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Horstmeier decided to look for a condominium to move into
together. In March or April 1974, Ms. Horstmeier purchased a
condominium in Skokie, Illinois, and began living there with Ms.
Scott. Ms. Scott did virtually all of the housework and kept
track of finances and bill paying for the couple. The women
lived in the condominium until February 1975, when it was sold.
Thereafter, they moved into a house in Glenview, Illinois
(the Glenview house). The Glenview house was purchased on
January 31, 1975, for $105,000. All documents with respect to
the Glenview house show that Ms. Horstmeier purchased the
property in her name only. Ms. Horstmeier paid for the Glenview
house with a $50,000 downpayment from her assets and a $55,000
mortgage for which she alone was liable. Ms. Horstmeier deducted
100 percent of the mortgage interest and real estate taxes with
respect to the Glenview house on the tax returns she filed from
1975 through 1992.
At the time the Glenview house was purchased, Ms. Scott did
not have assets to contribute to the purchase price, nor did she
have a regular source of income. Ms. Horstmeier was receiving an
annual salary from the business college of approximately $90,000.
Ms. Scott did virtually all the housework and continued to manage
household finances for the couple. She also performed all
required maintenance. Maintenance work for the house was more
extensive than that required for a condominium, and because Ms.
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Last modified: May 25, 2011