FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

              (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT of 1934

                  For the quarterly period ended June 30, 2002
   --------------------------------------------------------------------------

                                       OR

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

For the transition period from ____________________ to ______________________


                             Commission file number
                                     0-21558
                     ---------------------------------------


                            CNL Income Fund XII, Ltd.
-----------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


        Florida                                         59-3078856
----------------------------------              -----------------------------
(State or other jurisdiction of                       (I.R.S. Employer
incorporation or organization)                       Identification No.)


450 South Orange Avenue
Orlando, Florida                                            32801
----------------------------------              -----------------------------
(Address of principal executive offices)                  (Zip Code)


Registrant's telephone number
(including area code)                                  (407) 540-2000
                                                -----------------------------


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





<PAGE>


                                    CONTENTS





Part I                                                               Page
                                                                     ----

   Item 1.    Financial Statements:

                  Condensed Balance Sheets                            1

                  Condensed Statements of Income                      2

                  Condensed Statements of Partners' Capital           3

                  Condensed Statements of Cash Flows                  4

                  Notes to Condensed Financial Statements             5-6

   Item 2.    Management's Discussion and Analysis of Financial
                  Condition and Results of Operations                 7-9

   Item 3.   Quantitative and Qualitative Disclosures About
                  Market Risk                                         9

Part II

   Other Information                                                  10















<PAGE>


                            CNL INCOME FUND XII, LTD.
                         (A Florida Limited Partnership)
                            CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                                June 30,              December 31,
                                                                                  2002                    2001
                                                                           -------------------     -------------------

 <c>
                               ASSETS

   Land and buildings on operating leases, net                                  $  22,397,462           $  21,325,863
   Net investment in direct financing leases                                        8,051,948               8,143,625
   Real estate held for sale                                                          456,578               1,376,319
   Investment in joint ventures                                                     4,479,359               4,577,565
   Cash and cash equivalents                                                        1,145,337               1,281,855
   Certificates of deposit                                                            540,146                 545,107
   Due from related parties                                                             1,471                  25,037
   Accrued rental income, less allowance for doubtful
       accounts of $9,061 in 2002 and 2001                                          2,606,222               2,486,119
   Other assets                                                                        75,525                  75,121
                                                                           -------------------     -------------------

                                                                                $  39,754,048           $  39,836,611
                                                                           ===================     ===================

                  LIABILITIES AND PARTNERS' CAPITAL

   Accounts payable                                                              $     19,192            $     22,119
   Real estate taxes payable                                                           19,268                   7,037
   Distributions payable                                                              956,252                 956,252
   Due to related parties                                                              23,560                  25,885
   Rents paid in advance and deposits                                                  30,548                 175,992
                                                                           -------------------     -------------------
       Total liabilities                                                            1,048,820               1,187,285

   Partners' capital                                                               38,705,228              38,649,326
                                                                           -------------------     -------------------

                                                                                $  39,754,048           $  39,836,611
                                                                           ===================     ===================
</TABLE>
           See accompanying notes to condensed financial statements.





<PAGE>


                            CNL INCOME FUND XII, LTD.
                         (A Florida Limited Partnership)
                         CONDENSED STATEMENTS OF INCOME

<TABLE>
<CAPTION>

                                                                Quarter Ended                    Six Months Ended
                                                                   June 30,                          June 30,
                                                             2002            2001              2002             2001
                                                        ---------------  --------------  ----------------- ---------------

 <c>
Revenues:
    Rental income from operating leases                     $  674,787      $  644,797       $  1,358,054    $  1,348,931
    Earned income from direct financing leases                 236,757         229,045            460,412         494,818
    Contingent rental income                                     7,896             485             14,662           4,608
    Interest and other income                                   10,503          17,761              9,383          46,494
                                                        ---------------  --------------  ----------------- ---------------
                                                               929,943         892,088          1,842,511       1,894,851
                                                        ---------------  --------------  ----------------- ---------------

Expenses:
    General operating and administrative                        78,224          93,734            162,723         249,173
    Property expenses                                           10,699           8,145             18,018          42,068
    Management fees to related parties                          11,473          10,309             21,899          20,978
    State and other taxes                                          446          10,976             49,763          59,150
    Depreciation and amortization                              110,394         110,905            218,786         221,812
    Provision for write-down of assets                              --          64,518                 --         362,265
                                                        ---------------  --------------  ----------------- ---------------
                                                               211,236         298,587            471,189         955,446
                                                        ---------------  --------------  ----------------- ---------------

Income Before Equity in Earnings of Joint Ventures             718,707         593,501          1,371,322         939,405

Equity in Earnings of Joint Ventures                           104,279          96,087            206,215         159,148
                                                        ---------------  --------------  ----------------- --------------

Income from Continuing Operations                              822,986         689,588          1,577,537       1,098,553

Discontinued Operations (Note 3):
    Income from discontinued operations, net                    19,828          42,344             56,869          84,688
    Gain on disposal of discontinued operations, net           334,000              --            334,000              --
                                                        ---------------  --------------  ----------------- ---------------
                                                               353,828          42,344            390,869          84,688
                                                        ---------------  --------------  ----------------- ---------------

Net Income                                                 $ 1,176,814      $  731,932       $  1,968,406    $  1,183,241
                                                        ===============  ==============  ================= ===============

Income Per Limited Partner Unit
    Continuing operations                                    $    0.18       $    0.15         $     0.35      $     0.24
    Discontinued operations                                       0.08            0.01               0.09            0.02
                                                        ---------------  --------------  ----------------- ---------------
                                                             $    0.26       $    0.16         $     0.44      $     0.26
                                                        ===============  ==============  ================= ===============

Weighted Average Number of Limited
    Partner Units Outstanding                                4,500,000       4,500,000          4,500,000       4,500,000
                                                        ===============  ==============  ================= ===============


</TABLE>
           See accompanying notes to condensed financial statements.


<PAGE>


                            CNL INCOME FUND XII, LTD.
                         (A Florida Limited Partnership)
                    CONDENSED STATEMENTS OF PARTNERS' CAPITAL

<TABLE>
<CAPTION>

                                                                           Six Months Ended          Year Ended
                                                                               June 30,             December 31,
                                                                                 2002                   2001
                                                                         ---------------------    ------------------

 <c>
General partners:
    Beginning balance                                                          $      259,109          $    259,109
    Net income                                                                             --                    --
                                                                         ---------------------    ------------------
                                                                                      259,109               259,109
                                                                         ---------------------    ------------------

Limited partners:
    Beginning balance                                                              38,390,217            38,946,975
    Net income                                                                      1,968,406             3,268,250
    Distributions ($0.43 and $0.85 per
       limited partner unit, respectively)                                         (1,912,504 )          (3,825,008 )
                                                                         ---------------------    ------------------
                                                                                   38,446,119            38,390,217
                                                                         ---------------------    ------------------

Total partners' capital                                                       $    38,705,228         $  38,649,326
                                                                         =====================    ==================

</TABLE>
           See accompanying notes to condensed financial statements.

<PAGE>


                            CNL INCOME FUND XII, LTD.
                         (A Florida Limited Partnership)
                       CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                                   Six Months Ended
                                                                                       June 30,
                                                                               2002                 2001
                                                                          ----------------     ---------------

 <c>
Increase (Decrease) in Cash and Cash Equivalents

    Net Cash Provided by Operating Activities                                $  1,815,495        $  1,955,977
                                                                          ----------------     ---------------

    Cash Flows from Investing Activities:
       Additions to land and building on operating leases                      (1,287,713 )                --
       Proceeds from sale of assets                                             1,248,203                  --
       Investment in joint venture                                                     --          (1,689,609 )
       Return of capital from joint venture                                            --           1,663,260
       Collections on mortgage note receivable                                         --              43,760
                                                                          ----------------     ---------------
              Net cash provided by (used in) investing
                  activities                                                      (39,510 )            17,411
                                                                          ----------------     ---------------

    Cash Flows from Financing Activities:
       Distributions to limited partners                                       (1,912,504 )        (1,912,504 )
                                                                          ----------------     ---------------
              Net cash used in financing activities                            (1,912,504 )        (1,912,504 )
                                                                          ----------------     ---------------

Net Increase (Decrease) in Cash and Cash
    Equivalents                                                                  (136,519 )            60,884

Cash and Cash Equivalents at Beginning of Period                                1,281,855           1,161,018
                                                                          ----------------     ---------------

Cash and Cash Equivalents at End of Period                                   $  1,145,336        $  1,221,902
                                                                          ================     ===============

Supplemental Schedule of Non-Cash Financing
    Activities:

       Distributions declared and unpaid at end of
          period                                                              $   956,252         $   956,252
                                                                          ================     ===============

</TABLE>
           See accompanying notes to condensed financial statements.





<PAGE>

                            CNL INCOME FUND XII, LTD.
                         (A Florida Limited Partnership)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
              Quarters and Six Months Ended June 30, 2002 and 2001


1.       Basis of Presentation:

         The accompanying  unaudited  condensed  financial  statements have been
         prepared in accordance  with the  instructions  to Form 10-Q and do not
         include  all  of the  information  and  note  disclosures  required  by
         generally  accepted  accounting  principles.  The financial  statements
         reflect all adjustments,  consisting of normal  recurring  adjustments,
         which are, in the opinion of management,  necessary to a fair statement
         of the results for the interim periods presented. Operating results for
         the quarter and six months ended June 30, 2002,  may not be  indicative
         of the results  that may be expected  for the year ending  December 31,
         2002.  Amounts as of  December  31,  2001,  included  in the  financial
         statements,  have been derived from audited financial  statements as of
         that date.

         These unaudited financial statements should be read in conjunction with
         the financial statements and notes thereto included in Form 10-K of CNL
         Income Fund XII, Ltd. (the  "Partnership")  for the year ended December
         31, 2001.

         Effective  January  1,  2002,  the  Partnership  adopted  Statement  of
         Financial  Accounting  Standards No. 144 "Accounting for the Impairment
         or Disposal of  Long-Lived  Assets."  This  statement  requires  that a
         long-lived  asset be  tested  for  recoverability  whenever  events  or
         changes in  circumstances  indicate that its carrying amount may not be
         recoverable.   The  carrying  amount  of  a  long-lived  asset  is  not
         recoverable  if it  exceeds  the  sum of the  undiscounted  cash  flows
         expected to result from the use and eventual  disposition of the asset.
         The assessment is based on the carrying amount of the asset at the date
         it is tested for recoverability.  An impairment loss is recognized when
         the carrying amount of a long-lived asset exceeds its fair value. If an
         impairment is recognized,  the adjusted carrying amount of a long-lived
         asset is its new cost  basis.  The  statement  also  requires  that the
         results of  operations of a component of an entity that either has been
         disposed  of or is  classified  as  held  for  sale  be  reported  as a
         discontinued   operation  if  the  disposal   activity  was   initiated
         subsequent to the adoption of the Standard.

2.       Reclassification:

         Certain  items in the  prior  year's  financial  statements  have  been
         reclassified to conform to 2002 presentation.  These  reclassifications
         had no effect on total partners' capital or net income.

3.       Land and Buildings on Operating Leases:

         In June 2002, the  Partnership  reinvested the remaining  proceeds from
         the 2001 sale of the  property  in Winter  Haven,  Florida  and the net
         sales  proceeds from the sale of the property in Arlington,  Texas (see
         Note 4) in a property in San Antonio,  Texas at an approximate  cost of
         $1,287,700.  The  Partnership  acquired  this property from CNL Funding
         2001-A, LP, an affiliate of the general partners (see Note 5).

4.       Discontinued Operations:

         During  2002,  the  Partnership  entered  into  an  agreement  with  an
         unrelated  third party to sell its property in Valdosta,  Georgia.  The
         property  has been  reclassified  from land and  building on  operating
         leases and accrued rental income,  to real estate held for sale and was
         recorded at the lower of its carrying amount or fair value less cost to
         sell. In addition,  the Partnership stopped recording  depreciation and
         accrued rental income once the property was identified for sale.


<PAGE>


                            CNL INCOME FUND XII, LTD.
                         (A Florida Limited Partnership)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
              Quarters and Six Months Ended June 30, 2002 and 2001


4.       Discontinued Operations - Continued:

         In April 2002, the Partnership sold its property in Arlington, Texas to
         an unrelated third party for approximately  $1,288,600 and received net
         sales  proceeds  of  approximately  $1,248,200  resulting  in a gain on
         disposal of discontinued  operations of $334,000. The financial results
         for these  properties are reflected as  Discontinued  Operations in the
         accompanying financial statements.

         The operating results of discontinued operations are as follows:
<TABLE>
<CAPTION>

                                                          Quarter Ended June 30,            Six Months Ended June 30,
                                                          2002              2001            2002            2001
                                                      -------------     --------------  -------------   --------------

 <c>
         Rental revenues                                 $  21,151         $   42,334      $  62,822       $   84,688
         Other income                                          700                 --            700               --
         Expenses                                           (2,023 )               --         (6,653 )             --
         Gain on disposal of assets                        334,000                 --        334,000               --
                                                      -------------     --------------  -------------   --------------
         Income from discontinued operations             $ 353,828         $   42,334      $ 390,869       $   84,688
                                                      =============     ==============  =============   ==============
</TABLE>

5.       Related Party Transactions:

         In June 2002,  the  Partnership  acquired a  property  in San  Antonio,
         Texas,   from  CNL  Funding  2001-A,   LP,  for  a  purchase  price  of
         approximately  $1,287,700  (see Note 3). CNL Funding  2001-A,  LP is an
         affiliate of the general partners. CNL Funding 2001-A, LP had purchased
         and  temporarily  held title to the property in order to facilitate the
         acquisition of the property by the Partnership. The purchase price paid
         by the  Partnership  represented  the  costs  incurred  by CNL  Funding
         2001-A, LP to acquire and carry the property, including closing costs.



<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

         CNL Income Fund XII,  Ltd.  (the  "Partnership")  is a Florida  limited
Partnership  that was organized on August 20, 1991, to acquire for cash,  either
directly or through joint venture and tenancy in common arrangements, both newly
constructed  and  existing  restaurants,   as  well  as  Properties  upon  which
restaurants  were  to  be  constructed  (the  "Properties"),  which  are  leased
primarily  to operators of national  and  regional  fast-food  and  family-style
restaurant chains. The leases are generally  triple-net leases, with the lessees
responsible  for all repairs and  maintenance,  property  taxes,  insurance  and
utilities.  As of June 30, 2001 and 2002,  the  Partnership  owned 41 Properties
directly. In addition, as of June 30, 2001 and 2002, the Partnership owned seven
Properties indirectly through joint venture or tenancy in common arrangements.

Capital Resources

         The  Partnership's  primary  source of capital for the six months ended
June 30, 2002 and 2001 was cash from operating  activities  (which includes cash
received from tenants, distributions from joint ventures, and interest and other
income received,  less cash paid for expenses).  Cash from operating  activities
was  $1,815,495  and $1,955,977 for the six months ended June 30, 2002 and 2001,
respectively.  The decrease in cash from operating activities for the six months
ended June 30,  2002,  was  primarily  a result of changes in the  Partnership's
working capital and changes in income and expenses,  as described in "Results of
Operations" below.

         During the quarter and six months ended June 30, 2002, the  Partnership
sold  its  Property  in  Arlington,  Texas  to  an  unrelated  third  party  for
approximately  $1,288,600  and  received  net sales  proceeds  of  approximately
$1,248,200  resulting  in a gain  on  disposal  of  discontinued  operations  of
$334,000.  In June 2002, the Partnership  reinvested the remaining proceeds from
the 2001  sale of the  Property  in  Winter  Haven,  Florida  and the net  sales
proceeds from the sale of its Property in Arlington, Texas, in a Property in San
Antonio,  Texas at an approximate cost of $1,287,700.  The Partnership  acquired
this Property from CNL Funding 2001-A, LP, a Delaware limited partnership and an
affiliate of the general  partners.  CNL Funding  2001-A,  LP had  purchased and
temporarily held title to the Property in order to facilitate the acquisition of
the  Property by the  Partnership.  The purchase  price paid by the  Partnership
represented  the costs incurred by CNL Funding  2001-A,  LP to acquire and carry
the Property, including closing costs.

         Currently,  cash  reserves  and rental  income  from the  Partnership's
Properties  are invested in money market  accounts or other  short-term,  highly
liquid  investments,  such as demand deposit accounts at commercial banks, money
market  accounts and  certificates  of deposit with less than a 90-day  maturity
date, pending the Partnership's use of such funds to pay Partnership expenses or
to make  distributions  to the partners.  At June 30, 2002, the  Partnership had
$1,145,337 invested in such short-term investments, as compared to $1,281,855 at
December  31, 2001.  The funds  remaining  at June 30,  2002,  after  payment of
distributions  and  other  liabilities,  will be used to meet the  Partnership's
working capital needs.

Short-Term Liquidity

         The Partnership's  short-term liquidity  requirements consist primarily
of the operating expenses of the Partnership.

         The Partnership's  investment strategy of acquiring Properties for cash
and  leasing  them  under  triple-net  leases to  operators  who meet  specified
financial standards minimizes the Partnership's  operating expenses. The general
partners  believe that the leases will  continue to generate cash flow in excess
of operating expenses.

         The general  partners have the right,  but not the obligation,  to make
additional capital  contributions if they deem it appropriate in connection with
the operations of the Partnership.

         The Partnership  generally  distributes cash from operations  remaining
after the payment of operating  expenses of the Partnership,  to the extent that
the general partners  determine that such funds are available for  distribution.
Based on current and  anticipated  future cash from  operations the  Partnership
declared distributions to the limited partners of $1,912,504 for each of the six
months ended June 30, 2002 and 2001 ($956,252 for each applicable quarter). This
represents distributions for each of the six months of $0.43 per unit ($0.21 for
each applicable quarter). No distributions were made to the general partners for
the quarters and six months ended June 30, 2002 and 2001. No amounts distributed
to the  limited  partners  for the six months  ended June 30,  2002 and 2001 are
required to be or have been  treated by the  Partnership  as a return of capital
for  purposes of  calculating  the limited  partners'  return on their  adjusted
capital contributions. The Partnership intends to continue to make distributions
of cash available for distribution to the limited partners on a quarterly basis.

         Total  liabilities were $1,048,820 at June 30, 2002, from $1,187,285 at
December 31, 2001,  primarily as a result of a decrease in rents paid in advance
at June 30, 2002,  as compared to December 31, 2001.  The decrease was partially
offset by an increase in real estate taxes payable. The general partners believe
that the  Partnership  has sufficient  cash on hand to meet its current  working
capital needs.

Long-Term Liquidity

         The  Partnership  has no long-term  debt or other  long-term  liquidity
requirements.

Results of Operations

         Total rental revenues were $1,818,466 for the six months ended June 30,
2002,  as compared to  $1,843,749  in the  comparable  period of 2001,  of which
$911,544 and $873,842  were earned  during the second  quarter of 2002 and 2001,
respectively.  The decrease in rental  revenues during the six months ended June
30, 2002, as compared to the same period of 2001, was primarily due to the sales
of the Properties in Rialto,  California and Winter Haven,  Florida during 2001.
The decrease was partially  offset by an increase in rental  revenues during the
six months ended June 30, 2002 as a result of the  Partnership  reinvesting  the
majority of these net sales proceeds in Properties in Pflugerville and Pasadena,
Texas in December 2001.

         On May 1, 2002, Cypress  Restaurants of Georgia,  Inc., a tenant of the
Partnership,  filed for Chapter 7 bankruptcy  protection.  The general  partners
will continue to evaluate the Property in the  Partnership's  portfolio that the
tenant is  continuing  to operate as of July 31, 2002. If the lease is rejected,
the lost revenues  resulting from the rejected lease will have an adverse effect
on the results of operations of the Partnership,  if the Partnership is not able
to re-lease the Property in a timely manner.

         For the six months ended June 30, 2002 and 2001, the  Partnership  also
earned $14,662 and $4,608, respectively, in contingent rental income, $7,896 and
$485 of which was earned  during  the  quarters  ended  June 30,  2002 and 2001,
respectively.  The increase in contingent  rental income during the quarters and
six months  ended June 30, 2002,  as compared to the same  periods of 2001,  was
primarily  attributable  to an increase  in gross  sales for certain  restaurant
Properties whose leases require the payment of contingent rental income.

         During the six months  ended June 30,  2002 and 2001,  the  Partnership
earned $9,383 and $46,494,  respectively, in interest and other income, of which
$10,503 and  $17,761  were earned  during the  quarters  ended June 30, 2002 and
2001, respectively. The decrease in interest and other income during the quarter
and six months ended June 30, 2002, as compared to the same periods of 2001, was
due to a decrease in the average  cash  balance and due to a decline in interest
rates.

         During the six months  ended June 30,  2002 and 2001,  the  Partnership
earned $206,215 and $159,148, respectively, attributable to net income earned by
joint  ventures,  of which  $104,279 and $96,087 were earned during the quarters
ended June 30, 2002 and 2001, respectively. The increase in net income earned by
joint  ventures  during the six months ended June 30,  2002,  as compared to the
same period of 2001, was primarily  attributable to the fact that in April 2001,
the Partnership invested in a joint venture arrangement,  CNL VII, X, XII Kokomo
Joint Venture,  with CNL Income Fund VII, Ltd., and CNL Income X, Ltd.,  each of
which is a Florida limited partnership and an affiliate of the general partners.
The increase  during the six months ended June 30, 2002 was partially  offset by
the fact that in March 2001,  Middleburg Joint Venture, in which the Partnership
owned a 87.54%  interest,  sold its  Property  to the  tenant.  The  Partnership
dissolved the joint venture in accordance with the joint venture agreement.

         Operating expenses,  including  depreciation and amortization  expense,
and  provision  for  write-down of assets were $471,189 and $955,446 for the six
months  ended  June 30,  2002 and  2001,  respectively,  of which  $211,236  and
$298,587  was  incurred  during  the  quarters  ended  June 30,  2002 and  2001,
respectively.  Operating  expenses  were higher during the six months ended June
30, 2001, as compared to the same period of 2002, as a result of the Partnership
recording a provision  for  write-down  of assets of $362,265  consisting of the
accumulated  accrued rental income balance  relating to the Properties in Winter
Haven, Florida and Albany,  Georgia. The tenant of the Property in Winter Haven,
Florida vacated the Property and ceased rental payments to the Partnership.  The
tenant  of the  Property  in  Albany,  Georgia  terminated  its  lease  with the
Partnership.  The accrued rental income was the  accumulated  amount of non-cash
accounting   adjustments  previously  recorded  in  order  to  recognize  future
scheduled  rent  increases  as income  evenly  over the term of the  lease.  The
Partnership  sold the  Property in Winter  Haven,  Florida in December  2001 and
re-leased  the Property in Albany,  Georgia in January 2001 to a new tenant with
lease  terms  substantially  the  same as the  Partnership's  other  leases.  In
addition,  operating  expenses were higher during 2001, due to the fact that the
Partnership  incurred  certain  expenses,   such  as  repairs  and  maintenance,
insurance and real estate taxes in connection with the Property in Winter Haven,
Florida.  The decrease in operating  expenses  during the quarter and six months
ended June 30, 2002, was also  attributable  to a decrease in the costs incurred
for administrative expenses for servicing the Partnership and its Properties.

         Effective  January  1,  2002,  the  Partnership  adopted  Statement  of
Financial  Accounting  Standards  No.  144  "Accounting  for the  Impairment  or
Disposal of Long-Lived  Assets." This statement requires that a long-lived asset
be tested  for  recoverability  whenever  events  or  changes  in  circumstances
indicate that its carrying amount may not be recoverable. The carrying amount of
a long-lived  asset is not recoverable if it exceeds the sum of the undiscounted
cash flows  expected  to result  from the use and  eventual  disposition  of the
asset.  The assessment is based on the carrying  amount of the asset at the date
it is tested for  recoverability.  An  impairment  loss is  recognized  when the
carrying  amount of a long-lived  asset exceeds its fair value. If an impairment
is recognized,  the adjusted  carrying  amount of a long-lived  asset is its new
cost basis.  The  statement  also  requires  that the results of operations of a
component of an entity that either has been disposed of or is classified as held
for sale be reported as a  discontinued  operation if the disposal  activity was
initiated subsequent to the adoption of the Standard.

         In June of 2002,  the  Partnership  entered into an  agreement  with an
unrelated third party to sell the Property in Valdosta,  Georgia.  In accordance
with Statement of Financial  Accounting  Standards No. 144,  "Accounting for the
Impairment or Disposal of Long-Lived  Assets," the Partnership  reclassified the
assets from land and building on operating  leases and accrued  rental income to
real estate held for sale. The Partnership  recorded the reclassified  assets at
the  lower of  their  carrying  amount  or fair  value  less  cost to sell.  The
Partnership  also  suspended the recording of  depreciation  and accrued  rental
income upon  identifying the Property for sale. In addition,  in April 2002, the
Partnership  sold its Property in Arlington,  Texas to an unrelated  third party
for  approximately  $1,288,600 and received net sales proceeds of  approximately
$1,248,200  resulting  in a gain  on  disposal  of  discontinued  operations  of
$334,000.  The  Partnership  recognized  net  rental  income  from  discontinued
operations (rental revenues less property related expenses) amounting to $56,869
and $84,688  during the six months  ended June 30, 2002 and 2001,  respectively,
relating to these Properties, of which $19,828 and $42,334 was earned during the
quarters ended June 30, 2002 and 2001,  respectively.  The amounts were reported
as Discontinued Operations in the accompanying financial statements.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Inapplicable.

<PAGE>


                           PART II. OTHER INFORMATION


Item 1.    Legal Proceedings.   Inapplicable.
           ------------------

Item 2.    Changes in Securities.   Inapplicable.
           ----------------------

Item 3.    Default upon Senior Securities.   Inapplicable.
           -------------------------------

Item 4.    Submission of Matters to a Vote of Security Holders.   Inapplicable.
           ----------------------------------------------------

Item 5.    Other Information.   Inapplicable.
           ------------------

Item 6.    Exhibits and Reports on Form 8-K.
           ---------------------------------

           (a)   Exhibits

                    3.1      Affidavit and Certificate of Limited Partnership of
                             CNL Income Fund XII, Ltd.  (Included as Exhibit 3.2
                             to Registration  Statement No.  33-43278-01 on Form
                             S-11 and incorporated herein by reference.)

                    4.1      Affidavit and Certificate of Limited Partnership of
                             CNL Income Fund XII, Ltd.  (Included as Exhibit 3.2
                             to Registration  Statement No.  33-43278-01 on Form
                             S-11 and incorporated herein by reference.)

                    4.2      Amended   and   Restated   Agreement   of   Limited
                             Partnership of CNL Income Fund XII, Ltd.  (Included
                             as  Exhibit   4.2  to  Form  10-K  filed  with  the
                             Securities  and  Exchange  Commission  on April 15,
                             1993, and incorporated herein by reference.)

                    10.1     Management  Agreement  between CNL Income Fund XII,
                             Ltd.  and  CNL  Investment   Company  (Included  as
                             Exhibit 10.1 to Form 10-K filed with the Securities
                             and  Exchange  Commission  on April 15,  1993,  and
                             incorporated herein by reference.)

                    10.2     Assignment   of  Management   Agreement   from  CNL
                             Investment  Company  to CNL Income  Fund  Advisors,
                             Inc.  (Included  as Exhibit 10.2 to Form 10-K filed
                             with the  Securities  and  Exchange  Commission  on
                             March  31,  1995,   and   incorporated   herein  by
                             reference.)

                    10.3     Assignment of Management  Agreement from CNL Income
                             Fund  Advisors,  Inc.  to CNL Fund  Advisors,  Inc.
                             (Included  as Exhibit  10.3 to Form 10-K filed with
                             the Securities and Exchange  Commission on April 1,
                             1996, and incorporated herein by reference.)

                    10.4     Assignment   of  Management   Agreement   from  CNL
                             Advisors,  Inc. to CNL APF Partners,  LP. (Included
                             as  Exhibit  10.4  to  Form  10-Q  filed  with  the
                             Securities  and Exchange  Commission  on August 13,
                             2001, and incorporated herein by reference.)

                    10.5     Assignment  of  Management  Agreement  from CNL APF
                             Partners,  LP to CNL Restaurants XVIII, Inc. (Filed
                             herewith.)

                    (b)      Reports on Form 8-K

                             No  reports  on Form  8-K  were  filed  during  the
                             quarter ended June 30, 2002.


<PAGE>



                                   SIGNATURES


         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended,  the  registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

         DATED this 8th day of August, 2002.


                                    By: CNL INCOME FUND XII, LTD.
                                        General Partner


                                        By:/s/ James M. Seneff, Jr.
                                           -------------------------------
                                           JAMES M. SENEFF, JR.
                                           Chief Executive Officer
                                           (Principal Executive Officer)


                                        By:/s/ Robert A. Bourne
                                           -------------------------------
                                           ROBERT A. BOURNE
                                           President and Treasurer
                                           (Principal Financial and
                                           Accounting Officer)





<PAGE>



                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER
                          OF CORPORATE GENERAL PARTNER

            PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, James M. Seneff, Jr., the Chief Executive Officer of CNL Realty
Corporation,  the  corporate  general  partner of CNL Income Fund XII, Ltd. (the
"Partnership"),  has executed this  certification  in connection with the filing
with the  Securities  and Exchange  Commission  of the  Partnership's  Quarterly
Report on Form 10-Q for the period  ending  June 30,  2002 (the  "Report").  The
undersigned hereby certifies that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and

(2) the  information  contained in the Report fairly  presents,  in all material
respects, the financial condition and results of operations of the Partnership.

Date:  August 8, 2002                      /s/ James M. Seneff, Jr.
      ---------------------                --------------------------------
                                           Name:  James M. Seneff, Jr.
                                           Title:   Chief Executive Officer



<PAGE>


                    CERTIFICATION OF CHIEF FINANCIAL OFFICER
                          OF CORPORATE GENERAL PARTNER

            PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The  undersigned,  Robert A. Bourne,  the  President and Treasurer of CNL Realty
Corporation,  the  corporate  general  partner of CNL Income Fund XII, Ltd. (the
"Partnership"),  has executed this  certification  in connection with the filing
with the  Securities  and Exchange  Commission  of the  Partnership's  Quarterly
Report on Form 10-Q for the period  ending  June 30,  2002 (the  "Report").  The
undersigned hereby certifies that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and

(2) the  information  contained in the Report fairly  presents,  in all material
respects, the financial condition and results of operations of the Partnership.

Date:  August 8, 2002                       /s/ Robert A. Bourne
     ----------------------                 -------------------------------
                                            Name:  Robert A. Bourne
                                            Title: President and Treasurer


<PAGE>


                                  EXHIBIT INDEX


         Exhibit Number

            3.1      Affidavit and  Certificate  of Limited  Partnership  of CNL
                     Income  Fund  XII,   Ltd.   (Included  as  Exhibit  3.2  to
                     Registration  Statement  No.  33-43278-01  on Form S-11 and
                     incorporated herein by reference.)

            4.1      Affidavit and  Certificate  of Limited  Partnership  of CNL
                     Income  Fund  XII,   Ltd.   (Included  as  Exhibit  3.2  to
                     Registration  Statement  No.  33-43278-01  on Form S-11 and
                     incorporated herein by reference.)

            4.2      Amended and Restated  Agreement of Limited  Partnership  of
                     CNL Income Fund XII, Ltd.  (Included as Exhibit 4.2 to Form
                     10-K filed with the Securities  and Exchange  Commission on
                     April 15, 1993, and incorporated herein by reference.)

            10.1     Management  Agreement between CNL Income Fund XII, Ltd. and
                     CNL  Investment  Company  (Included as Exhibit 10.1 to Form
                     10-K filed with the Securities  and Exchange  Commission on
                     April 15, 1993, and incorporated herein by reference.)

            10.2     Assignment  of  Management  Agreement  from CNL  Investment
                     Company to CNL Income  Fund  Advisors,  Inc.  (Included  as
                     Exhibit  10.2 to Form 10-K  filed with the  Securities  and
                     Exchange  Commission  on March 31, 1995,  and  incorporated
                     herein by reference.)

            10.3     Assignment  of  Management  Agreement  from CNL Income Fund
                     Advisors,  Inc. to CNL Fund  Advisors,  Inc.  (Included  as
                     Exhibit  10.3 to Form 10-K  filed with the  Securities  and
                     Exchange  Commission  on April 1,  1996,  and  incorporated
                     herein by reference.)

            10.4     Assignment of Management Agreement from CNL Advisors,  Inc.
                     to CNL APF Partners,  LP. (Included as Exhibit 10.4 to Form
                     10-Q filed with the Securities  and Exchange  Commission on
                     August 13, 2001, and incorporated herein by reference.)

            10.5     Assignment of Management  Agreement  from CNL APF Partners,
                     LP to CNL Restaurants XVIII, Inc. (Filed herewith.)