C&R question

BigD_in_FL · December 11, 2013, 05:42 PM

On another forum, a question was raised regarding a C&R holder and buying and selling guns on a regular basis. I was under the impression that was a no-no, but no one seems able to provide any official info. What, exactly, IS the rule regarding a C&R buying and selling?

TIA

carguychris · December 11, 2013, 05:57 PM

An 03 Collector FFL- otherwise known as a C&R licensee, or C&R holder- may not be "engaged in the business" of selling firearms, whether or not those firearms are C&R eligible.

"Engaged in the business" has a formal meaning under federal law, but it is somewhat murky, and is dependent on intent. It is discussed at length in the following thread:

http://thefiringline.com/forums/showthread.php?t=535770

However, most authorities on the topic seem to agree that an 03 FFL's activities can only become problematic with regards to selling firearms; IOW a C&R licensee may buy to his/her heart's content.

CTS · December 11, 2013, 06:19 PM

Pretty much cut and dried. If you are buying guns with the intent of selling for a profit you are in the business an require an 01 Dealer in firearms other than destructive devices license. An 03 license does not give the holder the right to deal in curio and relics for the purposes of profit.

madmo44mag · December 11, 2013, 06:28 PM

Here is a twist that a good friend had happen many years ago that left the ATF scratching their heads.
He bought several cases of milsurp rifles and cherry picked them and sold the rest for what he paid for them plus his cost of shipping.
After almost a year it was decided that although he purchased in bulk he was not profiting and the ATF backed off.

BigD_in_FL · December 11, 2013, 07:02 PM

^^^thanks, that was one of the arguments

James K · December 11, 2013, 11:13 PM

Interesting, Madmo, but "decided by" whom? BATFE itself? A U.S. Attorney? a Federal court? In any case, only a court decision would provide precedent, and even then another person doing the same thing in another district could be tried and convicted of dealing without a license.

A lot depends on things over which the licensee has no control. If he sells guns on an 03 FFL and one of those guns falls into the famous "wrong hands" and is used in a serious crime, not only will the "collector" go to prison, but the whole C&R program could be terminated, either by Congress or by an executive order to tighten 03 license requirements so that effectively none would be issued.

Jim

Doc Hoy · December 12, 2013, 06:10 AM

It is helpful even if it doesn't pin down specifics.

I got my C&R some months ago with the idea of easing purchases of older pistols online. (Read any of my comments and you know I am in love with the cheap junk Saturday night specials. I appear to be somewhat unique in that affection.)

It has already worked very well for about half a dozen pistols.

But now I am thinking that some of the revolvers are not worth keeping. I figured as long as I sell them for less than I paid for them, I'd be okay with BATF. But that is not the case. Plenty of people who are "in business" make transactions which don't result in a profit.

I am going to be careful how I sell anything, Whether it is under my C&R or not.

noelf2 · December 12, 2013, 02:31 PM

There is no rule that says you can't sell a C&R gun from your collection for a profit. You just can't be in the business of selling guns for a profit. I bought many C&R guns and rifles back when they were super cheap, and I sell some off sometimes to improve my collection. Be damned if I'd sell them for what I payed!

Quote:

If he sells guns on an 03 FFL and one of those guns falls into the famous "wrong hands" and is used in a serious crime, not only will the "collector" go to prison, but the whole C&R program could be terminated, either by Congress or by an executive order to tighten 03 license requirements so that effectively none would be issued.

I think that's a bit over the top, and a mite paranoid... He would lose his license and go to jail not because he sold a gun that was later used in a crime, but for abusing his license and using it for business purposes (if that can be proven). I don't use my 03FFL for business, and as long as I sell off a gun lawfully I have nothing to fear. That said, I am a bit more careful when I sell a gun than I have to be.

CTS · December 12, 2013, 04:17 PM

Right. You can sell a gun or even several guns from you private collection and make a profit on them. If you did two or three a month you might have a problem. If you bought for your own collection and decide to sell later for what ever reason you are fine. If you really want to get the correct info go here:
ATF.gov and click on the FAQ section.
http://www.atf.gov/content/Firearms/..._industry_tabs

jag2 · December 13, 2013, 10:54 AM

Two points to ponder.
Most of the C&R guns I buy are from other collectors. We have common interests and from time to time change out our collections. Price has nothing to do with it. That's what the law is intended to do. The other point is that there is no record of a C&R transaction sent anywhere. The paper work is exchanged between the two parties. You would have to really abuse the privilege the C&R gives you to come to the ATFs attention. Even when you give up your license you just keep the records, they are never sent in to anyone.

noelf2 · December 13, 2013, 12:08 PM

Jag, mostly correct. However, when you give up your license you don't have to keep any records. You can destroy them if you want. In fact, I would recommend destroying them.

madmo44mag · December 13, 2013, 12:48 PM

James K - The BTAF made the call.
What brought attention was the number of guns he was buying in a short time with his 03 FFL.
The BTAF investigated him ( a little over a year) and he could document every transaction.
Their ruling was he had not violated any rule or law.
He was NOT making a profit nor running a business for profit only adding to his collection.
Most collectors don't have the means or resources to buy in bulk
This was back in the late 70's and early 80's.

Cheapshooter · December 17, 2013, 11:13 AM

Quote:

This was back in the late 70's and early 80's.

Does any finding from thirty years ago hold up today? I wouldn't take the chance just to get a free gun or two.
1. If someone has the resources to buy casses of guns to "cherry pick", they could certainly afford to just buy a good one outright.
2. However, on the other hand, they probably have the resources to pay a lawyer to defend them if the BATF wants to make a case out of him dealing in firearms.
The whole question is one of personal choice. If you want to take the chance on a BATF investigation just to get a couple free guns, then go for It. I tend to be much more cautious, but I have sold a couple guns from my C&R collection to "improve my collection" as It states in the BATF rules when I found others in better condition.

dogtown tom · December 18, 2013, 02:07 PM

Quote:

madmo44mag James K - The BTAF made the call.
What brought attention was the number of guns he was buying in a short time with his 03 FFL.
The BTAF investigated him ( a little over a year) and he could document every transaction.
Their ruling was he had not violated any rule or law.
He was NOT making a profit nor running a business for profit only adding to his collection.
Most collectors don't have the means or resources to buy in bulk
This was back in the late 70's and early 80's.

1. There is no requirement to make a profit to be engaged in the business. Buying guns that you have no intention of keeping is engaging in the business.....its called repetitive buying and selling. ATF will not care if you made or lost $$$ on the buying/selling.....only if you are buying guns not for your personal collection.
2. A "ATF ruling" is wholly and completely different than ATF choosing to not pursue criminal charges.
3. Did your friend continue to make quantity purchases and cherry pick?
4. ATF is decidedly more proactive in pursuing unlicensed dealers now than they were in the '70's.

noelf2 · December 18, 2013, 04:01 PM

Quote:

1. There is no requirement to make a profit to be engaged in the business. Buying guns that you have no intention of keeping is engaging in the business.....its called repetitive buying and selling. ATF will not care if you made or lost $$$ on the buying/selling.....only if you are buying guns not for your personal collection.

Apparently the ATF does care if you made some sort of profit. And it would hardly be likely that the ATF would be able to prove, or get admission from someone, that they didn't intend to keep the guns for themselves or their collection.

Relevant 18 USC 921 Definition:

(C) as applied to a dealer in firearms, as defined in section 921 (a)(11)(A), a person who devotes time, attention, and labor to dealing in firearms as a regular course of trade or business with the principal objective of livelihood and profit through the repetitive purchase and resale of firearms, but such term shall not include a person who makes occasional sales, exchanges, or purchases of firearms for the enhancement of a personal collection or for a hobby, or who sells all or part of his personal collection of firearms;

madmo44mag · December 18, 2013, 04:12 PM

My buddy for several years did make bulk purchases but not like your may think.
He would buy a case or two in a years time and over said time or longer sale off those that did not meet his collection standards.

noelf2 nailed it I think
(C) as applied to a dealer in firearms, as defined in section 921 (a)(11)(A), a person who devotes time, attention, and labor to dealing in firearms as a regular course of trade or business with the principal objective of livelihood and profit through the repetitive purchase and resale of firearms, but such term shall not include a person who makes occasional sales, exchanges, or purchases of firearms for the enhancement of a personal collection or for a hobby, or who sells all or part of his personal collection of firearms;

It was clearly a hobby and not a full time gig.

James K · December 18, 2013, 08:22 PM

Paranoid? OK, let's take a "frinstance". Say I have a C&R license, and I buy a lot of milsurp and sell the ones I don't need, to the tune of hundreds a year, to anyone who comes around.

One of those guns is used like a milsurp was used 50+ years ago. Does anyone think I am going to continue to keep my 03 license and keep peddling guns to all comers? Even if the folks on my friendly web site say I wasn't violating the law?

Does anyone think the antis won't push for a end to the C&R license, something they have already targeted? Did you see any exemption for C&R in the bans on "assault rifles" that passed following Newtown?

Jim

noelf2 · December 19, 2013, 07:01 AM

Quote:

Paranoid? OK, let's take a "frinstance". Say I have a C&R license, and I buy a lot of milsurp and sell the ones I don't need, to the tune of hundreds a year, to anyone who comes around.

They last part of your sentence (the anyone that comes around part) turned it into an irrational hypothetical vs. a "frinstance". If you don't break any laws, and you are really doing this to cherry pick and improve your collection, then it's on the ATF to prove you a liar. Prove me wrong! Come up with an example of your hypothetical.

Quote:

One of those guns is used like a milsurp was used 50+ years ago. Does anyone think I am going to continue to keep my 03 license and keep peddling guns to all comers? Even if the folks on my friendly web site say I wasn't violating the law?

Yes, I think you would keep your 03FFL. There was already an example posted where ATF backed down. Can you provide an example to the contrary, keeping in mind the 03FFL is using his/her license in the spirit of collecting? BTW, the "peddling guns to all comers" part adds drama and is, again, over the top. It supposes that the 03FFL holder is not considering the lawful requirements of the sale. I would change "peddling" to selling (or some sort of lawful disposition) and say "all qualified comers" versus "all comers" to keep this real and rational.

Quote:

Does anyone think the antis won't push for a end to the C&R license, something they have already targeted? Did you see any exemption for C&R in the bans on "assault rifles" that passed following Newtown?

I think the antis will push for the end of all licenses. Doubt most even know the difference between an 03 and an 01 FFL. Antis go after 01FFLs when they legally sell a gun and it ends up used in a crime. Can you give us an example of a legally sold gun being used in a crime that caused any licensee to lose their license? If you don't exercise your rights and privileges for fear of losing them, then, you don't really have them. (see, that's the paranoid part)

xring3 · December 19, 2013, 09:22 PM

What I do when disposing of C&R guns purchased with my 03 license is to put them on consignment with an 01 dealer. That puts some distance between me and the new buyer. They have to do a 4473 keeping the ATF happy, 01 dealer makes a buck keeping him happy, I MAY make a buck keeping me happy. Of course I do not dispose of cases at a time.

James K · December 20, 2013, 12:39 AM

OK, Noelf2, you have more faith than I have, and that may be good. Keep pretending that an 03 FFL can sell tons of guns on a regular and recurring basis and not have any problems if his "business" comes to the attention of BATFE.

And when does violating the law come under the heading of exercising my rights and privileges?

Jim

noelf2 · December 20, 2013, 06:55 AM

Quote:

Keep pretending that an 03 FFL can sell tons of guns on a regular and recurring basis and not have any problems

I will, thanks. You keep on pretending that the ATF is out to get'cha even if you stay within the letter of the law.

Quote:

And when does violating the law come under the heading of exercising my rights and privileges?

Violating what law?

dogtown tom · December 22, 2013, 07:06 PM

Quote:

noelf2

Quote:

Quote:
1. There is no requirement to make a profit to be engaged in the business. Buying guns that you have no intention of keeping is engaging in the business.....its called repetitive buying and selling. ATF will not care if you made or lost $$$ on the buying/selling.....only if you are buying guns not for your personal collection.

Apparently the ATF does care if you made some sort of profit. And it would hardly be likely that the ATF would be able to prove, or get admission from someone, that they didn't intend to keep the guns for themselves or their collection.

Your cut and paste proves my point..........there is no requirement to make a profit to be engaged in the business. ATF doesn't give a rats hiney if a dealer actually makes a profit. They are concerned with the repetitive purchase and sale of firearms with the INTENT to make a profit.....as stated in your cut and paste.

noelf2 · December 22, 2013, 08:39 PM

So, if your "intent" is to improve your collection, and your strategy is to cherry pick from bulk purchases and then legally dispose of those firearms that don't meet your criteria, you are not breaking the law. The ATF may wonder what the heck you are up to, but they will not be able to prove your intent other than what you say it is. If that is what your original point was, then I misunderstood you.

December 11, 2013, 05:42 PM	#1
BigD_in_FL Junior member Join Date: December 20, 2012 Location: The "Gunshine State" Posts: 1,981	C&R question On another forum, a question was raised regarding a C&R holder and buying and selling guns on a regular basis. I was under the impression that was a no-no, but no one seems able to provide any official info. What, exactly, IS the rule regarding a C&R buying and selling? TIA

December 11, 2013, 05:57 PM	#2
carguychris Senior Member Join Date: October 20, 2007 Location: Richardson, TX Posts: 7,523	An 03 Collector FFL- otherwise known as a C&R licensee, or C&R holder- may not be "engaged in the business" of selling firearms, whether or not those firearms are C&R eligible. "Engaged in the business" has a formal meaning under federal law, but it is somewhat murky, and is dependent on intent. It is discussed at length in the following thread: http://thefiringline.com/forums/showthread.php?t=535770 However, most authorities on the topic seem to agree that an 03 FFL's activities can only become problematic with regards to selling firearms; IOW a C&R licensee may buy to his/her heart's content. __________________ "Smokey, this is not 'Nam. This is bowling. There are rules... MARK IT ZERO!!" - Walter Sobchak Last edited by carguychris; December 11, 2013 at 05:59 PM. Reason: minor reword...

December 11, 2013, 06:19 PM	#3
CTS Senior Member Join Date: November 6, 2011 Location: NE Georgia Posts: 1,070	Pretty much cut and dried. If you are buying guns with the intent of selling for a profit you are in the business an require an 01 Dealer in firearms other than destructive devices license. An 03 license does not give the holder the right to deal in curio and relics for the purposes of profit. __________________ 01 FFL, NRA, NAGR, GOA.

December 11, 2013, 06:28 PM	#4
madmo44mag Senior Member Join Date: December 29, 2008 Location: Ft.Worth, Texas Posts: 1,522	Here is a twist that a good friend had happen many years ago that left the ATF scratching their heads. He bought several cases of milsurp rifles and cherry picked them and sold the rest for what he paid for them plus his cost of shipping. After almost a year it was decided that although he purchased in bulk he was not profiting and the ATF backed off. __________________ Texas - Not just a state but an attitude! For monthly shooting events in DFW visit http://www.meetup.com/TexasGunOwner-DFW

December 12, 2013, 06:10 AM	#7
Doc Hoy Senior Member Join Date: October 24, 2008 Location: Naples, Fl Posts: 5,440	Just read through that thread... It is helpful even if it doesn't pin down specifics. I got my C&R some months ago with the idea of easing purchases of older pistols online. (Read any of my comments and you know I am in love with the cheap junk Saturday night specials. I appear to be somewhat unique in that affection.) It has already worked very well for about half a dozen pistols. But now I am thinking that some of the revolvers are not worth keeping. I figured as long as I sell them for less than I paid for them, I'd be okay with BATF. But that is not the case. Plenty of people who are "in business" make transactions which don't result in a profit. I am going to be careful how I sell anything, Whether it is under my C&R or not. __________________ Seek truth. Relax. Take a breath.

December 11, 2013, 07:02 PM	#5
BigD_in_FL Junior member Join Date: December 20, 2012 Location: The "Gunshine State" Posts: 1,981	^^^thanks, that was one of the arguments

December 11, 2013, 11:13 PM	#6
James K Member In Memoriam Join Date: March 17, 1999 Posts: 24,383	Interesting, Madmo, but "decided by" whom? BATFE itself? A U.S. Attorney? a Federal court? In any case, only a court decision would provide precedent, and even then another person doing the same thing in another district could be tried and convicted of dealing without a license. A lot depends on things over which the licensee has no control. If he sells guns on an 03 FFL and one of those guns falls into the famous "wrong hands" and is used in a serious crime, not only will the "collector" go to prison, but the whole C&R program could be terminated, either by Congress or by an executive order to tighten 03 license requirements so that effectively none would be issued. Jim

December 12, 2013, 04:17 PM	#9
CTS Senior Member Join Date: November 6, 2011 Location: NE Georgia Posts: 1,070	Right. You can sell a gun or even several guns from you private collection and make a profit on them. If you did two or three a month you might have a problem. If you bought for your own collection and decide to sell later for what ever reason you are fine. If you really want to get the correct info go here: ATF.gov and click on the FAQ section. http://www.atf.gov/content/Firearms/..._industry_tabs __________________ 01 FFL, NRA, NAGR, GOA.

December 13, 2013, 10:54 AM	#10
jag2 Senior Member Join Date: June 30, 2009 Location: dallas Posts: 773	Two points to ponder. Most of the C&R guns I buy are from other collectors. We have common interests and from time to time change out our collections. Price has nothing to do with it. That's what the law is intended to do. The other point is that there is no record of a C&R transaction sent anywhere. The paper work is exchanged between the two parties. You would have to really abuse the privilege the C&R gives you to come to the ATFs attention. Even when you give up your license you just keep the records, they are never sent in to anyone.

December 13, 2013, 12:08 PM	#11
noelf2 Senior Member Join Date: April 14, 2008 Location: Stuart, VA Posts: 2,473	Jag, mostly correct. However, when you give up your license you don't have to keep any records. You can destroy them if you want. In fact, I would recommend destroying them. __________________ Liberty and freedom often offends those who understand neither.

December 13, 2013, 12:48 PM	#12
madmo44mag Senior Member Join Date: December 29, 2008 Location: Ft.Worth, Texas Posts: 1,522	James K - The BTAF made the call. What brought attention was the number of guns he was buying in a short time with his 03 FFL. The BTAF investigated him ( a little over a year) and he could document every transaction. Their ruling was he had not violated any rule or law. He was NOT making a profit nor running a business for profit only adding to his collection. Most collectors don't have the means or resources to buy in bulk This was back in the late 70's and early 80's. __________________ Texas - Not just a state but an attitude! For monthly shooting events in DFW visit http://www.meetup.com/TexasGunOwner-DFW

December 18, 2013, 04:12 PM	#16
madmo44mag Senior Member Join Date: December 29, 2008 Location: Ft.Worth, Texas Posts: 1,522	My buddy for several years did make bulk purchases but not like your may think. He would buy a case or two in a years time and over said time or longer sale off those that did not meet his collection standards. noelf2 nailed it I think (C) as applied to a dealer in firearms, as defined in section 921 (a)(11)(A), a person who devotes time, attention, and labor to dealing in firearms as a regular course of trade or business with the principal objective of livelihood and profit through the repetitive purchase and resale of firearms, but such term shall not include a person who makes occasional sales, exchanges, or purchases of firearms for the enhancement of a personal collection or for a hobby, or who sells all or part of his personal collection of firearms; It was clearly a hobby and not a full time gig. __________________ Texas - Not just a state but an attitude! For monthly shooting events in DFW visit http://www.meetup.com/TexasGunOwner-DFW

December 18, 2013, 08:22 PM	#17
James K Member In Memoriam Join Date: March 17, 1999 Posts: 24,383	Paranoid? OK, let's take a "frinstance". Say I have a C&R license, and I buy a lot of milsurp and sell the ones I don't need, to the tune of hundreds a year, to anyone who comes around. One of those guns is used like a milsurp was used 50+ years ago. Does anyone think I am going to continue to keep my 03 license and keep peddling guns to all comers? Even if the folks on my friendly web site say I wasn't violating the law? Does anyone think the antis won't push for a end to the C&R license, something they have already targeted? Did you see any exemption for C&R in the bans on "assault rifles" that passed following Newtown? Jim

December 19, 2013, 09:22 PM	#19
xring3 Member Join Date: March 6, 2008 Location: northwest Oklahoma Posts: 28	What I do when disposing of C&R guns purchased with my 03 license is to put them on consignment with an 01 dealer. That puts some distance between me and the new buyer. They have to do a 4473 keeping the ATF happy, 01 dealer makes a buck keeping him happy, I MAY make a buck keeping me happy. Of course I do not dispose of cases at a time.

December 20, 2013, 12:39 AM	#20
James K Member In Memoriam Join Date: March 17, 1999 Posts: 24,383	OK, Noelf2, you have more faith than I have, and that may be good. Keep pretending that an 03 FFL can sell tons of guns on a regular and recurring basis and not have any problems if his "business" comes to the attention of BATFE. And when does violating the law come under the heading of exercising my rights and privileges? Jim

December 22, 2013, 08:39 PM	#23
noelf2 Senior Member Join Date: April 14, 2008 Location: Stuart, VA Posts: 2,473	So, if your "intent" is to improve your collection, and your strategy is to cherry pick from bulk purchases and then legally dispose of those firearms that don't meet your criteria, you are not breaking the law. The ATF may wonder what the heck you are up to, but they will not be able to prove your intent other than what you say it is. If that is what your original point was, then I misunderstood you. __________________ Liberty and freedom often offends those who understand neither.