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A firearm bill of sale records the details of a sale between a private buyer and seller, facilitating ownership transfer and protecting both parties from potential legal issues. The video explains key information about firearm bill of sale forms and where to find free official templates. It outlines essential steps to sell a firearm, which vary by state due to differing gun laws. Despite these variations, best practices include researching state laws, selling to a trustworthy person, conducting a background check (if required), negotiating sale terms, and creating a bill of sale.