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


                                    FORM 10-Q



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


     For the period ended      September 30, 1997
                            ----------------------------------------------------

                                       OR

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

     For the transition period from ______________to_____________
     Commission file number  0-10743



                        MCNEIL REAL ESTATE FUND XII, LTD.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)




         California                              94-2717957
--------------------------------------------------------------------------------
 (State or other jurisdiction of                 (I.R.S. Employer
incorporation or organization)                    Identification No.)



             13760 Noel Road, Suite 600, LB70, Dallas, Texas, 75240
--------------------------------------------------------------------------------
          (Address of principal executive offices)          (Zip code)



Registrant's telephone number, including area code  (972) 448-5800
                                                    ----------------------------



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 and (2) has been  subject to such  filing
requirements for the past 90 days. Yes X No
                                      ---  ---



<PAGE>
                        MCNEIL REAL ESTATE FUND XII, LTD.

                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
------- --------------------

                                 BALANCE SHEETS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                        September 30,        December 31,
                                                                            1997                 1996
                                                                       ---------------      --------------
ASSETS
------

Real estate investments:
<S>                                                                    <C>                  <C>           
   Land.....................................................           $     4,534,618      $    6,079,334
   Buildings and improvements...............................                57,900,954          75,302,352
                                                                        --------------       -------------
                                                                            62,435,572          81,381,686
   Less:  Accumulated depreciation and amortization.........               (35,997,683)        (44,160,334)
                                                                        --------------       -------------
                                                                            26,437,889          37,221,352

Asset held for sale                                                          9,199,982                   -

Cash and cash equivalents...................................                 1,427,567           1,768,249
Cash segregated for security deposits ......................                   445,434             433,750
Accounts receivable.........................................                   153,730             242,360
Prepaid expenses and other assets...........................                   109,105             138,853
Escrow deposits.............................................                 1,444,904           1,167,732
Deferred borrowing costs, net of accumulated amorti-
   zation of $722,491 and $617,954 at September 30,
   1997 and December 31, 1996, respectively.................                 1,590,102           1,694,639
                                                                        --------------       -------------
                                                                       $    40,808,713      $   42,666,935
                                                                        ==============       =============

LIABILITIES AND PARTNERS' DEFICIT
---------------------------------

Mortgage notes payable......................................           $    54,371,137      $   54,859,073
Accounts payable............................................                     8,990              16,402
Accrued expenses............................................                   118,347             142,099
Accrued interest............................................                   378,213             383,990
Accrued property taxes......................................                 1,036,660             837,798
Deferred gain - land condemnation...........................                   297,754             297,754
Advance from Southmark......................................                    39,240              37,472
Advances from affiliates - General Partner..................                    31,468              29,494
Payable to affiliates - General Partner.....................                 4,291,281           3,941,378
Security deposits and deferred rental revenue...............                   540,133             502,905
                                                                        --------------       -------------
                                                                            61,113,223          61,048,365
                                                                        --------------       -------------
Partners' deficit:
   Limited partners - 240,000 limited partnership units
     authorized;  229,690 and 229,828 limited partnership
     units issued and outstanding at September 30,
     1997 and December 31, 1996, respectively...............               (10,375,793)         (9,148,979)
   General Partner..........................................                (9,928,717)         (9,232,451)
                                                                        --------------       -------------
                                                                           (20,304,510)        (18,381,430)
                                                                        --------------       -------------
                                                                       $    40,808,713      $   42,666,935
                                                                        ==============       =============
</TABLE>
The  financial  information  included  herein has been  prepared  by  management
without audit by independent public accountants.

                 See accompanying notes to financial statements.
<PAGE>
                        MCNEIL REAL ESTATE FUND XII, LTD.

                            STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                              Three Months Ended                   Nine Months Ended
                                                 September 30,                       September 30,
                                      ---------------------------------    ---------------------------------
                                          1997               1996               1997                1996
                                      --------------    ---------------    --------------     --------------
Revenue:
<S>                                   <C>                <C>               <C>                <C>           
   Rental revenue................     $    3,924,806     $    4,228,818    $   11,568,267     $   12,510,833
   Interest......................             19,659             33,541            69,467            178,629
                                       -------------      -------------     -------------      -------------
     Total revenue...............          3,944,465          4,262,359        11,637,734         12,689,462
                                       -------------      -------------     -------------      -------------

Expenses:
   Interest......................          1,201,099          1,305,014         3,616,416          3,897,787
   Interest - affiliates.........                669                651             1,974             52,972
   Depreciation and
     amortization................            893,123            906,536         2,828,041          2,697,294
   Property taxes................            303,171            321,067           909,513            883,799
   Personnel expenses............            508,319            503,874         1,369,512          1,428,688
   Utilities.....................            274,895            322,545           962,545          1,095,444
   Repair and maintenance........            636,937            546,145         1,669,184          1,615,186
   Property management
     fees - affiliates...........            194,795            208,158           578,327            620,793
   Other property operating
     expenses....................            240,491            272,718           657,487            793,989
   General and administrative....             69,645             32,656           170,405            130,610
   General and administrative -
     affiliates..................             54,110             75,856           165,713            270,091
                                       -------------      -------------     -------------      -------------
     Total expenses..............          4,377,254          4,495,220        12,929,117         13,486,653
                                       -------------      -------------     -------------      -------------

Net loss.........................     $     (432,789)    $     (232,861)   $   (1,291,383)    $     (797,191)
                                       =============      =============     =============      =============

Net loss allocable
   to limited partners...........     $     (411,150)    $   (1,098,085)   $   (1,226,814)    $   (1,572,877)
Net income (loss) allocable
   to General Partner............            (21,639)           865,224           (64,569)           775,686
                                       -------------      -------------     -------------      -------------
Net loss.........................     $     (432,789)    $     (232,861)   $   (1,291,383)    $     (797,191)
                                       =============      =============     =============      =============

Net loss per limited
   partnership unit..............     $        (1.79)    $        (4.78)   $        (5.34)    $        (6.84)
                                       =============      =============     =============      =============
</TABLE>


The  financial  information  included  herein has been  prepared  by  management
without audit by independent public accountants.

                 See accompanying notes to financial statements.
<PAGE>
                        MCNEIL REAL ESTATE FUND XII, LTD.

                         STATEMENTS OF PARTNERS' DEFICIT
                                   (Unaudited)

              For the Nine Months Ended September 30, 1997 and 1996
<TABLE>
<CAPTION>

                                                                                                  Total
                                                    General                 Limited               Partners'
                                                    Partner                 Partners              Deficit
                                                ----------------        ----------------      ----------------
<S>                                             <C>                     <C>                   <C>             
Balance at December 31, 1995..............      $   (10,335,932)        $    (7,513,252)      $   (17,849,184)

Net income (loss).........................              775,686              (1,572,877)             (797,191)

Management Incentive Distribution.........             (377,757)                      -              (377,757)
                                                  -------------           -------------         -------------

Balance at September 30, 1996.............      $    (9,938,003)         $   (9,086,129)       $  (19,024,132)
                                                 ==============           =============         =============


Balance at December 31, 1996..............      $    (9,232,451)         $   (9,148,979)       $  (18,381,430)

Net loss..................................              (64,569)             (1,226,814)           (1,291,383)

Management Incentive Distribution.........             (631,697)                      -              (631,697)
                                                  -------------           -------------         -------------

Balance at September 30, 1997.............      $    (9,928,717)         $  (10,375,793)       $  (20,304,510)
                                                  =============           =============         =============
</TABLE>





The  financial  information  included  herein has been  prepared  by  management
without audit by independent public accountants.

                 See accompanying notes to financial statements.
<PAGE>
                        MCNEIL REAL ESTATE FUND XII, LTD.

                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                      Decrease in Cash and Cash Equivalents

<TABLE>
<CAPTION>
                                                                            Nine Months Ended
                                                                                 September 30,
                                                                -------------------------------------------
                                                                        1997                     1996
                                                                -------------------        ----------------
Cash flows from operating activities:
<S>                                                             <C>                        <C>            
   Cash received from tenants........................           $       11,646,198         $    12,391,277
   Cash paid to suppliers............................                   (4,785,620)             (4,658,985)
   Cash paid to affiliates...........................                   (1,025,834)             (2,873,715)
   Interest received.................................                       69,467                 178,629
   Interest paid.....................................                   (3,515,888)             (3,780,108)
   Interest paid to affiliates.......................                            -                 (79,757)
   Property taxes paid...............................                     (996,509)             (1,066,531)
                                                                 -----------------          --------------
Net cash provided by operating activities............                    1,391,814                 110,810
                                                                 -----------------          --------------

Net cash flows from investing activities:
   Additions to real estate investments..............                   (1,244,560)             (1,925,457)
                                                                 -----------------          --------------

Cash flows from financing activities:
   Principal payments on mortgage notes
     payable.........................................                     (487,936)               (186,949)
   Deferred borrowing costs paid.....................                            -                 (35,665)
   Repayment of advances from affiliates -
     General Partner.................................                            -              (1,419,340)
   Management Incentive Distribution.................                            -                (910,551)
                                                                 -----------------          --------------
Net cash used in financing activities................                     (487,936)             (2,552,505)
                                                                 -----------------          --------------

Net decrease in cash and
    cash equivalents.................................                     (340,682)             (4,367,152)
Cash and cash equivalents at beginning of
   period............................................                    1,768,249               5,791,363
                                                                 -----------------          --------------

Cash and cash equivalents at end of period...........           $        1,427,567         $     1,424,211
                                                                 =================          ==============
</TABLE>


The  financial  information  included  herein has been  prepared  by  management
without audit by independent public accountants.

                 See accompanying notes to financial statements.

<PAGE>
                        MCNEIL REAL ESTATE FUND XII, LTD.

                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)

               Reconciliation of Net Loss to Net Cash Provided by
                              Operating Activities

<TABLE>
<CAPTION>
                                                                              Nine Months Ended
                                                                                 September 30,
                                                                  -----------------------------------------
                                                                        1997                     1996
                                                                  -----------------        ----------------
<S>                                                               <C>                      <C>             
Net loss.............................................             $     (1,291,383)        $      (797,191)
                                                                   ---------------          --------------

Adjustments to reconcile net loss to net cash
   provided by operating activities:
   Depreciation and amortization.....................                    2,828,041               2,697,294
   Amortization of deferred borrowing costs..........                      104,537                 116,633
   Net interest added on advances from
     affiliates - General Partner....................                        1,974                     940
   Net interest added on advances from
     Southmark.......................................                        1,768                   1,742
Changes in assets and liabilities:
     Cash segregated for security deposits...........                      (11,684)                  6,603
     Accounts receivable.............................                       88,630                (127,666)
     Prepaid expenses and other assets...............                       29,748                 (21,230)
     Escrow deposits.................................                     (277,172)                131,577
     Accounts payable................................                       (7,412)                   (549)
     Accrued expenses................................                      (23,752)                (23,781)
     Accrued interest................................                       (5,777)                (28,421)
     Accrued property taxes..........................                      198,862                  61,944
     Payable to affiliates - General Partner.........                     (281,794)             (1,982,831)
     Security deposits and deferred rental ..........
       revenue.......................................                       37,228                  75,746
                                                                   ---------------          --------------

       Total adjustments.............................                    2,683,197                 908,001
                                                                   ---------------          --------------

Net cash provided by operating activities............             $      1,391,814         $       110,810
                                                                   ===============          ==============
</TABLE>




The  financial  information  included  herein has been  prepared  by  management
without audit by independent public accountants.

                 See accompanying notes to financial statements.
<PAGE>
                        McNEIL REAL ESTATE FUND XII, LTD.

                          Notes to Financial Statements
                                   (Unaudited)

                               September 30, 1997

NOTE 1.
-------

McNeil Real Estate Fund XII, Ltd. (the  "Partnership") was organized February 2,
1981 as a limited  partnership  organized under the provisions of the California
Uniform  Limited  Partnership  Act. The general  partner of the  Partnership  is
McNeil Partners,  L.P. (the "General Partner"),  a Delaware limited partnership,
an affiliate of Robert A. McNeil.  The Partnership is governed by an amended and
restated limited  partnership  agreement,  dated September 6, 1991 (the "Amended
Partnership Agreement"). The principal place of business for the Partnership and
the General Partner is 13760 Noel Road, Suite 600, LB70, Dallas, Texas, 75240.

In the opinion of management,  the financial  statements reflect all adjustments
necessary for a fair  presentation of the Partnership's  financial  position and
results  of  operations.  All  adjustments  were of a normal  recurring  nature.
However,  the results of operations for the nine months ended September 30, 1997
are not necessarily indicative of the results to be expected for the year ending
December 31, 1997.

NOTE 2.
-------

The  financial  statements  should  be read in  conjunction  with the  financial
statements  contained in the  Partnership's  Annual  Report on Form 10-K for the
year  ended  December  31,  1996,  and the  notes  thereto,  as  filed  with the
Securities and Exchange  Commission,  which is available upon request by writing
to McNeil Real Estate Fund XII, Ltd. c/o The Human Group,  2121 San Jacinto St.,
26th Floor Dallas, Texas 75201.

NOTE 3.
-------

Certain reclassifications have been made to prior period amounts to conform with
current period presentation.

NOTE 4.
-------

The  Partnership  pays property  management fees equal to 5% of the gross rental
receipts of the Partnership's properties to McNeil Real Estate Management,  Inc.
("McREMI"),  an  affiliate  of  the  General  Partner,  for  providing  property
management services for the Partnership's  residential and commercial properties
and  leasing  services  for its  residential  properties.  McREMI  may choose to
provide leasing services for the Partnership's  commercial properties,  in which
case  McREMI  will  receive  a  property  management  fee from  such  commercial
properties  equal to 3% of the property's gross rental receipts plus commissions
based on the  prevailing  market rate for such  services  where the  property is
located.

The  Partnership  reimburses  McREMI  for  its  costs,  including  overhead,  of
administering the Partnership's affairs.

<PAGE>
Affiliates of the General Partner have advanced funds to the Partnership to meet
working capital requirements.  These advances accrue interest at a rate equal to
the prime lending rate plus 1%.

Under terms of the Amended  Partnership  Agreement,  the Partnership is paying a
Management  Incentive  Distribution  ("MID") to the General Partner. The maximum
MID is  calculated  as 1% of the tangible  asset value of the  Partnership.  The
maximum MID  percentage  decreases  subsequent to 1999.  Tangible asset value is
determined  by using the  greater  of (i) an amount  calculated  by  applying  a
capitalization  rate  of 9% to the  annualized  net  operating  income  of  each
property or (ii) a value of $10,000 per apartment unit for residential  property
and $50 per gross square foot for commercial  property to arrive at the property
tangible  asset value.  The property  tangible  asset value is then added to the
book value of all other assets excluding intangible items.

MID will be paid to the extent of the lesser of the  Partnership's  excess  cash
flow,  as  defined,  or net  operating  income,  as  defined  ("the  Entitlement
Amount"),  and may be paid (i) in cash, unless there is insufficient cash to pay
the  distribution  in which  event  any  unpaid  portion  not  taken in  limited
partnership  ("Units") will be deferred and is payable,  without interest,  from
the first  available  cash and/or (ii) in Units. A maximum of 50% of the MID may
be paid in Units.  The number of Units  issued in payment of the MID is based on
the greater of $50 per Unit or the net  tangible  asset value,  as defined,  per
Unit.

Any  amount  of the MID that is paid to the  General  Partner  in Units  will be
treated as if cash is distributed to the General Partner and is then contributed
to the Partnership by the General Partner. The MID represents a return of equity
to the General Partner for increasing cash flow, as defined,  and accordingly is
treated as a distribution.

Compensation,  reimbursements  and  distributions  paid  to or  accrued  for the
benefit of the General Partner and its affiliates are as follows:

                                                           Nine Months Ended
                                                              September 30,
                                                          ---------------------
                                                             1997       1996
                                                          ---------   ---------
Charged to other assets:
Property management fees - affiliates................     $ 578,327   $ 620,793
Interest - affiliates................................         1,974      52,972
Charged to general and administrative affiliates:
   Partnership administration........................       165,713     270,091
                                                           --------    --------
                                                          $ 746,014   $ 943,856
                                                           ========    ========

Charged to General Partner's deficit:
   Management Incentive Distribution.................     $ 631,697   $ 377,757
                                                           ========    ========







<PAGE>
NOTE 5.
-------

On February  23,  1996,  the  Partnership  was  awarded  $499,000 as payment for
condemnation of 6.45 acres,  with a carrying value of $201,246,  at Palisades at
the Galleria by Cobb County,  Georgia.  The county required the  right-of-way to
this property for highway construction. The condemnation of this parcel will not
materially affect the operations of the property.  The $499,000 is being held in
escrow by the  mortgagee  pending  completion  of  construction  adjacent to the
property. Upon receipt of the $499,000, the Partnership will recognize a gain of
$297,754.

NOTE 6.
-------

The  Partnership  has become  aware of the  presence  of certain  solvent  based
contamination  in ground water under a portion of the Lodge at Aspen Grove.  The
source of the contamination is related to a documented  release of solvents from
underground  storage  tanks located at a Colorado  Department of  Transportation
("CDOT")  facility  nearby.  The Partnership has been informed that CDOT, as the
responsible party, has agreed to remediate the property to comply with state and
federal  standards.  CDOT has submitted a corrective action plan to the Colorado
Department of Public Health and  Environment and  implementation  of the plan is
ongoing.  The  Partnership  is unable to  estimate  impairment,  if any,  to the
property at this time.  However,  due to the  existence and  involvement  of the
responsible  party,  the  Partnership  does not  believe  that this  event has a
material impact on the accompanying financial statements.

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

FINANCIAL CONDITION
-------------------

The Partnership is engaged in diversified real estate activities,  including the
ownership,  operation and management of residential  and commercial  real estate
and other real estate related  assets.  At September 30, 1997,  the  Partnership
owned  five  apartment   properties  and  one  shopping   center.   All  of  the
Partnership's properties are subject to mortgage notes.

RESULTS OF OPERATIONS
---------------------

Revenue:

Partnership  revenues  decreased  $317,894 and $1,051,728 for the three and nine
months ended  September 30, 1997,  respectively,  as compared to the same period
last year. Rental revenue decreased $942,566 or 8% and interest income decreased
$109,162.

Rental revenue for the nine months ended  September 30, 1997 was  $11,568,267 as
compared to  $12,510,833  for the same period last year.  This decline in rental
revenue  for the first nine  months of 1997 as  compared to the same period last
year is primarily due to the sale of Millwood  Park in October 1996.  The effect
from this  transaction  was a decline  in rental  revenue  of  $1,041,660.  This
decline was somewhat offset by increases in rental revenue at The Lodge at Aspen
Grove, Castle Bluff, and Channingway.

<PAGE>
Expenses:

Partnership  expenses  decreased  $117,966  and  $557,536 for the three and nine
months ended  September 30, 1997,  respectively,  as compared to the same period
last year  primarily due to the sale of Millwood Park in 1996.  The effects from
this  transaction  were declines of $252,161 for interest,  $49,590 for property
taxes,  $143,637 for personnel  expenses,  $139,200 for utilities,  $189,971 for
repair and maintenance,  $50,738 for property management fees - affiliates,  and
$106,506  for other  property  operating  expenses.  In  addition to the sale of
Millwood  Park,  other  factors  affected the level of expenses  reported by the
remaining properties.

Excluding  the  effects of the  Millwood  Park sale,  the  Partnership  incurred
increases in  depreciation,  property taxes,  repair and maintenance and general
and administrative  expenses.  These expenses were partially offset by decreases
in interest expense-affiliates, and general and administrative-affiliates.

Interest  expense -  affiliates  decreased  by $50,998 for the nine months ended
September 30, 1997, due to the repayment of $1,419,339 in advances in May 1996.

Depreciation  expense  increased  $130,747  or  5% in  1997  compared  to  1996.
Increased  depreciation  expense is the result of depreciation on the $1,244,560
of  new  capital  improvements  placed  in  service  during  1997.  The  capital
improvements  are  generally  depreciated  over lives  ranging  from five to ten
years.

Property tax expense increased $75,304 or 9% for the nine months ended September
30, 1997 as compared  to the same period last year.  The  increase is due to the
successful  appeal of real estate  taxes at  Palisades  at the  Galleria for the
years 1990 through 1993,  resulting in refunds of $88,775  realized in the first
quarter of 1996.

Repair and maintenance  expenses increased $243,969 or 15% in 1997. The increase
can be attributable  to the replacement of floor coverings and appliances  which
met the criteria for  capitalization  based on the magnitude of  replacements in
1996, but were expensed in 1997.

General and administrative expenses increased $39,795 or 31% for the nine months
ended  September 30, 1997 as compared to the same period last year. The increase
is due to costs  incurred for investor  services which were paid to an unrelated
third party in 1997.  During the first nine months of 1996, such costs were paid
to an  affiliate  of the  General  Partner  and were  included  in  general  and
administrative  -  affiliates  on  the  Statement  of  Operations.  General  and
administrative  -  affiliate  expenses  decreased  $104,378  or 39% for the nine
months ended  September 30, 1997 as compared to the same period last year.  This
decrease is due to a decrease in the percentage of the Partnership's  portion of
reimbursable costs and to cost of investor services discussed above.

All other remaining expense  categories  remained  comparable to the same period
last year.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

During the first nine months of 1997,  the  Partnership  provided  $1,391,814 in
cash from  operations  as compared to $110,810 in cash from  operations in 1996.
This  increase  in cash  can be  attributed  to the  reduction  in cash  paid to
affiliates in 1997 as compared to 1996.

<PAGE>
The Partnership  expended $1,244,560 and $1,925,457 for capital  improvements to
its  properties  for  the  nine  months  ended  September  30,  1997  and  1996,
respectively.

Cash used for  financing  activities  was  $487,936  for the nine  months  ended
September 30, 1997 as compared to $2,552,505  for the same period in 1996.  Cash
used for  principal  payments on mortgage  notes payable was $487,936 in 1997 as
compared to $186,949 for the same period in 1996. The Partnership  also incurred
$35,665  in  deferred  borrowing  costs,  repaid  $1,419,340  in  advances  from
affiliates and MID payments of $910,551 in 1996.

Short-term liquidity:

At  September  30,  1997,  the  Partnership  held cash and cash  equivalents  of
$1,427,567.  The General  Partner  considers  this level of cash  reserves to be
adequate to meet the Partnership's  operating needs in 1997. The General Partner
believes that anticipated  operating results for 1997 will be sufficient to fund
the Partnership's budgeted $1.87 million in capital improvements for 1997 and to
repay the current portion of the Partnership's mortgage notes.

Long-term liquidity:

The  Partnership's  working  capital needs have been  supported by advances from
affiliates during the past several years. Some of that support was provided on a
short-term  basis  to  meet  monthly  operating  requirements,   with  repayment
occurring as funds became  available;  other advances were longer term in nature
due to lack of funds  for  repayment.  Additionally,  the  General  Partner  has
allowed the  Partnership to defer payment of MID and  reimbursements  until such
time as the  Partnership  's cash  reserves  allow  payments.  During 1994,  the
Partnership  began to make  repayments  to the General  Partner for advances and
accrued MID. The  Partnership  will continue to make such payments as is allowed
by cash reserves and cash flows of the  Partnership.  However,  the  Partnership
will not be able to repay the General  Partner all payables  outstanding  in the
foreseeable  future.  The General Partner will continue to defer the unpaid sums
until the Partnership's cash reserves allow such payments.

For the long-term,  property operations will remain the primary source of funds.
In this regard,  the General Partner expects that the capital  improvements made
by the  Partnership  during the past will yield improved cash flow from property
operations in the future. If the Partnership's cash position  deteriorates,  the
General Partner may elect to defer certain of the capital  improvements,  except
where  such  improvements  are  expected  to  increase  the  competitiveness  or
marketability of the Partnership's properties.

The Partnership  has determined to begin orderly  liquidation of all its assets.
Although  there can be no assurance as to the timing of the  liquidation  due to
real estate  market  conditions,  the general  difficulty  of  disposing of real
estate,  and  other  general  economic  factors,  it is  anticipated  that  such
liquidation  would result in the  dissolution of the  Partnership  followed by a
liquidating  distribution to Unit holders by December 2001. In this regard,  the
Partnership  has  placed  Channingway  Apartments  on the  market for sale as of
August 1, 1997.







<PAGE>
Income allocation and distributions:

Terms  of  the  Amended   Partnership   Agreement  specify  that  income  before
depreciation  is allocated  to the General  Partner to the extent of MID paid in
cash. Depreciation is allocated in the ratio of 95:5 to the limited partners and
the  General  Partner,  respectively.  Therefore,  for  the  nine  months  ended
September 30, 1997 and 1996, $(64,569) and $775,686, respectively, was allocated
to the General Partner. The limited partners received allocations of net loss of
$(1,226,814)  and  $(1,572,877) for the nine months ended September 30, 1997 and
1996, respectively.

With the exception of the MID,  distributions  to partners  have been  suspended
since 1986 as part of the General Partner's policy of maintaining  adequate cash
reserves.  Distributions  to the limited  partners will remain suspended for the
foreseeable  future.  The  General  Partner  will  continue  to monitor the cash
reserves and working  capital needs of the  Partnership  to determine  when cash
flows will support  distributions  to the limited  partners.  A distribution  of
$631,697  for the MID has been accrued by the  Partnership  for the period ended
September 30, 1997 for the General Partner.

                           PART II. OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS
-------  -----------------

James F.  Schofield,  Gerald C. Gillett,  Donna S. Gillett,  Jeffrey  Homburger,
Elizabeth Jung,  Robert Lewis, and Warren Heller et al. v. McNeil Partners L.P.,
McNeil Investors,  Inc., McNeil Real Estate Management,  Inc., Robert A. McNeil,
Carole J. McNeil,  McNeil Pacific  Investors Fund 1972, Ltd., McNeil Real Estate
Fund IX,  Ltd.,  McNeil Real  Estate  Fund X, Ltd.,  McNeil Real Estate Fund XI,
Ltd.,  McNeil  Real Estate Fund XII,  Ltd.,  McNeil Real Estate Fund XIV,  Ltd.,
McNeil Real Estate Fund XV, Ltd.,  McNeil Real Estate Fund XX, L.P., McNeil Real
Estate Fund XXI, L.P.,  McNeil Real Estate Fund XXII,  L.P.,  McNeil Real Estate
Fund XXIV,  L.P.,  McNeil Real Estate  Fund XXV,  L.P.,  McNeil Real Estate Fund
XXVI, L.P., and McNeil Real Estate Fund XXVII,  L.P., et al. - Superior Court of
the State of California for the County of Los Angeles,  Case No. BC133799 (Class
and Derivative Action Complaint).

The action involves  purported  class and derivative  actions brought by limited
partners of each of the fourteen limited partnerships that were named as nominal
defendants as listed above (the  "Partnerships").  Plaintiffs allege that McNeil
Investors, Inc., its affiliate McNeil Real Estate Management,  Inc. and three of
their senior officers and/or directors (collectively, the "Defendants") breached
their  fiduciary  duties and certain  obligations  under the respective  Amended
Partnership  Agreement.  Plaintiffs  allege that  Defendants  have rendered such
Units highly illiquid and  artificially  depressed the prices that are available
for Units on the resale market.  Plaintiffs also allege that Defendants  engaged
in a course of conduct to prevent the  acquisition  of Units by an  affiliate of
Carl  Icahn  by  disseminating  purportedly  false,  misleading  and  inadequate
information.  Plaintiffs  further allege that Defendants  acted to advance their
own personal  interests at the expense of the Partnerships'  public unit holders
by failing to sell Partnership  properties and failing to make  distributions to
unitholders.





<PAGE>

On December 16, 1996, the Plaintiffs filed a consolidated and amended complaint.
Plaintiffs  are suing for breach of  fiduciary  duty,  breach of contract and an
accounting,  alleging,  among other things, that the management fees paid to the
McNeil affiliates over the last six years are excessive,  that these fees should
be reduced retroactively and that the respective Amended Partnership  Agreements
governing the Partnerships are invalid.

Defendants  filed a demurrer to the  consolidated  and amended  complaint  and a
motion to strike on February 14, 1997,  seeking to dismiss the  consolidated and
amended complaint in all respects.  A hearing on Defendant's demurrer and motion
to strike  was held on May 5,  1997.  The Court  granted  Defendants'  demurrer,
dismissing  the  consolidated  and  amended  complaint  with leave to amend.  On
October  31,  1997,  the  Plaintiffs  filed a second  consolidated  and  amended
complaint.  Defendants intend to file a demurrer to the second  consolidated and
amended complaint on or before December 1, 1997.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K
-------   --------------------------------

(a)      Exhibits.

         Exhibit
         Number                     Description
         -------                    -----------

         3.3                        Amended and Restated Partnership  Agreement,
                                    dated  September  6, 1991  (Incorporated  by
                                    reference  to the  Quarterly  Report on Form
                                    10-Q for the  quarter  ended  September  30,
                                    1991).

         11.                        Statement regarding  computation of net loss
                                    per limited  partnership  unit: net loss per
                                    limited  partnership  unit  is  computed  by
                                    dividing  net loss  allocated to the limited
                                    partners    by   the   number   of   limited
                                    partnership  units  outstanding.   Per  unit
                                    information   has  been  computed  based  on
                                    229,690  and  229,828  limited   partnership
                                    units outstanding in 1997 and 1996.

         27.                        Financial  Data   Schedule  for  the quarter
                                    ended September 30, 1997.

(b)      Reports on Form 8-K. There were no reports on Form 8-K filed during the
         quarter ended September 30, 1997.


<PAGE>


                        McNEIL REAL ESTATE FUND XII, LTD.

                                   SIGNATURES

Pursuant  to the  requirements  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:


                              McNEIL REAL ESTATE FUND XII, Ltd.

                              By:  McNeil Partners, L.P., General Partner

                                   By: McNeil Investors, Inc., General Partner



November 13, 1997                  By:  /s/  Ron K. Taylor
------------------                      ----------------------------------------
Date                                    Ron K. Taylor
                                        President and Director of McNeil
                                         Investors, Inc.
                                        (Principal Financial Officer)




November 13, 1997                  By:  /s/  Brandon K. Flaming
------------------                      ----------------------------------------
Date                                    Brandon K. Flaming
                                        Vice President of McNeil Investors, Inc.
                                        (Principal Accounting Officer)