FORM 10-KSB--Annual or Transitional Report Under
                               Section 13 or 15(d)
                                   Form 10-KSB

[X]   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934
      [No Fee Required]

                 For the fiscal year ended December 31, 2001

[ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934
      [No Fee Required]

               For the transition period _________to _________

                         Commission file number 0-11767

                      ANGELES INCOME PROPERTIES, LTD. II
                (Name of small business issuer in its charter)

         California                                             95-3793526
(State or other jurisdiction of                              (I.R.S. Employer
 incorporation or organization)                             Identification No.)

                          55 Beattie Place, PO Box 1089
                       Greenville, South Carolina 29602
                   (Address of principal executive offices)

                                 (864) 239-1000
                            Issuer's telephone number

        Securities registered under Section 12(b) of the Exchange Act:

                                      None

        Securities registered under Section 12(g) of the Exchange Act:

                      Units of Limited Partnership Interest
                                (Title of class)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act of 1934 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 filing requirements for the past 90 days. Yes X No___

Check if there is no disclosure  of delinquent  filers in response to Item 405
of  Regulation  S-B  contained  in  this  form,  and  no  disclosure  will  be
contained,  to the best of the  registrant's  knowledge in definitive proxy or
information  statements  incorporated  by  reference  in Part III of this Form
10-KSB or any amendment to this Form 10-KSB.  [X]

State issuer's revenues for its most recent fiscal year.   $7,267,000

State the aggregate  market value of the voting  partnership  interests  held by
non-affiliates  computed  by  reference  to the price at which  the  partnership
interests  were sold,  or the average bid and asked  prices of such  partnership
interests as of December 31, 2001. No market exists for the limited  partnership
interests of the Registrant,  and,  therefore,  no aggregate market value can be
determined.


                       DOCUMENTS INCORPORATED BY REFERENCE
                                      None

<PAGE>

                                     PART I

Item 1.     Description of Business

Angeles Income  Properties,  Ltd. II (the  "Partnership"  or  "Registrant") is a
publicly held limited partnership organized under the California Uniform Limited
Partnership Act on October 12, 1982. The Partnership's  managing general partner
is Angeles  Realty  Corporation  II, a  California  corporation  (the  "Managing
General  Partner" or "ARC II").  ARC II was  wholly-owned  by MAE GP Corporation
("MAE  GP").  Effective  February  25,  1998,  MAE GP was merged  into  Insignia
Properties  Trust  ("IPT").  Effective  February 26,  1999,  IPT was merged into
Apartment  Investment and Management Company  ("AIMCO"),  a publicly traded real
estate investment trust.  Thus, the Managing General Partner is now wholly-owned
by AIMCO. The Elliott  Accommodation  Trust and the Elliott Family  Partnership,
Ltd., California limited  partnerships,  were the non-managing general partners.
Effective  December 31, 1997 the Elliott Family  Partnership,  Ltd. acquired the
Elliott  Accommodation  Trust's general  partner  interest in the Registrant and
effective July 18, 2000, AIMCO Properties, L.P. (an affiliate of AIMCO) acquired
the  Elliott  Family  Partnership,   Ltd.'s  general  partner  interest  in  the
Registrant.  The Managing General Partner and the  non-managing  general partner
are herein collectively  referred to as the "General Partners".  The Partnership
Agreement  provides  that the  Partnership  is to terminate on December 31, 2037
unless terminated prior to such date.

The Partnership,  through its public offering of Limited Partnership Units, sold
100,000 units aggregating $50,000,000.  The General Partners contributed capital
in the amount of $1,000 for a 1% interest in the  Partnership.  The  Partnership
was formed for the purpose of acquiring fee and other forms of equity  interests
in various types of real estate  property.  The  Partnership  presently owns and
operates  three  apartment   properties.   (See  "Item  2.   Properties").   The
Partnership's  commercial  property was sold during the year ended  December 31,
2000.  Since its initial  offering,  the  Registrant  has not received,  nor are
limited partners required to make, additional capital contributions.

The  Partnership  has no full  time  employees.  Management  and  administrative
services are provided by the Managing  General Partner and by agents retained by
the Managing  General  Partner.  An affiliate  of the Managing  General  Partner
provided such property  management  services for the residential  properties for
the years ended December 31, 2001 and 2000.  Effective October 1, 1998, property
management  services for the  commercial  property were provided by an unrelated
party.

The  real  estate  business  in which  the  Partnership  is  engaged  is  highly
competitive.  There are other  residential  properties within the market area of
the Partnership's properties.  The number and quality of competitive properties,
including  those which may be managed by an affiliate  of the  Managing  General
Partner in such market area,  could have a material  effect on the rental market
for  apartment  properties  owned by the  Partnership  and the rents that may be
charged  for  such  apartments.  While  the  Managing  General  Partner  and its
affiliates  own and/or  control a significant  number of apartment  units in the
United  States,  such  units  represent  an  insignificant  percentage  of total
apartment  units in the United  States and  competition  for the  apartments  is
local.

There have been, and it is possible there may be other, Federal, state and local
legislation  and  regulations   enacted   relating  to  the  protection  of  the
environment.  The Partnership is unable to predict the extent,  if any, to which
such new  legislation  or  regulations  might occur and the degree to which such
existing or new legislation or regulations might adversely affect the properties
owned by the Partnership.

The Partnership  monitors its properties for evidence of pollutants,  toxins and
other dangerous substances, including the presence of asbestos. In certain cases
environmental  testing has been performed which resulted in no material  adverse
conditions or liabilities.  In no case has the Partnership  received notice that
it is a potentially  responsible party with respect to an environmental clean up
site.

Both  the  income  and  expenses  of  operating  the  properties  owned  by  the
Partnership are subject to factors outside of the Partnership's control, such as
changes in the supply and demand for similar  properties  resulting from various
market  conditions,  increases/decreases  in unemployment or population  shifts,
changes in the availability of permanent mortgage  financing,  changes in zoning
laws,  or changes in patterns or needs of users.  In  addition,  there are risks
inherent in owning and operating residential  properties because such properties
are  susceptible to the impact of economic and other  conditions  outside of the
control of the Partnership.

A further description of the Partnership's business is included in "Management's
Discussion and Analysis or Plan of Operations" included in "Item 6" of this Form
10-KSB.

Item 2.     Description of Properties

The following table sets forth the Partnership's investment in properties:

                                Date of
Property                        Purchase       Type of Ownership            Use

Deer Creek Apartments           09/28/83   Fee ownership subject to   Apartments
  Plainsboro, NJ                           a first mortgage           288 units

Georgetown Apartments           11/21/83   Fee ownership subject to   Apartments
  South Bend, IN                           a first and second         200 units
                                           mortgage (1)

Landmark Apartments             12/16/83   Fee ownership subject to   Apartments
  Raleigh, NC                              a first mortgage           292 units

(1)   Property is held by a limited  partnership in which the Registrant  owns a
      99% interest.

Schedule of Properties

Set forth below for each of the  Registrant's  properties is the gross  carrying
value,  accumulated  depreciation,  depreciable life, method of depreciation and
Federal tax basis.
<TABLE>
<CAPTION>

                             Gross
                           Carrying   Accumulated                          Federal
Property                     Value    Depreciation    Rate     Method     Tax Basis
                                (in thousands)                         (in thousands)
<S>                         <C>         <C>         <C>         <C>        <C>
Deer Creek Apartments       $13,637     $ 8,878     5-20 yrs    (1)        $ 5,154

Georgetown Apartments         8,357       6,552     5-20 yrs    (1)          1,612

Landmark Apartments          12,875      10,687     5-20 yrs    (1)          2,300
                            $34,869     $26,117                            $ 9,066
</TABLE>

(1)   Straight line and accelerated.

See  "Note A" of the  consolidated  financial  statements  included  in "Item 7.
Financial  Statements"  for a  description  of  the  Partnership's  depreciation
policy.

Schedule of Property Indebtedness

The  following  table  sets  forth  certain  information  relating  to the loans
encumbering the Registrant's properties.
<TABLE>
<CAPTION>

                       Principal                                          Principal
                       Balance At                                          Balance
                      December 31,   Interest     Period     Maturity      Due At
     Property             2001         Rate      Amortized     Date     Maturity (2)
                     (in thousands)                                    (in thousands)
Deer Creek
<S>                     <C>            <C>        <C>         <C>           <C>
  1st mortgage          $13,623        7.43%      20 yrs      07/2021       $ --

Georgetown
  1st mortgage            4,992        7.83%     28.67 yrs    10/2003        4,806
  2nd mortgage              173        7.83%        (1)       10/2003          173

Landmark
  1st mortgage            6,227        7.33%      30 yrs      11/2003        6,054
                         25,015                                            $11,033

Less unamortized
  discount                  (37)
                        $24,978
</TABLE>

(1)   Interest only payments.

(2)   See "Item 7. Financial  Statements - Note B" for information  with respect
      to the  Partnership's  ability to prepay  these  loans and other  specific
      details about the loans.

On June 27, 2001, the Partnership refinanced the mortgage encumbering Deer Creek
Apartments.  The refinancing replaced  indebtedness of approximately  $5,985,000
with a new mortgage of $13,750,000.  The new mortgage  carries a stated interest
rate of  7.43% as  compared  to the  7.33%  interest  rate on the old  mortgage.
Payments on the  mortgage  loan are due monthly  until the loan  matures in July
2021. Total  capitalized  loan costs were  approximately  $406,000.  These costs
included $138,000 in fees paid to the Managing General Partner.  The Partnership
recognized  an  extraordinary  loss  on the  early  extinguishment  of  debt  of
approximately $57,000 due to the write-off of unamortized loan costs.

Rental Rates and Occupancy

Average annual rental rate and occupancy for 2001 and 2000 for each property:

                                     Average Annual            Average Annual
                                       Rental Rate                Occupancy
                                       (per unit)
 Property                         2001            2000        2001         2000

 Deer Creek Apartments           $11,305         $10,041       95%          98%
 Georgetown Apartments             8,199           7,945       96%          96%
 Landmark Apartments               8,595           8,609       91%          90%

The General  Partner  attributes  the decrease at Deer Creek  Apartments  to the
economy of the general area and increased layoffs at local high-tech businesses.

As noted under "Item 1.  Description of Business",  the real estate  industry is
highly  competitive.  All of the  properties of the  Partnership  are subject to
competition from other residential apartment complexes in the area. The Managing
General Partner believes that all of the properties are adequately insured. Each
residential  property is an apartment  complex  which leases its units for lease
terms of one year or  less.  No  residential  tenant  leases  10% or more of the
available  rental space.  All of the properties are in good physical  condition,
subject to normal  depreciation  and  deterioration  as is typical for assets of
this type and age.

Schedule of Real Estate Taxes and Rates

Real estate taxes and rates in 2001 for each property were:

                                    2001             2001
                                  Billing            Rate
                               (in thousands)

Deer Creek Apartments              $ 393             2.75%
Georgetown Apartments                132*            9.60%
Landmark Apartments                  131             0.95%

* Amount per 2000 billings; tax bills for 2001 not yet received.

Capital Improvements

Deer Creek

During the year ended December 31, 2001,  the  Partnership  spent  approximately
$809,000 on capital  improvements  consisting primarily of air conditioning unit
replacements,  carpet  and  vinyl  replacements,  maintenance  equipment,  water
submetering,  and  cabinet  replacements.  These  improvements  were funded from
Partnership  reserves and  operating  cash flow.  The  Partnership  is currently
evaluating the capital  improvement needs of the property for the upcoming year.
The  minimum  amount to be  budgeted is expected to be $300 per unit or $86,400.
Additional  improvements  may be  considered  and will  depend  on the  physical
condition of the property as well as replacement  reserves and anticipated  cash
flow generated by the property.

Georgetown

During the year ended December 31, 2001,  the  Partnership  spent  approximately
$204,000 on capital improvements consisting primarily of buildings,  appliances,
and  carpet  replacements.  These  improvements  were  funded  from  Partnership
reserves,  insurance  proceeds,  and operating  cash flow.  The  Partnership  is
currently  evaluating  the capital  improvement  needs of the  property  for the
upcoming year. The minimum amount to be budgeted is expected to be $300 per unit
or $60,000.  Additional  improvements  may be considered  and will depend on the
physical  condition  of  the  property  as  well  as  replacement  reserves  and
anticipated cash flow generated by the property.

Landmark

During the year ended December 31, 2001,  the  Partnership  spent  approximately
$183,000 on capital improvements  consisting primarily of buildings,  structural
improvements, water heater replacements, countertop replacements, and carpet and
vinyl  replacements.  These improvements were funded from Partnership  reserves,
operating  cash  flow and  insurance  proceeds.  The  Partnership  is  currently
evaluating the capital  improvement needs of the property for the upcoming year.
The  minimum  amount to be  budgeted is expected to be $300 per unit or $87,600.
Additional  improvements  may be  considered  and will  depend  on the  physical
condition of the property as well as replacement  reserves and anticipated  cash
flow generated by the property.

Item 3.     Legal Proceedings

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the  Partnership,  its Managing  General Partner and
several of their  affiliated  partnerships  and corporate  entities.  The action
purports  to  assert  claims  on  behalf  of a class  of  limited  partners  and
derivatively  on behalf  of a number  of  limited  partnerships  (including  the
Partnership)  which are named as nominal  defendants,  challenging,  among other
things,  the  acquisition  of  interests  in certain  Managing  General  Partner
entities by Insignia Financial Group, Inc. ("Insignia") and entities which were,
at one  time,  affiliates  of  Insignia;  past  tender  offers  by the  Insignia
affiliates to acquire limited partnership units;  management of the partnerships
by the  Insignia  affiliates;  and the series of  transactions  which  closed on
October 1, 1998 and February 26, 1999 whereby  Insignia and Insignia  Properties
Trust,  respectively,  were merged  into AIMCO.  The  plaintiffs  seek  monetary
damages and equitable relief, including judicial dissolution of the Partnership.
On June 25, 1998, the Managing General Partner filed a motion seeking  dismissal
of the action.  In lieu of responding  to the motion,  the  plaintiffs  filed an
amended  complaint.  The Managing General Partner filed demurrers to the amended
complaint which were heard February 1999.

Pending the ruling on such  demurrers,  settlement  negotiations  commenced.  On
November 2, 1999,  the parties  executed and filed a Stipulation  of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the  settlement  was obtained on November 3, 1999 from the Court,  at which time
the Court set a final  approval  hearing for  December  10,  1999.  Prior to the
December  10,  1999  hearing,  the  Court  received  various  objections  to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement.  On
December 14, 1999, the Managing  General  Partner and its affiliates  terminated
the  proposed  settlement.  In  February  2000,  counsel  for some of the  named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated  the  settlement.  On June  27,  2000,  the  Court  entered  an order
disqualifying  them  from the case and an  appeal  was  taken  from the order on
October 5, 2000. On December 4, 2000, the Court  appointed the law firm of Lieff
Cabraser  Heimann & Bernstein  LLP as new lead  counsel for  plaintiffs  and the
putative class.  Plaintiffs filed a third amended complaint on January 19, 2001.
On March 2, 2001,  the  Managing  General  Partner  and its  affiliates  filed a
demurrer to the third amended  complaint.  On May 14, 2001,  the Court heard the
demurrer to the third amended  complaint.  On July 10, 2001, the Court issued an
order  sustaining  defendants'  demurrer on certain  grounds.  On July 20, 2001,
Plaintiffs filed a motion for reconsideration of the Court's July 10, 2001 order
granting in part and denying in part defendants' demurrer. On September 7, 2001,
Plaintiffs  filed a fourth amended class and  derivative  action  complaint.  On
September 12, 2001, the Court denied Plaintiffs' motion for reconsideration.  On
October 5, 2001, the Managing General Partner and affiliated  defendants filed a
demurrer to the fourth amended complaint,  which was heard on December 11, 2001.
On February 2, 2002,  the Court served its order  granting in part the demurrer.
The  Court has  dismissed  without  leave to amend  certain  of the  plaintiffs'
claims.  On February 11, 2002,  plaintiffs  filed a motion  seeking to certify a
putative  class  comprised of all  non-affiliated  persons who own or have owned
units  in  the  partnerships.   The  Managing  General  Partner  and  affiliated
defendants  intend  to  oppose  the  motion  and are  scheduled  to  file  their
opposition  brief on March 26, 2002. A hearing on the motion has been  scheduled
for April 29, 2002. The Court has set the matter for trial in January 2003.

During the third  quarter of 2001, a complaint  (the "Heller  action") was filed
against  the same  defendants  that are named in the  Nuanes  action,  captioned
Heller v. Insignia Financial Group. On or about August 6, 2001, plaintiffs filed
a first amended  complaint.  The first amended complaint in the Heller action is
brought as a purported  derivative  action,  and asserts  claims for among other
things  breach  of  fiduciary  duty;  unfair  competition;   conversion,  unjust
enrichment;  and judicial  dissolution.  Plaintiffs in the Nuanes action filed a
motion to  consolidate  the Heller action with the Nuanes action and stated that
the Heller action was filed in order to preserve the derivative claims that were
dismissed  without  leave to amend in the Nuanes action by the Court order dated
July 10, 2001. On October 5, 2001, the Managing  General  Partner and affiliated
defendants  moved to strike the first  amended  complaint  in its  entirety  for
violating  the Court's July 10, 2001 order  granting in part and denying in part
defendants'  demurrer in the Nuanes action, or alternatively,  to strike certain
portions of the complaint based on the statute of limitations.  Other defendants
in the action  demurred to the fourth  amended  complaint,  and,  alternatively,
moved to strike the complaint. On December 11, 2001, the court heard argument on
the motions  and took the matters  under  submission.  On February 4, 2002,  the
Court  served  notice of its order  granting  defendants'  motion to strike  the
Heller complaint as a violation of its July 10, 2001 order in the Nuanes action.

The Managing  General Partner does not anticipate that any costs,  whether legal
or  settlement  costs,  associated  with  these  cases will be  material  to the
Partnership's overall operations.

The  Partnership is unaware of any other pending or outstanding  litigation that
is not of a routine nature arising in the ordinary course of business.

Item 4.     Submission of Matters to a Vote of Security Holders

The unitholders of the Partnership did not vote on any matter during the quarter
ended December 31, 2001.


                                     PART II

Item 5.     Market for the Partnership's Common Equity and Related Security
            Holder Matters

The Partnership,  a publicly-held limited partnership,  offered and sold 100,000
Limited Partnership Units aggregating $50,000,000. The Partnership currently has
1,760 holders of record  owning an aggregate of 99,784 units.  Affiliates of the
Managing  General  Partner owned 59,166 units or 59.29% at December 31, 2001. No
public  trading  market has developed for the units,  and it is not  anticipated
that such a market will develop in the future.

The following table sets forth the distributions made by the Partnership for the
years ended December 31, 2000 and 2001 (see "Item 6. Management's Discussion and
Analysis or Plan of Operation" for more details):

                                                Distributions
                                                           Per Limited
                                        Aggregate        Partnership Unit
                                      (in thousands)
       01/01/00 - 12/31/00             $ 5,504 (1)            $53.76
       01/01/01 - 12/31/01               8,680 (2)             86.12

(1)   Consists of $2,758,000 of cash from operations and $2,746,000 of cash from
      sale proceeds from the sale of Atlanta Crossing Shopping Center.

(2)   Consists of $1,302,000 of cash from operations and $7,378,000 of cash from
      the refinance of Deer Creek Apartments in June 2001.

Future  cash  distributions  will  depend on the levels of cash  generated  from
operations, the availability of cash reserves and the timing of debt maturities,
refinancings  and/or  property  sales.  The  Partnership's  cash  available  for
distribution is reviewed on a monthly basis. There can be no assurance, however,
that the  Partnership  will  generate  sufficient  funds from  operations  after
required  capital  expenditures to permit  distributions  to its partners in the
year  2002  or  subsequent  periods.  Distributions  may  be  restricted  by the
requirement  to deposit net operating  income (as defined in the mortgage  note)
into the reserve  account until the reserve account is funded in an amount equal
to a minimum of $200 and a maximum  of $400 per  apartment  unit for  Georgetown
Apartments  for a total of  approximately  $40,000 to $80,000.  At December  31,
2001, the balance in this reserve account was approximately $81,000.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates owned 59,166 limited partnership units in
the Partnership  representing  59.29% of the  outstanding  units at December 31,
2001. A number of these units were  acquired  pursuant to tender  offers made by
AIMCO or its  affiliates.  It is  possible  that  AIMCO or its  affiliates  will
acquire additional limited partnership  interests in the Partnership for cash or
in exchange  for units in the  operating  partnership  of AIMCO  either  through
private purchases or tender offers. Under the Partnership Agreement, unitholders
holding a majority of the units are  entitled  to take action with  respect to a
variety of matters,  which would  include  voting on certain  amendments  to the
Partnership  Agreement and voting to remove the Managing General  Partner.  As a
result  of its  ownership  of  59.29% of the  outstanding  units,  AIMCO is in a
position to control all voting  decisions with respect to the  Registrant.  When
voting on matters, AIMCO would in all likelihood vote the units it acquired in a
manner  favorable to the interest of the Managing General Partner because of its
affiliation with the Managing General Partner.

Item 6.     Management's Discussion and Analysis or Plan of Operation

The  matters  discussed  in this Form  10-KSB  contain  certain  forward-looking
statements  and  involve  risks and  uncertainties  (including  changing  market
conditions,   competitive  and  regulatory   matters,   etc.)  detailed  in  the
disclosures  contained  in this  Form  10-KSB  and the  other  filings  with the
Securities and Exchange Commission made by the Registrant from time to time. The
discussions of the  Registrant's  business and results of operations,  including
forward-looking  statements  pertaining  to such  matters,  does not  take  into
account the effects of any changes to the  Registrant's  business and results of
operations.  Accordingly,  actual  results  could differ  materially  from those
projected in the forward-looking  statements as a result of a number of factors,
including those identified herein.

This item should be read in conjunction with "Item 7. Financial  Statements" and
other items contained elsewhere in this report.

Results of Operations

The  Partnership's  net  income  for the  year  ended  December  31,  2001,  was
approximately  $351,000 compared to approximately  $2,766,000 for the year ended
December  31,  2000.   (See  "Note  C"  of  the  financial   statements   for  a
reconciliation of these amounts to the Registrant's federal taxable income.) The
decrease in net income for the year ended December 31, 2001 is  attributable  to
the sale of  Atlanta  Crossing  Shopping  Center in March  2000 (see  discussion
below) and the extraordinary loss on early  extinguishment of debt recognized in
2001.  The  extraordinary  loss on early  extinguishment  of debt relates to the
refinancing of the mortgage  encumbering Deer Creek in June 2001 (see discussion
in "Liquidity and Capital Resources").

Excluding  the  operations  and  sale  of the  discontinued  operation  and  the
extraordinary  loss on early  extinguishment of debt, the Partnership had income
from continuing operations of approximately $408,000 for the year ended December
31, 2001,  compared to  approximately  $581,000 for the year ended  December 31,
2000.  The  decrease in income  from  continuing  operations  for the year ended
December 31, 2001 is due  primarily to an increase in total  expenses  which was
partially offset by an increase in total revenues.

Total  expenses  increased for the year ended December 31, 2001 primarily due to
increases  in  operating,  property  tax,  depreciation  and  interest  expenses
partially offset by a decrease in general and administrative expenses. Operating
expenses   increased  due  to  increased   insurance   expense  at  all  of  the
Partnership's properties, increased property management fees due to the increase
in rental  revenue  at all of the  Partnership's  properties  and  increased  ad
valorem taxes paid at Deer Creek  Apartments.  These  increases  were  partially
offset by reduced  maintenance  expenses due  primarily  to reduced  landscaping
supplies at Landmark Apartments and reduced snow removal and contract repairs at
Deer  Creek  Apartments.  Property  tax  expense  increased  at Deer  Creek  and
Georgetown  due to  increased  assessed  value which was  partially  offset by a
decrease  due to a  lower  assessed  value  at  Landmark.  Depreciation  expense
increased due to capital  improvements  completed during the past twelve months.
Interest  expense  increased due to the refinancing of Deer Creek  Apartments in
June 2001,  which  increased the debt balance at the  property,  as discussed in
Liquidity and Capital Resources.  General and administrative  expenses decreased
due to a decrease in a management  fee accrued to the Managing  General  Partner
based on a  percentage  of  positive  cash flow as  allowed  in the  Partnership
Agreement, a decrease in professional fees associated with the administration of
the  Partnership,  and a decrease  in legal  expenses.  Included  in general and
administrative expenses at both December 31, 2001 and 2000 are reimbursements to
the Managing General Partner allowed under the Partnership  Agreement associated
with its management of the Partnership,  costs associated with the quarterly and
annual  communications  with  investors and  regulatory  agencies and the annual
audit required by the Partnership Agreement.

The  increase  in total  revenues  for the year ended  December  31, 2001 is due
primarily  to an  increase  in rental  income,  a  casualty  gain at  Georgetown
Apartments  due to an ice storm in January 2001 and  casualty  gains at Landmark
Apartments due to fires in January and March 2001. The increase in rental income
is the result of increased  average  rental rates at  Georgetown  and Deer Creek
Apartments and increased occupancy at Landmark Apartments which more than offset
the decrease in occupancy at Deer Creek  Apartments and reduced rental rates and
increased concession costs at Landmark Apartments.

During the year ended  December 31,  2001,  a net casualty  gain was recorded at
Georgetown Apartments.  The casualty gain related to ice damage in January 2001.
The gain was the result of insurance proceeds of approximately  $28,000 less the
net book value of the damaged property of approximately $3,000.

During the year ended December 31, 2001, two net casualty gains were recorded at
Landmark  Apartments.  One casualty gain related to a fire in January 2001. This
gain was the result of insurance proceeds of approximately  $26,000 less the net
book value of the damaged property of approximately  $3,000.  The other casualty
gain  related to a fire in March  2001.  This gain was the  result of  insurance
proceeds  of  approximately  $22,000  less  the net book  value  of the  damaged
property of approximately $2,000.

In March 2000, Atlanta Crossing Shopping Center, located in Montgomery, Alabama,
was sold to an  unaffiliated  party for  $2,875,000.  After  payment  of closing
expenses,  the net sales proceeds received by the Partnership were approximately
$2,750,000.  The sale resulted in a gain of approximately $2,064,000,  which was
recognized during the year ended December 31, 2000.

Atlanta Crossing  Shopping Center was the only commercial  property owned by the
Partnership and represented one segment of the Partnership's operations.  Due to
the sale of this property, the results of the commercial segment have been shown
as  income  from  discontinued  operation  on  the  consolidated  statements  of
operations.  Revenues of this property were approximately  $199,000 for the year
ended December 31, 2000.  Income from  discontinued  operation was approximately
$121,000 for the year ended December 31, 2000.

As part of the ongoing  business plan of the  Partnership,  the Managing General
Partner  monitors  the  rental  market  environment  of each  of its  investment
properties  to assess  the  feasibility  of  increasing  rents,  maintaining  or
increasing  occupancy  levels and protecting the  Partnership  from increases in
expense.  As part of this plan, the Managing General Partner attempts to protect
the Partnership  from the burden of  inflation-related  increases in expenses by
increasing rents and maintaining a high overall occupancy level. However, due to
changing market  conditions,  which can result in the use of rental  concessions
and  rental  reductions  to  offset  softening  market  conditions,  there is no
guarantee that the Managing General Partner will be able to sustain such a plan.

Liquidity and Capital Resources

The  Partnership  had cash and cash  equivalents  of  approximately  $150,000 at
December 31, 2001, compared to approximately  $975,000 at December 31, 2000. The
decrease in cash and cash equivalents of  approximately  $825,000 since December
31,  2000,  is due  to  approximately  $1,621,000  of  cash  used  in  financing
activities  and  approximately  $1,190,000 of cash used in investing  activities
which was  partially  offset by  approximately  $1,986,000  of cash  provided by
operating  activities.  Cash used in financing activities consisted of repayment
of  the  mortgage   encumbering   Deer  Creek   Apartments,   loan  costs  paid,
distributions  to the partners,  and payments of principal made on the mortgages
encumbering the Partnership's  properties  partially offset by proceeds received
from the  refinancing  of Deer Creek  Apartments  and advances from the Managing
General  Partner.  Cash  used in  investing  activities  consisted  of  property
improvements  and  replacements  partially offset by net withdrawals from escrow
accounts maintained by the mortgage lenders and insurance proceeds received. The
Partnership invests its working capital reserves in interest bearing accounts.

On June 27, 2001, the Partnership refinanced the mortgage encumbering Deer Creek
Apartments.  The refinancing replaced  indebtedness of approximately  $5,985,000
with a new mortgage of $13,750,000.  The new mortgage  carries a stated interest
rate of  7.43% as  compared  to the  7.33%  interest  rate on the old  mortgage.
Payments on the  mortgage  loan are due monthly  until the loan  matures in July
2021. Total  capitalized  loan costs were  approximately  $406,000.  These costs
included $138,000 in fees paid to the Managing General Partner.  The Partnership
recognized  an  extraordinary  loss  on the  early  extinguishment  of  debt  of
approximately $57,000 due to the write-off of unamortized loan costs.

The sufficiency of existing  liquid assets to meet future  liquidity and capital
expenditure   requirements   is  directly   related  to  the  level  of  capital
expenditures  required at the various  properties  to  adequately  maintain  the
physical  assets and other operating needs of the Partnership and to comply with
Federal, state, and local legal and regulatory requirements.  The Partnership is
currently  evaluating  the capital  improvement  needs of the properties for the
upcoming year. The minimum amount to be budgeted is expected to be $300 per unit
or $234,000.  Additional  improvements  may be considered and will depend on the
physical  condition of the properties as well as anticipated cash flow generated
by the  properties.  The capital  expenditures  will be incurred only if cash is
available from operations or from Partnership  reserves. To the extent that such
budgeted capital improvements are completed, the Registrant's distributable cash
flow, if any, may be adversely affected at least in the short term.

The Partnership's  current assets are thought to be sufficient for any near-term
needs  (exclusive  of capital  improvements)  of the  Partnership.  The mortgage
indebtedness  encumbering Deer Creek Apartments of approximately  $13,623,000 is
amortized  over  20  years  and  matures  on July 1,  2021 at  which  time it is
scheduled  to  be  fully  amortized.   The  mortgage  indebtedness   encumbering
Georgetown Apartments and Landmark Apartments of approximately $11,355,000,  net
of discount,  is amortized over periods ranging from 29 to 30 years with balloon
payments of approximately  $11,033,000 due in 2003. The Managing General Partner
will attempt to refinance the mortgages  encumbering  Georgetown  Apartments and
Landmark  Apartments  and/or sell the properties prior to such maturity date. If
the  properties  cannot  be  refinanced  or sold for a  sufficient  amount,  the
Partnership may risk losing such properties through foreclosure.

During the year ended  December  31,  2001,  the  Partnership  declared and paid
distributions  of  approximately  $8,680,000  (approximately  $8,593,000  to the
limited partners or $86.12 per limited  partnership unit) of which approximately
$1,302,000  (approximately  $1,289,000  to the  limited  partners  or $12.92 per
limited  partnership  unit) was from  operations  and  approximately  $7,378,000
(approximately  $7,304,000  to  the  limited  partners  or  $73.20  per  limited
partnership  unit)  was  from  proceeds  of  the  refinancing  of  the  mortgage
encumbering Deer Creek Apartments.  During the year ended December 31, 2000, the
Partnership   paid  a  distribution   that  was  accrued  in  December  1999  of
approximately  $1,500,000  of  which  approximately  $1,074,000   (approximately
$1,063,000 to the limited partners or $10.65 per limited  partnership  unit) was
from  operations  and  approximately  $426,000  (approximately  $422,000  to the
limited partners or $4.23 per limited  partnership  unit) was from proceeds from
the sale of Princeton Meadows Golf Course Joint Venture in 1999. During the year
ended  December 31, 2000, the  Partnership  declared and paid  distributions  of
approximately  $5,504,000  (approximately  $5,364,000 to the limited partners or
$53.76  per  limited  partnership  unit)  of  which   approximately   $2,758,000
(approximately  $2,732,000  to  the  limited  partners  or  $27.38  per  limited
partnership   unit)   was   from   operations   and   approximately   $2,746,000
(approximately  $2,632,000  to  the  limited  partners  or  $26.38  per  limited
partnership  unit) was from proceeds from the sale of Atlanta Crossing  Shopping
Center.   Pursuant  to  the  Partnership  Agreement,   the  Partnership  paid  a
distribution of approximately $86,000 to the Managing General Partner related to
the sale of Atlanta  Crossing  Shopping  Center in March  2000.  This  amount is
subordinate  to  the  limited   partners   receiving   their  original   capital
contributions  plus a  cumulative  preferred  return  of 6% per  annum  of their
adjusted  capital  investment,  as defined in the  Partnership  Agreement.  This
distribution  was paid during the third quarter of 2000. If the limited partners
have not received the required  returns  when the  Partnership  terminates,  the
Managing General Partner will return this amount to the Partnership. Future cash
distributions  will depend on the levels of cash generated from operations,  the
availability  of cash reserves and the timing of debt  maturities,  refinancings
and/or  property sales.  The  Partnership's  cash available for  distribution is
reviewed  on a monthly  basis.  There  can be no  assurance,  however,  that the
Partnership  will  generate  sufficient  funds from  operations  after  required
capital  expenditures  to permit  distributions  to its partners during the year
2002 or subsequent  periods.  Distributions may be restricted by the requirement
to deposit  net  operating  income (as  defined in the  mortgage  note) into the
reserve  account  until the  reserve  account is funded in an amount  equal to a
minimum  of $200  and a  maximum  of $400  per  apartment  unit  for  Georgetown
Apartments for a total of approximately $40,000 to $80,000. At December 31, 2001
the balance in this reserve account was approximately $81,000.

In addition to its indirect  ownership of the general  partner  interests in the
Partnership,  AIMCO and its affiliates owned 59,166 limited partnership units in
the Partnership  representing  59.29% of the  outstanding  units at December 31,
2001. A number of these units were  acquired  pursuant to tender  offers made by
AIMCO or its  affiliates.  It is  possible  that  AIMCO or its  affiliates  will
acquire additional limited partnership  interests in the Partnership for cash or
in exchange  for units in the  operating  partnership  of AIMCO  either  through
private purchases or tender offers. Under the Partnership Agreement, unitholders
holding a majority of the units are  entitled  to take action with  respect to a
variety of matters  which  would  include  voting on certain  amendments  to the
Partnership  Agreement and voting to remove the Managing General  Partner.  As a
result  of its  ownership  of  59.29% of the  outstanding  units,  AIMCO is in a
position to control all voting  decisions with respect to the  Registrant.  When
voting on matters, AIMCO would in all likelihood vote the units it acquired in a
manner  favorable to the interest of the Managing General Partner because of its
affiliation with the Managing General Partner.

Recent Accounting Pronouncements

In August 2001, the Financial  Accounting Standards Board issued SFAS No. 144,
"Accounting  for the  Impairment or Disposal of Long-Lived  Assets".  SFAS No.
144 provides  accounting  guidance for financial  accounting and reporting for
the impairment or disposal of long-lived assets.  SFAS No. 144 supersedes SFAS
No.  121,  "Accounting  for  the  Impairment  of  Long-Lived  Assets  and  for
Long-Lived  Assets to be Disposed  Of".  SFAS No. 144 is effective  for fiscal
years  beginning  after December 15, 2001. The Managing  General  Partner does
not anticipate  that its adoption will have a material effect on the financial
position or results of operations of the Partnership.


Item 7.     Financial Statements

ANGELES INCOME PROPERTIES, LTD. II

LIST OF FINANCIAL STATEMENTS

      Report of Ernst & Young LLP, Independent Auditors

      Consolidated Balance Sheet - December 31, 2001

      Consolidated  Statements of  Operations - Years ended  December 31, 2001
      and 2000

      Consolidated  Statements  of Changes in  Partners'  Deficit - Years  ended
      December 31, 2001 and 2000

      Consolidated  Statements  of Cash Flows - Years ended  December 31, 2001
      and 2000

      Notes to Consolidated Financial Statements


<PAGE>


              Report of Ernst & Young LLP, Independent Auditors



The Partners
Angeles Income Properties, Ltd. II


We have audited the  accompanying  consolidated  balance sheet of Angeles Income
Properties,  Ltd.  II as of December  31,  2001,  and the  related  consolidated
statements of operations,  changes in partners' deficit, and cash flows for each
of the two  years  in the  period  ended  December  31,  2001.  These  financial
statements  are  the  responsibility  of  the  Partnership's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made  by the  Partnership's  management,  as  well  as  evaluating  the  overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the consolidated  financial  position of Angeles Income
Properties,  Ltd. II at December 31, 2001, and the  consolidated  results of its
operations  and its cash  flows  for each of the two years in the  period  ended
December 31, 2001, in conformity with accounting  principles  generally accepted
in the United States.


                                                          /s/ERNST & YOUNG LLP


Greenville, South Carolina
February 15, 2002



<PAGE>



                      ANGELES INCOME PROPERTIES, LTD. II

                           CONSOLIDATED BALANCE SHEET
                       (in thousands, except unit data)

                                December 31, 2001

<TABLE>
<CAPTION>

Assets
<S>                                                                          <C>
   Cash and cash equivalents                                                 $   150
   Receivables and deposits                                                      393
   Restricted escrows                                                            122
   Other assets                                                                  551
   Investment properties (Notes B and E):
      Land                                                    $ 1,984
      Buildings and related personal property                   32,885
                                                                34,869
      Less accumulated depreciation                            (26,117)        8,752
                                                                            $ 9,968
Liabilities and Partners' Deficit
Liabilities
   Accounts payable                                                          $ 151
   Tenant security deposit liabilities                                           258
   Accrued property taxes                                                        133
   Other liabilities                                                             224
   Due to affiliates (Note D)                                                     49
   Mortgage notes payable (Notes B and E)                                     24,978

Partners' Deficit
   General partners                                            $ (597)
   Limited partners (99,784 units issued and
      outstanding)                                             (15,228)      (15,825)
                                                                            $ 9,968

        See Accompanying Notes to Consolidated Financial Statements

</TABLE>

<PAGE>

                      ANGELES INCOME PROPERTIES, LTD. II

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     (in thousands, except per unit data)

<TABLE>
<CAPTION>

                                                                      Years Ended
                                                                      December 31,
                                                                   2001          2000
Revenues:
<S>                                                               <C>          <C>
  Rental income                                                   $ 6,764      $ 6,493
  Other income                                                        435          425
  Casualty gains (Note I)                                              68           --
      Total revenues                                                7,267        6,918

Expenses:
  Operating                                                         2,275        2,238
  General and administrative                                          297          419
  Depreciation                                                      1,833        1,739
  Interest                                                          1,687        1,398
  Property taxes                                                      767          543
      Total expenses                                                6,859        6,337

Income before discontinued operation and extraordinary
  item                                                                408          581
Income from discontinued operation (Note F)                            --          121
Gain on sale of discontinued operation (Note F)                        --        2,064
Income before extraordinary item                                      408        2,766
Extraordinary loss on early extinguishment of debt (Note B)           (57)          --

Net income                                                         $ 351       $ 2,766

Net income allocated to general partners                            $ 4         $ 113
Net income allocated to limited partners                              347        2,653

                                                                   $ 351       $ 2,766
Per limited partnership unit:
  Income before discontinued operation and extraordinary
   item                                                           $ 4.04        $ 5.77
  Income from discontinued operation                                   --         1.20
  Gain on sale of discontinued operation                               --        19.62
  Extraordinary loss on early extinguishment of debt                (0.56)          --

Net income                                                        $ 3.48       $ 26.59

Distributions per limited partnership unit                        $ 86.12      $ 53.76

        See Accompanying Notes to Consolidated Financial Statements

</TABLE>

<PAGE>

                      ANGELES INCOME PROPERTIES, LTD. II

           CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
                       (in thousands, except unit data)

<TABLE>
<CAPTION>


                                         Limited
                                       Partnership    General     Limited
                                          Units       Partners   Partners      Total

<S>                                      <C>            <C>      <C>          <C>
Original capital contributions           100,000        $ 1      $ 50,000     $ 50,001

Partners' deficit at
  December 31, 1999                       99,784       $ (487)   $ (4,271)    $ (4,758)

Distributions to partners                     --         (140)     (5,364)      (5,504)

Net income for the year ended
  December 31, 2000                           --          113       2,653        2,766

Partners' deficit at
  December 31, 2000                       99,784         (514)     (6,982)      (7,496)

Distributions to partners                     --          (87)     (8,593)      (8,680)

Net income for the year ended
  December 31, 2001                           --            4         347          351

Partners' deficit at
  December 31, 2001                       99,784       $ (597)   $(15,228)    $(15,825)

        See Accompanying Notes to Consolidated Financial Statements

</TABLE>

<PAGE>

                      ANGELES INCOME PROPERTIES, LTD. II

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (in thousands)
<TABLE>
<CAPTION>

                                                              Years Ended December 31,
                                                                  2001        2000
Cash flows from operating activities:
<S>                                                              <C>         <C>
  Net income                                                     $ 351       $ 2,766
  Adjustments to reconcile net income to net cash provided
   by operating activities:
   Depreciation                                                   1,833        1,739
   Amortization of discounts, loan costs and lease
      commissions                                                    80           84
   Bad debt recovery, net                                            --          (34)
   Extraordinary loss on early extinguishment of debt                57           --
   Casualty gains                                                   (68)          --
   Gain on sale of discontinued operation                            --       (2,064)
   Change in accounts:
      Receivables and deposits                                      (65)          56
      Other assets                                                  (27)         182
      Accounts payable                                              (12)          16
      Tenant security deposit liabilities                           (32)           1
      Accrued property taxes                                         20          (26)
      Due to affiliates                                             (79)        (147)
      Other liabilities                                             (72)        (146)
          Net cash provided by operating activities               1,986        2,427

Cash flows from investing activities:
  Property improvements and replacements                         (1,287)      (1,359)
  Net withdrawals from restricted escrows                            21          172
  Proceeds from sale of discontinued operation                       --        2,750
  Distributions from joint venture                                   --            2
  Insurance proceeds received                                        76           --
          Net cash (used in) provided by investing
            activities                                           (1,190)       1,565

Cash flows from financing activities:
  Payments on mortgage notes payable                               (347)        (242)
  Distributions to partners                                      (8,680)      (7,004)
  Proceeds from mortgage note payable                            13,750           --
  Repayment of mortgage note payable                             (5,985)          --
  Loan costs paid                                                  (406)          --
  Advances from Managing General Partner                             47           --
          Net cash used in financing activities                  (1,621)      (7,246)

Net decrease in cash and cash equivalents                          (825)      (3,254)
Cash and cash equivalents at beginning of the year                  975        4,229
Cash and cash equivalents at end of year                         $ 150        $ 975

Supplemental disclosure of cash flow information:
  Cash paid for interest                                        $ 1,561      $ 1,326

Supplemental disclosure of non-cash activity:
  Property improvements and replacements included in
   accounts payable                                               $ 59        $ 150

        See Accompanying Notes to Consolidated Financial Statements

</TABLE>

<PAGE>
                      ANGELES INCOME PROPERTIES, LTD. II

                  Notes to Consolidated Financial Statements

                                December 31, 2001


Note A - Organization and Significant Accounting Policies

Organization:   Angeles  Income  Properties,   Ltd.  II  (the  "Partnership"  or
"Registrant") is a California limited partnership  organized on October 12, 1982
to acquire and operate  residential and commercial real estate  properties.  The
Partnership's  managing  general  partner  responsible  for  management  of  the
Partnership's  business, is Angeles Realty Corporation II ("ARC II"). ARC II was
wholly-owned by MAE GP Corporation ("MAE GP").  Effective February 25, 1998, MAE
GP was merged into Insignia  Properties  Trust ("IPT").  Effective  February 26,
1999, IPT was merged into Apartment Investment and Management Company ("AIMCO"),
a publicly  traded real estate  investment  trust.  Thus,  the Managing  General
Partner is now  wholly-owned by AIMCO. The Elliott  Accommodation  Trust and the
Elliott Family  Partnership,  Ltd.,  California limited  partnerships,  were the
non-managing  general partners.  Effective  December 31, 1997 the Elliott Family
Partnership,  Ltd.  acquired the Elliott  Accommodation  Trust's general partner
interest in the Registrant.  Effective July 18, 2000, AIMCO Properties, L.P. (an
affiliate of AIMCO)  acquired the Elliott  Family  Partnership,  Ltd.'s  general
partner  interest  in the  Registrant.  The  Managing  General  Partner  and the
non-managing general partner are herein collectively referred to as the "General
Partners". The directors and officers of the Managing General Partner also serve
as executive  officers of AIMCO.  The  Partnership  Agreement  provides that the
Partnership is to terminate on December 31, 2037 unless terminated prior to such
date.  As of December 31,  2001,  the  Partnership  operates  three  residential
properties located one each in New Jersey, Indiana and North Carolina.

Principles  of  Consolidation:  The  consolidated  financial  statements  of the
Partnership  include all accounts of the  Partnership,  Georgetown AIP II, LP in
which the Partnership holds a 99% limited  partnership  interest and AIPL II GP,
LLC in which the Partnership is the sole member. Although legal ownership of the
respective  asset  remains  with these  entities,  the  Partnership  retains all
economic  benefits  from  the  properties.   The  Partnership  consolidates  its
interests  in these two  entities,  whereby  all  accounts  are  included in the
consolidated  financial  statements  of the  Partnership  with all  inter-entity
accounts being eliminated.

Allocations and  Distributions  to Partners:  In accordance with the Partnership
Agreement,  any gain from the sale or other  disposition of  Partnership  assets
will be  allocated  first to the Managing  General  Partner to the extent of the
amount  of any  brokerage  compensation  and  incentive  interest  to which  the
Managing  General Partner is entitled.  Any gain remaining after said allocation
will be allocated to the General  Partners and limited partners in proportion to
their interests in the Partnership.

The  Partnership  will  allocate  other  profits  and  losses 1% to the  General
Partners and 99% to the limited partners.

Except as discussed below, the Partnership will allocate distributions 1% to the
General Partners and 99% to the limited partners.

Upon  the  sale or  other  disposition,  or  refinancing,  of any  asset  of the
Partnership,  the  distributable  net proceeds  shall be distributed as follows:
First,  to the  partners  in  proportion  to their  interests  until the limited
partners have  received  proceeds  equal to their  original  capital  investment
applicable to the property.  Second,  to the partners until the limited partners
have  received  distributions  from all  sources  equal  to their 6%  cumulative
distribution;  Third, to the Managing General Partners until it has received its
brokerage compensation; Fourth, to the partners in proportion to their interests
until the limited partners have received distributions from all sources equal to
their additional 2% cumulative distribution;  and thereafter, 85% to the limited
partners and non-managing  general partners in proportion to their interests and
15% ("Incentive Interest") to the Managing General Partner.

Depreciation:  Depreciation  is  provided by the  straight-line  method over the
estimated lives of the apartment  properties and related personal property.  For
Federal income tax purposes,  the  accelerated  cost recovery method is used for
real property over 18 years for additions after March 15, 1984 and before May 9,
1985, and 19 years for additions  after May 8, 1985, and before January 1, 1987.
As a result of the Tax Reform Act of 1986,  for  additions  after  December  31,
1986, the modified  accelerated cost recovery method is used for depreciation of
(1) real property over 27 1/2 years and (2) personal  property  additions over 5
years.

Cash and Cash Equivalents: Cash and cash equivalents include cash on hand and in
banks and money market accounts.  At certain times, the amount of cash deposited
at a bank may  exceed  the limit on  insured  deposits.  Cash  balances  include
approximately  $84,000 at December 31, 2001 that are maintained by an affiliated
management  company  on  behalf of  affiliated  entities  in cash  concentration
accounts.

Tenant Security  Deposits:  The Partnership  requires security deposits from all
apartment  lessees for the duration of the lease and such  deposits are included
in receivables and deposits.  The security deposits are refunded when the tenant
vacates  the  apartment  provided  the tenant has not  damaged  the space and is
current on rental payments.

Investment   Properties:   Investment  properties  consist  of  three  apartment
complexes and are stated at cost.  Acquisition fees are capitalized as a cost of
real estate.  In accordance  with  Statement of Financial  Accounting  Standards
("SFAS") No. 121,  "Accounting  for the Impairment of Long-Lived  Assets and for
Long-Lived Assets to Be Disposed Of", the Partnership  records impairment losses
on long-lived assets used in operations when events and  circumstances  indicate
the assets might be impaired  and the  undiscounted  cash flows  estimated to be
generated by those assets are less than the  carrying  amounts of those  assets.
Costs of investment  properties  that have been  permanently  impaired have been
written down to appraised  value.  No  adjustments  for impairment of value were
necessary for the years ending December 31, 2001 or 2000. See "Recent Accounting
Pronouncements" below.

Loan Costs: Loan costs of approximately  $792,000 less accumulated  amortization
of  approximately  $320,000  are  included in other  assets on the  consolidated
balance  sheet and are being  amortized  over the  lives of the  related  loans.
Amortization of loan costs is included in interest  expense in the  accompanying
consolidated statements of operations.

Lease  Commissions:  Lease commissions were being amortized using the straight
line method over the term of the respective leases.

Leases: The Partnership  generally leases apartment units for twelve-month terms
or less. The Partnership  recognizes income as earned on its residential leases.
In  addition,   the  Managing  General  Partner's  policy  is  to  offer  rental
concessions  during  periods of  declining  occupancy  or in  response  to heavy
competition  from other similar  complexes in the area.  Concessions are charged
against rental income as incurred.

Use of Estimates:  The  preparation of financial  statements in conformity  with
accounting   principles   generally  accepted  in  the  United  States  requires
management to make estimates and assumptions that affect the amounts reported in
the financial  statements and  accompanying  notes.  Actual results could differ
from those estimates.

Fair  Value:  SFAS  No.  107,   "Disclosures   about  Fair  Value  of  Financial
Instruments",  as  amended  by  SFAS  No.  119,  "Disclosures  about  Derivative
Financial  Instruments  and  Fair  Value  of  Financial  Instruments",  requires
disclosure of fair value information about financial instruments, whether or not
recognized in the balance  sheet,  for which it is  practicable to estimate fair
value.  Fair value is defined in the SFAS as the amount at which the instruments
could be exchanged in a current transaction between willing parties,  other than
in a forced or  liquidation  sale.  The  Partnership  believes that the carrying
amounts of its  financial  instruments  (except for long term debt)  approximate
their fair values due to the short term maturity of these instruments.  The fair
value of the Partnership's  long term debt, after discounting the scheduled loan
payments  at  a  borrowing   rate  currently   available  to  the   Partnership,
approximates its carrying value.

Restricted Escrows:

      Capital  Improvement  Reserves  - At the time of the  refinancing  of Deer
      Creek and Landmark  Apartments,  $1,313,000 of the proceeds for Deer Creek
      Apartments  and  $150,000 of the proceeds  for  Landmark  Apartments  were
      designated  for  "Capital   Improvement   Escrows"  for  certain   capital
      improvements.  During 2000, all the required  improvements  were completed
      and the remaining funds were returned to the properties.

      Reserve  Account - A general  Reserve Account is maintained for Georgetown
      Apartments.  These funds were  established to cover necessary  repairs and
      replacements  of  existing  improvements,   debt  service,   out-of-pocket
      expenses  incurred for ordinary and necessary  administrative  tasks,  and
      payment of real property taxes and insurance premiums.  The Partnership is
      required to deposit net operating income (as defined in the mortgage note)
      from the property to the reserve  account until the reserve account equals
      a minimum of $200 and a maximum of $400 per apartment unit, for a total of
      approximately  $40,000 to $80,000.  At December 31, 2001,  the balance was
      approximately $81,000, which includes interest earned on these funds.

      Replacement  Reserve - A replacement  reserve  account is  maintained  for
      Landmark Apartments.  The property has a required monthly payment into its
      account to cover the costs of capital  improvements and replacements.  The
      balance of this  account at December 31, 2001,  is  approximately  $41,000
      which includes interest.

Segment Reporting: SFAS No. 131, "Disclosure about Segments of an Enterprise and
Related  Information"  established  standards  for the way that public  business
enterprises  report  information  about operating  segments in annual  financial
statements and requires that those enterprises report selected information about
operating segments in interim financial reports.  It also established  standards
for related disclosures about products and services, geographic areas, and major
customers.   (See  "Note  H"  for  detailed  disclosures  of  the  Partnership's
segments).

Advertising:  The  Partnership  expenses  the cost of  advertising  as incurred.
Advertising  costs of  approximately  $62,000  and  $70,000  for the years ended
December 31, 2001 and 2000,  respectively,  were charged to operating expense as
incurred.

Recent  Accounting  Pronouncements:  In August 2001, the Financial  Accounting
Standards  Board  issued  SFAS No.  144,  "Accounting  for the  Impairment  or
Disposal of Long-Lived Assets".  SFAS No. 144 provides accounting guidance for
financial   accounting  and  reporting  for  the  impairment  or  disposal  of
long-lived assets.  SFAS No. 144 supersedes SFAS No. 121,  "Accounting for the
Impairment of Long-Lived  Assets and for Long-Lived Assets to be Disposed Of".
SFAS No. 144 is effective for fiscal years  beginning after December 15, 2001.
The Managing  General  Partner does not anticipate that its adoption will have
a material  effect on the  financial  position or results of operations of the
Partnership.

Note B - Mortgage Notes Payable
<TABLE>
<CAPTION>

                           Principal     Monthly                            Principal
                          Balance At     Payment     Stated                  Balance
                         December 31,   Including   Interest   Maturity      Due At
Property                     2001       Interest      Rate       Date       Maturity
                              (in thousands)                             (in thousands)
Deer Creek Apartments
<S>                         <C>           <C>        <C>       <C>            <C>
  1st mortgage              $13,623       $ 110      7.43%     07/2021        $ --

Georgetown Apartments
  1st mortgage                4,992          41      7.83%     10/2003         4,806
  2nd mortgage                  173           1      7.83%     10/2003           173

Landmark Apartments
  1st mortgage                6,227          45      7.33%     11/2003         6,054
                             25,015       $ 197                              $11,033
Less unamortized
  discounts                     (37)
                            $24,978
</TABLE>

On June 27, 2001, the Partnership refinanced the mortgage encumbering Deer Creek
Apartments.  The refinancing replaced  indebtedness of approximately  $5,985,000
with a new mortgage of $13,750,000.  The new mortgage  carries a stated interest
rate of  7.43% as  compared  to the  7.33%  interest  rate on the old  mortgage.
Payments on the  mortgage  loan are due monthly  until the loan  matures in July
2021. Total  capitalized  loan costs were  approximately  $406,000.  These costs
included $138,000 in fees paid to the Managing General Partner.  The Partnership
recognized  an  extraordinary  loss  on the  early  extinguishment  of  debt  of
approximately $57,000 due to the write-off of unamortized loan costs.

The  Partnership  exercised  an interest  rate  buy-down  option for  Georgetown
Apartments when the debt was refinanced,  reducing the stated rate from 8.13% to
7.83%. The fee for the interest rate reduction amounted to $113,000 and is being
amortized as a mortgage discount on the effective  interest method over the life
of the loan.  The  unamortized  discount  fee is reflected as a reduction of the
mortgage notes payable and increases the effective rate of the debt to 8.13%.

The mortgage notes payable are  nonrecourse and are secured by pledge of certain
of the  Partnership's  rental  properties  and by  pledge of  revenues  from the
respective rental properties.  Certain of the notes require prepayment penalties
if repaid prior to maturity.

Scheduled  principal  payments of mortgage notes payable  subsequent to December
31, 2001, are as follows (in thousands):

                                   2002        $   515
                                   2003         11,543
                                   2004            372
                                   2005            401
                                   2006            431
                                Thereafter      11,753
                                               $25,015

Note C - Income Taxes

The Partnership has received a ruling from the Internal  Revenue Service that it
will  be  classified  as  a  partnership   for  Federal   income  tax  purposes.
Accordingly, no provision for income taxes is made in the consolidated financial
statements of the  Partnership.  Taxable  income or loss of the  Partnership  is
reported in the income tax returns of its partners.

The  following is a  reconciliation  of reported net income and Federal  taxable
income (in thousands, except per unit data):

                                          2001          2000

Net income as reported                    $ 351       $ 2,766
Add (deduct):
  Depreciation differences                 1,109        1,043
  Unearned income                            (68)         (73)
  Accrued audit                               (4)         (11)
  Other                                      (23)         (26)
  Gain on sale of discontinued
   operation                                  --         (660)

Federal taxable income                   $ 1,365      $ 3,039

Federal taxable income per limited
  partnership unit                       $ 13.54      $ 30.15


The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net liabilities (in thousands):

Net liabilities as reported                   $(15,825)
Land and buildings                               2,414
Accumulated depreciation                        (2,100)
Syndication and distribution costs               6,148
Unearned income                                     68
Other                                              105
Net liabilities - Federal tax basis           $ (9,190)

Note D - Transactions with Affiliated Parties

The  Partnership  has no employees  and is  dependent  on the  Managing  General
Partner  and  its  affiliates  for  the  management  and  administration  of all
Partnership activities.  The Partnership Agreement provides for certain payments
to affiliates for services and  reimbursement  of certain  expenses  incurred by
affiliates on behalf of the  Partnership.  The  following  payments were paid or
accrued to the Managing  General  Partner and affiliates  during the years ended
December 31, 2001 and 2000:

                                                              2001       2000
                                                              (in thousands)
   Property management fees (included in operating
     expenses)                                               $ 386      $ 348
   Partnership management fee (included in general and
     administrative expense)                                    19         81
   Reimbursement for services of affiliates (included in
     general and administrative expense and investment
     properties)                                               387        206
   Disposition fee (included in general partner deficit)        --         86
   Refinancing fee (included in other assets)                  138         --

During the years ended  December 31, 2001 and 2000,  affiliates  of the Managing
General  Partner were  entitled to receive 5% of gross  receipts from all of the
Registrant's  residential properties for providing property management services.
The Registrant paid to such affiliates  approximately  $386,000 and $348,000 for
the years ended December 31, 2001 and 2000, respectively.

Affiliates of the Managing General Partner received reimbursement of accountable
administrative expenses amounting to approximately $387,000 and $206,000 for the
years ended December 31, 2001 and 2000, respectively.  Included in these amounts
are  construction  oversight  fees paid to an affiliate of the Managing  General
Partner of  approximately  $205,000 and $30,000 for the years ended December 31,
2001 and 2000,  respectively.  This fee is  related to  construction  management
services provided by AIMCO and its affiliates. The fee was calculated based on a
percentage of current and certain prior year additions to investment  properties
and is being depreciated over 15 years.

The Partnership Agreement provides for a fee equal to 10% of "Net cash flow from
operations",  as defined in the Partnership Agreement to be paid to the Managing
General Partner for executive and administrative management services. During the
year ended December 31, 2001 the Partnership paid fees of approximately $100,000
for the year ended December 31, 2000 of which approximately  $81,000 was accrued
at December 31, 2000.  No such  management  fee was accrued or paid for the year
ended December 31, 2001.

Pursuant to the Partnership Agreement,  the Managing General Partner is entitled
to receive a distribution equal to 3% of the aggregate disposition price of sold
properties.  The Partnership paid a distribution of approximately $86,000 to the
Managing General Partner related to the sale of Atlanta Crossing Shopping Center
in March 2000.  This amount is  subordinate  to the limited  partners  receiving
their original capital  contributions  plus a cumulative  preferred return of 6%
per annum of their adjusted  capital  investment,  as defined in the Partnership
Agreement.  If the limited  partners  have not received  these  returns when the
Partnership terminates,  the Managing General Partner will return this amount to
the Partnership.

In addition to reimbursement for services of affiliates,  the Partnership paid a
commission  to an  affiliate of the Managing  General  Partner of  approximately
$138,000  related to the  refinancing of Deer Creek  Apartments  during the year
ended December 31, 2001.  These costs were capitalized and are included in other
assets on the consolidated balance sheet.

In accordance with the Partnership  Agreement,  the Managing General Partner has
loaned the Partnership funds for operating expenses at Landmark  Apartments.  At
December 31, 2001 the amount of the  outstanding  loan and accrued  interest was
approximately $47,000 and is included in "Due to Affiliates" on the consolidated
balance sheet.  Interest is charged at the prime rate plus 2%. Interest  expense
was  approximately  $1,000 for the year ended  December 31, 2001.  There were no
loans from the Managing General Partner or associated  interest  expenses during
the year ended  December  31,  2000.  Subsequent  to December 31, 2001 this loan
balance was repaid by the Partnership.

Beginning in 2001, the  Partnership  began insuring its properties up to certain
limits through coverage provided by AIMCO which is generally  self-insured for a
portion of losses and  liabilities  related  to workers  compensation,  property
casualty and vehicle liability. The Partnership insures its properties above the
AIMCO  limits  through  insurance  policies  obtained  by  AIMCO  from  insurers
unaffiliated  with the Managing General Partner.  During the year ended December
31, 2001, the Partnership  paid AIMCO and its affiliates  approximately  $69,000
for insurance coverage and fees associated with policy claims administration.

In addition to its indirect  ownership of the general  partner  interests in the
Partnership,  AIMCO and its affiliates owned 59,166 limited partnership units in
the Partnership  representing  59.29% of the  outstanding  units at December 31,
2001. A number of these units were  acquired  pursuant to tender  offers made by
AIMCO or its  affiliates.  It is  possible  that  AIMCO or its  affiliates  will
acquire additional limited partnership  interests in the Partnership for cash or
in exchange  for units in the  operating  partnership  of AIMCO  either  through
private purchases or tender offers. Under the Partnership Agreement, unitholders
holding a majority of the units are  entitled  to take action with  respect to a
variety of matters  which  would  include  voting on certain  amendments  to the
Partnership  Agreement and voting to remove the Managing General  Partner.  As a
result  of its  ownership  of  59.29% of the  outstanding  units,  AIMCO is in a
position to control all voting  decisions with respect to the  Registrant.  When
voting on matters, AIMCO would in all likelihood vote the units it acquired in a
manner  favorable to the interest of the Managing General Partner because of its
affiliation with the Managing General Partner.

Note E - Real Estate and Accumulated Depreciation
<TABLE>
<CAPTION>

                                                   Initial Cost
                                                  To Partnership
                                                  (in thousands)
                                                          Buildings         Cost
                                                         and Related     Capitalized
                                                           Personal     Subsequent to
Description                 Encumbrances       Land        Property      Acquisition
                           (in thousands)                              (in thousands)

<S>                            <C>             <C>         <C>             <C>
Deer Creek Apartments          $13,623         $ 953       $ 8,863         $ 3,821
Georgetown Apartments            5,165            293        6,545           1,519
Landmark Apartments              6,227            738        9,885           2,252
Totals                         $25,015        $ 1,984      $25,293         $ 7,592
</TABLE>

<TABLE>
<CAPTION>

                          Gross Amount At Which Carried
                              At December 31, 2001
                                 (in thousands)

                                    Buildings
                                   And Related
                                   Personal               Accumulated     Date    Depreciable
      Description         Land     Property     Total     Depreciation  Acquired  Life-Years
                                                         (in thousands)
<S>                      <C>       <C>         <C>          <C>         <C>   <C>  <C>
Deer Creek               $ 953     $12,684     $13,637      $ 8,878     09/28/83   5-20 yrs
Georgetown                  293      8,064       8,357        6,552     11/21/83   5-20 yrs
Landmark                    738     12,137      12,875       10,687     12/16/83   5-20 yrs

Totals                   $1,984    $32,885     $34,869      $26,117
</TABLE>

Reconciliation of "Investment Properties and Accumulated Depreciation":

                                                Years Ended December 31,
                                                  2001            2000
                                                     (in thousands)
Investment Properties
Balance at beginning of year                    $33,734          $37,705
   Property improvements                          1,196            1,352
   Sale of discontinued operation                    --           (5,323)
   Write-offs due to casualties                     (61)              --
Balance at end of year                          $34,869          $33,734

Accumulated Depreciation
Balance at beginning of year                    $24,337          $27,503
   Additions charged to expense                   1,833            1,739
   Sale of discontinued operation                    --           (4,905)
   Write-offs due to casualties                     (53)              --
Balance at end of year                          $26,117          $24,337

The  aggregate  cost of the real  estate  for  Federal  income tax  purposes  at
December  31,  2001 and 2000,  is  approximately  $37,282,000  and  $36,162,000,
respectively. The accumulated depreciation taken for Federal income tax purposes
at December 31, 2001 and 2000, is  approximately  $28,216,000  and  $27,492,000,
respectively.

Note F - Sale of Discontinued Operation

In March 2000, Atlanta Crossing Shopping center, located in Montgomery, Alabama,
was sold to an  unaffiliated  party for  $2,875,000.  After  payment  of closing
expenses,  the net sales proceeds received by the Partnership were approximately
$2,750,000.  The sale resulted in a gain of approximately $2,064,000,  which was
recognized during the year ended December 31, 2000.

Atlanta Crossing  Shopping Center was the only commercial  property owned by the
Partnership and represented one segment of the Partnership's operations.  Due to
the sale of this property, the results of the commercial segment have been shown
as  income  from  discontinued  operation  on  the  consolidated  statements  of
operations.  Revenues of this property were approximately  $199,000 for the year
ended December 31, 2000.  Income from  discontinued  operation was approximately
$121,000 for the year ended December 31, 2000.

Note G - Distributions

During the year ended  December  31,  2001,  the  Partnership  declared and paid
distributions  of  approximately  $8,680,000  (approximately  $8,593,000  to the
limited partners or $86.12 per limited  partnership unit) of which approximately
$1,302,000  (approximately  $1,289,000  to the  limited  partners  or $12.92 per
limited  partnership  unit) was from  operations  and  approximately  $7,378,000
(approximately  $7,304,000  to  the  limited  partners  or  $73.20  per  limited
partnership  unit)  was  from  proceeds  of  the  refinancing  of  the  mortgage
encumbering Deer Creek Apartments.  During the year ended December 31, 2000, the
Partnership   paid  a  distribution   that  was  accrued  in  December  1999  of
approximately  $1,500,000  of  which  approximately  $1,074,000   (approximately
$1,063,000 to the limited partners or $10.65 per limited  partnership  unit) was
from  operations  and  approximately  $426,000  (approximately  $422,000  to the
limited partners or $4.23 per limited  partnership  unit) was from proceeds from
the sale of Princeton Meadows Golf Course Joint Venture in 1999. During the year
ended  December 31, 2000, the  Partnership  declared and paid  distributions  of
approximately  $5,504,000  (approximately  $5,364,000 to the limited partners or
$53.76  per  limited  partnership  unit)  of  which   approximately   $2,758,000
(approximately  $2,732,000  to  the  limited  partners  or  $27.38  per  limited
partnership   unit)   was   from   operations   and   approximately   $2,746,000
(approximately  $2,632,000  to  the  limited  partners  or  $26.38  per  limited
partnership  unit) was from proceeds from the sale of Atlanta Crossing  Shopping
Center. Pursuant to the Partnership Agreement,  the Partnership accrued and paid
a distribution of approximately  $86,000 to the Managing General Partner related
to the sale of Atlanta  Crossing  Shopping  Center in March 2000. This amount is
subordinate  to  the  limited   partners   receiving   their  original   capital
contributions  plus a  cumulative  preferred  return  of 6% per  annum  of their
adjusted  capital  investment,  as defined in the  Partnership  Agreement.  This
distribution  was paid during the third quarter of 2000. If the limited partners
have not received the required  returns  when the  Partnership  terminates,  the
Managing General Partner will return this amount to the Partnership.

Note H - Segment Reporting

Description  of the types of products  and  services  from which the  reportable
segment  derives its revenues:  The  Partnership  had two  reportable  segments:
residential properties and commercial properties.  The Partnership's residential
property segment consists of three apartment complexes,  one each in New Jersey,
Indiana,  and North Carolina.  The Partnership  rents apartment units to tenants
for terms that are typically  twelve  months or less.  The  commercial  property
segment  consisted of a retail shopping  center located in Montgomery,  Alabama.
This  property  leased  space to a  discount  store,  various  specialty  retail
outlets,  and several  restaurants at terms ranging from twelve months to twenty
years.  The  commercial  property  was sold on March 15,  2000 (see  "Note  F").
Therefore, the commercial segment is reflected as a discontinued operation.

Measurement  of segment profit or loss: The  Partnership  evaluates  performance
based on segment profit (loss) before  depreciation.  The accounting policies of
the  reportable  segments  are the same as those  described  in the  summary  of
significant policies.

Factors  management used to identify the enterprise's  reportable  segment:  The
Partnership's reportable segments are investment properties that offer different
products and  services.  The  reportable  segments  are each managed  separately
because they provide  distinct  services  with  different  types of products and
customers.

Segment information for the years 2001 and 2000 is shown in the tables below (in
thousands). The "Other" column includes Partnership administration related items
and income and expense not allocated to the reportable segments.

2001                                   Residential          Other        Totals

Rental income                            $ 6,764            $   --       $ 6,764
Other income                                 423                12           435
Casualty gain                                 68                --            68
Interest expense                           1,687                --         1,687
Depreciation                               1,833                --         1,833
General and administrative
  expense                                     --               297           297
Segment profit (loss)                        636              (285)          351
Total assets                               9,950                18         9,968
Capital expenditures for
  investment properties                    1,196                --         1,196

<TABLE>
<CAPTION>

2000                               Residential     Commercial      Other      Totals
                                                 (discontinued)
<S>                                  <C>              <C>            <C>     <C>
Rental income                        $ 6,493          $  --          $ --    $ 6,493
Other income                             378             --            47        425
Interest expense                       1,398             --            --      1,398
Depreciation                           1,739             --            --      1,739
General and administrative
  expense                                 --             --           419        419
Income from discontinued
  operation                               --            121            --        121
Gain on sale of discontinued
  operation                               --          2,064            --      2,064
Segment profit (loss)                    953          2,185          (372)     2,766
Total assets                          11,007             --            83     11,090
Capital expenditures for
  investment properties                1,346              6            --      1,352
</TABLE>

Note I - Casualties

During the year ended  December 31,  2001,  a net casualty  gain was recorded at
Georgetown Apartments.  The casualty gain related to ice damage in January 2001.
The gain was the result of insurance proceeds of approximately  $28,000 less the
net book value of the damaged property of approximately $3,000.

During the year ended December 31, 2001, two net casualty gains were recorded at
Landmark  Apartments.  One casualty gain related to a fire in January 2001. This
gain was the result of insurance proceeds of approximately  $26,000 less the net
book value of the damaged property of approximately  $3,000.  The other casualty
gain  related to a fire in March  2001.  This gain was the  result of  insurance
proceeds  of  approximately  $22,000  less  the net book  value  of the  damaged
property of approximately $2,000.

Note J - Legal Proceedings

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the  Partnership,  its Managing  General Partner and
several of their  affiliated  partnerships  and corporate  entities.  The action
purports  to  assert  claims  on  behalf  of a class  of  limited  partners  and
derivatively  on behalf  of a number  of  limited  partnerships  (including  the
Partnership)  which are named as nominal  defendants,  challenging,  among other
things,  the  acquisition  of  interests  in certain  Managing  General  Partner
entities by Insignia Financial Group, Inc. ("Insignia") and entities which were,
at one  time,  affiliates  of  Insignia;  past  tender  offers  by the  Insignia
affiliates to acquire limited partnership units;  management of the partnerships
by the  Insignia  affiliates;  and the series of  transactions  which  closed on
October 1, 1998 and February 26, 1999 whereby  Insignia and Insignia  Properties
Trust,  respectively,  were merged  into AIMCO.  The  plaintiffs  seek  monetary
damages and equitable relief, including judicial dissolution of the Partnership.
On June 25, 1998, the Managing General Partner filed a motion seeking  dismissal
of the action.  In lieu of responding  to the motion,  the  plaintiffs  filed an
amended  complaint.  The Managing General Partner filed demurrers to the amended
complaint which were heard February 1999.

Pending the ruling on such  demurrers,  settlement  negotiations  commenced.  On
November 2, 1999,  the parties  executed and filed a Stipulation  of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the  settlement  was obtained on November 3, 1999 from the Court,  at which time
the Court set a final  approval  hearing for  December  10,  1999.  Prior to the
December  10,  1999  hearing,  the  Court  received  various  objections  to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement.  On
December 14, 1999, the Managing  General  Partner and its affiliates  terminated
the  proposed  settlement.  In  February  2000,  counsel  for some of the  named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated  the  settlement.  On June  27,  2000,  the  Court  entered  an order
disqualifying  them  from the case and an  appeal  was  taken  from the order on
October 5, 2000. On December 4, 2000, the Court  appointed the law firm of Lieff
Cabraser  Heimann & Bernstein  LLP as new lead  counsel for  plaintiffs  and the
putative class.  Plaintiffs filed a third amended complaint on January 19, 2001.
On March 2, 2001,  the  Managing  General  Partner  and its  affiliates  filed a
demurrer to the third amended  complaint.  On May 14, 2001,  the Court heard the
demurrer to the third amended  complaint.  On July 10, 2001, the Court issued an
order  sustaining  defendants'  demurrer on certain  grounds.  On July 20, 2001,
Plaintiffs filed a motion for reconsideration of the Court's July 10, 2001 order
granting in part and denying in part defendants' demurrer. On September 7, 2001,
Plaintiffs  filed a fourth amended class and  derivative  action  complaint.  On
September 12, 2001, the Court denied Plaintiffs' motion for reconsideration.  On
October 5, 2001, the Managing General Partner and affiliated  defendants filed a
demurrer to the fourth amended complaint,  which was heard on December 11, 2001.
On February 2, 2002,  the Court served its order  granting in part the demurrer.
The  Court has  dismissed  without  leave to amend  certain  of the  plaintiffs'
claims.  On February 11, 2002,  plaintiffs  filed a motion  seeking to certify a
putative  class  comprised of all  non-affiliated  persons who own or have owned
units  in  the  partnerships.   The  Managing  General  Partner  and  affiliated
defendants  intend  to  oppose  the  motion  and are  scheduled  to  file  their
opposition  brief on March 26, 2002. A hearing on the motion has been  scheduled
for April 29, 2002. The Court has set the matter for trial in January 2003.

During the third  quarter of 2001, a complaint  (the "Heller  action") was filed
against  the same  defendants  that are named in the  Nuanes  action,  captioned
Heller v. Insignia Financial Group. On or about August 6, 2001, plaintiffs filed
a first amended  complaint.  The first amended complaint in the Heller action is
brought as a purported  derivative  action,  and asserts  claims for among other
things  breach  of  fiduciary  duty;  unfair  competition;   conversion,  unjust
enrichment;  and judicial  dissolution.  Plaintiffs in the Nuanes action filed a
motion to  consolidate  the Heller action with the Nuanes action and stated that
the Heller action was filed in order to preserve the derivative claims that were
dismissed  without  leave to amend in the Nuanes action by the Court order dated
July 10, 2001. On October 5, 2001, the Managing  General  Partner and affiliated
defendants  moved to strike the first  amended  complaint  in its  entirety  for
violating  the Court's July 10, 2001 order  granting in part and denying in part
defendants'  demurrer in the Nuanes action, or alternatively,  to strike certain
portions of the complaint based on the statute of limitations.  Other defendants
in the action  demurred to the fourth  amended  complaint,  and,  alternatively,
moved to strike the complaint. On December 11, 2001, the court heard argument on
the motions  and took the matters  under  submission.  On February 4, 2002,  the
Court  served  notice of its order  granting  defendants'  motion to strike  the
Heller complaint as a violation of its July 10, 2001 order in the Nuanes action.

The Managing  General Partner does not anticipate that any costs,  whether legal
or  settlement  costs,  associated  with  these  cases will be  material  to the
Partnership's overall operations.

The  Partnership is unaware of any other pending or outstanding  litigation that
is not of a routine nature arising in the ordinary course of business.

Item 8.     Changes in and  Disagreements  with  Accountant on Accounting  and
            Financial Disclosure

            None.


                                    PART III

Item 9.     Directors,  Executive  Officers,  Promoters  and Control  Persons;
            Compliance with Section 16(a) of the Exchange Act

The names of the directors and executive  officers of Angeles Realty Corporation
II ("ARC II" or Managing  General  Partner),  the  Managing  General  Partner of
Angeles Income  Properties,  Ltd. II (the  "Partnership"  or "Registrant") as of
December  31,  2001,  their  ages and the  nature of all  positions  with ARC II
presently held by them are as follows:

       Name                  Age    Position

       Patrick J. Foye        44    Executive Vice President and Director

       Martha L. Long         42    Senior Vice President and Controller

Patrick  J.  Foye  has been  Executive  Vice  President  and  Director  of the
Managing  General  Partner  since  October  1,  1998.  Mr.  Foye has served as
Executive  Vice  President  of AIMCO since May 1998.  Prior to joining  AIMCO,
Mr.  Foye was a partner in the law firm of  Skadden,  Arps,  Slate,  Meagher &
Flom LLP from 1989 to 1998 and was  Managing  Partner of the firm's  Brussels,
Budapest and Moscow  offices from 1992 through  1994.  Mr. Foye is also Deputy
Chairman of the Long Island Power  Authority and serves as a member of the New
York State  Privatization  Council.  He received a B.A.  from Fordham  College
and a J.D. from Fordham University Law School.

Martha L. Long has been Senior Vice  President  and  Controller  of the Managing
General  Partner since October 1998 as a result of the  acquisition  of Insignia
Financial  Group,  Inc. As of February 2001, Ms. Long was also appointed head of
the service  business for AIMCO.  From June 1994 until January 1997, she was the
Controller for Insignia, and was promoted to Senior Vice President - Finance and
Controller in January 1997,  retaining that title until October 1998.  From 1988
to June 1994,  Ms. Long was Senior Vice  President and  Controller for The First
Savings Bank, FSB in Greenville, South Carolina.

One or more of the above persons are also directors and/or officers of a general
partner (or general partner of a general partner) of limited  partnerships which
either have a class of  securities  registered  pursuant to Section 12(g) of the
Securities Exchange Act of 1934, or are subject to the reporting requirements of
Section  15(d) of such Act.  Further,  one or more of the above persons are also
directors and/or officers of Apartment Investment and Management Company and the
general  partner  of  AIMCO  Properties,  L.P.,  entities  that  have a class of
securities  registered  pursuant to Section 12(g) of the Securities Exchange Act
of 1934, or are subject to the reporting  requirements of Section 15 (d) of such
Act.

The executive  officers and director of the Managing General Partner fulfill the
obligations  of the Audit  Committee  and  oversee the  Partnership's  financial
reporting process on behalf of the Managing General Partner.  Management has the
primary  responsibility  for the financial  statements and the reporting process
including  the  systems  of  internal  controls.  In  fulfilling  its  oversight
responsibilities,  the executive  officers and director of the Managing  General
Partner reviewed the audited  financial  statements with management  including a
discussion  of the  quality,  not  just  the  acceptability,  of the  accounting
principles,  the  reasonableness  of significant  judgments,  and the clarity of
disclosures in the financial statements.

The executive  officers and director of the Managing  General  Partner  reviewed
with the independent auditors,  who are responsible for expressing an opinion on
the conformity of those audited financial statements with accounting  principles
generally  accepted in the United States their judgments as to the quality,  not
just the  acceptability,  of the  Partnership's  accounting  principles and such
other  matters as are required to be discussed  with the Audit  Committee or its
equivalent under auditing standards  generally accepted in the United States. In
addition,  the  Partnership  has  discussed  with the  independent  auditors the
auditors' independence from management and the Partnership including the matters
in the written  disclosures  required by the  Independence  Standards  Board and
considered  the   compatibility   of  non-audit   services  with  the  auditors'
independence.

The executive  officers and director of the Managing  General Partner  discussed
with the  Partnership's  independent  auditors  the overall  scope and plans for
their audit. In reliance on the reviews and discussions  referred to above,  the
executive officers and director of the Managing General Partner has approved the
inclusion of the audited  financial  statements  in the Form 10-KSB for the year
ended December 31, 2001 for filing with the Securities and Exchange Commission.

The Managing  General Partner has  reappointed  Ernst & Young LLP as independent
auditors to audit the financial  statements of the  Partnership  for the current
fiscal year. Fees for the last fiscal year were audit services of  approximately
$49,000  and  non-audit  services  (principally  tax-related)  of  approximately
$25,000.

Item 10.    Executive Compensation

No  remuneration  was paid by the  Partnership to any officer or director of the
Managing General Partner during the year ended December 31, 2001.

Item 11.    Security Ownership of Certain Beneficial Owners and Management

Except as noted below, no person or entity was known by the Registrant to be the
beneficial  owner  of  more  than 5% of the  Limited  Partnership  Units  of the
Registrant as of December 31, 2001.

         Entity                             Number of Units    Percentage

         Cooper River Properties, LLC
          (an affiliate of AIMCO)                5,864            5.88%
         Insignia Properties, LP
          (an affiliate of AIMCO)                3,990            4.00%
         Broad River Properties, LLC
          (an affiliate of AIMCO)                8,908            8.92%
         AIMCO Properties, LP
          (an affiliate of AIMCO)               40,404           40.49%

Cooper  River  Properties,   LLC,  Insignia  Properties,  LP,  and  Broad  River
Properties, LLC are indirectly ultimately owned by AIMCO. Their business address
is 55 Beattie Place, Greenville, South Carolina 29602.

AIMCO Properties,  LP is indirectly ultimately controlled by AIMCO. Its business
address is 2000 South Colorado Boulevard, Denver, Colorado 80222.

The Partnership knows of no contractual arrangements, the operation of the terms
of,  which  may at a  subsequent  date  result  in a change  in  control  of the
Partnership,  except for: Article 12.1 of the Agreement, which provide that upon
a vote of the limited  partners  holding  more than 50% of the then  outstanding
limited  partnership  units  the  general  partners  may be  expelled  from  the
Partnership  upon 90 days written  notice.  In the event that successor  general
partners have been elected by limited partners holding more than 50% of the then
outstanding  limited  partnership  Units and if said limited  partners  elect to
continue the business of the Partnership,  the Partnership is required to pay in
cash to the expelled  general partners an amount equal to the accrued and unpaid
management  fee  described  in Article 10 of the  Agreement  and to purchase the
general  partners'  interest in the  Partnership  on the  effective  date of the
expulsion,  which shall be an amount equal to the difference between the balance
of the general  partners' capital account and the fair market value of the share
of  distributable  net proceeds to which the general partners would be entitled.
Such  determination of the fair market value of the share of  distributable  net
proceeds is defined in Article 12.2(b) of the Agreement.

Item 12.    Certain Relationships and Related Transactions

The  Partnership  has no employees  and is  dependent  on the  Managing  General
Partner  and  its  affiliates  for  the  management  and  administration  of all
Partnership activities.  The Partnership Agreement provides for certain payments
to affiliates for services and  reimbursement  of certain  expenses  incurred by
affiliates on behalf of the  Partnership.  The  following  payments were paid or
accrued to the Managing  General  Partner and affiliates  during the years ended
December 31, 2001 and 2000:

                                                              2001       2000
                                                              (in thousands)

   Property management fees                                  $ 386      $ 348
   Partnership management fee                                   19         81
   Reimbursement for services of affiliates                    387        206
   Disposition fee                                              --         86
   Refinancing fee                                             138         --

During the years ended  December 31, 2001 and 2000,  affiliates  of the Managing
General  Partner were  entitled to receive 5% of gross  receipts from all of the
Registrant's  residential properties for providing property management services.
The Registrant paid to such affiliates  approximately  $386,000 and $348,000 for
the years ended December 31, 2001 and 2000, respectively.

Affiliates of the Managing General Partner received reimbursement of accountable
administrative expenses amounting to approximately $387,000 and $206,000 for the
years ended December 31, 2001 and 2000, respectively.  Included in these amounts
are  construction  oversight  fees paid to an affiliate of the Managing  General
Partner of  approximately  $205,000 and $30,000 for the years ended December 31,
2001 and 2000,  respectively.  This fee is  related to  construction  management
services provided by AIMCO and its affiliates. The fee was calculated based on a
percentage of current and certain prior year additions to investment  properties
and is being depreciated over 15 years.

The Partnership Agreement provides for a fee equal to 10% of "Net cash flow from
operations",  as defined in the Partnership Agreement to be paid to the Managing
General Partner for executive and administrative management services. During the
year ended December 31, 2001 the Partnership paid fees of approximately $100,000
for the year ended December 31, 2000 of which approximately  $81,000 was accrued
at December 31, 2000.  No such  management  fee was accrued or paid for the year
ended December 31, 2001.

Pursuant to the Partnership Agreement,  the Managing General Partner is entitled
to receive a distribution equal to 3% of the aggregate disposition price of sold
properties.  The Partnership paid a distribution of approximately $86,000 to the
Managing General Partner related to the sale of Atlanta Crossing Shopping Center
in March 2000.  This amount is  subordinate  to the limited  partners  receiving
their original capital  contributions  plus a cumulative  preferred return of 6%
per annum of their adjusted  capital  investment,  as defined in the Partnership
Agreement.  If the limited  partners  have not received  these  returns when the
Partnership terminates,  the Managing General Partner will return this amount to
the Partnership.

In addition to reimbursement for services of affiliates,  the Partnership paid a
commission  to an  affiliate of the Managing  General  Partner of  approximately
$138,000  related to the  refinancing of Deer Creek  Apartments  during the year
ended December 31, 2001.  These costs were capitalized and are included in other
assets on the consolidated balance sheet.

In accordance with the Partnership  Agreement,  the Managing General Partner has
loaned the Partnership funds for operating expenses at Landmark  Apartments.  At
December 31, 2001 the amount of the  outstanding  loan and accrued  interest was
approximately $47,000 and is included in "Due to Affiliates" on the consolidated
balance sheet.  Interest is charged at the prime rate plus 2%. Interest  expense
was  approximately  $1,000 for the year ended  December 31, 2001.  There were no
loans from the Managing General Partner or associated  interest  expenses during
the year ended  December  31,  2000.  Subsequent  to December 31, 2001 this loan
balance was repaid by the Partnership.

Beginning in 2001, the  Partnership  began insuring its properties up to certain
limits through coverage provided by AIMCO which is generally  self-insured for a
portion of losses and  liabilities  related  to workers  compensation,  property
casualty and vehicle liability. The Partnership insures its properties above the
AIMCO  limits  through  insurance  policies  obtained  by  AIMCO  from  insurers
unaffiliated  with the Managing General Partner.  During the year ended December
31, 2001, the Partnership  paid AIMCO and its affiliates  approximately  $69,000
for insurance coverage and fees associated with policy claims administration.

In addition to its indirect  ownership of the general  partner  interests in the
Partnership,  AIMCO and its affiliates owned 59,166 limited partnership units in
the Partnership  representing  59.29% of the  outstanding  units at December 31,
2001. A number of these units were  acquired  pursuant to tender  offers made by
AIMCO or its  affiliates.  It is  possible  that  AIMCO or its  affiliates  will
acquire additional limited partnership  interests in the Partnership for cash or
in exchange  for units in the  operating  partnership  of AIMCO  either  through
private purchases or tender offers. Under the Partnership Agreement, unitholders
holding a majority of the units are  entitled  to take action with  respect to a
variety of matters  which  would  include  voting on certain  amendments  to the
Partnership  Agreement and voting to remove the Managing General  Partner.  As a
result  of its  ownership  of  59.29% of the  outstanding  units,  AIMCO is in a
position to control all voting  decisions with respect to the  Registrant.  When
voting on matters, AIMCO would in all likelihood vote the units it acquired in a
manner  favorable to the interest of the Managing General Partner because of its
affiliation with the Managing General Partner.


                                     PART IV


Item 13.    Exhibits and Reports on Form 8-K

      (a) Reports on Form 8-K filed in the fourth quarter of calendar year 2001:

          None.

<PAGE>


                                   SIGNATURES



In accordance  with Section 13 or 15(d) of the Exchange Act, the  Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.



                                    ANGELES INCOME PROPERTIES, LTD. II


                                    By:   Angeles Realty Corporation II
                                          Managing General Partner


                                    By:   /s/Patrick J. Foye
                                          Patrick J. Foye
                                          Executive Vice President


                                    By:   /s/Martha L. Long
                                          Martha L. Long
                                          Senior Vice President
                                          and Controller


                                   Date:


In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the Registrant and in the capacities on the date
indicated.


/s/Patrick J. Foye      Executive Vice President      Date:
Patrick J. Foye         and Director


/s/Martha L. Long       Senior Vice President         Date:
Martha L. Long          and Controller


<PAGE>


                      ANGELES INCOME PROPERTIES, LTD. II

                                  EXHIBIT INDEX



Exhibit Number    Description of Exhibit

       2.1        Agreement and Plan of Merger,  dated as of October 1, 1998, by
                  and between AIMCO and IPT incorporated by reference to Exhibit
                  2.1 filed with  Registrant's  Current Report on Form 8-K dated
                  October 1, 1998.

       3.1        Amendment  Agreement of Limited Partnership of the Partnership
                  dated  October 12, 1982 filed in Form 10K dated  November  30,
                  1983, incorporated herein by reference

       3.2        Amended  Agreement of Limited  Partnership of the  Partnership
                  dated  March  31,  1983  filed  in  the  Prospectus,   of  the
                  Partnership,  as Exhibit A, dated March 31, 1983  incorporated
                  herein by reference

      10.1        Agreement of Purchase and Sale of Real  Property with Exhibits
                  - Executive  Plaza filed in Form 8K dated  September 27, 1983,
                  incorporated herein by reference

      10.2        Agreement of Purchase and Sale of Real  Property with Exhibits
                  -  Atlanta  Crossing  Shopping  Center  filed in Form 8K dated
                  September 27, 1983, incorporated herein by reference

      10.3        Agreement of Purchase and Sale of Real  Property with Exhibits
                  - Deer Creek  Apartments  filed in Form 8K dated September 28,
                  1983, incorporated herein by reference

      10.4        Agreement of Purchase and Sale of Real  Property with Exhibits
                  - Georgetown  Apartments  filed in Form 8K dated  November 21,
                  1983, incorporated herein by reference

      10.5        Agreement of Purchase and Sale of Real  Property with Exhibits
                  -  Landmark  Apartments  filed in Form 8K dated  December  16,
                  1983, incorporated herein by reference

      10.6        Multifamily Note - Deer Creek Apartments,  dated June 11, 1986
                  filed in Form 10K dated February 25, 1987, incorporated herein
                  by reference.

      10.7        Multifamily  Note -  Georgetown  Apartments,  dated June 16,
                  1985, incorporated herein by reference

      10.8        Additional   Financing  -  Deer  Creek   Apartments,   dated
                  September 22, 1987.  Funded  November 1988 filed in Form 10K
                  dated March 29, 1989, incorporated herein by reference

      10.9        Additional   Financing  -   Georgetown   Apartments,   dated
                  September 22, 1989, incorporated herein by reference

      10.10       Purchase and Sale  Agreement  with Exhibits - dated July 26,
                  1991  between   Princeton  Golf  Course  Joint  Venture  and
                  Lincoln  Property  Company  No. 199 filed in Form 10-K dated
                  March 27, 1992, incorporated herein by reference

      10.11       Princeton Golf Course Joint Venture  Agreement with Exhibits -
                  dated  August  21,  1991  between  the  Partnership,   Angeles
                  Partners XI and Angeles  Partners XII filed in Form 10-K dated
                  March 27, 1992, incorporated herein by reference

      10.12       Stock Purchase  Agreement  dated November 24, 1992 showing the
                  purchase of 100% of the  outstanding  stock of Angeles  Realty
                  Corporation II, a subsidiary of MAE GP  Corporation,  filed in
                  Form 8-K dated December 31, 1993, which is incorporated herein
                  by reference

      10.13       Deed in Lieu of Foreclosure  between  Executive Plaza,  L.P.
                  and  Capshaw  Investment  Company,  L.L.C.  dated  March 20,
                  1995, incorporated herein by reference

      10.14       Multifamily  Note - Deer Creek  Apartments  between  Angeles
                  Income  Properties,  Ltd. II and Lehman  Brothers  Holdings,
                  Inc.  d/b/a Lehman  Capital,  a division of Lehman  Brothers
                  Holdings, Inc. dated November 1, 1996

      10.15       Multifamily  Note  -  Landmark  Apartments  between  Angeles
                  Income  Properties,  Ltd. II and Lehman  Brothers  Holdings,
                  Inc.  d/b/a Lehman  Capital,  a division of Lehman  Brothers
                  Holdings, Inc. dated November 1, 1996

      10.16       Purchase and Sale Contract  between  Registrant  and Atlanta
                  Crossing,  L.L.C.,  an Alabama  limited  liability  company,
                  dated October 25, 1999, is  incorporated by reference to the
                  Annual  Report on Form  10-KSB for the year  ended  December
                  31, 1999.

      10.17       Amendment to Purchase and Sale Contract  between  Registrant
                  and Atlanta  Crossing,  L.L.C.,  dated  February 7, 2000, is
                  incorporated  by  reference  to the  Annual  Report  on Form
                  10-KSB for the year ended December 31, 1999.

      10.18       Second  Amendment  to  Purchase  and Sale  Contract  between
                  Registrant  and  Atlanta  Crossing,  L.L.C.,  dated March 8,
                  2000, is  incorporated  by reference to the Annual Report on
                  Form 10-KSB for the year ended December 31, 1999.

      10.19       Multifamily  Note dated June 27, 2001, by and between  Angeles
                  Income Properties,  Ltd. II, a California Limited Partnership,
                  and  GMAC  Commercial  Mortgage  Corporation  for  Deer  Creek
                  Apartments,  is  incorporated  by reference  to the  Quarterly
                  Report on Form 10-QSB for the quarter ended June 30, 2001.