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Tennessee Gun Owners Forums
Rifles
Suppressors....individual or trust?
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<blockquote data-quote="John Harris" data-source="post: 4354752" data-attributes="member: 2003"><p>1) What happens when you die?</p><p></p><p>Under the NFA, a death is classified as an involuntary transfer by operation of law. That means that the items (suppressor, SBR, SBS, machinegun, etc.) that is registered to an individual on a Form 4 will pass through the person's estate. A transfer through an estate to an heir (including a spouse) passes on a Form 5 and that is a TAX FREE transfer under current law. If the estate decides to sell the firearm, the new purchaser (if not an heir) will take it on a Form 4 and be responsible for the tax.</p><p></p><p>If you die but the item is held in a trust, the terms of the trust control. The item would only incur a tax if held in a trust if the trust sells it or the trust terminates and the item(s) pass to the beneficiary.</p><p></p><p>2) As an attorney who litigates against ATF for dealers, NFA owners, etc., I have prepared a lot of these trusts. Even with the rule changes that went into effect in July 2016, the trust still has the benefit of multiple possessor capacity and the capacity to allow multi-generational ownership without incurring taxes. It can also provide protection for the item if, for example, one of the trustees becomes a "prohibited person" and can no longer possess the items.</p><p></p><p>3) There is momentum building to remove suppressors from the NFA but it will take a statutory change and that could take years and would be "low priority" with the RINOs in Congress unless there are a LOT of citizens demanding it.</p><p></p><p>John Harris</p><p>Attorney & </p><p>Exec. Director or the Tennessee Firearms Association (a volunteer position)</p></blockquote><p></p>
[QUOTE="John Harris, post: 4354752, member: 2003"] 1) What happens when you die? Under the NFA, a death is classified as an involuntary transfer by operation of law. That means that the items (suppressor, SBR, SBS, machinegun, etc.) that is registered to an individual on a Form 4 will pass through the person's estate. A transfer through an estate to an heir (including a spouse) passes on a Form 5 and that is a TAX FREE transfer under current law. If the estate decides to sell the firearm, the new purchaser (if not an heir) will take it on a Form 4 and be responsible for the tax. If you die but the item is held in a trust, the terms of the trust control. The item would only incur a tax if held in a trust if the trust sells it or the trust terminates and the item(s) pass to the beneficiary. 2) As an attorney who litigates against ATF for dealers, NFA owners, etc., I have prepared a lot of these trusts. Even with the rule changes that went into effect in July 2016, the trust still has the benefit of multiple possessor capacity and the capacity to allow multi-generational ownership without incurring taxes. It can also provide protection for the item if, for example, one of the trustees becomes a "prohibited person" and can no longer possess the items. 3) There is momentum building to remove suppressors from the NFA but it will take a statutory change and that could take years and would be "low priority" with the RINOs in Congress unless there are a LOT of citizens demanding it. John Harris Attorney & Exec. Director or the Tennessee Firearms Association (a volunteer position) [/QUOTE]
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Suppressors....individual or trust?
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