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, 2001or

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

Commission file #0-18431
Inland Land Appreciation Fund, L.P.
(Exact name of registrant as specified in its charter)

|Delaware                                   | 36-3544798                             
|------------------------------------------ | ---------------------------------------
|(State of organization)                    | (I.R.S. Employer Identification Number)
|                                           |                                        
|2901 Butterfield Road, Oak Brook, Illinois | 60523                                  
|(Address of principal executive office)    | (Zip Code)                             

Registrant's telephone number, including area code:  630-218-8000
Securities registered pursuant to Section 12(b) of the Act:



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

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



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



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



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



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

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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                                                                                    | 5   
|           |                                                                                               |     
|Item  3.   | Legal Proceedings                                                                             | 5   
|           |                                                                                               |     
|Item  4.   | Submission of Matters to a Vote of Security Holders                                           | 5   
|           |                                                                                               |     
|           | Part II                                                                                       |     
|           |                                                                                               |     
|Item  5.   | Market for Partnership's Limited Partnership Units and Related Security Holder Matters        | 6   
|           |                                                                                               |     
|Item  6.   | Selected Financial Data                                                                       | 7   
|           |                                                                                               |     
|Item  7.   | Management's Discussion and Analysis of Financial Condition and Results of Operations         | 8   
|           |                                                                                               |     
|Item  7(a) | Quantitative and Qualitative Disclosure About Market Risk                                     | 11  
|           |                                                                                               |     
|Item  8.   | Financial Statements and Supplementary Data                                                   | 12  
|           |                                                                                               |     
|Item  9.   | Changes in and Disagreements with Independent Auditors on Accounting and Financial Disclosure | 29  
|           |                                                                                               |     
|           | Part III                                                                                      |     
|           |                                                                                               |     
|Item 10.   | Directors and Executive Officers of the Registrant                                            | 29  
|           |                                                                                               |     
|Item 11.   | Executive Compensation                                                                        | 33  
|           |                                                                                               |     
|Item 12.   | Security Ownership of Certain Beneficial Owners and Management                                | 34  
|           |                                                                                               |     
|Item 13.   | Certain Relationships and Related Transactions                                                | 34  
|           |                                                                                               |     
|           | Part IV                                                                                       |     
|           |                                                                                               |     
|Item 14.   | Exhibits, Financial Statement Schedules, and Reports on Form 8-K                              | 35  
|           |                                                                                               |     
|           | SIGNATURES                                                                                    | 36  

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PART I

Item 1. Business

The Registrant, Inland Land Appreciation Fund, L.P. (the "Partnership"), was formed in October 1987, pursuant to the Delaware Revised Uniform Limited Partnership Act, to invest in undeveloped land on an all-cash basis and realize appreciation of such land upon resale. On October 12, 1988, the Partnership commenced an Offering of 10,000  (subject to increase to 30,000) Limited Partnership Units ("Units") pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933. The Offering terminated on October 6, 1989, with total sales of 30,000 Units, at  $1,000 per Unit, resulting in gross offering proceeds of $30,000,000, which does not include the General Partner or the Initial Limited Partner. All of the holders of these Units have been admitted to the Partnership. Inland Real Estate Investment Corporation is the General Partner. The Partnership used $25,187,069 of gross offering proceeds to purchase on an all-cash basis twenty-five parcels of undeveloped land and an option to purchase undeveloped land. The Limited Partners of the Partnership share in their portion of benefits of ownership of the Partnership's real property investments according to the number of Units held. As of December 31, 2001, 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.

The Partnership is 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 the Partnership's business taken as a whole.

The Partnership acquired fee ownership of the following real property investments:

|                                   | Gross Acres    | Purchase/Sales
|---------------------------------- | -------------- | --------------
|Parcel & Location                  | Purchased/Sold | Date          
|Parcel 1, Kendall County, Illinois | 84.7360        | 01/19/89      
|                                   | (3.5200        | sold 12/24/96)
|                                   | (.3520         | sold 11/25/97)
|                                   | (80.8640       | sold 12/29/97)
|                                   |                |               
|Parcel 2, McHenry County, Illinois | 223.4121       | 01/19/89      
|                                   | (183.3759      | sold 12/27/90)
|                                   | (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        | 04/18/89      
|                                   | (.4860         | sold 02/28/91)
|                                   | (27.5750       | sold 08/25/95)
|                                   | (3.9500        | sold 11/01/00)
|                                   | (4.4000        | sold Var 2001)
|                                   |                |               
|Parcel 5, Kendall County, Illinois | 372.2230 (a)   | 05/03/89      
|                                   | (Option        | sold 04/06/90)
|                                   |                |               
|Parcel 6, Kendall County, Illinois | 78.3900        | 06/21/89      
|                                   |                |               
|Parcel 7, Kendall County, Illinois | 77.0490        | 06/21/89      

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

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|                                    | Gross Acres    | Purchase/Sales
|----------------------------------- | -------------- | --------------
|Parcel & Location                   | Purchased/Sold | Date          
|Parcel 8, Kendall County, Illinois  | 5.0000         | 06/21/89      
|                                    | (5.0000        | sold 10/06/89)
|                                    |                |               
|Parcel 9, McHenry County, Illinois  | 51.0300        | 08/07/89      
|                                    |                |               
|Parcel 10, McHenry County, Illinois | 123.9400       | 08/07/89      
|                                    | (123.9400      | sold 12/06/89)
|                                    |                |               
|Parcel 11, McHenry County, Illinois | 30.5920        | 08/07/89      
|                                    |                |               
|Parcel 12, Kendall County, Illinois | 90.2710        | 10/31/89      
|                                    | (.7090         | sold 04/26/91)
|                                    |                |               
|Parcel 13, McHenry County, Illinois | 92.7800        | 11/07/89      
|                                    | (2.0810        | sold 09/18/97)
|                                    | (90.6990       | sold 02/15/01)
|                                    |                |               
|Parcel 14, McHenry County, Illinois | 76.2020        | 11/07/89      
|                                    |                |               
|Parcel 15, Lake County, Illinois    | 84.5564        | 01/03/90      
|                                    | (10.5300       | sold Var 1996)
|                                    | (5.4680        | sold Var 1997)
|                                    | (68.5584       | sold Var 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)
|                                    |                |               
|Parcel 17, McHenry County, Illinois | 99.9240        | 01/29/90      
|                                    | (27.5100       | sold 01/29/99)
|                                    |                |               
|Parcel 18, McHenry County, Illinois | 71.4870        | 01/29/90      
|                                    | (1.0000        | sold Var 1990)
|                                    | (.5200         | sold 03/11/93)
|                                    |                |               
|Parcel 19, McHenry County, Illinois | 63.6915        | 02/23/90      
|                                    |                |               
|Parcel 20, Kane County, Illinois    | 224.1480       | 02/28/90      
|                                    | (.2790         | sold 10/17/91)
|                                    |                |               
|Parcel 21, Kendall County, Illinois | 172.4950       | 03/08/90      
|                                    | (172.4950      | sold Var 1998)
|                                    |                |               
|Parcel 22, McHenry County, Illinois | 254.5250       | 04/11/90      
|                                    |                |               

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|                                    | Gross Acres    | Purchase/Sales
|----------------------------------- | -------------- | --------------
|Parcel & Location                   | Purchased/Sold | Date          
|Parcel 23, Kendall County, Illinois | 140.0210       | 05/08/90      
|                                    | (4.4100        | sold Var 1993)
|                                    | (35.8800       | sold Var 1994)
|                                    | (3.4400        | sold Var 1995)
|                                    | (96.2910       | sold 08/26/99)
|                                    |                |               
|Parcel 24, Kendall County, Illinois | 298.4830       | 05/23/90      
|                                    | (12.4570       | sold 05/25/90)
|                                    | (4.6290        | sold 04/01/96)
|                                    |                |               
|Parcel 25, Kane County, Illinois    | 225.0000       | 06/01/90      

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



The Partnership had purchased on an all-cash basis, twenty-five parcels of undeveloped land and is engaged in the rezoning and resale of the parcels. All of the investments were made in the Chicago metropolitan area.  The anticipated holding period of the land was approximately two to seven years from the completion of the land portfolio acquisitions. As of December 31, 2001, the Partnership has had multiple sales transactions, through which it has disposed of approximately 1,075 acres of the approximately 3,102 acres originally owned.



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

The Partnership had no employees during 2001.

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

Item 2. Properties

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

Item 3. Legal Proceedings

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



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

There were no matters submitted to a vote of security holders during 2001.

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PART II



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



As of December 31, 2001, there were 3,164 holders of Units of the Partnership. There is no public market for Units nor is it anticipated that any public market for Units will develop.



Although the Partnership has established a Unit Repurchase Program, funds for repurchase of Units are limited. Reference is made to "Unit Repurchase Program" on pages 17-18 of the Prospectus of the Partnership dated October 12, 1988, which is incorporated herein by reference. As of December 31, 2001, the Partnership had approximately $42,900 available for the repurchase of Units.



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Item 6. Selected Financial Data

INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
For the years ended December 31, 2001, 2000, 1999, 1998, and 1997
(not covered by Independent Auditors' Report)

|                                                             |   | 2001       | 2000       | 1999       | 1998       | 1997      
|------------------------------------------------------------ | - | ---------- | ---------- | ---------- | ---------- | ----------
|                                                             |   |            |            |            |            |           
|Total assets                                                 | $ | 26,413,426 | 25,475,076 | 24,680,969 | 25,809,385 | 28,057,898
|                                                             |   |            |            |            |            |           
|Total income                                                 | $ | 1,289,468  | 1,383,351  | 4,021,769  | 8,008,204  | 6,438,303 
|                                                             |   |            |            |            |            |           
|Net income                                                   | $ | 652,753    | 845,328    | 1,882,472  | 2,030,823  | 171,674   
|                                                             |   |            |            |            |            |           
|Net income (loss) allocated to the one General Partner Unit  | $ | 2,807      | 3,335      | 4,063      | 2,529      | (1,726)   
|                                                             |   |            |            |            |            |           
|Net income allocated per Limited Partnership Unit (b)        | $ | 21.96      | 28.45      | 63.46      | 68.47      | 5.85      
|                                                             |   |            |            |            |            |           
|Distributions per Limited Partnership Unit from sales (b)(c) | $ | -          | 50.68      | 89.55      | 115.68     | 62.41     
|                                                             |   |            |            |            |            |           
|Weighted average Limited Partnership Units                   |   | 29,593     | 29,596     | 29,599     | 29,621     | 29,639    

1. The above selected financial data should be read in conjunction with the financial statements and related notes appearing elsewhere in this Annual Report.
2. The net income per Unit and distributions per Unit data is based upon the weighted average number of Units outstanding.
3. Distributions from sales represent a return of Invested Capital, as defined in the Partnership Agreement.



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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 the Partnership's actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by these forward-looking statements. These factors include, among other things, federal, state or local regulations; adverse changes in general economic or local conditions; uninsured losses; and potential conflicts of interest between the Partnership and its Affiliates, including the General Partner.

Liquidity and Capital Resources

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



The Partnership used $25,187,069 of gross offering proceeds to purchase on an all-cash basis twenty-five parcels of undeveloped land and an option to purchase undeveloped land. These investments include the payment of the purchase price, acquisition fees and acquisition costs of such properties. Fourteen of the parcels were purchased during 1989 and eleven during 1990.  As of December 31, 2001, the Partnership has had multiple sales transactions, through which it has disposed of approximately 1,075 acres of the approximately 3,102 acres originally owned. As of December 31, 2001, cumulative distributions to the Limited Partners have totaled $13,573,623 (which represents a return of Invested Capital, as defined in the Partnership Agreement) and $153,743 to the General Partner. Through December 31, 2001, the Partnership has used $14,802,571 of working capital reserved for rezoning and other activities. Such amounts have been capitalized and are included in investments in land.



The Partnership's capital needs and resources will vary depending upon a number of factors, including the extent to which the Partnership conducts rezoning and other activities relating to utility access, the installation of roads, subdivision and/or annexation of land to a municipality, changes in real estate taxes affecting the Partnership's land, and the amount of revenue received from leasing.  As of December 31, 2001, the Partnership owns, in whole or in part, sixteen of its twenty-five original parcels, the majority of which are leased to local farmers and are generating sufficient cash flow from farm leases to cover property taxes and insurance.



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At December 31, 2001, the Partnership had cash and cash equivalents of $188,806, of which approximately  $42,900 is reserved for the repurchase of Units through the Unit Repurchase Program. The remaining $145,906 is available to be used for the Partnership expenses and liabilities, cash distributions to partners and other activities with respect to some or all of its land parcels. The Partnership has increased its parcel sales effort in anticipation of rising land values.



The Partnership plans to enhance the value of its land through pre-development activities such as rezoning annexation and land planning. The Partnership has already been successful in, or is in the process of pre-development activity on a majority of the Partnership's land investments. Parcels 4, 6 and 7 have completed two phases of improvements for an industrial park and sites are being marketed. A third phase is slated for 2002. Parcel 16 has been zoned with development and sales marketing underway. Zoning discussions have begun on Parcel 12, 17,18 and 22.

Results of Operations

As of December 31, 2001, the Partnership owned sixteen parcels of land consisting of approximately 2,027 acres. Of the 2,027 acres owned, approximately 1,927 acres are tillable, leased to local farmers and generate sufficient cash flow to cover property taxes, insurance and other miscellaneous expenses. Sale of investments in land and improvements and cost of land sold for the year ended December 31, 2001 is a result of the sale of four lots of Parcel 4 and the sale of the balance of 91 acres of Parcel 13. Sale of investments in land and improvements and cost of land sold for the year ended December 31, 2000 is a result of the sale of approximately 40 acres of Parcel 2, the sale of an additional lot of Parcel 4 and the sale of 3 acres of Parcel 16. Sale of investments in land and improvements and cost of land sold for the year ended December 31, 1999 is a result of the sale of approximately 134 acres, including the remaining acreage of Parcel 23, the sale of approximately 10 acres of Parcel 16 and the sale of approximately 28 acres of Parcel 17. Reference is made to Note 4 of the Notes to Financial Statements for additional discussion on the sales of the Partnership's real property investments.



Rental income increased for the year ended December 31, 2001 as compared to the year ended December 31, 2000, due to the annual increase in lease amount from tenants. Rental income decreased for the year ended December 31, 2000, as compared to the year ended December 31, 1999, due to a decrease in acres farmed due to land sales.

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Interest income decreased for the year ended December 31, 2001, as compared to the year ended December 31, 2000, primarily as a result of less interest income earned on the mortgage loans receivable as the Partnership received paydowns on the mortgages generated from the sales.  The Partnership also had less cash available to invest on a short term basis during the year which also resulted in a decrease in interest income earned.  Interest income decreased for the year ended December 31, 2000, as compared to the year ended December 31, 1999, primarily as a result of less interest income earned on the mortgage loans receivable as the Partnership received paydowns on the mortgages generated from the sales of Parcels 15 and 21. This decrease was partially offset by an increase in interest income on the mortgage loan receivable on Parcel 23. See Note 6 of the Notes to Financial Statements for further discussion of the terms of the mortgage loans receivable received from these sales.



Professional services to Affiliates decreased for the year ended December 31, 2001, as compared to the year ended December 31, 2000, due to a decrease in legal services.  Professional services to Affiliates increased for the year ended December 31, 2000, as compared to the year ended December 31, 1999, due to an increase in legal services.



General and administrative expenses to Affiliates decreased for the year ended December 31, 2001, as compared to the year ended December 31, 2000, due to a decrease in investor service expense and data processing expense. General and administrative expenses to Affiliates increased for the year ended December 31, 2000, as compared to the year ended December 31, 1999, due primarily to an increase in investor services expenses. General and administrative expenses to non-affiliates decreased for the year ended December 31, 2001, as compared to the year ended December 31, 2000, due to an increase in the Illinois Replacement Tax paid and a decrease in printing costs.

Marketing expenses to Affiliates and non-affiliates increased for the year ended December 31, 2001, as compared to the year ended December 31, 2000, due to an increase in advertising related to marketing the land portfolio to prospective purchasers. Marketing expenses to Affiliates decreased for the year ended December 31, 2000, as compared to the year ended December 31, 1999, due to an increase in the capitalization of marketing costs to the specific land parcels. Marketing expenses to non-affiliates decreased for the year ended December 31, 2000, as compared to the year ended December 31, 1999, due to a decrease in non-recurring advertising and travel expenses related to marketing the land portfolio to prospective purchasers.



Land operating expenses to non-affiliates decreased for the year ended December 31, 2001, as compared to the year ended December 31, 2000, due to a decrease in real estate tax expense in 2001 and one time costs incurred in 2000 relating to a proposed spec building.  This decrease was partially offset by an increase in grounds maintenance expenses of the Partnership's land investments. Land operating expenses to non-affiliates increased for the year ended December 31, 2000, as compared to the year ended December 31, 1999, due to costs relating to a proposed spec building on one of the parcels.



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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, 2001 and 2000.

|                                                  |   | 2001   
|------------------------------------------------- | - | -------
|                                                  |   | 12/31  
|Total income                                      | $ | 124,462
|Net income                                        |   | 67,435 
|                                                  |   |        
|Net income per common share, basic and   diluted: |   | 2.28   
|                                                  |   |        
|                                                  |   | 2000   
|                                                  |   | 12/31  
|Total income                                      | $ | 721,490
|Net income/(loss)                                 |   | 507,186
|                                                  |   |        
|Net income per common share, basic and   diluted: |   | 17.14  

Inflation

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



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

Not Applicable.

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Item 8.  Financial Statements and Supplementary Data

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

Index

|                                                                                       | Page
|-------------------------------------------------------------------------------------- | ----
|                                                                                       |     
|Independent Auditors' Report                                                           | 13  
|                                                                                       |     
|Financial Statements:                                                                  |     
|                                                                                       |     
|Balance Sheets, December 31, 2001 and 2000                                             | 14  
|                                                                                       |     
|Statements of Operations, for the years ended December 31, 2001, 2000, and 1999        | 16  
|                                                                                       |     
|Statements of Partners' Capital, for the years ended December 31, 2001, 2000, and 1999 | 17  
|                                                                                       |     
|Statements of Cash Flows, for the years ended December 31, 2001, 2000, and 1999        | 18  
|                                                                                       |     
|Notes to Financial Statements                                                          | 20  





Schedules not filed:

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

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INDEPENDENT AUDITORS' REPORT



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

We have audited the accompanying balance sheets of Inland Land Appreciation Fund, L.P. (a limited partnership) ("the Partnership") as of December 31, 2001 and 2000, and the related statements of operations, partners' capital, and cash flows for each of the three years in the period ended December 31, 2001. 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 auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.



In our opinion, such financial statements present fairly, in all material respects, the financial position of Inland Land Appreciation Fund, L.P. as of December 31, 2001 and 2000, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States of America.



February 5, 2002
Chicago, Illinois



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INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Balance Sheets
December 31, 2001 and 2000Assets



|                                                                                                                                                                                       |   | 2001       | 2000      
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ---------- | ----------
|Current assets:                                                                                                                                                                        |   |            |           
|Cash and cash equivalents                                                                                                                                                              | $ | 188,806    | 920,893   
|Accounts and accrued interest receivable (Note 6)                                                                                                                                      |   | 969,028    | 740,430   
|Current portion of mortgage loans receivable (Note 6)                                                                                                                                  |   | 144,557    | -         
|Other current assets                                                                                                                                                                   |   | 5,172      | 1,510     
|                                                                                                                                                                                       |   |            |           
|Total current assets                                                                                                                                                                   |   | 1,307,563  | 1,662,833 
|                                                                                                                                                                                       |   |            |           
|Other assets                                                                                                                                                                           |   | 16,840     | 16,840    
|Loan fees (net of accumulated amortization of $10,284 and $0 at
  December 31, 2001 and 2000, respectively)                                                                            |   | 19,716     | 30,000    
|Mortgage loans receivable, less current portion (Note 6)                                                                                                                               |   | 2,291,799  | 2,658,386 
|Investments in land and improvements, at cost (including acquisition fees paid   to Affiliates of $850,016 and $869,139 at December 31, 2001 and 2000,   respectively) (Notes 3 and 4) |   | 22,777,508 | 21,107,017
|                                                                                                                                                                                       |   |            |           
|Total assets                                                                                                                                                                           | $ | 26,413,426 | 25,475,076
|                                                                                                                                                                                       |   | ========== | ========= 

See accompanying notes to financial statements.

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INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Balance Sheets
(continued)
December 31, 2001 and 2000Liabilities and Partners' Capital

|                                                                                                                                                                                          |   | 2001         | 2000        
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------ | ------------
|                                                                                                                                                                                          |   |              |             
|Current liabilities:                                                                                                                                                                      |   |              |             
|Accounts payable                                                                                                                                                                          | $ | 11,035       | 4,881       
|Accrued real estate taxes                                                                                                                                                                 |   | 46,903       | 47,843      
|Due to Affiliates (Notes 3 and 7)                                                                                                                                                         |   | 56,006       | 19,823      
|Notes payable to Affiliate (Note 7)                                                                                                                                                       |   | 3,993,750    | 3,993,750   
|Unearned income                                                                                                                                                                           |   | 269,280      | 19,280      
|                                                                                                                                                                                          |   |              |             
|Total current liabilities                                                                                                                                                                 |   | 4,376,974    | 4,085,577   
|                                                                                                                                                                                          |   |              |             
|Deferred gain on sale of investments in land and improvements (Note 6)                                                                                                                    |   | 249,958      | 255,758     
|                                                                                                                                                                                          |   |              |             
|Partners' capital:                                                                                                                                                                        |   |              |             
|General Partner:                                                                                                                                                                          |   |              |             
|Capital contribution                                                                                                                                                                      |   | 500          | 500         
|Cumulative net income                                                                                                                                                                     |   | 178,683      | 175,876     
|Cumulative cash distributions                                                                                                                                                             |   | (153,743)    | (153,743)   
|                                                                                                                                                                                          |   |              |             
|                                                                                                                                                                                          |   | 25,440       | 22,633      
|Limited Partners:                                                                                                                                                                         |   |              |             
|Units of $1,000. Authorized 30,001 Units, 29,593 outstanding at       December 31, 2001 and 2000, (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                                                                                                                                                                     |   | 9,461,274    | 8,811,328   
|Cumulative cash distributions                                                                                                                                                             |   | (13,573,623) | (13,573,623)
|                                                                                                                                                                                          |   |              |             
|                                                                                                                                                                                          |   | 21,761,054   | 21,111,108  
|                                                                                                                                                                                          |   |              |             
|Total Partners' capital                                                                                                                                                                   |   | 21,786,494   | 21,133,741  
|                                                                                                                                                                                          |   |              |             
|Total liabilities and Partners' capital                                                                                                                                                   | $ | 26,413,426   | 25,475,076  
|                                                                                                                                                                                          |   | ===========  | =========== 

See accompanying notes to financial statements.

-15-

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INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Statements of Operations
For the years ended December 31, 2001, 2000 and 1999

|                                                                                                                                                                                                      |   | 2001         | 2000        | 1999       
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------ | ----------- | -----------
|                                                                                                                                                                                                      |   |              |             |            
|Income:                                                                                                                                                                                               |   |              |             |            
|Sale of investments in land and improvements (Note 4)                                                                                                                                                 | $ | 750,900      | 770,078     | 3,286,385  
|Recognition of deferred gain on sale of investments in     land and improvements (Note 6)                                                                                                             |   | 5,800        | 40,599      | 110,504    
|Rental income (Note 5)                                                                                                                                                                                |   | 272,752      | 254,617     | 268,149    
|Interest income                                                                                                                                                                                       |   | 259,774      | 311,036     | 353,231    
|Other income                                                                                                                                                                                          |   | 242          | 7,021       | 3,500      
|                                                                                                                                                                                                      |   |              |             |            
|                                                                                                                                                                                                      |   | 1,289,468    | 1,383,351   | 4,021,769  
|                                                                                                                                                                                                      |   |              |             |            
|Expenses:                                                                                                                                                                                             |   |              |             |            
|Cost of land sold                                                                                                                                                                                     |   | 384,614      | 298,882     | 1,920,750  
|Professional services to Affiliates                                                                                                                                                                   |   | 24,388       | 32,696      | 28,797     
|Professional services to non-affiliates                                                                                                                                                               |   | 30,753       | 29,750      | 30,732     
|General and administrative expenses to Affiliates                                                                                                                                                     |   | 15,745       | 22,339      | 20,077     
|General and administrative expenses to non-affiliates                                                                                                                                                 |   | 22,387       | 31,544      | 31,700     
|Marketing expenses to Affiliates                                                                                                                                                                      |   | 32,627       | 14,216      | 27,869     
|Marketing expenses to non-affiliates                                                                                                                                                                  |   | 49,668       | 23,351      | 17,517     
|Land operating expenses to non-affiliates                                                                                                                                                             |   | 66,249       | 85,245      | 61,855     
|Amortization                                                                                                                                                                                          |   | 10,284       | -           | -          
|                                                                                                                                                                                                      |   |              |             |            
|                                                                                                                                                                                                      |   | 636,715      | 538,023     | 2,139,297  
|                                                                                                                                                                                                      |   |              |             |            
|Net income                                                                                                                                                                                            | $ | 652,753      | 845,328     | 1,882,472  
|                                                                                                                                                                                                      |   | ===========  | ==========  | ========== 
|Net income allocated (Note 2):                                                                                                                                                                        |   |              |             |            
|General Partner                                                                                                                                                                                       | $ | 2,807        | 3,335       | 4,063      
|Limited Partners                                                                                                                                                                                      |   | 649,946      | 841,993     | 1,878,409  
|                                                                                                                                                                                                      |   |              |             |            
|Net income                                                                                                                                                                                            | $ | 652,753      | 845,328     | 1,882,472  
|                                                                                                                                                                                                      |   | ============ | ==========  | ===========
|Net income allocated to the one General Partner   Unit                                                                                                                                                | $ | 2,807        | 3,335       | 4,063      
|                                                                                                                                                                                                      |   | ============ | =========== | ===========
|Net income per Unit allocated to Limited Partners per   weighted average Limited Partnership Units (29,593,   29,596 and 29,599 for the years ended December 31,   2001, 2000 and 1999, respectively) | $ | 21.96        | 28.45       | 63.46      
|                                                                                                                                                                                                      |   | ============ | =========== | ===========

See accompanying notes to financial statements.

-16-

---



INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Statements of Partners' Capital
For the years ended December 31, 2001, 2000 and 1999

|                                                                                                       |   | General   | Limited     |            
|------------------------------------------------------------------------------------------------------ | - | --------- | ----------- | -----------
|                                                                                                       |   | Partner   | Partners    | Total      
|                                                                                                       |   |           |             |            
|Balance at January 1, 1999                                                                             | $ | 15,235    | 22,550,106  | 22,565,341 
|                                                                                                       |   |           |             |            
|Net income (Note 2)                                                                                    |   | 4,063     | 1,878,409   | 1,882,472  
|Distributions to Partners ($89.55 per weighted average   Limited Partnership Units of 29,599) (Note 2) |   | -         | (2,650,785) | (2,650,785)
|Repurchase of Limited Partnership Units                                                                |   | -         | (6,833)     | (6,833)    
|                                                                                                       |   |           |             |            
|Balance at December 31, 1999                                                                           |   | 19,298    | 21,770,897  | 21,790,195 
|                                                                                                       |   |           |             |            
|Net income (Note 2)                                                                                    |   | 3,335     | 841,993     | 845,328    
|Distributions to Partners ($50.68 per weighted average   Limited Partnership Units of 29,596) (Note 2) |   | -         | (1,500,000) | (1,500,000)
|Repurchase of Limited Partnership Units                                                                |   | -         | (1,782)     | (1,782)    
|                                                                                                       |   |           |             |            
|Balance at December 31, 2000                                                                           |   | 22,633    | 21,111,108  | 21,133,741 
|                                                                                                       |   |           |             |            
|Net income (Note 2)                                                                                    |   | 2,807     | 649,946     | 652,753    
|                                                                                                       |   |           |             |            
|Balance at December 31, 2001                                                                           | $ | 25,440    | 21,761,054  | 21,786,494 
|                                                                                                       |   | ========= | =========== | ===========



See accompanying notes to financial statements.

-17-

---



INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Statements of Cash Flows
For the years ended December 31, 2001, 2000 and 1999

|                                                                                                |   | 2001        | 2000        | 1999       
|----------------------------------------------------------------------------------------------- | - | ----------- | ----------- | -----------
|                                                                                                |   |             |             |            
|Cash flows from operating activities:                                                           |   |             |             |            
|Net income                                                                                      | $ | 652,753     | 845,328     | 1,882,472  
|Adjustments to reconcile net income to net cash provided     by (used in) operating activities: |   |             |             |            
|Gain on sale of investments in land and improvements                                            |   | (366,286)   | (471,196)   | (1,365,635)
|Recognition of deferred gain on sale of investments in       land and improvements              |   | (5,800)     | (40,599)    | (110,504)  
|Amortization                                                                                    |   | 10,284      | -           | -          
|Changes in assets and liabilities:                                                              |   |             |             |            
|Accounts and accrued interest receivable                                                        |   | (228,598)   | (278,221)   | (280,388)  
|Other assets                                                                                    |   | (3,662)     | 26,005      | (22,856)   
|Accounts payable                                                                                |   | 6,154       | (4,736)     | 7,120      
|Accrued real estate taxes                                                                       |   | (940)       | 2,744       | 2,925      
|Due to Affiliates                                                                               |   | 36,183      | (22,921)    | (232,553)  
|Unearned income                                                                                 |   | 250,000     | 16,073      | (50,817)   
|                                                                                                |   |             |             |            
|Net cash provided by (used in) operating activities                                             |   | 350,088     | 72,477      | (170,236)  
|                                                                                                |   |             |             |            
|Cash flows from investing activities:                                                           |   |             |             |            
|Principal payments collected on mortgage loans receivable                                       |   | 222,030     | 516,657     | 1,206,151  
|Additions to investments in land and improvements                                               |   | (2,055,105) | (1,103,222) | (782,498)  
|Proceeds from disposition of investments in land and     improvements                           |   | 750,900     | 770,078     | 1,966,944  
|                                                                                                |   |             |             |            
|Net cash flow provided by (used in) investing activities                                        |   | (1,082,175) | 183,513     | 2,390,597  
|                                                                                                |   |             |             |            
|Cash flows from financing activities:                                                           |   |             |             |            
|Repurchase of Limited Partnership Units                                                         |   | -           | (1,782)     | (6,833)    
|Net proceeds from notes payable to Affiliate                                                    |   | -           | 1,500,000   | -          
|Loan fees                                                                                       |   | -           | (30,000)    | -          
|Cash distributions                                                                              |   | -           | (1,500,000) | (2,650,785)
|                                                                                                |   |             |             |            
|Net cash flow used in financing activities                                                      |   | -           | (31,782)    | (2,657,618)

See accompanying notes to financial statements.

-18-

---



INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Statements of Cash Flows
(continued)
For the years ended December 31, 2001, 2000 and 1999

|                                                     |   | 2001        | 2000        | 1999       
|---------------------------------------------------- | - | ----------- | ----------- | -----------
|                                                     |   |             |             |            
|Net increase (decrease) in cash and cash equivalents | $ | (732,087)   | 224,208     | (437,257)  
|Cash and cash equivalents at beginning of year       |   | 920,893     | 696,685     | 1,133,942  
|                                                     |   |             |             |            
|Cash and cash equivalents at end of year             | $ | 188,806     | 920,893     | 696,685    
|                                                     |   | =========== | =========== | ===========



Supplemental schedule of non-cash investing and financing activities:

|                                                                    |   | 2001       | 2000       | 1999       
|------------------------------------------------------------------- | - | ---------- | ---------- | -----------
|                                                                    |   |            |            |            
|Mortgage loans receivable                                           | $ | -          | -          | (1,350,000)
|Reduction in investments in land and improvements                   |   | 384,614    | 298,882    | 1,920,750  
|Gain on sale of investments in land and improvements                |   | 366,286    | 471,196    | 1,365,635  
|Deferred gain on sale of investments in land and   improvements     |   | -          | -          | 30,559     
|Proceeds from disposition of investments in land and   improvements | $ | 750,900    | 770,078    | 1,966,944  
|                                                                    |   | ========== | ========== | ===========



See accompanying notes to financial statements.

-19-

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INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Notes to Financial Statements
For the years ended December 31, 2001, 2000 and 1999

(1) Organization and Basis of Accounting

The Registrant, Inland Land Appreciation Fund, L.P. (the "Partnership"), was formed in October 1987, pursuant to the Delaware Revised Uniform Limited Partnership Act, to invest in undeveloped land on an all-cash basis and realize appreciation of such land upon resale. On October 12, 1988, the Partnership commenced an Offering of 10,000 (subject to increase to 30,000) Limited Partnership Units ("Units") pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933. Inland Real Estate Investment Corporation is the General Partner. The Offering terminated on October 6, 1989, with total sales of 30,000 Units, at $1,000 per Unit, not including the General Partner or the Initial Limited Partner. All of the holders of these Units have been admitted to this Partnership. The Limited Partners of the Partnership share in their portion of benefits of ownership of the Partnership's real property investments according to the number of Units held. As of December 31, 2001, 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.



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



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



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



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



Statement of Financial Accounting Standards No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of" ("SFAS 121") requires the Partnership to record an impairment loss on its property to be held for investment whenever its carrying value cannot be fully recovered through estimated undiscounted future cash flows from their operations and sale. The amount of the impairment loss to be recognized would be the difference between the property's carrying value and the property's estimated fair value. For the years ended December 31, 2001, 2000 and 1999, the Partnership has not recognized any such impairment.

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.



-20-

---



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

A presentation of information about operating segments as required in Statement of Financial Accounting Standards No. 131 "Disclosures About Segments of an Enterprise and Related Information" would not be material to an understanding of the Partnership's business taken as a whole as the Partnership is engaged in the business of real estate investment which management considers to be a single operating segment.



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 and 138. 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.



In August 2001, the 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 FASB Statement No. 121, Accounting for the Impairment of Long-Lived Assets to be Disposed Of.  The provisions of this statement are effective for the Partnership beginning January 1, 2002.  In the opinion of management, this statement, when adopted, is not expected to  have a material impact on the financial position or results of operations of the Partnership.



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



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



|2001                                    | 2000
|--------------------------------------- | ----
|                                        |     
|                                        |     
|                                        |     
|Total assets                            | $   
|                                        |     
|Partners' capital:                      |     
|General Partner                         |     
|Limited Partners                        |     
|                                        |     
|Net income 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 and 29,596 during 2001 and 2000, respectively.

-21-

---

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

(2) Partnership Agreement

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



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



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



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



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

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.

-22-

---

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 $3,342 and $7,665 were unpaid as of December 31, 2001 and 2000, 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 $32,627, $14,216 and $27,869 have been incurred and are included in marketing expenses to Affiliates for the years ended December 31, 2001, 2000 and 1999, respectively, all of which was paid as of December 31, 2001 and 2000, respectively.



An Affiliate of the General Partner performed property upgrades, rezoning, annexation and other activities to prepare the Partnership's land investments for sale and was reimbursed  (as set forth under terms of the Partnership Agreement) for salaries and direct costs. The Affiliate did not recognize a profit on any project. Such costs are included in investments in land.

-23-

---

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

(4) Investments in Land and Improvements



|Initial Costs
|-------------
|             
|Parcel       
|             
|1            
|             
|             
|             
|             
|2            
|             
|             
|             
|3            
|             
|             
|4            
|             
|             
|             
|             
|             
|5            
|             
|             
|6            
|             
|7            
|             
|8            
|             
|             
|9            
|             
|10           
|             
|             

-24-

---

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

(4) Investments in Land and Improvements (continued)



|Initial Costs
|-------------
|             
|Parcel       
|             
|11           
|             
|12           
|             
|             
|13           
|             
|             
|             
|14           
|             
|15           
|             
|             
|             
|             
|16           
|             
|             
|             
|             
|17           
|             
|             
|18           
|             
|             
|             
|19           
|             
|20           
|             

-25-

---

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

(4) Investments in Land and Improvements (continued)



|Initial Costs
|-------------
|             
|Parcel       
|21           
|             
|             
|22           
|             
|23           
|             
|             
|             
|             
|             
|24           
|             
|             
|             
|25           
|             
|             
|             



-26-

---

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 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:



|                        |   | 2001       | 2000      
|----------------------- | - | ---------- | ----------
|                        |   |            |           
|Balance at January 1,   | $ | 21,107,017 | 20,302,677
|Additions during year   |   | 2,055,105  | 1,103,222 
|Sales during year       |   | (384,614)  | (298,882) 
|                        |   |            |           
|Balance at December 31, | $ | 22,777,508 | 21,107,017



(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, 2001, the Partnership had farm leases of generally one year in duration, for approximately 1,855 acres of the approximately 2,027 acres owned.

-27-

---

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.  The fair market value of the mortgage loans receivable was approximately $2,559,000 and $2,724,000 at December 31, 2001 and 2000, respectively.



|       |          |               | Principal Balance | Principal Balance | Accrued Interest Receivable | Deferred Gain
|------ | -------- | ------------- | ----------------- | ----------------- | --------------------------- | -------------
|Parcel | Maturity | Interest Rate | 12/31/01          | 12/31/00          | 12/31/01                    | 12/31/01     
|       |          |               |                   |                   |                             |              
|1      | 12/30/03 | 9.00%         | $  1,233,215      | 1,262,299         | 423,794                     | 60,752       
|       |          |               |                   |                   |                             |              
|15     | 06/30/02 | 9.00%         | 144,557           | 144,557           | 123,358                     | 4,947        
|       |          |               |                   |                   |                             |              
|21     | 06/30/03 | 9.00%         | 656,050           | 656,050           | 286,779                     | 175,147      
|       |          |               |                   |                   |                             |              
|23     | 08/26/03 | 9.00%         | 402,534           | 595,480           | 135,097                     | 9,112        
|       |          |               |                   |                   |                             |              
|       |          |               | $  2,436,356      | $  2,658,386      | 969,028                     | 249,958      
|       |          |               | ========          | ========          | ========                    | ========     
|       |          |               |                   |                   |                             |              



(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. The note accrues interest at 7.2% and had a maturity date of December 29, 2001 which was extended to December 29, 2002. For the years ended December 31, 2001 and 2000, respectively, interest of $182,059 and $182,044, respectively, was capitalized, of which $30,424 was unpaid as of December 31, 2001.



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.  The note accrues interest at 8.75% and has a maturity date of November 30, 2003.  For the years ended December 31, 2001 and 2000, interest of $142,536 and $9,479, respectively, was capitalized, of which $22,240 was unpaid as of December 31, 2001.



The fair market value of the notes payable to Affiliate was approximately $4,097,000 and $3,986,000 at December 31, 2001 and 2000, respectively.



(8) Subsequent Events



On January 30, 2002, the Partnership sold an additional lot of Parcel 4 for $76,000 and recorded a gain of approximately $31,000.



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

There were no disagreements on accounting or financial disclosure matters during 2001.



PART III



Item 10.  Directors and Executive Officers of the Registrant

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





Officers and Directors



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





|                     | Functional Title                               
|-------------------- | -----------------------------------------------
|                     |                                                
|Daniel L. Goodwin    | Chairman and Chief Executive Officer           
|Robert H. Baum       | Executive Vice President-General Counsel       
|G. Joseph Cosenza    | Senior Vice President-Acquisitions             
|Robert D. Parks      | Senior Vice President-Investments              
|Brenda G. Gujral     | President and Chief Operating Officer-IREIC    
|Catherine L. Lynch   | Treasurer                                      
|Roberta S. Matlin    | Assistant Vice President-Investments           
|Patricia A. DelRosso | Vice President-Asset Management                
|Kelly Tucek          | Assistant Vice President-Partnership Accounting



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DANIEL L. GOODWIN (age 58) is Chairman of the Board of Directors of The Inland Group, Inc., a billion-dollar real estate and financial organization located in Oak Brook, Illinois. Among Inland's subsidiaries is the largest property management firm in Illinois and one of the largest commercial real estate and mortgage banking firms in the Midwest.



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



Mr. Goodwin has been in the housing industry for more than 30 years, and has demonstrated a lifelong interest in housing-related issues. He is a licensed real estate broker and a member of the National Association of Realtors, the Illinois Association of Realtors and the Northern Illinois Commercial Association of Realtors. He has developed thousands of housing units in the Midwest, New England, Florida, and the Southwest. He is also the author of a nationally recognized real estate reference book for the management of residential properties.



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



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



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In 1988 Mr. Goodwin received the Outstanding Business Leader Award from the Oak Brook Jaycees and in March 1994 he won the Excellence in Business Award from the DuPage Area Association of Business and Industry. Additionally, he was honored by Little Friends on May 17, 1995 for rescuing their Parent-Handicapped Infant Program. He was the recipient of the 1995 March of Dimes Life Achievement Award and was recognized as the 1998 Corporate Leader of the Year by the Oak Brook Area Association of Commerce and Industry. The Ray Graham Association for People with Disabilities honored Mr. Goodwin as the 1999 Employer of the Year. Also, in 1999, the YWCA DuPage District bestowed the Corporate Recognition Award for Inland's policies and practices that demonstrate a commitment to the advancement of women in the workplace. For many years, he has been Chairman of the National Football League Players Association Mackey Awards for the benefit of inner-city youth and he served as the recent Chairman of the Speakers Club of the Illinois House of Representatives.



ROBERT H. BAUM (age 57) has been with The Inland Group, Inc. and its affiliates since 1968 and is one of the four original principals. Mr. Baum is Vice Chairman and Executive Vice President-General Counsel of The Inland Group, Inc. In his capacity as General Counsel, Mr. Baum is responsible for the supervision of the legal activities of The Inland Group, Inc. and its affiliates. This responsibility includes the supervision of The Inland Law Department and serving as liaison with outside counsel. Mr. Baum has served as a member of the North American Securities Administrators Association Real Estate Advisory Committee and as a member of the Securities Advisory Committee to the Secretary of State of Illinois. He is a member of the American Corporation Counsel Association and has also been a guest lecturer for the Illinois State Bar Association. Mr. Baum has been admitted to practice before the Supreme Court of the United States, as well as the bars of several federal courts of appeals and federal district courts and the State of Illinois and is a licensed real estate broker. He has served as a director of American National Bank of DuPage and currently serves as a director of Westbank. Mr. Baum also is a member of the Governing Council of Wellness House, a charitable organization that provides educational and emotional support for cancer patients and their families.



G. JOSEPH COSENZA (age 57) has been with The Inland Group, Inc. and its affiliates since 1968 and is one of the four original principals. Mr. Cosenza is a Director and Vice Chairman of The Inland Group, Inc. and oversees, coordinates and directs Inland's many enterprises. In addition, Mr. Cosenza immediately supervises a staff of ten persons who engage in property acquisition. Mr. Cosenza has been a consultant to other real estate entities and lending institutions on property appraisal methods. He has directly overseen the purchase of close to $4 billion of income producing real estate from 1968 to the present.



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



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



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ROBERT D. PARKS  (age 58) has been with The Inland Group Inc. ("Inland") and its affiliates since 1968 and is one of the four original principals; Chairman of Inland Real Estate Investment Corporation and Director of Inland Securities Corporation. Mr. Parks is president, chief executive officer, and a director of Inland Real Estate Corporation. He is  Chairman, Chief Executive Officer and Affiliated Director of Inland Retail Real Estate Trust, Inc. He is a director of Inland Real Estate Advisory Services, Inc., Inland Investment Advisors, Inc., Partnership Ownership Corp., Inland Southern Acquisitions, Inc. and Inland Southeast Investment Corp., and he is a Trustee of Inland Mutual Fund Trust.



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 Investments Trusts, Inc.



BRENDA G. GUJRAL (age 60) is President and Chief Operating Officer of Inland Real Estate Investment Corporation (IREIC). She is also President and Chief Operating Officer of Inland Securities Corporation (ISC), a member firm of the National Association of Securities Dealers (NASD).



Mrs. Gujral has overall responsibility for the operations of IREIC, including the distribution of checks to over 50,000 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.



Mrs. Gujral began her career with Inland in 1977, 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.



CATHERINE L. LYNCH (age 43) joined Inland in 1989 and is the Treasurer of Inland Real Estate Investment Corporation. Ms. Lynch is responsible for managing the Corporate Accounting Department. Prior to joining Inland, Ms. Lynch worked in the field of public accounting for KPMG Peat Marwick since 1980. She received her B.S. Degree in Accounting from Illinois State University. Ms. Lynch is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants and the Illinois CPA Society. She is registered with the National Association of Securities Dealers as a Financial Operations Principal.



ROBERTA S. MATLIN (age 57) joined Inland in 1984 as Director of Investor Administration and currently serves as Senior Vice President--Investments of IREIC, directing the day-to-day internal operations of the General Partner. Ms. Matlin is a Director of IREIC and ISC. She is President and Director of Inland Investment Advisors, Inc. and Intervest Southern Real Estate Corporation and a trustee of Inland Mutual Fund Trust.  Until December 31, 2001, she was a Director of Inland Apartment Acquisitions, Inc. Prior to joining Inland, she spent 11 years with the Chicago Region of the Social Security Administration of the United States Department of Health and Human Services. Ms. Matlin received her B.A. Degree from the University of Illinois. She is registered with the NASD as a general securities principal and investment advisor.



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PATRICIA A. DELROSSO (age 49) joined Inland in 1985. Ms. DelRosso serves as Senior Vice President of Inland Real Estate Investment Corporation in the area of Asset Management. As head of the Asset Management Department, she develops operating and disposition strategies for all investment-owned properties. Ms. DelRosso also serves as President of the newly formed Inland Real Estate Exchange Corporation.  In this capacity, she develops, implements and evaluates business plans for tenant-in-common and customized 1031 tax-deferred exchange replacement property offerings. Ms. DelRosso received her Bachelor's degree from George Washington University and her Master's from Virginia Tech University. Ms. DelRosso is a licensed real estate broker, NASD registered securities sales representative, a member of the Urban Land Institute and a member of the Northern Illinois Commercial Association of Realtors.



KELLY TUCEK (age 39) joined Inland in 1989 and is an Assistant Vice President of Inland Real Estate Investment Corporation. As of August 1996, Ms. Tucek is responsible for the Investment Accounting Department which includes all public partnership accounting functions along with quarterly and annual SEC filings. Prior to joining Inland, Ms. Tucek was on the audit staff of Coopers and Lybrand since 1984. She received her B.A. Degree in Accounting and Computer Science from North Central College.





Item 11.  Executive Compensation

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



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



The General Partner and its Affiliates may be reimbursed for their expenses or out-of-pocket costs relating to the administration of the Partnership. For the year ended December 31, 2001, such costs were $40,133, of which $3,342 was unpaid as of December 31, 2001.



The General Partner was entitled to receive an Asset Management Fee equal to one-quarter of 1% of the original cost to the Partnership of undeveloped land annually, limited to a cumulative total over the life of the Partnership of 2% of the land's original cost to the Partnership. As of June 30, 1998, the Partnership had met this limit.



An Affiliate of the General Partner performed marketing and advertising services for the Partnership and was reimbursed (as set forth under terms of the Partnership Agreement) for direct costs.  For the year ended December 31, 2001, the Partnership incurred $32,627 of such costs, all of which  was paid as of December 31, 2001.



An Affiliate of the General Partner performed property upgrades, rezoning, annexation and other activities to prepare the Partnership's land investments for sale and was reimbursed  (as set forth under terms of the Partnership Agreement) for salaries and direct costs. For the year ended December 31, 2001, the Partnership incurred $348,005 of such costs, all of which was paid and included in the investments in land and improvements. As of December 31, 2001, notes payable to an Affiliate totaled $3,993,750. For the year ended December 31, 2001, interest of $324,595 was capitalized, of which $52,664 was unpaid as of December 31, 2001.

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Item 12. Security Ownership of Certain Beneficial Owners and Management

1. No person or group is known by the Partnership to own beneficially more than 5% of the outstanding Units of the Partnership
2. The officers and directors of the General Partner of the Partnership own as a group the following Units of the Partnership:



|                          | Amount and Nature  |         
|------------------------- | ------------------ | --------
|                          | of Beneficial      | Percent 
|Title of Class            | Ownership          | of Class
|                          |                    |         
|Limited Partnership Units | 314 Units directly | 1%      
|                          |                    |         



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



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





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.



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PART IV



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

1. The financial statements listed in the index at page 12 of this Annual Report are filed as part of this Annual Report.
2. Exhibits. The following exhibits are incorporated herein by reference:
3. Financial Statement Schedules.
4. Reports on Form 8-K:

None.



No Annual Report or proxy material for the year 2001 has been sent to the Partners of the Partnership.   An Annual Report will be sent to the Partners subsequent to this filing and the Partnership will furnish copies of such report to the Commission when it is sent to the Partners.

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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/   | Robert D. Parks                                  
|      |                                                  
|By:   | Robert D. Parks                                  
|      | Chairman of the Board and Chief Executive Officer
|Date: | March 25, 2002                                   

Pursuant to the  requirements  of  the  Securities  Exchange  Act of 1934, this report has  been  signed  below  by  the  following  persons  on  behalf of the Registrant and in the capacities and on the dates indicated:

|By:   | Inland Real Estate Investment Corporation                   
|----- | ------------------------------------------------------------
|      | General Partner                                             
|      |                                                             
|/s/   | Robert D. Parks                                             
|      |                                                             
|By:   | Robert D. Parks                                             
|      | Chairman of the Board and Chief Executive Officer           
|Date: | March 25, 2002                                              
|      |                                                             
|/s/   | Patricia A. DelRosso                                        
|      |                                                             
|By:   | Patricia A. DelRosso                                        
|      | Senior Vice President                                       
|Date: | March 25, 2002                                              
|      |                                                             
|/s/   | Kelly Tucek                                                 
|      |                                                             
|By:   | Kelly Tucek                                                 
|      | Principal Financial Officer and Principal Accounting Officer
|Date: | March 25, 2002                                              
|      |                                                             
|/s/   | Daniel L. Goodwin                                           
|      |                                                             
|By:   | Daniel L. Goodwin                                           
|      | Director                                                    
|Date: | March 25, 2002                                              
|      |                                                             
|/s/   | Robert H. Baum                                              
|      |                                                             
|By:   | Robert H. Baum                                              
|      | Director                                                    
|Date: | March 25, 2002                                              

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