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A firearm bill of sale is a document that records the details of a gun sale between a private buyer and seller, establishing the transfer of ownership and protecting both parties in case of legal issues. The video tutorial discusses essential information about firearm bill of sale forms and where to find a free official template. It highlights that the sale process varies by state due to differing gun laws, with some having stricter requirements. Key steps include researching state laws, selling to a trustworthy person, conducting a background check (if required), negotiating sale terms, and creating a bill of sale.