You bought all three as part of your collecting activity and you're selling two of them as part of that activity. That doesn't seem wrong to me. What would seem wrong to me is buying a gun that has no relation to your collecting activity - such as buying one to transfer to a friend. What I'm getting at, and I think that what most others in this thread are getting at, is intent. And if an ATF agent were to take a look at your book and ask why there was such a quick turnaround on a gun, I'd much rather be in a position to cite the example above than have to say that I bought it for a friend (or make up a lie.)

I've had a couple of buddies ask if I'd transfer an old rifle for them and they all were understanding when I explained why I couldn't.

See my note 2 & 3 below
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As an 01-FFL, I am bound by a number of regulations that do not apply at all to C&R's or unlicensed persons. The Gun Control Act applies to all of us.

Note 1.

I believe you are correct. The provisions of 27 CFR 478.125a contrary to what I wrote earlier does not apply to C&R's. The C&R license applies only to transactions in curio or relic firearms.
[18 U.S.C. 923(b), 27 CFR 478.41(c), (d), 478.50(b) and 478.93]

Note 2.

A license as a collector of curio and relic firearms does not authorize you to engage in the business of dealing in curios or relics.
An 01 or 07 FFL must be obtained to engage in the business of dealing in any firearms, including curios and relics.
[18 U.S.C. 922(a) and 923(a), 27 CFR 478.41]

Note 3.

A licensed collector (C&R) has the same status under the GCA as a non-licensee except for transactions in curio or relic firearms.
[27 CFR 478.93]

The privilege of becoming licensed as a C&R allows you to do one thing that an unlicensed person cannot do and that is to collect on an interstate basis by means of buying, selling and or trades between other licensed C&R's.

For that privilege you get to record the acquisitions and dispositions in a bond book.

You as a C&R can buy or trade with another collector C&R out of state for your personal collection. You can't Deal in Firearms as a business.

According to [27 CFR 478.93] You, as a C&R have the same status under the GCA as a non-licensee except for transactions in interstate curio or relic firearms.

Therefore it is my unofficial opinion that as a C&R,
you or any unlicensed person may sell a firearm to an unlicensed resident of his State, if he does not know or have reasonable cause to believe the person is prohibited from receiving or possessing firearms under Federal law. A person may loan or rent a firearm to a resident of any State for temporary use for lawful sporting purposes, if he does not know or have reasonable cause to believe the person is prohibited from receiving or possessing firearms under Federal law. A person may sell or transfer a firearm to a licensee in any State. However, a firearm other than a curio or relic may not be transferred interstate to a licensed collector. Except, See Note 4.

There does not seem to be a stipulated amount of time that a firearm must be held, since a C&R is NOT a dealer.

You might call this a Gray area, however this C&R is not dealing firearms as a business.

Note 4.

Not withstanding all of the other reasons why this might seem to be a legal transaction between two unlicensed persons, Curios or relics are still firearms
subject to the provisions of the GCA; however, curio or relic firearms may be transferred in interstate commerce to licensed collectors or other licensees. The C&R can and does intend to purchase the curio or relic from out of state. Since a C&R can not sell any firearms form an interstate source to a private unlicensed person, this would be considered an illegal transaction.

I would recommend a call to BATFE, Industry Operations in your region. Any private citizen can call and ask a question. They do not ask for names or license numbers.
 
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I was not aware of the "1 year stipulation". When I buy a C&R on my FFL03 license and don't want to keep it, I sell it. I have never tried to make a profit. Sometimes I do, sometimes I don't. But I have never used any time limit. I'm not sure why I should hold onto a gun I don't want to for a full year. And I highly doubt the BATFE would care or harass me if I sold it after 3 months. They've got better things to deal with. A straw purchase is a whole other kettle of fish but I don't worry about how long I hold onto a C&R.
 
I was not aware of the "1 year stipulation". When I buy a C&R on my FFL03 license and don't want to keep it, I sell it. I have never tried to make a profit. Sometimes I do, sometimes I don't. But I have never used any time limit. I'm not sure why I should hold onto a gun I don't want to for a full year. And I highly doubt the BATFE would care or harass me if I sold it after 3 months. They've got better things to deal with. A straw purchase is a whole other kettle of fish but I don't worry about how long I hold onto a C&R.
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The one year regulation does not apply to C&R license holders. The major reason to obtain a C&R is so that you can trade with other licensed C&R's out of state. Because buying out of state is interstate commerce, you as a C&R cannot sell curio and relic firearms obtained from out of state.

If you keep you transactions between another C&R or any unlicensed persons intrastate, the transaction(s) is legal according to Federal law under the GCA provided it is not prohibited by your State laws.
 
It even gets simpler than all the chatter. The license states VERY CLEARLY that it is NOT a license to do BUSINESS and this is what the OP's friend is asking him to do.
Just me 2 shillings worth.
 
"you or any unlicensed person may sell a firearm to an unlicensed resident of his State, if he does not know or have reasonable cause to believe the person is prohibited from receiving or possessing firearms under Federal law."

Watch that state or local law, though. Some states have restrictions above and beyond federal law. Further, some states do NOT recognize a C&R license at all, so a transfer between 03FFL holders is the same as any transfer between unlicensed persons and subject to the same laws (waiting period, police approval, etc.). Some states, when certain firearms are involved, don't really recognize any federal license, requiring dealers to have state dealer licenses.

Jim
 
Jim Wrote:
"you or any unlicensed person may sell a firearm to an unlicensed resident of his State, if he does not know or have reasonable cause to believe the person is prohibited from receiving or possessing firearms under Federal law."

Watch that state or local law, though. Some states have restrictions above and beyond federal law. Further, some states do NOT recognize a C&R license at all, so a transfer between 03FFL holders is the same as any transfer between unlicensed persons and subject to the same laws (waiting period, police approval, etc.). Some states, when certain firearms are involved, don't really recognize any federal license, requiring dealers to have state dealer licenses.
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Jim,

Of his State is the operative phrase. In the OP's case, he is using his C&R to legally obtain a curio or relic by interstate commerce, not intrastate. This is legal for him to do as a collector as long as he does not attempt to sell or trade it without an FFL. If he does, he is engaging in business.

A C&R or ANY other unlicensed person can buy, sell or trade within his state (intrastate) face to face with another, without an FFL, provided that private transactions are not prohibited by the residents State or local laws.

Some States also allow private transfer of rifles and shotguns with contiguous States.
 
Using my C&R to improve another person's collection
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Not worth the potential pain and suffering. Ride wid da law, not agin it. Or, just make sure and certain that every i is dotted, every t is crossed, your bound (log)book is up to date, yada yada.

Of course you could always call or write your local ATF office and ask them. It would be enlightening (sp?) to see/hear what they say. Maybe a letter from them to keep a clear paper trail?

When in doubt, speaketh to the horses mouth as my advice probably comes from the other end of the equine in question
 
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