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, 2004



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.



Indicate by a checkmark whether the registrant is an accelerated filer (as defined in Securities Exchange Act

Rule 12b-2)    __ Yes    X No

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INLAND LAND APPRECIATION FUND, L.P.

(a limited partnership)



TABLE OF CONTENTS

|           | Part I                                                                                        | Page
|---------- | --------------------------------------------------------------------------------------------- | ----
|           |                                                                                               |     
|Item  1.   | Business                                                                                      | 3   
|           |                                                                                               |     
|Item  2.   | Properties                                                                                    | 4   
|           |                                                                                               |     
|Item  3.   | Legal Proceedings                                                                             | 6   
|           |                                                                                               |     
|Item  4.   | Submission of Matters to a Vote of Security Holders                                           | 6   
|           |                                                                                               |     
|           | Part II                                                                                       |     
|           |                                                                                               |     
|Item  5.   | Market for Partnership's Limited Partnership Units and Related Security Holder Matters        | 7   
|           |                                                                                               |     
|Item  6.   | Selected Financial Data                                                                       | 8   
|           |                                                                                               |     
|Item  7.   | Management's Discussion and Analysis of Financial Condition and Results of Operations         | 9   
|           |                                                                                               |     
|Item  7(a) | Quantitative and Qualitative Disclosures About Market Risk                                    | 15  
|           |                                                                                               |     
|Item  8.   | Financial Statements and Supplementary Data                                                   | 16  
|           |                                                                                               |     
|Item  9.   | Changes in and Disagreements with Independent Auditors on Accounting and Financial Disclosure | 36  
|           |                                                                                               |     
|Item 9(a). | Controls and Procedures                                                                       | 36  
|           |                                                                                               |     
|           | Part III                                                                                      |     
|           |                                                                                               |     
|Item 10.   | Directors and Executive Officers of the Registrant                                            | 37  
|           |                                                                                               |     
|Item 11.   | Executive Compensation                                                                        | 40  
|           |                                                                                               |     
|Item 12.   | Security Ownership of Certain Beneficial Owners and Management                                | 42  
|           |                                                                                               |     
|Item 13.   | Certain Relationships and Related Transactions                                                | 42  
|           |                                                                                               |     
|Item 14.   | Principal Accountant Fees and Services                                                        | 42  
|           |                                                                                               |     
|           | Part IV                                                                                       |     
|           |                                                                                               |     
|Item 15.   | Exhibits, Financial Statement Schedules, and Reports on Form 8-K                              | 43  
|           |                                                                                               |     
|           | SIGNATURES                                                                                    | 44  

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PART I

Item 1. Business

Inland Land Appreciation Fund, L.P. was formed in October 1987 to invest in undeveloped land on an all-cash basis and realize appreciation of such land upon resale. On October 12, 1988, we commenced an offering of 10,000  (subject to an increase to 30,000) limited partnership units or units at  $1,000 per unit, pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933. The offering terminated on October 6, 1989, after we sold 30,000 units, at  $1,000 per unit, resulting in gross offering proceeds of $30,000,000, which does not include proceeds from our general partner or our initial limited partner. All of the holders of our units were admitted to our partnership. Inland Real Estate Investment Corporation is our general partner. We 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. Our limited partners share in their portion of benefits of ownership of our real property investments according to the number of units held. As of December 31, 2004, we have repurchased a total of 407.75 Units for $359,484 from various limited partners through the unit repurchase program. Under this program limited partners could under certain circumstances have their units repurchased for an amount equal to their original capital as reduced by distributions from net sale proceeds.



We are engaged in the business of real estate investment which management considers being a single operating segment. A presentation of information about operating segments would not be material to an understanding of our business taken as a whole.

We plan to continue to enhance the value of our remaining land through pre-development activities such as rezoning, annexation and land planning. We have already been successful in, or are in the process of, pre-development activity on several of our land investments. Parcels 4, 6 and 7 have completed two phases of improvements for an industrial park and sites are being marketed and sold.  We have also begun planning and zoning on the residential portion of these parcels.  Zoning and land planning discussions have begun on Parcels 14, 17, 18, 19 and 22.

On February 20, 2004, we sold approximately 224 acres of Parcel 20 for $12,500,000. On March 10, 2004, we sold approximately 90 acres of Parcel 12 for $3,500,000. In March 2004, we paid distributions totaling $10,000,000, which includes $7,864,450 paid to the limited partners and $2,135,550 paid to the general partner. We received sales proceeds of $850,000 from the sale of lots of Parcel 4, 6 and 7.  In December 2004, we paid an additional distribution of $3,100,000 to the limited partners and $499,480 to the general partner. In addition to these sales which occurred in 2004, we anticipate additional sales of Parcels 4, 6 and 7 during 2005. Proceeds from the 2004 sales were used to repay the note payable to our general partner. Undistributed net sales proceeds will be used to cover our operations, including property upgrades. We will evaluate our cash needs throughout the year to determine future distributions.

We had no employees during 2004.



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Access to Our Information

We electronically file our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports with the Securities and Exchange Commission (SEC). The public may read and copy any of the reports that are filed with the SEC at the SEC's Public Reference Room at 450 Fifth Street, NW, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at (800)-SEC-0330. The SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically.

We make available, free of charge through our general partner's website, and by responding to requests addressed to our director of investor relations, the annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports. These reports are available as soon as reasonably practical after such material is electronically filed or furnished to the SEC. Our general partner's website address is www.inland-investments.com. The information contained on this website, or other websites linked to our website, is not part of this document.

Limited Partners

Item 2. Properties

We acquired fee ownership of the following real property investments:

|                                   | Gross Acres    | Remaining | Purchase/Sales    
|---------------------------------- | -------------- | --------- | ------------------
|Parcel & Location                  | Purchased/Sold | Acres     | 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)    
|                                   | (40.0362       |           | sold 05/11/00)    
|                                   |                |           |                   
|Parcel 3, Kendall County, Illinois | 20.0000        | -         | 02/09/89          
|                                   | (20.0000       |           | sold 05/08/90)    
|                                   |                |           |                   
|Parcel 4, Kendall County, Illinois | 69.2760        | 4.7900    | 04/18/89          
|                                   | (.4860         |           | sold 02/28/91)    
|                                   | (27.5750       |           | sold 08/25/95)    
|                                   | (4.4000        |           | sold various 2001)
|                                   | (2.1417        |           | sold various 2002)
|                                   | (23.1033       |           | sold various 2003)
|                                   | (6.7800        |           | sold various 2004)
|                                   |                |           |                   
|Parcel 5, Kendall County, Illinois | 372.2230       | -         | 05/03/89          
|                                   | (Option        |           | sold 04/06/90)    
|                                   | (372.2230      |           | sold 06/20/03)    

As part of the purchase agreement for parcel 5, we were required to buy an option to purchase an additional 243 acres immediately to the west of this parcel. The 1990 sale transaction relates to the sale of this option.

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|                                    | Gross Acres    | Remaining | Purchase/Sales    
|----------------------------------- | -------------- | --------- | ------------------
|Parcel & Location                   | Purchased/Sold | Acres     | Date              
|                                    |                |           |                   
|Parcel 6, Kendall County, Illinois  | 78.3900        | 74.4400   | 06/21/89          
|                                    | (3.9500        |           | sold 11/01/00)    
|                                    |                |           |                   
|Parcel 7, Kendall County, Illinois  | 77.0490        | 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        | 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        | 30.5920   | 08/07/89          
|                                    |                |           |                   
|Parcel 12, Kendall County, Illinois | 90.2710        | -         | 10/31/89          
|                                    | (.7090         |           | sold 04/26/91)    
|                                    | (89.5620       |           | sold 03/10/04)    
|                                    |                |           |                   
|Parcel 13, McHenry County, Illinois | 92.7800        | -         | 11/07/89          
|                                    | (2.0810        |           | sold 09/18/97)    
|                                    | (90.6990       |           | sold 02/15/01)    
|                                    |                |           |                   
|Parcel 14, McHenry County, Illinois | 76.2020        | 76.2020   | 11/07/89          
|                                    |                |           |                   
|Parcel 15, Lake County, Illinois    | 84.5564        | -         | 01/03/90          
|                                    | (10.5300       |           | sold various 1996)
|                                    | (5.4680        |           | sold various 1997)
|                                    | (68.5584       |           | sold various 1998)
|                                    |                |           |                   
|Parcel 16, Kane/Kendall Counties,   | 72.4187        | -         | 01/29/90          
|Illinois                            | (30.9000       |           | sold 07/10/98)    
|                                    | (10.3910       |           | sold 12/15/99)    
|                                    | (3.1000        |           | sold 12/12/00)    
|                                    | (28.0277       |           | sold 05/19/03)    
|                                    |                |           |                   
|Parcel 17, McHenry County, Illinois | 99.9240        | 72.4140   | 01/29/90          
|                                    | (27.5100       |           | sold 01/29/99)    
|                                    |                |           |                   
|Parcel 18, McHenry County, Illinois | 71.4870        | 69.9670   | 01/29/90          
|                                    | (1.0000        |           | sold various 1990)
|                                    | (.5200         |           | sold 03/11/93)    
|                                    |                |           |                   
|Parcel 19, McHenry County, Illinois | 63.6915        | 63.6915   | 02/23/90          
|                                    |                |           |                   
|Parcel 20, Kane County, Illinois    | 224.1480       | -         | 02/28/90          
|                                    | (.2790         |           | sold 10/17/91)    
|                                    | (223.8690      |           | sold 02/20/04)    

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|                                    | Gross Acres    | Remaining | Purchase/Sales    
|----------------------------------- | -------------- | --------- | ------------------
|Parcel & Location                   | Purchased/Sold | Acres     | Date              
|                                    |                |           |                   
|Parcel 21, Kendall County, Illinois | 172.4950       | -         | 03/08/90          
|                                    | (172.4950      |           | sold various 1998)
|                                    |                |           |                   
|Parcel 22, McHenry County, Illinois | 254.5250       | 254.5250  | 04/11/90          
|                                    |                |           |                   
|Parcel 23, Kendall County, Illinois | 140.0210       | -         | 05/08/90          
|                                    | (4.4100        |           | sold various 1993)
|                                    | (35.8800       |           | sold various 1994)
|                                    | (3.4400        |           | sold various 1995)
|                                    | (96.2910       |           | sold 08/26/99)    
|                                    |                |           |                   
|Parcel 24, Kendall County, Illinois | 298.4830       | 211.5770  | 05/23/90          
|                                    | (12.4570       |           | sold 05/25/90)    
|                                    | (4.6290        |           | sold 04/01/96)    
|                                    | (69.82         |           | sold 11/26/02)    
|                                    |                |           |                   
|Parcel 25, Kane County, Illinois    | 225.0000       | 225.0000  | 06/01/90          



Item 3. Legal Proceedings

We are not subject to any material pending legal proceedings.

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

Consistent with our partnership agreement, there were no matters submitted to a vote of our security holders during 2004.

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PART II

Item 5. Market for Our Limited Partnership Units and Related Security Holder Matters

As of March 7, 2005, there were 2,998 holders of our units. There is no public market for units nor is it anticipated that any public market for units will develop.

For the years ended December 31, 2004 and 2003, we paid the following distributions:

|                  |   |            |          
|----------------- | - | ---------- | ---------
|Distributions to: |   | 2004       | 2003     
|                  |   |            |          
|General partners  | $ | 2,635,030  | 1,265,299
|Limited partners  |   | 10,964,450 | 7,100,133
|                  |   |            |          
|Total             | $ | 13,599,480 | 8,365,432

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Item 6. Selected Financial Data

INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
For the years ended December 31, 2004, 2003, 2002, 2001 and 2000
(not covered by the Report of Independent Registered Public Accounting Firm)

|                                                            |   | 2004       | 2003       | 2002       | 2001       | 2000      
|----------------------------------------------------------- | - | ---------- | ---------- | ---------- | ---------- | ----------
|                                                            |   |            |            |            |            |           
|Total assets                                                | $ | 15,372,720 | 21,527,191 | 27,611,879 | 26,413,426 | 25,475,076
|                                                            |   |            |            |            |            |           
|Total income                                                | $ | 17,079,723 | 13,116,054 | 1,916,049  | 1,289,468  | 1,383,351 
|                                                            |   |            |            |            |            |           
|Net income                                                  | $ | 10,150,323 | 6,436,652  | 314,651    | 652,753    | 845,328   
|                                                            |   |            |            |            |            |           
|Net income (loss) allocated to the one general partner unit | $ | 2,632,985  | 1,265,292  | (8,513)    | 2,807      | 3,335     
|                                                            |   |            |            |            |            |           
|Net income allocated per limited partnership unit           | $ | 254.02     | 174.75     | 10.92      | 21.96      | 28.45     
|                                                            |   |            |            |            |            |           
|Distributions per limited partnership unit from sales       | $ | 370.51     | 239.93     | 51.76      | -          | 50.68     
|                                                            |   |            |            |            |            |           
|Weighted average limited partnership units                  |   | 29,593     | 29,593     | 29,593     | 29,593     | 29,596    

The above selected financial data should be read in conjunction with the financial statements and related notes appearing elsewhere in this annual report.

The net income per unit and distributions per unit data is based upon the weighted average number of units outstanding.

All distributions from sales represent a return of original capital until such time as the limited partners have received distributions totaling their original capital.  As of March 2004, the limited partners had received distributions in excess of their original capital.

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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 our 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, the ability to obtain annexation and zoning approvals required to develop our properties; the approval of local governing bodies to develop our properties; successful lobbying of local "no growth" or limited development homeowner groups; adverse changes in real estate, financing and general economic or local conditions; eminent domain proceedings; changes in the environmental conditions or changes in the environmental positions of governmental bodies; and potential conflicts of interest between us and our affiliates, including our general partner.

Critical Accounting Policies

On December 12, 2001, the Securities and Exchange Commission issued Financial Reporting Release or FRR No. 60 "Cautionary Advice Regarding Disclosure About Critical Accounting Policies."  A critical accounting policy is one that would materially affect our operations or financial condition, and requires management to make estimates or judgements in certain circumstances. We believe that our most critical accounting policies relate to how we value our investment properties and mortgage loans receivable and revenue recognition.  These judgements often result from the need to make estimates about the effect of matters that are inherently uncertain.  The purpose of the FRR is to provide investors with an understanding of how management forms these policies.  Critical accounting policies discussed in this section are not to be confused with accounting principles and methods disclosed in accordance with accounting principles generally accepted in the United States of America or GAAP.  GAAP requires information in financial statements about accounting principles, methods used and disclosures pertaining to significant estimates.  The following disclosure discusses judgements known to management pertaining to trends, events or uncertainties known which were taken into consideration upon the application of those policies and the likelihood that materially different amounts would be reported upon taking into consideration different conditions and assumptions.

Valuation of Investment Properties - On a quarterly basis, in accordance with Statement of Financial Accounting Standards No. 144, we conduct an impairment analysis to ensure that the carrying value of each property does not exceed its estimated fair value.  If this were to occur, we would be required to record an impairment loss equal to the excess of carrying value over fair value.

In determining the value of an investment property and whether the property is impaired, management considers several factors such as projected capital expenditures and sales prices. The aforementioned factors are considered by management in determining the value of any particular property.  The value of any particular property is sensitive to the actual results of any of these uncertain factors, either individually or taken as a whole.  Should the actual results differ from management's judgement, the valuation could be negatively or positively affected.

The valuation and possible subsequent impairment of investment properties is a significant estimate that can and does change based on management's continuous process of analyzing each property. For the year ended December 31, 2004, we had recorded no such impairment.

Cost Allocation - We use the area method of cost allocation, which approximates the relative sales method of cost 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.

Valuation of Mortgage Loans Receivable - On a quarterly basis, we conduct an analysis to ensure that the carrying value of each mortgage loan receivable is recoverable from the borrower.  If we determine that all or a portion of the receivable is not collectible, we would be required to record an allowance for doubtful accounts equal to the amount estimated to be uncollectible.

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In determining the value of mortgage loans receivable, management considers projected sales proceeds available and expenses related to the property associated with the mortgage. Should the actual results differ from management's judgement, the valuation could be negatively or positively affected.

The valuation and possible subsequent allowance for doubtful accounts is a significant estimate that can and does change based on management's continuous process of analyzing each mortgage loan receivable. As of December 31, 2004, the partnership has evaluated the mortgage loans receivables and written off $867,832 of previously reserved mortgage loans receivable. In addition, the partnership has recorded and allowance for doubtful accounts of $1,233,175 on the remaining mortgage loan receivable.

Revenue Recognition - We recognize income from the sale of land parcels in accordance with Statement of Financial Standards No. 66, "Accounting for Sales of Real Estate".

Liquidity and Capital Resources

On October 12, 1988, we commenced an offering of 10,000 (subject to increase to 30,000) limited partnership units or units pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933.  On October 6, 1989, the offering terminated after we had sold 30,000 units to the public at $1,000 per unit resulting in $30,000,000 in gross offering proceeds, which does not include proceeds from the initial limited partner and the general partner.  All of the holders of our units were admitted to our partnership. Our limited partners share in their portion of benefits of ownership of our real property investments according to the number of units held.

We 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, 2004, we have had multiple sales transactions, through which we have disposed of approximately 1,891 acres of the approximately 3,102 acres originally owned. As of December 31, 2004, cumulative distributions to the limited partners have totaled $33,169,906 (which exceeds the original capital) and $4,054,072 to the general partner. Through December 31, 2004, we have used $18,002,009 of working capital for rezoning and other activities. Such amounts have been capitalized and are included in investments in land.

Our capital needs and resources will vary depending upon a number of factors, including the extent to which we conduct 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 our land, and the amount of revenue received from leasing.  As of December 31, 2004, we own, in whole or in part, twelve of our 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.

At December 31, 2004, we had cash and cash equivalents of approximately $602,000, which is available to be used for our costs and liabilities, cash distributions to partners and other activities with respect to some or all of our land parcels.

On February 20, 2004, we sold approximately 224 acres of Parcel 20 for $12,500,000. On March 10, 2004, we sold approximately 90 acres of Parcel 12 for $3,500,000. On March 24, 2004, we paid distributions totaling $10,000,000, which includes $7,864,450 paid to the limited partners and $2,135,550 paid to the general partner. We received sales proceeds of $850,000 from the sale of lots of Parcel 4,6 and 7.  In December 2004, we paid an additional distribution of $3,100,000 to the limited partners and $499,480 to the general partner. In addition to these sales which occurred in 2004, we anticipate additional sales of Parcels 4, 6 and 7 during 2005. Proceeds from the 2004 sales were used to repay the note payable to our general partner. Undistributed net sales proceeds will be used to cover our operations, including property upgrades. We will evaluate our cash needs throughout the year to determine future distributions. We continue to market our remaining acres for sale.

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We plan to enhance the value of our land through pre-development activities such as rezoning, annexation and land planning. We have already been successful in, or are in the process of, pre-development activity on several of our land investments. Parcels 4, 6 and 7 have completed two phases of improvements for an industrial park and sites are being marketed. We have also begun planning and zoning on the residential portion of these parcels. Zoning and land planning discussions have begun on Parcels 14, 17, 18, 19 and 22.

Transactions with Related Parties

Our general partner and its affiliates are entitled to reimbursement for salaries and expenses of employees of the general partner and its affiliates relating to our administration. Such costs of $48,039, $55,631 and $62,640 are included in professional services to affiliates and general and administrative expenses to affiliates for the years ended December 31, 2004, 2003 and 2002, respectively, of which $5,422 and $5,672 was unpaid as of December 31, 2004 and 2003, respectively.

An affiliate of our general partner performed marketing and advertising services for us and was reimbursed for direct costs. Such costs of $19,280, $16,120, and $16,346 have been incurred and are included in marketing expenses to affiliates for the years ended December 31, 2004, 2003, and 2002, respectively, all of which was paid as of December 31, 2004 and 2003.

An affiliate of the general partner performed property upgrades, rezoning, annexation and other activities to prepare our parcels for sale and was reimbursed for salaries and direct costs. For the years ended December 31, 2004 and 2003, we incurred $98,576 and $144,857, respectively, of such costs. The affiliate did not recognize a profit on any project. Such costs are included in investments in land, of which $16,016 and $30,187 was unpaid as of December 31, 2004 and 2003, respectively.

On December 31, 1998, we obtained a loan from the general partner in the amount of $2,493,750 solely collateralized by Parcel 5. During 2002, the general partner advanced an additional $12,234.  The note accrued interest at prime plus .5% and had a maturity date which was extended to December 29, 2003. For the year ended December 31, 2003, interest of $63,822 was capitalized. During 2003, all principal and interest on this loan was repaid.

On December 6, 2000, we obtained a loan from the general partner in the amount of $1,500,000 collateralized by Parcels 17, 18 and 22. During 2002, the general partner advanced an additional $15,000. The note accrued interest at prime plus .5% and had a maturity date of November 30, 2004.  For the years ended December 31, 2004 and 2003, interest of $49,046 and $80,642, respectively, was capitalized, of which $0 and $229,921 was unpaid as of December 31, 2004 and 2003, respectively. During 2004, all principal and accrued interest on this loan was repaid.

On May 9, 2002, the general partner advanced us a loan in the amount of $200,000.  The note accrued interest at 5.25%. This advance was repaid in full on September 17, 2002.  For the year ended December 31, 2002, interest of $3,797 was capitalized, all of which was paid as of December 31, 2002.

On September 17, 2002, we obtained a loan from the general partner in the amount of $1,600,000, collateralized by Parcels 4, 6 and 7.  The note accrued interest at a rate of prime plus .5% and had a maturity date of September 17, 2005. For the years ended December 31, 2004 and 2003, interest of $22,609 and $65,546 was capitalized, of which $0 and $85,611 was unpaid as of December 31, 2004 and 2003, respectively. During 2004, all principal and accrued interest on this loan was repaid.

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Results of Operations

As of December 31, 2004, we owned twelve parcels of land consisting of approximately 1,211 acres. Of the 1,211 acres owned, approximately 965 acres are tillable, leased to local farmers and generate sufficient cash flow to cover property taxes, insurance and other miscellaneous expenses.  Rental income was $166,438, $225,179, and $274,768 for the years ended December 31, 2004, 2003, and 2002, respectively. The decrease in rental income is due to the decrease in tillable acres as a result of the sale of land.

Sales of investments in land and improvements of $16,847,378 and cost of land sold of $6,492,519 for the year ended December 31, 2004 are a result of the sale of additional lots of Parcel 4 and the sale of the balance of Parcels 12 and 20. Sales of investments in land and improvements of $12,827,798 and cost of land sold of $4,289,425 for the year ended December 31, 2003 are a result of the sale of approximately 23 acres of Parcel 4, the sale of approximately 372 acres of Parcel 5 and the sale of approximately 28 acres of Parcel 16.  The increase in sales activity for the years ended December 31, 2004 and 2003 is the result of favorable zoning as well as a change in our marketing approach to target homebuilders, industrial users and land developers.  Sales of investments in land and improvements of $1,609,108 and cost of land sold of $450,778 for the year ended December 31, 2002 are a result of the sale of two lots of Parcel 4 and the sale of approximately 70 acres of Parcel 24.



Professional services to affiliates were $27,543, $31,832 and $37,398 for the years ended December 31, 2004, 2003 and 2002, respectively.  Professional services to affiliates decreased for the years ended December 31, 2004 and 2003 compared to the year ended December 31, 2002, due to a decrease in legal services. This decrease was partially offset by an increase in fees for accounting services as a result of increased sales activity and regulatory requirements.

Professional services to non-affiliates were $55,829, $39,588 and $33,258 for the years ended December 31, 2004, 2003 and 2002, respectively.  Professional services to non-affiliates increased for the year ended December 31, 2004 compared to the years ended December 31, 2003 and 2002, due to an increase in fees for accounting services.

General and administrative expenses to non-affiliates were $33,559, $17,704 and $21,894 for the years ended December 31, 2004, 2003 and 2002, respectively.  The increase in general and administrative expenses in 2004 is due to the amortization of loan fees as a result of payoff of the note payable.

Tax expenses were $139,258, $8,201 and $5,970 for the years ended December 31, 2004, 2003 and 2002, respectively.  The increase in tax expenses in 2004 is due to state taxes paid and accrued as a result of the land sales.

Marketing expenses to non-affiliates were $54,982, $83,826 and $125,569 for the years ended December 31, 2004, 2003 and 2002, respectively. The increase in 2002 was due to increased marketing and advertising through radio and local cable television ads. In 2003 and continuing into 2004, we changed our marketing approach to target homebuilders, industrial users and land developers through direct mailings, newspaper and trade publication advertising and an enhanced website.

Land operating expenses to non-affiliates were $65,826, $72,980 and $106,588 for the years ended December 31, 2004, 2003 and 2002, respectively. These costs primarily include real estate tax expense, ground maintenance and insurance expense on the parcels we own and have decreased due to the sale of acres.

-12-

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We determined that the maximum value of Parcels 1, 15, 21 and 23 could be realized if the parcels were developed and sold as individual lots. However,

The velocity of the developer's individual lot sales was slower than originally projected and consequently, the developer's carrying costs were higher. The developer obtained a loan from an affiliate of our general partner. These funds were used for operating costs and to continue the development of the projects.  As a result of the slower lot sales, the net sale proceeds available to us are lower than anticipated. As of December 31, 2002, we had recorded an allowance for doubtful accounts of $767,248 relating to a portion of the accrued interest receivable on mortgage loans resulting from the sale of these parcels. In early August 2003, we reviewed recent forecasts on these parcels, and determined that the collectibility of these receivables was doubtful. As a result, we elected to reserve an additional $2,302,787 of principal and accrued interest relating to the mortgages receivable in 2003. The deferred gain of $242,368 relating to the mortgage loans receivable was also reserved and recorded against bad debt expense as of December 31, 2003.  We continued to monitor these transactions throughout 2004 and, based on our review of  the developments' financial situation during the fourth quarter of 2004, we do not anticipate receiving any additional proceeds on Parcels 15, 21 and 23. As of December 31, 2004, the Partnership has written off the mortgage loans receivable and related accrued interest receivable and deferred gain relating to Parcels 15, 21 and 23. As of December 31, 2004, the mortgage loan receivable relating to Parcel 1 has been fully reserved, however based on our review of the developments' financial situation relating to this Parcel and potential sales of the commercial pieces of this Parcel , we have not written off this receivable at this time.





Our 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 our land during a given year exceed our revenues, our general partner will make a supplemental capital contribution of such amount to us to ensure that we have sufficient funds to make such payments.

-13-

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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 our 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, we 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 us.

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 or 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.

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.

Off-Balance Sheet Arrangements, Contractual Obligations, Liabilities and Contracts and Commitments



-14-

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Selected Quarterly Financial Data (unaudited)

The following represents the results of operations for each quarter during the years ended December 31, 2004, 2003 and 2002.

|                                                                    |   | 12/31/04    | 09/30/04  | 06/30/04   | 03/31/04  
|------------------------------------------------------------------- | - | ----------- | --------- | ---------- | ----------
|Total income                                                        | $ | 58,690      | 296,805   | 669,857    | 16,054,371
|Net income (loss)                                                   |   | (2,404)     | 88,104    | 296,436    | 9,768,187 
|Net income (loss) allocated to the limited   partners               |   | (501,860)   | 88,255    | 297,584    | 7,633,359 
|Net income (loss) per limited partnership unit,   basic and diluted |   | (16.96)     | 2.98      | 10.06      | 257.94    
|                                                                    |   |             |           |            |           
|                                                                    |   | 12/31/03    | 09/30/03  | 06/30/03   | 03/31/03  
|Total income                                                        | $ | 281,354     | 557,672   | 12,211,269 | 65,759    
|Net income (loss)                                                   |   | 72,255      | 99,950    | 6,302,802  | (38,355)  
|Net income (loss) allocated to the limited   partners               |   | (1,192,882) | 97,583    | 6,304,630  | (37,971)  
|Net income (loss) per limited partnership unit,   basic and diluted |   | (40.31)     | 3.30      | 213.04     | (1.28)    
|                                                                    |   |             |           |            |           
|                                                                    |   | 12/31/02    | 09/30/02  | 06/30/02   | 03/31/02  
|Total income                                                        | $ | 1,511,105   | 81,077    | 184,342    | 139,525   
|Net income (loss)                                                   |   | 1,072,216   | (199,617) | 70,147     | (628,095) 
|Net income (loss) allocated to the limited   partners               |   | 1,072,238   | (197,544) | 69,972     | (621,502) 
|Net income (loss) per limited partnership unit,   basic and diluted |   | 36.23       | (6.68)    | 2.36       | (21.00)   
|                                                                    |   |             |           |            |           

Inflation

Inflation in future periods may cause capital appreciation of our 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. To date, our operations have not been significantly affected by inflation.

Item 7(a). Quantitative and Qualitative Disclosures About Market Risk

Not Applicable.

-15-

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Item 8.  Financial Statements and Supplementary Data

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

|                                                                                      | Page
|------------------------------------------------------------------------------------- | ----
|                                                                                      |     
|Report of Independent Registered Public Accounting Firm                               | 17  
|                                                                                      |     
|Report of Independent Registered Public Accounting Firm                               | 18  
|                                                                                      |     
|Financial Statements:                                                                 |     
|                                                                                      |     
|Balance Sheets, December 31, 2004 and 2003                                            | 19  
|                                                                                      |     
|Statements of Operations, for the years ended December 31, 2004, 2003 and 2002        | 21  
|                                                                                      |     
|Statements of Partners' Capital, for the years ended December 31, 2004, 2003 and 2002 | 22  
|                                                                                      |     
|Statements of Cash Flows, for the years ended December 31, 2004, 2003 and 2002        | 23  
|                                                                                      |     
|Notes to Financial Statements                                                         | 25  

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.

-16-

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Report of Independent Registered Public Accounting Firm

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

We have audited the accompanying balance sheet of Inland Land Appreciation Fund, L.P. (a limited partnership) ("the Partnership") as of December 31, 2004, and the related statements of operations, partners' capital, and cash flows for the year then ended.  The financial statements are the responsibility of the Partnership's management.  Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Partnership is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting.  Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Inland Land Appreciation Fund, L.P. at December 31, 2004, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.



-17-

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

We have audited the accompanying balance sheet of Inland Land Appreciation Fund, L.P. (a limited partnership) ("the Partnership") as of December 31, 2003, and the related statements of operations, partners' capital, and cash flows for each of the two years in the period ended December 31, 2003. 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting.  Accordingly, we express no such opinion.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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, 2003, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2003, in conformity with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP

March 26, 2004
Chicago, Illinois

-18-

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INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Balance Sheets
December 31, 2004 and 2003Assets



|                                                                                                                                                                                       |   | 2004       | 2003      
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ---------- | ----------
|Current assets:                                                                                                                                                                        |   |            |           
|Cash and cash equivalents (Note 1)                                                                                                                                                     | $ | 601,956    | 965,756   
|Accounts and accrued interest receivable (net of allowance for doubtful     accounts of $423,794 and $969,028 at December 31, 2004 and 2003,     respectively) (Note 6)                |   | 1,401      | 392       
|Mortgage loans receivable (net of allowance for doubtful accounts of     $1,233,175 and $2,101,007 at December 31, 2004 and 2003, respectively)     (Note 6)                           |   | -          | -         
|Other current assets                                                                                                                                                                   |   | 19,410     | 6,816     
|                                                                                                                                                                                       |   |            |           
|Total current assets                                                                                                                                                                   |   | 622,767    | 972,964   
|                                                                                                                                                                                       |   |            |           
|Other assets                                                                                                                                                                           |   | 5,729      | 16,840    
|Deferred loan fees (net of accumulated amortization of $77,507 and $57,399 
  at December 31, 2004 and 2003, respectively)                                                             |   | -          | 20,108    
|Investments in land and improvements, at cost (including acquisition fees paid   to Affiliates of $495,417 and $704,853 at December 31, 2004 and 2003,   respectively) (Notes 3 and 4) |   | 14,744,224 | 20,517,279
|                                                                                                                                                                                       |   |            |           
|Total assets                                                                                                                                                                           | $ | 15,372,720 | 21,527,191
|                                                                                                                                                                                       |   |            |           



See accompanying notes to financial statements.

-19-

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INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Balance Sheets
(continued)
December 31, 2004 and 2003Liabilities and Partners' Capital



|                                                                                                                                                                                          |   | 2004         | 2003        
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------ | ------------
|                                                                                                                                                                                          |   |              |             
|Current liabilities:                                                                                                                                                                      |   |              |             
|Accounts payable                                                                                                                                                                          | $ | 87,486       | 3,455       
|Accrued real estate taxes                                                                                                                                                                 |   | 43,458       | 55,718      
|Due to Affiliates (Notes 3 and 7)                                                                                                                                                         |   | 21,438       | 351,391     
|Current portion of notes payable to Affiliate (Note 7)                                                                                                                                    |   | -            | 1,515,000   
|Unearned income                                                                                                                                                                           |   | 28,830       | 19,280      
|                                                                                                                                                                                          |   |              |             
|Total current liabilities                                                                                                                                                                 |   | 181,212      | 1,944,844   
|                                                                                                                                                                                          |   |              |             
|Notes payable to Affiliate, less current portion (Note 7)                                                                                                                                 |   | -            | 941,682     
|                                                                                                                                                                                          |   |              |             
|Total liabilities                                                                                                                                                                         |   | 181,212      | 2,886,526   
|                                                                                                                                                                                          |   |              |             
|Partners' capital:                                                                                                                                                                        |   |              |             
|General Partner:                                                                                                                                                                          |   |              |             
|Capital contribution                                                                                                                                                                      |   | 500          | 500         
|Cumulative net income                                                                                                                                                                     |   | 4,068,447    | 1,435,462   
|Cumulative cash distributions                                                                                                                                                             |   | (4,054,072)  | (1,419,042) 
|                                                                                                                                                                                          |   |              |             
|                                                                                                                                                                                          |   | 14,875       | 16,920      
|Limited Partners:                                                                                                                                                                         |   |              |             
|Units of $1,000. Authorized 30,001 Units, 29,593 outstanding at       December 31, 2004 and 2003, (net of offering costs of $3,768,113, of       which $1,069,764 was paid to Affiliates) |   | 25,873,403   | 25,873,403  
|Cumulative net income                                                                                                                                                                     |   | 22,473,136   | 14,955,798  
|Cumulative cash distributions                                                                                                                                                             |   | (33,169,906) | (22,205,456)
|                                                                                                                                                                                          |   |              |             
|                                                                                                                                                                                          |   | 15,176,633   | 18,623,745  
|                                                                                                                                                                                          |   |              |             
|Total Partners' capital                                                                                                                                                                   |   | 15,191,508   | 18,640,665  
|                                                                                                                                                                                          |   |              |             
|Total liabilities and Partners' capital                                                                                                                                                   | $ | 15,372,720   | 21,527,191  
|                                                                                                                                                                                          |   |              |             

See accompanying notes to financial statements.

-20-

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INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Statements of Operations
For the years ended December 31, 2004, 2003 and 2002



|                                                                                                                                                                     |   | 2004       | 2003       | 2002     
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ---------- | ---------- | ---------
|                                                                                                                                                                     |   |            |            |          
|Income:                                                                                                                                                              |   |            |            |          
|Sale of investments in land and improvements (Note 4)                                                                                                                | $ | 16,847,378 | 12,827,798 | 1,609,108
|Recognition of deferred gain on sale of investments in     land and improvements (Note 6)                                                                            |   | -          | -          | 7,590    
|Rental income (Note 5)                                                                                                                                               |   | 166,438    | 225,179    | 274,768  
|Interest income                                                                                                                                                      |   | 58,782     | 53,772     | 6,827    
|Other income                                                                                                                                                         |   | 7,125      | 9,305      | 17,756   
|                                                                                                                                                                     |   |            |            |          
|                                                                                                                                                                     |   | 17,079,723 | 13,116,054 | 1,916,049
|                                                                                                                                                                     |   |            |            |          
|Expenses:                                                                                                                                                            |   |            |            |          
|Cost of land sold                                                                                                                                                    |   | 6,492,519  | 4,289,425  | 450,778  
|Professional services to Affiliates                                                                                                                                  |   | 27,543     | 31,832     | 37,398   
|Professional services to non-affiliates                                                                                                                              |   | 55,829     | 39,588     | 33,258   
|General and administrative expenses to Affiliates                                                                                                                    |   | 20,496     | 23,799     | 24,742   
|General and administrative expenses to non-affiliates                                                                                                                |   | 33,559     | 17,704     | 21,894   
|Tax expense                                                                                                                                                          |   | 139,258    | 8,201      | 5,970    
|Marketing expenses to Affiliates                                                                                                                                     |   | 19,280     | 16,120     | 16,346   
|Marketing expenses to non-affiliates                                                                                                                                 |   | 54,982     | 83,826     | 125,569  
|Land operating expenses to non-affiliates                                                                                                                            |   | 65,826     | 72,980     | 106,588  
|Amortization of deferred loan fees                                                                                                                                   |   | 20,108     | 35,508     | 11,607   
|Bad debt expense                                                                                                                                                     |   | -          | 2,060,419  | 767,248  
|                                                                                                                                                                     |   |            |            |          
|                                                                                                                                                                     |   | 6,929,400  | 6,679,402  | 1,601,398
|                                                                                                                                                                     |   |            |            |          
|Net income                                                                                                                                                           | $ | 10,150,323 | 6,436,652  | 314,651  
|                                                                                                                                                                     |   |            |            |          
|Net income (loss) allocated to (Note 2):                                                                                                                             |   |            |            |          
|General Partner                                                                                                                                                      | $ | 2,632,985  | 1,265,292  | (8,513)  
|Limited Partners                                                                                                                                                     |   | 7,517,338  | 5,171,360  | 323,164  
|                                                                                                                                                                     |   |            |            |          
|Net income                                                                                                                                                           | $ | 10,150,323 | 6,436,652  | 314,651  
|                                                                                                                                                                     |   |            |            |          
|Net income (loss) allocated to the one General Partner   Unit                                                                                                        | $ | 2,632,985  | 1,265,292  | (8,513)  
|                                                                                                                                                                     |   |            |            |          
|Net income per Unit allocated to Limited Partners per   weighted average Limited Partnership Units (29,593   for the years ended December 31, 2004, 2003 and   2002) | $ | 254.02     | 174.75     | 10.92    
|                                                                                                                                                                     |   |            |            |          

See accompanying notes to financial statements.

-21-

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INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Statements of Partners' Capital
For the years ended December 31, 2004, 2003 and 2002



|                                                                                                        |   | General     | Limited      |             
|------------------------------------------------------------------------------------------------------- | - | ----------- | ------------ | ------------
|                                                                                                        |   | Partner     | Partners     | Total       
|                                                                                                        |   |             |              |             
|Balance at January 1, 2002                                                                              | $ | 25,440      | 21,761,054   | 21,786,494  
|                                                                                                        |   |             |              |             
|Net income (loss) (Note 2)                                                                              |   | (8,513)     | 323,164      | 314,651     
|Distributions to Partners ($51.76 per weighted average   Limited Partnership Units of 29,593) (Note 2)  |   | -           | (1,531,700)  | (1,531,700) 
|                                                                                                        |   |             |              |             
|Balance at December 31, 2002                                                                            |   | 16,927      | 20,552,518   | 20,569,445  
|                                                                                                        |   |             |              |             
|Net income (Note 2)                                                                                     |   | 1,265,292   | 5,171,360    | 6,436,652   
|Distributions to Partners ($239.93 per weighted average   Limited Partnership Units of 29,593) (Note 2) |   | (1,265,299) | (7,100,133)  | (8,365,432) 
|                                                                                                        |   |             |              |             
|Balance at December 31, 2003                                                                            |   | 16,920      | 18,623,745   | 18,640,665  
|                                                                                                        |   |             |              |             
|Net income (Note 2)                                                                                     |   | 2,632,985   | 7,517,338    | 10,150,323  
|Distributions to Partners ($370.51 per weighted average Limited Partnership Units of 29,593) (Note 2)   |   | (2,635,030) | (10,964,450) | (13,599,480)
|                                                                                                        |   |             |              |             
|Balance at December 31, 2004                                                                            | $ | 14,875      | 15,176,633   | 15,191,508  



See accompanying notes to financial statements.

-22-

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INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Statements of Cash Flows
For the years ended December 31, 2004, 2003 and 2002

|                                                                                                |   | 2004         | 2003         | 2002       
|----------------------------------------------------------------------------------------------- | - | ------------ | ------------ | -----------
|                                                                                                |   |              |              |            
|Cash flows from operating activities:                                                           |   |              |              |            
|Net income                                                                                      | $ | 10,150,323   | 6,436,652    | 314,651    
|Adjustments to reconcile net income to net cash provided     by (used in) operating activities: |   |              |              |            
|Gain on sale of investments in land and improvements                                            |   | (10,354,859) | (8,538,373)  | (1,158,330)
|Recognition of deferred gain on sale of investments in       land and improvements              |   | -            | -            | (7,590)    
|Bad debt expense                                                                                |   | -            | 2,060,419    | 767,248    
|Amortization of deferred loan fees                                                              |   | 20,108       | 35,508       | 11,607     
|Changes in assets and liabilities:                                                              |   |              |              |            
|Accounts and accrued interest receivable                                                        |   | (1,009)      | -            | (392)      
|Other assets                                                                                    |   | (1,483)      | (6,816)      | 5,172      
|Accounts payable                                                                                |   | 84,031       | (68,030)     | 60,450     
|Accrued real estate taxes                                                                       |   | (12,260)     | (27,248)     | 36,063     
|Due to Affiliates                                                                               |   | (329,953)    | (3,960)      | 299,345    
|Unearned income                                                                                 |   | 9,550        | (650,000)    | 400,000    
|                                                                                                |   |              |              |            
|Net cash provided by (used in) operating activities                                             |   | (435,552)    | (761,848)    | 728,224    
|                                                                                                |   |              |              |            
|Cash flows from investing activities:                                                           |   |              |              |            
|Principal payments collected on mortgage loans receivable                                       |   | -            | -            | 335,349    
|Additions to investments in land and improvements                                               |   | (719,464)    | (921,343)    | (1,558,631)
|Proceeds from disposition of investments in land and     improvements                           |   | 16,847,378   | 12,827,798   | 1,609,108  
|                                                                                                |   |              |              |            
|Net cash flow provided by investing activities                                                  |   | 16,127,914   | 11,906,455   | 385,826    
|                                                                                                |   |              |              |            
|Cash flows from financing activities:                                                           |   |              |              |            
|Net proceeds from notes payable to Affiliate                                                    |   | -            | -            | 1,627,234  
|Loan fees                                                                                       |   | -            | -            | (47,507)   
|Principal payments on notes payable to Affiliates                                               |   | (2,456,682)  | (3,164,302)  | -          
|Cash distributions                                                                              |   | (13,599,480) | (8,365,432)  | (1,531,700)
|                                                                                                |   |              |              |            
|Net cash flow provided by (used in) financing activities                                        |   | (16,056,162) | (11,529,734) | 48,027     
|                                                                                                |   |              |              |            



See accompanying notes to financial statements.

-23-

---



INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Statements of Cash Flows
(continued)
For the years ended December 31, 2004, 2003 and 2002

|                                                     |   | 2004      | 2003      | 2002     
|---------------------------------------------------- | - | --------- | --------- | ---------
|                                                     |   |           |           |          
|Net increase (decrease) in cash and cash equivalents | $ | (363,800) | (385,127) | 1,162,077
|Cash and cash equivalents at beginning of year       |   | 965,756   | 1,350,883 | 188,806  
|                                                     |   |           |           |          
|Cash and cash equivalents at end of year             | $ | 601,956   | 965,756   | 1,350,883
|                                                     |   |           |           |          
|Cash paid for interest                               | $ | 387,189   | 232,681   | 3,797    

Supplemental schedule of non-cash investing and financing activities:

|                                                                    |   | 2004       | 2003       | 2002     
|------------------------------------------------------------------- | - | ---------- | ---------- | ---------
|                                                                    |   |            |            |          
|Reduction in investments in land and improvements                   | $ | 6,492,519  | 4,289,425  | 450,778  
|Gain on sale of investments in land and improvements                |   | 10,354,859 | 8,538,373  | 1,158,330
|Proceeds from disposition of investments in land and   improvements | $ | 16,847,378 | 12,827,798 | 1,609,108
|                                                                    |   |            |            |          



See accompanying notes to financial statements.

-24-

---



INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Notes to Financial Statements

For the years ended December 31, 2004, 2003 and 2002

(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 were 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, 2004, the Partnership has repurchased a total of 407.75 Units for $359,484 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.



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 which are carried at cost, which approximates market.

The Partnership recognizes income from the sale of land parcels in accordance with Statement of Financial Accounting Standards No. 66, "Accounting for Sales of Real Estate".

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.

-25-

---



INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)



In August 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets", ("SFAS No. 144").  SFAS 144 addresses accounting and reporting for the impairment or disposal of long-lived assets.  This statement supersedes SFAS No. 121.  The Partnership adopted the provisions of this statement beginning January 1, 2002.  SFAS No. 144 established new rules for the recognition, measurement and reporting  of  long-lived  assets  which  are  impaired  and either held for sale or in use by the Partnership. The adoption of this statement did not have a material impact on the financial position or results of operations of the Partnership.

On January 1, 2003, the Partnership adopted FASB Interpretation No. 45 ("FIN 45") "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness to Others, an interpretation of FASB Statements No. 5, 57 and 107 and a rescission of FASB Interpretation No. 34". FIN 45 elaborates on the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under guarantees issued. FIN 45 also clarifies that a guarantor is required to recognize, at inception of a guarantee, a liability for the fair value of the obligation undertaken. The adoption of FIN 45 did not have a material effect on the Partnership's financial statements.



In May 2003, the FASB issued Statement No. 150 ("SFAS 150") "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity".  This statement establishes standards for classifying and measuring certain financial instruments as liabilities that embody obligations of the issuer and have characteristics of both liabilities and equity. SFAS No. 150 is effective for all financial instruments created or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. The provisions of SFAS No. 150 did not have an impact on the Partnership's financial condition and results of operations.



-26-

---

INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)

Effective January 1, 2001, the Partnership adopted the provisions of SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities", as amended by SFAS Nos. 137, 138 and 149. This statement standardizes the accounting for derivative instruments by requiring that an entity recognize those items as assets or liabilities in the statement of financial position and measure them at fair value.  It also provides for matching the timing of gain or loss recognition on the hedging instrument with the recognition of (a) the changes in fair value of the hedged asset or liability attributable to the hedged risk or (b) the earnings effect of the hedged forecasted transaction.  The net impact of the adoption of SFAS No. 133 has no effect on the Partnership's financial statements.

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.

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 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:





|2004                                    | 2003
|--------------------------------------- | ----
|                                        |     
|                                        |     
|                                        |     
|                                        |     
|Total assets                            | $   
|                                        |     
|Partners' capital:                      |     
|General Partner                         |     
|Limited Partners                        |     
|                                        |     
|Net income (loss) allocated:            |     
|General Partner                         |     
|Limited Partners                        |     
|                                        |     
|Net income per Limited Partnership Unit |     

The net income per Unit is based upon the weighted average number of Units of 29,593 during 2004 and 2003.

-27-

---

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.

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.

-28-

---

INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)



(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 $5,422 and $5,672 were unpaid as of December 31, 2004 and 2003, 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 $19,280, $16,120 and $16,346 have been incurred and are included in marketing expenses to Affiliates for the years ended December 31, 2004, 2003 and 2002, respectively, all of which was paid as of December 31, 2004, 2003 and 2002.

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 years ended December 31, 2004 and 2003, the Partnership incurred $98,576 and $144,857, respectively, of such costs. The Affiliate did not recognize a profit on any project. Such costs are included in investments in land and improvements, of which $16,016 and $30,187 were unpaid as of December 31, 2004 and 2003, respectively.

-29-

---

INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)

(4) Investments in Land and Improvements

|       |             |                       |                |   | Initial Costs |             |           |                                  |                  
|------ | ----------- | --------------------- | -------------- | - | ------------- | ----------- | --------- | -------------------------------- | -----------------
|       | Illinois    | Gross Acres Purchased | Purchase/Sales |   | Original      | Acquisition | Total     | Costs  Capitalized Subsequent to | Costs of Property
|Parcel | County      | (Sold)                | Date           |   | Costs         | Costs       | Costs     | Acquisition                      | Sold             
|       |             |                       |                |   |               |             |           |                                  |                  
|1      | Kendall     | 84.7360               | 01/19/89       | $ | 423,680       | 61,625      | 485,305   | 5,462,589                        | 5,947,894        
|       |             | (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   | 26,816                           | 771,830          
|       |             | (183.3759)            | 12/27/90       |   |               |             |           |                                  |                  
|       |             | (40.0362)             | 05/11/00       |   |               |             |           |                                  |                  
|       |             |                       |                |   |               |             |           |                                  |                  
|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   | 1,164,784                        | 1,361,115        
|       |             | (.4860)               | 02/28/91       |   |               |             |           |                                  |                  
|       |             | (27.5750)             | 08/25/95       |   |               |             |           |                                  |                  
|       |             | (4.4000)              | Var 2001       |   |               |             |           |                                  |                  
|       |             | (2.1470)              | Var 2002       |   |               |             |           |                                  |                  
|       |             | (23.1033)             | Var 2003       |   |               |             |           |                                  |                  
|       |             | (6.7800)              | Var 2004       |   |               |             |           |                                  |                  
|       |             |                       |                |   |               |             |           |                                  |                  
|5      | Kendall (a) | 372.2230              | 05/03/89       |   | 2,532,227     | 135,943     | 2,668,170 | 456,398                          | 3,124,568        
|       |             | (Option)              | 04/06/90       |   |               |             |           |                                  |                  
|       |             | (372.2230)            | 06/20/03       |   |               |             |           |                                  |                  
|       |             |                       |                |   |               |             |           |                                  |                  
|6      | Kendall (b) | 78.3900               | 06/21/89       |   | 416,783       | 31,691      | 448,474   | 1,304,987                        | 43,735           
|       |             | (3.9500)              | 11/01/00       |   |               |             |           |                                  |                  
|       |             |                       |                |   |               |             |           |                                  |                  
|7      | Kendall (b) | 77.0490               | 06/21/89       |   | 84,754        | 8,163       | 92,917    | 1,265,851                        | -                
|       |             |                       |                |   |               |             |           |                                  |                  
|8      | Kendall (b) | 5.0000                | 06/21/89       |   | 60,000        | 5,113       | 65,113    | -                                | 65,113           
|       |             | (5.0000)              | 10/06/89       |   |               |             |           |                                  |                  
|       |             |                       |                |   |               |             |           |                                  |                  

-30-

---

INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)

(4) Investments in Land and Improvements (continued)

|       |             |                       |                |   | Initial Costs |             |           |                                 |                  
|------ | ----------- | --------------------- | -------------- | - | ------------- | ----------- | --------- | ------------------------------- | -----------------
|       | Illinois    | Gross Acres Purchased | Purchase/Sales |   | Original      | Acquisition | Total     | Costs Capitalized Subsequent to | Costs of Property
|Parcel | County      | (Sold)                | Date           |   | Costs         | Costs       | Costs     | Acquisition                     | Sold             
|       |             |                       |                |   |               |             |           |                                 |                  
|9      | McHenry (b) | 51.0300               | 08/07/89       | $ | 586,845       | 22,482      | 609,327   | 46,263                          | -                
|       |             |                       |                |   |               |             |           |                                 |                  
|10     | McHenry (b) | 123.9400              | 08/07/89       |   | 91,939        | 7,224       | 99,163    | 600                             | 99,763           
|       |             | (123.9400)            | 12/06/89       |   |               |             |           |                                 |                  
|       |             |                       |                |   |               |             |           |                                 |                  
|       |             |                       |                |   |               |             |           |                                 |                  
|11     | McHenry (b) | 30.5920               | 08/07/89       |   | 321,216       | 22,641      | 343,857   | 51,529                          | -                
|       |             |                       |                |   |               |             |           |                                 |                  
|12     | Kendall     | 90.2710               | 10/31/89       |   | 907,389       | 41,908      | 949,297   | 246,964                         | 1,196,261        
|       |             | (.7090)               | 04/26/91       |   |               |             |           |                                 |                  
|       |             | (89.562)              | 03/10/04       |   |               |             |           |                                 |                  
|       |             |                       |                |   |               |             |           |                                 |                  
|13     | McHenry     | 92.7800               | 11/07/89       |   | 251,306       | 19,188      | 270,494   | 18,745                          | 289,239          
|       |             | (2.0810)              | 09/18/97       |   |               |             |           |                                 |                  
|       |             | (90.6990)             | 02/15/01       |   |               |             |           |                                 |                  
|       |             |                       |                |   |               |             |           |                                 |                  
|14     | McHenry     | 76.2020               | 11/07/89       |   | 419,111       | 23,402      | 442,513   | 142,826                         | -                
|       |             |                       |                |   |               |             |           |                                 |                  
|15     | Lake        | 84.5564               | 01/03/90       |   | 1,056,955     | 85,283      | 1,142,238 | 1,661,344                       | 2,803,582        
|       |             | (10.5300)             | Var 1996       |   |               |             |           |                                 |                  
|       |             | (5.4680)              | Var 1997       |   |               |             |           |                                 |                  
|       |             | (68.5584)             | Var 1998       |   |               |             |           |                                 |                  
|       |             |                       |                |   |               |             |           |                                 |                  
|16     | Kane/       | 72.4187               | 01/29/90       |   | 1,273,537     | 55,333      | 1,328,870 | 706,718                         | 2,035,588        
|       | Kendall     | (30.9000)             | 07/10/98       |   |               |             |           |                                 |                  
|       |             | (10.3910)             | 12/15/99       |   |               |             |           |                                 |                  
|       |             | (3.1000)              | 12/12/00       |   |               |             |           |                                 |                  
|       |             | (28.0277)             | 05/19/03       |   |               |             |           |                                 |                  
|       |             |                       |                |   |               |             |           |                                 |                  
|17     | McHenry     | 99.9240               | 01/29/90       |   | 739,635       | 61,038      | 800,673   | 933,614                         | 320,961          
|       |             | (27.5100)             | 01/29/99       |   |               |             |           |                                 |                  

-31-

---

INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)

(4) Investments in Land and Improvements (continued)

|       |          |                       |                |   | Initial Costs |             |            |                                 |                  
|------ | -------- | --------------------- | -------------- | - | ------------- | ----------- | ---------- | ------------------------------- | -----------------
|       | Illinois | Gross Acres Purchased | Purchase/Sales |   | Original      | Acquisition | Total      | Costs Capitalized Subsequent to | Costs of Property
|Parcel | County   | (Sold)                | Date           |   | Costs         | Costs       | Costs      | Acquisition                     | Sold             
|18     | McHenry  | 71.4870               | 01/29/90       | $ | 496,116       | 26,259      | 522,375    | 211,074                         | 11,109           
|       |          | (1.0000)              | Var 1990       |   |               |             |            |                                 |                  
|       |          | (.5200)               | 03/11/93       |   |               |             |            |                                 |                  
|       |          |                       |                |   |               |             |            |                                 |                  
|19     | McHenry  | 63.6915               | 02/23/90       |   | 490,158       | 29,158      | 519,316    | 133,126                         | -                
|       |          |                       |                |   |               |             |            |                                 |                  
|20     | Kane     | 224.1480              | 02/28/90       |   | 2,749,800     | 183,092     | 2,932,892  | 1,938,930                       | 4,871,822        
|       |          | (.2790)               | 10/17/91       |   |               |             |            |                                 |                  
|       |          | (223.869)             | 02/20/04       |   |               |             |            |                                 |                  
|       |          |                       |                |   |               |             |            |                                 |                  
|21     | Kendall  | 172.4950              | 03/08/90       |   | 1,327,459     | 75,822      | 1,403,281  | 954,415                         | 2,357,696        
|       |          | (172.4950)            | Var 1998       |   |               |             |            |                                 |                  
|       |          |                       |                |   |               |             |            |                                 |                  
|22     | McHenry  | 254.5250              | 04/11/90       |   | 2,608,881     | 136,559     | 2,745,440  | 251,203                         | -                
|       |          |                       |                |   |               |             |            |                                 |                  
|23     | Kendall  | 140.0210              | 05/08/90       |   | 1,480,000     | 116,240     | 1,596,240  | 909,395                         | 2,505,635        
|       |          | (4.4100)              | Var 1993       |   |               |             |            |                                 |                  
|       |          | (35.8800)             | Var 1994       |   |               |             |            |                                 |                  
|       |          | (3.4400)              | Var 1995       |   |               |             |            |                                 |                  
|       |          | (96.2910)             | 08/26/99       |   |               |             |            |                                 |                  
|       |          |                       |                |   |               |             |            |                                 |                  
|24     | Kendall  | 298.4830              | 05/23/90       |   | 1,359,774     | 98,921      | 1,458,695  | 71,858                          | 436,638          
|       |          | (12.4570)             | 05/25/90       |   |               |             |            |                                 |                  
|       |          | (4.6290)              | 04/01/96       |   |               |             |            |                                 |                  
|       |          | (69.82)               | 11/26/02       |   |               |             |            |                                 |                  
|       |          |                       |                |   |               |             |            |                                 |                  
|25     | Kane     | 225.0000              | 06/01/90       |   | 2,600,000     | 168,778     | 2,768,778  | 41,980                          | -                
|       |          |                       |                |   |               |             |            |                                 |                  
|       | Totals   |                       |                | $ | 23,624,761    | 1,562,308   | 25,187,069 | 18,002,009                      | 28,444,854       
|       |          |                       |                |   |               |             |            |                                 |                  

-32-

---



INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)

(4) Investments in Land and Improvements (continued)

1. 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 1990 sale transaction relates to the sale of this option.
2. 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.
3. Reconciliation of investments in land and improvements owned:



|                        |   | 2004        | 2003       
|----------------------- | - | ----------- | -----------
|                        |   |             |            
|Balance at January 1,   | $ | 20,517,279  | 23,885,361 
|Additions during year   |   | 719,464     | 921,343    
|Sales during year       |   | (6,492,519) | (4,289,425)
|                        |   |             |            
|Balance at December 31, | $ | 14,744,224  | 20,517,279 

(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, 2004, the Partnership had farm leases of generally one year in duration, for approximately 965 acres of the approximately 1,211 acres owned.

-33-

---

INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)

(6) Mortgage Loans Receivable

Mortgage loans receivable are the result of sales of Parcels, in whole or in part.  The Partnership has recorded a deferred gain on these sales.  The deferred gain will be recognized over the life of the related mortgage loan receivable as principal payments are received.  As of December 31, 2004, the mortgage loans receivable and the related deferred gain are fully reserved.



|                                     |          |               |           | Principal Balance | Principal Balance | Accrued Interest Receivable | Deferred Gain
|------------------------------------ | -------- | ------------- | --------- | ----------------- | ----------------- | --------------------------- | -------------
|Parcel                               | Maturity | Interest Rate |           | 12/31/04          | 12/31/03          | 12/31/04                    | 12/31/04     
|                                     |          |               |           |                   |                   |                             |              
|1                                    | 03/01/04 | 9.00%         | $         | 1,233,175         | 1,233,175         | 423,794                     | 60,752       
|                                     |          |               |           |                   |                   |                             |              
|15                                   | 12/31/03 | 9.00%         |           | -                 | 144,557           | -                           | -            
|                                     |          |               |           |                   |                   |                             |              
|21                                   | 03/31/05 | 9.00%         |           | -                 | 656,050           | -                           | -            
|                                     |          |               |           |                   |                   |                             |              
|23                                   | 08/26/03 | 9.00%         |           | -                 | 67,225            | -                           | -            
|                                     |          |               |           |                   |                   |                             |              
|                                     |          |               | $         | 1,233,175         | 2,101,007         | 423,794                     | 60,752       
|                                     |          |               |           |                   |                   |                             |              
|Less Allowance for doubtful accounts |          | 1,233,175     | 2,101,007 | 423,794           | 60,752           
|                                     |          |               |           |                   |                   |                             |              
|                                     |          |               | $         | -                 | -                 | -                           | -            

The General Partner determined that the maximum value of Parcels 1, 15, 21 and 23 could be realized if the parcels were developed and sold as individual lots. However,

-34-



---

INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)

The velocity of the developer's individual lot sales was slower than originally projected and consequently, the developer's carrying costs were higher. The developer obtained a loan from an affiliate of the General Partner. These funds were used for operating costs and to continue the development of the projects. As a result of the slower lot sales, the net sale proceeds available to the Partnership were lower than anticipated. As of December 31, 2002, the Partnership recorded an allowance for doubtful accounts of $767,248 relating to a portion of the accrued interest receivable on mortgage loans resulting from the sale of these parcels. In early August 2003, we reviewed recent forecasts on these parcels, and determined that the collectibility of these receivables was doubtful. As a result, management elected to reserve an additional $2,302,787 of principal and accrued interest relating to the mortgages receivable in 2003. The deferred gain of $242,368 relating to the mortgage loans receivable was also reserved and recorded against bad debt expense as of December 31, 2003. The General Partner continued to monitor these transactions throughout 2004 and, based on its review of  the developments' financial situation during the fourth quarter of 2004, it does not anticipate receiving any additional proceeds on Parcels 15, 21 and 23.   As of December 31, 2004, the Partnership has written off the mortgage loans receivable and related accrued interest receivable and deferred gain relating to Parcels 15, 21 and 23. As of December 31, 2004, the mortgage loan receivable relating to Parcel 1 has been fully reserved, however based on review of the developments' financial situation relating to this Parcel and potential sales of the commercial pieces of this Parcel , we have not written off this receivable at this time.

The General Partner guaranteed the third party development loans owed by these LLCs. In reviewing the developments' financial situation, the General Partner determined that it would be in its best interest to have an affiliate acquire the interests in the LLCs. The General Partner and its affiliates concluded that they could better control the continuing costs to complete these developments and would therefore have the best opportunity to limit their exposure under the guarantee agreements and possibly recover a portion of the amount owed to the Partnership. An affiliate of the General Partner contributed approximately $1,900,000 to acquire the interests in the LLCs. The General Partner contributed approximately $2,400,000 to pay off the debt under its guarantee of the LLC loans. The affiliate of the General Partner will complete the development and the sale of these projects.

(7) Notes Payable to Affiliate

On December 31, 1998, the Partnership obtained a loan from the General Partner in the amount of  $2,493,750 solely collateralized by Parcel 5. During 2002, the General Partner advanced an additional $12,234.  The note accrued interest at prime plus .5% and had a maturity date which was extended to December 29, 2003. For the year ended December 31, 2003, interest of $63,822 was capitalized. During 2003, all principal and interest on this loan was repaid.

On December 6, 2000, the Partnership obtained a loan from the General Partner in the amount of $1,500,000 collateralized by Parcels 17, 18 and 22. During 2002, the General Partner advanced an additional $15,000. The note accrued interest at prime plus .5% and had a maturity date of November 30, 2004.  For the years ended December 31, 2004 and 2003, interest of $49,046 and $80,642, respectively, was capitalized, of which $0 and $229,921 was unpaid as of December 31, 2004 and 2003, respectively. During 2004, all principal and accrued interest on this loan was repaid.

On September 17, 2002, the Partnership obtained a loan from the General Partner in the amount of $1,600,000, collateralized by Parcels 4, 6 and 7.  The note accrued interest at a rate of prime plus .5% and had a maturity date of September 17, 2005. For the years ended December 31, 2004 and 2003, interest of $22,609 and $65,546 was capitalized, of which $0 and $85,611 was unpaid as of December 31, 2004 and 2003, respectively. During 2004, all principal and accrued interest on this loan was repaid.

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

On January 27, 2005, our audit committee engaged Grant Thornton LLP ("Grant Thornton") to serve as our independent registered public accounting firm effective immediately.  In addition, on January 27, 2005, our audit committee accepted notice from Deloitte & Touche LLP ("Deloitte"), its current independent registered public accounting firm, indicating that, effective immediately, Deloitte will resign as our independent registered public accounting firm.

The reports of Deloitte on our financial statements for the years ended December 31, 2002 and December 31, 2003 did not contain an adverse opinion, disclaimer of opinion or explanatory paragraphs and were not qualified or modified as to uncertainty, audit scope or accounting principle.



We provided Deloitte a copy of the Report on Form 8-K filed with the Securities and Exchange Commission (the "SEC") and requested Deloitte to furnish us with a letter addressed to the SEC stating whether Deloitte agreed with the above statements made by us and, if not, stating the respects in which it does not agree. We filed Deloitte's response with the SEC on Form 8-K.

We did not consult Grant Thornton regarding (i) either the application of accounting principles to a specific completed or contemplated transaction or the type of audit opinion that might be rendered on our financial statements; as such, no written or oral advice was provided, and none was an important factor considered by us in reaching a decision as to the accounting, auditing or financial reporting issues; or (ii) any matter that was a subject of a disagreement or reportable event with Deloitte (as there were none).

Item 9(a).  Controls and Procedures



There were no significant changes in our internal controls over financial reporting during the fourth quarter of 2004 that have materially effected or are reasonably likely to materially affect our internal control over financial reporting.

Item 9 (b).  Other Information

Not applicable

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PART III

Item 10.  Directors and Executive Officers of the Registrant

Our general partner, Inland Real Estate Investment Corporation (IREIC), was organized in 1984 for the purpose of acting as general partner of limited partnerships formed to acquire, own and operate real properties. Our general partner is a wholly owned subsidiary of The Inland Group, Inc. The general partner has responsibility for all aspects of our operations.



During 2004, our general partner adopted a Code of Ethics that applies to all of its employees.

Officers and Directors

The officers, directors, and key employees of IREIC and its affiliates that are likely to provide services to us are as follows. Ages are listed as of January 1, 2005.



|                   | Functional Title                                                                        
|------------------ | ----------------------------------------------------------------------------------------
|                   |                                                                                         
|Daniel L. Goodwin  | Director                                                                                
|Robert H. Baum     | Director, General Counsel of IREIC                                                      
|Robert D. Parks    | Chairman                                                                                
|Brenda G. Gujral   | Director, President and principal executive officer of the Partnership                  
|Catherine L. Lynch | Treasurer                                                                               
|Roberta S. Matlin  | Director, Senior Vice President-Investments                                             
|Guadalupe Griffin  | Vice President-Asset Management                                                         
|Kelly Tucek        | Vice President-Partnership Accounting and principal financial officer of the Partnership
|Gary E. Pechter    | Senior Vice President, The Inland Group,  General Counsel of the Partnership            

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DANIEL L. GOODWIN (age 61) has been with Inland since 1968 and is a founding and controlling stockholder of, and the chairman of the board and chief executive officer of, The Inland Group. Mr. Goodwin also serves as a director or officer of entities wholly owned or controlled by The Inland Group. In addition, Mr. Goodwin is the chairman of the board of Inland Real Estate Corporation, chairman of the board and chief executive officer of Inland Mortgage Investment Corporation and chairman of the board and chief executive officer of Inland Bancorp Holding Company, a bank holding company. Mr. Goodwin also serves on the management committee of Inland Real Estate Corporation.

Mr. Goodwin is a member of the National Association of Realtors, the Illinois Association of Realtors and the Northern Illinois Commercial Association of Realtors.  He is also the author of a nationally recognized real estate reference book for the management of residential properties.  Mr. Goodwin serves on the Board of the Illinois State Affordable Housing Trust Fund. He has served as an advisor for the Office of Housing Coordination Services of the State of Illinois, and as a member of the Seniors Housing Committee of the National Multi-Housing Council. He has served as Chairman of the DuPage County Affordable Housing Task Force and presently serves as chairman of New Directions Affordable Housing Corporation.

Mr. Goodwin obtained his bachelor's and master's degrees from Illinois State Universities. Following graduation, he taught for five years in the Chicago public schools system. More recently, Mr. Goodwin has served as a member of the board of governors of Illinois State Colleges and Universities.  He is vice chairman of the board of trustees of Benedictine University, vice chairman of the board of trustees of Springfield College and chairman of the board of Northeastern Illinois University.

ROBERT H. BAUM (age 61) has been with Inland since 1968 and is one of the founding stockholders. Mr. Baum is vice chairman and executive vice president and general counsel of The Inland Group. In his capacity as general counsel, Mr. Baum is responsible for the supervision of the legal activities of The Inland Group 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 is also a licensed real estate broker. He has served as a director of American National Bank of DuPage and currently serves as a director of Inland Bancorp Holding Company and of Westbank. Mr. Baum also is a member of the Governing Council of Wellness House, a charitable organization that exists to improve the quality of life for people whose lives have been affected by cancer and its treatment by providing psychosocial and educational support for cancer patients, their families and friends.

ROBERT D. PARKS  (age 61) has been with Inland since 1968 and is one of the founding stockholders. He also is chairman of Inland Real Estate Investment Corporation, director of Inland Securities Corporation and a director of Inland Investment Advisors, Inc.  Mr. Parks is president, chief executive officer, and a director of Inland Real Estate Corporation and serves on its management committee.  He is also chairman, chief executive officer and director of Inland Retail Real Estate Trust, Inc. and is chairman, chief executive officer and director of Inland Western Retail Real Estate Trust, Inc. He is chairman, chief executive officer and affiliated director of Inland American Real Estate Trust, Inc. 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 Limited Principal with the National Association of Securities Dealers, Inc. He is also a member of the Real Estate Investment Association, the Financial Planning Association, the Foundation for Financial Planning, as well as a member of the National Association of Real Estate Investment Trusts.

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BRENDA G. GUJRAL (age 62) is president, chief operating officer and a director of Inland Real Estate Investment Corporation (IREIC). She is also president, chief operating officer and a director of Inland Securities Corporation (ISC), a member firm of the National Association of Securities Dealers (NASD). Mrs. Gujral is also a director of Inland Investment Advisors, Inc., an investment advisor. She is also an affiliated director of Inland Western Retail Real Estate Trust, Inc., chairman of the board of Inland Real Estate Exchange Corporation and affiliated director of Inland American Retail Real Estate Trust, Inc.

Mrs. Gujral has overall responsibility for the operations of IREIC, including the distribution of checks to over 70,000 investors, review of periodic communications to those investors, the filing of quarterly and annual reports for Inland's publicly registered investment programs with the Securities and Exchange Commission, compliance with other SEC and NASD securities regulations both for IREIC and ISC, review of asset management activities, and marketing and communications with the independent broker/dealer firms selling Inland's current and prior programs.  Mrs. Gujral works with internal and outside legal counsel in structuring and registering the prospectuses for IREIC's investment programs and in connection with the preparation of its offering documents and registering the related securities with the Securities and Exchange Commission and state securities commissions.

Mrs. Gujral has been with the Inland organization for over 20 years, becoming an officer in 1982. Prior to joining Inland, she worked for the Land Use Planning Commission establishing an office in Portland, Oregon, to implement land use legislation for that state.

She is a graduate of California State University.  She holds Series 7, 22, 39 and 63 licenses from the NASD.  Mrs. Gujral is a member of the National Association of Real Estate Investment Trusts (NAREIT), the Financial Planning Association (FPA), the Foundation for Financial Planning (FFP) and the National Association for Female Executives.

CATHERINE L. LYNCH (age 46) 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 LLP 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.

ROBERTA S. MATLIN (age 60) joined Inland Real Estate Investment Corporation (IREIC) in 1984 as director of investor administration and currently serves as senior vice president of IREIC, directing the day-to-day internal operations.  Ms. Matlin is a director of IREIC and president of Inland Investment Advisors, Inc., and Intervest Southern Real Estate Corporation, and a director and vice president of Inland Securities Corporation. She is the president of Inland American Advisory Services, Inc. Since 2003, she has been vice president of administration of Inland Western Retail Real Estate Trust, Inc., and since 2004, vice president of administration of Inland American Real Estate Trust, Inc.  She was vice president of administration of Inland Real Corporation from 1995 until 2000 and of Inland Retail Real Estate Trust, Inc from 1998 until 2004. From June 2001 until April 2004, she was a trustee and executive vice president of Inland Mutual Fund Trust. Prior to joining Inland, she worked for the Chicago Region of the Social Security Administration of the Untied States Department of Health and Human Services.  Ms. Matlin is a graduate of the University of Illinois. She holds Series 7, 22, 24, 39, 63 and 65 licenses from the National Association of Securities Dealers.

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GUADALUPE GRIFFIN (age 40) joined Inland in 1994. Ms. Griffin serves as vice president of Inland Real Estate Investment Corporation and assistant vice president of Inland Midwest Investment Corporation. Ms. Griffin is responsible for the asset management and day-to-day operations of the public and private partnerships which include the development of operating and disposition strategies for the partnerships and investor communications. Prior to joining Inland, Ms. Griffin was employed by the University of Illinois at Chicago Center for Urban Educational Research and Development as Assistant to the Director of the Nation of Tomorrow Program; a privately funded multi-million dollar program, which provided educational and empowerment services to youths and their families in four inner-city schools. Ms. Griffin holds an Illinois Real Estate Sales License.

KELLY TUCEK (age 42) joined Inland in 1989 and is a vice president of Inland Real Estate Investment Corporation and since 2004, treasurer of Inland American Real Estate Trust, Inc.  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.

GARY E. PECHTER (age 53) joined Inland in 1985 and is a Senior Vice President and Senior Counsel of The Inland Real Estate Group, Inc., and a member of the Audit Committee for all public partnerships sponsored by IREIC. In his capacity as their counsel, Mr. Pechter has been admitted to practice law in the State of Illinois and the federal district court.  He is also a licensed real estate broker. Mr. Pechter received his undergraduate degree from the University of Illinois and his law degree from John Marshall Law School.





Our 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 us.

Our 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 our land during a given year exceed our revenues, our general partner will make a supplemental capital contribution of such amount to us to ensure that we have sufficient funds to make such payments.

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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 our 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, we 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 us.

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 or 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.

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.

We are permitted to engage in various transactions involving affiliates of our general partner, as described below.

Our general partner was entitled to receive an asset management fee equal to one-quarter of 1% of our original cost of undeveloped land annually, limited to a cumulative total over the life of our partnership of 2% of the land's original cost to us. As of June 30, 1998, we had met this limit and no additional asset management fees have been paid.

Our general partner and its affiliates may be reimbursed for their expenses or out-of-pocket costs relating to our administration. For the year ended December 31, 2004, such costs included in general and administrative services to affiliates and professional services to affiliates were $48,039, of which $5,422 was unpaid as of December 31, 2004.

An affiliate of the general partner performed marketing and advertising services for us and was reimbursed for direct costs.  For the year ended December 31, 2004, we incurred $19,280 of such costs, all of which was paid as of December 31, 2004.

An affiliate of the general partner performed property upgrades, rezoning, annexation and other activities to prepare our land investments for sale and was reimbursed for salaries and direct costs. For the year ended December 31, 2004, we incurred $98,576 of such costs, of which $16,016 was unpaid, and included in the investments in land and improvements. As of December 31, 2004, all notes payable to an affiliate had been repaid. For the year ended December 31, 2004, interest of $71,655 was capitalized and included in investments in land and improvements.

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Item 12. Security Ownership of Certain Beneficial Owners and Management

1. No person or group is known by us to own beneficially more than 5% of the outstanding units of our partnership
2. The officers and directors of our general partner own as a group the following units of our partnership:



|                          | Amount and Nature  |         
|------------------------- | ------------------ | --------
|                          | of Beneficial      | Percent 
|Title of Class            | Ownership          | of Class
|                          |                    |         
|Limited partnership units | 298 Units directly | 1%      
|                          |                    |         

No officer or director of our general partner possesses a right to acquire beneficial ownership of units of our partnership.

All of the outstanding shares of our general partner are owned by an affiliate or its officers and directors as set forth above in Item 10.

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.

Item 14:  Principal Accountant Fees and Services

Fees.  Aggregate fees paid for professional services rendered by our independent registered public accounting firm were as follows:

|                                                                                                                                                  |   | Years ended December 31,
|------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------------------
|                                                                                                                                                  |   | 2004                    
|                                                                                                                                                  |   |                         
|Audit fees for professional services rendered for the audit of our annual financial statements and quarterly reviews of our financial statements. | $ | 35,900                  
|Tax fees for professional services rendered for tax return preparation and review of our K-1s.                                                    |   | 15,190                  
|                                                                                                                                                  |   |                         
|Total fees                                                                                                                                        | $ | 51,090                  

On January 27, 2005, our audit committee approved Grant Thornton LLP to serve as our independent registered public accounting firm for the year ended December 31, 2004.

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PART IV

Item 15.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K

1. The financial statements listed in the index at page 16 of this annual report are filed as part of this annual report.
2. Exhibits. The following exhibits are incorporated herein by reference:



|     |                                                                      
|---- | ---------------------------------------------------------------------
|31.1 | Rule 13a-14(a)/15d-14(a) Certification by principal executive officer
|     |                                                                      
|31.2 | Rule 13a-14(a)/15d-14(a) Certification by principal financial officer
|     |                                                                      
|32.1 | Section 1350 Certification by principal executive officer            
|     |                                                                      
|32.2 | Section 1350 Certification by principal financial officer            
|     |                                                                      

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 2004 has been sent to our limited partners.   An annual report will be sent to the limited partners subsequent to this filing and we will furnish copies of such report to the Commission when it is sent to the limited partners.

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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/   | Brenda G. Gujral                         
|      |                                          
|By:   | Brenda G. Gujral                         
|      | President and Director                   
|Date: | March 23, 2005                           

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/   | Brenda G. Gujral                         
|      |                                          
|By:   | Brenda G. Gujral                         
|      | President and Director                   
|Date: | March 23, 2005                           
|      |                                          
|/s/   | Guadalupe Griffin                        
|      |                                          
|By:   | Guadalupe Griffin                        
|      | Vice President                           
|Date: | March 23, 2005                           
|      |                                          
|/s/   | Kelly Tucek                              
|      |                                          
|By:   | Kelly Tucek                              
|      | Vice President                           
|Date: | March 23, 2005                           
|      |                                          
|/s/   | Robert D. Parks                          
|      |                                          
|By:   | Robert D. Parks                          
|      | Chairman                                 
|Date: | March 23, 2005                           
|      |                                          
|/s/   | Daniel L. Goodwin                        
|      |                                          
|By:   | Daniel L. Goodwin                        
|      | Director                                 
|Date: | March 23, 2005                           
|      |                                          

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