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-   -   Shifting Title II inventory to corp (http://www.firearmstalk.com/forums/f47/shifting-title-ii-inventory-corp-34136/)

k3naaa 11-09-2010 12:27 AM

Shifting Title II inventory to corp
 
I'm a sole-proprietor FFL holder w/ a decent inventory of Title II items. I'm considering changing my business structure towards incorporation, and was wondering about my options to transfer my inventory to the new entity should I do it.

Can a Form 3 be used to transfer across the "cutoff" date? That is, I have my $500 SOT paid for the current year, and I don't want to pay the $500 for the corp so that it overlaps, but rather to start the new SOT year. Does the NFA branch allow Form 3's to go this way, or would it in fact require me to pay an additional $500.

Simplified:
2010: sole-prop FFL pays $500 tax
2011: corp FFL pays $500 tax
??2011: sole-prop needs to pay $500 to transfer over inventory??

If this is not allowed, I'm thinking it might just be cheapest to transfer to another friend w/ FFL+SOT, then have him transfer it all back to my new corp in the new tax year.

Ideas?

billdeserthills 11-09-2010 12:50 AM

Eew, all I know is after initially filling out my ffl papers as a sole proprieter and later mentioning that I would prefer having it with my LLC instead the atf rep got very ugly telling me I could refile as an LLC later, but that it might not be approved...

k3naaa 11-09-2010 02:12 AM

I mentioned it to the inspector at my last audit, and he didn't seemed bothered by it at all, just emphasizing that any actual change in business organization (even as little as changing a DBA) required immediate notification to the ATF. I guess your interviewer may have been annoyed that your situation was while still in the application process.

Glasshartt 11-09-2010 02:43 AM

K3, can you go by the introductions section and tell us a little bit about yourself?

billdeserthills 11-09-2010 04:20 AM

I don't know,
But I can confirm the most used word by the ATF when asked any question by myself- NO, and NO you can't do that. I have gotten conflicting answers from different ATF personel, sometimes many different answers. One good one was whether I could transfer a handgun to someone with a Californy drivers license, the license had listed this persons actual residence in Arizona- ATF said No initially, then ten days later says Well legally you can transfer the gun, but I wouldn't do it if I was you.
Unfortunately, of course my customer already has an Az Id card by then...

NWBuckeye 12-02-2010 01:08 AM

Why Change Owner Status on Anything? Not needed.
 
You already have the firearms under Sole Proprietor ownership correct?. Unless you are holding Post Samples, the Firearms will still be Under your control, not requiring any further transfer(s). If your wanting to retain the Tax Free transfer (Form3) on the firearm(s), then you still need to do nothing as their Ownership belongs to you as a Sole Proprietor, and once the new FFL/SOT Lic. is established under your name as a Sole Proprietor, transfer status becomes Tax Free once more across state lines via Form 3(s).

k3naaa 12-02-2010 04:48 PM

Quote:

Originally Posted by NWBuckeye (Post 395554)
You already have the firearms under Sole Proprietor ownership correct?. Unless you are holding Post Samples, the Firearms will still be Under your control, not requiring any further transfer(s). If your wanting to retain the Tax Free transfer (Form3) on the firearm(s), then you still need to do nothing as their Ownership belongs to you as a Sole Proprietor, and once the new FFL/SOT Lic. is established under your name as a Sole Proprietor, transfer status becomes Tax Free once more across state lines via Form 3(s).

I have transferable inventory under my current sole-prop, and I want to shift my business to a corporate structure (for liability/accounting purposes). If I leave my current inventory under my own name, then I cannot use a future corporate SOT for Form 3 transfers to other dealers (since they are still owned by my name), but rather I'd have to maintain an additional sole-prop FFL/SOT alongside my new corporate FFL/SOT, which I'd like to avoid due to the extra $500 yearly cost.

NWBuckeye 12-02-2010 08:12 PM

Will this New Corp. also be at a New Location?.
 
You are correct that a Tax Paid Transfer of ea. firearm will have to take place if you drop your current Lic. & SOT prior to transfering them to another SOT.
If you start a new Corp. w/FFL with a new EIN/SOT at a new Location before your current SOT expires, then you may be able to do Tax Free Transfers before your Prior Lic. & SOT expires. ATF will most likely require you to send in all your Aquisition/Disposition books also after dropping the other Lic. instead of transfering them to your new business though. Let us know what the Verdict is once all is said and done. Good luck.

NWBuckeye 12-02-2010 08:30 PM

You'll pay the SOT fee anyway for the New Business.
 
If I leave my current inventory under my own name, then I cannot use a future corporate SOT for Form 3 transfers to other dealers (since they are still owned by my name), but rather I'd have to maintain an additional sole-prop FFL/SOT alongside my new corporate FFL/SOT, which I'd like to avoid due to the extra $500 yearly cost.
SOT goes from July 1-June 30 yearly, and they are not pro-rated, so you will incurr a new SOT fee anyways if you begin your new Corp. before July 1st..
The Double Fee would most likely be Less than the Transfer Stamps incurred from your inventory would it not?.


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