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     March 31, 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>
                                                                          March 31,          December 31,
                                                                            1997                 1996
                                                                       ---------------      --------------
ASSETS
-------

Real estate investments:
<S>                                                                    <C>                  <C>           
   Land.....................................................           $     6,079,334      $    6,079,334
   Buildings and improvements...............................                75,561,695          75,302,352
                                                                        --------------       -------------
                                                                            81,641,029          81,381,686
   Less:  Accumulated depreciation and amortization.........               (45,107,293)        (44,160,334)
                                                                        --------------       -------------
                                                                            36,533,736          37,221,352

Cash and cash equivalents...................................                 1,418,805           1,768,249
Cash segregated for security deposits ......................                   436,179             433,750
Accounts receivable.........................................                   247,349             242,360
Prepaid expenses and other assets...........................                   123,142             138,853
Escrow deposits.............................................                 1,524,622           1,167,732
Deferred borrowing costs, net of accumulated amorti-
   zation of $652,741 and $617,954 at March 31,
   1997 and December 31, 1996, respectively.................                 1,659,852           1,694,639
                                                                        --------------       -------------
                                                                       $    41,943,685      $   42,666,935
                                                                        ==============       =============

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

Mortgage notes payable, net.................................           $    54,698,629      $   54,859,073
Accounts payable............................................                    10,183              16,402
Accrued expenses............................................                   108,847             142,099
Accrued interest............................................                   382,851             383,990
Accrued property taxes......................................                 1,071,885             837,798
Deferred gain - land condemnation...........................                   297,754             297,754
Advance from Southmark......................................                    38,043              37,472
Advances from affiliates - General Partner..................                    30,131              29,494
Payable to affiliates - General Partner.....................                 3,813,454           3,941,378
Security deposits and deferred rental revenue...............                   566,673             502,905
                                                                        --------------       -------------
                                                                            61,018,450          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 March 31,
     1997 and December 31, 1996, respectively...............                (9,612,852)         (9,148,979)
   General Partner..........................................                (9,461,913)         (9,232,451)
                                                                        --------------       -------------
                                                                           (19,074,765)        (18,381,430)
                                                                        --------------       -------------
                                                                       $    41,943,685      $   42,666,935
                                                                        ==============       =============

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>
<TABLE>
<CAPTION>
                                                                                   Three Months Ended
                                                                                         March 31,
                                                                           ---------------------------------
                                                                                1997                1996
                                                                           --------------     --------------
Revenue:
<S>                                                                        <C>                <C>           
   Rental revenue...................................                       $    3,807,257     $    4,108,035
   Interest.........................................                               22,990             76,045
                                                                            -------------      -------------
     Total revenue..................................                            3,830,247          4,184,080
                                                                            -------------      -------------

Expenses:
   Interest.........................................                            1,208,030          1,268,065
   Interest - affiliates............................                                  637             23,613
   Depreciation and amortization....................                              946,959            884,292
   Property taxes...................................                              303,171            238,513
   Personnel expenses...............................                              464,384            502,444
   Utilities........................................                              420,750            457,990
   Repair and maintenance...........................                              459,016            526,973
   Property management fees - affiliates............                              192,555            204,218
   Other property operating expenses................                              217,540            254,112
   General and administrative.......................                               50,687             69,936
   General and administrative - affiliates..........                               54,805             97,365
                                                                            -------------      -------------
     Total expenses.................................                            4,318,534          4,527,521
                                                                            -------------      -------------

Net loss............................................                       $     (488,287)    $     (343,441)
                                                                            =============      =============

Net loss allocable to limited partners..............                       $     (463,873)    $     (326,269)
Net loss allocable to General Partner...............                              (24,414)           (17,172)
                                                                            -------------      -------------
Net loss............................................                       $     (488,287)    $     (343,441)
                                                                            =============      =============

Net loss per limited partnership unit...............                       $        (2.02)    $        (1.42)
                                                                            =============      =============


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 Three Months Ended March 31, 1997 and 1996


</TABLE>
<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 loss..................................              (17,172)               (326,269)             (343,441)

Management Incentive Distribution.........             (235,722)                      -              (235,722)
                                                  -------------           -------------        --------------

Balance at September 30, 1996.............      $   (10,588,826)         $   (7,839,521)      $   (18,428,347)
                                                 ==============           =============        ==============


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

Net loss..................................              (24,414)               (463,873)             (488,287)

Management Incentive Distribution.........             (205,048)                      -              (205,048)
                                                  -------------           -------------         -------------

Balance at March 31, 1997.................      $    (9,461,913)         $   (9,612,852)      $   (19,074,765)
                                                  =============           =============        ==============
</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)

                Increase (Decrease) in Cash and Cash Equivalents

<TABLE>
<CAPTION>
                                                                            Three Months Ended
                                                                                 March 31,
                                                                -------------------------------------------
                                                                        1997                     1996
                                                                -------------------        ----------------
Cash flows from operating activities:
<S>                                                             <C>                        <C>            
   Cash received from tenants........................           $        3,859,819         $     4,103,198
   Cash paid to suppliers............................                   (1,680,714)             (1,397,041)
   Cash paid to affiliates...........................                     (580,332)               (201,650)
   Interest received.................................                       22,990                  76,045
   Interest paid.....................................                   (1,173,811)             (1,260,459)
   Property taxes paid...............................                     (377,609)               (482,604)
                                                                 -----------------          --------------
Net cash provided by operating activities............                       70,343                 837,489
                                                                 -----------------          --------------

Net cash flows from investing activities:
   Additions to real estate investments..............                     (259,343)               (589,809)
                                                                 -----------------          --------------

Cash flows from financing activities:
   Principal payments on mortgage notes
     payable.........................................                     (160,444)               (162,273)
   Deferred borrowing costs paid.....................                            -                 (35,665)
                                                                 -----------------          --------------
Net cash used in financing activities................                     (160,444)               (197,938)
                                                                 -----------------          --------------

Net increase (decrease) in cash
    and cash equivalents.............................                     (349,444)                 49,742
Cash and cash equivalents at beginning of
   period............................................                    1,768,249               5,791,363
                                                                 -----------------          --------------

Cash and cash equivalents at end of period...........           $        1,418,805         $     5,841,105
                                                                 =================          ==============
</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>

                                                                            Three Months Ended
                                                                                 March 31,
                                                                  -----------------------------------------
                                                                        1997                      1996
                                                                  -----------------        ----------------
<S>                                                               <C>                      <C>             
Net loss.............................................             $       (488,287)        $      (343,441)
                                                                   ---------------          --------------

Adjustments to reconcile net loss to net cash 
   provided by operating activities:
   Depreciation and amortization.....................                      946,959                 884,292
   Amortization of deferred borrowing costs..........                       34,787                  37,876
   Net interest added on advances from
     affiliates - General Partner....................                          637                  23,613
   Net interest added on advances from
     Southmark.......................................                          571                     582
     Changes in assets and liabilities:
     Cash segregated for security deposits...........                       (2,429)                  4,456
     Accounts receivable.............................                       (4,989)                 19,930
     Prepaid expenses and other assets...............                       15,711                  (4,015)
     Escrow deposits.................................                     (356,890)                 23,793
     Accounts payable................................                       (6,219)                240,353
     Accrued expenses................................                      (33,252)                (36,287)
     Accrued interest................................                       (1,139)                (30,852)
     Accrued property taxes..........................                      234,087                 (75,957)
     Payable to affiliates - General Partner.........                     (332,972)                 99,933
     Security deposits and deferred rental ..........
       revenue.......................................                       63,768                  (6,787)
                                                                   ---------------          --------------

       Total adjustments.............................                      558,630               1,180,930
                                                                   ---------------          --------------

Net cash provided by operating activities............             $         70,343         $       837,489
                                                                   ===============          ==============

</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)

                                 March 31, 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 three months ended March 31, 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:

                                                           Three Months Ended
                                                                 March 31,
                                                          ----------------------
                                                             1997        1996
                                                           ---------   ---------
Charged to other assets:
Property management fees - affiliates................     $  192,555   $ 204,218
Interest - affiliates................................            637      23,613
Charged to general and administrative affiliates:
   Partnership administration........................         54,805      97,365
                                                           ---------    --------
                                                          $  247,997   $ 325,196
                                                           =========    ========

Charged to General Partner's deficit:
   MID...............................................     $  205,048   $ 235,722
                                                           =========    ========








<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 existence of certain underground solvent
based  contamination at a portion of the Lodge at Aspen Grove. The source of the
contamination  is related to  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.  CDOT is negotiating to
obtain access  agreements from impacted  landowners,  including the Partnership.
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. The Partnership has determined to evaluate
market and other  economic  conditions to establish the optimum time to commence
an orderly liquidation of the Partnership's  assets in accordance with the terms
of the Amended Partnership  Agreement.  At March 31, 1997, the Partnership owned
six  apartment  properties  and one shopping  center.  All of the  Partnership's
properties are subject to mortgage notes.

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

Revenue:

Partnership  revenues decreased by $353,833 or 8% for the period ended March 31,
1997,  as compared to the same period last year.  Rental  revenue  decreased  by
$300,778 or 7% and interest income decreased by $53,055.

Rental  revenue for the three  months  ended March 31,  1997 was  $3,807,257  as
compared to $4,108,035  for the same period last year.  The decrease of $300,778
is primarily due to the loss in rental revenue generated by Millwood Park, which
was sold in October 1996.
<PAGE>

Expenses:

Partnership  expenses  decreased by $208,987 or 5% for the first three months of
1997 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
$83,760  for  interest,  $16,530  for  property  taxes,  $50,205  for  personnel
expenses, $67,400 for utilities, $50,094 or repair and maintenance,  $17,093 for
property  management  fees - affiliates,  and $26,561 other  property  operating
expenses.

In addition to the sale of Millwood  Park,  other factors  affected the level of
expenses  reported by the remaining  properties.  Interest  expense - affiliates
decreased  by $22,976  for the three  months  ended March 31,  1997,  due to the
repayment of $1,419,339 in advances in May 1996.

Property  tax expense  increased  by $81,188 or 37% for the three  months  ended
March 31, 1997 as compared to the same period last year.  The increase is due to
the  successful  appeal of real  estate  taxes at  Palisades  for the years 1990
through 1993,  resulting in refunds of $88,775  realized in the first quarter of
1996.

Utility expenses increased by $30,160 or 8% for the three months ended March 31,
1997.  The  increase is due to an increase in the cost of gas and oil at Brendon
Way Apartments.

General  and  administrative  expenses  decreased  $19,249  or 28% for the three
months  ended March 31,  1997 as  compared  to the same  period last year.  This
decrease  is  due  1996  legal  and  professional  fees  relating  to  the  land
condemnation  at  Palisades  and with the sale of  Millwood  Park  that were not
incurred in 1997.

General and administrative - affiliate expenses decreased $42,560 or 44% for the
three months ended March 31, 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.

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

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

During the first three months of 1997, the Partnership  provided $70,343 in cash
from  operations  as compared to $837,489 in cash  provided  from  operations in
1996.  This  decrease can be  attributed  to the reduction in cash received from
tenants as a result of the sale of Millwood  Park in 1996 and  increases in cash
paid to suppliers and payments to affiliates of the General Partner.

The Partnership  expended $259,343 and $589,809 for capital  improvements to its
properties for the three months ended March 31, 1997 and 1996, respectively.

Cash used for principal  payments on mortgage notes payable was $160,444  during
the first three  months of 1997 as  compared to $162,273  for the same period in
1996. The Partnership also incurred $35,665 in deferred borrowing costs in 1996.




<PAGE>

Short-term liquidity:

At March 31, 1997, the Partnership held cash and cash equivalents of $1,418,805.
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  determined to evaluate market and other economic  conditions to
establish  the  optimum  time  to  commence  an  orderly   liquidation   of  the
Partnership's  assets in  accordance  with the terms of the Amended  Partnership
Agreement.  Taking such conditions as well as other pertinent  information  into
account,  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.

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 three months ended March
31, 1997 and 1996, $(17,172) and $(24,414),  respectively, were allocated to the
General  Partner.  The  limited  partners  received  allocations  of net loss of
$(463,873)  and  $(326,269)  for the three months ended March 31, 1997 and 1996,
respectively.




<PAGE>
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
$205,048  for the MID has been accrued by the  Partnership  for the period ended
March 31, 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.

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.
Plaintiffs  have until May 27, 1997 to file a second amended  complaint,  unless
otherwise agreed to by the parties.

<PAGE>


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 March 31, 1997.

(b)      Reports on Form 8-K. There were no reports on Form 8-K filed during the
         quarter ended  March 31, 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



May 14, 1997                       By:  /s/  Ron K. Taylor
--------------                        ------------------------------------------
Date                                    Ron K. Taylor
                                        President and Director of McNeil
                                         Investors, Inc.
                                        (Principal Financial Officer)




May 14, 1997                       By:  /s/  Brandon K. Flaming
--------------                        ------------------------------------------
Date                                    Brandon K. Flaming
                                        Vice President of McNeil Investors, Inc.
                                        (Principal Accounting Officer)