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

                                  FORM 10-K405

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

     For the fiscal year ended   December 31, 1996
                                ------------------------------------------------

                                       OR

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

     For the transition period from ______________ to_____________

     Commission file number  0-12915
                            --------


                        McNEIL REAL ESTATE FUND XIV, LTD.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


         California                                94-2822299
--------------------------------------------------------------------------------
(State or other jurisdiction of                   (I.R.S. Employer
incorporation or organization)                     Identification No.)


             13760 Noel Road, Suite 600, LB70, Dallas, Texas, 75240
--------------------------------------------------------------------------------
          (Address of principal executive offices)          (Zip code)

Registrant's telephone number, including area code   (972)  448-5800
                                                  ------------------------------

Securities registered pursuant to Section 12(b) of the Act:  None
----------------------------------------------------------

Securities registered pursuant to Section 12(g) of the Act:  Limited partnership
                                                             units
----------------------------------------------------------

Indicate by check mark 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,  and (2) has been subject to such filing  requirements
for the past 90 days. Yes X No
                         ---  ---

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]

85,662  of the  registrant's  86,534  limited  partnership  units  are  held  by
non-affiliates  of this registrant.  The aggregate market value of units held by
non-affiliates  is not determinable  since there is no public trading market for
limited  partnership  units  and  transfers  of units  are  subject  to  certain
restrictions.

Documents Incorporated by Reference:  See Item 14, Page 39.

                                TOTAL OF 42 PAGES
<PAGE>
                                     PART I

ITEM 1.      BUSINESS
-------      --------

ORGANIZATION
------------

McNeil Real Estate Fund XIV, Ltd. (the  "Partnership")  was organized  April 30,
1982 as a limited  partnership  under the provisions of the  California  Uniform
Limited  Partnership  Act.  The  general  partner of the  Partnership  is McNeil
Partners,  L.P. (the "General  Partner"),  a Delaware  limited  partnership,  an
affiliate  of Robert A. McNeil  ("McNeil").  The  Partnership  is governed by an
amended  and  restated  partnership   agreement  of  limited  partnership  dated
September 20, 1991, as amended (the "Amended Partnership  Agreement").  Prior to
September 20, 1991, Pacific Investors  Corporation (the prior "Corporate General
Partner"), a wholly-owned subsidiary of Southmark Corporation ("Southmark"), and
McNeil were the general  partners of the  Partnership,  which was governed by an
agreement of limited partnership dated April 30, 1982 (the "Original Partnership
Agreement"). The principal place of business for the Partnership and the General
Partner is 13760 Noel Road, Suite 600, LB70, Dallas, Texas, 75240.

On  February  14,  1983,  a  Registration  Statement  on Form S-11 was  declared
effective by the  Securities  and Exchange  Commission  whereby the  Partnership
offered for sale $35,000,000 of limited  partnership  units ("Units"),  with the
General  Partners' right to increase the offering up to  $50,000,000.  The Units
represent equity interests in the Partnership and entitle the holders thereof to
participate in certain  allocations and  distributions of the  Partnership.  The
sale of Units closed on September 17, 1984, with 86,101 Units sold at $500 each,
or gross  proceeds of  $43,050,500  to the  Partnership,  including the original
general  partners'  purchase of 200 Units for $100,000.  In 1992, 483 Units were
issued to the General  Partner in payment of the fixed portion of the Management
Incentive  Distribution  ("MID").  In  1993,  30  Units  were  relinquished.  An
additional 20 Units were relinquished in 1994,  leaving 86,534 Units outstanding
at December 31, 1996.

SOUTHMARK BANKRUPTCY AND CHANGE IN GENERAL PARTNER
--------------------------------------------------

On July 14, 1989,  Southmark filed a voluntary petition for reorganization under
Chapter 11 of the U.S. Bankruptcy Code. Neither the Partnership,  McNeil nor the
Corporate   General   Partner   were   included  in  the   filing.   Southmark's
reorganization  plan became  effective  August 10, 1990. Under the plan, most of
Southmark's  assets,  including  Southmark's  interests in the Corporate General
Partner, were sold or liquidated for the benefit of creditors.

In  accordance  with  Southmark's  reorganization  plan,  on October  12,  1990,
Southmark, McNeil and various of their affiliates entered into an asset purchase
agreement  providing for, among other things,  the transfer of control to McNeil
or his affiliates of 34 limited partnerships  (including the Partnership) in the
Southmark portfolio.


<PAGE>
On February 14,  1991,  pursuant to the asset  purchase  agreement as amended on
that date: (a) an affiliate of McNeil purchased the Corporate  General Partner's
economic  interest in the  Partnership;  (b) McNeil became the managing  general
partner of the Partnership  pursuant to an agreement with the Corporate  General
Partner  that  delegated  management  authority  to McNeil;  and (c) McNeil Real
Estate Management,  Inc. ("McREMI"), an affiliate of McNeil, acquired the assets
relating to the property management and partnership  administrative  business of
Southmark  and its  affiliates  and commenced  management  of the  Partnership's
properties  pursuant  to an  assignment  of  the  existing  property  management
agreements from the Southmark affiliates.

On September 20, 1991, the limited  partners  approved a restructuring  proposal
that  provided for (i) the  replacement  of the  Corporate  General  Partner and
McNeil with the General  Partner;  (ii) the adoption of the Amended  Partnership
Agreement, which substantially alters the provisions of the Original Partnership
Agreement  relating  to,  among other  things,  compensation,  reimbursement  of
expenses, and voting rights; and (iii) the approval of a new property management
agreement with McREMI, the Partnership's property manager.

The  Amended  Partnership  Agreement  provides  for the MID to replace all other
forms of general partner  compensation  other than property  management fees and
reimbursements  of certain costs.  Additional  Units may be issued in connection
with the payment of the MID pursuant to the Amended Partnership  Agreement.  See
Item  8 -  Note  2  "Transactions  with  Affiliates."  For a  discussion  of the
methodology  for  calculating  and  distributing  the MID, see Item 13 - Certain
Relationships and Related Transactions.

Settlement of Claims:

The  Partnership  filed claims with the United States  Bankruptcy  Court for the
Northern  District of Texas,  Dallas Division (the  "Bankruptcy  Court") against
Southmark for damages relating to improper  overcharges,  breach of contract and
breach of fiduciary duty. The Partnership settled these claims in 1991, and such
settlement was approved by the Bankruptcy Court.

An Order Granting  Motion to Distribute  Funds to Class 8 Claimants  dated April
14, 1995 was issued by the Bankruptcy  Court.  In accordance  with the Order, in
May 1995, the Partnership  received in full satisfaction of its claims,  $30,118
in cash, and common and preferred stock in the reorganized  Southmark.  The cash
and  stock  represent  the  Partnership's  pro-rata  share of  Southmark  assets
available for Class 8 Claimants.  The Partnership  sold the Southmark common and
preferred  stock in May 1995,  for $9,723  which,  when  combined  with the cash
proceeds from Southmark, resulted in a gain on legal settlement of $39,841.

CURRENT OPERATIONS
------------------

General:

The Partnership is engaged in diversified real estate activities,  including the
ownership,  operation and management of  residential  and retail real estate and
other real estate related assets.  At December 31, 1996, the  Partnership  owned
seven income-producing properties as described in Item 2 - Properties.


<PAGE>
The  Partnership  does not directly  employ any personnel.  The General  Partner
conducts the business of the  Partnership  directly and through its  affiliates.
The  Partnership  is managed by the  General  Partner.  In  accordance  with the
Amended  Partnership  Agreement,  the Partnership  reimburses  affiliates of the
General  Partner for certain  expenses  incurred by the affiliates in connection
with the management of the Partnership. See Item 8 - Note 2 - "Transactions With
Affiliates."

The business of the Partnership to date has involved only one industry  segment.
See Item 8 - Financial Statements and Supplementary Data. The Partnership has no
foreign operations. The business of the Partnership is not seasonal.

Business Plan:

The Partnership  determined to evaluate market and other economic  conditions to
establish  the  optimum  time  to  commence  an  orderly   liquidation   of  the
Partnership's  assets in  accordance  with the terms of the Amended  Partnership
Agreement.  Taking such conditions as well as other pertinent  information  into
account,  the Partnership has determined to begin orderly liquidation of all its
assets.  Although there can be no assurance as to the timing of the  liquidation
due to real estate  market  conditions,  the general  difficulty of disposing of
real estate,  and other general  economic  factors,  it is anticipated that such
liquidation  would result in the  dissolution of the  Partnership  followed by a
liquidating  distribution  to Unitholders by December 2001. In this regard,  the
Partnership  has placed Country Hills Plaza,  Midvale Plaza and Redwood Plaza on
the market for sale. Until such time as the Partnership's assets are liquidated,
the  Partnership's  plan  of  operations  is to  preserve  or  increase  the net
operating income of its assets whenever possible,  while at the same time making
whatever capital expenditures are reasonable under the circumstances in order to
preserve  and  enhance  the  value  of the  Partnership's  assets.  See Item 7 -
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations.

Competitive Conditions:

Since the  principal  business of the  Partnership  is to own and  operate  real
estate,  the Partnership is subject to all of the risks incident to ownership of
real estate and interests  therein,  many of which relate to the  illiquidity of
this type of  investment.  These  risks  include  changes  in  general  or local
economic conditions,  changes in supply or demand for competing properties in an
area,  changes in interest rates and  availability  of permanent  mortgage funds
which  may  render  the  sale  or  refinancing   of  a  property   difficult  or
unattractive, changes in real estate and zoning laws, increases in real property
tax rates and Federal or local  economic or rent  controls.  The  illiquidity of
real estate  investments  generally  impairs the ability of the  Partnership  to
respond  promptly  to  changed  circumstances.  The  Partnership  competes  with
numerous established companies, private investors (including foreign investors),
real estate investment trusts,  limited partnerships and other entities (many of
which have greater  resources than the Partnership) in connection with the sale,
financing  and  leasing  of  properties.  The  impact  of  these  risks  on  the
Partnership,   including   losses  from  operations  and   foreclosures  of  the
Partnership's  properties,  is described in Item 7 - Management's Discussion and
Analysis  of  Financial  Condition  and  Results  of  Operations.  See  Item 2 -
Properties  for a discussion  of  competitive  conditions  at the  Partnership's
properties.




<PAGE>
Forward-Looking Information:

Within this document,  certain  statements are made as to the expected occupancy
trends,  financial  condition,  results  of  operations,  and cash  flows of the
Partnership  for periods after  December 31, 1996.  All of these  statements are
forward-looking  statements  made pursuant to the safe harbor  provisions of the
Private  Securities  Litigation  Reform Act of 1995.  These  statements  are not
historical  and  involve  risks  and  uncertainties.  The  Partnership's  actual
occupancy trends, financial condition, results of operations, and cash flows for
future  periods may differ  materially  due to several  factors.  These  factors
include,  but are not limited to, the  Partnership's  ability to control  costs,
make necessary  capital  improvements,  negotiate  sales or  refinancings of its
properties and respond to changing economic and competitive factors.

Other Information:

The environmental  laws of the Federal government and of certain state and local
governments  impose  liability  on current  property  owners for the clean-up of
hazardous and toxic substances discharged on the property. This liability may be
imposed  without  regard  to the  timing,  cause or person  responsible  for the
release of such substances onto the property.  The Partnership  could be subject
to such liability in the event that it owns properties having such environmental
problems.  The Partnership has no knowledge of any pending claims or proceedings
regarding such environmental problems.

In August 1995, High River Limited  Partnership,  a Delaware limited partnership
controlled by Carl C. Icahn ("High River") made an  unsolicited  tender offer to
purchase from holders of Units up to approximately  45% of the outstanding Units
of the Partnership for a purchase price of $95 per Unit. In September 1996, High
River made  another  unsolicited  tender  offer to  purchase  any and all of the
outstanding  Units of the  Partnership  for a purchase price of $95 per Unit. In
addition,   High  River  made  unsolicited   tender  offers  for  certain  other
partnerships controlled by the General Partner. The Partnership recommended that
the  limited  partners  reject  the  tender  offers  made  with  respect  to the
Partnership and not tender their Units.  The General Partner believes that as of
January  31,  1997,  High  River  has  purchased  approximately  11.99%  of  the
outstanding  Units  pursuant to the tender offers.  In addition,  all litigation
filed by High River,  Mr. Icahn and his affiliates in connection with the tender
offers has been dismissed without prejudice.


<PAGE>
ITEM 2.      PROPERTIES
-------      ----------

The  following  table sets forth the real  estate  investment  portfolio  of the
Partnership  at December 31, 1996.  The buildings and the land on which they are
located  are owned by the  Partnership  in fee,  subject in each case to a first
lien deed of trust as set forth more fully in Item 8 - Note 5 - "Mortgage  Notes
Payable."  See also  Item 8 - Note 4 - "Real  Estate  Investments"  and Item 8 -
Schedule  III -  "Real  Estate  Investments  and  Accumulated  Depreciation  and
Amortization."  In the opinion of  management,  the  properties  are  adequately
covered by insurance.

<TABLE>
<CAPTION>
                                               Net Basis                           1996            Date
Property              Description            of Property         Debt         Property Tax       Acquired
--------              -----------            -----------         ----         ------------       ---------
<S>                   <C>                  <C>               <C>               <C>                  <C> 
Real Estate Investments:

Embarcadero
  Club (1)            Apartments
College Park, GA      404 units            $   6,724,801     $   7,680,034     $   122,810          9/84

Tanglewood
  Village (2)         Apartments
Carson City, NV       130 units                3,342,390         2,761,777          41,064          6/86

Thunder Hollow (3)
Bensalem              Apartments
  Township, PA        301 units                7,905,162         9,513,932         262,183         11/84

Windrock (4)          Apartments
El Paso, TX           150 units                3,684,613         3,412,935         100,981         10/84
                                            ------------      ------------      ----------

                                          $   21,656,966     $  23,368,678     $   527,038
                                           =============      ============      ==========

Assets Held for Sale:

Country Hills
  Plaza               Retail Center
Ogden, UT             127,262 sq. ft.     $    3,787,273     $   1,843,948     $   104,081          6/84

Midvale Plaza         Retail Center
Midvale, UT           100,051 sq. ft.          2,229,912         1,298,081          45,803          6/84

Redwood Plaza         Retail Center
Salt Lake City, UT    86,369 sq. ft.           1,925,670           912,982          58,053          6/84
                                            ------------     -------------      ----------

                                          $    7,942,855    $    4,055,011    $    207,937
                                           =============     =============     ===========
</TABLE>
-----------------------------------------
Total:    Apartments  -  985 units
          Retail centers - 313,682 sq. ft.

<PAGE>
(1)      Embarcadero  Club Apartments is owned by Embarcadero  Associates  which
         is wholly-owned by the Partnership  and the General Partner.

(2)      Tanglewood  Village   Apartments   is   owned   by  Tanglewood Fund XIV
         Associates,  L.P. which is wholly-owned by the   Partnership  and   the
         General Partner.

(3)      Thunder  Hollow  Apartments is owned by Thunder Hollow Fund XIV Limited
         Partnership which is wholly-owned by the Partnership.

(4)      Windrock  Apartments   is   owned   by Windrock Fund XIV, L.P. which is
         wholly-owned by the Partnership.

The  following  table sets  forth the  properties'  occupancy  rate and rent per
square foot for each of the last five years:

<TABLE>
<CAPTION>
                                        1996           1995            1994           1993          1992
                                    -------------  -------------  --------------  -------------  ----------
<S>                                       <C>             <C>            <C>            <C>             <C>
Real Estate Investments:

Embarcadero Club
   Occupancy Rate............             97%             99%            98%            88%             89%
   Rent Per Square Foot......       $    7.10      $     6.89     $     6.46      $    6.12      $     5.77

Tanglewood Village
   Occupancy Rate............             97%             98%            97%            99%             97%
   Rent Per Square Foot......       $    7.36      $     7.35     $     7.00      $    6.64      $     6.18

Thunder Hollow
   Occupancy Rate............             99%             97%            99%           100%             96%
   Rent Per Square Foot......       $    8.15      $     7.76     $     7.53      $    7.18      $     6.76

Windrock
   Occupancy Rate............             93%             75%            83%            91%             90%
   Rent Per Square Foot......       $    5.02      $     5.01     $     5.33      $    5.11      $     4.80

Assets Held for Sale:

Country Hills Plaza
   Occupancy Rate............            100%            100%           100%            97%             99%
   Rent Per Square Foot......       $    7.31      $     7.38     $     6.83      $    6.88      $     7.01

Midvale Plaza
   Occupancy Rate............            100%            100%           100%            96%             96%
   Rent Per Square Foot......       $    5.07      $     4.96     $     5.61      $    4.97      $     4.81

Redwood Plaza
   Occupancy Rate............            100%            100%            98%            76%            100%
   Rent Per Square Foot......       $    7.13      $     7.04     $     6.33      $    5.28      $     4.38
</TABLE>

Occupancy rate  represents all units leased divided by the total number of units
for  residential  properties  and square  footage leased divided by total square
footage for retail  properties  as of  December  31 of the given year.  Rent per
square foot represents all revenue, except interest, derived from the property's
operations divided by the leasable square footage of the property.
<PAGE>
Competitive Conditions at Properties
------------------------------------

Country  Hills Plaza has been able to achieve  above market  levels of occupancy
and net rental rates.  Current  occupancy is 100%.  Two new retail  centers were
opened to the north and south of Country  Hills along the same major artery that
Country  Hills is located;  however,  Country  Hills  continues to hold a strong
market position. Country Hills enjoys a good location next to a university and a
major  medical  center.  Capital  improvements  made  during 1995 have given the
property an updated, 90's look. The Partnership is marketing Country Hills Plaza
for sale.

The area  surrounding  Embarcadero  Club  Apartments has rebounded from the 1991
Eastern  Airlines  bankruptcy.  Embarcadero  Club is 2.5  miles  from  Atlanta's
Hartsfield  International  Airport.  Area  occupancy  has  improved to 94%,  and
concessions  granted to tenants are becoming rare.  Embarcadero Club's occupancy
rate  is at 97%,  and  concessions  are no  longer  required  to  maintain  that
occupancy  rate.  Embarcadero  Club  competes  with  both  low end and  high end
properties.  Renovations  in excess of  $1,000,000  in the past four  years have
added  significantly to the property's  competitiveness.  No new construction is
planned for the area.

The lease  covering  Midvale  Plaza's  anchor tenant space was assigned to a new
tenant that has partially occupied the anchor tenant space. The property remains
100% leased with no leases coming up for renewal in 1997. The property enjoys an
excellent location at the intersection of two main thoroughfares.  The principal
problem for the  property is to maintain  its clean  appearance  and curb appeal
relative  to  newer  retail  centers  in  the  area.  In  this  regard,  capital
expenditures  will be necessary to update the  appearance of the  property.  The
Partnership is marketing Midvale Plaza for sale.

The area surrounding  Redwood Plaza is transforming  from a middle to low income
area to a  growing  commercial  district.  A new  housing  development  is being
constructed  immediately  north  of the  property.  Local  businesses,  such  as
McDonnell  Douglas,  Litton  Industries  and  Unisys,  as  well  as  one  of the
property's tenants,  the Utah Motor Vehicle Division,  provide strong lunch time
traffic to the property. The Motor Vehicle Division is one of only three offices
in the Salt Lake Valley where motorists may renew their  licenses.  Occupancy is
projected to remain strong during 1997.  The  Partnership  is marketing  Redwood
Plaza for sale.

Tanglewood  Village  Apartments  rental rates have increased ahead of its Carson
City  competition due to the addition of a new swimming pool,  renovation of the
clubhouse, and a unique floor plan mix. Occupancy rates for both the Carson City
area and Tanglewood  Village average a strong 96%.  Tanglewood Village has shown
strong  earnings  growth  the past two years due to  capital  improvements.  The
property is well located in an area projected to have a strong rental market for
the next three years.

Thunder Hollow Apartments has been able to maintain occupancy rates in excess of
the local  market's 95% to 96% average  occupancy  rate even though it typically
has been able to obtain rental rates higher than its  competition.  The property
has some of the  largest  floor plans in its market,  an  especially  attractive
feature  for  tenants  with  children.   There  has  been  no  new  multi-family
development  in the market for  several  years.  Competition  is limited in this
market, but further increases in rental rates may be difficult to achieve due to
the predominantly  blue collar  demographics of the area and an overbuilt single
family home market.

<PAGE>
The occupancy rate at Windrock  Apartments  recovered  during 1996 to finish the
year at 93%, up from 75% a year  earlier.  The local  economy is closely tied to
Mexico's  economy  which has been very  unstable due to the peso's  devaluation.
Windrock offers some unusually large floor plans in a secluded setting, but lack
of  washer/dryer  connections  and limited parking space have been handicaps for
the property as it competes with newer  properties  with full amenity  packages.
Capital improvements completed and planned are necessary for Windrock to compete
with newer properties in the area.

The following  schedule shows lease  expirations  for each of the  Partnership's
commercial properties for 1997 through 2006:

<TABLE>
<CAPTION>
                           Number of                                   Annual           % of Gross
                           Expirations           Square Feet            Rent            Annual Rent
                           -----------           -----------           ------           -----------
<C>                              <C>                   <C>           <C>                      <C>
Assets Held for Sale:

Country Hills Plaza
-------------------
1997                             2                     4,764         $    46,752              6%
1998                             1                     1,638              18,924              2%
1999                             2                     4,664              44,940              6%
2000                             3                     4,416              47,220              6%
2001                             2                     4,207              46,284              6%
2002                             1                     1,615              17,760              2%
2003                             0                         -                   -              -
2004                             1                    37,123             120,276             16%
2005                             0                         -                   -              -
2006                             0                         -                   -              -

Midvale Plaza
-------------
1997                             0                         -         $         -              -
1998                             2                     8,571              69,096             18%
1999                             0                         -                   -              -
2000                             1                     4,131              31,416              8%
2001                             1                    25,143              69,144             18%
2002                             0                         -                   -              -
2003                             0                         -                   -              -
2004                             1                    15,818              69,360             18%
2005                             0                         -                   -              -
2006                             1                    37,122             102,972             27%

Redwood Plaza
-------------
1997                             2                     5,549         $    32,844              6%
1998                             3                     5,330              37,860              7%
1999                             3                     4,856              35,484              7%
2000                             2                    28,313              86,940             17%
2001                             1                     3,040              55,632             11%
2002                             0                         -                   -              -
2003                             1                    20,100             203,616             39%
2004                             1                    14,993              63,276             12%
2005                             0                         -                   -              -
2006                             0                         -                   -              -
</TABLE>
<PAGE>
No  residential  tenant  leases 10% or more of the available  rental space.  The
following  schedule reflects  information on commercial tenants occupying 10% or
more of the leasable square feet for each property:

<TABLE>
<CAPTION>
Nature of
Business                       Square Footage                                                   Lease
   Use                              Leased                        Annual Rent                 Expiration
---------                      --------------                     -----------                 ----------
<S>                                   <C>                          <C>                           <C> 
Assets Held for Sale:

Country Hills Plaza
-------------------

Discount Store                        37,123                       $120,276                      2004
Grocery Store                         67,100                        416,808                      2013

Midvale Plaza
-------------

Grocery Store                         25,143                         69,144                      2001
Discount Store                        15,818                         69,360                      2004
Home Supply Store                     37,122                        102,972                      2006

Redwood Plaza
-------------

Grocery Store                         24,873                         55,968                      2000
Government Office                     20,100                        203,616                      2003
Discount Store                        14,993                         63,276                      2004
</TABLE>

ITEM 3.      LEGAL PROCEEDINGS
-------      -----------------

The Partnership is not party to, nor are any of the Partnership's properties the
subject of, any material pending legal proceedings, other than ordinary, routine
litigation incidental to the Partnership's business, except for the following:

1)   James F. Schofield, Gerald C. Gillett, Donna S. Gillett, Jeffrey Homburger,
     Elizabeth Jung,  Robert Lewis,  and Warren Heller et al. v. McNeil Partners
     L.P., McNeil Investors,  Inc., McNeil Real Estate Management,  Inc., Robert
     A. McNeil,  Carole J. McNeil,  McNeil Pacific  Investors  Fund 1972,  Ltd.,
     McNeil Real Estate Fund IX, Ltd.,  McNeil Real Estate Fund X, Ltd.,  McNeil
     Real Estate Fund XI, Ltd.,  McNeil Real Estate Fund XII, Ltd.,  McNeil Real
     Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate
     Fund XX, L.P.,  McNeil Real Estate Fund XXI, L.P.,  McNeil Real Estate Fund
     XXII,  L.P.,  McNeil Real Estate Fund XXIV,  L.P.,  McNeil Real Estate Fund
     XXV, L.P.,  McNeil Real Estate Fund XXVI, L.P., and McNeil Real Estate Fund
     XXVII,  L.P., et al. - Superior  Court of the State of  California  for the
     County of Los  Angeles,  Case No.  BC133799  (Class and  Derivative  Action
     Complaint).





<PAGE>
     The action  involves  purported  class and  derivative  actions  brought by
     limited  partners of each of the fourteen  limited  partnerships  that were
     named as nominal  defendants as listed above (as defined in this Section 1,
     the  "Partnerships").  Plaintiffs allege that McNeil  Investors,  Inc., its
     affiliate  McNeil Real Estate  Management,  Inc.  and three of their senior
     officers and/or directors (as defined in this Section 1, collectively,  the
     "Defendants") breached their fiduciary duties and certain obligations under
     the  respective  Amended  Partnership  Agreement.  Plaintiffs  allege  that
     Defendants  have  rendered  such Units  highly  illiquid  and  artificially
     depressed  the prices that are  available  for Units on the resale  market.
     Plaintiffs  also allege that  Defendants  engaged in a course of conduct to
     prevent  the  acquisition  of  Units  by an  affiliate  of  Carl  Icahn  by
     disseminating  purportedly  false,  misleading and inadequate  information.
     Plaintiffs  further  allege  that  Defendants  acted to  advance  their own
     personal interests at the expense of the Partnerships'  public unit holders
     by failing to sell Partnership properties and failing to make distributions
     to Unitholders.

     On December 16,  1996,  the  Plaintiffs  filed a  consolidated  and amended
     complaint.  Plaintiffs  are suing for breach of fiduciary  duty,  breach of
     contract  and  an  accounting,  alleging,  among  other  things,  that  the
     management  fees paid to the McNeil  affiliates over the last six years are
     excessive,  that these fees  should be reduced  retroactively  and that the
     respective Amended  Partnership  Agreements  governing the Partnerships are
     invalid.  On January 7, 1997,  the Court ordered  consolidation  with three
     other similar actions listed below.

     The  Partnerships  filed a demurrer to the complaint and a motion to strike
     on February 14, 1997, seeking to dismiss the complaint in all respects. The
     demurrer  is  pending.  The  Partnerships  deny that  there is any merit to
     Plaintiff's allegations and intend to vigorously defend this action.

2)   Alfred Napoletano v. McNeil Partners, L.P., McNeil Investors,  Inc., Robert
     A. McNeil,  Carole J. McNeil,  McNeil Pacific  Investors  Fund 1972,  Ltd.,
     McNeil Real Estate Fund V, Ltd.,  McNeil Real Estate Fund IX, Ltd.,  McNeil
     Real Estate Fund X, Ltd.,  McNeil  Real Estate Fund XI,  Ltd.,  McNeil Real
     Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate
     Fund XX, L.P.,  McNeil Real Estate Fund XXIV, L.P., McNeil Real Estate Fund
     XXV,  L.P.  -  Superior  Court of the  State of  California,  County of Los
     Angeles,  Case No. BC133849 (Class Action  Complaint).  On January 7, 1997,
     this  action  was  consolidated  by court  order  with  Schofield,  et al.,
     referenced above.

3)   Warren Heller v. McNeil Partners,  L.P., McNeil Investors,  Inc., Robert A.
     McNeil,  Carole J. McNeil, McNeil Pacific Investors Fund 1972, Ltd., McNeil
     Real Estate Fund V, Ltd.,  McNeil  Real Estate Fund IX,  Ltd.,  McNeil Real
     Estate Fund X, Ltd.,  McNeil Real Estate Fund XI, Ltd.,  McNeil Real Estate
     Fund XIV, Ltd.,  McNeil Real Estate Fund XV, Ltd.,  McNeil Real Estate Fund
     XX, L.P.,  McNeil Real Estate Fund XXIV, L.P., McNeil Real Estate Fund XXV,
     L.P. - Superior  Court of the State of  California,  County of Los Angeles,
     Case No. BC133957 (Class Action Complaint). On January 7, 1997, this action
     was consolidated by court order with Schofield, et al., referenced above.







<PAGE>
4)   Robert Lewis v. McNeil  Partners,  L.P.,  McNeil  Investors,  Inc.,  Robert
     A. McNeil et al. - In the District  Court of Dallas County,  Texas,  A-14th
     Judicial  District,  Cause No. 95-08535 (Class Action) - Plaintiff,  Robert
     Lewis, is a limited partner with McNeil Pacific  Investors Fund 1972, Ltd.,
     McNeil Real Estate Fund X, Ltd. and McNeil Real Estate Fund XV, Ltd.

     On  April  11,  1996,  the  action  was  dismissed   without  prejudice  in
     anticipation  of  consolidation  with other  class  action  complaints.  On
     January  7,  1997,  this  action  was  consolidated  by  court  order  with
     Schofield, et al., referenced above.

For a discussion of the Southmark bankruptcy, see Item 1 - Business.

ITEM 4.      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
-------      ---------------------------------------------------

None.

                                     PART II

ITEM 5.      MARKET FOR THE REGISTRANT'S UNITS OF LIMITED PARTNERSHIP AND
-------      ------------------------------------------------------------
             RELATED SECURITY HOLDER MATTERS
             -------------------------------

(A)          There is no established  public   trading   market   for    limited
             partnership  units, nor is one expected to  develop.

(B)          Title of Class                   Number of Record Unit Holders
             --------------                   -----------------------------

             Limited partnership units        4,011 as of January 31, 1997

(C)          No  distributions  were made to the limited partners during 1996 or
             1995.  Distributions  to limited  partners in 1997, if any, will be
             limited to proceeds from the sale of the  Partnership's  properties
             after  repayment  of  related  mortgage  notes and  maintenance  of
             adequate reserves of cash and cash equivalents.

             The Partnership accrued  distributions of $618,786 and $601,583 for
             the benefit of the General Partner for the years ended December 31,
             1996  and  1995,  respectively,  all of  which  remains  unpaid  at
             December 31, 1996. These  distributions are the MID pursuant to the
             Amended  Partnership  Agreement.  Payment of MID was  suspended for
             1994 and 1995.  A  $500,000  MID  payment  was made to the  General
             Partner in August 1996. The General Partner anticipates  additional
             MID  payments  in  1997.  See  Item 8 - Note 2  "Transactions  with
             Affiliates." See also Item 7 - Management's Discussion and Analysis
             of Financial  Condition and Results of Operations  for a discussion
             of the likelihood that the Partnership will resume distributions to
             the limited partners.








<PAGE>
ITEM 6.      SELECTED FINANCIAL DATA
-------      -----------------------

The  following  table sets forth a summary  of  certain  financial  data for the
Partnership.  This summary should be read in conjunction with the  Partnership's
financial statements and notes thereto appearing in Item 8.

<TABLE>
<CAPTION>
Statements of                                                Years Ended December 31,
Operations                              1996           1995            1994           1993           1992
------------------                  -------------  -------------  --------------  -------------  -------------
<S>                                 <C>             <C>           <C>             <C>            <C>          
Rental revenue................      $   9,429,880   $  9,188,439  $    8,899,488  $   8,881,991  $   8,942,919
Gain on legal settlement......                  -         39,841               -              -              -
Gain on involuntary
   conversion.................                  -              -          51,588              -              -
Gain on disposition
   of real estate.............                  -              -               -        627,902              -
Total revenue.................          9,536,634      9,350,464       8,988,225      9,539,165      9,046,359
Loss before extraordinary
   item.......................           (119,302)      (331,176)       (300,760)      (626,596)    (1,622,555)
Extraordinary gain on
   extinguishment of debt.....                  -              -               -              -         76,242
Net loss......................           (119,302)      (331,176)       (300,760)      (626,596)    (1,546,313)

Net loss per limited
 partnership unit:
Loss before extraordinary
   item.......................      $       (1.36)  $      (3.79) $        (3.44) $       (7.17) $      (18.55)
Extraordinary gain on
   extinguishment of debt.....                  -              -               -              -            .87
                                     ------------    -----------   -------------   ------------   ------------

Net loss per limited
   partnership unit...........      $       (1.36)  $      (3.79) $        (3.44) $      (7.17)  $      (17.68)
                                     ============    ===========   =============   ===========    ============


                                                              As of December 31,
Balance Sheets                          1996           1995            1994           1993           1992
--------------                      -------------  -------------  --------------  -------------  -------------

Real estate investments,
   net........................      $  21,656,966   $ 30,950,884  $   31,396,082  $  32,248,606  $  36,625,427
Assets held for sale..........          7,942,855              -               -              -              -
Total assets..................         34,188,885     35,275,343      35,214,866     35,514,281     39,408,958
Mortgage notes payable,
   net........................         27,423,689     27,871,969      27,161,556     27,520,265     30,144,223
Partners' equity..............          4,481,326      5,219,414       6,152,173      7,026,841      8,125,447

</TABLE>

See Item 7 -  Management's  Discussion  and Analysis of Financial  Condition and
Results of Operations.  The  Partnership  sold Ridgewood Park Apartments on June
15, 1993.



<PAGE>
ITEM 7.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
-------      -----------------------------------------------------------
             AND RESULTS OF OPERATIONS
             -------------------------

FINANCIAL CONDITION
-------------------

The  Partnership  was formed to  acquire,  operate and  ultimately  dispose of a
portfolio  of  income-producing  real  properties.  At  the  end  of  1996,  the
Partnership  owned four apartment  properties and three retail shopping centers.
On October 1, 1996, the Partnership  placed its three retail shopping centers on
the   market  for sale.    All  of  the  Partnership's properties are subject to
mortgage notes.

On March 13, 1995, the  Partnership  refinanced  Windrock  Apartments with a new
$3,450,000  mortgage  note.  Proceeds from the new mortgage were used to pay off
the prior first and second mortgage notes encumbering  Windrock  Apartments,  to
fund various escrows for the payment of property taxes,  insurance,  repairs and
replacements, and to pay for loan fees and other costs associated with obtaining
the new mortgage note. Residual proceeds of approximately $824,000 were added to
the Partnership's  cash reserves.  The Partnership's next maturing mortgage note
does not come due until April 1, 2002.

RESULTS OF OPERATIONS
---------------------

1996 compared to 1995

Revenue:

Thunder Hollow Apartments and Embarcadero Club Apartments  accounted for most of
the  Partnership's  $241,441 or 2.6% increase in rental revenue in 1996 compared
to 1995.  Base rental rates were  increased at both  properties.  Vacancy losses
reduced  the  effect of the rental  rate  increases  at  Embarcadero  Club,  but
improving  occupancy  boosted  the effect of the  increases  at  Thunder  Hollow
Apartments.  Although Tanglewood Village Apartments increased base rental rates,
the increase was wholly offset by increased vacancy losses, leading to unchanged
rental  revenue in 1996  compared  to 1995.  Rental  revenue  earned at Windrock
Apartments  improved  throughout  1996.  Windrock  Apartments began 1996 with an
occupancy rate of 75%, and increased occupancy to 93% at the end of 1996.
For the year, rental revenue rates and occupancy were unchanged from 1995.

All three of the  Partnership's  Utah retail  shopping  centers  ended 1996 100%
leased.  Good  locations  and a strong  Utah  economy  have  enabled  the  three
properties  to continue to provide  positive  cash flow for the  Partnership.  A
decrease in expense  recoveries  from  tenants led to a 0.9%  decrease in rental
revenue at Country  Hills.  Redwood  Plaza  increased  its rental  revenue  1.4%
principally through increased rental rates on its newer leases.  Midvale Plaza's
anchor tenant,  a home supply store,  vacated its space in June 1995. The anchor
tenant  subsequently  assigned its lease to a new tenant,  a retail  second hand
store,  that has occupied 55% of the anchor  tenant space.  The remaining  space
remains vacant,  but under lease.  For the year,  Midvale Plaza increased rental
revenue 2.3% mostly through an increase in contingent rentals based on the sales
activity of the property's tenants.




<PAGE>
Expenses:

Partnership  expenses  decreased  $25,704 or 0.3% in 1996 compared to 1995. On a
combined basis, the Partnership  reported a significant  increases in repair and
maintenance expense and in general and administrative  expenses, and significant
decreases in other property  operating  expenses and general and  administrative
expenses paid to affiliates.

Repair and maintenance  expenses increased $106,875 or 10.3% in 1996 compared to
1995. The increase was concentrated at the Partnership's residential properties.
Under the  Partnership's  capitalization  policy,  most  expenditures  for floor
covering  replacements were capitalized in 1995. However, such expenditures were
generally  expensed in 1996 because the level of such expenditures was not great
enough to qualify for capitalization.  Floor covering expenses increased $48,563
in  1996  compared  to  1995.  Also a  factor  in the  increase  in  repair  and
maintenance  was  a  $60,628   increase  in  snow  removal  expenses  and  other
storm-related clean up expenses incurred at Thunder Hollow Apartments.

General and administrative expenses increased $37,061 or 19% in 1996 compared to
1995. The Partnership  incurred increased costs associated with the fees charged
by professionals such as appraisers,  auditors and other consultants,  as well a
7.9% increase in expenses associated with an unsolicited tender offer.

Other property operating expenses decreased $62,728 or 10.8% in 1996 compared to
1995. The Partnership incurred decreased expenses for property insurance and for
costs  associated  with credit and collection  activities.  These decreases were
concentrated at the Partnership's residential properties.

General and  administrative  expenses  paid to affiliates  decreased  $79,472 or
21.3% in 1996  compared to 1995.  The  decrease  was mainly due to a decrease in
overhead expenses  allocated to the Partnership by McREMI.  Such  reimbursements
are paid in accordance with the Partnership's Amended Partnership Agreement.

1995 compared to 1994

Revenue:

The Partnership's  rental revenue increased $288,951 or 3.2% in 1995 compared to
1994. Rental revenue  increased at five of the  Partnership's  seven properties.
Base  rental  rates  increased  at all  four  of the  Partnership's  residential
properties.  Occupancy  rates  increased at Tanglewood  Village and  Embarcadero
Club,  leading  to  rental  revenue  gains of 5.0% and 6.6%,  respectively.  The
Partnership's  capital  improvement  program has improved the  attractiveness of
both properties to current and potential tenants.  Although occupancy  decreased
at Thunder Hollow,  rental revenue still increased 3.1%. Rental losses,  such as
vacancy,  discounts  or other  concessions,  increased  at Windrock  Apartments,
leading to a 5.9%  decrease in rental  revenue at the El Paso  property.  A weak
local  economy,  as  well  as  competition  from  newer  apartment   communities
contributed to the decrease in rental revenue at Windrock.

All three of the  Partnership's  Utah  strip  shopping  centers  ended 1995 100%
leased.  Good  locations  and a strong  Utah  economy  have  enabled  the  three
properties  to  continue  to  provide  positive  cash flow for the  Partnership.
Capital improvements and an excellent location have enabled Country Hills to not
only  compete with newer  developments,  but to increase  occupancy  and expense
recoveries from its tenants. Rental revenue at the Ogden property increased 8.1%
in 1995.  Redwood  Plaza  increased  its rental  revenue  by 11.1% as  occupancy


<PAGE>
significantly improved. Redwood Plaza has limited competition in a location that
is experiencing strong commercial growth.  Midvale Plaza's anchor tenant vacated
its  space  in June  1995.  Although  the  tenant  continues  to pay rent to the
Partnership,  the  "dark"  space at the  center  has a  negative  impact  on the
remaining  tenants.  Additionally,  percentage rents and expense recoveries have
decreased  significantly since the anchor tenant vacated.  Rental revenue at the
suburban Salt Lake City property decreased 11.7% in 1995.  Management is working
with  the  anchor  tenant  to  either  sublease  the  dark  space  or to  find a
replacement tenant for the Partnership's own account.  Midvale Plaza will likely
need capital improvement funds to update the property's appearance before it can
effectively compete with newer properties in the area.

Interest  revenue  increased more than three-fold to $122,184 during 1995. Steps
taken  during  the  course  of 1994  and 1995 to raise  the  Partnership's  cash
reserves have resulted in increased funds invested in interest-bearing accounts.

The  Partnership   received  $39,841  in  cash  and  securities  from  Southmark
Corporation  in  settlement  of  the  Partnership's   claims  in  the  Southmark
bankruptcy  case.  Proceeds from the settlement were recorded as a gain on legal
settlement in the second quarter of 1995.

Expenses:

Partnership  expenses  increased $392,655 or 4.2% in 1995 compared to 1994. On a
combined  basis,  increased  expenses  were  concentrated  in  depreciation  and
amortization, and general and administrative expenses.

Depreciation  and  amortization  expense  increased  $180,712  or  9.1%  in 1995
compared to 1994. Because of the $4.22 million invested in capital  improvements
over the past three years,  depreciation  charges  continue to  increase.  $1.74
million  was  invested  in  capital  improvements  during  1995.  These  capital
improvements are generally being depreciated over lives ranging from five to ten
years.

General and  administrative  expense increased $113,231 to $195,036 in 1995. The
Partnership  incurred $150,133 of costs relating to evaluation and dissemination
of  information  with  regards  to an  unsolicited  tender  offer.  General  and
administrative  expenses paid to affiliates  increased  $26,368 or 7.6% in 1995.
Administrative  expenses paid to affiliates  increased due to a reduction in the
number of properties managed by McREMI over which such costs are allocated.

All other expense line items, both  individually and as a group,  increased less
than 4.2% in 1995 compared to 1994.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

During  the  three  year  period  ended  December  31,  1996,  the   Partnership
experienced  losses  totaling  $751,238.  However,  during  the same  three year
period,  the  Partnership  generated  $6,344,091  of cash  flow  from  operating
activities.  Cash flow from operations  increased $780,893 to $2,408,791 in 1996
compared to 1995. The largest factor in the increase was a $421,991  decrease in
cash paid to affiliates. The Partnership's administrative reimbursements paid to
affiliates   in  1995   included   reimbursements   for  both   1995  and  1994.
Reimbursements in 1996 reflect only the 1996 expenses.




<PAGE>
The Partnership  invested $834,036 in capital  improvements in 1996, in addition
to the $1.74 and $1.17  million  invested  in 1995 and 1994,  respectively.  The
Partnership  has budgeted an  additional  $483,000 for capital  improvements  in
1997.

As a result of the Partnership's  improving cash position,  the Partnership paid
$500,000 of MID to the General  Partner in August  1996.  MID  payments had been
suspended  since the  beginning  of 1994 to  increase  the cash  reserves of the
Partnership.  The  Partnership  anticipates  further MID payments in 1997 if the
Partnership's properties continue to perform as anticipated.

In March 1995, the Partnership  refinanced  Windrock Apartments in a transaction
that yielded  approximately  $824,000 of financing  proceeds to the Partnership,
after funding the required  escrows and paying deferred  borrowing costs related
to the financing. The Partnership's next mortgage balloon payment does not occur
until 2002.

Short Term Liquidity:

The  Partnership  expended  considerable  resources  from 1993  through  1995 to
restore its properties to good operating condition. These expenditures have been
necessary  to  maintain  the  competitive  position of the  Partnership's  aging
properties in each of their markets.  The capital  improvements  made during the
three years have enabled the  Partnership  to increase  its rental  revenues and
reduce certain of its repairs and  maintenance  expenses.  The  Partnership  has
budgeted an additional  $483,000 of capital  improvements for 1997, to be funded
from property operations.

At  December  31,  1996,  the  Partnership  held  cash and cash  equivalents  of
$1,903,902.  The General  Partner  considers  this level of cash  reserves to be
adequate to meet the Partnership's  operating needs. The General Partner resumed
MID payments during 1996, and  anticipates  additional MID payments will be made
in 1997 if the Partnership's  properties  continue to perform as projected.  The
General Partner  believes that  anticipated  operating  results for 1997 will be
sufficient to fund the Partnership's  budgeted capital improvements for 1997 and
to repay the current portion of the Partnership's mortgage notes.

On October 1, 1996, the  Partnership  placed Country Hills Plaza,  Midvale Plaza
and  Redwood  Plaza on the  market  for  sale.  As of  December  31,  1996,  the
Partnership  signed an agreement to sell Country Hills Plaza.  The sale is still
subject to contingencies, and there is no guarantee that the Partnership will in
fact be able to  conclude  the sale of  Country  Hills  Plaza.  The  Partnership
anticipates that proceeds from the sale of these properties,  after repayment of
the related mortgage notes, will be used to pay the MID and to pay distributions
to the limited partners.

Long Term Liquidity:

For the long-term,  property operations will remain the primary source of funds.
In this  regard,  the General  Partner  expects that the $3.7 million of capital
improvements  made by the  Partnership  during the past  three  years will yield
improved cash flow from property  operations in the future. If the Partnership's
cash position  deteriorates,  the General  Partner may elect to defer certain of
the  capital  improvements,  except  where such  improvements  are  expected  to
increase the competitiveness or marketability of the Partnership's properties.




<PAGE>
The Partnership  determined to evaluate market and other economic  conditions to
establish  the  optimum  time  to  commence  an  orderly   liquidation   of  the
Partnership's  assets in  accordance  with the terms of the Amended  Partnership
Agreement.  Taking such conditions as well as other pertinent  information  into
account,  the Partnership has determined to begin orderly liquidation of all its
assets.  Although there can be no assurance as to the timing of the  liquidation
due to real estate  market  conditions,  the general  difficulty of disposing of
real estate,  and other general  economic  factors,  it is anticipated that such
liquidation  would result in the  dissolution of the  Partnership  followed by a
liquidating  distribution  to Unitholders by December 2001. In this regard,  the
Partnership  has placed Country Hills Plaza,  Midvale Plaza and Redwood Plaza on
the market for sale.

Income Allocations and Distributions:

Terms of the Amended Partnership Agreement specify that net losses for financial
reporting  purposes  are  allocated  99% to the limited  partners  and 1% to the
General Partner. Net income for financial reporting purposes is allocated to the
General Partner in an amount equal to the greater of (a) 1% of net income or (b)
the  cumulative  amount of the  contingent  portion of the MID paid for which no
income  allocation  has  previously  been  made;  any  remaining  net  income is
allocated to the limited partners. Therefore, for each of the three years in the
period  ended  December  31,  1996,  net  losses of $1,193,  $3,312 and  $3,008,
respectively,  were  allocated  to the General  Partner.  The  limited  partners
received  allocations  of net loss of  $118,109,  $327,864  and $297,752 for the
years ended December 31, 1996, 1995 and 1994, respectively.

Distributions  to  Unit  holders  have  been  suspended  since  1986  as part of
management's policy of maintaining  adequate cash reserves.  The General Partner
will  continue to monitor the cash  reserves  and working  capital  needs of the
Partnership to determine when cash flows will support  distributions to the Unit
holders.  The  Partnership  paid $500,000 of MID to the General  Partner  during
1996. No MID was paid during 1994 and 1995 due to the General Partner's decision
to defer  payment  of MID until  such time as the  Partnership's  cash  position
improved. The Partnership anticipates making additional MID payments during 1997
if the Partnership's properties continue to perform as projected.


<PAGE>
ITEM 8.      FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
-------      -------------------------------------------
<TABLE>
<CAPTION>

                                                                                                        Page
                                                                                                      Number
                                                                                                      ------
<S>                                                                                                      <C>
INDEX TO FINANCIAL STATEMENTS

Financial Statements:

   Report of Independent Public Accountants.......................................                       18

   Balance Sheets at December 31, 1996 and 1995...................................                       19

   Statements of Operations for each of the three years in the period
      ended December 31, 1996.....................................................                       20

   Statements of Partners' Equity (Deficit) for each of the three years
      in the period ended December 31, 1996.......................................                       21

   Statements of Cash Flows for each of the three years in the period
      ended December 31, 1996.....................................................                       22

   Notes to Financial Statements..................................................                       24

   Financial Statement Schedule:

      Schedule III - Real Estate Investments and Accumulated
         Depreciation and Amortization............................................                       34

</TABLE>


All other  schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.


<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the Partners of
McNeil Real Estate Fund XIV, Ltd.:

We have audited the accompanying  balance sheets of McNeil Real Estate Fund XIV,
Ltd. (a California  limited  partnership)  as of December 31, 1996 and 1995, and
the related statements of operations,  partners' equity (deficit) and cash flows
for each of the  three  years in the  period  ended  December  31,  1996.  These
financial  statements and the schedule referred to below are the  responsibility
of the Partnership's management.  Our responsibility is to express an opinion on
these financial statements and the schedule based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  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
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 financial  position of McNeil Real Estate Fund XIV,
Ltd. as of December 31, 1996 and 1995, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1996, in
conformity with generally accepted accounting principles.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial  statements  taken as a whole.  The  schedule  listed  in the index to
financial  statements is presented for purposes of complying with the Securities
and  Exchange  Commission's  rules  and  is not  part  of  the  basic  financial
statements.  The schedule has been subjected to the auditing  procedures applied
in our audits of the basic  financial  statements  and, in our  opinion,  fairly
states in all material  respects  the  financial  data  required to be set forth
therein in relation to the basic financial statements taken as a whole.





/s/ Arthur Andersen LLP

Dallas, Texas
   March 10, 1997


<PAGE>
                        McNEIL REAL ESTATE FUND XIV, LTD.

                                 BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                                  December 31,
                                                                       -----------------------------------
                                                                            1996                 1995
                                                                       ---------------      --------------
<S>                                                                    <C>                  <C>           
ASSETS
------

Real estate investments:

   Land.....................................................           $     4,663,828      $    6,833,471
   Building and improvements................................                35,944,879          45,953,575
                                                                        --------------       -------------
                                                                            40,608,707          52,787,046
   Less:  Accumulated depreciation and amortization.........               (18,951,741)        (21,836,162)
                                                                        --------------       --------------
                                                                            21,656,966          30,950,884

Assets held for sale........................................                 7,942,855                   -

Cash and cash equivalents...................................                 1,903,902           1,417,948
Cash segregated for security deposits.......................                   399,366             370,097
Accounts receivable.........................................                   385,721             350,823
Prepaid expenses and other assets...........................                   173,908             200,574
Escrow deposits.............................................                   681,430             844,622
Deferred borrowing costs, net of accumulated
   amortization of $346,255 and $250,597 at
   December 31, 1996 and 1995, respectively.................                 1,044,737           1,140,395
                                                                        --------------       -------------

                                                                       $    34,188,885      $   35,275,343
                                                                        ==============       =============


LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
------------------------------------------

Mortgage notes payable, net.................................           $    27,423,689      $   27,871,969
Accounts payable............................................                   103,747             166,434
Accrued property taxes......................................                   100,981             100,877
Accrued interest............................................                   197,124             201,267
Other accrued expenses......................................                    82,329              79,725
Payable to affiliates - General Partner.....................                 1,388,371           1,255,290
Security deposits and deferred rental revenue...............                   411,318             380,367
                                                                        --------------       -------------
                                                                            29,707,559          30,055,929
                                                                        --------------       -------------

Partners' equity (deficit):
   Limited  partners - 100,000  limited  partnership units
     authorized;  86,534 limited partnership units issued 
     and outstanding at December 31, 1996 and 1995..........                 7,648,141           7,766,250
   General Partner..........................................                (3,166,815)         (2,546,836)
                                                                        --------------       --------------
                                                                             4,481,326           5,219,414
                                                                        --------------       -------------

                                                                       $    34,188,885      $   35,275,343
                                                                        ==============       =============
</TABLE>
                 See accompanying notes to financial statements.

<PAGE>
                        McNEIL REAL ESTATE FUND XIV, LTD.

                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                            For the Years Ended December 31,
                                                   ----------------------------------------------------
                                                       1996                1995               1994
                                                   --------------     --------------    ---------------
<S>                                                <C>                <C>               <C>            
Revenue:
   Rental revenue..........................        $    9,429,880     $    9,188,439    $     8,899,488
   Interest................................               106,754            122,184             37,149
   Gain on legal settlement................                     -             39,841                  -
   Gain on involuntary conversion..........                     -                  -             51,588
                                                    -------------      -------------     --------------
     Total revenue.........................             9,536,634          9,350,464          8,988,225
                                                    -------------      -------------     --------------

Expenses:
   Interest................................             2,682,467          2,694,731          2,720,260
   Depreciation and amortization...........             2,185,099          2,171,607          1,990,895
   Property taxes..........................               713,729            719,183            711,473
   Personnel expenses......................               925,738            984,852            964,656
   Repairs and maintenance.................             1,145,081          1,038,206            996,159
   Utilities...............................               495,851            469,550            479,218
   Property management fees -
     affiliates............................               465,738            456,139            441,082
   Other property operating expenses.......               516,913            579,641            557,110
   General and administrative..............               232,097            195,036             81,805
   General and administrative -
     affiliates............................               293,223            372,695            346,327
                                                    -------------      -------------     --------------
     Total expenses........................             9,655,936          9,681,640          9,288,985
                                                    -------------      -------------     --------------

Net loss...................................        $     (119,302)    $     (331,176)   $      (300,760)
                                                    =============      =============     ==============

Net loss allocated to limited
   partners................................        $     (118,109)    $     (327,864)   $      (297,752)
Net loss allocated to General
   Partner.................................                (1,193)            (3,312)            (3,008)
                                                    -------------      -------------     --------------

Net loss...................................        $     (119,302)    $     (331,176)   $      (300,760)
                                                    =============      =============     ==============

Net loss per limited partnership unit......        $        (1.36)    $        (3.79)   $         (3.44)
                                                    =============      =============     ==============
</TABLE>


                 See accompanying notes to financial statements.
<PAGE>
                        McNEIL REAL ESTATE FUND XIV, LTD.

                    STATEMENTS OF PARTNERS' EQUITY (DEFICIT)

              For the Years Ended December 31, 1996, 1995 and 1994

<TABLE>
<CAPTION>

                                                                                                      Total
                                                                                                    Partners'
                                                    General                 Limited                  Equity
                                                    Partner                 Partners                (Deficit)
                                                 ----------------        ----------------      ---------------
<S>                                              <C>                     <C>                   <C>            
Balance at December 31, 1993..............       $    (1,365,025)        $     8,391,866       $     7,026,841

Net loss..................................                (3,008)               (297,752)             (300,760)

Management Incentive Distribution.........              (573,908)                      -              (573,908)
                                                  --------------          --------------        --------------

Balance at December 31, 1994..............            (1,941,941)              8,094,114             6,152,173

Net loss..................................                (3,312)               (327,864)             (331,176)

Management Incentive Distribution.........              (601,583)                      -              (601,583)
                                                  --------------          --------------        --------------

Balance at December 31, 1995..............            (2,546,836)              7,766,250             5,219,414

Net loss..................................                (1,193)               (118,109)             (119,302)

Management Incentive Distribution.........              (618,786)                      -              (618,786)
                                                  --------------          --------------        --------------

Balance at December 31, 1996..............       $    (3,166,815)        $     7,648,141       $     4,481,326
                                                  ==============          ==============        ==============
</TABLE>



                 See accompanying notes to financial statements.
<PAGE>
                        McNEIL REAL ESTATE FUND XIV, LTD.

                            STATEMENTS OF CASH FLOWS

                Increase (Decrease) in Cash and Cash Equivalents


<TABLE>
<CAPTION>
                                                           For the Years Ended December 31,
                                                   ----------------------------------------------------
                                                       1996               1995               1994
                                                   ---------------    ---------------   ---------------
<S>                                                <C>                <C>               <C>            
Cash flows from operating activities:
   Cash received from tenants..............        $    9,395,118     $    9,215,001    $     8,903,536
   Cash paid to suppliers..................            (3,182,745)        (3,400,938)        (2,983,226)
   Cash paid to affiliates.................              (744,666)        (1,166,657)          (441,134)
   Interest received.......................               106,754            122,184             37,149
   Interest paid...........................            (2,450,431)        (2,477,133)        (2,516,551)
   Property taxes paid.....................              (715,239)          (704,400)          (692,372)
   Cash received from legal
     settlement............................                     -             39,841                  -
                                                    -------------      -------------     --------------
Net cash provided by operating
     activities............................             2,408,791          1,627,898          2,307,402
                                                    -------------      -------------     --------------

Cash flows from investing activities:
   Additions to real estate
     investments...........................              (834,036)        (1,743,497)        (1,166,250)
   Insurance proceeds from gain on
     involuntary conversion................                     -             17,088             79,467
                                                    -------------      -------------     --------------
Net cash used in investing activities......              (834,036)        (1,726,409)        (1,086,783)
                                                    -------------      -------------     --------------

Cash flows from financing activities:
   Principal payments on mortgage
     notes payable.........................              (588,801)          (536,941)          (494,746)
   Deferred borrowing costs paid...........                     -           (107,525)           (12,065)
   Net proceeds from refinancing of
     mortgage notes payable................                     -          1,115,767                  -
   Management Incentive Distribution.......              (500,000)                 -                  -
                                                    -------------      -------------     --------------
Net cash provided by (used in)
     financing activities..................            (1,088,801)           471,301           (506,811)
                                                    -------------      -------------     --------------

Net increase in cash and cash
     equivalents...........................               485,954            372,790            713,808

Cash and cash equivalents at
     beginning of year.....................             1,417,948          1,045,158            331,350
                                                    -------------      -------------     --------------

Cash and cash equivalents at end
     of year...............................        $    1,903,902     $    1,417,948    $     1,045,158
                                                    =============      =============     ==============
</TABLE>

                 See accompanying notes to financial statements.

<PAGE>
                        McNEIL REAL ESTATE FUND XIV, LTD.

                            STATEMENTS OF CASH FLOWS

     Reconciliation of Net Loss to Net Cash Provided by Operating Activities

  
<TABLE>
<CAPTION>
                                                            For the Years Ended December 31,
                                                   -----------------------------------------------------
                                                        1996               1995               1994
                                                   ---------------    ---------------   ----------------
<S>                                                <C>                <C>               <C>             
Net loss...................................        $     (119,302)    $     (331,176)   $      (300,760)
                                                    -------------      -------------     --------------

Adjustments to reconcile net loss
   to net cash provided by operating
   activities:
   Depreciation and amortization...........             2,185,099          2,171,607          1,990,895
   Amortization of deferred
     borrowing costs.......................                95,658             88,026             71,255
   Amortization of discounts on
     mortgage notes payable................               140,521            131,587            136,037
   Gain on involuntary
     conversion............................                     -                  -            (51,588)
   Changes in assets and liabilities:
     Cash segregated for security
       deposits............................               (29,269)             2,060             10,172
     Accounts receivable...................               (34,898)            43,462             13,906
     Prepaid expenses and other
        assets.............................                26,666             29,947             26,897
     Escrow deposits.......................               163,192           (188,855)            50,534
     Accounts payable......................               (62,687)            11,363            (20,014)
     Accrued property taxes................                   104             15,997              6,810
     Accrued interest......................                (4,143)            (2,015)            (3,583)
     Other accrued expenses................                 2,604             (1,880)            10,350
     Payable to affiliates - General
       Partner.............................                14,295           (337,823)           346,275
     Security deposits and deferred
       rental revenue......................                30,951             (4,402)            20,216
                                                    -------------      -------------     --------------
         Total adjustments.................             2,528,093          1,959,074          2,608,162
                                                    -------------      -------------     --------------

Net cash provided by operating
     activities............................        $    2,408,791     $    1,627,898    $     2,307,402
                                                    =============      =============     ==============
</TABLE>

                 See accompanying notes to financial statements.
<PAGE>
                        McNEIL REAL ESTATE FUND XIV, LTD.

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1996


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
--------------------------------------------------------------------

Organization
------------

McNeil Real Estate Fund XIV, Ltd. (the  "Partnership")  was organized  April 30,
1982 as a limited  partnership  under the provisions of the  California  Uniform
Limited  Partnership  Act.  The  general  partner of the  Partnership  is McNeil
Partners,  L.P. (the "General  Partner"),  a Delaware  limited  partnership,  an
affiliate of Robert A.  McNeil.  The  Partnership  is governed by an amended and
restated partnership  agreement of limited partnership dated September 20, 1991,
as  amended  (the  "Amended  Partnership  Agreement").  The  principal  place of
business for the Partnership and General Partner is 13760 Noel Road,  Suite 600,
LB70, Dallas, Texas, 75240.

The Partnership is engaged in diversified real estate activities,  including the
ownership,  operation and management of residential  and commercial  real estate
and other real estate related assets. The Partnership has determined to evaluate
market and other  economic  conditions to establish the optimum time to commence
an orderly liquidation of the Partnership's  assets in accordance with the terms
of the Amended  Partnership  Agreement.  At December 31, 1996,  the  Partnership
owned seven  income-producing  properties  as  described in Note 4 - Real Estate
Investments.

Basis of Presentation
---------------------

The  accompanying  financial  statements  have been prepared in conformity  with
generally accepted accounting principles ("GAAP").  The preparation of financial
statements in conformity  with GAAP  requires  management to make  estimates and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.


<PAGE>
The  Partnership's  financial  statements  include the accounts of the following
listed tier  partnerships.  These single asset tier  partnerships were formed to
accommodate the refinancings of the related  properties.  The ownership interest
of the Partnership  and the General Partner in each tier is detailed below.  The
Partnership  retains  effective  control of each tier  partnership.  The General
Partner's  minority  interest  is not  presented  as it is  either  negative  or
immaterial.

                                                      % of Ownership Interest
   Tier Partnership                               Partnership    General Partner
   ----------------                               -----------    ---------------

   Limited partnerships:
     Tanglewood Fund XIV Associates, L.P. (b)...       99%              1%
     Thunder Hollow Fund XIV Limited
         Partnership (a) (b)....................      100               -
     Windrock Fund XIV, L.P. (a) (c)............      100               -

     General partnerships:
       Embarcadero Associates (b)...............       99               1

(a) The general partner of these  partnerships  is a corporation  whose stock is
    100% owned by the Partnership.

(b) Included in the financial  statements for the years ended December 31, 1996,
    1995 and 1994.

(c)  Included in the financial statements for the years ended December 31,  1996
     and 1995.

Real Estate Investments
-----------------------

Real estate investments are generally stated at the lower of depreciated cost or
fair value. Real estate investments are reviewed for impairment  whenever events
or changes in  circumstances  indicate  that their  carrying  amounts may not be
recoverable.  When the  carrying  value  of a  property  exceeds  the sum of all
estimated  future cash flows, an impairment loss is recognized.  At such time, a
write-down  is  recorded to reduce the basis of the  property  to its  estimated
recoverable amount.

The  Partnership's  method  of  accounting  for real  estate  investments  is in
accordance with Statement of Financial Accounting Standards No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of" ("SFAS 121"),  which the Partnership  adopted effective January 1, 1996. The
adoption  of  SFAS  121 did  not  have a  material  impact  on the  accompanying
financial statements.

Improvements and betterments are capitalized and expensed  through  depreciation
charges. Repairs and maintenance are charged to operations as incurred.

Assets Held for Sale
--------------------

Assets held for sale are stated at the lower of  depreciated  cost or fair value
less costs to sell.  Depreciation  on these  assets  ceases at the time they are
placed on the market for sale.


<PAGE>
Depreciation
------------

Buildings and improvements are depreciated using the  straight-line  method over
the  estimated  useful lives of the assets,  ranging from 5 to 25 years.  Tenant
improvements are amortized over the terms of the related tenant leases using the
straight-line method.

Cash and Cash Equivalents
-------------------------

Cash  and  cash  equivalents  include  cash on hand  and  cash on  deposit  with
financial  institutions  with  original  maturities  of  three  months  or less.
Carrying amounts for cash and cash equivalents approximate fair value.

Escrow Deposits
---------------

The  Partnership is required to maintain  escrow accounts in accordance with the
terms of various  mortgage  agreements.  These escrow accounts are controlled by
the  mortgagee  and are used for payment of property  taxes,  hazard  insurance,
capital improvements and/or property  replacements.  Carrying amounts for escrow
deposits approximate fair value.

Deferred Borrowing Costs
------------------------

Loan fees and other related costs incurred to obtain long-term financing on real
property are  capitalized  and amortized  using a method that  approximates  the
effective  interest  method  over  the  terms  of the  related  mortgage  notes.
Amortization of deferred  borrowing costs is included in interest expense on the
Statements of Operations.

Discounts on Mortgage Notes Payable
-----------------------------------

Discounts on mortgage  notes payable are amortized  over the remaining  terms of
the related mortgage notes using the effective interest method.  Amortization of
discounts on mortgage notes is included in interest expense on the Statements of
Operations.

Rental Revenue
--------------

The Partnership  leases its residential  properties under  short-term  operating
leases. Lease terms generally are less than one year in duration.  Rental income
is recognized as earned.

The Partnership leases its commercial properties under non-cancelable  operating
leases.  Certain leases provide concessions and/or periods of escalating or free
rent. Rental income is recognized on a straight-line  basis over the term of the
related  lease.  The excess of rental  income  recognized  over the  contractual
rental  payments  is  recorded  as accrued  rent  receivable  and is included in
accounts receivable on the Balance Sheets.





<PAGE>
Income Taxes
------------

No provision for Federal  income taxes is necessary in the financial  statements
of the  Partnership  because,  as a  partnership,  it is not  subject to Federal
income tax and the tax effect of its activities accrues to the partners.

Allocation of Net Income and Net Loss
-------------------------------------

Net  losses of the  Partnership  for both  financial  statement  and  income tax
reporting  purposes  are  allocated  99% to the limited  partners  and 1% to the
General Partner.

Net  income of the  Partnership  for both  financial  statement  and  income tax
reporting purposes is allocated to the General Partner in an amount equal to the
greater  of (a) 1% of net  income  or (b) the  cumulative  amount  paid  for the
Management  Incentive  Distribution  ("MID") for which no income  allocation has
previously  been  made  (see  Note  2 -  "Transactions  with  Affiliates").  Any
remaining net income is allocated to the limited partners.

Federal  income tax law provides  that the  allocation of loss to a partner will
not be  recognized  unless the  allocation  is in  accordance  with a  partner's
interest in the partnership or the allocation has substantial  economic  effect.
Internal  Revenue  Code Section  704(b) and  accompanying  Treasury  Regulations
establish  criteria for allocation of  partnership  deductions  attributable  to
debt. The  Partnership's  tax allocations for 1996, 1995 and 1994 have been made
in accordance with these provisions.

Distributions
-------------

Pursuant to the  Amended  Partnership  Agreement  and at the  discretion  of the
General  Partner,  distributions  during  each  taxable  year  shall  be made as
follows:

(a)      First,  to  the  General  Partner,  in   an  amount  equal  to the  MID
         (see  Note  2 -  "Transactions  with Affiliates"); and

(b)      any remaining distributable cash, as defined, shall be distributed 100%
         to the limited partners.

No  distributions  were paid to the limited  partners in 1996, 1995 or 1994. The
Partnership paid or accrued distributions of $618,786, $601,583 and $573,908 for
the  benefit  of the  General  Partner  for  the MID in  1996,  1995  and  1994,
respectively.

Net Loss Per Limited Partnership Unit
-------------------------------------

Net loss per limited partnership unit ("Units") is computed by dividing net loss
allocated  to the  limited  partners  by the  weighted  average  number of Units
outstanding.  Per Unit  information  has been  computed  based on  86,534  Units
outstanding in 1996, 1995 and 1994.





<PAGE>
NOTE 2 - TRANSACTIONS WITH AFFILIATES
-------------------------------------

The Partnership pays property  management fees equal to 5% of the  Partnership's
gross rental  receipts to McNeil Real Estate  Management,  Inc.  ("McREMI"),  an
affiliate of the General Partner, for providing property management services for
the Partnership's residential and commercial properties and leasing services for
its residential  properties.  McREMI may choose to perform leasing  services for
the  Partnership's  commercial  properties,  in which case McREMI will receive a
property  management  fee  equal  to 3% of  the  gross  rental  receipts  of the
Partnership's  commercial  properties  plus a commission for performing  leasing
services equal to the prevailing market rate for such services in the area where
the property is located.

The  Partnership  reimburses  McREMI  for  its  costs,  including  overhead,  of
administering the Partnership's affairs.

Under terms of the Amended Partnership Agreement,  the Partnership is paying MID
to the General  Partner.  The maximum MID is  calculated  as 1% of the  tangible
asset value of the Partnership.  The maximum MID percentage decreases subsequent
to 1999.  Tangible  asset  value is  determined  by using the  greater of (i) an
amount calculated by applying a capitalization  rate of 9% to the annualized net
operating  income of each property or (ii) a value of $10,000 per apartment unit
for residential  property and $50 per gross square foot for commercial  property
to arrive at the property  tangible  asset value.  The property  tangible  asset
value is then added to the book value of all other assets  excluding  intangible
assets.

The MID will be paid to the  extent of the  lesser of the  Partnership's  excess
cash flow, as defined,  or net operating  income,  as defined (the  "Entitlement
Amount"),  and may be paid (i) in cash, unless there is insufficient cash to pay
the  distribution  in which event any unpaid  portion not taken in Units will be
deferred and is payable,  without interest, from the first available cash and/or
(ii) in Units.  A maximum of 50% of the MID may be paid in Units.  The number of
Units  issued in payment  of the MID is based on the  greater of $50 per Unit or
the net tangible asset value, as defined,  per Unit. During 1996, 1995 and 1994,
no Units were issued as payment for the MID.

During  1991,  the  Partnership  amended  its  capitalization  policy  and began
capitalizing certain costs of improvements and betterments which, under policies
of prior  management,  had been  expensed  when  incurred.  The  purpose  of the
amendment was to more properly recognize items which were capital in nature. The
effect of the amendment  standing alone was evaluated at the time the change was
made and  determined  not to be  material  to the  financial  statements  of the
Partnership  in 1991,  nor was it expected  to be  material in any future  year.
However,  the amendment  does have a material  effect on the  calculation of the
Entitlement   Amount  which  determines  the  amount  of  MID  earned.   Capital
improvements  are  excluded  from cash flow,  as defined.  The  majority of base
period cash flow was measured under the previous  capitalization  policy,  while
incentive  period cash flow is determined  using the amended  policy.  Under the
amended  policy,  more  items  are  capitalized,  and cash flow  increases.  The
amendment of the  capitalization  policy did not  materially  affect the MID for
1996,  1995 or 1994 as the  Entitlement  Amount  was  sufficient  to pay the MID
notwithstanding the amendment of the capitalization policy.





<PAGE>
Any amount of MID that is paid to the  General  Partner in Units will be treated
as if cash is distributed to the General Partner and is then  contributed to the
Partnership by the General Partner. The MID represents a return of equity to the
General Partner for increasing cash flow, as defined, and accordingly is treated
as a distribution.

Compensation and  reimbursements  paid or accrued for the benefit of the General
Partner and its affiliates are as follows:

<TABLE>
<CAPTION>
                                                            For the Years Ended December 31,
                                                   ----------------------------------------------------
                                                       1996               1995               1994
                                                   --------------     --------------    ---------------
<S>                                                <C>                <C>               <C>            
Property management fees -
   affiliates..............................        $      465,738     $      456,139    $       441,082
Charged to general and
   administrative - affiliates:
   Partnership administration..............               293,223            372,695            346,327
                                                    -------------      -------------     --------------

                                                   $      758,961     $      828,834    $       787,409
                                                    =============      =============     ==============

Charged to General Partner's deficit:
   Management Incentive Distribution               $      618,786     $      601,583    $       573,908
                                                    =============      =============     ==============
</TABLE>

Payable to  affiliates - General  Partner at December 31, 1996 and 1995 consists
of reimbursable costs, property management fees and MID that are due and payable
from current operations.

NOTE 3 - TAXABLE LOSS
---------------------

McNeil Real Estate Fund XIV, Ltd. is a partnership and is not subject to Federal
and state income taxes.  Accordingly,  no  recognition  has been given to income
taxes in the  accompanying  financial  statements of the  Partnership  since the
income or loss of the  Partnership  is to be  included in the tax returns of the
individual  partners.  The  tax  returns  of  the  Partnership  are  subject  to
examination by Federal and state taxing authorities. If such examinations result
in  adjustments  to  distributive  shares of  taxable  income  or loss,  the tax
liability of the partners could be adjusted accordingly.

The  Partnership's  net assets and liabilities for tax purposes exceeded the net
assets  and  liabilities  for  financial   reporting   purposes  by  $1,802,969,
$1,331,413 and $873,565 in 1996, 1995 and 1994, respectively.









<PAGE>
NOTE 4 - REAL ESTATE INVESTMENTS
--------------------------------

The  basis  and  accumulated  depreciation  of  the  Partnership's  real  estate
investments at December 31, 1996 and 1995 are set forth in the following tables:

<TABLE>
<CAPTION>
                                                   Buildings and       Accumulated           Net Book
       1996                         Land           Improvements        Depreciation            Value
       ----                    --------------      ------------        ------------       ---------------
<S>                            <C>                 <C>                 <C>                 <C>           
Embarcadero Club
   College Park, GA            $    1,216,712      $   12,312,055      $   (6,803,966)     $    6,724,801
Tanglewood Village
   Carson City, NV                    705,859           5,031,895          (2,395,364)          3,342,390
Thunder Hollow
   Bensalem Township, PA            1,837,539          12,883,353          (6,815,730)          7,905,162
Windrock
   El Paso, TX                        903,718           5,717,576          (2,936,681)          3,684,613
                                -------------       -------------       -------------       -------------

                               $    4,663,828      $   35,944,879      $  (18,951,741)     $   21,656,966
                                =============       =============       =============       =============

                                                   Buildings and       Accumulated           Net Book
       1995                         Land           Improvements        Depreciation            Value
       ----                    --------------      ------------        ------------       ----------------

Country Hills Plaza
   Ogden, UT                   $      767,662      $    5,457,141      $   (2,278,024)     $    3,946,779
Embarcadero Club                    1,216,712          12,161,392          (6,216,068)          7,162,036
Midvale Plaza
   Midvale, UT                        783,169           2,772,471          (1,336,058)          2,219,582
Redwood Plaza
   Salt Lake City, UT                 618,812           2,460,573          (1,098,630)          1,980,755
Tanglewood Village                    705,859           4,831,955          (2,130,987)          3,406,827
Thunder Hollow                      1,837,539          12,670,168          (6,154,540)          8,353,167
Windrock                              903,718           5,599,875          (2,621,855)          3,881,738
                                -------------       -------------       -------------       -------------

                               $    6,833,471      $   45,953,575      $  (21,836,162)     $   30,950,884
                                =============       =============       =============       =============
</TABLE>

On October 1, 1996,  the General  Partner  placed  Country Hills Plaza,  Midvale
Plaza and  Redwood  Plaza on the  market  for sale.  All  three  properties  are
classified  as assets held for sale at December 31, 1996.  On December 31, 1996,
the  Partnership  entered  into a contract  to sell  Country  Hills  Plaza to an
unaffiliated  purchaser.  The sale of Country  Hills Plaza is scheduled to close
during the second  quarter of 1997.  The net book values of Country Hills Plaza,
Midvale Plaza and Redwood Plaza at December 31, 1996 were $3,787,273, $2,229,912
and $1,925,670, respectively.

The results of operations  for the assets held for sale at December 31, 1996 are
$459,447,  $297,444 and $220,928 for 1996, 1995 and 1994, respectively.  Results
of  operations  are  operating   revenues  less  operating   expenses  including
depreciation and interest expense.

<PAGE>
The Partnership  leases its commercial  properties under various  non-cancelable
operating leases. Future minimum rents to be received for commercial properties,
which are  classified  as assets held for sale as of December 31,  1996,  are as
follows:

       1997............................               $  1,615,000
       1998............................                  1,523,000
       1999............................                  1,434,000
       2000............................                  1,368,000
       2001............................                  1,144,000
       Thereafter......................                  6,672,000
                                                       -----------

                                                      $ 13,756,000
                                                       ===========

Future  minimum rents do not include  contingent  rents based on sales volume of
tenants.  Contingent rents amounted to $2,462,  $3,489 and $45,121 for the years
ended December 31, 1996, 1995 and 1994, respectively.  Future minimum rents also
do not include  expense  reimbursements  for common area  maintenance,  property
taxes, and other expenses.  These expense  reimbursements  amounted to $349,600,
$370,814  and $318,587  for the years ended  December  31, 1996,  1995 and 1994,
respectively.  These  contingent  rents and  expense  reimbursements,  which are
comprised of amounts  generated by assets held for sale,  are included in rental
revenue on the Statements of Operations.

The  Partnership's  real  estate  investments  and  assets  held  for  sale  are
encumbered by mortgage notes as discussed in Note 5 - "Mortgage Notes Payable."

NOTE 5 - MORTGAGE NOTES PAYABLE
-------------------------------

The following table sets forth the mortgage notes of the Partnership at December
31, 1996 and 1995. All mortgage notes are secured by real estate investments:

<TABLE>
<CAPTION>
                           Mortgage          Annual       Monthly
                             Lien            Interest     Payments/                        December 31,
Property                 Position (a)        Rates %      Maturity Date (d)          1996                1995
--------                 -------------       -------      -----------------     --------------    ---------------
<S>                      <C>                  <C>      <C>           <C>        <C>               <C>           
Country Hills Plaza      First                9.000    $   24,742    07/04 (d)  $   2,255,102     $    2,344,625
                         Discount (b)                                                (411,154)          (465,535)
                                                                                 ------------      -------------
                                                                                    1,843,948          1,879,090
                                                                                 ------------      -------------

Embarcadero Club         First                7.875        57,280    12/23          7,680,034          7,759,181
                                                                                 ------------      -------------

Midvale Plaza            First                9.500        20,589    09/06          1,566,962          1,660,294
                         Discount (b)                                                (268,881)          (305,017)
                                                                                 ------------      -------------
                                                                                    1,298,081          1,355,277
                                                                                 ------------      -------------
</TABLE>


<PAGE>

<TABLE>
<CAPTION>
                           Mortgage          Annual       Monthly
                             Lien            Interest     Payments/                       December 31,
Property                 Position (a)        Rates %      Maturity Date (d)         1996                1995
--------                 -------------       -------      -----------------     --------------    ---------------
<S>                      <C>                  <C>      <C>           <C>        <C>               <C>           
Redwood Plaza            First                9.875       $14,660    06/06      $   1,081,583      $   1,147,137
                         Discount (b)                                                (168,601)          (191,950)
                                                                                 ------------      -------------
                                                                                      912,982            955,187
                                                                                 ------------      -------------

Tanglewood Village       First                6.750        20,176    11/18          2,761,777          2,815,481
                                                                                 ------------      -------------

Thunder Hollow (c)       First                8.150        82,131    07/03 (d)      9,726,634          9,911,243
                         Discount (b)                                                (212,702)          (239,357)
                                                                                 ------------      -------------
                                                                                    9,513,932          9,671,886
                                                                                 ------------      -------------

Windrock                 First                9.440        28,859    04/02 (d)      3,412,935          3,435,867
                                                                                 ------------      -------------

                                                                                $  27,423,689     $   27,871,969
                                                                                 ============      =============
</TABLE>

(a)    The debt is non-recourse to the Partnership.

(b)    The discount on the Thunder Hollow mortgage note is based on an effective
       interest  rate of 8.62%.  All  other  discounts  are  based on  effective
       interest rates ranging from 12% to 14.4%.

(c)    Financing  was  obtained  in June 1993  under the terms of a Real  Estate
       Mortgage  Investment  Conduit  financing.  The note may not be prepaid in
       whole or part before July 1998. Any prepayments  made during the sixth or
       seventh  loan  years  are  subject  to a Yield  Maintenance  premium,  as
       defined.

(d)    Balloon payments on the mortgage notes are due as follows:

       Property                     Balloon Payment             Date

       Windrock                      $  3,249,832               04/02
       Thunder Hollow                   8,080,794               07/03
       Country Hills                    1,253,951               07/04










<PAGE>
Scheduled principal  maturities of the mortgage notes under existing agreements,
before consideration of discounts of $1,061,338, are as follows:

       1997 .........................        $    641,418
       1998 .........................             698,580
       1999 .........................             761,011
       2000 .........................             829,088
       2001..........................             903,325
       Thereafter ...................          24,651,605
                                              -----------
                                             $ 28,485,027
                                              ===========

Based on borrowing  rates  currently  available to the  Partnership for mortgage
loans  with  similar  terms  and  average  maturities,  the  fair  value  of the
Partnership's   mortgage  notes  payable  was   approximately   $27,340,000  and
$28,470,000 at December 31, 1996 and 1995, respectively.

NOTE 6 - REFINANCING OF MORTGAGE NOTE PAYABLE
---------------------------------------------

On March 13, 1995, the  Partnership  refinanced the Windrock  mortgage note. The
new mortgage  note,  in the amount of  $3,450,000,  bears  interest at 9.44% per
annum,  and requires  monthly  principal and interest  payments of $28,859.  The
maturity date of the new mortgage note is April 1, 2002.  Cash proceeds from the
refinancing transaction are as follows:

       New loan proceeds .......................    $   3,450,000
       Existing first lien retired .............       (1,894,233)
       Existing second lien retired ............         (440,000)
                                                     ------------

       Cash proceeds from refinancing ..........    $   1,115,767
                                                     ============

The  Partnership  incurred  $107,525 of deferred  borrowing costs related to the
refinancing of the Windrock  mortgage note. The Partnership was also required to
use $184,172 of the refinancing proceeds to fund various escrow accounts for the
payment of property taxes, hazard insurance and capital improvements.

NOTE 7 - GAIN ON INVOLUNTARY CONVERSION
---------------------------------------

On January 9, 1994, freezing weather caused $111,835 of damage to Thunder Hollow
Apartments.   The   Partnership   received  a  total  of  $96,555  in  insurance
reimbursements to cover the cost to repair Thunder Hollow Apartments.  Insurance
reimbursements  received  in excess of the basis of the  property  damaged  were
recorded as a $51,588 gain on involuntary conversion.











<PAGE>
NOTE 8 - LEGAL PROCEEDINGS
--------------------------

The Partnership is not party to, nor are any of the Partnership's properties the
subject of, any material pending legal proceedings, other than ordinary, routine
litigation incidental to the Partnership's business, except as noted below.

1)   James F. Schofield, Gerald C. Gillett, Donna S. Gillett, Jeffrey Homburger,
     Elizabeth Jung,  Robert Lewis,  and Warren Heller et al. v. McNeil Partners
     L.P., McNeil Investors,  Inc., McNeil Real Estate Management,  Inc., Robert
     A. McNeil,  Carole J. McNeil,  McNeil Pacific  Investors  Fund 1972,  Ltd.,
     McNeil Real Estate Fund IX, Ltd.,  McNeil Real Estate Fund X, Ltd.,  McNeil
     Real Estate Fund XI, Ltd.,  McNeil Real Estate Fund XII, Ltd.,  McNeil Real
     Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate
     Fund XX, L.P.,  McNeil Real Estate Fund XXI, L.P.,  McNeil Real Estate Fund
     XXII,  L.P.,  McNeil Real Estate Fund XXIV,  L.P.,  McNeil Real Estate Fund
     XXV, L.P.,  McNeil Real Estate Fund XXVI, L.P., and McNeil Real Estate Fund
     XXVII,  L.P., et al. - Superior  Court of the State of  California  for the
     County of Los  Angeles,  Case No.  BC133799  (Class and  Derivative  Action
     Complaint).

     The action  involves  purported  class and  derivative  actions  brought by
     limited  partners of each of the fourteen  limited  partnerships  that were
     named as nominal  defendants as listed above (as defined in this Section 1,
     the  "Partnerships").  Plaintiffs allege that McNeil  Investors,  Inc., its
     affiliate  McNeil Real Estate  Management,  Inc.  and three of their senior
     officers and/or directors (as defined in this Section 1, collectively,  the
     "Defendants") breached their fiduciary duties and certain obligations under
     the  respective  Amended  Partnership  Agreement.  Plaintiffs  allege  that
     Defendants  have  rendered  such Units  highly  illiquid  and  artificially
     depressed  the prices that are  available  for Units on the resale  market.
     Plaintiffs  also allege that  Defendants  engaged in a course of conduct to
     prevent  the  acquisition  of  Units  by an  affiliate  of  Carl  Icahn  by
     disseminating  purportedly  false,  misleading and inadequate  information.
     Plaintiffs  further  allege  that  Defendants  acted to  advance  their own
     personal interests at the expense of the Partnerships'  public unit holders
     by failing to sell Partnership properties and failing to make distributions
     to Unitholders.

     On December 16,  1996,  the  Plaintiffs  filed a  consolidated  and amended
     complaint.  Plaintiffs  are suing for breach of fiduciary  duty,  breach of
     contract  and  an  accounting,  alleging,  among  other  things,  that  the
     management  fees paid to the McNeil  affiliates over the last six years are
     excessive,  that these fees  should be reduced  retroactively  and that the
     respective Amended  Partnership  Agreements  governing the Partnerships are
     invalid.  On January 7, 1997,  the Court ordered  consolidation  with three
     other similar actions listed below.

     The  Partnerships  filed a demurrer to the complaint and a motion to strike
     on February 14, 1997, seeking to dismiss the complaint in all respects. The
     demurrer  is  pending.  The  Partnerships  deny that  there is any merit to
     Plaintiff's allegations and intend to vigorously defend this action.







<PAGE>
2)   Alfred Napoletano v. McNeil Partners, L.P., McNeil Investors,  Inc., Robert
     A. McNeil,  Carole J. McNeil,  McNeil Pacific  Investors  Fund 1972,  Ltd.,
     McNeil Real Estate Fund V, Ltd.,  McNeil Real Estate Fund IX, Ltd.,  McNeil
     Real Estate Fund X, Ltd.,  McNeil  Real Estate Fund XI,  Ltd.,  McNeil Real
     Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate
     Fund XX, L.P.,  McNeil Real Estate Fund XXIV, L.P., McNeil Real Estate Fund
     XXV,  L.P.  -  Superior  Court of the  State of  California,  County of Los
     Angeles,  Case No. BC133849 (Class Action  Complaint).  On January 7, 1997,
     this  action  was  consolidated  by court  order  with  Schofield,  et al.,
     referenced above.

3)   Warren Heller v. McNeil Partners,  L.P., McNeil Investors,  Inc., Robert A.
     McNeil,  Carole J. McNeil, McNeil Pacific Investors Fund 1972, Ltd., McNeil
     Real Estate Fund V, Ltd.,  McNeil  Real Estate Fund IX,  Ltd.,  McNeil Real
     Estate Fund X, Ltd.,  McNeil Real Estate Fund XI, Ltd.,  McNeil Real Estate
     Fund XIV, Ltd.,  McNeil Real Estate Fund XV, Ltd.,  McNeil Real Estate Fund
     XX, L.P.,  McNeil Real Estate Fund XXIV, L.P., McNeil Real Estate Fund XXV,
     L.P. - Superior  Court of the State of  California,  County of Los Angeles,
     Case No. BC133957 (Class Action Complaint). On January 7, 1997, this action
     was consolidated by court order with Schofield, et al., referenced above.

4)   Robert Lewis v. McNeil  Partners,  L.P.,  McNeil  Investors,  Inc.,  Robert
     A. McNeil et al. - In the District  Court of Dallas County,  Texas,  A-14th
     Judicial  District,  Cause No. 95-08535 (Class Action) - Plaintiff,  Robert
     Lewis, is a limited partner with McNeil Pacific  Investors Fund 1972, Ltd.,
     McNeil Real Estate Fund X, Ltd. and McNeil Real Estate Fund XV, Ltd.

     On  April  11,  1996,  the  action  was  dismissed   without  prejudice  in
     anticipation  of  consolidation  with other  class  action  complaints.  On
     January  7,  1997,  this  action  was  consolidated  by  court  order  with
     Schofield, et al., referenced above.

5)   McNeil Pacific  Investors Fund 1972, Ltd., McNeil Real Estate Fund V, Ltd.,
     McNeil Real Estate Fund IX, Ltd.,  McNeil Real Estate Fund X, Ltd.,  McNeil
     Real Estate Fund XI, Ltd.,  McNeil Real Estate Fund XIV, Ltd.,  McNeil Real
     Estate Fund XV, Ltd.,  McNeil Real Estate Fund XX, L.P., McNeil Real Estate
     Fund XXIV,  L.P.,  and McNeil  Real  Estate  Fund XXV,  L.P.  v. High River
     Limited Partnership,  Riverdale Investors Corp., Carl C. Icahn, and Unicorn
     Associates  Corporation  - United  States  District  Court for the  Central
     District of California, Case No. 96-5680SVW.

     On August 12,  1996,  High River  Limited  Partnership  (as defined in this
     Section 5, "High River"), a partnership controlled by Carl C. Icahn, sent a
     letter to the  partnerships  referenced above demanding lists of the names,
     current  residences or business  addresses  and certain  other  information
     concerning the Unitholders of such partnerships.  On August 19, 1996, these
     partnerships  commenced the above action  seeking,  among other things,  to
     declare that such  partnerships are not required to provide High River with
     a current list of Unitholders on the grounds that the defendants  commenced
     a tender  offer in  violation  of the  federal  securities  laws by  filing
     certain Schedule 13D Amendments on August 5, 1996.

     On October 16, 1996, the presiding judge denied the partnerships'  requests
     for a permanent and  preliminary  injunction to enjoin High River's  tender
     offers and  granted  the  defendants  request  for an order  directing  the
     partnerships  to turn  over  current  lists of  Unitholders  to High  River
     forthwith.  On October 24, 1996, the partnerships  delivered the Unitholder
     lists to High River.  The judge's  decision  resolved all the issues in the
     action.
<PAGE>
                        McNEIL REAL ESTATE FUND XIV, LTD.
                                  SCHEDULE III
      REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION AND AMORTIZATION
                                December 31, 1996
<TABLE>
<CAPTION>

                                                                                  Cumulative           Costs
                                                       Initial Cost (b)            Write-down       Capitalized
                          Related (b)                         Buildings and     and Permanent       Subsequent
Description               Encumbrances         Land           Improvements        Impairment       To Acquisition
-----------               ------------         ----           --------------    -------------      --------------
<S>                       <C>               <C>               <C>                <C>              <C>           
APARTMENTS:

Embarcadero Club
   College Park, GA       $     7,680,034   $     1,216,712   $    10,081,573    $           -    $    2,230,482

Tanglewood Village
   Carson City, NV              2,761,777           705,859         4,004,394                -         1,027,501

Thunder Hollow
   Bensalem
     Township, PA               9,513,932         1,837,539        10,412,721                -         2,470,632

Windrock
   El Paso, TX                  3,412,935           903,718         4,490,001          (97,632)        1,325,207
                           --------------    --------------    --------------     ------------     -------------

                          $    23,368,678   $     4,663,828   $    28,988,689    $     (97,632)   $    7,053,822
                           ==============    ==============    ==============     ============     =============

Assets Held for Sale (c):

Country Hills Plaza
   Ogden, UT              $     1,843,948

Midvale Plaza
   Midvale, UT                  1,298,081

Redwood Plaza
   Salt Lake City, UT             912,982
                           --------------
                          $     4,055,011
                           ==============
</TABLE>

(b)  The initial cost and encumbrances  reflect the present value of future loan
     payments  discounted,  if  appropriate,  at a  rate  estimated  to  be  the
     prevailing interest rate at the date of acquisition or refinancing.

(c)  Assets held for sale are carried at the lower of  depreciated  cost or fair
     value less costs to sell.  Historical cost net of accumulated  depreciation
     and write-downs  becomes the new cost basis when the asset is classified as
     "held for sale."  Depreciation  ceases at the time the assets are placed on
     the market for sale.


                     See accompanying notes to Schedule III.


<PAGE>

                        McNEIL REAL ESTATE FUND XIV, LTD.
                                  SCHEDULE III
      REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION AND AMORTIZATION
                                December 31, 1996

<TABLE>
<CAPTION>
                                            Gross Amount at
                                     Which Carried at Close of Period                    Accumulated
                                                 Buildings and                           Depreciation
Description                      Land            Improvements          Total (a)       and Amortization
-----------                      ----            --------------        ---------       ----------------
<S>                           <C>                <C>              <C>                <C>             
APARTMENTS:

Embarcadero Club
   College Park, GA           $    1,216,712     $   12,312,055   $     13,528,767   $    (6,803,966)

Tanglewood Village
   Carson City, NV                   705,859          5,031,895          5,737,754        (2,395,364)

Thunder Hollow
   Bensalem
     Township, PA                  1,837,539         12,883,353         14,720,892        (6,815,730)

Windrock
   El Paso, TX                       903,718          5,717,576          6,621,294        (2,936,681)
                               -------------      -------------    ---------------    --------------

                              $    4,663,828     $   35,944,879   $     40,608,707   $   (18,951,741)
                               =============      =============    ===============    ==============

Assets Held for Sale (c):

Country Hills Plaza
   Ogden, UT                                                      $     3,787,273

Midvale Plaza
   Midvale, UT                                                          2,229,912

Redwood Plaza
   Salt Lake City, UT                                                   1,925,670
                                                                   --------------
                                                                  $     7,942,855
                                                                   ==============  
</TABLE>

(a)  For Federal income tax purposes,  the properties are depreciated over lives
     ranging from 5-27.5 years using ACRS or MACRS  methods.  The aggregate cost
     of  real  estate   investments   for  Federal   income  tax   purposes  was
     approximately  $53,026,763 and accumulated  depreciation was $28,162,356 at
     December 31, 1996.

(c)  Assets held for sale are carried at the lower of  depreciated  cost or fair
     value less costs to sell.  Historical cost net of accumulated  depreciation
     and write-downs  becomes the new cost basis when the asset is classified as
     "held for sale."  Depreciation  ceases at the time the assets are placed on
     the market for sale.


                     See accompanying notes to Schedule III.


<PAGE>

                        McNEIL REAL ESTATE FUND XIV, LTD.
                                  SCHEDULE III
      REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION AND AMORTIZATION
                                December 31, 1996

<TABLE>
<CAPTION>

                                 Date of                    Date                Depreciable
Description                   Construction                Acquired              lives (years)
-----------                   ------------                --------              -------------
<S>                             <C>                         <C>                     <C> 
APARTMENTS:

Embarcadero Club
   College Park, GA             1970/74                     09/84                   5-25

Tanglewood Village
   Carson City, NV              1979                        06/86                   5-25

Thunder Hollow
   Bensalem
     Township, PA               1973                        11/84                   5-25

Windrock
   El Paso, TX                  1971                        10/84                   5-25

Assets Held for Sale:

Country Hills Plaza
   Ogden, UT                    1979                        06/84

Midvale Plaza
   Midvale, UT                  1976                        06/84

Redwood Plaza
   Salt Lake City, UT           1976                        06/84

</TABLE>

                     See accompanying notes to Schedule III.


<PAGE>
                        McNEIL REAL ESTATE FUND XIV, LTD.

                              Notes to Schedule III

      Real Estate Investments and Accumulated Depreciation and Amortization



A  summary  of  activity  for the  Partnership's  real  estate  investments  and
accumulated depreciation and amortization is as follows:

<TABLE>
<CAPTION>
                                                           For the Years Ended December 31,
                                                   -----------------------------------------------------
                                                        1996               1995               1994
                                                   --------------     --------------    ----------------
<S>                                                <C>                <C>               <C>            
Real estate investments:

Balance at beginning of year...............        $   52,787,046     $   51,070,722    $    49,948,804

Improvements...............................               771,475          1,743,497          1,166,250

Replacements...............................                     -            (27,173)           (44,332)

Reclassification of assets held
   for sale................................           (12,949,814)                 -                  -
                                                    -------------      -------------     --------------

Balance at end of year.....................        $   40,608,707     $   52,787,046    $    51,070,722
                                                    =============      ==============    ==============



Accumulated depreciation and amortization:

Balance at beginning of year...............        $   21,836,162     $   19,674,640    $    17,700,198

Depreciation and amortization..............             2,185,099          2,171,607          1,990,895

Replacements...............................                     -            (10,085)           (16,453)

Reclassification of assets held
   for sale................................            (5,069,520)                 -                  -
                                                    -------------      -------------     --------------

Balance at end of year.....................        $   18,951,741     $   21,836,162    $    19,674,640
                                                    =============      =============     ==============



Assets Held for Sale:

Balance at beginning of year...............        $            -

Reclassification of assets held
    for sale...............................             7,880,294

Improvements...............................                62,561
                                                    -------------

Balance at end of year.....................        $    7,942,855
                                                    =============

</TABLE>

<PAGE>
ITEM 9.      CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
-------      -----------------------------------------------------------
             AND FINANCIAL DISCLOSURE
             ------------------------

None.

                                    PART III

ITEM 10.      DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
--------      --------------------------------------------------

Neither the  Partnership  nor the General Partner has any directors or executive
officers.  The names and ages of, as well as the positions held by, the officers
and  directors of McNeil  Investors,  Inc.,  the general  partner of the General
Partner, are as follows:

                                       Other Principal Occupations and Other
Name and Position             Age      Directorships During the Past 5 Years
-----------------             ---      -------------------------------------

Robert A. McNeil,              76       Mr.  McNeil  is   also  Chairman  of the
Chairman of the                         Board and Director of McNeil Real Estate
Board and Director                      Management,  Inc. ("McREMI") which is an
                                        affiliate of the General Partner. He has
                                        held the foregoing  positions  since the
                                        formation  of such  entity in 1990.  Mr.
                                        McNeil  received  his B.A.  degree  from
                                        Stanford  University  in  1942  and  his
                                        L.L.B.  degree from  Stanford Law School
                                        in 1948. He is a member of the State Bar
                                        of  California  and has been involved in
                                        real   estate   acquisitions,   mortgage
                                        financing  and real estate  syndications
                                        since  1960.   From  1986  until  active
                                        operations    of   McREMI   and   McNeil
                                        Partners,  L.P.  began in February 1991,
                                        Mr. McNeil was a private  investor.  Mr.
                                        McNeil   has  been  a   member   of  the
                                        International  Board of Directors of the
                                        Salk Institute,  which promotes research
                                        in improvements in health care.

Carole J. McNeil               53       Mrs.  McNeil    is  Co-Chairman,    with
Co-Chairman of the                      husband  Robert  A.  McNeil,  of  McNeil
Board                                   Investors,  Inc. Mrs.  McNeil has twenty
                                        years of real  estate  experience,  most
                                        recently as a private investor from 1986
                                        to 1993.  In 1982,  she founded  Ivory &
                                        Associates,  a  commercial  real  estate
                                        brokerage  firm  in San  Francisco,  CA.
                                        Prior to that, she was a commercial real
                                        estate agent and analyst with Marcus and
                                        Millichap  in San  Francisco.  In  1978,
                                        Mrs.   McNeil   established  the  Escrow
                                        Training  Company,   California's  first
                                        accredited  commercial  training program
                                        for title  company  escrow  officers and
                                        real  estate  agents   needing   college
                                        credits   to   qualify   for   brokerage
                                        licenses.  She  began in real  estate as
                                        Manager and Marketing  Director of Title
                                        Insurance and Trust in Marin County, CA.
                                        Mrs. McNeil serves on the  International
                                        Board   of   Directors   of   the   Salk
                                        Institute.
<PAGE>
                                       Other Principal Occupations and Other
Name and Position             Age      Directorships During the Past 5 Years
-----------------             ---      -------------------------------------

Ron K. Taylor                  39       Mr.  Taylor is the  President  and Chief
President and                           Executive  Officer of McNeil Real Estate
Chief Executive Officer                 Management  which is an affiliate of the
                                        General Partner.  Mr. Taylor has been in
                                        this capacity  since the  resignation of
                                        Donald K. Reed on March 4,  1997.  Prior
                                        to       assuming       his      current
                                        responsibilities, Mr. Taylor served as a
                                        Senior  Vice  President  of McREMI.  Mr.
                                        Taylor has been in this  capacity  since
                                        McREMI  commenced  operations  in  1991.
                                        Prior  to  joining  McREMI,  Mr.  Taylor
                                        served as an  Executive  Vice  President
                                        for  a   national   syndication/property
                                        management  firm. In this capacity,  Mr.
                                        Taylor  had the  responsibility  for the
                                        management  and leasing of a  21,000,000
                                        square  foot   portfolio  of  commercial
                                        properties. Mr. Taylor has been actively
                                        involved  in the  real  estate  industry
                                        since 1983.

Each director  shall serve until his successor  shall have been duly elected and
qualified.

ITEM 11.     EXECUTIVE COMPENSATION
--------     ----------------------

No direct  compensation  was paid or payable by the  Partnership to directors or
officers  (since it does not have any  directors or officers) for the year ended
December  31,  1996,  nor was any  direct  compensation  paid or  payable by the
Partnership  to  directors  or officers  of the  general  partner of the General
Partner for the year ended  December 31, 1996. The  Partnership  has no plans to
pay any such remuneration to any directors or officers of the general partner of
the General Partner in the future.

See Item 13 - Certain  Relationships  and  Related  Transactions  for amounts of
compensation and  reimbursements  paid by the Partnership to the General Partner
and its affiliates.

ITEM 12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------     --------------------------------------------------------------

(A)   Security ownership of certain beneficial owners.

      No individual or group,  as defined by Section  13(d)(3) of the Securities
      Exchange Act of 1934,  known to the Partnership is the beneficial owner of
      more than 5% of the Partnership's securities except for the following:

      High River  Limited  Partnership,  100 S. Bedford Road,  Mount Kisco,  New
      York, 10549,  which owns 10,371 (11.99%) of the Partnership's  Units as of
      January 31, 1997.



<PAGE>
(B)   Security ownership of management.

      As of January 31, 1997, the General  Partner and its affiliates own 872 of
      the  Partnership's   Units,  which  is  approximately  1%  of  the  86,534
      outstanding Units.

(C)   Change in control.

      None.

ITEM 13.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------     ----------------------------------------------

Under terms of the Amended  Partnership  Agreement,  the Partnership is paying a
MID to the General Partner.  The maximum MID is calculated as 1% of the tangible
asset value of the Partnership.  The maximum MID percentage decreases subsequent
to 1999.  Tangible  asset  value is  determined  by using the  greater of (i) an
amount calculated by applying a capitalization  rate of 9% to the annualized net
operating  income of each property or (ii) a value of $10,000 per apartment unit
for residential  property and $50 per gross square foot for commercial  property
to arrive at the property  tangible  asset value.  The property  tangible  asset
value is then added to the book value of all other assets  excluding  intangible
assets.

The MID will be paid to the  extent of the  lesser of the  Partnership's  excess
cash flow, as defined, or net operating income (the "Entitlement  Amount"),  and
may  be  paid  (i) in  cash,  unless  there  is  insufficient  cash  to pay  the
distribution,  in which  event any  unpaid  portion  not taken in Units  will be
deferred and is payable,  without interest, from the first available cash and/or
(ii) in Units.  A maximum of 50% of the MID may be paid in Units.  The number of
Units  issued in payment  of the MID is based on the  greater of $50 per Unit or
the net tangible asset value, as defined,  per Unit. For the year ended December
31, 1996, the Partnership accrued MID in the amount of $618,786.

The  Partnership  pays  property  management  fees  equal to 5% of gross  rental
receipts of the Partnership's  properties to McREMI, an affiliate of the General
Partner,  for  providing  property  management  services  for the  Partnership's
residential and commercial properties and leasing services for the Partnership's
residential  properties.  The  Partnership  reimburses  McREMI  for  its  costs,
including  overhead,  of administering the Partnership's  affairs.  For the year
ended December 31, 1996, the  Partnership  paid or accrued  $758,961 in property
management fees and reimbursements.

See  Item 1 -  Business,  Item  7 -  Management's  Discussion  and  Analysis  of
Financial  Condition  and  Results  of  Operations,  and  Item  8  -  Note  2  -
"Transactions with Affiliates."



<PAGE>
                                     PART IV

ITEM 14.     EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K
--------     -----------------------------------------------------------------

See accompanying Index to Financial Statements at Item 8.

(A)         Exhibits

           Exhibit
           Number                           Description
           -------                          -----------

           3.                               Partnership  Agreement dated   April
                                            30, 1982, and amended  September 15,
                                            1982, October 13, 1982, and February
                                            1, 1983. (1)

           3.1                              Amended    and     Restated  Limited
                                            Partnership      Agreement     dated
                                            September 20, 1991. (3)

           3.2                              Amendment  No. 1  to the Amended and
                                            Restated  Partnership  Agreement  of
                                            McNeil Real  Estate Fund XIV,  Ltd.,
                                            dated to be effective as of July 31,
                                            1993. (5)

           3.3                              Amendment  No. 2 to the  Amended and
                                            Restated  Partnership  Agreement  of
                                            McNeil Real  Estate Fund XIV,  Ltd.,
                                            dated March 8, 1994. (5)

           10.1                             Security  Deed Note, dated  November
                                            16,   1988,   between    Embarcadero
                                            Associates  and American  Mortgages,
                                            Inc. (1)

           10.2                             Property      Management  Agreement,
                                            dated  September  12, 1991,  between
                                            McNeil Real  Estate  Fund XIV,  Ltd.
                                            and McNeil Real  Estate  Management,
                                            Inc. (3)

           10.3                             Property      Management  Agreement,
                                            dated  September  12, 1991,  between
                                            Embarcadero  Associates  and  McNeil
                                            Real Estate Management, Inc. (3)

           10.4                             Property      Management  Agreement,
                                            dated  September  12, 1991,  between
                                            Tanglewood  Village  Associates  and
                                            McNeil Real Estate Management, Inc.
                                            (3)


<PAGE>
           Exhibit
           Number                           Description
           -------                          -----------

           10.5                             Termination      Agreement,    dated
                                            September 20, 1991,  between  McNeil
                                            Real  Estate  Fund  XIV,   Ltd.  and
                                            McNeil Real Estate Management,  Inc.
                                            (3)

           10.6                             Termination      Agreement,    dated
                                            September    20,    1991,    between
                                            Embarcadero  Associates  and  McNeil
                                            Real Estate Management, Inc. (3)

           10.7                             Termination     Agreement,     dated
                                            September    20,    1991,    between
                                            Tanglewood  Village  Associates  and
                                            McNeil Real Estate Management,  Inc.
                                            (3)

           10.8                             Asset Management  Agreement,   dated
                                            September 20, 1991,  between  McNeil
                                            Real  Estate  Fund  XIV,   Ltd.  and
                                            McNeil Partners, L.P. (3)

           10.9                             Assignment      and       Assumption
                                            Agreement  Relating  to McNeil  Real
                                            Estate   Fund   XIV,   Ltd.,   dated
                                            September 20, 1991,  between  McNeil
                                            Partners, L.P. and Pacific Investors
                                            Corporation. (3)

           10.10                            Assignment       and      Assumption
                                            Agreement  Relating  to  Embarcadero
                                            Associates,   dated   September  20,
                                            1991, between McNeil Partners,  L.P.
                                            and Pacific  Investors  Corporation.
                                            (3)

           10.11                            Assignment and  Assumption Agreement
                                            Relating   to   Tanglewood   Village
                                            Associates,   dated   September  20,
                                            1991, between McNeil Partners,  L.P.
                                            and Pacific  Investors  Corporation.
                                            (3)

           10.12                            Amendment to Certificate  of Limited
                                            Partnership   filed   September  25,
                                            1991, with the Secretary of State of
                                            the State of California. (3)

           10.13                            Revolving  Credit  Agreement,  dated
                                            August  6,  1991,   between   McNeil
                                            Partners,     L.P.    and    certain
                                            partnerships,      including     the
                                            Registrant. (3)


<PAGE>
           Exhibit
           Number                           Description
           -------                          -----------

           10.14                            Amendment  of  Property   Management
                                            Agreement   dated   March  5,   1993
                                            between McNeil Real Estate Fund XIV,
                                            Ltd.    and   McNeil   Real   Estate
                                            Management, Inc. (2)

           10.15                            Loan Agreement   dated June 24, 1993
                                            between  Lexington  Mortgage Company
                                            and  McNeil  Real  Estate  Fund XIV,
                                            Ltd., et. al. (4)

           10.16                            Master     Property       Management
                                            Agreement,  dated  as  of  June  24,
                                            1993,  between  McNeil  Real  Estate
                                            Management,  Inc. and Thunder Hollow
                                            Fund XIV, Ltd. (5)

            10.17                           Multifamily  Note   dated  March 13,
                                            1995  between  Washington   Mortgage
                                            Financial  Group,  Ltd. and Windrock
                                            Fund XIV, L.P. (6)

            10.18                           Property Management  Agreement dated
                                            February  2, 1995  between  Windrock
                                            Fund  XIV,   L.P.  and  McNeil  Real
                                            Estate Management, Inc. (6)

            10.19                           Promissory Note, dated May 22, 1976,
                                            between  Price  Rentals,   Inc.  and
                                            Aetna Life Insurance Company. (6)

            10.20                           Promissory Note,  dated   August 19,
                                            1976,  between Midvale Plaza Company
                                            and Aetna  Life  Insurance  Company.
                                            (6)

            10.21                           Promissory Note,  dated May 5, 1978,
                                            between  Price Country Hills Company
                                            and First Security State Bank. (6)

            10.22                           Deed of Trust Note,  dated   October
                                            1, 1993, between Tanglewood Fund XIV
                                            Associates  Limited  Partnership and
                                            Love Funding Corporation. (6)

           11.                              Statement  regarding  computation of
                                            Net  Income   (Loss)   per   Limited
                                            Partnership  Unit (see Item 8 - Note
                                            1 -  "Organization  and  Summary  of
                                            Significant Accounting Policies").


<PAGE>
            Exhibit
            Number                          Description

           22.   Following is a list of subsidiaries of the Partnership:

<TABLE>
<CAPTION>
                                                                            Names Under
                                                     Jurisdiction of        Which It Is
                       Name of Subsidiary            Incorporation        Doing Business
                       ------------------            ---------------      --------------

<S>                    <C>                            <C>                    <C> 
                       Embarcadero Associates         Georgia                None

                       Tanglewood Fund XIV
                        Associates, L.P.              Nevada                 None

                       Thunder Hollow Fund XIV
                        Limited Partnership           Delaware               None

                       Windrock Fund XIV, L.P.        Texas                  None
</TABLE>

           27.    Financial Data Schedule for the year ended December 31, 1996.

                  The  Partnership  has  omitted  instruments  with  respect  to
                  long-term debt where the total amount of securities authorized
                  thereunder  does not  exceed  10% of the  total  assets of the
                  Partnership.  The Partnership agrees to furnish a copy of each
                  such instrument to the Commission upon request.

                    (1)                     Incorporated  by reference  to the
                                            Annual  Report of McNeil Real Estate
                                            Fund XIV, Ltd., on Form 10-K for the
                                            period ended  December 31, 1990,  as
                                            filed on March 29, 1991.

                    (2)                     Incorporated  by  reference  to  the
                                            Annual  Report of McNeil Real Estate
                                            Fund  XIV,  Ltd.,  (Commission  file
                                            number 0-12915) on Form 10-K for the
                                            period ended  December 31, 1992,  as
                                            filed   with  the   Securities   and
                                            Exchange  Commission  on  March  30,
                                            1993.

                    (3)                     Incorporated  by  reference  to  the
                                            Annual  Report of McNeil Real Estate
                                            Fund  XIV,  Ltd.   (Commission  file
                                            number 0-12915) for the period ended
                                            December 31, 1991, as filed with the
                                            Securities  and Exchange  Commission
                                            on March 30, 1992.

<PAGE>
                    (4)                     Incorporated  by  reference  to  the
                                            Annual  Report of McNeil Real Estate
                                            Fund  XI,  Ltd.   (Commission   file
                                            number 0-9783), on Form 10-K for the
                                            period ended  December 31, 1993,  as
                                            filed   with  the   Securities   and
                                            Exchange  Commission  on  March  30,
                                            1994.

                    (5)                     Incorporated  by  reference  to  the
                                            Annual  Report of McNeil Real Estate
                                            Fund  XIV,  Ltd.   (Commission  file
                                            number 0-12915) for the period ended
                                            December 31, 1993, as filed with the
                                            Securities  and Exchange  Commission
                                            on March 30, 1994.

                    (6)                     Incorporated  by  reference  to  the
                                            Annual  Report of McNeil Real Estate
                                            Fund  XIV,  Ltd.   (Commission  file
                                            number 0-12915) for the period ended
                                            December 31, 1994, as filed with the
                                            Securities  and Exchange  Commission
                                            on March 30, 1995.

(B)         Reports  on Form  8-K.  There  were no  reports  on Form 8-K for the
            quarter ended December 31, 1996.


<PAGE>



                        McNEIL REAL ESTATE FUND XIV, LTD.
                              A Limited Partnership

                                 SIGNATURE PAGE


Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


                          McNEIL REAL ESTATE FUND XIV, LTD.


                            By:  McNeil Partners, L.P., General Partner

                                 By: McNeil Investors, Inc., General Partner


March 28, 1997                   By:  /s/  Robert A. McNeil
--------------                        ------------------------------------------
Date                                  Robert A. McNeil
                                      Chairman of the Board and Director
                                      (Principal Executive Officer)


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities and on the dates indicated.



March 28, 1997                   By:  /s/  Ron K. Taylor
--------------                        ------------------------------------------
Date                                  Ron K. Taylor
                                      President and Director of McNeil 
                                        Investors, Inc.
                                      (Principal Financial Officer)




March 28, 1997                   By:  /s/  Brandon K. Flaming
--------------                        ------------------------------------------
Date                                  Brandon K. Flaming
                                      Vice President of McNeil Investors, Inc.
                                      (Principal Accounting Officer)