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

                                  FORM 10-K405

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

      For the fiscal year ended              December 31, 1998
                                  ----------------------------------------------

                                       OR

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

     For the transition period from ______________ to_____________

     Commission file number  0-14007
                           ----------


                        McNEIL REAL ESTATE FUND XX, L.P.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


         California                                33-0050225
--------------------------------------------------------------------------------
(State or other jurisdiction of                   (I.R.S. Employer
incorporation or organization)                     Identification No.)


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

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

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

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

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

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

49,507.5 of the registrant's  49,512 outstanding  limited  partnership units are
held  by   non-affiliates.   The  aggregate   market  value  of  units  held  by
non-affiliates  is not determinable  since there is no public trading market for
limited  partnership  units  and  transfers  of units  are  subject  to  certain
restrictions.

Documents Incorporated by Reference:        See Item 14, Page 34

                                TOTAL OF 36 PAGES
<PAGE>
                                     PART I
ITEM 1.  BUSINESS
-------  --------

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

McNeil  Real  Estate  Fund  XX,  L.P.  (the  "Partnership"),  formerly  known as
Southmark  Income  Investors,  Ltd., was organized on July 19, 1984 as a limited
partnership under the provisions of the California  Revised Limited  Partnership
Act to invest in, hold,  manage and dispose of mortgage  loans,  real estate and
real  estate-related  investments.  The general  partner of the  Partnership  is
McNeil Partners,  L.P. (the "General Partner"),  a Delaware limited partnership,
an affiliate of Robert A. McNeil ("McNeil").  The General Partner was elected at
a meeting of limited  partners on March 30,  1992,  at which time an amended and
restated  partnership  agreement  (the  "Amended  Partnership   Agreement")  was
adopted.  Prior to March 30, 1992, the general  partner of the  Partnership  was
Southmark  Investment  Group, Inc. (the "Original  General  Partner"),  a Nevada
corporation   and   a   wholly-owned   subsidiary   of   Southmark   Corporation
("Southmark").  The  principal  place of business  for the  Partnership  and the
General Partner is 13760 Noel Road, Suite 600, LB70, Dallas, Texas, 75240.

On September  28, 1984,  the  Partnership  registered  with the  Securities  and
Exchange  Commission  under the  Securities  Act of 1933 (File No.  2-92376) and
commenced a public  offering for the sale of $30,000,000 of limited  partnership
units  ("Units").  The Units represent  equity  interests in the Partnership and
entitle  the  holders   thereof  to  participate  in  certain   allocations  and
distributions  of the  Partnership.  The sale of Units closed on  September  27,
1985,  with 49,528 Units sold at $500 each, or gross  proceeds (net of discounts
of $57,546) of $24,706,454 to the Partnership.  In 1994 and 1993, 12 and 4 Units
were  relinquished,  respectively,  leaving 49,512 Units outstanding at December
31, 1998.

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

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

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

On February 14,  1991,  pursuant to the asset  purchase  agreement as amended on
that date,  McNeil Real Estate  Management,  Inc.  ("McREMI"),  an  affiliate of
McNeil,  acquired the assets relating to the property management and partnership
administrative business of Southmark and its affiliates and commenced management
of the  Partnership's  properties  pursuant  to an  assignment  of the  existing
property management agreements from the Southmark affiliates.




<PAGE>
On March 30, 1992, the limited partners  approved a restructuring  proposal that
provided  for (i) the  replacement  of the Original  General  Partner with a new
general  partner,  McNeil  Partners,  L.P.;  (ii) the  adoption  of the  Amended
Partnership  Agreement which substantially alters the provisions of the original
partnership   agreement   relating   to,  among  other   things,   compensation,
reimbursement  of expenses and voting  rights;  (iii) the approval of an amended
property management  agreement with McREMI, the Partnership's  property manager;
and (iv) the  approval  to change the  Partnership's  name to McNeil Real Estate
Fund XX, L.P. Under the Amended  Partnership  Agreement,  the Partnership  began
accruing an asset  management  fee,  retroactive to February 14, 1991,  which is
payable  to  the  General  Partner.  For a  discussion  of the  methodology  for
calculating  the asset  management  fee, see Item 13 Certain  Relationships  and
Related Transactions.  The proposals approved at the March 30, 1992 meeting were
implemented as of that date.

Concurrent with the approval of the restructuring,  the General Partner acquired
from Southmark and its affiliates,  for aggregate  consideration of $5,441,  the
general partner interest of the Original  General  Partner.  The General Partner
and its affiliates own in the aggregate less than 1% of the Units.

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

General:

The Partnership  has been engaged in the servicing of mortgage loans,  including
equity  and  revenue  participation  loans,  and the  ownership,  operation  and
management of revenue-producing properties acquired through foreclosure. In July
1990, the Partnership  foreclosed on Park Spring  Apartments  (renamed  Sterling
Springs  Apartments)  in settlement of the related  mortgage  loan. In September
1991, the Partnership foreclosed on Holiday Inn - Jacksonville (renamed Cherokee
Inn) in  partial  settlement  of the  related  mortgage  loan and later sold the
property  in January  1993.  In May 1993,  the  Partnership  foreclosed  on 1130
Sacramento  Condominiums  in settlement  of the related  mortgage loan and later
sold the property in August  1997.  In 1998,  the  Partnership's  mortgage  loan
investments secured by Idlewood and Lakeland nursing homes and the Partnership's
mortgage loan investments  affiliate  secured by Fort Meigs Plaza were repaid in
full by the respective borrowers. At December 31, 1998, the Partnership operated
one revenue-producing property as described in Item 2 - Properties.

The  Partnership  does not directly  employ any personnel.  The General  Partner
conducts the business of the  Partnership  directly and through its  affiliates.
The Partnership  reimburses  affiliates of the General Partner for such services
rendered in accordance with the Amended Partnership Agreement. See Item 8 - Note
2 - "Transactions With Affiliates."

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




<PAGE>
Business Plan:

As previously announced, the Partnership has retained PaineWebber,  Incorporated
("PaineWebber")  as its exclusive  financial advisor to explore  alternatives to
maximize  the  value  of  the  Partnership,  including,  without  limitation,  a
transaction  in which  limited  partnership  interests  in the  Partnership  are
converted into cash. The Partnership,  through  PaineWebber,  provided financial
and other  information to interested  parties as part of an auction  process and
until early March 1999 was conducting  discussions with one bidder in an attempt
to reach a definitive  agreement  with respect to a sale  transaction.  In early
March 1999, because the Partnership had been unable to conclude negotiations for
a transaction with such bidder, the Partnership  terminated such discussions and
commenced   discussions   with  respect  to  a  sale  transaction  with  another
well-financed  bidder who had been  involved in the  original  auction  process.
During  the last full  week of  March,  the  Partnership  entered  into a 45 day
exclusivity  agreement with such party.  It is possible that the General Partner
and its  affiliates  will receive  non-cash  consideration  for their  ownership
interests in  connection  with any such  transaction.  There can be no assurance
regarding whether any such agreement will be reached nor the terms thereof.

Competitive Conditions:

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

Forward-Looking Information:

Within this document,  certain  statements are made as to the expected occupancy
trends,  financial  condition,  results  of  operations,  and cash  flows of the
Partnership  for periods after  December 31, 1998.  All of these  statements are
forward-looking  statements  made pursuant to the safe harbor  provisions of the
Private  Securities  Litigation  Reform Act of 1995.  These  statements  are not
historical  and  involve  risks  and  uncertainties.  The  Partnership's  actual
occupancy trends, financial condition, results of operations, and cash flows for
future  periods may differ  materially  due to several  factors.  These  factors
include,  but are not limited to, the  Partnership's  ability to control  costs,
make necessary  capital  improvements,  negotiate the sale or refinancing of its
property and respond to changing economic and competitive factors.



<PAGE>
Environmental Matters:

Environmental laws create potential liabilities that may affect property owners.
The environmental  laws of Federal and certain state  governments,  for example,
impose liability on current and certain past owners of property from which there
is a release  or threat of  release  of  hazardous  substances.  This  liability
includes costs of investigation and remediation of the hazardous  substances and
natural resource  damages.  Liability for costs of investigation and remediation
is strict and may be imposed  irrespective  of whether the property owner was at
fault,  although  there are a number of  defenses.  Both  governments  and third
parties may seek recoveries under these laws.

Third parties also may seek  recovery  under the common law for damages to their
property  or person,  against  owners of  property  from which  there has been a
release of hazardous and other substances.

The presence of  contamination  or the failure to remediate  contaminations  may
adversely  affect the owner's  ability to sell or lease real estate or to borrow
using the real estate as collateral.

Various  buildings at properties do or may contain  building  materials that are
the subject of various  regulatory  programs  intended to protect  human health.
Such building materials include,  for example,  asbestos,  lead-based paint, and
lead plumbing components.  The Company has implemented programs to deal with the
presence  of those  materials,  which  include,  as  appropriate,  reduction  of
potential  exposure  situations.  The Company does not believe that the costs of
such programs are likely to have a material adverse effect. Failure to implement
such programs can result in regulatory  violations or liability claims resulting
from alleged exposure to such materials.

In connection with the proposed sale  transaction as more fully described above,
Phase I  environmental  site  assessments  have been completed for each property
owned  by the  Partnership.  Such  environmental  assessments  performed  on the
properties  have not revealed any  environmental  liability that the Partnership
believes  would have a material  adverse effect on the  Partnership's  business,
assets,  or results of operations.  The Partnership has not been notified by any
governmental  authority  of any  non-compliance,  liability  or  other  claim in
connection with any of its properties. There can be no assurances, however, that
environmental   liabilities   have  not  developed   since  such   environmental
assessments were prepared, or that future uses or conditions (including, without
limitation,  changes in applicable  environmental laws and regulations) will not
result in imposition of environmental liability.

Other Information:

In August  1995,  High River  Limited  Partnership  ("High  River"),  a Delaware
limited partnership controlled by Carl C. Icahn, announced that it had commenced
an unsolicited  tender to purchase from holders of Units up to approximately 45%
of the  outstanding  Units of the  Partnership  for a purchase price of $100 per
Unit. In September  1996,  High River made another  unsolicited  tender offer to
purchase any and all of the outstanding  Units of the Partnership for a purchase
price of $170.38  per Unit.  In  addition,  High River made  unsolicited  tender
offers for certain other  partnerships  controlled by the General  Partner.  The
Partnership  recommended that the limited partners reject the tender offers made
with respect to the Partnership and not tender their Units.  The General Partner
believes  that as of February  1, 1999,  High River has  purchased  13.1% of the
outstanding  Units  pursuant to the tender offers.  In addition,  all litigation
filed by High River,  Mr. Icahn and his affiliates in connection with the tender
offers has been dismissed without prejudice.
<PAGE>
ITEM 2. PROPERTY
------- --------

The following table sets forth the real estate investment of the Partnership at
December 31, 1998.  The  buildings and the land on which the property is located
are owned by the  Partnership  in fee,  subject to a first lien deed of trust as
set forth more fully in Item 8 - Note 7 - "Mortgage Note Payable." See also Item
8 - Note 4 - "Real Estate  Investment" and Schedule III - Real Estate Investment
and  Accumulated  Depreciation.  In the opinion of  management,  the property is
adequately covered by insurance.

<TABLE>
<CAPTION>
                                            Net Basis                              1998           Date
Property              Description          of Property           Debt        Property Taxes     Acquired
--------              -----------          -----------           ----        --------------     --------

Sterling Springs      Apartments
<S>                   <C>                  <C>               <C>               <C>                <C> 
Austin, TX            172 units            $ 2,848,199       $ 2,613,312       $ 142,490          7/90
                                            ==========        ==========        ========
</TABLE>

Sterling  Springs  Apartments  is  owned by  Sterling  Springs  Fund XX  Limited
Partnership, which is wholly-owned by the Partnership.

The following table sets forth the property's occupancy rate and rent per square
foot for the last five years:

<TABLE>
<CAPTION>
                                        1998           1997            1996           1995          1994
                                    -------------  -------------  --------------  -------------  -------

Sterling Springs
<S>                                      <C>              <C>            <C>            <C>             <C>
   Occupancy Rate............            97%              97%            91%            99%             95%
   Rent Per Square Foot......          $9.94            $9.50          $9.28          $9.10           $8.37
</TABLE>

Occupancy rate  represents all units leased divided by the total number of units
of the  property  as of  December  31 of the given  year.  Rent per square  foot
represents all revenue, except interest,  derived from the property's operations
divided by the leasable square footage of the property.


<PAGE>
Competitive Conditions
----------------------

Sterling Springs
----------------

Sterling Springs is a 172-unit  garden-style  apartment community located in the
southwest  area of Austin,  Texas. A large number of competing  apartment  units
were built over the past several years. Additional construction is projected for
1999,  including  a 440-unit  community  directly  across  the  street  from the
property. Sterling Springs' occupancy rate and rental rates are competitive with
apartment  communities  in the area,  however  occupancy  rates are  expected to
decline  in  1999 as more  apartment  communities  are  built.  The  Partnership
anticipates  average  occupancy  will be in the low to mid 90%  range in 1999 by
upgrading  vacant units and offering  discounts and  concessions  to attract and
maintain tenants.

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

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

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

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





<PAGE>
On December 16, 1996, the Plaintiffs filed a consolidated and amended complaint.
Plaintiffs  are suing for breach of  fiduciary  duty,  breach of contract and an
accounting,  alleging,  among other things, that the management fees paid to the
McNeil affiliates over the last six years are excessive,  that these fees should
be reduced retroactively and that the respective Amended Partnership  Agreements
governing the Partnerships are invalid.

Defendants  filed a demurrer to the  consolidated  and amended  complaint  and a
motion to strike on February 14, 1997,  seeking to dismiss the  consolidated and
amended complaint in all respects.  A hearing on Defendant's demurrer and motion
to strike  was held on May 5,  1997.  The Court  granted  Defendants'  demurrer,
dismissing  the  consolidated  and  amended  complaint  with leave to amend.  On
October  31,  1997,  the  Plaintiffs  filed a second  consolidated  and  amended
complaint. The case was stayed pending settlement discussions.  A Stipulation of
Settlement dated September 15, 1998 has been signed by the parties.  Preliminary
Court  approval was received on October 6, 1998. A hearing for Final Approval of
Settlement, initially scheduled for December 17, 1998, has been continued to May
25, 1999.

Because McNeil Real Estate Fund XXIII,  L.P., Hearth Hollow  Associates,  McNeil
Midwest  Properties I, L.P. and Regency North Associates,  L.P. would be part of
the  transaction  contemplated  in the settlement  and Plaintiffs  claim that an
effort should be made to sell the McNeil Partnerships,  Plaintiffs have included
allegations with respect to McNeil Real Estate Fund XXIII,  L.P.,  Hearth Hollow
Associates, McNeil Midwest Properties I, L.P. and Regency North Associates, L.P.
in the third consolidated and amended complaint.

Plaintiff's  counsel  intends  to seek an  order  awarding  attorney's  fees and
reimbursements  of their  out-of-pocket  expenses.  The  amount of such award is
undeterminable  until  final  approval  is  received  from the  court.  Fees and
expenses shall be allocated amongst the Partnerships on a pro rata basis,  based
upon  tangible  asset value of each such  partnership,  less total  liabilities,
calculated in accordance with the Amended Partnership Agreements for the quarter
most recently ended.

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

None.

                                     PART II

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

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

(B)        Title of Class                    Number of Record Unit Holders

           Limited partnership units         4,185 as of February 1, 1999


<PAGE>
(C)        In 1998, the Partnership  distributed $7,232,590 to the limited
           partners,  $5,562,896  of which was cash  proceeds from the payoff of
           the Idlewood Nursing Home mortgage loan investment and the Fort Meigs
           Plaza mortgage loan investment - affiliate.  The remaining $1,669,694
           was cash from operations.  The Partnership  distributed $3,249,987 to
           the limited  partners in 1997, of which  $1,750,000 was cash proceeds
           from  the  sale of 1130  Sacramento  Condominiums  and the  remaining
           $1,499,987 was cash from operations.  No  distributions  were paid to
           the  General  Partner in 1998 or 1997.  During the last week of March
           1999, the  Partnership  distributed  approximately  $1,500,200 to the
           limited  partners  of  record  as of  March  1,  1999.  See  Item 7 -
           Management's  Discussion  and  Analysis of  Financial  Condition  and
           Results  of  Operations,  and  Item 8 - Note  1 -  "Organization  and
           Summary of Significant Accounting Policies - Distributions."

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

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

<TABLE>
<CAPTION>

Statements of                                             Years Ended December 31,
Operations                              1998           1997            1996           1995           1994
------------------                  -------------  -------------  --------------  -------------  -------------
<S>                                 <C>            <C>              <C>           <C>            <C>          
Rental revenue...............       $   1,290,193  $   1,279,458    $  1,413,050  $   1,405,346  $   1,172,233
Interest income..............             516,148        539,573         524,791        568,970        591,791
Gain on extinguishment of
   mortgage loan
   investment................           1,025,833              -               -              -              -
Gain on disposition of real
   estate ...................                   -      1,962,280               -              -              -
Net income...................           1,258,637      2,239,792         116,736         64,116         88,909

Net income per limited
   partnership unit..........       $       25.17  $       44.78    $       2.33  $        1.28  $        1.78
                                     ============   ============     ===========   ============   ============

Distributions per limited
   partnership unit..........       $      146.08  $       65.64    $      24.24  $        5.05  $        5.05
                                     ============   ============     ===========   ============   ============


                                                              As of December 31,
Balance Sheets                           1998           1997            1996           1995           1994
------------------                  -------------  -------------  --------------  -------------  -------------

Real estate investments, net...     $   2,848,199  $   2,983,609  $    5,457,587  $   5,726,377  $   5,938,194
Mortgage loan investments,
   net.........................                 -      6,868,788       4,138,453      4,271,336      4,418,306
Total assets...................         6,225,467     12,112,244      13,189,106     14,345,949     14,484,111
Mortgage note payable, net.....         2,613,312      2,666,814       2,715,909      2,760,961      2,802,303
Partners' equity...............         3,012,266      8,986,219       9,996,414     11,079,628     11,265,513

</TABLE>

<PAGE>
See Item 7 -  Management's  Discussion  and Analysis of Financial  Condition and
Results  of  Operations.  In  May  1993,  the  Partnership  foreclosed  on  1130
Sacramento  Condominiums  in  settlement  of the  mortgage  loan  secured by the
property and later sold the property in August 1997.


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

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

The  Partnership  was formed to engage in the  business of making and  servicing
mortgage   loans  and   acquiring,   operating  and   ultimately   disposing  of
revenue-producing  real properties.  In July 1990, the Partnership foreclosed on
Park Springs Apartments (renamed Sterling Springs Apartments) in Austin,  Texas,
in settlement of the mortgage loan secured by the property.  In September  1991,
the Partnership  foreclosed on Holiday Inn - Jacksonville (renamed Cherokee Inn)
in  Jacksonville,  Texas, in partial  settlement of the mortgage loan secured by
the  property  and later sold the  property in January  1993.  In May 1993,  the
Partnership  foreclosed  on 1130  Sacramento  Condominiums  in settlement of the
mortgage  loan  secured by the  property  and later sold the  property in August
1997.

In August 1992,  pursuant to a lawsuit  settlement,  a mortgage loan investment,
which was secured by a property  owned by an affiliate  of the General  Partner,
was  transferred  to the  Partnership.  In June 1993, a new loan  agreement  was
executed;  and  the  affiliate  substituted  a  second  lien on  another  of its
properties, Fort Meigs Plaza Shopping Center, as the collateral on the loan. The
first lien  mortgage  note  secured by Fort Meigs  Plaza,  which was owned by an
unaffiliated  lender,  matured in December 1997. In order to prevent foreclosure
of the property by the first  lienholder and to protect its second lien interest
in the property,  the Partnership purchased the first lien in December 1997. The
first and second lien  mortgage  loan  investments  - affiliate  secured by Fort
Meigs Plaza matured in March 1998 and  September  1997,  respectively,  and were
repaid in April 1998 when the property was sold.

The  Partnership's  mortgage loan  investments  secured by Idlewood and Lakeland
nursing homes were repaid in full by the respective borrowers in 1998.

At December 31, 1998, the Partnership  operated one  revenue-producing  property
which was acquired through foreclosure.

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

1998 compared to 1997

Revenue

Total  revenue  decreased by $949,137 in 1998 as compared to 1997.  The decrease
was mainly  due to a gain on  disposition  of real  estate  recognized  in 1997,
partially  offset by a gain on  extinguishment  of mortgage  loan  investment in
1998, as discussed below.



<PAGE>
In 1998,  rental  revenue  increased  slightly  by $10,735 as  compared to 1997.
Rental  revenue  at  Sterling  Springs  Apartments  increased  in 1998 due to an
increase in rental rates and a decrease in discounts  and  concessions  given to
tenants.  This increase was partially offset by a decrease in rental revenue due
to the sale of 1130 Sacramento Condominiums in 1997. 1130 Sacramento contributed
approximately $90,400 of the rental revenue in 1997.

Interest  income on mortgage  loan  investments  decreased by $99,151 in 1998 as
compared to 1997.  The decrease was due to the  Lakeland  Nursing Home  mortgage
loan  investment  being paid off by the  borrower in August  1998.  Although the
Idlewood  Nursing Home  mortgage loan  investment  was also paid off in 1998, no
interest was accrued on this loan in 1998 or 1997.

In 1993, the  Partnership  acquired a second lien loan on a property owned by an
affiliate.  The  Partnership  purchased  the first lien loan on this property in
December 1997.  Both loans were repaid by the affiliate  borrower in April 1998.
Interest income on mortgage loan investments - affiliate increased by $30,834 in
1998 as compared to 1997.  Interest in 1997 included interest on the second lien
only and 1998 includes interest on both the first and second lien loans.

Other  interest  income  increased  by $44,892 in 1998 as  compared  to the same
period in 1997. The increase was the result of an increase in cash available for
short-term  investment  due  to  payoff  of  the  Partnership's   mortgage  loan
investments  and mortgage  loan  investments  - affiliate  during the second and
third quarters of 1998.

In the second quarter of 1998, the  Partnership  recognized a $1,025,833 gain on
extinguishment of mortgage loan investment related to the payoff of the Idlewood
Nursing Home loan. The gain represents the cash payoff received in excess of the
book value of the mortgage loan investment.

On August 1, 1997,  the  Partnership  sold one of four units of 1130  Sacramento
Condominiums to an unaffiliated  purchaser.  The remaining three units were sold
to the same  purchaser on August 28, 1997.  The cash purchase price for all four
units was $4,700,000.  The Partnership  recognized a gain on disposition of real
estate of  $1,962,280  as more fully  discussed in Item 8, Note 4 - "Real Estate
Investment."

Expenses:

Total  expenses  increased by $32,018 in 1998 as compared to 1997.  The increase
was mainly due to an increase in general and administrative expenses,  partially
offset by an approximately  $81,000 decrease in expenses due to the sale of 1130
Sacramento in 1997, as discussed below.

In 1998,  property  taxes and repairs and  maintenance  expense  decreased    by
$18,661   and  $26,643,  respectively, mainly due to the sale of 1130 Sacramento
in 1997.

Other property  operating  expenses  decreased by $16,964 in 1998 as compared to
1997.  The  decrease  was  mainly  due  to a  $10,000  deductible  paid  by  the
Partnership  in 1997 for two minor tenant  claims  settled by the  Partnership's
insurance  carrier.  The remaining decrease was attributable to 1130 Sacramento,
which was sold in 1997.

General and administrative expenses increased by $136,774 in 1998 as compared to
1997. The increase was mainly due to costs incurred to explore  alternatives  to
maximize the value of the Partnership (see Liquidity and Capital Resources).

<PAGE>
General and administrative expenses - affiliates decreased by $43,505 in 1998 as
compared to 1997.  The decrease was due to a decline in the tangible asset value
of the  Partnership,  on which  the fees are  based,  due to the  payoff  of the
Partnership's   mortgage  loan  investments  and  mortgage  loan  investments  -
affiliate in 1998 and the sale of 1130 Sacramento in 1997.

1997 compared to 1996

Revenue:

Total revenue  increased by $1,826,407 in 1997 as compared to 1996. The increase
was mainly due to a gain on the sale of 1130  Sacramento,  partially offset by a
decrease in rental revenue as discussed below.

Rental revenue  decreased by $133,592 in 1997 in relation to 1996, mainly due to
the decrease in rental revenue at 1130 Sacramento Condominiums.  One of the four
condominium  units was  vacated in April 1997 and was sold at the  beginning  of
August 1997. The remaining three units were sold at the end of August 1997.

As  further  discussed  in  Item 8 -  Note  6 -  "Mortgage  Loan  Investments  -
Affiliate," in 1993, the  Partnership  acquired a second lien loan on a property
owned by an  affiliate.  The  Partnership  purchased the first lien loan on this
property in  December  1997.  The  purchase of the first lien at the end of 1997
resulted in a $15,824 increase in interest income on mortgage loan investments -
affiliate in 1997 as compared to 1996.

On August 1, 1997,  the  Partnership  sold one of four units of 1130  Sacramento
Condominiums to an unaffiliated  purchaser.  The remaining three units were sold
to the same  purchaser on August 28, 1997.  The cash purchase price for all four
units was $4,700,000.  The Partnership  recognized a gain on disposition of real
estate of $1,962,280  as more fully  discussed in Item 8 - Note 4 - "Real Estate
Investment."

In 1996, the  Partnership  received  $17,063 in refunds of prior years' property
taxes  for 1130  Sacramento  Condominiums.  The  assessed  taxable  value of the
property  was reduced by taxing  authorities  as a result of an appeal  filed on
behalf of the property. No such refund was received in 1997.

Expenses:

Total  expenses  decreased by $296,649 in 1997 as compared to 1996. The decrease
was mainly due to a decrease in depreciation expense, general and administrative
expenses and general and administrative - affiliates, as discussed below.

Depreciation  expense in 1997  decreased  by $96,814 in  relation  to 1996.  The
decrease was due to 1130 Sacramento  Condominiums  being  classified as an asset
held for sale by the  Partnership  effective  April 15, 1997. In accordance with
the Financial  Accounting  Standards Board's  Statement of Financial  Accounting
Standards No. 121,  "Accounting for the Impairment of Long-Lived  Assets and for
Long-Lived  Assets  to  be  Disposed  Of,"  the  Partnership   ceased  recording
depreciation on the asset at the time it was placed on the market for sale.



<PAGE>
General and administrative expenses decreased by $135,923 in 1997 as compared to
1996.  The decrease was mainly due to a decrease in costs  incurred  relating to
evaluation  and  dissemination  of information  regarding an unsolicited  tender
offer.  This decrease was  partially  offset by  approximately  $26,000 of costs
incurred for investor  services,  which were paid to an unrelated third party in
1997. In 1996,  such costs were paid to an affiliate of the General  Partner and
were included in general and  administrative  - affiliates on the  Statements of
Operations.

In 1997,  general  and  administrative  -  affiliates  decreased  by  $46,690 as
compared to 1996. The decrease was mainly due to a decrease in overhead expenses
allocated to the Partnership by McREMI due to investor  services being performed
by an unrelated third party in 1997, as discussed above. In addition,  there was
a decrease in asset management fees due to a decline in the tangible asset value
of the Partnership, on which the fees are based.

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

The  Partnership  generated  $765,353  through  operating  activities  in   1998
as  compared to $487,912 in 1997 and $453,978 in 1996.

The Partnership expended $98,849,  $178,235 and $73,183 for capital improvements
to its  properties in 1998,  1997 and 1996,  respectively.  1997 includes  costs
incurred for exterior carpentry and painting at Sterling Springs Apartments.

In 1997, the Partnership  received  $4,493,834 of proceeds from the sale of 1130
Sacramento Condominiums. $2,996,176 of the proceeds was used to purchase a first
lien mortgage loan investment  secured by a property owned by an affiliate.  The
Partnership  made this  investment  to protect its second lien  interest in this
property.

The Partnership distributed $7,232,590 to the limited partners in 1998, of which
$5,562,896  was cash  proceeds  from the  payoff of the  Idlewood  Nursing  Home
mortgage loan  investment  and the Fort Meigs Plaza  mortgage loan  investment -
affiliate.  The remaining  $1,669,694 was cash from operations.  The Partnership
distributed  $3,249,987 to the limited partners in 1997, of which $1,750,000 was
cash proceeds from the sale of 1130  Sacramento  Condominiums  and the remaining
$1,499,987  was cash  from  operations.  In 1996,  the  Partnership  distributed
$1,199,950 to the limited partners from cash from operations.

Short-term liquidity:

At  December  31,  1998,  the  Partnership  held  cash and cash  equivalents  of
$3,070,785.  This balance provides a reasonable level of working capital for the
Partnership's immediate needs in operating its property.

In 1999,  operation  of  Sterling  Springs  Apartments  is  expected  to provide
sufficient  positive cash flow for normal  operations.  Management  will perform
routine  repairs and  maintenance  on the  property to preserve  and enhance its
value  and   competitiveness   in  the  market.  The  Partnership  has  budgeted
approximately  $74,000 for  capital  improvements  to Sterling  Springs in 1999,
which is expected to be funded from operations of the property.



<PAGE>
Additional efforts to maintain and improve  Partnership  liquidity have included
continued attention to property management activities. The objective has been to
obtain maximum  occupancy  rates while holding  expenses to levels  necessary to
maximize  cash flows.  The  Partnership  has made  capital  expenditures  on its
property where  improvements were expected to increase the  competitiveness  and
marketability of the property.

Under the terms of its Amended  Partnership  Agreement,  the Partnership  pays a
disposition fee to an affiliate of the General Partner  equaling up to 3% of the
gross sales price for brokerage  services  performed in connection with the sale
of the Partnership's properties,  provided,  however, that in no event shall all
real estate  commissions  (including  the  disposition  fee) paid to all persons
exceed the amount customarily charged in similar arms-length  transactions.  The
fee is due and payable at the time the sale  closes.  The  Partnership  incurred
$124,500 of such fees during 1997 in connection with the sale of 1130 Sacramento
Condominiums.  This amount represents 2.65% of the gross sales price. These fees
were paid by the Partnership subsequent to December 31, 1998 and are included in
payable to affiliates on the Balance Sheets at December 31, 1998 and 1997.

During the last week of March 1999, the  Partnership  distributed  approximately
$1,500,200 to the limited partners of record as of March 1, 1999.

Long-term liquidity:

The  Partnership's  property,  Sterling Springs  Apartments,  is encumbered with
mortgage debt. The mortgage is not due until 2003.

While the outlook for  maintenance of adequate levels of liquidity is favorable,
should  operations  deteriorate and present cash resources be  insufficient  for
current needs,  the Partnership  would require other sources of working capital.
Possible actions to resolve cash deficiencies include refinancings,  deferral of
capital expenditures on the Partnership's property except where improvements are
expected to increase the  competitiveness  and  marketability  of the  property,
arranging financing from affiliates or the ultimate sale of the property.

As previously announced, the Partnership has retained PaineWebber,  Incorporated
("PaineWebber")  as its exclusive  financial advisor to explore  alternatives to
maximize  the  value  of  the  Partnership,  including,  without  limitation,  a
transaction  in which  limited  partnership  interests  in the  Partnership  are
converted into cash. The Partnership,  through  PaineWebber,  provided financial
and other  information to interested  parties as part of an auction  process and
until early March 1999 was conducting  discussions with one bidder in an attempt
to reach a definitive  agreement  with respect to a sale  transaction.  In early
March 1999, because the Partnership had been unable to conclude negotiations for
a transaction with such bidder, the Partnership  terminated such discussions and
commenced   discussions   with  respect  to  a  sale  transaction  with  another
well-financed  bidder who had been  involved in the  original  auction  process.
During  the last full  week of  March,  the  Partnership  entered  into a 45 day
exclusivity  agreement with such party.  It is possible that the General Partner
and its  affiliates  will receive  non-cash  consideration  for their  ownership
interests in  connection  with any such  transaction.  There can be no assurance
regarding whether any such agreement will be reached nor the terms thereof.


<PAGE>
YEAR 2000 DISCLOSURE
--------------------

State of readiness
------------------

The year 2000 problem is the result of computer programs being written using two
digits rather than four to define the  applicable  year.  Any programs that have
time-sensitive  software may recognize a date using "00" as the year 1900 rather
than  the  year  2000.   This  could   result  in  major   systems   failure  or
miscalculations.

Management has assessed its  information  technology  ("IT")  infrastructure  to
identify  any systems  that could be affected by the year 2000  problem.  The IT
used by the  Partnership  for  financial  reporting and  significant  accounting
functions was made year 2000 compliant  during recent systems  conversions.  The
software  utilized for these  functions  are licensed by third party vendors who
have warranted that their systems are year 2000 compliant.

Management  is  in  the  process  of  evaluating  the  mechanical  and  embedded
technological systems at the various properties.  Management has inventoried all
such systems and queried suppliers,  vendors and manufacturers to determine year
2000 compliance. Management will complete assessment of findings by May 1, 1999.
In  circumstances  of  non-compliance  management  will work with the  vendor to
remedy the  problem or seek  alternative  suppliers  who will be in  compliance.
Management believes that the remediation of any outstanding year 2000 conversion
issues  will  not  have a  material  or  adverse  effect  on  the  Partnership's
operations. However, no estimates can be made as to the potential adverse impact
resulting  from the failure of third party  service  providers and vendors to be
year 2000 compliant.

Cost
----

The cost of IT and  embedded  technology  systems  testing  and  upgrades is not
expected to be material to the Partnership. Because all the IT systems have been
upgraded  over the last three years,  all such systems were  compliant,  or made
compliant at no additional cost by third party vendors.  Management  anticipates
the costs of assessing,  testing, and if necessary replacing embedded technology
components will be less than $50,000.  Such costs will be funded from operations
of the Partnership.

Risks
-----

Ultimately,  the potential impact of the year 2000 issue will depend not only on
the corrective measures the Partnership undertakes, but also on the way in which
the year 2000 issue is  addressed  by  government  agencies  and  entities  that
provide services or supplies to the  Partnership.  Management has not determined
the most likely worst case scenario to the  Partnership.  As management  studies
the findings of its property  systems  assessment and testing,  management  will
develop  a better  understanding  of what  would  be the  worst  case  scenario.
Management  believes  that  progress  on all  areas is  proceeding  and that the
Partnership  will  experience  no  adverse  effect  as a result of the year 2000
issue. However, there is no assurance that this will be the case.


<PAGE>
Contingency plans
-----------------

Management  is  developing  contingency  plans to  address  potential  year 2000
non-compliance of IT and embedded technology  systems.  Management believes that
failure of any IT system could have an adverse  impact on  operations.  However,
management  believes  that  alternative  systems  are  available  that  could be
utilized to minimize  such impact.  Management  believes that any failure in the
embedded  technology  systems  could have an adverse  impact on that  property's
performance.  Management  will assess these risks and develop  plans to mitigate
possible failures by June, 1999.

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

Not Applicable.




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

<TABLE>
<CAPTION>
                                                                                                      Page
                                                                                                      Number
                                                                                                     --------
INDEX TO FINANCIAL STATEMENTS
-----------------------------

Financial Statements:

<S>                                                                                                      <C>
   Report of Independent Public Accountants.......................................                       14

   Balance Sheets at December 31, 1998 and 1997...................................                       15

   Statements of Operations for each of the three years in the period
      ended December 31, 1998.....................................................                       16

   Statements of Partners' Equity (Deficit) for each of the three years in the
      period ended December 31, 1998..............................................                       17

   Statements of Cash Flows for each of the three years in the period
      ended December 31, 1998.....................................................                       18

   Notes to Financial Statements..................................................                       20

   Financial Statement Schedule -

      Schedule III - Real Estate Investment and Accumulated
         Depreciation.............................................................                       29



</TABLE>


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

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the Partners of McNeil Real Estate Fund XX, L.P.:

We have audited the  accompanying  balance sheets of McNeil Real Estate Fund XX,
L.P. (a California  limited  partnership)  as of December 31, 1998 and 1997, and
the related statements of operations,  partners' equity (deficit) and cash flows
for each of the  three  years in the  period  ended  December  31,  1998.  These
financial  statements and the schedule referred to below are the  responsibility
of the Partnership's management.  Our responsibility is to express an opinion on
these financial statements and the schedule based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  financial  position of McNeil Real Estate Fund XX,
L.P. as of December 31, 1998 and 1997, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1998, in
conformity with generally accepted accounting principles.

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


/s/  Arthur Andersen LLP


Dallas, Texas
  March 19, 1999

<PAGE>
                        McNEIL REAL ESTATE FUND XX, L.P.

                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                     December 31,
                                                                          ---------------------------------
                                                                              1998                 1997
                                                                          ------------         ------------

ASSETS
------

Real estate investment:
<S>                                                                       <C>                  <C>         
   Land ..........................................................        $    392,000         $    392,000
   Buildings and improvements ....................................           3,981,407            3,882,558
                                                                          ------------         ------------
                                                                             4,373,407            4,274,558
   Less:  Accumulated depreciation ...............................          (1,525,208)          (1,290,949)
                                                                          ------------         ------------
                                                                             2,848,199            2,983,609

Mortgage loan investments, net of allowance of
   $792,013 at December 31, 1997 .................................                  --            3,268,712
Mortgage loan investments - affiliate, net of allowance of
   $130,000 at December 31, 1997 .................................                  --            3,600,076
Cash and cash equivalents ........................................           3,070,785            1,824,293
Cash segregated for security deposits ............................              28,773               27,405
Interest and other accounts receivable ...........................               6,603              140,025
Escrow deposits ..................................................             180,267              162,652
Deferred borrowing costs, net of accumulated
   amortization of $76,154 and $60,222 at
   December 31, 1998 and 1997, respectively ......................              85,340              101,272
Prepaid expenses and other assets ................................               5,500                4,200
                                                                          ------------         ------------
                                                                          $  6,225,467         $ 12,112,244
                                                                          ============         ============

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

Mortgage note payable, net .......................................        $  2,613,312         $  2,666,814
Accounts payable and other accrued expenses ......................              52,848               61,994
Accrued property taxes ...........................................             142,490              137,050
Payable to affiliates ............................................             376,849              203,444
Deferred revenue .................................................                  --               27,229
Security deposits and deferred rental revenue ....................              27,702               29,494
                                                                          ------------         ------------
                                                                             3,213,201            3,126,025
                                                                          ------------         ------------

Partners' equity (deficit):
   Limited  partners - 60,000 limited  partnership  units
     authorized; 49,512 limited partnership units issued
     and outstanding at December 31, 1998 and 1997 ...............           3,296,145            9,282,684
   General Partner ...............................................            (283,879)            (296,465)
                                                                          ------------         ------------
                                                                             3,012,266            8,986,219
                                                                          ------------         ------------
                                                                          $  6,225,467         $ 12,112,244
                                                                          ============         ============
</TABLE>

                 See accompanying notes to financial statements.
<PAGE>
                        McNEIL REAL ESTATE FUND XX, L.P.

                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                             For the Years Ended December 31,
                                                     ----------------------------------------------
                                                       1998               1997               1996
                                                     ----------        ----------        ----------

Revenue:
<S>                                                  <C>               <C>               <C>       
   Rental revenue ...........................        $1,290,193        $1,279,458        $1,413,050
   Interest income on mortgage loan
     investments ............................           180,872           280,023           283,010
   Interest income on mortgage loan
     investments - affiliate ................           108,214            77,380            61,556
   Other interest income ....................           227,062           182,170           180,225
   Gain on extinguishment of mortgage
     loan investment ........................         1,025,833                --                --
   Gain on disposition of real estate .......                --         1,962,280                --
   Property tax refund ......................                --                --            17,063
                                                     ----------        ----------        ----------
     Total revenue ..........................         2,832,174         3,781,311         1,954,904
                                                     ----------        ----------        ----------

Expenses:
   Interest .................................           243,328           246,782           249,920
   Depreciation .............................           234,259           245,159           341,973
   Property taxes ...........................           142,490           161,151           170,597
   Personnel costs ..........................           158,653           144,376           142,069
   Repairs and maintenance ..................           103,831           130,474           134,645
   Property management fees -
     affiliates .............................            61,789            63,072            67,381
   Utilities ................................            83,795            81,418            83,481
   Other property operating expenses ........            75,390            92,354            88,756
   General and administrative ...............           250,749           113,975           249,898
   General and administrative -
     affiliates .............................           219,253           262,758           309,448
                                                     ----------        ----------        ----------
     Total expenses .........................         1,573,537         1,541,519         1,838,168
                                                     ----------        ----------        ----------

Net income ..................................        $1,258,637        $2,239,792        $  116,736
                                                     ==========        ==========        ==========

Net income allocable to limited
   partners .................................        $1,246,051        $2,217,394        $  115,569
Net income allocable to General
   Partner ..................................            12,586            22,398             1,167
                                                     ----------        ----------        ----------
Net income ..................................        $1,258,637        $2,239,792        $  116,736
                                                     ==========        ==========        ==========


Net income per limited partnership
   unit .....................................        $    25.17        $    44.78        $     2.33
                                                     ==========        ==========        ==========


Distributions per limited
   partnership unit .........................        $   146.08        $    65.64        $    24.24
                                                     ==========        ==========        ==========
</TABLE>

                 See accompanying notes to financial statements.
<PAGE>
                        McNEIL REAL ESTATE FUND XX, L.P.

                    STATEMENTS OF PARTNERS' EQUITY (DEFICIT)

              For the Years Ended December 31, 1998, 1997 and 1996


<TABLE>
<CAPTION>

                                                                                              Total
                                                    General              Limited             Partners'
                                                    Partner             Partners              Equity
                                                 -------------        -------------        -------------
<S>                                              <C>                  <C>                  <C>         
Balance at December 31, 1995 ............        $   (320,030)        $ 11,399,658         $ 11,079,628

Net income ..............................               1,167              115,569              116,736

Distributions to limited partners........                  --           (1,199,950)          (1,199,950)
                                                 ------------         ------------         ------------

Balance at December 31, 1996 ............            (318,863)          10,315,277            9,996,414

Net income ..............................              22,398            2,217,394            2,239,792

Distributions to limited partners .......                  --           (3,249,987)          (3,249,987)
                                                 ------------         ------------         ------------

Balance at December 31, 1997 ............            (296,465)           9,282,684            8,986,219

Net income ..............................              12,586            1,246,051            1,258,637

Distributions to limited partners .......                  --           (7,232,590)          (7,232,590)
                                                 ------------         ------------         ------------

Balance at December 31, 1998 ............        $   (283,879)        $  3,296,145         $  3,012,266
                                                 ============         ============         ============

</TABLE>



                 See accompanying notes to financial statements.
<PAGE>
                        McNEIL REAL ESTATE FUND XX, L.P.

                            STATEMENTS OF CASH FLOWS

                Increase (Decrease) in Cash and Cash Equivalents

<TABLE>
<CAPTION>
                                                                For the Years Ended December 31,
                                                      ----------------------------------------------------
                                                          1998                1997                1996
                                                      ------------        ------------        ------------

Cash flows from operating activities:
<S>                                                   <C>                 <C>                 <C>        
   Cash received from tenants ................        $ 1,324,552         $ 1,259,654         $ 1,422,803
   Cash paid to suppliers ....................           (686,225)           (607,269)           (723,975)
   Cash paid to affiliates ...................           (107,637)           (287,848)           (368,716)
   Interest received .........................            423,419             455,833             456,845
   Interest received from affiliate ..........            184,958              48,886              48,886
   Interest paid .............................           (219,330)           (224,165)           (228,625)
   Property taxes paid .......................               (281)            (24,101)            (50,954)
   Property taxes escrowed ...................           (154,103)           (133,078)           (119,349)
   Property tax refund received ..............                 --                  --              17,063
                                                      -----------         -----------         -----------
Net cash provided by operating
   activities ................................            765,353             487,912             453,978
                                                      -----------         -----------         -----------

Cash flows from investing activities:
   Additions to real estate
     investments .............................            (98,849)           (178,235)            (73,183)
   Collection of principal on
     mortgage loan investments ...............             53,364             135,841             132,883
   Proceeds from payoff of mortgage
     loan investments ........................          4,241,181                  --                  --
   Collection of principal on mortgage
     loan investments - affiliate ............              9,126                  --                  --
   Proceeds from payoff of mortgage
     loan investments - affiliate ............          3,570,896
   Purchase of mortgage loan
     investment - affiliate ..................                 --          (2,996,176)                 --
   Proceeds from disposition of real
     estate ..................................                 --           4,493,834                  --
                                                      -----------         -----------         -----------
   Net cash provided by investing
     activities ..............................          7,775,718           1,455,264              59,700
                                                      -----------         -----------         -----------

Cash flows from financing activities:
   Principal payments on mortgage
     note payable ............................            (61,989)            (57,153)            (52,694)
   Distributions to limited partners .........         (7,232,590)         (3,249,987)         (1,199,950)
                                                      -----------         -----------         -----------
Net cash used in financing activities ........         (7,294,579)         (3,307,140)         (1,252,644)
                                                      -----------         -----------         -----------

Net increase (decrease) in cash and
   cash equivalents ..........................          1,246,492          (1,363,964)           (738,966)

Cash and cash equivalents at
   beginning of year .........................          1,824,293           3,188,257           3,927,223
                                                      -----------         -----------         -----------

Cash and cash equivalents at end
   of year ...................................        $ 3,070,785         $ 1,824,293         $ 3,188,257
                                                      ===========         ===========         ===========
</TABLE>


See  discussion  of non-cash  investing  activities  in Note 6 - "Mortgage  Loan
Investments - Affiliate."

                 See accompanying notes to financial statements.
<PAGE>
                        McNEIL REAL ESTATE FUND XX, L.P.

                            STATEMENTS OF CASH FLOWS

              Reconciliation of Net Income to Net Cash Provided by
                              Operating Activities

<TABLE>
<CAPTION>

                                                                  For the Years Ended December 31,
                                                       ---------------------------------------------------
                                                            1998               1997               1996
                                                       -----------         -----------         -----------
<S>                                                    <C>                 <C>                 <C>        
Net income ....................................        $ 1,258,637         $ 2,239,792         $   116,736
                                                       -----------         -----------         -----------

Adjustments to reconcile net income
   to net cash provided by operating
   activities:
   Depreciation ...............................            234,259             245,159             341,973
   Amortization of deferred borrowing
     costs ....................................             15,932              14,947              14,011
   Amortization of discount on mortgage
     note payable .............................              8,487               8,058               7,642
   Amortization of deferred revenue ...........             (7,175)             (6,623)             (6,623)
   Gain on extinguishment of mortgage
     loan investment ..........................         (1,025,833)                 --                  --
   Gain on disposition of real estate .........                 --          (1,962,280)                 --
   Changes in assets and liabilities:
     Cash segregated for security
        deposits ..............................             (1,368)             27,545               4,919
     Interest and other accounts
       receivable .............................            133,422             (65,396)              2,851
     Escrow deposits ..........................            (17,615)             (8,675)             (9,133)
     Prepaid expenses and other
       assets .................................             (1,300)                834               3,556
     Accounts payable and other
       accrued expenses .......................             (9,146)            (35,236)            (23,063)
     Accrued property taxes ...................              5,440               6,093               7,427
     Payable to affiliates ....................            173,405              37,982               8,113
     Security deposits and deferred
       rental revenue .........................             (1,792)            (14,288)            (14,431)
                                                       -----------         -----------         -----------

     Total adjustments ........................           (493,284)         (1,751,880)            337,242
                                                       -----------         -----------         -----------

Net cash provided by operating
   activities .................................        $   765,353         $   487,912         $   453,978
                                                       ===========         ===========         ===========

</TABLE>



                 See accompanying notes to financial statements.
<PAGE>
                        McNEIL REAL ESTATE FUND XX, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                December 31, 1998

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

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

McNeil  Real  Estate  Fund  XX,  L.P.  (the  "Partnership"),  formerly  known as
Southmark  Income  Investors,  Ltd., was organized on July 19, 1984 as a limited
partnership under the provisions of the California  Revised Limited  Partnership
Act to invest in, hold,  manage and dispose of mortgage  loans,  real estate and
real  estate-related  investments.  The general  partner of the  Partnership  is
McNeil Partners,  L.P. (the "General Partner"),  a Delaware limited partnership,
an affiliate of Robert A. McNeil ("McNeil").  The General Partner was elected at
a meeting of limited  partners on March 30,  1992,  at which time an amended and
restated  partnership  agreement  (the  "Amended  Partnership   Agreement")  was
adopted.  The principal  place of business for the  Partnership  and the General
Partner is 13760 Noel Road, Suite 600, LB70, Dallas, Texas, 75240.

The Partnership  has been engaged in the servicing of mortgage loans,  including
equity  and  revenue  participation  loans,  and the  ownership,  operation  and
management of revenue-producing properties acquired through foreclosure. In July
1990, the Partnership  foreclosed on Park Spring  Apartments  (renamed  Sterling
Springs Apartments) in settlement of the related mortgage loan. In May 1993, the
Partnership  foreclosed  on 1130  Sacramento  Condominiums  in settlement of the
related  mortgage loan. In 1998,  the  Partnership's  mortgage loan  investments
secured by Idlewood and Lakeland  nursing homes and the  Partnership's  mortgage
loan  investment - affiliate  secured by Fort Meigs Plaza were repaid in full by
the respective  borrowers.  At December 31, 1998, the  Partnership  operated one
revenue-producing property as described in Note 4 - "Real Estate Investment."

As previously announced, the Partnership has retained PaineWebber,  Incorporated
("PaineWebber")  as its exclusive  financial advisor to explore  alternatives to
maximize  the  value  of  the  Partnership,  including,  without  limitation,  a
transaction  in which  limited  partnership  interests  in the  Partnership  are
converted into cash. The Partnership,  through  PaineWebber,  provided financial
and other  information to interested  parties as part of an auction  process and
until early March 1999 was conducting  discussions with one bidder in an attempt
to reach a definitive  agreement  with respect to a sale  transaction.  In early
March 1999, because the Partnership had been unable to conclude negotiations for
a transaction with such bidder, the Partnership  terminated such discussions and
commenced   discussions   with  respect  to  a  sale  transaction  with  another
well-financed  bidder who had been  involved in the  original  auction  process.
During  the last full  week of  March,  the  Partnership  entered  into a 45 day
exclusivity  agreement with such party.  It is possible that the General Partner
and its  affiliates  will receive  non-cash  consideration  for their  ownership
interests in  connection  with any such  transaction.  There can be no assurance
regarding whether any such agreement will be reached nor the terms thereof.






<PAGE>
Basis of Presentation
---------------------

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

The  Partnership's  financial  statements  consolidate  the accounts of Sterling
Springs  Fund XX Limited  Partnership.  This single asset tier  partnership  was
formed to  accommodate  the  refinancing  of Sterling  Springs  Apartments.  The
Partnership is the limited partner and  wholly-owns the corporation  that is the
general  partner of the tier  partnership.  The  Partnership  retains  effective
control of the tier partnership.

Adoption of Recent Accounting Pronouncements
--------------------------------------------

The Partnership has adopted Statement of Financial Accounting Standards No. 131,
"Disclosures  About  Segments of an Enterprise  and Related  Information  ("SFAS
131"). SFAS 131 requires an enterprise to report financial information about its
reportable operating segments, which are defined as components of a business for
which  separate  financial  information  is  evaluated  regularly  by the  chief
decision  maker  in  allocating   resources  and  assessing   performance.   The
Partnership  does not  prepare  such  information  for  internal  use,  since it
analyzes  the   performance  of  and  allocates   resources  for  each  property
individually.  The Partnership's  management has determined that it operates one
line of business and it would be  impracticable  to report segment  information.
Therefore, the adoption of SFAS 131 has no impact on the Partnership's financial
statements.

Real Estate Investment
----------------------

The real estate  investment is generally stated at the lower of depreciated cost
or fair value.  The real estate  investment is reviewed for impairment  whenever
events or changes in  circumstances  indicate that their carrying amount may not
be recoverable in accordance  with Statement of Financial  Accounting  Standards
No. 121,  "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of". When the carrying value of a property exceeds the sum
of all estimated  future cash flows, an impairment  loss is recognized.  At such
time,  a  write-down  is  recorded  to reduce the basis of the  property  to its
estimated fair value.

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

Depreciation
------------

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




<PAGE>
Mortgage Loan Investments
-------------------------

Mortgage loan  investments  were recorded at their  original  basis,  net of any
allowance  for  impairment.  Interest  income was  recognized  as it was earned.
Interest  accrual  ceased at such time as management  determined  collection was
doubtful.

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

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

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

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

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

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

Discount on Mortgage Note Payable
---------------------------------

The discount on the mortgage note payable is being  amortized over the remaining
term  of  the  related  mortgage  note  using  the  effective  interest  method.
Amortization  of the  discount  on the  mortgage  note  payable is  included  in
interest expense on the Statements of Operations.

Rental Revenues
---------------

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

Income Taxes
------------

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






<PAGE>
Allocation of Net Income and Net Loss
-------------------------------------

Under the terms of the Amended Partnership Agreement,  net income and net losses
(except  from a  terminating  disposition)  are  allocated  99%  to the  limited
partners and 1% to the General Partner.

Federal  income tax law provides  that the  allocation of loss to a partner will
not be  recognized  unless the  allocation  is in  accordance  with a  partner's
interest in the partnership or the allocation has substantial  economic  effect.
Internal  Revenue  Code Section  704(b) and  accompanying  Treasury  Regulations
establish  criteria for allocation of  Partnership  deductions  attributable  to
debt. The  Partnership's  tax allocations for 1998, 1997 and 1996 have been made
in accordance with these provisions.

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

Under the terms of the Amended  Partnership  Agreement,  operating cash flow and
cash from sales or refinancings  are distributed 100% to the limited partners as
further defined in the Amended Partnership Agreement.  Terminating  dispositions
are to be made  in  accordance  with  the  partners'  positive  capital  account
balances.  Distributions  may be restricted or suspended in circumstances  where
the General  Partner  determines that such action is in the best interest of the
Partnership.

In  1998,  the  Partnership  distributed  $7,232,590  to the  limited  partners,
$5,562,896 of which was cash  proceeds  from the payoff of the Idlewood  Nursing
Home mortgage loan  investment and the Fort Meigs Plaza mortgage loan investment
- affiliate. The remaining $1,669,694 was cash from operations.  The Partnership
distributed  $3,249,987 to the limited partners in 1997, of which $1,750,000 was
cash proceeds from the sale of 1130  Sacramento  Condominiums  and the remaining
$1,499,987 was cash from operations.  The Partnership  distributed $1,199,950 to
the limited  partners in 1996 from cash from operations.  No distributions  were
paid to the General Partner in 1998, 1997 or 1996. During the last week of March
1999,  the  Partnership  distributed  approximately  $1,500,200  to the  limited
partners of record as of March 1, 1999.

Net Income Per Limited Partnership Unit
---------------------------------------

Net income per limited  partnership  unit  ("Unit") is computed by dividing  net
income allocated to the limited partners by the weighted average number of Units
outstanding.  Per Unit  information  has been computed  based on 49,512  average
Units outstanding during 1998, 1997 and 1996.

NOTE 2 - TRANSACTIONS WITH AFFILIATES
-------------------------------------

The  Partnership  pays property  management fees equal to 5% of the gross rental
receipts for its properties to McNeil Real Estate Management,  Inc.  ("McREMI"),
an affiliate of the General Partner,  for providing property management services
and leasing services.

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



<PAGE>
Under the terms of its Amended  Partnership  Agreement,  the Partnership  pays a
disposition fee to an affiliate of the General Partner  equaling up to 3% of the
gross sales price for brokerage  services  performed in connection with the sale
of the Partnership's properties,  provided,  however, that in no event shall all
real estate  commissions  (including  the  disposition  fee) paid to all persons
exceed the amount customarily charged in similar arms-length  transactions.  The
fee is due and payable at the time the sale  closes.  The  Partnership  incurred
$124,500 of such fees during 1997 in connection with the sale of 1130 Sacramento
Condominiums.  This amount represents 2.65% of the gross sales price. These fees
were paid by the Partnership subsequent to December 31, 1998 and are included in
payable to affiliates on the Balance Sheets at December 31, 1998 and 1997.

Under the terms of the Amended Partnership Agreement,  the Partnership is paying
an  asset  management  fee to the  General  Partner.  Through  1999,  the  asset
management  fee is calculated as 1% of the  Partnership's  tangible asset value.
Tangible  asset  value is  determined  by using  the  greater  of (i) an  amount
calculated by applying a capitalization  rate of 9 percent to the annualized net
operating  income of each  property,  or (ii) a value of $10,000  per  apartment
unit.  The property  tangible asset value is then added to the book value of all
other assets excluding intangible items. The fee percentage decreases to .75% in
2000, .50% in 2001 and .25% thereafter.

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

<TABLE>
<CAPTION>
                                                      For the Years Ended December 31,
                                                 ----------------------------------------
                                                   1998            1997            1996
                                                 --------        --------        --------
<S>                                              <C>             <C>             <C>     
Property management fees ................        $ 61,789        $ 63,072        $ 67,381
Charged to gain on disposition
   of real estate:
   Disposition fee ......................              --         124,500              --
Charged to general and
   administrative - affiliates:
   Partnership administration ...........         107,358         111,839         145,203
   Asset management fee .................         111,895         150,919         164,245
                                                 --------        --------        --------
                                                 $281,042        $450,330        $376,829
                                                 ========        ========        ========
</TABLE>

Payable to  affiliates  at December  31, 1998 and 1997  consisted  primarily  of
unpaid property  management  fees, a disposition  fee,  Partnership  general and
administrative  expenses and asset  management  fees and is due and payable from
current operations.


<PAGE>
NOTE 3 - TAXABLE INCOME (LOSS)
------------------------------

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

The  Partnership's  net assets and liabilities for tax purposes exceeded the net
assets and liabilities for financial  reporting  purposes by $4,657,987 in 1998,
$7,573,698 in 1997 and $7,486,117 in 1996.

NOTE 4 - REAL ESTATE INVESTMENT
-------------------------------

The  basis  and  accumulated  depreciation  of  the  Partnership's  real  estate
investment at December 31, 1998 and 1997 are set forth in the following tables:

<TABLE>
<CAPTION>
                                              Buildings and       Accumulated          Net Book
       1998                       Land        Improvements        Depreciation           Value
       ----                    ----------     -------------       -------------       ----------

   Sterling Springs
<S>                            <C>            <C>                 <C>                 <C>        
     Austin, TX                $  392,000     $  3,981,407        $ (1,525,208)       $ 2,848,199
                                =========      ===========         ===========         ==========


                                               Buildings and      Accumulated           Net Book
       1997                       Land         Improvements       Depreciation            Value
       ----                    ----------      -------------      ------------        ----------

   Sterling Springs            $  392,000     $  3,882,558        $ (1,290,949)       $ 2,983,609
                                =========      ===========         ===========         ==========
</TABLE>


<PAGE>
On August 1, 1997,  the  Partnership  sold one of four units of 1130  Sacramento
Condominiums,   located  in  San  Francisco,   California,  to  an  unaffiliated
purchaser.  The remaining  three units were sold to the same purchaser on August
28,  1997.  The cash  purchase  price for all four  units was  $4,700,000.  Cash
proceeds and the gain on disposition of real estate are detailed below:

                                                   Gain on Sale    Cash Proceeds
                                                   ------------    -------------

     Cash sales price.........................     $  4,700,000    $  4,700,000
     Selling costs............................         (330,666)       (206,166)
                                                                    -----------

     Net cash proceeds........................                     $  4,493,834
                                                                    ===========

     Carrying value...........................       (2,407,054)
                                                    -----------

     Gain on disposition of real estate.......     $  1,962,280
                                                    ===========

As  discussed  in  Note 2 -  "Transactions  With  Affiliates,"  the  Partnership
incurred a $124,500  disposition  fee  payable to an  affiliate  of the  General
Partner in  connection  with the sale of 1130  Sacramento.  This fee reduced the
amount of the gain on  disposition  of real  estate and is  included  in selling
costs above.  However,  as the fee was not paid until subsequent to December 31,
1998, it did not reduce the amount of net cash  proceeds from the sale.  The net
cash proceeds from the sale of 1130  Sacramento are $4,369,334  after payment of
the disposition fee.


<PAGE>
NOTE 5 - MORTGAGE LOAN INVESTMENTS
----------------------------------

The  following  sets  forth  the  Partnership's  mortgage  loan  investments  to
unaffiliated  borrowers  at  December  31,  1998 and  1997.  The  mortgage  loan
investments were secured by the related real estate.

<TABLE>
<CAPTION>
                         Mortgage         Annual          Monthly
                         Lien             Interest        Payments/                   December 31,
Property                 Position         Rates %         Maturity              1998                1997
--------                 --------         -------      ----------------    --------------      ---------------

Idlewood Nursing
<S>                         <C>               <C>                <C>       <C>                 <C>           
   Home (a)                 First             8.50       (a)     2/98      $            -      $    1,794,700
   Allowance for impairment                                                             -            (792,013)
                                                                            -------------       -------------
                                                                                        -           1,002,687
                                                                            -------------       -------------
Lakeland Nursing
   Home (b)                 First            12.00     $24,9952/99                      -           2,266,025
                                                                            -------------       -------------

                                                       Total               $            -      $    3,268,712
                                                                            =============       =============
</TABLE>

(a)    The  Partnership  owned an 83%  participation  interest  in the  Idlewood
       Nursing Home mortgage  loan  investment.  In January 1991,  the borrowing
       partnership  became  unable  to make  all  payments  required  under  the
       original  mortgage  loan  agreement.  Since that time,  the mortgage loan
       agreement  was  modified  four  times  such  that the  maturity  date was
       extended and the interest rate was decreased.  The loan  modification  in
       effect  during 1998 and 1997  required  that payments be made on the loan
       equal  to the net cash  flow  from  operations  of the  property,  with a
       minimum amount due of $9,130 per month.

       As a result of the borrowing partnership's inability to make the required
       payments,  the Partnership recorded a $792,013 provision for loss in 1992
       to reduce the  carrying  value of the  mortgage  loan  investment  to the
       estimated  recoverable  amount of the collateral.  The Partnership ceased
       accruing  interest on the loan in 1994.  The loan was not  recorded as an
       in-substance foreclosure at December 31, 1997.

       A measure of the  impairment  of the Idlewood  loan was made based on the
       present  value of expected  future cash flows  required  under a February
       1995  modification.  This measure  indicated an impairment  less than the
       total allowance previously recorded. Due to the uncertainties surrounding
       this mortgage loan  investment and its ultimate  realizability  given its
       history  of  numerous  modifications,  none  of the  previously  recorded
       allowance  was  reversed  until the  underlying  property  was sold.  All
       payments  received  on the  loan in 1998  and  1997  were  recorded  as a
       reduction of principal.


<PAGE>
       The mortgage loan  investment  matured in February 1998. The  Partnership
       and the borrower entered into an agreement  whereby the borrower paid the
       Partnership $2.4 million in settlement of both principal and interest due
       on the  mortgage  note in May 1998.  Since the  Partnership  owned an 83%
       participation  interest  in  the  note,  $408,000  of  the  $2.4  million
       settlement  was paid to the owner of the  remaining 17% of the note. As a
       result  of  this  transaction,  the  Partnership  recognized  a  gain  on
       extinguishment of mortgage loan investment as follows:

       Net proceeds from payoff of mortgage loan investment.....    $1,992,000
       Net book value of mortgage loan investment...............      (966,167)
                                                                     ---------
       Gain on extinguishment of mortgage loan investment.......    $1,025,833
                                                                     =========

(b)    On August 20, 1998,  the  Partnership  received  $2,541,572 as payment in
       full for both  principal  and interest  receivable  on the mortgage  loan
       investment  secured by Lakeland Nursing Home. Since the Partnership owned
       a 90% participation interest in the note, $254,157 of the payoff was paid
       to the owner of the  remaining  10% of the note.  Of the  $2,287,415  net
       proceeds received, $2,249,181 was applied to the principal balance of the
       loan  and  the  remaining   $38,234  was  applied  to  accrued   interest
       receivable.

A summary of activity for mortgage loan  investments for each of the three years
in the period ended December 31, 1998 is as follows:

<TABLE>
<CAPTION>
                                                       For the Years Ended December 31,
                                            ----------------------------------------------------
                                               1998                1997                1996
                                            ------------        ------------        ------------

<S>                                         <C>                 <C>                 <C>        
Balance at beginning of year........        $ 3,268,712         $ 3,404,553         $ 3,537,436
Collection of principal ............            (53,364)           (135,841)           (132,883)
Proceeds from payoff ...............         (4,241,181)                 --                  --
Gain recognized ....................          1,025,833                  --                  --
                                            -----------         -----------         -----------
Balance at end of year .............        $        --         $ 3,268,712         $ 3,404,553
                                            ===========         ===========         ===========
</TABLE>



<PAGE>
NOTE 6 - MORTGAGE LOAN INVESTMENTS - AFFILIATE
-----------------------------------------------

The  following  sets forth the  Partnership's  mortgage loan  investments  to an
affiliated borrower at December 31, 1998 and 1997:

<TABLE>
<CAPTION>
                         Mortgage          Annual          Monthly
                         Lien              Interest       Payments/                 December 31,
Property                 Position (a)      Rates %        Maturity              1998               1997
--------                 ------------   -----------    ----------------    --------------      --------

Fort Meigs Plaza
<S>                                          <C>       <C>         <C>     <C>                <C>         
   Shopping Center          First            12.81     $ 33,333    3/98    $           --     $  2,996,176
                                                                            -------------      -----------

                            Second            8.25 (b)  $4,074 (b) 9/97                --          733,900
   Allowance                                                                           --         (130,000)
                                                                            -------------      -----------
                                                                                       --          603,900
                                                                            -------------      -----------

                                                       Total               $           --     $  3,600,076
                                                                            =============      ===========
</TABLE>

(a)     The mortgage loans were non-recourse to the borrower.

(b)    Although  interest on the loan accrued at 8.25%,  interest  only payments
       equal to an effective  interest rate of 6.66% were payable  monthly.  All
       accrued interest was due at maturity.

On  August  24,  1992,  pursuant  to  a  lawsuit  settlement,  a  mortgage  loan
investment, which was secured by a property owned by an affiliate of the General
Partner,  McNeil Real Estate Fund XXI, L.P. ("Fund XXI"), was transferred to the
Partnership.  In June 1993,  a new loan  agreement  was  executed;  and Fund XXI
substituted  a second  lien on  another  of its  properties,  Fort  Meigs  Plaza
Shopping  Center,  as the  collateral on the loan.  The first lien mortgage note
secured by Fort Meigs Plaza, which was owned by an unaffiliated lender,  matured
in December  1997. In order to prevent  foreclosure of the property by the first
lienholder  and to  protect  its  second  lien  interest  in the  property,  the
Partnership  purchased  the  first  lien in  December  1997 for  $2,996,176  and
extended the maturity of the loan to March 1998.

Related to the initial  transfer,  the Partnership  recorded a deferred gain for
the portion of the non-cash assets received as compared to total assets received
pursuant to the lawsuit  settlement.  This deferred gain was being  amortized as
principal   payments  were  received  on  the  mortgage  loan  investment.   The
Partnership  reduced the  deferred  gain by $130,000 in 1997,  representing  the
estimated  uncollectible  amount of the mortgage loan  investment,  as discussed
below. The deferred gain totaled $20,054 at December 31, 1997.






<PAGE>
On April 20,  1998,  Fort Meigs  Plaza was sold to a  non-affiliate  for a gross
sales price of $3.8 million.  The Partnership  received $3,615,353 as payment in
full for both principal and interest  receivable on the loans,  which represents
the available  cash  proceeds  from the sale of the property.  The cash proceeds
from the sale were not sufficient to allow the Partnership to collect the entire
balance of the mortgage loan  investments  or to recognize the entire balance of
deferred revenue.  The Partnership ceased accruing interest on the loans in 1998
when  it  became  apparent  that  the  entire  balance  of  the  loans  was  not
collectible.  The  Partnership  recognized  interest  income  on  mortgage  loan
investments  -  affiliate  of  $108,214  in  1998.  An  additional   $27,465  of
uncollectible interest was not recognized by the Partnership in 1998.

A summary of activity for mortgage loan  investments - affiliate for each of the
three years in the period ended December 31, 1998 is as follows:

<TABLE>
<CAPTION>
                                                      For the Years Ended December 31,
                                            ---------------------------------------------------
                                               1998                1997                1996
                                            -----------         ------------        -----------
<S>                                         <C>                 <C>                 <C>        
Balance at beginning of year........        $ 3,600,076         $   733,900         $   733,900
Purchase of first lien .............                 --           2,996,176                  --
Collection of principal ............             (9,126)                 --                  --
Proceeds from payoff ...............         (3,570,896)                 --                  --
Deferred gain ......................            (20,054)           (130,000)                 --
                                            -----------         -----------         -----------
Balance at end of year .............        $        --         $ 3,600,076         $   733,900
                                            ===========         ===========         ===========
</TABLE>

NOTE 7 - MORTGAGE NOTE PAYABLE
------------------------------

The  following  sets  forth the  mortgage  note  payable of the  Partnership  at
December 31, 1998 and 1997.  The mortgage note payable is secured by the related
real estate investment.

<TABLE>
<CAPTION>
                         Mortgage         Annual          Monthly
                         Lien             Interest        Payments/                  December 31,
Property                 Position (a)   Rate %            Maturity              1998            1997
--------                 ------------   -------        ----------------    --------------   -------------

Sterling Springs
<S>                      <C>               <C>         <C>       <C>       <C>              <C>         
   Apartments (c)        First             8.15        $23,443   7/03      $    2,657,171   $  2,719,160
                         Discount (b)                                             (43,859)       (52,346)
                                                                            -------------    -----------
                                                                           $    2,613,312   $  2,666,814
                                                                            =============    ===========
</TABLE>


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

(b)    The mortgage loan was discounted to an effective rate of 8.62%.

(c)    Financing  was  obtained  in June 1993  under the terms of a Real  Estate
       Mortgage Investment Conduit financing.  Principal prepayments made before
       July 2000 are subject to a Yield Maintenance premium, as defined.

Scheduled  principal  maturities  of the mortgage  note payable  under  existing
terms, excluding a discount of $43,859, are as follows:

                           1999                  $      67,234
                           2000                         72,923
                           2001                         79,093
                           2002                         85,786
                           2003                      2,352,135
                                                  ------------
                             Total               $   2,657,171
                                                  ============

Based on borrowing rates  currently  available to the Partnership for a mortgage
loan with similar terms and average  maturities,  the fair value of the mortgage
note payable was approximately $2,661,000 at December 31, 1998 and $2,768,000 at
December 31, 1997.

NOTE 8 - LEGAL PROCEEDINGS
--------------------------

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

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

The action involves  purported  class and derivative  actions brought by limited
partners  of each  of the  limited  partnerships  that  were  named  as  nominal
defendants as listed above (the  "Partnerships").  Plaintiffs allege that McNeil
Investors, Inc., its affiliate McNeil Real Estate Management,  Inc. and three of
their senior officers and/or directors (collectively, the "Defendants") breached
their  fiduciary  duties and certain  obligations  under the respective  Amended
Partnership  Agreement.  Plaintiffs  allege that  Defendants  have rendered such
Units highly illiquid and  artificially  depressed the prices that are available




<PAGE>
for Units on the resale market.  Plaintiffs also allege that Defendants  engaged
in a course of conduct to prevent the  acquisition  of Units by an  affiliate of
Carl  Icahn  by  disseminating  purportedly  false,  misleading  and  inadequate
information.  Plaintiffs  further allege that Defendants  acted to advance their
own personal  interests at the expense of the Partnerships'  public unit holders
by failing to sell Partnership  properties and failing to make  distributions to
unitholders.

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

Defendants  filed a demurrer to the  consolidated  and amended  complaint  and a
motion to strike on February 14, 1997,  seeking to dismiss the  consolidated and
amended complaint in all respects.  A hearing on Defendant's demurrer and motion
to strike  was held on May 5,  1997.  The Court  granted  Defendants'  demurrer,
dismissing  the  consolidated  and  amended  complaint  with leave to amend.  On
October  31,  1997,  the  Plaintiffs  filed a second  consolidated  and  amended
complaint. The case was stayed pending settlement discussions.  A Stipulation of
Settlement dated September 15, 1998 has been signed by the parties.  Preliminary
Court  approval was received on October 6, 1998. A hearing for Final Approval of
Settlement, initially scheduled for December 17, 1998, has been continued to May
25, 1999.

Because McNeil Real Estate Fund XXIII,  L.P., Hearth Hollow  Associates,  McNeil
Midwest  Properties I, L.P. and Regency North Associates,  L.P. would be part of
the  transaction  contemplated  in the settlement  and Plaintiffs  claim that an
effort should be made to sell the McNeil Partnerships,  Plaintiffs have included
allegations with respect to McNeil Real Estate Fund XXIII,  L.P.,  Hearth Hollow
Associates, McNeil Midwest Properties I, L.P. and Regency North Associates, L.P.
in the third consolidated and amended complaint.

Plaintiff's  counsel  intends  to seek an  order  awarding  attorney's  fees and
reimbursements  of their  out-of-pocket  expenses.  The  amount of such award is
undeterminable  until  final  approval  is  received  from the  court.  Fees and
expenses shall be allocated amongst the Partnerships on a pro rata basis,  based
upon  tangible  asset value of each such  partnership,  less total  liabilities,
calculated in accordance with the Amended Partnership Agreements for the quarter
most recently ended.

NOTE 9 - COMMITMENTS AND CONTINGENCIES
--------------------------------------

Environmental laws create potential liabilities that may affect property owners.
The environmental  laws of Federal and certain state  governments,  for example,
impose liability on current and certain past owners of property from which there
is a release  or threat of  release  of  hazardous  substances.  This  liability
includes costs of investigation and remediation of the hazardous  substances and
natural resource  damages.  Liability for costs of investigation and remediation
is strict and may be imposed  irrespective  of whether the property owner was at
fault,  although  there are a number of  defenses.  Both  governments  and third
parties may seek recoveries under these laws.




<PAGE>
Third parties also may seek  recovery  under the common law for damages to their
property  or person,  against  owners of  property  from which  there has been a
release of hazardous and other substances.

The presence of  contamination  or the failure to remediate  contaminations  may
adversely  affect the owner's  ability to sell or lease real estate or to borrow
using the real estate as collateral.

Various  buildings at properties do or may contain  building  materials that are
the subject of various  regulatory  programs  intended to protect  human health.
Such building materials include,  for example,  asbestos,  lead-based paint, and
lead plumbing components.  The Company has implemented programs to deal with the
presence  of those  materials,  which  include,  as  appropriate,  reduction  of
potential  exposure  situations.  The Company does not believe that the costs of
such programs are likely to have a material adverse effect. Failure to implement
such programs can result in regulatory  violations or liability claims resulting
from alleged exposure to such materials.

In connection with the proposed sale transaction as more fully described in Note
1 -  "Organization  and Summary of  Significant  Accounting  Policies",  Phase I
environmental  site  assessments  have been completed for each property owned by
the Partnership. Such environmental assessments performed on the properties have
not revealed any  environmental  liability that the  Partnership  believes would
have a material adverse effect on the Partnership's business, assets, or results
of  operations.  The  Partnership  has not  been  notified  by any  governmental
authority of any non-compliance, liability or other claim in connection with any
of its  properties.  There can be no  assurances,  however,  that  environmental
liabilities  have  not  developed  since  such  environmental  assessments  were
prepared,  or that future uses or  conditions  (including,  without  limitation,
changes in applicable  environmental  laws and  regulations)  will not result in
imposition of environmental liability.


<PAGE>
                        McNEIL REAL ESTATE FUND XX, L.P.
                                  SCHEDULE III
               REAL ESTATE INVESTMENT AND ACCUMULATED DEPRECIATION
                                December 31, 1998

<TABLE>
<CAPTION>
                                                                                                  Costs
                                                  Initial Cost               Cumulative        Capitalized
                             Related                       Buildings and     Write-down for      Subsequent
Description               Encumbrances           Land       Improvements      Impairment       To Acquisition

Sterling Springs
   Apartments
<S>                       <C>            <C>              <C>               <C>                <C>           
   Austin, TX             $2,613,312     $   392,000      $    2,908,000    $            -     $    1,073,407
                           =========      ==========       =============     =============      =============
</TABLE>


                     See accompanying notes to Schedule III.
<PAGE>
                        McNEIL REAL ESTATE FUND XX, L.P.
                                  SCHEDULE III
               REAL ESTATE INVESTMENT AND ACCUMULATED DEPRECIATION
                                December 31, 1998

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

Sterling Springs
   Apartments
<S>                          <C>                 <C>             <C>               <C>           
   Austin, TX                  $    392,000     $  3,981,407    $   4,373,407     $  (1,525,208)
                                ===========      ===========     ============      ============
</TABLE>


(a)  For Federal  income tax purposes,  the property is  depreciated  over lives
     ranging  from 7 to 27.5 years using ACRS or MACRS  methods.  The  aggregate
     cost of real  estate  investments  for  Federal  income  tax  purposes  was
     $4,330,914 and accumulated depreciation was $893,134 at December 31, 1998.


                     See accompanying notes to Schedule III.


<PAGE>
                        McNEIL REAL ESTATE FUND XX, L.P.
                                  SCHEDULE III
               REAL ESTATE INVESTMENT AND ACCUMULATED DEPRECIATION
                                December 31, 1998

<TABLE>
<CAPTION>


                                 Date of                    Date                 Depreciable
Description                   Construction                Acquired              Lives (Years)
-----------                   ------------                --------              -------------

Sterling Springs
   Apartments
<S>                             <C>                         <C>                     <C> 
   Austin, TX                   1985                        7/90                    5-25


</TABLE>



                     See accompanying notes to Schedule III.

<PAGE>
                        McNEIL REAL ESTATE FUND XX, L.P.

                              Notes to Schedule III
               Real Estate Investment and Accumulated Depreciation


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

<TABLE>
<CAPTION>
                                                          For the Years Ended December 31,
                                                 ---------------------------------------------------
                                                     1998               1997                1996
                                                 -----------        ------------        ------------

Real estate investments:

<S>                                              <C>                <C>                 <C>        
Balance at beginning of year ............        $ 4,274,558        $ 6,892,667         $ 6,819,484

Disposition of real estate ..............                 --         (2,796,344)                 --

Improvements ............................             98,849            178,235              73,183
                                                 -----------        -----------         -----------

Balance at end of year ..................        $ 4,373,407        $ 4,274,558         $ 6,892,667
                                                 ===========        ===========         ===========



Accumulated depreciation:

Balance at beginning of year ............        $ 1,290,949        $ 1,435,080         $ 1,093,107

Disposition of real estate ..............                 --           (389,290)                 --

Depreciation ............................            234,259            245,159             341,973
                                                 -----------        -----------         -----------

Balance at end of year ..................        $ 1,525,208        $ 1,290,949         $ 1,435,080
                                                 ===========        ===========         ===========

</TABLE>

<PAGE>

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

                                    PART III

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

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

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

Robert A. McNeil,              78       Mr.  McNeil  is also  Chairman  of   the
Chairman of the                         Board and Director of McNeil Real Estate
Board and Director                      Management,  Inc. ("McREMI") which is an
                                        affiliate of the General Partner. He has
                                        held the foregoing  positions  since the
                                        formation of such an entity in 1990. Mr.
                                        McNeil  received  his B.A.  degree  from
                                        Stanford  University  in  1942  and  his
                                        L.L.B.  degree from  Stanford Law School
                                        in 1948. He is a member of the State Bar
                                        of  California  and has been involved in
                                        real  estate  financing  since  the late
                                        1940's and in real estate  acquisitions,
                                        syndications  and   dispositions   since
                                        1960. From 1986 until active  operations
                                        of  McREMI  and  McNeil  Partners,  L.P.
                                        began in February 1991, Mr. McNeil was a
                                        private investor. Mr. McNeil is a member
                                        of the International  Board of Directors
                                        of the Salk  Institute,  which  promotes
                                        research in improvements in health care.


<PAGE>
Carole J. McNeil               55       Mrs. McNeil is Co-Chairman, with husband
Co-Chairman of the                      Robert A. McNeil,  of McNeil  Investors,
Board                                   Inc.  Mrs.  McNeil has  twenty  years of
                                        real estate experience, most recently as
                                        a private investor from 1986 to 1993. In
                                        1982, she founded Ivory & Associates,  a
                                        commercial real estate brokerage firm in
                                        San  Francisco,  CA. Prior to that,  she
                                        was a commercial  real estate  associate
                                        with the Madison Company and, earlier, a
                                        commercial  sales  associate and analyst
                                        with   Marcus  and   Millichap   in  San
                                        Francisco.    In   1978,   Mrs.   McNeil
                                        established   Escrow  Training  Centers,
                                        California's first accredited commercial
                                        training   program  for  title   company
                                        escrow  officers and real estate  agents
                                        needing  college  credits to qualify for
                                        brokerage  licenses.  She  began in real
                                        estate as Manager and Marketing Director
                                        of Title  Insurance  and  Trust in Marin
                                        County,  CA. Mrs.  McNeil  serves on the
                                        International  Board of Directors of the
                                        Salk Institute.

Ron K. Taylor                  41       Mr.  Taylor is the  President  and Chief
President and Chief                     Executive  Officer of McNeil Real Estate
Executive Officer                       Management  which is an affiliate of the
                                        General Partner.  Mr. Taylor has been in
                                        this capacity  since the  resignation of
                                        Donald K. Reed on March 4,  1997.  Prior
                                        to       assuming       his      current
                                        responsibilities, Mr. Taylor served as a
                                        Senior  Vice  President  of McREMI.  Mr.
                                        Taylor has been in this  capacity  since
                                        McREMI  commenced  operations  in  1991.
                                        Prior  to  joining  McREMI,  Mr.  Taylor
                                        served as an  Executive  Vice  President
                                        for  a   national   syndication/property
                                        management  firm. In this capacity,  Mr.
                                        Taylor  had the  responsibility  for the
                                        management  and leasing of a  21,000,000
                                        square  foot   portfolio  of  commercial
                                        properties. Mr. Taylor has been actively
                                        involved  in the  real  estate  industry
                                        since 1983.

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


<PAGE>
ITEM 11.  EXECUTIVE COMPENSATION
--------  ----------------------

No direct  compensation  was paid or payable by the  Partnership to directors or
officers  (since it does not have any  directors or officers) for the year ended
December  31,  1998,  nor was any  direct  compensation  paid or  payable by the
Partnership  to  directors  or officers  of the  general  partner of the General
Partner for the year ended  December 31, 1998. The  Partnership  has no plans to
pay any such remuneration to any directors or officers of the general partner of
the General Partner in the future.

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

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

(A)     Security ownership of certain beneficial owners.

        No individual or group, as defined by Section 13(d)(3) of the Securities
        Exchange Act of 1934,  was known by the  Partnership to own more than 5%
        of the Units, other than High River Limited Partnership which owns 6,486
        Units (13.1% of the  outstanding  Units) and MacKenzie  Patterson,  Inc.
        which owns 2,984 Units (6.03% of the  outstanding  Units) at February 1,
        1999.  The business  address for High River Limited  Partnership  is 100
        South Bedford Road,  Mount Kisco,  New York 10549.  The business address
        for  MacKenzie  Patterson,  Inc. is 1640 School  Street,  #100,  Moraga,
        California 94556.


(B)     Security ownership of management.

        Affiliates of the General  Partner and the officers and directors of its
        general  partner  collectively  own 4.5 Units,  which is less than 1% of
        Units outstanding at February 1, 1999.

(C)     Change in control.

        None.

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

The amendments to the Partnership compensation structure included in the Amended
Partnership  Agreement  provide for an asset management fee to replace all other
forms of general partner  compensation  other than property  management fees and
reimbursements  of certain  costs.  Through 1999,  the asset  management  fee is
calculated as 1% of the Partnership's tangible asset value. Tangible asset value
is  determined  by using the greater of (i) an amount  calculated  by applying a
capitalization  rate of 9 percent to the annualized net operating income of each
property,  or (ii) a value of $10,000 per apartment unit. The property  tangible
asset  value is then  added to the book  value  of all  other  assets  excluding
intangible items. The fee percentage decreases to .75% in 2000, .50% in 2001 and
 .25%  thereafter.  For the year ended December 31, 1998, the Partnership paid or
accrued $111,895 of such asset management fees.



<PAGE>
The  Partnership  pays property  management fees equal to 5% of the gross rental
receipts of its properties to McREMI,  an affiliate of the General Partner,  for
providing property management services. Additionally, the Partnership reimburses
McREMI for its costs,  including  overhead,  of administering  the Partnership's
affairs.  For the year ended December 31, 1998, the Partnership  paid or accrued
$169,147  of such  property  management  fees and  reimbursements.  See Item 1 -
Business,  Item 7 - Management's  Discussion and Analysis of Financial Condition
and Results of Operations and Item 8 - Note 2 - "Transactions With Affiliates."

Under the terms of its Amended  Partnership  Agreement,  the Partnership  pays a
disposition fee to an affiliate of the General Partner  equaling up to 3% of the
gross sales price for brokerage  services  performed in connection with the sale
of the Partnership's properties,  provided,  however, that in no event shall all
real estate  commissions  (including  the  disposition  fee) paid to all persons
exceed the amount customarily charged in similar arms-length  transactions.  The
fee is due and payable at the time the sale  closes.  The  Partnership  incurred
$124,500 of such fees during 1997 in connection with the sale of 1130 Sacramento
Condominiums.  This amount represents 2.65% of the gross sales price. These fees
were paid by the Partnership subsequent to December 31, 1998 and are included in
payable to affiliates on the Balance Sheets at December 31, 1998 and 1997.




<PAGE>
                                     PART IV

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

See accompanying Index to Financial  Statements at Item 8 - Financial Statements
and Supplementary Data.

(A)       Exhibits

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

          4.                                Amended   and    Restated    Limited
                                            Partnership  Agreement  dated  March
                                            30, 1992  (incorporated by reference
                                            to  the   Current   Report   of  the
                                            registrant  on Form 8-K dated  March
                                            30,  1992,  as filed  on  April  10,
                                            1992).

          10.10                             Loan  Agreement   dated    June  23,
                                            1993,   between  Lexington  Mortgage
                                            Company  and McNeil Real Estate Fund
                                            XX, L.P., et al. (1)

          10.11                             Property    Management     Agreement
                                            dated June 24, 1993,  between McNeil
                                            Real  Estate  Management,  Inc.  and
                                            Sterling  Springs  Fund  XX  Limited
                                            Partnership      (filed      without
                                            schedules). (2)

          10.14                             Property  Management Agreement dated
                                            March 30, 1992,  between McNeil Real
                                            Estate Fund XX, L.P. and McNeil Real
                                            Estate Management, Inc. (3)

          10.15                             Amendment  of   Property  Management
                                            Agreement  dated  March 5, 1993,  by
                                            McNeil Real Estate Fund XX, L.P. and
                                            McNeil Real Estate Management,  Inc.
                                            (3)

          11.                               Statement  regarding  computation of
                                            net income per  limited  partnership
                                            unit   (see   Item  8  -  Note  1  -
                                            "Organization    and    Summary   of
                                            Significant Accounting Policies").


<PAGE>
          22.                               Following  is a list of subsidiaries
                                              of the Partnership:

                                                                     Names Under
                                            Jurisdiction            Which It Is
             Name of Subsidiary            Incorporation          Doing Business
             ------------------            --------------         --------------

             Sterling Springs Fund XX
              Limited Partnership             Delaware                 None

                  (1)                       Incorporated  by reference  to   the
                                            Annual  Report of McNeil Real Estate
                                            Fund XI, Ltd.  (File No.  0-9783) on
                                            Form  10-K  for  the  period   ended
                                            December 31, 1993, as filed on March
                                            30, 1994.

                  (2)                        Incorporated  by reference to   the
                                            Annual  Report of the  registrant on
                                            Form  10-K  for  the  period   ended
                                            December 31, 1993, as filed on March
                                            30, 1994.

                  (3)                       Incorporated  by reference to    the
                                            Annual  Report of the  registrant on
                                            Form  10-K  for  the  period   ended
                                            December 31, 1992, as filed on March
                                            30, 1993.

(B)       Reports on Form 8-K.  There  were no reports on Form 8-K filed  during
          the quarter ended December 31, 1998.


<PAGE>
                        McNEIL REAL ESTATE FUND XX, L.P.
                              A Limited Partnership

                                 SIGNATURE PAGE


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


                          McNEIL REAL ESTATE FUND XX, L.P.


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

                               By: McNeil Investors, Inc., General Partner



March 31, 1999                 By:  /s/  Robert A. McNeil
--------------                    ----------------------------------------------
Date                                Robert A. McNeil
                                    Chairman of the Board and Director
                                    Principal Executive Officer


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




March 31, 1999                 By:  /s/  Ron K. Taylor
--------------                    ----------------------------------------------
Date                                Ron K. Taylor
                                    President and Director of McNeil
                                     Investors, Inc.
                                    (Principal Financial Officer)




March 31, 1999                 By:  /s/  Carol A. Fahs
--------------                    ----------------------------------------------
Date                                Carol A. Fahs
                                    Vice President of McNeil Investors, Inc.
                                    (Principal Accounting Officer)