I already own a commercial building so I can open up a side line of gun/parts/transfer/ammo sales. I understand they will not give out a license to work out of your home anymore.
Whats some of the items I will need for sure to get a FFL? What rights do I give up by having a FFL? Do I have to keep normal hours? etc?

Even if i'm my best customer that will be just fine. My overhead is almost nothing now so I should be able to operate and sell cheap.

Rick

Pack some personal things now to take with you to Levenworth later.

[ROFL2]

What I meant was ---
A ffl is issued for a run for profit only deal.
Being your own best customer violates this.
You also need  in most states a venders license, this entails a lot of tax forms, and monthly or bi annual tax payments to the state. Along with tax payments on all your inventory, building, equipment. Not to mention the Federal Income tax that you will be required to pay, oh and try and dodge this and you will go to Levenworth, as the ATF is a division of the Treasury Department  AKA  the IRS.  Not to mention the volumes of paperwork, that you better not muck up, misplace or lose.

There are many other headaches that come with the FFL, so welcome to the club.

OK...lets assume I go the whole 9 yards. Tax ID #, place of business, some advertising etc. So ok i'm in it for profit. Just as long as I made money I should be ok with the gov?
As far a an income, Do I have to pay myself?
If I do I'll cut me a small check at the end of the year. I do tons of paper work now with an excellent filing system.
Would it be wise to incorporate both businesses together? I'm a sole proprietorship now.

Rick

You've got two problems to solve here.  The first is the ATF requirement that you be a "real" dealer and not just to buy stuff cheap for yourself.  I'm not an FFL, so others on this board can give you a better idea of how to do this right.

The other issue is the IRS.  If you have losses, and want to deduct them against your other income, you need to avoid being classified as a hobby.  In other words, make money as a hobby and it's taxable.  Lose money in a hobby, well that's just too bad.  You can deduct expenses to the extent you have income from that hobby, but not against any other income.

The definition of a hobby is pretty vague, but it basically says you need to show the intent to make a profit and conduct your affairs in business like manner.  This means keeping proper books and records, consulting with those more knowledgeable about how to succeed, and acting like a business.  Just making a profit isn't enough since hobbies often make money.  Having a business plan helps, as does sticking to it or changing it when necessary.

Of course, the usual documentation helps - business license, letterhead, business cards, advertising materials, etc.

If you make a profit in 3 of 5 years, the IRS "presumes" you to be in business and not running a hobby.  You can run losses for 15 straight years if you want to, but the burden then comes on you to prove it's a business and not a hobby.



This depends solely on your business type.  You are not an employee and don't need a paycheck if you are a sole proprietor, a partner in a partnership or member in an LLC.  If you form a C-corporation or S-corp, you are an employee and must take a "reasonable" paycheck.  What's reasonable could fill several pages of discussion, so talk to your tax guy about that.



Again, I don't know anything about being a SOT (or even a sot for that matter), but I think being a sole proprietor for almost anything is just scary.  I don't know what your other business is, but in general you don't operate a safe and a risky business in the same entity.  It's more paperwork to have two companies, but well worth it if a problem ever crops up.

I tell all my clients that a sole proprietor is an awful form of business and suitable for very few people.  Again, the right type could take quite a bit of discussion.  There are lots of entities, but the big three are LLCs (limited liability companies), c-corporations and s-corporations.  Anyone who recommends one over the other without knowing your full situation, circumstances and goals is an idiot.  Every type has its purpose.

Another factor is the audit potential of a sole proprietor.  The chance of audit for Schedule C filers (sole props) is around 4% if you gross over $100k or under $25k.  For partnerships and S-corps, it's closer to .25-.5%.

I may not know what gun Al Pacino used in Heat (man, I've got to rent that movie.....), but I do know tax.  That's why I'm the tax_monster.

Actually they are under the Department of Justice. [;)]

[url]http://www.ustreas.gov/bureaus/[/url]

Yeah I forgot

They need to get new ID's out to their people the last two that did a on site inspection still had ID with Department of Treasury on it.

Get a C&R license.  Almost as good.

[b]THE ATF WILL NOW GIVE FFLS TO WEB SITES[/b]

Yes, that's right, they will now let you call a [b]WEB SITE[/b] your licensed premises...

If you just want dealer-price, get a C&R (Type 03 FFL). No business stuff required, you can recieve ANY GUN THAT'S AT LEAST 50 YEARS OLD or ANYTHING ON THE ATF LIST direct... A bunch of places give C&Rs dealer price, and then you arrange a local 'real' FFL to recieve for you for a small fee (just ASK FIRST, right Aug?)...

Sorry I just had to do it! [lol]

I had one for 9 whole years.

I DO NOT MISS IT!

at all.

Danny

I cant even get a C&R in the city I live.

Why not?  You don't need approval from anybody.

City has an ordinance against having a FFL at a residence, they call it an Business and or a occupation.

A C&R by fed law is NOT a business.  It is very explicit in that.  Check it out again.  You don't have to get it approved by anyone.  Once the ATF checks to see you aren't a felon that is it.  You have to mail a copy of the app to your police chief but he has no say in the matter.  It is for informational purposes only.