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If you bought a shotgun frame that someone MIGHT have had a too-short barrel on at one time, and you put a legal length barrel on it- it would be legal.
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But if it began life as a registered shotgun with a short barrel, you could not modify it to make it legal.
It is my understanding that if I took a M2 and changed parts to make it into a M1, it is illegal.
If I took an M1 and turned it into an M2, it is illegal.
So if serial #1,2xx,xxx began life as an M2 (In any record of its manufacture) it will never be known as a legal rifle.
If serial #1,2xx,xxx began life as a M1, it is a very illegal weapon to own (unless there is some government paperwork to show 'permission given' to modify it). Changing the weapon back to an M-1 would seem to be legal, unless the rifle has been machined to accept illegal parts.
(Also, I believe, depending on who did the machining. If it came from the factory already machined for those parts, but parts not installed, I would think you would be good to go. I have heard both sides of the 'they came from the factory that way and the no they did not' arguments.)
We had a family here in Missouri (I can not find the news article) that found a beautiful Thompson "Al Capone" style machine gun in their grandmothers attic. They tried to get the ATF to let them convert it to a semi, but they would have nothing to do with it and gave the family the option of either turning it in for destruction or having it modified and then given to a museum. (I do not remember what they did with it, if it was even in the story.)
My head hurts trying to figure all this out. But I think the best thing to do with it would be to walk away from it. If in fact it will not cost you anything to obtain this rifle, then I would get it and call the ATF and tell them what you have. You usually do not get in trouble if you turn in a gun that has been willed to you, or you bought in an estate sale.
Tamara, am I correct on this issue?