My name is Mark Goodfield. Welcome to The Blunt Bean Counter ™, a blog that shares my thoughts on income taxes, finance and the psychology of money. I am a Chartered Professional Accountant and a partner with a National Accounting Firm in Toronto. This blog is meant for everyone, but in particular for high net worth individuals and owners of private corporations. The views and opinions expressed in this blog are written solely in my personal capacity and cannot be attributed to the accounting firm with which I am affiliated. My posts are blunt, opinionated and even have a twist of humor/sarcasm. You've been warned.

Tuesday, December 21, 2010

Comments and Best Wishes

The Blogger stats for this site reflect a significant increase in readership as of late. I appreciate that people other than my mom are now reading the blog. For those reading, it is not very clear, but there is a comments button at the bottom of each blog entry, beside the little panel with Twitter, Facebook, etc. Please feel free to leave your comments, I would be happy to answer a question or engage you in debate.

This is my last blog entry for this year. I have what I consider some interesting blog topics for January, but the readers will be the judge of that.

I wish you all a Merry Christmas/ Happy Holiday Season and all the best in the new year.

The blogs posted on The Blunt Bean Counter provide information of a general nature. These posts should not be considered specific advice; as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.

Tuesday, December 14, 2010

One Big Happy Family - Until We Discuss the Will

What I want to discuss in today’s blog is the issue of whether parents should discuss their will with their children.

When there is a “black sheep” child in the family, or a child who is not treated equally in the will, I expect that a family meeting would likely be a disaster. But what about a meeting in situations when the children are treated somewhat equally? There is no right or wrong answer, but I think a family meeting is wise. Any meeting of this type can turn ugly because of money issues, but more likely, any ugliness will be the result of historical family jealousies or resentment over some prior issue or treatment. Nevertheless, if you feel you can navigate the minefields noted above, the family meeting can be very effective and useful.

The family meeting could be used to deal or clarify several different types of issues. For example:

  1. Possible perceived inequalities: The meeting could be used to explain why you have left your Picasso to your daughter instead of your son so that he doesn’t feel slighted when the will is read. This discussion could involve explaining that since your daughter studied Art History at university, you feel she would appreciate the Picasso; however, since it is worth $500,000, you have left your son $500,000 of stock to equalize (or you have not tried to equalize, you can explain why face to face). Also, where you have left more money to one child (perhaps they make less money than the other children), you can use the meeting to explain why and explain that it has nothing to do with loving that child more, you are just helping them since they have not been as fortunate as the other siblings.
  2. Determine wants and needs of the beneficiaries: Many families have second properties such as cottages or ski chalets. Some children may have attachments to these properties while others might not, or maybe you are not sure whether any child would want to take over the property when you pass. A meeting provides the opportunity to raise the issue for your children to decide among themselves if they will want to sell the property, share the use, or have one child inherit the property. This issue may be best discussed prior to a will being finalized.
  3. Deciding on an executor: Most children have no idea of the responsibilities and the burden of being named an executor of the will. You can broach this topic at the meeting to explain the duties of the executor and determine if the children or child you wish to be an executor(s) are/is willing to undertake the position. (Click here to view an article regarding the duties of the executor).
  4. Full disclosure: Finally, depending how open you wish the meeting to be, you can provide a current list of assets to your children so they know what assets you own and where they are held. You should also provide such a list to your accountant or lawyer, or put such a list in your safety deposit box, but you must ensure such a document exists and someone knows where it is.
The decision to have a family meeting to explain your estate planning while alive and in good mental and physical health is a complex decision based on past family history and relationships. However, if you feel the meeting can be held without creating a “civil war,” it gives you a great chance to explain your estate planning and to get everyone onside.

The Dentist’s Wallpaper

There is not much to do while you are in the dentist’s chair, especially if you are not lucky enough to have nitrous oxide administered. Personally, I look for anything to take my mind off that damn drill.

One day while having a cavity filled I started reading my dentist’s wallpaper. Before you say “I think you really did have nitrous oxide administered and maybe too much,” you must understand my dentist’s wallpaper actually has “life quotes” all over it. One of the quotes was “Life is Hard by the Yard, But by the Inch Life’s a Cinch.”

I don’t want to get all philosophical here, but I just found the quote so interesting; it actually took my mind of the drill. Such a simple adage that says so much.

We all can get overwhelmed when we look at all the tasks and requirements of our daily lives, but if you break those tasks down into bite-sized pieces, the totality of all the tasks is less overwhelming. Although this is easier said than done, I do try and remember this quote when I feel overwhelmed.

The blogs posted on The Blunt Bean Counter provide information of a general nature. These posts should not be considered specific advice; as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.

Wednesday, December 8, 2010

The Blunt Bean Counter Mentioned in Weekly Blog Roundup

Thanks to Larry MacDonald, author and contributing columnist to the Globe and Mail, for mentioning my blog in his Weekly Roundup of Blogs. Larry’s blog covers various investment topics.

The blogs posted on The Blunt Bean Counter provide information of a general nature. These posts should not be considered specific advice; as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.

Capital Loss Strategies

The newspapers are filled with the typical year-end tax planning and investment strategies. It seems the number one strategy in almost all of these articles is to trigger any unrealized capital losses in your portfolio to use them against any capital gains you realized in 2010.
Well, what if you don’t have capital gains or you have capital losses galore from some prior investment mishap? Or, how about the case where you have gains and your spouse has losses, or vice versa? I will examine a couple strategies for 2011 to take advantage of these lonely unutilized losses.
Flow-Through Shares
The first strategy you may wish to consider is the purchase of a Flow-Through Tax Shelter (“Flow-Through”). Please see my September blog entitled Are You a Flow-Through Junkie for a discussion of Flow-Through’s. As noted in the Flow-Through blog, flow-through’s generate a capital gain upon disposition.
So following the $10,000 example in the September blog, you purchase a Flow-Through tax shelter in 2011 for $10,000 which results in income tax savings of approximately $4,600 in filing your 2011 income tax return and leaves you out of pocket $5,400 ($10,000-4,600). It should be noted that the adjusted cost base of your flow-through is now nil.
Typically the Flow-Through funds roll into a mutual fund 24 months following their purchase. If you sell the mutual fund 24 months later for the same $10,000 you purchased the fund for, and apply $10,000 of your unused capital losses, you would end up ahead by $4,600 on the investment ($10,000 cost -$4,600 in tax savings - $10,000 proceeds of sale). You also have downside protection. In the example above, where you utilize your capital losses, the value of the investment could fall to $5,400 and you would still break even.
Of course you and your investment advisor must evaluate the investment risk and consider that commodity prices may drop, or the market for junior resource stocks may deteriorate.
Transferring Capital Losses to a Spouse
Many couples trade independently and even if they trade together, one spouse may have realized capital gains while the other spouse has unrealized capital losses. Because the Income Tax Act does not permit transferring losses directly to a spouse, the typical strategy of selling stocks with unrealized losses to net against realized capital gains is not applicable. However, you are not out of luck.
The Income Tax Act prevents taxpayers from triggering a loss by selling a property to an affiliated person such as a spouse thorough the superficial loss rules. However, using proper tax planning, spouses can utilize the superficial loss rules of the Income Tax Act to allow one spouse to offset their gains against the losses of the other spouse.
Say June bought Glowing Gold Mines for $20,000 and the shares are now worth only $5,000 while her husband Ward is a sharp trader and has numerous gains. In order to transfer June’s capital loss to Ward, she sells her stock on the open market. Ward then immediately buys Glowing Gold Mines on the open market for $5,000. June’s losses are denied under the superficial loss rules because Ward, an affiliated person, has purchased the same security within 30 days of June selling.
But in an ironic twist of income tax fate, June’s loss of $15,000 is denied, but it is added to the cost base of Ward’s shares. His Glowing Gold Mine shares now have a cost base of $20,000 and if he sells them for $5,000 at least 31 days after purchasing them, Ward will have a $15,000 loss to claim against his capital gains even though he only purchased the shares for $5,000.  
Radar Traps
I think we can all agree, police radar traps are a necessary evil in school areas and on neighbourhood streets and certain other areas where speed could result in a fatality. However, it is another story when radar is set up as an apparent money grab in what we perceive to be non-risk areas. Of course, you know where I am going with this.
On the weekend I was driving on the 401 Highway in Toronto which has a posted speed limit of 100, but of course everyone drives between 110 and 120 km per hour. I was driving to an appointment around
Black Creek Drive , an area that I am not very familiar with.
The cut-off to Black Creek appeared to be a continuation of Highway 401. I was not going much faster than the speed of traffic and, in the middle lane, was not aware or even considering that the limit could have dropped. However, to my consternation, as I was flagged down, I learned that the speed limit for this cut-off was 80 km per hour.
The police officer was very fair to me under the circumstances, and I have no issue with him, my issue is the placement of the radar in this area. I told the police officer that having radar in this area is “like shooting fish in a barrel” and he did not disagree. This is one of those “it is what it is” issues, however, that does not mean I cannot publicly vent – one of the benefits of this blog.

The blogs posted on The Blunt Bean Counter provide information of a general nature. These posts should not be considered specific advice; as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.

Monday, November 29, 2010

Resverlogix- A Cautionary Tale

This blog will recount the saga of my share ownership of  Resverlogix Corp. (“RVX”), a TSX-listed company. This is a cautionary tale in investing and a very interesting story and it should not be construed as advice. If I had the inclination, there is enough gossip and innuendo surrounding this stock that I could spin this story into one that could be printed in the National Enquirer; however, it is my intent to be mostly matter of fact and reflect the investment element.
The saga begins in the spring of 1996 when I was made aware of a bio-tech stock out of Calgary called Resverlogix Corp. (“RVX”). The company was working on a drug (RVX-208) to turn on Apolipoprotein A-1 (“ApoA-1”). ApoA-1 is the major protein component of high density lipoprotein (HDL). HDL is known as the “good cholesterol.” In extremely simplistic terms it is hoped that the protein will promote the removal of plaque from the arteries by reverse cholesterol transport (cholesterol is removed from the arteries and delivered to the liver for excretion).
With my eyes wide open to the fact that bio-techs are very risky, I dipped my toe into RVX as the concept denoted above was very novel and extremely exciting. In addition, the CEO Don McCaffrey stated it was the intention of RVX to sell pre-clinical, which in my mind removed substantial bio-tech risk.
In early December 2006, Pfizer announced that its cholesterol drug Torcetrapib failed its clinical tests and Pfizer’s stock plummeted. If I had done more then dip my toes in RVX, I would be writing this blog from the Turks and Caicos because after Pfizer’s failure, RVX was seen as a possible successor and, fueled by rumours of a sale, RVX stock went from $5 to $30 within about ten weeks. Helping fuel the fun was a press release stating that RVX has hired UBS Securities as an investment banker to help with a “strategic alternatives.” Not a bad profit for a ten week timeframe.
What follows is the roller coaster ride from hell. The stock drops from $30 to $13 in two months as no deal emerges and by August of 2007 it is at $9.  By the end of the October 2008 crash RVX is down to $2.30. I blow most of my gains on the initial huge run by buying back shares as I think the price is a bargain. This story includes my ignorance.
The dramatic stock drop is blamed on RVX not receiving any public offers and Big Pharma’s reluctance to make purchases due to numerous drug failures and, probably more significantly, financing issues.
Anyone who has ever been involved with a small-cap stock, and especially a small-cap bio-tech stock, is aware that financing is a huge issue. RVX engaged in “death spiral financing,” a process where the convertible financing used to fund a small-cap company can be used against the company in the marketplace causing the company’s stock to fall dramatically. It can lead to the company’s ultimate downfall.
While RVX stock stayed low, the science moved along tremendously with positive testing and good results in Phase 1B/2A testing . In October 2009, RVX announced it would move ahead with parallel tests called Assert and Assure. These studies were to be run by renowned researchers  at the Cleveland Clinic. This was considered to be important confirmation that RVX had a potential blockbuster drug.
The primary endpoint of Assert was to determine if RVX-208 would increase ApoA-1 and to examine safety and tolerability. Assure was going to use a process called intravascular ultrasound to detect changes in plaque and examine early lipid effects and plaque on the coronary vessels. Assert moved ahead quickly, dosing patients ahead of schedule in late 2009.
What was extremely interesting to investors was that at the beginning of 2010, even though the stock price of RVX was only $2.40, the science had moved at a rapid pace and  if Assure was successful, a “big if,” there would be a bidding war for RVX with estimates in the range of $30-$60. Of course, if Assure failed, RVX would most likely fall to less then $1.
I personally felt that $2.40 was a ridiculously low price for a drug with potential yearly sales of 10-20 billion dollar and purchased more shares at that point. Score one for my investing intelligence.
The stock floated around the $2-$3 range until March 2010 when the stock took off up to $7.50, mostly propelled by an article by Ellen Gibson of Bloomberg stating “Resverlogix Corp., without a marketed product, may accomplish what Pfizer Inc., the world’s biggest drug maker, couldn’t: Creating a new medicine that fights heart disease by raising so-called good cholesterol.” There was some additional publicity that followed and the stock jumped around in the $5 to $8 range. At this point I sold a portion of my stock and bought call options. The options provided me high leverage but could expire worthless, but most importantly, the options allowed me to remove a significant amount of my cash investment, while retaining potential upside to the stock.
In May 2010 it was announced that the Assure trial would be delayed as RVX was having trouble recruiting patients. The RVX spin was positive saying that since Assert had finished early, the researchers could now use what they learned in Assert to plan Assure; however, many months were wasted. The market did not appreciate the delay in Assure and the stock price fell from $6.80 to $2.80 in late June.
RVX decided to present the Assert data at a Late Breaking Trial Session on November 17th at the American Heart Association (“AHA”) conference. These session slots are supposedly only provided to those companies providing significant trial results, whether good or bad, and there is an embargo on any information being released prior to the presentation. RVX would lose their presentation spot if any information was released.
At RVX’s Annual General Meeting in early September, which I did not attend, the trial’s principal investigator Dr. Stephen Nicholls of the Cleveland Clinic spoke, and while he could not speak about Assert results, those there blogged about his appearance and said that his apparent enthusiasm for RVX 208 bode well for the AHA presentation. After the AGM, the stock rose from the high twos into the mid-fours over the next several weeks as attention was directed towards the November 17th AHA presentation.
Many investors were unaware that Merck would also be presenting results on a HDL drug they were working on known as Anacetrapib, a drug from the same family of inhibitors as Pfizer’s Torcetrapib which, as noted above, had failed miserably. Thus, investors who had heard of Merck’s presentation were not expecting much.
A cause of concern for RVX investors from August onwards was that the short position grew from 440,000 at July 31st to 1,770,000 at September 15th and ultimately to 2,160,000 at October 31st. An increase in shorts prior to the most significant trial results in RVX’s history was reason to raise an eyebrow. I figured the increase might have something to do with the people who had financed RVX the last year using shorts as a hedge on their warrants, but I was unsure and sort of wary of this increase.
I expected an increase in RVX’s stock price as the AHA approached on anticipation of positive results that would put them one step closer to Assure testing and the small possibility that the Assert results would bring an offer from Big Pharma. Not much happened until the week of November 14th, which is now a week I will never forget and leads to the title of this article.
On Monday, November 16th, in anticipation of the AHA presentation, RVX stock ran from $5.72 to $6.39. On Tuesday, the day before the presentation, the stock ran to a high of $6.98 in the morning and then settled at $6.70 or so until 3:30, at which time, out of nowhere, the stock dropped to $4.50 on significant volume. Needless to say, it was a shocking last half hour of trading and rumours on the stock bullboards ran from a leak of bad results to the shorts pulling a “Bear Raid;” a tactic where shorts try and push the stock down to cover their shorts. This “Bear Raid” theory seemed to make the most sense at the time, since the shorts had a large position with RVX’s presentation scheduled for the next day. A leak did not seem to make sense based on the embargo by the AHA.
Apparently the embargo on the late breaking sessions at the AHA on Wednesday was lifted first thing Wednesday morning. Early Wednesday morning Bloomberg reported that “Resverlogix Corp.’s most advanced experimental medicine, a cholesterol pill called RVX-208, failed to raise levels of a protein thought to help clear plaque from arteries in a study.”
The Bloomberg report was followed by an RVX press release that said the “Assert trial data demonstrated that the three key biomarkers in the reverse cholesterol transport (RCT) process showed dose dependant and consistent improvement.”
Following the RVX release, the Dow Jones reported “A study involving a new type of drug being developed by Resverlogix Corp. showed it failed to meet a goal of boosting levels of a specific protein the drug was designed to raise.”
To put the final nail in the RVX’s coffin for the day, Merck reported its Anacetrapib had tremendous results in increasing HDL and also reducing LDL the bad cholesterol.
The stock opened around $5.30 on Wednesday morning with investors obviously thinking the shorts had caused the prior day’s stock price drop, but after the press releases, the stock quickly dropped to a low of $3.35 by 9:45 am. However, investors were clearly now not sure what to believe; the headlines by Bloomberg and the Dow Jones, or RVX’s press release. The stock rebounded to $4 by the time of RVX’s actual presentation. By all accounts the presentation was very factual emphasizing that RVX did not achieve a statistically significant  % change in ApoA-1. Supposedly, to be statistically significant the p (probability value) would have to be less than 0.05 and RVX’s was 0.06.
Following the presentation, RVX’s stock slid to $2.73. It then slid Thursday to $2.14 before rebounding on the Friday to $2.34. As of today’s writing, the stock is $2.00.
Notwithstanding the fact I probably will need RVX-208 to combat the heart attack symptoms this experience caused, the story still has more twists and turns.
Some questions arise in relation to the AHA conference itself. Supposedly video clips of presenter interviews were made days before the presentations, and supposedly the slides for Dr. Nicholls’ presentation were available online before the presentation.
The conclusions presented by Dr. Nicholls were buffered somewhat in a post presentation RVX conference call on Wednesday with statements that some of the data RVX noted in their press release was promising and, if the trial had continued, the results may have become statistically significant. More importantly, Nicholls made a couple comments that RVX-208 could still have a “profound effect” on reducing plaque volume. It was clearly a “could” and not a “would,” but a far more positive spin than the media was reporting.
All in all, there was mass confusion and huge paper or actual stock losses for RVX shareholders.
You are probably thinking “Why the heck did Mark not sell the day before the AHA?” In retrospect, that would have been prudent, however, I had decided I was going for a home run and would accept a strike out. In the bloody aftermath, more detailed analysis of RVX-208 and Merck’s Anacetrapib were reported. The analysis ranged from optimism for Anacetrapib to comments that the HDL levels were out of line and may never achieve clinical success.
Meanwhile, RVX created significant problems for itself with its endpoint selection, especially since there was evidence that a longer trial may have given the drug time to   achieve statistical significance. RVX also had an increase in liver enzymes not highlighted in its press release that led to further unanswered questions. The uncertainty around RVX-208 became cloudier as AHA clips and Medical publications said such things as: 
"The discussant for the trial, Eliot Brinton, said “that a drug like RVX-208 that has a modest effect on HDL levels might have a large clinical effect.”"
MedPage Today, quoted Elliott Antman, MD, professor of medicine at Harvard Medical School (a very well respected researcher according to a doctor friend of mine) as saying
"The important thing that we saw here with RVX-208 was the dose response. That means that something is happening with the drug. I think that the dose response trumps P-values."
What is a non scientist to think? At the end of the day, RVX’s stock price was hit so badly that it may cause financing issues in the future. Some may say that although the Bloomberg and Dow Jones writers were accurate in reporting that RVX did not achieve statistical significance, they also went for headlines instead of researching the more hidden or complicated facts. It remains to be seen whether RVX does indeed have a drug that will inspire Big Pharma to either buy or partner with RVX .
I am not sure there is a moral to this story; this was cathartic to write and like I said, it is a saga, a saga that is still ongoing. I guess, if anything, this is just a cautionary tale about investing in biotech’s and investing in general.

The blogs posted on The Blunt Bean Counter provide information of a general nature. These posts should not be considered specific advice; as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.

Thursday, November 25, 2010

Sign That Will

I always try to ensure that my clients have up to date wills (if they have their own corporations I recommend 2 wills to reduce probate tax) that tie into their estate plans. Often one of the action points following a meeting includes updating a will. However, I have observed a consistent procrastination in relation to completing this task. In the end, I think it is an issue of mortality. People just don’t want to face their mortality and preparing or updating a will brings you face to face with the fact you are planning post mortem. I have seen situations of wills drafted months and years ago that remain in draft because of a reluctance to deal with the issue only to have that person or their spouse pass away with the draft will still unsigned. The proposed changes become null and void and the estate is forced to go back to a prior will that was usually created years and years ago when the taxpayer had limited wealth to distribute.

Thus, if your will needs to be updated, it is extremely important that you not only update the will, but also ensure the process is completed on a timely basis.

As noted above, I try to ensure that my clients’ wills are updated to tie into their estate plans. This can be problematic on its own. Some clients live in a penurious manner, denying themselves their just rewards so that their children will inherit the maximum amount possible, while others believe they deserve to live life to the utmost and if there is nothing left for the children so be it. Still others want their children to earn their own money and leave their inheritance to charity. Finally, there is the most common mid-ground, where a client wants to leave substantial funds to their children while still enjoying the fruits of their labour.

Whatever the decision, there are various means to achieve the wealth transfer from outright gifts to the use of trusts. The details of such means will be a topic in a future blog.

Bucket List

In the 2007 movie The Bucket List, starring Jack Nicholson and Morgan Freeman, two terminally ill men head off on a road trip with a wish list of the things they want to do before they die. As result of the movie, the term “Bucket List” has become a common slang term.

In the movie, the characters were ill when they created their bucket list. The message of the movie is to live life to the fullest while you are able and not to wait until you are old or sick. The movie did not garner many good reviews, but the message certainly made many think about setting some time aside to create their own bucket list and stop putting off their dreams for "someday" in the future.

I created my own bucket list the day after watching the movie. My bucket list includes travel (African Safari, Bora Bora, Australia) and certain golf spots (Pebble Beach, St. Andrews) amongst other things.

Daily life often gets in the way and when you finally look up, time has flown by.
I suggest if you have not created your own Bucket List, you consider doing so and create a plan to start acting upon it.

The blogs posted on The Blunt Bean Counter provide information of a general nature. These posts should not be considered specific advice; as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.

Thursday, November 18, 2010

Doing Business of Any Kind in China

Whether you are outsourcing, entering into a business venture, or just investigating doing business in China, there are plenty of risks for the uninitiated. However, if you can navigate the Chinese playing field, there are substantial profits to be made.

Cunningham LLP, the firm I work for, has an International Accounting Affiliation with the Alliott Group. I recently attended Alliott’s worldwide conference in Singapore. One of the sessions at the conference was titled “Protecting your clients’ interests when doing business in Singapore, China and Vietnam.” The session was presented by a lawyer, Caroline Berube (cberube@hjmasialaw.com) a transplanted Quebecer now living in China.

Amongst the many discussion points, Caroline pointed out that even if a Canadian business just outsources to a Chinese manufacturer, the Canadian company should register its trademark or risk the trademark being seized by the outsourcing firm in China.

Even business cards require a new understanding in China. Caroline stated that the English name on a Chinese business card has no meaning. So a company can market itself under the English name “Beijing Truss Fabricators Inc.” and in reality, the company’s legal Chinese name could be “Chan Bubble Gum Company.”

Caroline provided an interesting example of why you need advisors on the ground in China who can provide proper due diligence. She cited an example of a Canadian client that was extremely excited abut a Chinese company they met at a trade show that could provide manufacturing for the Canadian company. Caroline stated although the Canadian client was pushing to get her to sign the deal immediately, upon further legal due diligence, it was determined the Chinese company was in fact not a manufacturing company itself, but a trading company who subcontracted to Chinese manufacturing companies.

Caroline also notes that legal signing authority can be an issue in China and without understanding the position of who is signing the contract on behalf of the Chinese company, you may have an invalid contract.

Another potential legality is who is provided legal signing authority for the Chinese company. The legal representative maybe able to access loans for themselves on behalf of the Chinese entity if you do not have proper legal restrictions in place.

The above are but a few of the traps and pitfalls of doing business in China. Doing business in China can open up tremendous opportunities, but it is a very complex place to do business and Canadian companies must ensure they obtain proper professional advice from those who have Chinese experience before entering into any kind of a Chinese business arrangement.

The blogs posted on The Blunt Bean Counter provide information of a general nature. These posts should not be considered specific advice; as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.

Monday, November 15, 2010

Ontario HST Small Business Transition Support and Sales Tax Transition Benefit

Pretty boring stuff, however I have been asked a couple times by sole practitioners about the taxability of both the Ontario HST Small Business Transition Support and the Ontario Sales Tax Transition Benefit, so here it is.

The Ontario HST Small Business Transition Support payment going out to small businesses across Ontario is meant to provide assistance to small businesses with the transition to HST. This payment is for Ontario businesses with revenue of less then two million dollars for the most recent 12 month period ending after January 1, 2009 and is being sent out automatically. The maximum credit is .05% of revenue to a maximum amount of $1,000.

The Ontario HST Small Business Transition Support payment is taxable.

The Ontario Sales Tax Transition Benefit is meant to provide temporary relief to residents of Ontario to help them adjust to the HST. Ontario residents that qualify will receive three payments. The first payment was in June 2010. The next two payments are December 2010 and June 2011. The maximum benefit is $300 for single people and $1,000 for families. Single people lose their benefit if their income exceeds $82,000 and families lose their benefit if their income exceeds $166,700. The payments are sent out automatically when you file your 2009 and 2010 tax returns.

The Ontario Sales Tax Transition Benefit is not taxable.

The blogs posted on The Blunt Bean Counter provide information of a general nature. These posts should not be considered specific advice; as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.

Friday, November 12, 2010

Smoke & Mirrors - Is Retirement as Costly as We are Led to Believe?

I recently attended a course taught by David Trahair called “Smoke and Mirrors”. David is a well known author and proponent of various retirement and investment strategies that contradict accepted conventional wisdom. Some of David’s against-the-grain thoughts are (1) GIC’s are a better investment than stocks (2) RRSP’s are not the Holy Grail and (3) you need substantially less to retire than the investment community purports. Although I may disagree with some of the above, I nevertheless find several points David makes about retirement to be poignant and I discuss them below.

David attempts to dispel the financial planning “myth” that you need to accumulate enough funds at retirement to provide for 70% of your current yearly income, i.e.: if you make $100,000 a year you will need $70,000 a year in retirement and a retirement fund of at least $1,400,000. David feels the mythical 70% number is in most cases significantly in excess of what will be required at retirement.

David is a proponent of eliminating all debt pre-retirement. This ensures that at retirement you are not paying out funds and depleting capital, but rather living off the capital. He feels that the reduction of debt has a secondary positive offshoot in that during your working life, your need for disability insurance is reduced. The rationale is that since repaying monthly debt is the largest cost for most people, as that debt is reduced, your need for disability insurance that would cover these debt payments is also reduced.

David feels that in addition to the significant reduction of mortgage and other debt payments in retirement, retirees will have additional cost reductions as dependent children become self sufficient, RRSP or pension plan contributions cease, and tax burdens and automobile costs decrease. David feels that it is important to plan to purchase your last car before retirement and drive it a number of years in retirement.

As David would admit, one size does not fit all. I would suggest your costs in retirement will be far less than 70% if you don’t plan to travel, help your children buy a house, join a golf course, etc. That is why it is vital to have a financial planner who takes all your future needs into consideration and reviews your pre-retirement spending habits.

This is where I agree totally with David: you need to have a financial plan and take charge of your future now. Review your monthly spending and determine what can truly be trimmed now and what could be trimmed in retirement.

China- Communist or Capitalist?

I was recently in Beijing and Singapore and will blog about both these countries in more detail in future blogs. I am having trouble reconciling China and its economic growth. As someone who had never visited China, I did not know what to expect in Beijing. What I found was a bustling city with hundreds and hundreds of office buildings, Cartier stores, Hugo Boss stores, etc. I met several US businessmen in my hotel who told me China is a great place to do business, yet the typical Chinese citizen does not appear to have benefited in equal amounts from this “capitalistic” growth and wealth either in lifestyle or wages. It is all very confusing for someone who does not have intimate knowledge on China, its politics or its change in attitude towards commerce.


The blogs posted on The Blunt Bean Counter provide information of a general nature. These posts should not be considered specific advice; as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.

Wednesday, November 3, 2010

TFSA's- I Opened The Account, Now What?

I think by now, most Canadians are familiar with Tax-Free Savings Accounts (“TFSA’s”).  In today’s blog, I will provide a quick summary of TFSA’s, but I also want to veer off  into a discussion of the growth potential of TFSA’s and how the actual deployment of your TFSA funds will affect you from an income tax and investment perspective.

TFSA’s have been in existence since 2009. You can contribute up to $5,000 a year into a TFSA and you can carryforward unused contribution room. There is no income tax deduction for contributing to a TFSA; however, the income earned inside a TFSA is tax-free. In addition, you can withdraw monies from a TFSA tax-free at any time and can re-contribute the amounts you withdrew anytime after the year of withdrawal (i.e. if you withdraw money in 2009, you can re-contribute beginning in 2010).

Initially, I found my clients were indifferent to TFSA’s, however, with the banks and investment houses pushing these accounts, most clients now have TFSA’s.  I think the fact you are investing only $5,000 a year in a low interest rate environment has caused many to look at the account as small potatoes. However, they seem to snap to attention when I inform them that if they contribute $5,000 a year for 20 years at a return of approximately 4% they will end up with around $150,000, and if their return is closer to 6% they could end up with around $200,000.

Once you realize the potential growth power of a TFSA, I think you then need to get a handle on what the TFSA means to you. Is it solely a rainy day fund? A tax-free replacement to your regular trading account? Something in the middle?

After answering the above question, you or your advisor must then address how you invest your TFSA funds. If your TFSA is a rainy day fund, clearly you and your advisor should ensure you hold risk-free investments such a GIC’s, money markets, etc.

But what if you, like many of my clients, are a higher net worth individual and are essentially just moving money from your trading accounts to your TFSA? As a Chartered Accountant I cannot advise you on what to invest in, but I will tell you what I have seen.  Many clients have just “thrown” their TFSA funds into GIC’s or Money Markets. Others have placed the funds in ETF’s, mutual funds, etc. looking at the TFSA as a long term growth investment. Some of my more sophisticated clients have been stock pickers and purchased higher growth stocks to try and maximize the tax-free aspect of the TFSA. The result is that some clients have $20,000 to $30,000 in their TFSA’s today, while other clients have picked incorrectly and have only 30% to 40% of their original investment remaining.

Whether you are the ETF-type, Mutual Fund-type, or stock picker, what you have to understand is that the tax-free aspect of the TFSA may come at a cost for equity investments. If your investments increase in value, at the high rate in Ontario you have saved 23% in income tax on your realized capital gains within your TFSA. However, if your investments decrease in value and are sold in your TFSA, you will have forgone the capital loss you could carryforward outside your TFSA. Very clearly, you are playing off a potential tax-free capital gain against the risk of incurring a capital loss which is forgone.

In conclusion, once you invest in a TFSA, you need to consider the significant growth potential as the years march by and discuss with your investment advisor your investment strategy on the funds accumulated.


For the Love of Football?

I am a casual football fan. I usually only watch when there is a specific game of interest or nothing else on TV. However, the last few years I have been in a suicide football pool (initially created by my son’s hockey coach to raise money for the team) where you pick a winner each week and are eliminated if you select a losing team. It is incredible how much my level of interest and awareness of all things NFL has increased since I joined the pool. I now follow ESPN’s top picks, watch the NFL Network previews of games, etc. to get all the facts for my weekly pick.

I know my friends have had the same experience. However, except for diehard NFL fans, we all have the same response once our teams are eliminated - complete indifference to the NFL. Whereas the week before I was eliminated I could tell you the injury list for each team, two weeks after I am eliminated I cannot even tell you which teams are playing.
It just makes one realize how intertwined the NFL’s success is with legal and illegal betting and football pools.


The blogs posted on The Blunt Bean Counter provide information of a general nature. These posts should not be considered specific advice; as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.

Thursday, October 21, 2010

Estate Tax: Social Equality or a Terrible Idea

As I started reading a recent article by Linda McQuaig of the Toronto Star titled “Tax Exempt Fortunes Feed Inequality” I knew I my views would be widely divergent.

The article proposed that removing the Estate Tax in 1972 deprived Ottawa of much needed revenue and put Canadians on a path toward greater inequality. Estate tax, which is/has been a huge issue in the United States, is essentially a tax levied at death on the deceased’s accumulated wealth.

Ms. McQuaig suggests restoring an Estate Tax based on a plan by Neil Brooks an Osgoode Hall tax professor. She argues restoring the Estate Tax would remove or partially address income inequality. Mr. Brooks’ plan would be to tax estates greater than $1.5 million which Ms. McQuaig says, would be enough to set up a $16,000 education trust for each Canadian child on their 16th birthday.

Ms. McQuaig suggests some may protest this as a tax on the wealthy; I protest estate tax as a double tax. One accumulates wealth with after-tax dollars so to tax your estate on death is double tax. The United States has at least justified estate tax with substantially lower income taxes while one is alive.

For example, take hypothetical Guy, a successful business owner who risks his house and all his assets to start a business. He and his spouse make, on average, $250,000 a year for say 25 years. Each year they pay income tax of approximately $100,000 on their income. Say they keep $75,000 after living expenses and use that to buy a house for $500,000 and a cottage for $300,000 over time. Upon death the house is worth $1,000,000, the cottage $700,000 and the remaining cash around $1,200,000. 

Upon the death of the last surviving spouse, their executor would have to pay income taxes on the inherent gain in the cottage of approximately $100,000 on their final terminal tax return. There would be no income tax on their principal residence.

The estate would be worth in total $2,800,000 after paying the $100,000 in taxes. Applying Mr. Brooks’ proposed $1,500,000 exemption, there would still be estate tax on $1,300,000. Say the rate is 40%; the US has an even higher rate, that would be an additional double tax of $520,000.

You can argue as Ms. McQuaig that this is just social policy; I argue it is a blatant double tax.




I recently ate at the Hy’s steakhouse location in Toronto with some friends. We had an excellent meal, including caesar salad, black and blue ahi tuna ,filet mignon and Cajun rib steak. We were well taken care of by the General Manager and Director of Eastern Operations Michael Shatz. The Toronto location is a beautiful restaurant and we were all dressed in a style you would describe these days as “casual smart” (dress pants and shirt) or, in the case of the girls, nicer.

Which brings me to my point of discussion: What is the proper dress attire for a fine restaurant? While I think most people are somewhat “old school” and dress differently depending on the restaurant, I often see people in jeans and t-shirts. Casual is appropriate for many restaurants, and while I have no problem wearing jeans to those type of restaurants, I would never wear a t-shirt.

I think what bothers me is the lack of respect for the restaurant and the other diners. It is like these casual dressers are saying “I don’t care if I am spending $200 or more, I will wear what I feel like.” It just seems to smack of disrespect for the other diners who reserve that restaurant for special occasions, or even those who just expect a minimum dress code. Maybe I have just hit the age where I have now become my parents.

The blogs posted on The Blunt Bean Counter provide information of a general nature. These posts should not be considered specific advice; as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.

Thursday, October 14, 2010

The CRA and the PGA, Some Strange Rules

I recently read that Toronto Police Association president Mike McCormack said the Canada Revenue Agency (“CRA”) has decided that allowing the police to park at police stations is a taxable benefit. Mr. McCormack says the taxman is looking for three years back taxes and that could amount to “thousands of dollars” for each officer.

I have never understood CRA’s position on parking where a company has its own parking lot. You are driving to your place of employment to work, how is that a personal benefit?

The CRA’s position on parking is set forth in the following links:


In general, the CRA considers there to be a taxable benefit for parking whether the employer owns the parking lot or not. The most common exceptions are for scramble parking and parking provided for business reasons.

Business reasons relates to situations when an employee regularly uses his/her automobile to perform employment duties such as travelling off-site to meetings or service calls.

The CRA defines regularly as:
We consider "regularly" to be an average of three or more days per week. If the employee requires the use of a vehicle for business purposes less frequently, we will accept a pro-ration of the benefit. For example, if the employee uses a vehicle in the course of his or her duties 1 day per week, the value of the parking may be reduced by 20%, since the employee required a spot for business purposes 20% of the time.”

Employers often overlook the potential taxable benefit for parking which can result in a surprise income addition, and taxes payable, for their employees. Employers should review this issue with their advisors.

Stupid Golf Rules

As I get older, the injuries I ignored in my youth are coming back to haunt me. My knees now prevent me from playing basketball and my back keeps me from hockey. The one sport I seem to be able to handle physically is golf. I have a set game with my friends and we are all pretty good golfers (12-15 handicaps) and more importantly, we all have the same philosophy; we play golf for fun.

We play to be outdoors. We play for the challenge of the game. We play teams for lunch and we play to make fun of each other. We allow gimme’s and just take penalties from where we go out of bounds. We let one another move balls from divots.

Now I know anyone reading this who is a golf purist is offended by our lack of adherence to the rules and is already saying “You are not a 12 handicap if you play the way you do.” You know what, I agree, and our handicaps hurt us in any regulated tournament or club-like championship as they are understated due to the way we play. But we would rather play the way we play and we don’t care what our true handicaps really are. But, different strokes for different folks, and I understand those who are strict play-by-the-rules types, it is just not how we want to play the game as a recreational golfers.

After this year’s PGA when Dustin Johnston was penalized for grounding his club in a trap which did not look like a trap, some of golf’s archaic rules were revisited by many journalists and bloggers.

The following are some rules that just seem stupid in my opinion.

Balls in divots- You cannot take a free drop from a divot on a ball that lands in the fairway. How crazy? Someone else creates a divot and you hit a good shot and you are penalized by playing the ball from a large hole? How does this make sense when you get a free drop from ground under repair or a drain?

Padrig Harrington was penalized in a tournament when the wind blew his ball as he set up. He was penalized not because the ball moved, but because he had addressed the ball. How crazy is that? Mother Nature affected the ball, not the player.

Michelle Wie had a famous disqualification because she failed to sign her scorecard before leaving the scoring area. Everyone watching the tournament knows the score with all the electronic scorekeeping, so who cares when she signs?

You cannot fix a spike mark made on the green. Again, someone else created the impediment, but you suffer.

Golf is the most challenging game I have ever played and it can be enjoyed by playing strictly by the rules or using modified rules for weekend hackers.


The blogs posted on The Blunt Bean Counter provide information of a general nature. These posts should not be considered specific advice; as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.

Thursday, October 7, 2010

Where Did My Money Go?

A common issue I have uncovered over the years is that many people have little or no idea how they spend their money. Having a finger on the pulse of your spending is important for two planning reasons. Firstly, on a month to month and year to year basis, if you have the numbers in front of you, you can revise your spending habits or reallocate your spending. Secondly, when doing financial planning or estate planning, it is important to have a grip on current spending to extrapolate those costs going forward.

When I ask people why they don’t track their costs they often cite a lack of time or say they just don’t have an accounting inclination. While these are both valid reasons, with the advent of online banking and simple software like Quicken, both those reasons for not tracking spending are somewhat muted.

I use Quicken Cash Manager (which retails for $45) rather then Excel, since I can reconcile my bank accounts and track my expenses. Quicken Home and Business, which retails for around $100, provides some additional investing and accounting tools. If someone has an incorporated business I suggest they purchase QuickBooks or QuickBooks Pro.

I use Quicken to reconcile to my bank accounts to make sure I don’t bounce any cheques or prepayments. I find the most valuable tool is the monthly and yearly spending summary, which is created automatically if you are tracking your bank accounts. The yearly report is eye opening and often leads me to fits of nausea when I review how much I spent during the year.

I will admit that many people, including myself, have trouble keeping track of every cheque they write. I either post any cheque over $200 immediately in Quicken or I note the cheque amount and who it is for on a piece of paper and post it when I have a minute. Then on the weekend I go to my online bank account and post all the entries for the week, including smaller amounts I have not posted, which allows me to reconcile my account to my Quicken. Quicken even has a function to connect to your bank account.

The final step to keep things timely is to input all the pre-authorized amounts (e.g. car payments, insurance payments and realty taxes) at the beginning of the month. This is fairly easy to do since they are the same each month and the transaction can be set up once on a recurring basis.

Once you get in the habit, tracking your finances is easy and allows you to budget your costs and set goals for monthly savings. Keeping track of expenses and your bank account may not be fun, and may require half an hour to an hour a week, but the return is substantial for the time invested.

A topic related to personal budgets is ensuring monthly costs are reasonable and the services we are paying for meet our current needs. Many of us do some due diligence when signing up for telephone, internet, insurance, etc. However, once that diligence is done, if you are like me you no longer pay attention and just pay the monthly bills unless something looks out of “whack”.

Last week my wife decided we need to change our telephone long distance plan to include more long distance time in Ontario. She called Bell Canada and was told from the outset that our plan was way out of date, we were paying $5 too much, and we could have two additional features for free. When she started discussing our long distance needs, the reason for the call in the first place, my wife was told we already pay $4.95 for long distance that we are not using.

Once the dust had settled, we had the exact same monthly charge, two additional services and hundreds of minutes more long distance. The moral of the story, maybe once every year or two, call up your service providers to review what you are paying for to ensure you are getting the best bang for your buck.

Along the same vein, if your children are driving, have good marks, and are moving up their various levels of licensing and/or go off to University (and not driving while at University), there are various reductions to your car insurance bill that are not necessarily clearly known or voiced by the insurance companies.

I am waiting for my free ticket from Brazil for 2014
I have been in Europe twice during World Cup years. The first time I was in Italy in 1982 and this year I was in Spain during World Cup 2010. Both times, the country I was visiting won the World Cup.

I only remember bedlam in Italy.  In 1982 I was not even aware the World Cup was on because at that time I thought soccer was a sport for sissies. However, after enduring hundreds of games and tournaments for my son, who played rep soccer, I have come to appreciate the game and follow it to a small degree. Thus, I was quite aware that I would be in Madrid during the World Cup final.

Spain made it to the finals and we ended up watching the final game with a hundred thousand of our best friends. Actually, we tried to watch with a hundred thousand of our friends, but the street was blocked off by a huge TV screen so we watched the game in a hotel with the Spanish employees. As you know, Spain won in overtime. We were treated to free Champagne at the hotel before wandering outside. It was a mass of partying humanity. The celebrations were fun and joyous and a great outlet for many Spaniards suffering from a tough economic climate. It was a great experience and one that I will never forget.


The blogs posted on The Blunt Bean Counter provide information of a general nature. These posts should not be considered specific advice; as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.

Friday, October 1, 2010

Rock On

I will start today off with a prediction. Many Ontario businesses will be haunted by the introduction of the HST (“Harmonized Sales Tax”) over the next couple years when government HST audits are in full force. I say this because the HST does not appear to be well thought out. It was changing by the minute as the July 2010 deadline approached and most Ontario businesses look at the HST solely as an 8% increase in the GST (“Goods and Sales Tax”) from 5% to 13%.

The truth is, HST is a meshing of the GST, which was fairly well understood by most businesses, with Retail Sales Tax, which was never well understood by most businesses and many accountants. In my opinion, there will be havoc down the road with Sales Tax rules becoming embedded in the HST. I predict that place of supply and delivery rules, transitional billing rules and input tax credit restrictions will rear their ugly heads. The above is just a prediction based on my gut feeling, but I would be willing to bet that I will be proven correct.

Switching gears, I was listening to a rebroadcast of Casey Kasem’s American Top 40 (some FM stations & Sirus stations rebroadcast the original shows where Casey counted down the weekly top 40 – I personally enjoy the shows from the 70’s) and there was some talk about Tommy James. Tommy James performed, either solo, or with the Shondells, such hits as Draggin' the Line, Crimson and Clover, Crystal Blue Persuasion, Mony Mony and I Think We’re Alone Now. I was a little surprised by the number of hits he had produced so I Googled him. There are several sites on the net saying he should be in the Rock and Roll Hall of Fame. That got me interested in finding out which artists are not in the Rock and Roll Hall of fame so I did some more surfing and some of those not in the Hall of Fame, in no particular order, are:

  • Tommy James
  • Deep Purple
  • Heart
  • Stevie Ray Vaughan
  • Procol Harum
  • Ohio Players
  • Rush
  • Chicago
  • Rufus and Chaka Khan
  • Moody Blues
  • Hall and Oates
  • Jethro Tull
  • Alice Cooper
  • Kiss
  • Linda Ronstadt
  • Steve Miller
  • Emerson Lake and Palmer
  • Boston
  • Rick James
  • Yes
The blogs posted on The Blunt Bean Counter provide information of a general nature. These posts should not be considered specific advice; as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.

Tuesday, September 28, 2010

I am a Contractor, Unless CRA Says Otherwise

While we may be uncomfortable with a little bit of gray in our business relationships, the Canada Revenue Agency (CRA) is not. One issue that has fuzzy boundaries, but must be defined for tax purposes, is the issue of employee versus contractor.

Business owners need to be concerned about the distinction because they must remit payroll taxes on behalf of employees and provide employees with reasonable notice of termination. However, these rules do not apply to contractors (although there are some cases of reasonable notice for contractors). Individuals need to be concerned about the distinction because there are certain tax write-offs that are permitted for contractors (self-employed individuals) that are not permitted for employees.

In a perfect world, without CRA, (how utopian is that?), both the employer and employee would have a predilection to achieve monetary savings by ensuring work agreements are structured as independent contractor agreements. In fact, especially in the computer consultant world, many companies require the worker to incorporate a company to further insulate the payer company from CRA.

Many employers however ignore other factors that come into play. Since they are not withholding income taxes, Workers Compensation and Employee Health Tax, the contractor (or their corporation) is liable for these taxes. I have seen many cases where the contractor does not deal with these taxes and instead comes back to the employer asking for help in paying these liabilities.

In addition, I have seen cases where the “employee” requests to be a contractor for tax purposes, but when the company no longer requires their services and their request for Employment Insurance (“EI”) is turned down (since they are self employed) they often make a claim against the employer saying they did not understand they would not be covered for EI and they really were employees. A recent case involving the Royal Winnipeg Ballet focussed on the expressed intention of the arrangement and maybe helpful in this regard in future cases.

I generally advise my clients to treat workers as employer/employee relationships when the individual is working for them several days a week. I also generally advise my contractor clients to avoid the use of corporations due to Personal Service Business (“PSB”) concerns. If CRA considers a PSB to be in place a punitive income tax is applied to the corporation. Where a contractor agreement comes under CRA’s scrutiny, the first thing CRA does is examine the agreement between the payer and the employee/self-employed contractor to determine the intent of the relationship; but intent alone is not enough. The CRA then applies 4 tests to determine if the relationship is a business relationship or an employer-employee relationship. CRA has issued RC 4110 to communicate their position.

It should be noted that much of CRA’s position is drawn from two notable cases Weibe Doors and 671122 Ontario Ltd. vs Sagaz Industries.

The tests are as follows:

Control test: A lack of control over how work is done is evidence that there is an employer-employee relationship – e.g. the payer determines how the work should be done, what work should be done and provides training. In a business relationship, the contractor would work independently and accept or refuse work at his/her own discretion.

Tool test: Generally contractors supply their own tools. “Tools” is not limited to hammers – it includes instruments, computers, vehicles and any other items that the worker uses to perform his/her job.

Subcontractor test: The ability to hire assistants or contract work out is evidence that there is a business relationship.

Risk/Opportunity test: Risk of loss and opportunity for profit are indicators that there is a business relationship.

Integration test: This test examines whether the payer’s activities are incorporated into the worker’s business or whether the worker is integrated into the payer’s activities.

The employee versus contractor issue is a minefield and employers and employees alike should consult their advisors before entering into a new agreement.

The blogs posted on The Blunt Bean Counter provide information of a general nature. These posts should not be considered specific advice; as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.