When I do private sales, I always do a bill of sale and look at the permit to purchase (Free, but required for handguns in MN), permit to carry (Not free, but also acts as your permit to purchase so you don't have to go through the hassle every time... plus it obviously allows you to legally carry), and driver's license.
If they don't have both a driver's license and a permit to purchase or carry, they don't get the gun.
If they exhibit suspicious behavior, I would also deny the sale, but so far I haven't had any problems.
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