<PAGE>

                           AMERICAN INCOME PARTNERS V



                American Income Partners V-D Limited Partnership


                Annual Report to the Partners, December 31, 1996
<PAGE>

               AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP
                    INDEX TO ANNUAL REPORT TO THE PARTNERS



                                                                           Page
                                                                           ----


SELECTED FINANCIAL DATA                                                       2

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS                                         3-6


FINANCIAL STATEMENTS:

Report of Independent Auditors                                                7

Statement of Financial Position
at December 31, 1996 and 1995                                                 8

Statement of Operations
for the years ended December 31, 1996, 1995 and 1994                          9

Statement of Changes in Partners' Capital
for the years ended December 31, 1996, 1995 and 1994                         10

Statement of Cash Flows
for the years ended December 31, 1996, 1995 and 1994                         11

Notes to the Financial Statements                                         12-20


ADDITIONAL FINANCIAL INFORMATION:

Schedule of Excess (Deficiency) of Total Cash
Generated to Cost of Equipment Disposed                                      21

Statement of Cash and Distributable Cash
From Operations, Sales and Refinancings                                      22

Schedule of Costs Reimbursed to the
General Partner and its Affiliates as
Required by Section 10.4 of the Amended and
and Restated Agreement and Certificate of
Limited Partnership                                                          23

                                      -1-
<PAGE>

                            SELECTED FINANCIAL DATA


    The following data should be read in conjunction with Management's
Discussion and Analysis of Financial Condition and Results of Operations and the
financial statements.

    For each of the five years in the period ended December 31, 1996:

<TABLE>
<CAPTION>

          Summary of
          Operations              1996         1995         1994          1993           1992
-----------------------------  -----------  -----------  -----------  -------------  ------------
<S>                            <C>          <C>          <C>          <C>            <C>
Lease revenue                   $1,816,273   $2,179,607   $2,992,070   $ 3,663,342    $ 3,893,557

Net income (loss)               $1,656,646   $  733,938   $  213,680   $(1,165,153)   $   237,963

Per Unit:
         Net income (loss)      $     3.28   $     1.45   $     0.42   $     (2.30)   $      0.47

         Cash distributions     $     4.52   $     2.00   $     2.50   $      2.50    $      2.88


     Financial Position
-----------------------------

Total assets                    $3,551,413   $4,132,437   $5,673,509   $ 8,184,084    $12,377,650

Total long-term obligations     $  307,479   $   86,802   $1,182,287   $ 2,683,780    $ 4,439,182

Partners' capital               $2,927,711   $3,555,934   $3,833,000   $ 4,883,075    $ 7,311,984
</TABLE>

                                      -2-
<PAGE>

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

               Year ended December 31, 1996 compared to the year
          ended December 31, 1995 and the year ended December 31, 1995
                  compared to the year ended December 31, 1994

Overview
--------

  American Income Partners V-D Limited Partnership (the "Partnership") was
organized in 1990 as a direct-participation equipment leasing program to acquire
a diversified portfolio of capital equipment subject to lease agreements with
third parties.  The Partnership's stated investment objectives and policies
contemplated that the Partnership would wind-up its operations within
approximately seven years of its inception.  The value of the Partnership's
equipment portfolio decreases over time due to depreciation resulting from age
and usage of the equipment, as well as technological changes and other market
factors.  In addition, the Partnership does not replace equipment as it is sold;
therefore, its aggregate investment value in equipment declines from asset
disposals occurring in the normal course.  As a result of the Partnership's age
and a declining equipment portfolio, the General Partner is evaluating a variety
of transactions that will reduce the Partnership's prospective costs to operate
as a publicly registered limited partnership and, therefore, enhance overall
cash distributions to the limited partners.  Such a transaction might involve
the sale of the Partnership's remaining equipment or a transaction that would
allow for the consolidation of the Partnership's expenses with other similarly-
organized equipment leasing programs.  In order to increase the marketability of
the Partnership's remaining equipment, the General Partner expects to use a
portion of the Partnership's available cash and future cash flow to retire
indebtedness.  This may negatively effect short-term cash distributions.


Results of Operations
---------------------

  For the year ended December 31, 1996, the Partnership recognized lease revenue
of $1,816,273 compared to $2,179,607 and $2,992,070 for the years ended December
31, 1995 and 1994, respectively. Lease revenue in 1996 includes the receipt of
$516,712 of lease termination rents received in connection with the sale of the
Partnership's interest in two Boeing 727-251 Advanced aircraft in July 1996 (see
below).  The decrease in lease revenue from 1994 to 1996 was expected and
resulted principally from primary lease term expirations and the sale of
equipment.  The Partnership also earns interest income from temporary
investments of rental receipts and equipment sales proceeds in short-term
instruments.

  The Partnership's equipment portfolio includes certain assets in which the
Partnership holds a proportionate ownership interest.  In such cases, the
remaining interests are owned by an affiliated equipment leasing program
sponsored by Equis Financial Group Limited Partnership (formerly American
Finance Group), a Massachusetts limited partnership ("EFG").  Proportionate
equipment ownership enables the Partnership to further diversify its equipment
portfolio by participating in the ownership of selected assets, thereby reducing
the general levels of risk which could result from a concentration in any single
equipment type, industry or lessee.  The Partnership and each affiliate
individually report, in proportion to their respective ownership interests,
their respective shares of assets, liabilities, revenues, and expenses
associated with the equipment.

  In 1996, the Partnership sold equipment having a net book value of $858,150 to
existing lessees and third parties.  These sales resulted in a net gain, for
financial statement purposes, of $703,591 compared to a net gain of $229,279 in
1995 on equipment having a net book value of $199,826 and a net loss of $98,695
in 1994 on equipment having a net book value of $332,613.  The 1996 equipment
sales included the sale of the Partnership's interest in two Boeing 727-251
Advanced Aircraft with an original cost and net book value of $4,536,732 and
$740,021, respectively, sold to the existing lessee in July 1996.  In connection
with this sale, the Partnership realized sale proceeds of $1,195,994 which
resulted in a net gain, for financial statement purposes, of $455,973.  This
equipment was sold prior to the expiration of the related lease term, resulting
in the receipt by the Partnership of lease termination rents, described above.

                                      -3-
<PAGE>

  During July 1996, the Partnership transferred its ownership interest in
certain trailers to a third party for cash consideration of $60,170 (See Note 3
to the financial statements).  The trailers had a net book value of $22,808 at
the time of the transfer, resulting in a net gain, for financial statement
purposes, of $37,362.  In September 1996, the Partnership replaced these
trailers with comparable trailers and leased such to a new lessee.  The
transaction was structured as a like-kind exchange for income tax reporting
purposes.  The net carrying value of the new trailers, $357,884, was net of
$36,574, representing the proportionate amount of gain deferred on the original
trailers.  The Partnership funded this transaction with $58,901 of the cash
consideration and long-term financing of $335,557.  The unused cash
consideration of $1,269 was recognized as proceeds from equipment sales.  The
associated deferred gain of $788 was recognized as Gain on Sale of Equipment on
the Statement of Operations in 1996.

  It cannot be determined whether future sales of equipment will result in a net
gain or a net loss to the Partnership, as such transactions will be dependent
upon the condition and type of equipment being sold and its marketability at the
time of sale.  In addition, the amount of gain or loss reported for financial
statement purposes is partly a function of the amount of accumulated
depreciation associated with the equipment being sold.

  The ultimate realization of residual value for any type of equipment is
dependent upon many factors, including EFG's ability to sell and re-lease
equipment.  Changing market conditions, industry trends, technological advances,
and many other events can converge to enhance or detract from asset values at
any given time.  EFG attempts to monitor these changes in order to identify
opportunities which may be advantageous to the Partnership and which will
maximize total cash returns for each asset.

  The total economic value realized upon final disposition of each asset is
comprised of all primary lease term revenue generated from that asset, together
with its residual value.  The latter consists of cash proceeds realized upon the
asset's sale in addition to all other cash receipts obtained from renting the
asset on a re-lease, renewal or month-to-month basis.  The Partnership
classifies such residual rental payments as lease revenue.  Consequently, the
amount of gain or loss reported in the financial statements is not necessarily
indicative of the total residual value the Partnership achieved from leasing the
equipment.

  Depreciation and amortization expense was $753,448, $1,441,415 and $2,313,381
for the years ended December 31, 1996, 1995 and 1994, respectively.  For
financial reporting purposes, to the extent that an asset is held on primary
lease term, the Partnership depreciates the difference between (i) the cost of
the asset and (ii) the estimated residual value of the asset on a straight-line
basis over such term.  For purposes of this policy, estimated residual values
represent estimates of equipment values at the date of primary lease expiration.
To the extent that an asset is held beyond its primary lease term, the
Partnership continues to depreciate the remaining net book value of the asset on
a straight-line basis over the asset's remaining economic life (see Note 2 to
the financial statements herein.)

  Interest expense was $15,362 or less than 1% of lease revenue in 1996, $57,049
or 2.6% of lease revenue in 1995 and $189,677 or 6.3% of lease revenue in 1994.
Interest expense in 1996 resulted from financing obtained from a third-party
lender in connection with the like-kind exchange transaction which occurred
during the third quarter of 1996, described above.  Interest expense in the
near-term will increase due to leveraging obtained during 1996.  Subsequently,
interest expense will decline in amount and as a percentage of lease revenue as
the principal balance of notes payable is reduced through the application of
rent receipts to outstanding debt.  In addition, the General Partner expects to
use a portion of the Partnership's available cash and future cash flow to retire
indebtedness (see Overview).

  Management fees were 4.9%, 4.3% and 3.9% of lease revenue during the years
ended December 31, 1996, 1995 and 1994, respectively.  Management fees during
the year ended December 31, 1996 include $4,617, resulting from an underaccrual
in 1995.  Management fees are based on 5% of gross lease revenue generated by
operating leases and 2% of gross lease revenue generated by full payout leases.

  Operating expenses consist principally of administrative charges, professional
service costs, such as audit and legal fees, as well as printing, distribution
and remarketing expenses.  In certain cases, equipment storage or repairs and
maintenance costs may be incurred in connection with equipment being remarketed.
Collectively,

                                      -4-
<PAGE>

operating expenses represented 5.7%, 5.9% and 3.2% of lease revenue in 1996,
1995 and 1994, respectively. Operating expenses increased in 1995 due to
additional maintenance costs associated with the Partnership's interest in an
aircraft engine and an increase in professional service costs. The amount of
future operating expenses cannot be predicted with certainty; however, such
expenses are usually higher during the acquisition and liquidation phases of a
partnership. Other fluctuations typically occur in relation to the volume and
timing of remarketing activities.


Liquidity and Capital Resources and Discussion of Cash Flows
------------------------------------------------------------

  The Partnership by its nature is a limited life entity which was established
for specific purposes described in the preceding "Overview".  As an equipment
leasing program, the Partnership's principal operating activities derive from
asset rental transactions.  Accordingly, the Partnership's principal source of
cash from operations is generally provided by the collection of periodic rents.
These cash inflows are used to satisfy debt service obligations associated with
leveraged leases, and to pay management fees and operating costs.  Operating
activities generated net cash inflows of $1,772,557, $1,953,038 and $2,775,280
in 1996, 1995 and 1994, respectively.  Future renewal, re-lease and equipment
sale activities will continue to cause a decline in the Partnership's lease
revenue and corresponding sources of operating cash.  Overall, expenses
associated with rental activities, such as management fees, and net cash flow
from operating activities will also decline as the Partnership experiences a
higher frequency of remarketing events.

  Ultimately, the Partnership will dispose of all assets under lease.  This will
occur principally through sale transactions whereby each asset will be sold to
the existing lessee or to a third party.  Generally, this will occur upon
expiration of each asset's primary or renewal/re-lease term.  In certain
instances, casualty or early termination events may result in the disposal of an
asset.  Such circumstances are infrequent and usually result in the collection
of stipulated cash settlements pursuant to terms and conditions contained in the
underlying lease agreements.

  Cash expended for equipment acquisitions and cash realized from asset disposal
transactions are reported under investing activities on the accompanying
Statement of Cash Flows.  The Partnership capitalized $66,000 of refurbishment
costs incurred to upgrade certain equipment in 1994.  During 1996, the
Partnership realized $1,563,010 in equipment sale proceeds compared to $429,105
and $233,918 in 1995 and 1994, respectively.  Future inflows of cash from asset
disposals will vary in timing and amount and will be influenced by many factors
including, but not limited to, the frequency and timing of lease expirations,
the type of equipment being sold, its condition and age, and future market
conditions.

  The Partnership obtained long-term financing in connection with certain
equipment leases.  The repayments of principal related to such indebtedness are
reported as a component of financing activities.  Each note payable is recourse
only to the specific equipment financed and to the minimum rental payments
contracted to be received during the debt amortization period (which period
generally coincides with the lease rental term).  As rental payments are
collected, a portion or all of the rental payment is used to repay the
associated indebtedness.  In September 1996, the Partnership obtained additional
long-term financing in connection with the like-kind exchange transaction
involving certain trailers (see Results of Operations).  In future years, the
amount of cash used to repay debt obligations is scheduled to be less than that
used during 1996.  However, the level of cash required may fluctuate due to the
use of the Partnership's available cash and future cash flow to retire
indebtedness (see Overview).

  Cash distributions to the General Partner and Recognized Owners are declared
and generally paid within fifteen days following the end of each calendar
quarter.  The payment of such distributions is presented as a component of
financing activities.  For the year ended December 31, 1996, the Partnership
declared total cash distributions of Distributable Cash From Operations and
Distributable Cash From Sales and Refinancings of $2,284,869.  In accordance
with the Amended and Restated Agreement and Certificate of Limited Partnership,
the Recognized Owners were allocated 95% of these distributions, or $2,170,626,
and the General Partner was allocated 5%, or $114,243.  The fourth quarter 1996
cash distribution was paid on January 13, 1997.

                                      -5-
<PAGE>

  Cash distributions paid to the Recognized Owners consist of both a return of
and a return on capital.  Cash distributions do not represent and are not
indicative of yield on investment. Actual yield on investment cannot be
determined with any certainty until conclusion of the Partnership and will be
dependent upon the collection of all future contracted rents, the generation of
renewal and/or re-lease rents, and the residual value realized for each asset at
its disposal date. Future market conditions, technological changes, the ability
of EFG to manage and remarket the assets, and many other events and
circumstances, could enhance or detract from individual asset yields and the
collective performance of the Partnership's equipment portfolio.

    The future liquidity of the Partnership will be influenced by the foregoing
and will be greatly dependent upon the collection of contractual rents and the
outcome of residual activities.  The General Partner anticipates that cash
proceeds resulting from these sources will satisfy the Partnership's future
expense obligations.  However, the amount of cash available for distribution in
future periods will fluctuate.  Equipment lease expirations and asset disposals
will cause the Partnership's net cash from operating activities to diminish over
time; and equipment sale proceeds will vary in amount and period of realization.
In addition, the Partnership may be required to incur asset refurbishment or
upgrade costs in connection with future remarketing activities.  Accordingly,
fluctuations in the level of future quarterly cash distributions are
anticipated.


                                      -6-
<PAGE>

                         REPORT OF INDEPENDENT AUDITORS
                         ------------------------------


To the Partners of American Income Partners V-D Limited Partnership:

    We have audited the accompanying statements of financial position of
American Income Partners V-D Limited Partnership as of December 31, 1996 and
1995, and the related statements of operations, changes in partners' capital,
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 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 American Income Partners V-D
Limited Partnership at December 31, 1996 and 1995, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1996, in conformity with generally accepted accounting principles.

    Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole.  The Additional Financial Information
identified in the Index to Annual Report to the Partners is presented for
purposes of additional analysis and is not a required part of the basic
financial statements.  Such information has been subjected to the auditing
procedures applied in our audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.



                                                               ERNST & YOUNG LLP



Boston, Massachusetts
March 14, 1997

                                      -7-
<PAGE>

                AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP

                        STATEMENT OF FINANCIAL POSITION
                           December 31, 1996 and 1995

<TABLE>
<CAPTION>
                                              1996          1995
                                          ------------  ------------

ASSETS
------
<S>                                       <C>           <C>
Cash and cash equivalents                  $1,867,874    $1,108,982

Rents receivable                               15,859        49,874

Accounts receivable - affiliate               101,298       130,677

Equipment at cost, net of accumulated
   depreciation of $4,761,138 and
    $9,947,876 at December 31, 1996
    and 1995, respectively                  1,566,382     2,842,904
                                           ----------    ----------

   Total assets                            $3,551,413    $4,132,437
                                           ==========    ==========


LIABILITIES AND PARTNERS' CAPITAL
---------------------------------

Notes payable                              $  307,479    $   86,802
Accrued interest                                1,336         2,029
Accrued liabilities                            23,245        20,000
Accrued liabilities - affiliate                20,837        11,673
Deferred rental income                        194,980       203,248
Cash distributions payable to partners         75,825       252,751
                                           ----------    ----------
   Total liabilities                          623,702       576,503
                                           ----------    ----------
Partners' capital (deficit):
   General Partner                           (385,667)     (354,256)
   Limited Partnership Interests
   (480,227 Units; initial purchase
   price of $25 each)                       3,313,378     3,910,190
                                           ----------    ----------
   Total partners' capital                  2,927,711     3,555,934
                                           ----------    ----------
   Total liabilities and partners'         $3,551,413    $4,132,437
    capital                                ==========    ==========
</TABLE>

                The accompanying notes are an integral part of
                          these financial statements.

                                      -8-
<PAGE>

                AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP

                            STATEMENT OF OPERATIONS
              for the years ended December 31, 1996, 1995 and 1994

<TABLE>
<CAPTION>
                                          1996         1995          1994
                                       -----------  -----------  ------------
<S>                                    <C>          <C>          <C>

Income:

   Lease revenue                        $1,816,273   $2,179,607   $2,992,070

   Interest income                          97,019       45,357       34,229

   Gain (loss) on sale of equipment        704,379      229,279      (98,695)
                                        ----------   ----------   ----------

   Total income                          2,617,671    2,454,243    2,927,604
                                        ----------   ----------   ----------

Expenses:

   Depreciation and amortization           753,448    1,441,415    2,313,381

   Interest expense                         15,362       57,049      189,677

   Equipment management fees
   - affiliate                              89,296       93,197      115,699

   Operating expenses - affiliate          102,919      128,644       95,167
                                        ----------   ----------   ----------

       Total expenses                      961,025    1,720,305    2,713,924
                                        ----------   ----------   ----------

Net income                              $1,656,646   $  733,938   $  213,680
                                        ==========   ==========   ==========
Net income
   per limited partnership unit         $     3.28   $     1.45   $     0.42
                                        ==========   ==========   ==========
Cash distributions declared
   per limited partnership unit         $     4.52   $     2.00   $     2.50
                                        ==========   ==========   ==========
</TABLE>

                The accompanying notes are an integral part of
                          these financial statements.

                                      -9-
<PAGE>

                AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP

                   STATEMENT OF CHANGES IN PARTNERS' CAPITAL
              for the years ended December 31, 1996, 1995 and 1994

<TABLE>
<CAPTION>
                                  General      Recognized Owners
                                  Partner    ---------------------
                                  Amount      Units      Amount        Total
                                -----------  -------  ------------  ------------
<S>                             <C>          <C>      <C>           <C>
Balance at December 31, 1993     $(287,899)  480,227  $ 5,170,974   $ 4,883,075

Net income - 1994                   10,684        --      202,996       213,680

Cash distributions declared        (63,188)       --   (1,200,567)   (1,263,755)
                                 ---------   -------  -----------   -----------

Balance at December 31, 1994      (340,403)  480,227    4,173,403     3,833,000

Net income - 1995                   36,697        --      697,241       733,938

Cash distributions declared        (50,550)       --     (960,454)   (1,011,004)
                                 ---------   -------  -----------   -----------

Balance at December 31, 1995      (354,256)  480,227    3,910,190     3,555,934

Net income - 1996                   82,832        --    1,573,814     1,656,646

Cash distributions declared       (114,243)       --   (2,170,626)   (2,284,869)
                                 ---------   -------  -----------   -----------

Balance at December 31, 1996     $(385,667)  480,227  $ 3,313,378   $ 2,927,711
                                 =========   =======  ===========   ===========
</TABLE>

                The accompanying notes are an integral part of
                          these financial statements.

                                      -10-
<PAGE>

                AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP

                            STATEMENT OF CASH FLOWS
              for the years ended December 31, 1996, 1995 and 1994

<TABLE>
<CAPTION>
                                       1996             1995           1994
                                 ----------------  --------------  -------------
<S>                              <C>               <C>             <C>
Cash flows from (used in)
 operating activities:
Net income                           $ 1,656,646     $   733,938    $   213,680

Adjustments to reconcile net
 income to net cash from
 operating activities:
   Depreciation and amortization         753,448       1,441,415      2,313,381

   (Gain) loss on sale of
    equipment                           (704,379)       (229,279)        98,695

Changes in assets and
 liabilities:
   Decrease (increase) in:
       Rents receivable                   34,015          78,404        (17,683)
       Accounts receivable -
        affiliate                         29,379          33,893        126,214
   Increase (decrease) in:
       Accrued interest                     (693)        (14,928)       (20,817)
       Accrued liabilities                 3,245           4,500          3,000
       Accrued liabilities -
        affiliate                          9,164         (73,919)        76,863
       Deferred rental income             (8,268)        (20,986)       (18,053)
                                     -----------     -----------    -----------

       Net cash from operating
        activities                     1,772,557       1,953,038      2,775,280
                                     -----------     -----------    -----------

Cash flows from (used in)
 investing activities:
   Purchase of equipment                      --              --        (66,000)
   Proceeds from equipment sales       1,563,010         429,105        233,918
                                     -----------     -----------    -----------

       Net cash from investing
        activities                     1,563,010         429,105        167,918
                                     -----------     -----------    -----------

Cash flows used in financing
 activities:
   Principal payments - notes
    payable                             (114,880)     (1,095,485)    (1,501,493)
   Distributions paid                 (2,461,795)     (1,074,192)    (1,263,755)
                                     -----------     -----------    -----------
       Net cash used in
        financing activities          (2,576,675)     (2,169,677)    (2,765,248)
                                     -----------     -----------    -----------

Net increase in cash and cash
 equivalents                             758,892         212,466        177,950

Cash and cash equivalents at
 beginning of year                     1,108,982         896,516        718,566
                                     -----------     -----------    -----------

Cash and cash equivalents at
 end of year                         $ 1,867,874     $ 1,108,982    $   896,516
                                     ===========     ===========    ===========

Supplemental disclosure of
 cash flow information:
   Cash paid during the year
    for interest                     $    16,055     $    71,977    $   210,494
                                     ===========     ===========    ===========
</TABLE>

Supplemental disclosure of non-cash investing and financing activities:
  See Note 3 to the Financial Statements.


                The accompanying notes are an integral part of
                          these financial statements.

                                      -11-
<PAGE>

                AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP
                       Notes to the Financial Statements

                               December 31, 1996


NOTE 1 - ORGANIZATION AND PARTNERSHIP MATTERS
---------------------------------------------

   The Partnership was organized as a limited partnership under the
Massachusetts Uniform Limited Partnership Act (the "Uniform Act") on May 21,
1990 for the purpose of acquiring and leasing to third parties a diversified
portfolio of capital equipment.  Partners' capital initially consisted of
contributions of $1,000 from the General Partner (AFG Leasing IV Incorporated)
and $100 from the Initial Limited Partner (AFG Assignor Corporation).  On
September 27, 1990, the Partnership issued 480,227 units, representing
assignments of limited partnership interests (the "Units"), to 806 investors.
Unitholders and Limited Partners (other than the Initial Limited Partner) are
collectively referred to as Recognized Owners.  The Partnership has one General
Partner, AFG Leasing IV Incorporated, a Massachusetts corporation and an
affiliate of Equis Financial Group Limited Partnership (formerly American
Finance Group) a Massachusetts limited partnership ("EFG").  The common stock of
the General Partner is owned by AF/AIP Programs Limited Partnership, of which
AFG and a wholly-owned subsidiary are the 99% limited partners and AFG Programs,
Inc., which is wholly-owned by Geoffrey A. MacDonald, is the 1% General Partner.
The General Partner is not required to make any other capital contributions
except as may be required under the Uniform Act and Section 6.1(b) of the
Amended and Restated Agreement and Certificate of Limited Partnership (the
"Restated Agreement, as amended").

   Significant operations commenced September 28, 1990 when the Partnership made
its initial equipment purchase.  Pursuant to the Restated Agreement, as amended,
Distributable Cash From Operations and Distributable Cash From Sales or
Refinancings will be allocated 95% to the Recognized Owners and 5% to the
General Partner.  Payout will occur when the Recognized Owners have received
distributions equal to their original investment plus a cumulative return of 11%
(compounded quarterly) on undistributed invested capital.

   Under the terms of a management agreement between the Partnership and AF/AIP
Programs Limited Partnership and the terms of an identical management agreement
between AF/AIP Programs Limited Partnership and EFG (collectively, the
"Management Agreement"), management services are provided by EFG to the
Partnership at fees which the General Partner believes to be competitive for
similar services.  (Also see Note 4.)

   EFG is a Massachusetts limited partnership formerly known as American Finance
Group ("AFG").  AFG was established in 1988 as a Massachusetts general
partnership and succeeded American Finance Group, Inc., a Massachusetts
corporation organized in 1980.  EFG and its subsidiaries (collectively, the
"Company") are engaged in various aspects of the equipment leasing business,
including EFG's role as Equipment Manager or Advisor to the Partnership and
several other Direct-Participation equipment leasing programs sponsored or co-
sponsored by EFG (the "Other Investment Programs").  The Company arranges to
broker or originate equipment leases, acts as remarketing agent and asset
manager, and provides leasing support services, such as billing, collecting, and
asset tracking.

   The general partner of EFG, with a 1% controlling interest, is Equis
Corporation, a Massachusetts corporation owned and controlled entirely by Gary
D. Engle, its President and Chief Executive Officer.  Equis Corporation also
owns a controlling 1% general partner interest in EFG's 99% limited partner, GDE
Acquisition Limited Partnership ("GDE LP").  Equis Corporation and GDE LP were
established in December 1994 by Mr. Engle for the sole purpose of acquiring the
business of AFG.

   In January 1996, the Company sold certain assets of AFG relating primarily to
the business of originating new leases, and the name "American Finance Group,"
and its acronym, to a third party (the "Buyer").  AFG changed its name to Equis
Financial Group Limited Partnership after the sale was concluded.  Pursuant to
terms of the sale agreements, EFG agreed not to compete with the Buyer's lease
origination business for a period of five years; however, EFG is permitted to
originate certain equipment leases, principally those involving non-investment
grade lessees and ocean-going vessels, which are not in competition with the
Buyer.  In addition, the sale agreements specifically reserved to EFG the rights
to continue using the name American Finance Group and its acronym in connection
with the Partnership and the Other Investment Programs and to continue managing
all

                                      -12-
<PAGE>

                AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP
                       Notes to the Financial Statements

                                  (Continued)

assets owned by the Partnership and the Other Investment Programs, including
the right to satisfy all required equipment acquisitions utilizing either
brokers or the Buyer.  Geoffrey A. MacDonald, Chairman of Equis Corporation and
Gary D. Engle agreed not to compete with the sold business on terms and
conditions similar to those for the Company.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------

Statement of Cash Flows
-----------------------

    The Partnership considers liquid investment instruments purchased with a
maturity of three months or less to be cash equivalents.  From time to time, the
Partnership invests excess cash with large institutional banks in reverse
repurchase agreements with overnight maturities.  Under the terms of the
agreements, title to the underlying securities passes to the Partnership.  The
securities underlying the agreements are book entry securities.  At December 31,
1996, the Partnership had $1,755,000 invested in reverse repurchase agreements
secured by U.S. Treasury Bills or interests in U.S. Government securities.

Revenue Recognition
-------------------

    Rents are payable to the Partnership monthly, quarterly or semi-annually and
no significant amounts are calculated on factors other than the passage of time.
The leases are accounted for as operating leases and are noncancellable. Rents
received prior to their due dates are deferred.  Future minimum rents of
$503,775 are due as follows:

<TABLE>
<S>                                               <C>
For the year ending December 31, 1997             $184,967
                                 1998              102,488
                                 1999               85,478
                                 2000               84,778
                                 2001               46,064
                                                  --------

                                Total             $503,775
                                                  ========
</TABLE>

    Revenue from major individual lessees which accounted for 10% or more of
lease revenue during the years ended December 31, 1996, 1995 and 1994 is as
follows:

<TABLE>
<CAPTION>
                                   1996              1995               1994
                                 ---------         ---------          ---------
<S>                              <C>               <C>                <C>
Consolidated Rail Corporation     $218,922          $218,923                 --
Northwest Airlines, Inc.          $936,905          $720,331           $720,329
Roses Stores, Inc.                      --                --           $457,189
</TABLE>

Use of Estimates
----------------

    The preparation of the financial statements in conformity with generally
accepted accounting principles requires the use of estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes.  Actual results could differ from those estimates.

                                      -13-
<PAGE>

                AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP
                       Notes to the Financial Statements

                                  (Continued)


Equipment on Lease
------------------

    All equipment was acquired from EFG, one of its affiliates, including other
equipment leasing programs sponsored by EFG, or from third-party sellers.
Equipment cost represents asset base price plus acquisition fees and was
determined in accordance with the Restated Agreement, as amended, and certain
regulatory guidelines.  Asset base price is affected by the relationship of the
seller to the Partnership as summarized herein.  Where the seller of the
equipment was EFG or an affiliate, asset base price was the lower of (i) the
actual price paid for the equipment by EFG or the affiliate plus all actual
costs accrued by EFG or the affiliate while carrying the equipment less the
amount of all rents earned by EFG or the affiliate prior to selling the
equipment or (ii) fair market value as determined by the General Partner in its
best judgment, including all liens and encumbrances on the equipment and other
actual expenses.  Where the seller of the equipment was a third party who did
not manufacture the equipment, asset base price was the lower of (i) the price
invoiced by the third party or (ii) fair market value as determined by the
General Partner.  Where the seller of the equipment was a third party who also
manufactured the equipment, asset base price was the manufacturer's invoice
price, which price was considered to be representative of fair market value.

Depreciation and Amortization
-----------------------------

    The Partnership's depreciation policy is intended to allocate the cost of
equipment over the period during which it produces economic benefit.  The
principal period of economic benefit is considered to correspond to each asset's
primary lease term, which term generally represents the period of greatest
revenue potential for each asset.  Accordingly, to the extent that an asset is
held on primary lease term, the Partnership depreciates the difference between
(i) the cost of the asset and (ii) the estimated residual value of the asset on
a straight-line basis over such term.  For purposes of this policy, estimated
residual values represent estimates of equipment values at the date of primary
lease expiration.  To the extent that an asset is held beyond its primary lease
term, the Partnership continues to depreciate the remaining net book value of
the asset on a straight-line basis over the asset's remaining economic life.
Periodically, the General Partner evaluates the net carrying value of equipment
to determine whether it exceeds estimated net realizable value.  Adjustments to
reduce the net carrying value of equipment are recorded in those instances where
estimated net realizable value is considered to be less than net carrying value.

    The ultimate realization of residual value for any type of equipment is
dependent upon many factors, including EFG's ability to sell and re-lease
equipment. Changing market conditions, industry trends, technological advances,
and many other events can converge to enhance or detract from asset values at
any given time.  EFG attempts to monitor these changes in order to identify
opportunities which may be advantageous to the Partnership and which will
maximize total cash returns for each asset.

    Organization costs were amortized using the straight-line method over a
period of five years.

Accrued Liabilities - Affiliate
-------------------------------

    Unpaid operating expenses paid by EFG on behalf of the Partnership and
accrued but unpaid administrative charges are reported as Accrued Liabilities -
Affiliate.  (See Note 4.)

Allocation of Profits and Losses
--------------------------------

    For financial statement purposes, net income or loss is allocated to each
Partner according to their respective ownership percentages (95% to the
Recognized Owners and 5% to the General Partner). See Note 6 concerning
allocation of income or loss for income tax purposes.

                                      -14-
<PAGE>

                AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP
                       Notes to the Financial Statements

                                  (Continued)


Net Income and Cash Distributions Per Unit
------------------------------------------

    Net income and cash distributions per Unit are based on 480,227 Units
outstanding during each of the three years in the period ended December 31, 1996
and computed after allocation of the General Partner's 5% share of net income
and cash distributions.

Provision for Income Taxes
--------------------------

    No provision or benefit from income taxes is included in the accompanying
financial statements.  The Partners are responsible for reporting their
proportionate shares of the Partnership's taxable income or loss and other tax
attributes on their tax returns.

Impact of Recently Issued Accounting Standards
----------------------------------------------

    In March 1995, the Financial Accounting Standards Board issued Statement No.
121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of, which requires impairment losses to be recorded on
long-lived assets used in operations when indicators of impairment are present
and the undiscounted cash flows estimated to be generated by those assets are
less than the assets' carrying amount.  Statement 121 also addresses the
accounting for long-lived assets that are expected to be disposed of.  The
Partnership adopted Statement 121 in the first quarter of 1996.  The adoption of
Statement 121 did not have a material effect on the financial statements of the
Partnership.


NOTE 3 - EQUIPMENT
------------------

    The following is a summary of equipment owned by the Partnership at December
31, 1996.  In the opinion of EFG, the acquisition cost of the equipment did not
exceed its fair market value.

<TABLE>
<CAPTION>

                                  Lease Term    Equipment
      Equipment Type               (Months)      at Cost               Location
--------------------------------  -----------  ------------  -----------------------------
<S>                               <C>          <C>           <C>
Locomotives                               78   $ 1,656,854   IL/PA
Materials handling                      1-60     1,445,590   CA/IA/IL/KY/MI/MN/NE/NY/OH/PA
                                                             WA/WI
Aircraft                                1-19     1,160,990   NY
Computer and peripherals               12-60       371,579   AK/CA/CT/KS/LA/MI/MS/ND/NM/OK
                                                             PA/TX/UT/WV/WY
Construction and mining                12-60       364,308   AL/GA/IL/MI/SC/WV
Trailers/intermodal containers            60       357,884   GA
Tractors and heavy duty trucks         24-60       301,746   CO/NJ/WV
Manufacturing                             60       268,764   NJ
Communications                         23-60       229,633   CA/FL/GA/LA/MS/OK/SC/TN/TX/UT
Research and test                       9-48       105,805   CA
Motor vehicles                            60        64,367   NJ
                                               -----------

                        Total equipment cost     6,327,520

                    Accumulated depreciation    (4,761,138)
                                               -----------

  Equipment, net of accumulated depreciation   $ 1,566,382
                                               ===========
</TABLE>

                                      -15-
<PAGE>

                AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP
                       Notes to the Financial Statements

                                  (Continued)

    During July 1996, the Partnership transferred its ownership interest in
certain trailers, previously leased to The Atchison Topeka and Santa Fe
Railroad, to a third party for cash consideration of $60,170.  The trailers had
a net book value of $22,808 at the time of the transfer, which resulted in a net
gain, for financial statement purposes, of $37,362.  In September 1996, the
Partnership replaced these trailers with comparable trailers and leased such to
a new lessee.  The transaction was structured as a like-kind exchange for income
tax reporting purposes.  The net carrying value of the new trailers, $357,884,
was net of $36,574, representing the proportionate amount of gain deferred on
the original trailers.  The Partnership funded this transaction with $58,901 of
the cash consideration and long-term financing of $335,557.  The unused cash
consideration of $1,269 was recognized as proceeds from equipment sales.  The
associated deferred gain of $788 was recognized as Gain on Sale of Equipment on
the Statement of Operations in 1996.

    In certain cases, the cost of the Partnership's equipment represents a
proportionate ownership interest.  The remaining interests are owned by EFG or
an affiliated equipment leasing program sponsored by EFG.  The Partnership and
each affiliate individually report, in proportion to their respective ownership
interests, their respective shares of assets, liabilities, revenues, and
expenses associated with the equipment.  Proportionate equipment ownership
enables the Partnership to further diversify its equipment portfolio by
participating in the ownership of selected assets, thereby reducing the general
levels of risk which could result from a concentration in any single equipment
type, industry or lessee.  At December 31, 1996, the Partnership's equipment
portfolio included equipment having a proportionate original cost of $2,989,562,
representing approximately 47% of total equipment cost.

    Certain of the equipment and related lease payment streams were used to
secure term loans with third-party lenders.  The preceding summary of equipment
includes leveraged equipment having an original cost of approximately $358,000
and a net book value of approximately $336,000 at December 31, 1996.  (See
Note 5.)

    Generally, the costs associated with maintaining, insuring and operating the
Partnership's equipment are incurred by the respective lessees pursuant to terms
specified in their individual lease agreements with the Partnership.

    As equipment is sold to third parties, or otherwise disposed of, the
Partnership recognizes a gain or loss equal to the difference between the net
book value of the equipment at the time of sale or disposition and the proceeds
realized upon sale or disposition.  The ultimate realization of estimated
residual value in the equipment is dependent upon, among other things, EFG's
ability to maximize proceeds from selling or re-leasing the equipment upon the
expiration of the primary lease terms.  The summary above includes equipment
held for sale or re-lease with an original cost and net book value of
approximately $535,000 and $2,000, respectively, at December 31, 1996.  The
General Partner is actively seeking the sale or re-lease of all equipment not on
lease.

NOTE 4 - RELATED PARTY TRANSACTIONS
-----------------------------------

    All operating expenses incurred by the Partnership are paid by EFG on behalf
of the Partnership and EFG is reimbursed at its actual cost for such
expenditures.  Fees and other costs incurred during the years ended December 31,
1996, 1995 and 1994, which were paid or accrued by the Partnership to EFG or its
Affiliates, are as follows:

<TABLE>
<CAPTION>
                                          1996            1995            1994
                                        ---------       ---------       ---------
<S>                                     <C>             <C>             <C>
Equipment management fees                $ 89,296        $ 93,197        $115,699
Administrative charges                     37,037          20,544          12,000
Reimbursable operating
   expenses due to third parties           65,882         108,100          83,167
                                         --------        --------        --------
                           Total         $192,215        $221,841        $210,866
                                         ========        ========        ========
</TABLE>

                                      -16-
<PAGE>

                AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP
                       Notes to the Financial Statements

                                  (Continued)

    As provided under the terms of the Management Agreement, EFG is compensated
for its services to the Partnership.  Such services include all aspects of
acquisition, management and sale of equipment.  For acquisition services, EFG is
compensated by an amount equal to 2.23% of Equipment Base Price paid by the
Partnership.  For management services, EFG is compensated by an amount equal to
the lesser of (i) 5% of gross operating lease rental revenue and 2% of gross
full payout lease rental revenue received by the Partnership or (ii) fees which
the General Partner reasonably believes to be competitive for similar services
for similar equipment.  Both of these fees are subject to certain limitations
defined in the Management Agreement.  Compensation to EFG for services connected
to the sale of equipment is calculated as the lesser of (i) 3% of gross sale
proceeds or (ii) one-half of reasonable brokerage fees otherwise payable under
arm's length circumstances.  Payment of the remarketing fee is subordinated to
Payout and is subject to certain limitations defined in the Management
Agreement.

    Administrative charges represent amounts owed to EFG, pursuant to Section
10.4 of the Restated Agreement, as amended, for persons employed by EFG who are
engaged in providing administrative services to the Partnership.  Reimbursable
operating expenses due to third parties represent costs paid by EFG on behalf of
the Partnership which are reimbursed to EFG.

    All equipment was acquired from EFG, one of its affiliates, including other
equipment leasing programs sponsored by EFG, or from third-party sellers.  The
Partnership's Purchase Price was determined by the method described in Note 2,
Equipment on Lease.

    All rents and proceeds from the sale of equipment are paid directly to
either EFG or to a lender.  EFG temporarily deposits collected funds in a
separate interest-bearing escrow account prior to remittance to the Partnership.
At December 31, 1996, the Partnership was owed $101,298 by EFG for such funds
and the interest thereon.  These funds were remitted to the Partnership in
January 1997.

    On August 18, 1995, Atlantic Acquisition Limited Partnership ("AALP"), a
newly formed Massachusetts limited partnership owned and controlled by certain
principals of EFG, commenced a voluntary cash Tender Offer (the "Offer") for up
to approximately 45% of the outstanding units of limited partner interest in
this Partnership and 20 affiliated partnerships sponsored and managed by EFG.
The Offer was subsequently amended and supplemented in order to provide
additional disclosure to unitholders; increase the offer price; reduce the
number of units sought to approximately 35% of the outstanding units; and extend
the expiration date of the Offer to October 20, 1995.  Following commencement of
the Offer, certain legal actions were initiated by interested persons against
AALP, each of the general partners (4 in total) of the 21 affected programs, and
various other affiliates and related parties.  One action, a class action
brought in the United States District Court for the District of Massachusetts
(the "Court") on behalf of the unitholders (Recognized Owners), sought to enjoin
the Offer and obtain unspecified monetary damages.  A settlement of this
litigation was approved by the Court on November 15, 1995. The Plaintiffs filed
an appeal in this matter.  On November 26, 1996, the United States Court of
Appeals for the First Circuit handed down a decision affirming the Court's
approval of the settlement.  A second class action, brought in the Superior
Court of the Commonwealth of Massachusetts (the "Superior Court") seeking to
enjoin the Offer, obtain unspecified monetary damages, and intervene in the
first class action, was dismissed by the Superior Court. The limited partners of
the Partnership tendered approximately 20,888 units or 4.35% of the total
outstanding units of the Partnership to AALP.  The operations of the Partnership
were not adversely affected by these proceedings or settlements.  On December 1,
1996, EFG purchased a Class D interest, representing a 49% economic interest in
AALP.

                                      -17-
<PAGE>

                AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP
                       Notes to the Financial Statements

                                  (Continued)

NOTE 5 - NOTES PAYABLE
----------------------

    Notes payable at December 31, 1996 consisted of installment notes payable to
banks of $307,479. The installment notes are non-recourse, with interest rates
ranging between 9.75% and 9.9% and are collateralized by the equipment and
assignment of the related lease payments.  All of the notes were originated in
connection with the like-kind exchange transaction (see Note 3) and will be
fully amortized by noncancellable rents.  The carrying amount of notes payable
approximates fair value as December 31, 1996.

The annual maturities of the installment notes payable are as follows:

<TABLE>
<S>                                           <C>
For the year ending December 31, 1997         $ 57,097
                                 1998           62,952
                                 1999           69,425
                                 2000           76,564
                                 2001           41,441
                                              --------

                                Total         $307,479
                                              ========
</TABLE>

NOTE 6 - INCOME TAXES
---------------------

    The Partnership is not a taxable entity for federal income tax purposes.
Accordingly, no provision for income taxes has been recorded in the accounts of
the Partnership.

    For financial statement purposes, the Partnership allocates net income or
loss to each class of partner according to their respective ownership
percentages (95% to the Recognized Owners and 5% to the General Partner).  This
convention differs from the income or loss allocation requirements for income
tax and Dissolution Event purposes as delineated in the Restated Agreement, as
amended.  For income tax purposes, the Partnership allocates net income or net
loss in accordance with the provisions of such agreement.  The Restated
Agreement, as amended, requires that upon dissolution of the Partnership, the
General Partner will be required to contribute to the Partnership an amount
equal to any negative balance which may exist in the General Partner's tax
capital account.  At December 31, 1996, the General Partner had a positive tax
capital account balance.

    The following is a reconciliation between net income reported for financial
statement and federal income tax reporting purposes for the years ended December
31, 1996, 1995 and 1994:



<TABLE>
<CAPTION>
                                           1996          1995         1994
                                       ------------  ------------  ----------
<S>                                    <C>           <C>           <C>
Net income                              $1,656,646    $  733,938   $ 213,680
   Financial statement depreciation
      in excess of tax depreciation        137,148       195,845     695,987
   Prepaid rental income                    (8,268)      (20,986)    (18,053)
   Other                                  (881,535)      116,488    (212,753)
                                        ----------    ----------   ---------

Net income for federal income tax
   reporting purposes                   $  903,991    $1,025,285   $ 678,861
                                        ==========    ==========   =========
</TABLE>

                                      -18-
<PAGE>

                AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP
                       Notes to the Financial Statements

                                  (Continued)


   The principal component of "Other" consists of the differences between the
tax gain or loss on equipment disposals and the financial statement gain or loss
on disposals.

   The following is a reconciliation between partners' capital reported for
financial statement and federal income tax reporting purposes for the years
ended December 31, 1996 and 1995:

<TABLE>
<CAPTION>
                                              1996                 1995
                                          ------------         ------------

<S>                                       <C>                  <C>
Partners' capital                          $2,927,711           $3,555,934

Add back selling commissions and
 organization and offering costs            1,345,638            1,345,638

Financial statement distributions in
 excess of tax distributions                    3,791               12,638

Cumulative difference between federal
 income tax and financial statement
 income (loss)                               (823,603)             (70,948)
                                           ----------           ----------

Partners' capital for federal income
 tax reporting purposes                    $3,453,537           $4,843,262
                                           ==========           ==========
</TABLE>

   Financial statement distributions in excess of tax distributions and
cumulative difference between federal income tax and financial statement income
(loss) represent timing differences.


NOTE 7 - LEGAL PROCEEDINGS
--------------------------

    On July 27, 1995, EFG, on behalf of the Partnership and other EFG-sponsored
investment programs, filed an action in the Commonwealth of Massachusetts
Superior Court Department of the Trial Court in and for the County of Suffolk,
for damages and declaratory relief against a lessee of the Partnership, National
Steel Corporation  ("National Steel"), under a certain Master Lease Agreement
("MLA") for the lease of certain equipment.  EFG is seeking the reimbursement by
National Steel of certain sales and/or use taxes paid to the State of Illinois
and other remedies provided by the MLA.  On August 30, 1995, National Steel
filed a Notice of Removal which removed the case to the United States District
Court, District of Massachusetts.  On September 7, 1995, National Steel filed
its Answer to EFG's Complaint along with Affirmative Defenses and Counterclaims,
seeking declaratory relief and alleging breach of contract, implied covenant of
good faith and fair dealing and specific performance.  EFG filed its Answer to
these counterclaims on September 29, 1995.  Though the parties have been
discussing settlement with respect to this matter for some time, to date, the
negotiations have been unsuccessful.  Notwithstanding these discussions, EFG
recently filed an Amended and Supplemental Complaint alleging further default
under the MLA and the matter remains pending before the Court.  The Partnership
has not experienced any material losses as a result of this action.

                                      -19-
<PAGE>

                       ADDITIONAL FINANCIAL INFORMATION

<PAGE>

                AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP

        SCHEDULE OF EXCESS (DEFICIENCY) OF TOTAL CASH GENERATED TO COST
                             OF EQUIPMENT DISPOSED

              for the years ended December 31, 1996, 1995 and 1994



   The Partnership classifies all rents from leasing equipment as lease revenue.
Upon expiration of the primary lease terms, equipment may be sold, rented on a
month-to-month basis or re-leased for a defined period under a new or extended
lease agreement.  The proceeds generated from selling or re-leasing the
equipment, in addition to any month-to-month revenue, represent the total
residual value realized for each item of equipment.  Therefore, the financial
statement gain or loss, which reflects the difference between the net book value
of the equipment at the time of sale or disposition and the proceeds realized
upon sale or disposition, may not reflect the aggregate residual proceeds
realized by the Partnership for such equipment.

   The following is a summary of cash excess associated with equipment
dispositions occurring in the years ended December 31, 1996, 1995 and 1994:

<TABLE>
<CAPTION>
                                             1996         1995         1994
                                          -----------  -----------  -----------
<S>                                       <C>          <C>          <C>
Rents earned prior to disposal of          $6,375,173   $1,260,881   $3,176,177
   equipment, net of interest charges

Sale proceeds realized upon disposition
   of equipment                             1,563,010      429,105      233,918
                                           ----------   ----------   ----------

Total cash generated from rents
   and equipment sale proceeds              7,938,183    1,689,986    3,410,095

Original acquisition cost of equipment
   disposed                                 6,821,144    1,293,887    3,356,797
                                           ----------   ----------   ----------
Excess of total cash generated to cost
   of equipment disposed                   $1,117,039   $  396,099   $   53,298
                                           ==========   ==========   ==========
</TABLE>

<PAGE>

                AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP

           STATEMENT OF CASH AND DISTRIBUTABLE CASH FROM OPERATIONS,
                             SALES AND REFINANCINGS

                      for the year ended December 31, 1996

<TABLE>
<CAPTION>
                                                    Sales and
                                    Operations    Refinancings       Total
                                  --------------  -------------  --------------
<S>                               <C>             <C>            <C>
Net income                           $  952,267    $   704,379     $ 1,656,646
Add:
   Depreciation                         753,448             --         753,448
   Management fees                       89,296             --          89,296
   Book value of disposed
    equipment                                --        858,631         858,631

Less:
   Principal reduction of notes
    payable                            (114,880)            --        (114,880)
                                     ----------   ------------     -----------

   Cash from operations, sales
    and refinancings                  1,680,131      1,563,010       3,243,141

Less:
   Management fees                      (89,296)            --         (89,296)
                                     ----------   ------------     -----------

   Distributable cash from
    operations, sales and
    refinancings                      1,590,835      1,563,010       3,153,845
                                     ----------   ------------     -----------

Other sources and uses of cash:
   Cash at beginning of year          1,108,982             --       1,108,982
   Net change in receivables and
   accruals                              66,842             --          66,842

Less:
   Cash distributions paid             (898,785)    (1,563,010)     (2,461,795)
                                     ----------   ------------     -----------

Cash at end of year                  $1,867,874             --     $ 1,867,874
                                     ==========   ============     ===========
</TABLE>

                                      -21-
<PAGE>

                AMERICAN INCOME PARTNERS V-D LIMITED PARTNERSHIP

                      SCHEDULE OF COSTS REIMBURSED TO THE
                 GENERAL PARTNER AND ITS AFFILIATES AS REQUIRED
                  BY SECTION 10.4 OF THE AMENDED AND RESTATED
                AGREEMENT AND CERTIFICATE OF LIMITED PARTNERSHIP

                               December 31, 1996



    For the year ended December 31, 1996, the Partnership reimbursed the General
Partner and its Affiliates for the following costs:



     Operating expenses                      $96,042