16 months ago citizen finds a FN Herstal 5.7 handgun (a very expensive handgun, apparently) with one round missing from magazine. Turns it over to police. Gun not reported stolen. Name and address of last known owner found through ATF, but owner has since moved and no response when contacted by PD. No match for weapon in any crimes reported in metro area. Citizen who found gun now wants it back, so he can sell it. Now what?

I don't think CCP 18.17 applies, as this doesn't sound like property seized by a peace officer. I perused the Property Code. Ch. 72.101 says three years must pass for property to be presumed abandonded.

Schley v. Couch, 284 s.w.2d 333 (Tex. 1955): A worker found a jar of cash buried under the garage he was hired to work on. Who gets to keep it - the worker or the landowner?

If Schley applies, the gun should be turned over to the landowner or the finder, depending on whether it was mislaid, lost, or abandoned, which depends on the circumstances. (In Schley someone had taken pains to put the money in a jar and deliberately bury it, so it was held to be mislaid, meaning the landonwer gets to keep it until the true owner reclaims it.)