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A firearm bill of sale outlines the details of a private sale of handguns, rifles, or shotguns, documenting the transfer of ownership and protecting both buyer and seller from potential legal issues. The video discusses essential information about firearm bill of sale forms and where to find a free official template. It highlights six best practice steps for selling a firearm, emphasizing the need to research state-specific gun laws, which can vary significantly. Recommended steps include selling to a trustworthy person, conducting a background check as required by law, and negotiating sale terms before creating a bill of sale.