I understand that the dealer samples were foreign made MGs that were imported after 68 and before 86. My question is what all is out there and how did they get here? For example, I have seen numerous MP40s Thompsons, stens, etc but never an MP44, Are they out there? And I noticed on Gunbroker there is a pre 86 dealer sample CHINESE manufactured type 56, how did that get here? Maybe a Vietnam bring back that was registered after the amnesty???
Are there any M16s?
Whats the estimated number of DS out there?
To my limited knowledge, a C&R MP40 and pre 86 DS MP40 are the same thing minus their registration status (IE they still have the original german tube and not a domestically made tube?)
Whats out there as far as beltfeds go? The only ones i have seen are: MG42, MG34, and M249s
Is it legal to purchase a DS Mp5 and convert it to a MP5SD?
Also, when/if i give up my SOT do they transfer to me tax paid on a Form 4? As a follow up question to that, are they transferable to my heirs???
Ive also seen pre86 DS suppressors and Grenade Launchers, I thought these werent able to be registered/restricted for public sale?
Im considering getting my FFL after the first of the year, so im trying to get pre educated on the Dealer samples.


Thanks for all of your help guys!

I'm not expert, but I am a fellow SOT that owns quite a few transferables and a couple dealer samples, so I'll answer the questions that I can.

I fully intend to do business, i just wanted some more info in this section as this is by no means my main income, just a side hobby with a little money making mixed in ;) My only concern is with LE demo letters and such as far as actually acquiring them. I also wonder how some can be stocking licensed dealers of FNH, Colt, etc and how they possess more than 2 of each model if a Demo letter is only good for two? I know manufacturers can have 100's of the same model of MG if they are legitimately making and selling enough to demand that kind of turn out or filling a large order, but licensed dealers are obviously not manufacturers of FNH et al.

Like who?

99% of dealers have 2 or less of a given sample. Unless you saw inside their safe, quantity 1 is "In-Stock".

The LE letter rule has pretty much put dealers out of business for post-86 MGs. Almost all are drop shipped from the MFG.

Yep

OP, you probably already know this, but just incase, you do not need a demo letter for a pre sample.  Only post samples.

How/why is a suppressor or DD a dealer sample item?

Foreign post-68 manufacture

from my understanding, its because it was imported between 68 and 86 and most/all of the instances ive seen are foreign made examples. http://www.onlythebestfirearms.com/HK69-678.html

Not necessarily foreign made, but any non-MG NFA firearm imported after 1968 follows the same rules as a Pre-Sample MG.There's legally no such thing as a Pre-Sample suppressor, but they are treated in the same manner as a Pre-Sample MG.

NFA firearms of all types are prohibited from importation for civilian sale. The Gun Owners Protection Act of 1986 created the Pre and Post Sample MG classification and regulations, but there is no such law for non-MGs. If a suppressor, short barreled rifle or DD is imported, even one newly manufactured, then it can be possessed by an SOT and kept by the licensed entity after the expiration of the license.

Separately, keep in mind that Pre-Samples can only be kept free and clear by SOTs who possess the license as an individual. SOTs licensed as corporations or LLCs cannot keep pre-samples unless the entity is maintained after expiration of the license.

Interesting.



How common are these dealer sample non-MGs? I assume that a non-MG sample cannot be transferred to any other entity, even on a Form 5 upon death, correct?



What is the purpose of the pre sample designation? If the MG was in the inventory of an SOT prior to May 19, 1986, and thus listed in the NFRTR, why can it not be transferred to a non-licensee?



 

Non-MG imported NFA firearms are quite common, but increasingly less so due to the market domination of domestic firearms and foreign-owned companies creating manufacturing capabilities here, like HK, FN, Beretta, etc.

Prior to the Gun Owners Protection Act of 1986, they were simply "Dealer Samples". All NFA firearms were prohibited from importation for civilian sales with the Gun Control Act of 1968, so all NFA firearms imported after 1968 were restricted dealer sample guns. The 1986 Hughes Amedement applied further restrictions to machine guns only, but all other imported NFA firearms remain under the laws and regs of GCA of 1968.

Even in inventory prior to May 19, 1986, it's still a dealer sample and can only be possessed by an SOT or former licensee. The Gun Owners Protection Act of 1986 had absolutely no applicability to existing Dealer Sample guns, just all MGs manufactured after that date. Hence the term Pre and Post Sample, which is a shortening of Pre-May 19th and Post-May 19th.

What about partnerships with SOT's when the SOT is not renewed? (regarding keeping)



Do partnerships have to be maintained annually with a state? (I understand this can vary.)





And...

I saw another post here recently where a guy was asking about a trust having membership interest in a LLC... What if a trust (perhaps with child beneficiaries) had membership interest in a partnership with the SOT-holder [as the only other partner]? Could that let the trust inherit the pre-samples upon the SOT holder's death? Or would the trust then "hold a FFL," which is disallowed? Perhaps they could appoint a successor to the actual partnership...? Did I just get way too complicated here?

Negative on all counts.

Only sole proprietors can keep Pre Samples free and clear, but even then, they must be transferred out upon the death of the former SOT.  They are not really "property" in this respect.  They leave one way or another.

A partnership in the form of an LLC or LLP has to be active with both the state and federal govt to hold an FFL.  If the FFL expires, then the LLC or LLP must remain active if it is to keep transferables and Pre Samples. If the LLC or LLP is to dissolve, then all inventory must be transferred out tax paid. Pre Samples must go to an active SOT.

Regarding a Trust holding membership of an LLC, this isn't what you think it is.  For a trust to hold membership for a beneficiary, it is setting up the beneficiary to run the business as a member. They do not inherit LLC assets, they just inherit the percentage share of LLC.  Big difference.  LLC assets cannot be placed in trust directly because they belong to the LLC.  Membership in the LLC would give rights for the members to transfer assets from the LLC to the trust, but the value of the asset would be considered income to the member. A $10,000 MG being transferred to a member from the LLC inventory would be considered a "member draw" and that member would owe state and federal income tax on that $10,000 as if it were cash.

Separately, because a Trust is not a business entity and cannot hold a license, ATF would not approve a Form 4 for a Pre Sample into a Trust, regardless of what the trust document states.

Just make sure you are planning to do legitimate business with the SOT as simply using it to expand your firearm collection and a reduced cost is not allowed and can land you in some legal troubles.

In Texas the partnership just needs to be maintained after there is no more FFL/sot. It's like $20 every 10 years. Pretty easy.

Tax returns still have to be filed, even with no income to report.

I have a post-68 sample silencer (bottom one):

You have any more?

Got the HK/B&T from LMO 18 months ago, check with them.  know they had more than 1 at the time. The KAC can came from Cliff Decker.

Here is a post-68 sample for UMP.

Thanks. I just sent LMO an email.