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A firearm bill of sale documents the sale details of handguns, rifles, or shotguns between private buyers and sellers, transferring ownership and protecting both parties legally. The video outlines essential information about firearm bill of sale forms and where to obtain a free official template. It emphasizes that the selling process varies by state due to differing gun laws, but six best practices should be followed: research state gun laws and requirements, sell to a trustworthy person (ideally a friend or family member), perform a background check (as required by state law), negotiate sale terms, and create a bill of sale.