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

                                   FORM 10-K

   (Mark One)

             ANNUAL REPORT  PURSUANT TO SECTION 13 OR  15(d) OF THE SECURITIESx
             EXCHANGE ACT OF 1934 [FEE REQUIRED]

               For the fiscal year ended       December 31, 1996

                                        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                0-19244              

                          Krupp Government Income Trust
              (Exact name of registrant as specified in its charter)
               Massachusetts                                   04-3089272
   (State or other jurisdiction of                          (IRS Employer
   incorporation or organization)                           Identification
   No.)

   470 Atlantic Avenue, Boston, Massachusett            02210
   (Address of principal executive offices)        (Zip Code)

   (Registrant's telephone number, including area code)    (617) 423-2233 

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

         Title                         Name of Exchange on which Registered
   Shares of Beneficial Interest                      None

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

   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 definitive proxy  or information
   statements incorporated by reference in  Part III of this Form 10-K  or any
   amendment to this Form 10-K. [ ].

   Aggregate  market value of  voting securities held  by non-affiliates:  Not
   applicable.

   Documents incorporated by reference: see Part IV, Item 14

   The exhibit index is located on pages 12-22.
<PAGE>

                                      PART I

   This  Form 10-K contains  forward-looking statements within  the meaning of
   Section 27A of the Securities Act of 1933 and Section 21E of the Securities
   Exchange Act of  1934.  Actual results  could differ materially  from those
   projected in  the forward-looking  statements as  a result  of a  number of
   factors, including those identified herein.

   ITEM 1.  BUSINESS

      Krupp  Government Income Trust (the  "Trust") was formed  on November 1,
   1989     by  filing  a   Declaration  of  Trust  in   the  Commonwealth  of
   Massachusetts.   The Trust  is authorized to  sell and issue  not more than
   17,510,000 shares of beneficial interest  ("the Shares").  The Trust raised
   approximately  $300  million  through  a  public  offering  of   Shares  of
   beneficial  interest  and  used   the  proceeds  available  for  investment
   primarily    to   acquire   participating   insured   mortgages   ("PIMs"),
   participating insured  mortgage investments ("PIMIs"),  and mortgage-backed
   securities ("MBS").  The Trust  considers itself to be engaged in  only one
   industry segment,  investment in mortgages.   The  Trust has elected  to be
   treated  as  a real  estate investment  trust  ( REIT ) under  the Internal
   Revenue Code  of 1986, as amended.   The Trust shall  terminate on December
   31, 2029, unless earlier terminated by the affirmative vote of holders of a
   majority of the outstanding Shares entitled to vote thereon.

      The Trust's  investments in PIMs on  multi-family residential properties
   consist of 1) a MBS or an insured mortgage loan (collectively, the "insured
   mortgage") guaranteed or  insured as to principal and basic interest and 2)
   a participating mortgage.  The  insured mortgages were issued or originated
   under or  in connection with the  housing programs of the  Federal National
   Mortgage Association ("FNMA"), the Government National Mortgage Association
   ("GNMA"), or the Federal Housing Administration ("FHA") under the authority
   of the Department of Housing  and Urban Development ("HUD").  PIMs  provide
   the Trust  with monthly payments  of principal and  basic interest  and may
   also provide  for Trust participation in the  current revenue stream and in
   residual value, if any, from a  sale or other realization of the underlying
   property.   The  borrower  conveys these  rights  to the  Trust  through  a
   subordinated promissory note  and mortgage.  The participation features are
   neither insured nor guaranteed.

      The PIMIs consist of 1) an insured mortgage issued by GNMA or originated
   under the  lending program of the  FHA, 2) an additional  loan ("Additional
   Loan") to the borrower or owners of the borrower that increases the Trust's
   total  financing  with  respect  to  that property  and  its  participation
   interests and  3) a  participating mortgage.   Additional  Loans associated
   with  an insured  mortgage  issued or  originated  in connection  with  HUD
   insured programs cannot, under government regulations, be collateralized by
   a  mortgage  on  the  underlying  property.    These Additional  Loans  are
   typically collateralized  by a security interest  satisfactory to Berkshire
   Mortgage  Advisors Limited  Partnership  ("the Advisor").   The  Additional
   Loans are neither insured  nor guaranteed.  In addition,  the participation
   features related  to  the participating  mortgage are  neither insured  nor
   guaranteed.  Additional  Loans should  provide the  Trust with  semi-annual
   interest payments and  may provide additional interest in  the future while
   the participating  mortgage should provide  for Trust participation  in the
   net income and residual value, if any, of the underlying property.

      The  Trust also  acquired MBS  collateralized by  single-family mortgage
   loans  issued or originated by  GNMA, FNMA, the  Federal Home Loan Mortgage
   Corporation ("FHLMC") or FHA.   FNMA and FHLMC guarantee the  principal and
   basic interest of  the FNMA and FHLMC  MBS, respectively.   GNMA guarantees
   the timely  payment of principal and  interest on its MBS,  and HUD insures
   the pooled mortgage loans underlying the GNMA MBS and FHA mortgage loans.

   The Trust can  reinvest principal proceeds from its mortgage investments
   which it  receives or is in the process of collection prior to December 14,
<PAGE>

   1997 in  new mortgages.   Any reinvestment  in mortgages will  be based  on
   management's  evaluation of  market conditions  for mortgages.     When the
   reinvestment  period  ends   the  Trust  will   distribute  proceeds   from
   prepayments  or other realizations  of mortgage assets  to investors either
   through quarterly distributions or possibly special distributions.
      Although the  Trust will  terminate  no later  than December  31,  2029,
   management  expects that the value of the  PIMs and PIMIs generally will be
   realized by the Trust through repayment or sale  as early as ten years from
   the  dates of the closings  of the permanent loans, and  that the Trust may
   realize the  value of all of  its other investments within  that time frame
   thereby  resulting in  a dissolution  of the  Trust significantly  prior to
   December 31, 2029.

      The  Trust's investments  are  not expected  to be  subject  to seasonal
   fluctuations, although net income may vary somewhat from quarter to quarter
   based upon the participation features of its investments.  The requirements
   for compliance with  federal, state and local regulations to  date have not
   adversely affected  the Trust's  operations, and the  Trust anticipates  no
   adverse effect in the future.

      To qualify as a real estate investment trust ("REIT") for federal income
   tax purposes, the  Trust made a  valid election to  be so treated  and must
   continue  to satisfy  a range  of complex  requirements including  criteria
   related to its ownership  structure, the nature of its  assets, the sources
   of its income  and the amount  of its distributions  to shareholders.   The
   Trust intends  to qualify  as a  REIT in each  year of  operation, however,
   certain factors may have an  adverse effect on the Trust's REIT status.  If
   for any  taxable year, the Trustees  and the Advisor determine  that any of
   the asset,  income, or distribution tests  are not likely to  be satisfied,
   the  Trust may be  required to borrow  money, dispose of  mortgages or take
   other action to avoid loss of REIT status.

      Additionally, if  the Trust does not  qualify as a REIT  for any taxable
   year, it will be subject to federal  income tax as if it were a corporation
   and the  shareholders will be taxed  as shareholders of a  corporation.  If
   the Trust were taxed as a corporation, the payment of such tax by the Trust
   would  substantially  reduce  the   funds  available  for  distribution  to
   shareholders or for reinvestment. To the extent that distributions had been
   made in  anticipation of  the Trust's  qualification as  a REIT,  the Trust
   might be required to borrow additional funds or to liquidate certain of its
   investments  in  order to  pay the  applicable tax.   Moreover,  should the
   Trust's election  to  be taxed  as  a  REIT be  terminated  or  voluntarily
   revoked, the Trust may not be able to elect to be treated as a REIT for the
   following five-year period.

      As  of December 31, 1996,  there were no  personnel directly employed by
   the Trust.

   ITEM 2.  PROPERTIES

      None.

   ITEM 3.  LEGAL PROCEEDINGS

      There are no material pending legal  proceedings to which the Trust is a
   party or to which any of its investments are subject to.


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

      None.
<PAGE>

                                     PART II

   ITEM 5.  MARKET FOR  THE REGISTRANT'S COMMON  STOCK AND RELATED  STOCKHOLDER
            MATTERS

      There currently is no established public trading market for the Shares.

      The  number of  investors  holding Shares  as  of December  31, 1996  is
   approximately 14,000.

      The  Trust has  and will  continue  to declare  and pay  dividends on  a
   quarterly basis.   The Trustees established  a dividend rate per  Share per
   quarter of $.325 for 1996 and 1995.


   ITEM 6.  SELECTED FINANCIAL DATA

      The following table sets  forth selected financial information regarding
   the Trust's financial  position and  operating results.   This  information
   should be read in conjunction with Management's  Discussion and Analysis of
   Financial  Condition and Results of Operations and the Financial Statements
   and  Supplementary Data, which are included in  Item 7 and Item 8 (Appendix
   A) of this report, respectively.

<TABLE>
                   (Amounts  in   thousands,  except   for  per   Share amounts)
<CAPTION>
                                         1996       1995      1994       1993     1992

            <S>                       <C>        <C>       <C>        <C>       <C>
            Total revenues            $ 16,358   $ 17,200  $ 16,846   $ 18,046  $ 17,285

            Net income                $ 12,481   $ 13,022  $ 12,599   $ 13,869  $ 13,633

            Net income per Share      $    .83   $    .87  $    .84   $    .92  $    .91

            Weighted average Shares
             outstanding                15,053     15,053    15,053     15,053    15,053

            Total assets at 
             December 31              $241,634   $247,620  $251,333   $256,565  $265,347

            Average dividends 
             per Share                $   1.30   $   1.30  $   1.30   $   1.70  $   1.70 

</TABLE>
   ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS  OF FINANCIAL CONDITION AND
              RESULTS  OF OPERATIONS

   Management s discussion and  analysis of financial condition and results of
   operations  contains  forward-looking  statements  within  the  meaning  of
   Section 27A of the Securities Act of 1933 and Section 21E of the Securities
   Exchange Act  of 1934.   Actual results could differ  materially from those
   projected in  the forward-looking  statements as a  result of  a number  of
   factors, including those identified herein.

   Liquidity and Capital Resources

              At December  31,  1996,  the  Trust  has  significant  liquidity
   consisting of cash and cash equivalents, of approximately  $19   million as
   well  as the  cash inflows  provided  by PIMs,  PIMIs, MBS,  cash and  cash
   equivalents. Included  in the  cash and  cash equivalents  is approximately
   $8.9 million  from  the  prepayment  of the  Canyon  Ridge  Apartments  PIM
   prepayment.  The Trust is currently looking at investment opportunities for
<PAGE>

   this prepayment.   The Trust may also receive additional cash flow from the
   participation features of  its PIMs and PIMIs.   The Trust anticipates that
   these  sources  will  be  adequate to  provide  the  Trust  with sufficient
   liquidity  to meet its  obligations, including  providing dividends  to its
   investors.

              The  most  significant  demand  on  the  Trust's  liquidity  are
   dividends  paid to investors which  currently approximate $19.6 million per
   year ($4.9  million per quarter).   For 1996, the Trust  declared an annual
   dividend  of $1.30 per  share, paid in quarterly  installments of $.325 per
   share.   Funds for dividends  come from interest  income received  on PIMs,
   PIMIs, MBS and cash and cash equivalents net of operating expenses, and the
   principal collections  received on  PIMs, PIMIs and  MBS.   The portion  of
   dividends funded  from principal collections reduces  the capital resources
   of  the Trust.  As  the capital resources of  the Trust decrease, the total
   cash flows  to the Trust will  also decrease which will  result in periodic
   adjustments to the dividends paid to the investors.

              The Trust's  investments  in  PIMs  and  PIMIs  in  addition  to
   providing  guaranteed or  insured monthly  principal and  interest payments
   should provide  the Trust with  additional income through  participation in
   the cash  generated by the  operations of the  underlying properties  and a
   portion of the  appreciation realized upon  the sale or refinancing  of the
   underlying  properties.    The  Trust's  participation  interests  and  the
   interest payments on the  Additional Loan portion of the  PIMIs are neither
   insured  nor  guaranteed, and  will  depend  primarily  on  the  successful
   operation of the  underlying properties.  Seven  of the Trust's  nine PIMIs
   funded  the construction  of multi-family  housing,  which require  time to
   achieve stabilized  operations following completion of  construction.  With
   this in  mind, the Trust required  the borrowers to establish  reserves and
   escrows with Additional Loan  proceeds to provide funds for  the Additional
   Loan base interest payments  during the construction and  lease-up periods.
   As these reserves become depleted full payment of the  Additional Loan base
   interest  will depend  primarily  on whether  the  underlying property  can
   generate sufficient operating cash flow.  As of December 31, 1996,  Coconut
   Palm, Mountain  View, Red Run  and The Seasons  have sufficient escrows  to
   make  the required  Additional  Loan  base  interest payments  in  1997  if
   necessary.  Management is closely monitoring the operating performances  of
   the  remaining  properties.  Overall,  the  Trust's  ability  to  meet  its
   objectives  will  depend  primarily  on the  operating  performance  of the
   properties underlying the PIMs and PIMIs. 

              Many of  the properties had  stable or improved  performances in
   1996.  High occupancy rates were maintained and rental  rate increases were
   achieved at  more than half  of the properties  due to stable  or improving
   markets  or the unique  character of the  specific property.   Three of the
   properties continued to maintain strong operating performances from 1995 to
   1996 and  paid  participation income  during 1996;  two  others achieved  a
   successful level  of performance in 1996 that will result in the payment of
   participation  income  for  the first  time  during  1997.    Timber  Ridge
   Apartments  operations generated sufficient cash  flow to provide the Trust
   with $160,000  of participation income and provide  for the Additional Loan
   base  interest  payments.   The  Trust received  approximately  $130,000 of
   participation income  from Lincoln Green  PIM, and management  expects this
   property  will continue  to improve  in 1997.   Riverview  Apartment s 1995
   operating  performance reached  the  participation threshold  and paid  the
   Trust   approximately  $12,000   in  participation   income  during   1996.
   Management expects continued improvement in  1997.  The Seasons, which  was
   completely renovated in 1994 and 1995, performed very well during 1996 and,
   as a result, will pay participation income to the Trust in 1997.  Waterford
   Townhomes  operations  reached the participation threshold  during 1996 and
   will pay the Trust participation income for the first time in 1997.

              Other  properties underlying  the PIMI s  have not  achieved the
   desired level of  operating performance.   Lifestyles Apartments,  Windward
   Lakes  Apartments  and Coconut  Palm Apartments  all  have been  impeded by
   competition from new apartment complexes and affordable single-family homes
<PAGE>

   in  markets  where the  ability  to raise  rents  is limited.   Lifestlyes 
   operations deteriorated  during the first half  of 1996.  As  a result, the
   borrower of  the  Lifestyles  PIMI  requested  some  form of  debt  service
   relief.  During the third quarter the Advisor and the borrower finalized an
   agreement that  includes a  1% per  annum reduction  in  the interest  paid
   monthly on the insured mortgage for  a 24-month period.  The agreement also
   specifies  that Additional  Loan base  interest payments  will be  based on
   surplus cash  and extends the prepayment  lockout date by five  years.  The
   borrower  contributed $150,000  to fund  current operating deficits  of the
   property and agreed to fund future operating deficits of the property up to
   a  maximum of  $50,000 per  year  if deemed  necessary  by the  Trust.   In
   addition  to the  workout s  financial attributes,  the Advisor  required a
   change  in the  property s on-site  management.   Since the  new management
   company  assumed responsibility  for day-to-day  operations, occupancy  has
   improved dramatically.  Windward  Lakes  operating performance deteriorated
   in 1996 as the property also was challenged by a rash of burglary incidents
   which  affected occupancy.   The  drop in  occupancy  exacerbated operating
   deficits which led the borrower to seek debt service relief from the Trust.
   During the  first quarter of  1997, the  Advisor agreed to  a workout  that
   includes a reduction in the interest paid on the insured mortgage of 2% per
   annum for a 12 month period and then a 1% per annum  for a 36 month period.
   The  agreement also  specifies that Additional  Loan base  interest will be
   based  on  the  property s  surplus cash  calculation.    In  addition, the
   borrower  will  contribute  $133,000 of  new  equity to  fund  the  cost of
   security systems.  Coconut Palm s operating performance also dropped during
   1996 as a result  of increased vacancy in a competitive  market.  There are
   adequate escrows to cover the 1997 base interest payments.  Management will
   continue to closely monitor the operations of the property.
    
              Whether  the  operating performance  at  any  of the  properties
   mentioned  above improves  enough to  provide sufficient  cash flow  to pay
   Additional Loan interest will depend  on factors that the Trust has  little
   or no control over.  Should the properties be unable to generate sufficient
   cash flow to pay their  Additional Loan base interest, it would  reduce the
   Trust's  distributable  cash  flow  and  could  affect  the  value  of  the
   Additional Loan collateral.

              The borrower  of the Canyon Ridge Apartments  PIM was delinquent
   on its  debt service  payments and  the servicer  and the Federal  National
   Mortgage Association ( FNMA ) intended to foreclose on the property.  Prior
   to  this foreclosure  the  Trust  received  a  prepayment  from  FNMA,  and
   subsequently  the  borrower  filed  for bankruptcy.    The  Trust  received
   approximately  $8.9 million and  intends to reinvest  it in  a new mortgage
   investment.  The  Trust is currently  looking at investment  opportunities.
   The Trust subsequently collected $200,000 of participation interest  income
   through a claim with the bankruptcy court.

              During the fourth quarter, the owner of Timber  Ridge Apartments
   approached the Trust about prepaying  the PIMI and subsequently prepaid the
   PIMI  during  the first  quarter of  1997.   The  Trust  received remaining
   principal balance of the first mortgage and additional loan of $5.6 million
   and  $1.54 million,  respectively.  In  addition, the  Trust received $1.05
   million representing additional  interest.  The  Trust intends to  reinvest
   the principal proceeds in a new mortgage investment.

              For the first five years of the PIMs and PIMIs the borrowers are
   prohibited from  repaying.   For the second  five years,  the borrower  can
   repay the  loans incurring  a prepayment  penalty  for PIMs  or paying  all
   amounts due under  the PIMIs and satisfying the  required preferred return.
   The  Trust  has  the option  to  call certain  PIMs  and all  the  PIMIs by
   accelerating their maturity, if the loans are not prepaid by the tenth year
   after permanent funding.  The Trust will determine the merits of exercising
   the call option for each PIM or  PIMI as economic conditions warrant.  Such
   factors as  the condition of  the asset, local market  conditions, interest
   rates and available financing will have an impact on this decision.

                          (Amounts in thousands, except per Share amounts)
<PAGE>
<TABLE>
<CAPTION>
                                                            Year          Inception
                                                            Ended          Through
                                                           12/31/96        12/31/96
          Distributable Cash Flow (a):

          <S>                                              <C>             <C>
          Net income                                       $12,481         $ 84,735
          Items not requiring or providing the
           use of operating funds:
           Amortization of prepaid fees and 
            expenses and organization costs                  1,614            7,751

           Additional Loan Interest Deferred                 1,404            7,325

           Total Distributable Cash Flow ("DCF")            15,499           99,811

          DCF per Share based on Shares
           outstanding at December 31, 1996                $  1.03         $   6.63 (c)

          Dividends:

           Total dividends to Shareholders                 $19,569(b)      $136,680 (b)
           Average dividend per Share based
            on Shares outstanding at 
            December 31, 1996                              $  1.30         $          9.08
          (b)(c)
</TABLE>

   (a)           Distributable   Cash   Flow   consists    of   income   before
                 amortization of  prepaid  fees and  expenses and  organization
                 costs  and includes  deferred  interest on  Additional  Loans.
                 The Trust believes  Distributable Cash Flow is an  appropriate
                 supplemental  measure of  operating performance,  however,  it
                 should not be considered as a substitute for net  income as an
                 indication  of  operating  performance  or  cash  flows  as  a
                 measure of liquidity.
   (b)           Includes an estimate  of the distribution to be paid  February
                 1997.
   (c)           Shareholders  average per  Share return  of capital  on a cash
                 basis as of  February 1997 is $2.45  [$9.08 - $6.63].   Return
                 of  capital represents that portion of the  dividends which is
                 not funded  from DCF  such as  principal collections  received
                 from MBS and PIMs.


   Assessment of Credit Risk

      The  Trust's investments in  mortgages are guaranteed  or insured by the
   Federal  National  Mortgage Association  ("FNMA"),  the  Federal Home  Loan
   Mortgage   Corporation  ("FHLMC"),   the   Government   National   Mortgage
   Association ("GNMA")  and the Department  of Housing and  Urban Development
   ("HUD")  and therefore the  certainty of their  cash flows and  the risk of
   material  loss of the  amounts invested depends  on the creditworthiness of
   these entities.

      FNMA  is  a  federally  chartered private  corporation  that  guarantees
   obligations originated under its programs.  FHLMC  is a federally chartered
   corporation that  guarantees obligations originated under  its programs and
   is wholly-owned  by the twelve Federal Home  Loan Banks.  These obligations
   are not  guaranteed by the  U.S. Government or  the Federal Home  Loan Bank
   Board.   GNMA guarantees the full and timely payment of principal and basic
   interest on the securities it  issues, which represents interest in  pooled
   mortgages insured  by HUD.   Obligations insured by  HUD, an agency  of the
<PAGE>

   U.S. Government,  are backed  by  the full  faith and  credit  of the  U.S.
   Government.

      The Trust's Additional Loans have similar risks as those associated with
   higher risk debt instruments, including:  reliance on the owner's operating
   skills, ability  to maintain occupancy levels,  control operating expenses,
   maintain  the properties  and obtain  adequate insurance  coverage; adverse
   changes  in  general economic  conditions,  adverse  local conditions,  and
   changes in governmental regulations, real estate zoning  laws, or tax laws;
   and other circumstances over which the Trust may have little or no control.

   Operations

      The following discussion relates to  the operations of the Trust  during
   the years ended December  31, 1996, 1995 and 1994.   Dollars are stated  in
   thousands, except for per Share amounts.
<TABLE>
                                                      Year Ended December 31,                
<CAPTION>
                                            1996               1995              1994      
                                                   Per               Per               Per
                                      Amount      Share  Amount     Share   Amount    Share
            <S>                       <C>         <C>    <C>        <C>     <C>       <C>
            Interest income on PIMs
             and insured mortgages    $13,167     $ .88  $14,062    $ .93   $13,854   $ .92
            Additional loan interest
             received                   1,404       .09    1,277      .09     1,710     .11
            Interest income on MBS      2,306       .15    2,608      .17     2,402     .16
            Other interest income         886       .06      531      .04       590     .04
            Trust expenses             (2,264)     (.15)  (2,496)    (.17)   (2,545)   (.17)

            DCF                        15,499      1.03   15,982     1.06    16,011    1.06

            Reconciliation to
             net income:

             Amortization of prepaid
              fees, expenses and
              organization costs       (1,614)     (.11)  (1,683)    (.10)   (1,702)   (.11)
             Additional loan interest
              deferred                 (1,404)     (.09)  (1,277)    (.09)   (1,710)   (.11)

                 Net income           $12,481     $ .83  $13,022    $ .87   $12,599   $ .84

            Weighted average
              Shares outstanding        15,053,135         15,053,135          15,053,135
</TABLE>
      The Trust's net income for  1996 decreased by approximately $541,000  as
   compared to 1995 due primarily to decreases in base interest income on PIMs
   and insured mortgages and interest income on  MBS of approximately $895,000
   and $302,000, respectively, which were  partially offset by an increase  in
   other  interest income of  approximately $355,000  and a decrease  in Trust
   expenses of approximately $232,000.   The decrease in base interest  income
   on  PIMs  and insured  mortgages  for  1996 as  compared  to  1995 was  due
   primarily to  the prepayment of the Canyon Ridge PIM which caused a decline
   in interest income of $502,000 and interest rate reductions of $211,000 for
   the Mountain View  and Lifestlyes Apartments PIMs.  Interest  income on MBS
   will  continue to decline  as principal collections  reduce the outstanding
   balance of the MBS portfolio.  Other interest income increased  as a result
   of  short-term investments  made with  the proceeds  from the  Canyon Ridge
   prepayment.  Expenses  decreased for 1996 as compared to 1995 due primarily
   to lower  asset management fees, expenses reimbursements  to affiliates and
   general and administrative expenses.
<PAGE>

      The Trust's net income for  1995 increased by approximately $423,000  as
   compared to  1994 due primarily to  an increase in interest  income on PIMS
   and MBS of approximately $208,000 and $206,000, respectively.  Although the
   Trust had  a higher  average balance  in  early 1994,  the significant  MBS
   prepayments during  the  first half  of 1994  reduced  MBS investments  and
   interest  income on  MBS. To  improve the  return on  the Trust's  invested
   assets, the Trust acquired approximately $6 million of MBS during the third
   quarter  of  1994  and   invested  in  a  Federal  Housing   Administration
   construction loan  having a face value  of approximately $5 million.   As a
   result, interest  income  on MBS  increased when  comparing  1995 to  1994.
   During  the  third  quarter  of  1995,  the   Trust  received  $200,000  of
   participation interest  income on  the Timber Ridge  PIMI, which  increased
   interest income on PIMs $126,000 during 1995 as compared to 1994.

   ITEM 8.            FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

       See Appendix A to this report.

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

      None.

                                     PART III

   ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Information as to the Trustees and Executive Officers of Krupp Government
   Income Trust is as follows:

                                      Position with Krupp
              Name and Age         Government Income Trust

          Douglas Krupp (50)       Chairman of Board of Trustees and Trustee
          Laurence Gerber (40)     President and Trustee 
             *                     Charles N. Goldberg (55)     Trustee
             *                     E. Robert Roskind (51)       Trustee
             *                     J. Paul Finnegan (71)        Trustee
          Robert A. Barrows (39)   Treasurer and Chief Accounting Officer
          Scott D. Spelfogel (36)  Clerk
          K. Scott Griggs (34)     Assistant Clerk

   * Independent Trustee


          Douglas Krupp is Co-Chairman and Co-Founder  of The Berkshire Group.
   Established  in 1969 as  the Krupp  Companies, this real  estate-based firm
   expanded over the years within its areas  of expertise including investment
   program  sponsorship, property  and  asset  management,  mortgage  banking,
   healthcare  facility ownership and  the management of  the Company.  Today,
   The Berkshire Group is an  integrated real estate, mortgage and  healthcare
   company which  is headquartered in Boston with  regional offices throughout
   the country.  A staff of 3,400 are responsible for the more than $3 billion
   under management  for institutional and individual clients.  Mr. Krupp is a
   graduate  of Bryant  College.  In  1989 he  received an  honorary Doctor of
   Science in  Business Administration from  this institution and  was elected
   trustee in  1990.      Mr.  Krupp serves  as Chairman  of the  Board and  a
   director  of Berkshire  Realty Company,  Inc. (BRI-NYSE).   Mr.  Krupp also
   serves as  Chairman of the Board  and a Trustee of  Krupp Government Income
   Trust II.

          Laurence Gerber is the President and Chief  Executive Officer of The
   Berkshire Group.  Prior to  becoming President and Chief Executive  Officer
<PAGE>

   in 1991, Mr.  Gerber held various positions with The  Berkshire Group which
   included  overall responsibility at various times  for:  strategic planning
   and  product  development,  real  estate  acquisitions,  corporate finance,
   mortgage banking, syndication  and marketing.  Before joining The Berkshire
   Group  in 1984,  he was  a  management consultant  with Bain  & Company,  a
   national consulting  firm headquartered in Boston.  Prior to that, he was a
   senior  tax  accountant  with  Arthur  Andersen  &  Co.,  an  international
   accounting and consulting firm.  Mr.  Gerber has a B.S. degree in Economics
   from  the University of  Pennsylvania, Wharton School  and an M.B.A. degree
   with high  distinction from  Harvard Business  School.  He  is a  Certified
   Public Accountant.   Mr. Gerber also serves as President  and a Director of
   Berkshire  Realty Company,  Inc. (NYSE-BRI)  and  President and  Trustee of
   Krupp Government Income Trust II.

          Charles N.  Goldberg  is the  Managing  Partner of  Goldberg  Brown,
   Attorneys at Law in Houston, Texas since 1980.  He is a member of the State
   Bar of Texas and is admitted to practice before the  U.S. Court of Appeals,
   Fifth  Circuit  and  U.S.  District  Court,  Southern  District  of  Texas.
   Goldberg Brown specializes in the representation  of lenders and developers
   in their acquisition, refinancing and disposition of property.  He received
   a B.B.A. degree and J.D. degree from the University of Texas.  Mr. Goldberg
   also  serves as a  Trustee of  Krupp Government  Income Trust  II and  as a
   Director of Berkshire Realty Company, Inc. (NYSE-BRI).


          E. Robert Roskind is the Chairman and  Co-Chief Executive Officer of
   Lexington  Corporate Properties,  a self  administered REIT  which owns  23
   properties, each net leased to a  single corporate tenant, and whose Shares
   are  listed on  the New  York Stock  Exchange.    Mr.  Roskind is  also the
   Managing Partner of The LCP  Group, a real estate investment firm  based in
   New York, which has acquired on behalf of the partnerships sponsored by the
   firm over  400 properties  throughout  the United  States.   Most  of  such
   properties have  been net leased to major U.S. corporations.  The LCP Group
   is  the   successor  to  Lepercq  Capital  Partners   and  Lepercq  Capital
   Corporation.   Mr. Roskind in  1974 co-founded Lepercq  Capital Corporation
   and  served as its  Chairman.   Mr. Roskind is  also Chairman  of Net Lease
   Partners Realty Advisors, a registered pension  fund advisor, which advises
   pension funds with respect to the acquisition  and subsequent management of
   properties  net leased  to major  corporations.   He is  a graduate  of the
   University of Pennsylvania and Columbia Law School and has been a member of
   the New York Bar since 1970.  Mr. Roskind also serves as a Trustee of Krupp
   Government Income Trust  II and as a Director  of Berkshire Realty Company,
   Inc. (NYSE-BRI).


          J. Paul Finnegan is a  retired partner of Coopers & Lybrand,  L.L.P.
   where he  specialized in  tax matters.   He retired  in September  1987 and
   since then has been engaged in business as a  consultant, a director and an
   arbitrator  for  the  American  Arbitration Association  and  the  National
   Association of  Securities Dealers,  Inc.   Mr. Finnegan  is a  graduate of
   Harvard College and  Boston College Law  School and  is a Certified  Public
   Accountant.   Mr. Finnegan also  serves as  a Trustee  of Krupp  Government
   Income Trust II and as a  Director of Berkshire Realty Company, Inc. (NYSE-
   BRI).  He is also a director at Scituate Federal Savings Bank.

          Robert  A. Barrows  is  Senior Vice  President  and Chief  Financial
   Officer of Berkshire Mortgage Finance and The Berkshire Group.  Mr. Barrows
   has  held several positions  within The  Berkshire Group since  joining the
   company in 1983 and is  currently responsible for accounting and  financial
   reporting,  treasury, tax,  payroll and  office administrative  activities.
   Prior  to joining  The  Berkshire Group,  he was  an  audit supervisor  for
   Coopers & Lybrand  L.L.P. in Boston,  He received a B.S. degree from Boston
   College and is a Certified Public Accountant.
<PAGE>


          Scott D. Spelfogel is Senior  Vice President and General Counsel  to
   The Berkshire Group.  He previously served as Vice President  and Assistant
   General Counsel.   Before  joining  the firm  in November  1988,  he was  a
   litigator in private practice in Boston.  He received a Bachelor of Science
   degree  in Business Administration  from Boston University,  a Juris Doctor
   Degree from Syracuse  University's College  of Law,  and a  Master of  Laws
   degree in  Taxation from Boston University  Law School.  He  is admitted to
   practice law  in Massachusetts and New  York, is a member  of the American,
   Boston, Massachusetts and  New York  State bar  associations, the  American
   Corporate  Counsel  Association  and  the  American  Society  of  Corporate
   Secretaries and is a licensed real estate broker in Massachusetts.


          K. Scott  Griggs  is Assistant  Clerk  of  the Trust  and  Assistant
   General Counsel of The Berkshire Group.  Before joining The Berkshire Group
   in March 1991, he served as counsel to The Fafard Companies, a construction
   and real estate firm  in Greater Boston.   He received  a B.A. degree  from
   Columbia University  in 1984 and  a J.D. degree from  the Boston University
   School  of Law  in 1989.    He is  a  member of  the  American, Boston  and
   Massachusetts Bar associations.


          In  addition, the following  are deemed to  be Executive Officers of
   the registrant:

          George Krupp  (age  52) is  the Co-Chairman  and  Co-Founder of  The
   Berkshire Group.   Established in  1969 as  the Krupp Companies,  this real
   estate-based  firm expanded over  the years  within its areas  of expertise
   including investment  program sponsorship,  property and  asset management,
   mortgage  banking and healthcare facility  ownership.  Today, The Berkshire
   Group is an integrated real  estate, mortgage and healthcare company  which
   is headquartered in Boston with regional offices throughout the country.  A
   staff of  3,400 are responsible for  more than $3 billion  under management
   for  institutional   and  individual  clients.    Mr.  Krupp  attended  the
   University of Pennsylvania and Harvard University.  Douglas Krupp is George
   Krupp's brother.

          Peter F. Donovan (age 43) is President of Berkshire Mortgage Finance
   and  directs the  underwriting, servicing  and asset  management of  a $3.9
   billion  multi-family  loan portfolio.    Previously,  he was  Senior  Vice
   President  of  Berkshire  Mortgage  Finance  and  was responsible  for  all
   participating mortgage originations.  Before  joining the firm in 1984,  he
   was  Second Vice  President, Real  Estate Finance for  Continental Illinois
   National Bank  & Trust, where he  managed a $300 million  construction loan
   portfolio of  commercial  properties.   Mr. Donovan  received  a B.A.  from
   Trinity College and an M.B.A. degree from Northwestern University.  

   ITEM 11.  EXECUTIVE COMPENSATION

          Except for the Independent Trustees as described below, the Trustees
   and Officers of  the Trust have not been and will not be compensated by the
   Trust for their services.  However, the Officers will be compensated by the
   Advisor or an affiliate of the Advisor.

          Compensation of Trustees

          The Trust paid each of the Independent Trustees a fee  of $25,000 in
          1996.

   ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
<PAGE>

          As of February 5,  1997, no person owned  of record or was  known by
   the  Advisor to own  beneficially more  than 5%  of the  Trust's 15,053,135
   outstanding Shares.   The only  shares held by  the Advisor  or any of  its
   affiliates consist of the original 10,000 Shares.
<TABLE>

<CAPTION>
            Class of        Name of Beneficial    Amount and Nature of     Percent
             Stock                 Owner          Beneficial Interest      of Class

            <S>             <C>                   <C>                       <C>
            Shares of       Laurence Gerber
            Beneficial      470 Atlantic Avenue
            Interest        Boston, Mass. 02210   10,000 Shares*            ***

            Shares of       Douglas Krupp
            Beneficial      470 Atlantic Avenue
            Interest        Boston, Mass. 02210   10,000 Shares**           ***

            Shares of
            Beneficial      All Directors and
            Interest         Officers             10,000 Shares             ***
</TABLE>
      * Mr.  Gerber is a beneficial  owner of 10,000 shares  held by Berkshire
   Mortgage Advisors  Limited  Partnership, the  Advisor  to the  Company,  by
   virtue of being the president of Berkshire Funding Corporation, the general
   partner of Berkshire Mortgage Advisors  Limited Partnership.  In each  case
   where Mr. Gerber is  a beneficial owner of shares he  has shared voting and
   investment powers and such shares are also beneficially owned by Mr. Krupp.

      **  Mr.  Krupp is  a  beneficial  owner of  the  10,000  shares held  by
   Berkshire  Mortgage  Advisors  Limited  Partnership,  the  Advisor  to  the
   Company,  by virtue of  being a director  of Berkshire Funding Corporation,
   the general partner of Berkshire Mortgage Advisors Limited Partnership.  In
   each case where Mr.  Krupp is a  beneficial owner of  shares he has  shared
   voting and investment powers and such shares are also beneficially owned by
   Mr. Gerber.

      ***  The amount  owned does  not  exceed one  percent of  the shares  of
   beneficial interest of the Trust outstanding as of February 5, 1997.

   ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      See  Note  G to  Financial  Statements included  in Appendix  A  of this
   report.

                                     PART IV

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

   (a)           1.   Financial Statements - see Index to Financial Statements
                      and Supplementary Data  included under Item  8, Appendix
                      A, on page F-2 of this report.

                 2.   Financial Statement  Schedules - see  Index to Financial
                      Statements and Supplementary Data included under Item 8,
                      Appendix A, on page F-2  of this report.   All schedules
                      are omitted as they  are not applicable, not required or
                      the information is provided  in the Financial Statements
                      or the Notes thereto.

   (b)           Exhibits:

      Number and Description
      Under Regulation S-K  
<PAGE>

      The following reflects all  applicable Exhibits required under  Item 601
      of Regulation S-K:

      (4)        Instruments   defining   the  rights   of   security  holders
                 including indentures:

                 (4.1)       Second Amended  and Restated Declaration of Trust
                             filed with  The Massachusetts Secretary of  State
                             on April  12, 1990  [Included as  Exhibit 4.4  to
                             Prospectus  included in  Pre-effective  Amendment
                             No. 3  to Registrant's Registration Statement  on
                             Form  S-11 dated  April 16,  1990  (File No.  33-
                             31942)].*

                 (4.2)       Subscription  Agreement  Specimen   [Included  as
                             Exhibit  C   to  Prospectus   included  in   Pre-
                             effective  Amendment   No.  2   to  Regis-trant's
                             Registration Statement  on Form  S-11 dated March
                             23, 1990 (File No. 33-31942)].*

      (10)  Material Contracts:

                 (10.1)         Advisory Services  Agreement dated  October 22,
                                1990  between  the  Trustee and  Krupp Mortgage
                                Advisors Limited  Partnership. [Exhibit 10.1 to
                                Registrant's report on Form  10-K for the  year
                                ended December 31, 1994 (File No. 0-19244)].*


                 (10.2)         Assignment  and   Assumption  Agreement   dated
                                December 29,  1994  by  and  between  Berkshire
                                Realty Advisors  Limited Partnership  (formerly
                                known   as   Krupp   Realty  Advisors   Limited
                                Partnership    ("Assignor")    and    Berkshire
                                Mortgage    Advisors    Limited     Partnership
                                ("Assignee")  [Exhibit  10.2  to   Registrant's
                                report  on  Form   10-K  for  the  year   ended
                                December 31, 1994 (File No. 0-19244)].*


    
                 Lifestyles Apartments

                 (10.3)         Modification  Agreement  by  and between  Krupp
                                Government Income  Trust and Lifestyles at Boot
                                Ranch and  M&D Palm Harbor,  and FL-Tampa  Inc.
                                [Exhibit 10.1  to Registrant's  report on  Form
                                10-Q  for the quarter  ended September 30, 1996
                                (File No. 0-19244)].*

                 (10.4)         Escrow Deposit  Agreement by  and between Krupp
                                Government Income  Trust and  M&D Palm  Harbor,
                                and  FL-Tampa  Inc.  the  general  partners  of
                                Lifestyles  at  Boot  Ranch.  [Exhibit 10.2  to
                                Registrant's  report  on  Form   10-Q  for  the
                                quarter  ended September 30, 1996  (File No. 0-
                                19244)].*

                 (10.5)         Subordinated  Promissory  Note  dated  December
                                11, 1990 between Lifestyles At Boot Ranch  (the
                                "Mortgagor") and  Krupp Government Income Trust
                                (the "Holder")  [Exhibit  10.1 to  Registrant's
<PAGE>

                                Annual Report on Form 10-K for the fiscal  year
                                ended December 31, 1990 (File No. 33-31942)].*

                 (10.6)         Agreement RE  Subordinated Note  dated December
                                11, 1990 between Krupp Government Income  Trust
                                and Krupp  Mortgage  Corporation [Exhibit  10.2
                                to Registrant's Annual Report on  Form 10-K for
                                the fiscal  year ended December  31, 1990 (File
                                No. 33-31942)].*

                 (10.7)         Subordinated    Multifamily   Mortgage    dated
                                December 11,  1990 between  Lifestyles at  Boot
                                Ranch (the  "Mortgagor")  and Krupp  Government
                                Income Trust  (the  "Mortgagee") [Exhibit  10.3
                                to Registrant's  Annual Report on Form 10-K for
                                the fiscal year  ended December 31, 1990  (File
                                No. 33-31942)].*

                 (10.8)         Additional Loan  Agreement  dated December  11,
                                1990  between FL-Tampa,  Inc. and  M &  D  Palm
                                Harbor,  Inc  (collectively,  the  "Borrowers")
                                and   Krupp   Government   Income  Trust   (the
                                "Holder") [Exhibit  10.4 to Registrant's Annual
                                Report on Form  10-K for the fiscal year  ended
                                December 31, 1990 (File No. 33-31942)].*

                 (10.9)         Additional  Loan  Note  dated December  11,1990
                                between FL-Tampa,  Inc and M  & D Palm  Harbor,
                                Inc. (collectively,  the "Borrowers") and Krupp
                                Government   Income   Trust   (the    "Holder")
                                [Exhibit 10.5 to Registrant's  Annual Report on
                                Form 10-K  for the fiscal  year ended  December
                                31, 1990 (File No. 33-31942)].*

                 (10.10)        Mortgage Note  dated December 11, 1991  between
                                Lifestyles at  Boot Ranch  (the "Borrower") and
                                Krupp  Mortgage  Corporation  (the   "Holder").
                                [Exhibit 10.6 to Registrant's Annual Report  on
                                Form 10-K  for the fiscal  year ended  December
                                31, 1991 (File No. 0-19244)].*

                 (10.11)        GNMA  Purchase  Agreement  dated  December  11,
                                1991 between Krupp Government  Income Trust and
                                Krupp Mortgage  Corporation.  [Exhibit 10.7  to
                                Registrant's  Annual  Report  on Form  10-K for
                                the fiscal year  ended December 31, 1991  (File
                                No. 0-19244)].*

                 Windward Lakes Apartments

                 (10.12)        Subordinated  Promissory  Note  dated  December
                                28,  1990  between  the  McNab-K  C  3  Limited
                                Partnership   (the   "Mortgagor")   and   Krupp
                                Government   Income   Trust   (the    "Holder")
                                [Exhibit 10.6 to Registrant's  Annual Report on
                                Form 10-K for  the fiscal  year ended  December
                                31, 1990 (File No. 33-31942)].*

                 (10.13)        Additional Loan  Agreement  dated December  28,
                                1990 between  George Krupp,  Douglas Krupp  and
                                Krupp GP,  Inc. (collectively, the "Borrowers")
                                and   Krupp   Government   Income  Trust   (the
                                "Holder") [Exhibit  10.7 to Registrant's Annual
<PAGE>

                                Report on Form  10-K for the fiscal year  ended
                                December 31, 1990 (File No. 33-31942)].*

                 (10.14)        Additional Loan  Note dated  December 28,  1990
                                between  Krupp  GP,  Inc.,  George  Krupp   and
                                Douglas Krupp  (collectively, the  "Borrowers")
                                and   Krupp   Government   Income  Trust   (the
                                "Holder") [Exhibit  10.8 to Registrant's Annual
                                Report on Form  10-K for the fiscal year  ended
                                December 31, 1990 (File No. 33-31942)].*

                 (10.15)        Agreement RE  Subordinated Note  dated December
                                28, 1990 between Krupp  Government Income Trust
                                and Love  Funding  Corporation. [Exhibit  10.11
                                to Registrant's  Annual Report on Form 10-K for
                                the fiscal year  ended December 31, 1991  (File
                                No. 0-19244)].*

                 (10.16)        Subordinated    Multi-family   Mortgage   dated
                                December  28,  1991  between McNab-KC3  Limited
                                Partnership   (the   "Borrower")   and    Krupp
                                Government   Income   Trust   (the   "Lender").
                                [Exhibit 10.12  to  Registrant's Annual  Report
                                on  Form  10-K   for  the  fiscal   year  ended
                                December 31, 1991 (File No. 0-19244)].*

                 (10.17)        GNMA  Purchase  Agreement  dated  December  28,
                                1991 between Krupp Government  Income Trust and
                                Love  Funding  Corporation.  [Exhibit 10.13  to
                                Registrant's  Annual  Report  on Form  10-K for
                                the fiscal year  ended December 31,  1991 (File
                                No. 0-19244)].*

                 River View Apartments

                 (10.18)        Subordinated  Promissory  Note  dated April  2,
                                1991  between  Sterling  Partners  III  Limited
                                Partnership   (the   "Mortgagor")   and   Krupp
                                Government   Income   Trust   (the    "Holder")
                                [Exhibit 19.1  to Registrant's  report on  Form
                                10-Q for the quarter ended June 30, 1991  (File
                                No. 0-19244)].*

                 (10.19)        Agreement  RE   Subordinated  Promissory   Note
                                dated April  2, 1991  between Krupp  Government
                                Income  Trust   and  Love  Funding  Corporation
                                [Exhibit 19.2  to Registrant's  report on  Form
                                10-Q for the quarter ended June 30, 1991  (File
                                No. 0-19244)].*

                 (10.20)        Subordinated Multifamily  Mortgage dated  April
                                2, 1991 between Sterling  Partners III  Limited
                                Partnership   (the   "Mortgagor")   and   Krupp
                                Government  Income   Trust  (the   "Mortgagee")
                                [Exhibit 19.3  to Registrant's  report on  Form
                                10-Q for the quarter ended June 30, 1991  (File
                                No. 0-19244)].*

                 (10.21)        Supplement to Prospectus  dated May 1, 1991 for
                                Government National  Mortgage Association  Pool
                                Number  280840  [Exhibit  19.4 to  Registrant's
                                report on Form 10-Q for the quarter ended  June
                                30, 1991 (File No. 0-19244)].*
<PAGE>

                 Mill Pond Apartments

                 (10.22)        Subordinated  Promissory  Note  dated  May  28,
                                1991  between  Mill  Pond  Limited  Partnership
                                (the "Mortgagor")  and Krupp  Government Income
                                Trust   (the   "Holder")   [Exhibit   19.5   to
                                Registrant's  report  on  Form   10-Q  for  the
                                quarter  ended  June  30,  1991  (File  No.  0-
                                19244)].*

                 (10.23)        Agreement  RE   Subordinated  Promissory   Note
                                dated  May  28,  1991 between  Krupp Government
                                Income  Trust  and  Krupp Mortgage  Corporation
                                [Exhibit 19.6  to Registrant's  report on  Form
                                10-Q for the quarter ended June 30, 1991  (File
                                No. 0-19244)].*

                 (10.24)        Subordinated  Multifamily  Mortgage  dated  May
                                28, 1991 between Mill  Pond Limited Partnership
                                (the "Mortgagor")  and Krupp  Government Income
                                Trust  (the   "Mortgagee")  [Exhibit   19.7  to
                                Registrant's  report  on  Form   10-Q  for  the
                                quarter  ended  June  30,  1991  (File  No.  0-
                                19244)].*

                 (10.25)        Mortgage Note dated May  28, 1991 between Krupp
                                Mortgage Corporation  (the  "Holder") and  Mill
                                Pond Apartments  (the "Borrower") [Exhibit 19.8
                                to Registrant's  report  on Form  10-Q for  the
                                quarter  ended  June  30,  1991  (File  No.  0-
                                19244)].*

                 (10.26)        Participation  Agreement  dated  May  28,  1991
                                between   Krupp   Mortgage   Corporation   (the
                                "Mortgagee") and  Krupp Government Income Trust
                                [Exhibit 19.9  to Registrant's  report on  Form
                                10-Q for the quarter ended June 30, 1991  (File
                                No. 0-19244)].*

                 (10.27)        Assignment  of  Open  End   Mortgage  Deed  and
                                Security Agreement  dated May 28, 1991  between
                                Krupp  Mortgage  Corporation  (the  "Assignor")
                                and   Krupp   Government   Income  Trust   (the
                                "Assignee")   [Exhibit  19.1   to   Registrants
                                report  on  Form  10-Q  for  the quarter  ended
                                September 30, 1991 (File No. 0-19244)].*

                 Waterford Townhome Apartments

                 (10.28)        Subordinated  Promissory  Note  dated June  12,
                                1991  between  Waterford  Apartment Corp.  (the
                                "Mortgagor") and  Krupp Government Income Trust
                                (the "Holder")  [Exhibit 19.10  to Registrant's
                                report on Form 10-Q for the quarter ended  June
                                30, 1991 (File No. 0-19244)].*

                 (10.29)        Agreement  RE   Subordinated  Promissory   Note
                                dated June  12, 1991  between Krupp  Government
                                Income  Trust   and  Nichols/Conlan   Financial
                                Company [Exhibit  19.11 to  Registrant's report
                                on Form  10-Q for  the quarter  ended June  30,
                                1991 (File No. 0-19244)].*
<PAGE>

                 (10.30)        Subordinated  Multifamily Mortgage  dated  June
                                12,  1991  between  Waterford Apartments  Corp.
                                (the "Mortgagor")  and Krupp  Government Income
                                Trust  (the   "Mortgagee")  [Exhibit  19.12  to
                                Registrant's  report  on  Form  10-Q  for   the
                                quarter  ended  June  30,  1991  (File  No.  0-
                                19244)].*

                 (10.31)        Mortgage  Note  dated  June  12,  1991  between
                                Nichols/Conlan     Financial    Company    (the
                                "Holder") and  Waterford  Apartment Corp.  (the
                                "Borrower")  [Exhibit  19.13  to   Registrant's
                                report on Form 10-Q for the quarter ended  June
                                30, 1991 (File No. 0-19244)].*

                 (10.32)        Assignment  of Loan  Documents  dated  June 12,
                                1991  by  Nichols/Conlan  Financial Company  to
                                Krupp   Mortgage   Corp   [Exhibit   19.14   to
                                Registrant's  report  on  Form   10-Q  for  the
                                quarter  ended  June  30,  1991  (File  No.  0-
                                19244)].*

                 (10.33)        Participation  Agreement  dated  June 12,  1991
                                between Nichols/Conlan  Financial Company  (the
                                "Mortgagee") and  Krupp Government Income Trust
                                [Exhibit 19.15  to Registrant's report on  Form
                                10-Q for the quarter ended June 30, 1991  (File
                                No. 0-19244)].*

                 Rivergreens Apartments

                 (10.34)        Subordinated  Promissory  Note  dated  November
                                14,   1991   between   Rivergreens   Associates
                                Limited  Partnership   (the  "Mortgagor")   and
                                Krupp Government  Income Trust  (the "Holder").
                                [Exhibit 10.33  to  Registrant's Annual  Report
                                on  Form  10-K   for  the  fiscal  year   ended
                                December 31, 1991 (File No. 0-19244)].*

                 (10.35)        Agreement   Re-Subordinated   Promissory   Note
                                dated   November   14,   1991   between   Krupp
                                Government  Income  Trust  and  Krupp  Mortgage
                                Corporation.  [Exhibit  10.34  to  Registrant's
                                Annual Report on Form 10-K for the fiscal  year
                                ended December 31, 1991 (File No. 0-19244)].*

                 (10.36)        Subordinated Multifamily  Deed  of Trust  dated
                                November   14,    1991   between    Rivergreens
                                Associates     Limited     Partnership     (the
                                "Borrower"),  Oregon  Title  Insurance  Company
                                (the  "Trustee")  and  Krupp Government  Income
                                Trust  (the   "Lender").   [Exhibit  10.35   to
                                Registrant's  Annual Report  on Form  10-K  for
                                the fiscal year ended  December 31, 1991  (File
                                No. 0-19244)].*

                 (10.37)        Mortgage Note  dated November  14, 1991 between
                                Krupp  Mortgage  Corporation  and   Rivergreens
                                Associates Limited Partnership. [Exhibit  10.36
                                to Registrant's Annual Report on Form 10-K  for
                                the fiscal year ended  December 31, 1991  (File
                                No. 0-19244)].*
<PAGE>

                 (10.38)        Participation  Agreement  dated  November   14,
                                1991  between  Krupp  Mortgage Corporation  and
                                Krupp Government  Income Trust.  [Exhibit 10.37
                                to Registrant's Annual Report on Form 10-K  for
                                the fiscal year ended  December 31, 1991  (File
                                No. 0-19244)].*

                 Audubon Villas

                 (10.39)        Prospectus  for  Government  National  Mortgage
                                Association  Pool  Number  295307(CS) and  Pool
                                Number    295308(PN).   [Exhibit    10.38    to
                                Registrant's  Annual Report  on  Form  10-K for
                                the  fiscal year ended December  31, 1991 (File
                                No. 0-19244)].*

                 (10.40)        Subordinated  Promissory  Note  dated  December
                                27, 1991 between Golf View Partners, Ltd.  (the
                                "Mortgagor") and  Krupp Government Income Trust
                                (the "Holder").  [Exhibit 10.39 to Registrant's
                                Annual Report on Form 10-K for the fiscal  year
                                ended December 31, 1991 (File No. 0-19244)].*

                 (10.41)        Agreement   Re-Subordinated   Promissory   Note
                                dated   December   27,   1991   between   Krupp
                                Government  Income   Trust  and   Love  Funding
                                Corporation.  [Exhibit  10.40  to  Registrant's
                                Annual Report on Form 10-K for the fiscal  year
                                ended December 31, 1991 (File No. 0-19244)].*

                 (10.42)        Subordinated    Multifamily    Mortgage   dated
                                December 27,  1991 between Golf View  Partners,
                                Ltd.  (the  "Borrower")  and  Krupp  Government
                                Income Trust (the "Lender").  [Exhibit 10.41 to
                                Registrant's  Annual Report  on Form  10-K  for
                                the fiscal  year ended December  31, 1991 (File
                                No. 0-19244)].*

                 (10.43)        Additional Loan  Agreement  dated December  27,
                                1991 between  Capital  Developments, Inc.,  Gus
                                M.  Pelias,  Jr.,  and  Durham  Partners,  Ltd.
                                (collectively,  the  "Borrowers"),  Golf   View
                                Partners,   Ltd.   (the   "Owner")  and   Krupp
                                Government   Income   Trust   (the   "Holder").
                                [Exhibit 10.42  to  Registrant's Annual  Report
                                on  Form  10-K   for  the  fiscal  year   ended
                                December 31, 1991 (File No. 0-19244)].*

                 (10.44)        Additional Loan  Note dated  December 27,  1991
                                between  Capital  Developments,  Inc.,  Gus  M.
                                Pelias,   Jr.,   and   Durham  Partners,   Ltd.
                                (collectively,  the   "Borrowers")  and   Krupp
                                Government   Income   Trust   (the   "Holder").
                                [Exhibit 10.43  to  Registrant's Annual  Report
                                on   Form  10-K  for   the  fiscal  year  ended
                                December 31, 1991 (File No. 0-19244)].*

                 Coconut Palm Apartments

                 (10.45)        Subordinated  Promissory  Note  dated  December
                                11,  1991  between  CoClub  Associates  Limited
                                Partnership   (the   "Mortgagor")   and   Krupp
                                Government   Income   Trust   (the   "Holder").
<PAGE>

                                [Exhibit 10.44  to  Registrant's Annual  Report
                                on  Form  10-K   for  the  fiscal  year   ended
                                December 31, 1991 (File No. 0-19244)].*

                 (10.46)        Agreement   Re-Subordinated   Promissory   Note
                                dated   December   11,   1991   between   Krupp
                                Government  Income  Trust  and  Krupp  Mortgage
                                Corporation.  [Exhibit  10.45  to  Registrant's
                                Annual Report on Form 10-K for the fiscal  year
                                ended December 31, 1991 (File No. 0-19244)].*

                 (10.47)        Subordinated    Multifamily   Mortgage    dated
                                December  11,  1991  between CoClub  Associates
                                Limited Partnership  (the "Borrower") and Krupp
                                Government  Income  Trust  (the   "Mortgagee").
                                [Exhibit 10.46  to  Registrant's Annual  Report
                                on  Form  10-K   for  the  fiscal   year  ended
                                December 31, 1991 (File No. 0-19244)].*

                 (10.48)        Additional Loan  Agreement  dated December  11,
                                1991 between Roger  A. Hard,  Robert V.  Meehan
                                and  The May  Company  L.P.  (collectively, the
                                "Borrowers"),    CoClub   Associates    Limited
                                Partnership (the  "Owner") and Krupp Government
                                Income Trust (the "Holder").  [Exhibit 10.47 to
                                Registrant's  Annual Report  on Form  10-K  for
                                the  fiscal year ended  December 31, 1991 (File
                                No. 0-19244)].*

                 (10.49)        Additional Loan  Note dated  December 11,  1991
                                between  Roger A.  Hard,  Robert V.  Meehan and
                                The  May   Company   L.P.  (collectively,   the
                                "Borrowers") and  Krupp Government Income Trust
                                (the "Holder").  [Exhibit 10.48 to Registrant's
                                Annual Report on Form 10-K for the fiscal  year
                                ended December 31, 1991 (File No. 0-19244)].*

                 (10.50)        Mortgage Note  dated December 11, 1991  between
                                Krupp Mortgage  Corporation (the  "Holder") and
                                CoClub  Associates  Limited  Partnership   (the
                                "Borrower").  [Exhibit  10.49  to  Registrant's
                                Annual Report on Form 10-K for the fiscal  year
                                ended December 31, 1991 (File No. 0-19244)].*

                 (10.51)        GNMA  Purchase  Agreement  dated  December  11,
                                1991  between  Krupp  Mortgage Corporation  and
                                Krupp Government  Income Trust.  [Exhibit 10.50
                                to  Registrant's Annual Report on Form 10-K for
                                the  fiscal year ended December  31, 1991 (File
                                No. 0-19244)].*

                 (10.52)        Prospectus  for  Government  National  Mortgage
                                Association  Pool  Number  293805(CL) and  Pool
                                Number    293806(PL).   [Exhibit    10.51    to
                                Registrant's  Annual Report  on  Form  10-K for
                                the  fiscal year ended December  31, 1991 (File
                                No. 0-19244)].*

                 Mountain View Apartments

                 (10.53)        Subordinated Promissory  Note  dated April  21,
                                1992   between    Mountain   View   Ltd.   (the
                                "Mortgagor") and  Krupp Government Income Trust
<PAGE>

                                (the "Holder").  [Exhibit 19.1  to Registrant's
                                report on Form 10-Q for the quarter ended  June
                                30, 1992 (File No. 0-19244)].*

                 (10.54)        Agreement  RE   Subordinated  Promissory   Note
                                dated April  21, 1992  between Krupp Government
                                Income Trust  and  Krupp Mortgage  Corporation.
                                [Exhibit 19.2  to Registrant's  report on  Form
                                10-Q for the quarter ended June 30, 1992  (File
                                No. 0-19244)].*

                 (10.55)        Subordinated Multifamily  Mortgage dated  April
                                21,  1992  between  Mountain   View  Ltd.  (the
                                "Mortgagor") and  Krupp Government Income Trust
                                (the   "Mortgagee").       [Exhibit   19.3   to
                                Registrant's  report  on  Form   10-Q  for  the
                                quarter  ended  June  30,  1992  (File  No.  0-
                                19244)].*

                 (10.56)        Additional Loan Agreement dated April 21,  1992
                                between Philip P.  Mulkey, Henry  V. Bragg  and
                                Gregory    V.    Bragg    (collectively,    the
                                "Borrowers") and  Krupp Government Income Trust
                                (the "Holder").  [Exhibit 19.4  to Registrant's
                                report on Form 10-Q for the quarter ended  June
                                30, 1992 (File No. 0-19244)].*

                 (10.57)        Additional  Loan  Note  dated  April  21,  1992
                                between Philip  P. Mulkey,  Henry V. Bragg  and
                                Gregory    V.    Bragg    (collectively,    the
                                "Borrowers") and  Krupp Government Income Trust
                                (the "Holder").  [Exhibit 19.5  to Registrant's
                                report on Form 10-Q for the quarter ended  June
                                30, 1992 (File No. 0-19244)].*

                 (10.58)        Mortgage  Note  dated  April  21, 1992  between
                                Mountain View Ltd. (the  "Borrower") and  Krupp
                                Mortgage Corporation  (the "Holder").  [Exhibit
                                19.6 to  Registrant's report on  Form 10-Q  for
                                the quarter  ended June 30,  1992 (File No.  0-
                                19244)].*

                 (10.59)        Modification  Agreement  by  and between  Krupp
                                Government Income Trust and Mountain View  Ltd.
                                [Exhibit 10.1  to Registrant's report Form 10-Q
                                for the quarter ended September 30, 1995  (File
                                No. 0-19244)].*

                 Red Run Apartments

                 (10.60)        Subordinated Promissory  Note dated May 5, 1992
                                between  Red   Run  Limited   Partnership  (the
                                "Mortgagor") and  Krupp Government Income Trust
                                (the "Holder").  [Exhibit 19.7  to Registrant's
                                report on Form 10-Q for the quarter ended  June
                                30, 1992 (File No. 0-19244)].*

                 (10.61)        Agreement  RE   Subordinated  Promissory   Note
                                dated  May  5, 1992  between  Krupp  Government
                                Income  Trust  and  Maryland National  Mortgage
                                Corporation (the"Mortgagee"). [Exhibit 19.8  to
                                Registrant's  report  on  Form  10-Q  for   the
<PAGE>

                                quarter  ended  June  30,  1992  (File  No.  0-
                                19244)].*

                 (10.62)        Subordinated Multifamily  Mortgage dated May 5,
                                1992 between  Red Run Limited Partnership  (the
                                "Trustor") and  Krupp  Government Income  Trust
                                (the "Lender").  [Exhibit 19.9  to Registrant's
                                report on Form 10-Q for the quarter ended  June
                                30, 1992 (File No. 0-19244)].*



                 (10.63)        Additional  Loan Agreement  dated  May  5, 1992
                                between Red  Run Corporation and Summit  Towers
                                Company  (collectively,  the  "Borrowers")  and
                                Krupp Government  Income Trust  (the "Holder").
                                [Exhibit 19.10  to Registrant's report on  Form
                                10-Q for the quarter ended June 30, 1992  (File
                                No. 0-19244)].*

                 (10.64)        Additional Loan Note dated May  5, 1992 between
                                Red Run Corporation and  Summit Towers  Company
                                (collectively,  the   "Borrowers")  and   Krupp
                                Government   Income   Trust   (the   "Holder").
                                [Exhibit 19.11 to Registrant's  report on  Form
                                10-Q for the quarter ended June 30, 1992  (File
                                No. 0-19244)].*

                 (10.65)        Deed of  Trust Note dated  May 5, 1992  between
                                Red  Run   Limited  Partnership   and  Maryland
                                National Mortgage  Corporation.   [Exhibit 19.3
                                to  Registrant's report  on Form  10-Q for  the
                                quarter ended September 30,  1992 (File No.  0-
                                19244)].*

                 (10.66)        Participation and  Servicing  Agreement by  and
                                between Maryland National Mortgage  Corporation
                                and  Krupp  Government  Income Trust.  [Exhibit
                                19.4 to  Registrant's report on  Form 10-Q  for
                                the quarter ended September  30, 1992 (File No.
                                0-19244)].*

                 Park Highland Apartments

                 (10.67)        Subordinated  Promissory  Note  dated  June  5,
                                1992 between  Park Highland Limited Partnership
                                (the "Mortgagor")  and Krupp  Government Income
                                Trust  (the   "Holder").   [Exhibit  19.12   to
                                Registrant's  report  on  Form   10-Q  for  the
                                quarter  ended  June  30,  1992  (File  No.  0-
                                19244)].*

                 (10.68)        Agreement  RE   Subordinated  Promissory   Note
                                dated  June  5,  1992 between  Krupp Government
                                Income Trust  and  Krupp Mortgage  Corporation.
                                [Exhibit 19.13  to Registrant's report on  Form
                                10-Q for the quarter ended June 30, 1992  (File
                                No. 0-19244)].*

                 (10.69)        Subordinated  Multifamily Mortgage  dated  June
                                5,   1992   between   Park   Highland   Limited
                                Partnership   (the   "Borrower")   and    Krupp
                                Government  Income Trust  (the  "Beneficiary").
<PAGE>

                                [Exhibit 19.14 to Registrant's  report on  Form
                                10-Q for the quarter ended June 30, 1992  (File
                                No. 0-19244)].*

                 (10.70)        Additional Loan  Agreement dated  June 5,  1992
                                between   Intrawest   Corporation   and    Park
                                Highland  Apartments, Ltd.  (collectively,  the
                                "Borrowers") and  Krupp Government Income Trust
                                (the "Holder").  [Exhibit 19.15 to Registrant's
                                report on Form 10-Q for the quarter ended  June
                                30, 1992 (File No. 0-19244)].*

                 (10.71)        Additional  Loan  Note  dated   June  5,   1992
                                between   Intrawest   Corporation   and    Park
                                Highlands  Apartment, Inc.  (collectively,  the
                                "Borrowers") and  Krupp Government Income Trust
                                (the "Holder").  [Exhibit 19.16 to Registrant's
                                report on Form 10-Q for the quarter ended  June
                                30, 1992 (File No. 0-19244)].*

                 (10.72)        Deed of Trust  Note dated June 5, 1992  between
                                Park Highlands  Limited  Partnership and  Krupp
                                Mortgage   Corporation.   [Exhibit   19.1    to
                                Registrant's  report   on  Form  10-Q  for  the
                                quarter ended September  30, 1992 (File No.  0-
                                19244)].*

                 (10.73)        Participation Agreement dated June  5, 1992  by
                                and  between  Krupp  Mortgage  Corporation  and
                                Krupp Government  Income Trust.   [Exhibit 19.2
                                to  Registrant's report  on  Form 10-Q  for the
                                quarter ended September  30, 1992 (File No.  0-
                                19244)].*


                 Timber Ridge Apartments

                 (10.74)        Subordinated  promissory note  dated  September
                                30, 1992  between Exoho/Timber Ridge Associates
                                Limited   Partnership  and   Krupp   Government
                                Income  Trust.  [Exhibit  19.5 to  Registrant's
                                report on  Form  10-Q  for  the  quarter  ended
                                September 30, 1992 (File No. 0-19244)].*

                 (10.75)        Additional  loan   dated  September   30,  1992
                                between  Mark  IV  and  JLM  Realty  and  Krupp
                                Government  Income   Trust.  [Exhibit  19.6  to
                                Registrant's  report   on  Form  10-Q  for  the
                                quarter  ended September 30, 1992  (File No. 0-
                                19244)].*

                 (10.76)        Additional loan  agreement dated  September 30,
                                1992 by  and between  Mark IV  Realty Inc.  and
                                JLM Realty,  Inc. and  Krupp Government  Income
                                Trust. [Exhibit 19.7 to  Registrant's report on
                                Form  10-Q for the quarter  ended September 30,
                                1992 (File No. 0-19244)].*

                 (10.77)        Subordinated deed of trust dated September  30,
                                1992  between  Exoho/Timber  Ridge   Associates
                                Limited   Partnership  and   Krupp   Government
                                Income Trust.  [Exhibit  10.78 to  Registrant's
<PAGE>

                                Annual Report on Form 10-K for the fiscal  year
                                ended December 31, 1995 (File No. 0-19244)].*

                 (10.78)        Participation     certificate     with    Krupp
                                Government Income  Trust  as registered  owner.
                                [Exhibit 10.79  to  Registrant's Annual  Report
                                on   Form  10-K  for  the   fiscal  year  ended
                                December 31, 1995 (File No. 0-19244)].*

                 (10.79)        Participation and  Servicing  Agreement by  and
                                between  Love  Funding  Corporation  and  Krupp
                                Government  Income  Trust.  [Exhibit  10.80  to
                                Registrant's  Annual Report  on  Form  10-K for
                                the  fiscal year ended December  31, 1995 (File
                                No. 0-19244)].*

                 (10.80)        Deed  of Trust  Note  dated September  30, 1992
                                between Exoho/Timber  Ridge Associates  Limited
                                Partnership  and   Love  Funding   Corporation.
                                [Exhibit 10.81  to  Registrant's Annual  Report
                                on   Form  10-K  for  the   fiscal  year  ended
                                December 31, 1995 (File No. 0-19244)].*

                 (10.81)        Deed of Trust  dated September 30, 1992 between
                                Exoho/Timber     Ridge    Associates    Limited
                                Partnership  and   Love  Funding   Corporation.
                                [Exhibit 10.82  to  Registrant's Annual  Report
                                on   Form  10-K  for  the   fiscal  year  ended
                                December 31, 1995 (File No. 0-19244)].*

                 Lincoln Green Apartments

                 (10.82)        Supplement to  prospectus dated  August 1, 1992
                                for Federal  National Mortgage Association pool
                                number    MX-073023.    [Exhibit    19.8     to
                                Registrant's  report   on  Form  10-Q  for  the
                                quarter ended September  30, 1992 (File No.  0-
                                19244)].*

                 (10.83)        Subordinated  promissory note  dated  September
                                15,   1992  by   and  between   Lincoln   Green
                                Associates     Limited     Partnership     (the
                                "Mortgagor") and  Krupp Government Income Trust
                                (the "Holder").  [Exhibit 19.9  to Registrant's
                                report  on  Form  10-Q  for  the quarter  ended
                                September 30, 1992 (File No. 0-19244)].*




                 (10.84)        Subordinated Multi-family  Deed of  Trust dated
                                September  16,  1992  by  and  between  Lincoln
                                Green  Associates   Limited  Partnership   (the
                                "Borrower") and  Krupp Government  Income Trust
                                (the "Lender").  [Exhibit 19.10 to Registrant's
                                report on  Form  10-Q  for  the  quarter  ended
                                September 30, 1992 (File No. 0-19244)].*

                 The Seasons

                 (10.85)        Additional Loan  Agreement dated  September 16,
                                1993   between   The   Krupp  Company   Limited
                                Partnership-IV  (the   "Borrower")  and   Krupp
<PAGE>

                                Government  Income   Trust  II  (the  "Holder")
                                [Exhibit 10.80  to Registrant's report on  Form
                                10-K  for  the  year  ended  December 31,  1994
                                (File No. 0-19244)].*

                 (10.86)        Additional Loan  Note dated  September 16, 1993
                                between The  Krupp Company Limited Partnership-
                                IV  (the   "Borrower")  and   Krupp  Government
                                Income Trust  II (the  "Holder") [Exhibit 10.81
                                to  Registrant's report  on  Form 10-K  for the
                                year  ended  December 31,  1994  (File  No.  0-
                                19244)].*

                 (10.87)        Subordinated  Promissory Note  dated  September
                                16, 1993  between  Maryland Associates  Limited
                                Partnership (the  "Maker") and Krupp Government
                                Income Trust  II (the "Holder") [Exhibit  10.82
                                to  Registrant's report  on Form  10-K for  the
                                year  ended  December  31,  1994  (File  No. 0-
                                19244)].*

                 (10.88)        Pledge and  Security Agreement  dated September
                                16,  1993  by and  between  The  Krupp  Company
                                Limited  Partnership-IV   (the  "Debtor")   and
                                Krupp Government Income Trust  II (the "Secured
                                Party") [Exhibit  10.83 to  Registrant's report
                                on Form  10-K for the  year ended December  31,
                                1994 (File No. 0-19244)].*

                 (10.89)        The Deed of  Trust dated September 16, 1993  by
                                and   between   Maryland   Associates   Limited
                                Partnership  and  Krupp  Mortgage   Corporation
                                [Exhibit 10.84  to Registrant's  report on Form
                                10-K  for  the  year ended  December  31,  1994
                                (File No. 0-19244)].*

                 (10.90)        Participation and  Servicing Agreement  made as
                                of September  16,  1993  by and  between  Krupp
                                Mortgage  Corporation   (the  "Servicer")   and
                                Krupp   Government   Income   Trust   II   (the
                                "Participant") [Exhibit  10.85 to  Registrant's
                                report   on  Form  10-K  for   the  year  ended
                                December 31, 1994 (File No. 0-19244)].*

                 (10.91)        Assignment  and   Assumption  Agreement   dated
                                September  16,  1993  between Krupp  Government
                                Income  Trust  II (the  "Assignor")  and  Krupp
                                Government   Income  Trust   (the   "Assignee")
                                [Exhibit 10.86 to Registrant's  report on  Form
                                10-K  for  the  year  ended December  31,  1994
                                (File No. 0-19244)].*

                 Rosemont Apartments

                 (10.92)        Participation  and  Servicing  Agreement  dated
                                July  14,   1994,  by   and  between   Rockport
                                Mortgage  Corporation   (the  "Servicer")   and
                                Krupp    Government    Income    Trust     (the
                                "Participant") [Exhibit  10.87 to  Registrant's
                                report  on  Form   10-K  for  the  year   ended
                                December 31, 1994 (File No. 0-19244)].*
<PAGE>

                 (10.93)        Deed of Trust  Note dated July 1, 1994  between
                                Rosemont    Ltd.    and    Rockport    Mortgage
                                Corporation.  [Exhibit  10.88  to  Registrant's
                                report  on  Form   10-K  for  the  year   ended
                                December 31, 1994 (File No. 0-19244)].*

                 (10.94)        Allonge to  Deed of  Trust Note  dated July  1,
                                1994  between   Rosemont   Ltd.  and   Rockport
                                Mortgage   Corporation   [Exhibit   10.89    to
                                Registrant's report on  Form 10-K for  the year
                                ended December 31, 1994 (File No. 0-19244)].*

                 (10.95)        Participation     Certificate     with    Krupp
                                Government Income  Trust  as registered  owner.
                                [Exhibit 10.96  to Registrant's  report on Form
                                10-K  for  the year  ended  December  31,  1995
                                (File No. 0-19244)].*

                 * Incorporated by reference


      (c)        Reports on Form 8-K

                 During the last quarter of the year ended December  31, 1996,
                 the Trust did not file any reports on Form 8-K.
<PAGE>

                                    SIGNATURES

      Pursuant to the requirements of  Section 13 or 15 (d) of  the Securities
   Exchange  Act of  1934, the registrant  has duly  caused this  report to be
   signed on its  behalf by the undersigned, thereunto duly authorized, on the
   11th day of March, 1997.

                            KRUPP GOVERNMENT INCOME TRUST




                    By:                                                
                            Douglas Krupp, Chairman of Board of Trustees and a
                            Trustee of Krupp Government Income Trust

          Pursuant to the requirements of the Securities Exchange Act of 1934,
   this report has been signed below by the following persons on behalf of the
   registrant and in the capacities indicated, on the 11th day of March, 1997.

                    Signatures             Title(s)


                                      Chairman of Board of Trustees and a
            Douglas Krupp             Trustee of Krupp Government Income Trust


                                      President and a Trustee of Krupp
            Laurence Gerber           Government Income Trust


                                      Vice President and Treasurer of Krupp
            Robert A. Barrows         Government Income Trust


                                      Trustee of Krupp Government Income Trust
            Charles N. Goldberg


                                      Trustee of Krupp Government Income Trust
            E. Robert Roskind


                                       Trustee of Krupp Government Income Trust
            J. Paul Finnegan
<PAGE>






















                                                APPENDIX A

                                      KRUPP GOVERNMENT INCOME TRUST
                                                          









                               FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
                                           ITEM 8 of FORM 10-K

                         ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION
                                   For the Year Ended December 31, 1996
<PAGE>

                                      KRUPP GOVERNMENT INCOME TRUST

                           INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
                                                           



            Report of Independent Accountants                         F-3

            Balance Sheets at December 31, 1996 and 1995              F-4

            Statements of Income for the Years Ended December 31, 1996,
             1995 and 1994                                            F-5

            Statements of Changes in Shareholders' Equity for the Years Ended
            December 31, 1996, 1995 and 1994                          F-6

            Statements of Cash Flows for the Years Ended December 31, 1996, 1995
            and 1994                                                  F-7

            Notes to Financial Statements                             F-8 - F-19

            Supplementary Data - Selected Quarterly Financial Data
            (Unaudited)                                               F-20





All schedules  are omitted as  they are not  applicable or  not required, or the
information is provided in the financial statements or the notes thereto.  
<PAGE>

                        REPORT OF INDEPENDENT ACCOUNTANTS
                                              






   To the Shareholders of
   Krupp Government Income Trust:

          We  have audited the financial statements of Krupp Government Income
   Trust (the "Trust")  listed in the  index on  page F-2 of  this Form  10-K.
   These  financial statements  are  the responsibility  of  management.   Our
   responsibility is to express an opinion on these financial statements based
   on our audits.

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

          In our opinion, the  financial statements referred to  above present
   fairly,  in  all  material  respects,  the  financial  position   of  Krupp
   Government Income Trust as of  December 31, 1996 and 1995, and  the results
   of its operations  and cash flows for each of the three years in the period
   ended December  31, 1996 in  conformity with generally  accepted accounting
   principles.





   Boston, Massachusetts
   February 27, 1997, except
   as to the information
   presented in Note K for 
   which the date is 
   March 6, 1997
<PAGE>

                                      KRUPP GOVERNMENT INCOME TRUST
<TABLE>
                                              BALANCE SHEETS

                                        December 31, 1996 and 1995
                                                          

<CAPTION>
                                                  ASSETS
                                                                 1996               1995

            <S>                                                <C>              <C>
            Participating Insured Mortgage Investments
             ("PIMIs") (Notes B, C and J):
             Insured Mortgages                                 $114,625,179     $115,131,611
             Additional loans                                    20,749,108       20,749,108
            Participating Insured Mortgages ("PIMs")
             (Notes B, D and J)                                  48,479,897       57,691,223
            Mortgage-Backed Securities and insured
             mortgage ("MBS") (Notes B, E and J)                 26,754,326       31,394,259

                     Total mortgage investments                 210,608,510      224,966,201

            Cash and cash equivalents (Notes B and J)            19,053,931        8,914,295
            Interest receivable and other assets                  1,707,799        1,862,335
            Prepaid acquisition fees and expenses, net
             of accumulated amortization of $6,090,173
             and $4,909,201, respectively (Note B)                7,383,186        8,564,158
            Prepaid participation servicing fees, net of
             accumulated amortization of $1,610,677 and
             $1,177,984, respectively (Note B)                    2,880,328        3,313,021

                     Total assets                              $241,633,754     $247,620,010

                                  LIABILITIES AND SHAREHOLDERS' EQUITY

            Deferred income on Additional Loans (Note B)       $  7,325,414     $  5,920,957
            Other liabilities                                        27,733           20,577

                     Total liabilities                            7,353,147        5,941,534

            Commitments (Note H)

            Shareholders' equity (Notes A, F and I):
                 Common stock, no par value; 17,510,000
                 Shares authorized; 15,053,135 Shares
                 issued and outstanding                         233,015,255      240,103,655
                 Unrealized gain on MBS (Note B)                  1,265,352        1,574,821

                     Total Shareholders  equity                 234,280,607      241,678,476

                     Total liabilities and Shareholders'
                       equity                                  $241,633,754     $247,620,010
</TABLE>


                                 The accompanying notes are an integral
                                    part of the financial statements.
<PAGE>

<TABLE>
                                      KRUPP GOVERNMENT INCOME TRUST

                                          STATEMENTS OF INCOME

                          For the Years Ended December 31, 1996, 1995 and 1994
                                                           
<CAPTION>
                                                     1996            1995           1994

            <S>                                   <C>            <C>            <C>
            Revenues:
              Interest income - PIMs and PIMIs:
                Base interest                     $12,807,392    $13,689,837    $13,752,680
                Participation income                  359,161        372,228        101,324
              Interest income - MBS                 2,305,613      2,607,682      2,401,681
              Other interest income                   885,874        530,669        590,279

                Total revenues                     16,358,040     17,200,416     16,845,964

            Expenses:
              Asset management fee 
               to an affiliate (Note G)             1,604,853      1,692,943      1,694,963
              Expense reimbursements 
               to affiliates (Note G)                 343,214        440,891        439,996
              Amortization of prepaid fees, 
               expenses and organization costs      1,613,665      1,682,629      1,702,369
              General and administrative              315,613        362,321        409,637

                    Total expenses                  3,877,345      4,178,784      4,246,965

            Net income                            $12,480,695    $13,021,632    $12,598,999

            Earnings per share                    $       .83    $       .87    $       .84

            Weighted average shares outstanding    15,053,135     15,053,135     15,053,135
</TABLE>


                               The accompanying notes are an integral
                                 part of the financial statements.
<PAGE>

<TABLE>
                                        KRUPP GOVERNMENT INCOME TRUST

                                STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

                             For the Years Ended December 31, 1996, 1995 and 1994
                                                             

<CAPTION>
                                                                                      Total
                                             Common      Retained    Unrealized    Shareholders'
                                              Stock      Earnings    Gain on MBS      Equity    

           <S>                           <C>           <C>           <C>           <C>
           Balance at December 31, 1993  $253,621,211  $    -        $    -        $253,621,211

           Dividends                       (6,970,092) (12,598,999)       -         (19,569,091)

           Net income                          -        12,598,999        -          12,598,999

           Balance at December 31, 1994   246,651,119        -            -         246,651,119

           Dividends                       (6,547,464) (13,021,632)       -         (19,569,096)

           Net income                          -        13,021,632        -          13,021,632

           Unrealized gain on MBS              -            -          1,574,821      1,574,821

           Balance at December 31, 1995   240,103,655       -          1,574,821    241,678,476

           Dividends (Notes F and I)       (7,088,400) (12,480,695)       -         (19,569,095) 

           Net income (Note I)                 -        12,480,695        -          12,480,695

           Change in unrealized gain
               on MBS                          -            -           (309,469)      (309,469)

           Balance at December 31, 1996  $233,015,255  $    -         $1,265,352   $234,280,607
</TABLE>


           Shared issued and outstanding for  each of the three years ended 
           December 31, 1996 are 15,053,135



                                   The accompanying notes are an integral
                                     part of the financial statements.
<PAGE>

<TABLE>
                                       KRUPP GOVERNMENT INCOME TRUST

                                          STATEMENTS OF CASH FLOWS

                            For the Years Ended December 31, 1996, 1995 and 1994
                                                            

<CAPTION>
                                                         1996            1995           1994
           <S>                                       <C>             <C>           <C>
           Operating activities:
            Net income                               $12,480,695     $13,021,632   $12,598,999
            Adjustments to reconcile net income
             to net cash provided by operating
             activities:
            Amortization of premium and discounts         (1,110)          8,663         9,738
            Amortization of prepaid fees, expenses
             and organization costs                    1,613,665       1,682,629     1,702,369
            Changes in assets and liabilities:
             Decrease (increase) in interest 
              receivable and other assets                154,536         246,218      (192,851)
             Increase (decrease) in other
              liabilities                                  7,156         (17,148)       28,132

                 Net cash provided by operating
                  activities                          14,254,942      14,941,994    14,146,387

           Investing activities:
            Principal collections on PIMs and PIMIs      855,308         844,835       706,793
            Principal collections on MBS               4,331,574       3,554,556    12,538,168
            Increase in deferred income on
              Additional Loans                         1,404,457       1,276,777     1,710,452
            Investments in PIMs                           -               -         (1,586,359)
            PIM prepayment                             8,862,450          -              -
            Acquisition of MBS                            -           (3,203,221)   (8,221,086)

                 Net cash provided by investing
                  activities                          15,453,789       2,472,947     5,147,968

           Financing activity:  
            Dividends                                (19,569,095)    (19,569,096)  (19,569,091)

           Net increase (decrease) in cash and
            cash equivalents                          10,139,636      (2,154,155)     (274,736)

           Cash and cash equivalents, beginning
            of year                                    8,914,295      11,068,450    11,343,186

           Cash and cash equivalents, end of year    $19,053,931     $ 8,914,295   $11,068,450
</TABLE>



                                   The accompanying notes are an integral
                                     part of the financial statements.
<PAGE>



                          KRUPP GOVERNMENT INCOME TRUST

                          NOTES TO FINANCIAL STATEMENTS
                                                
   A.           Organization

                Krupp  Government Income  Trust  (the "Trust")  was  formed on
                November 1,  1989 by  filing  a Declaration  of Trust  in  The
                Commonwealth  of Massachusetts.   The  Trust is  authorized to
                sell and issue  not more than 17,510,000  shares of beneficial
                interest (the  "Shares").   Berkshire Realty  Advisors Limited
                Partnership ("BRALP"),  (see  below) acquired  10,000 of  such
                Shares  for  $200,000  and  14,999,999  Shares were  sold  for
                $299,480,263 net  of  purchase  volume discounts  of  $519,717
                under a public offering which commenced on April 19, 1990  and
                ended on July 15, 1991.  Under the Dividend Reinvestment  Plan
                ("DRP"), 43,136  Shares  were sold  for $819,356.   The  Trust
                shall  terminate   on  December   31,  2029,   unless  earlier
                terminated by the affirmative vote of holders of a majority of
                the outstanding Shares entitled to vote thereon.

                On  December 29,  1994,  Berkshire Mortgage  Advisors  Limited
                Partnership, an  affiliate of  BRALP, acquired  BRALP's 10,000
                Shares and assumed the role of "Advisor" to the Trust.

                The  Trustees of the Trust desire that  the Trust qualify as a
                real  estate  investment   trust  ("REIT"),  under   the  REIT
                Provisions of the Internal Revenue  Code of 1986 (the "Code"),
                as  amended.   To qualify  as a  REIT  for federal  income tax
                purposes, the Trust made a valid election on its 1990  federal
                income tax return  filed for the year ended December  31, 1990
                to be  so treated  and  must continually  satisfy a  range  of
                complex requirements.   An election continues  in effect until
                voluntarily revoked or automatically terminated by the Trust's
                failure to  qualify as a REIT  for a taxable year.   The Trust
                was organized and intends  to conduct its operations to enable
                it to  qualify as a REIT  under the Code.   Qualification as a
                REIT requires  the Trust to meet  certain criteria concerning,
                among other  things, its  share ownership, the  nature of  its
                assets,  the  source  of  its income  and  the  amount of  its
                distributions to shareholders.   However, should the Trust not
                qualify  as a REIT in any taxable year, it would be taxed as a
                corporation  and the  distributions to  shareholders would  be
                taxed as dividends to the shareholders of the corporation.

   B.           Significant Accounting Policies

                The Trust uses the following accounting policies for financial
                reporting purposes:

                    MBS

                    At  December 31,  1995, the Trust  in accordance  with the
                    Financial Accounting  Standards Board's  Special Report on
                    Statement 115,  "Accounting  for  Certain  Investments  in
                    Debt  and   Equity  Securities",   reclassified  its   MBS
                    portfolio  from  held-to-maturity  to  available-for-sale.
                    The  Trust carries  its  MBS  at  fair  market  value  and
                    reflects  any  unrealized  gains  (losses)  as a  separate
                    component of Shareholders' Equity.  Prior  to December 31,
                    1995, the  Trust carried  its MBS  portfolio at  amortized
<PAGE>



                    cost.  The Trust amortizes purchase  premiums or discounts
                    over  the  life  of the  underlying  mortgages  using  the
                    effective interest method.

                    PIMs and PIMIs

                    The  Trust  carries  its  investments  in  PIMs  and PIMIs
                    (consisting of  an insured mortgage  and Additional  Loan)
                    at  amortized cost as it  has the ability and intention to
                    hold these  investments.    Basic interest  is  recognized
                    based on the stated rate  of the Department of Housing and
                    Urban Development ("HUD") insured mortgage loan  (less the
                    servicer's

                                    Continued
<PAGE>






                          KRUPP GOVERNMENT INCOME TRUST

                     NOTES TO FINANCIAL STATEMENTS, Continued
                                                

   B.           Significant Accounting Policies, Continued

                   PIMs and PIMIs, Continued

                   fee) or the coupon rate of the Government National Mortgage
                   Association   ("GNMA")   or   Federal   National   Mortgage
                   Association ("FNMA") MBS.   The  Trust recognizes  interest
                   related to the participation features as earned and when it
                   deems these amounts as collectible.   The Trust defers  the
                   recognition of Additional  Loan interest payments as income
                   to  the extent  these  interest payments  are  from escrows
                   established with the proceeds of the Additional Loan.  When
                   the  properties underlying  the PIMIs  generate  sufficient
                   cash  flow to  make the  required Additional  Loan interest
                   payments  with funds other than from escrows, the Trust may
                   recognize  income as  earned  and may  commence  amortizing
                   deferred interest  amounts into  income over  the remaining
                   term of the Additional Loan.

                   The Trust also fully reserves the portion of any Additional
                   Loan base interest  payment satisfied through  the issuance
                   of  an operating loan  and any  associated interest  due on
                   such  operating loan.  The Trust  will recognize the income
                   related  to the  operating  loan when  the  borrower repays
                   amounts due under the operating loan.

                   Cash Equivalents

                   The   Trust  includes   all  short-term   investments  with
                   maturities  of  three  months  or  less  from the  date  of
                   acquisition  in  cash  and  cash  equivalents.   The  Trust
                   invests  its cash  primarily in  deposits and  money market
                   funds with  a commercial  bank and has not  experienced any
                   loss to date on its invested cash.

                   Prepaid Fees and Expenses

                   Prepaid  fees  and  expenses represent  prepaid acquisition
                   fees and expenses and prepaid participation  servicing fees
                   paid for the acquisition  and servicing of PIMs  and PIMIs.
                   The Trust  amortizes prepaid acquisition fees  and expenses
                   using a  method that  approximates the  effective  interest
                   method  over  a  period  of  ten  to  twelve  years,  which
                   represents the actual maturity  or anticipated call date of
                   the  underlying mortgage.   Acquisition  fees  and expenses
                   incurred   on  potential   acquisitions  which   were   not
                   consummated were charged to operations.

                   The  Trust amortizes  prepaid participation  servicing fees
                   using  a method  that  approximates the  effective interest
                   method  over   a  ten   year  period  beginning   at  final
                   endorsement of the loan  if a HUD-insured mortgage loan and
                   at closing if a FNMA MBS.
<PAGE>

                   Income Taxes

                   The  Trust has  elected to  be  taxed as  a REIT  under the
                   Internal Revenue Code of 1986,  as amended, and believes it
                   will   continue   to    meet   all   such   qualifications.
                   Accordingly, the Trust will not be subject to federal 




                                    Continued
                          KRUPP GOVERNMENT INCOME TRUST

                     NOTES TO FINANCIAL STATEMENTS, Continued
                                                

   B.           Significant Accounting Policies, Continued

                   Income Taxes, Continued

                   income  taxes  on  amounts   distributed  to   shareholders
                   provided it distributes  annually at least 95%  of its REIT
                   taxable  income  and meets  certain other  requirements for
                   qualifying as  a REIT. Therefore, no  provision for federal
                   income taxes has been recorded in the financial statements.

                   Estimates and Assumptions

                   The preparation of  financial statements in accordance with
                   generally    accepted   accounting    principles   requires
                   management to  make estimates  and assumptions  that affect
                   the reported  amount of assets and  liabilities, contingent
                   assets and liabilities and revenues and expenses during the
                   period.  Actual results could differ from those estimates.

   C.           PIMIs

                The Trust  has investments in  nine PIMIs that  in most  cases
                financed  the  construction  and  in  all  cases  provide  the
                permanent financing of multi-family housing.  One component of
                a PIMI is either a securitized HUD-insured first mortgage loan
                issued and guaranteed by GNMA or a sole participation interest
                in a  first mortgage loan originated under the Federal Housing
                Administration  ("FHA")  lending program  and  insured by  HUD
                (collectively  the  "insured   mortgages").    The  FHA  first
                mortgage or  the first  mortgage underlying the  GNMA security
                provides the borrower (generally a limited partnership) with a
                below market interest rate  loan in exchange for providing the
                Trust with participation in a percentage of the cash generated
                from  property   operations  and   in  a  percentage   of  any
                appreciation of the underlying property to a preferred return,
                then  a  percentage  of  any  appreciation  thereafter.    The
                borrower  conveys   these  rights  to  the   Trust  through  a
                subordinated promissory  note and mortgage.   In addition, the
                Trust made an Additional Loan to the owners of the borrower to
                provide  additional funds for  the construction  and permanent
                financing of the property.  The owners generally collateralize
                the Additional  Loan through  a pledge and  security agreement
<PAGE>




                that pledges  their ownership  interests in the  borrower, and
                their  share  of  any  distributions  made from  surplus  cash
                generated by  the property and the  proceeds realized upon the
                refinancing of the  property, sale of the property or  sale of
                the  partnership  interests.     Amounts  payable  under   the
                Additional Loan are neither guaranteed nor insured.

                The Trust receives monthly  principal and interest payments on
                the insured mortgage and  is entitled to receive participation
                interest under the subordinated promissory note and  mortgage,
                and semi-annual interest payments 
                ("Base  Interest") and preferred interest under the Additional
                Loan.  The  Trust receives principal and  interest payments on
                the insured  mortgages currently,  because these  payments are
                insured or  guaranteed; however, there are  limitations to the
                amount  and  obligation  to  pay  participation  interest  and
                Additional Loan interest.  

                The  subordinated promissory  note  and mortgage  entitles the
                Trust to receive (i)  Participating Income Interest  generally
                equal to 50% of (a) all distributable Surplus Cash (as defined
                in the regulatory agreement of the HUD-insured first mortgage)
                generated by the property  (b) any unrestricted cash generated
                from property operations and (c) to the extent available 


                                    Continued
                          KRUPP GOVERNMENT INCOME TRUST

                     NOTES TO FINANCIAL STATEMENTS, Continued
                                                

   C.           PIMIs, Continued

                unexpended  reserves  and   escrows,  and  (ii)  Participating
                Appreciation  Interest  generally  equal  to  50% of  the  net
                proceeds or value of the property upon the  sale, refinancing,
                maturity or  accelerated maturity, or permitted  prepayment of
                all amounts due under the insured mortgage and Additional Loan
                less  the  Outstanding  Indebtedness,  as  defined.    Amounts
                received by the Trust  pursuant to the subordinated promissory
                note as  Participating Income Interest  reduce amounts payable
                as Preferred Interest and  may reduce amounts payable as  Base
                Interest under the Additional Loan. 

                The   insured  mortgage   and  subordinated   promissory  note
                generally have  maturities of  30 to 40 years,  however, under
                the  subordinated  promissory  note  the  Trust  can generally
                accelerate these maturity dates at any time after the ninth or
                tenth  anniversary  of final  endorsement for  coinsurance and
                insurance, but  in certain cases for  construction loans after
                the eleventh  or  twelfth anniversary  of initial  endorsement
                (commencement of construction)  for coinsurance and insurance,
                upon giving twelve months  written notice for  the payment  of
                all  accrued  participation  interest through  the accelerated
                maturity date.  The Trust can accelerate the maturity date for
                payment of amounts due  under the subordinated promissory note
                and the insured mortgage providing the contract of coinsurance
<PAGE>






                with the Secretary of HUD on the insured mortgage is  canceled
                prior to the accelerated maturity date.

                Additional Loan  Base Interest  is payable from  the following
                sources:  (i)  any  Surplus  Cash  received  pursuant  to  the
                subordinated promissory note as Participating Income Interest,
                (ii)  amounts conveyed  to  the  Trust by  the owners  of  the
                borrowing  entity representing  distributions of  Surplus Cash
                and  (iii) amounts  in reserve  accounts established  with the
                Additional  Loan  proceeds,  if  available, and  any  interest
                earned on these amounts.  If these sources are not  sufficient
                to make  Base Interest  payments the  owners of  the borrowing
                entity  must notify the  Trust of the amount  of the shortfall
                and at its  option the Trust could require a capital call from
                the owners of the borrowing entity.  The capital call would be
                equal to 50% of the  Base Interest shortfall and the  Trust in
                certain  situations could  convert the  remaining 50%  into an
                operating loan  or  would  forego 50%  of  the  Base  Interest
                shortfall.  

                In addition to the Base Interest payments, the Additional Loan
                requires  the  payment of  Preferred  Interest  representing a
                cumulative,  non-compounded preferred return from  the date of
                final endorsement to the date of calculation at interest rates
                ranging from 9.5% to 11% per annum on the original outstanding
                balance of  the insured mortgage plus  the Additional Loan and
                any other funds advanced by the Trust to the borrowing  entity
                or  the  owners of  the  borrowing  entity until  the  insured
                mortgage,  Additional   Loan  and  other   funds  (reduced  by
                principal  collections)  have  been  paid  in full  less:  (i)
                interest  payments  paid  to   the  Trust  under  the  insured
                mortgage,  (ii) Participating  Income Interest and  (iii) Base
                Interest payments  made under  the Additional  Loan  including
                amounts foregone by the Trust.     

                The   insured  mortgage   and  subordinated   promissory  note
                generally cannot be prepaid for  a term of five years from the
                construction   completion  date   or  final   endorsement  and
                thereafter may  be prepaid  in whole without  penalty provided
                all  participation  interest  and  amounts  under the  insured
                mortgage are  paid.   Any prepayment  requires not  less  than
                ninety nor more than 180 days prior written notice.


                                    Continued
                          KRUPP GOVERNMENT INCOME TRUST

                     NOTES TO FINANCIAL STATEMENTS, Continued
                                              

   C.           PIMIs, Continued

                The Additional  Loan generally may not  be prepaid before  
                the fifth  anniversary  of the Agreement  or  the  construction
                completion date and thereafter  may be prepaid in full without
                penalty provided  Preferred Interest and any amounts due under
                the insured mortgage and subordinated promissory note are paid
                in full.
<PAGE>




                During  August  1996, the  Trust  entered into  a modification
                agreement  (the    Agreement )  with  the   borrower  of   the
                Lifestyles  Apartments  PIMI that  reduces  the  interest paid
                monthly on the insured  mortgage by 1% per annum for  a period
                of 24 months.  The Agreement also extended the prepayment lock
                out period by five years and postponed the date when the Trust
                can accelerate  the maturity date  five years.   The Agreement
                modified the terms  of the  Additional Loan  as follows:  base
                interest  will only be payable  from 50% of  available surplus
                cash  during  each  fiscal year  up  to  a maximum  payment of
                $100,000; the  Preferred Interest  rate will  be 10%; and  the
                Preferred  Return will only  be calculated  on the outstanding
                balance of the Additional  Loan.  The  Agreement also  amended
                the  participation  features  to  increase  the  Participating
                Income Interest  percentage from 50% to 75% of surplus cash on
                available surplus  cash in excess  of $200,000.   In addition,
                the  borrower  agreed  to contribute  $150,000  to  an  escrow
                account controlled by the Trust to fund  operating deficits of
                the property and agreed to fund up to a maximum of $50,000 per
                year  for  operating  deficits  at  the   property  if  deemed
                necessary by  GIT.   Upon the  sale, refinancing,  maturity or
                permitted  prepayment, and  following payment  of  the insured
                mortgage and the Additional Loan principal, the Trust  will be
                entitled  to receive  the interest  currently foregone  on the
                insured mortgage.   However, the  Trust and  the borrower will
                share  equally in  the proceeds  until  the borrower  receives
                repayment of the $150,000 contributed to the escrow.  If there
                are still sufficient proceeds, the Trust will then be entitled
                to payment for  any Preferred  Interest and will then  receive
                50%  of  the  remaining  proceeds.    Any  amounts  under  the
                participation  features or  the Preferred  Return  accumulated
                prior to the modification have been foregone by the Trust.
                The  Trust's investments in PIMIs consist  of the following at
                December 31, 1996 and 1995:
<TABLE>
<CAPTION>
                              Original
                                Loan       Interest     Maturity   Balance Outstanding
          PIM                  Amount        Rate         Date       at December 31, 
                                                                       1996            1995

      <S>                   <C>              <C>         <C>       <C>             <C>
      Lifestyles (GNMA)(a)  $ 10,292,394     7.25%       5/1/32    $ 10,121,765    $ 10,165,489
      Windward (GNMA)(b)      14,000,778   8.50%(b)      6/1/32      13,791,753      13,846,359

      Audubon Villas(GNMA)    15,250,000     7.75%       9/15/33     15,056,168      15,121,241
      Coconut Palm (GNMA)     16,155,100     8.25%       5/1/33      15,966,932      16,029,058

      Mountain View (FHA)      9,547,700    7.625%
                                              (c)        1/1/34       9,447,473       9,476,075

      Red Run (FHA)           19,019,600    7.875%
                                              (d)        5/1/34      18,832,455      18,909,592


      Park Highland (FHA)     17,068,500    7.625%       1/1/34      16,869,418      16,944,707

      Timber Ridge (FHA)       5,775,000    8.125%       10/1/29      5,634,320       5,675,651
      The Seasons (FHA)(e)     9,075,351    7.875%       10/1/28      8,904,895       8,963,439

                            $116,184,423                           $114,625,179
                                                                         (g)       $115,131,611
</TABLE>
                                               Continued


                                     KRUPP GOVERNMENT INCOME TRUST

                               NOTES TO FINANCIAL STATEMENTS, Continued
                                                        
            C.  PIMIs, Continued
<TABLE>
<CAPTION>
                                                                   Base          Preferred
                                             Outstanding          Interest        Interest
                  Additional Loan             Balance              Rate             Rate

                  <S>                        <C>                    <C>             <C>
                  Lifestyles (a)             $ 1,817,665            7.5%            11%

                  Windward (b)                 2,471,294            7.5%            11%

                  Audubon Villas               2,691,000            7.0%            10%

                  Coconut Palm                 2,850,900            7.5%            11%

                  Mountain View (c)            1,553,600            7.0%            10%

                  Red Run                      2,900,000            7.0%            10%

                  Park Highland                3,000,000            7.5%           9.5%

                  Timber Ridge                 1,540,000            9.0%            11%

                  The Seasons (e)              1,924,649            9.0%
                                                                    (f)             10%


                                             $20,749,108

</TABLE>
                (a)  The  Trust entered  into an  Agreement which  reduced the
                     interest  rate on the  insured mortgage  by 1%  per annum
                     effective  August 1,  1996  for a  period of  twenty-four
                     months,  extended  the lockout  date  by  five years  and
                     modified the  terms of the Lifestlyes  Additional Loan as
                     mentioned as above.

                (b)  Windward  is affiliated with the Advisor of the Trust. As
                     of December  31, 1996, Windward was  in technical default
                     on its Additional  Loan for not making  the full required
                     base interest payments on  the Additional Loan.  However,
                     Windward was negotiating  with the Advisor and  completed
                     these negotiations during the  first quarter of  1997(see
                     Note K).

                (c)  The  Trust entered  into an  agreement which  reduced the
                     interest  rate  on the  insured  mortgage  .5% per  annum
                     effective  July 1, 1995 for  a period of eighteen months.
                     The  borrower  was also  allowed  to  forego making  four
                     semiannual interest  payments  beginning March  1,  1995.
                     These  unpaid  amounts  will  be  payable  from  the  net
                     proceeds of a sale or refinancing of the property.

                (d)  Received    final   endorsement    during   June    1994.
                     Construction-phase interest rate was 9.875% per annum.

                (e)  The  total PIM and Additional  Loan on this property were
                     $32,300,000 and $6,850,000, respectively, of which 72% is
                     held by Krupp Government Income Trust II.  The Seasons is
                     affiliated with the Advisor of the Trust.

                (f)  The  base interest  rate was 6%  per annum  for the first
                     three years and beginning  in September 1996 increased to
                     9% per annum.
<PAGE>

                (g)  The  aggregate cost  for federal  income tax  purposes is
                     $114,625,179.



                                    Continued


                          KRUPP GOVERNMENT INCOME TRUST

                     NOTES TO FINANCIAL STATEMENTS, Continued
                                              
                C. PIMIs, Continued

                A  reconciliation of activity  for each of the  three years in
                the period ended December 31, 1996 is as follows:

<TABLE>
<CAPTION>
                                                   1996           1995           1994

              <S>                             <C>            <C>            <C>
              Balance at beginning of period  $115,131,611   $115,612,833   $115,110,759

                Acquisitions                       -              -              893,026

                Principal collections             (506,432)      (481,222)      (390,952)

              Balance at end of period        $114,625,179   $115,131,611   $115,612,833
</TABLE>

         Property descriptions:

         Lifestyles Apartments ("Lifestyles") is  a 236-unit garden style
         apartment complex located in Palm Harbor, Florida.
         
         Windward  Lakes Apartments  ("Windward")  is a  276-unit  garden
         style apartment complex located in Pompano Beach, Florida.

         Audubon  Villas   is  a   308-unit  apartment  complex
         located in Clearwater, Florida.

         Coconut  Palm  Club  ("Coconut  Palm")  is  a 301-unit
         apartment complex located in Coconut Creek, Florida.

         Mountain  View Apartments ("Mountain View")  is a 256-
         unit apartment complex located in Madison, Alabama.
         
         Red  Run   Apartments  ("Red   Run")  is  a   304-unit
         apartment complex located in  Owings Mills, Maryland.
 
         Park Highland Apartments  ("Park Highland") is a  250-
         unit   apartment   complex     located   in  Bellevue,
         Washington.

         Timber  Ridge Apartments  ("Timber Ridge")  is  a 198-
         unit apartment complex  located in Vail, Colorado.

         The Seasons is a 1,088-unit  apartment complex located
         in Laurel, Maryland.

   D.   PIMs

        The Trust has investments  in five  PIMs at December  31,
        1996.   The Trust's  PIMs consist of a  GNMA or  FNMA MBS
        representing the  securitized first mortgage  loan on the
        underlying property or a sole participation interest in a
        first  mortgage  loan originated  under  the  FHA lending
        program  on  the  underlying  property  (collectively the
        "insured mortgages"), and participation interests  in the
<PAGE>
        revenue  stream   and  appreciation  of  the   underlying
        property  above  specified  base levels.    The  borrower
        conveys  these  participation  features   to  the   Trust
        generally  through  a  subordinated promissory  note  and
        mortgage (the "Agreement").

        The  Trust   receives  guaranteed  monthly  payments   of
        principal and interest  on the GNMA and FNMA MBS  and HUD
        insures the mortgage loan underlying the GNMA MBS and the
        FHA mortgage  loan.  The borrower  usually cannot  prepay
        the first mortgage loan during  the first five years  and
        may prepay the first mortgage loan thereafter  subject to
        a 9% prepayment  penalty in years six through nine,  a 1%
        prepayment penalty in year ten and no  prepayment penalty
        thereafter. The Trust may receive interest related to its
        participation  interests  in   the  underlying  property,
        however,   these   amounts   are   neither   insured  nor
        guaranteed.

        Generally,  the  participation  features  consist  of the
        following:   (i) "Minimum Additional  Interest" at  rates
        ranging  from .5%  to  .75% per  annum calculated  on the
        unpaid  principal balance  of the  first mortgage  on the
        underlying property, 

                             Continued
                   KRUPP GOVERNMENT INCOME TRUST

              NOTES TO FINANCIAL STATEMENTS, Continued
                                       
   D.   PIMs, Continued

        (ii)  "Shared Income Interest" ranging from 25% to 30% of
        the  monthly  gross   rental  income  generated  by   the
        underlying property  in excess  of a  specified base, but
        only to the extent that it exceeds the  amount of Minimum
        Additional Interest received during such month, and (iii)
        "Shared Appreciation Interest" ranging from 25% to 30% of
        any  increase  in Value  of  the  underlying  property in
        excess  of a  specified base.   Payment  of participation
        interest from  the operations of  the property is limited
        to 50% of net revenue or  surplus cash as defined by FNMA
        or HUD,  respectively.   The aggregate  amount of Minimum
        Additional  Interest, Shared  Income Interest  and Shared
        Appreciation Interest payable  by the underlying borrower
        on the maturity date generally can not exceed  50% of any
        increase in Value of the property. However, generally the
        net proceeds from a sale or refinancing will be available
        to  satisfy  any  accrued  but  unpaid  shared  income or
        minimum additional interest.

        Shared  Appreciation Interest is payable when  one of the
        following occurs: (1) the sale of the underlying property
        to unrelated third  party on a  date which is later  than
        five  years from  the  date of  the  Agreement,  (2)  the
        maturity  date  or  accelerated  maturity  date  of   the
        Agreement,  or (3)  prepayment of  amounts due  under the
        Agreement and the insured mortgage.

        Under the Agreement, the Trust, upon giving twelve months
        written notice,  can accelerate the  maturity date of the
<PAGE>






        Agreement to a  date not earlier than  ten years from the
        date  of  the  Agreement  for  (a)  the  payment  of  all
        participation interest due under the Agreement as  of the
        accelerated  maturity date,  or  (b) the  payment  of all
        participation interest  due under the  Agreement plus all
        amounts due on the first mortgage note on the property. 

        On April 25, 1996, the Trust received a prepayment of the
        Canyon  Ridge Apartments  PIM from  the  Federal National
        Mortgage   Association  ( FNMA )   for  the   outstanding
        principal  balance of  approximately  $8.9 million.   The
        Trust is currently looking at investment opportunities to
        reinvest  the principal  received. The borrower defaulted
        on its first mortgage loan and FNMA intended to foreclose
        on the  property, but the borrower  filed for  bankruptcy
        before this happened.   The Trust subsequently  collected
        $200,000 of participation interest income through a claim
        with the bankruptcy court.


        The Trust's  PIMs consisted of  the following at December
        31, 1996 and 1995:

<TABLE>
<CAPTION>
                        Original
                          Loan        Interest   Maturity  Balance at December 31,
        PIM              Amount        Rate       Date        1996        1995

     <S>               <C>            <C>       <C>       <C>         <C>
     River View (GNMA) $ 9,284,877    8.00%     1/15/33   $ 9,159,679 $ 9,199,196

     Mill Pond (FHA)     7,812,100    8.15%      1/1/33     7,697,101   7,730,070

     Waterford (FHA)    6,935,900     8.125%     8/1/32     6,841,912   6,872,203      
                                       (a)

     Rivergreens (FHA) 10,003,000     8.005%     4/1/33     9,862,103   9,917,858
                                       (b)
     Canyon Ridge (FNMA)9,100,000     7.50%      10/1/01        -       8,878,321

    Lincoln Green(FNMA)15,565,000     6.75%      10/1/02   14,919,102  15,093,575
                                                   (c)
        Total         $58,700,877                         $48,479,897 $57,691,223
                                                            (d)(e)
</TABLE>


   (a)  Received  final endorsement in March 1994.  Construction-
        phase interest was 10.125%.
   (b)  Received final endorsement during August 1994.
   (c)  Normal   monthly   benefit   is   based   on   a  30-year
        amortization.    All  unpaid  principal  of approximately
        $13,583,000 and  accrued interest is  due at the maturity
        date.
   (d)  The  aggregate cost  for federal  income tax  purposes is
        $48,479,897.

   A  reconciliation of activity  for each  of the  three years in
   the period ended December 31, 1996 is as follows:
<TABLE>
<CAPTION>
                                           1996        1995        1994

   <S>                                  <C>          <C>         <C>
   Balance at beginning of period       $57,691,223  $58,054,836 $57,677,344

             Acquisitions                    -           -           693,333

             PIM prepayment              (8,862,450)     -           -

             Principal collections         (348,876)   (363,613)    (315,841)

           Balance at end of period     $48,479,897  $57,691,223  $58,054,836
</TABLE>
Property descriptions:

    River View Apartments ("River View") is a 220-unit apartment
     complex located in Columbia, South Carolina.
    Mill Pond  Apartments ("Mill Pond") is  a 146-unit apartment
     complex in Bellbrook, Ohio.
    Waterford Townhomes  Apartments ("Waterford") is  a 122-unit
     apartment complex in Eagen, Minnesota.
    Rivergreens   Apartments  ("Rivergreens")   is  a   208-unit
     apartment complex in Gladstone, Oregon.
    Canyon  Ridge  Apartments  ("Canyon Ridge")  is  a  162-unit
     apartment complex in San Diego, California.
    Lincoln  Green  Apartments ("Lincoln  Green") is  a 616-unit
     apartment complex in Greensboro, North Carolina.

   E.   MBS

        At December  31, 1996,  the Trust s MBS  portfolio had an
        amortized cost of  $25,488,974 and gross unrealized gains
        of  $1,265,352.   At December 31,  1995, the  Trust's MBS
        portfolio had an  amortized cost of $29,819,438 and gross
        unrealized  gains of  $1,574,821.   The Trust's  MBS have
        maturities ranging from 2008 to 2029.

        In July  1995, the  Trust completed  funding a $4,978,200
        FHA insured mortgage having an interest rate of 8.75% per
        annum which it purchased for $4,953,309.


                             Continued
                   KRUPP GOVERNMENT INCOME TRUST
<PAGE>
              NOTES TO FINANCIAL STATEMENTS, Continued
                                       

   F.   Shareholders' Equity

        Under the  Declaration of  Trust and  commencing with the
        initial  closing of  the public  offering of  shares, the
        Trust  has declared  and  paid dividends  on  a quarterly
        basis.  During the period in which the Trust qualifies as
        a REIT,  the Trust has and  will pay  quarterly dividends
        aggregating at least  95% of taxable income on  an annual
        basis to  be allocated to  the shareholders in proportion
        to their respective number of shares.

        In order for  the Trust to maintain its REIT  status with
        respect  to  the requirements  of  Share  ownership,  the
        Declaration of Trust  prohibits any investor from owning,
        directly or indirectly, more than 9.8% of the outstanding
        Shares and empowers the Trustees to refuse to  permit any
        transfer   of  Shares  which,  in  their  opinion,  would
        jeopardize the status of the Trust as a REIT.

   G.   Related Party Transactions

        Under the  terms of  the Advisory  Service Agreement, the
        Advisor receives  an Asset  Management Fee  equal to .75%
        per  annum  of  the  value  of  the  Trust's  actual  and
        committed invested assets payable quarterly.

        The Trust  also reimburses affiliates  of the Advisor for
        certain costs incurred in connection with maintaining the
        books  and records of the  Trust and  the preparation and
        mailing of financial  reports, tax information  and other
        communications to investors.

        During the three years ended December 31, 1996, the Trust
        received  interest collections  on Additional  Loans with
        affiliates  of  the Advisor  of  the  Trust  of $234,593,
        $300,825, and $295,348, respectively.

   H.   Original Shares

        Upon  termination  of  the Trust,    an affiliate  of the
        Advisor is committed to pay to holders of Original Shares
        the  amount  (if  any)  by  which  (a)  the Shareholders'
        Original Investments exceed (b) all Dividends (as defined
        in the prospectus) paid by the Trust with respect to such
        Original  Shares.    Original  Shares  are  those  Shares
        purchased  during  the  Trust's initial  public  offering
        either   through  purchase   or   through   the  dividend
        reinvestment program  and held  until the  last  mortgage
        held by the Trust is repaid or disposed of.

   I.   Federal Income Taxes

        The  reconciliation  of  the   income  reported  in   the
        accompanying statement of income with the income reported
        in the Trust's 1996 federal income tax return follows:
<PAGE>






          Net income per statement of income                $12,480,695

             Add:   Additional Loan interest deferred
                     for book purposes                        1,729,278

               Book to tax difference for amortization
                of prepaid fees and expenses                    968,335

               Net income for federal income tax purposes   $15,178,308


                                      Continued

                   KRUPP GOVERNMENT INCOME TRUST

              NOTES TO FINANCIAL STATEMENTS, Continued
                                        

   I.   Federal Income Taxes, continued

        The Trust  paid dividends of $1.30  per share during 1996
        which represents approximately $1.01 from ordinary income
        and  $.29  represents   a  non-taxable  distribution  for
        federal income tax purposes.

   J.   Fair Value Disclosures of Financial Instruments

        The Trust  uses the following  methods and assumptions to
        estimate  the  fair  value  of  each  class  of financial
        instruments:

           Cash and Cash Equivalents

           The carrying amount approximates fair value because of
           the short maturity of those instruments.

           MBS

           The Partnership estimates the  fair value of MBS based
           on quoted market prices.

           PIMs and PIMIs
    
           There  is  no  established  trading  market  for these
           investments, so management estimates the fair value of
           the PIMs  and PIMIs using quoted market  prices of MBS
           having  the same  stated  coupon rate  as the  insured
           mortgages and  Additional Loans based on the estimated
           fair value of the  underlying properties.   Management
           does  not  include  any participation  income  in  the
           Trust s estimated fair values, because Management does
           not believe it  can predict the time of realization of
           the  feature  with  any   certainty.    Based  on  the
           estimated  fair value  determined using  these methods
           and assumptions, the  Trust's investments in PIMs  and
           PIMIs  had  gross  unrealized  losses  and   gains  of
           approximately  $5,668,000 and  $889,000, respectively,
           at December  31, 1996 and gross  unrealized losses and
<PAGE>






           gains  of  approximately  $4,407,000  and  $2,743,000,
           respectively, at December 31, 1995.

           At December 31, 1996 and 1995, the Trust estimated the
           fair value of its financial instruments as follows:
                                                    (amounts in thousands)
                                                      1996        1995    

                 Cash and cash equivalents         $ 19,054     $  8,914

                 MBS                                 26,754       31,394

                 PIMs and PIMIs:
                   PIMs                              48,783       58,868
                   Insured mortgages                116,869      118,213
                   Additional Loans                  13,424       14,827

                                                   $224,884     $232,216



                                      Continued


                   KRUPP GOVERNMENT INCOME TRUST

              NOTES TO FINANCIAL STATEMENTS, Continued
                                        

   K.   Subsequent Events

        Windward Lakes Apartments


        On February 6, 1997, the Trust, with the knowledge of the
        independent  Trustees,  agreed  to  a  workout  with  the
        borrower of Windward Lakes Apartments PIMI,  an affiliate
        of the Advisor of the  Trust.  The terms  are as follows:
        a) interest rate relief for 1997 of  2% per annum and  1%
        per annum for 1998 through  2000 on the insured mortgage;
        b) the borrower, McNab KC-3 L.P., will put in $133,036 of
        new equity into  the property; c) the  borrower will  cap
        the annual management  fee paid to an affiliate to  3% of
        revenues;  d)   the  Trust s   participation  in  current
        operations  shall be  50% of  Surplus Cash  as determined
        under HUD guidelines;  e) Base Interest on the Additional
        Loan  is payable from  Trust s share of Surplus  Cash but
        accrues at 7%  per annum; and f)the Trust s participation
        in a sale  or refinancing,  after repayment of  the first
        mortgage and  additional loans, interest  rate relief and
        accrued Base  Interest and  McNab s new  equity, shall be
        50% of any remaining proceeds up to an amount which would
        result  in  the  Trust  having  received  a   cumulative,
        noncompounded preferred return  of 10% on  its investment
        in the first mortgage and additional loans; any remaining
        proceeds shall be distributed to McNab.  
<PAGE>






        Timber Ridge Apartments

        On  February  28,  1997,  and  March  6,  1997 the  Trust
        received  a  prepayment  of The  Timber  Ridge Apartments
        PIMI.   The Trust received  the Additional  Loan and  the
        outstanding  first   mortgage   principal   balances   of
        $1,540,000 and $5,663,191, respectively, plus outstanding
        interest.  In  addition, the Trust received $1.05 million
        representing additional interest.


                            KRUPP GOVERNMENT INCOME TRUST
                                  SUPPLEMENTARY DATA
                          SELECTED QUARTERLY FINANCIAL DATA
                                     (Unaudited)



                           For the Quarter Ended               
                           March 31,    June 30,  September 30,  December 31,
                             1996         1996        1996           1996    

     Total revenues        $4,120,423  $4,233,475  $3,961,045   $4,043,097

     Net income            $3,077,602  $3,264,669  $3,000,682   $3,137,742

     Earnings per Share    $      .20  $      .22  $      .20   $      .21


                                     For the Quarter Ended               
                          March 31,     June 30,  September 30,  December 31,
                            1995          1995        1995           1995    

     Total revenues        $4,339,068  $4,216,325  $4,441,047  $4,203,976

     Net income            $3,291,240  $3,155,275  $3,395,218  $3,179,899

     Earnings per Share    $      .22  $      .21  $      .22  $      .22
<PAGE>