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                                                                  EXHIBIT 10.4
                                       
                             TAX SHARING AGREEMENT

          TAX SHARING AGREEMENT (the "Agreement"), dated as of September 30, 
1998, between LTC Properties, Inc., a Maryland corporation ("LTC"), and LTC 
Healthcare, Inc., a Nevada corporation ("Healthcare").

          WHEREAS, LTC is the parent corporation of an affiliated group of
corporations  that join in filing consolidated federal Income Tax Returns and
certain consolidated, combined or unitary state Income Tax Returns;

          WHEREAS, pursuant to the Distribution Agreement (as hereinafter 
defined), LTC presently intends to distribute all of the common stock, $.01 
par value per share, of Healthcare to its common stockholders, Series C 
preferred stockholders and debentureholders (the "Distribution"); and

          WHEREAS, LTC and Healthcare desire on behalf of themselves, their
subsidiaries and their successors to set forth their respective rights and
obligations with respect to Taxes (as hereinafter defined).

          NOW THEREFORE, in consideration of their mutual promises, the parties
hereby agree as follows:

          1.   DEFINITIONS. 

          When used herein the following terms shall have the following
meanings:

          "AGREEMENT"  -- shall have the meaning set forth in the introductory
paragraph hereof.

          "CLOSING DATE" -- the date the Distribution is consummated pursuant to
the terms of the Distribution Agreement.

          "CODE" -- the Internal Revenue Code of 1986, as amended, or any 
successor thereto, as in effect for the taxable year in question.

          "DISTRIBUTION" -- shall have the meaning set forth in the recitals
hereof.

          "DISTRIBUTION AGREEMENT" -- the Distribution Agreement dated as of
September 30, 1998 between LTC and Healthcare.

          "HEALTHCARE" -- shall have the meaning set forth in the introductory
paragraph hereof.

                                       

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          "HEALTHCARE ASSETS" -- the retail properties and other assets
(together with any related liabilities) distributed to Healthcare pursuant to
the Distribution Agreement.

          "HEALTHCARE GROUP" -- Healthcare and each corporation filing a
consolidated federal Income Tax Return with Healthcare as the parent
corporation.

          "INCOME TAX(ES)" -- with respect to any corporation or group of
corporations, any and all Taxes to the extent based upon or measured by net
income (regardless of whether denominated as an "income tax," a "franchise tax"
or otherwise), imposed by any Taxing Authority, together with any related
interest, penalties or other additions thereto.

          "IRS" -- the U.S. Internal Revenue Service.

          "LTC" -- shall have the meaning set forth in the introductory
paragraph hereof.

          "LTC ASSETS" -- the properties and other assets (together with any
related liabilities) retained by LTC pursuant to the Distribution Agreement.

          "LTC GROUP" --  for any taxable year or period, LTC and each
corporation filing a consolidated federal Income Tax Return with LTC as the
parent corporation.

          "OTHER TAXES" -- Taxes other than Income Taxes.

          "OVERDUE RATE" -- a rate of interest per annum that fluctuates with
the federal short-term rate established from time to time pursuant to Code
Section 6621(b).

          "TAX(ES)" -- any net income, gross income, gross receipts, sales, use,
excise, franchise, transfer, payroll, premium, property or windfall profits tax,
alternative or add-on minimum tax, or other tax, fee or assessment, together
with any interest and any penalty, addition to tax or other additional amount
imposed by any Taxing Authority, whether any such tax is imposed directly or
through withholding.

          "TAXING AUTHORITY" -- the IRS and any other domestic or foreign
governmental authority responsible for the administration of any Tax.

          "TAX RETURN(S)" -- all returns, reports, estimates, information
statements, declarations and other filings relating to, or required to be filed
by any taxpayer in connection with, its liability for, or its payment or receipt
of any refund of, any Tax.

          2.   PREPARATION AND FILING OF TAX RETURNS; PAYMENT OF TAXES

               a.   LTC shall prepare and timely file, or cause to be prepared
and timely filed, with the appropriate Taxing Authorities (i) all federal and
state Income and Other Tax Returns of the LTC Group and any member or members
thereof for all taxable years and 

                                       

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periods ending on or before the Closing Date; and (ii) all federal and state
Income and Other Tax Returns of LTC for all taxable years and periods beginning
after the Closing Date.  LTC shall pay, or cause to be paid, all Taxes due with
respect to Tax Returns described in this subsection (a).  LTC shall be entitled
to all Tax refunds received or receivable with respect to any and all Income and
Other Taxes attributable to the LTC Assets for all taxable years and periods.

               b.   Healthcare shall prepare and timely file, or cause to be
prepared and timely filed, with the appropriate Taxing Authorities, all federal
and state Income and Other Tax Returns of the Healthcare Group and any member or
members thereof for taxable years and periods beginning after the Closing Date. 
Healthcare shall pay, or cause to be paid, all Taxes due with respect to Tax
Returns described in this subsection (b).  Healthcare shall be entitled to all
Tax refunds received or receivable with respect to any and all Income and Other
Taxes attributable to the Healthcare Assets for all taxable years and periods.

          3.   PAYMENTS.

               a.   METHOD.  Unless the parties otherwise agree, all payments
made by a party pursuant to this Agreement shall be made by wire transfer to a
bank account designated from time to time by the other party. The paying party
shall also provide a notice of payment to the recipient.

               b.   INTEREST.  If any payment is not timely paid, interest shall
accrue on the unpaid amount at the Overdue Rate.  A payment will be deemed to be
timely paid only if actually received by the payee within seven (7) days of the
receipt of notice from the other party that such payment is due.

               c.   CHARACTERIZATION.  Any payment (other than interest thereon)
made hereunder shall be treated by all parties for all purposes as a nontaxable
intercompany settlement of liabilities existing immediately before the
Distribution or, to the extent appropriate, as a non-taxable dividend
distribution or capital contribution.

          4.   CONTESTS AND AUDITS; INDEMNIFICATION.  

               a.   NOTICE.  Upon the receipt by LTC or Healthcare, as the case
may be, of notice of any pending or threatened Tax audit or assessment which may
affect the liability for Taxes that are subject to indemnification hereunder,
LTC or Healthcare, as the case may be, shall promptly notify the other in
writing of the receipt of such notice.

               b.   CONTROL AND SETTLEMENT.  From and after the Closing Date,
LTC shall have full control over, and the right to represent the interests of,
LTC and all other corporations involved in or affected by any Tax audit or
administrative, judicial or other proceeding relating, in whole or in part, to
Taxes that are subject to indemnification by LTC hereunder.  LTC shall have the
right to employ counsel of its choice at its expense, and shall have the
ultimate control of the contest and any settlement or other resolution thereof. 
Any 

                                       

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liability for Taxes established pursuant to such proceeding shall be allocated
and paid in accordance with Section 2 of this Agreement.

               c.   AMENDMENT OF TAX RETURNS.  LTC shall have sole control over
the preparation and filing of any and all amendments to Tax Returns described in
Section 2(a).

               d.   INDEMNIFICATION.  LTC shall indemnify and hold harmless
Healthcare and the Healthcare Group against any and all Income and Other Taxes
specifically attributable to the LTC Assets for all taxable years and periods. 
Healthcare shall indemnify and hold harmless LTC against any and all Income and
Other Taxes specifically attributable to the Healthcare Assets for all taxable
years and periods.

          5.   COOPERATION; DOCUMENT RETENTION; CONFIDENTIALITY.

               a.   COOPERATION.  Upon reasonable request, LTC and Healthcare
shall promptly provide (and shall cause their respective affiliates to provide)
the requesting party with such cooperation and assistance, documents, and other
information, without charge, as may be necessary or reasonably helpful in
connection with (i) the preparation and filing of any original or amended Tax
Return, (ii) the conduct of any audit, appeal, protest or other examination or
any judicial or administrative proceeding involving to any extent Taxes or Tax
Returns within the scope of this Agreement, or (iii) the verification by a party
of an amount payable hereunder to, or receivable hereunder from, another party. 
Such cooperation and assistance shall include, without limitation: (a) the
provision on demand of books, records, Tax Returns, documentation or other
information relating to any relevant Tax Return; (b) the execution of any
document that may be necessary or reasonably helpful in connection with the
filing of any Tax Return, or in connection with any audit, appeal, protest,
proceeding, suit or action of the type generally referred to in the preceding
sentence, including, without limitation, the execution of powers of attorney and
extensions of applicable statutes of limitations; (c) the prompt and timely
filing of appropriate claims for refund; and (d) the use of reasonable best
efforts to obtain any documentation from a governmental authority or a third
party that may be necessary or helpful in connection with the foregoing.  Each
party shall make its employees and facilities available on a mutually convenient
basis to facilitate such cooperation.

               b.   RETENTION. LTC and Healthcare shall retain or cause to be
retained all Tax Returns, and all books, records, schedules, workpapers, and
other documents relating thereto, which Tax Returns and other materials are
within the scope of this Agreement, until the expiration of the later of (i) all
applicable statutes of limitations (including any waivers or extensions
thereof), and (ii) any retention period required by law or pursuant to any
record retention agreement.  The parties hereto shall notify each other in
writing of any waivers, extensions or expirations of applicable statutes of
limitations, and shall provide at least thirty (30) days prior written notice of
any intended destruction of the documents referred to in the preceding sentence.
A party giving such a notification shall not dispose of any of the foregoing
materials without first allowing the other party a reasonable opportunity to
copy them at such other party's expense.

                                       

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               c.   CONFIDENTIALITY.  Except as required by law or with the
prior written consent of the other party, all Tax Returns, documents, schedules,
work papers and similar items and all information contained therein, which Tax
Returns and other materials are within the scope of this Agreement, shall be
kept confidential by the parties hereto and their representatives, shall not be
disclosed to any other person or entity and shall be used only for the purposes
provided herein.

          6.   MISCELLANEOUS.

               a.   EFFECTIVENESS.  This Agreement shall be effective from and
after the Closing Date and shall survive until the expiration of all applicable
statutes of limitations with respect to taxable years and periods ending on or
before or including the Closing Date.

               b.   ENTIRE AGREEMENT.  This Agreement constitutes the entire
agreement and supersedes all prior agreements, understandings, negotiations and
discussions, whether written or oral, between the parties hereto with respect to
the subject matter hereof, so that no such external or separate agreement
relating to the subject matter of this Agreement shall have any effect or be
binding, unless the same is referred to specifically in this Agreement or is
executed by the parties after the date hereof.  To the extent that the terms of
this Agreement and similar terms of the Distribution Agreement are in conflict,
this Agreement shall govern. This Agreement cancels and supersedes, as of the
Closing Date, any and all other agreements with respect to Taxes between LTC and
Healthcare.

               c.   SEVERABILITY.  In the event that one or more of the terms or
provisions of this Agreement or the application thereof to any person(s) or in
any circumstance(s) shall, for any reason and to any extent be found by a court
of competent jurisdiction to be invalid, illegal or unenforceable, such court
shall have the power, and hereby is directed, to substitute for or limit such
invalid term(s), provision(s) or application(s) and to enforce such substituted
or limited terms or provisions, or the application thereof.  Subject to the
foregoing, the invalidity, illegality or enforceability of any one or more of
the terms or provisions of this Agreement, as the same may be amended from time
to time, shall not affect the validity, legality or enforceability of any other
term or provision hereof.

               d.   AMENDMENTS; WAIVERS.  No termination, cancellation,
modification, amendment, deletion, addition or other change in this Agreement,
or any provision hereof, or waiver of any right or remedy herein provided, shall
be effective for any purpose unless such change or waiver is specifically set
forth in a writing signed by the party or parties to be bound thereby.  The
waiver of any right or remedy with respect to any occurrence on one occasion
shall not be deemed a waiver of such right or remedy with respect to such
occurrence on any other occasion.

               e.   GOVERNING LAW. This Agreement and the rights and obligations
of the parties hereunder shall be governed by the laws of the State of
California, without regard to 

                                       

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the principles of choice of law thereof, except with respect to matters of law
concerning the internal corporate affairs of any corporate entity which is a
party to or subject of this Agreement, and as to those matters the law of the
jurisdiction under which the respective entity derives its powers shall govern.

               f.   NOTICES.  All notices, requests, demands, statements, bills
and other communications under this Agreement shall be delivered in accordance
with Section 9.04 of the Distribution Agreement.

               g.   SUCCESSORS AND ASSIGNS.  This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns.  This Agreement shall not be assigned without the
express written consent of each of the parties hereto.

               h.   NO THIRD-PARTY BENEFICIARIES.  This Agreement is solely for
the benefit of the parties hereto and shall not be deemed to confer upon third
parties any remedy, claim, liability, reimbursement, claim of action or other
right in excess of those existing without this Agreement.

               i.   TITLES AND HEADINGS.  Titles and headings to sections herein
are inserted for the convenience of reference only and are not intended to be a
part of or to affect the meaning or interpretation of this Agreement.

               j.   PREDECESSORS AND SUCCESSORS.  To the extent necessary to
give effect to the purposes of this Agreement, any reference to any corporation
shall also include any predecessor or successor thereto, by operation of law or
otherwise.

               k.   TAX ELECTIONS.  Nothing in this Agreement is intended to
change or otherwise affect any previous tax election made by or on behalf of the
LTC Group, and LTC shall have sole discretion to make or change any and all
elections affecting the LTC Group or any member or members thereof for all
taxable years and periods ending on or before the Closing Date.

               l.   EXPENSES.  Except as otherwise set forth in this Agreement,
all costs and expenses in connection with the preparation, execution, delivery
and implementation of this Agreement and with the consummation of the
transactions contemplated by this Agreement shall be charged to the party for
whose benefit the expenses are incurred, with any expenses which cannot be
allocated on such basis to be split equally between the parties.

               m.   DISPUTE RESOLUTION.  Any dispute arising under this
Agreement shall be resolved by binding arbitration in the manner contemplated by
Section 9.13 of the Distribution Agreement, including the attorneys fees
provisions referred to therein.

               n.   COUNTERPARTS.  This Agreement may be executed in two or more
counterparts, each of which together shall be deemed to be an original and all
of which together shall be deemed to constitute one and the same agreement.

                                       

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               o.   RELATIONSHIP OF PARTIES.  Nothing in this Agreement shall be
deemed or construed by the parties or any third party as creating the
relationship of principal and agent, partnership or joint venture between the
parties, it being understood and agreed that no provision contained herein, and
no act of the parties, shall be deemed to create any relationship between the
parties other than the relationship set forth herein.

               p.   FURTHER ACTION.  Healthcare and LTC each shall cooperate in
good faith and take such steps and execute such papers as may be reasonably
requested by the other party to implement the terms and provisions of this
Agreement.

               q.   LEGAL ENFORCEABILITY.  Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof.  Any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.  Without
prejudice to any rights or remedies otherwise available to any party hereto,
each party hereto acknowledges that damages would be an inadequate remedy for
any breach of the provisions of this Agreement and agrees that the obligations
of the parties hereunder shall be specifically enforceable.

                               [SIGNATURE PAGE FOLLOWS]

                                       

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          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

                                   LTC PROPERTIES, INC., A MARYLAND CORPORATION.


                                   BY: /s/ ANDRE C. DIMITRIADIS
                                       ----------------------------------------
                                   Name:  Andre C. Dimitriadis
                                   Title: Chairman and Chief Executive Officer

                                   LTC HEALTHCARE INC., A NEVADA CORPORATION

                                   By: /s/ JAMES J. PIECZYNSKI
                                       ----------------------------------------
                                   Name:  James J. Pieczynski
                                   Title: President and Chief Financial Officer

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