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

                                    FORM 10-K

(Mark One)

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

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

                                       OR

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

For the transition period from _______________________ to ______________________

Commission file number 0-18365
                       ---------------------------------------------------------

                AMERICAN INCOME PARTNERS V-B LIMITED PARTNERSHIP
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

MASSACHUSETTS                                   04-3061971
----------------------------------------        --------------------------------
(State or other jurisdiction of                 (IRS Employer
 incorporation or organization)                 Identification No.)

88 BROAD ST., SIXTH FLOOR, BOSTON, MA           02110
----------------------------------------        --------------------------------
(Address of principal executive offices)        (Zip Code)

Registrant's telephone number, including area code     (617) 854-5800
                                                   -----------------------------

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

    Title of each class             Name of each exchange on which registered

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

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

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

Securities registered pursuant to Section 12(g) of the Act:

            1,547,930 UNITS REPRESENTING LIMITED PARTNERSHIP INTEREST
--------------------------------------------------------------------------------
                                (Title of class)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.      Yes   X        No
                                                   -----         -----

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definite 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 nonaffiliates
of the registrant. Not applicable. Securities are nonvoting for this purpose.
Refer to Item 12 for further information.

<PAGE>

                AMERICAN INCOME PARTNERS V-B LIMITED PARTNERSHIP

                                    FORM 10-K

                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----

                                     PART I

Item 1.           Business                                                     3

Item 2.           Properties                                                   5

Item 3.           Legal Proceedings                                            5

Item 4.           Submission of Matters to a Vote of Security Holders          5


                                     PART II

Item 5.           Market for the Partnership's Securities and
                  Related Security Holder Matters                              6

Item 6.           Selected Financial Data                                      7

Item 7.           Management's Discussion and Analysis of
                  Financial Condition and Results of Operations                7

Item 8.           Financial Statements and Supplementary Data                  7

Item 9.           Changes in and Disagreements with Accountants on
                  Accounting and Financial Disclosure                          7


                                    PART III

Item 10.          Directors and Executive Officers of the Partnership          8

Item 11.          Executive Compensation                                       9

Item 12.          Security Ownership of Certain Beneficial Owners
                  and Management                                              10

Item 13.          Certain Relationships and Related Transactions              10


                                     PART IV

Item 14.          Exhibits, Financial Statement Schedules and
                  Reports on Form 8-K                                      13-15


                                       2
<PAGE>


PART I

ITEM 1.  BUSINESS.

     (a)  General Development of Business

     American Income Partners V-B Limited Partnership (the "Partnership") was
organized as a limited partnership under the Massachusetts Uniform Limited
Partnership Act (the "Uniform Act") on September 29, 1989 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 December 27, 1989, the
Partnership issued 1,547,930 units, representing assignments of limited
partnership interests (the "Units"), to 2,402 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 known as 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 EFG and a
wholly-owned subsidiary are the 99% limited partners and AFG Programs, Inc.,
which is wholly-owned by EFG, 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").

     (b)  Financial Information about Industry Segments

     The Partnership is engaged in only one operating industry segment:
financial services. Historically, the Partnership has acquired capital equipment
and leased the equipment to creditworthy lessees on a full payout or operating
lease basis. Full payout leases are those in which aggregate undiscounted
noncancellable rents equal or exceed the acquisition cost of the leased
equipment. Operating leases are those in which the aggregate undiscounted
noncancellable rental payments are less than the acquisition cost of the leased
equipment. Industry segment data is not applicable.

     See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" incorporated herein by reference to the 2000 Annual
Report.

     In connection with a preliminary settlement agreement for a Class Action
Lawsuit described in Note 9 to the financial statements, the court permitted the
Partnership to invest in any new investment, including but not limited to new
equipment or other business activities, subject to certain limitations. On March
8, 2000, the Partnership loaned $5,700,000 to a newly formed real estate
company, Echelon Residential Holdings LLC ("Echelon Residential Holdings") to
finance the acquisition of real estate assets by that company. Echelon
Residential Holdings, through a wholly owned subsidiary ("Echelon Residential
LLC"), used the loan proceeds, along with the loan proceeds from similar loans
by ten affiliated partnerships representing $32 million in the aggregate, to
acquire various real estate assets from Echelon International Corporation, an
independent Florida-based real estate company. Echelon Residential Holding's
interest in Echelon Residential LLC is pledged pursuant to a pledge agreement to
the partnerships as collateral for the loans.

     (c)  Narrative Description of Business

     The Partnership was organized to acquire a diversified portfolio of capital
equipment subject to various full payout and operating leases and to lease the
equipment to third parties as income-producing investments. More specifically,
the Partnership's primary investment objectives were to acquire and lease
equipment that would:

     1. Generate quarterly cash distributions;

     2. Preserve and protect Partnership capital; and

     3. Maintain substantial residual value for ultimate sale.

     The Partnership has the additional objective of providing certain federal
income tax benefits.


                                       3
<PAGE>
     The Closing Date of the Offering of Units of the Partnership was December
27, 1989. The initial purchase of equipment and the associated lease commitments
occurred on December 28, 1989. The acquisition of the equipment and its
associated leases is described in Note 3 to the financial statements included in
Item 14, herein. The Restated Agreement, as amended, provides that the
Partnership would terminate no later than December 31, 2000. However, the
Partnership is a Nominal Defendant in a Class Action Lawsuit, the outcome of
which could significantly alter the nature of the Partnership's organization and
its future business operations. The General Partner does not expect that the
Partnership will be dissolved until such time that the Class Action Lawsuit is
settled or adjudicated.

     The Partnership has no employees; however, it is managed pursuant to a
Management Agreement with EFG or one of its affiliates (the "Manager"). The
Manager's role, among other things, is to (i) evaluate, select, negotiate, and
consummate the acquisition of equipment, (ii) manage the leasing, re-leasing,
financing, and refinancing of equipment, and (iii) arrange the resale of
equipment. The Manager is compensated for such services as provided for in the
Restated Agreement, as amended, described in Item 13 herein, and in Note 7 to
the financial statements, included in Item 14, herein.

     The Partnership's investment in equipment is, and will continue to be,
subject to various risks, including physical deterioration, technological
obsolescence, credit quality and defaults by lessees. A principal business risk
of owning and leasing equipment is the possibility that aggregate lease revenues
and equipment sale proceeds will be insufficient to provide an acceptable rate
of return on invested capital after payment of all debt service costs and
operating expenses. Another risk is that the credit quality of the lease may
deteriorate after a lease is made. In addition, the leasing industry is very
competitive. The Partnership is subject to considerable competition when
re-leasing or selling equipment at the expiration of its lease terms. The
Partnership must compete with lease programs offered directly by manufacturers
and other equipment leasing companies, many of which have greater resources,
including limited partnerships and trusts organized and managed similarly to the
Partnership and including other EFG sponsored partnerships and trusts, which may
seek to re-lease or sell equipment within their own portfolios to the same
customers as the Partnership. In addition, default by a lessee under a lease may
cause equipment to be returned to the Partnership at a time when the General
Partner or the Manager is unable to arrange for the re-lease or sale of such
equipment. This could result in the loss of anticipated revenue.

     The Partnership holds a note receivable from and common stock in Semele
Group, Inc. ("Semele"). The note receivable is subject to a number of risks
including, Semele's ability to make loan payments which is dependent upon the
liquidity of Semele and primarily Semele's ability to sell or refinance its
principal real estate asset consisting of an undeveloped 274-acre parcel of land
near Malibu, California. The market value of the Partnership's investment in
Semele common stock has generally declined since the Partnership's initial
investment in 1997. In 1998, the General Partner determined that the decline in
market value of the stock was other-than-temporary and wrote down the
Partnership's investment. Subsequently, the market value of the Semele common
stock has fluctuated. The market value of the stock could decline in the future.
Gary D. Engle, President and Chief Executive Officer of EFG and a Director of
the General Partner is Chairman and Chief Executive Officer of Semele and James
A. Coyne, Executive Vice President of EFG is Semele's President and Chief
Operating Officer. Mr. Engle and Mr. Coyne are both members of the Board of
Directors of, and own significant stock in, Semele.

     The loan made by the Partnership to Echelon Residential Holdings is, and
will continue to be, subject to various risks, including the risk of default by
Echelon Residential Holdings, which could require the Partnership to foreclose
under the pledge agreement on its interests in Echelon Residential LLC. The
ability of Echelon Residential Holdings to make loan payments and the amount the
Partnership may realize after a default would be dependent upon the risks
generally associated with the real estate lending business including, without
limitation, the existence of senior financing or other liens on the properties,
general or local economic conditions, property values, the sale of properties,
interest rates, real estate taxes, other operating expenses, the supply and
demand for properties involved, zoning and environmental laws and regulations,
rent control laws and other governmental rules. A default by Echelon Residential
Holdings could have a material adverse effect on the future cash flow and
operating results of the Partnership.

      The Restated Agreement, as amended, prohibits the Partnership from making
loans to the General Partner or its affiliates. Since the acquisition of the
several parcels of real estate from the owner had to occur prior to the
admission of certain independent third parties as equity owners, Echelon
Residential Holdings and its wholly
                                       4
<PAGE>

owned subsidiary, Echelon Residential LLC, were formed in anticipation of their
admission. The General Partner agreed to an officer of the Manager serving as
the initial equity holder of Echelon Residential Holdings and as an unpaid
manager. The officer made a $185,465 equity investment in Echelon Residential
Holdings. His return on his equity investment is restricted to the same rate of
return as the partnerships realize on their loans. There is a risk that the
court may object to the general partner's action in structuring the loan in this
way and may require the partnerships to restructure or divest the loan.

     The Investment Company Act of 1940 (the "Act") places restrictions on the
capital structure and business activities of companies registered thereunder.
The Partnership has active business operations in the financial services
industry, including equipment leasing, the loan to Echelon Residential Holdings
and its ownership of securities of Semele. The Partnership does not intend to
engage in investment activities in a manner or to an extent that would require
the Partnership to register as an investment company under the Act. However, it
is possible that the Partnership may unintentionally engage in an activity or
activities that may be construed to fall within the scope of the Act. If the
Partnership were to be determined to be an investment company, its business
would be adversely affected. If necessary, the Partnership intends to avoid
being deemed an investment company by disposing of or acquiring certain assets
that it might not otherwise dispose of or acquire.

     Revenue from major individual lessees which accounted for 10% or more of
lease revenue during the years ended December 31, 2000, 1999 and 1998 is
incorporated herein by reference to Note 2 to the financial statements included
in Item 14, herein. Refer to Item 14(a)(3) for lease agreements filed with the
Securities and Exchange Commission.

     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 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, Chief Executive Officer and sole Director. Equis
Corporation also owns a controlling 1% general partner interest in EFG's 99%
limited partner, GDE Acquisition Limited Partnership ("GDE LP"). Mr. Engle
established Equis Corporation and GDE LP in December 1994 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. AFG changed its name to Equis
Financial Group Limited Partnership after the sale was concluded. Pursuant to
terms of the sale agreements, EFG specifically reserved 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
assets owned by the Partnership and the Other Investment Programs.

     (d) Financial Information about Foreign and Domestic Operations and Export
Sales

     Not applicable.


ITEM 2.  PROPERTIES.

     Incorporated herein by reference to Note 3 to the financial statements
included in Item 14.

ITEM 3.  LEGAL PROCEEDINGS.

     Incorporated herein by reference to Note 9 to the financial statements
included in Item 14.

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

     None.

                                       5
<PAGE>
PART II

ITEM 5.  MARKET FOR THE PARTNERSHIP'S SECURITIES AND RELATED SECURITY HOLDER
         MATTERS.

     (a) Market Information

     There is no public market for the resale of the Units and it is not
anticipated that a public market for resale of the Units will develop.

     (b) Approximate Number of Security Holders

     At December 31, 2000, there were 2,231 record holders of Units in the
Partnership.

     (c) Dividend History and Restrictions

     Historically, the amount of cash distributions to be paid to the Partners
has been determined on a quarterly basis. Each quarter's distribution may have
varied in amount and was made 95% to the Limited Partners and 5% to the General
Partner. Generally, cash distributions have been paid within 15 days after the
completion of each calendar quarter.

     The Partnership is a Nominal Defendant in a Class Action Lawsuit described
in Note 9 to the accompanying financial statements included in Item 14 herein.
The proposed settlement to that lawsuit, if effected, will materially change the
future organizational structure and business interests of the Partnership, as
well as its cash distribution policies. In addition, commencing with the first
quarter of 2000, the General Partner suspended the payment of quarterly cash
distributions pending final resolution of the Class Action Lawsuit. Accordingly,
future cash distributions are not expected to be paid until the Class Action
Lawsuit is settled or adjudicated.

     In any given year, it is possible that Recognized Owners will be allocated
taxable income in excess of distributed cash. This discrepancy between tax
obligations and cash distributions may or may not continue in the future, and
cash may or may not be available for distribution to the Recognized Owners
adequate to cover any tax obligation.

     Distributions declared in 2000 and 1999 were as follows:

<TABLE>
<CAPTION>
                                                                 GENERAL     RECOGNIZED
                                                    TOTAL        PARTNER       OWNERS
                                                  --------      --------      --------
<S>         <C>                                   <C>           <C>           <C>
      Total 2000 distributions declared ....      $     --      $     --      $     --

      Total 1999 distributions declared ....       855,440        42,772       812,668
                                                  --------      --------      --------

                       Total ...............      $855,440      $ 42,772      $812,668
                                                  ========      ========      ========
</TABLE>

     There are no formal restrictions under the Restated Agreement, as amended,
that materially limit the Partnership's ability to pay cash distributions,
except that the General Partner may suspend or limit cash distributions to
ensure that the Partnership maintains sufficient working capital reserves to
cover, among other things, operating costs and potential expenditures, such as
refurbishment costs to remarket equipment upon lease expiration. In addition to
the need for funds in connection with the Class Action Lawsuit, liquidity is
especially important as the Partnership sells equipment, as the remaining
equipment base consists of fewer revenue-producing assets that are available to
cover prospective cash disbursements. Insufficient liquidity could inhibit the
Partnership's ability to sustain its operations or maximize the realization of
proceeds from remarketing its remaining assets.

     Cash distributions consist of Distributable Cash From Operations and
Distributable Cash From Sales or Refinancings.


                                       6
<PAGE>


     "Distributable Cash From Operations" means the net cash provided by the
Partnership's normal operations after general expenses and current liabilities
of the Partnership are paid, reduced by any reserves for working capital and
contingent liabilities to be funded from such cash, to the extent deemed
reasonable by the General Partner, and increased by any portion of such reserves
deemed by the General Partner not to be required for Partnership operations and
reduced by all accrued and unpaid Equipment Management Fees and, after Payout,
further reduced by all accrued and unpaid Subordinated Remarketing Fees.
Distributable Cash from Operations does not include any Distributable Cash from
Sales or Refinancings.

     "Distributable Cash From Sales or Refinancings" means Cash From Sales or
Refinancings as reduced by (i)(a) amounts realized from any loss or destruction
of equipment which the General Partner determines shall be reinvested in similar
equipment for the remainder of the original lease term of the lost or destroyed
equipment, or in isolated instances, in other equipment, if the General Partner
determines that investment of such proceeds will significantly improve the
diversity of the Partnership's equipment portfolio, and subject in either case
to satisfaction of all existing indebtedness secured by such equipment to the
extent deemed necessary or appropriate by the General Partner, or (b) the
proceeds from the sale of an interest in equipment pursuant to any agreement
governing a joint venture which the General Partner determines will be invested
in additional equipment or interests in equipment and which ultimately are so
reinvested and (ii) any accrued and unpaid Equipment Management Fees and, after
Payout, any accrued and unpaid Subordinated Remarketing Fees.

     "Cash From Sales or Refinancings" means cash received by the Partnership
from sale or refinancing transactions, as reduced by (i)(a) all debts and
liabilities of the Partnership required to be paid as a result of sale or
refinancing transactions, whether or not then due and payable (including any
liabilities on an item of equipment sold which are not assumed by the buyer and
any remarketing fees required to be paid to persons not affiliated with the
General Partner, but not including any Subordinated Remarketing Fees whether or
not then due and payable) and (b) any reserves for working capital and
contingent liabilities funded from such cash to the extent deemed reasonable by
the General Partner and (ii) increased by any portion of such reserves deemed by
the General Partner not to be required for Partnership operations. In the event
the Partnership accepts a note in connection with any sale or refinancing
transaction, all payments subsequently received in cash by the Partnership with
respect to such note shall be included in Cash From Sales or Refinancings,
regardless of the treatment of such payments by the Partnership for tax or
accounting purposes. If the Partnership receives purchase money obligations in
payment for equipment sold, which are secured by liens on such equipment, the
amount of such obligations shall not be included in Cash From Sales or
Refinancings until the obligations are fully satisfied.

     "Payout" is defined as the first time when the aggregate amount of all
distributions to the Recognized Owners of Distributable Cash From Operations and
Distributable Cash From Sales or Refinancings equals the aggregate amount of the
Recognized Owners' original capital contributions plus a cumulative annual
return of 11% (compounded quarterly and calculated beginning with the last day
of the month of the Partnership's Closing Date) on their aggregate unreturned
capital contributions. For purposes of this definition, capital contributions
shall be deemed to have been returned only to the extent that distributions of
cash to the Recognized Owners exceed the amount required to satisfy the
cumulative annual return of 11% (compounded quarterly) on the Recognized Owners'
aggregate unreturned capital contributions, such calculation to be based on the
aggregate unreturned capital contributions outstanding on the first day of each
fiscal quarter.

ITEM 6.  SELECTED FINANCIAL DATA.

     Incorporated herein by reference to the section entitled "Selected
Financial Data" in the 2000 Annual Report.

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

     Incorporated herein by reference to the section entitled "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in the
2000 Annual Report.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

     Incorporated herein by reference to the financial statements and
supplementary data included in the 2000 Annual Report.

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

     None.


                                       7
<PAGE>

PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP.

     (a-b) Identification of Directors and Executive Officers

     The Partnership has no Directors or Officers. As indicated in Item 1 of
this report, AFG Leasing lV Incorporated is the sole General Partner of the
Partnership. Under the Restated Agreement, as amended, the General Partner is
solely responsible for the operation of the Partnership's properties. The
Limited Partners have no right to participate in the control of the
Partnership's general operations, but they do have certain voting rights, as
described in Item 12 herein. The names, titles and ages of the Directors and
Executive Officers of the General Partner as of March 15, 2001 are as follows:

DIRECTORS AND EXECUTIVE OFFICERS OF THE GENERAL PARTNER (SEE ITEM 13)

<TABLE>
<CAPTION>
                NAME                                            TITLE                             AGE             TERM
------------------------------------       ---------------------------------------------        -------     ---------------
<S>                                        <C>                                                     <C>          <C>
Geoffrey A. MacDonald                      Chairman of EFG and President                                         Until a
                                           and a Director of the General Partner                   52           successor
                                                                                                                 is duly
Gary D. Engle                              President and Chief Executive                                         elected
                                           Officer of EFG and a Director                                           and
                                           of the General Partner                                  52           qualified

Michael J. Butterfield                     Executive Vice President and
                                           Chief Operating Officer of EFG
                                           and Treasurer of the General Partner                    41

Gail D. Ofgant                             Senior Vice President, Lease Operations
                                           of EFG and Senior Vice President of the
                                           General Partner                                         35
</TABLE>

     (c) Identification of Certain Significant Persons

     None.

     (d) Family Relationship

     No family relationship exists among any of the foregoing Partners,
Directors or Executive Officers.

     (e) Business Experience

     Mr. MacDonald, age 52, is Chairman of EFG and has been President of the
General Partner since 1988 and a Director of the General Partner since 1987. Mr.
McDonald was a co-founder of EFG's predecessor, American Finance Group, which
was established in 1980. Mr. MacDonald is a member of the Board of Managers of
Echelon Development Holdings LLC and President of American Finance Group
Securities Corporation. Prior to co-founding American Finance Group, Mr.
MacDonald held various positions in the equipment leasing industry and the
ethical pharmaceutical industry with Eli Lilly & Company. Mr. MacDonald holds an
M.B.A. from Boston College and a B.A. degree from the University of
Massachusetts (Amherst).

     Mr. Engle, age 52, is President and Chief Executive Officer of EFG, sole
shareholder and Director of its general partner, Equis Corporation, and a Vice
President and Director of several of EFG's subsidiaries and affiliates. Mr.
Engle has been a Director of the General Partner since 1990 and is President of
AFG Realty Corporation. Mr. Engle is also Chairman and Chief Executive Officer
of Semele Group Inc. ("Semele") and a member of the Board of Managers of Echelon
Development Holdings LLC. Mr. Engle controls the general partners of Atlantic
Acquisition Limited Partnership ("AALP") and Old North Capital Limited
Partnership ("ONC"). Mr. Engle joined EFG in 1990 as an Executive Vice President
and acquired control of EFG and its subsidiaries in December 1994. Mr. Engle
co-founded Cobb Partners Development, Inc., a real estate and mortgage banking
company,


                                       8
<PAGE>

where he was a principal from 1987 to 1989. From 1980 to 1987, Mr. Engle was
Senior Vice President and Chief Financial Officer of Arvida Disney Company, a
large-scale community development organization owned by Walt Disney Company.
Prior to 1980, Mr. Engle served in various management consulting and
institutional brokerage capacities. Mr. Engle has an M.B.A. degree from Harvard
University and a B.S. degree from the University of Massachusetts (Amherst).

     Mr. Butterfield, age 41, is Executive Vice President and Chief Operating
Officer of EFG and has served as Vice President and Treasurer of the General
Partner since 1996. Mr. Butterfield also serves as Vice President and Treasurer
of subsidiaries and affiliates of EFG. Mr. Butterfield is also Chief Financial
Officer of Semele and Vice President, Finance and Clerk of Equis/Echelon
Management Corporation, the manager of Echelon Residential LLC. Mr. Butterfield
joined EFG in June 1992 and became a Vice President in 1996 and Executive Vice
President and Chief Operating Officer in 2000. Prior to joining EFG, Mr.
Butterfield was an audit manager with Ernst & Young LLP, which he joined in
1987. Mr. Butterfield was employed in public accounting and industry positions
in New Zealand and London (UK) prior to coming to the United States in 1987. Mr.
Butterfield attained his Associate Chartered Accountant (A.C.A.) professional
qualification in New Zealand and has completed his C.P.A. requirements in the
United States. Mr. Butterfield holds a Bachelor of Commerce degree from the
University of Otago, Dunedin, New Zealand.

     Ms. Ofgant, age 35, is Senior Vice President, Lease Operations of EFG and
has served as Senior Vice President of the General Partner since 1997. Ms.
Ofgant is Senior Vice President and Assistant Clerk of Equis/Echelon Management
Corporation, the manager of Echelon Residential LLC. Ms. Ofgant joined EFG in
July 1989 and held various positions with the company before becoming Senior
Vice President in 1998. From 1987 to 1989, Ms. Ofgant was employed by Security
Pacific National Trust Company. Ms. Ofgant holds a B.S. degree from Providence
College.

     (f) Involvement in Certain Legal Proceedings

     None.

     (g) Promoters and Control Persons

     Not applicable.

ITEM 11.  EXECUTIVE COMPENSATION.

     (a) Cash Compensation

     Currently, the Partnership has no employees. However, under the terms of
the Restated Agreement, as amended, the Partnership is obligated to pay all
costs of personnel employed full or part-time by the Partnership, including
officers or employees of the General Partner or its Affiliates. There is no plan
at the present time to make any officers or employees of the General Partner or
its Affiliates employees of the Partnership. The Partnership has not paid and
does not propose to pay any options, warrants or rights to the officers or
employees of the General Partner or its Affiliates.

     (b) Compensation Pursuant to Plans

     None.

     (c) Other Compensation

     Although the Partnership has no employees, as discussed in Item 11(a),
pursuant to section 10.4 of the Restated Agreement, as amended, the Partnership
incurs a monthly charge for personnel costs of the Manager for persons engaged
in providing administrative services to the Partnership. A description of the
remuneration paid by the Partnership to the Manager for such services is
included in Item 13, herein and Note 7 to the financial statements included in
Item 14, herein.

     (d) Stock Options and Stock Appreciation Rights.

     Not applicable.


                                       9
<PAGE>

     (e) Long-Term Incentive Plan Awards Table.

     Not applicable.

     (f) Defined Benefit or Actuarial Plan Disclosure.

     Not applicable.

     (g) Compensation of Directors

     None.

     (h) Termination of Employment and Change of Control Arrangement

     There exists no remuneration plan or arrangement with the General Partner
or its Affiliates which results or may result from their resignation, retirement
or any other termination.

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

     By virtue of its organization as a limited partnership, the Partnership has
no outstanding securities possessing traditional voting rights. However, as
provided in Section 11.2(a) of the Restated Agreement, as amended (subject to
Sections 11.2(b) and 11.3), a majority interest of the Recognized Owners has
voting rights with respect to:

        1.    Amendment of the Restated Agreement;

        2.    Termination of the Partnership;

        3.    Removal of the General Partner; and

        4.    Approval or disapproval of the sale of all, or substantially all,
              of the assets of the Partnership (except in the orderly
              liquidation of the Partnership upon its termination and
              dissolution).

     As of March 15, 2001, the following person or group owns beneficially more
than 5% of the Partnership's 1,547,930 outstanding Units:

<TABLE>
<CAPTION>
                                                      NAME AND                            AMOUNT                  PERCENT
              TITLE                                  ADDRESS OF                        OF BENEFICIAL                OF
            OF CLASS                              BENEFICIAL OWNER                       OWNERSHIP                 CLASS
-------------------------------     -----------------------------------------   --------------------------    -------------
<S>                                 <C>                                                <C>                         <C>
       Units Representing           Atlantic Acquisition Limited Partnership

       Limited Partnership                      88 Broad Street                        94,570 Units                6.11%
            Interests                          Boston, MA 02110
</TABLE>

     EFG owns limited partnership interests, representing substantially all of
the economic benefit, in Atlantic Acquisition Limited Partnership ("AALP"). The
general partner of AALP is controlled by Gary D. Engle and Mr. Engle is
President and Chief Executive Officer of EFG, sole shareholder and Director of
EFG's general partner. See Item 10 and Item 13 of this report.

     The ownership and organization of EFG is described in Item 1 of this
report.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     The General Partner of the Partnership is AFG Leasing IV Incorporated, an
affiliate of EFG.


                                       10
<PAGE>

     (a) Transactions with Management and Others

     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,
2000, 1999 and 1998, which were paid or accrued by the Partnership to EFG or its
Affiliates, are as follows:

<TABLE>
<CAPTION>
                                                                       2000          1999          1998
                                                                     --------      --------      --------
<S>                                                                  <C>           <C>           <C>
      Equipment management fees ...............................      $  2,002      $  6,879      $ 64,755
      Administrative charges ..................................        71,921        95,666        59,736
      Reimbursable operating expenses due to third parties ....       327,823       373,853       799,508
                                                                     --------      --------      --------

                                      Total ...................      $401,746      $476,398      $923,999
                                                                     ========      ========      ========
</TABLE>

     As provided under the terms of the Management Agreement, EFG is compensated
for its services to the Partnership. Such services include acquisition and
management of equipment. For acquisition services, EFG was 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 5% of gross
operating lease rental revenues and 2% of gross full payout lease rental revenue
received by the Partnership. Both acquisition and management fees are 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 at actual cost.

     All equipment was purchased from EFG, one of its affiliates or from
third-party sellers. The Partnership's acquisition cost was determined by the
method described in Note 2 to the financial statements included in Item 14,
herein.

     As a result of an exchange in 1997, the Partnership is the beneficial owner
of 39,339 shares of Semele common stock and holds a beneficial interest in a
note from Semele (the "Semele Note") of $888,844. The Semele Note matures in
April 2003 and bears an annual interest rate of 10% with mandatory principal
reductions prior to maturity, if and to the extent that net proceeds are
received by Semele from the sale or refinancing of its principal real estate
asset consisting of an undeveloped 274-acre parcel of land near Malibu,
California. For further discussion, see Note 5, "Investment Securities -
Affiliate and Note Receivable - Affiliate to the financial statements included
in Item 14 herein and Item 10.

     All rents and proceeds from the sale of equipment are paid directly to
either EFG or a lender. EFG temporarily deposits collected funds in a separate
interest-bearing escrow account prior to remittance to the Partnership. At
December 31, 2000, the Partnership was owed $5,993 by EFG for such funds and the
interest thereon. These funds were remitted to the Partnership in January 2001.

     Certain affiliates of the General Partner own Units in the Partnership as
follows:

<TABLE>
<CAPTION>
        ----------------------------------------------- -------------------- -----------------------
                                                             NUMBER OF          PERCENT OF TOTAL
                          AFFILIATE                         UNITS OWNED        OUTSTANDING UNITS
        ----------------------------------------------- -------------------- -----------------------
<S>                                                                  <C>                      <C>
        Atlantic Acquisition Limited Partnership                     94,570                   6.11%
        ----------------------------------------------- -------------------- -----------------------

        Old North Capital Limited Partnership                        17,594                   1.14%
        ----------------------------------------------- -------------------- -----------------------
</TABLE>

     Atlantic Acquisition Limited Partnership ("AALP") and Old North Capital
Limited Partnership ("ONC") are both Massachusetts Limited Partnerships formed
in 1995. The general partners of AALP and ONC are controlled by Gary Engle. EFG
owns limited partnership interests, representing substantially all of the
economic benefit, in AALP and the limited partnership interests of ONC are owned
by Semele. Gary D. Engle is Chairman and Chief Financial Officer of Semele and
President and Chief Executive Officer of EFG and sole shareholder and Director
of EFG's general partner. James A. Coyne, Executive Vice President of EFG, is
Semele's President and Chief


                                       11
<PAGE>

Operating Officer. Mr. Engle and Mr. Coyne are both members of the Board of
Directors of, and own significant stock in, Semele.

     (b) Certain Business Relationships

     None.

     (c) Indebtedness of Management to the Partnership

     None.

     (d) Transactions with Promoters

     Not applicable.



                                       12
<PAGE>

PART IV

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

        (a)  Documents filed as part of this report:

             (1)         Financial Statements:

<TABLE>
<S>                                                                                                   <C>
                         Report of Independent Auditors...............................................*

                         Statement of Financial Position
                         at December 31, 2000 and 1999................................................*

                         Statement of Operations
                         for the years ended December 31, 2000, 1999 and 1998.........................*

                         Statement of Changes in Partners' Capital
                         for the years ended December 31, 2000, 1999 and 1998.........................*

                         Statement of Cash Flows
                         for the years ended December 31, 2000, 1999 and 1998.........................*

                         Notes to the Financial Statements............................................*
</TABLE>

             (2)         Financial Statement Schedules:

                         None required.

             (3)         Exhibits:

                         Except as set forth below, all Exhibits to Form 10-K,
                         as set forth in Item 601 of Regulation S-K, are not
                         applicable.

             A list of exhibits filed or incorporated by reference is as
follows:

          EXHIBIT
          NUMBER
          ------

             2.1         Plaintiffs' and Defendants' Joint Motion to Modify
                         Order Preliminarily Approving Settlement, Conditionally
                         Certifying Settlement Class and Providing for Notice
                         of, and Hearing on, the Proposed Settlement was filed
                         in the Registrant's Annual Report on Form 10-K/A for
                         the year ended December 31, 1998 as Exhibit 2.1 and is
                         incorporated herein by reference.

             2.2         Plaintiffs' and Defendants' Joint Memorandum in Support
                         of Joint Motion to Modify Order Preliminarily Approving
                         Settlement, Conditionally Certifying Settlement Class
                         and Providing for Notice of, and Hearing on, the
                         Proposed Settlement was filed in the Registrant's
                         Annual Report on Form 10-K/A for the year ended
                         December 31, 1998 as Exhibit 2.2 and is incorporated
                         herein by reference.

*  Incorporated herein by reference to the appropriate portion of the 2000
   Annual Report to security holders for the year ended December 31, 2000 (see
   Part II).


                                       13
<PAGE>

      EXHIBIT
      NUMBER
      ------

         2.3      Order Preliminarily Approving Settlement, Conditionally
                  Certifying Settlement Class and Providing for Notice of, and
                  Hearing on, the Proposed Settlement (August 20, 1998) was
                  filed in the Registrant's Annual Report on Form 10-K/A for the
                  year ended December 31, 1998 as Exhibit 2.3 and is
                  incorporated herein by reference.

         2.4      Modified Order Preliminarily Approving Settlement,
                  Conditionally Certifying Settlement Class and Providing for
                  Notice of, and Hearing on, the Proposed Settlement (March 22,
                  1999) was filed in the Registrant's Annual Report on Form
                  10-K/A for the year ended December 31, 1998 as Exhibit 2.4 and
                  is incorporated herein by reference.

         2.5      Plaintiffs' and Defendants' Joint Memorandum in Support of
                  Joint Motion to Further Modify Order Preliminarily Approving
                  Settlement, Conditionally Certifying Settlement Class and
                  Providing for Notice of, and Hearing on, the Proposed
                  Settlement was filed in the Registrant's Annual Report on Form
                  10-K for the year ended December 31, 1999 as Exhibit 2.5 and
                  is incorporated herein by reference.

         2.6      Second Modified Order Preliminarily Approving Settlement,
                  Conditionally Certifying Settlement Class and Providing for
                  Notice of, and Hearing on, the Proposed Settlement (March 5,
                  2000) was filed in the Registrant's Annual Report on Form 10-K
                  for the year ended December 31, 1999 as Exhibit 2.6 and is
                  incorporated herein by reference.

         2.7      Proposed Order Granting Joint Motion to Continue Final
                  Approval Settlement Hearing (March 13, 2001) is filed in the
                  Registrant's Annual Report for the year ended December 31,
                  2000 and is included herein.

         4        Amended and Restated Agreement and Certificate of Limited
                  Partnership included as Exhibit A to the Prospectus, which was
                  included in Registration Statement on Form S-1 (No. 33-27828).

         10.1     Promissory Note in the principal amount of $5,700,000 dated
                  March 8, 2000 between the Registrant, as lender, and Echelon
                  Residential Holdings LLC, as borrower, was filed in the
                  Registrant's Annual Report on Form 10-K for the year ended
                  December 31, 1999 as Exhibit 10.1 and is incorporated herein
                  by reference.

         10.2     Pledge Agreement dated March 8, 2000 between Echelon
                  Residential Holdings LLC (Pledgor) and American Income
                  Partners V-A Limited Partnership, as Agent for itself and the
                  Registrant was filed in the Registrant's Annual Report on Form
                  10-K for the year ended December 31, 1999 as Exhibit 10.2 and
                  is incorporated herein by reference.

         10.3     Promissory Note from Semele Group Inc. (formerly known as
                  Banyan Strategic Land Fund II), dated May 31, 1997 is filed as
                  in the Registrant's Annual Report on Form 10-K for the year
                  ended December 31, 2000 and is included herein.

         10.4     The First Allonge to Promissory Note from Semele Group Inc.
                  (formerly known as Banyan Strategic Land Fund II), dated March
                  21, 2000 is filed as in the Registrant's Annual Report on Form
                  10-K for the year ended December 31,2000 and is included
                  herein.

         10.5     The Second Allonge to Promissory Note from Semele Group Inc.
                  (formerly known as Banyan Strategic Land Fund II), dated March
                  12, 2001 is filed as in the Registrant's Annual Report on Form
                  10-K for the year ended December 31, 2000 and is included
                  herein.


                                       14
<PAGE>

         EXHIBIT
          NUMBER
          ------

         13       The 2000 Annual Report to security holders, a copy of which is
                  furnished for the information of the Securities and Exchange
                  Commission. Such Report, except for those portions thereof
                  which are incorporated herein by reference, is not deemed
                  "filed" with the Commission.

         23       Consent of Independent Auditors.

         99(a)    Lease agreement with Sunworld International Airlines, Inc. was
                  filed in the Registrant's Annual Report on Form 10-K for the
                  year ended December 31, 1996 as Exhibit 99 (e) and is
                  incorporated herein by reference.

         99(b)    Lease agreement with Transmeridian Airlines was filed in the
                  Registrant's Annual Report on Form 10-K for the year ended
                  December 31, 1997 as Exhibit 99 (e) and is incorporated herein
                  by reference.

         99(c)    Lease agreement with American National Can Company was filed
                  in the Registrant's Annual Report on Form 10-K for the year
                  ended December 31, 1999 as Exhibit 99 (d) and is incorporated
                  herein by reference.

         99(d)    Lease agreement with Conwell Corporation was filed in the
                  Registrant's Annual Report on Form 10-K for the year ended
                  December 31, 1999 as Exhibit 99 (e) and is incorporated herein
                  by reference.

         99(e)    Lease agreement with Ford Motor Company was filed in the
                  Registrant's Annual Report on Form 10-K for the year ended
                  December 31, 1999 as Exhibit 99 (f) and is incorporated herein
                  by reference.

         (b) Reports on Form 8-K

             None.

         (c) Other Exhibits

              None.

         (d) Financial Statement Schedules:

              Consolidated Financial Statements for Echelon Residential Holdings
              LLC as of December 31, 2000 and for the Period March 8, 2000 (Date
              of Inception) through December 31, 2000 and Independent Auditors'
              Report


                                       15
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below on behalf of the registrant and in the capacity and
on the date indicated.

                AMERICAN INCOME PARTNERS V-B LIMITED PARTNERSHIP


                        By: AFG Leasing IV Incorporated,
                        a Massachusetts corporation and the
                        General Partner of the Registrant.


By: /s/ GEOFFREY A. MACDONALD                 By: /s/ GARY D. ENGLE
    ------------------------------------          ------------------------------
Geoffrey A. MacDonald                             Gary D. Engle
Chairman of EFG and President                     President and Chief Executive
and a Director of the General Partner             Officer of EFG and a Director
                                                  of the General Partner
                                                  (Principal Executive Officer)


Date:     MARCH 31, 2001                          Date:     MARCH 31, 2001
      ----------------------------------                ------------------------


By: /s/   MICHAEL J. BUTTERFIELD
    ------------------------------------
Michael J. Butterfield
Executive Vice President and
Chief Operating Officer of EFG and
Treasurer of the General Partner
(Principal Financial and Accounting Officer)



Date:     MARCH 31, 2001
      ----------------------------------


                                       16
<PAGE>

                                                                  SCHEDULE 14(d)

ECHELON RESIDENTIAL HOLDINGS LLC

CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2000
AND FOR THE PERIOD MARCH 8, 2000 (DATE OF INCEPTION)
THROUGH DECEMBER 31, 2000
AND INDEPENDENT AUDITORS' REPORT


<PAGE>


INDEPENDENT AUDITORS' REPORT

To the Members of
Echelon Residential Holdings LLC:

We have audited the accompanying consolidated balance sheet of Echelon
Residential Holdings LLC, a Delaware limited liability company ("the Company")
as of December 31, 2000 and the related consolidated statement of operations,
members' equity (deficiency) and cash flows for the period March 8, 2000 (date
of inception) through December 31, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. 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 audit provides a
reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of the Company as of December 31,
2000, and the results of its operations and its cash flows for the period March
8, 2000 (date of inception) through December 31, 2000 in conformity with
accounting principles generally accepted in the United States of America.

/s/ DELOITTE & TOUCHE LLP



Tampa, Florida
March 23, 2001


<PAGE>

ECHELON RESIDENTIAL HOLDINGS LLC

CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2000
-------------------------------------------------------------------------------

ASSETS

REAL ESTATE - Net (Notes 1 and 2)                                  $ 61,092,202

CASH AND CASH EQUIVALENTS (Note 1)                                    3,789,198

RESTRICTED CASH (Note 1)                                                  8,703

RESTRICTED INVESTMENTS (Note 1)                                       2,155,160

ACCOUNTS RECEIVABLE - Affiliates (Note 7)                               115,521

PREPAID EXPENSES AND OTHER LONG-TERM ASSETS                              69,417

CORPORATE EQUIPMENT - Net of accumulated depreciation of $57,733        286,784

INVESTMENT IN UNCONSOLIDATED JOINT VENTURE (Note 3)                   1,063,906
                                                                   ------------

TOTAL ASSETS                                                       $ 68,580,891
                                                                   ============

LIABILITIES AND MEMBERS' EQUITY

LIABILITIES:

  Accounts payable                                                 $     10,984
  Contractor payable                                                  1,752,830
  Accounts payable - Affiliates (Note 7)                                114,180
  Accrued expenses                                                      797,832
  Retainage payable                                                   1,125,865
  Security deposits                                                       8,625
  Interest payable                                                    4,385,805
  Construction loans (Note 4)                                        26,837,740
  Other long-term liabilities                                           109,411
  Notes payable (Note 5)                                             35,039,890
                                                                   ------------

           Total liabilities                                         70,183,162

COMMITMENTS & CONTINGENCIES (Notes 4 and 9)

MINORITY INTEREST (Note 6)                                            2,257,367

MEMBERS' EQUITY (DEFICIENCY) (Note 1)                                (3,859,638)
                                                                   ------------

TOTAL LIABILITIES AND MEMBERS' EQUITY                              $ 68,580,891
                                                                   ============

See notes to consolidated financial statements

                                      - 2 -




<PAGE>

ECHELON RESIDENTIAL HOLDINGS LLC

CONSOLIDATED STATEMENT OF OPERATIONS
PERIOD MARCH 8, 2000 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2000
--------------------------------------------------------------------------------

SALES AND REVENUES:
  Real estate operations:
    Rental revenues                                          $    230,834
    Management fees                                               695,162
    Developer fees                                                985,141
  Sale of development property                                  3,104,532
  Investment income                                               191,543
  Other income                                                     23,000
                                                             ------------

           Total sales and revenues                             5,230,212
                                                             ------------

EXPENSES:
  Rental and other operations                                     558,561
  Cost of development property sold                             3,317,880
  Write-down of land held for development or sale                 635,437
  Depreciation expense                                            148,861
  Interest expense on long-term debt - net of amounts
           capitalized of $606,990                              4,460,345
  General and administrative expenses                           2,937,514
                                                             ------------

           Total expenses                                      12,058,598
                                                             ------------

EQUITY IN LOSS OF UNCONSOLIDATED JOINT VENTURE                   (148,023)

MINORITY INTEREST                                                 270,383
                                                             ------------

NET LOSS                                                     $ (6,706,026)
                                                             ============

See notes to consolidated financial statements.




                                     - 3 -

<PAGE>
ECHELON RESIDENTIAL HOLDINGS LLC

CONSOLIDATED STATEMENT OF CASH FLOWS
PERIOD MARCH 8, 2000 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2000
--------------------------------------------------------------------------------

<TABLE>
<S>                                                                     <C>
CASH FLOW PROVIDED BY (USED IN) OPERATING ACTIVITIES:
  Net loss                                                              $ (6,706,026)
  Adjustment to reconcile net loss to cash provided by
     (used in) operating activities:
      Depreciation                                                           148,861
      Loss on sale of development property                                   213,348
      Minority interest                                                     (270,383)
      Equity in loss of unconsolidated joint venture                         148,023
      Write-down of land held for development or sale                        635,437
      Changes in working capital:
        Accounts payable, accrued expenses and other liabilities          (4,343,190)
        Interest payable                                                   4,385,805
        Other working capital changes                                        311,588
                                                                        ------------

          Net cash used in operating activities                           (5,476,537)
                                                                        ------------

CASH FLOW PROVIDED BY (USED IN) INVESTING ACTIVITIES:
  Increase in restricted cash and restricted investments                  (2,163,863)
  Net proceeds from sale of development property                           3,104,532
  Payments related to construction in progress                           (29,601,108)
                                                                        ------------

           Net cash used in investing activities                         (28,660,439)
                                                                        ------------

CASH FLOW PROVIDED BY (USED IN) FINANCING ACTIVITIES:
  Issuance of notes payable                                                6,244,000
  Repayment of notes payable                                              (5,474,000)
  Proceeds from construction loans                                        26,585,765
  Members' capital contributions                                           2,651,162
                                                                        ------------

           Net cash provided by financing activities                      30,006,927
                                                                        ------------

NET DECREASE IN CASH AND CASH EQUIVALENTS                                 (4,130,049)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                             7,919,247
                                                                        ------------

CASH AND CASH EQUIVALENTS, END OF PERIOD                                $  3,789,198
                                                                        ============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Cash paid during the period for:
    Interest                                                            $    681,530
                                                                        ============
</TABLE>

See notes to consolidated financial statements.




                                     - 4 -

<PAGE>


ECHELON RESIDENTIAL HOLDINGS LLC

CONSOLIDATED STATEMENT OF MEMBERS' EQUITY (DEFICIENCY)
PERIOD MARCH 8, 2000 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2000
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                          INITIAL          PARTICIPATING
                                          MEMBERS             MEMBERS              TOTAL
                                        -----------        -------------        -----------
<S>                                     <C>                <C>                  <C>
BALANCE AT MARCH 8, 2000                $   195,226         $      --           $   195,226

  Members' capital contributions               --             2,651,162           2,651,162

  Net loss                               (5,600,020)         (1,106,006)         (6,706,026)
                                        -----------         -----------         -----------

BALANCE AT DECEMBER 31, 2000            $(5,404,794)        $ 1,545,156         $(3,859,638)
                                        ===========         ===========         ===========
</TABLE>

See notes to consolidated financial statements.




                                     - 5 -

<PAGE>

ECHELON RESIDENTIAL HOLDINGS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PERIOD MARCH 8, 2000 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2000
--------------------------------------------------------------------------------

1.    SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

      BACKGROUND - On March 7, 2000, EIN Acquisition Corporation ("EIN
      Acquisition") closed on a Tender Offer ("Tender Offer") for all of the
      outstanding shares of Echelon International Corporation ("Echelon") for a
      cash price of $34.00 per share. Immediately after the close of the Tender
      Offer, EIN Acquisition merged into Echelon (the "Merger"), with Echelon
      being the surviving entity.

      In conjunction with the Tender Offer, Echelon had entered into various
      contracts to sell or convey various real estate assets and investments in
      two real estate joint ventures to third parties. Subsequent to the Merger
      on March 8, 2000, Echelon closed on existing contracts to sell or convey
      its real estate assets and investments in two real estate joint ventures.
      Specific real estate assets and investments in two real estate joint
      ventures were sold to Echelon Residential LLC ("Echelon Residential"), a
      wholly owned limited liability subsidiary of Echelon Residential Holdings
      LLC ("Echelon Residential Holdings" or the "Company"). Echelon Residential
      will own, manage, and develop or sell these purchased multi-family
      residential properties.

      The acquisition of the assets by Echelon Residential was accounted for as
      an asset purchase under Accounting Principles Board Opinion No. 16 ("APB
      No. 16"). In accordance with APB No. 16, Echelon Residential allocated the
      total purchase price to the assets acquired and liabilities assumed based
      on the estimated fair market values at the date of acquisition. Since the
      purchase price of the business was less than the fair market value of the
      net assets acquired, the credit excess was allocated on a pro-rata basis
      to the real estate, corporate equipment and the investment in an
      unconsolidated joint venture. There are no contingencies or other matters
      that could materially affect the allocation of the purchase cost. The
      results of operations of the acquired real estate assets and investments
      in two real estate joint ventures are included in the consolidated results
      of Echelon Residential Holdings from the acquisition date.

      The Company's summarized consolidated balance sheet, reflecting the above
      acquisition of assets, as of March 8, 2000 is as follows:

      ASSETS:

        Real estate                                       $34,164,672
        Cash and cash equivalents                           7,919,247
        Investment in unconsolidated joint venture          1,211,929
        Other assets                                          832,417
                                                          -----------

      Total assets                                        $44,128,265
                                                          ===========

      LIABILITIES AND MEMBERS' EQUITY:

        Accounts payable and other liabilities            $ 6,883,424
        Construction loans                                    251,975
        Notes payable                                      34,269,890
                                                          -----------

      Total liabilities                                    41,405,289
      Minority interest                                     2,527,750
      Members' equity                                         195,226
                                                          -----------

      Total liabilities and members' equity               $44,128,265
                                                          ===========

      The Company's fiscal year end is December 31.




                                     - 6 -
<PAGE>

      DESCRIPTION OF BUSINESS - Echelon Residential Holdings was formed on
      February 29, 2000, under the laws of the state of Delaware and operates in
      one industry segment: owning, leasing, developing, and managing real
      estate. There were no activities of Echelon Residential Holdings from
      February 29, 2000 through March 8, 2000. The Company is governed by its
      Amended and Restated Limited Liability Company Agreement ("the Agreement")
      dated June 23, 2000. At March 8, 2000, members' equity included capital
      contributions from the initial members of the Company, James A. Coyne and
      Charles E. Cobb, Jr. ("Initial Members"), who made collective capital
      contributions of $195,226. On June 23, 2000, the participating members,
      Darryl A. LeClair and Susan G. Johnson ("Participating Members") made
      capital contributions totaling $2,651,162. The collective Participating
      Members' capital contributions are comprised of Participating A Capital of
      $2,591,093, Participating B Capital of $45,052 and additional capital
      contributions of $15,017.

      Subsequent to the initial capital contributions above, the Agreement was
      executed and includes a provision whereby the members have no further
      obligation to contribute additional amounts of capital to the Company. If
      the Company requires additional funds, the Board of Managers is to notify
      the members. Each member has the right to contribute a pro rata share of
      such additional funds, based on the relative equity contributions made by
      each member. In addition, the liability of the members of the Company is
      limited to the members' total capital contributions.

      In accordance with the Agreement, the Participating Members earn a
      cumulative compounding annual return on their unreturned capital (as
      defined), at a per annum rate equal to 14% for Participating A capital and
      15% for Participating B capital, commencing on June 23, 2000. Preferred
      returns will be paid to the Participating Members in accordance with the
      terms of the Agreement. Payout of preferred returns (if any) is contingent
      upon the cumulative performance of the Company. See Note 9 - COMMITMENTS
      AND CONTINGENCIES.

      Per the Agreement, the Company is to distribute its cash flow (if any)
      periodically, but not less frequently than quarterly. The losses and
      profits of the Company are generally allocated to the members as follows:

            a)    losses are generally allocable 77.9% to members other than
                  Participating Members and 22.1% to Participating Members, and

            b)    profits are generally allocated the same way except for a
                  priority income allocation to the Participating Members to
                  cover priority cash distributions made on their Participating
                  Capital.

      PRINCIPLES OF CONSOLIDATION - The accompanying consolidated financial
      statements include the accounts of Echelon Residential Holdings, its
      wholly owned subsidiary and a 60% interest in a joint venture. All
      intercompany balances have been eliminated. Investments for which the
      Company has a 20% to 50% ownership interest are accounted for using the
      equity method.

      The Company has recorded a minority interest in the Company's consolidated
      financial statements to reflect the ownership of its partner in the joint
      venture.

      ESTIMATES - The preparation of financial statements in conformity with
      accounting principles generally accepted in the United States of America
      requires management to make estimates and assumptions that affect the
      amount of assets and liabilities and disclosure of contingent assets and
      liabilities at the date of the financial statements and the amounts of
      revenues and expenses during the reported period. Actual results could
      differ from those estimates. Significant estimates include the
      recoverability of real estate held for sale.

      CASH AND CASH EQUIVALENTS - Cash and cash equivalents include cash on
      hand, demand deposits, and short-term investments with original maturities
      of three months or less.




                                     - 7 -
<PAGE>

      RESTRICTED CASH - Restricted cash represents security deposits at
      multi-family residential communities held in separate noninterest-bearing
      depository accounts.

      RESTRICTED INVESTMENTS - Restricted investments represent certificates of
      deposit with maturities greater than three months. These investments are
      held by financial institutions that require such deposits in support of
      standby letters of credit.

      REAL ESTATE - Real estate additions are recorded at cost. Interest and
      real estate taxes incurred during construction periods are capitalized and
      depreciated on the same basis as the related assets. Costs directly
      related to the acquisition, development or improvement of real estate, and
      certain indirect development costs have also been capitalized.
      Depreciation is calculated on a straight-line basis over the estimated
      lives of the assets as follows:

                                                                  ESTIMATED
                                                                USEFUL LIVES

      Buildings                                                    35 years
      Furniture, fixtures, and equipment                         3-10 years

      IMPAIRMENT OF LONG-LIVED ASSETS - The carrying value of long-lived assets,
      including property and equipment, will be reviewed for impairment whenever
      events or changes in circumstances indicate that the recorded value cannot
      be recovered from undiscounted future cash flows.

      REVENUE RECOGNITION - The Company recognizes revenue on the sale of real
      estate properties when title has passed to the buyer and all contingencies
      have been removed. Rental revenues, management fees and developer fees are
      recognized when earned.

      INCOME TAXES - Under the provisions of the Internal Revenue Code and
      applicable state laws, the Company is not directly subject to income
      taxes; the results of its operations are included in the tax returns of
      its members.

      NEW ACCOUNTING PRONOUNCEMENTS - SFAS No. 133, ACCOUNTING FOR DERIVATIVE
      INSTRUMENTS AND HEDGING ACTIVITIES, is effective for all fiscal years
      beginning after June 15, 2000. SFAS No. 133, as amended, establishes
      accounting and reporting standards for derivative instruments and hedging
      activities. Under SFAS No. 133, certain contracts that were not formerly
      considered derivatives may now meet the definition of a derivative. The
      Company adopted SFAS No. 133 effective January 1, 2001. There was no
      impact on the Company's financial position, results of operations or
      liquidity resulting from the adoption of SFAS No. 133.

      Effective March 8, 2000 (date of inception), the Company adopted the
      provisions of Securities Exchange Commission Staff Accounting Bulletin
      101, "Revenue Recognition in Financial Statements" ("SAB No. 101"). SAB
      No. 101 provides guidance for the recognition, presentation and disclosure
      of revenue in financial statements. The adoption of SAB No. 101 had no
      impact on the Company's financial statements.




                                     - 8 -
<PAGE>

      RECLASSIFICATIONS - Certain amounts previously reported in the March 8,
      2000 consolidated balance sheet have been reclassified to conform to the
      December 31, 2000 presentation.

2.    REAL ESTATE - NET

      As of December 31, 2000, real estate consists of the following:

      Land and land improvements held for development or sale     $ 15,676,581
                                                                  ------------

      Real estate under development:

        Land and land improvements                                   8,302,770
        Construction in progress                                    14,694,874
                                                                  ------------

                                                                    22,997,644
                                                                  ------------

      Income producing real estate:

        Land and land improvements                                   2,303,890
        Buildings and improvements                                  19,720,463
        Equipment and other                                            484,752
        Accumulated depreciation                                       (91,128)
                                                                  ------------

                                                                    22,417,977
                                                                  ------------

                                                                  $ 61,092,202
                                                                  ============

      For the period March 8, 2000 (date of inception) through December 31,
      2000, the Company recorded a write-down of land held for development or
      sale of $635,437 in the consolidated statement of operations. Land held
      for development or sale was determined to have been impaired because the
      estimated cash flows are less than the carrying value of the two parcels
      of land. The estimated fair value of these two parcels of land was based
      on letters of intent from third-party purchasers, dated October 2000 and
      December 2000, to purchase the two parcels of land.

      As of December 31, 2000, the Company's land and land improvements held for
      development or sale includes five parcels of improved and unimproved land
      for the development of multi-family residential communities. The land is
      located in urban areas in Memphis, Tennessee; Dallas, Texas; Denver,
      Colorado and Colorado Springs, Colorado.

      As of December 31, 2000, real estate under development includes the
      following three multi-family residential communities:

<TABLE>
<CAPTION>

                                                                               CONSTRUCTION      ACTUAL/ESTIMATED
                                                        RENTABLE     LAND      COMMENCEMENT      DATE FIRST UNITS
      PROJECT NAME                       LOCATION        UNITS     ACREAGE         DATE              AVAILABLE
      ------------                     -----------      --------   -------     ------------      ----------------
      <S>                              <C>              <C>       <C>          <C>               <C>
      ECHELON AT THE BALLPARK          Memphis, TN        385         5           Q1 2000             Q1 2001
      ECHELON AT LAKESIDE               Plano, TX         181         12          Q3 1999             Q3 2000
      ECHELON AT UPTOWN                Orlando, FL        244         3           Q2 2001             Q2 2002
</TABLE>

      As discussed in Note 6, INVESTMENT IN CONSOLIDATED JOINT VENTURE
      PARTNERSHIP, ECHELON AT LAKESIDE commenced operations during the period
      March 8, 2000 (date of inception) through December 31, 2000 and portions
      of the project remained under construction as of December 31, 2000.

      As of December 31, 2000, real estate includes $606,990 of interest
      capitalized during the period March 8, 2000 (date of inception) through
      December 31, 2000.




                                     - 9 -
<PAGE>

3.    INVESTMENT IN UNCONSOLIDATED JOINT VENTURE

      In July 1999, Fannie Mae's American Communities Fund agreed to invest with
      a wholly owned subsidiary of Echelon in the development of ECHELON AT
      CHENEY PLACE, a 303-unit multi-family residential community currently
      under construction in downtown Orlando, Florida. Echelon's 20% interest in
      the joint venture was purchased by Echelon Residential, in conjunction
      with the real estate assets purchased as discussed in Note 1, SUMMARY OF
      BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES. The Company accounts for its
      investment in the joint venture under the equity method. Concurrent with
      the execution of the joint venture agreement with Fannie Mae's American
      Communities Fund, the joint venture executed an agreement with Wachovia
      Bank, N.A. for a $21,500,000 loan to fund the construction of ECHELON AT
      CHENEY PLACE. The loan is guaranteed by Echelon Residential.

      Construction of ECHELON AT CHENEY PLACE began in late July 1999 and
      construction continued on portions of the project through December 31,
      2000. For the period March 8, 2000 (date of inception) through December
      31, 2000, the Company recorded its share of losses for ECHELON AT CHENEY
      PLACE, from the initial operations of the project, as a reduction of the
      investment in unconsolidated joint venture. As of December 31, 2000, total
      capital expenditures and construction loan draws for the project were
      $24,834,193 and $18,408,921, respectively. Through December 31, 2000, the
      Company's capital contributions to the joint venture totaled $1,386,000.
      The total of net losses and purchase price adjustment allocated to the
      investment in unconsolidated joint venture is $322,094.

4.    CONSTRUCTION LOANS

      As of December 31, 2000, the Company's construction loans outstanding are
      as follows:

      Bank of America                                              $ 17,614,845
      First Union National Bank of Florida                            9,222,895
                                                                   ------------

                                                                   $ 26,837,740
                                                                   ============

      The Company has a $20,000,000 construction loan with Bank of America to
      fund the construction of ECHELON AT LAKESIDE. The loan is guaranteed by
      Echelon Residential. The interest rate is LIBOR plus 1.85% (8.4875% as of
      December 31, 2000), and the loan matures in September 2002. As of December
      31, 2000, the Company has made $17,614,845 of construction draws on this
      loan. See further discussion of the development of ECHELON AT LAKESIDE
      included in Note 6, INVESTMENT IN CONSOLIDATED JOINT VENTURE PARTNERSHIP.
      Accrued interest on the Bank of America construction loan is $125,685 as
      of December 31, 2000.

      The Company has a $26,075,000 construction loan with First Union National
      Bank of Florida to fund the construction of ECHELON AT THE BALLPARK, a
      385-unit multi-family residential community currently under construction
      in downtown Memphis, Tennessee. The loan is guaranteed by Echelon
      Residential. The interest rate is LIBOR plus 1.65% (8.2125% as of December
      31, 2000) with monthly interest payments required through the term of the
      loan, which expires on June 2002. As of December 31, 2000, the Company has
      made construction draws of $9,222,895. Accrued interest on the First Union
      National Bank construction loan is $8,258 as of December 31, 2000.

      The Company's significant financial covenants include minimum net worth
      and liquidity requirements. As of December 31, 2000, the Company was in
      compliance with all financial covenants contained in its debt agreements.

      In the opinion of management, the carrying value of the Company's
      construction loans approximates their fair value based on management's
      estimates for similar issues, giving consideration to quality,




                                     - 10 -
<PAGE>

      interest rates, maturity and other significant characteristics. Although
      management is not aware of any factors that would significantly affect the
      estimated fair value of the construction loans, the amounts have not been
      comprehensively revalued for purposes of these consolidated financial
      statements since December 31, 2000 and current estimates of fair value may
      differ significantly.

      See Note 10, SUBSEQUENT EVENT, for discussion of a construction loan
      executed for the construction of ECHELON AT UPTOWN, in February 2001.

5.    NOTES PAYABLE

      As of December 31, 2000, notes payable outstanding are as follows:

<TABLE>
      <S>                                                                  <C>
      American Income Partners V-A Limited Partnership                     $ 2,160,000
      American Income Partners V-B Limited Partnership                       5,700,000
      American Income Partners V-C Limited Partnership                       2,390,000
      American Income Partners V-D Limited Partnership                       2,730,000
      American Income Fund I-A, a Massachusetts Limited Partnership          1,650,000
      American Income Fund I-B, a Massachusetts Limited Partnership          1,310,000
      American Income Fund I-C, a Massachusetts Limited Partnership          2,780,000
      American Income Fund I-D, a Massachusetts Limited Partnership          3,050,000
      American Income Fund I-E, a Massachusetts Limited Partnership          4,790,000
      AIRFUND International Limited Partnership                              1,800,000
      AIRFUND II International Limited Partnership                           3,640,000
                                                                           -----------
      Subtotal                                                              32,000,000

      Series A Note                                                          1,684,211
      Series B Notes                                                           585,679
      Note payable - Echelon Development Holdings LLC                          770,000
                                                                           -----------

                                                                           $35,039,890
                                                                           ===========
</TABLE>

      On March 8, 2000, the Company executed $32,000,000 in notes payable with
      11 partnerships. The Company contributed the proceeds from the notes
      payable to Echelon Residential to acquire various real estate assets from
      Echelon, as discussed in Note 1, SUMMARY OF BUSINESS AND SIGNIFICANT
      ACCOUNTING POLICIES. These partnerships are managed by their general
      partners who have engaged Equis Financial Group ("EFG") as the
      partnerships' manager. Mr. James A. Coyne is Executive Vice President of
      EFG and is an equity investor in the Company. Mr. Coyne, in his individual
      capacity, is the only equity investor in the Company related to EFG. These
      notes payable have a term of 30 months, maturing on September 8, 2002, and
      an annual interest rate of 14% for the first 24 months and 18% for the
      final six months. No principal payments are required prior to the
      scheduled maturity. Interest accrues and compounds monthly and is payable
      at maturity. Accrued interest on these notes is $3,907,798 as of December
      31, 2000. The Company has assigned and pledged a security interest in all
      of its rights, title, and interest in its membership interests in Echelon
      Residential to the 11 partnerships as collateral.

      On March 8, 2000, the Company executed a Series A Note with Cobb Partners
      Limited. The Series A Note has a term of 30 months, maturing on September
      8, 2002, and an annual interest rate of 14% for the first 24 months and
      18% for the final six months. No principal payments are required prior to
      the scheduled maturity. Accrued interest on the Series A Note is $205,674
      as of December 31, 2000. Interest accrues and compounds monthly and is
      payable at maturity. The Company also executed




                                     - 11 -
<PAGE>

      Series B Notes with several individuals, who are employees or investors of
      EFG. The Series B Notes have an annual interest rate of 15% and mature on
      June 30, 2004. No principal payments are required prior to the scheduled
      maturity. Interest accrues and compounds monthly and is payable at
      maturity. The Series B Notes are subordinated to the $32,000,000 notes
      payable and the Series A Note. Accrued interest on the Series B Notes is
      $76,920 as of December 31, 2000.

      On December 29, 2000, the Company executed a $770,000 note payable to
      Echelon Development Holdings LLC ("Echelon Development Holdings"). The
      note payable has a term of 24 months, maturing on December 29, 2002, and
      an annual interest rate of 10%. Interest accrues and compounds daily and
      is payable on December 31st of each year the note payable is outstanding.
      The Company repaid the note, plus interest of $6,751, on January 30, 2001.

      In the opinion of management, the carrying value of the Company's notes
      payable approximates the fair value based on management's estimates for
      similar issues, giving consideration to quality, interest rates, maturity
      and other significant characteristics.

6.    INVESTMENT IN CONSOLIDATED JOINT VENTURE PARTNERSHIP

      In September 1999, a wholly owned subsidiary of Echelon entered into a
      joint venture agreement with Turner Heritage Investments, Ltd. ("Turner")
      for the development of ECHELON AT LAKESIDE, a 181-unit multi-family
      residential community currently under construction in Plano, Texas, which
      is near Dallas. Echelon's 60% interest in the joint venture was purchased
      by Echelon Residential, in conjunction with the transaction discussed in
      Note 1, SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES.
      Construction of ECHELON AT LAKESIDE began in October 1999 and continued on
      portions of the project through December 31, 2000. As of December 31,
      2000, total capital expenditures for the project were $23,927,413.

      Through December 31, 2000, the Company's capital contributions totaled
      $2,592,000 and Turner contributed land valued at $2,592,000 to the joint
      venture. The Company's interest represents a controlling interest, and
      accordingly, for financial reporting purposes, the assets, liabilities,
      retained deficit, and current period results of operations of the joint
      venture for the period March 8, 2000 (date of inception) through December
      31, 2000, are included in the Company's consolidated financial statements,
      and Turner's partnership interest in the joint venture has been recorded
      as a minority interest. See further discussion of debt financing for
      ECHELON AT LAKESIDE included in Note 4, CONSTRUCTION LOANS.

7.    RELATED PARTY TRANSACTIONS

      In conjunction with the purchase of Echelon's interest in the joint
      venture formed for the development of ECHELON AT LAKESIDE, Echelon
      Residential also assumed the development agreement, an asset management
      agreement and a property management and leasing agreement with Lakeside
      Baywater Enterprises Limited Partnership, the joint venture partnership.
      In accordance with the development agreement, Echelon Residential has been
      engaged as the developer for ECHELON AT LAKESIDE and receives a
      development fee, payable in arrears, in monthly installments of $44,371.
      In accordance with the asset management agreement, Echelon Residential
      receives a monthly asset management fee, computed in arrears, equal to 1%
      of the ECHELON AT LAKESIDE monthly gross income. Under the terms of the
      property management and leasing agreement, Echelon Residential also
      receives a monthly management fee, computed in arrears, equal to 4% of the
      ECHELON AT LAKESIDE monthly gross income.




                                     - 12 -
<PAGE>

      For the period March 8, 2000 (date of inception) through December 31,
      2000, Echelon Residential recognized $388,212 in development, asset
      management, and property management revenues from ECHELON AT LAKESIDE.

      In conjunction with the purchase of Echelon's interest in the joint
      venture formed for the development of ECHELON AT CHENEY PLACE, Echelon
      Residential also assumed agreements which include the payment of a
      development fee, a property management and leasing agreement and an
      incentive management fee with Cheney Place LLC, the joint venture
      partnership. In accordance with these agreements, Echelon Residential has
      been engaged as the developer for ECHELON AT CHENEY PLACE and receives a
      monthly development fee equal to 5% of the hard construction costs
      incurred during the month. Echelon Residential is also the property
      manager and leasing agent for the property and will receive a monthly
      management fee, computed in arrears, equal to $7,500 per month for two
      months prior to the opening of the clubhouse. For the next nine months
      thereafter, Echelon Residential will receive the greater of a) 3% of the
      effective monthly gross income or b) 3% of the effective monthly gross
      income that would be collected if 75% of ECHELON AT CHENEY PLACE were
      occupied at rents equaling the average pro forma base rent. Thereafter,
      the monthly management fee will be calculated as 3% of the effective
      monthly gross income of ECHELON AT CHENEY PLACE. The incentive management
      fee is equal to 2% of ECHELON AT CHENEY PLACE'S effective gross income, as
      defined. For the period March 8, 2000 (date of inception) through December
      31, 2000, Echelon Residential recognized $392,695 in development, property
      management and incentive management fee revenues from ECHELON AT CHENEY
      PLACE.

      Echelon Property Management LLC, a wholly owned subsidiary of Echelon
      Residential, has contracted to manage several operating multi-family
      residential communities currently leased by Echelon Commercial LLC
      ("Echelon Commercial"), a wholly owned limited liability subsidiary of
      Echelon Development LLC. Echelon Development LLC is a wholly owned limited
      liability subsidiary of Echelon Development Holdings LLC. Several of the
      equity investors in Echelon Residential Holdings are also equity investors
      in Echelon Development Holdings LLC. For the period March 8, 2000 (date of
      inception) through December 31, 2000, Echelon Residential recognized
      $587,908 in property management revenues from the management of
      multi-family properties leased by Echelon Commercial.

      As of December 31, 2000, the Company had accounts receivable balances of
      $51,880 due from Echelon Commercial LLC, $19,455 due from ECHELON AT
      CHENEY PLACE and $44,186 from other related parties. These amounts were
      repaid by the end of February 2001.

8.    RETIREMENT PLAN

      Echelon Residential is the sponsor of the Echelon 401(k) Savings Plan
      ("Savings Plan") under Section 401(k) of the Internal Revenue Service Code
      (the "Code"), to which participants may contribute a percentage of their
      pay up to limits established by the Code. The Company may make
      discretionary contributions to the Savings Plan. The Company did not
      contribute to the Savings Plan during the period March 8, 2000 (date of
      inception) through December 31, 2000. As of January 1, 2001, the Company
      initiated an option in the Savings Plan to include a mandatory matching
      contribution from the Company.

9.    COMMITMENTS AND CONTINGENCIES

      As of December 31, 2000, two multi-family residential communities were
      under construction and had remaining commitments of $12,985,656 with
      construction contractors.

      On December 29, 2000, the Company executed a $5,000,000 revolving
      promissory note with Echelon Development Holdings. The revolving
      promissory note has a term of 24 months, maturing on December 29, 2002,
      and an annual interest rate of 10%. Interest accrues and compounds daily
      and is




                                     - 13 -
<PAGE>

      payable on December 31st of each year the note is outstanding. As of
      December 31, 2000, there were no amounts outstanding on the revolving
      promissory note.

      As discussed in Note 1, SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING
      POLICIES, the Company maintains preferred return accounts for the
      Participating Members. As of December 31, 2000, the preferred return
      balances for Participating A and B Capital were $198,597 and $3,709,
      respectively. These amounts have not been paid and therefore, have not
      been reflected as a reduction of Participating A and B Capital in the
      December 31, 2000 consolidated financial statements.

      The joint venture formed for the development of ECHELON AT LAKESIDE
      maintains preferred return accounts for the limited partners, Echelon LP,
      a wholly owned limited liability subsidiary of Echelon Residential, and
      Turner. The payment of any preferred returns to Echelon LP would be
      eliminated upon consolidation. As of December 31, 2000, the preferred
      return balance for Turner was $312,669. This amount has not been paid and
      therefore, has not been reflected as a reduction of member's equity in the
      December 31, 2000 consolidated financial statements.

10.   SUBSEQUENT EVENT

      In February 2001, the Company closed on a $18,600,000 loan from SouthTrust
      Bank for the construction financing of ECHELON AT UPTOWN, a 244-unit
      multi-family residential community to be developed in downtown Orlando,
      Florida. The interest rate is LIBOR plus 1.75% with monthly interest
      payments required over the 36-month initial term of the loan. The loan is
      guaranteed by Echelon Residential and construction is expected to commence
      in the second quarter of 2001.

11.   QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

      The following is a summary of the quarterly results of operations for the
      period March 8, 2000 (date of inception) through December 31, 2000:

<TABLE>
<CAPTION>

                                        PERIOD                           THREE MONTHS ENDED
                                       MARCH 8 -     ----------------------------------------------------------
                                       MARCH 31,       JUNE 30,      SEPTEMBER 30,   DECEMBER 31,      TOTAL
                                      ----------     ------------    -------------  -------------  ------------
      <S>                             <C>            <C>            <C>             <C>            <C>
      Total revenues............      $ 147,078      $   758,673     $   659,867    $ 3,664,594    $ 5,230,212
      Net loss..................      $(328,623)     $(1,359,326)    $(1,855,757)   $(3,162,320)   $(6,706,026)
</TABLE>

                                     ******






                                     - 14 -
<PAGE>

                                  EXHIBIT INDEX
                                 2000 Form 10-K

EXHIBIT
-------

 2.7     Proposed Order Granting Joint Motion to Continue Final Approval
         Settlement Hearing (March 13, 2001).

10.3     Promissory Note from Semele Group Inc. (formerly known as Banyan
         Strategic Land Fund II), dated May 31, 1997 is filed as in the
         Registrant's Annual Report on Form 10-K for the year ended December 31,
         2000 and is included herein.

10.4     The First Allonge to Promissory Note from Semele Group Inc. (formerly
         known as Banyan Strategic Land Fund II), dated March 21, 2000 is filed
         as in the Registrant's Annual Report on Form 10-K for the year ended
         December 31,2000 and is included herein.

10.5     The Second Allonge to Promissory Note from Semele Group Inc. (formerly
         known as Banyan Strategic Land Fund II), dated March 12, 2001 is filed
         as in the Registrant's Annual Report on Form 10-K for the year ended
         December 31, 2000 and is included herein.

13       Annual Report to the Partners dated December 31, 2000.

23       Consent of Indpendent Auditors.