Burnet vs. Logan

Case Solution

Henry B. Reiling
Harvard Business School ()

The taxpayer sold shares in the mining company and had to pay royalties when the mineral was extracted from the company’s mine. Since the actual questions about whether and, if so, how much and when the mineral will be mined were so vague, the court determined that the contractual right to royalty payments could not be assessed. There was no “knowledge”. Recognition would be postponed until payments were actually received.

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