_________________________________________________________________________________________

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549



Form 10-KSB

(Mark One)

[X]

ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the fiscal year ended December 31, 2005



[ ]

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the transition period from _________to _________



Commission file number 0-13309



ANGELES PARTNERS XII

(Name of small business issuer in its charter)



|                                |                     
|------------------------------- | --------------------
|California                      | 95-3903623          
|(State or other jurisdiction of | (I.R.S. Employer    
|incorporation or organization)  | (Identification No.)



55 Beattie Place, PO Box 1089

Greenville, South Carolina  29602

(Address of principal executive offices)



Issuer's telephone number    (864) 239-1000



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



None



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



Limited Partnership Units

(Title of class)



Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act []



Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YesX No___



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



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes []  No[X]



State issuer's revenues for its most recent fiscal year.$14,307,000



State the aggregate market value of the voting partnership interests held by non-affiliates computed by reference to the price at which the partnership interests were sold, or the average bid and asked prices of such partnership interests as of December 31, 2005.  No market exists for the limited partnership interests of the Registrant, and, therefore, no aggregate market value can be determined.



DOCUMENTS INCORPORATED BY REFERENCE

None



The matters discussed in this report contain certain forward-looking statements, including, without limitation, statements regarding future financial performance and the effect of government regulations. Actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors including, without limitation: national and local economic conditions; the terms of governmental regulations that affect the Registrant and interpretations of those regulations; the competitive environment in which the Registrant operates; financing risks, including the risk that cash flows from operations may be insufficient to meet required payments of principal and interest; real estate risks, including variations of real estate values and the general economic climate in local markets and competition for tenants in such markets; litigation, including costs associated with prosecuting and defending claims and any adverse outcomes, and possible environmental liabilities. Readers should carefully review the Registrant's financial statements and the notes thereto, as well as the risk factors described in the documents the Registrant files from time to time with the Securities and Exchange Commission.



PART I



Item 1.

Description of Business



Angeles Partners XII (the "Partnership" or "Registrant") is a publicly-held limited partnership organized under the California Uniform Limited Partnership Act pursuant to the amended Certificate and Agreement of Limited Partnership (herein referred to as the "Agreement") dated May 26, 1983.  The Partnership's managing general partner is Angeles Realty Corporation II ("ARC II" or the "Managing General Partner"), a California corporation. ARC II was a wholly-owned subsidiary of MAE GP Corporation ("MAE GP"). Effective February 25, 1998, MAE GP was merged into Insignia Properties Trust ("IPT"), which was an affiliate of Insignia Financial Group, Inc. ("Insignia"). Effective February 26, 1999, IPT was merged into Apartment Investment and Management Company ("AIMCO") a publicly traded real estate investment trust. Thus the Managing General Partner is now a wholly-owned subsidiary of AIMCO.  The Elliott Accommodation Trust and the Elliott Family Partnership, a California limited partnership, were the Non-Managing General Partners.  Effective December 31, 1997, the Elliott Family Partnership, Ltd. acquired the Elliott Accommodation Trust's general partner interest in the Partnership. On June 30, 2000, Elliott Family Partnership sold its remaining interest to AIMCO Properties, LP, a wholly owned subsidiary of AIMCO. The Managing General Partner and the Non-Managing General Partner are herein referred to collectively as the "General Partners". The Partnership Agreement provides that the Partnership is to terminate on December 31, 2035, unless terminated prior to such date.



Commencing May 26, 1983, the Partnership offered up to 80,000 units of Limited Partnership Interest (the units) at a purchase price of $1,000 per Unit with a minimum purchase of 5 Units pursuant to a Registration Statement filed with the Securities and Exchange Commission. The Managing General Partner contributed capital in the amount of $1,000 for a 1% interest in the Partnership. The offering terminated on February 13, 1985. Upon termination of the offering, the Partnership had sold 44,773 units aggregating $44,773,000.



The Partnership is engaged in the business of operating and holding real estate properties for investment. In 1984 and 1985 during its acquisition phase, the Partnership acquired ten existing apartment properties and one existing commercial property. In 1990, the Partnership lost one of its apartment properties to foreclosure. During 1991, the Partnership acquired a 44.5% general partnership interest in a joint venture, Princeton Meadows Golf Course Joint Venture ("Joint Venture"), partnering with two affiliated partnerships. In 1999, the Partnership sold its only commercial property, one of its apartment properties and the Joint Venture sold its only investment property, Princeton Meadows Golf Course. In May 2001, the Partnership sold two of its apartment properties. In April and December
2005, the Partnership sold two of its six remaining apartment properties, one of which was classified as held for sale at December 31, 2004. As of December 31, 2005, the Partnership continues to own and operate four apartment complexes. (see "Item 2, Description of Properties").



The Managing General Partner of the Partnership intends to maximize the operating results and, ultimately, the net realizable value of each of the Partnership's properties in order to achieve the best possible return for the investors. Such results may best be achieved through property sales, refinancings, debt restructurings or relinquishment of the assets. The Partnership intends to evaluate each of its holdings periodically to determine the most appropriate strategy for each of the assets.  The Managing General Partner's policy is to only commit cash from operations and financings secured by the real property to support operations, capital improvements and repayment of debt on a property specific basis.



The Partnership has no employees. The Managing General Partner is vested with full authority as to the general management and supervision of the business and affairs of the Partnership.  Limited partners and the Non-Managing General Partner have no right to participate in the management or conduct of such business and affairs.  An affiliate of the Managing General Partner provides property management services for the Partnership's residential properties.



Risk Factors



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



Laws benefiting disabled persons may result in the Partnership's incurrence of unanticipated expenses.  Under the Americans with Disabilities Act of 1990, or ADA, all places intended to be used by the public are required to meet certain Federal requirements related to access and use by disabled persons. Likewise, the Fair Housing Amendments Act of 1988, or FHAA, requires apartment properties first occupied after March 13, 1990 to be accessible to the handicapped.  These and other Federal, state and local laws may require modifications to the Partnership's properties, or restrict renovations of the properties.  Noncompliance with these laws could result in the imposition of fines or an award of damages to private litigants and also could result in an order to correct any non-complying feature, which could result in substantial capital expenditures. Although the Managing General Partner believes that the Partnership's properties are substantially in compliance with the present requirements, the Partnership may incur unanticipated expenses to comply with the ADA and the FHAA.



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



From time to time, the Federal Bureau of Investigation, or FBI, and the United States Department of Homeland Security issue alerts regarding potential terrorist threats involving apartment buildings. Threats of future terrorist attacks, such as those announced by the FBI and the Department of Homeland Security, could have a negative effect on rent and occupancy levels at the Partnerships properties. The effect that future terrorist activities or threats of such activities could have on the Partnerships operations is uncertain and unpredictable. If the Partnership were to incur a loss at a property as a result of an act of terrorism, the Partnership could lose all or a portion of the capital invested in the property, as well as the future revenue from the property.



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



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



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



Item 2.

Description of Property



The following table sets forth the Partnership's investments in properties as of December 31, 2005:



|                       |          |                                |           
|---------------------- | -------- | ------------------------------ | ----------
|                       | Date of  |                                |           
|Property               | Purchase | Type of Ownership              | Use       
|                       |          |                                |           
|Hunters Glen Apts - IV | 01/31/85 | Fee ownership subject to       | Apartment 
|Plainsboro, New Jersey |          | first and second mortgages (1) | 264 units 
|                       |          |                                |           
|Hunters Glen Apts - V  | 01/31/85 | Fee ownership subject to       | Apartment 
|Plainsboro, New Jersey |          | first and second mortgages (1) | 304 units 
|                       |          |                                |           
|Hunters Glen Apts - VI | 01/31/85 | Fee ownership subject to       | Apartment 
|Plainsboro, New Jersey |          | first and second mortgages (1) | 328 units 
|                       |          |                                |           
|Twin Lake Towers       |          |                                |           
|Apartments             | 03/30/84 | Fee ownership subject to       | Apartments
|Westmont, Illinois     |          | first mortgage (1)             | 399 units 



(1)

Property is held by a Limited Partnership in which the Partnership ultimately owns a 100% interest.



On April 26, 2005, the Partnership sold Chambers Ridge Apartments to a third party for net proceeds of approximately $14,076,000 after payment of closing costs. The Partnership used approximately $8,007,000 of the net proceeds to repay the mortgage encumbering the property. The Partnership recognized a gain of approximately $11,147,000 as a result of the sale. In addition, the Partnership recognized a loss on early extinguishment of debt of approximately $159,000 as a result of unamortized loan costs being written off, and prepayment penalties paid, which is included in income from discontinued operations.



On December 1, 2005, the Partnership sold Pickwick Place Apartments to a third party for net proceeds of approximately $13,085,000 after payment of closing costs. The Partnership used approximately $9,333,000 of the net proceeds to repay the mortgage encumbering the property. The Partnership recognized a gain of approximately $9,659,000 as a result of the sale. In addition, the Partnership recognized a loss on early extinguishment of debt of approximately $104,000 as a result of unamortized loan costs being written off, and prepayment penalties paid, which is included in income from discontinued operations.



Schedule of Properties



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



|                      |                |              |              |                |          
|--------------------- | -------------- | ------------ | ------------ | -------------- | ---------
|                      | Gross          |              |              |                |          
|                      | Carrying       | Accumulated  | Depreciable  | Method         | Federal  
|Property              | Value          | Depreciation | Life         | of             | Tax Basis
|                      | (in thousands) |              | Depreciation | (in thousands)
|                      |                |              |              |                |          
|Hunters Glen Apts-IV  | $14,386        | 11,050       | 5-40 yrs     | (1)            | $ 3,904  
|Hunters Glen Apts-V   | 16,633         | 12,773       | 5-40 yrs     | (1)            | 4,407    
|Hunters Glen Apts-VI  | 18,063         | 13,876       | 5-40 yrs     | (1)            | 4,261    
|Twin Lake Towers Apts | 21,350         | 18,070       | 5-40 yrs     | (1)            | 4,051    
|                      |                |              |              |                |          
|                      | $70,432        | $55,769      |              |                | $16,623  



(1)

Straight line



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



Schedule of Property Indebtedness



The following table sets forth certain information relating to the loans encumbering the Partnership's properties.



|                      |                |          |           |          |               
|--------------------- | -------------- | -------- | --------- | -------- | --------------
|                      | Principal      |          |           |          | Principal     
|                      | Balance At     |          |           |          | Balance       
|                      | December 31,   | Interest | Period    | Maturity | Due At        
|Property              | 2005           | Rate (1) | Amortized | Date (2) | Maturity      
|                      | (in thousands) |          |           |          | (in thousands)
|                      |                |          |           |          |               
|Hunters Glen Apts IV  |                |          |           |          |               
|1st mortgage          | $11,194        | 5.51%    | 30 yrs    | 12/2015  | $ 9,028       
|2nd mortgage          | 5,500          | 5.63%    | 30 yrs    | 12/2015  | 4,622         
|Hunters Glen Apts V   |                |          |           |          |               
|1st mortgage          | 12,871         | 7.39%    | 30 yrs    | 12/2015  | 10,906        
|2nd mortgage          | 6,860          | 5.63%    | 30 yrs    | 12/2015  | 5,765         
|Hunters Glen Apts VI  |                |          |           |          |               
|1st mortgage          | 13,396         | 7.39%    | 30 yrs    | 12/2015  | 11,352        
|2nd mortgage          | 7,140          | 5.63%    | 30 yrs    | 12/2015  | 6,001         
|Twin Lake Towers Apts |                |          |           |          |               
|1st mortgage          | 11,059         | 4.54%    | 20 yrs    | 07/2013  | 7,385         
|                      | $68,020        |          |           |          | $55,059       



(1)

Fixed rate mortgages.



(2)

See "Item 7. Financial Statements - Note B" for information with respect to the Registrant's ability to prepay these loans and more specific details as to the terms of the loans.



On December 1, 2005, the Registrant obtained second mortgages in the total principal amount of approximately $19,500,000 on Hunters Glen IV, V, and VI Apartments. The new second mortgages bear interest at a fixed interest rate of 5.63% and require monthly payments of principal and interest of approximately $112,000 in the aggregate beginning on January 1, 2006 until the loans mature December 1, 2015, with balloon payments of approximately $16,388,000 in the aggregate due at maturity. The Registrant has the option of extending the maturity date of each mortgage for one additional year, to December 1, 2016, during which period the second mortgages would require monthly payments of principal and interest, and would bear interest at a rate equal to the average of the one month LIBOR plus 250 basis points. The Registrant may prepay the second mortgages without penalty during the period from December 2, 2015 through December 1, 2016. However, if the Registrant prepays the second mortgage loans prior to December 1, 2015, a prepayment penalty as defined in the loan agreements will apply. Loan costs of approximately $400,000 were incurred in connection with obtaining the second mortgages and have been capitalized in other assets on the consolidated balance sheet included in Item 7. Financial Statements.



In connection with the new financing, the Registrant agreed to certain modifications of the existing first mortgage loans encumbering  Hunters Glen IV, V, and VI Apartments. For Hunters Glen IV Apartments, the interest rate was modified to a fixed rate of 5.51%, and commencing January 1, 2006 through the loans maturity date of December 1, 2015 the loan requires monthly payments of principal and interest of approximately $64,000, with a balloon payment of approximately $9,028,000 due at maturity. For Hunters Glen V Apartments and Hunters Glen VI
Apartments, the interest rate was modified to a fixed rate of approximately 7.39%, and commencing January 1, 2006 through the loans maturity dates of December 1, 2015, the loans require monthly payments of approximately $89,000 and $93,000, respectively, with balloon payments of approximately $10,906,000 and $11,352,000, respectively, due at maturity. The Registrant has the option of extending the maturity dates for one additional year, to December 1, 2016, during which period the mortgages would require monthly payments of principal and interest and would bear interest at a rate equal to the average of the one month LIBOR plus 250 basis points.  The previous terms for the first mortgage on Hunters Glen IV Apartments required monthly payments of approximately $86,000 with a stated fixed interest rate of 5.26% through its maturity of January 1, 2022, at which time the loan was scheduled to be fully amortized. The previous terms for the first mortgages on Hunters Glen V Apartments and Hunters Glen VI Apartments required monthly payments of approximately $112,000 and $117,000, respectively, with a stated fixed interest rate of 7.14% through maturity of January 1, 2022, at which time the loans were scheduled to be fully amortized.



On April 29, 2005, the Partnership refinanced the mortgage encumbering Pickwick Place Apartments. The refinancing replaced the existing mortgage of approximately $5,775,000 with a new mortgage in the amount of approximately $9,431,000. Total capitalized loan costs were approximately $90,000. The Partnership recognized a loss on early extinguishment of debt of approximately $2,000 due to loan costs being written off, which is included in income from discontinued operations.



The April 29, 2005 refinancing of Pickwick Place Apartments was under a credit facility ("Permanent Credit Facility") which also provided for the refinancing of several other properties. The Permanent Credit Facility created separate loans for each property refinanced thereunder, which loans were not cross-collateralized or cross-defaulted with each other. The Permanent Credit Facility matures in September 2007 with an option for the Partnership to elect one five-year extension.  Each note under this Permanent Credit Facility is initially a variable rate loan. The interest rate on the variable rate loans is the Fannie Mae discounted mortgage-backed security index plus 85 basis points and the rate resets monthly. Each loan automatically renews at the end of each month. In addition, monthly principal payments are required based on a 30-year amortization schedule, using the interest rate in effect during the first month that the property is financed by the Permanent Credit Facility. The loans may be prepaid without penalty. The Partnership sold Pickwick Place Apartments to a third party on December 1, 2005 and repaid the mortgage encumbering the property.



Rental Rates and Occupancy



Average annual rental rates and occupancy for 2005 and 2004 for each property were as follows:



|                                 |                |                |      |     
|-------------------------------- | -------------- | -------------- | ---- | ----
|                                 | Average Annual | Average Annual
|                                 | Rental Rates   | Occupancy     
|                                 | (per unit)     |                |     
|Property                         | 2005           | 2004           | 2005 | 2004
|                                 |                |                |      |     
|Hunters Glen Apartments  IV (1) | 11,527         | 11,221         | 96%  | 93% 
|Hunters Glen Apartments  V      | 11,376         | 11,126         | 95%  | 93% 
|Hunters Glen Apartments  VI (1) | 11,190         | 10,889         | 94%  | 91% 
|Twin Lake Towers Apartments (2)  | 9,042          | 8,945          | 96%  | 90% 



(1)

The Managing General Partner attributes the increase in occupancy at Hunters Glen Apartments IV and VI to improved market conditions.



(2)

The Managing General Partner attributes the increase in occupancy at Twin Lake Towers Apartments to improved lease management.



As noted under "Item 1. Description of Business", the real estate industry is highly competitive. All of the properties of the Partnership are subject to competition from other residential apartment complexes in the area. The Managing General Partner believes that all of the properties are adequately insured. The residential properties are apartment complexes which lease units for terms of one year or less.  As of December 31, 2005, no residential  tenant leases 10% or more of the available rental space. All of the properties are in good physical condition subject to normal depreciation and deterioration as is typical for assets of this type and age.



Real Estate Taxes and Rates



Real estate taxes and rates in 2005 for each property were:



|                            |                |      
|--------------------------- | -------------- | -----
|                            | 2005           | 2005 
|                            | Taxes          | Rate 
|                            | (in thousands) |      
|                            |                |      
|Hunters Glen Apartments-IV  | $  310         | 1.99%
|Hunters Glen Apartments-V   | 357            | 1.99%
|Hunters Glen Apartments-VI  | 385            | 1.99%
|Twin Lake Towers Apartments | 341            | 5.34%



Capital Improvements



Chambers Ridge Apartments



During the year ended December 31, 2005, the Partnership completed approximately $33,000 of capital improvements at the property consisting primarily of floor covering replacements. These improvements were funded from operating cash flow. This property was sold during April 2005 (see Item 7. Financial Statements  Note F for further information).



Hunters Glen Apartments IV



During the year ended December 31, 2005, the Partnership completed approximately $698,000 of capital improvements at the property consisting primarily of floor covering replacements, washer and dryer installation in the apartment units, furniture and fixtures, recreation facilities, interior decoration, golf carts and structural improvements. These improvements were funded from operating cash flow. The Partnership regularly evaluates the capital improvement needs of the property. While the Partnership has no material commitments for property improvements and replacements, certain routine capital expenditures are anticipated during 2006. Such capital improvements will depend on the physical condition of the property as well as the anticipated cash flow generated by the property.



Hunters Glen Apartments V



During the year ended December 31, 2005, the Partnership completed approximately $698,000 of capital improvements at the property consisting primarily of floor covering replacements, washer and dryer installation in the apartment units, security equipment, water heater, appliance and cabinet replacements, interior decoration, fire safety equipment and structural improvements. These improvements were funded from operating cash flow. The Partnership regularly evaluates the capital improvement needs of the property. While the Partnership has no material
commitments for property improvements and replacements, certain routine capital expenditures are anticipated during 2006. Such capital improvements will depend on the physical condition of the property as well as the anticipated cash flow generated by the property.



Hunters Glen Apartments VI



During the year ended December 31, 2005, the Partnership completed approximately $867,000 of capital improvements at the property consisting primarily of floor covering replacements, installation of washers and dryers in the apartment units, security equipment, water heater, air conditioning unit and appliance replacements, plumbing fixtures, interior decorating, and fire safety upgrades. These improvements were funded from operating cash flow. The Partnership regularly evaluates the capital improvement needs of the property. While the Partnership has no material commitments for property improvements and replacements, certain routine capital expenditures are anticipated during 2006. Such capital improvements will depend on the physical condition of the property as well as the anticipated cash flow generated by the property.



Pickwick Place Apartments



During the year ended December 31, 2005, the Partnership completed approximately $471,000 of capital improvements at the property consisting primarily of floor covering and air conditioning unit replacements, stairway improvements, washer and dryer replacements and interior decoration. These improvements were funded from operating cash flow and replacement reserves. This property was sold during December 2005 (see Item 7. Financial Statements  Note F for further information).



Twin Lake Towers Apartments



During the year ended December 31, 2005, the Partnership completed approximately $305,000 of capital improvements at the property consisting primarily of floor covering replacements, recreation facility upgrades, interior lighting, heating upgrades, parking lot resurfacing and water and sewer upgrades. These improvements were funded from operating cash flow. The Partnership regularly evaluates the capital improvement needs of the property. While the Partnership has no material commitments for property improvements and replacements, certain routine capital expenditures are anticipated during 2006. Such capital improvements will depend on the physical condition of the property as well as the anticipated cash flow generated by the property.



Capital improvements will be incurred only to the extent of cash available from operations and Partnership reserves. To the extent that capital improvements are completed, the Partnerships distributable cash flow, if any, may be adversely affected, at least in the short term.



Item 3.

Legal Proceedings



In March 1998, several putative unit holders of limited partnership units of the Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the State of California for the County of San Mateo. The plaintiffs named as defendants, among others, the Partnership, its Managing General Partner and several of their affiliated partnerships and corporate entities. The action purported to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) that are named as nominal defendants, challenging, among other things, the acquisition of interests in certain Managing General Partner entities by Insignia Financial Group, Inc. ("Insignia") and entities that were, at one time, affiliates of Insignia; past
tender offers by the Insignia affiliates to acquire limited partnership units; management of the partnerships by the Insignia affiliates; and the series of transactions which closed on October 1, 1998 and February 26, 1999 whereby Insignia and Insignia Properties Trust, respectively, were merged into AIMCO. The plaintiffs sought monetary damages and equitable relief, including judicial dissolution of the Partnership. In addition, during the third quarter of 2001, a complaint captioned Heller v. Insignia Financial Group (the "Heller action") was filed against the same defendants that are named in the Nuanes action. On or about August 6, 2001, plaintiffs filed a first amended complaint. The Heller action was brought as a purported derivative action, and asserted claims for, among other things, breach of fiduciary duty, unfair competition, conversion, unjust enrichment, and judicial dissolution. On January 28, 2002, the trial court granted defendants motion to strike the complaint.  Plaintiffs took an appeal from this order.



On January 8, 2003, the parties filed a Stipulation of Settlement in proposed settlement of the Nuanes action and the Heller action. On June 13, 2003, the court granted final approval of the settlement and entered judgment in both the Nuanes and Heller actions. On August 12, 2003, an objector ("Objector") filed an appeal (the Appeal) seeking to vacate and/or reverse the order approving the settlement and entering judgment thereto. On May 4, 2004, the Objector filed a second appeal challenging the courts use of a referee and its order requiring Objector to pay those fees.



On March 21, 2005, the Court of Appeals issued opinions in both pending appeals.  With regard to the settlement and judgment entered thereto, the Court of Appeals vacated the trial courts order and remanded to the trial court for further findings on the basis that the state of the record is insufficient to permit meaningful appellate review.  The matter was transferred back to the trial court on June 21, 2005.  With regard to the second appeal, the Court of Appeals reversed the order requiring the Objector to pay referee fees. With respect to the related Heller appeal, on July 28, 2005, the Court of Appeals reversed the trial courts order striking the first amended complaint.



On August 18, 2005, Objector and his counsel filed a motion to disqualify the trial court based on a peremptory challenge and filed a motion to disqualify for cause on October 17, 2005, both of which were ultimately denied and/or struck by the trial court.  On or about October 13, 2005 Objector filed a motion to intervene and on or about October 19, 2005 filed both a motion to take discovery relating to the adequacy of plaintiffs as derivative representatives and a motion to dissolve the anti-suit injunction in connection with settlement.  On November 14, 2005, Plaintiffs filed a Motion For Further Findings pursuant to the remand ordered by the Court of Appeals. Defendants joined in that motion.  On February 3, 2006, the Court held a hearing on the various matters pending before it and has ordered additional briefing from the parties and Objector.



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



AIMCO Properties L.P. and NHP Management Company, both affiliates of the Managing General Partner, are defendants in a lawsuit alleging that they willfully violated the Fair Labor Standards Act (FLSA) by failing to pay maintenance workers overtime for all hours worked in excess of forty per week. The complaint, filed in the United States District Court for the District of Columbia, attempts to bring a collective action under the FLSA and seeks to certify state subclasses in California, Maryland, and the District of Columbia. Specifically, the plaintiffs contend that AIMCO Properties L.P. and NHP Management Company failed to compensate maintenance workers for time that they were required to be "on-call". Additionally, the complaint alleges AIMCO Properties L.P. and NHP Management Company failed to comply with the FLSA in compensating maintenance workers for time that they worked
in excess of 40 hours in a week.   In June 2005 the Court conditionally certified the collective action on both the on-call and overtime issues, which allows the plaintiffs to provide notice of the collective action to all non-exempt maintenance workers from August 7, 2000 through the present.  Notices have been sent out to all current and former hourly maintenance workers. The opt-in period has not yet closed. Defendants will have the opportunity to move to decertify the collective action.  Because the court denied plaintiffs motion to certify state subclasses, on September 26, 2005, the plaintiffs filed a class action with the same allegations in the Superior Court of California (Contra Costa County), and on November 5, 2005 in Montgomery County Maryland Circuit Court.  Although the outcome of any litigation is uncertain, AIMCO Properties, L.P. does not believe that the ultimate outcome will have a material adverse effect on its consolidated financial condition or results of operations. Similarly, the Managing General Partner does not believe that the ultimate outcome will have a material adverse effect on the Partnerships consolidated financial condition or results of operations.



Item 4.

Submission of Matters to a Vote of Security Holders



The unitholders of the Partnership did not vote on any matter through the solicitation of proxies or otherwise during the quarter ended December 31, 2005.



PART II



Item 5.

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



The Partnership, a publicly-held limited partnership, sold 44,773 Limited Partnership Units during its offering period through February 13, 1985.  As of December 31, 2005, the Partnership had 1,135 Limited Partners of record and 44,718 Limited Partnership Units (the "Units") outstanding. As of December 31, 2005, affiliates of the Managing General Partner owned 33,292 limited partnership units or 74.45% of the outstanding Units.  No public trading market has developed for the Units, and it is not anticipated that such a market will develop in the future.



The following table sets forth the distributions made by the Partnership for the years ended December 31, 2005 and 2004 (see Item 6. "Management's Discussion and Analysis or Plan of Operation" for further details):



|                 |              |             |              |            
|---------------- | ------------ | ----------- | ------------ | -----------
|                 |              |             |              |            
|                 | Year Ended   | Per Limited | Year Ended   | Per Limited
|                 | December 31, | Partnership | December 31, | Partnership
|                 | 2005         | Unit        | 2004         | Unit       
|                 |              |             |              |            
|Operations       | $    612     | $ 13.55     | $ 1,567      | $ 34.68    
|Sales (1)        | 10,017       | 221.74      | --           | --         
|Financings (2)   | 17,805       | 394.17      | --           | --         
|Refinancings (3) | 3,539        | 78.38       | --           | --         
|Total            | $31,973      | $707.84     | $1,567       | $34.68     



(1)

From the April 2005 sale of Chambers Ridge Apartments, and the December 2005 sale of Pickwick Place Apartments.

(2)

From the December 2005 financings on Hunters Glen IV, V and VI Apartments.

(3)

From the April 2005 refinancing of Pickwick Place Apartments



Future cash distributions will depend on the levels of cash generated from operations, and the timing of debt maturities, property sales and/or refinancings. The Partnerships cash available for distribution is reviewed on a monthly basis. There can be no assurance that the Partnership will generate sufficient funds from operations, after planned capital improvement expenditures, to permit any distributions to its partners during 2006 or subsequent periods.



In addition to its indirect ownership of the general partner interests in the Partnership, AIMCO and its affiliates owned 33,292 Units in the Partnership representing 74.45% of the outstanding Units at December 31, 2005.  A number of these Units were acquired pursuant to tender offers made by AIMCO or its affiliates. It is possible that AIMCO or its affiliates will acquire additional Units in exchange for cash or a combination of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO, either through private purchases or tender offers. Pursuant to the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters that include, but are not limited to, voting on certain amendments to the Partnership Agreement and voting to remove the Managing General Partner. As a result of its ownership of 74.45% of the outstanding Units, AIMCO and its affiliates are in a position to control all voting decisions with respect to the Partnership. Although the Managing General Partner owes fiduciary duties to the limited partners of the Partnership, the Managing General Partner also owes fiduciary duties to AIMCO as its sole stockholder. As a result, the duties of the Managing General Partner, as managing general partner, to the Partnership and its
limited partners may come into conflict with the duties of the Managing General Partner to AIMCO as its sole stockholder.



Item 6.

Management's Discussion and Analysis or Plan of Operation



This item should be read in conjunction with the consolidated financial statements and other items contained elsewhere in this report.



The Partnerships financial results depend upon a number of factors including the ability to attract and maintain tenants at the investment properties, interest rates on mortgage loans, costs incurred to operate the investment properties, general economic conditions and weather. As part of the ongoing business plan of the Partnership, the Managing General Partner monitors the rental market environment of its investment properties to assess the feasibility of increasing rents, maintaining or increasing occupancy levels and protecting the Partnership from increases in expenses. As part of this plan, the Managing General Partner attempts to protect the Partnership from the burden of inflation-related increases in expenses by increasing rents and maintaining a high overall occupancy level. However, the Managing General Partner may use rental concessions and rental rate reductions to offset softening market conditions, accordingly, there is no guarantee that the Managing General Partner will be able to sustain such a plan. Further, a number of factors that are outside the control of the Partnership such as the local economic climate and weather can adversely or positively affect the Partnerships financial results.



Results of Operations



The Partnership recognized net income of approximately $23,860,000 and $1,036,000 for the years ended December 31, 2005 and 2004, respectively. The increase in net income for the year ended December 31, 2005 is due to the gain on sale of discontinued operations (as discussed below) and to a lesser extent, an increase in total revenues and a decrease in total expenses, partially offset by a decrease in income from discontinued operations.



On April 26, 2005, the Partnership sold Chambers Ridge Apartments to a third party for net proceeds of approximately $14,076,000 after payment of closing costs. The Partnership used approximately $8,007,000 of the net proceeds to repay the mortgage encumbering the property. The Partnership recognized a gain of approximately $11,147,000 as a result of the sale. In addition, the Partnership recognized a loss on early extinguishment of debt of approximately $159,000 as a result of unamortized loan costs being written off, and prepayment penalties paid, which is included in income from discontinued operations.



On December 1, 2005, the Partnership sold Pickwick Place Apartments to a third party for net proceeds of approximately $13,085,000 after payment of closing costs. The Partnership used approximately $9,333,000 of the net proceeds to repay the mortgage encumbering the property. The Partnership recognized a gain of approximately $9,659,000 as a result of the sale. In addition, the Partnership recognized a loss on early extinguishment of debt of approximately $104,000 as a result of unamortized loan costs being written off, and prepayment penalties paid, which is included in income from discontinued operations.



In accordance with Statement of Financial Accounting Standards ("SFAS") No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the accompanying consolidated statements of operations for the year ended December 31, 2005 and 2004 reflect the operations of Chambers Ridge and Pickwick Place Apartments as income from discontinued operations. The statement of operations for the year ended December 31, 2004 has been restated to reflect the operations of Pickwick Place Apartments as discontinued operations as of January 1, 2004. Income from discontinued operations is approximately $54,000 and $445,000 for the years ended
December 31, 2005 and 2004, respectively, including revenues of approximately $2,922,000 and $4,835,000 for the years ended December 31, 2005 and 2004, respectively.



The Partnership recognized income from continuing operations of approximately $3,000,000 and $591,000 for the years ended December 31, 2005 and 2004, respectively. The increase in income from continuing operations for the year ended December 31, 2005 is due to a decrease in total expenses and an increase in total revenues.



Total expenses decreased for the year ended December 31, 2005 largely due to a decrease in depreciation expense and, to a lesser extent, decreases in property tax and general and administrative expenses, partially offset by an increase in operating expenses. Depreciation expense decreased due to property improvements and replacements becoming fully depreciated during the first quarter of 2005 at Hunters Glen IV, V and VI Apartments. Property tax expense decreased primarily due to decreases in the property tax rates at Hunters Glen IV, V, and VI Apartments.  Operating expense increased for the year ended December 31, 2005 primarily due to an increase in property expense and management fees. Property expense increased primarily due to increases in salaries and related benefits at Hunters Glen V, Hunters Glen VI and Twin Lake Towers Apartments and utilities expenses at Hunters Glen VI and Twin Lake Towers Apartments.  Management fees increased at all four investment properties as a result of an increase in occupancy rates.



General and administrative expenses decreased for the year ended December 31, 2005 due to a decrease in Partnership management fees as a result of a decrease in cash flows which are used to calculate the fee pursuant to the Partnership Agreement. Also included in general and administrative expenses are the costs of services included in the management reimbursements to the Managing General Partner as allowed under the Partnership Agreement, costs associated with the quarterly and annual communications with investors and regulatory agencies and the annual audit required by the Partnership Agreement.



Total revenues increased for the year ended December 31, 2005 primarily due to an increase in rental income. Rental income increased for the year ended December 31, 2005 primarily due to increases in the average rental rates and occupancy at all of the Partnerships properties.



Liquidity and Capital Resources



At December 31, 2005 the Partnership had cash and cash equivalents of approximately $2,464,000 compared to approximately $1,804,000 at December 31, 2004. Cash and cash equivalents increased approximately $660,000 due to approximately $24,228,000 and $5,012,000 of cash provided by investing and operating activities, respectively, partially offset by approximately $28,580,000 of cash used in financing activities. Cash provided by investing activities consisted of proceeds from the sales of Chambers Ridge and Pickwick Place Apartments and withdrawals from restricted escrows maintained by the mortgage lenders, partially offset by property improvements and replacements. Cash used in financing activities consisted of repayment of the mortgages encumbering Chambers Ridge and Pickwick Place Apartments, principal payments made on the mortgages encumbering the Partnership's properties, distributions paid to partners, loan costs paid and prepayment penalties paid, partially offset by proceeds from the refinancing of the mortgage encumbering Pickwick Place Apartments and loan proceeds received as a result of the second mortgages obtained on Hunters Glen IV, V, and VI Apartments. The Partnership invests its working capital reserves in interest bearing accounts.



The sufficiency of existing liquid assets to meet future liquidity and capital expenditure requirements is directly related to the level of capital expenditures required at the properties to adequately maintain the physical assets and other
operating needs of the Partnership and to comply with Federal, state, and local legal and regulatory requirements. The Managing General Partner monitors developments in the area of legal and regulatory compliance. For example, the Sarbanes-Oxley Act of 2002 mandates or suggests additional compliance measures with regard to governance, disclosure, audit and other areas. In light of these changes, the Partnership expects that it will incur higher expenses related to compliance. The Partnership regularly evaluates the capital improvement needs of the properties. While the Partnership has no material commitments for property improvements and replacements, certain routine capital expenditures are anticipated during 2006. Such capital expenditures will depend on the physical condition of the properties as well as anticipated cash flow generated by the properties. Capital expenditures will be incurred only if cash is available from operations or from Partnership reserves. To the extent that capital improvements are completed, the Partnerships distributable cash flow, if any, may be adversely affected at least in the short term.



On December 1, 2005, the Partnership obtained second mortgages in the total principal amount of $19,500,000 on Hunters Glen IV, V, and VI Apartments.  The new second mortgages bear interest at a fixed interest rate of 5.63% and require monthly payments of principal and interest of approximately $112,000 in the aggregate beginning on January 1, 2006 until the loans mature December 1, 2015, with balloon payments of approximately $16,388,000 in the aggregate due at maturity.  Loan costs of approximately $400,000 that were paid in connection with the second mortgages have been capitalized during the year ended December 31, 2005 and are included in other assets on the consolidated balance sheet included in Item 7. Financial Statements.



In connection with the new financing, the Partnership agreed to certain modifications on the existing mortgage loans encumbering Hunters Glen IV, V, and VI Apartments.  For Hunters Glen IV Apartments, the interest rate was modified to a fixed rate of 5.51%, and commencing January 1, 2006 through the loans maturity date of December 1, 2015 the loan requires monthly payments of principal and interest of approximately $64,000, with a balloon payment of approximately $9,028,000 due at maturity. For Hunters Glen V Apartments and Hunters Glen VI Apartments, the interest rate was modified to a fixed rate of approximately 7.39%, and commencing January 1, 2006 through the loans maturity dates of December 1, 2015, the loans require monthly payments of approximately $89,000 and $93,000, respectively, with balloon payments of approximately $10,906,000 and $11,352,000, respectively, due at maturity. The Partnership has the option of extending the maturity dates for one additional year, to December 1, 2016, during which period the mortgages would require monthly payments of principal and interest and would bear interest at a rate equal to the average of the one month LIBOR plus 250 basis points.  The previous terms for the first mortgage on Hunters Glen IV Apartments required monthly payments of approximately $86,000 with a stated fixed interest rate of 5.26% through its maturity of January 1, 2022, at which time the loan was scheduled to be fully amortized. The previous terms for the first mortgages on Hunters Glen V Apartments and Hunters Glen VI Apartments required monthly payments of approximately $112,000 and $117,000, respectively, with a stated fixed interest rate of 7.14% through maturity of January 1, 2022, at which time the loans were scheduled to be fully amortized.



The Partnership's mortgage indebtedness encumbering Hunter's Glen IV, V and VI Apartments of approximately $56,961,000 matures in December 2015 with a one year extension option and balloon payments of approximately $47,674,000 due at maturity. The mortgage indebtedness encumbering Twin Lake Towers Apartments of approximately $11,059,000 matures in July 2013, at which time a balloon payment totaling approximately $7,385,000 will be due. The Managing General Partner will attempt to refinance the mortgages on Hunters Glen IV, V, VI, and Twin Lake Towers Apartments
and/or sell the properties prior to the maturity date. If the properties cannot be refinanced or sold for a sufficient amount, the Partnership will risk losing the properties through foreclosure. The Partnership's assets are thought to be generally sufficient for any near-term needs (exclusive of capital improvements) of the Partnership.



On April 29, 2005, the Partnership refinanced the mortgage encumbering Pickwick Place Apartments. The refinancing replaced the existing mortgage of approximately $5,775,000 with a new mortgage in the amount of approximately $9,431,000. Total capitalized loan costs were approximately $90,000. The Partnership recognized a loss on early extinguishment of debt of approximately $2,000 due to loan costs being written off, which is included in income from discontinued operations.



The April 29, 2005 refinancing of Pickwick Place Apartments was under a credit facility ("Permanent Credit Facility") which also provided for the refinancing of several other properties. The Permanent Credit Facility created separate loans for each property refinanced thereunder, which loans were not cross-collateralized or cross-defaulted with each other. The Permanent Credit Facility matures in September 2007 with an option for the Partnership to elect one five-year extension.  Each note under this Permanent Credit Facility is initially a variable rate loan. The interest rate on the variable rate loans is the Fannie Mae discounted mortgage-backed security index plus 85 basis points and the rate resets monthly. Each loan automatically renews at the end of each month. In addition, monthly principal payments are required based on a 30-year amortization schedule, using the interest rate in effect during the first month that the property is financed by the Permanent Credit Facility. The loans may be prepaid without penalty. The Partnership sold Pickwick Place Apartments to a third party on December 1, 2005 and repaid the mortgage encumbering the property.



The Partnership distributed the following amounts during the years ended December 31, 2005 and 2004 (in thousands except per unit data):



|                 |              |             |              |            
|---------------- | ------------ | ----------- | ------------ | -----------
|                 | Year Ended   | Per Limited | Year Ended   | Per Limited
|                 | December 31, | Partnership | December 31, | Partnership
|                 | 2005         | Unit        | 2004         | Unit       
|Operations       | $    612     | $ 13.55     | $ 1,567      | $ 34.68    
|Sales (1)        | 10,017       | 221.74      | --           | --         
|Financings (2)   | 17,805       | 394.17      | --           | --         
|Refinancings (3) | 3,539        | 78.38       | --           | --         
|Total            | $31,973      | $707.84     | $1,567       | $34.68     



(1)

From the April 2005 sale of Chambers Ridge Apartments, and the December 2005 sale of Pickwick Place Apartments.

(2)

From the December 2005 financings on Hunters Glen IV, V and VI Apartments.

(3)

From the April 2005 refinancing of Pickwick Place Apartments



Future cash distributions will depend on the levels of cash generated from operations, and the timing of debt maturities, property sales and/or refinancings. The Partnerships cash available for distribution is reviewed on a monthly basis. There can be no assurance that the Partnership will generate sufficient funds from operations, after planned capital improvement expenditures, to permit any distributions to its partners during 2006 or subsequent periods.



Other



In addition to its indirect ownership of the general partner interests in the Partnership, AIMCO and its affiliates owned 33,292 limited partnership units (the "Units") in the Partnership representing 74.45% of the outstanding Units at December 31, 2005.  A number of these Units were acquired pursuant to tender offers made by AIMCO or its affiliates. It is possible that AIMCO or its affiliates will acquire additional Units in exchange for cash or a combination of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO, either through private purchases or tender offers. Pursuant to the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters that include, but are not limited to, voting on certain amendments to the Partnership Agreement and voting to remove the Managing General Partner. As a result of its ownership of 74.45% of the outstanding Units, AIMCO and its affiliates are in a position to control all voting decisions with respect to the Partnership. Although the Managing General Partner owes fiduciary duties to the limited partners of the Partnership, the Managing General Partner also owes fiduciary duties to AIMCO as its sole stockholder. As a result, the duties of the Managing General Partner, as managing general partner, to the Partnership and its limited partners may come into conflict with the duties of the Managing General Partner to AIMCO as its sole stockholder.



Critical Accounting Policies and Estimates



A summary of the Partnerships significant accounting policies is included in "Note A  Organization and Significant Accounting Policies" which is included in the consolidated financial statements in "Item 7. Financial Statements". The ManagingGeneral Partner believes that the consistent application of these policies enables the Partnership to provide readers of the consolidated financial statements with useful and reliable information about the Partnerships operating results and financial condition.  The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires the Partnership to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements as well as reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.  Judgments and assessments of uncertainties are required in applying the Partnerships accounting policies in many areas. The Partnership believes that of its significant accounting policies, the following may involve a higher degree of judgment and complexity.



Impairment of Long-Lived Assets



Investment properties are recorded at cost, less accumulated depreciation, unless the carrying amount of the asset is not recoverable.  If events or circumstances indicate that the carrying amount of a property may not be recoverable, the Partnership will make an assessment of its recoverability by comparing the carrying amount to the Partnerships estimate of the undiscounted future cash flows, excluding interest charges, of the property.   If the carrying amount exceeds the aggregate undiscounted future cash flows, the Partnership would recognize an impairment loss to the extent the carrying amount exceeds the estimated fair value of the property.



Real property investment is subject to varying degrees of risk.  Several factors may adversely affect the economic performance and value of the Partnerships investment properties.  These factors include, but are not limited to, general economic climate; competition from other apartment communities and other housing options; local conditions, such as loss of jobs or an increase in the supply of apartments that might adversely affect apartment occupancy or rental rates; changes
in governmental regulations and the related cost of compliance; increases in operating costs (including real estate taxes) due to inflation and other factors, which may not be offset by increased rents; and changes in tax laws and housing laws, including the enactment of rent control laws or other laws regulating multi-family housing.  Any adverse changes in these factors could cause impairment of the Partnerships assets.





Revenue Recognition



The Partnership generally leases apartment units for twelve-month terms or less.  The Partnership will offer rental concessions during particularly slow months or in response to heavy competition from other similar complexes in the area.  Rental income attributable to leases, net of any concessions, is recognized on a straight-line basis over the term of the lease.  The Partnership evaluates all accounts receivable from residents and establishes an allowance, after the application of security deposits, for accounts greater than 30 days past due on current tenants and all receivables due from former tenants.





Item 7.

Financial Statements



ANGELES PARTNERS XII



LIST OF FINANCIAL STATEMENTS



Report of Independent Registered Public Accounting Firm



Consolidated Balance Sheet - December 31, 2005



Consolidated Statements of Operations - Years ended December 31, 2005 and 2004



Consolidated Statements of Changes in Partners' Deficit - Years ended December 31, 2005 and 2004



Consolidated Statements of Cash Flows - Years ended December 31, 2005 and 2004



Notes to Consolidated Financial Statements







Report of Independent Registered Public Accounting Firm







The Partners

Angeles Partners XII





We have audited the accompanying consolidated balance sheet of Angeles Partners XII as of December 31, 2005, and the related consolidated statements of operations, changes in partners' deficit, and cash flows for each of the two years in the period ended December 31, 2005. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.



We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Partnerships internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnerships internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.



In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Angeles Partners XII at December 31, 2005, and the consolidated results of its operations and its cash flows for each of the two years in the period ended December 31, 2005, in conformity with U.S. generally accepted accounting principles.



/s/ERNST & YOUNG LLP





Greenville, South Carolina

March 6, 2006







ANGELES PARTNERS XII



CONSOLIDATED BALANCE SHEET

(in thousands, except unit data)



December 31, 2005





|                                                       |            |         
|------------------------------------------------------ | ---------- | --------
|Assets                                                 |            |         
|Cash and cash equivalents                              |            | $  2,464
|Receivables and deposits                               |            | 699     
|Other assets                                           |            | 2,164   
|Investment properties (Notes B, E and F):              |            |         
|Land                                                   | $  6,468   |         
|Buildings and related personal property                | 63,964     |         
|                                                       | 70,432     |         
|Less accumulated depreciation                          | (55,769)   | 14,663  
|                                                       |            |         
|                                                       |            | $19,990 
|Liabilities and Partners' Deficit                      |            |         
|Liabilities                                            |            |         
|Accounts payable                                       |            | $    236
|Tenant security deposit liabilities                    |            | 433     
|Accrued property taxes                                 |            | 334     
|Other liabilities                                      |            | 637     
|Due to affiliates (Note D)                             |            | 16      
|Mortgage notes payable (Note B)                        |            | 68,020  
|                                                       |            |         
|Partners' Deficit                                      |            |         
|General partners                                       | $    (215) |         
|Limited partners (44,718 units issued and outstanding) | (49,471)   | (49,686)
|                                                       |            |         
|                                                       |            | $19,990 





See Accompanying Notes to Consolidated Financial Statements





ANGELES PARTNERS XII



CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per unit data)



|                                                  |              |           
|------------------------------------------------- | ------------ | ----------
|                                                  | Years Ended 
|                                                  | December 31,
|                                                  | 2005         | 2004      
|Revenues:                                         |              | (Restated)
|Rental income                                     | $ 12,982     | $ 12,212  
|Other income                                      | 1,325        | 1,308     
|Total revenues                                    | 14,307       | 13,520    
|                                                  |              |           
|Expenses:                                         |              |           
|Operating                                         | 4,450        | 4,019     
|General and administrative                        | 506          | 607       
|Depreciation                                      | 1,721        | 3,324     
|Interest                                          | 3,234        | 3,225     
|Property taxes                                    | 1,396        | 1,754     
|Total expenses                                    | 11,307       | 12,929    
|                                                  |              |           
|Income from continuing operations                 | 3,000        | 591       
|Income from discontinued operations (Note A)      | 54           | 445       
|Gain on sales of discontinued operations (Note F) | 20,806       | --        
|                                                  |              |           
|Net income (Note C)                               | $23,860      | $1,036    
|                                                  |              |           
|Net income allocated to general partners          | $    242     | $     10  
|Net income allocated to limited partners          | 23,618       | 1,026     
|                                                  |              |           
|                                                  | $23,860      | $1,036    
|                                                  |              |           
|Per limited partnership unit:                     |              |           
|Income from continuing operations                 | $  66.41     | $  13.08  
|Income from discontinued operations               | 1.19         | 9.86      
|Gain on sales of discontinued operations          | 460.55       | --        
|Net income per limited partnership unit           | $528.15      | $22.94    
|                                                  |              |           
|Distributions per limited partnership unit        | $707.84      | $34.68    



See Accompanying Notes to Consolidated Financial Statements





ANGELES PARTNERS XII



CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' DEFICIT

(in thousands, except unit data)







|                               |             |          |           |          
|------------------------------ | ----------- | -------- | --------- | ---------
|                               | Limited     |          |           |          
|                               | Partnership | General  | Limited   |          
|                               | Units       | Partners | Partners  | Total    
|                               |             |          |           |          
|Original capital contributions | 44,773      | $1       | $44,773   | $44,774  
|                               |             |          |           |          
|Partners' deficit              |             |          |           |          
|at December 31, 2003           | 44,718      | $ (131)  | $(40,911) | $(41,042)
|                               |             |          |           |          
|Net income for the year ended  |             |          |           |          
|December 31, 2004              | --          | 10       | 1,026     | 1,036    
|                               |             |          |           |          
|Distributions to partners      | --          | (16)     | (1,551)   | (1,567)  
|                               |             |          |           |          
|Partners' deficit at           |             |          |           |          
|December 31, 2004              | 44,718      | (137)    | (41,436)  | (41,573) 
|                               |             |          |           |          
|Net income for the year ended  |             |          |           |          
|December 31, 2005              | --          | 242      | 23,618    | 23,860   
|                               |             |          |           |          
|Distributions to partners      | --          | (320)    | (31,653)  | (31,973) 
|                               |             |          |           |          
|Partners' deficit at           |             |          |           |          
|December 31, 2005              | 44,718      | $(215)   | $(49,471) | $(49,686)



See Accompanying Notes to Consolidated Financial Statements





ANGELES PARTNERS XII



CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)



|                                                      |              |         
|----------------------------------------------------- | ------------ | --------
|                                                      | Years Ended 
|                                                      | December 31,
|                                                      | 2005         | 2004    
|Cash flows from operating activities:                 |              |         
|Net income                                            | $ 23,860     | $  1,036
|Adjustments to reconcile net income to net cash       |              |         
|provided by operating activities:                     |              |         
|Depreciation                                          | 2,061        | 4,462   
|Amortization of loan costs                            | 158          | 188     
|Gain on sale of discontinued operations               | (20,806)     | --      
|Loss on early extinguishment of debt                  | 263          | --      
|Bad debt                                              | 98           | 264     
|Change in accounts:                                   |              |         
|Receivables and deposits                              | 90           | (166)   
|Other assets                                          | 222          | (156)   
|Accounts payable                                      | (184)        | (147)   
|Tenant security deposit liabilities                   | (152)        | (123)   
|Accrued property taxes                                | (173)        | (88)    
|Due to affiliates                                     | (357)        | (166)   
|Other liabilities                                     | (68)         | (3)     
|Net cash provided by operating activities             | 5,012        | 5,101   
|                                                      |              |         
|Cash flows from investing activities:                 |              |         
|Property improvements and replacements                | (2,969)      | (1,837) 
|Net withdrawals from (deposits to) restricted escrows | 36           | (9)     
|Proceeds from the sale of discontinued operations     | 27,161       | --      
|Net cash provided by (used in) investing activities   | 24,228       | (1,846) 
|                                                      |              |         
|Cash flows from financing activities:                 |              |         
|Payments on mortgage notes payable                    | (1,869)      | (1,859) 
|Repayment of mortgage notes payable                   | (23,115)     | --      
|Proceeds from mortgage notes payable                  | 28,931       | --      
|Distributions to partners                             | (31,973)     | (1,567) 
|Loan costs paid                                       | (490)        | --      
|Prepayment penalties paid                             | (64)         | --      
|Net cash used in financing activities                 | (28,580)     | (3,426) 
|                                                      |              |         
|Net increase (decrease) in cash and cash equivalents  | 660          | (171)   
|Cash and cash equivalents at beginning of year        | 1,804        | 1,975   
|                                                      |              |         
|Cash and cash equivalents at end of year              | $2,464       | $1,804  
|                                                      |              |         
|Supplemental disclosure of cash flow information:     |              |         
|Cash paid for interest                                | $3,558       | $3,753  
|                                                      |              |         
|Supplemental disclosure of non-cash activity:         |              |         
|Property improvements and replacements in accounts    |              |         
|payable                                               | $191         | $88     



See Accompanying Notes to Consolidated Financial Statements





ANGELES PARTNERS XII



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2005





Note A - Organization and Significant Accounting Policies



Organization: Angeles Partners XII (the "Partnership" or "Registrant") is a publicly-held limited partnership organized under the California Uniform Limited Partnership Act pursuant to the amended Certificate and Agreement of Limited Partnership (herein referred to as the "Agreement") dated May 26, 1983.  The Partnership's managing general partner is Angeles Realty Corporation II ("ARC II" or the "Managing General Partner"), a California corporation. ARC II was a wholly-owned subsidiary of MAE GP Corporation ("MAE GP").  Effective February 25, 1998, MAE GP was merged into Insignia Properties Trust ("IPT"), which was an affiliate of Insignia Financial Group, Inc. ("Insignia").  Effective February 26, 1999, IPT was merged into Apartment Investment and Management Company ("AIMCO") a publicly traded real estate investment trust. Thus the Managing General Partner is now a wholly-owned subsidiary of AIMCO.  The Elliott Accommodation Trust and the Elliott Family Partnership, a California limited partnership, were the Non-Managing General Partners. Effective December 31, 1997, the Elliott Family Partnership, Ltd. acquired the Elliott Accommodation Trust's general partner interest in the Partnership. On June 30, 2000, Elliott Family Partnership sold its remaining interest to AIMCO Properties, LP, a wholly owned subsidiary of AIMCO.  The Managing General Partner and the Non-Managing General Partner are herein collectively referred to as the "General Partners".  The Partnership Agreement provides that the Partnership is to terminate on December 31, 2035, unless terminated prior to such date. As of December 31, 2005, the Partnership operates four residential properties in or near major urban areas in the United States.



Basis of Presentation: In accordance with Statement of Financial Accounting Standards ("SFAS") No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the consolidated statement of operations for the year ended December 31, 2004 has been restated to reflect the operations of Pickwick Place Apartments as income from discontinued operations and the consolidated statements of operations for the years ended December 31, 2005 and 2004 reflect the operations of Chambers Ridge and Pickwick Place Apartments as income from discontinued operations due to the properties sales in April 2005 and December 2005, respectively. The results of the properties operations for the years ended December 31, 2005 and 2004 of approximately $54,000 and $445,000, respectively, are included in  income from discontinued operations and include revenues of approximately $2,922,000 and $4,835,000 respectively.



Certain reclassifications have been made to the 2004 balances to conform to the 2005 presentation.



Principles of Consolidation: The consolidated financial statements of the Partnership include its 99.99% limited partnership interest in Pickwick Place AP XII LP.  Because the Partnership may remove the General Partner of Pickwick Place AP XII LP, this partnership is controlled and consolidated by the Partnership. The consolidated financial statements also include the Partnership's interests in AP XII Associate GP, LLC and Hunters Glen Phase V GP, LLC, single member limited liability corporations, which are wholly-owned by the Partnership and APXII Associates, LP which is wholly owned by the Partnership. All significant inter-entity balances have been eliminated. Minority interest is immaterial and not shown separately in the consolidated financial statements.



Allocation of Profits, Gains, Losses and Distributions: The Partnership will allocate all profits, losses and distributions related to the operations of its investment properties 1% to the General Partners and 99% to the Limited Partners.  All profits, losses and distributions related to the sales and/or refinancing of its investment properties will be allocated in accordance with the Agreement.



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



Upon the sale or other disposition, or refinancing, of any asset of the Partnership, the distributable net proceeds shall be distributed as follows: (i) to the Partners in proportion to their interests until the Limited Partners have received cumulative distributions equal to their original capital contributions reduced by the amount of any previous distributions;  (ii) to the Partners until the Limited Partners have received distributions from all sources equal to their 6% cumulative distribution; (iii) to the Managing General Partner until it has received an amount equal to 3% of the aggregate Disposition Prices of all properties or other investments sold or otherwise disposed of, or refinanced; (iv), to the Partners in proportion to their interests until the Limited Partners have received cumulative distributions from all sources equal to 150% of the Capital Contribution of the Limited Partners; (v) to the Managing General Partner until it has received an amount equal to 17.6% of the distributions made pursuant to (iv); and (vi) 85% to the Limited Partners and non-Managing General Partner in proportion to their interests and 15% ("Incentive Interest") to the Managing General Partner.



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



Cash and Cash Equivalents: Cash and cash equivalents include cash on hand and in banks. At certain times, the amount of cash deposited at a bank may exceed the limit on insured deposits. Cash balances include approximately $2,418,000 at December 31, 2005 that are maintained by an affiliated management company on behalf of affiliated entities in cash concentration accounts.



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



Deferred Costs: Loan costs of approximately $2,266,000, less accumulated amortization of approximately $364,000, are included in other assets. The loan costs are amortized over the terms of the related loan agreements. Amortization expense for 2005 was approximately $158,000 and is included in interest expense and income from discontinued operations. Amortization expense is expected to be approximately $198,000 in the years 2006 through 2010.



Leasing commissions and other direct costs incurred in connection with successful leasing efforts are deferred and amortized over the terms of the related leases.  Amortization of these costs is included in operating expenses.



Investment Properties: Investment properties consist of four apartment complexes and are stated at cost. The Partnership capitalizes costs incurred in connection with capital expenditure activities, including redevelopment and construction projects, other tangible property improvements and replacements of existing property components.  Costs associated with redevelopment projects are capitalized in accordance with Statement of Financial Accounting Standard (SFAS) No. 67,
Accounting for Costs and the Initial Rental Operations of Real Estate Properties.  Costs incurred in connection with capital projects are capitalized where the costs of the project exceed $250.  Included in these capitalized costs are payroll costs associated with time spent by site employees in connection with the planning, execution and control of all capital expenditure activities at the property level.  The Partnership capitalizes interest, property taxes and operating costs in accordance with SFAS No. 34 Capitalization of Interest Costs during periods in which redevelopment and construction projects are in progress.  The Partnership did not capitalize any costs related to interest, property taxes or operating costs during the years ended December 31, 2005 and 2004. Capitalized costs are depreciated over the useful life of the asset.  Expenditures for ordinary repairs, maintenance and apartment turnover costs are expensed as incurred.



In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the Partnership records impairment losses on long-lived assets used in operations when events and circumstances indicate the assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets.  No adjustments for impairment of value were necessary for the years ending December 31, 2005 and 2004.



Recent Accounting Pronouncement: In May 2005, the Financial Accounting Standards Board issued SFAS No. 154 Accounting Changes and Error Corrections, which replaces APB Opinion No. 20 and SFAS No. 3, and changes the requirements for the accounting for and reporting of a change in accounting principle. This statement is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005, although early adoption is permitted for accounting changes and corrections of errors made in fiscal years beginning after the date SFAS No. 154 was issued. The Partnership does not anticipate that the adoption of SFAS No. 154 will have a material effect on the Partnerships consolidated financial condition or results of operations.



Segment Reporting: SFAS No. 131, "Disclosure about Segments of an Enterprise and Related Information" established standards for the way that public business enterprises report information about operating segments in annual financial statements and requires that those enterprises report selected information about operating segments in interim financial reports.  SFAS No. 131 also established standards for related disclosures about products and services, geographic areas, and major customers. As defined in SFAS 131, the Partnership has only one reportable segment.



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



Leases:  The Partnership generally leases apartment units for twelve-month terms or less.  The Partnership will offer rental concessions during particularly slow months or in response to heavy competition from other similar complexes in the area.  Rental income attributable to leases, net of any concessions, is recognized on a straight-line basis over the term of the lease.  The Partnership evaluates all accounts receivable from residents and establishes an allowance, after the application of security deposits, for accounts greater than 30 days past due on current tenants and all receivables due from former tenants.





Fair Value of Financial Instruments: SFAS No. 107, "Disclosures about Fair Value of Financial Instruments", as amended by SFAS No. 119, "Disclosures about Derivative Financial Instruments and Fair Value of Financial Instruments", requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate fair value. Fair value is defined in the SFAS as the amount at which the instruments could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The Partnership believes that the carrying amount of its financial instruments (except for long term debt) approximates their fair value due to the short term maturity of these instruments. The Partnership estimates the fair value of its long term debt by discounting future cash flows using a discount rate commensurate with that currently believed to be available to the Partnership for similar term, fully amortizing long term debt. The fair value of the Partnerships long term debt at the Partnerships incremental borrowing rate approximates its carrying value.



Advertising Costs: The Partnership expenses the costs of advertising as incurred.  Advertising costs of approximately $173,000and $200,000 for the years ended December 31, 2005 and 2004, respectively, are included in operating expense and income from discontinued operations.



Note B - Mortgage Notes Payable



The principal terms of mortgage notes payable are as follows:



|                      |                |           |          |          |               
|--------------------- | -------------- | --------- | -------- | -------- | --------------
|                      | Principal      | Monthly   |          |          | Principal     
|                      | Balance At     | Payment   | Standard |          | Balance       
|                      | December 31,   | Including | Interest | Maturity | Due At        
|Property              | 2005           | Interest  | Rate     | Date     | Maturity      
|                      | (in thousands) |           |          |          | (in thousands)
|                      |                |           |          |          |               
|Hunters Glen Apts IV  |                |           |          |          |               
|1st mortgage          | $11,194        | 64        | 5.51%    | 12/2015  | $ 9,028       
|2nd mortgage          | 5,500          | 32        | 5.63%    | 12/2015  | 4,622         
|Hunters Glen Apts V   |                |           |          |          |               
|1st mortgage          | 12,871         | 89        | 7.39%    | 12/2015  | 10,906        
|2nd mortgage          | 6,860          | 39        | 5.63%    | 12/2015  | 5,765         
|Hunters Glen Apts VI  |                |           |          |          |               
|1st mortgage          | 13,396         | 93        | 7.39%    | 12/2015  | 11,352        
|2nd mortgage          | 7,140          | 41        | 5.63%    | 12/2015  | 6,001         
|Twin Lake Towers Apts |                |           |          |          |               
|1st mortgage          | 11,059         | 76        | 4.54%    | 07/2013  | 7,385         
|                      | $68,020        | $434      |          |          | $55,059       



The mortgage notes payable are fixed rate mortgages that are non-recourse and are secured by a pledge of the Partnership's rental properties and by a pledge of revenues from the respective rental properties. Certain of the notes include prepayment penalties if repaid prior to maturity. Further, the properties may not be sold subject to existing indebtedness.



On December 1, 2005, the Registrant obtained second mortgages in the total principal amount of approximately $19,500,000 on the Hunters Glen IV, V, and VI Apartments. The new second mortgages bear interest at a fixed interest rate of 5.63% and require monthly payments of principal and interest of approximately $112,000 in the aggregate beginning on January 1, 2006 until the loans mature December 1, 2015, with balloon payments of approximately $16,388,000 in the aggregate due at maturity. The Registrant has the option of extending the maturity date of each mortgage for one additional year, to December 1, 2016, during which period the second mortgages would require monthly payments of principal and interest, and would bear interest at a rate equal to the average of the one month LIBOR plus 250 basis points. The Registrant may prepay the second mortgages without penalty during the period from December 2, 2015 through December 1, 2016. However, if the Registrant prepays the second mortgage loan prior to December 1, 2015, a prepayment penalty as defined in the loan agreement will apply.  Loan costs of approximately $400,000 were incurred in connection with obtaining the second mortgages and have been capitalized in other assets on the consolidated balance sheet.



In connection with the new financing, the Registrant agreed to certain modifications of the existing first mortgage loans encumbering  Hunters Glen IV, V, and VI Apartments. For Hunters Glen IV Apartments, the interest rate was modified to a fixed rate of 5.51%, and commencing January 1, 2006 through the loans maturity date of December 1, 2015 the loan requires monthly payments of principal and interest of approximately $64,000, with a balloon payment of approximately $9,028,000 due at maturity. For Hunters Glen V Apartments and Hunters Glen VI Apartments, the interest rate was modified to a fixed rate of approximately 7.39%, and commencing January 1, 2006 through the loans maturity dates of December 1, 2015, the loans require monthly payments of approximately $89,000 and $93,000, respectively, with balloon payments of approximately $10,906,000 and $11,352,000,
respectively, due at maturity. The Registrant has the option of extending the maturity dates for one additional year, to December 1, 2016, during which period the mortgages would require monthly payments of principal and interest and would bear interest at a rate equal to the average of the one month LIBOR plus 250 basis points.  The previous terms for the first mortgage on Hunters Glen IV Apartments required monthly payments of approximately $86,000 with a stated fixed interest rate of 5.26% through its maturity of January 1, 2022, at which time the loan was scheduled to be fully amortized. The previous terms for the first mortgages on Hunters Glen V Apartments and Hunters Glen VI Apartments required monthly payments of approximately $112,000 and $117,000, respectively, with a stated fixed interest rate of 7.14% through maturity of January 1, 2022, at which time the loans were scheduled to be fully amortized.



On April 29, 2005, the Partnership refinanced the mortgage encumbering Pickwick Place Apartments. The refinancing replaced the existing mortgage of approximately $5,775,000 with a new mortgage in the amount of approximately $9,431,000. Total capitalized loan costs were approximately $90,000. The Partnership recognized a loss on early extinguishment of debt of approximately $2,000 due to loan costs being written off, which is included in income from discontinued operations.



The April 29, 2005 refinancing of Pickwick Place Apartments was under a credit facility ("Permanent Credit Facility") which also provided for the refinancing of several other properties. The Permanent Credit Facility created separate loans for each property refinanced thereunder, which loans were not cross-collateralized or cross-defaulted with each other. The Permanent Credit Facility matures in September 2007 with an option for the Partnership to elect one five-year extension.  Each note under this Permanent Credit Facility is initially a variable rate loan. The interest rate on the variable rate loans is the Fannie Mae discounted mortgage-backed security index plus 85 basis points and the rate resets monthly. Each loan automatically renews at the end of each month. In addition, monthly principal payments are required based on a 30-year amortization schedule, using the interest rate in effect during the first month that the property is financed by the Permanent Credit Facility. The loans may be prepaid without penalty. The Partnership sold Pickwick Place Apartments to a third party on December 1, 2005 and repaid the mortgage encumbering the property.



Scheduled principal payments of mortgage notes payable subsequent to December 31, 2005, are as follows (in thousands):



|           |        
|---------- | -------
|2006       | $ 1,121
|2007       | 1,185  
|2008       | 1,243  
|2009       | 1,325  
|2010       | 1,402  
|Thereafter | 61,744 
|           | $68,020



Note C - Income Taxes



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



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



|                                    |         |        
|----------------------------------- | ------- | -------
|                                    | 2005    | 2004   
|                                    |         |        
|Net income as reported              | $23,860 | $ 1,036
|Add (deduct):                       |         |        
|Depreciation differences            | (215)   | 1,877  
|Unearned income                     | (66)    | (114)  
|Gain on sale of investment property | (800)   | --     
|Extinguishment of debt              | --      | (1)    
|Other                               | (121)   | (516)  
|Federal taxable income              | $22,658 | $2,282 
|Federal taxable income per limited  |         |        
|partnership unit                    | $497.12 | $50.52 



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



|                                    |          
|----------------------------------- | ---------
|Net liabilities                     | $(49,686)
|Land and buildings                  | 4,341    
|Accumulated depreciation            | (2,381)  
|Syndication and distribution costs  | 5,604    
|Other                               | 605      
|                                    |          
|Net liabilities - Federal tax basis | $(41,517)



Note D - Transactions with Affiliated Parties



The Partnership has no employees and depends on the Managing General Partner and its affiliates for the management and administration of all Partnership activities. The Partnership Agreement provides for (i) certain payments to affiliates for services and (ii) reimbursement of certain expenses incurred by affiliates on behalf of the Partnership.



Affiliates of the Managing General Partner receive 5% of gross receipts from all of the Partnership's properties as compensation for providing property management services. The Partnership paid to such affiliates approximately $859,000 and $903,000 for the years ended December 31, 2005 and 2004, respectively, which is included in operating expenses and income from discontinued operations.



The Partnership Agreement provides for a fee equal to 7.5% of "net cash from operations", as defined in the Partnership Agreement to be paid to the Managing General Partner for executive and administrative management services. One half of this fee is to be accrued and not paid unless the limited partners have received distributions equal to a 5% cumulative annual return on their adjusted capital investment as defined in the Partnership Agreement or there are proceeds from the sale of a property. The fee was approximately $16,000 and $105,000 for the years ended December 31, 2005 and 2004, respectively, which is included in general and administrative expenses. Due to the sale of Chambers Ridge Apartments, the accrued
fee balance at the time of the sale of approximately $365,000 was paid to the Managing General Partner during the year ended December 31, 2005 and approximately $16,000 remains unpaid and is included in due to affiliates.



Affiliates of the Managing General Partner charged the Partnership for reimbursement of accountable administrative expenses amounting to approximately $641,000and $432,000 for the years ended December 31, 2005 and 2004, respectively, which is included in general and administrative expenses and investment properties. The portion of these reimbursements included in investment properties for the years ended December 31, 2005 and 2004 are fees related to construction management services provided by an affiliate of the Managing General Partner of approximately $316,000 and $104,000, respectively.



Pursuant to the Partnership Agreement, the Managing General Partner is entitled to receive a distribution equal to 3% of the aggregate disposition price of sold properties. The Partnership paid a distribution of $186,000 to the Managing General Partner related to the sale of Cooper Point Plaza in 1999. During 2001, the Partnership paid distributions of approximately $85,000 and $375,000 related to the sales of Briarwood and Gateway Gardens Apartments, respectively. These distributions are subordinate to the limited partners receiving their original capital contributions plus a cumulative preferred return of 6% per annum of their adjusted capital investment, as defined in the Partnership Agreement. If the limited partners have not received these returns when the Partnership terminates, the Managing General Partner will be required to return these amounts to the Partnership.



In addition, pursuant to the Partnership Agreement, the Managing General Partner is entitled to a fee equal to 1% of the gross proceeds of a financing of an investment property.  During the year ended December 31, 2005, the Partnership paid approximately $195,000 in such fees related to the financings of Hunters Glen IV, V and VI Apartments.  Such fees are capitalized as loan costs, are included in other assets and are being amortized over the life of the related loans.



The Partnership insures its properties up to certain limits through coverage provided by AIMCO which is generally self-insured for a portion of losses and liabilities related to workers compensation, property casualty, general liability, and vehicle liability. The Partnership insures its properties above the AIMCO limits through insurance policies obtained by AIMCO from insurers unaffiliated with the Managing General Partner. During the years ended December 31, 2005 and 2004, the Partnership was charged by AIMCO and its affiliates approximately $209,000 and $256,000, respectively, for insurance coverage and fees associated with policy claims administration.



In addition to its indirect ownership of the general partner interests in the Partnership, AIMCO and its affiliates owned 33,292 limited partnership units (the "Units") in the Partnership representing 74.45% of the outstanding Units at December 31, 2005.  A number of these Units were acquired pursuant to tender offers made by AIMCO or its affiliates. It is possible that AIMCO or its affiliates will acquire additional Units in exchange for cash or a combination of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO, either through private purchases or tender offers. Pursuant to the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters that include, but are not limited to, voting on certain amendments to the Partnership Agreement and voting to remove the Managing General Partner. As a result of its ownership of 74.45% of the outstanding Units, AIMCO and its affiliates are in a position to control all voting decisions with respect to the Partnership. Although the Managing General Partner owes fiduciary duties to the limited partners of the Partnership, the Managing General Partner also owes fiduciary duties to AIMCO as its sole stockholder. As a result, the duties of the
Managing General Partner, as managing general partner, to the Partnership and its limited partners may come into conflict with the duties of the Managing General Partner to AIMCO as its sole stockholder.



Note E - Investment Properties and Accumulated Depreciation



|                      |                |                |             |                |  | 
|--------------------- | -------------- | -------------- | ----------- | -------------- |  | 
|                      |                | Initial Cost   |            
|                      |                | To Partnership |            
|                      |                | (in thousands) |            
|                      |                |                |             |               
|                      |                |                | Buildings   | Cost          
|                      |                |                | and Related | Capitalized   
|                      |                |                | Personal    | Subsequent    
|Description           | Encumbrances   | Land           | Property    | to Acquisition
|                      | (in thousands) |                |             | (in thousands)
|Investment Properties |                |                |             |               
|Hunters Glen Apts IV  | $16,694        | $ 1,552        | $ 8,324     | $ 4,510       
|Hunters Glen Apts V   | 19,731         | 1,820          | 9,759       | 5,054         
|Hunters Glen Apts VI  | 20,536         | 1,981          | 10,620      | 5,462         
|Twin Lake Towers Apts | 11,059         | 1,115          | 12,806      | 7,429         
|Totals                | $68,020        | $6,468         | $41,509     | $22,455       



|                      |                               |           |         |                |          |             |  |  |  |  | 
|--------------------- | ----------------------------- | --------- | ------- | -------------- | -------- | ----------- |  |  |  |  | 
|                      | Gross Amount At Which Carried |           |         |               
|                      | At December 31, 2005          |           |         |               
|                      | (in thousands)                |           |         |               
|                      |                               | Buildings |         |                |          |            
|                      |                               | And       |         |                |          |            
|                      |                               | Related   |         |                |          |            
|                      |                               | Personal  |         | Accumulated    | Date     | Depreciable
|Description           | Land                          | Property  | Total   | Depreciation   | Acquired | Life-Years 
|                      |                               |           |         | (in thousands) |          |            
|Hunters Glen Apt IV   | $1,552                        | $12,834   | $14,386 | $11,050        | 01/31/85 | 5-40       
|Hunters Glen Apt V    | 1,820                         | 14,813    | 16,633  | 12,773         | 01/31/85 | 5-40       
|Hunters Glen Apt VI   | 1,981                         | 16,082    | 18,063  | 13,876         | 01/31/85 | 5-40       
|Twin Lake Towers Apts | 1,115                         | 20,235    | 21,350  | 18,070         | 03/30/84 | 5-40       
|Totals                | $6,468                        | $63,964   | $70,432 | $55,769        |          |            



The depreciable lives included above are for the building and components. The depreciable lives for related personal property are for 5 to 7 years.



Reconciliation of "investment properties and accumulated depreciation":



|                             |                          |         
|---------------------------- | ------------------------ | --------
|                             | Years Ended December 31,
|                             | 2005                     | 2004    
|                             | (in thousands)          
|Investment Properties        |                          |         
|Balance at beginning of year | $ 80,470                 | $92,759 
|Property improvements        | 3,072                    | 1,925   
|Assets held for sale         | --                       | (14,208)
|Dispositions of assets       | (13,110)                 | (6)     
|Balance at end of year       | $70,432                  | $80,470 
|                             |                          |         
|Accumulated Depreciation     |                          |         
|Balance at beginning of year | $ 63,492                 | $70,383 
|Additions charged to expense | 2,061                    | 4,462   
|Assets held for sale         | --                       | (11,347)

|                       |         |        
|---------------------- | ------- | -------
|Dispositions of assets | (9,784) | (6)    
|Balance at end of year | $55,769 | $63,492



The aggregate cost of the real estate for Federal income tax purposes at December 31, 2005 and 2004, is approximately $74,773,000 and $85,377,000, respectively.  The accumulated depreciation for Federal income tax purposes as of December 31, 2005 and 2004, is approximately $58,150,000 and $66,118,000, respectively.



Note F  Sale of Investment Properties



On April 26, 2005, the Partnership sold Chambers Ridge Apartments to a third party for net proceeds of approximately $14,076,000 after payment of closing costs. The Partnership used approximately $8,007,000 of the net proceeds to repay the mortgage encumbering the property. The Partnership recognized a gain of approximately $11,147,000 as a result of the sale. In addition, the Partnership recognized a loss on early extinguishment of debt of approximately $159,000 as a result of unamortized loan costs being written off, and prepayment penalties paid, which is included in income from discontinued operations. In accordance with SFAS No. 144, the results of the propertys operations have been shown as income from discontinued operations for the years ended December 31, 2005 and 2004.



On December 1, 2005, the Partnership sold Pickwick Place Apartments to a third party for net proceeds of approximately $13,085,000 after payment of closing costs. The Partnership used approximately $9,333,000 of the net proceeds to repay the mortgage encumbering the property. The Partnership recognized a gain of approximately $9,659,000 as a result of the sale. In addition, the Partnership recognized a loss on early extinguishment of debt of approximately $104,000 as a result of unamortized loan costs being written off, and prepayment penalties paid, which is included in loss from discontinued operations. In accordance with SFAS No. 144, the results of the propertys operations have been shown as income from discontinued operations for the years ended December 31, 2005 and 2004.



Note G - Contingencies



In March 1998, several putative unit holders of limited partnership units of the Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the State of California for the County of San Mateo. The plaintiffs named as defendants, among others, the Partnership, its Managing General Partner and several of their affiliated partnerships and corporate entities. The action purported to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) that are named as nominal defendants, challenging, among other things, the acquisition of interests in certain Managing General Partner entities by Insignia Financial Group, Inc. ("Insignia") and entities that were, at one time, affiliates of Insignia; past tender offers by the Insignia affiliates to acquire limited partnership units; management of the partnerships by the Insignia affiliates; and the series of transactions which closed on October 1, 1998 and February 26, 1999 whereby Insignia and Insignia Properties Trust, respectively, were merged into AIMCO. The plaintiffs sought monetary damages and equitable relief, including judicial dissolution of the Partnership. In addition, during the third quarter of 2001, a complaint captioned Heller v. Insignia Financial Group (the "Heller action") was filed against the same defendants that are named in the Nuanes action. On or about August 6, 2001, plaintiffs filed a first amended complaint. The Heller action was brought as a purported derivative action, and asserted claims for, among other things, breach of fiduciary duty, unfair competition, conversion, unjust enrichment, and judicial dissolution. On January 28, 2002, the trial court granted defendants motion to strike the complaint.  Plaintiffs took an appeal from this order.



On January 8, 2003, the parties filed a Stipulation of Settlement in proposed settlement of the Nuanes action and the Heller action. On June 13, 2003, the court granted final approval of the settlement and entered judgment in both the Nuanes and Heller actions. On August 12, 2003, an objector ("Objector") filed an appeal (the Appeal) seeking to vacate and/or reverse the order approving the settlement and entering judgment thereto. On May 4, 2004, the Objector filed a second appeal challenging the courts use of a referee and its order requiring Objector to pay those fees.



On March 21, 2005, the Court of Appeals issued opinions in both pending appeals.  With regard to the settlement and judgment entered thereto, the Court of Appeals vacated the trial courts order and remanded to the trial court for further findings on the basis that the state of the record is insufficient to permit meaningful appellate review.  The matter was transferred back to the trial court on June 21, 2005.  With regard to the second appeal, the Court of Appeals reversed the order requiring the Objector to pay referee fees. With respect to the related Heller appeal, on July 28, 2005, the Court of Appeals reversed the trial courts order striking the first amended complaint.



On August 18, 2005, Objector and his counsel filed a motion to disqualify the trial court based on a peremptory challenge and filed a motion to disqualify for cause on October 17, 2005, both of which were ultimately denied and/or struck by the trial court.  On or about October 13, 2005 Objector filed a motion to intervene and on or about October 19, 2005 filed both a motion to take discovery relating to the adequacy of plaintiffs as derivative representatives and a motion to dissolve the anti-suit injunction in connection with settlement.  On November 14, 2005, Plaintiffs filed a Motion For Further Findings pursuant to the remand ordered by the Court of Appeals. Defendants joined in that motion.  On February 3, 2006, the Court held a hearing on the various matters pending before it and has ordered additional briefing from the parties and Objector.



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



AIMCO Properties L.P. and NHP Management Company, both affiliates of the Managing General Partner, are defendants in a lawsuit alleging that they willfully violated the Fair Labor Standards Act (FLSA) by failing to pay maintenance workers overtime for all hours worked in excess of forty per week. The complaint, filed in the United States District Court for the District of Columbia, attempts to bring a collective action under the FLSA and seeks to certify state subclasses in California, Maryland, and the District of Columbia. Specifically, the plaintiffs contend that AIMCO Properties L.P. and NHP Management Company failed to compensate maintenance workers for time that they were required to be "on-call". Additionally, the complaint alleges AIMCO Properties L.P. and NHP Management Company failed to comply with the FLSA in compensating maintenance workers for time that they worked in excess of 40 hours in a week.   In June 2005 the Court conditionally certified the collective action on both the on-call and overtime issues, which allows the plaintiffs to provide notice of the collective action to all non-exempt maintenance workers from August 7, 2000 through the present.  Notices have been sent out to all current and former hourly maintenance workers. The opt-in period has not yet closed. Defendants will have the opportunity to move to decertify the collective action.  Because the court denied plaintiffs motion to certify state subclasses, on September 26, 2005, the plaintiffs filed a class action with the same allegations in the Superior Court of California (Contra Costa County), and on November 5, 2005 in Montgomery County Maryland Circuit Court.  Although the outcome of any litigation is uncertain, AIMCO Properties, L.P. does not believe that the ultimate outcome will have a material adverse effect on its consolidated financial condition or results of operations. Similarly, the Managing General Partner does not believe that the ultimate outcome will have a material adverse effect on the Partnerships consolidated financial condition or results of operations.



The Partnership is unaware of any other pending or outstanding litigation matters involving it or its investment properties that are not of a routine nature arising in the ordinary course of business.



Environmental



Various Federal, state and local laws subject property owners or operators to liability for management, and the costs of removal or remediation, of certain hazardous substances present on a property. Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release or presence of the hazardous substances. The presence of, or the failure to manage or remedy properly, hazardous substances may adversely affect occupancy at affected apartment communities and the ability to sell or finance affected properties. In addition to the costs associated with investigation and remediation actions brought by government agencies, and potential fines or penalties imposed by such agencies in connection therewith, the presence of hazardous substances on a property could result in claims by private plaintiffs for personal injury, disease, disability or other infirmities. Various laws also impose liability for the cost of removal, remediation or disposal of hazardous substances through a licensed disposal or treatment facility. Anyone who arranges for the disposal or treatment of hazardous substances is potentially liable under such laws. These laws often impose liability whether or not the person arranging for the disposal ever owned or operated the disposal facility. In connection with the ownership, operation and management of its properties, the Partnership could potentially be liable for environmental liabilities or costs associated with its properties.

Mold



The Partnership is aware of lawsuits against owners and managers of multifamily properties asserting claims of personal injury and property damage caused by the presence of mold, some of which have resulted in substantial monetary judgments or settlements.  The Partnership has only limited insurance coverage for property damage loss claims arising from the presence of mold and for personal injury claims related to mold exposure.  Affiliates of the Managing General Partner have implemented a national policy and procedures to prevent or eliminate mold from its properties and the Managing General Partner believes that these measures will minimize the effects that mold could have on residents.  To date, the Partnership has not incurred any material costs or liabilities relating to claims of mold exposure or to abate mold conditions.  Because the law regarding mold is unsettled and subject to change the Managing General Partner can make no assurance that liabilities resulting from the presence of or exposure to mold will not have a material adverse effect on the Partnerships consolidated financial condition or results of operations.



SEC Investigation



On December 19, 2005, AIMCO announced that the Central Regional Office of the Securities and Exchange Commission (the Commission) has informed AIMCO that its investigation has been recommended for termination and no enforcement action has been recommended to the Commission regarding AIMCO.



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

Disclosures



None.



Item 8a.

Controls and Procedures



(a)

Disclosure Controls and Procedures. The Partnerships management, with the participation of the principal executive officer and principal financial officer of the Managing General Partner, who are the equivalent of the Partnerships principal executive officer and principal financial officer, respectively, has evaluated the effectiveness of the Partnerships disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of the end of the period covered by this report. Based on such evaluation, the principal executive officer and principal financial officer of the Managing General Partner, who are the equivalent of the Partnerships principal executive officer and principal financial officer, respectively, have concluded that, as of the end of such period, the Partnerships disclosure controls and procedures are effective.



(b)

Internal Control Over Financial Reporting. There have not been any changes in the Partnerships internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth quarter of 2005 that have materially affected, or are reasonably likely to materially affect, the Partnerships internal control over financial reporting.



Item 8b.

Other Information



None.



PART III



Item 9.

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



Angeles Realty Corporation II ("ARC II" or the "Managing General Partner"), was a wholly-owned subsidiary of MAE GP Corporation ("MAE GP"). Effective February 25, 1998, MAE GP merged into Insignia Properties Trust ("IPT"), which was an affiliate of Insignia Financial Group, Inc. ("Insignia"). Effective, October 1, 1998 and February 26, 1999, Insignia and IPT were respectively merged into Apartment Investment and Management Company ("AIMCO"). Thus the Managing General Partner is now a wholly-owned subsidiary of AIMCO.



The names of the directors and officers of ARC II, their ages and the nature of all positions with ARC II presently held by them are as follows:



|                     |     |                                           
|-------------------- | --- | ------------------------------------------
|Name                 | Age | Position                                  
|Martha L. Long       | 46  | Director and Senior Vice President        
|Harry G. Alcock      | 43  | Director and Executive Vice President     
|Miles Cortez         | 62  | Executive Vice President, General Counsel 
|                     |     | and Secretary                             
|Patti K. Fielding    | 42  | Executive Vice President                  
|Thomas M. Herzog     | 43  | Executive Vice President and Chief        
|                     |     | Financial Officer                         
|Robert Y. Walker, IV | 40  | Senior Vice President and Chief Accounting
|                     |     | Officer                                   
|Stephen B. Waters    | 44  | Vice President                            



Martha L. Long has been a Director and Senior Vice President of the Managing General Partner since February 2004.  Ms. Long has been with AIMCO since October 1998 and has served in various capacities.  From 1998 to 2001, Ms. Long served as Senior Vice President and Controller of AIMCO and the Managing General Partner.  During 2002 and 2003, Ms. Long served as Senior Vice President of Continuous Improvement for AIMCO.



Harry G. Alcock was appointed as a Director of the Managing General Partner in October 2004 and was appointed Executive Vice President of the Managing General Partner in February 2004 and has been Executive Vice President and Chief Investment Officer of AIMCO since October 1999.  Mr. Alcock has had responsibility for acquisition and financing activities of AIMCO since July 1994, serving as Vice President from July 1996 to October 1997 and as Senior Vice President from October 1997 to October 1999.



Miles Cortez was appointed Executive Vice President, General Counsel and Secretary of the Managing General Partner in February 2004 and of AIMCO in August 2001.  Prior to joining AIMCO, Mr. Cortez was the senior partner of Cortez Macaulay Bernhardt & Schuetze LLC, a Denver law firm, from December 1997 through September 2001.



Patti K. Fielding was appointed Executive Vice President  Securities and Debt of the Managing General Partner in February 2004 and of AIMCO in February 2003. Ms. Fielding was appointed Treasurer of AIMCO in January 2005.  Ms. Fielding is responsible for debt financing and the treasury department.  Ms. Fielding previously served as Senior Vice President  Securities and Debt of AIMCO from January 2000 to February 2003.  Ms. Fielding joined AIMCO in February 1997 as a Vice President.



Thomas M. Herzog was appointed Chief Financial Officer of the Managing General Partner and AIMCO in November 2005 and was appointed Executive Vice President of the Managing General Partner and AIMCO in July 2005.  In January 2004, Mr. Herzog joined AIMCO as Senior Vice President and Chief Accounting Officer and of the Managing General Partner in February 2004.  Prior to joining AIMCO in January 2004, Mr. Herzog was at GE Real Estate, serving as Chief Accounting Officer & Global Controller from April 2002 to January 2004 and as Chief Technical Advisor from March 2000 to April 2002.  Prior to joining GE Real Estate, Mr. Herzog was at Deloitte & Touche LLP from 1990 to 2000.



Robert Y. Walker, IV was appointed Senior Vice President of the Managing General Partner and AIMCO in August 2005 and became the Chief Accounting Officer of the Managing General Partner and AIMCO in November 2005.  From June 2002, until he joined AIMCO, Mr. Walker served as senior vice president and chief financial officer at Miller Global Properties, LLC, a Denver-based private equity, real estate fund manager.  From May 1997 to June 2002, Mr. Walker was employed by GE Capital Real Estate, serving as global controller from May 2000 to June 2002.



Stephen B. Waters was appointed Vice President of the Managing General Partner in April 2004.
Mr. Waters previously served as a Director of Real Estate Accounting since joining AIMCO in September 1999.  Mr. Waters has responsibility for partnership accounting with AIMCO.



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



The board of directors of the Managing General Partner does not have a separate audit committee. As such, the board of directors of the Managing General Partner fulfills the functions of an audit committee. The board of directors has determined that Martha L. Long meets the requirement of an "audit committee financial expert".



The directors and officers of the Managing General Partner with authority over the Partnership are all employees of subsidiaries of AIMCO. AIMCO has adopted a code of ethics that applies to such directors and officers that is posted on AIMCO's website (www.AIMCO.com). AIMCO's website is not incorporated by reference to this filing.



Item 10.

Executive Compensation



None of the directors and officers of the Managing General Partner received any remuneration from the Registrant.



Item 11.

Security Ownership of Certain Beneficial Owners and Management



Except as noted below, no person or entity was known by the Registrant to be the beneficial owner of more than 5% of the Limited Partner Units of the Registrant as of December 31, 2005.



|                             |                 |            
|---------------------------- | --------------- | -----------
|Entity                       | Number of Units | Percentages
|                             |                 |            
|Cooper River Properties, LLC |                 |            
|(an affiliate of AIMCO)      | 4,607           | 10.30%     
|Broad River Properties       |                 |            
|(an affiliate of AIMCO)      | 8,002           | 17.89%     
|AIMCO Properties, IPLP       |                 |            
|(an affiliate of AIMCO)      | 1,824           | 4.08%      
|AIMCO Properties, LP         |                 |            
|(an affiliate of AIMCO)      | 18,859          | 42.18%     



Cooper River Properties, LLC, Broad River Properties and AIMCO Properties IPLP are indirectly ultimately owned by AIMCO.  Their business address is 55 Beattie Place, Greenville, SC 29602.



AIMCO Properties, LP is indirectly ultimately controlled by AIMCO.  Its business address is 4582 S. Ulster St. Parkway, Suite 1100, Denver, Colorado 80237.



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



Item 12.

Certain Relationships and Related Transactions



The Partnership has no employees and depends on the Managing General Partner and its affiliates for the management and administration of all Partnership activities. The Partnership Agreement provides for (i) certain payments to affiliates for services and (ii) reimbursement of certain expenses incurred by affiliates on behalf of the Partnership.



Affiliates of the Managing General Partner receive 5% of gross receipts from all of the Partnership's properties as compensation for providing property management services. The Partnership paid to such affiliates approximately $859,000 and $903,000 for the years ended December 31, 2005 and 2004, respectively, which is included in operating expenses and income from discontinued operations.



The Partnership Agreement provides for a fee equal to 7.5% of "net cash from operations", as defined in the Partnership Agreement to be paid to the Managing General Partner for executive and administrative management services. One half of this fee is to be accrued and not paid unless the limited partners have received distributions equal to a 5% cumulative annual return on their adjusted capital investment as defined in the Partnership Agreement or there are proceeds from the sale of a property. The fee was approximately $16,000 and $105,000 for the years ended December 31, 2005 and 2004, respectively, which is included in general and administrative expenses. Due to the sale of Chambers Ridge Apartments, the accrued fee balance at the time of the sale of approximately $365,000 was paid to the Managing General Partner during the year ended December 31, 2005 and approximately $16,000 remains unpaid and is included in due to affiliates on the consolidated balance sheet in Item 7. Financial Statements.



Affiliates of the Managing General Partner charged the Partnership for reimbursement of accountable administrative expenses amounting to approximately $641,000and $432,000 for the years ended December 31, 2005 and 2004, respectively, which is included in general and administrative expenses and investment properties. The portion of these reimbursements included in investment properties for the years ended December 31, 2005 and 2004 are fees related to construction management services provided by an affiliate of the Managing General Partner of approximately $316,000 and $104,000, respectively.



Pursuant to the Partnership Agreement, the Managing General Partner is entitled to receive a distribution equal to 3% of the aggregate disposition price of sold properties. The Partnership paid a distribution of $186,000 to the Managing General Partner related to the sale of Cooper Point Plaza in 1999. During 2001, the Partnership paid distributions of approximately $85,000 and $375,000 related to the sales of Briarwood and Gateway Gardens Apartments, respectively. These distributions are subordinate to the limited partners receiving their original capital contributions plus a cumulative preferred return of 6% per annum of their adjusted capital investment, as defined in the Partnership Agreement. If the limited partners have not received these returns when the Partnership terminates, the Managing General Partner will be required to return these amounts to the Partnership.



In addition, pursuant to the Partnership Agreement, the Managing General Partner is entitled to a fee equal to 1% of the gross proceeds of a financing of an investment property.  During the year ended December 31, 2005, the Partnership paid approximately $195,000 in such fees related to the financings of Hunters Glen IV, V and VI Apartments.  Such fees are capitalized as loan costs, are included in other assets and are being amortized over the life of the related loans.



The Partnership insures its properties up to certain limits through coverage provided by AIMCO which is generally self-insured for a portion of losses and liabilities related to workers compensation, property casualty, general liability, and vehicle liability. The Partnership insures its properties above the AIMCO limits through insurance policies obtained by AIMCO from insurers unaffiliated with the Managing General Partner. During the years ended December 31, 2005 and 2004, the Partnership was charged by AIMCO and its affiliates approximately $209,000 and $256,000, respectively, for insurance coverage and fees associated with policy claims administration.



In addition to its indirect ownership of the general partner interests in the Partnership, AIMCO and its affiliates owned 33,292 limited partnership units (the "Units") in the Partnership representing 74.45% of the outstanding Units at December 31, 2005.  A number of these Units were acquired pursuant to tender offers made by AIMCO or its affiliates. It is possible that AIMCO or its affiliates will acquire additional Units in exchange for cash or a combination of cash and units in
AIMCO Properties, L.P., the operating partnership of AIMCO, either through private purchases or tender offers. Pursuant to the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters that include, but are not limited to, voting on certain amendments to the Partnership Agreement and voting to remove the Managing General Partner. As a result of its ownership of 74.45% of the outstanding Units, AIMCO and its affiliates are in a position to control all voting decisions with respect to the Partnership. Although the Managing General Partner owes fiduciary duties to the limited partners of the Partnership, the Managing General Partner also owes fiduciary duties to AIMCO as its sole stockholder. As a result, the duties of the Managing General Partner, as managing general partner, to the Partnership and its limited partners may come into conflict with the duties of the Managing General Partner to AIMCO as its sole stockholder.



Item 13.

Exhibits



See Exhibit Index attached.



Item 14.

Principal Accountant Fees and Services



The Managing General Partner has reappointed Ernst & Young, LLP as independent auditors to audit the financial statements of the Partnership for 2006. The aggregate fees billed for services rendered by Ernst & Young, LLP for 2005 and 2004 are described below.



Audit Fees. Fees for audit services totaled approximately $57,000 and $60,000 for 2005 and 2004, respectively. Fees for audit services also include fees for the reviews of the Partnerships Quarterly Reports on Form 10-QSB.



Tax Fees. Fees for tax services totaled approximately $32,000 and $23,000 for 2005 and 2004, respectively.



SIGNATURES







In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



| |                                    
| | -----------------------------------
| | ANGELES PARTNERS XII               
| | (A California Limited Partnership) 
| |                                    
| | By:   Angeles Realty Corporation II
| | Managing General Partner           
| | By:   /s/Martha L. Long            
| | Martha L. Long                     
| | Senior Vice President              
| |                                    
| | By:   /s/Stephen B. Waters         
| | Stephen B. Waters                  
| | Vice President                     
| |                                    
| | Date: March 28, 2006               





In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



|                     |                        |                     
|-------------------- | ---------------------- | --------------------
|/s/Harry G. Alcock   | Director and Executive | Date: March 28, 2006
|Harry G. Alcock      | Vice President         |                     
|                     |                        |                     
|/s/Martha L. Long    | Director and Senior    | Date: March 28, 2006
|Martha L. Long       | Vice President         |                     
|                     |                        |                     
|/s/Stephen B. Waters | Vice President         | Date: March 28, 2006
|Stephen B. Waters    |                        |                     





ANGELES PARTNERS XII



EXHIBIT INDEX





Exhibit Number

Description of Exhibit



3.1

Amended Certificate and Agreement of Limited Partnership dated May 26, 1983 filed in Form S-11 dated June 2, 1983 and is incorporated herein by reference.



10.22

Multifamily Note secured by a Mortgage or Deed of Trust dated December 20, 2001, between Hunters Glen AP XII Limited Partnership and GMAC Commercial Mortgage, relating to Hunters Glen Apartments V & VI. Filed as Exhibit 10.16(g) to the Partnership's Annual Form 10-KSB for the year ended December 31, 2002 and incorporated herein by reference.



10.23

Multifamily Note dated May 16, 2003, between AP XII Associates Limited Partnership, a South Carolina limited partnership, and GMAC Commercial Mortgage Corporation, a California corporation related to Chambers Ridge Apartments filed as Exhibit 10.23 with the Registrant's Form 10-QSB for the quarterly period ended June 30, 2003 and incorporated herein by reference.



10.24

Multifamily Note dated June 26, 2003, between AIMCO Twin Lake Towers L. P., a Delaware limited partnership, and Keycorp Real Estate Capital Markets, Inc., an Ohio corporation related to Twin Lake Towers Apartments filed with the Registrant's Form 10-QSB for the quarterly period ended June 30, 2003 and incorporated herein by reference.



10.25

Multifamily Note dated June 30, 2003, between Hunters Glen AP XII Limited Partnership, a South Carolina limited partnership, and GMAC Commercial Mortgage Bank, a Utah corporation related to Hunters Glen IV Apartments filed with the Registrant's Form 10-QSB for the quarterly period ended June 30, 2003 and incorporated herein by reference.



10.26

Purchase and Sale Contract between APXII Associates Limited Partnership, a South Carolina limited partnership, as Seller, and Elon Group, Ltd., a Pennsylvania corporation, as Purchaser, effective February 2, 2005, filed with the Registrants Form  8-K on February 8, 2005 and incorporated herein by reference.



10.27

First Amendment to Purchase and Sale Contract between APXII Associates Limited Partnership, a South Carolina limited partnership, as Seller, and Elon Group, Ltd., a Pennsylvania corporation, as Purchaser, effective March 4, 2005, filed with the Registrants Form 8-K on May 2, 2005 and incorporated herein by reference.



10.28

Second Amendment to Purchase and Sale Contract between APXII Associates Limited Partnership, a South Carolina limited partnership, as Seller, and Elon Group, Ltd., a Pennsylvania corporation, as Purchaser, effective March 11, 2005 filed with the Registrants Form 8-K on May 2, 2005 and incorporated herein by reference.



10.29

Multifamily Note dated April 29, 2005 between Pickwick Place AP XII, L.P., a South Carolina limited partnership and GMAC Commercial Mortgage Corporation, filed with the Registrants Form 8-K on May 5, 2005 and incorporated herein by reference.



10.30

Multifamily Mortgage, Assignment of Rents and Security Agreement dated April 29, 2005 between Pickwick Place AP XII, L.P. and GMAC Mortgage Corporation, filed with the Registrants Form 8-K on May 5, 2005 and incorporated herein by reference.



10.31

Assignment of Security Instrument dated April 29, 2005, between GMAC Commercial Mortgage Corporation and Fannie Mae, filed with the Registrants Form 8-K on May 5, 2005 and incorporated herein by reference.



10.32

Guaranty dated April 29, 2005 by AIMCO Properties, L.P., for the benefit of GMAC Commercial Mortgage Corporation, filed with the Registrants Form 8-K on May 5, 2005 and incorporated herein by reference.



10.33

Purchase and Sale Contract between Pickwick Place AP XII Limited Partnership and Prime Quest Management, LLC dated August 16, 2005.



10.34

First Amendment to Purchase and Sale Contract between Pickwick Place AP XII Limited Partnership and Prime Quest Management, LLC dated September 16, 2005.



10.35

Reinstatement and Second Amendment to the Purchase and Sale Contract between Pickwick Place AP XII Limited Partnership and Prime Quest Management, LLC dated October 11, 2005.



10.36

Multifamily Note dated December 1, 2005 between Hunters Glen AP XII L.P., a South Carolina limited partnership and GMAC Commercial Mortgage Bank in reference to Hunters Glen IV and filed December 7, 2005 with the Registrants Form 8-K dated December 1, 2005 and incorporated herein by reference.



10.37

Amended and Restated Multifamily Note dated December 1, 2005 between Hunters Glen AP XII L.P., a South Carolina limited partnership and GMAC Commercial Mortgage Bank in reference to Hunters Glen IV and filed December 7, 2005 with the Registrants Form 8-K dated December 1, 2005 and incorporated herein by reference.



10.38

Multifamily Note dated December 1, 2005 between Hunters Glen AP XII L.P., a South Carolina limited partnership and GMAC Commercial Mortgage Bank in reference to Hunters Glen V and VI and filed December 7, 2005 with the Registrants Form 8-K dated December 1, 2005 and incorporated herein by reference.



10.39

Amended and Restated Multifamily Note dated December 1, 2005 between Hunters Glen AP XII L.P., a South Carolina limited partnership and GMAC Commercial Mortgage Bank in reference to Hunters Glen V and VI and filed December 7, 2005 with the Registrants Form 8-K dated December 1, 2005 and incorporated herein by reference.



31.1

Certification of equivalent of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.



31.2

Certification of equivalent of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.



32.1

Certification of the equivalent of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.





Exhibit 31.1

CERTIFICATION

I, Martha L. Long, certify that:

1.

I have reviewed this annual report on Form 10-KSB of Angeles Partners XII;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;



3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;



4.

The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:



(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;



(b)

Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and



(c)

Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and



5.

The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions):



(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and



(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.

Date: March 28, 2006

/s/Martha L. Long

Martha L. Long

Senior Vice President of Angeles Realty Corporation II, equivalent of the chief executive officer of the Partnership



Exhibit 31.2

CERTIFICATION

I, Stephen B. Waters, certify that:

1.

I have reviewed this annual report on Form 10-KSB of Angeles Partners XII;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;



3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;



4.

The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:



(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;



(b)

Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and



(c)

Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and



5.

The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions):



(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and



(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.

Date: March 28, 2006

/s/Stephen B. Waters

Stephen B. Waters

Vice President of Angeles Realty Corporation II, equivalent of the chief financial officer of the Partnership



Exhibit 32.1





Certification of CEO and CFO

Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002







In connection with the Annual Report on Form 10-KSB of Angeles Partners XII (the "Partnership"), for the fiscal year ended December 31, 2005 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Martha L. Long, as the equivalent of the chief executive officer of the Partnership, and Stephen B. Waters, as the equivalent of the chief financial officer of the Partnership, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:



(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and



(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.



| |                        
| | -----------------------
| | /s/Martha L. Long      
| | Name: Martha L. Long   
| | Date: March 28, 2006   
| |                        
| | /s/Stephen B. Waters   
| | Name: Stephen B. Waters
| | Date: March 28, 2006   



This certification is furnished with this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Partnership for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.