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

                                   FORM 10-K

[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
    Exchange Act of 1934

                  For The Fiscal Year Ended December 31, 1997

                                      or

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
    Exchange Act of 1934

                           Commission file #0-18431

                      Inland Land Appreciation Fund, L.P.
            (Exact name of registrant as specified in its charter)

       Delaware                                   36-3544798
(State of organization)            (I.R.S. Employer Identification Number)

2901 Butterfield Road, Oak Brook, Illinois        60523
 (Address of principal executive office)         (Zip Code)

       Registrant's telephone number, including area code:  630-218-8000

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

Title of each class:          Name of each exchange on which registered:
       None                                      None

       Securities registered pursuant to Section 12(g) of the Act:
                           LIMITED PARTNERSHIP UNITS
                               (Title of class)

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

Indicate by check mark if disclosure  of delinquent filers pursuant to Item 405
of Regulation S-K is not contained  herein,  and  will not be contained, to the
best of registrant's knowledge,  in  definitive proxy or information statements
incorporated by reference in Part  III  of  this  Form 10-K or any amendment to
this Form 10-K.[X]

State the aggregate market value of  the  voting stock held by nonaffiliates of
the registrant. Not applicable.

The Prospectus of the Registrant  dated  October  12, 1988, as supplemented and
filed pursuant to Rule 424(b) and  424(c)  under  the Securities Act of 1933 is
incorporated by reference in Parts I, II  and III of this Annual Report on Form
10-K.


                                      -1-



                      INLAND LAND APPRECIATION FUND, L.P.
                            (a limited partnership)


                               TABLE OF CONTENTS



                                    Part I                                Page
                                    ------                                ----

  Item  1. Business.......................................................  3

  Item  2. Properties.....................................................  5

  Item  3. Legal Proceedings..............................................  5

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


                                    Part II
                                    -------

  Item  5. Market for Partnership's Limited Partnership Units
            and Related Security Holder Matters...........................  6

  Item  6. Selected Financial Data........................................  7

  Item  7. Management's Discussion and Analysis of Financial
            Condition and Results of Operations...........................  8

  Item  8. Financial Statements and Supplementary Data.................... 11

  Item  9. Changes in and Disagreements with Independent Auditors on
            Accounting and Financial Disclosure........................... 29


                                   Part III
                                   --------
  Item 10. Directors and Executive Officers of the Registrant............. 29

  Item 11. Executive Compensation......................................... 34

  Item 12. Security Ownership of Certain Beneficial Owners and
            Management.................................................... 35

  Item 13. Certain Relationships and Related Transactions................. 35


                                    Part IV
                                    -------
  Item 14. Exhibits, Financial Statement Schedules, and Reports
            on Form 8-K................................................... 36

  SIGNATURES.............................................................. 37


                                      -2-



                                    PART I

Item 1. Business

The Registrant, Inland Land  Appreciation  Fund,  L.P. (the "Partnership"), was
formed in  October  1987,  pursuant  to  the  Delaware  Revised Uniform Limited
Partnership Act, to invest in undeveloped land on an all-cash basis and realize
appreciation of such land upon  resale.    On October 12, 1988, the Partnership
commenced an  Offering  of  10,000  (subject  to  increase  to  30,000) Limited
Partnership Units ("Units") pursuant to  a  Registration Statement on Form S-11
under the Securities Act of 1933.   The Offering terminated on October 6, 1989,
with total sales  of  30,000  Units,  at  $1,000  per  Unit, resulting in gross
offering proceeds of $30,000,000, which does not include the General Partner or
the Initial Limited Partner.    All  of  the  holders  of these Units have been
admitted to the Partnership. Inland  Real  Estate Investment Corporation is the
General Partner. The Partnership used $25,187,069 of gross offering proceeds to
purchase on an all-cash basis  twenty-five  parcels  of undeveloped land and an
option to purchase undeveloped land.    The Limited Partners of the Partnership
share in their  portion  of  benefits  of  ownership  of the Partnership's real
property investments according to the number of Units held.  As of December 31,
1997, the Partnership has repurchased a total of 371.75 Units for $332,490 from
various Limited Partners  through  the  Unit  Repurchase  Program.   Under this
program Limited  Partners  may  under  certain  circumstances  have their Units
repurchased for an amount equal to their Invested Capital.

The Partnership is  engaged  in  the  business  of  real  estate investment.  A
presentation of information about industry segments would not be material to an
understanding of the Partnership's business taken as a whole.

The  Partnership  acquired  fee  ownership   of  the  following  real  property
investments:
                                         Gross Acres         Purchase/Sales
       Parcel & Location                Purchased/Sold            Date
-----------------------------------  --------------------  -----------------
Parcel 1, Kendall County, Illinois          84.7360              01/19/89
                                            (3.5200         sold 12/24/96)
                                             (.3520         sold 11/25/97)
                                           (80.8640         sold 12/29/97)

Parcel 2, McHenry County, Illinois         223.4121              01/19/89
                                          (183.3759         sold 12/27/90)

Parcel 3, Kendall County, Illinois          20.0000              02/09/89
                                           (20.0000         sold 05/08/90)

Parcel 4, Kendall County, Illinois          69.2760              04/18/89
                                             (.4860         sold 02/28/91)
                                           (27.5750         sold 08/25/95)

Parcel 5, Kendall County, Illinois         372.2230 (a)          05/03/89
                                           (Option          sold 04/06/90)

(a) Included in the purchase  agreement  of  this  parcel  was a condition that
    required the Partnership to  buy  an  option  to purchase an additional 243
    acres immediately to the west of this parcel.


                                      -3-



                                         Gross Acres         Purchase/Sales
       Parcel & Location                Purchased/Sold            Date
-----------------------------------  --------------------  -----------------
Parcel 6, Kendall County, Illinois          78.3900              06/21/89

Parcel 7, Kendall County, Illinois          77.0490              06/21/89

Parcel 8, Kendall County, Illinois           5.0000              06/21/89
                                            (5.0000         sold 10/06/89)

Parcel 9, McHenry County, Illinois          51.0300              08/07/89

Parcel 10, McHenry County, Illinois        123.9400              08/07/89
                                          (123.9400         sold 12/06/89)

Parcel 11, McHenry County, Illinois         30.5920              08/07/89

Parcel 12, Kendall County                   90.2710              10/31/89
                                             (.7090         sold 04/26/91)

Parcel 13, McHenry County, Illinois         92.7800              11/07/89
                                            (2.0810         sold 09/18/97)

Parcel 14, McHenry County, Illinois         76.2020              11/07/89

Parcel 15, Lake County, Illinois            84.5564              01/03/90
                                           (10.5300         sold Var 1996)
                                            (5.4680         sold Var 1997)

Parcel 16, Kane/Kendall Counties,           72.4187              01/29/90
           Illinois

Parcel 17, McHenry County, Illinois         99.9240              01/29/90

Parcel 18, McHenry County, Illinois         71.4870              01/29/90
                                            (1.0000         sold Var 1990)
                                             (.5200         sold 03/11/93)

Parcel 19, McHenry County, Illinois         63.6915              02/23/90

Parcel 20, Kane County, Illinois           224.1480              02/28/90
                                             (.2790         sold 10/17/91)

Parcel 21, Kendall County, Illinois        172.4950              03/08/90

Parcel 22, McHenry County, Illinois        254.5250              04/11/90

Parcel 23, Kendall County, Illinois        140.0210              05/08/90
                                            (4.4100         sold Var 1993)
                                           (35.8800         sold Var 1994)
                                            (3.4400         sold Var 1995)






                                      -4-



                                         Gross Acres         Purchase/Sales
       Parcel & Location                Purchased/Sold            Date
-----------------------------------  --------------------  -----------------
Parcel 24, Kendall County, Illinois        298.4830              05/23/90
                                           (12.4570         sold 05/25/90)
                                            (4.6290         sold 04/01/96)

Parcel 25, Kane County, Illinois           225.0000              06/01/90

Reference is made to Note 4  of  the  Notes  to Financial Statements (Item 8 of
this Annual  Report)  for  additional  descriptions  of  the Partnership's real
property investments.

The  Partnership  purchased  on  an  all-cash  basis,  twenty-five  parcels  of
undeveloped land and is engaged in the  rezoning and resale of the parcels. All
of the investments were made in the Chicago metropolitan area.  The anticipated
holding period of  the  land  is  approximately  two  to  seven  years from the
completion of the land portfolio  acquisitions.    As of December 31, 1997, the
Partnership has had multiple sales  transactions, through which it has disposed
of approximately 527 acres of the approximately 3,102 acres originally owned.

The General Partner anticipates  that  land  purchased  by the Partnership will
produce  sufficient  income  to   pay   property  taxes,  insurance  and  other
miscellaneous expenses.  Income will  be  derived  through leases to farmers or
from other activities compatible with  undeveloped  land.   The majority of the
parcels purchased by the  Partnership  consist  of land which generates revenue
from farming  or  other  leasing  activities.    It  is  not  expected that the
Partnership will generate cash distributions  to  investors from farm leases or
other activities.

The Partnership had no employees during 1997.

The terms of transactions between the Partnership and Affiliates of the General
Partner of the Partnership are set  forth  in  Item  11 below and Note 3 of the
Notes to Financial Statements (Item 8 of this Annual Report) to which reference
is hereby made for a description of such terms and transactions.

The  Partnership  has  reviewed  its  current  computer  systems  and  does not
anticipate any future costs or problems relating to the year 2000.


Item 2. Properties

The Partnership owns directly the parcels of  land referred to in Item 1 and in
Note 4 of the Notes to Financial  Statements  (Item 8 of this Annual Report) to
which reference is hereby made for a description of said parcels.


Item 3. Legal Proceedings

The Partnership is not subject to any material pending legal proceedings.


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

There were no matters submitted to a vote of security holders during 1997.


                                      -5-



                                    PART II


Item 5. Market for the Partnership's Limited Partnership Units and Related
        Security Holder Matters

As of December 31, 1997, there were  3,313 holders of Units of the Partnership.
There is no public  market  for  Units  nor  is  it anticipated that any public
market for Units will develop.

Although the Partnership has established  a  Unit Repurchase Program, funds for
repurchase of  Units  are  limited.    Reference  is  made  to "Unit Repurchase
Program" on pages 17-18 of the  Prospectus of the Partnership dated October 12,
1988, which is incorporated herein by  reference.  As of December 31, 1997, the
Partnership had approximately $62,200 allocated for the repurchase of Units.










































                                      -6-



Item 6. Selected Financial Data


                      INLAND LAND APPRECIATION FUND, L.P.
                            (a limited partnership)

       For the years ended December 31, 1997, 1996, 1995, 1994 and 1993

                 (not covered by Independent Auditors' Report)



                            1997       1996       1995       1994       1993
                            ----       ----       ----       ----       ----
Total assets........... $28,057,898 28,788,243 25,575,833 25,507,940 26,490,788
                        =========== ========== ========== ========== ==========

Total income........... $ 6,438,303  1,348,095  1,017,740  1,649,345    525,180
                        =========== ========== ========== ========== ==========

Net income............. $   171,674    451,249    354,647    396,656     95,938
                        =========== ========== ========== ========== ==========

Net income (loss)
 allocated to the one
 General Partner Unit.. $   (1,726)      (822)       (82)        624        245
                        =========== ========== ========== ========== ==========
Net income allocated
  per Limited
  Partnership Unit (b). $      5.85      15.20      11.90      13.27       3.20
                        =========== ========== ========== ========== ==========

Distributions per
  Limited Partnership
  Unit from sales
  (b)(c)............... $     62.41       -         12.36      45.89       -
                        =========== ========== ========== ========== ==========

Weighted average Limited
  Partnership Units....   29,639.10  29,738.54  29,802.51  29,843.92  29,900.61
                        =========== ========== ========== ========== ==========

(a)  The above selected financial data  should  be read in conjunction with the
     financial statements and related notes  appearing elsewhere in this Annual
     Report.

(b)  The net income per  Unit,  basic  and  diluted, and distributions per Unit
     data is based upon the weighted average number of Units outstanding.

(c)  Distributions from  sales  represent  a  return  of  Invested  Capital, as
     defined in the Partnership Agreement.

(d)  Reference is made to Note 4  of  the Notes to Financial Statements (Item 8
     of this  Annual  Report)  for  a  description  of  the  Partnership's land
     acquisitions and dispositions.


                                      -7-



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


Certain statements in this  "Management's  Discussion and Analysis of Financial
Condition and Results of  Operations"  and  elsewhere  in this annual report on
Form 10-K constitute  "forward-looking  statements"  within  the meaning of the
Federal Private Securities  Litigation  Reform  Act  of  1995.   These forward-
looking statements involve  known  and  unknown  risks, uncertainties and other
factors which  may  cause  the  Partnership's  actual  results, performance, or
achievements to be materially  different  from any future results, performance,
or achievements expressed or implied by these forward-looking statements. These
factors include,  among  other  things,  federal,  state  or local regulations;
adverse changes in general economic  or local conditions; uninsured losses; and
potential conflicts of  interest  between  the  Partnership and its Affiliates,
including the General Partner.

Liquidity and Capital Resources

On October 12, 1988, the  Partnership  commenced an Offering of 10,000 (subject
to increase to 30,000)  Limited  Partnership  Units  pursuant to a Registration
Statement on Form S-11 under the Securities  Act  of 1933.  On October 6, 1989,
the Offering terminated with a  total  of  30,000  Units  sold to the public at
$1,000 per Unit resulting in $30,000,000 in gross offering proceeds, which does
not include the Initial Limited Partner  and  the  General Partner.  All of the
holders of these  Units  have  been  admitted  to  the Partnership. The Limited
Partners of the Partnership share in  their portion of benefits of ownership of
the Partnership's real property  investments  according  to the number of Units
held.

The Partnership used $25,187,069 of  gross  offering proceeds to purchase on an
all-cash basis  twenty-five  parcels  of  undeveloped  land  and  an  option to
purchase undeveloped  land.    These  investments  include  the  payment of the
purchase price, acquisition  fees  and  acquisition  costs  of such properties.
Fourteen of the parcels were purchased during  1989 and eleven during 1990.  As
of December 31,  1997,  the  Partnership  has  had multiple sales transactions,
through which it has disposed  of  approximately 527 acres of the approximately
3,102 acres originally owned. As of December 31, 1997, cumulative distributions
to the Limited Partners have  totaled  $5,996,219 (which represents a return of
Invested Capital, as defined in the  Partnership Agreement) and $153,743 to the
General  Partner.    Through  December  31,  1997,  the  Partnership  has  used
$9,730,419 of working capital reserve  for  rezoning and other activities. Such
amounts have been capitalized and are included in investments in land.

The Partnership's capital needs and resources will vary depending upon a number
of factors, including the extent to which the Partnership conducts rezoning and
other  activities  relating  to  utility  access,  the  installation  of roads,
subdivision and/or annexation of land to a municipality, changes in real estate
taxes affecting the Partnership's land, and the amount of revenue received from
leasing.  As of December 31, 1997,  the  Partnership owns, in whole or in part,
twenty-one of its  twenty-five  original  parcels,  the  majority  of which are
leased to local  farmers  and  are  generating  sufficient  cash flow from farm
leases to cover property taxes and insurance.




                                      -8-



At December 31, 1997, the Partnership had cash and cash equivalents of $15,502.
The  Unit  Repurchase  Program  has  approximately  $62,200  allocated  for the
repurchase of Units.  There are  currently  no requests for repurchase, but the
Partnership plans to replenish cash  available  for this program through future
parcel sales.    The  Partnership  has  increased  its  parcel  sales effort in
anticipation of rising land values.

Net sales proceeds totaling $1,849,826 from Parcels 1, 4, 12, 15, 20, 23 and 24
were previously retained and used  to  fund pre-development activity on certain
of  the  Partnership's  land   investments.   In  July  1997,  the  Partnership
replenished these net  sales  proceeds  by  obtaining  a  loan from the General
Partner.  This note accrues interest at  10% and will be repaid with future net
sales proceeds  as  parcels  are  sold.    On  July  7,  1997,  the Partnership
distributed these net  sales  proceeds  to  the  Limited  Partners resulting in
cumulative distributions of $5,996,219.

The Partnership plans to enhance the  value of its land through pre-development
activities such as rezoning annexation and  land planning.  The Partnership has
already been successful in, or is in the process of pre-development activity on
a majority of the Partnership's  land  investments.    Parcels  4, 6 and 7 have
completed improvements for an  industrial  park  and  sites are being marketed.
Parcel 15, zoned  and  annexed  to  the  Village  of  Hawthorn  Woods, also has
improvements underway and sites are  being  marketed. Of the forty lots, eleven
lots were sold to individuals during 1996 and  1997 (see Note 4 of the Notes to
Financial Statements.)  Parcels 16, 21  and 23 have been zoned with development
and sales marketing  underway.  The  Partnership  sold  the  remaining acres of
Parcel 1 on December 29, 1997 to an unaffiliated third-party (see Note 4 of the
Notes to Financial Statements.)

Results of Operations

As of December  31,  1997,  the  Partnership  owned  twenty-one parcels of land
consisting  of  approximately   2,575   acres.   Of   the  2,575  acres  owned,
approximately 2,110 acres are  tillable,  leased  to local farmers and generate
sufficient cash flow to cover property taxes, insurance and other miscellaneous
expenses. Land sales income and cost  of  land sold for the year ended December
31, 1997 is a result of the sale  of  the remaining acres of Parcel 1, the sale
of five additional lots of Parcel 15 and  the sale of 2.081 acres of Parcel 13.
Land sales income and cost of land sold for the year ended December 31, 1996 is
a result of the sale of  4.629  acres  of  Parcel  24,  the sale of six lots of
Parcel 15 totaling 10.53 acres, the sale  of  15 lots of Parcel 1 totaling 3.52
acres, and the  prepayments  of  the  remaining  mortgage  loans receivable and
recognition of deferred gain relating to the  1994 lot sales of Parcel 23. Land
sales income and cost of land sold  for  the  year ended December 31, 1995 is a
result of the sale of the remaining three lots of Parcel 23 totaling 3.44 acres
and the sale of 27.575 acres of Parcel 4.

As a result of the sale of the remaining approximately 81 acres of Parcel 1 for
a sales price of $5,750,000  on  December  29,  1997, the purchaser assumed the
note payable  to  an  Affiliate  on  this  parcel  totaling  $3,325,515 and the
interest  payable  to  the  Affiliate  of  $254,396.  The  Partnership received
mortgage loans receivable  totaling  $2,170,089  and  recorded deferred gain on
sale of $106,905.  The deferred  gain  will  be recognized over the life of the
related mortgage loans receivable as  principal payments are received. See Note
6 of the Notes to Financial  Statements  for further discussion of the terms of
the mortgage loans receivable received from this sale.


                                      -9-



The decrease in rental income for  the  years ended December 31, 1997 and 1996,
as compared to the year  ended  December  31,  1995,  is due to the decrease of
tillable acres and an overall  decrease  of  the  land portfolio as a result of
land sales and  pre-development.  This  decrease  was  partially  offset by the
annual increase in lease amounts  from  tenants. The decrease in land operating
expenses to Affiliates for  the  years  ended  December  31,  1997 and 1996, as
compared to the year ended December 31,  1995,  is due to the decrease in asset
management fees due to  the  General  Partner  as  a  result of land sales. The
increase in  land  operating  expenses  to  non-affiliates  for  the year ended
December 31, 1997, as compared to the  year  ended December 31, 1996, is due to
an increase in maintenance expenses  of the Partnership's land investments. The
decrease in  land  operating  expenses  to  non-affiliates  for  the year ended
December 31,  1996,  as  compared  to  the  year  ended  December  31, 1995, is
primarily due to decreases in real estate taxes and insurance.

Interest income decreased for the  years  ended  December 31, 1997 and 1996, as
compared to the year ended December  31, 1995, due primarily to the Partnership
utilizing its working capital reserve  to  fund pre-development activity on the
Partnership's land investments.

Professional services to Affiliates and  non-affiliates increased for the years
ended December 31, 1997 and 1996,  as  compared  to the year ended December 31,
1995, due to increases in legal and accounting services related to the increase
in sales activity within the Partnership.

General and administrative expenses to  Affiliates decreased for the year ended
December 31, 1996, as compared  to  the  year  ended  December 31, 1995, due to
decreases in postage and  data  processing expenses. General and administrative
expenses to non-affiliates increased for  the  year ended December 31, 1997, as
compared to the  year  ended  December  31,  1996,  due  to  an increase in the
Illinois Replacement Tax paid in  1997.  General and administrative expenses to
non-affiliates had decreased for the year  ended December 31, 1996, as compared
to the year  ended  December  31,  1995,  due  to  a  decrease  in the Illinois
Replacement Tax paid in 1996.

Marketing expenses to  Affiliates  increased  for  the  year ended December 31,
1997, as compared to the year  ended  December  31, 1996, and decreased for the
year ended December 31, 1996, as compared  to the year ended December 31, 1995,
due to  the  timing  of  expenses  relating  to  marketing  and advertising the
Partnership's land investments for  sale.  Marketing expenses to non-affiliates
decreased for the year ended December  31,  1997, as compared to the year ended
December 31, 1996, and  increased  for  the  year  ended  December 31, 1996, as
compared to the year ended December 31,  1995, due to the timing of advertising
and travel expenses relating  to  marketing  the  land portfolio to prospective
purchasers.

Inflation

Inflation in future periods may cause capital appreciation of the Partnership's
investments in land.   Rental  income  levels  (from  leases  to new tenants or
renewals of existing tenants)  will  rise  and  fall  in accordance with normal
agricultural market conditions and may or may not be affected by inflation.





                                     -10-



Item 8.  Financial Statements and Supplementary Data



                      INLAND LAND APPRECIATION FUND, L.P.
                            (a limited partnership)


                                     Index
                                     -----



                                                                          Page
                                                                          ----
Independent Auditors' Report.............................................   12

Financial Statements:

  Balance Sheets, December 31, 1997 and 1996.............................   13

  Statements of Operations, for the years ended
    December 31, 1997, 1996 and 1995.....................................   15

  Statements of Partners' Capital, for the years ended
    December 31, 1997, 1996 and 1995.....................................   17

  Statements of Cash Flows, for the years ended
    December 31, 1997, 1996 and 1995.....................................   18

  Notes to Financial Statements..........................................   20


Schedules not filed:

All schedules have been omitted as  the required information is inapplicable or
the information is presented in the financial statements or related notes.




















                                     -11-







INDEPENDENT AUDITORS' REPORT


To the Partners of 
Inland Land Appreciation Fund, L.P. 

We have audited the  accompanying  balance  sheets  of Inland Land Appreciation
Fund, L.P. (a limited partnership) as  of  December  31, 1997 and 1996, and the
related statements of operations, partners' capital, and cash flows for each of
the three years  in  the  period  ended  December  31,  1997.   These financial
statements  are  the  responsibility  of  the  Partnership's  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,  such  financial  statements  present  fairly,  in all material
respects, the financial position of  Inland  Land Appreciation Fund, L.P. as of
December 31, 1997 and 1996,  and  the  results  of  its operations and its cash
flows for each of the three  years  in  the  period ended December 31, 1997, in
conformity with generally accepted accounting principles.  



DELOITTE & TOUCHE LLP


Chicago, Illinois
February 4, 1998
















                                     -12-



                      INLAND LAND APPRECIATION FUND, L.P.
                            (a limited partnership)

                                Balance Sheets

                          December 31, 1997 and 1996


                                    Assets
                                    ------

                                                       1997          1996
Current assets:                                        ----          ----
  Cash and cash equivalents (Note 1).............. $    15,502        89,672
  Accounts and accrued interest receivable........       1,361          -
  Current portion of mortgage loans
    receivable (Note 6)...........................     575,000          -
  Other current assets............................       2,241         2,330
                                                   ------------  ------------
Total current assets..............................     594,104        92,002
                                                   ------------  ------------
Other assets......................................      19,915        19,915
Mortgage loans receivable, less current
    portion (Note 6)..............................   1,595,089          -
Investments in land and improvements, at cost
  (including acquisition fees paid to Affiliates
  of $1,430,329 and $1,464,852 at December 31,
  1997 and 1996, respectively) (Notes 3 and 4)....  25,848,790    28,676,326
                                                   ------------  ------------
Total assets...................................... $28,057,898    28,788,243
                                                   ============  ============
























                See accompanying notes to financial statements.


                                     -13-



                      INLAND LAND APPRECIATION FUND, L.P.
                            (a limited partnership)

                                Balance Sheets
                                  (continued)
                          December 31, 1997 and 1996


                       Liabilities and Partners' Capital
                       ---------------------------------

                                                       1997          1996
                                                       ----          ----
Current liabilities:
  Accounts payable................................ $    25,185        82,373
  Accrued real estate taxes.......................      47,889        48,117
  Due to Affiliates (Notes 3 and 7)...............     595,655       149,376
  Notes payable to Affiliate (Note 7).............   3,283,471     2,801,635
  Unearned income.................................      19,278        23,239
                                                   ------------  ------------
Total current liabilities.........................   3,971,478     3,104,740

Deferred gain on sale (Note 6)....................     106,905          -

Partners' capital (Notes 1 and 2):
  General Partner:
    Capital contribution..........................         500           500
    Cumulative net income.........................     165,949       167,675
    Cumulative cash distributions.................    (153,743)     (153,743)
                                                   ------------  ------------
                                                        12,706        14,432
  Limited Partners:                                ------------  ------------
    Units of $1,000. Authorized 30,001 Units,
      29,629.25 and 29,659.25 outstanding at
      December 31, 1997 and 1996, respectively
      (net of offering costs of $3,768,113, of
      which $1,069,764 was paid to Affiliates)....  25,900,396    25,926,243 
    Cumulative net income.........................   4,062,632     3,889,232
    Cumulative cash distributions.................  (5,996,219)   (4,146,404)
                                                   ------------  ------------
                                                    23,966,809    25,669,071
                                                   ------------  ------------
Total Partners' capital...........................  23,979,515    25,683,503
                                                   ------------  ------------
Total liabilities and Partners' capital........... $28,057,898    28,788,243
                                                   ============  ============









                See accompanying notes to financial statements.


                                     -14-



                      INLAND LAND APPRECIATION FUND, L.P.
                            (a limited partnership)

                           Statements of Operations

             For the years ended December 31, 1997, 1996 and 1995



                                         1997          1996          1995
                                         ----          ----          ----
Income:
  Land sales (Note 4)............... $ 6,190,802     1,101,329       691,990
  Rental income (Note 5)............     241,853       235,458       255,956
  Interest income...................         348        11,129        69,794
  Other income......................       5,300           179          -
                                     ------------  ------------  ------------
                                       6,438,303     1,348,095     1,017,740
                                     ------------  ------------  ------------
Expenses:
  Cost of land sold.................   5,846,535       567,886       329,165
  Professional services to
    Affiliates......................      47,558        45,673        31,791
  Professional services to
    non-affiliates..................      46,652        32,627        25,549
  General and administrative
    expenses to Affiliates..........      29,694        29,644        32,144
  General and administrative
    expenses to non-affiliates......      19,838        15,674        18,997
  Marketing expenses
    to Affiliates...................     123,333        57,870        84,033
  Marketing expenses to
    non-affiliates..................      19,797        35,228        21,664
  Land operating expenses to
    Affiliates......................      55,279        56,774        57,216
  Land operating expenses to
    non-affiliates..................      77,943        55,470        62,534
                                     ------------  ------------  ------------
                                       6,266,629       896,846       663,093
                                     ------------  ------------  ------------
Net income.......................... $   171,674       451,249       354,647  
                                     ============  ============  ============
 












                See accompanying notes to financial statements.


                                     -15-



                      INLAND LAND APPRECIATION FUND, L.P.
                            (a limited partnership)

                           Statements of Operations
                                  (continued)

             For the years ended December 31, 1997, 1996 and 1995



                                         1997          1996          1995
                                         ----          ----          ----
Net income (loss) allocated (Note 2):
  General Partner................... $    (1,726)         (822)          (82)
  Limited Partners..................     173,400       452,071       354,729
                                     ------------  ------------  ------------
Net income.......................... $   171,674       451,249       354,647
                                     ============  ============  ============

Net loss allocated to
  the one General Partner Unit...... $    (1,726)         (822)          (82)
                                     ============  ============  ============

Net income per Unit, basic and
  diluted, allocated to Limited
  Partners per weighted average
  Limited Partnership Units
  (29,639.10, 29,738.54 and 29,802.51
  for the years ended December 31,
  1997, 1996 and 1995, respectively) $      5.85         15.20         11.90
                                     ============  ============  ============
























                See accompanying notes to financial statements.


                                     -16-



                      INLAND LAND APPRECIATION FUND, L.P.
                            (a limited partnership)

                        Statements of Partners' Capital

             For the years ended December 31, 1996, 1995 and 1994



                                        General      Limited
                                        Partner      Partners       Total
                                     ------------  ------------  ------------
Balance at January 1, 1995.......... $    15,336    25,362,698    25,378,034

Net income (loss)...................         (82)      354,729       354,647
Distributions to Partners ($12.36 per
  weighted average Limited Partnership
  Units of 29,802.51) (Note 2)......        -         (368,325)     (368,325)
Repurchase of Limited Partnership
  Units.............................        -          (17,516)      (17,516)
                                     ------------  ------------  ------------
Balance at December 31, 1995........      15,254    25,331,586    25,346,840

Net income (loss)...................        (822)      452,071       451,249
Distributions to Partners (Note 1)..        -               (9)           (9)
Repurchase of Limited Partnership
  Units.............................        -         (114,577)     (114,577)
                                     ------------  ------------  ------------
Balance at December 31, 1996........      14,432    25,669,071    25,683,503

Net income (loss)...................      (1,726)      173,400       171,674
Distributions to Partners ($62.41 per
  weighted average Limited Partnership
  Units of 29,639.10) (Note 2)......        -       (1,849,815)   (1,849,815)
Repurchase of Limited Partnership
  Units.............................        -          (25,847)      (25,847)
                                     ------------  ------------  ------------
Balance at December 31, 1997........ $    12,706    23,966,809    23,979,515
                                     ============  ============  ============
















                See accompanying notes to financial statements.


                                     -17-



                      INLAND LAND APPRECIATION FUND, L.P.
                            (a limited partnership)

                           Statements of Cash Flows

             For the years ended December 31, 1997, 1996 and 1995



                                         1997          1996          1995
                                         ----          ----          ----
Cash flows from operating activities:
  Net income........................ $   171,674       451,249       354,647
  Adjustments to reconcile net income
      to net cash provided by (used
      in) operating activities:
    Gain on sale of land............    (344,267)     (533,443)     (362,825)
    Changes in assets and liabilities:
      Accounts and accrued interest
       receivable...................      (1,361)        7,224        10,708
      Other current assets..........          89        (1,165)          (89)
      Other assets..................        -             -          (19,915)
      Accounts payable..............     (57,188)      (49,399)         (172)
      Accrued real estate taxes.....        (228)          384         4,704
      Due to Affiliates.............     446,279       135,521        13,289
      Unearned income...............      (3,961)        2,532        (2,274)
      Other current liabilities.....        -             -             (300)
Net cash provided by (used in)       ------------  ------------  ------------
  operating activities..............     211,037        12,903        (2,227)
                                     ------------  ------------  ------------
Cash flows from investing activities:
  Principal payments collected on
    mortgage loans receivable.......        -           73,614        40,997
  Additions to investments in land
    and improvements................  (3,018,999)   (4,397,239)     (975,495) 
  Proceeds from disposition of
    investments in land and
    improvements....................     802,103     1,086,403       681,566
Net cash flow used in investing      ------------  ------------  ------------
  activities........................  (2,216,896)   (3,237,222)     (252,932)
                                     ------------  ------------  ------------
Cash flows from financing activities:
  Repurchase of Limited Partnership
    Units...........................     (25,847)     (114,577)      (17,516)
  Proceeds from notes payable to
    Affiliate, net..................   3,807,351     2,801,635          -
  Cash distributions................  (1,849,815)           (9)     (368,325)
Net cash flow provided by (used in)  ------------  ------------  ------------
  financing activities..............   1,931,689     2,687,049      (385,841)
                                     ------------  ------------  ------------





                See accompanying notes to financial statements.


                                     -18-



                        INLAND LAND APPRECIATION FUND, L.P.
                              (a limited partnership)

                             Statements of Cash Flows
                                    (continued)

               For the years ended December 31, 1997, 1996 and 1995

                                         1997          1996          1995
                                         ----          ----          ----
Net decrease in cash and cash
  equivalents....................... $   (74,170)     (537,270)     (641,000)
Cash and cash equivalents at
  beginning of year.................      89,672       626,942     1,267,942
Cash and cash equivalents at end     ------------  ------------  ------------
  of year........................... $    15,502        89,672       626,942
                                     ============  ============  ============



Supplemental schedule of non-cash investing and financing activities:


                                         1997          1996          1995
                                         ----          ----          ----
  Mortgage loans receivable......... $(2,170,089)         -             -       
  Reduction in investments in land
    and improvements................   5,846,535          -             -
  Gain on sale of land..............     344,267          -             -
  Assumption of note payable to
    Affiliate.......................  (3,325,515)         -             -
  Deferred gain on sale.............     106,905          -             -
  Proceeds from disposition of       ------------  ------------  ------------
    investments in land and
    improvements.................... $   802,103          -             -
                                     ============  ============  ============



















                See accompanying notes to financial statements.


                                     -19-



                      INLAND LAND APPRECIATION FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements

             For the years ended December 31, 1997, 1996 and 1995


(1) Organization and Basis of Accounting

The Registrant, Inland Land  Appreciation  Fund,  L.P. (the "Partnership"), was
formed in  October  1987,  pursuant  to  the  Delaware  Revised Uniform Limited
Partnership Act, to invest in undeveloped land on an all-cash basis and realize
appreciation of such land  upon  resale.  On  October 12, 1988, the Partnership
commenced an  Offering  of  10,000  (subject  to  increase  to  30,000) Limited
Partnership Units ("Units") pursuant to  a  Registration Statement on Form S-11
under the Securities Act of 1933.  Inland Real Estate Investment Corporation is
the General Partner.  The  Offering  terminated  on October 6, 1989, with total
sales of 30,000 Units, at $1,000 per Unit, not including the General Partner or
the Initial Limited Partner.    All  of  the  holders  of these Units have been
admitted to this Partnership.  The Limited Partners of the Partnership share in
their portion of  benefits  of  ownership  of  the  Partnership's real property
investments according to the number of Units  held.    As of December 31, 1997,
the Partnership has  repurchased  a  total  of  371.75  Units for $332,490 from
various Limited Partners  through  the  Unit  Repurchase  Program.   Under this
program Limited  Partners  may  under  certain  circumstances  have their Units
repurchased for an amount equal to their Invested Capital.

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

Offering costs have been offset against the Limited Partners' capital accounts.

The Partnership  considers  all  highly  liquid  investments  purchased  with a
maturity of three months or  less  to  be  cash  equivalents and are carried at
cost, which approximates market.

Except as described in footnote (b)  to  Note 4 of these notes, the Partnership
uses the area  method  of  allocation,  which  approximates  the relative sales
method of  allocation,  whereby  a  per  acre  price  is  used  as the standard
allocation method for land purchases and  sales.   The total cost of the parcel
is divided by the total number of acres to arrive at a per acre price.

Statement  of  Financial  Accounting  Standards  No.  121  "Accounting  for the
Impairment of Long-Lived Assets and  for  Long-Lived  Assets to be Disposed of"
("SFAS 121") requires  the  Partnership  to  record  an  impairment loss on its
property to be held for investment  whenever its carrying value cannot be fully
recovered  through  estimated  undiscounted   future   cash  flows  from  their
operations and sale.  The amount of  the impairment loss to be recognized would
be the difference  between  the  property's  carrying  value and the property's
estimated fair value.  As of  December  31,  1997 and 1996, the Partnership has
not recognized any such impairment.


                                     -20-



                      INLAND LAND APPRECIATION FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)


The Partnership is required to  pay  a  withholding tax to the Internal Revenue
Service with  respect  to  a  Partner's  allocable  share  of the Partnership's
taxable net income, if the  Partner  is  a foreign person. The Partnership will
first pay the withholding tax  from  the  distributions to any foreign partner,
and to the extent that the tax exceeds the amount of distributions withheld, or
if there have been no distributions  to  withhold, the excess will be accounted
for as a distribution to the foreign partner. Withholding tax payments are made
every April, June, September and December.

Statement of Financial Accounting  Standards  No.  128 "Earnings per Share" was
adopted by the Partnership for the  year  ended  December 31, 1997 and has been
applied to all prior  earnings  periods  presented in the financial statements.
The Partnership has no dilutive securities.

No provision for Federal income taxes  has  been made as the liability for such
taxes is that of the Partners rather than the Partnership.

The Partnership's records are maintained on  the accrual basis of accounting in
accordance with generally accepted accounting principles ("GAAP").  The Federal
income tax return has been prepared  from such records after making appropriate
adjustments, if any,  to  reflect  the  Partnership's  accounts as adjusted for
Federal income tax reporting purposes.    Such  adjustments are not recorded in
the records of the Partnership.  The net effect of these items is summarized as
follows:

                                        1997                     1996
                             ------------------------- ------------------------
                                               Tax                      Tax
                                 GAAP         Basis       GAAP         Basis
                                 Basis     (unaudited)    Basis     (unaudited)
                             ------------ ------------ ----------- ------------
  Total assets.............. $28,057,898   31,826,012   28,788,243  32,556,357

  Partners' capital:
    General Partner.........      12,706       15,259       14,432      16,094
    Limited Partners........  23,966,809   27,732,370   25,669,071  29,435,522

  Net income (loss):
    General Partner.........      (1,726)        (836)        (822)        527
    Limited Partners........     173,400      172,510      452,071     689,992

  Net income per Limited
    Partnership Unit, basic
    and diluted.............        5.85         5.82        15.20       23.20


The net income per Unit, basic and  diluted, is based upon the weighted average
number of Units of 29,639.10 and 29,738.54 during 1997 and 1996, respectively.


                                     -21-



                      INLAND LAND APPRECIATION FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)


(2) Partnership Agreement

The Partnership Agreement defines  the  allocation  of  profits and losses, and
available cash.  If and  to  the  extent  that  real estate taxes and insurance
payable with respect  to  the  Partnership's  land  during  a given year exceed
revenues of the  Partnership,  the  General  Partner  will  make a Supplemental
Capital Contribution of such amount  to  the  Partnership to ensure that it has
sufficient funds to make such payments.

Profits and losses from  operations  (other  than capital transactions) will be
allocated 99% to the Limited Partners and  1%  to the General Partner.  The net
gain from  a  sale  of  Partnership  properties  is  first  allocated among the
Partners in proportion to the  negative  balances,  if any, in their respective
capital accounts.  Thereafter, except as  provided below, net gain is allocated
to the General Partner in an  amount  equal  to the proceeds distributed to the
General Partner from such sale and the  balance of any net gain is allocated to
the Limited Partners.  If the amount  of  net gain realized from a sale is less
than the amount of cash distributed to  the General Partner from such sale, the
Partnership will allocate income or  gain  to  the General Partner in an amount
equal to the excess of the cash distributed to the General Partner with respect
to such sale as quickly as permitted by law.   Any net loss from a sale will be
allocated to the Limited Partners.

Distributions of  Net  Sale  Proceeds  will  be  allocated  between the General
Partner and the Limited Partners based upon both an aggregate overall return to
the Limited Partners and a separate return  with respect to each parcel of land
purchased by the Partnership.

As a general rule, Net  Sale  Proceeds  will  be distributed 90% to the Limited
Partners and  10%  to  the  General  Partner  until  the  Limited Partners have
received from Net Sale Proceeds  (i)  a  return  of their Original Capital plus
(ii) a noncompounded  Cumulative  Preferred  Return  of  15%  of their Invested
Capital.  However, with respect to  each  parcel of land, the General Partner's
10% share will be subordinated until  the  Limited Partners receive a return of
the Original Capital attributed to such parcel ("Parcel Capital") plus a 6% per
annum noncompounded Cumulative Preferred Return thereon.

After the amounts described  in  items  (i)  and  (ii) above and any previously
subordinated distributions to  the  General  Partner  have  been  paid, and the
amount of  any  Supplemental  Capital  Contributions  have  been  repaid to the
General Partner, subsequent  distributions  shall  be  paid  75% to the Limited
Partners and 25% to  the  General  Partner  without considering Parcel Capital.
If, after all Net Sale Proceeds  have been distributed, the General Partner has
received more than 25%  of  all  Net  Sale Proceeds (exclusive of distributions
made to the Limited  Partners  to  return  their Original Capital), the General
Partner shall contribute to  the  Partnership  for  distribution to the Limited
Partners an amount equal to such excess.



                                     -22-



                      INLAND LAND APPRECIATION FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)


Any distributions from Net Sale  Proceeds  at  a  time when Invested Capital is
greater than zero shall be deemed applied first as a reduction of such Invested
Capital before application to payment  of  any deficiency in the 15% Cumulative
Preferred Return.


(3) Transactions with Affiliates

The General  Partner  and  its  Affiliates  are  entitled  to reimbursement for
salaries and expenses of employees  of  the  General Partner and its Affiliates
relating to the administration of the  Partnership.  Such costs are included in
professional services and general and administrative expenses to Affiliates, of
which $90,278  and  $40,569  was  unpaid  as  of  December  31,  1997 and 1996,
respectively.

The General Partner is entitled to  receive Asset Management Fees equal to one-
quarter of 1% of  the  original  cost  to  the  Partnership of undeveloped land
annually, limited to a cumulative total over  the life of the Partnership of 2%
of the land's original cost to the  Partnership.  Such fees of $55,279, $56,774
and $57,216 have been incurred for the  years ended December 31, 1997, 1996 and
1995, respectively, of which $55,279 and  $14,066 was unpaid as of December 31,
1997 and 1996, respectively.

An  Affiliate  of  the  General  Partner  performed  marketing  and advertising
services for the Partnership and  was  reimbursed  (as set forth under terms of
the Partnership Agreement) for direct  costs.   Such costs of $123,333, $57,870
and $84,033 have  been  incurred  and  are  included  in  marketing expenses to
Affiliates for the years ended December  31, 1997, 1996 and 1995, respectively,
of which $151,908 and $30,091  was  unpaid  as  of  December 31, 1997 and 1996,
respectively.

An Affiliate of  the  General  Partner  performed  property upgrades, rezoning,
annexation and other activities  to  prepare the Partnership's land investments
for sale and  was  reimbursed  (as  set  forth  under  terms of the Partnership
Agreement) for salaries and direct  costs.    The Affiliate did not recognize a
profit on any project.  Such costs  of $233,540 and $118,765 have been incurred
for the years ended December 31,  1997 and 1996, respectively, and are included
in investments in land, of which $113,878 and $58,347 was unpaid as of December
31, 1997 and 1996, respectively.











                                     -23-



<TABLE>
                                               INLAND LAND APPRECIATION FUND, L.P.
                                                     (a limited partnership)

                                                  Notes to Financial Statements
                                                           (continued)

(4) Investments in Land and Improvements
<CAPTION>

                                                                                                              Total
                   Gross                            Initial Costs                 Costs                     Remaining    Current
                   Acres    Purchase/  --------------------------------------  Capitalized     Costs of      Costs of   Year Gain
       Location: Purchased    Sales       Original  Acquisition     Total     Subsequent to    Property     Parcels at   on Sale
Parcel  County    (Sold)      Date         Costs       Costs        Costs      Acquisition       Sold        12/31/97   Recognized
------ --------- ---------- ---------- ------------ ------------ ------------ -------------- ------------ ------------ ------------
 <S>    <C>        <C>       <C>           <C>          <C>         <C>          <C>           <C>              <C>        <C>
 1      Kendall    84.7360   01/19/89  $   423,680       61,625      485,305      5,462,589    5,947,894          -          6,032
                   (3.5200)  12/24/96
                    (.3520)  11/25/97
                  (80.8640)  12/29/97

 2      McHenry   223.4121   01/19/89      650,000       95,014      745,014         21,538      611,505       155,047        -
                 (183.3759)  12/27/90  

 3      Kendall    20.0000   02/09/89      189,000       13,305      202,305           -         202,305          -           -
                  (20.0000)  05/08/90  

 4      Kendall    69.2760   04/18/89      508,196       38,126      546,322         49,408      235,275       360,455        -
                    (.4860)  02/28/91
                  (27.5750)  08/25/95

 5      Kendall   372.2230   05/03/89    2,532,227      135,943    2,668,170         26,288      160,313     2,534,145        -
        (a)        (Option)  04/06/90  

 6      Kendall    78.3900   06/21/89      416,783       31,691      448,474        187,301         -          635,775        -
        (b)
 7      Kendall    77.0490   06/21/89       84,754        8,163       92,917        172,438         -          265,355        -
        (b)
 8      Kendall     5.0000   06/21/89       60,000        5,113       65,113           -          65,113          -           -
        (b)        (5.0000)  10/06/89

 9      McHenry    51.0300   08/07/89      586,845       22,482      609,327          1,893         -          611,220        -
        (b)
10      McHenry   123.9400   08/07/89       91,939        7,224       99,163            600       99,763          -           -
        (b)      (123.9400)  12/06/89

11      McHenry    30.5920   08/07/89      321,216       22,641      343,857          6,292         -          350,149        -
        (b)
12      Kendall    90.2710   10/31/89      907,389       41,908      949,297          1,034        7,456       942,875        -
                    (.7090)  04/26/91

13      McHenry    92.7800   11/07/89      251,306       19,188      270,494          4,105        6,136       268,463      19,674
                   (2.0810)  09/18/97

14      McHenry    76.2020   11/07/89      419,111       23,402      442,513         43,470         -          485,983        -

15       Lake      84.5564   01/03/90    1,056,955       85,283    1,142,238      1,486,450      437,606     2,191,082     318,561
                  (10.5300)  Var 1996
                   (5.4680)  Var 1997  ------------ ------------ ------------ -------------- ------------ ------------ ------------
                                       
        Subtotal                       $ 8,499,401      611,108    9,110,509      7,463,406    7,773,366     8,800,549     344,267




                                                                   -24-


                                     -24-



                                                    INLAND LAND APPRECIATION FUND, L.P.
                                                          (a limited partnership)

                                                       Notes to Financial Statements
                                                                (continued)



(4) Investments in Land and Improvements (continued)
                                                                                                              Total
                   Gross                            Initial Costs                 Costs                     Remaining    Current
                   Acres    Purchase/  --------------------------------------  Capitalized     Costs of      Costs of   Year Gain
       Location: Purchased    Sales       Original  Acquisition     Total     Subsequent to    Property     Parcels at   on Sale
Parcel  County    (Sold)      Date         Costs       Costs        Costs      Acquisition       Sold        12/31/97   Recognized
------ --------- ---------- ---------- ------------ ------------ ------------ -------------- ------------ ------------ ------------
 <S>    <C>        <C>       <C>           <C>          <C>         <C>          <C>           <C>              <C>        <C>

       Subtotal                        $ 8,499,401      611,108    9,110,509      7,463,406    7,773,366    8,800,549    344,267

16  Kane/Kendall  72.4187    01/29/90    1,273,537       55,333    1,328,870         88,431         -       1,417,301       -

17      McHenry   99.9240    01/29/90      739,635       61,038      800,673        298,509         -       1,099,182       -

18      McHenry   71.4870    01/29/90      496,116       26,259      522,375         20,418       11,109      531,684       -
                  (1.0000)   Var 1990
                   (.5200)   03/11/93

19      McHenry   63.6915    02/23/90      490,158       29,158      519,316          7,646         -         526,962       -

20       Kane    224.1480    02/28/90    2,749,800      183,092    2,932,892        352,185        3,651    3,281,426       -
                   (.2790)   10/17/91

21      Kendall  172.4950    03/08/90    1,327,459       75,822    1,403,281        864,077         -       2,267,358       -

22      McHenry  254.5250    04/11/90    2,608,881      136,559    2,745,440         29,430         -       2,774,870       -

23      Kendall  140.0210    05/08/90    1,480,000      116,240    1,596,240        573,801    1,196,909      973,132       -
                  (4.4100)   Var 1993
                 (35.8800)   Var 1994
                  (3.4400)   Var 1995

24      Kendall  298.4830    05/23/90    1,359,774       98,921    1,458,695         19,068       83,663    1,394,100       -
                 (12.4570)   05/25/90
                  (4.6290)   04/01/96

25       Kane    225.0000    06/01/90    2,600,000      168,778    2,768,778         13,448         -       2,782,226       -
                                       ------------ ------------ ------------ -------------- ------------ ------------ ----------
                                       $23,624,761    1,562,308   25,187,069      9,730,419    9,068,698   25,848,790    344,267
                                       ============ ============ ============ ============== ============ ============ ==========



</TABLE>











                                                                   -25-

                                     -25-



                      INLAND LAND APPRECIATION FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)


(4) Investments in Land and Improvements (continued)

(a) Included in  the  purchase  agreement  of  Parcel  5  was  a condition that
    required the Partnership to  buy  an  option  to purchase an additional 243
    acres immediately to the west of this parcel.  The sale transaction relates
    to the sale of this option.

(b) The Partnership  purchased  from  two  third  parties,  two  sets  of three
    contiguous parcels of land (Parcels 6, 7  and 8; and Parcels 9, 10 and 11).
    The General Partner believes  that  the  total  value  of this land will be
    maximized if it is treated and  marketed  to buyers as six separate parcels
    and closed the transactions as  six  separate purchases to facilitate this.
    Parcels 6, 7 and 8 will be treated  as  one parcel and Parcels 9, 10 and 11
    will be treated as one parcel  for purposes of computing Parcel Capital (as
    defined) and distributions to the Partners.

(c) Reconciliation of investments in land and improvements owned:

                                          1997               1996
                                          ----               ----
    Balance at January 1,...........  $28,676,326         24,846,973
    Additions during year...........    3,018,999          4,397,239
    Sales during year...............    5,846,535            567,886
                                      ------------       ------------
    Balance at December 31,.........  $25,848,790         28,676,326
                                      ============       ============

(d) The aggregate  cost  of  investments  in  land  and  improvements  owned at
    December  31,  1997  for  Federal  income  tax  purposes  was approximately
    $25,850,000 (unaudited).


(5) Rental Income

The Partnership has determined that all leases relating to the farm parcels are
operating leases.  Accordingly, rental income is reported when earned.

As of December 31, 1997, the Partnership  had farm leases of generally one year
in duration, for approximately  2,110  acres  of  the approximately 2,575 acres
owned.










                                     -26-



                      INLAND LAND APPRECIATION FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)


(6) Mortgage Loans Receivable

As a result of the sale of the remaining approximately 81 acres of Parcel 1 for
a sales price of $5,750,000  on  December  29,  1997, the purchaser assumed the
note payable  to  an  Affiliate  on  this  parcel  totaling  $3,325,515 and the
interest  payable  to  the  Affiliate  of  $254,396.  The  Partnership received
mortgage loans receivable  totaling  $2,170,089  and  recorded deferred gain on
sale of $106,905. The deferred  gain  will  be  recognized over the life of the
related mortgage loans receivable  as  principal  payments are received. Of the
$2,170,089 mortgage loan receivable  received,  $575,000 accrues interest at 9%
per annum and has a maturity date  of  July  1, 1998, at which time all accrued
interest, as  well  as  principal,  is  due.  The  remaining $1,595,089 accrues
interest at 9% per annum and has a maturity date of December 30, 2000, at which
time all accrued interest, as well as principal, is due.


(7) Notes Payable to Affiliate

On May 1, 1996, the  Partnership  obtained  a  line  of credit from the General
Partner, Inland Real Estate Investment  Corporation, in the aggregate amount of
$1,000,000 to be  used  specifically  for  the  pre-development improvements on
Parcel 15. The Partnership is  required  to  pay  a  1% loan fee to the General
Partner as money is funded. The note  accrues interest at 10.9%, and required a
principal paydown of $150,000  on  October  1,  1996,  and thereafter Net Sales
Proceeds from Parcel 15 are being applied  first to paydown the note. This note
had an original maturity date of May 1, 1997, but has been extended to February
1, 1998 at the same interest rate. As of December 31, 1997, the balance of this
note was $201,778. For the years ended  December 31, 1997 and 1996, interest of
$36,579 and $26,817 was capitalized, of  which $20,292 and $3,942 was unpaid as
of December 31, 1997 and  1996,  respectively.  For the year ended December 31,
1997, loan fees incurred and paid  to  the General Partner totaled $791 and are
included in investment in land  and  improvements.  For the year ended December
31, 1997, loan extension fees incurred  and paid to the General Partner totaled
$1,250 and are included in investment in land and improvements.

On June 1, 1996, the  Partnership  obtained  a  line of credit from the General
Partner, Inland Real Estate Investment  Corporation, in the aggregate amount of
$3,000,000 to be  used  specifically  for  the  pre-development improvements on
Parcel 1. The Partnership is  required  to  pay  a  1%  loan fee to the General
Partner as money is funded. The  note  accrues interest at 10.9%, and Net Sales
Proceeds from Parcel 1 are being  applied  first to paydown the note. This note
had an original maturity date of May 1, 1997, but had been extended to February
1, 1998 at the same  interest  rate.  With  the  sale of the remaining acres of
Parcel 1 on December 29, 1997, the  buyer assumed this note which had a balance
of $3,325,515 at that time.  For  the  years  ended December 31, 1997 and 1996,
interest of $288,866 and $44,092 was  capitalized, none of which is unpaid. For
the year ended December 31, 1997,  loan  fees  incurred and paid to the General
Partner  totaled  $13,790  and   are   included   in  investment  in  land  and
improvements. For  the  year  ended  December  31,  1997,  loan  extension fees
incurred and paid to the  General  Partner  totaled $21,280 and are included in
investment in land and improvements.


                                     -27-



                      INLAND LAND APPRECIATION FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)


On May 12, 1997, the  Partnership  obtained  a  line of credit from the General
Partner, Inland Real Estate Investment  Corporation, in the aggregate amount of
$744,000 to be used specifically for the pre-development improvements on Parcel
21. The note accrues interest  at  9.625%  and  has  a maturity date of May 12,
1998. Interest-only payments on this note are due quarterly and the loan may be
prepaid at any time without penalty.  As  of  December 31, 1997, the balance of
this note was $601,293.  For  the  year  ended  December  31, 1997, interest of
$29,170 was capitalized, of which $29,170 was unpaid as of December 31, 1997.

As of December 31,  1997,  Inland  Real  Estate Investment Corporation has made
loans to the  Partnership  totaling  $2,480,400.    Net sales proceeds totaling
$1,849,815 from Parcels 1, 4, 12,  15,  20, 23, and 24 were previously retained
and used to fund pre-development activity  on certain of the Partnership's land
investments. In July 1997, the Partnership replenished these net sales proceeds
by obtaining a loan from the General Partner.  The remainder of funds loaned to
the Partnership were for Partnership operations.   The note accrues interest at
10% per annum and has a maturity date  of  January 1, 1999.  For the year ended
December 31, 1997 and 1996, interest of $135,859 and $2,361 was capitalized, of
which $134,850 and $2,361 was unpaid  as  of December 31, 1997 and December 31,
1996, respectively.






























                                     -28-



Item 9.  Changes in and Disagreements  with  Independent Auditors on Accounting
         and Financial Disclosure

There were  no  disagreements  on  accounting  or  financial disclosure matters
during 1997.


                                   PART III


Item 10.  Directors and Executive Officers of the Registrant

The  General  Partner  of  the   Partnership,  Inland  Real  Estate  Investment
Corporation, was organized in 1984 for the purpose of acting as general partner
of limited partnerships formed  to  acquire,  own  and operate real properties.
The General Partner is a wholly-owned subsidiary  of The Inland Group, Inc.  In
1990, Inland Real Estate Investment  Corporation became the replacement General
Partner for an additional 301  privately-owned real estate limited partnerships
syndicated by Affiliates.    The  General  Partner  has  responsibility for all
aspects of the  Partnership's  operations.    The  relationship  of the General
Partner  to  its  Affiliates  is  described  under  the  caption  "Conflicts of
Interest" at pages 11 to 13 of  the  Prospectus, a copy of which description is
hereby incorporated herein by reference.


Officers and Directors

The officers, directors, and key  employees  of  The Inland Group, Inc. and its
Affiliates ("Inland") that are  likely  to  provide services to the Partnership
are as follows:


                               Functional Title

  Daniel L. Goodwin....... Chairman and Chief Executive Officer
  Robert H. Baum.......... Executive Vice President-General Counsel
  G. Joseph Cosenza....... Senior Vice President-Acquisitions
  Robert D. Parks......... Senior Vice President-Investments
  Norbert J. Treonis...... Senior Vice President-Property Management
  Catherine L. Lynch...... Treasurer
  Paul J. Wheeler......... Vice President-Personal Financial Services Group
  Roberta S. Matlin....... Assistant Vice President-Investments
  Mark Zalatoris.......... Assistant Vice President-Due Diligence
  Patricia A. Challenger.. Vice President-Asset Management
  Kelly Tucek............. Assistant Vice President-Partnership Accounting
  Venton J. Carlston...... Assistant Controller











                                     -29-



    DANIEL L. GOODWIN (age 54)   is  Chairman  of the Board of Directors of The
Inland Group, Inc.,  a  billion-dollar  real  estate and financial organization
located in Oak Brook,  Illinois.    Among  Inland's subsidiaries is the largest
property management firm in  Illinois  and  one  of the largest commercial real
estate and mortgage banking firms in the Midwest.

Mr. Goodwin has served as Director  of  the  Avenue  Bank  of Oak Park and as a
Director of the Continental Bank of  Oakbrook  Terrace.  He was Chairman of the
Bank Holding Company of American National Bank  of DuPage.  Currently he is the
Chairman of the Board of Inland Mortgage Investment Corporation.

Mr. Goodwin has been in the  housing  industry  for more than 28 years, and has
demonstrated a lifelong interest in  housing-related  issues.  He is a licensed
real estate broker and a member  of  the  National Association of Realtors.  He
has developed thousands of housing units  in the Midwest, New England, Florida,
and the Southwest.   He  is  also  the  author  of a nationally recognized real
estate reference book for the management of residential properties.

Mr. Goodwin has served on  the  Board  of the Illinois State Affordable Housing
Trust Fund for the past 7 years.    He  is an advisor for the Office of Housing
Coordination Services of the State  of  Illinois,  and  a member of the Seniors
Housing Committee of the  National  Multi-Housing  Council.  Recently, Governor
Edgar appointed  him  Chairman  of  the  Housing  Production  Committee for the
Illinois State Affordable Housing Conference.    He  also served as a member of
the Cook County Commissioner's  Economic  Housing Development Committee, and he
was the Chairman of the DuPage County  Affordable Housing Task Force.  The 1992
Catholic  Charities  Award  was  presented  to  Mr.  Goodwin  for  his  work in
addressing affordable housing needs.   The  City  of Hope designated him as the
Man of the Year for the Illinois  construction industry.  In 1989,  the Chicago
Metropolitan  Coalition  on  Aging  presented  Mr.  Goodwin  with  an  award in
recognition of his  efforts  in  making  housing  more  affordable to Chicago's
Senior Citizens.  On May 4, 1995, PADS, Inc. (Public Action to Deliver Shelter)
presented Mr. Goodwin  with  an  award,  recognizing  The  Inland  Group as the
leading corporate provider of transitional  housing  for the homeless people of
DuPage County.  Mr. Goodwin also  serves  as Chairman of New Directions Housing
Corporation, a leading provider of affordable housing in northern Illinois.

Mr. Goodwin is a product  of  Chicago-area schools, and obtained his Bachelor's
and Master's Degrees  from  Illinois  Universities.    Following graduation, he
taught for five  years  in  the  Chicago  Public  Schools.    His commitment to
education has continued  through  his  work  with  the Better Boys Foundation's
Pilot  Elementary  School  in  Chicago,  and  the  development  of  the  Inland
Vocational Training  Center  for  the  Handicapped  located  at  Little City in
Palatine, Illinois.   He  personally  established  an  endowment  which funds a
perpetual scholarship program for inner-city  disadvantaged  youth.  In 1990 he
received the Northeastern  Illinois  University President's Meritorious Service
Award.  Mr. Goodwin holds a Master's Degree in Education from Northern Illinois
University, and in 1986, he was awarded an Honorary Doctorate from Northeastern
Illinois University College of Education.    More  than 12 years ago, under Mr.
Goodwin's direction, Inland instituted  a  program to educate disabled students
about the workplace.  Most  of  these  original  students are still employed at
Inland today, and Inland  continues  as  one  of  the  largest employers of the
disabled in DuPage County.  Mr. Goodwin has  served as a member of the Board of
Governors of Illinois State Colleges  and  Universities,  and he is currently a
trustee of Benedictine University.    He  was  elected Chairman of Northeastern
Illinois University Board of Trustees in January 1996.

                                     -30-



Mr. Goodwin served as a  member  of  Governor  Jim Edgar's Transition Team.  In
1988 he received  the  Outstanding  Business  Leader  Award  from the Oak Brook
Jaycees and has  been  the  General  Chairman  of  the National Football League
Players Association Mackey Awards  for  the  benefit  of  inner-city youth.  He
served as the recent Chairman  of  the  Speakers  Club of the Illinois House of
Representatives.  In March 1994, he  won  the Excellence in Business Award from
the DuPage Area Association  of  Business  and  Industry.  Additionally, he was
honored by Little Friends on May 17, 1995 for rescuing their Parent-Handicapped
Infant Program when they lost their  lease.    He was the recipient of the 1995
March of Dimes Life Achievement Award  and  was recently recognized as the 1997
Corporate Leader of the Year by the  Oak Brook Area Association of Commerce and
Industry.

    ROBERT H. BAUM (age  54)  has  been  with  The  Inland  Group, Inc. and its
affiliates since 1968 and is one of  the four original principals.  Mr. Baum is
Vice Chairman and Executive Vice President-General Counsel of The Inland Group,
Inc.  In his  capacity  as  General  Counsel,  Mr.  Baum is responsible for the
supervision  of  the  legal  activities  of  The  Inland  Group,  Inc.  and its
affiliates.  This responsibility  includes  the  supervision  of The Inland Law
Department and serving as liaison with outside counsel.  Mr. Baum has served as
a member  of  the  North  American  Securities  Administrators Association Real
Estate Advisory Committee and as a  member of the Securities Advisory Committee
to the Secretary  of  State  of  Illinois.    He  is  a  member of the American
Corporation Counsel Association and  has  also  been  a  guest lecturer for the
Illinois State Bar Association.   Mr. Baum has been admitted to practice before
the Supreme Court of the United States,  as well as the bars of several federal
courts of appeals and federal district  courts  and  the State of Illinois.  He
received his B.S. Degree from the  University  of Wisconsin and his J.D. Degree
from Northwestern University School of Law.   Mr. Baum has served as a director
of American National Bank of  DuPage.    Currently,  he serves as a director of
Westbank, and is  a  member  of  the  Governing  Council  of  Wellness House, a
charitable organization that provides emotional support for cancer patients and
their families. 

    G. JOSEPH COSENZA (age 54)  has  been  with  The Inland Group, Inc. and its
affiliates since 1968 and is one of  the four original principals.  Mr. Cosenza
is a Director  and  Vice  Chairman  of  The  Inland  Group,  Inc. and oversees,
coordinates and directs Inland's  many  enterprises.   In addition, immediately
supervises a staff of eight  persons  who  engage in property acquisition.  Mr.
Cosenza has  been  a  consultant  to  other  real  estate  entities and lending
institutions on property appraisal methods.

Mr. Cosenza received his B.A.  Degree from Northeastern Illinois University and
his M.S. Degree from  Northern  Illinois  University.    From  1967 to 1968, he
taught at the LaGrange School District  in  Hodgkins, Illinois and from 1968 to
1972, he served as  Assistant  Principal  and  taught in the Wheeling, Illinois
School District.  Mr. Cosenza has been a licensed real estate broker since 1968
and an active member of  various  national  and local real estate associations,
including the National Association of Realtors and the Urban Land Institute.

Mr. Cosenza has also been Chairman  of  the  Board of American National Bank of
DuPage, and has  served  on  the  Board  of  Directors  of  Continental Bank of
Oakbrook Terrace.   He  is  presently  Chairman  of  the  Board  of Westbank in
Westchester and Hillside, Illinois.



                                     -31-



    ROBERT D. PARKS  (age  54)    is  a  Director  of  The  Inland Group, Inc.,
President,  Chairman  and  Chief  Executive   Officer  of  Inland  Real  Estate
Investment Corporation and President,  Chief Executive Officer, Chief Operating
Officer and Affiliated Director of Inland Real Estate Corporation.

Mr. Parks is responsible for  the ongoing administration of existing investment
programs,  corporate  budgeting  and  administration  for  Inland  Real  Estate
Investment Corporation.   He  oversees  and  coordinates  the  marketing of all
investments and investor relations. 

Prior to joining Inland, Mr.  Parks  was  a  school teacher in Chicago's public
schools.  He received his B.A. degree from Northeastern Illinois University and
his M.A. degree from the  University  of  Chicago.    He is a registered Direct
Participation Program Principal  with  the  National  Association of Securities
Dealers, Inc., and he is a member of the Real Estate Investment Association and
a member of NAREIT.

    NORBERT J.  TREONIS  (age  47)    joined  The  Inland  Group,  Inc. and its
affiliates in 1975 and he is  currently Chairman and Chief Executive Officer of
The Inland Property Management Group, Inc.  and a Director of The Inland Group,
Inc.  He serves on the  Board  of Directors of all Inland subsidiaries involved
in the  property  management,  acquisitions  and  maintenance  of  real estate,
including  Mid-America  Property   Management   Corporation,  and  Metropolitan
Construction Services, Inc.  Mr. Treonis  is charged with the responsibility of
the overall management and leasing  of  all apartment units, retail, industrial
and commercial properties nationwide.

Mr. Treonis is a licensed real estate broker.  He is a past member of the Board
of Directors of American National  Bank  of  DuPage, the Apartment Builders and
Managers Association of Illinois,  the  National  Apartment Association and the
Chicagoland Apartment Association.

Mr. Treonis  has  been  the  Chairman  of  the  Board  of  Directors  of Inland
Commercial Property Management, Inc. since its formation in 1994.

    CATHERINE L. LYNCH (age 39) joined  Inland  in 1989 and is the Treasurer of
Inland Real  Estate  Investment  Corporation.    Ms.  Lynch  is responsible for
managing the Corporate Accounting  Department.    Prior  to joining Inland, Ms.
Lynch worked in the  field  of  public  accounting  for KPMG Peat Marwick since
1980.    She  received  her  B.S.  degree  in  Accounting  from  Illinois State
University.  Ms. Lynch is  a  Certified  Public  Accountant and a member of the
American  Institute  of  Certified  Public  Accountants  and  the  Illinois CPA
Society.  She is registered with the National Association of Securities Dealers
as a Financial Operations Principal.

    PAUL J. WHEELER (age  45)    joined  Inland  in  1982  and is currently the
President of  Inland  Property  Sales,  Inc.,  the  entity  responsible for all
corporately owned  real  estate.    Mr.  Wheeler  received  his  B.A. degree in
Economics from  DePauw  University  and  an  M.B.A.  in Finance/Accounting from
Northwestern University.   Mr.  Wheeler  is  a  Certified Public Accountant and
licensed real estate broker.    For  three  years  prior to joining Inland, Mr.
Wheeler was Vice President/Finance at the real estate brokerage firm of Quinlan
& Tyson, Inc.




                                     -32-



    ROBERTA S. MATLIN (age 53)   joined  Inland in 1984 as Director of Investor
Administration  and  currently  serves  as  Senior  Vice President-Investments.
Prior to that, Ms. Matlin spent 11  years with the Chicago Region of the Social
Security Administration of the  United  States  Department  of Health and Human
Services.  As  Senior  Vice  President-Investments,  she directs the day-to-day
internal operations of  the  General  Partner.    Ms.  Matlin received her B.A.
degree from the University of  Illinois.    She is registered with the National
Association of Securities Dealers, Inc. as a General Securities Principal.

    MARK ZALATORIS (age 40) joined Inland  in 1985 and currently serves as Vice
President of Inland Real  Estate  Investment Corporation.  His responsibilities
include the coordination of due  diligence activities by selling broker/dealers
and is also involved  with  limited  partnership asset management including the
mortgage funds.  Mr.  Zalatoris  is  a  graduate  of the University of Illinois
where he received  a  Bachelors  degree  in  Finance  and  a  Masters degree in
Accounting and Taxation.   He  is  a  Certified  Public  Accountant and holds a
General Securities License with Inland Securities Corporation.

    PATRICIA A. CHALLENGER (age  45)  joined  Inland  in  1985.  Ms. Challenger
serves as Senior Vice President of Inland Real Estate Investment Corporation in
the area of Asset Management.  As  head of the Asset Management Department, she
develops  operating  and   disposition   strategies  for  all  investment-owned
properties.    Ms.  Challenger  received  her  Bachelor's  degree  from  George
Washington University and  her  Master's  from  Virginia  Tech University.  Ms.
Challenger was selected and  served  from  1980-1984 as Presidential Management
Intern, where she was part of a special government-wide task force to eliminate
waste, fraud and abuse  in  government  contracting  and  also served as Senior
Contract Specialist  responsible  for  capital  improvements  in 109 government
properties.  Ms. Challenger is  a  licensed real estate broker, NASD registered
securities sales representative and is a member of the Urban Land Institute. 

    KELLY TUCEK (age  35)  joined  Inland  in  1989  and  is  an Assistant Vice
President of Inland Real Estate Investment Corporation.  As of August 1996, Ms.
Tucek is responsible for  the  Investment  Accounting Department which includes
all public partnership accounting functions along with quarterly and annual SEC
filings.  Prior to joining Inland, Ms.  Tucek was on the audit staff of Coopers
and Lybrand since  1984.    She  received  her  B.A.  Degree  in Accounting and
Computer Science from North Central College.

    VENTON J. CARLSTON (age 40)    joined  Inland  in 1985 and is the Assistant
Controller of Inland Real Estate Investment Corporation where he supervises the
corporate  bookkeeping  staff  and   is  responsible  for  financial  statement
preparation and budgeting for Inland Real Estate Investment Corporation and its
subsidiaries.    Prior  to  joining  Inland,  Mr.  Carlston  was  a partnership
accountant with JMB Realty.   He  received  his  B.S. degree in Accounting from
Southern Illinois University.   Mr.  Carlston  is a Certified Public Accountant
and a member of the Illinois CPA  Society.   He is registered with the National
Association of Securities Dealers, Inc. as a Financial Operations Principal.









                                     -33-



Item 11.  Executive Compensation

The General Partner is entitled to receive a share of cash distributions of Net
Sales Proceeds based  upon  both  an  aggregate  overall  return to the Limited
Partners and a separate return with respect to each parcel of land purchased by
the Partnership as described under the caption "Cash Distributions" and a share
of profits or losses as described  under  the caption "Allocation of Profits or
Losses" at  page  38  of  the  Prospectus,  and  at  pages  A-6  to  A-9 of the
Partnership Agreement, included as  an  exhibit  to  the  Prospectus, a copy of
which descriptions is incorporated herein by reference.

The Partnership  is  permitted  to  engage  in  various  transactions involving
Affiliates of the General Partner  of  the  Partnership, as described under the
captions "Compensation and Fees" at  pages  7-9  and "Conflicts of Interest" at
pages 9-11 of the Prospectus, and at pages A-10 through A-19 of the Partnership
Agreement, included as  an  exhibit  to  the  Prospectus,  a  copy  of which is
incorporated herein by reference. The  relationship of the General Partner (and
its directors and officers) to its Affiliates is set forth above in Item 10.

The General Partner and its Affiliates  may be reimbursed for their expenses or
out-of-pocket costs relating to the  administration of the Partnership. For the
year ended December 31, 1997,  such  costs  were  $77,252, of which $90,278 was
unpaid as of December 31, 1997.

The General Partner is entitled  to  receive  an  Asset Management Fee equal to
one-quarter of 1% of the original  cost  to the Partnership of undeveloped land
annually, limited to a cumulative total over  the life of the Partnership of 2%
of the land's original cost to  the  Partnership.   For the year ended December
31, 1997, the Partnership incurred  $55,279  in Asset Management Fees, of which
$55,279 was unpaid.

An  Affiliate  of  the  General  Partner  performed  marketing  and advertising
services for the Partnership and  was  reimbursed  (as set forth under terms of
the Partnership Agreement) for direct  costs.  For  the year ended December 31,
1997, the Partnership incurred $123,333  of  such  costs, of which $151,908 was
unpaid.

An Affiliate of  the  General  Partner  performed  property upgrades, rezoning,
annexation and other activities  to  prepare the Partnership's land investments
for sale and  was  reimbursed  (as  set  forth  under  terms of the Partnership
Agreement) for salaries and direct costs. For the year ended December 31, 1997,
the Partnership incurred $233,540 of such  costs, of which $113,878 was unpaid,
and included in the investments in land  and improvements.   As of December 31,
1997, notes  payable  to  Affiliate  totaled  $3,283,471.  For  the  year ended
December 31, 1997, interest of $490,474  was capitalized, of which $184,312 was
unpaid as of December 31, 1997.   The  Partnership is required to pay a 1% loan
fee to the General Partner on lines of credit as money is funded.  For the year
ended December 31, 1997, loan fees paid to the General Partner totaled $13,572,
all  of  which  have  been  paid   and  included  in  investment  in  land  and
improvements.







                                     -34-



Item 12. Security Ownership of Certain Beneficial Owners and Management

  (a) No person or group is known  by  the Partnership to own beneficially more
      than 5% of the outstanding Units of the Partnership

  (b) The officers and directors of the  General Partner of the Partnership own
      as a group the following Units of the Partnership:


                                Amount and Nature        
                                 of Beneficial              Percent
       Title of Class           Ownership                   of Class
       --------------         -------------------        -------------
       Limited Partnership    267 Units directly          Less than 1%
       Units


      No  officer  or  director  of  the  General  Partner  of  the Partnership
      possesses a  right  to  acquire  beneficial  ownership  of  Units  of the
      Partnership.

      All of the outstanding shares  of  the General Partner of the Partnership
      are owned by an  Affiliate  or  its  officers  and directors as set forth
      above in Item 10.

  (c) There exists no arrangement, known  to  the Partnership, the operation of
      which may at a  subsequent  date  result  in  a  change in control of the
      Partnership.


Item 13. Certain Relationships and Related Transactions

There were  no  significant  transactions  or  business  relationships with the
General Partner, Affiliates or their  management  other than those described in
Items 10 and 11 above.  Reference is  made  to Note 3 of the Notes to Financial
Statements (Item 8 of  this  Annual  Report)  for information regarding related
party transactions.




















                                     -35-



                                    PART IV


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

  (a) The financial statements listed in  the  index  at page 11 of this Annual
      Report are filed as part of this Annual Report.

  (b) Exhibits. The following documents are filed as part of this report:

      3 Restated Certificate of  Limited  Partnership  and amended and restated
      Agreement of Limited Partnership,  included  as  Exhibits  A and B of the
      Prospectus dated  October  12,  1988  as  supplemented,  are incorporated
      herein by reference thereto.

      4  Form  of  Certificate  of  Ownership  representing  interests  in  the
      registrant filed as Exhibits 4(a)  and  4(b) to Registration Statement on
      Form  S-11,  File  No.  33-18607,  is  incorporated  herein  by reference
      thereto.

      28 Prospectus, to Form S-11 Registration Statement, File No. 33-18607, as
      filed  with  Securities  Exchange  Commission  on  October  12,  1988, as
      supplemented to date, is incorporated herein by reference thereto.


  (c) Financial Statement Schedules.

      All  schedules  have  been   omitted   as  the  required  information  is
      inapplicable or the information is  presented in the financial statements
      or related notes.


  (d) Reports on Form 8-K:

      None.


No Annual Report or proxy  material  for  the  year  1997  has been sent to the
Partners of the Partnership.   An  Annual  Report  will be sent to the Partners
subsequent to this  filing  and  the  Partnership  will  furnish copies of such
report to the Commission when it is sent to the Partners.
















                                     -36-



                                  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.

                            INLAND LAND APPRECIATION FUND, L.P.
                            Inland Real Estate Investment Corporation
                            General Partner

                                  /s/ Robert D. Parks

                            By:   Robert D. Parks
                                  Chairman of the Board
                                  and Chief Executive Officer
                            Date: March 26, 1998

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 and on the dates indicated:

                            By:   Inland Real Estate Investment Corporation
                                  General Partner

                                  /s/ Robert D. Parks

                            By:   Robert D. Parks
                                  Chairman of the Board
                                  and Chief Executive Officer
                            Date: March 26, 1998

                                  /s/ Patricia A. Challenger

                            By:   Patricia A. Challenger
                                  Senior Vice President
                            Date: March 26, 1998

                                  /s/ Kelly Tucek

                            By:   Kelly Tucek
                                  Principal Financial Officer
                                  and Principal Accounting Officer
                            Date: March 26, 1998

                                  /s/ Daniel L. Goodwin

                            By:   Daniel L. Goodwin
                                  Director
                            Date: March 26, 1998

                                  /s/ Robert H. Baum

                            By:   Robert H. Baum
                                  Director
                            Date: March 26, 1998


                                     -37-