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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, signifying the transfer of ownership and protecting both parties from potential legal issues. The video outlines important information about firearm bill of sale forms and where to find free official templates. It emphasizes that the process of selling a firearm can vary significantly across the 50 states due to differing gun laws. Despite this, it recommends six best practice steps: research state gun laws and sale requirements, sell to a trustworthy person, consider conducting a background check (as required by some states), negotiate sale terms, and create a bill of sale.