UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                      Washington, DC 20549
                           FORM 10-K
     [X]  Annual Report Pursuant to Section 13 or 15(d) of the
                  Securities Exchange Act of 1934
            For the Fiscal Year Ended December 31, 1996
   [  ]  Transition Report Pursuant to Section 13 or 15(a) of the
                  Securities Exchange Act of 1934
                   Commission File Number 0-15756
 
                                  LIF
        (Exact name of registrants as specified in its charter)

                       California 94-2969720
             (State or other jurisdiction of (I.R.S. Employer
           incorporation or organization) Identification Number)

                 P. O. Box 130, Carbondale, Colorado 81623
                  (Address of principal executive offices)

                          (970) 963-8007
          (Partnership's telephone number, including area code)
      Securities registered pursuant to Section 12(b) of the Act:

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

                Units of Limited Partnership Interest
                         (Title of Class)

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

                     Yes [ X ]     No [   ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 
of Regulation S-K (229.405 of this chapter) 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 [  ]

State the aggregate market value of the voting stock held by non-affiliates 
of the registrant.  Inapplicable.

DOCUMENTS INCORPORATED BY REFERENCE:  None

<PAGE>

                                     LIF
                                  FORM 10-K
                     FOR THE YEAR ENDED DECEMBER 31, 1996

                               TABLE OF CONTENTS
Item No.      Name of Item

Part I
 Item 1.      Business 
 Item 2.      Properties
 Item 3.      Legal Proceedings
 Item 4.      Submission of Matters to a Vote of Security Holders

Part II
 Item 5.      Market for Partnership's Common Equity and Related
              Shareholders Matters
 Item 6.      Selected Financial Data
 Item 7.      Management's Discussion and Analysis of Financial
              Condition and Results of Operations
 Item 8.      Financial Statements and Supplementary Data
 Item 9.      Change in and Disagreements with Accountants on
              Accounting and Financial Disclosure

Part III
 Item 10.      Directors and Executive Officers of the Registrant
 Item 11.      Executive Compensation
 Item 12.      Security Ownership of Certain Beneficial Owners
               and Management
 Item 13.      Certain Relationships and Related Transactions

Part IV
 Item 14. Exhibits, Financial Statement Schedules, and Reports
          on Form 8-K

Signatures

Index to Consolidated Financial Statements and Supplemental
Consolidated Financial Statement Schedules

<PAGE>

PART I

ITEM 1. BUSINESS

LIF (the "Partnership") is a limited partnership which was organized under 
the California Revised Limited Partnership Act on June 29, 1984.  The 
Partnership was organized to acquire real properties, including 
commercial, residential and agricultural properties, located primarily 
within the western portion of the United States, and to make short-term 
loans and capital contributions to other limited partnerships formed to 
acquire or develop and operate one or more income-producing real 
properties.  The Partnership was formed with the following principal 
investment objectives: (i) to provide the maximum possible cash 
distributions from operations, a substantial portion of which may not be 
taxable to the holders of units of limited partnership interest in the 
Partnership (the "Holders"); (ii) to provide for capital growth through 
appreciation in values; and (iii) to protect the Partnership's capital.  The 
General Partner of LIF is Partners '85 (the "General Partner") a partnership 
whose General Partner is Landsing Equities Corporation.

The Partnership's business consists of a single segment -- acquisition and 
operation of one or more income-producing real properties and making 
short-term loans and capital contributions to operating entities formed to 
acquire or develop real properties.  For a schedule of the Partnership's 
income and losses and assets, see Item 6, Selected Financial Data.  The 
Partnership will not be engaged in the production of goods or the rendering 
of services.  For a more specific discussion of the Partnership's operations 
and financial condition, see Item 7, Management's Discussion and 
Analysis of Financial Condition and Results of Operations.

The Partnership currently has an investment in Landsing Private Fund-21 
("P-21") which owns one multi-family rental property, Alpine Center 
Partners ("ACP") which owns one commercial rental property under 
construction; and Cattle Creek Development Partners ("CCDP") which owns 
two retail rental properties.  For financial reporting purposes the 
Partnership's investments are presented on a consolidated basis.  

Results of the Partnership's operations depend primarily upon the  
successful operation of it's investment.  The yields (return on capital) 
available on equity ownership of investments in income-producing and 
other types of real estate investments depend to a large extent upon the 
ability to lease or rent the property, the geographic location of the 
property, competition and other factors, none of which can be predicted 
with any certainty.

The Partnership has not engaged in research activities relating to the 
development or improvement of products or services.  The Partnership has 
not made, nor does it anticipate making, during the succeeding fiscal year, 
any capital expenditures for environmental control facilities, nor does it 
expect any material effects upon capital expenditures, earnings or 
competitive position resulting from compliance with present federal, state 
or local environmental control provisions.  The Partnership has no 
employees.  All of the Partnership's operations are located in the United 
States.

<PAGE>
<TABLE>

ITEM 2. PROPERTIES

A description of the income-producing properties which the Partnership 
owned at December 31, 1996 is as follows:
<CAPTION>

                                             Financial
                                             Occupancy                 Average
                                  Net        For the      Physical    Effective
                                  Rentable   Year Ended   Occupancy    Rental
Name & Location      Type         Sq. Ft.    12/31/96     At 12/31/96   Rate
                                             <F1>         <F2>          <F3>
<S>                  <C>          <C>        <C>          <C>           <C>
Whistler Point Apt   Residential  140,230     92%          89%          $ 9
Boise, Idaho

Valley View 
Business Center
Glenwood Springs, CO      Retail   20,750     80%          90%          $ 6

701 Cooper
Glenwood Springs, CO  Commercial    2,937    100%         100%          $10

Alpine Center
Carbondale, CO        Commercial   21,783    <F4>         <F4>          <F4>

</TABLE>
[FN]
<F1>
Expressed as a percentage, it compares the actual dollar amount of 
rent received with the dollar amount of rent which would be received 
if the property were fully leased.

<F2>
Physical occupancy denotes the percentage of net rentable square 
footage leased as of a certain date.

<F3>
Represents the average effective rental rates, per square foot, for the 
year ended December 31, 1996.

<F4>
Alpine Center was under construction as of December 31, 1996 and 
thus not available for occupancy.  Initial occupancy of Phase I which 
contains 12,349 square feet occurred in February 1997.

Each of the Partnership's properties is subject to substantial encumbrances.  
Reference is made to Schedule XI to the Financial Statements filed as part 
of this annual report for information regarding such encumbrances.

ITEM 3. LEGAL PROCEEDINGS

The Partnership, through CCDP, has had suit filed against it by two tenants 
alleging loss of business during the re-development of CCDP's property.  
No action has been taken by the Plaintiffs and CCDP is seeking to have the 
matter dismissed.  CCDP's defense is being paid by its insurance carrier.  

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

No matter has been submitted to a vote of the limited partners (the 
"Limited Partners") through the solicitation of proxies or otherwise, during 
the fourth quarter of 1996.

<PAGE>
<TABLE>
PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY 
AND RELATED SHAREHOLDERS MATTERS

There is no established public trading market for the Units of Limited 
Partnership interest of the Partnership and there are substantial restrictions 
on the transferability of such Units imposed by federal and state securities 
laws and by the Limited Partnership Agreement.

The approximate number of record holders of Units of the Partnership as 
of January 1, 1997, is 951.

The Limited Partners of the Partnership are entitled to certain distributions 
under the Amended and Restated Certificate and Agreement of Limited 
Partnership of the Partnership.  A cash distribution of $15 per unit was 
paid on September 30, 1996 to Limited Partners of record as of September 
15, 1996.  

ITEM 6. SELECTED FINANCIAL DATA
       (In thousands, except per Unit amount)
<CAPTION>

                                      . . . . . . .DECEMBER 31 . . . . . . .
                                       1996    1995    1994    1993     1992
<S>                                <C>       <C>     <C>     <C>      <C>
Total Revenues                     $  1,517  $1,542  $1,361  $1,216   $1,157
Net Income (Loss)                       136     (52)     27      58      (47)
Net Income (Loss) Per Unit<F1>          (11)     (4)      2       5       (4) 
Total Assets                          9,864   9,076   8,153   7,318    7,385
Long-term Obligations - Net           7,960   6,897   5,591   4,406    4,489 
Cash Distributions-Limited Partners     193     385     385       0        0
Paid Per Unit<F1>                        15      30      30       0        0

<FN>
<F1>
Based on a weighted average of 12,820 limited partnership units 
outstanding in 1996, 1995, 1994, 1993, and 1992. 

</TABLE>
<PAGE>

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

INTRODUCTION

The Partnership was organized to acquire real properties, including 
commercial, residential and agricultural properties, located primarily 
within the western portion of the United States, and to make short-term 
loans and capital contributions to other limited partnerships formed to 
acquire or develop and operate one or more income-producing real 
properties.  

The Partnership currently has an investment in Landsing Private Fund-21 
("P-21") which owns one multi-family rental property, Alpine Center 
Partners ("ACP") which owns one commercial building under 
construction, and Cattle Creek Development Partners ("CCP") which owns 
two retail rental properties.  For financial reporting purposes the 
Partnership's investments are presented on a consolidated basis.  

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 1996, the Partnership's consolidated cash balance 
totaled $388,000.  Cash not required for current operations is placed in 
federally insured financial instruments, certificates of deposit, and money 
market funds which can be liquidated as needed.  It is the Partnership's 
intention to maintain adequate cash reserves for its operations.  

During 1996, the Partnership experienced a net decrease in cash and cash 
equivalents of $168,000.  During this same period, the Partnership 
experienced a net decrease in short-term investments of $99,000.  As of 
December 31, 1996, cash plus short-term investment totaled $388,000 
versus a balance of $655,000 at December 31, 1995 for a net decrease of 
$267,000.  The Partnership made one Short-Term Loan during 1996.  The 
Partnership had two Short-Term Loans repaid in full and a third partially 
repaid in 1996.

The Short-Term Loan made to Prince Creek Partners, a Colorado limited 
partnership ("PCP"), was repaid in June 1996.  The three rental residential 
property acquired by PCP were sold in 1996.  The Partnership recognized 
a gain of $33,000 as a result of these sales.  

The Short-Term Loan made to Thompson Creek Partners, a Colorado 
limited partnership ("TCP"), was repaid in June 1996.  The rental 
residential property acquired by TCP was sold in 1996.  The Partnership 
recognized a gain of $6,000 as a result of this sale.

The Short-Term Loan made to Cattle Creek Development Partners, a 
Colorado limited partnership ("CCDP"), was partially repaid in December 
1996.  The remaining loan balance, including accrued and unpaid interest, 
as of December 31, 1996 was $550,000.  The loan is currently past due 
and is thus in default.  It is expected that the two commercial properties 
securing this loan will either be sold in 1997 or the remainder of the Short-
Term Loan will be repaid.  As of December 31, 1996, one of the properties 
owned by CCDP was 100% occupied, while the other property owned by 
CCDP was 90% occupied.  Currently as a Co-General Partner of CCDP, 
the Partnership is allocated 99% of all the profits, losses and cash 
distributions of CCDP as long as the Short-Term Loan remains 
outstanding.  

On June 3, 1996, the Partnership made a Short-Term Loan in the principal 
amount of $585,000 to Alpine Center Partners, a Colorado limited 
partnership ("ACP").  ACP was organized to acquire one commercial 
property located in Carbondale, Colorado.  The property is currently 
undergoing renovation and expansion.  The Partnership also made a capital 
contribution to ACP in the amount of $10,000 and became a Co-General 
Partner of ACP.  As a Co-General Partner of ACP, the Partnership will be 
allocated 95% of all profits, losses and cash distributions of ACP as long 
as the Short-Term Loan remains outstanding.  Upon repayment of the loan, 
the Partnership will receive 1% of profits and losses and 1% of cash 
distributions.  A Short-Term Loan currently bears interest at the rate of 
6.87% per annum and is due and payable on March 3, 1997, with the 
option of exercising five (5) three month extensions.  Each three month 
extension requires a payment of an exercise fee in the amount of $3,410, 
and an adjustment to the interest rate (Index Rate plus 2%).  As of 
December 31, 1996, the property owned by ACP was under construction 
and not available for occupancy.  Occupancy of Phase I was achieved in 
February 1997.

For financial reporting purposes, results of operations for CCDP, TCP and 
ACP have been shown on a consolidated basis.  

<PAGE>

RESULTS OF OPERATIONS

The Partnership's revenues for the year ended December 31, 1996 have 
declined compared to 1995.  Rental revenues were $1,483,000 in 1996, a 
decrease of $59,000 or approximately 4% from 1995.  Rental revenues 
were $1,542,000 in 1995, an increase of $210,000 or approximately 16% 
from 1994.  The decline in rental revenues in 1996 versus 1995 were the 
result of the sale of four properties in 1996, which properties were 
operational for the entire year in 1995.  The improvement in revenues in 
1995 as compared to 1994 was the result of the acquisition of four 
residential properties, which were only partially included in 1994's 
operation and improved operations at Whistler Point Apartments.

Operating expenses were $595,000 in 1996, a decrease of $48,000 or 7% 
from 1995.  Operating expenses were $643,000 in 1995, an increase of 
$104,000 or 19% from 1994.  The decrease in operating expenses in 1996 
was the result of property sales during the year.  Specifically, maintenance 
and repairs decreased 14%, and general and administrative costs decreased 
12%.  Other operating costs remained steady with 1995 levels.  The 
increase of operating expenses in 1995 versus 1994 was the result of 
having more properties operating for the entire year in 1995 as compared 
to 1994. 

Net operating income of the properties (rental revenue less operating 
expenses) was $888,000 in 1996, a decrease of $11,000 or 2% from 1995.  
Management believes net operating income is the best indication of the 
properties performance.  The decrease of 4% was due to the sale of four 
residential properties in 1996 that were in operation for the entire year 
1995.

Interest income decreased slightly in 1996.  The decline was due to the 
decrease in the Partnership's short term investments and cash equivalents, 
and reduced interest rates.

Interest expense increased 16% in 1996 from 1995 levels due to average 
larger outstanding loan balances in 1996 and acquisition of Alpine Center.  
Interest expense increased in 1995 from 1994, due to the acquisition of new 
properties in 1994.

Entity level general and administrative expenses, exclusive of that at the 
property level, remained consistent in 1996 compared to 1995, after a 33% 
decrease in 1995 versus 1994.   

The net loss for the Partnership was $136,000 in 1996, an increase of 
$59,000 from a net loss of $84,000 in 1995.  The net loss of the 
Partnership of $52,000 in 1995 was a decrease of $79,000 from the net 
income of $27,000 in 1994.  These decreases are a result of acquiring new 
properties in 1994 and 1996, and the related increased depreciation and 
interest expense amounts.

<PAGE>

PROPERTY OPERATIONS


Residential Property - Four residential properties were sold in 1996 at a 
profit of $39,000 to the Partnership.  The remaining residential property's, 
Whistler Point Apartments in Boise, Idaho, operations remained stable.  In 
1996, the Partnership continued to make capital improvements to the 
property to allow it to compete effectively with new competition.  The 
Partnership is continuing this program in 1997.  The Partnership 
anticipates that when this improvement program is completed, the property 
will be placed on the market for sale in 1998.

Commercial Property - The 701 Cooper Building remained 100% occupied 
during 1996.  The Valley View Business Center improved its occupancy 
from 80% to 90% by year-end.  As of March 31, 1997, the property is 99% 
occupied and leased.  The Fund acquired the Alpine Center complex in 
1996.  The property is currently undergoing a renovation and expansion.  
Occupancy of Phase I occurred in February 1997.  As of March 31, 1997, 
Phase I was 63% leased.  

OCCUPANCY

Occupancy at all of the Partnership's properties remain high in 1996.  As 
of December 31, 1996, occupancy at Whistler Point Apartments was 92%.  
This occupancy, despite new competition, is expected to remain stable 
through 1997.  Occupancy at properties owned by CCDP was 90% as of 
December 31, 1996.  It is expected that all Partnership properties will 
maintain stable occupancy during 1997.

DISTRIBUTIONS

A cash distribution of $15.00/unit was paid on September 30, 1996.   

INFLATION

The effect of inflation on the Partnership's operations have been no greater 
than the effect on the economy as a whole.  Because of competitive 
conditions, market rate rents may increase or decrease disproportionately 
with inflation while property operating costs continue to follow 
inflationary trends.  Inflationary conditions are not expected to have a 
major impact on the Partnership during 1997.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required by this Item is contained at page F-1 following in 
this report.

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

<PAGE>

PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The General Partner of the Partnership is Partners '85, which has sole 
responsibility for all aspects of the Partnership's operations.  Partners '85
is a limited partnership, whose General Partner is Landsing Equities 
Corporation, a California corporation.

Landsing Equities Corporation was incorporated in California in 1983.  It 
is a wholly-owned subsidiary of The Landsing Corporation which has 
acted as a sponsor of real estate investment programs, providing property 
acquisition and management services.

Gary K. Barr is the Director and President of Landsing Equities 
Corporation.  His principal occupation during the last five years or more, 
and certain other affiliations are set forth below:

Gary K. Barr.  Mr. Barr serves as Chairman and Chief Executive Officer 
of Pacific Coast Capital and has served as President and Director of 
Landsing Pacific Fund from its inception in November, 1988 to July, 1992.  
Mr. Barr received a Bachelor of Science degree in Mechanical Engineering 
from Oklahoma State University in 1967 and a Master of Business 
Administration degree from the Stanford University Graduate School of 
Business in 1972.  Mr. Barr serves on the Board of Governors of the 
National Association of Real Estate Investment Trusts and on its Editorial 
Board.  Mr. Barr has served as President of the California Chapter of the 
Real Estate Securities and Syndication Institute of the National Association 
of Realtors ("RESSI"), which has awarded him the designation of 
Specialist in Real Estate Securities.  Since 1983, he has served on the 
Board of Directors of Silicon Valley Bancshares.  In 1989 he authored the 
book J.K. Lasser's "Real Estate Investment Guide" published by Prentice 
Hall.  

ITEM 11. EXECUTIVE COMPENSATION

The Director and President of Landsing Equities Corporation does not 
receive compensation from the Partnership.  However, the General Partner, 
Partners '85, has contracted with Pacific Coast Capital, an affiliate, for the 
provision of certain asset management and administrative services.  During 
1996, Pacific Coast Capital received management fees of $103,000, which 
were determined based on expenses incurred in order to operate the 
Partnership. In addition, Pacific Coast Capital was paid $25,000 for 
property management services.  These property management fees were 
based on 2% of the monthly property revenues received from Whistler 
Point Apartments.  See Item 13, Certain Relationships and Related 
Transactions for further information.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

No persons or groups are known by the Partnership to hold more than 5% 
of the Units of limited partnership of the Partnership.  The General Partner 
is not a direct or beneficial owner of Units of limited partnership.  The 
General Partner knows of no arrangement, including any pledge by any 
person of securities of the Partnership, the operation of which may at a 
subsequent date result in a change in control of the Partnership.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Partnership has agreements with The Landsing Corporation and one of 
its affiliates, Pacific Coast Capital, pursuant to which the Partnership has 
paid various fees and compensation to these companies.  

The Partnership has entered into a property management agreement with 
Pacific Coast Capital for the management of the Partnership's property.  
During 1996, the Partnership paid Pacific Coast Capital $25,000 for 
property management and leasing services.

The Partnership has retained Pacific Coast Capital to serve as advisor and 
to manage the day-to-day operations of the Partnership.  Pacific Coast 
Capital is to perform these services based on reimbursement of costs 
incurred but in no case are these to exceed those which the Partnership 
would have to pay independent parties for comparable services.  During 
1996, the Partnership paid Pacific Coast Capital expense reimbursements 
of $103,000.

For information concerning the agreements between the Partnership and 
the affiliates of The Landsing Corporation, see Note 2 of Notes to 
Financial Statements filed as part of this Annual Report.

<PAGE>

PART IV

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

 (a)   1. Financial Statements
          See the Index on page F-1.

       2. Financial Statement Schedules
          See the Index on page F-1.

       3. Exhibits
          See the Exhibit Index which immediately precedes the
          Exhibits filed with this Report.

 (b)   No reports were filed by the Partnership on Form 8-K during
       the fourth quarter ended December 31, 1996.

<PAGE>

                               SIGNATURES

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

                               LIF

                               By: Partners '85

                               By: Landsing Equities Corporation,
                                   General Partner

March 31, 1997                     By:  /s/ Gary K. Barr 
                                       GARY K. BARR, President and Director

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 
Partnership and in the capacities and on the dates indicated.


March 31, 1997                         /s/ Gary K. Barr 
                                      GARY K. BARR, President and Director
                                      Landsing Equities Corporation
                                      (Principal Executive Officer)

Supplemental Information to be Furnished With Reports Filed Pursuant to 
Section 15(d) of the Act by Registrants Which Have Not Registered 
Securities Pursuant to Section 12 of the Act.

No Annual Report or Proxy material has been sent to Partnership's security 
holders.  An Annual Report will be furnished to such security holders 
subsequent to the filing of Partnership's Annual Report on Form 10-K, and, 
when so sent, Partnership shall furnish copies of such material to the 
Commission.

<PAGE>

LIF

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTAL 
CONSOLIDATED FINANCIAL STATEMENT SCHEDULES INCLUDED IN THE FORM 10-K

Report of Independent Accountants

Financial Statements:
Consolidated Balance Sheets, December 31, 1996 and 1995

Consolidated Statements of Operations for the Years Ended
  December 31, 1996, 1995 and 1994

Consolidated Statements of Changes in Partners' Equity for the Years
  Ended December 31, 1996, 1995 and 1994

Consolidated Statements of Cash Flows for the Years Ended
  December 31, 1996, 1995 and 1994

Notes to Consolidated Financial Statements

Supplemental Consolidated Financial Statement Schedules:
Schedule X - Supplementary Consolidated Income Statement
  Information for the Years Ended December 31, 1996, 1995 and 1994

Schedule XI - Real Estate and Accumulated Depreciation
  for the Year Ended December 31, 1996

<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Partners of LIF:

We have audited the accompanying consolidated financial statements and 
consolidated financial statement schedules of LIF and subsidiaries listed in 
the index on page F-1 of this Form 10-K as of December 31, 1996 and 
1995, and the related consolidated statements of operations, partners' 
equity and cash flows for each of the three years in the period ended 
December 31, 1996.  These financial statements are the responsibility of 
the Partnership's management.  Our responsibility is to express an opinion 
on these financial statements and financial statement schedules based on 
our audits.

We conducted our audits in accordance with generally accepted auditing 
standards.  Those standards required 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 consolidated financial statements referred to above 
present fairly, in all material respects, the consolidated financial position
of LIF and subsidiaries as of December 31, 1996 and 1995, and the 
consolidated results of their operations and their cash flows for each of the 
three years in the period ended December 31, 1996, in conformity with 
generally accepted accounting principles.  In addition, in our opinion, the 
consolidated financial statement schedules referred to above, when 
considered in relation to the basic financial statements taken as a whole, 
present fairly, in all material respects, the information required to be 
included therein.

DALBY, WENDLAND & CO., P.C.

Glenwood Springs, Colorado
March 13, 1997

<PAGE>
<TABLE>

LIF

CONSOLIDATED BALANCE SHEETS, DECEMBER 31, 1996 AND 1995
(In thousands)
<CAPTION>
                                                      1996           1995
<S>                                                <C>            <C>
ASSETS

INVESTMENT IN REAL ESTATE:
Rental property                                    $11,871        $10,267
Accumulated depreciation                            (2,282)        (2,010)
Rental property - net                                9,316          8,257

CASH AND CASH EQUIVALENTS (including interest
 bearing deposits of $282 in 1996 and $548 in 1995)    388            556

OTHER ASSETS:
Short-term investments                                   0             99
Accounts receivable                                      9             15
Deferred loan costs, net of accumulated
 amortization of $174 in 1996 and $135 in 1995         122            132
Prepaid expenses                                        29             17
Total other assets                                     154            263

TOTAL                                              $ 9,864        $ 9,076

LIABILITIES AND PARTNERS' EQUITY

LIABILITIES:
Notes payable                                      $ 7,960        $ 6,897
Accounts payable                                        29             80
Other liabilities                                      194            170
Total liabilities                                    8,183          7,147

Minority Interest                                       75

PARTNERS' EQUITY                                     1,606          1,929

TOTAL                                              $ 9,864        $ 9,076

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

</TABLE>
<PAGE>
<TABLE>
LIF

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(In thousands except per unit amounts)
<CAPTION>

                                           1996       1995       1994
<S>                                      <C>        <C>        <C>
REVENUES:
Rental                                   $1,483     $1,542     $1,332
Interest                                     34         25         29
Total revenues                            1,517      1,567      1,361

EXPENSES:
Interest                                    533        482        341
Operating                                   595        643        539
Depreciation and amortization               343        307        246
General and administrative                  218        187        208
Total expenses                            1,689      1,619      1,334

NET INCOME (LOSS) FROM OPERATIONS        $ (172)     $ (52)    $   27
GAIN FROM SALE OF REAL ESTATE                36          0          0
NET INCOME (LOSS)                        $ (136)     $ (52)    $   27

NET INCOME (LOSS) PER PARTNERSHIP UNIT
    General Partners                     $    0      $   0     $    0
    Limited Partners                        (11)        (4)         2

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

</TABLE>
<PAGE>
<TABLE>
LIF

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(In thousands, except partnership units)
<CAPTION>
                                LIMITED PARTNERS
                                   NUMBER OF              GENERAL   TOTAL
                                  PARTNERSHIP             PARTNER   PARTNERS'
                                     UNITS      AMOUNT    AMOUNT    EQUITY
<S>                                  <C>        <C>       <C>       <C>
BALANCE, JANUARY 1, 1994             12,820     $2,882    $ (82)    $2,800
Net income - 1994                                   27        0         27
Distribution - 1994                               (385)     (41)      (426)
Contributions - 1994                                 0        1          1

BALANCE, DECEMBER 31, 1994           12,820      2,524     (122)     2,402
Net loss - 1995                                    (52)       0        (52)
Distribution - 1995                               (385)     (41)      (426)
Contributions - 1995                                 0        5          5

BALANCE, DECEMBER 31, 1995           12,820      2,087     (158)     1,929
Net loss - 1996                                   (136)       0       (136)
Distribution - 1996                               (192)     (22)      (214)
Contributions - 1996                                 0       27         20

BALANCE, DECEMBER 31, 1996  12,820              $1,759    $(153)    $1,606

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

</TABLE>
<PAGE>
<TABLE>

LIF


CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(In thousands)
<CAPTION>

                                                 1996        1995      1994
<S>                                           <C>         <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                             $  (136)    $   (52)   $   27
(Gain) loss on sale of property                   (36)
Adjustments to reconcile net income (loss) to
 net cash provided by operating activities:
Depreciation and amortization                     297         267       246

Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable          6         (15)        7
Decrease (increase) in prepaid expenses
 and deposits                                     (12)         (2)      (15)
Increase (decrease) in accounts payable           (51)         64         1
(Decrease) increase in other liabilities           24         (50)       10
Net cash provided by operating activities         138         212       276

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures                             (932)       (868)   (1,915)
Sale of investment property                       208           0         0
Proceeds from short-term investments               99          99       688
Net cash used in investing activities            (625)       (769)   (1,227)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from financing                           563       5,707     1,312
(Distributions) contributions net                (187)       (421)     (426)
Payments on notes payable                        (164)     (4,401)     (127)
Proceeds from sale of minority interest           107           0         0
Net cash provided by financing activities         319         885       759

Increase (decrease) in cash and 
 cash equivalents                                (168)        328      (192)
Cash and cash equivalents at beginning of year    556         228       420

Cash and cash equivalents at end of year      $   388     $   556   $   228

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

</TABLE>
<PAGE>

LIF

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands except per unit amounts)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization - LIF (the "Partnership") is a limited partnership 
organized under the laws of the state of California for the purpose 
of investing in income properties and making short-term loan and 
capital contributions to operating entities formed to acquire or 
develop and operate one or more income producing real 
properties.  The General Partner is Partners '85 (the "General 
Partner"), a California limited partnership, whose General Partner 
is Landsing Equities Corporation.  LIF was formed in June 1984, 
and shall continue until December 31, 2034, unless sooner 
terminated.

Investment In Real Estate Partnership - At December 31, 1996 
and 1995, the Partnership was invested in Landsing Private Fund 
("P-21"), a wholly-owned real estate partnership, and CCDP, a 
Colorado limited partnership formed in 1994.  The Partnership 
has a 99% profits and loss interest and cash distribution interest in 
CCDP.  On the occurrence of certain events, the Partnership's 
cash distribution interest is reduced to 1%.  Additionally, the 
profits and loss interest is reduced to 1%.  The other partners in 
CCDP are affiliates of the General Partner.  In 1995 and for a 
portion of 1996, the Partnership was also invested in Prince Creek 
Partners ("PCP") and Thompson Creek Partners ("TCP").  In 
1996, the properties owned by these partnerships were sold and 
the partnerships terminated.  During 1996, the Partnership 
invested into a new entity - Alpine Center Partners ("ACP").  The 
Partnership acquired rental real estate in Colorado in 1996.  The 
Partnership has a 95% profits and loss interest and cash 
distribution interest in ACP.  Upon the occurrence of certain 
events, the Partnership's cash distribution interest is reduced to 
1%.  Additionally, the profits and loss interest is reduced to 1%.  
The other partners in ACP are affiliates of the General Partner.  
For financial reporting purposes, the Partnership consolidates the 
operations of P-21, PCP, CCDP, TCP and ACP with that of the 
Partnership.  All significant intercompany transactions and 
balances have been eliminated.  Minority interest was 
insignificant at December 31, 1996 and 1995.    

Rental Property - Rental property is stated at cost.  Depreciation is 
computed by the straight-line method over estimated useful lives 
ranging from five to forty years.  Major additions and betterments 
are capitalized at cost, while maintenance and repairs which do 
not improve or extend the life of the respective assets are 
expensed currently.  When assets are retired or otherwise 
disposed of, the costs and related accumulated depreciation are 
removed from the accounts, and any gain or loss on disposal is 
included in the results of operations.

<PAGE>

Deferred Loan Costs - Loan fees are deferred and amortized over 
the life of the related note payable.  

Cash and Cash Equivalents - The Partnership considers all highly 
liquid investments with a maturity of three months or less at the 
time of purchase to be cash equivalents.

Short-Term Investments - The Partnership invests in short-term 
federally insured certificates of deposits which mature on a date 
in excess of three months from the date of purchase.  The cost of 
these investments approximates market value.

Income Taxes - No provision for federal or state income taxes has 
been made in the consolidated financial statements because these 
taxes are the obligation of the partners.
 
Net Income (Loss) Per Partnership Unit is based on weighted 
average units outstanding of 12,820 in 1996, 1995 and 1994, after 
giving effect to net income (loss) allocated to the General Partner 
of $0 in 1996, $0 in 1995, and $0 in 1994.  Cash distributions of 
$15 per unit were paid to holders of record as of September 30, 
1996.  Cash distributions of $30 per unit were paid to holders in 
1995 and 1994.  

Concentrations of Credit Risk - The Partnership's financial 
instruments that are exposed to concentrations of credit risk 
consist primarily of its cash and cash equivalents.  The 
Partnership's cash and cash equivalents are in high-quality 
institutions with high credit ratings.  This investment policy limits 
the Partnership's exposure to concentrations of credit risk.

Use of Estimates - The preparation of financial statements in 
conformity with generally accepted accounting principles requires 
management to make estimates and assumptions that affect 
certain reported amounts and disclosures.  Accordingly, actual 
results could differ from those estimates.

Reclassifications - Certain amounts in the 1994 and 1995 financial 
Statements have been reclassified to conform to the 1996 presentation.

<PAGE>

2. RELATED PARTY TRANSACTIONS

The Partnership has entered into agreements with Pacific Coast 
Capital.  Advisory services for investment management, general 
and administrative and property management are provided by 
Pacific Coast Capital.  The General Partner is an affiliate of 
Pacific Coast Capital.  The related party transactions delineated in 
the Partnership Agreement with affiliates of the General Partner 
are as follows:

                                                1996      1995      1994

General and Administrative Support Fees        $ 103     $ 103     $ 105

Property Management                            $  25     $  28     $  26

In addition, as described in Note 1, the Partnership has invested in 
new partnerships during 1994 and 1996.  The other partners in 
those partnerships are affiliates of the General Partner.

3. RENTAL PROPERTY

 Rental property consists of the following:

                                                1996      1995

Land                                         $ 1,922   $ 1,751
Building and improvements                      9,676     8,516
Total                                        $11,598   $10,267

 The residential leases are generally for a term of one year or less 
or are on a month-to-month basis.  Retail leases range from one to 
five years in length.

<PAGE>
<TABLE>

4. NOTES PAYABLE
<CAPTION>
                                                             1996      1995
<S>                                                        <C>      <C>
First note payable bears interest at 8%, matures
  September 1, 2000, and is collateralized by 
  Whistler Point Apartments. The note requires monthly
  payments of principal and interest of $42 per month.
  In addition the note is guaranteed by the Landsing
  Corporation.                                             $5,373   $5,447

First note payable collateralized by the Valley View
  Business Park, with an interest rate of 9.00%, and
  monthly payments of $11, matures on December 10, 1998.    1,068      649

Second note payable collateralized by the Valley View 
  Business Park, with an interest rate of 8.5% and monthly
  payments of $2, matures on August 28, 2004.                 199      202

First note payable collateralized by 701 Cooper commercial 
  building, with an interest rate of 9.99% and monthly
  payments of $3, matures on October 7, 2001.                 324      193

First note payable collateralized by residence at 481 Mesa 
  Verde,   with an interest rate of 6.375% and monthly 
  payments of $1, matures on July 1, 2024.                      0      109

First note payable collateralized by residence at 3901 
  Mountain Drive, with an interest rate of 8.25% and monthly
  payments of $1, matures on July 1, 2024.                      0       86

First note payable collateralized by residence at 0051 Badger
  Court, with an interest rate of 8.79% and monthly payments 
  of $1, matures on September 1, 2024.                          0       93

First note payable collateralized by residence at 239 Crystal
  Road, with an interest rate of 9.0% and monthly payments of
  $1, matures on October 1, 2024.                               0     118

First note payable collateralized by Alpine Center, with
  an interest rate of 8.75% and monthly payments of $9, 
  matures on June 3, 1997.                                    996       0

TOTAL                                                      $7,960  $6,897

</TABLE>
<PAGE>

The Partnership paid interest of $533 in 1996, $482 in 1995, 
and $340 in 1994.  

Principal payments required in future years are as follows:

            1997         $ 1,118
            1998           1,169
            1999             363
            2000           5,168
            2001             142
            Total        $ 7,960

5. RENTAL PROPERTIES UNDER OPERATING LEASES

Minimum future rents from rental properties under operating 
leases having initial or remaining noncancelable lease terms in 
excess of one year at December 31, 1996, are as follows:

           1997            $ 185
           1998              162
           1999               76
           2000               32
           2001               24
          Total            $ 479

<PAGE>
<TABLE>

6. RECONCILIATION TO INCOME TAX BASIS OF ACCOUNTING

The difference at December 31, 1996, 1995 and 1994, between 
the basis of accounting used in the accompanying consolidated 
financial statements and the income tax basis used to file the 
Partnership's federal income tax return are as follows:

<CAPTION>

                                               1996        1995        1994
<S>                                          <C>         <C>         <C>
Net income (loss)                            $ (136)     $  (52)     $   27
Remove book (income) loss from partnership
  investments                                    96         (43)        (78)
Difference in book vs. tax loss from
  partnerships                                 (175)        (86)        (45)
Net income (loss) - tax basis                  (215)       (181)        (96)

Partners' equity                              1,732       1,929       2,402
Remove equity in partnership investments       (509)       (453)       (403)
Syndication costs                             1,906       1,906       1,906
Investment in partnerships                     (978)       (803)       (717)
Partners' equity - tax basis                  2,151       2,579       3,188

</TABLE>
<PAGE>
<TABLE>

SCHEDULE X

LIF

SUPPLEMENTARY CONSOLIDATED INCOME STATEMENT INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(In thousands)

<CAPTION>

           Column A                              Column B
             ITEM                        CHARGED TO COSTS & EXPENSES
                                            1996     1995     1994
<S>                                        <C>      <C>      <C>
1.   Maintenance and repairs               $ 151    $ 176    $ 139

2a.  Depreciation                            304      267      224
2b.  Amortization of deferred expenses        39       40       22

3.   Property taxes                          146      146      129

4.   Utilities                                72       69

5.   General & Administrative                147      168

6.   Property Management                      57       58

As to items omitted, amounts did not exceed one percent of total revenue.

</TABLE>
<PAGE>
<TABLE>

SCHEDULE XI

LIF
(A California limited partnership)

REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
(In thousands)
<CAPTION>
                                                           COST
                                                           CAPITALIZED
                                          INITIAL COST     SUBSE-    CONSOLI-  CONSOLI-
                                          BLDG. &          QUENT TO  DATED     DATED     ACCUMULATED
                          ENCUM-          IMPROVE-         ACQUI-    ADJUST-   CARRYING  DEPRECI-
                          BRANCES LAND    MENTS    TOTAL   SITION    MENT      COST      ATION
<S>                       <C>     <C>     <C>      <C>      <C>      <C>       <C>       <C>
Whistler Point Apts.      $5,373  $1,351  $5,947   $7,298   $ 762    $ (122)   $ 7,938   $2,190
 Boise, ID
 Date Acquired: 12/23/85  

Valley View Business Park  1,267     187     751      938     819       (15)     1,742       76
 Glenwood Springs, CO
 Date Acquired: 08/28/94

701 Cooper-Commercial        324      65     261      326       1        (6)       321       16
 Glenwood Springs, CO
 Date Acquired: 06/20/94

Alpine Center                996     410     326      736     861         0      1,597        0
 Carbondale, CO
 Date Acquired: 06/03/96

TOTAL                     $7,960  $2,013   $7,285   $9,298 $2,443    $ (143)   $11,598   $2,282

</TABLE>
<PAGE>

SCHEDULE XI
LIF

REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
(In thousands)

NOTES:

(1)   The Partnership's policy is to invest in income producing real 
      properties and make short-term loans and capital contributions to 
      operating entities formed to acquire or develop and operate one or 
      more income producing real properties.  Costs incurred before 
      completion of the development are included in building basis.  
      Costs incurred after completion of the development projects and 
      costs incurred subsequent to the purchase of completed projects 
      are included as improvements.

(2)   Depreciation is computed by the straight-line method on lives of 
      five to forty years.

<PAGE>


E X H I B I T   I N D E X


Exhibit Number 
in Accordance with
    601 of
 Regulation S-K                      Exhibit Description
  
     3.1              Amended and Restated Certificate and Agreement of 
                      Limited Partnership of LIF, a California limited 
                      partnership, filed as Exhibit 3 to Partnership's
                      Registration Statement No. 2-94509 on Form S-11, as
                      amended, is incorporated herein by reference.
  
     3.2              Assignment Agreement, filed as Exhibit 10.1 to 
                      Partnership's Registration Statement No. 2-94509 on
                      Form S-11, as amended, is incorporated herein by
                      reference.
  
    10.1              Agreement of Limited Partnership for Cattle Creek 
                      Development Partners, Ltd. (Incorporated by reference
                      to Form 8-K dated August 31, 1994)
  
    10.2              Promissory Note to LIF. (Incorporated by reference to 
                      Form 8-K dated August 31, 1994)
  
    10.3              Bill of Sale, along with the Closing and Settlement 
                      Agreement for the acquisition of Valley View Business 
                      Park. (Incorporation by reference to Form 8-K dated 
                      August 31, 1994)
  
    10.4              Promissory Note to Alpine Bank, along with related Deed 
                      of Trust. (Incorporated by reference to Form 8-K dated 
                      August 31, 1994)
  
    10.5              Promissory Note to Norman Overacker and Elaine 
                      Overacker, along with related Deed of Trust. 
                      (Incorporated by reference to Form 8-K dated 
                      August 31, 1994)
  
    10.6              Closing and Settlement Agreement for acquisition of 701 
                      Cooper Avenue Building. (Incorporated by reference to 
                      Form 8-K dated August 31, 1994)
  
    10.7              Promissory Note to Alpine Bank, along with related Deed 
                      of Trust. (Incorporated by reference to Form 8-K dated 
                      August 31, 1994)