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

                                  FORM 10-K405

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

      For the fiscal year ended         December 31, 1996
                                 -----------------------------------------------

                                       OR

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

     For the transition period from ______________ to_____________
     Commission file number  0-9026
                            -------


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


         California                                 94-2491437
--------------------------------------------------------------------------------
(State or other jurisdiction of                 (I.R.S. Employer
incorporation or organization)                   Identification No.)


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


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

Securities registered pursuant to Section 12(b) of the Act:  None
----------------------------------------------------------

Securities registered pursuant to Section 12(g) of the Act:  Limited partnership
                                                              units
----------------------------------------------------------

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

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 ]

104,455  of the  registrant's  110,170  limited  partnership  units  are held by
non-affiliates  of this registrant.  The aggregate market value of units held by
non-affiliates  is not determinable  since there is no public trading market for
limited  partnership  units  and  transfers  of units  are  subject  to  certain
restrictions.

Documents Incorporated by Reference:        See Item 14, Page 40

                                TOTAL OF 44 PAGES
<PAGE>
                                     PART I


ITEM 1.      BUSINESS
-------      --------

ORGANIZATION
------------

McNeil Real Estate Fund IX, Ltd. (the  "Partnership") was organized May 1, 1978,
as a limited  partnership  under  provisions of the California  Uniform  Limited
Partnership  Act. The general partner of the Partnership is McNeil Partners L.P.
(the "General Partner"), a Delaware limited partnership,  an affiliate of Robert
A. McNeil  ("McNeil").  The  Partnership  is governed by an amended and restated
partnership  agreement  dated  November  12,  1991,  as  amended  (the  "Amended
Partnership   Agreement").   Prior  to  November  12,  1991,  Pacific  Investors
Corporation (the prior "Corporate General Partner"),  a wholly-owned  subsidiary
of Southmark Corporation ("Southmark"),  and McNeil were the general partners of
the Partnership, which was governed by an agreement of limited partnership dated
May 1, 1978 (the  "Original  Partnership  Agreement").  The  principal  place of
business for the Partnership  and the General Partner is 13760 Noel Road,  Suite
600, LB70, Dallas, Texas, 75240.

On  January  10,  1979,  a  Registration  Statement  on Form  S-11 was  declared
effective by the  Securities  and Exchange  Commission  whereby the  Partnership
offered for sale $55,000,000 of limited  partnership units ("Units").  The Units
represent equity interests in the Partnership and entitle the holders thereof to
participate in certain  allocations and  distributions of the  Partnership.  The
sale of Units closed on September 7, 1979, with 110,000 Units sold at $500 each,
or gross proceeds of $55,000,000 to the Partnership.  In addition,  the original
general  partners  purchased an additional  200 Units for $100,000.  In 1993, 30
Units were relinquished leaving 110,170 Units outstanding at December 31, 1996.

SOUTHMARK BANKRUPTCY AND ASSET PURCHASE AGREEMENT
-------------------------------------------------

On July 14, 1989,  Southmark filed a voluntary petition for reorganization under
Chapter 11 of the U.S. Bankruptcy Code. Neither the Partnership,  McNeil nor the
Corporate   General   Partner   were   included  in  the   filing.   Southmark's
reorganization  plan became  effective  August 10, 1990. Under the plan, most of
Southmark's  assets,  which  included  Southmark's  interests  in the  Corporate
General Partner, were sold or liquidated for the benefit of creditors.

In  accordance  with  Southmark's  reorganization  plan,  Southmark,  McNeil and
various of their affiliates  entered into an asset purchase agreement on October
12, 1990,  providing for, among other things,  the transfer of control to McNeil
or his affiliates of 34 limited partnerships  (including the Partnership) in the
Southmark portfolio.

On February 14,  1991,  pursuant to the asset  purchase  agreement as amended on
that date: (a) an affiliate of McNeil purchased the Corporate  General Partner's
economic  interest in the  Partnership;  (b) McNeil became the managing  general
partner of the Partnership  pursuant to an agreement with the Corporate  General
Partner  that  delegated  management  authority  to McNeil;  and (c) McNeil Real
Estate Management,  Inc. ("McREMI"), an affiliate of McNeil, acquired the assets
relating to the property management and partnership  administrative  business of
Southmark  and its  affiliates  and commenced  management  of the  Partnership's
properties  pursuant  to an  assignment  of  the  existing  property  management
agreements from the Southmark affiliates.
<PAGE>

On November 12, 1991, the limited  partners  approved a  restructuring  proposal
that  provided for (i) the  replacement  of the  Corporate  General  Partner and
McNeil with the General  Partner;  (ii) the adoption of the Amended  Partnership
Agreement,   which   substantially   altered  the  provisions  of  the  Original
Partnership   Agreement   relating   to,  among  other   things,   compensation,
reimbursement  of expenses,  and voting rights;  and (iii) the approval of a new
property management agreement with McREMI, the Partnership's property manager.

The  Amended   Partnership   Agreement  provides  for  a  Management   Incentive
Distribution  ("MID") to replace all other forms of general partner compensation
other  than  property  management  fees and  reimbursements  of  certain  costs.
Additional  Units  may be  issued  in  connection  with the  payment  of the MID
pursuant  to  the  Amended  Partnership  Agreement.  See  Item  8  -  Note  2  -
"Transactions  with  Affiliates."  For  a  discussion  of  the  methodology  for
calculating  and  distributing  MID,  see Item 13 -  Certain  Relationships  and
Related Transactions.

Settlement of Claims:

The  Partnership  filed claims with the United States  Bankruptcy  Court for the
Northern  District of Texas,  Dallas Division (the  "Bankruptcy  Court") against
Southmark for damages relating to improper  overcharges,  breach of contract and
breach of fiduciary duty. The Partnership settled these claims in 1991, and such
settlement was approved by the Bankruptcy Court.

An Order Granting  Motion to Distribute  Funds to Class 8 Claimants  dated April
14, 1995, was issued by the Bankruptcy  Court.  In accordance with the Order, in
May 1995, the Partnership  received in full satisfaction of its claims,  $53,573
in cash, and common and preferred stock in the reorganized  Southmark.  The cash
and  stock  represent  the  Partnership's  pro-rata  share of  Southmark  assets
available for Class 8 claimants.  The Partnership  sold the Southmark common and
preferred  stock in May 1995 for  $17,244  which,  when  combined  with the cash
proceeds  from  Southmark,  resulted in a gain on  settlement  of  litigation of
$70,817.

CURRENT OPERATIONS
------------------

General:

The Partnership is engaged in real estate  activities,  including the ownership,
operation  and  management  of  residential  real  estate and other real  estate
related  assets.   At  December  31,  1996,  the   Partnership   owned  thirteen
income-producing properties as described in Item 2 - Properties.

The  Partnership  does not directly  employ any personnel.  The General  Partner
conducts the business of the  Partnership  directly and through its  affiliates.
The  Partnership  is  managed  by  the  General  Partner.  The  Partnership  has
reimbursed  affiliates of the General Partner for certain  expenses  incurred by
the affiliates in connection with the management of the Partnership.  See Item 8
- Note 2 - "Transactions With Affiliates."

The business of the Partnership to date has involved only one industry  segment.
See Item 8 - Financial Statements and Supplementary Data. The Partnership has no
foreign operations. The business of the Partnership is not seasonal.



<PAGE>
Business Plan:

The Partnership  determined to evaluate market and other economic  conditions to
establish  the  optimum  time  to  commence  an  orderly   liquidation   of  the
Partnership's  assets in  accordance  with the terms of the Amended  Partnership
Agreement.  Taking such conditions as well as other pertinent  information  into
account,  the Partnership has determined to begin orderly liquidation of all its
assets.  Although there can be no assurance as to the timing of the  liquidation
due to real estate  market  conditions,  the general  difficulty of disposing of
real estate,  and other general  economic  factors,  it is anticipated that such
liquidation  would result in the  dissolution of the  Partnership  followed by a
liquidating distribution to Unitholders by December 2001. Until such time as the
Partnership's assets are liquidated,  the Partnership's plan of operations is to
preserve or increase the net operating  income of its assets whenever  possible,
while at the same time making whatever capital expenditures are reasonable under
the   circumstances   in  order  to  preserve  and  enhance  the  value  of  the
Partnership's  assets.  See Item 7 -  Management's  Discussion  and  Analysis of
Financial Condition and Results of Operations.

Competitive Conditions:

Since the  principal  business of the  Partnership  is to own and  operate  real
estate,  the Partnership is subject to all of the risks incident to ownership of
real estate and interests  therein,  many of which relate to the  illiquidity of
this type of  investment.  These  risks  include  changes  in  general  or local
economic conditions,  changes in supply or demand for competing properties in an
area,  changes in interest rates and  availability  of permanent  mortgage funds
which  may  render  the  sale  or  refinancing   of  a  property   difficult  or
unattractive, changes in real estate and zoning laws, increases in real property
tax rates and Federal or local  economic or rent  controls.  The  illiquidity of
real estate  investments  generally  impairs the ability of the  Partnership  to
respond  promptly  to  changed  circumstances.  The  Partnership  competes  with
numerous established companies, private investors (including foreign investors),
real estate investment trusts,  limited partnerships and other entities (many of
which have greater  resources than the Partnership) in connection with the sale,
financing  and  leasing  of  properties.  The  impact  of  these  risks  on  the
Partnership,   including   losses  from  operations  and   foreclosures  of  the
Partnership's  properties,  is described in Item 7 - Management's Discussion and
Analysis  of  Financial  Condition  and  Results  of  Operations.  See  Item 2 -
Properties  for a discussion  of  competitive  conditions  at the  Partnership's
properties.

Forward-Looking Information:

Within this document,  certain  statements are made as to the expected occupancy
trends,  financial  condition,  results  of  operations,  and cash  flows of the
Partnership  for periods after  December 31, 1996.  All of these  statements are
forward-looking  statements  made pursuant to the safe harbor  provisions of the
Private  Securities  Litigation  Reform Act of 1995.  These  statements  are not
historical  and  involve  risks  and  uncertainties.  The  Partnership's  actual
occupancy trends, financial condition, results of operations, and cash flows for
future  periods may differ  materially  due to several  factors.  These  factors
include,  but are not limited to, the  Partnership's  ability to control  costs,
make necessary  capital  improvements,  negotiate  sales or  refinancings of its
properties,  collect  payments  on the  mortgage  note  receivable,  respond  to
changing economic and competitive factors.



<PAGE>
Other Information:

The environmental  laws of the Federal government and of certain state and local
governments  impose  liability  on current  property  owners for the clean-up of
hazardous and toxic substances discharged on the property. This liability may be
imposed  without  regard  to the  timing,  cause or person  responsible  for the
release of such substances onto the property.  The Partnership  could be subject
to such liability in the event that it owns properties having such environmental
problems.  The Partnership has no knowledge of any pending claims or proceedings
regarding such environmental problems.

In August 1995, High River Limited  Partnership,  a Delaware limited partnership
controlled by Carl C. Icahn ("High River") made an  unsolicited  tender offer to
purchase from holders of Units up to approximately  45% of the outstanding Units
of the  Partnership  for a purchase  price of $143 per Unit. In September  1996,
High River made another  unsolicited tender offer to purchase any and all of the
outstanding  Units of the  Partnership for a purchase price of $180 per Unit. In
addition,   High  River  made  unsolicited   tender  offers  for  certain  other
partnerships controlled by the General Partner. The Partnership recommended that
the  limited  partners  reject  the  tender  offers  made  with  respect  to the
Partnership and not tender their Units.  The General Partner believes that as of
January  31,  1997,  High  River  has  purchased  approximately  11.93%  of  the
outstanding  Units  pursuant to the tender offers.  In addition,  all litigation
filed by High River,  Mr. Icahn and his affiliates in connection with the tender
offers have been dismissed without prejudice.


<PAGE>

ITEM 2.      PROPERTIES
-------      ----------

The following table  sets  forth  the  real  estate  investment portfolio of the
Partnership  at December 31, 1996.  The buildings and the land on which they are
located  are owned by the  Partnership  in fee,  subject in each case to a first
lien deed of trust as set forth more fully in Item 8 - Note 5 - "Mortgage  Notes
Payable." See also Item 8 - Note 4 - "Real Estate  Investments" and Schedule III
- "Real Estate  Investments  and  Accumulated  Depreciation."  In the opinion of
management, the properties are adequately covered by insurance.

<TABLE>
<CAPTION>

                                              Net Basis                              1996              Date
Property              Description            of Property         Debt             Property Tax      Acquired
---------             -----------           --------------   --------------    ----------------     ---------
<S>                   <C>                   <C>              <C>               <C>                     <C> 
Berkley Hills (1)     Apartments
Madison, TN           251 units             $    2,349,186   $    3,227,638    $      65,927           6/79

Cherry Hills (2)      Apartments
Wichita, KS           348 units                  4,331,856        4,557,325           73,207           6/80

Forest Park
  Village (3)         Apartments
Columbus, OH          376 units                  3,882,180        6,034,650          189,852           12/79

Heather Square        Apartments
Dallas, TX            288 units                  4,042,866        3,294,874          145,925           10/79

Lantern Tree (4)      Apartments
Omaha, NE             110 units                  1,471,292        2,364,323           66,527           7/79

Meridian West (5)     Apartments
Puyallup, WA          181 units                  2,344,497        3,297,123           83,482           1/80

Pennbrook (6)         Apartments
Dallas, TX            216 units                  3,259,320        3,160,860          145,158           1/80

Rockborough (7)       Apartments
Addison, TX           136 units                  2,103,379        2,175,916           66,856           1/80

Rolling Hills (8)     Apartments
Louisville, KY        400 units                  3,788,273        6,637,002           79,045           9/79

Ruskin Place (9)      Apartments
Lincoln, NE           270 units                  2,743,258        4,544,544          168,007           12/79

Sheraton Hills        Apartments
Nashville, TN         272 units                  2,786,069        2,794,397           97,212           6/79

Westgate (10)         Apartments
Lansing, MI           264 units                  2,861,080        5,833,019          148,024           12/79

Williamsburg (11)     Apartments
Shreveport, LA        194 units                  2,345,349        2,678,335           64,688           12/79
                                            --------------    -------------     ------------

                                           $    38,308,605   $   50,600,006    $   1,393,910
                                            ==============    =============     ============
</TABLE>
----------------------------
Total:    Apartments  -  3,306 units


<PAGE>

(1)        Berkley Hills  Apartments is owned by Berkley Hills  Associates which
           is wholly-owned by the Partnership and the General Partner.

(2)        Cherry  Hills  Apartments  is owned by Cherry  Hills  Fund IX Limited
           Partnership which is wholly-owned by the Partnership.

(3)        Forest   Park   Village   Apartments  is owned by Forest Park Fund IX
           Associates   Limited  Partnership  which  is  wholly-owned   by   the
           Partnership and the General Partner.

(4)        Lantern  Tree  Apartments  is owned by  Lantern  Tree Fund IX Limited
           Partnership which is wholly-owned by the Partnership.

(5)        Meridian  West  Apartments  is owned by Meridian West Fund IX Limited
           Partnership which is wholly-owned by the Partnership.

(6)        Pennbrook  Apartments is owned by Pennbrook Fund IX Associates,  L.P.
           which is  wholly-owned  by the Partnership and the General Partner.

(7)        Rockborough   Apartments is  owned  by   Rockborough  Fund IX Limited
           Partnership  which is  wholly-owned by the Partnership.

(8)        Rolling Hills Apartments is owned by Rolling Hills Fund IX Associates
           L.P.  which  is  wholly-owned  by  the  Partnership  and  the General
           Partner.

(9)        Ruskin Place  Apartments  is owned by Ruskin Place Fund IX Associates
           which is wholly-owned by the Partnership and the General Partner.

(10)       Westgate Apartments (formerly known as Sherwood Forest Apartments) is
           owned by Sherwood Forest Fund IX Associates  which is wholly-owned by
           the Partnership and the General Partner.

(11)       Williamsburg  Apartments is  owned  by  Williamsburg  Fund IX Limited
           Partnership which is wholly-owned by the Partnership.


<PAGE>
The  following  table sets  forth the  properties'  occupancy  rate and rent per
square foot for each of the last five years:
<TABLE>
<CAPTION>
                                        1996           1995            1994           1993           1992
                                    -------------  -------------  --------------  -------------  --------
<S>                                       <C>            <C>            <C>            <C>             <C>
Berkley Hills
   Occupancy Rate............             93%            98%            98%            98%             94%
   Rent Per Square Foot......       $    5.94      $    5.69      $    5.35       $   4.87       $    4.48

Cherry Hills
   Occupancy Rate............             95%            89%            89%            81%             85%
   Rent Per Square Foot......       $    6.21      $    5.75      $    5.80       $   5.05       $    5.15

Forest Park Village
   Occupancy Rate............             90%            85%            92%            91%             91%
   Rent Per Square Foot......       $    6.24      $    5.80      $    5.57       $   5.51       $    5.38

Heather Square
   Occupancy Rate............             97%            99%            99%            97%             93%
   Rent Per Square Foot......       $    7.60      $    7.00      $    6.61       $   6.20       $    5.75

Lantern Tree
   Occupancy Rate............             89%            99%            99%            96%             97%
   Rent Per Square Foot......       $    7.61      $    7.58      $    7.07       $   6.83       $    6.41

Meridian West
   Occupancy Rate............             95%            93%            90%            92%             95%
   Rent Per Square Foot......       $    7.39      $    7.18      $    6.99       $   7.35       $    7.11

Pennbrook
   Occupancy Rate............             97%            98%            94%            97%             95%
   Rent Per Square Foot......       $    8.12      $    7.62      $    7.23       $   7.03       $    6.62

Rockborough
   Occupancy Rate............             99%            97%            99%            96%             93%
   Rent Per Square Foot......       $    8.25      $    7.80      $    7.40       $   7.00       $    6.67

Rolling Hills
   Occupancy Rate............             95%            94%            97%            90%             91%
   Rent Per Square Foot......       $    4.81      $    4.66      $    4.33       $   3.95       $    3.79

Ruskin Place
   Occupancy Rate............             94%            97%            96%            97%             96%
   Rent Per Square Foot......       $    7.08      $    6.78      $    6.47       $   6.26       $    6.10

Sheraton Hills
   Occupancy Rate............             90%            98%            97%            98%             94%
   Rent Per Square Foot......       $    5.72      $    5.53      $    5.14       $   4.85       $    4.37

Westgate
   Occupancy Rate............             87%            86%            92%            94%             94%
   Rent Per Square Foot......       $    6.52      $    6.66      $    6.51       $   6.15       $    6.11

Williamsburg
   Occupancy Rate............             92%            95%            99%            97%             95%
   Rent Per Square Foot......       $    6.39      $    6.22      $    5.86       $   5.41       $    4.98
</TABLE>
<PAGE>
Occupancy rate  represents all units leased divided by the total number of units
of the  property  as of  December  31 of the given  year.  Rent per square  foot
represents all revenue,  except  interest,  derived from the property divided by
the leasable square footage of the property.

Competitive Conditions at Properties
------------------------------------

A strong local economy has  benefited  Berkley  Hills  Apartments.  The property
increased  rental  revenue 7% over 1995 levels.  Occupancy  rates are comparable
with the  property's  competitors.  Capital  improvements  at Berkley Hills have
allowed the property to remain  competitive with nearby  apartment  communities.
The  strong  local  economy,  and the high  occupancy  rates are  prompting  new
construction in the area; but to date, the new construction has not been located
near Berkley  Hills,  and has been targeted to upscale  single  residents  while
Berkley Hills targets middle class families and singles.

Cherry Hills Apartments is one of Wichita's finer apartment communities in terms
of interior and exterior  appearance.  The well-maintained  property's occupancy
rate is several  points  above the average  occupancy  rate of its  competitors.
Rental rates,  also,  have  typically  been higher than the rates charged by the
property's competitors. Although nearby McConnell Air Force Base has constructed
new housing  facilities for military  personnel,  upon which Cherry Hills relies
for many of its  tenants,  other major  employers  in Wichita  are  flourishing,
providing a good economic setting for the property.

Forest Park Village  Apartments is currently in the midst of a four-year capital
improvement  program.  Exterior  renovations are largely complete,  and interior
upgrades are in process.  The capital program is needed to allow the property to
compete with numerous  other  apartment  communities  in the Northeast  Columbus
submarket.  Forest Park Village  represents a common  property in the submarket,
with no  distinguishing  characteristics  other than basements in all its units.
The submarket is very  competitive,  and many of the competing  properties  have
been renovated in the past few years. The capital program will allow Forest Park
Village to maintain its competitiveness.

Occupancy  rates at Heather  Square  Apartments  typically run 2 or 3 percentage
points above the market due to the excellent  curb appeal of the  property.  The
property also is able to command rental rates  slightly  higher than most of its
competition.  Competition is mixed in the Dallas  submarket where Heather Square
is located.  As long as the local economy remains strong, it is anticipated that
the property  will do well in  competition  with both older  properties  and new
construction  under  development.  Annual  absorption of apartment  units in the
property's submarket has roughly equaled newly constructed units in the past two
years.

Occupancy  rates decreased at Lantern Tree Apartments for the first time in four
years. The closing of the AKSARBEN Race Track was the principal cause behind the
decreased  occupancy  of most  of  Omaha's  apartment  communities.  However,  a
business  campus  development  is planned for the closed  facility that promises
renewed growth in apartment  community revenues in the area. The new development
is only blocks from Lantern Tree Apartments. Lantern Tree compares well with its
competition due to spacious and attractive floor plans. Lantern Tree's occupancy
rate usually exceeds its  competition's  occupancy rate. The property appeals to
single,  upper-middle class residents. The principal competitive disadvantage of
the  property  is its  location  which  is set back  from the main  thoroughfare
reducing its drive-by visibility.


<PAGE>

The economy in Meridian West Apartments'  submarket has improved during the past
year. As a result,  rental and  occupancy  rates in the Puyallup area are on the
upswing.  Meridian  West's  occupancy rate improved in 1996 over 1995.  Meridian
West competes primarily with better quality apartment communities,  and thus the
Partnership generally expects rental and occupancy rates lower than local market
rates. Capital improvements placed in service during 1995 and 1994 were critical
to  allow  the  property  to  compete   effectively   with  its   better-quality
competition.

The 97% occupancy  rate at Pennbrook  Apartments  exceeds the 94% average of the
Dallas submarket where the property is located.  Extensive capital  improvements
during  1991-1993 have  positioned the property to compete  effectively  for the
middle-class,  single residents that dominate its resident  profile.  The Dallas
market is  expected  to remain  strong.  For the past two years,  new  apartment
construction  has roughly  equaled the number of apartment units absorbed by the
market.  Absorption is expected to exceed  construction in 1997, but most of the
increased  demand will be for newer,  high-quality  apartment  communities,  and
should have little effect on Pennbrook.

Rockborough  Apartments  boasts  excellent  curb  appeal,  which has enabled the
property to maintain  occupancy  levels a few  percentage  points  above the 94%
market  average.   Rockborough  compares  well  to  the  established   apartment
communities in the area. There is new construction in the area, but rental rates
are substantially higher than the rates charged at Rockborough.  The Dallas area
economy is expected to remain strong. New apartment  construction is expected to
lag  absorption  in 1997,  but most of the  increased  demand will be for newer,
high-quality   apartment   communities,   and  should  have  little   effect  on
Rockborough.

The area  surrounding  Rolling Hills  Apartments is experiencing  strong growth.
Capital  improvements  at Rolling  Hills the past three years have  upgraded the
property to compete more effectively with the high-quality apartment communities
in the immediate area. Rolling Hills offers the largest floor plans in the area.
The unit interiors are being updated to better compete with the newer properties
that Rolling Hills competes  against.  The property's 95% occupancy rate exceeds
the  Louisville  market's 90% average,  but average  rental rates are lower than
market  rates.  Rolling  Hills  is a good  quality  property  competing  against
even-better quality properties.

Ruskin Place  Apartments  has steadily  improved its  performance  over the past
several years despite competitive  pressures from newer apartment  properties in
the Lincoln market.  The newer  properties and new construction in progress have
put upward pressure on local rental rates. Ruskin Place Apartments has been able
to offer its units at  lower,  but still  rising  rental  rates.  This  trend is
expected  to  continue  given  the  population  increases  and  stable  economic
conditions in the local area.

The Nashville  economy is expected to remain strong through 1997, and developers
are planning new apartment  projects in the area of Sheraton  Hills  Apartments.
Older  properties,  such as Sheraton  Hills,  have been able to increase  rental
rates an  average  of 6% to 7% since  1993.  Although  Sheraton  Hills  will not
compete directly with the new  construction,  the new construction  will tend to
slow the  increases in rental rates that older  properties  may expect in coming
years.  The  property's  year-end  occupancy  rate of 90% includes 12 unoccupied
units currently undergoing reconstruction following a fire at the property.



<PAGE>

Westgate  Apartments  is in need of extensive  capital  improvements  to compete
effectively with other Lansing apartment properties.  The exterior and interiors
of the units are dated and  unattractive.  Occupancy  rates are averaging  eight
percentage  points below  competing  properties,  and rental rates are averaging
approximately  85% of the average rental rates charged by competing  properties.
Nine percent of Westgate's  units are three and four bedroom floor plans,  which
are the only  three and four  bedroom  units in the area.  The local  economy is
doing  very  well,  with  unemployment  at 3.3%.  The  property  also has a good
location in a desirable school district.

Competition from new and refurbished apartment communities combined to lower the
occupancy  rate at  Williamsburg  Apartments  to 92% in 1996  compared to 95% in
1995. The property is in good  condition,  with only minor capital  improvements
needed. The property offers attractive floor plans with interiors that are being
upgraded  with new  fixtures.  The  Shreveport  market  has  experienced  modest
improvement  over the past three years.  Nearby  Barksdale  Air Force Base and a
growing gambling industry provide the employment base for many of the property's
tenants.

ITEM 3.      LEGAL PROCEEDINGS
-------      -----------------

The Partnership is not party to, nor are any of the Partnership's properties the
subject of, any material pending legal proceedings, other than ordinary, routine
litigation incidental to the Partnership's business, except for the following:

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

     The action  involves  purported  class and  derivative  actions  brought by
     limited  partners of each of the fourteen  limited  partnerships  that were
     named as nominal  defendants as listed above (as defined in this Section 1,
     the  "Partnerships").  Plaintiffs allege that McNeil  Investors,  Inc., its
     affiliate  McNeil Real Estate  Management,  Inc.  and three of their senior
     officers and/or directors (as defined in this Section 1, collectively,  the
     "Defendants") breached their fiduciary duties and certain obligations under
     the  respective  Amended  Partnership  Agreement.  Plaintiffs  allege  that
     Defendants  have  rendered  such Units  highly  illiquid  and  artificially
     depressed  the prices that are  available  for Units on the resale  market.
     Plaintiffs  also allege that  Defendants  engaged in a course of conduct to
     prevent  the  acquisition  of  Units  by an  affiliate  of  Carl  Icahn  by
     disseminating  purportedly  false,  misleading and inadequate  information.
     Plaintiffs  further  allege  that  Defendants  acted to  advance  their own
     personal interests at the expense of the Partnerships'  public unit holders
     by failing to sell Partnership properties and failing to make distributions
     to unitholders.

<PAGE>

     On December 16,  1996,  the  Plaintiffs  filed a  consolidated  and amended
     complaint.  Plaintiffs  are suing for breach of fiduciary  duty,  breach of
     contract  and  an  accounting,  alleging,  among  other  things,  that  the
     management  fees paid to the McNeil  affiliates over the last six years are
     excessive,  that these fees  should be reduced  retroactively  and that the
     respective Amended  Partnership  Agreements  governing the Partnerships are
     invalid.  On January 7, 1997,  the Court ordered  consolidation  with three
     other similar actions listed below.

     The  Partnerships  filed a demurrer to the complaint and a motion to strike
     on February 14, 1997, seeking to dismiss the complaint in all respects. The
     demurrer  is  pending.  The  Partnerships  deny that  there is any merit to
     Plaintiff's allegations and intend to vigorously defend this action.

2)   Alfred Napoletano v. McNeil Partners, L.P., McNeil Investors,  Inc., Robert
     A. McNeil,  Carole J. McNeil,  McNeil Pacific  Investors  Fund 1972,  Ltd.,
     McNeil Real Estate Fund V, Ltd.,  McNeil Real Estate Fund IX, Ltd.,  McNeil
     Real Estate Fund X, Ltd.,  McNeil  Real Estate Fund XI,  Ltd.,  McNeil Real
     Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate
     Fund XX, L.P.,  McNeil Real Estate Fund XXIV, L.P., McNeil Real Estate Fund
     XXV,  L.P.  -  Superior  Court of the  State of  California,  County of Los
     Angeles,  Case No. BC133849 (Class Action  Complaint).  On January 7, 1997,
     this  action  was  consolidated  by  court  order with  Scholfield, et al.,
     referenced above.

3)   Warren Heller v. McNeil Partners,  L.P., McNeil Investors,  Inc., Robert A.
     McNeil,  Carole J. McNeil, McNeil Pacific Investors Fund 1972, Ltd., McNeil
     Real Estate Fund V, Ltd.,  McNeil  Real Estate Fund IX,  Ltd.,  McNeil Real
     Estate Fund X, Ltd.,  McNeil Real Estate Fund XI, Ltd.,  McNeil Real Estate
     Fund XIV, Ltd.,  McNeil Real Estate Fund XV, Ltd.,  McNeil Real Estate Fund
     XX, L.P.,  McNeil Real Estate Fund XXIV, L.P., McNeil Real Estate Fund XXV,
     L.P. - Superior  Court of the State of  California,  County of Los Angeles,
     Case No. BC133957 (Class Action Complaint). On January 7, 1997, this action
     was consolidated by court order with Scholfield, et al., referenced above.

4)   Robert Lewis v. McNeil  Partners,  L.P.,  McNeil  Investors,  Inc.,  Robert
     A. McNeil et al. - In the District  Court of Dallas County,  Texas,  A-14th
     Judicial  District,  Cause No. 95-08535 (Class Action) - Plaintiff,  Robert
     Lewis, is a limited partner with McNeil Pacific  Investors Fund 1972, Ltd.,
     McNeil Real Estate Fund X, Ltd. and McNeil Real Estate Fund XV, Ltd.

     On  April  11,  1996,  the  action  was  dismissed   without  prejudice  in
     anticipation  of  consolidation  with other  class  action  complaints.  On
     January  7,  1997,  this  action  was  consolidated  by  court  order  with
     Schofield, et al., referenced above.

For a discussion of the Southmark bankruptcy, see Item 1 - Business.

ITEM 4.      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
-------      ---------------------------------------------------

None.





<PAGE>
                                     PART II

ITEM 5.      MARKET FOR THE REGISTRANT'S UNITS OF LIMITED PARTNERSHIP AND
-------      ------------------------------------------------------------
             RELATED SECURITY HOLDER MATTERS
             -------------------------------

(A)   There is no  established  public  trading  market for limited  partnership
      units, nor is one expected to develop.

(B)      Title of Class                       Number of Record Unit Holders
         --------------                       -----------------------------

         Limited partnership units            4,555 as of January 31, 1997

(C)   No distributions were made to the limited partners during 1996 or 1995. On
      February 28, 1997,  the  Partnership  paid a  distribution  of  $2,250,000
      ($20.42 per limited partnership unit) to the limited partners.

      The Partnership accrued distributions of $1,133,561 and $1,070,763 for the
      benefit of the General  Partner for the years ended  December 31, 1996 and
      1995, respectively, of which $120,964 remains unpaid at December 31, 1996.
      These distributions  relate to the MID pursuant to the Amended Partnership
      Agreement.  See  Item  8  -  Note  2  -  "Transactions  with  Affiliates."
      Distributions  of MID are  expected to be paid to the  General  Partner in
      1997.  See Item 7 -  Management's  Discussion  and  Analysis of  Financial
      Condition  and Results of Operations  for a discussion  of the  likelihood
      that the Partnership will resume distributions to the limited partners.

ITEM 6. SELECTED FINANCIAL DATA
------  -----------------------

The  following  table sets forth a summary  of  certain  financial  data for the
Partnership.  This summary should be read in conjunction with the  Partnership's
financial statements and notes thereto appearing in Item 8.

<TABLE>
<CAPTION>
Statements of                                                Years Ended December 31,
                                    --------------------------------------------------------------------------
Operations                              1996           1995            1994           1993           1992
------------------                  -------------  -------------  --------------  -------------  -------------
<S>                                <C>             <C>            <C>             <C>            <C>          
Rental revenue...............      $   19,732,110  $  19,123,434  $   18,202,306  $  17,215,644  $  16,487,239
Total revenue................          19,964,950     19,567,182      18,642,220     17,367,511     16,636,929
Loss before extraordinary
 items.......................            (293,982)      (328,996)       (387,787)    (1,320,829)    (1,613,265)
Extraordinary items..........                   -              -               -        (31,055)       104,096
Net loss.....................            (293,982)      (328,996)       (387,787)    (1,351,884)    (1,509,169)

Net loss per limited
partnership unit:
Loss before
extraordinary items..........      $       (13.21)  $      (9.19)  $       (9.21) $      (19.30) $      (22.05)
Extraordinary items..........                   -              -               -           (.28)           .94
                                    -------------    -----------    ------------   ------------   ------------
Net loss.....................      $       (13.21)  $      (9.19)  $       (9.21) $      (19.58) $      (21.11)
                                    =============    ===========    ============   ============   ============
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
                                                                       December 31,
Balance Sheets                          1996            1995            1994           1993           1992
--------------                      -------------   ------------   -------------   -------------  ------------
<S>                                <C>              <C>            <C>             <C>           <C>          
Real estate investments, net...    $   38,308,605   $ 42,434,162   $  42,830,552   $ 42,133,962  $  42,478,066
Total assets...................        47,650,109     49,970,886      51,749,891     53,376,263     49,696,209
Mortgage notes payable, net....        50,600,006     51,390,822      52,098,952     52,610,769     46,917,274
Partners' equity (deficit).....        (5,828,303)    (4,400,760)     (3,001,001)    (1,640,191)       519,560
</TABLE>

See  Item 7 -  Management's  Discussion  and  Analysis  of  Financial  Condition
and  Results  of  Operations.  The  Partnership  sold  Westridge  Apartments  on
July 30, 1996.

ITEM 7.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
-------      -----------------------------------------------------------
             AND RESULTS OF OPERATIONS
             -------------------------

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

The  Partnership  was formed to  acquire,  operate and  ultimately  dispose of a
portfolio  of  income-producing  real  properties.  At  the  end  of  1996,  the
Partnership  owned  thirteen  apartment  properties.  All of  the  Partnership's
properties are subject to mortgage notes.

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

1996 compared to 1995

Revenues:

Rental  revenue  increased  $608,676 or 3.2% in 1996 compared to rental  revenue
achieved in 1995.  Excluding rental revenue from Westridge  Apartments,  sold by
the Partnership on July 30, 1996, rental revenue  increased  $881,595 or 4.8% in
1996 compared to 1995.  Rental revenues  increased at 11 of the Partnership's 13
remaining properties. Rental revenue was unchanged at Lantern Tree Apartments as
a 4%  increase  in base rental  rates was  matched by a  comparable  increase in
vacancy  losses.  Rental revenue  decreased  2.1% at Westgate  Apartments due to
increased vacancy losses at the Michigan property. Of the Partnership's 11 other
properties,  10  increased  base rental  rates an average of 4.7%.  Cherry Hills
Apartments did not increase base rental rates,  but rental  revenue  improved as
vacancy losses decreased by nearly half.  Improving occupancy rates also boosted
rental revenue at Forest Park Village  Apartments,  Heather  Square  Apartments,
Meridian West Apartments, Pennbrook Apartments, and Rockborough Apartments.









<PAGE>

Expenses:

Partnership  expenses  increased  $362,754  or 1.8% in 1996  compared  to  1995.
However, after excluding both the loss on sale of Westridge Apartments,  and the
expenses  associated  with operations at Westridge  Apartments  before its sale,
expenses  increased  $381,881 or 2.0% in 1996  compared to 1995.  The  increased
expenses were concentrated in depreciation,  repair and maintenance, and general
and administrative expenses. These increases were partially offset by a decrease
in general and administrative expenses paid to affiliates.

Depreciation  expense  increased  $253,415  or 6.5% in 1996  compared  to  1995.
Excluding the effects of the sale of Westridge Apartments reveals an even larger
increase of $346,749 or 9.3%.  Increased  depreciation  expense is the result of
depreciation on the $2.4 million of new capital  improvements  placed in service
during 1996.  The capital  improvements  are  generally  depreciated  over lives
ranging from five to ten years.

Repair and maintenance  expenses increased $244,052 or 10.3% in 1996 compared to
1995.  The increase is  attributable  to a $284,000  increase in floor  covering
replacements  during 1996.  Expenditures for floor covering  replacements during
1995 were large  enough to qualify for  capitalization  under the  Partnership's
capitalization  policy. Though still substantial,  such expenditures in 1996 did
not qualify for capitalization and were, accordingly, expensed.

General and administrative  expenses increased $42,123 or 14.2% in 1996 compared
to 1995. The  Partnership  incurred a $17,630  increase in costs relating to the
evaluation  and  dissemination  of  information  with regards to an  unsolicited
tender offer. An additional $20,000 was expended for appraisal fees.

Due to the sale of  Westridge  Apartments  on July  30,  1996,  the  Partnership
recognized a $220,157 loss on sale of real estate.  No properties  were disposed
of during 1995.

General and administrative expenses paid to affiliates decreased $196,189 or 27%
in 1996  compared to 1995.  Part of the decrease is due to the sale of Westridge
Apartments  during  the year,  but a greater  part of the  decrease  is due to a
reduced level of overhead expenses charged to the Partnership by affiliates.

1995 compared to 1994

Revenue:

Rental  revenue for 1995 increased  $921,128 or 5.1% over 1994 rental  revenues.
Rental revenues increased at all of the Partnership's  properties,  except for a
0.7% decrease at Cherry Hills  Apartments.  The  Partnership  raised base rental
rates an  average of 4.0% at all of its  properties.  Increases  in base  rental
rates were partially  offset by lower average  occupancy  rates at Berkley Hills
Apartments,   Westgate   Apartments,   Westridge   Apartments  and  Williamsburg
Apartments.  Occupancy  rates at the remainder of the  Partnership's  properties
increased or remained steady.

In 1995 the  Partnership  received  cash and common and  preferred  stock in the
reorganized  Southmark in settlement of its bankruptcy claims against Southmark.
The  Partnership  recognized  a  one-time  gain of  $70,817  as a result of this
settlement.



<PAGE>

The Partnership also recorded a $125,967 gain on involuntary conversion in 1995.
The gain relates to hail damage incurred at Westridge Apartments on May 5, 1995,
and to a fire that destroyed two units at Cherry Hill  Apartments on November 3,
1995.  The  Partnership  incurred  damages of $150,938  and $55,495 at Westridge
Apartments and Cherry Hill Apartments,  respectively. The Partnership received a
total of  $185,094  from its  insurance  carrier  to repair  the  damage at both
properties.  The excess of insurance  proceeds  over the  adjusted  basis of the
property  destroyed resulted in a $125,167 gain on involuntary  conversion.  The
gain on  involuntary  conversions  of  $187,854 in 1994  related to  Rockborough
Apartments and Rolling Hills Apartments.

Expenses:

Partnership  expenses  increased  $866,171 or 4.6% in 1995 compared to 1994. The
increased   expenses  were   concentrated  in   depreciation   and  general  and
administrative expenses.

Depreciation  expense  increased  $527,010  or 15.5% in 1995  compared  to 1994.
Increased depreciation expense is the result of depreciation on the $3.6 million
of  new  capital  improvements  placed  in  service  during  1995.  The  capital
improvements  are  generally  depreciated  over lives  ranging  from five to ten
years.

General and  administrative  expenses increased $120,290 or 68% in 1995 compared
to 1994. The Partnership  incurred  $173,497 of costs relating to the evaluation
and dissemination of information with regards to an unsolicited tender offer. No
such expenses were incurred in 1994.

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

During  the  three  year  period  ended  December  31,  1996,  the   Partnership
experienced  losses  totaling  $1,010,765.  However,  during the same three year
period,  the  Partnership  generated  $11,747,512  of cash flow  from  operating
activities.  Cash provided by operating activities increased $162,225 or 4.2% in
1996  compared to 1995. A 7.1%  increase in cash paid to suppliers was more than
offset by an increase in cash  received from tenants and a decrease in cash paid
to affiliates.

The  Partnership  continued to invest in capital  improvements at its properties
during 1996.  The  Partnership  invested  $2.4 million for capital  improvements
during 1996, a decrease from the $3.6 million invested by the Partnership during
1995.  These  expenditures  are  necessary  to  allow  the  Partnership's  aging
properties  to maintain  their appeal to current and  prospective  tenants.  The
Partnership has budgeted an additional $1.7 million for capital  improvements in
1997.

The  Partnership  realized  $492,384  of  proceeds  from the  sale of  Westridge
Apartments in 1996.  The  purchaser  financed  $1,550,000 of the purchase  price
through a short-term mortgage note payable to the Partnership. The Partnership's
mortgage note receivable was paid-off in full on February 5, 1997.







<PAGE>

Short-term liquidity:

Due to operating cash flow and the sale of Westridge Apartments, the Partnership
enters 1997 with  substantial  cash  reserves.  These reserves will be needed to
address continuing capital  improvement needs in light of the aging condition of
the  Partnership's  properties.  The  Partnership  has budgeted $1.7 million for
capital  improvements  for 1997 in  addition  to the $10.2  million  of  capital
improvements  made during the past three  years.  The General  Partner  believes
these capital  improvements  are necessary to allow the  Partnership to increase
its  rental  revenues  in the  competitive  markets  in which the  Partnership's
properties  operate.  These  expenditures  also allow the  Partnership to reduce
future  repair and  maintenance  expenses  from amounts that would  otherwise be
incurred.

At  December  31,  1996,  the  Partnership  held  $3,001,521  of cash  and  cash
equivalents,  down  $58,061  from the  balance at the end of 1995.  The  General
Partner  anticipates  that the Partnership  will provide  positive cash flow for
1997.  The  Partnership's  next  maturing  mortgage note does not come due until
January 1998.  The General  Partner  considers the  Partnership's  cash reserves
adequate for anticipated operations for 1997.

On February 5, 1997, the Partnership collected in full the $1,550,000 short-term
mortgage note from the purchaser of Westridge Apartments.  On February 28, 1997,
the Partnership used proceeds from the sale of Westridge Apartments, the pay-off
of the mortgage note receivable,  and cash from the Partnership's  cash reserves
to pay a $2,250,000 distribution to the limited partners.

Long-term liquidity:

For the long term,  property operations will remain the primary source of funds.
In this regard,  the General  Partner  expects that the $10.2 million of capital
improvements  made by the  Partnership  during the past  three  years will yield
improved cash flow from property  operations in 1997.  Furthermore,  the General
Partner has  budgeted an  additional  $1.7 million of capital  improvements  for
1997. If the Partnership's cash position  deteriorates,  the General Partner may
elect  to  defer  certain  of  the  capital  improvements,   except  where  such
improvements  are expected to increase the  competitiveness  or marketability of
the Partnership's properties.

The Partnership  determined to evaluate market and other economic  conditions to
establish  the  optimum  time  to  commence  an  orderly   liquidation   of  the
Partnership's  assets in  accordance  with the terms of the Amended  Partnership
Agreement.  Taking such conditions as well as other pertinent  information  into
account,  the Partnership has determined to begin orderly liquidation of all its
assets.  Although there can be no assurance as to the timing of the  liquidation
due to real estate  market  conditions,  the general  difficulty of disposing of
real estate,  and other general  economic  factors,  it is anticipated that such
liquidation  would result in the  dissolution of the  Partnership  followed by a
liquidating distribution to Unitholders by December 2001.









<PAGE>

Income Allocations and Distributions:

Terms  of  the  Amended   Partnership   Agreement  specify  that  income  before
depreciation  is allocated  to the General  Partner to the extent of MID paid in
cash. Depreciation is allocated in the ratio of 95:5 to the limited partners and
the General Partner,  respectively.  Therefore, for the years ended December 31,
1996,  1995  and  1994,  net  income  of  $1,161,697,   $684,002  and  $627,358,
respectively,  was  allocated  to the  General  Partner.  The  limited  partners
received  allocations of net loss of  $1,455,679,  $1,012,998 and $1,015,145 for
the years ended December 31, 1996, 1995 and 1994, respectively.

With the exception of the MID,  distributions  to partners  have been  suspended
since 1986 as part of the General Partner's policy of maintaining  adequate cash
reserves.  However,  on February 28, 1997,  the General  Partner  determined  to
distribute $2,250,000 to the limited partners.  Approximately  $2,042,000 of the
distribution represents proceeds from the sale of Westridge Apartments.  For the
foreseeable future,  distributions to limited partners will likely be limited to
proceeds from the sale of  Partnership  properties.  Currently,  no  Partnership
properties  are being  marketed for sale.  The General  Partner will continue to
monitor  the cash  reserves  and working  capital  needs of the  Partnership  to
determine when cash flows will support distributions to the limited partners.

During 1996, the  Partnership  recorded MID of  $1,133,561.  MID payments to the
General  Partner are expected to continue in 1997.  To the extent that cash flow
from  operations  is not  sufficient  to fund  payments  of MID along with other
Partnership obligations, the Partnership will use its cash reserves to make such
payments.


<PAGE>


ITEM 8.      FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

<TABLE>
<CAPTION>
                                                                                                      Page
                                                                                                      Number
                                                                                                      ------

INDEX TO FINANCIAL STATEMENTS
-----------------------------

Financial Statements:

<S>                                                                                                      <C>
   Report of Independent Public Accountants.......................................                       17

   Balance Sheets at December 31, 1996 and 1995...................................                       18

   Statements of Operations for each of the three years in the period
      ended December 31, 1996.....................................................                       19

   Statements of Partners' Equity (Deficit) for each of the three years
      in the period ended December 31, 1996.......................................                       20

   Statements of Cash Flows for each of the three years in the
      period ended December 31, 1996..............................................                       21

   Notes to Financial Statements..................................................                       23

   Financial Statement Schedule:

      Schedule III - Real Estate Investments and Accumulated
         Depreciation.............................................................                       35

</TABLE>



All other schedules are omitted because they are not applicable or the financial
information  required  is  included  in the  financial  statements  or the notes
thereto.


<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Partners of
McNeil Real Estate Fund IX, Ltd.:


We have audited the  accompanying  balance sheets of McNeil Real Estate Fund IX,
Ltd. (a California  limited  partnership)  as of December 31, 1996 and 1995, and
the related statements of operations,  partners' equity (deficit) and cash flows
for each of the  three  years in the  period  ended  December  31,  1996.  These
financial  statements and the schedule referred to below are the  responsibility
of the Partnership's management.  Our responsibility is to express an opinion on
these financial statements and the schedule based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  financial  position of McNeil Real Estate Fund IX,
Ltd. as of December 31, 1996 and 1995, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1996, in
conformity with generally accepted accounting principles.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial  statements  taken as a whole.  The  schedule  listed  in the index to
financial  statements is presented for purposes of complying with the Securities
and  Exchange  Commission's  rules  and  is not  part  of  the  basic  financial
statements.  This schedule has been subjected to the auditing procedures applied
in our audits of the basic  financial  statements  and, in our  opinion,  fairly
states in all material  respects  the  financial  data  required to be set forth
therein in relation to the basic financial statements taken as a whole.


/s/  Arthur Andersen LLP



Dallas, Texas
  March 10, 1997

<PAGE>

                        McNEIL REAL ESTATE FUND IX, LTD.

                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                   December 31,
                                                                       -----------------------------------
                                                                            1996                 1995
                                                                       ---------------      --------------
ASSETS
------
<S>                                                                    <C>                  <C>           
Real estate investments:
   Land.....................................................           $     6,370,834      $    6,716,099
   Buildings and improvements...............................                81,666,317          83,847,294
                                                                        --------------       -------------
                                                                            88,037,151          90,563,393
   Less:  Accumulated depreciation..........................               (49,728,546)        (48,129,231)
                                                                        --------------       -------------
                                                                            38,308,605          42,434,162

Cash and cash equivalents...................................                 3,001,521           3,059,582
Cash segregated for security deposits.......................                   571,749             534,609
Accounts receivable.........................................                    59,871             114,367
Insurance proceeds receivable...............................                   562,560                   -
Mortgage note receivable....................................                 1,550,000                   -
Prepaid expenses and other assets...........................                   214,497             223,959
Escrow deposits.............................................                 1,401,648           1,418,389
Deferred borrowing costs, net of accumulated
   amortization of $895,853 and $689,693 at
   December 31, 1996 and 1995, respectively.................                 1,979,658           2,185,818
                                                                        --------------       -------------

                                                                       $    47,650,109      $   49,970,886
                                                                        ==============       ==============

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

Mortgage notes payable, net.................................           $    50,600,006      $   51,390,822
Accounts payable............................................                         -             266,777
Accrued property taxes......................................                   928,103             962,251
Accrued interest............................................                   368,556             374,740
Other accrued expenses......................................                   271,227             306,022
Deferred gain on involuntary conversion.....................                   474,376                   -
Payable to affiliates - General Partner.....................                   279,716             508,369
Security deposits and deferred rental revenue...............                   556,428             562,665
                                                                        --------------       -------------
                                                                            53,478,412          54,371,646
                                                                        --------------       -------------

Partners' deficit:
   Limited partners - 110,200 limited partnership
     units authorized, 110,170 limited partnership
     units issued and outstanding...........................                (3,029,682)         (1,574,003)
   General Partner..........................................                (2,798,621)         (2,826,757)
                                                                        --------------       -------------
                                                                            (5,828,303)         (4,400,760)

                                                                       $    47,650,109      $   49,970,886
                                                                        ==============       =============
</TABLE>
                 See accompanying notes to financial statements.

<PAGE>
                                             McNEIL REAL ESTATE FUND IX, LTD.

                                                 STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                             For the Years Ended December 31,
                                                   ----------------------------------------------------
                                                       1996                1995               1994
                                                   --------------     --------------    ---------------
Revenue:
<S>                                                <C>                <C>               <C>            
   Rental revenue..........................        $   19,732,110     $   19,123,434    $    18,202,306
   Interest................................               232,840            246,964            252,060
   Gain on legal settlement................                     -             70,817                  -
   Gain on involuntary conversions.........                     -            125,967            187,854
                                                    -------------      -------------     --------------
     Total revenue.........................            19,964,950         19,567,182         18,642,220
                                                    -------------      -------------     --------------

Expenses:
   Interest................................             4,796,060          4,856,024          4,884,548
   Depreciation............................             4,173,260          3,919,845          3,392,835
   Property taxes..........................             1,392,027          1,436,453          1,341,960
   Personnel expenses......................             2,437,597          2,511,799          2,472,613
   Repairs and maintenance.................             2,621,322          2,377,270          2,423,640
   Property management fees -
     affiliates............................               978,168            946,627            915,989
   Utilities...............................             1,634,169          1,556,159          1,527,997
   Other property operating expenses.......             1,130,177          1,261,940          1,174,837
   General and administrative..............               338,298            296,175            175,885
   General and administrative -
     affiliates............................               537,697            733,886            719,703
   Loss on sale of real estate.............               220,157                  -                  -
                                                    -------------      -------------     --------------
     Total expenses........................            20,258,932         19,896,178         19,030,007
                                                    -------------      -------------     --------------

Net loss...................................        $     (293,982)    $     (328,996)   $      (387,787)
                                                    =============      =============     ==============

Net loss allocated to limited
   partners................................        $   (1,455,679)    $   (1,012,998)   $    (1,015,145)
Net income allocated to the
   General Partner.........................             1,161,697            684,002            627,358
                                                    -------------      -------------     --------------

Net loss...................................        $     (293,982)    $     (328,996)   $      (387,787)
                                                    =============      =============     ==============

Net loss per limited partnership unit......        $       (13.21)    $        (9.19)   $         (9.21)
                                                    =============      =============     ==============
</TABLE>


                 See accompanying notes to financial statements.


<PAGE>
                        McNEIL REAL ESTATE FUND IX, LTD.

                    STATEMENTS OF PARTNERS' EQUITY (DEFICIT)

              For the Years Ended December 31, 1996, 1995 and 1994

<TABLE>
<CAPTION>
                                                                                                      Total
                                                                                                    Partners'
                                                    General                 Limited                  Equity
                                                    Partner                 Partners                (Deficit)
                                                 ----------------        ----------------      ----------------
<S>                                              <C>                     <C>                   <C>              
Balance at December 31, 1993..............       $    (2,094,331)        $       454,140       $    (1,640,191)

Net income (loss).........................               627,358              (1,015,145)             (387,787)

Management Incentive Distribution.........              (973,023)                      -              (973,023)
                                                  --------------          --------------        --------------

Balance at December 31, 1994..............            (2,439,996)               (561,005)           (3,001,001)

Net income (loss).........................               684,002              (1,012,998)             (328,996)

Management Incentive Distribution.........            (1,070,763)                      -            (1,070,763)
                                                  --------------          --------------        --------------

Balance at December 31, 1995..............            (2,826,757)             (1,574,003)           (4,400,760)

Net income (loss).........................             1,161,697              (1,455,679)             (293,982)

Management Incentive Distribution.........            (1,133,561)                      -            (1,133,561)
                                                  --------------          --------------        --------------

Balance at December 31, 1996..............       $    (2,798,621)        $    (3,029,682)      $    (5,828,303)
                                                  ==============          ==============        ==============

</TABLE>





                 See accompanying notes to financial statements.

<PAGE>

                        McNEIL REAL ESTATE FUND IX, LTD.

                            STATEMENTS OF CASH FLOWS

                Increase (Decrease) in Cash and Cash Equivalents

<TABLE>
<CAPTION>
                                                              For the Years Ended December 31,
                                                   ----------------------------------------------------
                                                        1996               1995               1994
                                                   --------------     --------------    ---------------
<S>                                                <C>                <C>               <C>            
Cash flows from operating activities:
   Cash received from tenants..............        $   19,717,808     $   19,040,536    $    18,213,413
   Cash received from legal settlement.....                     -             70,817                  -
   Cash paid to suppliers..................            (8,488,048)        (7,922,261)        (6,737,217)
   Cash paid to affiliates.................            (1,507,719)        (1,671,044)        (1,623,756)
   Interest received.......................               232,840            246,964            252,060
   Interest paid...........................            (4,557,296)        (4,542,671)        (4,851,901)
   Property taxes paid and escrowed........            (1,349,638)        (1,336,619)        (1,438,756)
                                                    -------------      -------------     --------------
Net cash provided by operating
   activities..............................             4,047,947          3,885,722          3,813,843
                                                    -------------      -------------     --------------

Cash flows from investing activities:
   Additions to real estate
     investments...........................            (2,398,428)        (3,582,582)        (4,261,449)
   Insurance proceeds from fire/freeze
     damage................................                     -            185,094            359,878
Proceeds from sale of real estate..........             2,042,384                  -                  -
Mortgage note receivable...................            (1,550,000)                 -                  -
                                                    -------------      -------------     --------------
Net cash used in investing
   activities..............................            (1,906,044)        (3,397,488)        (3,901,571)
                                                    -------------      -------------     --------------

Cash flows from financing activities:
   Principal payments on mortgage
     notes payable.........................              (829,604)          (748,502)          (711,658)
   Deferred borrowing costs paid...........                     -                  -           (120,486)
   Management Incentive Distribution.......            (1,370,360)          (879,994)          (797,000)
   Net cash proceeds from
     refinancing/modification of
     mortgage notes payable................                     -                  -            161,809
                                                    -------------      -------------     --------------
Net cash used in financing
   activities..............................            (2,199,964)        (1,628,496)        (1,467,335)
                                                    -------------      -------------     --------------

Net decrease in cash and cash
   equivalents.............................               (58,061)        (1,140,262)        (1,555,063)

Cash and cash equivalents at
   beginning of year.......................             3,059,582          4,199,844          5,754,907
                                                    -------------      -------------     --------------

Cash and cash equivalents at end
   of year.................................        $    3,001,521     $    3,059,582    $    4,199,844
                                                    =============      =============     =============
</TABLE>

See discussion of noncash investing activity in Note 6 - "Sale of Real Estate."

                 See accompanying notes to financial statements.

<PAGE>

                        McNEIL REAL ESTATE FUND IX, LTD.

                            STATEMENTS OF CASH FLOWS

               Reconciliation of Net Loss to Net Cash Provided by
                              Operating Activities

<TABLE>
<CAPTION>
                                                               For the Years Ended December 31,
                                                   -----------------------------------------------------
                                                        1996                1995              1994
                                                   ---------------    ---------------   ----------------
<S>                                                <C>                <C>               <C>             
Net loss...................................        $     (293,982)    $     (328,996)   $      (387,787)
                                                    -------------      -------------     --------------

Adjustments to reconcile net loss
   to net cash provided by operating
   activities:
   Depreciation............................             4,173,260          3,919,845          3,392,835
   Amortization of discounts on
     mortgage notes payable................                38,788             40,372             38,032
   Amortization of deferred borrowing
     costs.................................               206,160            201,762            159,019
   Gain on involuntary conversions.........                     -           (125,967)          (187,854)
   Loss on sale of real estate.............               220,157                  -                  -
   Changes in assets and liabilities:
     Cash segregated for security
       deposits............................               (37,140)           (39,808)           (11,032)
     Accounts receivable...................                54,496            (49,903)            40,537
     Prepaid expenses and other
       assets..............................                 9,462            (12,693)            19,334
     Escrow deposits.......................                16,741            142,995            680,527
     Accounts payable......................              (266,777)          (147,117)           158,350
     Accrued property taxes................               (34,148)            27,518              6,890
     Accrued interest......................                (6,184)            71,219           (164,404)
     Other accrued expenses................               (34,795)           113,070             32,114
     Payable to affiliates - General
       Partner.............................                 8,146              9,469             11,936
     Security deposits and deferred
       rental revenue......................                (6,237)            63,956             25,346
                                                    -------------      -------------     --------------

         Total adjustments.................             4,341,929          4,214,718          4,201,630
                                                    -------------      -------------     --------------

Net cash provided by operating
     activities............................        $    4,047,947     $    3,885,722    $     3,813,843
                                                    =============      =============     ==============
</TABLE>

                 See accompanying notes to financial statements.
<PAGE>

                        McNEIL REAL ESTATE FUND IX, LTD.

                          NOTES TO FINANCIAL STATEMENTS

                                December 31, 1996


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
--------------------------------------------------------------------

Organization
------------

McNeil Real Estate Fund IX, Ltd.  (the  "Partnership")  was  organized on May 1,
1978 as a limited  partnership  under the provisions of the  California  Uniform
Limited  Partnership  Act.  The  general  partner of the  Partnership  is McNeil
Partners  L.P. (the  "General  Partner"),  a Delaware  limited  partnership,  an
affiliate of Robert A.  McNeil.  The  Partnership  is governed by an amended and
restated partnership agreement dated November 12, 1991, as amended (the "Amended
Partnership Agreement"). The principal place of business for the Partnership and
the General Partner is 13760 Noel Road, Suite 600, LB70, Dallas, Texas 75240.

The Partnership is engaged in real estate  activities,  including the ownership,
operation  and  management  of  residential  real  estate and other real  estate
related  assets.  The  Partnership  has determined to evaluate  market and other
economic  conditions  to  establish  the  optimum  time to  commence  an orderly
liquidation  of the  Partnership's  assets in  accordance  with the terms of the
Amended  Partnership  Agreement.  At December 31, 1996, the Partnership owned 13
income-producing properties as described in Note 4 - Real Estate Investments.

Basis of Presentation
---------------------

The  accompanying  financial  statements  have been prepared in conformity  with
generally accepted accounting principles ("GAAP").  The preparation of financial
statements in conformity  with GAAP  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.

The  Partnership's  financial  statements  include the accounts of the following
listed tier  partnerships  for the years ended December 31, 1996, 1995 and 1994.
These single asset tier partnerships were formed to accommodate the refinancings
of the related  properties.  The ownership  interest of the  Partnership and the
General  Partner in each tier  partnership is detailed  below.  The  Partnership
retains  effective  control  of each tier  partnership.  The  General  Partner's
minority interest is not presented because it is either negative or immaterial.


<PAGE>

<TABLE>
<CAPTION>
                                                                           % of Ownership Interest
   Tier Partnership                                                    Partnership     General Partner
   ----------------                                                    -----------     ---------------
<S>                                                                          <C>                 
   Limited partnerships:
     Cherry Hills Fund IX Limited Partnership (a) ................           100%               -
     Forest Park Fund IX Associates Limited Partnership (b).......            99                1%
     Lantern Tree Fund IX Limited Partnership (a) ................           100                -
     Meridian West Fund IX Limited Partnership (a)................           100                -
     Pennbrook Fund IX Associates, L.P............................            99                1
     Rockborough Fund IX Limited Partnership (a)..................           100                -
     Rolling Hills Fund IX Associates, L.P........................            99                1
     Williamsburg Fund IX Limited Partnership (a).................           100                -

   General partnerships:
     Berkley Hills Associates.....................................            99                1
     Ruskin Place Fund IX Associates..............................            99                1
     Sherwood Forest Fund IX Associates...........................            99                1
</TABLE>

(a)  The general partner of these partnerships  is a corporation  whose stock is
     100% owned by the Partnership.

(b)  Forest Park Fund IX Associates Limited  Partnership has assigned all of its
     interest and rights to the Partnership.

Real Estate Investments
-----------------------

Real estate investments are generally stated at the lower of depreciated cost or
fair value. Real estate investments are reviewed for impairment  whenever events
or changes in  circumstances  indicate  that their  carrying  amounts may not be
recoverable.  When the  carrying  value  of a  property  exceeds  the sum of all
estimated  future cash flows, an impairment loss is recognized.  At such time, a
write-down  is  recorded to reduce the basis of the  property  to its  estimated
recoverable amount.

The  Partnership's  method  of  accounting  for real  estate  investments  is in
accordance with 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"),  which the Partnership  adopted effective January 1, 1996. The
adoption  of  SFAS  121 did  not  have a  material  impact  on the  accompanying
financial statements.

Improvements and betterments are capitalized and expensed  through  depreciation
charges. Repairs and maintenance are charged to operations as incurred.

Depreciation
------------

Buildings and improvements are depreciated using the  straight-line  method over
the estimated useful lives of the assets, ranging from 3 to 32 years.




<PAGE>

Cash and Cash Equivalents
-------------------------

Cash  and  cash  equivalents  include  cash on hand  and  cash on  deposit  with
financial  institutions  with  original  maturities  of  three  months  or less.
Carrying amounts for cash and cash equivalents approximate fair value.

Escrow Deposits
---------------

The  Partnership is required to maintain  escrow accounts in accordance with the
terms of various  mortgage  agreements.  These escrow accounts are controlled by
the  mortgagee  and are used for payment of property  taxes,  hazard  insurance,
capital improvements and/or property  replacements.  Carrying amounts for escrow
deposits approximate fair value.

Deferred Borrowing Costs
------------------------

Loan fees and other related costs incurred to obtain long-term financing on real
property are  capitalized  and amortized  using a method that  approximates  the
effective  interest method over the terms of the related mortgage notes payable.
Amortization of deferred  borrowing costs is included in interest expense on the
Statements of Operations.

Discounts on Mortgage Notes Payable
-----------------------------------

Discounts on mortgage  notes payable are amortized  over the remaining  terms of
the related mortgage notes using the effective interest method.  Amortization of
discounts  on mortgage  notes  payable is  included  in interest  expense on the
Statements of Operations.

Rental Revenue
--------------

The Partnership leases its properties under short-term  operating leases.  Lease
terms generally are less than one year in duration. Rental revenue is recognized
as earned.

Income Taxes
------------

No provision for Federal  income taxes is necessary in the financial  statements
of the  Partnership  because,  as a  partnership,  it is not  subject to Federal
income tax and the tax effect of its  activities  accrues to the  partners.  See
Note 3 - "Taxable Loss."


<PAGE>
Allocation of Net Income and Net Loss
-------------------------------------

The Amended  Partnership  Agreement  provides  for net income or net loss of the
Partnership for both financial statement and income tax reporting purposes to be
allocated as indicated below. For allocation  purposes,  net income and net loss
of the Partnership are determined prior to deductions for depreciation.

(a)     First,  5% of all deductions for depreciation  shall be allocated to the
        General  Partner,  and 95% of all  deductions for depreciation shall  be
        allocated to the limited partners;

(b)     then,  an  amount  of net  income  equal  to the  cumulative  amount  of
        Management  Incentive  Distribution  ("MID") paid to the General Partner
        for  which  no  income  has  previously  been  allocated  (see  Note 2 -
        "Transactions  with  Affiliates")  shall  be  allocated  to the  General
        Partner;  however,  if all or a portion of the MID  consists  of limited
        partnership  units  ("Units"),  the amount of net income so allocated to
        the  General  Partner  shall be equal to the amount of cash the  General
        Partner would have otherwise received;

(c)     then, any remaining net income shall be allocated to the General Partner
        and to the  limited  partners  so that the total  amount  of net  income
        allocated to the General  Partner  pursuant to  paragraph  (b) above and
        this  paragraph  (c),  and to the  limited  partners  pursuant  to  this
        paragraph  (c),  shall be in the ratio of 5% to the General  Partner and
        95% to the limited partners.

(d)     Net loss shall  be allocated 95% percent  to the limited partners and 5%
        to the General Partner.

Federal  income tax law provides  that the  allocation of loss to a partner will
not be  recognized  unless the  allocation  is in  accordance  with a  partner's
interest in the partnership or the allocation has substantial  economic  effect.
Internal  Revenue  Code Section  704(b) and  accompanying  Treasury  Regulations
establish  criteria for  allocations of Partnership  deductions  attributable to
debt. The  Partnership's  tax allocations for 1996, 1995 and 1994 have been made
in accordance with these provisions.

Distributions
-------------

Pursuant to the Amended Partnership  Agreement and at the sole discretion of the
General  Partner,  distributions  during  each  taxable  year  shall  be made as
follows:

(a)      first, to the General Partner, an amount equal to the MID; and

(b)      any remaining distributable cash, as defined, shall be distributed 100%
         to the limited partners.

No  distributions  were made to the limited  partners in 1996, 1995 or 1994. The
Partnership paid or accrued distributions of $1,133,561, $1,070,763 and $973,023
for the benefit of the General  Partner for the years ended  December  31, 1996,
1995 and 1994,  respectively.  These  distributions  are the MID pursuant to the
Amended Partnership Agreement.

On February 28, 1997, the  Partnership  paid a distribution of $2,250,000 to the
limited partners.
<PAGE>

Net Loss Per Limited Partnership Unit
-------------------------------------

Net loss per limited partnership unit is computed by dividing net loss allocated
to the limited partners by the weighted average number of Units outstanding. Per
Unit  information has been computed based on 110,170 Units  outstanding in 1996,
1995, and 1994.

NOTE 2 - TRANSACTIONS WITH AFFILIATES
-------------------------------------

The  Partnership  pays property  management fees equal to 5% of the gross rental
receipts of the Partnership's properties to McNeil Real Estate Management,  Inc.
("McREMI"),  an  affiliate  of  the  General  Partner,  for  providing  property
management and leasing services for the Partnership's properties.

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

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

The MID will be paid to the  extent of the  lesser of the  Partnership's  excess
cash flow as defined,  or net  operating  income,  as defined (the  "Entitlement
Amount"),  and may be paid (i) in cash, unless there is insufficient cash to pay
the  distribution  in which event any unpaid  portion not taken in Units will be
deferred and is payable,  without interest, from the first available cash and/or
(ii) in Units.  A maximum of 50% of the MID may be paid in Units.  The number of
Units  issued in payment  of the MID is based on the  greater of $50 per Unit or
the net tangible asset value, as defined,  per Unit. During 1996, 1995 and 1994,
no Units were issued as payment for the MID.

During  1991,  the  Partnership  amended  its  capitalization  policy  and began
capitalizing  certain costs of improvements  and betterments that under policies
of  prior  management  had been  expensed  when  incurred.  The  purpose  of the
amendment was to more properly recognize items which were capital in nature. The
effect of the amendment  standing alone was evaluated at the time the change was
made and  determined  not to be  material  to the  financial  statements  of the
Partnership  in 1991,  nor was it expected  to be  material in any future  year.
However,  the amendment  can have a material  effect on the  calculation  of the
Entitlement   Amount  which  determines  the  amount  of  MID  earned.   Capital
improvements  are  excluded  from cash flow,  as defined.  The  majority of base
period cash flow was measured under the previous  capitalization  policy,  while
<PAGE>

incentive  period cash flow is determined  using the amended  policy.  Under the
amended policy,  more items are capitalized,  and cash flow increases.  Had base
period cash flow been measured on a basis  comparable with incentive period cash
flow, MID for the years ended December 31, 1995 and 1994 would have been reduced
by $111,248 and  $169,741,  respectively.  The  amendment of the  capitalization
policy did not materially affect the MID for 1996 because the Entitlement Amount
was   sufficient   to  pay  the  MID   notwithstanding   the  amendment  to  the
capitalization policy.

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

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

<TABLE>
<CAPTION>
                                                          For the Years Ended December 31,
                                                       1996               1995               1994
                                                   --------------     --------------    ---------------
<S>                                                <C>                <C>               <C>            
Property management fees - affiliates.......       $      978,168     $      946,627    $       915,989
Charged to general and
   administrative - affiliates:
   Partnership administration...............              537,697            733,886            719,703
                                                    -------------      -------------     --------------

                                                   $    1,515,865     $    1,680,513    $     1,635,692
                                                    =============      =============     ==============

Charged to General Partner's deficit:
   Management Incentive Distribution........       $    1,133,561     $    1,070,763    $       973,023
                                                    =============      =============     ==============
</TABLE>

Payable to  affiliates - General  Partner at December  31,  1996,  1995 and 1994
consists of MID,  reimbursable costs and property  management fees which are due
and payable from current operations.

NOTE 3 - TAXABLE LOSS
---------------------

McNeil Real Estate Fund IX, Ltd. is a partnership  and is not subject to Federal
and state income taxes.  Accordingly,  no  recognition  has been given to income
taxes in the  accompanying  financial  statements of the  Partnership  since the
income or loss of the  Partnership  is to be  included in the tax returns of the
individual  partners.  The  tax  returns  of  the  Partnership  are  subject  to
examination by Federal and state taxing authorities. If such examinations result
in  adjustments  to  distributive  shares of  taxable  income  or loss,  the tax
liability of the partners could be adjusted accordingly.





<PAGE>

The  Partnership's  net assets and liabilities for tax purposes exceeded the net
assets and liabilities for financial  reporting  purposes by $9,965,434 in 1996,
$9,613,062 in 1995 and $8,983,358 in 1994.

NOTE 4 - REAL ESTATE INVESTMENTS
--------------------------------

The  basis  and  accumulated  depreciation  of  the  Partnership's  real  estate
investments at December 31, 1996 and 1995 are set forth in the following tables:

<TABLE>
<CAPTION>
                                                   Buildings and        Accumulated           Net Book
       1996                         Land           Improvements         Depreciation            Value
       ----                    --------------      --------------      ---------------     --------------
<S>                            <C>                 <C>                 <C>                 <C>           
Berkley Hills
   Madison, TN                 $      246,988      $    6,067,612      $   (3,965,414)     $    2,349,186
Cherry Hills
   Wichita, KS                        514,205           8,867,317          (5,049,666)          4,331,856
Forest Park Village
   Columbus, OH                       716,395           9,211,812          (6,046,027)          3,882,180
Heather Square
   Dallas, TX                         853,746           7,432,783          (4,243,663)          4,042,866
Lantern Tree
   Omaha, NE                          217,809           3,356,298          (2,102,815)          1,471,292
Meridian West
   Puyallup, WA                       253,167           4,880,604          (2,789,274)          2,344,497
Pennbrook
   Dallas, TX                         692,515           6,188,400          (3,621,595)          3,259,320
Rockborough
   Addison, TX                        427,932           3,737,808          (2,062,361)          2,103,379
Rolling Hills
   Louisville, KY                     557,249           8,777,777          (5,546,753)          3,788,273
Ruskin Place
   Lincoln, NE                        920,061           5,066,855          (3,243,658)          2,743,258
Sheraton Hills
   Nashville, TN                      296,531           6,547,390          (4,057,852)          2,786,069
Westgate
   Lansing, MI                        390,482           6,304,118          (3,833,520)          2,861,080
Williamsburg
   Shreveport, LA                     283,754           5,227,543          (3,165,948)          2,345,349
                                -------------       -------------       -------------       -------------
                               $    6,370,834      $   81,666,317      $  (49,728,546)     $   38,308,605
                                =============       =============       =============       =============
</TABLE>



<PAGE>
<TABLE>
<CAPTION>

                                                   Buildings and        Accumulated           Net Book
       1995                         Land           Improvements         Depreciation            Value
       ----                    --------------      --------------      ---------------     --------------
<S>                            <C>                 <C>                 <C>                 <C>           
Berkley Hills                  $      246,988      $    5,914,125      $   (3,643,359)     $    2,517,754
Cherry Hills                          514,205           8,771,156          (4,660,956)          4,624,405
Forest Park Village                   716,395           8,891,627          (5,551,503)          4,056,519
Heather Square                        853,746           7,294,403          (3,912,468)          4,235,681
Lantern Tree                          217,809           3,245,613          (1,939,545)          1,523,877
Meridian West                         253,167           4,838,970          (2,538,764)          2,553,373
Pennbrook                             692,515           6,068,091          (3,312,652)          3,447,954
Rockborough                           427,932           3,595,458          (1,866,840)          2,156,550
Rolling Hills                         557,249           8,594,002          (5,050,846)          4,100,405
Ruskin Place                          920,061           4,975,901          (2,984,860)          2,911,102
Sheraton Hills                        296,531           6,211,692          (3,910,764)          2,597,459
Westgate                              390,482           6,093,518          (3,527,200)          2,956,800
Westridge
   Ft. Worth, TX                      345,265           4,269,089          (2,302,482)          2,311,872
Williamsburg                          283,754           5,083,649          (2,926,992)          2,440,411
                                -------------       -------------       -------------       -------------

                               $    6,716,099      $   83,847,294      $  (48,129,231)     $   42,434,162
                                =============       =============       =============       =============
</TABLE>

NOTE 5 - MORTGAGE NOTES PAYABLE
-------------------------------

The table below sets forth the  mortgage  notes  payable of the  Partnership  at
December  31,  1996 and 1995.  All  mortgage  notes are  secured by real  estate
investments.

<TABLE>
<CAPTION>
                          Mortgage           Annual        Monthly
                            Lien             Interest      Payments/                      December 31,
Property                 Position (a)        Rates %       Maturity Date (f)       1996                1995
--------                 -------------       --------      -----------------  ---------------     --------------
<S>                      <C>                  <C>          <C>       <C>      <C>                 <C>           
Berkley Hills            First                8.750        $26,005   12/23    $     3,227,638     $    3,255,924
                                                                                -------------      -------------

Cherry Hills (e)         First                8.150         39,353   07/03          4,659,767          4,748,209
                         Discount (b)                                                (102,442)          (114,168)
                                                                                -------------      -------------
                                                                                    4,557,325          4,634,041
                                                                                -------------      -------------

Forest Park Village      First                9.125         59,732   01/98          6,034,650          6,192,845
                                                                                -------------      -------------

Heather Square           First                9.625         38,250   03/09          3,294,874          3,429,615
                                                                                -------------      -------------

</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                          Mortgage           Annual        Monthly
                            Lien             Interest      Payments/                      December 31,
Property                 Position (a)        Rates %       Maturity Date (f)       1996                1995
--------                 -------------       --------      -----------------  ---------------     --------------
<S>                      <C>                  <C>           <C>      <C>            <C>                <C>      
Lantern Tree (e)         First                8.150        $20,416   07/03    $     2,417,470     $    2,463,353
                         Discount (b)                                                 (53,147)           (59,231)
                                                                                -------------      -------------
                                                                                    2,364,323          2,404,122
                                                                                -------------      -------------

Meridian West (e)        First                8.150         28,471   07/03          3,371,237          3,435,223
                         Discount (b)                                                 (74,114)           (82,599)
                                                                                -------------      -------------
                                                                                    3,297,123          3,352,624
                                                                                -------------      -------------

Pennbrook                First                9.450         27,209   02/00          3,160,860          3,187,297
                                                                                -------------      -------------

Rockborough (e)          First                8.150         18,789   07/03          2,224,827          2,267,055
                         Discount (b)                                                 (48,911)           (54,511)
                                                                                -------------      -------------
                                                                                    2,175,916          2,212,544
                                                                                -------------      -------------

Rolling Hills            First                9.250         55,389   11/24          6,637,002          6,685,297
                                                                                -------------      -------------

Ruskin Place             First                8.750         36,348   10/24          4,544,544          4,581,309
                                                                                -------------      -------------

Sheraton Hills (c)       First                 (d)           (d)     10/98          2,794,397          2,838,674
                                                                                -------------      -------------

Westgate                 First                8.000         44,114   09/23          5,833,019          5,893,110
                                                                                -------------      -------------

Williamsburg (e)         First                8.150         23,128   07/03          2,738,540          2,790,518
                         Discount (b)                                                 (60,205)           (67,098)
                                                                                -------------      -------------
                                                                                    2,678,335          2,723,420
                                                                                -------------      -------------

                                                       Total                  $    50,600,006     $   51,390,822
                                                                                =============      =============
</TABLE>

(a)  The debt is non-recourse to the Partnership.

(b)  Mortgage discounts are based on an effective interest rate of 8.62%.


<PAGE>
(c)  The  mortgage  encumbering  Sheraton Hills Apartments  contains  provisions
     which may give the lender the right to  accelerate  the mortgage  debt as a
     result of the November  12, 1991,  restructuring  of the  Partnership.  The
     General Partner has requested that the lender waive its right to accelerate
     the mortgage debt. The lender may require the payment of fees or additional
     interest as a condition to granting such a waiver.  In the event the waiver
     is not obtained and the mortgage debt is accelerated, the Partnership would
     be  required  to satisfy  the  outstanding  mortgage  debt,  which  totaled
     $2,794,397  at December  31,  1996.  In such event,  the  Partnership  will
     attempt to arrange alternative sources of mortgage financing. However, such
     refinancing  may be at an interest  rate which is higher or is otherwise on
     terms  which are less  favorable  than those  provided  for by the  current
     mortgage.  Furthermore,  if alternative  financing cannot be obtained,  the
     lender could  foreclose on Sheraton Hills  Apartments.  The General Partner
     believes the likelihood of this outcome is remote and  accordingly  has not
     reflected this balance as currently due.

(d)  The  Sheraton  Hills  mortgage  note bears  interest  at a  variable  rate,
     adjusted at six-month intervals equal to the six-month treasury bill weekly
     average  rate plus 3.0% per annum,  not to exceed  12.75%  per  annum.  The
     monthly  payment is also adjusted each six months so that the mortgage note
     will fully  amortize over a period of 30 years.  At December 31, 1996,  the
     interest rate was 8.57%,  and the monthly payment of principal and interest
     was $23,617.

(e)  Financing was obtained under the terms of a Real Estate Mortgage Investment
     Conduit financing.  The mortgage notes payable are cross-collateralized and
     may not be prepaid in whole or in part  before July 1998.  Any  prepayments
     made  during  the  sixth or  seventh  loan  years  are  subject  to a Yield
     Maintenance premium, as defined.  Additionally,  the Partnership must pay a
     release  payment equal to 25% of the prepaid  balance which will be applied
     to the remaining mortgage notes in the collateral pool.

(f)  Balloon payments on the Partnership's mortgage notes are due as follows:

                      Property                   Balloon Payment   Date
                      --------                   ---------------   ----

          Forest Park Village .............       $  5,831,000     01/98
          Sheraton Hills...................          2,661,000     10/98
          Pennbrook........................          3,059,000     02/00
          Cherry Hills.....................          3,875,000     07/03
          Lantern Tree.....................          2,010,000     07/03
          Meridian West....................          2,804,000     07/03
          Rockborough......................          1,850,000     07/03
          Williamsburg.....................          2,278,000     07/03

Scheduled  principal  maturities of the mortgage  notes  payable under  existing
agreements, before consideration of discounts of $338,819, are shown below.

          1997.............................       $    902,562
          1998.............................          9,355,346
          1999.............................            812,434
          2000.............................          3,912,038
          2001.............................            923,348
          Thereafter.......................         35,033,097
                                                   -----------
                                                  $ 50,938,825
                                                   ===========
<PAGE>

Based on borrowing  rates  currently  available to the  Partnership for mortgage
loans with similar terms and average maturities,  the fair value of the mortgage
notes payable was approximately $50,250,000 and $52,256,000 at December 31, 1996
and 1995, respectively.

NOTE 6 - SALE OF REAL ESTATE
----------------------------

The  Partnership  classified  Westridge  Apartments as an asset held for sale on
June 1, 1996. On July 30, 1996, the Partnership sold Westridge  Apartments to an
unaffiliated  purchaser for a purchase price of  $2,110,500.  The purchaser paid
$560,500  in cash to the  Partnership.  The  purchaser  financed  the  remaining
$1,550,000  of the  purchase  price by entering  into a  short-term,  $1,550,000
mortgage note payable to the Partnership. See Note 7 "Mortgage Note Receivable."
Cash  proceeds  from  the  sale,  as  well as the  loss  on  sale  of  Westridge
Apartments, are detailed below.

                                                   Loss on Sale   Cash Proceeds
                                                  -------------   -------------

       Cash sales price..................         $  2,110,500    $  2,110,500
       Selling costs.....................              (68,116)        (68,116)
       Basis of real estate sold.........           (2,262,541)
                                                   -----------

       Loss on sale of real estate.......         $   (220,157)
                                                   ===========

       Mortgage note receivable from
         the purchaser...................                           (1,550,000)
                                                                   -----------

       Net cash proceeds.................                         $    492,384
                                                                   ===========

NOTE 7 - MORTGAGE NOTE RECEIVABLE
---------------------------------

In connection with the sale of Westridge  Apartments,  the purchaser  financed a
portion of the sales price by entering  into a $1,550,000  mortgage note payable
to the  Partnership  on a short-term  basis until the  purchaser  could  arrange
permanent financing.  The Partnership's mortgage note receivable is secured by a
non-recourse lien against Westridge  Apartments.  The table below sets forth the
terms of the mortgage note receivable at December 31, 1996.

                   Mortgage       Annual          Monthly
                     Lien        Interest        Payment/         December 31,
Property           Position       Rate %       Maturity Date          1996
--------          -----------    --------    -----------------    ------------

Westridge          First           10.0%     $12,917     05/97    $ 1,550,000
                                                                   ==========

On  February  5, 1997,  the  purchaser  paid off the  $1,550,000  mortgage  note
receivable together with all accrued and unpaid interest thereon.



<PAGE>

NOTE 8 - MODIFICATION OF MORTGAGE NOTES PAYABLE
-----------------------------------------------

On July 28, 1994, the  Partnership  and the holder of the Berkley Hills mortgage
note agreed to modify the terms of the Berkley Hills mortgage note. The interest
rate was reduced to 8.75% from 10%,  and the monthly  debt  service  payment was
reduced to $26,005 from $28,283. In addition, the Partnership agreed to increase
the principal  balance of the mortgage note $74,108 to $3,290,000,  the mortgage
note's original balance.  The Partnership incurred $46,254 of deferred borrowing
costs in connection with the  modification,  and the default that existed on the
mortgage note was removed.

On July 28, 1994,  the  Partnership  and the holder of the Ruskin Place mortgage
note agreed to modify the terms of the Ruskin Place  mortgage note. The interest
rate was reduced to 8.75% from 9.75%,  and the monthly debt service  payment was
reduced to $36,348 from $38,882. In addition, the Partnership agreed to increase
the principal  balance of the mortgage note $87,701 to $4,625,600,  the mortgage
note's original balance.  The Partnership incurred $66,734 of deferred borrowing
costs in connection with the  modification,  and the default that existed on the
mortgage note was removed.

NOTE 9 - GAIN ON INVOLUNTARY CONVERSIONS
----------------------------------------

On April 24,  1996,  a roofing  contractor  caused a fire that did  $562,560  of
damage  to 12 units at  Sheraton  Hills  Apartments.  The  roofing  contractor's
insurance  carrier will  reimburse the  Partnership  for all costs incurred as a
result of the fire. The excess of expected  insurance proceeds over the basis of
the real estate destroyed resulted in a $474,376 gain on involuntary conversion.
As of December  31,  1996,  however,  the  Partnership  had not yet received the
insurance  reimbursement.  Therefore, the recognition of the gain on involuntary
conversion  was deferred and is shown on the  Partnership's  Balance  Sheet as a
deferred gain on involuntary  conversion.  When the insurance  reimbursement  is
received,  the  deferred  gain on  involuntary  conversion  will be  recognized.
Reconstruction  of the destroyed or damaged units was completed during the third
quarter of 1996.

On November 3, 1995, two units at Cherry Hills Apartments were damaged by a fire
that caused $55,495 in damages.  The  Partnership  received a $40,428  insurance
reimbursement to cover the cost to repair Cherry Hills Apartments. The insurance
reimbursement  received  in  excess  of the basis of the  property  damaged  was
recorded as a $16,961 gain on involuntary conversion.

On May 5, 1995,  Westridge  Apartments  incurred  hail damage of  $150,938.  The
Partnership  received $144,666 in insurance  reimbursements to cover the cost to
repair Westridge Apartments.  Insurance reimbursements received in excess of the
basis of the property  damaged were recorded as a $109,006  gain on  involuntary
conversion.

On April 25, 1994, eleven units at Rockborough Apartments were damaged by a fire
that caused $225,123 in damages.  The Partnership received $219,382 in insurance
reimbursements  to cover the cost to repair  Rockborough  Apartments.  Insurance
reimbursements  received  in  excess of the basis of the  property  damage  were
recorded as a $79,332 gain on involuntary conversion.




<PAGE>
On January 19, 1994, freezing weather caused $157,680 of damage to Rolling Hills
Apartments.  The Partnership  received  $140,496 in insurance  reimbursements to
cover the cost to repair  Rolling  Hills  Apartments.  Insurance  reimbursements
received  in excess of the basis of the  property  damaged  were  recorded  as a
$108,522 gain on involuntary conversion.

NOTE 10 - LEGAL PROCEEDINGS
---------------------------

The Partnership is not party to, nor are any of the Partnership's properties the
subject of, any material pending legal proceedings, other than ordinary, routine
litigation incidental to the Partnership's business, except for the following:

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

     The action  involves  purported  class and  derivative  actions  brought by
     limited  partners of each of the fourteen  limited  partnerships  that were
     named as nominal  defendants as listed above (as defined in this Section 1,
     the  "Partnerships").  Plaintiffs allege that McNeil  Investors,  Inc., its
     affiliate  McNeil Real Estate  Management,  Inc.  and three of their senior
     officers and/or directors (as defined in this Section 1, collectively,  the
     "Defendants") breached their fiduciary duties and certain obligations under
     the  respective  Amended  Partnership  Agreement.  Plaintiffs  allege  that
     Defendants  have  rendered  such Units  highly  illiquid  and  artificially
     depressed  the prices that are  available  for Units on the resale  market.
     Plaintiffs  also allege that  Defendants  engaged in a course of conduct to
     prevent  the  acquisition  of  Units  by an  affiliate  of  Carl  Icahn  by
     disseminating  purportedly  false,  misleading and inadequate  information.
     Plaintiffs  further  allege  that  Defendants  acted to  advance  their own
     personal interests at the expense of the Partnerships'  public unit holders
     by failing to sell Partnership properties and failing to make distributions
     to unitholders.

     On December 16,  1996,  the  Plaintiffs  filed a  consolidated  and amended
     complaint.  Plaintiffs  are suing for breach of fiduciary  duty,  breach of
     contract  and  an  accounting,  alleging,  among  other  things,  that  the
     management  fees paid to the McNeil  affiliates over the last six years are
     excessive,  that these fees  should be reduced  retroactively  and that the
     respective Amended  Partnership  Agreements  governing the Partnerships are
     invalid.  On January 7, 1997,  the Court ordered  consolidation  with three
     other similar actions listed below.

     The  Partnerships  filed a demurrer to the complaint and a motion to strike
     on February 14, 1997, seeking to dismiss the complaint in all respects. The
     demurrer  is  pending.  The  Partnerships  deny that  there is any merit to
     Plaintiff's allegations and intend to vigorously defend this action.
<PAGE>
2)   Alfred Napoletano v. McNeil Partners, L.P., McNeil Investors,  Inc., Robert
     A. McNeil,  Carole J. McNeil,  McNeil Pacific  Investors  Fund 1972,  Ltd.,
     McNeil Real Estate Fund V, Ltd.,  McNeil Real Estate Fund IX, Ltd.,  McNeil
     Real Estate Fund X, Ltd.,  McNeil  Real Estate Fund XI,  Ltd.,  McNeil Real
     Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate
     Fund XX, L.P.,  McNeil Real Estate Fund XXIV, L.P., McNeil Real Estate Fund
     XXV,  L.P.  -  Superior  Court of the  State of  California,  County of Los
     Angeles,  Case No. BC133849 (Class Action  Complaint).  On January 7, 1997,
     this  action  was consolidated by  court  order  with  Scholfield,  et al.,
     referenced above.

3)   Warren Heller v. McNeil Partners,  L.P., McNeil Investors,  Inc., Robert A.
     McNeil,  Carole J. McNeil, McNeil Pacific Investors Fund 1972, Ltd., McNeil
     Real Estate Fund V, Ltd.,  McNeil  Real Estate Fund IX,  Ltd.,  McNeil Real
     Estate Fund X, Ltd.,  McNeil Real Estate Fund XI, Ltd.,  McNeil Real Estate
     Fund XIV, Ltd.,  McNeil Real Estate Fund XV, Ltd.,  McNeil Real Estate Fund
     XX, L.P.,  McNeil Real Estate Fund XXIV, L.P., McNeil Real Estate Fund XXV,
     L.P. - Superior  Court of the State of  California,  County of Los Angeles,
     Case No. BC133957 (Class Action Complaint). On January 7, 1997, this action
     was consolidated by court order with Scholfield, et al., referenced above.

4)   Robert Lewis v. McNeil  Partners,  L.P.,  McNeil  Investors,  Inc.,  Robert
     A. McNeil et al. - In the District  Court of Dallas County,  Texas,  A-14th
     Judicial  District,  Cause No. 95-08535 (Class Action) - Plaintiff,  Robert
     Lewis, is a limited partner with McNeil Pacific  Investors Fund 1972, Ltd.,
     McNeil Real Estate Fund X, Ltd. and McNeil Real Estate Fund XV, Ltd.

     On  April  11,  1996,  the  action  was  dismissed   without  prejudice  in
     anticipation  of  consolidation  with other  class  action  complaints.  On
     January  7,  1997,  this  action  was  consolidated  by  court  order  with
     Schofield, et al., referenced above.

5)   McNeil Pacific  Investors Fund 1972, Ltd., McNeil Real Estate Fund V, Ltd.,
     McNeil Real Estate Fund IX, Ltd.,  McNeil Real Estate Fund X, Ltd.,  McNeil
     Real Estate Fund XI, Ltd.,  McNeil Real Estate Fund XIV, Ltd.,  McNeil Real
     Estate Fund XV, Ltd.,  McNeil Real Estate Fund XX, L.P., McNeil Real Estate
     Fund XXIV,  L.P.,  and McNeil  Real  Estate  Fund XXV,  L.P.  v. High River
     Limited Partnership,  Riverdale Investors Corp., Carl C. Icahn, and Unicorn
     Associates  Corporation  - United  States  District  Court for the  Central
     District of California, Case No. 96-5680SVW.

     On August 12,  1996,  High River  Limited  Partnership  (as defined in this
     Section 5, "High River"), a partnership controlled by Carl C. Icahn, sent a
     letter to the  partnerships  referenced above demanding lists of the names,
     current  residences or business  addresses  and certain  other  information
     concerning the unitholders of such partnerships.  On August 19, 1996, these
     partnerships  commenced the above action  seeking,  among other things,  to
     declare that such  partnerships are not required to provide High River with
     a current list of unitholders on the grounds that the defendants  commenced
     a tender  offer in  violation  of the  federal  securities  laws by  filing
     certain Schedule 13D Amendments on August 5, 1996.

     On October 16, 1996, the presiding judge denied the partnerships'  requests
     for a permanent and  preliminary  injunction to enjoin High River's  tender
     offers and  granted  the  defendants  request  for an order  directing  the
     partnerships  to turn  over  current  lists of  unitholders  to High  River
     forthwith.  On October 24, 1996, the partnerships  delivered the unitholder
     lists to High River.  The judge's  decision  resolved all the issues in the
     action.
<PAGE>
                        McNEIL REAL ESTATE FUND IX, LTD.
                                  SCHEDULE III
              REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
                                December 31, 1996

<TABLE>
<CAPTION>
                                                                                  Cumulative           Costs
                                                      Initial Cost (b)            Write-down       Capitalized
                          Related     (b)                     Buildings and     and Permanent       Subsequent
Description               Encumbrances              Land      Improvements        Impairment       To Acquisition
-----------               ------------         ------------   --------------    -------------      --------------
<S>                        <C>               <C>               <C>                <C>              <C>          
APARTMENTS:

Berkley Hills
   Madison, TN             $    3,227,638    $      246,988    $    4,779,121     $          -     $   1,288,491

Cherry Hills
   Wichita, KS                  4,557,325           514,205         7,373,589                -         1,493,728

Forest Park Village
   Columbus, OH                 6,034,650           716,395         7,095,131                -         2,116,681

Heather Square
   Dallas, TX                   3,294,874           853,746         6,087,281                -         1,345,502

Lantern Tree
   Omaha, NE                    2,364,323           217,809         2,467,872                -           888,426

Meridian West
   Puyallup, WA                 3,297,123           253,167         3,787,807                -         1,092,797

Pennbrook
   Dallas, TX                   3,160,860           692,515         4,708,479                -         1,479,921

Rockborough
   Addison, TX                  2,175,916           427,932         2,924,451                -           813,357

Rolling Hills
   Louisville, KY               6,637,002           557,249         6,156,595                -         2,621,182

Ruskin Place
   Lincoln, NE                  4,544,544           899,372         3,792,676                -         1,294,868

Sheraton Hills
   Nashville, TX                2,794,397           296,531         4,819,251                -         1,728,139

Westgate
   Lansing, MI                  5,833,019           390,482         4,963,710                -         1,340,408

Williamsburg
   Shreveport, LA               2,678,335           283,754         4,203,172                -         1,024,371
                           --------------    --------------    --------------     ------------     -------------
                          $    50,600,006   $     6,350,145   $    63,159,135    $           -    $   18,527,871
                           ==============    ==============    ==============     ============     =============
</TABLE>

(b)  The initial cost and encumbrances  reflect the present value of future loan
     payments  discounted,  if  appropriate,  at a  rate  estimated  to  be  the
     prevailing interest rate at the date of acquisition or refinancing.


                     See accompanying notes to Schedule III.
<PAGE>
                        McNEIL REAL ESTATE FUND IX, LTD.
                                  SCHEDULE III
              REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
                                December 31, 1996

<TABLE>
<CAPTION>
                                            Gross Amount at
                                     Which Carried at Close of Period                  Accumulated
                                                 Buildings and                         Depreciation
Description                      Land            Improvements          Total (a)     and Amortization
-----------                   --------------     --------------   ----------------   ----------------
<S>                           <C>                <C>              <C>                <C>             
APARTMENTS:

Berkley Hills
   Madison, TX                $      246,988     $    6,067,612   $      6,314,600   $    (3,965,414)

Cherry Hills
   Wichita, KS                       514,205          8,867,317          9,381,522        (5,049,666)

Forest Park Village
   Columbus, OH                      716,395          9,211,812          9,928,207        (6,046,027)

Heather Square
   Dallas, TX                        853,746          7,432,783          8,286,529        (4,243,663)

Lantern Tree
   Omaha, NE                         217,809          3,356,298          3,574,107        (2,102,815)

Meridian West
   Puyallup, WA                      253,167          4,880,604          5,133,771        (2,789,274)

Pennbrook
   Dallas, TX                        692,515          6,188,400          6,880,915        (3,621,595)

Rockborough
   Addison, TX                       427,932          3,737,808          4,165,740        (2,062,361)

Rolling Hills
   Louisville, KY                    557,249          8,777,777          9,335,026        (5,546,753)

Ruskin Place
   Lincoln, NE                       920,061          5,066,855          5,986,916        (3,243,658)

Sheraton Hills
   Nashville, TN                     296,531          6,547,390          6,843,921        (4,057,852)

Westgate
   Lansing, MI                       390,482          6,304,118          6,694,600        (3,833,520)

Williamsburg
   Shreveport, LA                    283,754          5,227,543          5,511,297        (3,165,948)
                              --------------     --------------   ----------------     -------------
                             $     6,370,834    $    81,666,317  $      88,037,151    $  (49,728,546)
                              ==============     ==============   ================     =============
</TABLE>

(a)  For Federal income tax purposes,  the properties are depreciated over lives
     ranging from 5-27.5 years using ACRS or MACRS  methods.  The aggregate cost
     of  real  estate   investments   for  Federal   income  tax   purposes  was
     approximately  $90,625,965 and accumulated  depreciation was $50,663,001 at
     December 31, 1996.

                     See accompanying notes to Schedule III.
<PAGE>
                        McNEIL REAL ESTATE FUND IX, LTD.
                                  SCHEDULE III
              REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
                                December 31, 1996

<TABLE>
<CAPTION>

                                 Date of                    Date                Depreciable
Description                   Construction                Acquired              lives (years)
-----------                   ------------                --------              -------------
<S>                             <C>                         <C>                     <C> 
Apartments:

Berkley Hills
   Madison, TN                  1970                        06/79                   3-25

Cherry Hills
   Wichita, KS                  1974                        06/80                   3-32

Forest Park Village
   Columbus, OH                 1970                        12/79                   3-25

Heather Square
   Dallas, TX                   1978                        10/79                   3-32

Lantern Tree
   Omaha, NE                    1974                        07/79                   3-28

Meridian West
   Puyallup, WA                 1977                        01/80                   3-31

Pennbrook
   Dallas, TX                   1978                        01/80                   3-31

Rockborough
   Addison, TX                  1978                        01/80                   3-31

Rolling Hills
   Louisville, KY               1974                        09/79                   3-27

Ruskin Place
   Lincoln, NE                  1973                        12/79                   3-27

Sheraton Hills
   Nashville, TN                1971                        06/79                   3-27

Westgate
   Lansing, MI                  1974                        12/79                   3-28

Williamsburg
   Shreveport, LA               1975                        12/79                   3-28

</TABLE>

                     See accompanying notes to Schedule III.

<PAGE>
                        McNEIL REAL ESTATE FUND IX, LTD.

                              Notes to Schedule III

              Real Estate Investments and Accumulated Depreciation


A  summary  of  activity  for the  Partnership's  real  estate  investments  and
accumulated depreciation is as follows:


<TABLE>
<CAPTION>
                                                            For the Years Ended December 31,
                                                   -----------------------------------------------------
                                                        1996               1995               1994
                                                   ---------------    ---------------   ----------------
Real estate investments:
<S>                                                <C>                <C>               <C>            
Balance at beginning of year...............        $   90,563,393     $   87,104,715    $    83,199,845

Improvements...............................             2,398,428          3,582,582          4,261,449

Assets replaced............................              (277,307)          (123,904)          (356,579)

Sale of real estate........................            (4,647,363)                 -                  -
                                                    -------------      -------------     --------------

Balance at end of year.....................        $   88,037,151     $   90,563,393    $    87,104,715
                                                    =============      =============     ==============



Accumulated depreciation:

Balance at beginning of year...............        $   48,129,231     $   44,274,163    $    41,065,883

Depreciation...............................             4,173,260          3,919,845          3,392,835

Assets replaced............................              (189,123)           (64,777)          (184,555)

Sale of real estate........................            (2,384,822)                 -                  -
                                                    -------------      -------------     --------------

Balance at end of year.....................        $   49,728,546     $   48,129,231    $    44,274,163
                                                    =============      =============     ==============
</TABLE>



<PAGE>
ITEM 9.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
-------       ---------------------------------------------------------------
              FINANCIAL DISCLOSURE
              --------------------

None.
                                    PART III

ITEM 10.      DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
--------      --------------------------------------------------

Neither the  Partnership  nor the General Partner has any directors or executive
officers.  The names and ages of, as well as the positions held by, the officers
and  directors of McNeil  Investors,  Inc.,  the general  partner of the General
Partner, are as follows:

                                        Other Principal Occupations and Other
Name and Position             Age       Directorships During the Past 5 Years
-----------------             ---       -------------------------------------

Robert A. McNeil,              76       Mr.  McNeil  is also  Chairman  of   the
Chairman of the                         Board and Director of McNeil Real Estate
Board and Director                      Management,  Inc. ("McREMI") which is an
                                        affiliate of the General Partner. He has
                                        held the foregoing  positions  since the
                                        formation  of such  entity in 1990.  Mr.
                                        McNeil  received  his B.A.  degree  from
                                        Stanford  University  in  1942  and  his
                                        L.L.B.  degree from  Stanford Law School
                                        in 1948. He is a member of the State Bar
                                        of  California  and has been involved in
                                        real  estate  financing  since  the late
                                        1940's and in real estate  acquisitions,
                                        syndications  and   dispositions   since
                                        1960. From 1986 until active  operations
                                        of  McREMI  and  McNeil  Partners,  L.P.
                                        began in February 1991, Mr. McNeil was a
                                        private investor. Mr. McNeil is a member
                                        of the International  Board of Directors
                                        of the Salk  Institute,  which  promotes
                                        research in improvements in health care.

Carole J. McNeil               53       Mrs.   McNeil   is   Co-Chairman,   with
Co-Chairman of the                      husband  Robert  A.  McNeil,  of  McNeil
Board                                   Investors,  Inc. Mrs.  McNeil has twenty
                                        years of real  estate  experience,  most
                                        recently as a private investor from 1986
                                        to 1993.  In 1982,  she founded  Ivory &
                                        Associates,  a  commercial  real  estate
                                        brokerage  firm  in San  Francisco,  CA.
                                        Prior to that, she was a commercial real
                                        estate   associate   with  the   Madison
                                        Company and, earlier, a commercial sales
                                        associate  and  analyst  with Marcus and
                                        Millichap  in San  Francisco.  In  1978,
                                        Mrs. McNeil  established Escrow Training
                                        Centers,  California's  first accredited
                                        commercial  training  program  for title
                                        company escrow  officers and real estate
                                        agents   needing   college   credits  to
                                        qualify  for  brokerage  licenses.   She
                                        began  in real  estate  as  Manager  and
                                        Marketing  Director  of Title  Insurance
                                        and  Trust in  Marin  County,  CA.  Mrs.
                                        McNeil serves on the International Board
                                        of Directors of the Salk Institute.
<PAGE>
                                        Other Principal Occupations and Other
Name and Position             Age       Directorships During the Past 5 Years
-----------------             ---       -------------------------------------

Ron K. Taylor                  39       Mr.  Taylor is the  President  and Chief
President and Chief                     Executive  Officer of McNeil Real Estate
Executive Officer                       Management  which is an affiliate of the
                                        General Partner.  Mr. Taylor has been in
                                        this capacity  since the  resignation of
                                        Donald K. Reed on March 4,  1997.  Prior
                                        to       assuming       his      current
                                        responsibilities, Mr. Taylor served as a
                                        Senior  Vice  President  of McREMI.  Mr.
                                        Taylor has been in this  capacity  since
                                        McREMI  commenced  operations  in  1991.
                                        Prior  to  joining  McREMI,  Mr.  Taylor
                                        served as an  Executive  Vice  President
                                        for  a   national   syndication/property
                                        management  firm. In this capacity,  Mr.
                                        Taylor  had the  responsibility  for the
                                        management  and leasing of a  21,000,000
                                        square  foot   portfolio  of  commercial
                                        properties. Mr. Taylor has been actively
                                        involved  in the  real  estate  industry
                                        since 1983.

Each director  shall serve until his successor  shall have been duly elected and
qualified.

ITEM 11.     EXECUTIVE COMPENSATION
--------     ----------------------

No direct  compensation  was paid or payable by the  Partnership to directors or
officers  (since it does not have any  directors or officers) for the year ended
December  31,  1996,  nor was any  direct  compensation  paid or  payable by the
Partnership  to  directors  or officers  of the  general  partner of the General
Partner for the year ended  December 31, 1996. The  Partnership  has no plans to
pay any such remuneration to any directors or officers of the general partner of
the General Partner in the future.

See Item 13 - Certain  Relationships  and  Related  Transactions  for amounts of
compensation and  reimbursements  paid by the Partnership to the General Partner
and its affiliates.

ITEM 12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------     --------------------------------------------------------------

(A)     Security ownership of certain beneficial owners.


<PAGE>

        No individual or group, as defined by Section 13(d)(3) of the Securities
        Exchange Act of 1934,  known to the Partnership is the beneficial  owner
        of more  than 5% of the  Partnership's  securities,  except  as noted in
        below:

        1.      A  group  of  limited  partnerships  affiliated  with  Liquidity
                Financial  Corporation,  all of whose outstanding stock is owned
                by  Richard  G.  Wollack  and Brent R.  Donaldson,  2200  Powell
                Street, Suite 700, Emeryville,  California,  94608, collectively
                own 6,389 Units (5.80%) as of January 31, 1997.

        2.      High River Limited  Partnership,  100 S.  Bedford  Road,   Mount
                Kisco,  New  York,   10549,  owns  13,147 Units  (11.93%) as  of
                January 31, 1997.

(B)     Security ownership of management.

        The  General  Partner  and the  officers  and  directors  of its general
        partner, collectively, own 5,715 Units (5.19%) as of January 31, 1997.

(C)     Change in control.

        None.

ITEM 13.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------     ----------------------------------------------

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

The MID will be paid to the lesser of the  Partnership's  excess  cash flow,  as
defined, or net operating income (the "Entitlement  Amount"), and may be paid in
(i) cash, unless there is insufficient  cash to pay the  distribution,  in which
event any unpaid  portion  not taken in Units will be  deferred  and is payable,
without interest,  from the first available cash and/or (ii) in Units. A maximum
of 50% of the MID may be paid in Units. The number of Units issued in payment of
the MID is based on the greater of $50 per Unit or the net tangible asset value,
as defined, per Unit. For the year ended December 31, 1996, the Partnership paid
or accrued MID for the General Partner in the amount of $1,133,561.

During  1991,  the  Partnership  amended  its  capitalization  policy  and began
capitalizing  certain costs of improvements and betterments which under policies
of  prior  management  had been  expensed  when  incurred.  The  purpose  of the
amendment was to more properly recognize items which were capital in nature. The
effect of the amendment  standing alone was evaluated at the time the change was
made and  determined  not to be  material  to the  financial  statements  of the
Partnership  in 1991,  nor was it expected  to be  material in any future  year.




<PAGE>

However,  the amendment  can have a material  effect on the  calculation  of the
Entitlement   Amount  which  determines  the  amount  of  MID  earned.   Capital
improvements  are  excluded  from cash flow,  as defined.  The  majority of base
period cash flow was measured under the previous  capitalization  policy,  while
incentive  period cash flow is determined  using the amended  policy.  Under the
amended policy,  more items are capitalized,  and cash flow increases.  Had base
period cash flow been measured on a basis  comparable with incentive period cash
flow, MID for the years ended December 31, 1995 and 1994 would have been reduced
by $111,248 and  $169,741,  respectively.  The  amendment of the  capitalization
policy did not materially affect the MID for 1996 because the Entitlement Amount
was   sufficient   to  pay  the  MID   notwithstanding   the  amendment  to  the
capitalization policy.

The  Partnership  pays  property  management  fees  equal to 5% of gross  rental
receipts  of the  Partnership's  properties  to McREMI  for  providing  property
management  and  leasing  services  for  the   Partnership's   properties.   The
Partnership   reimburses   McREMI  for  its  costs,   including   overhead,   of
administering the Partnership's  affairs.  For the year ended December 31, 1996,
the   Partnership   incurred   $1,515,865  of  property   management   fees  and
reimbursements.

See  Item 1 -  Business,  Item  7 -  Management's  Discussion  and  Analysis  of
Financial  Condition  and  Results  of  Operations,  and  Item  8  -  Note  2  -
"Transactions with Affiliates."



<PAGE>
                                     PART IV

ITEM 14.     EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
--------     ----------------------------------------------------------------

See accompanying Index to Financial Statements at Item 8.

(A) The  following  exhibits are  incorporated  by reference and are an integral
    part of this Form 10-K.

        Exhibits

              Exhibit
              Number              Description
              -------             -----------
               3.                 Limited  Partnership  Agreement  (Incorporated
                                  by reference to the Annual Report on Form 10-K
                                  for the fiscal year ended September 30, 1987).

               3.1                Amended   and  Restated  Limited   Partnership
                                  Agreement     dated    November    12,    1991
                                  (Incorporated  by reference  to the  Quarterly
                                  Report on Form 10-Q for the quarter year ended
                                  September 30, 1991).

               3.2                Amendment  No. 1 to the  Amended and  Restated
                                  Partnership  Agreement  of McNeil  Real Estate
                                  Fund IX,  Ltd.,  dated to be  effective  as of
                                  July 31, 1993. (5)

               3.3                Amendment  No. 2 to the  Amended and  Restated
                                  Partnership  Agreement  of McNeil  Real Estate
                                  Fund IX, Ltd., dated March 28, 1994. (5)

              10.1                Mortgage   Note,  dated  September  26,  1989,
                                  between  Rolling Hills Fund IX Associates L.P.
                                  and Newport Mortgage Corporation. (1)

              10.2                Mortgage  Note, dated August 11, 1988, between
                                  Sherwood   Forest  Fund  IX   Associates   and
                                  American Mortgages, Inc. (1)

              10.3                Assignment  and  Assumption  Agreement,  dated
                                  as  of  November  12,  1991,  between  Pacific
                                  Investors  Corporation  and  McNeil  Partners,
                                  L.P.   regarding   Sherwood   Forest  Fund  IX
                                  Associates. (2)

              10.4                Assignment  and  Assumption  Agreement,  dated
                                  as  of  November  12,  1991,  between  Pacific
                                  Investors  Corporation  and  McNeil  Partners,
                                  L.P. regarding Berkley Hills Associates. (2)

              10.5                Assignment and   Assumption  Agreement,  dated
                                  as  of  November  12,  1991,  between  Pacific
                                  Investors  Corporation  and  McNeil  Partners,
                                  L.P.    regarding   Ruskin   Place   Fund   IX
                                  Associates. (2)

<PAGE>
              Exhibit
              Number              Description
              -------             -----------
              10.6                Assignment  and  Assumption  Agreement,  dated
                                  as of November 12, 1991, between Rolling Hills
                                  Apartment  Corp.  and  McNeil  Partners,  L.P.
                                  regarding  Rolling  Hills Fund IX  Associates,
                                  L.P. (2)

              10.7                Assignment and   Assumption  Agreement,  dated
                                  as  of  November  12,  1991,  between  Pacific
                                  Investors  Corporation,  Robert A.  McNeil and
                                  McNeil  Partners,  L.P.  regarding McNeil Real
                                  Estate Fund IX, Ltd. (2)

              10.8                Termination  Agreement,  dated  as of November
                                  12,  1991,   between   Ruskin  Place  Fund  IX
                                  Associates and McNeil Real Estate  Management,
                                  Inc. (2)

              10.9                Termination Agreement, dated  as of   November
                                  12, 1991.  (2) between  Rolling  Hills Fund IX
                                  Associates,   L.P.   and  McNeil  Real  Estate
                                  Management, Inc.

              10.10               Termination  Agreement,  dated  as of November
                                  12,  1991,  between  Sherwood  Forest  Fund IX
                                  Associates and McNeil Real Estate  Management,
                                  Inc. (2)

              10.11               Termination  Agreement,  dated  as of November
                                  12, 1991, between Berkley Hills Associates and
                                  McNeil Real Estate Management, Inc. (2)

              10.12               Property  Management  Agreement,  dated  as of
                                  November 12, 1991,  between McNeil Real Estate
                                  Fund  IX,   Ltd.   and  McNeil   Real   Estate
                                  Management, Inc. (2)

              10.13               Property  Management  Agreement,  dated as  of
                                  November 12, 1991,  between  Ruskin Place Fund
                                  IX   Associates   and   McNeil   Real   Estate
                                  Management, Inc. (2)

              10.14               Property  Management  Agreement,  dated  as of
                                  November 12, 1991,  between Rolling Hills Fund
                                  IX  Associates,  L.P.  and McNeil  Real Estate
                                  Management, Inc. (2)

              10.15               Property  Management  Agreement,  dated as  of
                                  November 12,  1991,  between  Sherwood  Forest
                                  Fund  IX  Associates,  L.P.  and  McNeil  Real
                                  Estate Management, Inc. (2)



<PAGE>
              Exhibit
              Number              Description
              -------             -----------

              10.16               Property  Management  Agreement,  dated as  of
                                  November  12,  1991,   between  Berkley  Hills
                                  Associates and McNeil Real Estate  Management,
                                  Inc. (2)

              10.17               Asset   Management  Agreement,  dated   as  of
                                  November 12, 1991,  between McNeil Real Estate
                                  Fund IX, Ltd. and McNeil Partners, L.P. (2)

              10.18               Revolving  Credit  Agreement,  dated August 6,
                                  1991, between McNeil Real Estate Fund IX, Ltd.
                                  and McNeil Partners, L.P. (2)

              10.19               Amendment  of  Property  Management  Agreement
                                  dated March 5, 1993  between  the  Partnership
                                  and McNeil Real Estate Management, Inc. (3)

              10.20               Property  management  agreement,  dated as  of
                                  January 28, 1993,  between  Pennbrook Fund IX,
                                  L.P. and McNeil Real Estate  Management,  Inc.
                                  (3)

              10.21               Amendment  of  Property  Management  Agreement
                                  dated March 5, 1993 between  Pennbrook Fund IX
                                  Associates,   L.P.   and  McNeil  Real  Estate
                                  Management, Inc. (3)

              10.22               Loan  Agreement  dated June 24,  1993  between
                                  Lexington  Mortgage  Company  and McNeil  Real
                                  Estate Fund IX, Ltd., et. al. (4)

              10.23               Master Property  Management  Agreement,  dated
                                  as of  June  24,  1993,  between  McNeil  Real
                                  Estate Management, Inc. and McNeil Real Estate
                                  Fund IX, Ltd. (5)

              10.24               Mortgage  Note,   dated  September  28,  1989,
                                  between  Ruskin Place Fund IX  Associates  and
                                  American Mortgages, Inc. (6)

              10.25               Modification  of Mortgage Note, dated July 28,
                                  1994,  between Ruskin Place Fund IX Associates
                                  and American Mortgages, Inc. (6)

              10.26               Deed of  Trust Note,  dated  November 3, 1988,
                                  between Berkley Hills  Associates and American
                                  Mortgages, Inc. (6)

              10.27               Modification of Deed of Trust Note, dated July
                                  28, 1994, between Berkley Hills Associates and
                                  American Mortgages, Inc. (6)


<PAGE>
              Exhibit
              Number              Description
              -------             -----------

              10.28               Loan  Agreement,  dated   December  30,  1992,
                                  between Forest Park Fund IX Associates Limited
                                  Partnership,  McNeil  Partners,  L.P.,  McNeil
                                  Real  Estate  Fund  IX,  Ltd.  and  Collateral
                                  Mortgage, Ltd. (6)

              10.29               Promissory   Note,   dated  February 5,  1979,
                                  between Summers-The Heather Apartments Company
                                  and The Mutual Benefit Life Insurance Company.
                                  (6)

              10.30               Promissory    Note,  dated  September 2, 1988,
                                  between  McNeil Real Estate Fund IX, Ltd.  and
                                  FNB Mortgage Corp. (6)

              10.31               Multifamily   Note,  dated  January 29,  1993,
                                  between Pennbrook Fund IX Associates, L.P. and
                                  Washington Mortgage Financial Group, Ltd. (6)

              10.32               Modification  of Mortgage  Note,  dated   June
                                  30,  1993,  between  Sherwood  Forest  Fund IX
                                  Associates and American Mortgages, Inc. (6)

              11.                 Statement    regarding   computation  of   Net
                                  Income  (Loss) per  Limited  Partnership  Unit
                                  (see Note 1 to Financial Statements).

              22.                 Following   is  a  list of subsidiaries of the
                                  Partnership:

<TABLE>
<CAPTION>
                                                                                            Names Under
                                                                   Jurisdiction             Which It Is
                                  Name of Subsidiary             of Incorporation          Doing Business
                                  ------------------             ----------------          --------------

<S>                               <C>                              <C>                          <C>
                                  Berkley Hills Associates         Tennessee                    None

                                  Cherry Hills Fund IX
                                  Limited Partnership              Delaware                     None

                                  Forest Park Fund IX
                                  Associates Limited
                                  Partnership                      Ohio                         None

                                  Lantern Tree Fund IX
                                  Limited Partnership              Delaware                     None

                                  Meridian West Fund IX
                                  Limited Partnership              Delaware                     None
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                                                                   Jurisdiction            Which It Is
                                  Name of Subsidiary             of Incorporation         Doing Business
                                  ------------------             ----------------         --------------

<S>                               <C>                              <C>                         <C>
                                  Pennbrook Fund IX
                                  Associates, L.P.                 Texas                        None

                                  Rockborough Fund IX
                                  Limited Partnership              Delaware                     None

                                  Rolling Hills Fund IX
                                  Associates, L.P.                 Kentucky                     None

                                  Ruskin Place
                                  Fund IX Associates               Nebraska                     None

                                  Sherwood Forest
                                  Fund IX Associates               Michigan                     None

                                  Williamsburg Fund IX
                                  Limited Partnership              Delaware                     None
</TABLE>

              The Partnership has omitted  instruments with respect to long-term
              debt  where  the  total  amount  of  the   securities   authorized
              thereunder  does  not  exceed  10%  of  the  total  assets  of the
              Partnership. The Partnership agrees to furnish a copy of each such
              instrument to the Commission upon request.

        (1)   Incorporated  by  reference  to the Annual  Report of McNeil  Real
              Estate Fund IX, Ltd. (File No. 0-9026) on Form 10-K for the period
              ended December 31, 1990, as filed with the Securities and Exchange
              Commission on March 29, 1991.

        (2)   Incorporated  by  reference  to the Annual  Report of McNeil  Real
              Estate  Fund IX,  Ltd.  (File  No.  0-9026),  on Form 10-K for the
              period ended  December 31, 1991, as filed with the  Securities and
              Exchange Commission on March 30, 1992.

        (3)   Incorporated  by  reference  to the Annual  Report of McNeil  Real
              Estate  Fund IX,  Ltd.  (File  No.  0-9026),  on Form 10-K for the
              period ended  December 31, 1992, as filed with the  Securities and
              Exchange Commission on March 30, 1993.

        (4)   Incorporated  by  reference  to the Annual  Report of McNeil  Real
              Estate  Fund XI,  Ltd.  (File  No.  0-9783),  on Form 10-K for the
              period ended  December 31, 1993, as filed with the  Securities and
              Exchange Commission on March 30, 1994.

        (5)   Incorporated  by  reference  to the Annual  Report of McNeil  Real
              Estate  Fund IX,  Ltd.  (File  No.  0-9026),  on Form 10-K for the
              period ended  December 31, 1993, as filed with the  Securities and
              Exchange Commission on March 30, 1994.


<PAGE>

        (6)   Incorporated  by  reference  to the Annual  Report of McNeil  Real
              Estate  Fund IX,  Ltd.  (File  No.  0-9026),  on Form 10-K for the
              period ended  December 31, 1996, as filed with the  Securities and
              Exchange Commission on March 30, 1995.

        27.   Financial Data Schedule for the year ended December 31, 1996.

(B)  Reports on Form 8-K.  There  were no  reports on Form 8-K filed  during the
quarter ended December 31, 1996.


<PAGE>



                        McNEIL REAL ESTATE FUND IX, LTD.
                              A Limited Partnership

                                 SIGNATURE PAGE


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.


                                McNEIL REAL ESTATE FUND IX, LTD.


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

                                     By: McNeil Investors, Inc., General Partner



March 28, 1997                     By:  /s/  Robert A. McNeil
--------------                         -----------------------------------------
Date                                   Robert A. McNeil
                                       Chairman of the Board and Director
                                       (Principal Executive Officer)


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.


March 28, 1997                     By:  /s/  Ron K. Taylor
--------------                          ----------------------------------------
Date                                    Ron K. Taylor
                                        President and Director of McNeil 
                                         Investors, Inc.
                                        (Principal Financial Officer)




March 28, 1997                     By:  /s/  Brandon K. Flaming
--------------                         ----------------------------------------
Date                                    Brandon K. Flaming
                                        Vice President of McNeil Investors, Inc.
                                        (Principal Accounting Officer)