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No it doesn't.
Distant relatives
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I said it depended on the relationship. I did this, I had a 1911 I gave it to my nephew when he got out of boot camp. All legal. I never said anything about distant relative, where did you make that one up?
Is a federal thing, a close relative can gift a gun to another close relative.
Gee I have given a lot of guns to folks, all you need to do is a FFL transfer to the person you are giving the gun too. Same as if they bought it from you.
Person A bought the gun and did the paperwork, person b added the gun to his allowed gun list (which is something I find repulsive) after he was ALLOWED to posses this gun it was transfered to him thru a FFL. Blame the state he lives in laws and requirements.