CFA Legal Compliance & Documentation Standards 3 — Questions and Answers
Question 1: Which record is considered the primary source document in an FFL's bound book (Acquisition and Disposition record)?
- The manufacturer's invoice
- The A&D book entry recording each firearm acquired and disposed (Correct answer)
- The customer's driver's license photocopy
- The NICS transaction number printout
Correct answer: The A&D book entry recording each firearm acquired and disposed
The Acquisition and Disposition (A&D) bound book is the ATF-required register of every firearm an FFL receives and transfers, serving as the primary accountability record.
Question 2: An appraiser is evaluating a machine gun manufactured after May 19, 1986. What is the correct legal status of this firearm for civilian ownership?
- It may be owned by civilians if registered with ATF and tax paid
- It is transferable to civilians only with local law enforcement approval
- It is prohibited from civilian transfer under the Hughes Amendment to FOPA 1986 (Correct answer)
- It may be transferred to civilians in states that have not adopted the Hughes Amendment
Correct answer: It is prohibited from civilian transfer under the Hughes Amendment to FOPA 1986
The Hughes Amendment to the Firearm Owners Protection Act of 1986 banned civilian transfer of machine guns manufactured or registered after May 19, 1986.
Question 3: For estate appraisal purposes, which document is most critical to establish a decedent's lawful ownership of an NFA-registered item?
- The original purchase receipt from the gun store
- The ATF-approved Form 4 or Form 1 in the decedent's name (Correct answer)
- A notarized affidavit from family members attesting to ownership
- The state probate court's inventory listing
Correct answer: The ATF-approved Form 4 or Form 1 in the decedent's name
NFA items must be registered on an ATF-approved form (Form 4 for transfers, Form 1 for manufacture) in the owner's name; this document is the definitive proof of lawful registration.
Question 4: A client wants to transport a firearm across state lines for an appraisal. Under the Firearm Owners Protection Act (FOPA), what is the key legal requirement for lawful interstate transport?
- The firearm must be registered in each state transited
- The firearm must be unloaded, in a locked container, not readily accessible, and lawfully possessed at origin and destination (Correct answer)
- The owner must carry a notarized bill of sale for each state line crossed
- A federal transport permit must be obtained from the ATF 72 hours in advance
Correct answer: The firearm must be unloaded, in a locked container, not readily accessible, and lawfully possessed at origin and destination
FOPA's 'safe passage' provision (18 U.S.C. § 926A) protects interstate transport when the firearm is unloaded, in a locked container, and legal at both endpoints.
Question 5: Which scenario correctly describes a 'straw purchase' that an appraiser must be alert to when reviewing a firearm's provenance documentation?
- A buyer purchasing a firearm as a gift for an eligible family member and disclosing this on Form 4473
- A person buying a firearm on behalf of another who cannot legally purchase it, falsely stating they are the actual buyer (Correct answer)
- A licensed dealer selling a consigned firearm on behalf of a private owner
- A trust purchasing multiple NFA items to be shared by trustees
Correct answer: A person buying a firearm on behalf of another who cannot legally purchase it, falsely stating they are the actual buyer
A straw purchase occurs when the actual buyer is ineligible to purchase and uses a proxy who lies on Form 4473 about being the true purchaser, which is a federal felony.
Question 6: When appraising a firearm for insurance purposes, what documentation standard best supports an accurate replacement-value appraisal?
- A verbal estimate from any licensed dealer
- A signed written appraisal citing comparable sales, condition grade, and reference sources (Correct answer)
- A printout of the firearm's current auction listing price only
- An informal email from a collector stating an opinion of value
Correct answer: A signed written appraisal citing comparable sales, condition grade, and reference sources
Insurance appraisals require a signed written document with methodology, comparable sales data, condition grading, and cited reference sources to be defensible.
Question 7: Under ATF regulations, which of the following changes to a semiautomatic firearm would reclassify it as a machine gun?
- Installing a shorter barrel without an NFA tax stamp
- Installing a bump stock (as currently classified by ATF rule) (Correct answer)
- Adding a pistol brace configured for use as a stock
- Replacing the trigger with an aftermarket unit that reduces pull weight
Correct answer: Installing a bump stock (as currently classified by ATF rule)
ATF's 2018 rule (subsequently litigated) classified bump stocks as machine gun conversion devices under 26 U.S.C. § 5845(b); appraisers must be aware of such regulatory reclassifications.
CFA Legal Compliance & Documentation Standards 3
Which record is considered the primary source document in an FFL's bound book (Acquisition and Disposition record)?