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I know that antique firearms prior to 1898 do not need transferred, and thats the whole problem!]
That is NOT necessarily true, and both you and your SP (who are not lawyers) are mis-informed - which is the real problem with your intended purchase.
The fact that the subject antique revolver is chambered for a conventional, commercial, and readily-available cartridge over-rules it's "antique" status for the purposes of transfer under Federal Law.
The seller is entirely correct, in that his .38S&W chambered antique needs to be transferred through an FFL, or possibly a C&R.
Here's the applicable Federal Law:
http://www.nraila.org/federalfirearms.htm#Sec.%20921
Gun Control Act Of 1968
(P. L. 90-618 As Amended, Principally By P.L. 99-3081)
Title I : State Firearms Control Assistance
Chapter 44. Firearms
(Title18, U.S. Code, Sections 921-929)
Sec. 5845. Definitions
(g) Antique firearm:The term "antique firearm" means ANY FIREARM NOT DESIGNED or redesigned FOR using rim fire or CONVENTIONAL CENTER FIRE IGNITION WITH FIXED AMMUNITION and manufactured in or before 1898 (including any matchlock, flintlock, percussion cap, or similar type of ignition system or replica thereof, whether actually manufactured before or after the year 1898) and also any firearm using fixed ammunition manufactured in or before 1898, for which ammunition is no longer manufactured in the United States and is not readily available in the ordinary channels of commercial trade.
FWIW - If the subject revolver had been chambered for some obsolete cartridge, say .32 Short Rimfire - THEN, no FFL transfer would be required.
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