24 Senators Demand "Engaged in The Business of Selling Firearms" Defined by EO

[buckhorn_cortez]

I think Mom and Dad, and the kids Susie and Chip, together are not going to be able to sell 49 guns apiece and get away with it, most states are community property.

That has nothing to do with the 50 number as you're now conflating state laws with federal laws. The state community property law has NOTHING to do with a federal law setting a limit of 50 guns.

As long as each person in the household obeys the less than 50 number, they've complied with the federal law - even though 147 guns have been handled.

If the household does all of the business in cash or trades, they don't keep any books and don't declare any of the money on their income tax - they're not a business and in compliance with the "less than 50" number.

Again - setting a number only creates the law avoidance point.

[Frank Ettin]

Originally Posted by buckhorn_cortez

...Personal collecting doesn't involve the "principal objective of livelihood and profit..." while running a business does....

It depends on exactly what you're doing and how you're doing it. You don't have the final say on the question. You might think you're only "personal collecting"; but if the judge and jury disagree, you'll be going to prison anyway.

See post 8 for a look at how courts have dealt with the question.

Originally Posted by kilimanjaro

....most states are community property....

Nope, most States are not community property States. Only nine States are community property States. In the rest common law marital property principles apply.

Originally Posted by buckhorn_cortez

...Is the person is using gun trading as a way to generate money or simply collect guns? If they're using guns as a source of income, then they're a business and require an FFL....

That's a gross oversimplification.

Under federal law, one needs an FFL to engage in the business of a dealer in firearms. "Engaged in the business" is defined at 18 USC 921(a)(21)(C), emphasis added:

(21) The term “engaged in the business” means—

(A)...

(B) ...

(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;...

The operative concepts are (1) devoting time, attention and labor; (2) doing so regularly as a trade or business; (3) the repetitive purchase and resale of guns; and (4) intending to make money.

"Livelihood" simply means:

1: means of support or subsistence

Nothing in the statutory definition of "engaged in the business" requires that it be one's only business or means of support. It could be a side business, a secondary business or one of several ways you have of bringing money into the household. What matters is that you're doing it regularly to make money. You don't even necessarily need to make a profit to be "engaged in business." People go into business all the time and wind up not making money. It's not that they're not engaged in business; it's just that they're not very good at it.

But an occasional sale is not being "engaged in the business." Where is the the line between an occasional sale and the repetitive purchase and resale? That's not clear from the statutes, and I don't know if there's been any clarification judicially. Again, see post 8 for citations showing how courts have dealt with the issue.

Money is fungible. The money spent on guns and shooting is interchangeable with the money spent to pay bills and buy groceries. I can set up different operating accounts to track my money, but it's all my money. When my finances are considered in the aggregate, the sources of the money don't change the character of the money, nor does what I spend it on change the character of the money. It's just my money. (The times tracking is important are for keeping proper track of marital property, e. g., distinguishing between separate property and marital/community property; or when amounts of money from certain sources, or amounts paid, might be subject to different tax treatment, e. g., capital gains or municipal bond income or medical expenses.)

The only way to really keep finances truly separate is by creating different legal entities, like corporations, for different activities. Of course if you have a corporation for your gun buying and selling, that looks even more like a business.

So the bottom line is that if a federal prosecutor, looking at the totality of the circumstances and all the factors discussed in the various cases, decides that he can first convince a grand jury that there's probable cause to believe you're buying and selling guns as a trade or business, and then convince a trial jury beyond a reasonable doubt that you're buying and selling guns as a trade or business, he very well might prosecute you.

Originally Posted by buckhorn_cortez

...If the household does all of the business in cash or trades, they don't keep any books and don't declare any of the money on their income tax - they're not a business....

Not necessarily. They might just be running their business sloppily (and violating some tax laws along the way).

[johnwilliamson062]

What about defining a number that, when under is definitely NOT "engaged in the business." 'Under fifty you definitely aren't, over 50 you better be careful.' I know that isn't what the 24 Senators are after, but I would sure like it. I would do a lot more picking up deals I find whether I was interested in the specific firearm or not. I pass on a lot of 'need cash today ads' where I know I could resell the gun over a few weeks for more than the current seller is asking. Take it out to shoot a little and get familiar with the design then send it on its way for a little extra cash.