NFA transfer through Corporation

[anonymous_]

I've looked into a trust and decided a corporation is the best way for me to go with my suppressor purchase. However, when I look online for examples everything pushes me towards a trust. I've already gone down the trust route and don't like it. If anyone has any input for special considerations about forming the corporation or experiences using a corporation I'd love to hear them. Hopefully someone can write a "how to do it" kind of response or link one. Thanks.

EDIT: not looking to hear about how much “better” a trust is or why I should just do a trust. Just looking to hear about people who have gone the Corp route and what they did.

 

[alamo5000]

One word.

Taxes.

The way you incorporate is much more along the lines of a gun range or something like that where guns, ammo, suppressors etc are part of the business model.

You will have to get a tax ID number, articles of incorporation and a lot more state specific stuff.

It doesn't help with the NFA process at all. Corporate structures are usually to limit liability for the owners and possibly to gain tax benefits. If you are not careful you might wind up filing taxes every year on the corporation as well as yourself.

If you owned a hog hunting business and wanted to be sort of protected from getting sued by a tourist that doesn't know much about guns putting assets under a corporate name might make sense.

In general though a trust is a well worn path. For like $100 bucks you can get a generic trust and buy all of the stuff you want under that name. It's way easier than the corporate route. If you don't have 17 cousins all on one trust it's really easy after the initial setup expense.

With a corporation those expenses are way more costly up front in my experience. Also you can very easily wind up with ongoing costs as well. With a trust that's not really a concern.

 

[Downtown]

Another tax issue is that many states tax corporate assets every year. So all corporate property would need to be listed for tax purposes. Also most states have corporate registration fees due annually.

 

[alamo5000]

Another tax issue is that many states tax corporate assets every year. So all corporate property would need to be listed for tax purposes.

Paying the accountant to sort through all of the crap is often times more expensive than the actual tax.

 

[Newbie2020]

What didn’t you like about the trust that is better with a corporation? I just formed my trust and I’m wondering what I’m missing?

 

[Mudmarine]

What didn’t you like about the trust that is better with a corporation? I just formed my trust and I’m wondering what I’m missing?

You’re not missing anything. Corps, specifically sub-s corps used to be all the rage before trusts became the nfa goto. Like was stated earlier, corps are governed by the state and there are usually reporting requirements, taxes, etc., along with some heavy lifting required upfront to get one started.

A trust on the other hand is easy, cheap and mostly a private thing between you and the ATF, or if you’re using a trust for owning something like real estate, between you and the bank/county.

 

[anonymous_]

What didn’t you like about the trust that is better with a corporation? I just formed my trust and I’m wondering what I’m missing?

Trusts are neat if you want to have a sweet system that will work while you're living and maybe one or two generations down the road even in states like mine that don't require the trust to end. If you're looking for real protection of your firearms from grubby hands uncle sam then you need to go through a corporation. Historically speaking guns typically aren't banned but the transfer is. Therefore a trust will work awesome for an individual now but when the trust ends and the items get transferred the laws may have changed and uncle sam will get them back. If the laws never change then it doesn't matter. However, I expect them to change for more than just NFA firearms that will be held in the LLC in my lifetime.

Like everyone has ranted on this post already trusts are much easier but they missed that they don't provide protection for creating a family dynasty armory when the trust ends. After working for a couple weeks with my attorney we decided the costs of having an LLC in my case is way better than having a trust. Also, for everyone concerned with the costs. I DON'T CARE ABOUT COSTS. It's fairly easy to set up some investments with the corp to pay for the maintenance costs and potentially even maintenance on the firearms as well.

So long story short, does anyone have any experience with filing with a corp or establishing the corp?

 

[Downtown]

Your attorneys should, or at least know of another attorney who does. You need a attorney in your state who knows your states incorporation laws. My experience in my state isn't that useful to you, so asking on a nationwide forum really isn't that helpful.

 

[anonymous_]

Your attorneys should, or at least know of another attorney who does. You need a attorney in your state who knows your states incorporation laws. My experience in my state isn't that useful to you, so asking on a nationwide forum really isn't that helpful.

Assuming you've gone through a similar process before, your experience would be helpful. As a consultant in the professional world I always expect my clients to do some of their own research and ask others who have had similar experiences what they learned in addition to my services. Each parties perspective often lends a new realization to the situation at large. Furthermore, the process of using the corp to obtain the firearm is a national level process lending credibility to the notion of asking about others experiences on a nationwide forum. So, if you have an experience using a corp to purchase NFA products or establishing a corp for such purposes I'd love to hear about your experiences.

 

[hereinaz]

Your attorney should answer the questions, not random internets.

And, an LLC is not a corporation. Though it can be taxed as one.

An LLC is just as easy as a trust on the paperwork side.

But, when different people end up on the LLC, you will end up with the same sort of problem as with a trust.

 

[anonymous_]

Your attorney should answer the questions, not random internets.

And, an LLC is not a corporation. Though it can be taxed as one.

An LLC is just as easy as a trust on the paperwork side.

But, when different people end up on the LLC, you will end up with the same sort of problem as with a trust.

Thanks for the input. Read the above response if you still question the reason for the post. True on the discrepancy in terminology but for this application they are similar enough. Have you personally done it before? Did you place any special verbiage in the company articles? The LLC route definitely has quirks in function and isn't for most people, but again, not the point of the post.

 

[chrome]

Thanks for the input. Read the above response if you still question the reason for the post. True on the discrepancy in terminology but for this application they are similar enough. Have you personally done it before? Did you place any special verbiage in the company articles? The LLC route definitely has quirks in function and isn't for most people, but again, not the point of the post.

Unless you already have an LLC that is generating revenue, I am missing the ROI on using it solely as a vehicle for NFA acquisitions as opposed to the trust. Depending on your state, you'll be filing 200-$1,000 a year on LLC filing fees. If you create an LLC just for Class III items, and it doesn't generate any revenue, those Class III items will continue be very expensive on a yearly basis as opposed to a trust.

I have an LLC for my side hustle/consulting biz, but I decided on a trust for all class III items even in the face of having a LLC that generates revenue to justify the state filing fees.

To answer you question directly, I do not foresee any specific language you'd put in the company articles to address the class III items.

 

[hereinaz]

Thanks for the input. Read the above response if you still question the reason for the post. True on the discrepancy in terminology but for this application they are similar enough. Have you personally done it before? Did you place any special verbiage in the company articles? The LLC route definitely has quirks in function and isn't for most people, but again, not the point of the post.

Well, I am an attorney, and though I could answer your question for Arizona, I won't. Giving legal advice and asking for legal advice, you will get the same answer from me. It is always ask your own attorney.

State law is different, and there are so many variables that whatever advice you get here is suspect.

And, language and specifics matter. The law isn't like hand grenades, close enough isn't good enough.

 

[anonymous_]

Unless you already have an LLC that is generating revenue, I am missing the ROI on using it solely as a vehicle for NFA acquisitions as opposed to the trust. Depending on your state, you'll be filing 200-$1,000 a year on LLC filing fees. If you create an LLC just for Class III items, and it doesn't generate any revenue, those Class III items will continue be very expensive on a yearly basis as opposed to a trust.

I have an LLC for my side hustle/consulting biz, but I decided on a trust for all class III items even in the face of having a LLC that generates revenue to justify the state filing fees.

To answer you question directly, I do not foresee any specific language you'd put in the company articles to address the class III items.

Thanks for the input. Like mentioned a bunch of times already money doesn’t matter and there are reasons I’m ditching the trust and moving over. In my state the LLC costs almost nothing. In fact it’s 1/3 the price for me to set up the LLC than it is to have a cheap attorney do a gun trust.

 

[anonymous_]

Well, I am an attorney, and though I could answer your question for Arizona, I won't. Giving legal advice and asking for legal advice, you will get the same answer from me. It is always ask your own attorney.

State law is different, and there are so many variables that whatever advice you get here is suspect.

And, language and specifics matter. The law isn't like hand grenades, close enough isn't good enough.

Already talked to the attorney for weeks. Read my above comment about the origination of the post if you’re interested in why consultants should encourage 3rd party research from all avenues including this one. For someone who doesn’t want to give an opinion you sure seem to give a lot of opinions . Have fun dude but no need to hijack a post.

 

[alamo5000]

Thanks for the input. Like mentioned a bunch of times already money doesn’t matter and there are reasons I’m ditching the trust and moving over. In my state the LLC costs almost nothing. In fact it’s 1/3 the price for me to set up the LLC than it is to have a cheap attorney do a gun trust.

Who said you need an attorney to create a trust?

You can buy pre packaged ones from silencer shop and numerous other outfits for really cheap.

I got mine done at coyote rifle works. They sell them for $95 bucks total out the door cost. I've never seen nor met anyone there either and I'm not a lawyer either.

At Silencer Shop you can add a trust as a tack on for $25. For one equivalent to mine it's $130 flat one time fee.

The general consensus here is that doing a corporation or LLC is pretty stupid for buying NFA items. That is unless there is a specific reason to do so.

You keep on saying money doesn't matter, but if that's the case just go on and do it.

I don't know what planted the idea in your head that the government can or will be able to crack down on Trusts any more than they would an LLC or other corporate structure, but your fears are basically not true. I would say get off it and move along.

If you want to do it under another structure, fine, be my guest, but that still doesn't make your fears and misunderstanding of things to be valid.

 

[alamo5000]

Trusts are neat if you want to have a sweet system that will work while you're living and maybe one or two generations down the road even in states like mine that don't require the trust to end. If you're looking for real protection of your firearms from grubby hands uncle sam then you need to go through a corporation. Historically speaking guns typically aren't banned but the transfer is. Therefore a trust will work awesome for an individual now but when the trust ends and the items get transferred the laws may have changed and uncle sam will get them back.

Honestly this is the most bullshit I have ever seen packed into one post. Everything you said there is wrong.

And on top of that "Uncle Sam" won't get shit 'back'. The government has never owned any guns of mine.

 

[anonymous_]

Who said you need an attorney to create a trust?

You can buy pre packaged ones from silencer shop and numerous other outfits for really cheap.

I got mine done at coyote rifle works. They sell them for $95 bucks total out the door cost. I've never seen nor met anyone there either and I'm not a lawyer either.

At Silencer Shop you can add a trust as a tack on for $25. For one equivalent to mine it's $130 flat one time fee.

The general consensus here is that doing a corporation or LLC is pretty stupid for buying NFA items. That is unless there is a specific reason to do so.

You keep on saying money doesn't matter, but if that's the case just go on and do it.

I don't know what planted the idea in your head that the government can or will be able to crack down on Trusts any more than they would an LLC or other corporate structure, but your fears are basically not true. I would say get off it and move along.

If you want to do it under another structure, fine, be my guest, but that still doesn't make your fears and misunderstanding of things to be valid.

Thanks for the input. I disagree and encourage you to re read the above comments do some research and understand your situation may be different.

 

[anonymous_]

Honestly this is the most bullshit I have ever seen packed into one post. Everything you said there is wrong.

And on top of that "Uncle Sam" won't get shit 'back'. The government has never owned any guns of mine.

Please feel free to provide evidence. I’d be happy if this was incorrect.

 

[alamo5000]

Thanks for the input. I disagree and encourage you to re read the above comments do some research and understand your situation may be different.

You can disagree all you want. It doesn't make what you said, or anything you said, or any reasoning you gave to have any merit to it whatsoever.

And yes I have set up an LLC and other business entities before, but just not for gun stuff, because that would be completely stupid.

 

[alamo5000]

Please feel free to provide evidence. I’d be happy if this was incorrect.

No one needs to provide you with any evidence. If anything you are the one needing to provide evidence. Everyone else here has common sense and has used a trust. That's the standard and you are going off the reservation based on your own misguided beliefs.

 

[anonymous_]

No one needs to provide you with any evidence. If anything you are the one needing to provide evidence. Everyone else here has common sense and has used a trust. That's the standard and you are going off the reservation based on your own misguided beliefs.


sounds great, just like Stephenmentioned. Every situation, state, and person on the internet is different. I’ll heed your advice in the manner appropriate and get back to asking others for their experience.

 

[alamo5000]

No one needs to provide you with any evidence. If anything you are the one needing to provide evidence. Everyone else here has common sense and has used a trust. That's the standard and you are going off the reservation based on your own misguided beliefs.


sounds great, just like Stephenmentioned. Every situation, state, and person on the internet is different. I’ll heed your advice in the manner appropriate and get back to asking others for their experience.

Everyone else's experience is in using a Trust. So ask away.

Everyone that's responded so far has used a Trust for NFA items. There are numerous like me that have opened up a variety of corporate structures, but just not for gun related purchases.

Keep on asking. That's fine. Eventually someone might show up to validate your choice.

 

[MDof2]

You apparently spend 'weeks' with your attorney discussing the differences between a corporation versus a trust for your needs, then come to the internet to a) ask for advice and ii) argue with the advice given.

Sell stupid next door. We're all stocked up here.

My money says you're a real gem at social gatherings.

 

[alamo5000]

You apparently spend 'weeks' with your attorney discussing the differences between a corporation versus a trust for your needs, then come to the internet to a) ask for advice and ii) argue with the advice given.

Sell stupid next door. We're all stocked up here.

My money says you're a real gem at social gatherings.

That lawyer knows what pays his rent. It's people that don't know they need a lawyer.

Those people sit down with a lawyer who proceeds to make stuff way more complicated than it needs to be for a given task and then sells people on the idea that he's a necessity. Lawyers don't make a penny by cutting themselves out of the picture.

I might even be persuaded that his lawyer is giving bad advice too.

 

[Fig]

 

[vinniedelpino]

Trusts are neat if you want to have a sweet system that will work while you're living and maybe one or two generations down the road even in states like mine that don't require the trust to end. If you're looking for real protection of your firearms from grubby hands uncle sam then you need to go through a corporation. Historically speaking guns typically aren't banned but the transfer is. Therefore a trust will work awesome for an individual now but when the trust ends and the items get transferred the laws may have changed and uncle sam will get them back. If the laws never change then it doesn't matter. However, I expect them to change for more than just NFA firearms that will be held in the LLC in my lifetime.

Like everyone has ranted on this post already trusts are much easier but they missed that they don't provide protection for creating a family dynasty armory when the trust ends. After working for a couple weeks with my attorney we decided the costs of having an LLC in my case is way better than having a trust. Also, for everyone concerned with the costs. I DON'T CARE ABOUT COSTS. It's fairly easy to set up some investments with the corp to pay for the maintenance costs and potentially even maintenance on the firearms as well.

So long story short, does anyone have any experience with filing with a corp or establishing the corp?

This is a little outside my wheelhouse, so hopefully an attorney can chime in with details where needed.

Trusts can be set up a bunch of different ways. You can have a living trust that reverts to an irrevocable trust after you pass away. Most people wind these trusts down since tax rates on income generated by the trust are outrageous. This isn't required though, and since the NFA items aren't generating income this wouldn't be a big deal.

Setting up a corporation is pretty easy. It's usually pretty cheap too. Just file articles of incorporation with your state and file form ss4 for an EIN. The biggest downside is filing a corporate tax return every year. Most other documentation normally required for a corp wouldn't apply. You can probably get it done for around a hundred bucks. If you want a corporate bank account the bank is probably going to ask for bylaws, conflict of interest policies etc. If you're skipping this it makes incorporating a bit easier and you don't have to get an attorney involved.

Personally, I'd stick with the trust.

 

[armorpl8chikn]

I smell cereal. AlphaBits cereal.

 

[Mike Casselton]

Do the letters touch at the tip?