gaptrick wrote:What if I already have a corporation? Is it the same as a trust or does one need to be opened specifically for the NFA item?
A corporation can own NFA firearms the same as a trust. But talk to a lawyer first. It's probably wise to review your articles of incorporation and other papers before simply using what you have to save a few bucks today. If your corporation was not set up with handling NFA items in mind it probably doesn't have critical provisions for things like:
1. Providing for the proper disposition of restricted items on wind up. A trust goes on more or less forever (as far as you're concerned), but businesses, particularly small ones, come and go all the time. What happens when you retire, sell your company, or just plain get sick of doing what you're doing? It takes six months or more, plus transfer taxes to properly transfer each item to whatever new entity you come up with. Most corporation wind up clauses I've seen don't account for the special handling procedures necessary for NFA items. Not to mention potentially paying the transfer tax multiple times on an NFA item that never leaves your possession.
2. Handling corporate officers who are, or become under disability.
3. Purpose of the corporation - if your corporation exists to be the best darn website development company and the docs empower the officers to take all necessary and proper actions in furtherance of that goal then it would be hard to see how owning NFA items would be either necessary or proper. This probably isn't a big deal if you're the only shareholder (since practically speaking your fiduciary duty is to yourself only), but I suppose it could come up during a tax audit. If you're looking to buy machine guns for investment purposes then your corporation better be set up as an investment outfit and will need to pay taxes accordingly.
4. Accounting issues - NFA items become assets of the corporation and would have to be accounted for on the taxes, including depreciation (depending on what the assets are). As a corporation you'd have to be able to say how those depreciated assets benefited the business. A good NFA trust specifically addresses trustee(s) non-liability for asset depreciation. That'd be a tough flag to fly as a corporation. The IRS shares tax information with state and local governments now, so that's at least three more agencies (IRS, State of Ohio, and your local taxing authority, if any) that could find out what your corporation owns. The more people you have to tell, the more likely someone might question the point in (3) above - "why is this website company handling dangerous, nasty, icky gun things? Let's do an audit and see how else he's laundering money."