UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                              Washington, D.C. 20549

                                   FORM 10-QSB

(Mark One)

  [x]             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended      June 30, 2004
                                    -------------
                                             OR

  [ ]             TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                           OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                    to

                  Commission file number    1-8594
                                            ------

                             PRESIDENTIAL REALTY CORPORATION
                             ---------------------------------
              (Exact name of small business issuer as specified in its charter)

      Delaware                                         13-1954619
      --------                                         ----------
(State or other jurisdiction of                     (I.R.S.  Employer
 incorporation or organization)                     Identification No.)

180 South Broadway, White Plains, New York 10605
-------------------------------------------------
(Address of principal executive offices)

Issuer's telephone number, including area code  914-948-1300
                                                ------------
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such fling requirements for the past 90 days.
Yes   x          No
   --------        --------

The number of shares outstanding of each of the issuer's classes of common stock
as of the close of business on August 6, 2004 was 478,840 shares of Class A
common and 3,324,218 shares of Class B common.

Transitional Small Business Disclosure Format (check one):
Yes               No   x
    -----            ------





               PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES
               -------------------------------------------------


                               Index to Form 10-QSB
                             For the Six Months Ended
                                   June 30, 2004


Part I   Financial Information (Unaudited)

  Item 1.         Financial Statements
                           Consolidated Balance Sheets
                           Consolidated Statements of Operations
                           Consolidated Statements of Cash Flows
                           Notes to Consolidated
                             Financial Statements

  Item 2.         Management's Discussion and Analysis of
                    Financial Condition and Results of Operations

                  Quantitative and Qualitative Disclosures
                    about Market Risk

  Item 3.         Controls and Procedures


Part II  Other Information

  Item 6.         Exhibits and Reports on Form 8-K


<TABLE>
PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Unaudited)
<CAPTION>



                                                                                     June 30,              December 31,
                                                                                       2004                  2003
                                                                                    -----------           -----------
Assets

<S>                                                                                 <C>                   <C>
  Real estate (Note 2)                                                             $11,723,667           $11,646,869
    Less: accumulated depreciation                                                   5,792,324             5,650,595
                                                                                   -----------           -----------

  Net real estate                                                                    5,931,343             5,996,274
                                                                                   -----------           -----------

  Mortgage portfolio (Note 3):
    Sold properties and other - net                                                 21,293,317            21,375,192
    Related parties - net                                                              252,570               316,573
                                                                                   -----------           -----------

  Net mortgage portfolio (of which $144,014 in 2004
      and $112,730 in 2003 are due within one year)                                 21,545,887            21,691,765
                                                                                   -----------           -----------

  Assets related to discontinued operations (Note 4)                                 9,189,528            31,431,930
  Prepaid expenses and deposits in escrow                                            1,277,142             1,198,753
  Other receivables (net of valuation allowance of
    $241,300 in 2004 and $180,613 in 2003)                                             909,956               770,360
  Cash and cash equivalents (Note 4)                                                13,415,450             1,372,818
  Other assets                                                                         595,774               648,868
                                                                                   -----------           -----------

Total Assets                                                                       $52,865,080           $63,110,768
                                                                                   ===========           ===========

Liabilities and Stockholders' Equity

  Liabilities:
    Mortgage debt (of which $199,199 in 2004 and
      $191,250 in 2003 are due within one year)                                     $8,966,738            $9,060,091
    Liabilities related to discontinued operations (Note 4)                          7,694,855            29,221,431
    Contractual pension and postretirement benefits liabilities (Note 10)            3,381,292             3,396,393
    Defined benefit plan liability (Note 11)                                         1,367,776             1,393,341
    Accrued liabilities                                                              1,335,161             1,129,188
    Accounts payable                                                                   218,534               344,067
    Distributions from partnership in excess of investment and earnings (Note 5)     2,365,000             2,411,112
    Other liabilities                                                                  383,697               377,382
                                                                                    -----------           -----------

Total Liabilities                                                                   25,713,053            47,333,005
                                                                                    -----------           -----------


Minority Interest in Consolidated Partnership (Note 6)                                  55,578                69,346
                                                                                   -----------           -----------


  Stockholders' Equity:
     Common stock; par value $.10 per share
       Class A, authorized 700,000 shares, issued 478,940 shares
          and 100 shares held in treasury                                               47,894                47,894
       Class B         June 30, 2004         December 31, 2003                         332,087               330,667
       -----------     -------------         -----------------
      Authorized:      10,000,000                10,000,000
      Issued:           3,320,874                 3,306,674
      Treasury:             1,997                     1,897

    Additional paid-in capital                                                       3,290,833             3,189,840
    Retained earnings                                                               26,513,064            15,374,021
    Accumulated other comprehensive loss (Note 8)                                   (2,844,791)           (2,845,097)
    Treasury stock (at cost)                                                           (22,138)              (21,408)
    Notes receivable for exercise of stock options                                    (220,500)             (367,500)
                                                                                   -----------           -----------

Total Stockholders' Equity                                                          27,096,449            15,708,417
                                                                                   -----------           -----------

Total Liabilities and Stockholders' Equity                                         $52,865,080           $63,110,768
                                                                                   ===========           ===========



See notes to consolidated financial statements.
</TABLE>



<TABLE>
PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
<CAPTION>





                                                                                    SIX MONTHS ENDED JUNE 30,
                                                                                -----------------------------

                                                                                   2004             2003
                                                                                ------------    -------------
Revenues:
<S>                                                                              <C>              <C>
  Rental                                                                         $1,845,670       $2,013,492
  Interest on mortgages - sold properties and other                               1,461,429        1,238,706
  Interest on mortgages - related parties                                           284,932          184,736
  Other revenues                                                                     16,551           16,608
                                                                                ------------    -------------

Total                                                                             3,608,582        3,453,542
                                                                                ------------    -------------

Costs and Expenses:
  General and administrative                                                      1,744,368        1,584,983
  Depreciation on non-rental property                                                10,505           12,762
  Rental property:
    Operating expenses                                                            1,120,857        1,074,741
    Interest on mortgage debt                                                       299,682          272,551
    Real estate taxes                                                               241,422          233,916
    Depreciation on real estate                                                     151,845          153,723
    Amortization of mortgage costs                                                   10,986            6,138
                                                                                ------------    -------------

Total                                                                             3,579,665        3,338,814
                                                                                ------------    -------------

Other Income:
  Investment income                                                                  21,602           58,118
  Equity in income of partnership (Note 5)                                          157,712          197,139
                                                                                ------------    -------------

Income before minority interest and net gain
  from sales of properties                                                          208,231          369,985

Minority interest                                                                    (6,232)          (8,431)
                                                                                ------------    -------------

Income before net gain from sales of properties                                     201,999          361,554

Net gain from sales of properties                                                   913,945          919,893
                                                                                ------------    -------------

Income from continuing operations                                                 1,115,944        1,281,447
                                                                                ------------    -------------

Discontinued Operations (Note 4):
  Income (loss) from discontinued operations                                           (764)        (442,376)
  Net gain from sales of discontinued operations                                 11,236,833                -
                                                                                ------------    -------------

Total income (loss) from discontinued operations                                 11,236,069         (442,376)
                                                                                ------------    -------------

Net Income                                                                      $12,352,013         $839,071
                                                                                ============    =============


Earnings per Common Share (basic and diluted):
  Income before net gain from sales of properties                                     $0.06            $0.10

  Net gain from sales of properties                                                    0.24             0.24
                                                                                ------------    -------------

  Income from continuing operations                                                    0.30             0.34
                                                                                ------------    -------------

  Discontinued Operations (Note 4):
    Income (loss) from discontinued operations                                         0.00            (0.12)
    Net gain from sales of discontinued operations                                     2.96                -
                                                                                ------------    -------------

  Total income (loss) from discontinued operations                                     2.96            (0.12)
                                                                                ------------    -------------

  Net Income per Common Share - basic                                                 $3.26            $0.22
                                                                                ============    =============
                              - diluted                                               $3.25            $0.22
                                                                                ============    =============

Cash Distributions per Common Share                                                   $0.32            $0.32
                                                                                ============    =============

Weighted Average Number of Shares Outstanding - basic                             3,790,560        3,758,736
                                                                                ============    =============
                                              - diluted                           3,798,256        3,769,356
                                                                                ============    =============

See notes to consolidated financial statements.



PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)



                                                                                 THREE MONTHS ENDED JUNE  30,
                                                                                -----------------------------

                                                                                   2004             2003
                                                                                ------------    -------------
Revenues:
  Rental                                                                           $912,359       $1,015,360
  Interest on mortgages - sold properties and other                                 728,853          615,137
  Interest on mortgages - related parties                                           125,857           83,607
  Other revenues                                                                      7,237           11,170
                                                                                ------------    -------------

Total                                                                             1,774,306        1,725,274
                                                                                ------------    -------------

Costs and Expenses:
  General and administrative                                                        907,928          756,343
  Depreciation on non-rental property                                                 5,253            6,472
  Rental property:
    Operating expenses                                                              538,170          536,250
    Interest on mortgage debt                                                       149,440          136,146
    Real estate taxes                                                               120,711          116,959
    Depreciation on real estate                                                      76,960           77,801
    Amortization of mortgage costs                                                    5,314            2,638
                                                                                ------------    -------------

Total                                                                             1,803,776        1,632,609
                                                                                ------------    -------------

Other Income:
  Investment income                                                                   9,785           30,553
  Equity in income of partnership (Note 5)                                           91,615          114,669
                                                                                ------------    -------------

Income before minority interest and net gain
  from sales of properties                                                           71,930          237,887

Minority interest                                                                    (3,284)          (3,726)
                                                                                ------------    -------------

Income before net gain from sales of properties                                      68,646          234,161

Net gain from sales of properties                                                         -           11,401
                                                                                ------------    -------------

Income from continuing operations                                                    68,646          245,562
                                                                                ------------    -------------

Discontinued Operations (Note 4):
  Income (loss) from discontinued operations                                         81,305         (224,392)
  Net gain from sales of discontinued operations                                 11,236,833                -
                                                                                ------------    -------------

Total income (loss) from discontinued operations                                 11,318,138         (224,392)
                                                                                ------------    -------------

Net Income                                                                      $11,386,784          $21,170
                                                                                ============    =============


Earnings per Common Share (basic and diluted):
  Income before net gain from sales of properties                                     $0.02            $0.07

  Net gain from sales of properties                                                       -             0.00
                                                                                ------------    -------------

  Income from continuing operations                                                    0.02             0.07
                                                                                ------------    -------------

  Discontinued Operations (Note 4):
    Income (loss) from discontinued operations                                         0.02            (0.06)
    Net gain from sales of discontinued operations                                     2.96                -
                                                                                ------------    -------------

  Total income (loss) from discontinued operations                                     2.98            (0.06)
                                                                                ------------    -------------

  Net Income per Common Share - basic                                                 $3.00            $0.01
                                                                                ============    =============
                              - diluted                                               $2.99            $0.01
                                                                                ============    =============

Cash Distributions per Common Share                                                   $0.16            $0.16
                                                                                ============    =============

Weighted Average Number of Shares Outstanding - basic                             3,793,798        3,764,427
                                                                                ============    =============
                                              - diluted                           3,802,456        3,775,774
                                                                                ============    =============

See notes to consolidated financial statements.
</TABLE>



<TABLE>
PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
<CAPTION>


                                                                                               SIX MONTHS ENDED JUNE 30,
                                                                                     -----------------------------------

                                                                                         2004                  2003
                                                                                     -------------          ------------
 Cash Flows from Operating Activities:
<S>                                                                                    <C>                   <C>
   Cash received from rental properties                                                $1,815,253            $1,946,603
   Interest received                                                                    1,613,244             1,383,994
   Distributions received from partnership                                                111,600               161,200
   Miscellaneous income                                                                    15,303                 9,601
   Interest paid on rental property mortgage debt                                        (295,159)             (276,313)
   Cash disbursed for rental property operations                                       (1,471,922)           (1,340,938)
   Cash disbursed for general and administrative costs                                 (1,661,731)           (1,894,505)
                                                                                     -------------          ------------

 Net cash provided by (used in) continuing operations                                     126,588               (10,358)
 Net cash (used in) provided by discontinued operations                                    (4,297)               18,839
                                                                                     -------------          ------------

 Net cash provided by operating activities                                                122,291                 8,481
                                                                                     -------------          ------------

 Cash Flows from Investing Activities:
   Cash flows from continuing operations:
     Payments received on notes receivable                                                218,638             2,604,706
     Payments disbursed for investments in notes receivable                                    -             (1,500,000)
     Payments of taxes payable on gain from sale                                               -               (498,750)
     Payments disbursed for additions and improvements                                   (189,607)             (135,617)
     Proceeds from sales of co-op apartments                                            1,015,828                    -
     Purchase of additional interest in partnership                                            -                (39,443)
     Other                                                                                   (730)               (8,217)
                                                                                     -------------          ------------

                                                                                        1,044,129               422,679
                                                                                     -------------          ------------

   Cash flows from discontinued operations:
     Payments disbursed for additions and improvements                                    (87,495)              (67,827)
     Proceeds from sales of discontinued operations                                    19,712,548                    -
                                                                                     -------------          ------------

                                                                                       19,625,053               (67,827)
                                                                                     -------------          ------------

 Net cash provided by investing activities                                             20,669,182               354,852
                                                                                     -------------          ------------

 Cash Flows from Financing Activities:
   Cash flows from continuing operations:
     Principal payments on mortgage debt                                                  (93,353)              (78,719)
     Mortgage costs paid                                                                   (8,346)                   -
     Distributions to minority partners                                                   (20,000)              (15,113)
     Cash distributions on common stock                                                (1,212,970)           (1,203,126)
     Cash received from loan repayment by officer                                         147,000                    -
     Proceeds from dividend reinvestment and share purchase plan                           79,571               142,072
                                                                                     -------------          ------------

                                                                                       (1,108,098)           (1,154,886)
                                                                                     -------------          ------------

   Cash flows from discontinued operations:
     Principal payments on mortgage debt                                                  (97,131)             (143,882)
     Repayment of mortgage debt from sale of property                                  (7,543,612)                   -
                                                                                     -------------          ------------

                                                                                       (7,640,743)             (143,882)
                                                                                     -------------          ------------

 Net cash used in financing activities                                                 (8,748,841)           (1,298,768)
                                                                                     -------------          ------------


 Net Increase (Decrease) in Cash and Cash Equivalents                                  12,042,632              (935,435)

 Cash and Cash Equivalents, Beginning of Period                                         1,372,818             6,738,768
                                                                                     -------------          ------------

 Cash and Cash Equivalents, End of Period                                             $13,415,450            $5,803,333
                                                                                     =============          ============


 See notes to consolidated financial statements.
</TABLE>



<TABLE>
PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
<CAPTION>


                                                                                                    SIX MONTHS ENDED JUNE 30,
                                                                                          --------------------------------------

                                                                                              2004                    2003
                                                                                          --------------          --------------


Reconciliation of Net Income to Net Cash
  Provided by (Used in) Operating Activities
<S>                                                                                       <C>                     <C>
Net Income                                                                                  $12,352,013                $839,071
                                                                                          --------------          --------------
Adjustments to reconcile net income to net cash provided by (used in) continuing
  operations:
    Net gain from sales of properties                                                          (913,945)               (919,893)
    Loss from discontinued operations                                                               764                 442,376
    Net gain from sales of discontinued operations                                          (11,236,833)                    -
    Equity in income of partnership                                                            (157,712)               (197,139)
    Depreciation and amortization                                                               173,336                 172,623
    Issuance of stock for fees and expenses                                                      11,421                  10,461
    Amortization of discounts on notes and fees                                                 (72,760)                (65,018)
    Minority interest                                                                             6,232                   8,431
    Distributions received from  partnership                                                    111,600                 161,200

    Changes in assets and liabilities:
    Increase in other receivables                                                              (133,010)               (136,348)
    Increase (decrease)  in accounts payable and accrued liabilities                            102,517                (299,040)
    Increase in other liabilities                                                                22,374                  48,113
    Increase in prepaid expenses, deposits in escrow
      and deferred charges                                                                     (138,161)                (75,847)
    Other                                                                                        (1,248)                    652
                                                                                          --------------          --------------

Total adjustments                                                                           (12,225,425)               (849,429)
                                                                                          --------------          --------------

Net cash provided by (used in) continuing operations                                            126,588                 (10,358)
                                                                                          --------------          --------------


Discontinued operations:

  Loss from discontinued operations                                                                (764)               (442,376)
                                                                                          --------------          --------------

  Adjustments to reconcile loss to net cash (used in) provided by discontinued
    operations:
      Depreciation and amortization                                                             146,145                 523,046
      Net change in operating assets and liabilities                                           (149,678)                (61,831)
                                                                                          --------------          --------------

  Total adjustments                                                                              (3,533)                461,215
                                                                                          --------------          --------------

Net cash (used in) provided by discontinued operations                                           (4,297)                 18,839
                                                                                          --------------          --------------

Net cash provided by operating activities                                                      $122,291                  $8,481
                                                                                          ==============          ==============


SUPPLEMENTAL NONCASH DISCLOSURES:

  Satisfaction of mortgage debt as a  result of foreclosure sale                            $13,595,028
                                                                                          ==============

  Net carrying value of real estate written off as a result of foreclosure sale             $13,094,590
                                                                                          ==============


See notes to consolidated financial statements.
</TABLE>





PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2004

Presidential Realty Corporation ("Presidential" or the "Company"), a Real Estate
Investment Trust ("REIT"), is engaged principally in the ownership of income
producing real estate and in the holding of notes and mortgages secured by real
estate. Presidential operates in a single business segment, investments in real
estate related assets.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Principles of Consolidation - The consolidated financial statements include
the accounts of Presidential Realty Corporation and its wholly owned
subsidiaries. Additionally, the consolidated financial statements include 100%
of the account balances of UTB Associates, a partnership in which Presidential
is the general partner and owns a 75% interest. All significant intercompany
balances and transactions have been eliminated.

B. Net Income Per Share - Basic net income per share data is computed by
dividing net income by the weighted average number of shares of Class A and
Class B common stock outstanding during each period. Diluted net income per
share is computed by dividing net income by the weighted average shares
outstanding, including the dilutive effect, if any, of stock options
outstanding. The dilutive effect of stock options is calculated using the
treasury stock method.

C. Basis of Presentation - The accompanying unaudited consolidated financial
statements have been prepared in accordance with accounting principles generally
accepted in the United States of America for interim financial information. The
results for such interim periods are not necessarily indicative of the results
to be expected for the year. In the opinion of management, all adjustments
(consisting of only normal recurring accruals) considered necessary for a fair
presentation of the results for the respective periods have been reflected.
These consolidated financial statements and accompanying notes should be read in
conjunction with the Company's Form 10-K for the year ended December 31, 2003.

D. Management Estimates - In preparing the consolidated financial statements in
conformity with accounting principles generally accepted in the United States of
America, management is required to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities as of the date of the consolidated balance sheets and the
reported amounts of income and expense for the reporting period. Actual results
could differ from those estimates.

E. Discontinued Operations - The Company complies with the provisions of
Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for
the Impairment or Disposal of Long-Lived Assets". This statement requires that
the results of operations, including impairment, gains and losses related to the
properties that have been sold or properties that are intended to be sold be
presented as discontinued operations in the statements of operations for all
periods presented and the assets and liabilities of properties intended to be
sold are to be separately classified on the balance sheet. Properties designated
as held for sale are carried at the lower of cost or fair value less costs to
sell and are not depreciated.

F. Adoption of Recent Accounting Pronouncements - In January of 2003, the
Financial Accounting Standards Board ("FASB") issued Interpretation No. 46,
"Consolidation of Variable Interest Entities", which was amended by
Interpretation No. 46(R) in December of 2003. This Interpretation clarifies the
application of existing accounting pronouncements to certain entities in which
equity investors do not have the characteristics of a controlling financial
interest or do not have sufficient equity at risk for the entity to finance its
activities without additional subordinated financial support from other parties.
As it applied to Presidential, Interpretation No. 46(R) was immediately
effective for all variable interest entities on March 31, 2004. The adoption of
Interpretation No. 46 had no impact on the Company's consolidated financial
statements.


2. REAL ESTATE

         Real estate is comprised of the following:

                                    June 30,              December 31,
                                     2004                    2003
                                  -----------             ------------

Land                              $   675,377             $   695,475
Buildings                          10,902,156              10,806,098
Furniture and equipment               146,134                 145,296
                                  -----------             -----------
Total real estate                 $11,723,667             $11,646,869
                                  ===========             ===========

3. MORTGAGE PORTFOLIO

The components of the net mortgage portfolio at June 30, 2004 and December 31,
2003 are as follows:

                                Sold
                              Properties       Related
June 30, 2004                  and Other       Parties            Total
--------------               -----------      ----------       -----------

Notes receivable             $28,508,609       $307,487        $28,816,096
Less: Discounts                  981,902         54,917          1,036,819
      Deferred gains           6,233,390                         6,233,390
                             -----------       --------        -----------
Net mortgage portfolio       $21,293,317       $252,570        $21,545,887
                             ===========       ========        ===========

December 31, 2003
-----------------

Notes receivable             $28,656,210       $378,524        $29,034,734
Less: Discounts                1,047,628         61,951          1,109,579
      Deferred gains           6,233,390                         6,233,390
                             -----------       --------        -----------
Net mortgage portfolio       $21,375,192       $316,573        $21,691,765
                             ===========       ========        ===========

At June 30, 2004, all of the notes in the Company's mortgage portfolio are
current in accordance with their terms, as modified.

4. DISCONTINUED OPERATIONS

For the periods ended June 30, 2004 and 2003, income (loss) from discontinued
operations includes income from the Continental Gardens property and losses from
the Preston Lake Apartments and the Farrington Apartments properties. The
Farrington Apartments property which was designated as held for sale during the
quarter ended June 30, 2004, is currently under a contract for sale.

As a result of the Company's decision to discontinue payments on the first
mortgage note secured by the Preston Lake Apartments property and the
appointment of a receiver by the mortgagee in late February, 2004, the loss from
operations for the 2004 period reflects only two months of operations for the
Preston Lake Apartments property.

<TABLE>
The following table summarizes income or loss for the properties sold or held
for sale:
<CAPTION>

                                                  Six Months Ended          Three Months Ended
                                                      June 30,                  June 30,
                                            --------------------------  --------------------------
                                                2004            2003         2004        2003
                                                ----            ----         ----        ----
Revenues:
<S>                                         <C>             <C>            <C>          <C>
   Rental                                   $ 2,139,387     $2,881,475     $   941,009  $ 1,418,582
                                            -----------     ----------     -----------  -----------

Rental property expenses:
   Operating expenses                           925,022      1,324,394         377,690      641,395
   Interest on mortgage debt                    812,933      1,194,462         313,668      598,894
   Real estate taxes                            256,139        281,802          94,848      141,190
   Depreciation on real estate                  139,343        500,069          70,052      250,925
   Amortization of mortgage costs                 6,802         22,977           3,450       11,624
                                            -----------     ----------      ----------  -----------
Total                                         2,140,239      3,323,704         859,708    1,644,028
                                            -----------     ----------      ----------   ----------

Other income:
   Investment income (loss)                          88           (147)              4        1,054
                                            -----------     ----------     -----------   ----------

Income (loss) from
   discontinued operations                         (764)      (442,376)         81,305     (224,392)

Net gain from sales of
   discontinued operations                   11,236,833                     11,236,833
                                            -----------     ----------    ------------   ----------

Total income (loss) from
   discontinued operations                  $11,236,069     $ (442,376)    $11,318,138   $ (224,392)
                                            ===========     ==========     ===========   ==========
</TABLE>

On June 29, 2004, the Company consummated the sale of its Continental Gardens
property in Miami, Florida to MAJO 208, LLC, a Florida limited liability
company, for a sales price of $21,500,000 pursuant to a contract for the sale
executed in September, 2003. The net cash proceeds of sale, after repayment of
the $7,543,612 first mortgage loan and prepayment penalty of $919,522, brokerage
fees of $411,610 and other expenses of sale of $499,563, were $12,125,693,
substantially all of which is being held in escrow to be used to purchase one or
more exchange properties pursuant to a tax-free exchange under Section 1031 of
the Internal Revenue Code. Presidential has not yet identified a suitable
property to acquire with the proceeds of sale and if it does not find a suitable
exchange property, the proceeds will be released from escrow and the sale will
result in taxable capital gain of approximately $15,243,000. The gain from sale
for financial reporting purposes is $11,007,596.

In 2003, the Company also decided to sell Preston Lake Apartments, a 320-unit
apartment property in Tucker, Georgia. Based upon offers made by prospective
purchasers, the Company estimated that the fair value of the property, less
costs to sell, was below the $16,204,950 net carrying value of the property.
Therefore, in 2003, based on its decision to sell the property in the near term,
rather than to hold it as a long-term investment, the Company recorded an
impairment charge in the amount of $3,110,000 to reduce the carrying value of
the assets related to discontinued operations to their estimated fair value less
costs to sell.

In February, 2004, the Company decided not to make the monthly payment due
February 1, 2004 on the first mortgage note secured by Preston Lake Apartments.
The outstanding principal balance of the mortgage debt on February 1, 2004 was
$13,595,028. The mortgage note was nonrecourse and the Company had no personal
liability for repayment of the indebtedness. The holder of the first mortgage
commenced foreclosure proceedings and Presidential consented to the appointment
of a receiver for the property and did not contest the foreclosure sale. On May
4, 2004, the property was sold in a foreclosure sale by the holder of the first
mortgage. The Company recorded a gain on the foreclosure sale for financial
reporting purposes of $229,237.

In the second quarter of 2004, the Company decided to sell the Farrington
Apartments property in Clearwater, Florida. In July, 2004, the Company entered
into a contract for the sale of the property for a sales price equal to
$1,820,000 above the outstanding principal balance on the closing date of the
existing mortgage loan secured by the property. The outstanding balance of the
mortgage loan at the contract date was $7,640,480. The contract may be
terminated by the purchaser prior to the expiration of the due diligence period
on August 15, 2004 and closing is further subject to the approval by the lender
to the assumption of the mortgage by the purchaser. Based on the terms of the
contract, the gain from the sale for financial reporting purposes is estimated
to be approximately $177,000. Presidential intends to utilize all or a portion
of the estimated net cash proceeds of $1,700,000 from the sale to purchase
another property or properties and treat the sale and purchase as a tax-free
exchange under Section 1031 of the Internal Revenue Code ("IRC"). There can be
no assurances, however, that the sale will close or that the amount ultimately
realized will not change from the amount described herein or that a satisfactory
exchange property will be found. However, if a successful tax-free exchange
under Section 1031 of the IRC does not occur, the Company may be subject to tax
on its undistributed capital gains.

The assets and liabilities of the Farrington Apartments property at June 30,
2004, and the combined assets and liabilities of the Farrington Apartments,


<TABLE>
Continental Gardens and the Preston Lake Apartments properties at December 31,
2003, are segregated in the consolidated balance sheets. The components are as
follows:
<CAPTION>


                                                              June 30,          December 31,
                                                               2004                2003
                                                            -----------         ------------
Assets related to discontinued operations:
<S>                                                        <C>                  <C>
  Land                                                     $ 1,900,000          $ 6,588,000
  Buildings                                                  8,228,487           28,557,536
  Furniture and equipment                                       23,817              267,711
  Less: accumulated depreciation                            (1,106,284)          (4,627,994)
                                                           -----------          -----------
  Net real estate                                            9,046,020           30,785,253
  Other assets                                                 143,508              646,677
                                                           -----------          -----------
Total                                                      $ 9,189,528          $31,431,930
                                                           ===========          ===========

Liabilities related to discontinued operations:
  Mortgage debt                                            $ 7,647,255          $28,883,027
  Other liabilities                                             47,600              338,404
                                                           -----------          -----------
Total                                                      $ 7,694,855          $29,221,431
                                                           ===========          ===========
</TABLE>


5. DISTRIBUTIONS FROM PARTNERSHIP IN EXCESS OF INVESTMENT AND EARNINGS

PDL, Inc. (a wholly owned subsidiary of Presidential) is the general partner of
PDL, Inc. and Associates Limited Co-Partnership ("Home Mortgage Partnership").
The Home Mortgage Partnership owns and operates an office building in Hato Rey,
Puerto Rico. Presidential and PDL, Inc. have an aggregate 31% general and
limited partner interest in Home Mortgage Partnership at June 30, 2004. The
Company accounts for its investment in this partnership under the equity method
because it exercises significant influence, but not control, over the
partnership's affairs.

The Company's interest in the Home Mortgage Partnership has a negative basis and
therefore is classified as a liability on the Company's consolidated balance
sheets, under the caption "distributions from partnership in excess of
investment and earnings". The negative basis is solely due to the refinancing of
the mortgage on the property owned by the partnership and the distribution of
the proceeds to the partners in excess of their investment in prior years, and
not due to partnership operating losses.


<TABLE>
Summary financial information for Home Mortgage Partnership is as follows:
<CAPTION>
                                                                June 30,                  December 31,
                                                                  2004                        2003
                                                              ------------                ------------
Condensed Balance Sheets
<S>                                                           <C>                         <C>
  Net real estate                                             $  4,174,182                $  4,295,672
  Prepaid expenses and deposits in
   escrow                                                          814,736                     742,795
  Cash and cash equivalents                                        726,744                     813,306
  Receivables and other assets                                     612,122                     567,474
                                                              ------------                ------------
  Total Assets                                                $  6,327,784                $  6,419,247
                                                              ============                ============

  Nonrecourse mortgage debt                                   $ 16,424,772                $ 16,531,798
  Other liabilities                                                618,481                     751,666
                                                              ------------                ------------
  Total Liabilities                                             17,043,253                  17,283,464
  Partners' Deficiency                                         (10,715,469)                (10,864,217)
                                                              ------------                ------------
  Total Liabilities and
   Partners' Deficiency                                       $  6,327,784                $  6,419,247
                                                              ============                ============
On the Company's Consolidated
  Balance Sheets:
  Distributions from partnership in
    excess of investment and earnings                         $  2,365,000                $  2,411,112
                                                              ============                ============
</TABLE>


                            Six Months Ended          Three Months Ended
                               June 30,                     June 30,
                           2004          2003          2004          2003
                        -----------   ----------    ----------    ----------
Condensed Statements
  of Operations
  Revenues              $ 2,252,973  $ 2,364,581    $1,158,511    $1,258,775
  Interest on
    mortgage debt          (614,713)    (619,040)     (306,838)     (310,726)
  Other expenses         (1,132,381)  (1,114,671)     (557,524)     (580,560)
  Investment income           2,869        5,063         1,382         2,413
                        -----------   -----------    ----------    ----------
  Net Income            $   508,748  $   635,933    $  295,531    $  369,902
                        ===========   ===========    ==========    ==========

On the Company's
  Consolidated Statement
  of Operations:
  Equity in income
   of partnership       $   157,712  $   197,139    $   91,615    $  114,669
                        ===========  ===========    ==========    ==========



6. MINORITY INTEREST IN CONSOLIDATED PARTNERSHIP

Presidential is the general partner of UTB Associates, a partnership in which
Presidential has a 75% interest at June 30, 2004. As the general partner of UTB
Associates, Presidential exercises effective control over this partnership
through its ability to manage the affairs of the partnership in the ordinary
course of business, including the ability to approve the partnership's budgets,
and through its significant equity interest. Accordingly, Presidential
consolidates this partnership in the accompanying financial statements. The
minority interest reflects the minority partners' equity in the partnership.

7. INCOME TAXES

Presidential has elected to qualify as a Real Estate Investment Trust under the
Internal Revenue Code. A REIT which distributes at least 90% of its real estate
investment trust taxable income to its shareholders each year by the end of the
following year and which meets certain other conditions will not be taxed on
that portion of its taxable income which is distributed to its shareholders.

For the year ended December 31, 2003, the Company had taxable income (before
distributions to stockholders) of approximately $952,000 ($.25 per share), which
included approximately $791,000 ($.21 per share) of capital gains. This taxable
income will be reduced by the $154,000 ($.03 per share) of its 2003
distributions that were not utilized in reducing the Company's 2002 taxable
income. In addition, the Company may elect to apply any eligible year 2004
distributions to reduce its 2003 taxable income.

As previously stated, in order to retain REIT status, Presidential is required
to distribute 90% of its REIT taxable income (exclusive of capital gains).
Presidential distributed all of the required 90% ($.04 per share) of its 2003
REIT taxable income in 2003, exclusive of capital gains. In addition, although
no assurances can be given, it is the Company's present intention to distribute
all of its remaining 2003 taxable income in 2004 and, therefore, no provision
for income taxes was made at December 31, 2003.

Furthermore, the Company had a taxable loss (before distributions to
stockholders) for the six months ended June 30, 2004 of approximately $2,557,000
($.67 per share), which is comprised of an ordinary loss of approximately
$1,674,000 ($.44 per share) and capital losses of approximately $883,000 ($.23
per share). For the six months ended June 30, 2004, the Company recorded net
book income of approximately $12,352,000 and had a taxable loss of
approximately $2,557,000. The most significant difference relates to the
deferral of the gain from the sale of Continental Gardens because of the
Company's present intention to purchase one or more exchange properties
pursuant to a tax-free exchange under Section 1031 of the Internal Revenue Code.
In addition, certain items that are expenses or costs of sale and are deducted
from gain from sales of properties for financial reporting purposes are
treated as ordinary deductions for income tax purposes.

Presidential intends to continue to maintain its REIT status. Presidential has,
for tax purposes, reported the gain from the sale of certain of its properties
using the installment method.

8. COMPREHENSIVE INCOME

The Company's other comprehensive income consists of the changes in the net
unrealized gain on securities available for sale and the minimum pension
liability adjustments, if any. Thus, comprehensive income, which consists of net
income plus or minus other comprehensive income, is as follows:


                                    Six Months Ended          Three Months Ended
                                        June 30,                   June 30,
                                    2004        2003           2004        2003
                                 -----------  --------      -----------  -------

Net income                       $12,352,613  $839,071      $11,386,784  $21,170

Other comprehensive income-
  Net unrealized gain (loss)
    on securities
    available for sale                   306       982           (1,311)     524
                                 -----------  --------      -----------  -------

Comprehensive income             $12,352,919  $840,053      $11,385,473  $21,694
                                 ===========  ========      ===========  =======

9. COMMITMENTS AND CONTINGENCIES

Presidential is not a party to any material legal proceedings. The Company may
be a party to routine litigation incidental to the ordinary course of its
business.

In the opinion of management, all of the Company's properties are adequately
covered by insurance in accordance with normal insurance practices. The Company
is not aware of any environmental issues at any of its properties. The presence,
with or without the Company's knowledge, of hazardous substances at any of its
properties could have an adverse effect on the Company's operating results and
financial condition.


10. CONTRACTUAL PENSION AND POSTRETIREMENT BENEFITS

The following table sets forth the components of net periodic benefit costs for
contractual pension benefits:

                                    Six Months Ended       Three Months Ended
                                        June 30,                 June 30,
                                     2004      2003          2004        2003
                                   --------   --------     --------    -------

Service cost                       $ 20,739   $ 18,736     $ 10,369    $ 9,369
Interest cost                        75,650     77,314       37,825     38,657
Amortization of prior
  service cost                      (12,347)   (12,347)      (6,174)    (6,174)
Recognized actuarial loss           123,409     96,819       61,705     48,409
                                   --------   --------     --------    -------

Net periodic benefit cost          $207,451   $180,522     $103,725    $90,261
                                   ========   ========     ========    =======


The following table sets forth the components of net periodic benefit costs for
contractual postretirement benefits:

                                      Six Months Ended    Three Months Ended
                                          June 30,             June 30,
                                      2004      2003        2004         2003
                                    --------   --------    -------     -------

Service cost                        $  6,545   $  9,332   $  1,545     $ 4,666
Interest cost                         19,127     20,308      8,877      10,153
Amortization of prior
  service cost                        (4,806)    (4,806)    (2,406)     (2,403)
Recognized actuarial loss              9,551     13,433      2,801       6,717
                                    --------   --------   --------     -------

Net periodic benefit cost           $ 30,417   $ 38,267   $ 10,817     $19,133
                                    ========   ========   ========     =======


During the six months ended June 30, 2004, the Company made contributions of
$227,154 and $25,815 for contractual pension benefits and postretirement
benefits, respectively. The Company anticipates additional contributions of
$231,486 and $40,500 for contractual pension benefits and postretirement
benefits, respectively, for the remainder of 2004.





11. DEFINED BENEFIT PLAN

The following table sets forth the components of net periodic benefit costs:

                                 Six Months Ended       Three Months Ended
                                     June 30,                 June 30,
                                 2004        2003          2004       2003
                               ---------   ---------     --------    --------

Service cost                   $ 194,020   $ 246,124     $ 97,010    $123,062
Interest cost                    171,420     140,843       85,710      70,422
Expected return on
   plan assets                  (154,261)   (107,044)     (77,130)    (53,523)
Amortization of prior
   service cost                    6,308       6,308        3,154       3,154
Amortization of
   accumulated loss               31,482      32,879       15,741      16,440
                               ---------   ---------     --------    --------
Net periodic
  benefit cost                 $ 248,969   $ 319,110     $124,485    $159,555
                               =========   =========     ========    ========

During the six months ended June 30, 2004, the Company made contributions of
$274,534 to the defined benefit plan. The Company anticipates additional
contributions of $271,820 to the plan during the remainder of 2004.



PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS
         FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003

Critical Accounting Policies
----------------------------

In preparing the consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America ("GAAP"),
management is required to make estimates and assumptions that affect the
financial statements and disclosures. These estimates require management's most
difficult, complex or subjective judgments. The Company's critical accounting
policies are described in its Form 10-K for the year ended December 31, 2003.
There have been no significant changes in the Company's critical accounting
policies since December 31, 2003.

Results of Operations

Financial Information for the six months ended June 30, 2004 and 2003:
------------------------------------------------------------------------

Continuing Operations:

Revenues increased by $155,040 primarily as a result of increases in interest
income on mortgages-sold properties and other and an increase in interest income
on mortgages-related parties, offset by a decrease in rental revenues.

Rental revenues decreased by $167,822 primarily due to decreases in rental
revenue of $82,331 at the Mapletree Industrial Center property, $55,672 at the
Fairlawn Gardens property and $19,839 at the Cambridge Green property as a
result of increased vacancies at these properties. The increased vacancy loss at
the Mapletree Industrial Center property was the result of a major tenant going
out of business and vacating their rental space upon the expiration of their
lease. The increased vacancy loss at the Fairlawn Gardens property was a result
of flood damage to apartments in 2003. The Company is in the process of
repairing the damage and expects to rent these vacated units in the near future.

Interest on mortgages-sold properties and other increased by $222,723 primarily
due to interest income of $216,123 earned on the $4,500,000 loan made in
October, 2003.

Interest on mortgages-related parties increased by $100,196 primarily as a
result of an increase of $127,250 in payments of interest income received on the
Consolidated Loans. This increase was partially offset by a decrease of $18,387
in interest income on the Overlook note receivable which was repaid in March,
2003.

Costs and expenses increased by $240,851 primarily due to increases in general
and administrative expenses, rental property operating expenses and mortgage
interest expense.



General and administrative expenses increased by $159,385 primarily as a result
of a $138,200 increase in salary expense (of which $117,102 pertains to
contractual executive bonuses) and a bad debt expense of $89,500. The bad debt
expense is the result of the allowance that was set up for the doubtful
collectability of advances made to the rental property management company that
manages the Company's properties (discussed further below). These increases were
offset by a $70,141 decrease in defined benefit plan expenses.

Rental property operating expenses increased by $46,116 primarily as a result of
an increase of $35,313 in bad debt expense and increases of $16,237 in repairs
and maintenance expense.

Mortgage interest expense increased by $27,131 as a result of the new $1,200,000
mortgage on the Building Industries Center property which the Company obtained
in December, 2003.

Other income decreased by $75,943 primarily as a result of a $39,427 decrease in
equity in income of partnership, due to lower earnings of the Home Mortgage
Partnership. In addition, investment income decreased by $36,516 primarily as a
result of decreased interest earned on lower cash investment balances.

Income from continuing operations before net gain from sales of properties
decreased by $159,555 from $361,554 in 2003 to $201,999 in 2004. This decrease
was primarily due to a $251,545 decrease in income from rental property
operations, increases of $159,385 in general and administrative expenses and a
$75,943 decrease in other income. These decreases were offset by increased
interest income of $322,919.

Net gain from sales of properties depends on the timing of sales or the receipt
of installments or prepayments on purchase money notes. In 2004, the net gain
from sales of properties was $913,945 compared with $919,893 in 2003:

<TABLE>
Gain from sales recognized for the six months
  ended June 30,                                                                2004               2003
<CAPTION>
                                                                              --------           --------
  Sale of property:
<S>                                                                           <C>                <C>
    330 West 72nd St. apartment unit                                          $560,265           $
    Sherwood House apartment unit                                              334,868
    Emily Towers apartment unit                                                 18,812

  Deferred gains recognized upon receipt of principal payments on notes:
     Overlook                                                                                     880,927
     Cooperative apartments notes                                                                  38,966
                                                                              --------           --------

  Net gain                                                                    $913,945           $919,893
                                                                              ========           ========
</TABLE>

Discontinued Operations:

The Company has three properties that are classified as discontinued operations;
the Farrington Apartments property in Clearwater, Florida, which is under
contract of sale, the Continental Gardens property in Miami, Florida, which was
sold in June of 2004 and the Preston Lake Apartments property in Tucker,
Georgia, which was sold in May of 2004. (See Discontinued Operations below).

Loss from discontinued operations before net gain from sale of such operations
was $764 in 2004 compared to $442,376 in 2003. The 2004 period only has two
months of operations for the Preston Lake Apartments property compared to six
months of operations in the 2003 period. The Preston Lake Apartments property
went into receivership at the end of February, 2004, and was sold on May 4, 2004
at a foreclosure sale by the holder of the first mortgage.

The following table compares the total income or loss from discontinued
operations for the six month periods ended June 30, for properties included in
discontinued operations:

                                                       2004             2003
                                                    -----------       ---------

Income (loss) from discontinued operations:

Continental Gardens, Miami, FL                     $   251,178       $ 115,322
Farrington Apartments, Clearwater, FL                 (130,324)       (154,508)
Preston Lake Apartments, Tucker, GA                   (121,618)       (403,190)
                                                    ------------      ---------

Loss from discontinued operations                         (764)       (442,376)
                                                    -----------      ---------

Net gain from sales of discontinued operations:
Continental Gardens                                 11,007,596
Preston Lake Apartments                                229,237
                                                   -----------       ---------

Net gain from sales of discontinued operations      11,236,833
                                                   -----------       ---------

Total income (loss) from
  discontinued operations                          $11,236,069       $(442,376)
                                                   ===========       =========


Financial Information for the three months ended June 30, 2004 and 2003:
------------------------------------------------------------------------

Continuing Operations:

Revenues increased by $49,032 primarily as a result of increases in interest
income on mortgages-sold properties and other and an increase in interest income
on mortgages-related parties, offset by a decrease in rental revenues.

Rental revenues decreased by $103,001 primarily due to decreases in rental
revenue of $60,606 at the Mapletree Industrial Center property, $29,632 at the
Fairlawn Gardens property and $8,143 at the Cambridge Green property as a result
of increased vacancies at these properties as previously discussed.

Interest on mortgages-sold properties and other increased by $113,716 primarily
due to interest income of $108,061 earned on the $4,500,000 loan made in
October, 2003.

Interest on mortgages-related parties increased by $42,250 primarily as a result
of an increase of $45,250 in payments of interest income received on the
Consolidated Loans.

Costs and expenses increased by $171,167 primarily due to increases in general
and administrative expenses and mortgage interest expense.

General and administrative expenses increased by $151,585 primarily as a result
of a $120,175 increase in salary expense (of which $117,102 pertains to
contractual executive bonuses) and a bad debt expense of $29,000. The bad debt
expense is part of the allowance that was set up for the doubtful collectability
of advances made to the rental property management company that manages the
Company's properties (discussed further below).

Mortgage interest expense increased by $13,294 as a result of the new $1,200,000
mortgage on the Building Industries Center property which the Company obtained
in December, 2003.

Other income decreased by $43,822 primarily as a result of a $23,054 decrease in
equity in income of partnership, due to lower earnings of the Home Mortgage
Partnership. In addition, investment income decreased by $20,768 primarily as a
result of decreased interest earned on lower cash investment balances.

Income from continuing operations before net gain from sales of properties
decreased by $165,515 from $234,161 in 2003 to $68,646 in 2004. This decrease
was primarily due to increases of $151,585 in general and administrative
expenses, a $123,802 decrease in income from rental property operations and a
$43,822 decrease in other income. These decreases were offset by increased
interest income of $155,966.

Net gain from sales of properties depends on the timing of sales or the receipt
of installments or prepayments on purchase money notes. In 2004, the net gain
from sales of properties was zero compared with $11,401 in 2003:

Gain from sales recognized for the three months
  ended June 30,                                   2004               2003
                                                 --------           --------
Deferred gains recognized upon receipt of
 principal payments on notes:
     Cooperative apartments notes                $                  $ 11,401
                                                 --------           --------
                                                 $                  $ 11,401
                                                 ========           ========

Discontinued Operations:

Income from discontinued operations before net gain from sales of such
operations was $81,305 in 2004 compared to a loss of $224,392 in 2003. There
were no operations for the Preston Lake Apartments property in the 2004 period
compared to three months of operations in the 2003 period, because the Preston
Lake Apartments property went into receivership at the end of February, 2004.

The following table compares the total income or loss from discontinued
operations for the three month periods ended June 30, for properties included in
discontinued operations:

                                                     2004             2003
                                                  -----------       ---------

Income (loss) from discontinued operations:

Continental Gardens, Miami, FL                    $   145,595       $  56,674
Farrington Apartments, Clearwater, FL                 (65,168)        (64,288)
Preston Lake Apartments, Tucker, GA                       878        (216,778)
                                                  -----------       ---------

Income (loss) from discontinued operations             81,305        (224,392)
                                                  -----------       ---------


Net gain from sales of discontinued operations:
Continental Gardens                                11,007,596
Preston Lake Apartments                               229,237
                                                  -----------       ---------

Net gain from sales of discontinued operations     11,236,833
                                                  -----------       ---------

Total income (loss) from
  discontinued operations                         $11,318,138       $(224,392)
                                                  ===========       =========


Funds from Operations

Funds from operations ("FFO") represents net income computed in accordance with
GAAP, excluding gains or losses from sales of properties (including properties
classified as discontinued operations), plus depreciation and amortization on
real estate. FFO is calculated in accordance with the National Association of
Real Estate Investment Trusts' ("NAREIT") definition. There are no material
legal or functional restrictions on the use of FFO. FFO should not be considered
as an alternative to net income as an indicator of the Company's operating
performance. Management considers FFO a supplemental measure of operating
performance and uses FFO as a measure for reviewing the Company's operating
performance between periods and for comparing performance to other REITs.





FFO is summarized in the following table:

                               Six Months Ended        Three Months Ended
                                   June 30,                 June 30,
                              2004         2003          2004        2003
                           ------------ ----------   ------------  ---------
Net Income                 $ 12,352,013 $  839,071   $ 11,386,784  $ 21,170
Net gain from sales
  of properties                (913,945)  (919,893)                 (11,401)
Net gain from sales of
  discontinued operations   (11,236,833)              (11,236,833)
Depreciation and
  amortization on:
  Real estate                   151,845    153,723         76,960    77,801
  Real estate of
    discontinued operations     139,343    500,069         70,052   250,925
  Real estate of
    partnership                  47,487     47,713         23,777    23,956
                           ------------  ----------  ------------  --------
Funds From Operations      $    539,910 $  620,683   $    320,740  $362,451
                           ============ ==========   ============  ========

Distributions paid
   to shareholders         $  1,212,970 $1,203,126   $    606,901  $602,391
                           ============ ==========   ============  ========

FFO payout ratio (1)             224.7%     193.8%         189.2%    166.2%
                           ============ ==========   ============  ========


          (1)     In the first two quarters of 2004 and 2003, the Company
                  decided to maintain its cash dividend at the quarterly rate of
                  $.16 per share despite the fact the dividends paid exceeded
                  funds from operations. As a result of balloon payments
                  received on the Company's mortgage portfolio and proceeds from
                  sales of properties, the Company had funds available to it for
                  distribution to shareholders in addition to funds from
                  operations. See Liquidity and Capital Resources below.

Balance Sheet

Assets related to discontinued operations decreased by $22,242,402 primarily as
a result of the sales of the Continental Gardens and Preston Lake Apartments
properties. The net carrying value of the properties sold was $21,687,383 and
other assets related to the sales were $492,483.

Prepaid expenses and deposits in escrow increased by $78,389 primarily as a
result of increases of $152,322 in prepaid expenses (primarily insurance and
real estate tax), partially offset by decreases of $73,933 in deposits in
escrow.

Other receivables increased by $139,596 primarily as a result of an increase in
accrued interest receivable of $114,986 and net increases of $27,974 in damage
settlement claims due from insurance carriers for fire and flood damage which
occurred at three properties in 2003. Included in other receivables is a $89,500
receivable which is due from the rental property management company that manages
the Company's rental properties. This receivable is for operating advances made
by the Company to the management company in December, 2003 and in the first six
months of 2004. The collectability of these advances is doubtful and as a
result, the Company set up a $89,500 allowance for doubtful accounts for these
advances and charged bad debt expense for the $89,500.

Cash and cash equivalents increased by $12,042,632 as a result of the net
proceeds of approximately $12,126,000 received from the sale of the Continental
Gardens property.

Other assets decreased by $53,094 primarily as a result of the write-off of
$25,805 for deferred expenses of sale relating to properties sold in 2004. In
addition, $13,204 of deposits held by utility companies were refunded to the
Company. Other assets also decreased by $10,505 due to the depreciation of home
office furniture and equipment.

Liabilities related to discontinued operations decreased by $21,526,576. As a
result of the sale of the Continental Gardens property, the outstanding mortgage
debt of $7,543,612 was repaid. In addition, as a result of the foreclosure sale
of the Preston Lake Apartments property, the $13,595,028 outstanding mortgage
debt was written off.

Accrued liabilities increased by $205,973 primarily as a result of $200,100 of
accrued expenses of sale in connection with the sale of the Continental Gardens
property.

Accounts payable decreased by $125,533 primarily as a result of the sale of
Preston Lake Apartments. At December 31, 2003, accounts payable included
$144,846 attributed to Preston Lake Apartments.

In January, 2004, three directors of the Company were each given 1,000 shares of
the Company's Class B common stock as partial payment for directors' fees for
the 2004 year. The shares were valued at $7.614 per share, which was the market
value of the Class B common stock at the grant date, and, accordingly, the
Company recorded $22,842 in prepaid directors' fees (to be amortized during
2004) based on the market value of the stock. The Company recorded additions to
the Company's Class B common stock of $300 at par value of $.10 per share and
$22,542 to additional paid-in capital.

Forward-Looking Statements

Certain statements made in this report may constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended and Section 21E of the Securities Exchange Act of 1934, as amended. Such
forward-looking statements include statements regarding the intent, belief or
current expectations of the Company and its management and involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include, among other things, the
following: general economic and business conditions, which will, among other
things, affect the demand for apartments or commercial space, availability and
credit worthiness of prospective tenants, lease rents and the terms and
availability of financing; adverse changes in the real estate markets including,
among other things, competition with other companies; risks of real estate
development and acquisition; governmental actions and initiatives; and
environment/safety requirements.

Liquidity and Capital Resources

Management believes that the Company has sufficient liquidity and capital
resources to carry on its existing business and, barring any unforeseen
circumstances, to pay the dividends required to maintain REIT status in the
foreseeable future. Except as discussed herein, management is not aware of any
other trends, events, commitments or uncertainties that will have a significant
effect on liquidity.

Presidential obtains funds for working capital and investment from its available
cash and cash equivalents, from operating activities, from refinancing of
mortgage loans on its real estate equities or from sales of such equities, and
from repayments on its mortgage portfolio. The Company also has at its disposal
a presently unused $250,000 unsecured line of credit and a $250,000 commercial
loan available from a lending institution.

During the first six months of 2004 and the year of 2003, the Company paid cash
distributions to shareholders which exceeded cash flows from operating
activities. Periodically the Company receives balloon payments on its mortgage
portfolio, net proceeds from sales of cooperative apartments and net proceeds
from sales of discontinued operations. These payments are available to the
Company for distribution to its shareholders or the Company may retain these
payments for future investment. The Company may in the future, as it did in the
first six months of 2004 and the year of 2003, pay dividends in excess of its
cash flow from operating activities if management believes that the Company's
liquidity and capital resources are sufficient to pay such dividends.

The Company does not have a specific policy as to the retention or distribution
of capital gains. The Company's dividend policy regarding capital gains for
future periods will be based upon many factors including, but not limited to,
the Company's present and projected liquidity, its desire to retain funds
available for additional investment, its historical dividend rate and its
ability to reduce taxes by paying dividends. While the Company expects to
maintain the annual $.64 dividend rate in 2004, no assurances can be given that
the present dividend rate will be maintained in the future.

At June 30, 2004, Presidential had $13,415,450 in available cash and cash
equivalents, an increase of $12,042,632 from the $1,372,818 at December 31,
2003. This increase in cash and cash equivalents was due to cash provided by
investing activities of $20,669,182 and cash provided by operating activities of
$122,291, offset by cash used in financing activities of $8,748,841.
Approximately $12,368,000 of the $13,415,450 cash and cash equivalents is being
held in an escrow account pending a possible tax-free exchange under Section
1031 of the Internal Revenue Code (see sale of Continental Gardens below).

Operating Activities

Cash from operating activities includes interest on the Company's mortgage
portfolio, net cash received from (disbursed for) rental property operations and
distributions received from the Home Mortgage Partnership. In 2004, cash
received from interest on the Company's mortgage portfolio was $1,613,244 and
distributions received from the Home Mortgage Partnership were $111,600. Cash
disbursed for rental property operations was $28,172. Net cash received from
(disbursed for) rental property operations is net of distributions to minority
partners but before additions and improvements and mortgage amortization.

Investing Activities

Presidential holds a portfolio of mortgage notes receivable. During 2004, the
Company received principal payments of $218,638 on its mortgage portfolio of
which $162,649 represented prepayments and balloon payments. Prepayments and
balloon payments are sporadic and cannot be relied upon as a regular source of
liquidity.

During the first six months of 2004, the Company invested $189,607 in additions
and improvements to its properties.

The Company owns a small portfolio of cooperative apartments, which are located
in New York and Connecticut. These apartments are held for the production of
rental income and are not marketed for sale. On occasion, the Company will
receive purchase offers for some of these apartments and will make sales if the
purchase price is agreeable to management. In 2004, the Company sold three
cooperative apartments which were located in the New York metropolitan area. The
net cash proceeds from the sale of those apartments were $1,015,828.

Financing Activities

The Company's indebtedness at June 30, 2004, consisted of $8,966,738 of mortgage
debt. The mortgage debt, which is collateralized by individual properties, is
nonrecourse to the Company with the exception of the $1,190,498 Building
Industries Center mortgage and the $179,486 Mapletree Industrial Center
mortgage, which are collateralized by the properties and are recourse to
Presidential. In addition, some of the Company's mortgages provide for Company
liability for damages resulting from specified acts or circumstances, such as
for environmental liabilities and fraud. Generally, mortgage debt repayment is
serviced with cash flow from the operations of the individual properties. During
the first six months of 2004, the Company made $93,353 of principal payments on
mortgage debt.

The mortgages on the Company's properties are at fixed rates of interest. With
the exception of three mortgages which will be fully amortized by periodic
principal payments, the remaining mortgages have balloon payments due at
maturity.

In March, 2004, the Company received a $147,000 repayment on a note receivable
from an officer for a loan made in 1999 for the exercise of stock options.

During the first six months of 2004, Presidential declared and paid cash
distributions of $1,212,970 to its shareholders and received proceeds from its
dividend reinvestment and share purchase plan of $79,571.

Discontinued Operations

On June 29, 2004, the Company consummated the sale of its Continental Gardens
property in Miami, Florida to MAJO 208, LLC, a Florida limited liability
company, for a sales price of $21,500,000 pursuant to a contract for the sale
executed in September, 2003. The net cash proceeds of sale, after repayment of
the $7,543,612 first mortgage loan and prepayment penalty of $919,522, brokerage
fees of $411,610 and other expenses of sale of $499,563, were $12,125,693,
substantially all of which is being held in escrow to be used to purchase one or
more exchange properties pursuant to a tax-free exchange under Section 1031 of
the Internal Revenue Code. Presidential has not yet identified a suitable
property to acquire with the proceeds of sale and if it does not find a suitable
exchange property, the proceeds will be released from escrow and the sale will
result in taxable capital gain of approximately $15,243,000. The gain from sale
for financial reporting purposes is $11,007,596.

In the third quarter of 2003, the Company decided to sell the Preston Lake
Apartments property. Based upon offers made by prospective purchasers, the
Company estimated that the fair value of the property, less costs to sell, was
below the $16,204,950 carrying value of the property (net of accumulated
depreciation of $1,628,334). Therefore, in 2003, the Company recorded an
impairment charge in the amount of $3,110,000 to reduce the carrying value of
the assets related to discontinued operations to their estimated fair value less
costs to sell.

The Company decided not to make the monthly payment due February 1, 2004 on the
first mortgage note secured by Preston Lake Apartments. The holder of the first
mortgage commenced foreclosure proceedings and Presidential consented to the
appointment of a receiver for the property and did not contest the foreclosure
sale. On May 4, 2004, the property was sold in a foreclosure sale by the holder
of the first mortgage. The Company recorded a gain on the foreclosure sale for
financial reporting purposes of $229,237.

In the second quarter of 2004, the Company decided to sell the Farrington
Apartments property in Clearwater, Florida. In July, 2004, the Company entered
into a contract for the sale of the property for a sales price equal to
$1,820,000 above the outstanding principal balance on the closing date of the
existing mortgage loan secured by the property. The outstanding balance of the
mortgage loan at the contract date was $7,640,480. The contract may be
terminated by the purchaser prior to the expiration of the due diligence period
on August 15, 2004 and the closing is further subject to the approval by the
lender to the assumption of the mortgage by the purchaser. Based on the terms of
the contract, the gain from the sale for financial reporting purposes is
estimated to be approximately $177,000. Presidential intends to utilize all or a
portion of the estimated net cash proceeds of $1,700,000 from the sale to
purchase another property or properties and treat the sale and purchase as a
tax-free exchange under Section 1031 of the Internal Revenue Code ("IRC"). There
can be no assurances, however, that the sale will close or that the amount
ultimately realized will not change from the amount described herein or that a
satisfactory exchange property will be found. However, if a successful tax-free
exchange under Section 1031 of the IRC does not occur, the Company may be
subject to tax on its undistributed capital gains.

At June 30, 2004, assets related to discontinued operations were $9,189,528 and
liabilities related to discontinued operations were $7,694,855.

Cash used in discontinued operations for the six months ended June 30, 2004 was
as follows: cash used in operating activities was $4,297, cash provided by
investing activities was $19,625,053 and cash used in financing activities was
$7,640,743.

Consolidated Loans

Presidential holds two nonrecourse loans (the "Consolidated Loans"), which were
collateralized by substantially all of the remaining assets of Ivy Properties,
Ltd. and its affiliates "(Ivy"). At June 30, 2004, the Consolidated Loans have
an outstanding principal balance of $4,770,050 and a net carrying value of zero.
Pursuant to existing agreements, the Company is entitled to receive, as payments
of principal and interest on the Consolidated Loans, 25% of the cash flow of
Scorpio Entertainment, Inc. ("Scorpio"), a company owned by two of the Ivy
principals (Messrs. Baruch and Viertel), to carry on theatrical productions.
Amounts received by Presidential from Scorpio will be applied to unpaid and
unaccrued interest on the Consolidated Loans and recognized as income. The
Company anticipates that these amounts could be significant over the next
several years. However, the continued profitability of any theatrical production
is by its nature uncertain and management believes that any estimate of payments
from Scorpio on the Consolidated Loans for future periods is too speculative to
project. During the six months ended June 30, 2004, the Company received
payments of $258,250 from Scorpio. At June 30, 2004, the unpaid and unaccrued
interest was $3,368,878.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's financial instruments consist primarily of mortgage notes
receivable and mortgage notes payable. Substantially all of these instruments
bear interest at fixed rates, so the Company's cash flows from them are not
directly impacted by changes in market rates of interest. Changes in market
rates of interest impact the fair values of these fixed rate assets and
liabilities. However, because the Company generally holds its notes receivable
until maturity and repays its notes payable at maturity or upon sale of the
related properties, any fluctuations in values do not impact the Company's
earnings, balance sheet or cash flows. However, since some of the Company's
mortgage notes payable are at fixed rates of interest and provide for yield
maintenance payments upon prepayment prior to maturity, if market interest rates
are lower than the interest rates on the mortgage notes payable, the Company's
ability to sell the properties securing the notes may be adversely affected and
the net proceeds of any sale may be reduced because of the yield maintenance
requirements. The Company does not own any derivative financial instruments or
engage in hedging activities.

ITEM 3.  CONTROLS AND PROCEDURES

a)       As of the end of the period covered by this quarterly report on Form
         10-QSB, the Company carried out an evaluation, under the supervision
         and with the participation of our Chief Executive Officer and Chief
         Financial Officer, of the effectiveness of the design and operation of
         its disclosure controls and procedures. Based on this evaluation, our
         Chief Executive Officer and Chief Financial Officer concluded that our
         disclosure controls and procedures are effective in timely alerting
         them to material information required to be included in this report.

b)       There has been no change in the Company's internal control over
         financial reporting that occurred during the Company's most recent
         fiscal quarter that has materially affected or is reasonably likely to
         materially affect the Company's internal control over financial
         reporting.





PART II - OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K.

(a)      Exhibits

         31.1     Certification of Chief Executive Officer of the Company
                  pursuant to Rule 13a-14(a) of the Securities Exchange Act of
                  1934, as amended.

         31.2     Certification of Chief Financial Officer of the Company
                  pursuant to Rule 13a-14(a) of the Securities Exchange Act of
                  1934, as amended.

         32.1     Certification of Chief Executive Officer of the Company
                  pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002.

         32.2     Certification of Chief Financial Officer of the Company
                  pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002.


(b) During the calendar quarter ended June 30, 2004, the Company filed a Form
8-K on May 17, 2004 and a Form 8-K/A on June 10, 2004 which disclosed under Item
2 - Acquisition or Disposition of Assets and Item 7 - Financial Statements and
Exhibits the disposition of Preston Lake Apartments.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

PRESIDENTIAL REALTY CORPORATION
        (Registrant)



DATE:    August 11, 2004             By: /s/ Jeffrey F. Joseph
                                         ---------------------
                                         Jeffrey F. Joseph
                                         President and Chief Executive Officer



DATE:    August 11, 2004             By: /s/ Elizabeth Delgado
                                         ---------------------
                                         Elizabeth Delgado
                                         Treasurer