Suppressors Fair prices for a trust (NFA secondary market)

[SRSDriver]

A friend is leaving town and selling his NFA trust. He has a rock river SBR with nothing fancy on it, a gemtech G5, and a gemtech oasis integrated ruger upper.

I don't know what the NFA secondary market looks like, and don't really need any of this stuff for myself, but he is looking to transfer to a new job pretty quick. Any thoughts on the resale market for NFA?

ETA: NOT selling or advertising for him, it's not for sale. Just want to help my friend out by offering him a fair price for his stuff so he can move.

 

[GunKnowledge]

Re: Fair prices for a trust (NFA secondary market)

Resale value for suppressors and SBRs is pretty much whatever low ridiculous offer you feel like. Your competitive buyer pool is very small.

Transferable machine guns (only NFA worth selling) hold their value and are usually seen as solid investments, but used cans and SBRs are horrible investments.

If you sell in state, still a $200 transfer tax for each, if you sell out of state its TWO $200 transfer taxes per item. Only really happens for machineguns.

Also, a lot of folks aren't interested in second hand NFA as they don't trust the legalities. They'd rather buy new and clean.

At the shop we'd have people come in with $200 .22 cans and want to resell them, and were very disappointed to hear that we pretty much valued them at a box or two of ammo. That would be IF they could find someone in state interested.

If I was instate with you, I might be a buyer at:

AR15 SBR - $350
Gemtech G5 - $250
Gemtech Oasis upper - $250


But that's not his biggest problem. You said he's moving "pretty quick". Does he know how slow NFA transfers are approved? They may not get transferred in time, and he may have to add you or someone else in state to the trust just to leave his stuff behind when he leaves.

 

[Helter]

Re: Fair prices for a trust (NFA secondary market)

Since it's owned by a trust, could the current owner simply name a new beneficiary and trustee (ie, the buyer)?

 

[Conqueror]

Re: Fair prices for a trust (NFA secondary market)

The SBR should hold better value than that. Look on AR-15, Sturm, etc., no one is selling low-mileage SBRs for $350, or else I would be snapping them up by the armload.

 

[GunKnowledge]

Re: Fair prices for a trust (NFA secondary market)

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Helter</div><div class="ubbcode-body">Since it's owned by a trust, could the current owner simply name a new beneficiary and trustee (ie, the buyer)? </div></div>

No, ATF considers that tax evasion since you used the trust to transfer the NFA items without the new owner paying the $200 tax.

 

[GunKnowledge]

Re: Fair prices for a trust (NFA secondary market)

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Conqueror</div><div class="ubbcode-body">The SBR should hold better value than that. Look on AR-15, Sturm, etc., no one is selling low-mileage SBRs for $350, or else I would be snapping them up by the armload. </div></div>


I just checked on subguns (my usual reference for NFA pricing) the first several pages of ARFCOM, Sturmgewehr and Gunbroker; and found<span style="color: #FF0000"> 0 used SBR ARs</span>.

Anyone can buy a short barrel and Form 1 a receiver, so you're pretty much just buying used AR parts with a very expensive receiver. When you can get brand new AR15 parts kits minus lower receiver for $400 brand new, that makes used parts from a basic model AR15 pretty plain. Yes, a fancy model like an Colt/HK/LWRC/LMT factory SBR will hold value better as a complete gun, but your typical run of the mill AR that was homemade won't. RRA wasn't doing factory SBRs last time I asked them.

Where are some of the used SBR AR15s that are fetching good money?

 

[Conqueror]

Re: Fair prices for a trust (NFA secondary market)

I'm not going to repeat your whole search, I'll take it at face value, but I did just glance in the ARF EE and SBR uppers are going for 400-700 depending on options with no BCG/CH.

Now, do I expect a plain-jane RRA upper to command that much? No. But, as you pointed out, it's easy enough for someone to Form 1 a lower, so I bet he could get $300 for the upper without breaking a sweat. If someone out of state would pay $300 for the upper, I bet he could get more than $350 from an in-state buyer, even if their first step would be to hawk the upper on Gunbroker. That would basically get them a free SBR lower.

IIRC RRA does do (or has done) factory SBRs, they just aren't visible on the webpage.

 

[Charger442]

Re: Fair prices for a trust (NFA secondary market)

its not the upper that he is really selling you as an SBR, its the lower which is what is engraved and owned by the trust. that part is actually what is registered as an NFA firearm. Uppers are always going to be uppers and can be bought and sold freely since they are only gun parts. a registered SBR lower is a different animal.

 

[Conqueror]

Re: Fair prices for a trust (NFA secondary market)

Thank you, captain obvious.

My point was that if the upper is worth X, you should be able to find someone who will buy the complete rifle for more than X.

 

[50APIT]

Re: Fair prices for a trust (NFA secondary market)

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: KSwift</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Helter</div><div class="ubbcode-body">Since it's owned by a trust, could the current owner simply name a new beneficiary and trustee (ie, the buyer)? </div></div>

No, ATF considers that tax evasion since you used the trust to transfer the NFA items without the new owner paying the $200 tax. </div></div>

The OP makes it sound like that is exactly what is friend is looking to do. "A friend is leaving town and selling his NFA trust."
That being said, has the ATF ever put out a letter or other written interpretation on the subject?
Even if the ATF allowed someone to "sell" a trust, my understanding is that the grantor cannot be changed. That would mean the seller could change the trustees even after he sold the trust.
A corporation on the other hand would allow a much more straight forward transfer, though there would still be the possibility of the ATF frowning on the whole arrangement.

 

[Helter]

Re: Fair prices for a trust (NFA secondary market)

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: 50APIT</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: KSwift</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Helter</div><div class="ubbcode-body">Since it's owned by a trust, could the current owner simply name a new beneficiary and trustee (ie, the buyer)? </div></div>

No, ATF considers that tax evasion since you used the trust to transfer the NFA items without the new owner paying the $200 tax. </div></div>

The OP makes it sound like that is exactly what is friend is looking to do. "A friend is leaving town and selling his NFA trust."
That being said, has the ATF ever put out a letter or other written interpretation on the subject?
Even if the ATF allowed someone to "sell" a trust, my understanding is that the grantor cannot be changed. That would mean the seller could change the trustees even after he sold the trust.
A corporation on the other hand would allow a much more straight forward transfer, though there would still be the possibility of the ATF frowning on the whole arrangement. </div></div>

I'm not a lawyer, don't play one on tv, and didn't stay at any discount hotel chains recently.
However, I don't think you can sell a trust. The trust is like a person, it exists in it's own right, it isn't property.

RE: KSwift, is there any documentation for that? I don't doubt you, but I'm curious about the technicalities of it. If a trust owns a suppressor, changing trustees doesn't change the owner, it's still owned by the trust.

 

[bdcmh]

Re: Fair prices for a trust (NFA secondary market)

If you are selling NFA items fast (well relatively fast as nothing NFA related ever transfers fast) you will take a huge hit and be close to the values KSwift mentioned with the exception of the SBR. However, if you take your time and keep it advertised in state you can get within a few hundred of the original price. With the SBR either it is factory and worth more or it is Form 1 and break it apart. You can sell the upper as a pistol upper, send a letter to the ATF to take the lower off of the registry and sell the completed lower and net more than $350. So make your offer somewhere in between.

As a practical matter if you know the seller and you trust each other (pun, I know) he can put you as a trustee on the trust and you could have the NFA devices in your possession. That would give you time to do the appropriate paperwork to transfer them to you or your trust while he can move without them.

 

[SRSDriver]

Re: Fair prices for a trust (NFA secondary market)

The NFA lawyer that did the original trust apparently has a mechanism he believes can effectively transfer control of the trust to a new buyer in state. New buyer was found, lawyer is doing whatever NFA lawyers do, so I'm fortunately out of the whole thing.

I'll report back on whatever magic the lawyer did once it's all said and done.

Thanks guys! I'm betting that the new buyer overpaid...

 

[poison123]

Re: Fair prices for a trust (NFA secondary market)

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: SRSDriver</div><div class="ubbcode-body">The NFA lawyer that did the original trust apparently has a mechanism he believes can effectively transfer control of the trust to a new buyer in state. New buyer was found, lawyer is doing whatever NFA lawyers do, so I'm fortunately out of the whole thing.

I'll report back on whatever magic the lawyer did once it's all said and done.

Thanks guys! I'm betting that the new buyer overpaid... </div></div>

Sounds like someone is going to jail.

 

[GunKnowledge]

Re: Fair prices for a trust (NFA secondary market)

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Poison123</div><div class="ubbcode-body">

Sounds like someone is going to jail. </div></div>

That's what it sounds like to me too. Say goodbye to your friend.

 

[glocker17]

Re: Fair prices for a trust (NFA secondary market)

I am not sure that it can't be done.

I have a trust that has had amendments made and an additional co-trustee added by my attorney. It may depend on your states trust laws, and how the original trust was formed. You need to submit the amended version to BATFE with future purchases.

I am sure BATFE would frown upon it being used in lieu of a transfer, but that doesn't mean it illegal. It wouldn't be any different than corp owned items, which may convey with changes/sale of a corp, would it?

 

[SRSDriver]

Re: Fair prices for a trust (NFA secondary market)

Got the 'down low' on this 'deal' today. Pretty much the NFA lawyer is proposing nothing more than locking the NFA in a safe deposit box, creating a new trust for the purchaser, and then transferring the NFA items to the new guys trust via stamps.

Funny, I have a feeling the new guy buying all this stuff thought he was only going to be out the $600 some odd dollars for the 'new trust changes'...

Anyway, nothing more than a typical in state transfer, with some NFA lawyer wordsmithing and misrepresentation to sell another basic NFA trust...

 

[TheShooter]

Re: Fair prices for a trust (NFA secondary market)

I would be very hesitant to try to sell a trust and would never personally do it without several legal opinions. A trust is an entity designed for transfer of property from an individual to another. They are frequently used to avoid taxes or retain control of a gift after it has been given. The fact that they are used to hold assets like nfa items should not confuse a trust with a business entity. If you want to sell an entity, it better be a inc, LLC, or lp.

I am not a lawyer, but I work for lawyers that specialize in estate planning and spend a fair amount of my time reviewing trust docs.