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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q


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

                For the quarterly period ended September 30, 1996

                         Commission file number 0-14460

             INTEGRATED RESOURCES AMERICAN LEASING INVESTORS VII-B,
                        A California Limited Partnership
             (Exact name of registrant as specified in its charter)


       CALIFORNIA                                                13-3244533
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

                   411 West Putnam Avenue, Greenwich, CT 06830
                    (Address of principal executive offices)

                                 (203) 862-7000
              (Registrant's telephone number, including area code)

                                      None
              (Former name, former address and former fiscal year,
                          if changed since last report)


Indicate by check whether the registrant  (1) has filed all reports  required to
be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during
the  preceding 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 [   ]

<PAGE>
                              INTEGRATED RESOURCES
                        AMERICAN LEASING INVESTORS VII-B,
                        A CALIFORNIA LIMITED PARTNERSHIP

                         FORM 10-Q - SEPTEMBER 30, 1996



                                      INDEX



PART I - FINANCIAL INFORMATION

     ITEM 1 - FINANCIAL STATEMENTS

        BALANCE SHEETS - September 30, 1996 and December 31, 1995


        STATEMENTS OF OPERATIONS - For the three months ended September 30, 1996
             and 1995 and the nine months ended September 30, 1996 and 1995


        STATEMENT OF PARTNERS' EQUITY - For the nine months ended
             September 30, 1996


        STATEMENTS OF CASH FLOWS - For the nine months ended
             September 30, 1996 and 1995


        NOTES TO FINANCIAL STATEMENTS

     ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
               CONDITION AND RESULTS OF OPERATIONS


PART II - OTHER INFORMATION

     ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

SIGNATURES
<PAGE>
PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
                                 INTEGRATED RESOURCES
                          AMERICAN LEASING INVESTORS VII-B,
                           A CALIFORNIA LIMITED PARTNERSHIP

                                    BALANCE SHEETS


                                                          September 30,  December 31,
                                                              1996           1995
                                                          -----------    -----------
<S>                                                       <C>            <C>        
ASSETS

     Cash and cash equivalents ........................   $ 3,024,136    $   148,205
     Leased equipment - net of accumulated depreciation
        of $2,123,922 and $10,600,903 and allowance
        for equipment impairment of $277,200
        and $1,311,299 ................................       346,555      4,840,261
     Accounts receivable ..............................       148,442        333,172
     Other receivables and prepaid expenses ...........        11,500          7,199
                                                          -----------    -----------
                                                          $ 3,530,633    $ 5,328,837
                                                          ===========    ===========

LIABILITIES AND PARTNERS' EQUITY

Liabilities

     Distributions payable ............................   $ 2,970,956    $      --   
     Accounts payable and accrued expenses ............        24,901         42,284
     Due to affiliates ................................         5,560          7,842
     Deferred income ..................................          --        1,009,960
     Notes payable ....................................          --          290,216
     Accrued interest payable .........................          --            9,682
                                                          -----------    -----------
        Total liabilities .............................     3,001,417      1,359,984
                                                          -----------    -----------

Commitments and contingencies

Partners' equity
     Limited partners' equity (19,099 units issued
        and outstanding) ..............................       618,428      4,023,669
     General partners' deficit ........................       (89,212)       (54,816)
                                                          -----------    -----------
        Total partners' equity ........................       529,216      3,968,853
                                                          -----------    -----------

                                                          $ 3,530,633    $ 5,328,837
                                                          ===========    ===========
</TABLE>

See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
                                                        INTEGRATED RESOURCES
                                                  AMERICAN LEASING INVESTORS VII-B,
                                                  A CALIFORNIA LIMITED PARTNERSHIP

                                                      STATEMENTS OF OPERATIONS


                                                                    For the three months ended          For the nine months ended
                                                                           September 30,                       September 30,
                                                                   -----------------------------       -----------------------------
                                                                       1996             1995              1996              1995
                                                                   -----------       -----------       -----------       -----------
<S>                                                                <C>               <C>               <C>               <C>        
Revenues
     Rental .................................................      $    71,313       $   204,209       $   696,860       $ 1,095,327
     Other, principally interest ............................           30,320             2,277            36,916             6,413
                                                                   -----------       -----------       -----------       -----------

                                                                       101,633           206,486           733,776         1,101,740
                                                                   -----------       -----------       -----------       -----------
Costs and expenses
     Depreciation ...........................................           99,249           114,648           570,268           679,607
     General and administrative .............................           14,227            19,859            61,793            63,539
     Fees to affiliates .....................................            3,934             3,322            16,502            21,144
     Operating ..............................................            1,500             4,545             2,848             5,496
     Provision for equipment impairment .....................             --             100,000           397,000           100,000
     Interest ...............................................             --              42,054              --             162,012
                                                                   -----------       -----------       -----------       -----------

                                                                       118,910           284,428         1,048,411         1,031,798
                                                                   -----------       -----------       -----------       -----------

                                                                       (17,277)          (77,942)         (314,635)           69,942

Gain on disposition of equipment ............................           58,713              --              84,209             3,217
                                                                   -----------       -----------       -----------       -----------

Net income (loss) ...........................................      $    41,436       $   (77,942)      $  (230,426)      $    73,159
                                                                   ===========       ===========       ===========       ===========
Net income (loss)  attributable to
     Limited partners .......................................      $    41,022       $   (77,163)      $  (228,122)      $    72,427
     General partners .......................................              414              (779)           (2,304)              732
                                                                   -----------       -----------       -----------       -----------

                                                                   $    41,436       $   (77,942)      $  (230,426)      $    73,159
                                                                   ===========       ===========       ===========       ===========

Net income (loss) per unit of limited partnership
     interest (19,099 units outstanding) ....................      $      2.15       $     (4.04)      $    (11.94)      $      3.79
                                                                   ===========       ===========       ===========       ===========
</TABLE>

See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
                                                        INTEGRATED RESOURCES
                                                  AMERICAN LEASING INVESTORS VII-B,
                                                  A CALIFORNIA LIMITED PARTNERSHIP

                                                    STATEMENT OF PARTNERS' EQUITY




                                                                           Limited                 General                 Total
                                                                           Partners'              Partners'              Partners'
                                                                            Equity                 Deficit                Equity
                                                                          -----------            -----------            -----------
<S>                                                                       <C>                    <C>                    <C>        
Balance, January 1, 1996 ......................................           $ 4,023,669            $   (54,816)           $ 3,968,853

Net loss for the nine months
     ended September 30, 1996 .................................              (228,122)                (2,304)              (230,426)

Distributions to partners for the nine
     months ended September 30, 1996
     ($166.35 per limited partnership unit) ...................            (3,177,119)               (32,092)            (3,209,211)
                                                                          -----------            -----------            -----------

Balance, September 30, 1996 ...................................           $   618,428            $   (89,212)           $   529,216
                                                                          ===========            ===========            ===========
</TABLE>


See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
                                      INTEGRATED RESOURCES
                                AMERICAN LEASING INVESTORS VII-B,
                                A CALIFORNIA LIMITED PARTNERSHIP

                                    STATEMENTS OF CASH FLOWS

                                                                      For the nine months ended
                                                                            September 30,
                                                                     --------------------------
                                                                         1996          1995
                                                                     -----------    -----------
<S>                                                                  <C>            <C>        
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS

Cash flows from operating activities
     Net (loss) income ...........................................   $  (230,426)   $    73,159
     Adjustments to reconcile net (loss) income to net
        cash (used in) provided by operating activities
            Depreciation .........................................       570,268        679,607
            Provision for equipment impairment ...................       397,000        100,000
            Amortization of deferred income ......................    (1,009,960)          --   
            Gain on disposition of equipment .....................       (84,209)        (3,217)
     Changes in assets and liabilities
        Accounts receivable ......................................       184,730        678,124
        Other receivables and prepaid expenses ...................        (4,301)        (4,836)
        Accounts payable and accrued expenses ....................       (17,383)         3,284
        Due to affiliates ........................................        (2,282)          --   
        Accrued interest payable .................................        (9,682)      (102,922)
                                                                     -----------    -----------
               Net cash (used in) provided by operating activities      (206,245)     1,423,199
                                                                     -----------    -----------
Cash flows from investing activities
     Proceeds from disposition of equipment ......................     3,610,647         30,353
     Other non-operating payments ................................          --           (5,800)
                                                                     -----------    -----------
               Net cash provided by investing activities .........     3,610,647         24,553
                                                                     -----------    -----------
Cash flows from financing activities
     Distributions to partners ...................................      (238,255)          --   
     Principal payments on notes payable .........................      (290,216)    (1,428,773)
                                                                     -----------    -----------
               Net cash used in financing activities .............      (528,471)    (1,428,773)
                                                                     -----------    -----------

Net increase in cash and cash equivalents ........................     2,875,931         18,979

Cash and cash equivalents, beginning of period ...................       148,205        148,460
                                                                     -----------    -----------

Cash and cash equivalents, end of period .........................   $ 3,024,136    $   167,439
                                                                     ===========    ===========
Supplemental disclosure of cash flow information
     Interest paid ...............................................   $     9,682    $   264,934
                                                                     ===========    ===========
</TABLE>

See notes to financial statements.
<PAGE>
                              INTEGRATED RESOURCES
                        AMERICAN LEASING INVESTORS VII-B,
                        A CALIFORNIA LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS


1         INTERIM FINANCIAL INFORMATION

         The summarized  financial  information  contained  herein is unaudited;
         however, in the opinion of management, all adjustments (consisting only
         of normal recurring accruals) necessary for a fair presentation of such
         financial  information have been included.  The accompanying  financial
         statements, footnotes and discussion should be read in conjunction with
         the financial  statements,  related footnotes and discussions contained
         in  the  Integrated  Resources  American  Leasing  Investors  VII-B,  a
         California  Limited  Partnership (the  "Partnership")  annual report on
         Form  10-K for the  year  ended  December  31,  1995.  The  results  of
         operations  for the nine  months  ended  September  30,  1996,  are not
         necessarily indicative of the results to be expected for the full year.

2         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Leased equipment

         The  cost  of  leased  equipment  represents  the  initial  cost of the
         equipment to the Partnership plus miscellaneous acquisition and closing
         costs,  and  is  carried  at  the  lower  of  depreciated  cost  or net
         realizable value.

         Depreciation  is  computed  using the  straight-line  method,  over the
         estimated   useful   lives  of  such   assets   (13  to  15  years  for
         transportation equipment).

         When  equipment  is  sold  or  otherwise  disposed  of,  the  cost  and
         accumulated  depreciation  (and any  related  allowance  for  equipment
         impairment)  are removed from the accounts and any gain or loss on such
         sale or disposal is reflected in  operations.  Normal  maintenance  and
         repairs are charged to operations as incurred. The Partnership provides
         allowances for equipment  impairment  based upon a quarterly  review of
         all equipment in its portfolio,  when management  believes that,  based
         upon market analysis,  appraisal  reports and leases currently in place
         with respect to specific  equipment,  the  investment in such equipment
         may not be recoverable.

3        CONFLICTS OF INTEREST AND TRANSACTIONS WITH RELATED PARTIES

         The corporate  general  partner of the  Partnership,  ALI Capital Corp.
         (the "Corporate General Partner"),  the managing general partner of the
         Partnership,  ALI Equipment Management Corp.  ("Equipment  Management")
         and Integrated  Resources  Equipment  Group,  Inc.  ("IREG") are wholly
         owned subsidiaries of Presidio Capital Corp.  ("Presidio").  Z Square G
         Partners  II was  the  associate  general  partner  of the  Partnership
         through February 27, 1995. On February 28, 1995,  Presidio Boram Corp.,
         a subsidiary of Presidio,  became the associate general partner.  Other
         limited  partnerships and similar investment  programs have been formed
         by Equipment  Management or its  affiliates to acquire  equipment  and,
<PAGE>
3        CONFLICTS OF INTEREST AND TRANSACTIONS WITH RELATED PARTIES (continued)

         accordingly,  conflicts of interest may arise  between the  Partnership
         and such other limited partnerships. Affiliates of Equipment Management
         have also engaged in businesses  related to the management of equipment
         and the sale of various  types of equipment  and may transact  business
         with the Partnership.

         Subject  to the  rights  of the  Limited  Partners  under  the  Limited
         Partnership  Agreement,  Presidio will control the Partnership  through
         its direct or  indirect  ownership  of all of the  shares of  Equipment
         Management, the Corporate General Partner and, as of February 28, 1995,
         the  associate  general  partner.   Presidio  is  managed  by  Presidio
         Management Company, LLC ("Presidio  Management"),  a company controlled
         by a director of Presidio. Presidio is also party to an administrataive
         services agreement with Wexford Management LLC ("Wexford")  pursuant to
         which Wexford is responsible for the day-to-day  management of Presidio
         and,  among other  things,  has  authority  to  designate  directors of
         Equipment  Management,  the Corporate General Partner and the associate
         general  partner.  During the nine months  ended  September  30,  1996,
         reimbursable  expenses  to  Wexford  by  the  Partnership  amounted  to
         $20,630.

         Presidio is a liquidating  company.  Although Presidio has no immediate
         plans to do so, it will  ultimately seek to dispose of the interests it
         acquired from  Integrated  Resources,  Inc.  including its interests in
         Equipment  Management,  the Corporate  General Partner and IREG through
         liquidation;  however,  there can be no assurance of the timing of such
         transaction or the effect it may have on the Partnership.

         The Partnership has a management agreement with IREG, pursuant to which
         IREG receives 5% of annual gross rental  revenues on operating  leases;
         2% of annual gross rental  revenues on full payout leases which contain
         net  lease  provisions;  and 1% of  annual  gross  rental  revenues  if
         services are performed by third parties under the active supervision of
         IREG,  as defined in the Limited  Partnership  Agreement.  For the nine
         months ending  September 30, 1996 and 1995,  the  Partnership  incurred
         expenses  of $13,937 and  $21,145,  respectively,  for such  management
         services.

         During  the  operating  and  sale  stage  of the  Partnership,  IREG is
         entitled to a partnership  management fee equal to 4% of  distributable
         cash from operations,  as defined in the Limited Partnership Agreement,
         subject to increase  after the limited  partners have received  certain
         specified  minimum  returns on their  investment.  For the nine  months
         ended  September  30,  1996,  the  Partnership   incurred   partnership
         management  fee expense of $2,564.  No such amount was incurred  during
         the nine months ended September 30, 1995.

         The general  partners  are  entitled to 1% of  distributable  cash from
         operations  and cash from sales and an  allocation of 1% of taxable net
         income or loss of the Partnership.
<PAGE>
3        CONFLICTS OF INTEREST AND TRANSACTIONS WITH RELATED PARTIES (continued)

         During the  operating  and sale stage of the  Partnership,  IREG may be
         entitled to receive  certain other fees which are  subordinated  to the
         receipt by the limited partners of their original  invested capital and
         certain specified minimum returns on their investment.

         Upon the ultimate liquidation of the Partnership,  the general partners
         may  be  required  to  remit  to  the  Partnership   certain   payments
         representing  capital account deficit  restoration based upon a formula
         provided within the Limited  Partnership  Agreement.  Such  restoration
         amount may be less than the recorded general partners'  deficit,  which
         could  result in  distributions  to the  limited  partners of less than
         their recorded equity.

         In April 1995, Equipment Management and certain affiliates entered into
         an agreement with Fieldstone Private Capital Group, L.P. ("Fieldstone")
         pursuant  to  which   Fieldstone   performs   certain   management  and
         administrative  services relating to the Partnership as well as certain
         other  partnerships  in which  Equipment  Management  serves as general
         partner.  Substantially  all costs  associated  with the  retention  of
         Fieldstone will be paid by Equipment Management.

4        DISTRIBUTIONS TO PARTNERS

         Distributions  payable to the Limited  Partners and General Partners of
         $2,941,246 ($154.00 per unit) and $29,710,  respectively,  at September
         30, 1996, were paid in November 1996.

5        EQUIPMENT SALES - 1996

         On February 8, 1996,  the  Partnership  entered into an agreement  (the
         "Agreement") with an unaffiliated  third party (the "Purchaser")  which
         provided  for  the  sale  of  407  dry  van  piggyback   trailers  (the
         "Trailers")  upon their  return  from the lessee  pursuant to its lease
         with the Partnership (the "Lease").  The purchase price of each Trailer
         was to be determined by its  redelivery  date,  decining from $2,575 to
         $1,990  per  Trailer  over the  course of the year.  Redelivery  of the
         Trailers  commenced on or about  January 2, 1996,  and was scheduled to
         continue through the earlier of the date at which all Trailers had been
         redelivered  and December 31, 1996. The basic term of the Lease expired
         on December 31, 1995,  but each Trailer  remains  subject to the Lease,
         with specified per diem rentals  payable until such date as it has been
         redelivered by the lessee in compliance with the the return  conditions
         defined in the Lease.  At  present,  the return  dates of the  Trailers
         which remain on lease have not been finalized,  and it is likely that a
         small number of Trailers may remain  subject to the Lease through early
         1997.

         As of September  30, 1996,  206  Trailers had been  transferred  to and
         accepted by Purchaser,  for sales proceeds aggregating $505,250. At the
         time of sale the net carrying  value of the 206 Trailers was  $421,015.
         The 206 Trailers had  originally  been  acquired in January 1986 for an
         aggregate   purchase  cost  of  $2,816,026,   inclusive  of  associated
         acquisition costs.
<PAGE>
5        EQUIPMENT SALES - 1996 (continued)

         The  Agreement  had provided  for a schedule of purchases  based on the
         Trailers'   redelivery   dates  in  order  to  effect  a  sale  of  the
         Partnership's  remaining assets by December 31, 1996. The Purchaser had
         failed  or  refused  to  adhere  to this  schedule  and  had  otherwise
         defaulted  in its  obligations  under the  Agreement,  citing in part a
         declining  market for the  Trailers.  When it became  apparent that the
         Purchaser was unable or unwilling to cure its defaults, the Partnership
         terminated the Agreement, effective November 7, 1996.

         The  Partnership  has  subsequentially  entered  into an  agreement  in
         principle  with another  unaffiliated  third party which calls for such
         party to acquire all of the  remaining  Trailers  on a single  purchase
         date and to assume the  Partnership's  rights and obligations as lessor
         under the Lease.  The purchase  price for each Trailer is $1,400.  From
         October 1 to November 13, 1996, the Partnership  closed the sale of 201
         trailers for aggregate  sales proceeds of $332,750.  Such equipment had
         net carrying values aggregating $324,485 when sold.

         On July 16, 1996, the Partnership  sold a Boeing 727-200  Aircraft (the
         "Aircraft")  to  an  unrelated   third  party  for  sales  proceeds  of
         approximately   $2,950,000  less  selling   expenses  of  approximately
         $307,500.  Concurrently with the sale, the Partnership and USAir Group,
         Inc.  ("USAir")  terminated  the  Aircraft  lease,  scheduled to expire
         January 2, 1997. In addition,  the Partnership  retained and recognized
         as income approximately  $462,900  representing the outstanding balance
         of the  October  1995  lease  prepayment.  At the  time of  sale,  such
         Aircraft had a net carrying value of approximately $3,105,400.

6        EQUIPMENT LEASE PREPAYMENT

         In December 1985, the Partnership,  through an equipment trust of which
         it is the sole  beneficiary,  acquired  the  Aircraft  and  immediately
         leased the Aircraft  back to Piedmont  Aviation,  Inc.  (the  "Aircraft
         Lease").  The  Partnership  provided a portion of the purchase price by
         utilizing  approximately 40% of the net proceeds from the Partnership's
         offering  of units of limited  partnership  interest.  The  balance was
         provided by the Partnership  assuming a loan from an unaffiliated third
         party  lender (the  "Lender").  The loan,  which was  nonrecourse,  was
         anticipated to be  self-liquidating  by the  application of rentals due
         over the life of the Aircraft Lease. Subsequent to 1985, the operations
         of Piedmont were merged into USAir.

         In early 1995,  USAir publicly  announced that it anticipated  reducing
         its fleet  size and  during  1995,  planned  to retire or dispose of 21
         aircraft  including  its six  remaining  727-200  aircraft.  During the
         quarter ended  September 30, 1995,  USAir  indicated  that the Aircraft
         would  require a heavy  maintenance  check under the USAir  maintenance
         program. Rather than perform such heavy maintenance, USAir grounded the
         Aircraft.
<PAGE>
6        EQUIPMENT LEASE PREPAYMENT Continued)

         In October 1995,  the  Partnership  and USAir entered into an agreement
         (the  "Agreement")  that provided for a  restructuring  of the Aircraft
         Lease.  Pursuant to the terms of the Agreement,  USAir agreed to make a
         payment to the Lender in the amount of  $1,553,452,  which was equal to
         the outstanding  principal  balance plus interest which accrued through
         October 30, 1995. This payment fully retired the associated nonrecourse
         debt and relieved USAir of all future Basic Rent  obligations due under
         the  Aircraft  Lease.  Additionally,  pursuant  to  the  terms  of  the
         Agreement,  USAir  commenced a world-wide  remarketing  effort directed
         toward the sale of the Aircraft (see Note 5).
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS

         Liquidity and Capital Resources

         The  Partnership  declared a cash  distribution  of $154.00 per unit of
         limited partnership  interest totaling $2,970,956 for the quarter ended
         September  30, 1996,  which  represented  cash from sales of $2,910,765
         generated  during the current  quarter,  as well as from cash  reserves
         generated in prior quarters.

         At September  30,  1996,  the  Partnership  had  operating  reserves of
         approximately  $182,000 which was comprised of undistributed  cash from
         operations of approximately  $87,100 as well as general working capital
         reserves of $95,485.

         In December 1985, the Partnership,  through an equipment trust of which
         it is the sole  beneficiary,  acquired a Boeing  727-200  Aircraft (the
         "Aircraft")  and  immediately  leased  the  Aircraft  back to  Piedmont
         Aviation,  Inc. (the  "Aircraft  Lease").  The  Partnership  provided a
         portion of the purchase price by utilizing approximately 40% of the net
         proceeds   from  the   Partnership's   offering  of  units  of  limited
         partnership  interest.  The  balance was  provided  by the  Partnership
         assuming a loan from an unaffiliated third party lender (the "Lender").
         The loan, which was nonrecourse, was anticipated to be self-liquidating
         by the  application of rentals due over the life of the Aircraft Lease.
         Subsequent to 1985,  the  operations of Piedmont were merged into USAir
         Group, Inc. ("USAir").

         In early 1995,  USAir publicly  announced that it anticipated  reducing
         its fleet  size and  during  1995,  planned  to retire or dispose of 21
         aircraft  including  its six  remaining  727-200  aircraft.  During the
         quarter ended  September 30, 1995,  USAir  indicated  that the Aircraft
         would  require a heavy  maintenance  check under the USAir  maintenance
         program. Rather than perform such heavy maintenance, USAir grounded the
         Aircraft.

         In October 1995,  the  Partnership  and USAir entered into an agreement
         (the  "Agreement")  that provided for a  restructuring  of the Aircraft
         Lease.  Pursuant to the terms of the Agreement,  USAir agreed to make a
         payment to the Lender in the amount of  $1,553,452,  which was equal to
         the outstanding  principal  balance plus interest which accrued through
         October 30, 1995. This payment fully retired the associated nonrecourse
         debt and relieved USAir of all future Basic Rent  obligations due under
         the  Aircraft  Lease.  Additionally,  pursuant  to  the  terms  of  the
         Agreement,  USAir  commenced a world-wide  remarketing  effort directed
         toward the sale of the Aircraft.

         On July 16,  1996,  the  Partnership  sold the Aircraft to an unrelated
         third party for sales proceeds of approximately $2,950,000 less selling
         expenses of  approximately  $307,500.  Concurrently  with the sale, the
         Partnership  and USAir  terminated  the  Aircraft  Lease,  scheduled to
         expire  January 2, 1997.  In  addition,  the  Partnership  retained and
         recognized   as  income   approximately   $462,900   representing   the
         outstanding  balance of the October 1995 lease prepayment.  At the time
         of sale,  such  Aircraft  had a net  carrying  value  of  approximately
         $3,105,400.
<PAGE>
         Liquidity and Capital Resources (continued)

         On February 8, 1996,  the  Partnership  entered into an agreement  (the
         "Agreement") with an unaffiliated  third party (the "Purchaser")  which
         provided  for  the  sale  of  407  dry  van  piggyback   trailers  (the
         "Trailers")  upon their  return  from the lessee  pursuant to its lease
         with the Partnership (the "Lease").  The purchase price of each Trailer
         was to be determined by its  redelivery  date,  decining from $2,575 to
         $1,990  per  Trailer  over the  course of the year.  Redelivery  of the
         Trailers  commenced on or about  January 2, 1996,  and was scheduled to
         continue through the earlier of the date at which all Trailers had been
         redelivered  and December 31, 1996. The basic term of the Lease expired
         on December 31, 1995,  but each Trailer  remains  subject to the Lease,
         with specified per diem rentals  payable until such date as it has been
         redelivered by the lessee in compliance with the the return  conditions
         defined in the Lease.  At  present,  the return  dates of the  Trailers
         which remain on lease have not been finalized,  and it is likely that a
         small number of Trailers may remain  subject to the Lease through early
         1997.

         As of September  30, 1996,  206  Trailers had been  transferred  to and
         accepted by Purchaser,  for sales proceeds aggregating $505,250. At the
         time of sale the net carrying  value of the 206 Trailers was  $421,015.
         The 206 Trailers had  originally  been  acquired in January 1986 for an
         aggregate   purchase  cost  of  $2,816,026,   inclusive  of  associated
         acquisition costs.

         The  Agreement  had provided  for a schedule of purchases  based on the
         Trailers'   redelivery   dates  in  order  to  effect  a  sale  of  the
         Partnership's  remaining assets by December 31, 1996. The Purchaser had
         failed  or  refused  to  adhere  to this  schedule  and  had  otherwise
         defaulted  in its  obligations  under the  Agreement,  citing in part a
         declining  market for the  Trailers.  When it became  apparent that the
         Purchaser was unable or unwilling to cure its defaults, the Partnership
         terminated the Agreement, effective November 7, 1996.

         The  Partnership  has  subsequentially  entered  into an  agreement  in
         principle  with another  unaffiliated  third party which calls for such
         party to acquire all of the  remaining  Trailers  on a single  purchase
         date and to assume the  Partnership's  rights and obligations as lessor
         under the Lease.  The purchase  price for each Trailer is $1,400.  From
         October 1 to November 13, 1996, the Partnership  closed the sale of 201
         trailers for aggregate  sales proceeds of $332,750.  Such equipment had
         net carrying values aggregating $324,485 when sold.

         The sale of the remaining  trailers on November 13, 1996  completes the
         liquidation  of the  Partnership's  equipment  portfolio.  The Managing
         General  Partner  will  prepare a final  accounting  of the  assets and
         liabilities  and  commence  the  dissolution  and  termination  of  the
         Partnership and make a final distribution to partners.
<PAGE>
         Liquidity and Capital Resources (continued)

         At the present  time,  the level of fees  payable to IREG for  services
         rendered to the  Partnership  and other  affiliated  equipment  leasing
         partnerships  is  declining.  The  effect of this  situation  cannot be
         determined  at  this  point.  The  management  agreements  between  the
         Partnership  and  IREG  may be  terminated  by  either  party  to  such
         agreements.

         In April 1995,  the  Managing  General  Partner and certain  affiliates
         entered into an agreement with Fieldstone  pursuant to which Fieldstone
         performs certain management and administrative services relating to the
         assets of the  Partnership  as well as certain  other  partnerships  in
         which  the  Managing   General  Partner  serves  as  general   partner.
         Substantially  all costs  associated  with the  retention of Fieldstone
         will be paid by the Managing General Partner.

         On February 28, 1995,  Presidio  Boram Corp., a subsidiary of Presidio,
         became the Associate General Partner, upon the withdrawal of Z Square G
         Partners II, the former Associate General Partner.

         Inflation and changing  prices have not had any material  effect on the
         Partnership's  revenues since its inception,  nor does the  Partnership
         anticipate any material effect on its business from these factors.

         The  Partnership  had no outstanding  material  commitments for capital
         expenditures as of September 30, 1996.

         Results of Operations

         The Partnership had net income for the quarter ended September 30, 1996
         as compared  to a net loss for the  comparable  prior year  ended.  Net
         income  decreased  for  the  nine  months  ended  September  30,  1996,
         resulting  in a net loss,  as  compared  to the  comparable  prior year
         period.

         The  Partnership's  rental revenues  decreased for the quarter and nine
         months  ended  September  30,  1996,  as compared  to the prior  year's
         period,  primarily  due  to  the  restructuring  of  the  USAir  lease,
         effective  July 1, 1995 and sale of the Aircraft on July 16,  1996,  as
         well as a reduction  in rental  revenues  with  respect to the Trailers
         which are in the  process of being  returned  and sold,  as  previously
         discussed.  Other  revenues  increased  for the quarter and nine months
         ended  September 30, 1996, as compared to the prior year's  periods due
         to higher balances available for investment.

         Expenses excluding provision for equipment  impairment decreased in the
         quarter and nine months ended  September  30, 1996 in comparison to the
         prior year's periods. There was no interest expense for the quarter and
         nine  months  ended  September  30, 1996 due to the  retirement  of the
         nonrecourse  loan associated with the Trailers on January 2, 1996. Fees
         to affiliates  decreased due to a decrease in equipment management fees
         resulting  from the  decrease  in rentals on which such fees are based.
         Depreciation expense decreased, resulting from the restructuring of the
         USAir lease during the quarter  ended  September  30, 1995. A provision
         for equipment  impairment of $397,000 was recognized during the quarter
         ended June 30, 1996 to reflect the reduced value of the Aircraft.
<PAGE>
PART II - OTHER INFORMATION

ITEM 6 -   EXHIBITS AND REPORTS ON FORM 8-K


(a)      Exhibits:  None
(b)      Reports on Form 8-K:  Current report on Form 8-K dated July 16, 1996
<PAGE>
                                   SIGNATURES


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



                                          Integrated Resources
                                          American Leasing Investors VII-B,
                                             a California Limited Partnership
                                 By:      ALI Equipment Management Corp.
                                          Managing General Partner




                                 /S/      Douglas J. Lambert
                                          --------------------------------------
                                          Douglas J. Lambert
                                          President (Principal Executive and
                                             Financial Officer)




Date: November 12, 1996