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

                     --------------------------------------

     FORM 10-K

(Mark One)

    X     ANNUAL  REPORT  PURSUANT  TO  SECTION  13 OR 15(d)  OF THE  SECURITIES
          EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

          For the fiscal year ended            December 31, 2000
                                    -------------------------------------------

                                       OR

          TRANSITION  REPORT  PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
          EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

          For the transition period from                   to
                                         ----------------      ---------------

                         Commission File number 0-14377
                                                -------

                      Krupp Realty Limited Partnership-VII
-------------------------------------------------------------------------------

Massachusetts                                         04-2842924
-------------------------------      ------------------------------------------
(State or other jurisdiction of            (IRS employer identification no.)
incorporation or organization

One Beacon Street, Boston, Massachusetts                02108
----------------------------------------      ------------------------------
(Address of principal executive                        (Zip code)
offices)

(Registrant's telephone number, including area code)          (617) 523-7722
                                                    ---------------------------

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

Securities registered pursuant to Section 12(g) of the Act:   Units of Investor
                                                              Limited Partner
                                                              Interest

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the  preceeding 12 months (or for such shorter period that the registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.

                              Yes         X             No
                                   ----------------         -----------------

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

Aggregate market value of voting securities held by non-affiliates: Not
                                                                    Applicable.

Documents incorporated by reference: Part IV, Item 14.

The exhibit index is located on pages 12-13.

The total number of pages in this document is 31.

<PAGE>

                                     PART I

     This Form 10-K contains  forward-looking  statements  within the meaning of
Section 27A of the  Securities  Act of 1933 and  Section  21E of the  Securities
Exchange  Act of  1934.  Actual  results  could  differ  materially  from  those
projected in the forward-looking  statements as a result of a number of factors,
including those identified herein.

ITEM 1.       BUSINESS
------

     Krupp Realty Limited Partnership-VII  ("KRLP-VII") was formed on August 21,
1984 by filing a  Certificate  of Limited  Partnership  in the  Commonwealth  of
Massachusetts.  KRLP-VII  issued all of the  General  Partner  Interests  to two
General Partners, The Krupp Corporation,  a Massachusetts  corporation,  and The
Krupp Company  Limited  Partnership-II,  a  Massachusetts  limited  partnership.
KRLP-VII also issued all of the Original Limited Partner  Interests to The Krupp
Company  Limited  Partnership-II.  On November 2, 1984,  KRLP-VII  commenced  an
offering  of up to  40,000  units of  Investor  Limited  Partner  Interest  (the
"Units") for $1,000 per Unit. The public  offering was closed on April 25, 1986,
at which time 27,184 Units had been sold. For additional details,  see Note A to
Consolidated  Financial  Statements  included  in  Item 8  (Appendix  A) of this
report. The primary business of KRLP-VII is to invest in, operate, refinance and
ultimately  dispose of a  diversified  portfolio  of  residential  real  estate.
KRLP-VII considers itself to be engaged in only one industry segment, investment
in real estate.

     On December 19, 1984 the General  Partners  formed Krupp Realty  Courtyards
Limited  Partnership  ("Realty-VII")  as a prerequisite  for the  refinancing of
Courtyards Village East Apartments ("Courtyards Village"). At the same time, the
General Partners transferred ownership of Courtyards Village to Realty-VII.  The
General  Partner of Realty-VII is KRLP-VII.  The Limited  Partners of Realty-VII
are  KRLP-VII  and The  Krupp  Corporation  ("Krupp  Corp.").  Krupp  Corp.  has
beneficially assigned its interest in Realty-VII to KRLP-VII.

     On March 31, 1994, the General  Partners  formed Windsor  Partners  Limited
Partnership  ("Windsor  L.P.") as a prerequisite  for the refinancing of Windsor
Apartments.  At the same time, the General Partners transferred ownership of the
property to Windsor L.P. In exchange  for the  property,  KRLP-VII  received 99%
Limited Partnership interest in Windsor L.P. The General Partner of Windsor L.P.
is ST. Windsor Corporation,  which has a 1% interest in Windsor L.P. and is 100%
owned by KRLP-VII.

     KRLP-VII,  Realty-VII  and Windsor  L.P.  are  collectively  known as Krupp
Realty Limited Partnership-VII and Subsidiaries (collectively referred to herein
as the "Partnership").

     On January 30, 1998,  the  Partnership  sold Nora Corners  Shopping  Center
("Nora  Corners"),  a shopping  center  containing  89,432 leasable square feet,
located in Indianapolis,  Indiana,  to unaffiliated third parties (see Note E to
Consolidated  Financial  Statements,  included  in Item 8  (Appendix  A) of this
report).

     The  Partnership's  real estate  investments  are subject to some  seasonal
fluctuations  due to changes in utility  consumption  and  seasonal  maintenance
expenditures.  However,  the future  performance of the Partnership  will depend
upon factors which cannot be predicted.  Such factors include  general  economic
and real estate market  conditions,  both on a national basis and in those areas
where the Partnership's  real estate  investments are located,  the availability
and cost of borrowed funds, real estate tax rates,  operating  expenses,  energy
costs,  government  regulations,  and  federal  and state  income tax laws.  The
requirements  for compliance with federal,  state and local  regulations to date
have not had an adverse affect on the Partnership's  operations,  and no adverse
affect therefrom is anticipated in the future.

     The Partnership's investments in real estate are also subject to such risks
as (i) competition from existing and future projects held by other owners in the
locations of the  Partnership's  properties,  (ii) fluctuations in rental income
due to changes in occupancy  levels,  (iii) possible adverse changes in mortgage
interest  rates,  (iv) possible  adverse  changes in general  economic and local
conditions,  such as competitive  over-building,  increases in unemployment,  or
adverse changes in real estate zoning laws, (v) possible future adoption of rent
control legislation which would not permit the full amount of increased costs to
be  passed  on to  tenants  in the  form  of  rent  increases,  and  (vi)  other
circumstances over which the Partnership may have little or no control.

     As of December 31, 2000, the Partnership did not employ any personnel.

                                      -2-
<PAGE>


ITEM 2.       PROPERTIES
------

     As of December 31, 2000, the Partnership  had leveraged  investments in two
apartment complexes having an aggregate of 524 units.

     A summary of the Partnership's  real estate  investments as of December 31,
2000 is  presented  below.  Schedule III included in Item 8 (Appendix A) to this
report  contains  additional  detailed  information  with respect to  individual
properties.
<TABLE>
<CAPTION>

                                            Average Occupancy For the Year Ended
                                                        December 31,
                                            ------------------------------------
                          Year of      Total
       Description        Acquisition  Units  2000   1999   1998   1997   1996
------------------------  ----------- ------ ------ ------ ------ ------ ------

<S>                        <C>         <C>   <C>    <C>    <C>    <C>    <C>
Courtyards Village East
Apartments
Naperville, Illinois       1985          224    95%    95%    97%    97%    98%

Windsor Apartments
Garland, Texas             1984          300    95%    96%    97%    96%    96%
                                      ------

                                         524  Units
                                      ======
</TABLE>



ITEM 3.       LEGAL PROCEEDINGS
------

     There are no material pending legal proceedings to which the Partnership is
a party or of which any of its property is the subject.


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

     None.







                                      -3-
<PAGE>


                                     PART II

ITEM 5.       MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
              MATTERS
------

     The  transfer of Units is subject to certain  limitations  contained in the
Partnership  Agreement.  There is no public  market  for the Units and it is not
anticipated that any such public market will develop.

     The  number of  Investor  Limited  Partners  as of  December  31,  2000 was
approximately 1,365.

     One of the objectives of the  Partnership is to generate cash available for
distribution.  The  Partnership  discontinued  distributions  during 1989 due to
insufficient  operating  Cash  Flow.  In 1994,  however,  the  General  Partners
determined that there was sufficient Cash Flow to reinstate distributions. These
distributions  commenced  in  August  1994  at a rate  of  $5.00  per  Unit  and
thereafter  were paid  semiannually at an annual rate of $20.00 per Unit through
1998. In 1999 and  thereafter the  semiannual  distributions  were reduced to an
annual rate of $18.28 per Unit.

     The Partnership made special capital  distributions in 1998 totaling $86.14
per Unit with the funds received from the sale of Nora Corners in 1998. Pursuant
to the Partnership Agreement,  distributions from capital transactions,  such as
the sale of Nora Corners,  are allocated 99% to Investor Limited Partners and 1%
to the General  Partners.  For  details,  see Note G to  Consolidated  Financial
Statements included in Item 8 (Appendix A) of this report.

     The Partnership made the following distributions to its Partners during the
years ended December 31, 2000 and 1999:
<TABLE>
<CAPTION>

                                               Year Ended December 31,
                                      ------------------------------------------
                                               2000                1999
                                      --------------------  --------------------
                                        Amount   Per Unit     Amount   Per Unit
                                      ---------- ---------  ---------- ---------
Limited Partners:
<S>                                   <C>        <C>        <C>        <C>
     Investor Limited Partners
         (27,184 Units outstanding)   $  496,852 $  18.28    $ 496,853 $  18.28

     Original Limited Partner             44,164                44,165

General Partners                          11,042                11,041
                                      ----------             ---------

                                      $  552,058             $ 552,059
                                      ==========             =========

</TABLE>


                                      -4-
<PAGE>


ITEM 6.       SELECTED FINANCIAL DATA
------

     The following table sets forth selected financial information regarding the
Partnership's  financial position and operating results. This information should
be used in conjunction  with  Management's  Discussion and Analysis of Financial
Condition and Results of Operations and the  Consolidated  Financial  Statements
and  Notes  thereto,  which  are  included  in  Items  7 and 8 of  this  report,
respectively.

<TABLE>
<CAPTION>
                             2000       1999      1998       1997       1996
                          ---------- ---------- ---------- ---------- ----------

<S>                       <C>        <C>        <C>        <C>        <C>
Total revenue             $4,202,751 $3,997,617 $3,989,189 $4,795,059 $4,688,515

Income (loss) before gain
   on sale of property      (279,488)  (549,227)  (298,630)  (151,137)    10,513

Gain on sale of property         -          -      676,316         -          -

Net income (loss)           (279,488)  (549,227)   377,686   (151,137)    10,513

Net income (loss)
  allocated to:

     Investor Limited
       Partners             (276,693)  (543,735)   373,909   (149,626)     9,462
         Per Unit             (10.18)    (20.00)     13.75      (5.50)      0.35

     Original Limited
       Partner                    -          -          -          -         841

     General Partners         (2,795)    (5,492)     3,777     (1,511)       210

Total assets at
   December 31,            8,985,092  9,837,297 10,974,526 17,995,610 16,855,594

Long-term obligations at
   December 31,            5,028,109 10,108,246 10,220,786 14,345,624 12,366,197

Distributions:

     Investor Limited
       Partners              496,852    496,853  2,885,312    543,679    543,679
         Per Unit              18.28      18.28     106.14      20.00      20.00

     Original Limited
       Partner                44,164     44,165     48,327     48,327     48,327

     General Partners         11,042     11,041     35,460     12,082     12,082

</TABLE>

Operating  results for the periods  presented are not comparable due to the sale
of Nora Corners on January 30, 1998.

The per Unit  distributions  for the years ended December 31, 2000,  1999, 1998,
1997 and 1996 were $18.28, $18.28, $106.14, $20.00, and $20.00, respectively, of
which $86.14 in 1998 represented a return of capital.

Prior  performance of the  Partnership is not  necessarily  indicative of future
operations.

                                      -5-
<PAGE>


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

     This  Management's  Discussion  and  Analysis of  Financial  Condition  and
Results  of  Operations  contains  forward-looking  statements  including  those
concerning Management's  expectations regarding the future financial performance
and future events. These forward-looking statements involve significant risk and
uncertainties,  including  those  described  herein.  Actual  results may differ
materially from those anticipated by such forward-looking statements.

Liquidity and Capital Resources

     The  Partnership's  ability to generate  cash adequate to meet its needs is
dependent  primarily  upon the operations of its real estate  investments.  Such
ability would also be impacted by the future availability of bank borrowings and
the future  refinancing  and sale of the  Partnership's  remaining  real  estate
investments.  These  sources of liquidity  will be used by the  Partnership  for
payment of expenses  related to real estate  operations,  capital  improvements,
debt service, and other expenses. Cash Flow, if any, as calculated under Section
8.2(a) of the Partnership Agreement,  will then be available for distribution to
the Partners.  In August 1994, the Partnership  began making  distributions at a
rate of $5.00 per Unit which  increased in February 1995 to a rate of $20.00 per
Unit.  Additionally,  the Partnership made special capital distributions in 1998
totaling  $86.14 per Unit based on the  remaining  proceeds  of the sale of Nora
Corners.  Distributions  of net cash  proceeds  from  capital  transactions  are
allocated in accordance with the  Partnership  Agreement (as described in Note H
to the consolidated financial statements included in Item 8 (Appendix A) of this
report).  Due to the special  capital  distributions  as a result of the sale of
Nora Corners,  and the  subsequent  decrease in the Investor  Limited  Partners'
Capital, the semiannual  distributions were adjusted in 1999 to $18.28 per Unit,
beginning with the distribution payable in February 1999.

     Over the past several years,  real estate markets in general have improved,
and the General Partners feel it is an opportune time to formulate a liquidation
strategy for the Partnership.  As such, the General Partners intend to begin the
process  of  more  thoroughly   assessing  the  property  sales  market  in  the
Partnership's  market areas and  developing a  disposition  strategy  which will
yield  the  highest  value  to  investors   through  an  efficient  and  orderly
liquidation  of the  Partnership.  In keeping  with this  strategy,  the General
Partners  intend to refinance  mortgage  loans which mature in the next 6 months
with financing that leaves flexibility for the property sales.

     Assuming  market  conditions do not change,  the assessment of the property
sales  market is  consistent  with the General  Partners'  expectations,  and an
acceptable  disposition plan can be implemented,  the General Partners expect to
complete the liquidation process over the next 12 months.  However, there can be
no assurance that such a liquidation will occur, or what amounts may be realized
by the Partnership.

     The General  Partners are in the process of negotiating an extension of the
mortgage note payable on Windsor  Apartments.  It is  anticipated  that the note
will be extended under terms substantially similar to the current terms.

     On January 30, 1998, the General Partners sold Nora Corners to unaffiliated
third  parties.  The  property was  included in a package  with  thirteen  other
properties owned by affiliates of the General Partners.  The total selling price
of the fourteen properties was $138,000,000,  of which the Partnership  received
$6,604,300  for the sale of its  property,  less the payoff of the mortgage note
and its share of the  closing  costs of  $224,512  (see  Note E to  Consolidated
Financial Statements included in Item 8 (Appendix A) of this report).

     On July 30, 1997, the Partnership successfully completed the refinancing of
the Courtyards Village East Apartments ("Courtyards Village") mortgage note. The
$5,280,000  note  bears  interest  at an annual  rate of 7.88%,  requires  equal
monthly principal and interest installments of $38,302, and matures on August 1,
2007. Net refinancing  proceeds of approximately  $1,860,000 provided additional
liquidity  to  fund  capital  improvements  at  the  Partnership's   properties,
Courtyards Village and Windsor Apartments.

                                      -6-
<PAGE>

     In  order  to  remain   competitive  in  their  respective   markets,   the
Partnership's  properties spent approximately $362,000 for fixed assets in 2000.
During 2001, the Partnership's properties intend to spend approximately $507,000
for fixed  assets with an emphasis in areas that will  improve the return in the
event of a liquidation.  These  expenditures  will be primarily funded from cash
generated from property  operations.  These  improvements  include  interior and
exterior enhancements,  installation of sprinkler system,  pavement improvement,
and roofing at Windsor Apartments.

     In June 1997, the Financial  Accounting  Standards  Board  ("FASB")  issued
Statement of Financial  Accounting  Standards ("SFAS") No. 133,  "Accounting for
Derivative  Instruments  and  Hedging  Activities".  SFAS  No.  133  establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts,  and for hedging activities.
It  requires  recognition  of all  derivative  instruments  as  either  asset or
liabilities in the statement of financial position and measure those instruments
at fair value.  This statement will be effective for the  Partnership  beginning
January 1, 2001.  The  Partnership  did not hold any  derivative  instruments at
December  31,  2000,  and  as  such,  the  Partnership   does  not  expect  this
pronouncement  to  have a  significant  impact  on the  Partnership's  financial
statements.

Operations

     The following  discussion  relates to the operations of the Partnership and
its properties  (Courtyards  Village and Windsor Apartments) for the years ended
December 31, 2000,  1999 and 1998. The sale of Nora Corners on January 30, 1998,
significantly impacts the comparability of the Partnership's  operations for the
years ended December 31, 1999 and 1998.

2000 compared to 1999

     Net loss  decreased in 2000 when compared  1999 as total revenue  increased
and total  expenses  decreased.  The  increase in total  revenue is  primarily a
result  of  rental  rate  increases  implemented  at all  of  the  Partnership's
properties at the end of the first quarter of 2000. Interest income decreased in
2000 due to a lower  average cash and cash  equivalent  balances  available  for
investment when compared to 1999.

     Total  expenses  for 2000  decreased  when  compared to 1999.  Depreciation
expense  decreased as fixed asset  additions  purchased  in the  previous  years
became  fully  depreciated.  Maintenance  expenses  decreased in 2000 as capital
expenditures  reduced  the need  for  repairs  and  maintenance  in some  areas.
Operating  expenses  increased  primarily  as a result of  increases in leasing,
utilities, and insurance costs.

1999 compared to 1998

     Net income, net of Nora Corners' activity,  decreased in 1999 when compared
to 1998 as  increases  in total  expenses  more than offset  increases  in total
revenue.

     In comparing 1999 to 1998,  the increase in rental revenue is  attributable
to  residential  rental rate  increases  implemented  at Courtyards  and Windsor
Apartments.  However  this was  substantially  offset by  decreases  in interest
income due to lower  average cash and cash  equivalent  balances  available  for
investment, resulting from the sale of Nora Corners.

     Total expenses increased when compared to 1998,  primarily due to increases
in  operating  expenses,  real estate  taxes,  general and  administrative,  and
depreciation  expense.  Operating  expense  increased  in 1999 as a result of an
increase  in  workmen's  compensation  expense  over  1998  due  to a  favorable
adjustment  to the liability  and  workmen's  compensation  reserve in 1998 as a
result of favorable  claim  experience.  Real estate tax expense  increased as a
result of a reassessment  of Windsor  Apartments'  property value in 1998 by the
local taxing authority.  General and  administrative  expenses  increased due to
higher  expenses   incurred  in  connection  with  preparation  and  mailing  of
Partnership  reports  and other  investor  communication.  Depreciation  expense
increased  in  conjunction  with  increased  capital  improvements  completed at
Courtyards Village, particularly the rehab of eleven apartments during the first
quarter.

                                      -7-
<PAGE>


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
--------

     The Partnership's  future earnings,  cash flows and fair values relevant to
financial  instruments are dependent upon prevalent market rates. Market risk is
the risk of loss from adverse changes in market prices and interest  rates.  The
Partnership  manages its market risk by matching  projected  cash  inflows  from
operating  activities,   investing  activities  and  financing  activities  with
projected   cash  outflows  to  fund  debt   payments,   acquisitions,   capital
expenditures,   distributions   and  other   cash   requirements.   All  of  the
Partnership's debt (maturing at various times through 2007) has a fixed interest
rate, which minimizes the interest rate risk.

     If market rates of interest increase by ten percent,  the fair value of the
Partnership's  total outstanding debt would decrease by approximately  $193,000.
If market  rates of  interest  decrease  by ten  percent,  the fair value of the
Partnership's total outstanding debt would increase by approximately $201,000.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
------

     The financial  statements and supplementary data are listed in the Index to
Financial  Statements and Financial  Statement Schedule appearing on Page F-2 of
this Annual Report on Form 10-K.


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

     None.






                                      -8-
<PAGE>


                                    PART III

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

     The Partnership has no directors or executive  officers.  Information as to
the  directors  and  executive  officers  of The Krupp  Corporation,  which is a
General Partner of KRLP-VII, and The Krupp Company Limited  Partnership-II,  the
other General Partner of KRLP-VII, is as follows:

             Name and Age                  Position with The Krupp Corporation

             Douglas Krupp (54)            Co-Chairman of the Board
             George Krupp (56)             Co-Chairman of the Board
             Frank Apeseche (43)           President
             David C. Quade (57)           Treasurer and Executive Vice

     Douglas Krupp  co-founded  and serves as  Co-Chairman  and Chief  Executive
Officer of The Berkshire  Group,  an integrated real estate  financial  services
firm engaged in real estate acquisitions, property management, mortgage banking,
investment sponsorship,  venture capital investing and financial management. Mr.
Krupp  has held the  position  of  Co-Chairman  since  The  Berkshire  Group was
established  as The  Krupp  Companies  in 1969 and he has  served  as the  Chief
Executive  Officer  since  1992.  Mr.  Krupp  serves as a member of the Board of
Trustees at Brigham & Women's Hospital. He is a graduate of Bryant College where
he received an honorary Doctor of Science in Business Administration in 1989 and
was elected trustee in 1990.

     George Krupp is the Co-Founder and  Co-Chairman of The Berkshire  Group, an
integrated  real  estate   financial   services  firm  engaged  in  real  estate
acquisitions,  property management,  mortgage banking,  investment  sponsorship,
venture  capital  investing  and  financial  management.  Mr. Krupp has held the
position of Co-Chairman  since The Berkshire  Group was established as The Krupp
Companies in 1969. Mr. Krupp has been an instructor of history at the New Jewish
High  School in  Waltham,  Massachusetts  since  September  of 1997.  Mr.  Krupp
attended the  University  of  Pennsylvania  and Harvard  University  and holds a
Master's Degree in History from Brown University.

     Frank Apeseche is the President of The Berkshire Group. Mr. Apeseche joined
The  Berkshire  Group in 1986.  He served as Chief  Financial  Officer and Chief
Planning  Officer from 1992 to 1995.  Mr.  Apeseche  was the  founding  Managing
Partner of BG Affiliates, a private equity investment firm. Prior to joining The
Berkshire  Group he  served  as a  manager  with  Andersen  Consulting  where he
specialized  in  providing  technology  solutions  to Fortune 500  clients.  Mr.
Apeseche received a BA with distinction from Cornell  University and an MBA with
Honors from the University of Michigan.

     David  C.  Quade is the  Treasurer  and  Executive  Vice  President  of The
Berkshire  Group. Mr. Quade joined The Berkshire Group in 1998. Prior to joining
The Berkshire Group, he was a Principal and Executive  V.P./CFO at Leggat McCall
Properties  for eighteen  years.  At Leggatt  McCall,  Mr.  Quade had  extensive
experience in business strategic planning, financial workouts, funds management,
and corporate  financing  regarding asset  management.  Prior to that, Mr. Quade
worked in senior  financial  capacities for two NYSE  companies,  North American
Mortgage  Investors and Equitable Life Mortgage & Realty Investors,  and he also
worked at Coopers & Lybrand.  He has a P.A.P.  from the Northwestern  University
Graduate School of Business, and a B.S. degree and a Master's degree in Business
Administration from Central Michigan University.


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

     The Partnership has no directors or executive officers.


                                      -9-
<PAGE>


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

     As of February 15, 2001, beneficial owners of record owning more than 5% of
the Partnership's 27,184 outstanding Units were as follows:
<TABLE>
<CAPTION>

 Title            Name and Address        Amount and Nature           Percent
  of                   Of                       Of                      of
 Class            Beneficial Owner       Beneficial Ownership          Class
------------- -------------------------- -------------------      --------------
<S>             <C>                       <C>                          <C>
 Investor       Equity Resources Group,
 Limited        Incorporated
 Partner Units  14 Story Street
                Cambridge, MA 02138       1,664.00 Units (1)           6.12%

 Investor       Madison Avenue Investment
 Limited        Partners, LLC
 Partner Units  P.O. Box 7533
                Incline Village, NV 89452 1,396.90 Units (2)(3)        5.14%

 Investor       First Equity Realty, LLC
 Limited        555 Fifth Avenue,
 Partner Units  9th Floor
                New York, NY 10017        1,396.90 Units (2)(4)        5.14%

 Investor       The Harmony Group II, LLC
 Limited        P.O. Box 7533
 Partner Units  Incline Village, NV 89452 1,396.90 Units (2)(5)        5.14%

 Investor       Ronald M. Dickerman
 Limited        555 Fifth Avenue,
 Partner Units  9th Floor
                New York, NY 10017        1,396.90 Units (2)(6)        5.14%

 Investor       Bryan E. Gordon
 Limited        P.O. Box 7533
 Partner Units  Incline Village, NV 89542 1,396.90 Units (2)(7)        5.14%
<FN>
(1)  According to the  statement on Schedule  13D  originally  filed on April 3,
     1996 by Equity Resources  Group,  Incorporated,  Equity Resource  Cambridge
     Fund Limited Partnership, Equity Resource General Fund Limited Partnership,
     Equity Resource Brattle Fund Limited  Partnership,  Equity Resource Fund XV
     Limited Partnership,  Equity Resource Fund XVI Limited Partnership,  Equity
     Resource Fund XVII Limited Partnership,  Equity Resource Fund XVIII Limited
     Partnership, Equity Resource Fund XIX Limited Partnership, James E. Brooks,
     Mark S.Thompson and Eggert  Dagbjartsson,  as amended by Amendment  No. 1
     thereto dated December 12, 1996 and Amendment No. 2 thereto dated April 21,
     1997,  Equity  Resources  Group,  Incorporated,  James E.  Brooks,  Mark S.
     Thompson and Eggert  Dagbjartsson,  in their capacities as General Partners
     of each of Equity  Resource  Cambridge  Fund  Limited  Partnership,  Equity
     Resource  General Fund Limited  Partnership,  Equity Resource  Brattle Fund
     Limited Partnership,  Equity Resource Fund XV Limited  Partnership,  Equity
     Resource Fund XVI Limited  Partnership,  Equity  Resource Fund XVII Limited
     Partnership,  Equity  Resource  Fund XVIII Limited  Partnership  and Equity
     Resource  Fund XIX Limited  Partnership,  respectively,  share the power to
     vote or direct  the vote and to dispose  of or direct  the  disposition  of
     1,664 units.

(2)  According to the statement on Schedule 13G originally  filed on February 9,
     2000 (the "Madison Schedule 13G"), by Madison Avenue  Investment  Partners,
     LLC ("MAIP"),  First Equity Realty, LLC ("First Equity"), The Harmony Group
     II,  LLC  ("Harmony  Group"),  Ronald  M.  Dickerman  and  Bryan E.  Gordon
     (collectively,  the  "Reporting  Persons"),  each of  MAIP,  First  Equity,
     Harmony Group and  Reporting  Persons may be deemed to constitute a "group"
     within the meaning of Section  13(d)(3) of the Exchange  Act.  According to
     the  Madison  Schedule  13G,  MAIP is the  controlling  person  of  various
     entities  which are the nominee  owners of, or the  successors by merger to
     the assets of nominee owners of, Limited Partner  Interest (the "Units") of
     the Issuer. As stated in the Madison Schedule 13G, these nominees,  none of
     which  beneficially  own 5% or  more  of the  Units,  are  ISA  Partnership
     Liquidity Investors,  Madison/AG  Partnership Value Partners III and Cobble
     Hill Investments, LP.

                                      -10-
<PAGE>

     According to the Madison Schedule 13G, the controlling  members of MAIP are
     The Harmony Group II, LLC, a Delaware  limited  liability  company of which
     Bryan E. Gordon is the Managing Member, and First Equity Realty, LLC, a New
     York limited liability company of which Ronald M. Dickerman is the Managing
     Member.

(3)  According to the Madison Schedule 13G, Madison Avenue Investment  Partners,
     LLC has sole voting and dispositive power with respect to 1,396.90 units of
     the Partnership.

(4)  According to the Madison Schedule 13G, First Equity Realty,  LLC has shared
     voting  and  dispositive  power  with  respect  to  1,396.90  units  of the
     Partnership.

(5)  According to the Madison Schedule 13G, The Harmony Group II, LLC has shared
     voting  and  dispositive  power  with  respect  to  1,396.90  units  of the
     Partnership.

(6)  According  to the Madison  Schedule  13G,  Ronald M.  Dickerman  has shared
     voting  and  dispositive  power  with  respect  to  1,396.90  units  of the
     Partnership.

(7)  According to the Madison  Schedule  13G,  Bryan E. Gordon has shared voting
     and dispositive power with respect to 1,396.90 units of the Partnership.
</FN>
</TABLE>

The only interests  held by management or its affiliates  consist of its General
Partner and Original Limited Partner Interests.


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

     The Partnership does not have any directors, executive officers or nominees
for  election  as  director.  Please  see Note I to the  Consolidated  Financial
Statements (Appendix A).

                                      -11-
<PAGE>


                                     PART IV

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

(a)      1.   Consolidated  Financial  Statements - see Index to Consolidated
              Financial  Statements and Schedule included under Item 8(Appendix
              A), on page F-2 to this report.

         2.   Consolidated   Financial   Statement  Schedules  -  see  Index  to
              Consolidated Financial Statements and Schedule included under Item
              8 (Appendix  A), on page F-2 to this report.  All other  schedules
              are  omitted as they are not  applicable  or not  required  or the
              information is provided in the Consolidated  Financial  Statements
              or the Notes thereto.

(b)      Exhibits:

         Number and Description Under Regulation S-K

          The following reflects all applicable exhibits required under Item 601
          of Regulation S-K:

         (4)      Instruments defining the rights of security holders including
                  indentures:

                  (4.1)    Amended Agreement of Limited  Partnership dated as of
                           October 23, 1984 [Exhibit A to Prospectus included in
                           Registrant's  Registration  Statement  on  Form  S-11
                           (File 2-92889)].*

                  (4.2)    Thirty-Second    Amendment   and    Restatement    of
                           Certificate  of  Limited  Partnership  filed with the
                           Massachusetts  Secretary  of  State  on June 4,  1986
                           [Exhibit  4.2 to  Registrant's  Report  on Form  10-K
                           dated October 31, 1986 (File No. 0-14377)].*

         (10)     Material Contracts

                  Windsor Apartments

                  (10.1)   Purchase  and  Sale  Agreement  dated  June  3,  1983
                           between  Douglas  Krupp,  on  behalf of  himself  and
                           others,  and Garland Land Joint Venture [Exhibit 1 to
                           Registrant's  Report on Form 8-K dated  December  27,
                           1984 (File No.
                           2-92889)].*

                  (10.2)   Property  Management  Agreement,  dated  December 27,
                           1984 between Krupp Realty Limited Partnership-VII, as
                           Owner and BRI OP Limited Partnership,  formerly known
                           as Berkshire  Property  Management,  a subsidiary  of
                           Berkshire  Realty  Company,  Inc.  [Exhibit  10.4  to
                           Registrant's  Report on Form 10-K for the fiscal year
                           ended October 31, 1984 (File No. 2-92889)].*

                  (10.3)   Promissory  Note dated  April 13, 1994 by and between
                           Windsor  Partners  Limited  Partnership  and Sun Life
                           Insurance   Company  of  America   [Exhibit  10.1  to
                           Registrant's  Report on Form 10-Q dated June 30, 1994
                           (File No. 0-14377)].*

                  (10.4)   Deed of Trust,  Security  Agreement,  Fixture Filing,
                           Financing  Statement  and  Assignment  of Leases  and
                           Rents dated April 13, 1994 from the grantor,  Windsor
                           Partners Limited Partnership,  to the Trustee,  Brian
                           C. Rider [Exhibit 10.2 to Registrant's Report on Form
                           10-Q dated June 30, 1994 (File No. 0-14377)].*

                  Courtyards Village East Apartments

                  (10.5)   Purchase and Sale  Agreement  dated  October 12, 1984
                           between  Douglas  Krupp  on  behalf  of  himself  and
                           others, and The Courtyards Village and The Courtyards
                           Village Inn-East Apartments Partnership [Exhibit 1 to
                           Registrant's  Report on Form 8-K dated  April 1, 1985
                           (File 2-92889)].*


                                      -12-
<PAGE>


                  (10.6)   Amended Trust Agreement dated May 6, 1976 between The
                           Courtyards   Village  and  The   Courtyards   Village
                           Inn-East Apartments Partnership and American National
                           Bank and  Trust  Company  of  Chicago  [Exhibit  2 to
                           Registrant's  Report on Form 8-K dated  April 1, 1985
                           (File No. 2-92889)].*

                  (10.7)   Assignment  of Trust of American  National  Bank and
                           Trust Company of Chicago dated April 1, 1985 [Exhibit
                           3 to Registrant's Report on Form 8-K dated April 1,
                           1985 (File No. 2-92889)].*

                  (10.8)   Mortgage Note dated January 1, 1973 between  American
                           National  Bank  and  Trust  Company  of  Chicago  and
                           Republic  Realty  Mortgage   Company  [Exhibit  4  to
                           Registrant's  Report on Form 8-K dated  April 1, 1985
                           (File No. 2-92889)].*

                  (10.9)   Modification  Agreement  dated  May 1,  1975  between
                           American  National  Bank and Trust Company of Chicago
                           and Republic Realty Mortgage Corporation.  [Exhibit 5
                           to  Registrant's  Report on Form 8-K  dated  April 1,
                           1985 (File No. 2-92889)].*

                  (10.10)  Mortgage  Note dated May 18,  1976  between  American
                           National  Bank  and  Trust  Company  of  Chicago  and
                           Republic  Realty  Mortgage   Company  [Exhibit  6  to
                           Registrant's  Report on Form 8-K dated  April 1, 1985
                           (File No.
                           2-92889)].*

                  (10.11)  Mortgage   Agreement   dated  May  18,  1976  between
                           American  National  Bank and Trust Company of Chicago
                           and Republic Realty Mortgage  Corporation  [Exhibit 7
                           to  Registrant's  Report on Form 8-K  dated  April 1,
                           1985 (File No. 2-92889)].*

                  (10.12)  Amended HUD Regulatory  Agreement  dated May 18, 1976
                           between  American  National Bank and Trust Company of
                           Chicago  and  Republic  Realty  Mortgage  Corporation
                           [Exhibit 8 to  Registrant's  Report on Form 8-K dated
                           April 1, 1985 (File No. 2-92889)].*

                  (10.13)  Consolidation  Agreement  dated June 14, 1976 between
                           American  Bank  and  Trust  Company  of  Chicago,  as
                           Trustee,  and Republic  Realty  Mortgage  Corporation
                           [Exhibit 9 to  Registrant's  Report on Form 8-K dated
                           April 1, 1985 (File No. 2-92889)].*

                  (10.14)  Property  Management  Agreement,  dated April 1, 1985
                           between  Krupp  Realty  Limited  Partnership-VII,  as
                           Owner and BRI OP Limited Partnership,  formerly known
                           as  Berkshire  Property  Management,  an affiliate of
                           Berkshire  Realty  Company,  Inc.  [Exhibit  10.20 to
                           Registrant's  Report on Form 10-K for the year  ended
                           October 31, 1985 (File No. 2-92889)].*

                  (10.15)  Promissory Note dated July 30, 1997 between  American
                           National Bank and Trust Company of Chicago and Reilly
                           Mortgage Group, Inc.*

                  (10.16)  Multifamily   Mortgage,   Assignment  of  Rents,  and
                           Security   Agreement  dated  July  30,  1997  between
                           American  National  Bank and Trust Company of Chicago
                           and Reilly Mortgage Group, Inc.*

                  *  Incorporated by reference


(c)      Reports on Form 8-K

         During the last  quarter  of the year  ended  December  31,  2000,  the
         Partnership did not file any reports on Form 8-K.

                                      -13-
<PAGE>


                                   SIGNATURES


     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the  undersigned,  thereunto duly  authorized,  on the 30th day of
March, 2001.

                      Krupp Realty Limited Partnership-VII
                      ----------------------------------------------------
                                   (Registrant)

                  BY: The Krupp Corporation, a General Partner
                      ----------------------------------------------------

                  BY:  /s/ Douglas Krupp
                      ----------------------------------------------------
                      Douglas Krupp
                      Co-Chairman  (Principal  Executive  Officer)  and
                      Director of The Krupp Corporation

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities indicated, on the 30th day of March 2001.

Signatures                                Titles



/s/ Douglas Krupp                         Co-Chairman (Principal Executive
----------------------------------------- Officer) and Director of The Krupp
Douglas Krupp                             Corporation, a General Partner.


/s/ George Krupp                          Co-Chairman (Principal Executive
----------------------------------------- Officer) and Director of the Krupp
George Krupp                              Corporation, a General Partner.


/s/ Frank Apeseche                        President of the Krupp Corporation,
----------------------------------------- a General Partner.
Frank Apeseche


/s/ David Quade                           Treasurer (Principal Financial and
----------------------------------------- Accounting Officer) of the Krupp
David Quade                               Corporation, a General Partner.


                                      -14-
<PAGE>


















                                   APPENDIX A

              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES















                  CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE
                               ITEM 8 OF FORM 10-K

               ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION
                       For the Year Ended December 31, 2000







                                      F-1
<PAGE>


              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

             INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE





Report of Independent Accountants                                           F-3


Consolidated Balance Sheets
at December 31, 2000 and December 31, 1999                                  F-4


Consolidated Statements of Operations
for the Years Ended December 31, 2000, 1999 and 1998                        F-5


Consolidated Statements of Changes in Partners' Equity (Deficit)
for the Years Ended December 31, 2000, 1999 and 1998                        F-6


Consolidated Statements of Cash Flows
for the Years Ended December 31, 2000, 1999 and 1998                        F-7

Notes to Consolidated Financial Statements                           F-8 - F-15


Schedule III - Real Estate and Accumulated Depreciation             F-16 - F-17



All other schedules are omitted as they are not applicable, not required, or the
information is provided in the  consolidated  financial  statements or the notes
thereto.









                                      F-2
<PAGE>






                        REPORT OF INDEPENDENT ACCOUNTANTS




To the Partners of
Krupp Realty Limited Partnership-VII and Subsidiaries:


     In  our  opinion,  the  consolidated  financial  statements  listed  in the
accompanying  index  present  fairly,  in all material  respects,  the financial
position  of  Krupp  Realty  Limited   Partnership-VII   and  Subsidiaries  (the
"Partnership")  at  December  31,  2000  and  1999,  and the  results  of  their
operations  and their cash flows for each of the three years in the period ended
December 31, 2000 in conformity with accounting principles generally accepted in
the United  States of  America.  In  addition,  in our  opinion,  the  financial
statement  schedule listed in the  accompanying  index presents  fairly,  in all
material  respects,  the  information set forth therein when read in conjunction
with the related consolidated  financial statements.  These financial statements
and financial  statement  schedule are the  responsibility  of the Partnership's
management;  our  responsibility  is to express  an  opinion on these  financial
statements and financial  statement  schedule based on our audits.  We conducted
our audits of these statements in accordance with auditing  standards  generally
accepted in the United States of America, which require that we plan and perform
the audit to obtain reasonable  assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence  supporting the amounts and  disclosures  in the financial  statements,
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.



/s/ PricewaterhouseCoopers LLP

Boston, Massachusetts
March 19, 2001






                                      F-3
<PAGE>





              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                           December 31, 2000 and 1999
                                     -------
<TABLE>
<CAPTION>

                                     ASSETS

                                                2000               1999
                                          ---------------    ---------------
<S>                                       <C>                <C>
Multi-family apartment complexes,
  net of accumulated depreciation
  of $15,671,250 and $14,265,488,
  respectively (Note F)                       $ 7,766,297        $ 8,809,883
Cash and cash equivalents (Note C)                456,851            120,525
Cash restricted for tenant security
  deposits                                         27,800             27,256
Replacement reserve escrow (Note F)                56,043             72,378
Due from affiliates (Note I)                       31,115            237,015
Prepaid expenses and other assets                 476,014            426,006
Investment in securities                           65,340                 -
Deferred expenses, net of accumulated
  amortization of $210,020 and
  $171,421, respectively                          105,632            144,234
                                          ---------------    ---------------
         Total assets                         $ 8,985,092        $ 9,837,297
                                          ===============    ===============

                        LIABILITIES AND PARTNERS' DEFICIT

Liabilities:
     Mortgage notes payable (Notes E
       and F)                                $ 10,107,446       $ 10,220,052
     Accrued expenses and other
       liabilities (Note G)                       717,537            625,590
                                          ---------------    ---------------
         Total liabilities                     10,824,983         10,845,642

Commitment (Note H)

Partners' deficit (Note H):

     Investor Limited Partners
      (27,184 Units outstanding)                 (946,178)          (172,633)
     Original Limited Partner                    (569,931)          (525,767)
     General Partners                            (323,782)          (309,945)
                                          ---------------    ---------------

         Total partners' deficit               (1,839,891)        (1,008,345)
                                          ---------------    ---------------
         Total liabilities and
            partners' deficit                 $ 8,985,092        $ 9,837,297
                                          ===============    ===============
</TABLE>

               The accompanying notes are an integral part of the
                       consolidated financial statements.


                                      F-4
<PAGE>


              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
              For the Years Ended December 31, 2000, 1999 and 1998

<TABLE>
<CAPTION>

                                            2000          1999         1998
                                         -----------   -----------  -----------
Revenue:
<S>                                      <C>           <C>          <C>
     Rental                              $ 4,184,217   $ 3,970,170  $ 3,853,006
     Interest income (Note C)                 18,534        27,447      136,183
                                         -----------   -----------  -----------

         Total revenue                     4,202,751     3,997,617    3,989,189
                                         -----------   -----------  -----------

Expenses:
     Operating (Notes E and I)             1,045,932     1,010,972      964,827
     Maintenance                             321,259       341,331      331,021
     Real estate taxes                       418,345       428,806      360,747
     General and administrative (Note I)     197,064       176,664      118,755
     Management fees (Note I)                185,038       157,467      172,873
     Depreciation and amortization         1,444,361     1,552,134    1,421,027
     Interest (Note F)                       870,240       879,470      918,569
                                         -----------   -----------  -----------

         Total expenses                    4,482,239     4,546,844    4,287,819

Loss before gain on sale of property        (279,488)     (549,227)    (298,630)

Gain on sale of property (Note E)                 -             -       676,316
                                         -----------   -----------  -----------

Net income (loss) (Note J)               $  (279,488)  $  (549,227) $   377,686
                                         ===========   ===========  ===========

Allocation of net income (loss) (Note H):

     Investor Limited Partners
       (27,184 Units outstanding):
         Loss before gain on sale of
           property                      $  (276,693)  $  (543,735) $  (295,644)
         Gain on sale of property                 -             -       669,553
                                         -----------   ----------- ------------
         Net income (loss)               $  (276,693)  $  (543,735) $   373,909
                                         ===========   =========== ============

     Investor Limited Partners, Per Unit:
         Loss before gain on sale of
           property                      $    (10.18)  $    (20.00) $    (10.88)
         Gain on sale of property                 -             -         24.63
                                         -----------   -----------  -----------
         Net income (loss)               $    (10.18)  $    (20.00) $     13.75
                                         ===========   ===========  ===========

     Original Limited Partner:
         Loss before gain on sale of
           property                      $        -    $       -    $        -
         Gain on sale of property                 -            -             -
                                         -----------   -----------  -----------
         Net income (loss)               $        -    $       -    $        -
                                         ===========   ===========  ===========

     General Partners:
         Loss before gain on sale of
           property                      $    (2,795)  $    (5,492) $    (2,986)
         Gain on sale of property                 -             -         6,763
                                         -----------   -----------  -----------
         Net income (loss)               $    (2,795)  $    (5,492) $     3,777
                                         ===========   ===========  ===========

</TABLE>


               The accompanying notes are an integral part of the
                       consolidated financial statements.

                                      F-5


<PAGE>


              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

        CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIT)
              For the Years Ended December 31, 2000, 1999 and 1998
<TABLE>
<CAPTION>

                                                                  Total
                      Investor      Original                      Partners'
                      Limited       Limited        General        (Deficit)
                      Partners      Partner        Partners       Equity
                     -------------  -------------  -------------  --------------

Balance at
<S>                  <C>            <C>            <C>            <C>
   December 31, 1997 $   3,379,358  $    (433,275) $    (261,729) $   2,684,354

Net income                 373,909             -           3,777        377,686

Distributions           (2,885,312)       (48,327)       (35,460)    (2,969,099)
                     ------------- --------------- -------------  --------------
                           867,955       (481,602)      (293,412)        92,941
Balance at
   December 31, 1998

Net loss                  (543,735)            -          (5,492)      (549,227)

Distributions             (496,853)       (44,165)       (11,041)      (552,059)
                     ------------- --------------- -------------  --------------
                          (172,633)      (525,767)      (309,945)    (1,008,345)
Balance at
   December 31, 1999

Net loss                  (276,693)            -          (2,795)      (279,488)

Distributions             (496,852)       (44,164)       (11,042)      (552,058)
                     ------------- --------------- ------------- ---------------

Balance at
   December 31, 2000 $    (946,178) $    (569,931) $    (323,782) $  (1,839,891)
                     ============= =============== ============= ===============

</TABLE>

The per Unit  distributions  for each of the years ended December 31, 2000, 1999
and 1998 was  $18.28,  $18.28  and  $106.14,  respectively,  of which $0, $0 and
$86.14 represented a return of capital, respectively.













               The accompanying notes are an integral part of the
                       consolidated financial statements.

                                      F-6

<PAGE>



              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              For the Years Ended December 31, 2000, 1999 and 1998
`
<TABLE>
<CAPTION>

                                            2000        1999        1998
                                         ----------  ----------  ----------

Cash flows from operating activities:
<S>                                      <C>         <C>         <C>
   Net income (loss)                     $ (279,488) $ (549,227) $  377,686
    Adjustments to reconcile net income
      (loss) to net cash provided by
       operating activities:
   Interest earned on replacement
     reserve escrow                            (787)     (1,023)       (160)
   Depreciation and amortization          1,444,361   1,552,133   1,421,027
   Gain on sale of property                      -           -     (676,316)
   Changes in assets and liabilities:
     Increase in restricted cash for
        tenant security deposits               (544)       (650)       (626)
     Decrease (increase) in prepaid
       expenses and other assets and due
       from affiliates                      155,895     (59,107)      3,646
     Increase (decrease) in accrued
       expenses and other liabilities        28,811      68,729    (254,228)
                                         ----------  ----------  ----------

   Net cash provided by operating
      activities                          1,348,248   1,010,855     871,029
                                         ----------  ----------  ----------

Cash flows from investing activities:
     Deposits to replacement reserve
       escrow                               (50,400)    (50,400)    (21,000)
     Withdrawals from replacement
       reserve escrow                        67,522         205          -
     Additions to fixed assets             (362,176)   (812,887) (1,829,349)
     Increase (decrease) in accrued
       expenses and other liabilities
       related to fixed asset additions      (2,204)     (1,296)      3,500
     Proceeds from sale of property, net         -           -    6,514,681
                                         ----------  ----------  ----------

    Net cash (used in) provided by
      investing activities                 (347,258)   (864,378)  4,667,832
                                         ----------  ----------  ----------

Cash flows from financing activities:
     Principal payments on mortgage notes
       payable                             (112,606)   (103,376)    (94,906)
     Repayment of mortgage notes payable         -           -   (4,084,037)
     Increase in deferred expenses               -           -      (15,496)
     Distributions                         (552,058)   (552,059) (2,969,099)
                                         ----------  ----------  ----------

     Net cash used in financing
      activities                           (664,664)   (655,435) (7,163,538)
                                         ----------  ----------  ----------

Net increase (decrease) in cash and cash
   equivalents                              336,326    (508,958) (1,624,677)
Cash and cash equivalents, beginning of
  the year                                  120,525     629,483   2,254,160
                                         ----------  ----------  ----------
Cash and cash equivalents, end of year   $  456,851  $  120,525  $  629,483
                                         ==========  ==========  ==========

Non-cash investing activities:
  Investment in securities               $   65,340
</TABLE>



               The accompanying notes are an integral part of the
                       consolidated financial statements.


                                      F-7

<PAGE>




              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   ----------
A.   Organization

     Krupp Realty Limited Partnership-VII  ("KRLP-VII") was formed on August 21,
     1984 by filing a Certificate of Limited  Partnership in the Commonwealth of
     Massachusetts.  KRLP-VII  terminates  on December  31, 2025 unless  earlier
     terminated  upon the  occurrence  of  certain  events  as set  forth in the
     Partnership Agreement. KRLP-VII issued all of the General Partner Interests
     to  two  General   Partners,   The  Krupp   Corporation,   a  Massachusetts
     corporation, and The Krupp Company Limited Partnership-II,  a Massachusetts
     limited  partnership,  in exchange  for capital  contributions  aggregating
     $1,000. In addition,  the General Partners were required to make additional
     capital  contributions  of $135,891 which were used to pay organization and
     offering  costs in  excess  of 5% of the gross  proceeds  of the  offering.
     Except under certain limited  circumstances  upon  termination of KRLP-VII,
     the General Partners are not required to make any other additional  capital
     contributions.

     KRLP-VII also issued all of the Original  Limited Partner  Interests to The
     Krupp Company Limited Partnership-II in exchange for a capital contribution
     of $4,000.

     On November 2, 1984,  KRLP-VII  commenced an offering of up to 40,000 units
     of Investor Limited Partner Interest (the "Units") for $1,000 per Unit. The
     public  offering was closed on April 25,  1986,  at which time 27,184 Units
     had been sold for $27,184,000.

     On December 19, 1984 the General  Partners  formed Krupp Realty  Courtyards
     Limited Partnership ("Realty-VII") as a prerequisite for the refinancing of
     Courtyards  Village East  Apartments  ("Courtyards  Village").  At the same
     time, the General Partners  transferred  ownership of Courtyards Village to
     Realty-VII.  The General  Partner of  Realty-VII  is KRLP-VII.  The Limited
     Partners of  Realty-VII  are  KRLP-VII  and The Krupp  Corporation  ("Krupp
     Corp.").  Krupp Corp. has beneficially  assigned its interest in Realty-VII
     to KRLP-VII.

     On March 31, 1994, the General  Partners  formed Windsor  Partners  Limited
     Partnership  ("Windsor  L.P.") as a  prerequisite  for the  refinancing  of
     Windsor  Apartments.  At the same time,  the General  Partners  transferred
     ownership of the  property to Windsor  L.P. In exchange  for the  property,
     KRLP-VII  received a 99% Limited  Partnership  interest in Windsor L.P. The
     General Partner of Windsor L.P. is ST. Windsor  Corporation  which has a 1%
     interest in Windsor L.P. and is 100% owned by KRLP-VII.

     KRLP-VII,  Realty-VII  and Windsor  L.P.  are  collectively  known as Krupp
     Realty Limited  Partnership-VII and Subsidiaries  (collectively referred to
     herein as the "Partnership").

     On January 30, 1998, the Partnership  sold Nora Corners,  a shopping center
     containing 89,432 leasable square feet,  located in Indianapolis,  Indiana,
     to Kejack,  Inc. and its permitted  assigns,  which are unaffiliated  third
     parties.  Nora  Corners  Shopping  Center was  included  in a package  with
     thirteen other  properties owned by affiliates of the General Partners (see
     Note E).








                                   Continued

                                      F-8

<PAGE>

              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                                   ----------




B.   Significant Accounting Policies

     The  Partnership  uses the  following  accounting  policies  for  financial
     reporting  purposes,  which may differ in certain  respects from those used
     for federal income tax purposes (see Note J):

         Basis of Presentation

         The consolidated  financial statements present the consolidated assets,
         liabilities  and  operations  of  the  Partnership.   All  intercompany
         balances and transactions have been eliminated.

         Risks and Uncertainties

         The Partnership invests its cash primarily in deposits and money market
         funds with  commercial  banks.  The Partnership has not experienced any
         losses to date on its invested cash.

         The  preparation of financial  statements in conformity with accounting
         principals  generally accepted in the United States of America requires
         management to make estimates and  assumptions  that affect the reported
         amount of assets and liabilities, contingent assets and liabilities and
         revenues and expenses during the reporting period. Actual results could
         differ from those estimates.

         Cash and Cash Equivalents

         The  Partnership  includes all  short-term  investments  with  original
         maturities of three months or less from the date of acquisition in cash
         and cash equivalents.  The cash investments are recorded at cost, which
         approximates market values.

         Rental Revenue

         Leases  require  the  payment of base rent  monthly in advance.  Rental
         revenue are recorded on the accrual basis.

         Real Estate

         Real  estate  assets  and  equipment  are stated at  depreciated  cost.
         Pursuant to Statement of Financial Accounting Standards Opinion No. 121
         "Accounting for the Impairment of Long-Lived  Assets and for Long-Lived
         Assets to be Disposed of," impairment losses are recorded on long-lived
         assets used in operations on a property by property basis,  when events
         and  circumstances  indicate  that  the  real  estate  assets  might be
         impaired and the estimated  undiscounted  cash flows,  without interest
         charges,  to be  generated  by those  assets are less than the carrying
         amount of those  assets.  Upon  determination  that an  impairment  has
         occurred,  those assets  shall be reduced to fair value less  estimated
         costs to sell.

         Expenditures  for  ordinary  maintenance  and repairs  are  expensed to
         operations  as  they  are   incurred.   Significant   renovations   and
         improvements  which improve or extend the useful life of the assets are
         capitalized. Except for amounts attributed to land, rental property and
         improvements  are depreciated  over their estimated  useful lives using
         the straight-line  method. The estimated useful lives by asset category
         are:


              Buildings and improvements                3 to 25 years
              Equipment, furnishings and fixtures       3 to 8 years



                                    Continued

                                      F-9
<PAGE>

              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                                   ----------

B.    Significant Accounting Policies, Continued

         Real Estate, Continued

         The  Partnership  classifies  assets  as  available  for sale  upon the
         General  Partners  committing  to  a  formal  plan  of  disposal.   The
         Partnership is in the process of determining the  marketability  of the
         Partnership's  real  estate  assets but the General  Partners  have not
         committed to a formal plan of  disposition  and therefore no properties
         have been classified as available for sale.

         Deferred Expenses

         Costs of obtaining and recording  mortgages are amortized over the term
         of the related  mortgage  notes using the  straight-line  method  which
         approximates the effective interest method.

         Income Taxes

         The  Partnership is not liable for federal or state income taxes as the
         Partnership  income or loss is allocated to the Partners for income tax
         purposes.  In the event that the Partnership's tax returns are examined
         by the  Internal  Revenue  Service or state  taxing  authority  and the
         examination  results in a change in the  Partnership  taxable income or
         loss, such change will be reported to the Partners.

         Descriptive Information About Reportable Segments

         The  Partnership  operates and  develops  apartment  communities  which
         generate  rental and other  income  through  the  leasing of  apartment
         units. The General Partners separately evaluate the performance of each
         of the Partnership's  apartment communities.  However,  because each of
         the  apartment   communities  has  similar  economic   characteristics,
         facilities,  services and tenants, the apartment  communities have been
         aggregated into a single dominant apartment communities segment.

         All revenue are from  external  customers  and no revenue are generated
         from  transactions  with  other  segments.  There  are no  tenants  who
         contributed 10% or more of the Partnership's total revenue during 2000,
         1999 or 1998.

         Recent Accounting Pronouncements

         In June 1997, the Financial  Accounting Standards Board ("FASB") issued
         Statement  of  financial   Accounting   standards   ("SFAS")  No.  133,
         "Accounting for Derivative  Instruments and Hedging  Activities".  SFAS
         No. 133 establishes  accounting and reporting  standards for derivative
         instruments, including certain derivative instruments embedded in other
         contracts,  and for hedging activities.  It requires recognition of all
         derivative instruments as either assets or liabilities in the statement
         of financial position and measure those instruments at fair value. This
         statement will be effective for the  Partnership  beginning  January 1,
         2001.  The  Partnership  did not hold  any  derivative  instruments  at
         December 31, 2000,  and as such, the  Partnership  does not expect this
         pronouncement  to  have  a  significant  impact  on  the  Partnership's
         financial statements.

         Investment in Securities

         Investment in securities is carried at its original issuance  valuation
         as the common  stock is not listed or traded on an exchange  and is not
         considered  a  marketable  security  pursuant to Statement of Financial
         Accounting   Standards   Opinion  No.  115,   "Accounting  for  Certain
         Investments in Debt and Equity Securities" ("FAS 115").

                                    Continued

                                      F-10
<PAGE>

              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                                   ----------


C.   Cash and Cash Equivalents

         Cash and  cash  equivalents  at December 31, 2000 and 1999 consisted of
         the following:
<TABLE>
<CAPTION>

                                               December 31,
                                          -------------------------
                                             2000         1999
                                          ------------ ------------

<S>                                         <C>           <C>
      Cash and money market accounts        $  456,851    $ 120,525
                                          ============ ============
</TABLE>

D.   Investment in Securities

     On October 5, 2000,  the  Partnership,  as a member of an alliance of major
     multi-family  real  estate  companies,  executed a master  lease  agreement
     ("MLA") with a provider of high-speed internet, video and voice services to
     multi-family communities.  Pursuant to the MLA, the Partnership granted the
     provider  preferred  lease,  license  and  access  rights to  provide  data
     services,  consisting of  high-speed  broadband  internet  access and video
     services,  to the residents at some of its  multi-family  communities for a
     ten-year  period.  In exchange for these rights,  the Partnership  received
     250,843  shares of common  stock  which were  valued at $.2285 per share or
     $57,341.  In  addition,  the  Partnership  will  receive  7.5% of the gross
     revenues that the provider obtains from providing its services as well as a
     fixed amount for each  resident that  executes a subscriber  agreement.  In
     conjunction  with  the  execution  of the  MLA,  the  Partnership  made  an
     investment  of $5,751 in exchange  for 25,164  additional  shares of common
     stock  also  valued  at  $.2285  per  share.   The   Partnership   incurred
     approximately  $2,248 in closing  costs related to the  acquisition  by the
     Partnership  and the closing costs  incurred were recorded as an investment
     in securities in the financial statements as of December 31, 2000.

E.   Sale of Property

     On January 30, 1998,  the  Partnership  sold Nora Corners  Shopping  Center
     ("Nora Corners") to unaffiliated  third parties.  Nora Corners was included
     in a package with  thirteen  other  properties  owned by  affiliates of the
     General  Partners.  The total selling price of the fourteen  properties was
     $138,000,000,  of which the Partnership received $6,604,300, less repayment
     of the existing  mortgage note and interest of $4,114,668  and its share of
     closing  costs  of  $224,512.   For  financial  reporting   purposes,   the
     Partnership  realized  a  gain  of  $676,316  on the  sale.  The  gain  was
     calculated as the difference  between the property's selling price less net
     book value of the property and closing costs.

     Nora Corners was situated on 11.21 acres of land, seven acres of which were
     owned by certain  non-affiliated  third parties.  These seven acres of land
     were  leased to the  Partnership  subject  to a 99-year  land  lease  which
     expired in 2061. The land lease required  annual rental payments of $17,280
     from 1987 through 2012. On January 30, 1998, in  conjunction  with the sale
     of Nora  Corners,  the land  lease was  assigned  to the  purchaser  of the
     property, under the terms of the land lease.

                                    Continued

                                      F-11
<PAGE>

              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                                   ----------

F.   Mortgage Notes Payable

     The properties  owned by the  Partnership are pledged as collateral for the
     respective  non-recourse mortgage notes payable outstanding at December 31,
     2000 and 1999. Mortgage notes payable consisted of the following:


<TABLE>
<CAPTION>
                                       Principal        Annual
     ----------------------   ------------------------  Interest   Maturity
          Property                2000          1999    Rate       Date
     ----------------------   -----------  -----------  --------  ---------

<S>                           <C>          <C>            <C>   <C>
     Courtyards Village       $ 5,109,846  $ 5,164,455    7.88% August 1, 2007

     Windsor Apartments         4,997,600    5,055,597    9.25%    May 1, 2001
                              -----------  -----------

          Total               $10,107,446  $10,220,052
                              ===========  ===========
</TABLE>

         Courtyards Village

         On July 30, 1997, the  Partnership  refinanced  the Courtyards  Village
         mortgage  note.   The  property  was   refinanced   with  a  $5,280,000
         non-recourse  mortgage note payable at the rate of 7.88% per annum with
         monthly principal and interest payments of $38,302.  The mortgage note,
         which is collateralized  by the property,  matures on August 1, 2007 at
         which time the remaining principal  (approximately  $4,658,637) and any
         accrued  interest  are  due.  The  note may be  prepaid,  subject  to a
         prepayment  premium,  at any time with 30 days notice.  The Partnership
         used the majority of the  proceeds  from the  refinancing  to repay the
         existing mortgage note on the property of $3,172,809, pay closing costs
         of  $136,040  and  to  establish  various  escrows.   As  part  of  the
         refinancing,  the Partnership was required to establish a $9,525 repair
         escrow and a replacement reserve escrow. The replacement reserve escrow
         required no initial deposit at the close and monthly deposits of $4,200
         which began on September 1, 1998.

         Based on the borrowing rates currently available to the Partnership for
         bank loans with similar terms and average maturities, the fair value of
         long-term debt is approximately $5,309,000 and $5,076,000 for the years
         ended December 31, 2000 and 1999, respectively.

         Windsor Apartments

         The property is subject to a non-recourse  mortgage note payable in the
         original  amount of  $5,300,000,  based on a 30-year  amortization  and
         payable at the rate of 9.25% per annum in equal monthly installments of
         $43,602,  consisting of principal and interest. At maturity, all unpaid
         principal,  approximately $5,021,000, and any accrued interest are due.
         The note may be prepaid subject to a prepayment penalty.

         Based on the borrowing rates currently available to the Partnership for
         bank loans with similar terms and average maturities, the fair value of
         long-term debt is approximately $5,075,000 and $5,161,000 for the years
         ended December 31, 2000 and 1999, respectively.

         The General  Partners are in the process of negotiating an extension of
         the mortgage note payable on Windsor Apartments. It is anticipated that
         the note will be  extended  under  terms  substantially  similar to the
         current terms.

     Due to  restrictions  on transfers and  prepayment,  the Partnership may be
     unable to refinance  certain mortgage notes payable at such calculated fair
     value.



                                    Continued

                                      F-12

<PAGE>
              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                                   ----------

F.   Mortgage Notes Payable, Continued

     The  aggregate  scheduled  principal  amounts of long-term  borrowings  due
     during the five years  ending  December 31, 2005 are  $5,079,337,  $63,481,
     $68,668, $74,279 and $80,348.

     The Partnership paid interest on its borrowings in the amounts of $870,240,
     $879,470 and $918,569  during the years ended  December 31, 2000,  1999 and
     1998, respectively.

     The weighted  average  interest rate on the  Partnership's  mortgage  notes
     payable is 8.56% at December 31, 2000.

G.   Accrued Expenses and Other Liabilities

     Accrued  expenses  and other  liabilities  consisted  of the  following  at
     December 31, 2000 and 1999:

<TABLE>
<CAPTION>
                                              2000                 1999
                                        ----------------    -----------------

<S>                                     <C>                  <C>
        Accounts payable                $       8,338        $       18,550
        Accrued real estate taxes             419,230               392,868
        Other liabilities                     203,556               132,502
        Tenant security deposits               57,461                45,604
        Prepaid rent                           28,952                36,066
                                        ----------------    -----------------

                                        $     717,537        $      625,590
                                        ================    =================
</TABLE>
H.   Partners' Equity

     Under the terms of the  Partnership  Agreement,  losses from operations are
     allocated  99% to  the  Investor  Limited  Partners  and 1% to the  General
     Partners. Profits from operations are allocated 90% to the Investor Limited
     Partners,  8% to  the  Original  Limited  Partner  and  2% to  the  General
     Partners,  until such time that the Investor Limited Partners have received
     a return of their total  invested  capital  plus a 9% per annum  cumulative
     return thereon and thereafter, 69% to the Investor Limited Partners, 25% to
     the Original Limited Partner and 6% to the General Partners.

     Profits  from  Capital  Transactions  are  allocated  first to the Investor
     Limited  Partners until they have received a return of their total invested
     capital.  Thereafter,  profits from Capital  Transactions  are allocated in
     accordance with the Partnership Agreement. Losses from Capital Transactions
     are  allocated 99% to the Investor  Limited  Partners and 1% to the General
     Partners.  Notwithstanding  anything above,  the General  Partners shall be
     allocated at least 1% of all profits and losses from Capital Transactions.

     Under the terms of the Partnership  Agreement,  cash distributions are made
     on the same basis as the allocations of profits  described above.  Pursuant
     to the  Partnership  Agreement,  proceeds from Capital  Transactions  shall
     first be  applied  to the  payment  of all  debts  and  liabilities  of the
     Partnership  and second to fund reserves for  contingent  liabilities.  The
     remaining net cash proceeds  will then be  distributed  99% to the Investor
     Limited  Partners until they have received a return of their total invested
     capital and 1% to the General  Partners,  thereafter net cash proceeds will
     be distributed  in accordance  with the  Partnership  Agreement and will be
     distributed  in  part  after  payment  by  the  Partnership  of  a  certain
     subordinated financial consulting fee as described below.


                                   Continued

                                      F-13
<PAGE>
              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                                   ----------

H.   Partners' Equity, Continued

     The  Partnership  entered  into a Sales  Agent  Agreement  for  the  public
     offering of Units.  Under that  Agreement,  the Partnership was required to
     pay to the sales  agent  underwriting  commissions  and  related  financial
     consulting  fees equal to 9% of the gross  proceeds from the  offering.  In
     addition, the sales agent will be entitled to receive, over the life of the
     Partnership,  a  subordinated  financial  consulting fee based upon the net
     cash  proceeds  received  by the  Partnership  as a  result  of  sales  and
     refinancings of Partnership properties, which fee shall be in an amount not
     exceeding 1.5% of the gross proceeds of the offering of Units. No such fees
     will,  however,  be payable  unless and until all Partners  have received a
     return of their  Invested  Capital and the Investor  Limited  Partners have
     received a 9% per annum cumulative return.

     As of December 31, 2000, the following cumulative partner contributions and
     allocations have been made since the inception of the Partnership:
<TABLE>
<CAPTION>

                              Investor    Original                 Total
                              Limited     Limited     General      Partners'
                              Partners    Partner     Partners     (Deficit)
     ----------------------- -----------  ----------  -----------  ------------

<S>                         <C>           <C>         <C>          <C>
     Capital contributions  $ 27,184,000  $    4,000  $   136,891  $ 27,324,891
     Syndication costs        (3,697,375)         -      (135,891)   (3,833,266)
     Distributions:
       Operation              (6,466,199)   (574,772)    (143,692)   (7,184,663)
       Capital transaction    (2,341,632)         -       (23,378)   (2,365,010)
     Income (loss):
       Operations            (15,477,758)        841     (156,225)  (15,633,142)
       Capital transaction      (147,214)         -        (1,487)     (148,701)
                             -----------   ---------   ----------  ------------
     Balance at
       December 31, 2000     $  (946,178)  $(569,931)  $ (323,782) $ (1,839,891)
                             ===========   =========   ==========  ============
</TABLE>

I.   Related Party Transactions

     The  Partnership  pays  property  management  fees to an  affiliate  of the
     General  Partners  for  management  services.  Pursuant  to the  management
     agreements,  management  fees are  payable  monthly  at a rate of 4% of the
     gross receipts,  net of leasing  commissions,  from the commercial property
     which was under  management  until  January 30, 1998 (see Note E) and 5% of
     gross  receipts  from   residential   properties  under   management.   The
     Partnership also reimburses  affiliates of the General Partners for certain
     expenses  incurred in connection  with the operation of the Partnership and
     its properties including administrative expenses.

     Amounts  accrued or paid to the  General  Partners'  affiliates  during the
     years ended December 31, 2000, 1999 and 1998 were as follows:
<TABLE>
<CAPTION>

                                   2000              1999              1998
                                -----------     -------------      ------------
<S>                             <C>             <C>                <C>
       Property management fees $   185,038     $     157,467      $    172,873
       Expense reimbursements       203,128           196,973           146,025
                                -----------     -------------      ------------

         Charged to operations  $   388,166     $     354,440      $    318,898
                                ===========     =============      ============
</TABLE>

     Expense  reimbursements  due from  affiliates  of $31,115 and $237,015 were
     included  in  due  from   affiliates   at  December   31,  2000  and  1999,
     respectively.

     In addition to the amounts above,  costs  associated  with the sale of Nora
     Corners of $4,171 were paid to the General Partners'  affiliates during the
     year ended December 31, 1998.


                                    Continued

                                      F-14
<PAGE>
              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                                   ----------

J.   Federal Income Taxes

     For federal income tax purposes,  the Partnership is depreciating  property
     using the  Accelerated  Cost  Recovery  System  ("ACRS")  and the  Modified
     Accelerated   Cost  Recovery  System   ("MACRS")   depending  on  which  is
     applicable.

     The  reconciliation  of the net income (loss) reported in the  accompanying
     Consolidated Statement of Operations with the net income (loss) reported in
     the  Partnership's  federal  income tax return for the years ended December
     31, 2000, 1999 and 1998 is as follows:

<TABLE>
<CAPTION>
                                      2000            1999            1998
                                 --------------  --------------  --------------

<S>                              <C>             <C>             <C>
     Net income (loss) per
      Consolidated Statement of
      Operations                 $     (279,488) $     (549,227) $      377,686

          Difference in book and
           tax depreciation and
           amortization                 432,720         215,924         152,684

          Difference between book
           and tax gain on sale
           of property                       -               -          977,707

          Rental adjustment
           required by generally
           accepted accounting
           principles                    (4,246)           (399)         26,672
                                 --------------  --------------  --------------

     Net income (loss) for
      federal income tax
      purposes                   $      148,986  $     (333,702)   $  1,536,749
                                 ==============  ==============  ==============
</TABLE>


     The  allocation  of the net income for federal  income tax purposes for the
year ended December 31, 2000 is as follows:
<TABLE>
<CAPTION>

                                 Portfolio    Passive
                                 Income       Income         Total
                                 ----------   ------------   -----------

<S>                              <C>          <C>            <C>
     Investor Limited Partners   $   16,680   $    117,407   $   134,087
     Original Limited Partner         1,483         10,436        11,919
     General Partners                   371          2,609         2,980
                                 ----------   ------------   -----------
                                 $   18,534   $    130,452   $   148,986
                                 ==========   ============   ===========
</TABLE>


     For the years ended  December  31,  2000,  1999 and 1998,  the per Unit net
     income  (loss) to the  Investor  Limited  Partners  for federal  income tax
     purposes was $4.93, $12.15 and $55.97, respectively.

     The basis of the  Partnership's  assets for  financial  reporting  purposes
     exceeds  its tax  basis  by  approximately  $1,193,000  and  $2,279,000  at
     December 31, 2000 and 1999,  respectively.  The basis of the  Partnership's
     liabilities for financial  reporting purposes is less than its tax basis by
     approximately  $3,483,000  and  $3,520,000  at December  31, 2000 and 1999,
     respectively.

                                      F-15
<PAGE>

              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

             SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                                December 31, 2000
                                   ----------


<TABLE>
<CAPTION>
                                                            Costs
                                                            Capitalized
                                    Initial Cost to         Subsequent to
                                    Partnership             Acquisition
                                    ----------------------- ------------
                                               Buildings &  Buildings &
  Description        Encumbrances   Land       Improvements Improvements   Life
-------------------- ------------  ----------  ------------ ------------ -------

<S>                  <C>           <C>         <C>          <C>          <C>
Courtyards Village
East Apartments
Naperville, Illinois $ 5,109,846   $  487,529  $ 6,486,198  $  5,008,883 3 to 25
                                                                           years

Windsor Apartments
Garland, Texas         4,997,600      696,362    9,251,669     1,506,906 3 to 25
                                                                           years
                     -----------   ----------  -----------   -----------

     Total           $10,107,446   $1,183,891  $15,737,867  $  6,515,789
                     ===========   ==========  ===========  ============
</TABLE>





<TABLE>
<CAPTION>

                   Gross Amounts Carried at
                          End of Year
              -----------------------------------
                         Buildings                           Year
                          and                   Accumulated  Construction Date
 Dexcription     Land    Improvements   Total   Depreciation Completed  Acquired
------------- ---------- ------------ --------- ------------ ---------  --------

<S>           <C>        <C>         <C>          <C>           <C>     <C>
Courtyards
Village East
Apartments
Naperville,
Illinois      $  487,529 $11,495,081  $11,982,610 $ 7,912,869   1973      4/1/85

Windsor
Apartments
Garland, Texas   696,362  10,758,575   11,454,937   7,758,381   1984    12/27/84
              ---------- -----------  ----------- -----------

     Total    $1,183,891 $22,253,656  $23,437,547 $15,671,250
              ========== ============ =========== ===========
</TABLE>



                                    Continued

                                      F-16
<PAGE>




              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

       SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION, Continued

                                December 31, 2000
                                   ----------

Reconciliation of Real Estate and Accumulated Depreciation for each of the three
years in the period ended December 31, 2000:
<TABLE>
<CAPTION>

                             2000          1999          1998
                         ------------  ------------  ------------

   Real Estate

<S>                      <C>           <C>           <C>
   Balance at beginning
    of year              $ 23,075,371  $ 22,262,484  $ 30,206,277

   Acquisition and
    improvements              362,176       812,887     1,829,349

   Sale of property                -             -     (9,773,142)
                         ------------  ------------  ------------

   Balance at end
    of year              $ 23,437,547  $ 23,075,371  $ 22,262,484
                         ============  ============  ============



                             2000          1999          1998
                         ------------  ------------  ------------

   Accumulated Depreciation

   Balance at beginning
    of year              $ 14,265,488  $ 12,751,953  $ 15,523,683

   Depreciation expense     1,405,762     1,513,535     1,297,939

   Sale of property                -             -     (4,069,669)
                         ------------  ------------  ------------

   Balance at end
    of year              $ 15,671,250  $ 14,265,488  $ 12,751,953
                         ============  ============  ============

</TABLE>

The  aggregate  cost of the  Partnership's  real estate for  federal  income tax
purposes is $23,451,443 and the aggregate  accumulated  depreciation for federal
income tax purposes is $18,073,517.






                                      F-17