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, 1999

                                       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
             (Exact name of registrant as specified in its charter)

         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 offices)                   (Zip Code)

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


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  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X No

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 10-13.

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 and commercial 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 D 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.





<PAGE>



     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) the 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, 1999, the Partnership did not employ any personnel.

ITEM 2. PROPERTIES

     As of December 31, 1999, 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,
1999 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                     ------------------------
Description               Acquisition    Total Units    1999 1998 1997 1996 1995
-----------               -----------   -------------   ---- ---- ---- ---- ----
<S>                           <C>             <C>        <C>  <C>  <C>  <C>  <C>

Courtyards Village
  East Apartments
Naperville, Illinois           1985           224        95%  97%  97%  98%  95%

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






















<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,  1999 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 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, 1999 and 1998:
<TABLE>
<CAPTION>

                                              Year Ended December 31,
                                  ---------------------------------------------
                                           1999                   1998
                                  ---------------------   ---------------------
                                    Amount     Per Unit     Amount    Per Unit
                                  ----------   --------   ---------   ---------
Limited Partners:
<S>                               <C>          <C>        <C>         <C>
  Investor Limited Partners
    (27,184 Units
    outstanding)                  $  496,853   $  18.28   $2,885,312  $  106.14

  Original Limited Partner            44,165                  48,327

General Partners                      11,041                  35,460
                                  ----------              ----------

                                  $  552,059              $2,969,099
                                  ==========              ==========
</TABLE>





<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>
                        1999        1998        1997        1996        1995
                    ----------- ----------- ----------- ----------- -----------
<S>                 <C>         <C>         <C>         <C>         <C>
Total revenue       $ 3,997,617 $ 3,989,189 $ 4,795,059 $ 4,688,515 $ 4,537,418

Income (loss) before
  gain on sale of
  property             (549,227)   (298,630)   (151,137)     10,513     (24,601)

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

Net income (loss)      (549,227)    377,686    (151,137)     10,513     (24,601)

Net income (loss)
  allocated to:

  Investor Limited
    Partners           (543,735)    373,909    (149,626)      9,462     (24,355)
      Per Unit           (20.00)      13.75       (5.50)        .35        (.90)

  Original Limited
    Partner                -           -           -            841        -


  General Partners       (5,492)      3,777      (1,511)        210        (246)

Total assets at
  December 31,        9,837,297  10,974,526  17,995,610  16,855,594  17,611,547

Long-term obligations
  at December 31,    10,108,246  10,220,786  14,345,624  12,366,197  12,563,382

Distributions:

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

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

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

</TABLE>

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

The per Unit  distributions  for the years ended December 31, 1999,  1998, 1997,
1996 and 1995 were $18.28, $106.14, $20.00, $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.


<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 1994, the General Partners determined that there was sufficient
Cash Flow to reinstate semiannual  distributions.  These distributions commenced
in August 1994 at a rate of $5.00 per Unit and  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 G 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.

     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 D 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 provides additional
liquidity  to  fund  capital  improvements  at  the  Partnership's   properties,
Courtyards Village and Windsor Apartments.

     In  order  to  remain   competitive  in  their  respective   markets,   the
Partnership's  properties spent approximately $813,000 in 1999 and are expecting
to spend approximately  $340,000 for fixed assets in 2000, 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.










<PAGE>



     Financial   Accounting   Standards  Board  Statement  No.137.  ("FAS  137")
"Accounting for Derivative  Instruments and Hedging  Activities-deferral  of the
Effective Date of the Statement of Financial  Accounting  Standards No.133." FAS
137 amended FAS 133 by deferring  the effective  date to fiscal  quarters of all
fiscal years  beginning after June 15, 2000. The General  Partners  believe that
the  implementation  of  FAS  137  will  not  have  a  material  impact  on  the
Partnership's financial statement.

Year 2000

     The General Partners of the Partnership have conducted an assessment of the
Partnership's core internal and external computer  information  systems and have
taken the  necessary  steps to  understand  the  nature  and  extent of the work
required to make its  systems  Year 2000 ready.  They have  evaluated  Year 2000
compliance  issues with respect to its  non-financial  systems and have received
assurances from third-party service providers  (including but not limited to its
telecommunications   providers  and  banks)  with  regard  to  their  Year  2000
readiness.

     The  General   Partners   completed  the  testing  and  conversion  of  the
Partnerships  financial  accounting  operating  systems in February  1998.  As a
result, the General Partners have generated  operating  efficiencies and believe
their financial  accounting  operating  systems are Year 2000 ready. The General
Partners  incurred  hardware  costs as well as  consulting  and  other  expenses
related to the infrastructure and facilities  enhancements necessary to complete
the  upgrade  and  prepare  for the Year  2000.  There are no other  significant
internal systems or software that the Partnership is using at the present time.

     To date, the  Partnership  has not incurred,  and does not expect to incur,
any significant cost associated with being Year 2000 compliant.

     To date, the Partnership has not had, and does not expect to have, any Year
2000 related problems.

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, 1999,  1998 and 1997. The sale of Nora Corners on January 30, 1998,
significantly impacts the comparability of the Partnership's  operations between
these years.

1999 compared to 1998

     Net income, net of Nora Corners's 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's  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


<PAGE>



Courtyards Village, particularly the rehab of eleven apartments during the first
quarter.

1998 compared to 1997

     Net income,  net of Nora  Corners's  activity,  decreased  during 1998 when
compared to 1997 as the  increase in expenses  more than offset the  increase in
total  revenue.  Rental  revenue  increased as a result of rental rate increases
implemented at both Courtyards Village and Windsor  Apartments.  Interest income
increased as a result of interest earned on the investment of proceeds  received
from the sale of Nora Corners.

         Total expenses in 1998, net of Nora Corners's activity,  increased when
compared  to 1997 due  primarily  to  increases  in  depreciation  and  interest
expenses.  This  was  partially  offset  by a  decrease  in  operating  expense.
Depreciation   expense   increased  in  conjunction   with   increased   capital
improvements completed at the Partnership's properties. Interest expense rose as
a result of the refinancing of the Courtyards  mortgage note in 1997 (see Note E
to  Consolidated  Financial  Statements  included in Item 8 (Appendix A) of this
report).  Operating  expense  decreased  primarily as a result of a reduction in
liability and workers compensation expense at the Partnership's properties,  due
to lower claims experience.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     See Appendix A to this report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE
     None.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     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:

                                  Position with
         Name and Age             The Krupp Corporation
         ------------             ---------------------
         Douglas Krupp (53)       President and Co-Chairman of the Board
         George Krupp (55)        Co-Chairman of the Board
         Wayne H. Zarozny (41)    Treasurer

     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

<PAGE>



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.

     Wayne H. Zarozny is Vice President of The Berkshire  Group. Mr. Zarozny has
held several  positions  within The Berkshire Group since joining the company in
1986 and is currently  responsible for asset management,  accounting,  financial
reporting and treasury activities.  Prior to joining The Berkshire Group, he was
an audit  supervisor  for Pannell  Kerr Forster  International  and on the audit
staff of Deloitte,  Haskins and Sells in Boston.  He received a B.S. degree from
Bryant  College,  a  Master's  degree  in  Business  Administration  from  Clark
University and is a Certified Public Accountant.

ITEM 11. EXECUTIVE COMPENSATION

     The Partnership has no directors or executive officers.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     As of February 9, 2000,  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        14 Story Street
Units          Cambridge, MA 02138              1,664.00 Units(1)     6.12%

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

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

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

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

Investor       Bryan E. Gordon
Limited
Partner        P.O. Box 7533
Units          Incline Village, NV 89452        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


<PAGE>



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"),  (the "Madison  Schedule 13G"),  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.

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 H to the  Consolidated  Financial
Statements.

                                     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.


<PAGE>


               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)].*


<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



<PAGE>




(C)      Reports on Form 8-K

       During  the last  quarter  of the  year  ended  December  31,  1999,  the
       Partnership did not file any reports on Form 8-K.


<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, 2000.

                                   KRUPP REALTY LIMITED PARTNERSHIP-VII

                                   By: The Krupp Corporation, a General
                                       Partner

                                   By:     /s/ Douglas Krupp
                                           Douglas Krupp, President, 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, 2000.

Signatures                  Titles
----------                  ------

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


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


/s/ Wayne H. Zarozny        Treasurer (Principal Financial and Accounting
Wayne H. Zarozny            Officer) of The Krupp Corporation, a General
                            Partner.



<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, 1999


<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, 1999 and
December 31, 1998                                                          F-4


Consolidated Statements of Operations for the Years Ended
December 31, 1999, 1998 and 1997                                           F-5


Consolidated Statements of Changes in Partners' Equity (Deficit)
for the Years Ended December 31, 1999, 1998 and 1997                       F-6


Consolidated Statements of Cash Flows for the Years Ended
December 31, 1999, 1998 and 1997                                           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 and the financial
statement  schedule  listed  in the  index on page F-2  present  fairly,  in all
material   respects,   the   financial   position   of  Krupp   Realty   Limited
Partnership-VII  and Subsidiaries  (the  "Partnership") at December 31, 1999 and
December 31, 1998, and the results of their  operations and their cash flows for
each of the three years in the period ended  December 31,  1999,  in  conformity
with  accounting  principles  generally  accepted  in the United  States.  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,  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 the opinion  expressed
above.


/s/ PricewaterhouseCoopers LLP


February 25, 2000


<PAGE>



              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                           December 31, 1999 and 1998

<TABLE>
<CAPTION>

                                    ASSETS
                                                       1999           1998
                                                   -----------    -----------

<S>                                                <C>            <C>
Multi-family apartment complexes, net of
  accumulated depreciation of $14,265,488 and
  $12,751,953, respectively (Note E)               $ 8,809,883    $ 9,510,531
Cash and cash equivalents (Note C)                     120,525        629,483
Cash restricted for tenant security deposits            27,256         26,606
Replacement reserve escrow (Note E)                     72,378         21,160
Prepaid expenses and other assets                      663,021        603,914
Deferred expenses, net of accumulated
  amortization of $171,421 and $132,823,
  respectively (Note H)                                144,234        182,832
                                                   -----------    -----------

    Total assets                                   $ 9,837,297    $10,974,526
                                                   ===========    ===========


                   LIABILITIES AND PARTNERS' (DEFICIT) EQUITY

Liabilities:
  Mortgage notes payable (Notes D and E)           $10,220,052    $10,323,428
  Accrued expenses and other liabilities (Note F)      625,590        558,157
                                                   -----------    -----------

    Total liabilities                               10,845,642     10,881,585
                                                   -----------    -----------

Commitment (Note G)

Partners' (deficit) equity (Note G):
  Investor Limited Partners (27,184 Units
    outstanding)                                      (172,633)       867,955
  Original Limited Partner                            (525,767)      (481,602)
  General Partners                                    (309,945)      (293,412)
                                                   -----------    -----------

    Total Partners' (deficit)equity                 (1,008,345)        92,941
                                                   -----------    -----------

    Total liabilities and Partners'
      (deficit) equity                             $ 9,837,297    $10,974,526
                                                   ===========    ===========

</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, 1999, 1998 and 1997
<TABLE>
<CAPTION>

                                          1999          1998          1997
                                      -----------   -----------   -----------
<S>                                   <C>           <C>           <C>
Revenue:
  Rental                              $ 3,970,170   $ 3,853,006   $ 4,718,640
  Interest income (Note C)                 27,447       136,183        76,419
                                      -----------   -----------   -----------

    Total revenue                       3,997,617     3,989,189     4,795,059
                                      -----------   -----------   -----------

Expenses:
  Operating (Notes D and H)             1,010,972       964,827     1,122,340
  Maintenance                             341,331       331,021       393,024
  Real estate taxes                       428,806       360,747       465,010
  General and administrative (Note H)     176,664       118,755       128,855
  Management fees (Note H)                157,467       172,873       204,023
  Depreciation and amortization         1,552,134     1,421,027     1,468,094
  Interest (Note E)                       879,470       918,569     1,164,850
                                      -----------   -----------   -----------

    Total expenses                      4,546,844     4,287,819     4,946,196
                                      -----------   -----------   -----------

  Loss before gain on sale
    of property                          (549,227)     (298,630)     (151,137)

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

Net income (loss) (Note I)            $  (549,227)  $   377,686   $  (151,137)
                                      ===========   ===========   ===========

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

  Investor Limited Partners
    (27,184 Units outstanding):
    Loss before gain on sale
      of property                     $  (543,735)  $  (295,644)  $  (149,626)
    Gain on sale of property                 -          669,553          -
                                      -----------   -----------   -----------
    Net income (loss)                 $  (543,735)  $   373,909   $  (149,626)
                                      ===========   ===========   ===========

    Investor Limited Partners, Per Unit:
      Loss before gain on sale
        of property                   $    (20.00)  $    (10.88)  $     (5.50)
      Gain on sale of property               -            24.63          -
                                      -----------   -----------   -----------
      Net income (loss)               $    (20.00)  $     13.75   $     (5.50)
                                      ===========   ===========   ===========

     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                  $    (5,492)  $    (2,986)  $    (1,511)
       Gain on sale of property              -            6,763          -
                                      -----------   -----------   -----------
       Net income (loss)              $    (5,492)  $     3,777   $    (1,511)
                                      ===========   ===========   ===========
</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, 1999, 1998 and 1997

<TABLE>
<CAPTION>
                         Investor      Original
                         Limited       Limited      General     Total Partners'
                         Partners      Partner      Partners    (Deficit) Equity
                        -----------   ---------    ----------   ----------------
<S>                     <C>           <C>          <C>           <C>
Balance at
  December 31, 1996     $ 4,072,663   $(384,948)   $ (248,136)   $ 3,439,579

Distributions              (543,679)    (48,327)      (12,082)      (604,088)

Net loss                   (149,626)       -           (1,511)      (151,137)
                        -----------   ---------    ----------    -----------

Balance at
  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)
                        -----------   ---------    ----------    -----------

Balance at
  December 31, 1998         867,955    (481,602)     (293,412)        92,941

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

Distributions (Note G)     (496,853)    (44,165)      (11,041)      (552,059)
                        -----------   ---------    ----------    -----------

Balance at
  December 31, 1999     $  (172,633)  $(525,767)   $ (309,945)   $(1,008,345)
                        ===========   =========    ==========    ===========
</TABLE>
The per Unit  distributions  for each of the years ended December 31, 1999, 1998
and 1997 was $18.28, $106.14 and $20.00,  respectively,  of which $0, $86.14 and
$0 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, 1999, 1998 and 1997
<TABLE>
<CAPTION>
                                            1999         1998         1997
                                        -----------  -----------  -----------
<S>                                     <C>           <C>          <C>
Cash flows from operating activities:
  Net income (loss)                     $  (549,227)  $   377,686  $  (151,137)
  Adjustments to reconcile net
    income (loss) to net cash
    provided by operating
    activities:
  Interest earned on replacement
    reserve escrow                           (1,023)         (160)        -
  Depreciation and amortization           1,552,133     1,421,027    1,468,094
  Gain on sale of property                     -         (676,316)        -
  Changes in assets and liabilities:
    Decrease (increase) in
      restricted cash for tenant
      security deposits                        (650)         (626)      10,843
    Decrease (increase) in prepaid
      expenses and other assets             (59,107)        3,646     (157,524)
    Increase (decrease) in accrued
      expenses and other
      liabilities                            68,729      (254,228)     (41,650)
                                        -----------   -----------  -----------

      Net cash provided by
        operating activities              1,010,855       871,029    1,128,626
                                        -----------   -----------  -----------

Cash flows from investing activities:
  Deposits to replacement reserve
    escrow                                  (50,400)      (21,000)     (12,000)
  Withdrawals from replacement
    reserve escrow                              205          -          64,009
  Additions to fixed assets                (812,887)   (1,829,349)  (1,300,570)
  Increase (decrease) in accrued
    expenses and other liabilities
    related to fixed asset
    additions                                (1,296)        3,500       (3,315)
  Proceeds from sale of property,
    net                                        -        6,514,681         -
                                        -----------   -----------  -----------

      Net cash (used in) provided
        by investing activities            (864,378)    4,667,832   (1,251,876)
                                        -----------   -----------  -----------

Cash flows from financing activities:
  Principal payments on mortgage
    notes payable                          (103,376)      (94,906)    (166,985)
  Proceeds from mortgage
    note payable                               -             -       5,280,000
  Repayment of mortgage
    note payable                               -       (4,084,037)  (3,172,809)
  Increase in deferred expenses                -          (15,496)    (136,040)
  Distributions                            (552,059)   (2,969,099)    (604,088)
                                        -----------   -----------  -----------

      Net cash (used in) provided
        by financing activities            (655,435)   (7,163,538)   1,200,078
                                        -----------   -----------  -----------

Net (decrease) increase in cash and
  cash equivalents                         (508,958)   (1,624,677)   1,076,828
Cash and cash equivalents,
  beginning of year                         629,483     2,254,160    1,177,332
                                        -----------   -----------  -----------
Cash and cash equivalents,
  end of year                           $   120,525   $   629,483  $ 2,254,160
                                        ===========   ===========  ===========
</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 D).








                                    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 I):

         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 generally
         accepted  accounting  principles  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 Revenues

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

         Depreciation

         Depreciation  is provided  for by the use of the  straight-line  method
         over estimated useful lives of the related assets as follows:

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

         Impairment of Long-Lived Assets

         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 assets might be impaired and the
         estimated  undiscounted  cash flows 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.


                                    Continued

                                       F-9

<PAGE>



              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued


B.   Significant Accounting Policies, Continued

         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  have  similar  economic   characteristics,
         facilities,  services and tenants, the apartment  communities have been
         aggregated into a single dominant apartment communities segment.

         All revenues are from external  customers and no revenues are generated
         from  transactions  with other  segments.  There are no  tenants  which
         contributed 10% or more of the Partnership's total revenue during 1999,
         1998 or 1997.

C.   Cash and Cash Equivalents

     Cash and cash  equivalents  at December 31, 1999 and 1998  consisted of the
     following:
<TABLE>
<CAPTION>
                                                December 31,
                                          -------------------------
                                             1999           1998
                                          ----------     ----------
<S>                                       <C>            <C>

      Cash and money market accounts      $  120,525     $  479,625
      Commercial paper                          -           149,858
                                          ----------     ----------

                                          $  120,525     $  629,483
                                          ==========     ==========
</TABLE>















                                    Continued

                                      F-10

<PAGE>




              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued


D.   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.

E.   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,
     1999 and 1998. Mortgage notes payable consisted of the following:
<TABLE>
<CAPTION>
                                 Principal       Annual Interest
         Property            1999        1998         Rate        Maturity Date
     ------------------  ----------- ----------- --------------- ---------------
<S>                      <C>         <C>              <C>         <C>
     Courtyards Village
       East Apartments   $ 5,164,455 $ 5,214,939      7.88%       August 1, 2007

     Windsor Apartments    5,055,597   5,108,489      9.25%          May 1, 2001
                         ----------- -----------

        Total            $10,220,052 $10,323,428
                         =========== ===========
</TABLE>
        Courtyards Village East Apartments

        On July 30, 1997, the  Partnership  refinanced  the  Courtyards  Village
        Apartments  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.

                                    Continued



                                      F-11

<PAGE>




              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued


E.   Mortgage Notes Payable, Continued

         Courtyards Village East Apartments, Continued

         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 $5,076,000 and $5,582,000 for the years
         ended December 31, 1999 and 1998, respectively.

         Nora Corners Shopping Center

         In  conjunction  with the sale of the property on January 30, 1998, the
         Partnership paid the outstanding principal of the non-recourse mortgage
         note of $4,084,037 (see Note D).

         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  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 $5,161,000 and $5,416,000 for the years
         ended December 31, 1999 and 1998, respectively.

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

     The  aggregate  scheduled  principal  amounts of long-term  borrowings  due
     during the five years ending  December 31, 2004 are  $111,806,  $5,079,337,
     $63,481, $68,668 and $74,279.

     The Partnership paid interest on its borrowings in the amounts of $879,470,
     $918,569 and $1,155,562  during the years ended December 31, 1999, 1998 and
     1997, respectively.

F.   Accrued Expenses and Other Liabilities

     Accrued  expenses  and other  liabilities  consisted  of the  following  at
     December 31, 1999 and 1998:
<TABLE>
<CAPTION>
                                                 1999                1998
                                             -----------         -----------
<S>                                          <C>                 <C>
        Accounts payable                     $    18,550         $     4,306
        Accrued real estate taxes                392,868             362,556
        Other liabilities                        132,502             126,445
        Tenant security deposits                  45,604              54,240
        Prepaid rent                              36,066              10,610
                                             -----------         -----------

                                             $   625,590         $   558,157
                                             ===========         ===========
</TABLE>


                                    Continued

                                      F-12

<PAGE>



              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued


G.   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.

     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.















                                    Continued

                                      F-13

<PAGE>



              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued


G.   Partners' Equity, Continued

     As of December 31, 1999, 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:
       Operations              (5,969,347)   (530,608)  (132,650)   (6,632,605)
       Capital
         transactions          (2,341,632)       -       (23,378)   (2,365,010)
     Income (loss):
       Operations             (15,201,065)        841   (153,430)  (15,353,654)
       Capital
         transactions            (147,214)       -        (1,487)     (148,701)
                             ------------  ----------  ---------  ------------

     Balance at
       December 31, 1999     $   (172,633) $ (525,767) $(309,945) $ (1,008,345)
                             ============  ==========  =========  ============
</TABLE>
H.   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 D) 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, 1999, 1998 and 1997 were as follows:
<TABLE>
<CAPTION>
                                        1999        1998        1997
                                      --------    --------    --------

<S>                                   <C>         <C>         <C>
         Property management fees     $157,467    $172,873    $204,023

         Expense reimbursements        196,973     146,025     161,571
                                      --------    --------    --------

            Charged to operations     $354,440    $318,898    $365,594
                                      ========    ========    ========
</TABLE>
     Expense  reimbursements  due from  affiliates of $237,015 and $239,514 were
     included in prepaid  expenses  and other  assets at  December  31, 1999 and
     1998, respectively.

     In addition to the amounts above,  costs  associated  with the sale of Nora
     Corners of $4,171 and Courtyards Village  refinancing costs of $53,540 were
     paid to the General  Partners'  affiliates  during the years ended December
     31, 1998 and 1997, respectively.




                                    Continued

                                      F-14

<PAGE>
              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued


I.   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,
  1999, 1998 and 1997 is as follows:
<TABLE>
<CAPTION>
                                           1999           1998          1997
                                       -----------    -----------   -----------
<S>                                    <C>            <C>           <C>
     Net income (loss) per
       Consolidated Statement of
         Operations                    $  (549,227)   $   377,686   $  (151,137)

       Difference in book
         and tax depreciation
         and amortization                  215,924        152,684        35,424

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

       Rental adjustment
         required by Generally
         Accepted Accounting
         Principles                           (399)        28,672       (10,930)
                                        ----------    -----------   -----------

     Net income (loss) for federal
       income tax purposes              $ (333,702)   $ 1,536,749   $  (126,643)
                                        ==========    ===========   ===========
</TABLE>
  The  allocation of the net income for federal income tax purposes for the year
  ended December 31, 1999 is as follows:

<TABLE>
<CAPTION>
                                         Portfolio     Passive
                                          Income        Loss           Total
                                        ----------    ----------    -----------
<S>                                     <C>           <C>           <C>
     Investor Limited Partners          $   24,935    $ (355,300)   $  (330,365)
     Original Limited Partner                 -             -              -

     General Partners                          252        (3,589)        (3,337)
                                        ----------    ----------    -----------

                                        $   25,187    $ (358,889)   $  (333,702)
                                        ==========    ==========    ===========
</TABLE>

     For the years ended  December  31,  1999,  1998 and 1997,  the per Unit net
     income  (loss) to the  Investor  Limited  Partners  for federal  income tax
     purposes was $12.15, $55.97 and $(4.61), respectively.

     The basis of the  Partnership's  assets for  financial  reporting  purposes
     exceeds  its tax  basis  by  approximately  $2,279,000  and  $2,830,800  at
     December 31, 1999 and 1998,  respectively.  The basis of the  Partnership's
     liabilities for financial  reporting purposes is less than its tax basis by
     approximately $3,520,000 at December 31, 1999.







                                      F-15

<PAGE>
              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

             SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                                December 31, 1999


<TABLE>
<CAPTION>
                                                         Costs
                                                       Capitalized
                                                      Subsequent to
                          Initial Cost to Partnership  Acquisition
                          ---------------------------  ------------
                                       Buildings &    Buildings &   Depreciable
Description  Encumbrances     Land     Improvements   Improvements     Life
-----------  ------------  ----------  -------------  ------------ -------------
<S>           <C>          <C>         <C>            <C>          <C>
Courtyards
Village East
Apartments
Naperville,
Illinois      $  5,164,455 $  487,529  $ 6,486,198    $  4,821,820 3 to 25 Years

Windsor
Apartments
Garland,
Texas            5,055,597    696,362    9,251,669       1,331,793 3 to 25 Years
              ------------ ----------  -----------    ------------

    Total     $ 10,220,052 $1,183,891  $15,737,867    $  6,153,613
              ============ ==========  ===========    ============
</TABLE>


<TABLE>
<CAPTION>
                Gross Amounts Carried at
                       End of Year
             --------------------------------
                        Buildings                          Year
                          and                 Accumulated  Construction Date
Description    Land   Improvements   Total    Depreciation Completed    Acquired
-----------  -------- ------------ ---------- ------------ ------------ --------
<S>         <C>        <C>          <C>         <C>           <C>       <C>

Courtyards
Village East
Apartments
Naperville,
Illinois    $  487,529 $ 11,308,018 $11,795,547 $ 6,943,011   1973        4/1/85

Windsor
Apartments
Garland,
Texas          696,362   10,583,462  11,279,824   7,322,477   1984      12/27/84
            ---------- ------------ ----------- -----------

  Total     $1,183,891 $ 21,891,480 $23,075,371 $14,265,488
            ========== ============ =========== ===========
</TABLE>
















                                    Continued

                                      F-16

<PAGE>


              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

             SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
                                   (Continued)

                                December 31, 1999



Reconciliation of Real Estate and Accumulated Depreciation for each of the three
years in the period ended December 31, 1999:

<TABLE>
<CAPTION>
                                           1999          1998          1997
                                       -----------   -----------   -----------
   Real Estate
   -----------
<S>                                    <C>           <C>           <C>
   Balance at beginning of year        $22,262,484   $30,206,277   $28,905,707

   Acquisition and improvements            812,887     1,829,349     1,300,570

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

   Balance at end of year              $23,075,371   $22,262,484   $30,206,277
                                       ===========   ===========   ===========
</TABLE>

<TABLE>
<CAPTION>

                                           1999          1998          1997
                                       -----------   -----------   -----------
   Accumulated Depreciation
   ------------------------
<S>                                    <C>           <C>           <C>
   Balance at beginning of year        $12,751,953   $15,523,683   $14,097,123

   Depreciation expense                  1,513,535     1,297,939     1,426,560

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

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

</TABLE>
The  aggregate  cost of the  Partnership's  real estate for  federal  income tax
purposes is $23,089,267 and the aggregate  accumulated  depreciation for federal
income tax purposes is $17,097,694.


                                      F-17