UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549

                                    FORM 10-K

(Mark One)

    X    ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
  -----
         SECURITIES EXCHANGE ACT OF 1934

         For the fiscal year ended            December 31, 1999
                                  ----------------------------------------------

                                                        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                     0-11655
                               -------------------------------------------------


                                NTS-PROPERTIES IV
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

           Kentucky                                           61-1026356
---------------------------------                    ---------------------------
(State or other jurisdiction of                      (I.R.S. Employer
incorporation or organization)                        Identification No.)

   10172 Linn Station Road
   Louisville, Kentucky                                       40223
---------------------------------                    ---------------------------
(Address of principal executive                             (Zip Code)
offices)

Registrant's telephone number, including area code:         (502) 426-4800
                                                     ---------------------------

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

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

                         Limited Partnership Interests
--------------------------------------------------------------------------------
                                (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                                         YES  X         NO
                                                             ----         ------

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-K (Section 229.405 of this chapter) 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]

Exhibit Index: See page 56

Total Pages: 61

<PAGE>

                                TABLE OF CONTENTS

                                                                           Pages
                                                                           -----

                                     PART I

Items 1 and 2.             Business and Properties                          3-18

Item 3.                    Legal Proceedings                                  18

Item 4.                    Submission of Matters to a Vote
                            of Security Holders                               18


                                     PART II


Item 5.                    Market for the Registrant's Limited
                            Partnership Interests and Related
                            Partner Matters                                   19

Item 6.                    Selected Financial Data                            20

Item 7.                    Management's Discussion and Analysis
                            of Financial Condition and Results
                            of Operations                                  21-30

Item 7A.                   Quantitative and Qualitative Disclosures
                            About Market Risk                                 30

Item 8.                    Financial Statements and Supplementary
                            Data                                           31-51

Item 9.                    Changes in and Disagreements with
                            Accountants on Accounting and
                            Financial Disclosure                              52


                                    PART III


Item 10.                   Directors and Executive Officers of
                            the Registrant                                 53-54

Item 11.                   Management Remuneration and Transactions           54

Item 12.                   Security Ownership of Certain Beneficial
                            Owners and Management                             54

Item 13.                   Certain Relationships and Related
                            Transactions                                      55


                                     PART IV


Item 14.                   Exhibits, Financial Statement Schedules
                            and Reports on Form 8-K                        56-60


Signatures                                                                    61


                                      - 2 -

<PAGE>

                                     PART I

Items 1. and 2.  Business and Properties
                 -----------------------

Development of Business
-----------------------

NTS-Properties IV., Ltd., a Kentucky Limited Partnership,  (the "Partnership" or
"NTS-Properties  IV") is a limited  partnership  organized under the laws of the
Commonwealth of Kentucky on May 13, 1983. The General Partner is  NTS-Properties
Associates  IV, a Kentucky  limited  partnership.  As of December 31, 1999,  the
Partnership owned the following properties:

          -    Commonwealth  Business  Center  Phase I, a business  center  with
               approximately  81,000 net  rentable  square  feet in  Louisville,
               Kentucky, constructed by the Partnership.

          -    Plainview  Point Office  Center Phases I and II, an office center
               with approximately 56,000 net rentable square feet in Louisville,
               Kentucky, acquired complete by the Partnership.

          -    The Willows of  Plainview  Phase I, a 118-unit  luxury  apartment
               complex in Louisville, Kentucky, constructed by the Partnership.

          -    A joint venture  interest in The Willows of Plainview Phase II, a
               144-unit  luxury  apartment  complex  in  Louisville,   Kentucky,
               constructed by the joint venture between the Partnership and NTS-
               Properties V, a Maryland Limited Partnership, an affiliate of the
               General  Partner of the  Partnership,  ("NTS-Properties  V"). The
               Partnership's percentage interest in the joint venture was 10% at
               December 31, 1999.

          -    A joint  venture  interest in Golf Brook  Apartments,  a 195-unit
               luxury apartment complex in Orlando, Florida,  constructed by the
               joint venture between the Partnership  and  NTS-Properties  VI, a
               Maryland Limited Partnership, an affiliate of the General Partner
               of the  Partnership,  ("NTS-Properties  VI").  The  Partnership's
               percentage  interest in the joint  venture was 4% at December 31,
               1999.

          -    A joint venture interest in Plainview Point III Office Center, an
               office center with approximately  63,000 net rentable square feet
               in Louisville, Kentucky, constructed by the joint venture between
               the  Partnership  and   NTS-Properties   VI.  The   Partnership's
               percentage  interest in the joint  venture was 5% at December 31,
               1999.

          -    A joint venture  interest in  Blankenbaker  Business Center 1A, a
               business  center with  approximately  50,000 net rentable  ground
               floor square feet and approximately 50,000 net rentable mezzanine
               square feet located in Louisville, Kentucky, acquired complete by
               a  joint   venture   between   NTS-Properties   Plus   Ltd.   and
               NTS-Properties  VII, Ltd.,  affiliates of the General  Partner of
               the Partnership.  The  Partnership's  percentage  interest in the
               joint venture was 30% at December 31, 1999.

          -    A joint  venture  interest in the  Lakeshore/University  II Joint
               Venture  ("L/U II Joint  Venture").  The L/U II Joint Venture was
               formed  on   January   23,   1995  among  the   Partnership   and
               NTS-Properties   V,   NTS-Properties   Plus  Ltd.   and  NTS/Fort
               Lauderdale,  Ltd.,  affiliates  of  the  General  Partner  of the
               Partnership.  The Partnership's  percentage interest in the joint
               venture was 12% at December 31, 1999.

                                      - 3 -

<PAGE>

Development of Business - Continued
-----------------------------------

A description of the properties owned by the L/U II Joint Venture as of December
31, 1999 appears below:

         -        Lakeshore  Business  Center  Phase I - a business  center with
                  ------------------------------------
                  approximately 103,000 net rentable square feet located in Fort
                  Lauderdale, Florida, acquired complete by the joint venture.

         -        Lakeshore  Business  Center Phase II - a business  center with
                  ------------------------------------
                  approximately  97,000 net rentable square feet located in Fort
                  Lauderdale, Florida, acquired complete by the joint venture.

         -        Outparcel  Building  Site -  approximately  3.8  acres of land
                  -------------------------
                  adjacent to the Lakeshore  Business  Center  development  upon
                  which  construction of Lakeshore Business Center Phase III has
                  commenced.

The Partnership or the joint venture in which the Partnership is a partner has a
fee title interest in the above properties.  In the opinion of the Partnership's
management, the properties are adequately covered by insurance.

As of December  31,  1999,  the  Partnership's  properties  were  encumbered  by
mortgages as shown in the table below:

                               Interest   Maturity           Balance
Property                         Rate       Date           at 12/31/99
--------                        ------     ------          -----------
Commonwealth Business Center
Phase I                          8.8%    10/01/04 (1)       $1,715,679

Plainview Point Office Center
Phases I and II                             --                 None

Willows of Plainview Phase I    7.15%    01/05/13 (2)       $1,845,116

Willows of Plainview Phase I    7.15%    01/05/13 (2)       $1,756,462

Willows of Plainview Phase II    7.2%    01/05/13 (2) $        299,682 (3)

Willows of Plainview Phase II    7.2%    01/05/13 (2) $        178,983 (3)

Golf Brook Apartments                         --             See Below (4)

Plainview Point Office Center
Phase III                                     --             See Below (5)

Blankenbaker Business Center
1A                               8.5%    11/15/05 (6) $        940,500 (7)

Lakeshore Business Center
Phase I                         8.125%   08/01/08 (8) $        542,043 (9)

Lakeshore Business Center
Phase II                        8.125%   08/01/08 (8) $        583,180 (9)

                       (Footnotes continued on next page)

                                      - 4 -

<PAGE>

Development of Business - Continued
-----------------------------------

(1)      Current   monthly   principal   payments   are  based  upon  a  10-year
         amortization  schedule. At maturity, the mortgage will have been repaid
         based on the current rate of amortization.

(2)      Current   monthly   principal   payments   are  based  upon  a  15-year
         amortization  schedule.  At  maturity,  the loan will have been  repaid
         based on the current rate of amortization.

(3)      This amount represents the Partnership's  proportionate interest in the
         mortgages payable at December 31, 1999. The outstanding balances of the
         mortgages  at  December  31,  1999  were   $2,949,626  and  $1,761,647,
         respectively.

(4)      Golf Brook Apartments, a joint venture between the Partnership and NTS-
         Properties  VI, is  encumbered  by a mortgage  payable to an  insurance
         company.  The $7,677,179 mortgage payable is recorded as a liability by
         NTS-Properties VI in accordance with the Joint Venture  Agreement.  The
         mortgage  bears  interest  at a fixed rate of 7.43% and matures May 15,
         2009.

(5)      Plainview  Point Office Center Phase III, a joint  venture  between the
         Partnership and  NTS-Properties VI, is encumbered by a mortgage payable
         to a bank. The $2,298,000  mortgage  payable is recorded as a liability
         by  NTS-Properties  VI in accordance with the Joint Venture  Agreement.
         The  mortgage  bears  interest  at Euro Rate plus 225 basis  points and
         matures June 23, 2002.

(6)      Current   monthly   principal   payments  are  based  upon  an  11-year
         amortization  schedule. At maturity, the mortgage will have been repaid
         based on the current rate of amortization.

(7)      This amount represents the Partnership's  proportionate interest in the
         mortgage  payable at December 31, 1999. The outstanding  balance of the
         mortgage at December 31, 1999 was $3,121,473.

(8)      Current   monthly   principal   payments   are  based  upon  a  12-year
         amortization  schedule. At maturity, the mortgage will have been repaid
         based on the current rate of amortization.

(9)      This amount represents the Partnerships's proportionate interest in the
         mortgage  payable at December 31, 1999. The outstanding  balance of the
         mortgage at December 31, 1999 was $4,543,531 for Phase I and $4,888,353
         for Phase II.

Currently,  the  Partnership's  plans for  renovations  and other major  capital
expenditures   include   tenant  finish   improvements   as  required  by  lease
negotiations  at  the  Partnership's  properties.   Changes  to  current  tenant
improvements are a typical part of any lease negotiation. Improvements generally
include a revision to the current floor plan to  accommodate  a tenant's  needs,
new  carpeting  and  paint  and/or  wallcovering.  The  extent  and  cost of the
improvements   are  determined  by  the  size  of  the  space  and  whether  the
improvements  are for a new tenant or incurred  because of a lease renewal.  The
tenant finish  improvements  will be funded by cash flow from  operations,  cash
reserves or additional financing where necessary.

On July 23, 1999,  the L/U II Joint  Venture  closed on the sale of 2.4 acres of
land adjacent to the Lakeshore Business Center for a purchase price of $528,405.
The Partnership  reflects a gain of approximately  $11,300  associated with this
sale in the third  quarter of 1999 and expects to use the net proceeds  from the
land sale to help fund the  construction of Lakeshore  Business Center Phase III
as described below.

                                      - 5 -

<PAGE>

Development of Business - Continued
-----------------------------------

As of December 31, 1999, the L/U II Joint Venture has a commitment,  pursuant to
a contract  signed  December  6, 1999,  to  construct  a building to be known as
Lakeshore  Business  Center  Phase  III on the 3.8  acres of land it owns at the
Lakeshore  Business  Center  Development.  Site work began in December  1999 and
shell  construction  began the first quarter of 2000. The construction costs are
currently  estimated to be $4,000,000 and will be funded by a $1,737,000 capital
contribution  from  NTS-Properties V in July 1999 and  approximately  $2,680,000
debt financing  obtained  subsequent to December 31, 1999. The  Partnership  and
NTS-  Properties  Plus,  which prior to July 1, 1999 had an 18% and 12% interest
respectively,  in the L/U II Joint Venture, were not in a position to contribute
additional  capital required for the  construction of Lakeshore  Business Center
Phase III. The Partnership,  together with  NTS-Properties Plus agreed that NTS-
Properties  V would make the capital  contribution  to the L/U II Joint  Venture
with the  knowledge  that  their  Joint  Venture  interest  would,  as a result,
decrease to 8% and 12% respectively.  See Item 8 Note 14 for information of debt
financing  obtained for the construction of Lakeshore  Business Center Phase III
subsequent to December 31, 1999.

As of December 31, 1999,  the  Partnership  has also started  renovation  of the
community  clubhouse  at  Golf  Brook  Apartments.  The  estimated  cost  of the
renovation  is $200,000.  The  renovation  is being funded partly from cash flow
from  operations  and partly from  financing  obtained by  NTS-Properties  VI on
September  23, 1999 in the amount of  $2,500,000  which is secured by  Plainview
Point III Office Center.

The  Partnership  had no other material  commitments  for renovations or capital
improvements as of December 31, 1999.

Financial Information About Industry Segments
---------------------------------------------

The  Partnership is engaged solely in the business of developing,  constructing,
owning and operating residential apartments and commercial real estate. See Item
8, Note 13 for information regarding the Partnership's operating segments.

Narrative Description of Business
---------------------------------

General
-------

The current  business of the Partnership is consistent with the original purpose
of the Partnership which was to invest in real property,  which was either under
development or proposed for development,  on which it would develop,  construct,
own and operate apartment complexes,  business parks, and retail, industrial and
office  buildings.  The Partnership  properties are in a condition  suitable for
their intended use.

The Partnership  intends to hold the properties until such time as sale or other
disposition   appears  to  be   advantageous   with  a  view  to  achieving  the
Partnership's  investment objectives or it appears that such objectives will not
be met. In deciding  whether to sell a property,  the Partnership  will consider
factors such as potential capital appreciation, cash flow and Federal income tax
considerations,  including  possible  adverse Federal income tax consequences to
the Limited Partners.

The following is information  regarding  properties that represent either 10% or
more of total  consolidated  assets or  revenues  as of and for the year  ending
December 31, 1999.

                                      - 6 -

<PAGE>

Commonwealth Business Center Phase I
------------------------------------

As of  December  31,  1999,  there were 12  tenants  leasing  space  aggregating
approximately  75,766  square feet of  rentable  area at  Commonwealth  Business
Center Phase I. All leases provide for tenants to contribute  toward the payment
of common area expenses, insurance and real estate taxes. The tenants who occupy
Commonwealth   Business  Center  Phase  I  are  professional   service  oriented
organizations.  The  principal   occupations/professions   practiced  include  a
stockbrokerage  house,  insurance  and  machinery   sales/service.   One  tenant
individually  leases more than 10% of  Commonwealth  Business  Center  Phase I's
rentable  area.  The occupancy  levels at the business  center as of December 31
were 93% (1999),  89% (1998), 87% (1997) and 86% (1996 and 1995). See Item 7 for
average  occupancy  levels for the periods  ending  December 31, 1999,  1998 and
1997.

The following  table  contains  approximate  data  concerning the major lease in
effect on December 31, 1999:

                                            Sq. Ft. and         Current Annual
                                              % of Net              Rental
                    Year of Expiration      Rentable Area       per Square Foot
                    ------------------      -------------       ---------------
Major Tenant (1):
     1                    2004              40,079 (49.3%)          $7.59

(1)  Major tenants are those that individually  occupy 10 percent or more of the
     rentable square footage.

Plainview Point Office Center Phases I and II
---------------------------------------------

As of  December  31,  1999,  there  were 6  tenants  leasing  space  aggregating
approximately  44,461  square feet of rentable  area at  Plainview  Point Office
Center Phases I and II. All leases provide for tenants to contribute  toward the
payment of common area  expenses,  insurance and real estate taxes.  The tenants
who  occupy  Plainview  Point  Office  Center  Phases I and II are  professional
service oriented organizations. The principal  occupations/professions practiced
include a business  school,  telemarketing  services and insurance.  Two tenants
individually  lease more than 10% of Plainview  Point Office  Center's  rentable
area.  The  occupancy  levels at the office  center as of  December  31 were 79%
(1999),  65%  (1998),  73%  (1997),  88% (1996) and 85%  (1995).  See Item 7 for
average  occupancy  levels for the periods  ending  December 31, 1999,  1998 and
1997.

The following  table contains  approximate  data  concerning the major leases in
effect on December 31, 1999:

                                                                 Current Annual
                                        Sq. Ft. and % of Net         Rental
                   Year of Expiration      Rentable Area         per Square Foot
                   ------------------       -------------        ---------------
Major Tenant (1):
      1                  2004               28,675 (50.7%)           $13.42
      2                  2004                7,428 (13.1%)           $13.60

(1)  Major tenants are those that individually  occupy 10 percent or more of the
     rentable square footage.

                                      - 7 -

<PAGE>

The Willows of Plainview Phase I
--------------------------------

Units at The Willows of Plainview Phase I include one and two-bedroom  lofts and
deluxe  apartments  and  two-bedroom  town  homes.  All units have  wall-to-wall
carpeting,  individually  controlled heating and air conditioning,  dishwashers,
ranges,  refrigerators  and garbage  disposals.  All units,  except  one-bedroom
lofts, have washer/dryer  hook-ups. The one-bedroom lofts have stackable washers
and dryers.  Tenants  have access to and the use of  coin-operated  washer/dryer
facilities, clubhouse, management offices, pool, whirlpool and tennis courts.

Monthly rental rates at The Willows of Plainview  Phase I start at $679 for one-
bedroom apartments,  $939 for two-bedroom  apartments and $1,039 for two-bedroom
town homes,  with  additional  monthly rental  amounts for special  features and
locations.  Tenants pay all costs of heating,  air conditioning and electricity.
Most  leases are for a period of one year.  Units will be rented in some  cases,
however,  on a shorter term basis at an additional  charge. The occupancy levels
at the  apartment  complex as of December 31 were 96%  (1999),  86% (1998),  92%
(1997),  89% (1996) and 91% (1995).  See Item 7 for average occupancy levels for
the periods ending December 31, 1999, 1998 and 1997.

Blankenbaker Business Center 1A
-------------------------------

Sykes  HealthPlan  Services  Bureau,  Inc.  (SHPS,  Inc.)  has  leased  100%  of
Blankenbaker  Business Center 1A. The annual base rent,  which excludes the cost
of  utilities,  is $7.48 per  square  foot.  The lease  term is for 11 years and
expires in July 2005. The lease provides for the tenant to contribute toward the
payment  of  common  area  expenses,  insurance  and real  estate  taxes.  Sykes
HealthPlan   Services   Bureau,   Inc.  is  a  professional   service-orientated
organization  which deals in insurance claim processing.  The occupancy level at
the business center as of December 31, 1999, 1998, 1997, 1996 and 1995 was 100%.
See Item 7 for average  occupancy  levels for the periods  ending  December  31,
1999, 1998, and 1997.

The following table contains  approximate data concerning the lease in effect on
December 31, 1999:

                                                                 Current Annual
                                         Sq. Ft. and % of Net       Rental
      Name           Year of Expiration    Rentable Area (1)    per Square Foot
      ----           ------------------    -----------------    ---------------
Sykes HealthPlan
 Services Bureau, Inc.      2005            100,640 (100%)          $ 7.48

(1) Rentable area includes ground floor and mezzanine square feet.

It has previously  been reported that SHPS,  Inc.  intended to  consolidate  its
operations and build its corporate  headquarters in Jefferson County,  Kentucky.
SHPS,  Inc.  occupies 100% of  Blankenbaker  Business Center 1A. The Partnership
believes that SHPS, Inc. no longer intends to build a Corporate Headquarters. As
of December 31, 1999, it is the  Partnership's  understanding  that SHPS,  Inc.,
intends  to occupy the space at  Blankenbaker  Business  Center 1A  through  the
duration of the lease term, which expires in July 2005.

                                      - 8 -

<PAGE>

Lakeshore Business Center Phase I
---------------------------------

As of  December  31,  1999,  there were 29  tenants  leasing  space  aggregating
approximately  76,069 square feet of rentable area at Lakeshore  Business Center
Phase I. All leases  provide  for  tenants to  contribute  toward the payment of
common area expenses,  insurance,  utilities and real estate taxes.  The tenants
who occupy Lakeshore  Business Center Phase I are professional  service oriented
organizations.   The   principal   occupations/professions   practiced   include
telemarketing  services,  financial services and computer integration  services.
There are no tenants that lease 10% or more of Lakeshore  Business  Center Phase
I's rentable area. The occupancy levels at the business center as of December 31
were 73% (1999),  85% (1998), 96% (1997) and 92% (1996 and 1995). See Item 7 for
average  occupancy  levels for the periods  ending  December 31, 1999,  1998 and
1997.

Lakeshore Business Center Phase II
----------------------------------

As of  December  31,  1999,  there were 20  tenants  leasing  space  aggregating
approximately  70,417  square feet of the rentable  area at  Lakeshore  Business
Center Phase II. All leases provide for tenants to contribute toward the payment
of common area expenses, insurance, utilities and real estate taxes. The tenants
who occupy Lakeshore Business Center Phase II are professional  service oriented
organizations. The principal  occupations/professions  practiced include medical
equipment  leasing,  insurance  services and management  offices for the Florida
state  lottery.  One  tenant  individually  leases  more  than 10% of  Lakeshore
Business  Center Phase II's rentable area. The occupancy  levels at the business
center as of December 31 were 72% (1999),  79% (1998),  100% (1997),  89% (1996)
and 72% (1995).  See Item 7 for average  occupancy levels for the periods ending
December 31, 1999, 1998 and 1997.

The following  table  contains  approximate  data  concerning the major lease in
effect on December 31, 1999:

                                                                Current Annual
                                       Sq. Ft. and % of             Rental
               Year of Expiration     Net Rentable Area         per Square Foot
               ------------------     -----------------         ---------------
Major Tenant (1):
     1               2002               14,665 (15.1%)              $15.30


(1)  Major tenants are those that individually  occupy 10 percent or more of the
     rentable square footage.

Additional Operating Data
-------------------------

Additional operating data regarding the Partnership's properties is furnished in
the following table:

                               Federal            Realty              Annual
                              Tax Basis          Tax Rate          Realty Taxes
                              ---------          --------          ------------
Wholly-Owned Properties
-----------------------

Commonwealth Business
Center Phase I                $4,055,103        $ .010710        $   34,493

Plainview Point Office
Center Phases I and II         3,416,402          .010910            17,615

The Willows of
Plainview Phase I              7,374,906          .010910            60,728


Percentage  ownership has not been applied to the information in the table above
and below for properties owned through a joint venture.

                            (Continued on next page)

                                      - 9 -

<PAGE>

Additional Operating Data - Continued
-------------------------------------

                                        Federal         Realty         Annual
                                       Tax Basis       Tax Rate     Realty Taxes
                                       ---------       --------     ------------

Property Owned in Joint Venture
-------------------------------
with NTS-Properties V
---------------------

The Willows of Plainview Phase II     $7,865,171        .010910     $  65,528


Properties Owned in Joint Venture
---------------------------------
with NTS-Properties VI
----------------------

Golf Brook Apartments                 16,214,515        .017895       288,325

Plainview Point III Office Center      4,697,899        .010910        34,007


Property Owned in Joint
-----------------------
Venture with NTS-Properties VII
-------------------------------
and NTS-Properties Plus Ltd.
----------------------------

Blankenbaker Business
Center 1A                              7,356,545        .010710        55,850

Properties Owned Through
------------------------
Lakeshore/ University II Joint
------------------------------
Venture (L/U II Joint Venture)
------------------------------

Lakeshore Business Center Phase I     10,273,821        .025496       162,680

Lakeshore Business Center Phase II    12,263,794        .025496       174,122

Depreciation for book purposes is computed using the  straight-line  method over
the  estimated  useful  lives  of the  assets  which  are  5-30  years  for land
improvements, 30 years for buildings, 5-30 years for building improvements, 5-30
years for amenities and the life of the lease for tenant improvements.

Investment in Joint Ventures
----------------------------

NTS Willows  Phase II Joint  Venture - On  September  1, 1984,  the  Partnership
entered  into a  joint  venture  agreement  with  NTS-Properties  V to  develop,
construct, own and operate a 144 - unit luxury apartment complex on an 8.29 acre
site in  Louisville,  Kentucky  known as The Willows of Plainview  Phase II. The
term of the Joint Venture shall continue until dissolved.

Dissolution  shall  occur  upon,  but not  before,  the  first  to  occur of the
following:

         (a)      the withdrawal, bankruptcy or dissolution of a Partner or the
                  execution by a Partner of an assignment for the benefit of its
                  creditors;

         (b)      the sale, condemnation or taking by eminent domain of all or
                  substantially all of the assets of the Partnership, other than
                  its cash and cash equivalent assets;

         (c)      the vote or consent of each of the Partners to dissolve the
                  Partnership; or

         (d)      September 30, 2028.

                                     - 10 -

<PAGE>

Investment in Joint Ventures - Continued
----------------------------------------

The  Partnership  contributed  land  valued at  $800,000  and  NTS-Properties  V
contributed approximately $7,455,000, the construction and carrying costs of the
apartment  complex.  No future  contributions are anticipated as of December 31,
1999.

The apartment  complex is encumbered by permanent  mortgages  with two insurance
companies.  Both loans are  secured by a first  mortgage  on the  property.  The
outstanding  balance  of the  mortgages  at  December  31,  1999  is  $4,711,273
($2,949,626  and  $1,761,647).  The mortgages are recorded as a liability of the
Joint  Venture.  The  Partnership's  proportionate  interest in the mortgages at
December 31, 1999 is $478,665  ($299,682  and  $178,983).  Both  mortgages  bear
interest at a fixed rate of 7.2% and are due January 5, 2013.  At maturity,  the
loans will have been repaid based on the current rate of amortization.

The Net Cash Flow for each calendar  quarter is  distributed  to the Partners in
accordance with their respective  Percentage  Interests.  The term Net Cash Flow
means the excess,  if any, of (A) the gross  receipts from the operations of the
Joint Venture Property  (including  investment  income) for such period plus any
funds released from previously  established reserves (referred to in clause (iv)
below),  over (B) the sum of (i) all cash  operating  expenses paid by the Joint
Venture  Property  during such period in the course of  business,  (ii)  capital
expenditures  during such period not funded by capital  contributions,  loans or
paid out of previously  established reserves,  (iii) payments during such period
on account of  amortization  of the principal of any debts or liabilities of the
Joint Venture  property and (iv) reserves for contingent  liabilities and future
expenses  of  the  Joint  Venture  Property.   Percentage  Interest  means  that
percentage  which the capital  contributions of a Partner bears to the aggregate
capital contributions of all the Partners.

Net income or net loss is  allocated  between the  Partners in  accordance  with
their respective Percentage Interests. The Partnership's ownership share was 10%
at December 31, 1999.

NTS Sabal Golf Villas  Joint  Venture - On September  1, 1985,  the  Partnership
entered  into a joint  venture  agreement  with  NTS-Properties  VI to  develop,
construct,  own and operate a 158-unit luxury apartment  complex on a 13.15 acre
site in Orlando,  Florida known as Golf Brook  Apartments Phase I. On January 1,
1987, the joint venture  agreement was amended to include Golf Brook  Apartments
Phase  II, a 37-unit  luxury  apartment  complex  located  on a 3.069  acre site
adjacent to Golf Brook  Apartments  Phase I. The term of the Joint Venture shall
continue until  dissolved.  Dissolution  shall occur upon,  but not before,  the
first to occur of the following:

         (a)      the withdrawal, bankruptcy or dissolution of a Partner or the
                  execution by a Partner of an assignment for the benefit of its
                  creditors;

         (b)      the sale, condemnation or taking by eminent domain of all or
                  substantially all of the assets of the Partnership, other than
                  its cash and cash-equivalent assets;

         (c)      the vote or consent of each of the Partners to dissolve the
                  Partnership; or

         (d)      September 30, 2025.

The  Partnership  contributed  land  valued at  $1,900,000  with a related  note
payable to a bank of $1,200,000.  NTS-Properties  VI  contributed  approximately
$15,800,000, the cost of constructing and leasing the apartments. NTS-Properties
VI also  contributed  funds to retire the $1,200,000  note payable to a bank. No
future contributions are anticipated as of December 31, 1999.

                                     - 11 -

<PAGE>

Investment in Joint Ventures - Continued
----------------------------------------

Golf  Brook  Apartments  is  encumbered  by a mortgage  payable to an  insurance
company.  The original  borrowings  obtained by NTS-Properties VI for Golf Brook
Apartments were used to fund a portion of  NTS-Properties  VI's  contribution to
the Joint Venture.  The current  mortgage payable of $7,677,179 is recorded as a
liability by NTS-Properties  VI in accordance with the Joint Venture  Agreement.
The mortgage  payable  bears  interest at a fixed rate of 7.43%,  is due May 15,
2009 and is secured by the assets of Golf Brook  Apartments.  At  maturity,  the
loan will have been repaid based on the current rate of amortization.

The Net Cash Flow for each calendar  quarter is  distributed  to the Partners in
accordance with their respective  Percentage  Interests.  The Term Net Cash Flow
means the excess,  if any, of (a) the sum of (i) the gross receipts of the Joint
Venture Property, for such period, other than capital  contributions,  plus (ii)
any funds from previously  established  reserves (referred to in clause (b) (iv)
below),  over (b) the sum of (i) all cash  expenses  paid by the  Joint  Venture
Property during such period,  (ii) all capital  expenditures paid in cash during
such period, (iii) payments during such period on account of amortization of the
principal of any debts or  liabilities of the Joint Venture  Property,  and (iv)
reserves for  contingent  liabilities  and future  expenses of the Joint Venture
Property,  as established by the Partners;  provided,  however, that the amounts
referred to in (i), (ii) and (iii) above shall be taken into account only to the
extent not funded by capital contributions or paid out of previously established
reserves.   Percentage   Interest  means  that  percentage   which  the  capital
contributions of a Partner bears to the aggregate  capital  contributions of all
the Partners.

Net income or net loss is  allocated  between the  Partners in  accordance  with
their respective Percentage Interests.  The Partnership's ownership share was 4%
at December 31, 1999.

Plainview  Point III Joint Venture - On March 1, 1987, the  Partnership  entered
into a joint venture agreement with NTS-Properties VI to develop, construct, own
and operate an office building in Louisville,  Kentucky known as Plainview Point
III  Office  Center.  The  terms  of the  Joint  Venture  shall  continue  until
dissolved.  Dissolution shall occur upon, but not before,  the first to occur of
the following:

         (a)      the withdrawal, bankruptcy or dissolution of a Partner or the
                  execution by a Partner of an assignment for the benefit of its
                  creditors;

         (b)      the sale,  condemnation  or taking by eminent domain of all or
                  substantially  all of the assets of the Real Property,  unless
                  such  disposition  is, in whole or in part,  represented  by a
                  promissory note of the purchaser;

         (c)      the vote or consent of each of the Partners to dissolve the
                  Partnership; or

         (d)      December 30, 2026.

The  Partnership  contributed  land valued at $790,000 with an outstanding  note
payable to a bank of $550,000 which was secured by the land.  NTS-Properties  VI
contributed  approximately  $4,100,000,  the cost to  construct  and  lease  the
building.  NTS-Properties  VI also contributed funds to retire the $550,000 note
payable to the bank. No future  contributions are anticipated as of December 31,
1999.

                                     - 12 -

<PAGE>

Investment in Joint Ventures - Continued
----------------------------------------

Plainview Point III Office Center is encumbered by a mortgage payable to a bank.
The current  mortgage  payable of  $2,298,000 is recorded as a liability by NTS-
Properties  VI in  accordance  with the Joint  Venture  Agreement.  The mortgage
payable bears interest at Euro Rate plus 225 basis points, matures June 23, 2002
and is secured by the assets of Plainview  Point III Office Center.  At maturity
the loan will have been repaid based on the current rate of amortization.

The Net Cash Flow for each calendar  quarter is  distributed  to the Partners in
accordance with their respective  Percentage  Interests.  The term Net Cash Flow
means the excess,  if any, of (a) the sum of (i) the gross receipts of the Joint
Venture Property, for such period, other than capital  contributions,  plus (ii)
any funds from previously  established  reserves (referred to in clause (b) (iv)
below),  over (b) the sum of (i) all cash  expenses  paid by the  Joint  Venture
Property during such period,  (ii) all capital  expenditures paid in cash during
such period, (iii) payments during such period on account of amortization of the
principal of any debts or  liabilities of the Joint Venture  Property,  and (iv)
reserves for  contingent  liabilities  and future  expenses of the Joint Venture
Property,  as established by the Partners;  provided,  however, that the amounts
referred to in (i), (ii) and (iii) above shall be taken into account only to the
extent not funded by capital contributions or paid out of previously established
reserves.   Percentage   Interest  means  that  percentage   which  the  capital
contributions of a Partner bears to the aggregate  capital  contributions of all
the Partners.

Net income or net loss is  allocated  between the  Partners in  accordance  with
their respective Percentage Interests.  The Partnership's ownership share was 5%
at December 31, 1999.

Blankenbaker   Business   Center  Joint  Venture  -  On  August  16,  1994,  the
Blankenbaker  Business  Center Joint Venture  agreement was amended to admit the
Partnership  to the Joint Venture.  The Joint Venture was  originally  formed on
December 28, 1990 between NTS-Properties Plus Ltd. and NTS-Properties VII, Ltd.,
affiliates  of the  General  Partner  of the  Partnership,  to own  and  operate
Blankenbaker  Business  Center  1A and to  acquire  an  approximately  2.49 acre
parking lot that was being  leased by the  business  center from an affiliate of
the General  Partner.  The use of the parking lot is a provision of the tenant's
lease agreement with the business  center.  The terms of the Joint Venture shall
continue until  dissolved.  Dissolution  shall occur upon,  but not before,  the
first to occur of the following:

         (a)      the withdrawal, bankruptcy or dissolution of a Partner or the
                  execution by a Partner of an assignment for the benefit of its
                  creditors;

         (b)      the sale,  condemnation  or taking by eminent domain of all or
                  substantially  all of the  assets  of the  Real  Property  and
                  Parking Lot and the sale and/or collection of any evidences of
                  indebtedness received in connection therewith;

         (c)      the vote or consent of each of the Partners to dissolve the
                  Partnership; or

         (d)      December 31, 2030.

In 1990, when the Joint Venture was originally formed,  NTS-Properties VII, Ltd.
contributed  $450,000,  which was used for additional tenant improvements to the
business center, and contributed $325,000 to purchase the 2.49 acre parking lot.
The  additional  tenant  improvements  were made to the business  center and the
parking  lot  was  purchased  in  1991.  NTS-Properties  Plus  Ltd.  contributed
Blankenbaker Business Center 1A together with improvements and personal property
subject to mortgage indebtedness of $4,715,000. During November 1994, this note

                                     - 13 -

<PAGE>

Investment in Joint Ventures - Continued
----------------------------------------

payable was replaced with permanent  financing in the amount of $4,800,000.  The
outstanding  balance at  December  31,  1999 was  $3,121,473.  The  mortgage  is
recorded as a liability of the Joint Venture.  The  Partnership's  proportionate
interest in the mortgage at December 31, 1999 was $940,500.  The mortgage  bears
interest at a fixed rate of 8.5% and is due November 15, 2005. Monthly principal
payments  are based upon an 11-year  amortization  schedule.  At  maturity,  the
mortgage will have been repaid based on the current rate of amortization.

On April 28, 1994,  the Joint Venture  obtained  $1,100,000 in debt financing to
fund a portion of the tenant finish and leasing costs which were associated with
the  Prudential  Service  Bureau,  Inc.  [currently  known as Sykes  Health Plan
Service Bureau, Inc. ("Sykes")] lease renewal and expansion. The $1,100,000 note
bore  interest  at the Prime  Rate + 1 1/2%.  In order for the Joint  Venture to
obtain the $4,800,000 of permanent  financing  discussed above, it was necessary
for the Joint Venture to seek an additional Joint Venture partner to provide the
funds  necessary  for the  tenant  finish  and  leasing  costs  instead  of debt
financing.  The $1,100,000 note was retired in August 1994. This resulted in the
Joint  Venture's  debt  being  at a level  where  permanent  financing  could be
obtained and serviced.

On August 16, 1994,  NTS-Properties IV contributed $1,100,000 and NTS-Properties
VII, Ltd.  contributed  $500,000 in  accordance  with the agreement to amend the
Joint Venture  agreement.  The need for additional  capital by the Joint Venture
was a result of the lease renewal and expansion  which was signed April 28, 1994
between  the Joint  Venture  and Sykes.  NTS-Properties  Plus Ltd.  was not in a
position to contribute additional capital, nor was NTS-Properties VII, Ltd. in a
position  to  contribute  all of the capital  required  for this  project.  NTS-
Properties IV was willing to participate in the Joint Venture and to contribute,
together with  NTS-Properties  VII, Ltd., the capital  necessary with respect to
the project.  NTS-Properties Plus Ltd. agreed to the admission of NTS-Properties
IV to the Joint Venture,  and to the capital  contributions by NTS-Properties IV
and NTS-Properties  VII, Ltd. with the knowledge that its joint venture interest
would, as a result,  decrease.  With this expansion,  Sykes occupied 100% of the
business  center.  No future  contributions  are  anticipated as of December 31,
1999.

The Net Cash Flow for each calendar  quarter is  distributed  to the Partners in
accordance with the respective Percentage Interests.  The term Net Cash Flow for
any  period  shall  mean the  excess,  if any,  of (A) the sum of (i) the  gross
receipts of the Joint  Venture  Property  for such  period,  other than  capital
contributions,  plus (ii) any funds  released by the  Partners  from  previously
established reserves (referred to in clause (B) (iv) below), over (B) the sum of
(i) all cash operating  expenses paid by the Joint Venture  Property during such
period in the course of the  business,  (ii) capital  expenditures  paid in cash
during such period, (iii) payments during such period on account of amortization
of the principal of any debts or liabilities  of the Joint Venture  Property and
(iv)  reserves  for  contingent  liabilities  and future  expenses  of the Joint
Venture  Property as established by the Partners;  provided,  however,  that the
amounts  referred  to in (B)(i),  (ii) and (iii)  above shall only be taken into
account  to the  extent  not  funded  by  capital  contributions  or paid out of
previously established reserves. Percentage Interest means that percentage which
the  capital   contributions  of  a  Partner  bears  to  the  aggregate  capital
contributions of all the Partners.

Net income or net loss is  allocated  between the  Partners in  accordance  with
their respective Percentage Interests. The Partnership's ownership share was 30%
at December 31, 1999.

                                     - 14 -

<PAGE>

Investment in Joint Ventures - Continued
----------------------------------------

Lakeshore/University  II Joint  Venture - On January 23, 1995,  a joint  venture
known as the  Lakeshore/University  II Joint Venture (L/U II Joint  Venture) was
formed among the Partnership and NTS-Properties V,  NTS-Properties Plus Ltd. and
NTS/Fort Lauderdale, Ltd., affiliates of the General Partner of the Partnership,
for purposes of owning  Lakeshore  Business  Center Phases I and II,  University
Business  Center  Phase II  (property  sold  during 1998 - see below for details
regarding this transaction) and certain  undeveloped  tracts of land adjacent to
the Lakeshore Business Center development.

The table below identifies which properties were contributed to the L/U II Joint
Venture and the respective  owners of such properties  prior to the formation of
the joint venture.

                       Property                      Contributing Owner
                       --------                      ------------------

        Lakeshore Business Center Phase I         NTS-Properties IV and NTS-
                                                  Properties V

        Lakeshore Business Center Phase II        NTS-Properties Plus Ltd.

        Undeveloped land adjacent to the          NTS-Properties Plus Ltd.
        Lakeshore Business Center
        development (3.8 acres)

        Undeveloped land adjacent to the          NTS/Fort Lauderdale, Ltd.
        Lakeshore Business Center
        development (2.4 acres)

        University Business Center Phase II       NTS-Properties V and NTS-
                                                  Properties Plus Ltd.

The term of the Joint Venture shall continue until dissolved.  Dissolution shall
occur upon, but not before, the first to occur of the following:

         (a)      the withdrawal, bankruptcy or dissolution of a Partner or the
                  execution by a Partner of an assignment for the benefit of its
                  creditors;

         (b)      the sale, condemnation or taking by eminent domain of all or
                  substantially all of the Real Property and the sale and/or
                  collection of any evidences of indebtedness received in
                  connection therewith;

         (c)      the vote or consent of each of the Partners to dissolve the
                  Partnership; or

         (d)      December 31, 2030.

Each of the  properties was  contributed to the L/U II Joint Venture  subject to
existing  indebtedness,  except for Lakeshore  Business Center Phase I which was
contributed to the joint venture free and clear of any mortgage  liens,  and all
such  indebtedness was assumed by the joint venture.  Mortgages were recorded on
University Business Center Phase II in the amount of $3,000,000, in favor of the
banks  which held the  indebtedness  on  University  Business  Center  Phase II,
Lakeshore  Business Center Phase II and the undeveloped  tracts of land prior to
the formation of the joint venture and on Lakeshore  Business  Center Phase I in
the  amount  of  $5,500,000  subsequent  to the  formation  of the L/U II  Joint
Venture. In addition to the above, the Partnership also contributed  $750,000 to
the L/U II  Joint  Venture.  As a  result  of the  valuation  of the  properties
contributed  to the  L/U II  Joint  Venture,  the  Partnership  obtained  an 18%
partnership interest in the joint venture.

                                     - 15 -

<PAGE>

Investment in Joint Ventures - Continued
----------------------------------------

The properties of the L/U II Joint Venture are  encumbered by mortgages  payable
to an insurance company as follows:

         Loan Balance
         at 12/31/99                Encumbered Property
         -----------                -------------------

         $4,543,531                 Lakeshore Business Center Phase I
         $4,888,353                 Lakeshore Business Center Phase II

The loans are recorded as liabilities of the Joint  Venture.  The  Partnership's
proportionate  interest  in the  loans  at  December  31,  1999  was  $1,125,223
($542,043 and  $583,180).  The mortgages bear interest at a fixed rate of 8.125%
and are due August 1, 2008.  Monthly principal payments are based upon a 12-year
amortization schedule. At maturity, the loans will have been repaid based on the
current rate of amortization.

On October 6, 1998  pursuant to a contract  executed on September  8, 1998,  the
Lakeshore/University II Joint Venture ("L/U II") sold University Business Center
Phase II office building to Silver City Properties,  Ltd. ("the  Purchaser") for
$8,975,000.  University  Business  Center Phase II was owned by the L/U II Joint
Venture of which the  Partnership  owned an 18%  interest as of October 6, 1998.
Portions  of the  proceeds  from  this  sale  were  immediately  used to pay the
remainder of the  outstanding  debt of  approximately  $5,933,382  on University
Business  Center Phase II  (including  interest and  prepayment  penalty).  NTS-
Properties IV reflected a gain of  approximately  $208,000  associated with this
sale  in  the  fourth  quarter  of  1998.  Net  cash  proceeds  received  by the
Partnership from the L/U II Joint Venture as a result of a cash  distribution of
the proceeds from the sale were approximately $442,000.

On   July   1,   1999,   NTS-Properties   V   contributed   $1,737,000   to  the
Lakeshore/University II Joint Venture (L/U II Joint Venture). The other partners
in the  Joint  Venture,  including  NTS-Properties  IV,  did  not  make  capital
contributions at that time. Accordingly,  the ownership percentages of the other
partners in the Joint Venture decreased.  Effective July 1, 1999, NTS-Properties
IV's  percentage  of ownership  in the Joint  Venture is 12%, as compared to 18%
prior to July 1, 1999.

On July 23, 1999,  the L/U II Joint  Venture sold 2.4 acres of land  adjacent to
the Lakeshore Business Center for a purchase price of $528,405.  The Partnership
reflects a gain of approximately  $11,300 associated with this sale in the third
quarter of 1999 and expects to use the net proceeds from the sale of the land to
help fund the  construction  of  Lakeshore  Business  Center III.  See above for
details of the Partnership's intention to build Lakeshore Business Center III.

The Net Cash Flow for each calendar  quarter is  distributed  to the Partners in
accordance with their  respective  Percentage  Interest.  The term Net Cash Flow
means the excess,  if any, of (A) the sum of (i) the gross receipts of the Joint
Venture Properties for such period (including loan proceeds), other than capital
contributions, plus (ii) any funds released from previously established reserves
(referred  to in  clause  (B)(iv)  below),  over  (B) the  sum of (i)  all  cash
operating expenses paid by the Joint Venture during such period in the course of
business,  (ii)  capital  expenditures  paid in cash during such  period,  (iii)
payments  during such period on account of  amortization of the principal of any
debts or  liabilities  of the Joint  Venture and (iv)  reserves  for  contingent
liabilities  and future  expenses of the Joint  Venture,  as  established by the
Partners;  provided,  however,  that the amounts referred to in (B)(i), (ii) and
(iii) above shall only be taken into account to the extent not funded by capital
contributions  or  paid  out  of  previously  established  reserves.  Percentage
Interest  means that  percentage  which the capital  contributions  of a Partner
bears to the aggregate capital contributions of all the Partners.

                                     - 16 -

<PAGE>

Investment in Joint Ventures - Continued
----------------------------------------

Net income or net loss is  allocated  between the  partners in  accordance  with
their respective Percentage Interests. The Partnership's ownership share was 12%
at December 31, 1999.

Competition
-----------

The  Partnership's  properties are subject to competition  from similar types of
properties  (including,  in  certain  areas,  properties  owned  or  managed  by
affiliates of the General  Partner) in the  respective  vicinities in which they
are located. Such competition is generally for the retention of existing tenants
or  for  new  tenants  when  vacancies  occur.  The  Partnership  maintains  the
suitability  and  competitiveness  of its  properties  primarily on the basis of
effective  rents,  amenities  and service  provided to tenants.  Competition  is
expected to increase in the future as a result of the construction of additional
properties.  As of  December  31,  1999,  the  following  properties  were under
construction  in the respective  vicinities in which the properties are located;
in the  vicinity  of Golf  Brook  Apartments,  there are 4  apartment  complexes
currently under  construction  with expected  completion  dates of January 2000,
March 2000, July 2000 and December 2000, respectively.  The complexes consist of
360 units, 551 units, 452 units and 310 units, respectively.  In the vicinity of
The Willows of Plainview,  there is one new apartment  complex  currently  under
construction  which is scheduled to be completed by the fourth  quarter of 2000.
The number of units in this  complex is  unknown  at this time.  Currently,  the
effect these new units will have on occupancy at Golf Brook  Apartments  and the
Willows of Plainview is unknown.  The Partnership has not  commissioned a formal
market  analysis  of  competitive  conditions  in any  market  in  which it owns
properties,  but relies upon the market condition  knowledge of the employees of
NTS Development Company who manage and supervise leasing for each property.

Management of Properties
------------------------

NTS  Development  Company,  an affiliate of  NTS-Properties  Associates  IV, the
General Partner of the Partnership,  directs the management of the Partnership's
properties pursuant to a written agreement. NTS Development Company is a wholly-
owned  subsidiary  of NTS  Corporation.  Mr.  J. D.  Nichols  has a  controlling
interest  in  NTS  Corporation  and  is  a  General  Partner  of  NTS-Properties
Associates  IV. Under the agreement,  the Property  Manager  establishes  rental
policies and rates and directs the marketing activity of leasing  personnel.  It
also  coordinates the purchase of equipment and supplies,  maintenance  activity
and the selection of all vendors,  suppliers  and  independent  contractors.  As
compensation for its services, the Property Manager received a total of $186,264
for the year ended  December 31, 1999.  $110,227  was received  from  commercial
properties  and $76,037 was received  from  residential  properties.  The fee is
equal  to 6% of  gross  revenues  from  commercial  properties  and 5% of  gross
revenues from residential properties.

In addition,  the management  agreement requires the Partnership to purchase all
insurance relating to the managed  properties,  to pay the direct  out-of-pocket
expenses  of the  Property  Manager  in  connection  with the  operation  of the
properties,  including the cost of goods and materials used for and on behalf of
the  Partnership,  and to  reimburse  the  Property  Manager  for the  salaries,
commissions,  fringe  benefits,  and  related  employment  expenses  of  on-site
personnel.

The term of the Management  Agreement  between NTS  Development  Company and the
Partnership was initially for five years, and thereafter for succeeding one-year
periods,  unless  cancelled.  The Agreement is subject to cancellation by either
party upon sixty days written  notice.  As of December 31, 1999,  the Management
Agreement is still in effect.

                                     - 17 -

<PAGE>

Working Capital Practices
-------------------------

Information  about the  Partnership's  working capital  practices is included in
Management  Discussion  and  Analysis  of  Financial  Condition  and  Results of
Operations in Part II, Item 7.

Seasonal Operations
-------------------

The Partnership  does not consider its operations to be seasonal to any material
degree.

Conflict of Interest
--------------------

Because the  principals of the General  Partner and/or its affiliates own and/or
operate real estate  properties  other than those owned by the Partnership  that
are or could be in  competition  with the  Partnership,  potential  conflicts of
interest exist.  Because the Partnership was organized by and is operated by the
General  Partner,   these  conflicts  are  not  resolved   through   arms-length
negotiations  but through the exercise of the General  Partner's  good  judgment
consistent  with its fiduciary  responsibility  to the Limited  Partners and the
Partnership's  investment  objectives  and  policies.  The  General  Partner  is
accountable  to the  Limited  Partners  as a  fiduciary  and  consequently  must
exercise  good faith and  integrity in handling  the  Partnership's  affairs.  A
provision has been made in the  Partnership  Agreement that the General  Partner
will not be liable to the Partnership except for acts or omissions  performed or
omitted  fraudulently,  in bad  faith  or  with  negligence.  In  addition,  the
Partnership Agreement provides for indemnification by the General Partner of the
Partnership for liability  resulting from errors in judgement or certain acts or
omissions. The General Partner and its affiliates retain a free right to compete
with the  Partnership's  properties  including  the right to  develop  competing
properties now and in the future in addition to those existing  properties which
may compete  directly or  indirectly.  NTS  Development  Company,  the  Property
Manager and an affiliate of the General Partner,  acts in a similar capacity for
other  affiliated  entities in the same geographic  region where the Partnership
has property interests. In management's opinion, the agreement with the Property
Manager is on terms no less favorable to the Partnership  than those which could
be obtained  from a third party for  similar  services in the same  geographical
region in which the properties are located. The contract is terminable by either
party without penalty upon 60 days written notice.

There are no other  agreements or  relationships  between the  Partnership,  the
General Partner and its affiliates other than that previously described.

Employees
---------

The  Partnership  has no  employees;  however,  employees of an affiliate of the
General  Partner are  available  to perform  services for the  Partnership.  The
Partnership  reimburses this affiliate for the allocated costs of providing such
services.  (See  Item 8  Note  10  for  further  discussions  of  related  party
transactions).

Governmental Contracts and Regulations
--------------------------------------

No portion of the Partnership's  business is subject to renegotiation of profits
or  termination  of  contracts  or  sub-contracts  at the election of the United
States Government.

Item 3.  Legal Proceedings
         -----------------
None.

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

None.

                                     - 18 -

<PAGE>

                                     PART II

Item 5.        Market for Registrant's Limited Partnership Interests and Related
               -----------------------------------------------------------------
               Partner Matters
               ---------------

There is no established  trading market for the limited  partnership  interests.
The  Partnership  had 1,898  limited  partners as of  February  29,  2000.  Cash
distributions  and  allocations of income and loss are made as described in Note
1C to the Partnership's 1998 financial statements in Item 8.

No distributions  were paid during 1999, 1998 or 1997.  Quarterly  distributions
are  determined  based on current cash  balances,  cash flow being  generated by
operations  and cash reserves  needed for future  leasing  costs,  tenant finish
costs, and capital improvements.

Due to the fact that no  distributions  were made during 1999, 1998 or 1997, the
table which presents that portion of the  distributions  that represent a return
of capital on a Generally Accepted Accounting Principle basis has been omitted.

                                     - 19 -

<PAGE>

Item 6.  Selected Financial Data
         -----------------------

<TABLE>

Years ended December 31, 1999, 1998, 1997, 1996 and 1995.

<CAPTION>
                                       1999                 1998               1997              1996            1995
                                       ----                 ----               ----              ----            ----
<S>                                <C>                 <C>                 <C>              <C>              <C>
Rental and other income            $  3,306,463        $  3,619,094        $  3,708,597     $  3,577,554     $  3,285,430
Gain on sale of assets                   11,256(1)          208,607(2)               --               --               --
Total expenses                       (3,320,410)         (3,575,343)         (3,680,643)      (3,610,839)      (3,711,915)
                                   ------------        ------------        ------------     ------------     ------------
Income (loss) before
 extraordinary item                     (2,691)            252,358              27,954          (33,285)        (426,485)
Extraordinary item                           --            (154,062)            (77,004)         (12,896)              --
                                   ------------        ------------        ------------     ------------     ------------

Net income (loss)                  $     (2,691)       $     98,296        $    (49,050)    $    (46,181)    $   (426,485)
                                   ============        ============        ============     ============     ============

Net income (loss) allocated to:
  General Partner                  $        (27)       $        983        $       (490)    $       (462)    $     (4,265)
  Limited partners                 $     (2,664)       $     97,313        $    (48,560)    $    (45,719)    $   (422,220)

Net income (loss) per
limited partnership
units                              $      (0.11)       $       3.75        $      (1.82)    $      (1.63)    $     (14.19)

Weighted average number
of limited partnership
units                                    24,778              25,918              26,708           28,012           29,745

Cumulative net income
  (loss)allocated to:
  General Partner                  $      3,872        $      3,899        $      2,916     $      3,406     $      3,868
  Limited partners                 $    383,189        $    385,853        $    288,540     $    337,100     $    382,819

Cumulative taxable income
(loss) allocated to:
  General Partner                  $    (27,678)       $    (26,810)       $    (24,092)    $    (24,618)    $    (24,486)
  Limited partners                 $ (2,740,689)       $ (2,654,795)       $ (2,385,433)    $ (2,437,521)    $ (2,424,353)

Distributions declared:
 General Partner                   $         --        $         --        $         --     $      2,251     $     11,117
 Limited partners                  $         --        $         --        $         --     $    222,842     $  1,100,565

Cumulative distributions
 declared to:
  General Partner                  $    218,253        $    218,253        $    218,253     $    218,253     $    216,002
  Limited partners                 $ 21,607,636        $ 21,607,636        $ 21,607,636     $ 21,607,636     $ 21,384,794

At year end:
Land, buildings and
 amenities, net                    $ 10,480,193        $ 11,566,911        $ 13,321,032     $ 14,098,502     $ 14,915,069

Total assets                       $ 11,665,677        $ 13,055,709        $ 14,812,308     $ 15,406,286     $ 16,645,788

Mortgages and notes
 payable                           $  7,861,645        $  9,121,979        $ 10,706,802     $ 11,236,625     $ 11,592,641
</TABLE>

The  above  selected  financial  data  should  be read in  conjunction  with the
financial  statements  and related notes  appearing  elsewhere in this Form 10-K
report.

(1)  See Item 8 Note 11 for  details  of the  sale of 2.4  acres of land in July
     1999.

(2)  See  Item 8 Note 11 for the  details  on the  sale of  University  Business
     Center Phase II to Silver City Properties, Ltd. on October 6, 1998.

                                     - 20 -

<PAGE>

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

Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations  is  structured in four major  sections.  The first section  provides
information  related to occupancy  levels and information  regarding  rental and
other income  generated by the  Partnership's  properties.  The second  analyzes
results of  operations  on a  consolidated  basis.  The final  sections  address
consolidated  cash flows and financial  condition.  Discussion of certain market
risks and our cautionary statements also follow. Management's analysis should be
read in conjunction  with the financial  statements in Item 8 and the cautionary
statements below.

Occupancy Levels
----------------

The occupancy levels at the  Partnership's  properties as of December 31 were as
follows:

                                                   1999(1)   1998    1997
                                                   -------   ----    ----
Wholly-Owned Properties
-----------------------

Commonwealth Business Center Phase I                  93%     89%     87%
Plainview Point Office Center Phases I and II         79%     65%     73%
The Willows of Plainview Phase I                      96%     86%     92%

Properties Owned in Joint Venture with NTS-
-------------------------------------------
Properties V (ownership % at December 31, 1999)
-----------------------------------------------

The Willows of Plainview Phase II (10%)(2)            87%     92%     90%

Properties Owned in Joint Venture with NTS-
-------------------------------------------
Properties VI (ownership % at December 31, 1999)
------------------------------------------------

Golf Brook Apartments (4%)(2)                         95%     96%     96%
Plainview Point III Office Center (5%)                86%     81%     96%

Property Owned in Joint Venture with NTS-
-----------------------------------------
Properties VII, Ltd. and NTS-Properties Plus Ltd.
-------------------------------------------------
(ownership % at December 31, 1999)
----------------------------------

Blankenbaker Business Center 1A (30%)                100%    100%    100%

Properties Owned Through Lakeshore/University II
------------------------------------------------
Joint Venture (L/U II Joint Venture)
------------------------------------

Lakeshore Business Center Phase I (2)(3)(4)           73%     85%     96%
Lakeshore Business Center Phase II(2)(4)              72%     79%    100%
University Business Center Phase II (5)               N/A     N/A     99%

(1)      Current occupancy levels are considered adequate to continue the
         operation of the Partnership's properties.

(2)      In the opinion of the General Partner of the Partnership,  the decrease
         in year ending  occupancy is only a temporary  fluctuation and does not
         represent a permanent downward occupancy trend.

(3)      As of December 31, 1999, one new five-year  lease totaling 2,406 square
         feet was  signed  at  Lakeshore  Business  Center  I. The  tenant  took
         occupancy  during the first  quarter of 2000 and the business  center's
         occupancy has increased to 76%.

(4)      Ownership percentage was 18% at December 31, 1997 and 1998 and 12% as
         of December 31, 1999.  See Item 8 Note 5F.

(5)      On October 6, 1998, University Center Phase II was sold. See below for
         the details of this transaction.

                                     - 21 -

<PAGE>

Occupancy Levels - Continued
----------------------------

The average occupancy levels at the  Partnership's  properties as of December 31
were as follows:

                                                    1999     1998       1997
                                                    ----     ----       ----
Wholly-Owned Properties
-----------------------

Commonwealth Business Center Phase I                  95%     88%        85%
Plainview Point Office Center Phases I and II (1)     58%     70%        83%
The Willows of Plainview Phase I                      94%     90%        93%

Properties Owned in Joint Venture with
--------------------------------------
NTS-Properties V (ownership % at December 31,
---------------------------------------------
1999)
-----

The Willows of Plainview Phase II (10%)               93%     87%        91%

Properties Owned in Joint Venture with
--------------------------------------
NTS-Properties VI (ownership % at December 31,
----------------------------------------------
1999)
-----

Golf Brook Apartments (4%)(1)                         94%     96%        93%
Plainview Point III Office Center (5%)(1)             91%     92%        90%

Property Owned in Joint Venture with
------------------------------------
NTS-Properties VII, Ltd. and NTS-Properties Plus
------------------------------------------------
Ltd. (ownership % at December 31, 1999)
---------------------------------------

Blankenbaker Business Center 1A (30%)                100%    100%       100%

Properties Owned through Lakeshore/University II
------------------------------------------------
Joint Venture (L/U II Joint Venture)
------------------------------------

Lakeshore Business Center Phase I(1)(2)               74%     88%        96%
Lakeshore Business Center Phase II(1)(2)              85%     91%        94%
University Business Center Phase II (3)              N/A      91%(4)     99%

(1)      In the opinion of the General Partner of the Partnership,  the decrease
         in  average  occupancy  is only a  temporary  fluctuation  and does not
         represent a permanent downward occupancy trend.

(2)      Ownership percentage was 18% as of December 31, 1997 and 1998 and 12%
         as of December 31, 1999.  (See Item 8 Note 5F).

(3)      On October 6, 1998, University Center Phase II was sold.  See below for
         the detail of this transaction.

(4)      Represents average occupancy through October 6, 1998.

                                     - 22 -

<PAGE>

Rental and Other Income
-----------------------

The rental and other income  generated by the  Partnership's  properties for the
years ended December 31, 1999, 1998 and 1997 were as follows:

                                            1999     1998             1997
                                            ----     ----             ----
Wholly-Owned Properties
-----------------------

Commonwealth Business Center Phase I    $  793,230 $  705,009      $  657,888

Plainview Point Office Center Phases
I and                                   $  331,212 $  457,904      $  571,950

The Willows of Plainview Phase I        $1,182,573 $1,148,200      $1,231,150

Properties Owned in Joint Venture with
--------------------------------------
NTS-Properties V (ownership % at December
-----------------------------------------
31, 1999)
---------

The Willows of Plainview Phase II (10%) $  130,143 $  130,126       $  137,881

Properties Owned in Joint Venture with
--------------------------------------
NTS-Properties VI (ownership % at December
------------------------------------------
31, 1999)
---------

Golf Brook Apartments (4%)              $  118,307 $  120,971       $  113,578

Plainview Point Office Center III (5%)  $   42,301 $   40,779       $   38,512

Property Owned in Joint Venture with NTS-
-----------------------------------------
Properties VII, Ltd., and NTS-Properties
----------------------------------------
Plus Ltd. (ownership % at December 31,
--------------------------------------
1999)
-----

Blankenbaker Business Center 1A (30%)   $  270,791 $  276,575       $  277,713

Properties Owned through
------------------------
Lakeshore/University II Joint Venture (L/U
------------------------------------------
II Joint Venture)
-----------------

Lakeshore Business Center Phase I (1)   $  192,978 $  266,873       $  253,826

Lakeshore Business Center Phase II (1)  $  210,941 $  292,671       $  251,910

University Business Center Phase II         N/A    $  139,220(2)(3) $ 148,536(3)

(1)      Represents  ownership percentage of 18% for the periods ending December
         31, 1997 and 1998. Ownership percentage is 18% for the six months ended
         June 30, 1999 and 12% for the six months ended December 31, 1999.

(2)      On October 6, 1998,  University Business Centers Phase II was sold. See
         below  for  the  details  of  this  transaction.  Revenues  shown  here
         represent 1998 income through the date of disposition.

(3)      Revenues for 1998 and 1997 are reported at 18% ownership.

Revenues shown in the table above for  properties  owned through a joint venture
represent only the Partnership's percentage interest in those revenues.

                                     - 23 -

<PAGE>

Results of Operations
---------------------

The following is an analysis of material  changes in results of  operations  for
the periods ending December 31, 1999,  1998 and 1997.  Items that did not have a
material  impact on  operations  for the periods  listed above have been omitted
from this discussion.

Rental and other income decreased approximately $300,000 or 8% in 1999 primarily
as a result of a decrease in lease buy-out income at Lakeshore  Business  Center
Phases I and II and decreased  occupancy at Plainview Point Office Center Phases
I and II and Lakeshore Business Center Phases I and II. Also contributing to the
decrease  is the sale of  University  Business  Center  Phase  II in  1998.  The
decrease is partially offset by increased income at Commonwealth Business Center
Phase I and The Willows of Plainview Phase I as a result of increases in average
occupancy.

The 1999  gain on sale of asset was a result of the sale of 2.4 acres of land by
the  Lakeshore/University  II Joint  Venture.  The gain  totaled  $94,347.  NTS-
Properties IV's share of the gain is approximately $11,300.

The 1998 gain on sale of asset is the  result  of  selling  University  Business
Center Phase II. On October 6, 1998 pursuant to a contract executed on September
8, 1998, the  Lakeshore/University  II Joint Venture ("L/U II") sold  University
Business Center Phase II office building to Silver City  Properties,  Ltd. ("the
Purchaser"),  for $8,975,000.  University  Business Center Phase II was owned by
the L/U II Joint  Venture of which the  Partnership  owned an 18% interest as of
the date of the sale.  Portions of the proceeds from this sale were  immediately
used to pay outstanding debt on the University II property  (including  interest
and prepayment penalty) of approximately $5,933,382.

Interest  and  other  income  includes  income  from  investments  made  by  the
Partnership with cash reserves.  Interest income decreased approximately $12,700
or 22% in 1999 and approximately $34,000 or 37% in 1998 as a result of decreased
cash reserves available for investment.

Operating expenses decreased  approximately $67,000 or 9% in 1999 primarily as a
result  of  decreased   landscape   replacements  and  parking  lot  repairs  at
Commonwealth  Business  Center  Phase  I  and  decreased  exterior  repairs  and
maintenance  at  Blankenbaker  Business  Center  1A.  Also  contributing  to the
decrease is the sale of University  Business Center Phase II in October 1998 and
decreased  walkway  repairs at The Willows of Plainview Phase I. The decrease is
partially  offset by an increase in HVAC costs at Plainview  Point Office Center
Phases I and II as a result of zoneline  replacements and increased  maintenance
costs at  Plainview  Point  Office  Center  Phases I and II  resulting  from the
purchase of a new building security system.

Operating expenses - affiliated increased  approximately  $51,000 or 11% in 1999
primarily as a result of increased  administrative  salaries at Plainview  Point
Office  Center  Phases I and II and  Commonwealth  Business  Center Phase I. The
increase  is  partially  offset  by a  decrease  due to the  sale of  University
Business  Center  Phase II.  Operating  expenses -  affiliated  are expenses for
services performed by employees of NTS Development  Company, an affiliate of the
General Partner of the Partnership.

Operating expenses - affiliated increased  approximately $67,000 or 17% in 1998.
The increase was primarily the result of increased allocated property management
payroll costs at Commonwealth Business Center Phase I and Plainview Point Office
Center Phases I and II.

                                     - 24 -

<PAGE>

Results of Operations - Continued
---------------------------------

The 1999 loss on disposal of assets can be attributed to the write-off of tenant
improvements  at the  Partnership's  commercial  properties and the write-off of
clubhouse and exterior renovations at the Partnership's  residential properties.
The write-offs are the result of various property improvements, including tenant
improvements,   to  accommodate  new  leases  at  the  Partnership's  commercial
properties and clubhouse and pool renovations at the  Partnership's  residential
properties.  The write-offs represent the costs of unamortized assets which were
replaced as a result of the renovations.

The 1998 loss on disposal of assets can be  attributed  primarily to The Willows
of  Plainview  Phases  I and II.  The  write-off  was a result  of new  property
signage,  updating  the  model  apartments  and  pool  renovations.  In order to
complete these  projects,  it was necessary to replace assets which had not been
fully depreciated.

Interest expense decreased  approximately  $147,000 or 18% in 1999 primarily due
to the pay-off of University Business Center Phase II's debt in October 1998 and
required  principal payments on the mortgages payable of the Partnership and its
Joint Venture properties.

Interest expense decreased  approximately $52,000 or 6% in 1998 primarily due to
required  principal payments on the mortgages payable of the Partnership and its
Joint Venture properties. Interest expense also decreased in 1998 as a result of
the reduction in debt from the sale of University  Business Center Phase II (see
discussion  above).  The decrease in interest  expense is partially  offset by a
higher  interest  rate  on The  Willows  of  Plainview  Phase  I  financing  the
Partnership  obtained  December  1997  (7.15% as compared to a rate of 7% on the
previous mortgage).

Management  fees are  calculated as a percentage of cash  collections;  however,
revenue for reporting  purposes is recorded on the accrual  basis.  As a result,
the  fluctuations of revenues  between periods will differ from the fluctuations
of management fee expense.

Professional and administrative  expenses increased approximately $27,000 or 24%
and approximately $13,000 or 12% in 1999 and 1998, respectively,  primarily as a
result of costs  incurred in connection  with the Tender Offers (See Item 8 Note
4).

Depreciation and amortization  decreased  approximately  $137,000 or 17% in 1999
primarily  as a result of the sale of  University  Business  Center  Phase II in
October 1998 and decreased  approximately $107,000 or 12% in 1998 primarily as a
result of a portion of the original  assets at  Blankenbaker  Business Center 1A
becoming  fully  depreciated  and the result of the sale of University  Business
Center Phase II.  Depreciation is computed using the  straight-line  method over
the  estimated  useful  lives  of the  assets  which  are  5-30  years  for land
improvements, 30 years for buildings, 5-30 years for building improvements, 5-30
years  for  amenities  and the life of the lease for  tenant  improvements.  The
aggregate  cost of the  Partnership's  properties  for Federal  tax  purposes is
approximately $21,447,190.

Also  contributing  to all of the  decreases  discussed  above is a decrease  in
ownership  of the  Lakeshore/University  II Joint  Venture from 17.86% to 11.93%
effective July 1, 1999. See Item 8 Note 5F for details of a capital contribution
made to the Joint Venture by NTS-Properties V affecting the change in ownership.

The 1998 extraordinary  item - early  extinguishment of debt relates to the sale
of University  Business Center Phase II (see discussion above). A portion of the
proceeds from the sale was used to retire a $5,128,872 mortgage payable prior to
its maturity (August 2008). As a result of the prepayment,  a $763,995  penalty,
of which the Partnerships  proportionate share was $136,449, was required by the
insurance  company who held the mortgage.  Unamortized loan costs connected with
this loan were also  expensed due to the fact that the mortgage was repaid prior
to its maturity.

                                     - 25 -

<PAGE>

Results of Operations - Continued
---------------------------------

The 1997 extraordinary item - early extinguishment of debt relates to loan costs
associated with The Willows of Plainview Phase I and II mortgages  payable.  The
unamortized  loan costs were  expensed due to the fact that the  mortgages  were
retired in 1997 prior to their maturity (December 5, 2003).

Consolidated Cash Flows and Financial Condition
-----------------------------------------------

The  majority  of  the  Partnership's   cash  flow  is  derived  from  operating
activities.  Cash  flows used in  investing  activities  are for  tenant  finish
improvements and other capital additions and were funded by operating activities
or cash reserves.  Changes to current tenant finish  improvements  are a typical
part of any lease negotiation.  Improvements generally include a revision to the
current  floor plan to  accommodate  a tenant's  needs,  new carpeting and paint
and/or wallcovering. The extent and cost of these improvements are determined by
the size of the space  and  whether  the  improvements  are for a new  tenant or
incurred because of a lease renewal. Cash flows used in investing activities are
also for the purchase of investment  securities.  As part of its cash management
activities,  the Partnership had purchased Certificates of Deposit or securities
issued by the U.S.  Government  with  initial  maturities  of greater than three
months to improve  the return on its cash  reserves.  The  Partnership  held the
securities until maturity. Cash flows provided by investing activities were from
the maturity of investment  securities.  Cash flows used in financing activities
are for  cash  distributions,  payment  of loan  costs,  principal  payments  on
mortgages and notes  payable,  repurchases of limited  partnership  Units and an
increase in funds  reserved by the  Partnership  for the  repurchase  of limited
partnership Units through the Tender Offer or the Interest  Repurchase  Reserve.
Cash flows provided by financing  activities  represent an increase in mortgages
payable.  The Partnership  utilizes the  proportionate  consolidation  method of
accounting for joint venture properties. The Partnership's interest in the joint
venture's assets, liabilities,  revenues, expenses and cash flows is combined on
a line-by-line basis with the Partnership's own assets,  liabilities,  revenues,
expenses and cash flows.

Cash flows provided by (used in):

                                  1999            1998            1997
                                  ----            ----            ----
Operating activities          $   893,811     $   985,883     $ 1,176,545
Investing activities             (145,418)      1,454,698        (517,720)
Financing activities             (781,850)     (2,075,757)       (729,159)
                              -----------     -----------     -----------
Net increase (decrease) in
 cash and equivalents         $   (33,457)    $   364,824     $   (70,334)
                              ===========     ===========     ===========

Net cash provided by operating activities decreased  approximately $92,000 or 9%
in 1999  primarily as a result of decreased net income from  operations and as a
result of the sale of University Business Center Phase II in 1998.

Net cash provided by operating  activities decreased  approximately  $191,000 or
16% in 1998.  The  decrease  was  primarily  driven by a decrease in net working
capital assets and liabilities (excluding cash).

Net cash provided by investing activities decreased approximately  $1,600,000 in
1999.  The  decrease is  primarily a result of the 1998  balance  including  the
Partnership's  proportionate  share of the  proceeds  received  from the sale of
University Business Center Phase II in October 1998. The decrease is also due to
increased  capital  expenditures  and is  partially  offset by the  positive net
effect on cash flow of the change in the Partnership's  ownership  percentage of
the Lakeshore/University II Joint Venture.

                                     - 26 -

<PAGE>

Consolidated Cash Flows and Financial Condition - Continued
-----------------------------------------------------------

Net cash provided by investing activities increased approximately  $1,970,000 in
1998. The increase in cash provided by investing activities was primarily driven
by the  proceeds  from the  sale of  assets  and net  maturities  of  investment
securities over purchases partially offset by increased capital expenditures.

The approximate  $1,294,000 decrease in net cash used in financing activities in
1999  is  primarily  driven  by  a  reduction  in  payments  on  mortgages.  The
approximate $1,347,000 increase in net cash used in financing activities in 1998
is primarily a result of increased  principal  payments on mortgages payable and
increased funds used for the repurchase of limited partnership Units through the
Interest  Repurchase  Reserve and increased funds reserved for the repurchase of
limited partnership Units through the Tender Offers.

The  Partnership  has not made any cash  distributions  since the quarter  ended
September  30,  1996.  Distributions  will be resumed once the  Partnership  has
established adequate cash reserves and is generating cash from operations which,
in  management's  opinion,  is sufficient to warrant future  distributions.  The
primary source of future  liquidity and  distributions is expected to be derived
from cash generated by the Partnership's properties after adequate cash reserves
are established for future leasing costs,  tenant finish costs and other capital
improvements.  Cash reserves  (which are  unrestricted  cash and equivalents and
investment securities as shown on the Partnership's balance sheet as of December
31) were  $607,512,  $783,538 and $698,481 at December 31, 1999,  1998 and 1997,
respectively.

Due to the fact that no  distributions  were made during 1999, 1998 or 1997, the
table which presents that portion of the  distribution  that represents a return
of capital on a Generally Accepted Accounting Principle basis has been omitted.

Currently,  the  Partnership's  plans for  renovations  and other major  capital
expenditures  include tenant  improvements  at the  Partnership's  properties as
required by lease  negotiations.  Changes to current tenant finish  improvements
are a typical part of any lease  negotiation.  Improvements  generally include a
revision  to the  current  floor  plan to  accommodate  a  tenant's  needs,  new
carpeting  and  paint  and/or  wall  covering.   The  extent  and  cost  of  the
improvements  are  determined  by the size of the space being leased and whether
the  improvements  are for a new tenant or incurred  because of a lease renewal.
The tenant finish improvements will be funded by cash flow from operations, cash
reserves or additional financing where necessary.

In the next 12 months, the demand on future liquidity is anticipated to increase
as the  Partnership  continues  its efforts in the leasing of the  Partnership's
commercial properties.  At this time, the future leasing and tenant finish costs
which will be required to renew current leases that expire during 2000 or obtain
new tenants are unknown.

As of December 31, 1999, the L/U II Joint Venture has a commitment,  pursuant to
a contract  signed  December  6, 1999,  to  construct  a building to be known as
Lakeshore  Business  Center  Phase  III on the 3.8  acres of land it owns at the
Lakeshore  Business  Center  development.  Site work began in December  1999 and
shell  construction  began first quarter 2000.  Construction costs are currently
estimated  to  be  $4,000,000  and  will  be  funded  by  a  $1,737,000  capital
contribution from  NTS-Properties V and approximately  $2,680,000 debt financing
obtained  subsequent  to  December  31,  1999.  Construction  is  expected to be
completed by the fourth  quarter of 2000.  See Item 8 Note 5F for details of the
capital  contribution  made by  NTS-Properties  V and Note 14 for details of the
debt financing obtained subsequent to December 31, 1999.

As of December 31, 1999,  the  Partnership  has also started  renovations of the
community  clubhouse  at  Golf  Brook  Apartments.  The  estimated  cost  of the
renovation  is $200,000.  The  renovation  is being funded partly from cash flow
from  operations  and partly from  financing  obtained by  NTS-Properties  VI on
September 23, 1999,  in the amount of  $2,500,000  which is secured by Plainview
Point III Office Center.

                                     - 27 -

<PAGE>

Consolidated Cash Flows and Financial Condition - Continued
-----------------------------------------------------------

The  Partnership  had no other material  commitments  for renovations or capital
improvements as of December 31, 1999.

Pursuant to Section 16.4 of the Partnership's  Amended and Restated Agreement of
Limited Partnership,  the Partnership established an Interest Repurchase Reserve
in June 1996.  During the years ended  December  31,  1998,  1997 and 1996,  the
Partnership  funded  $201,565,  $45,000,  and  $575,070,  respectively,  to  the
reserve. Through November 20, 1998 (the commencement of the First Tender Offer),
the Partnership had repurchased 4,436 Units for $700,920 at a price ranging from
$150 to $205 per  Unit.  The  offering  price  per Unit was  established  by the
General  Partner in its sole  discretion  and does not purport to represent  the
fair  market  value or  liquidation  value of the Units.  Repurchased  Units are
retired by the Partnership,  thus increasing the percentage of ownership of each
remaining limited partner investor.  The Interest  Repurchase Reserve was funded
from cash reserves. The balance in the Reserve at December 31, 1999 was $0.

On November  20,  1998,  the  Partnership  and ORIG,  LLC, an  affiliate  of the
Partnership (the "bidders"), commenced a tender offer (the "First Tender Offer")
to  purchase up to 1,200 of the  Partnership's  limited  partnership  Units at a
price of $205  per Unit as of the date of the  First  Tender  Offer.  The  First
Tender offer expired  February 19, 1999, at which time 1,259 Units were tendered
pursuant to the First Tender Offer.  The  Partnership  repurchased 600 Units and
ORIG,  LLC  purchased  659  Units  at a total  cost of  $258,095  plus  offering
expenses.

On July 28, 1999, the  Partnership  commenced a second tender offer (the "Second
Tender Offer") to purchase up to 1,000 of the Partnership's  limited partnership
Units at a price of $205.00 per Unit as of the date of the Second  Tender Offer.
The initial  expiration date of the Second Tender Offer was October 29, 1999 and
this  expiration  date was  extended to December 8, 1999. A total of 2,245 Units
were tendered, pursuant to the Second Tender Offer, and the bidders accepted all
Units. The Partnership repurchased 500 Units and ORIG, LLC purchased 1,745 Units
at a total cost of $460,225 plus offering expenses.

On July 23, 1999,  the L/U II Joint  Venture  closed on the sale of 2.4 acres of
land adjacent to the Lakeshore Business Center for a purchase price of $528,405.
The Partnership  reflects a gain of approximately  $11,300  associated with this
sale in the third  quarter of 1999 and expects to use the net proceeds  from the
land sale to help fund the  construction of Lakeshore  Business Center Phase III
as described above.

The following  describes the efforts being taken by the  Partnership to increase
the occupancy levels at the Partnership's commercial properties. The leasing and
renewal negotiations at the Lakeshore Business Center development are handled by
an on-site leasing agent, an employee of NTS Development  Company, (an affiliate
of the  General  Partner  of the  Partnership),  who  makes  calls to  potential
tenants,  negotiates  lease  renewals  with  current  tenants and manages  local
advertising  with the assistance of NTS Development  Company's  marketing staff.
The leasing and renewal negotiations for the Partnership's  remaining commercial
properties are handled by leasing agents,  employees of NTS Development Company,
located in Louisville, Kentucky. The leasing agents are located in the same city
as commercial properties. All advertising for these properties is coordinated by
NTS Development Company's marketing staff located in Louisville, Kentucky. In an
effort  to  continue  to  improve  occupancy  at the  Partnership's  residential
properties,  the  Partnership  has an on-site  leasing  staff,  employees of NTS
Development Company, at each of the apartment communities. The staff handles all
on-site visits from potential  tenants,  coordinates  local advertising with NTS
Development  Company's  marketing  staff,  makes  visits to local  companies  to
promote  fully  furnished  units and  negotiates  lease  renewals  with  current
residents.

Leases at Commonwealth Business Center Phase I, Blankenbaker Business Center 1A,
and Lakeshore  Business Center Phases I and II provide for tenants to contribute
toward the payment of common area  expenses,  insurance  and real estate  taxes.
Leases at Plainview  Point Office Center Phases I and II and Plainview Point III
Office Center provide for tenants to contribute  toward the payment of increases
in common area maintenance expenses, insurance, utilities and real estate taxes.

                                     - 28 -

<PAGE>

Consolidated Cash Flows and Financial Condition - Continued
-----------------------------------------------------------

These  lease  provisions,  along  with  the fact  that  residential  leases  are
generally for a period of one year, should protect the Partnership's  operations
from the impact of inflation and changing prices.

Year 2000
---------

During 1999, all divisions of NTS Corporation,  including NTS-Properties IV, the
General  Partner of the  Partnership,  reviewed the effort  necessary to prepare
NTS'  information  systems (IT) and  non-information  technology  with  embedded
technology  (ET) for the Year 2000. The  information  technology  solutions were
addressed  separately  for the Year 2000 since the  Partnership  saw the need to
move to more advanced  management and  accounting  systems made available by new
technology  and  software  development  during  the decade of the  1990's.  NTS'
property  management staff surveyed vendors to evaluate  embedded  technology in
our  alarm  systems,  HVAC  controls,   telephone  systems  and  other  computer
associated facilities.  Some equipment was replaced,  while others had circuitry
upgrades.

In 1999, the PILOT software system,  purchased in the early 1990's, needed to be
replaced by a windows based network system both for NTS'  headquarter  functions
and other locations.  The real estate  accounting  system  developed,  sold, and
supported  by the Yardi  Company of Santa  Barbara,  California  was selected to
replace  PILOT.  The Yardi system is fully  implemented  and  operational  as of
December 31, 1999. Our system for multi-family apartment locations was converted
to GEAC's  Power  Site  System  earlier  in 1998.  There  have been no Year 2000
related problems with either system.

The cost of these advances in our systems  technology is not all attributable to
the Year 2000  issue  since  NTS had  already  identified  the need to move to a
network based system regardless of the Year 2000. The Partnership's share of the
costs  involved  were  approximately  $70,000  over 1999 and 1998.  These  costs
primarily include the purchase, lease and maintenance of hardware and software.

At the date of this filing the  Partnership  did not experience any  significant
operating issues relative to the Year 2000 issue. Despite diligent  preparation,
unanticipated  third-party  failures,  inability of our tenants to pay rent when
due, more general public  infrastructure  failures or failure of our remediation
efforts  as  planned  could have a  material  adverse  impact on our  results of
operations, financial conditions and/or cash flows in 2000 and beyond.

Cautionary Statements
---------------------

Some of the statements included in Item 7, Management's  Discussion and Analysis
of  Financial  Condition  and Results of  Operations,  may be  considered  to be
"forward-looking  statements" since such statements relate to matters which have
not yet occurred. For example,  phrases such as " the Partnership anticipates ",
"believes" or "expects" indicate that it is possible that the event anticipated,
believed or expected may not occur. Should such event not occur, then the result
which  the  Partnership  expected  also may not  occur  or occur in a  different
manner, which may be more or less favorable to the Partnership.  The Partnership
does not  undertake  any  obligations  to  publicly  release  the  result of any
revisions to these  forward-looking  statements  that may be made to reflect any
future events or circumstances.

Any forward-looking  statements included in Management's Discussion and Analysis
of Financial  Condition and Results of Operations,  or elsewhere in this report,
which reflect  management's best judgement based on factors known, involve risks
and uncertainties. Actual results could differ materially from those anticipated
in any forward-looking  statements as a result of a number of factors, including
but not  limited  to those  discussed  below.  Any  forward-looking  information
provided by the  Partnership  pursuant to the safe harbor  established by recent
securities legislation should be evaluated in the context of these factors.

                                     - 29 -

<PAGE>

Cautionary Statements - Continued
---------------------------------

The Partnership's principal activity is the leasing and management of commercial
office  buildings,   business  centers  and  apartment  complexes.  If  a  major
commercial  tenant  or a large  number of  apartment  lessees  default  on their
leases,  the  Partnership's   ability  to  make  payments  due  under  its  debt
agreements,  payment of operating costs and other partnership  expenses would be
directly  impacted.  A lessee's  ability to make  payments  are subject to risks
generally  associated with real estate,  many of which are beyond the control of
the Partnership,  including general or local economic  conditions,  competition,
interest rates, real estate tax rates, other operating expenses and acts of God.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk
          ----------------------------------------------------------

Our primary  market risk  exposure  with  regards to  financial  instruments  is
changes in interest  rates.  All of the  Partnership's  debt bears interest at a
fixed rate.  At December 31, 1999, a  hypothetical  100 basis point  increase in
interest  rates would  result in an  approximate  $309,000  decrease in the fair
value of debt.

                                     - 30 -

<PAGE>

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

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
                    ----------------------------------------

To NTS-Properties IV, a Kentucky Limited Partnership:

We have audited the accompanying balance sheets of NTS-Properties IV (a Kentucky
limited  partnership)  as of  December  31,  1999  and  1998,  and  the  related
statements of operations,  partners' equity and cash flows for each of the three
years in the period ended December 31, 1999. These financial  statements and the
schedules  referred  to  below  are  the  responsibility  of  the  Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements and schedules based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. 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  NTS-Properties  IV as of
December 31, 1999 and 1998, and the results of its operations and its cash flows
for each of the three years in the period ended  December 31, 1999 in conformity
with accounting principles generally accepted in the United States.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial  statements  taken  as a whole.  The  schedules  included  on pages 57
through 60 are  presented  for purposes of  complying  with the  Securities  and
Exchange  Commission's  rules and regulations and are not a required part of the
basic financial statements.  These schedules have been subjected to the auditing
procedures  applied in our audits of the basic financial  statements and, in our
opinion, fairly state in all material respects the financial data required to be
set forth  therein in  relation  to the basic  financial  statements  taken as a
whole.

                                                          ARTHUR ANDERSEN LLP



Louisville, Kentucky
March 24, 2000

                                     - 31 -

<PAGE>

<TABLE>

                                NTS-PROPERTIES IV
                                -----------------

                                 BALANCE SHEETS
                                 --------------

                        AS OF DECEMBER 31, 1999 AND 1998
                        --------------------------------
<CAPTION>


                                             1999              1998
                                             ----              ----
ASSETS
------
<S>                                       <C>            <C>
Cash and equivalents                      $    607,512   $    640,969
Cash and equivalents - restricted               60,809        183,050
Investment securities                               --        142,569
Accounts receivable, net of allowance
 for doubtful accounts of $0 (1999)
 and $1,972 (1998)                             192,079        183,170
Land, buildings and amenities, net          10,480,193     11,566,911
Other assets                                   325,084        339,040
                                           -----------    -----------

                                           $11,665,677    $13,055,709
                                           ===========    ===========

LIABILITIES AND PARTNERS' EQUITY
--------------------------------

Mortgages payable                          $ 7,861,645    $ 9,121,979
Accounts payable                               224,227        115,103
Security deposits                               69,991         75,108
Other Liabilities                               48,004         53,518
                                           -----------    -----------

                                             8,203,867      9,365,708


Commitments and contingencies (Note 12)



Partners' equity                             3,461,810      3,690,001
                                           -----------    -----------

                                           $11,665,677    $13,055,709
                                           ===========    ===========

</TABLE>


The  accompanying  notes to financial  statements  are an integral part of these
statements.

                                     - 32 -

<PAGE>

<TABLE>

                                NTS-PROPERTIES IV
                                -----------------

                            STATEMENTS OF OPERATIONS
                            ------------------------

              FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
              ----------------------------------------------------

<CAPTION>


                                                          1999              1998             1997
                                                          ----              ----             ----
Revenues:
---------
<S>                                                     <C>             <C>             <C>
 Rental income, net of provision for
  doubtful accounts of $0 (1999), $2,043
 (1998) and $0(1997)                                    $ 3,261,445     $ 3,561,342     $ 3,616,883
 Gain on sale of asset                                       11,256         208,607              --
 Interest and other income                                   45,018          57,752          91,714
                                                        -----------     -----------     -----------

                                                          3,317,719       3,827,701       3,708,597
Expenses:
---------
 Operating expenses                                         718,387         785,718         813,091
 Operating expenses - affiliated                            517,548         466,497         398,950
 Loss on disposal of assets                                  55,262          13,081              --
 Interest expense                                           656,235         803,140         855,488
 Management fees                                            186,264         204,498         208,837
 Real estate taxes                                          203,348         212,763         224,345
 Professional and administrative
  expenses                                                  142,009         114,956         102,345
 Professional and administrative
  expenses - affiliated                                     158,042         154,605         150,715
 Depreciation and amortization                              683,315         820,085         926,872
                                                        -----------     -----------     -----------

                                                          3,320,410       3,575,343       3,680,643
                                                        -----------     -----------     -----------

Income (loss) before extraordinary item                      (2,691)        252,358          27,954
Extraordinary item - early extinguishment
 of debt                                                         --        (154,062)        (77,004)
                                                        -----------     -----------     -----------

Net income (loss)                                       $    (2,691)    $    98,296     $   (49,050)
                                                        ===========     ===========     ===========

Net income (loss) allocated to the
 limited partners:
  Income (loss) before extraordinary item               $    (2,664)    $   249,834     $    27,674
  Extraordinary item                                             --        (152,521)        (76,234)
                                                        -----------     -----------     -----------

  Net income (loss)                                     $    (2,664)    $    97,313     $   (48,560)
                                                        ===========     ===========     ===========

Net income (loss) per limited partnership
 Unit:
  Income (loss) before extraordinary item               $     (0.11)    $      9.64     $      1.03
  Extraordinary item                                             --           (5.89)          (2.85)
                                                        -----------     -----------     -----------
Net income (loss) per limited partnership
 Unit                                                   $     (0.11)    $      3.75     $     (1.82)
                                                        ===========     ===========     ===========
Weighted average number of limited
 partnership units                                           24,778          25,918          26,708
                                                        ===========     ===========     ===========
</TABLE>

The  accompanying  notes to financial  statements  are an integral part of these
statements.

                                     - 33 -

<PAGE>

<TABLE>


                                NTS-PROPERTIES IV
                                -----------------

                       STATEMENTS OF PARTNERS' EQUITY (1)
                       ----------------------------------

              FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
              ----------------------------------------------------

<CAPTION>


                                        Limited          General
                                        Partners         Partners        Total
                                        --------         --------        -----

<S>                                  <C>             <C>             <C>
Balances at December 31, 1996         $ 4,132,023     $  (214,848)    $ 3,917,175
 Net loss                                 (48,560)           (490)        (49,050)
 Repurchase of limited partnership
  Units                                   (33,900)             --         (33,900)
                                      -----------     -----------     -----------
Balances at December 31, 1997           4,049,563        (215,338)      3,834,225
 Net income                                97,313             983          98,296
 Repurchase of limited partnership
  Units                                  (242,520)             --        (242,520)
                                      -----------     -----------     -----------
Balances at December 31, 1998           3,904,356        (214,355)      3,690,001
 Net loss                                  (2,664)            (27)         (2,691)
 Repurchase of limited partnership
  Units                                  (225,500)             --        (225,500)
                                      -----------     -----------     -----------
Balances at December 31, 1999         $ 3,676,192     $  (214,382)    $ 3,461,810
                                      ===========     ===========     ===========

</TABLE>

The  accompanying  notes to financial  statements  are an integral part of these
statements.

(1)  For the periods  presented,  there are no  elements of other  comprehensive
     income as defined by the Financial Accounting Standards Board, Statement of
     Financial Accounting  standards Statement No. 130, Reporting  Comprehensive
     Income.

                                     - 34 -

<PAGE>

<TABLE>

                                NTS-PROPERTIES IV
                                -----------------

                            STATEMENTS OF CASH FLOWS
                            ------------------------

              FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
              ----------------------------------------------------

<CAPTION>

                                                         1999           1998            1997
                                                         ----           ----            ----
CASH FLOWS FROM OPERATING ACTIVITIES
------------------------------------

<S>                                                <C>             <C>             <C>
Net income (loss)                                  $    (2,691)    $    98,296     $   (49,050)
Adjustments to reconcile net income (loss) to
 net cash provided by operating activities:
Gain on sale of assets                                 (11,256)       (208,607)             --
Extraordinary item - early extinguishment of
 debt                                                       --         154,062          77,004
Accrued interest on investment securities                   --          (2,569)         (3,877)
Provision for doubtful accounts                             --           2,043              --
Write-off of unamortized improvements                   55,262          13,081              --
Depreciation and amortization                          683,315         820,085         926,872
Changes in assets and liabilities:
 Cash and equivalents - restricted                        (759)         47,924           4,719
 Accounts receivable                                    (4,962)         57,921         103,999
 Other assets                                           76,409          44,359         100,947
 Accounts payable - operations                         109,125         (20,479)        (22,608)
 Security deposits                                      (5,117)         (8,282)           (521)
 Other liabilities                                      (5,515)        (11,951)         39,060
                                                   -----------     -----------     -----------

  Net cash provided by operating activities            893,811         985,883       1,176,545
                                                   -----------     -----------     -----------

CASH FLOWS FROM INVESTING ACTIVITIES
------------------------------------

Proceeds from the sale of land                          55,742              --              --
Proceeds from the sale of assets before payment
 of debt                                                    --       1,498,242              --
Additions to land, buildings and amenities            (405,214)       (334,563)        (99,261)
Purchase of investment securities                           --      (1,125,550)       (799,777)
Maturity of investment securities                           --       1,407,885         381,318
Other                                                       --           8,684              --
Change in ownership of Joint Venture (Note 5F)         204,054              --              --
                                                   -----------     -----------     -----------
  Net cash provided by (used in) investing
   activities                                         (145,418)      1,454,698        (517,720)
                                                   -----------     -----------     -----------

CASH FLOWS FROM FINANCING ACTIVITIES
------------------------------------

Increase in mortgages payable                               --              --       4,414,080
Principal payments on mortgages and notes
 payable                                              (679,350)     (1,584,823)     (4,943,902)
Early principal payment penalty                             --        (136,449)             --
Decrease in loan costs                                      --          10,285              --
Additions to loan costs                                     --              --        (120,187)
Repurchase of limited partnership Units               (225,500)       (242,520)        (33,900)
Decrease (increase) in cash and equivalents -
 restricted                                            123,000        (122,250)        (45,250)
                                                   -----------     -----------     -----------

  Net cash used in financing activities               (781,850)     (2,075,757)       (729,159)
                                                   -----------     -----------     -----------

  Net increase (decrease) in cash and
   equivalents                                         (33,457)        364,824         (70,334)

CASH AND EQUIVALENTS, beginning of year                640,969         276,145         346,479
                                                   -----------     -----------     -----------

CASH AND EQUIVALENTS, end of year                  $   607,512     $   640,969     $   276,145
                                                   ===========     ===========     ===========

Interest paid on a cash basis                      $   722,163     $   793,577     $   876,871
                                                   ===========     ===========     ===========
</TABLE>

The  accompanying  notes to financial  statements  are an integral part of these
statements.

                                     - 35 -

<PAGE>

                                NTS-PROPERTIES IV
                                -----------------

                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------

              FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
              ----------------------------------------------------

1.   Significant Accounting Policies
     -------------------------------

     A)  Organization
         ------------

         NTS-Properties  IV  (the   "Partnership")  is  a  limited   partnership
         organized  under the laws of the  Commonwealth  of  Kentucky on May 13,
         1983. The General Partner is  NTS-Properties  Associates IV, a Kentucky
         limited partnership.  The Partnership is in the business of developing,
         constructing,   owning  and  operating   residential   apartments   and
         commercial real estate.

     B)  Properties
         ----------
         The Partnership owns and operates the following properties:

         -    Commonwealth  Business  Center  Phase I, a  business  center  with
              approximately  81,000  net  rentable  square  feet in  Louisville,
              Kentucky.

         -    Plainview  Point Office  Center  Phases I and II, an office center
              with approximately  56,000 net rentable square feet in Louisville,
              Kentucky.

         -    The  Willows of  Plainview  Phase I, a 118-unit  luxury  apartment
              complex in Louisville, Kentucky.

         -    A 10% joint venture interest in The Willows of Plainview Phase II,
              a 144-unit luxury apartment complex in Louisville, Kentucky.

         -    A 4% joint venture interest in Golf Brook Apartments,  a 195- unit
              luxury apartment complex in Orlando, Florida.

         -    A 5% joint venture  interest in Plainview Point III Office Center,
              an office  center with  approximately  63,000 net rentable  square
              feet in Louisville, Kentucky.

         -    A 30% joint venture interest in Blankenbaker Business Center 1A, a
              business  center with  approximately  50,000 net  rentable  ground
              floor square feet and approximately  50,000 net rentable mezzanine
              square feet in Louisville, Kentucky.

         -    A 12% joint venture interest in the  Lakeshore/University II Joint
              Venture.  A  description  of the  properties  owned  by the  Joint
              Venture appears below:

              -       Lakeshore Business Center Phase I - a business center with
                      ---------------------------------
                      approximately 103,000 rentable square feet located in Fort
                      Lauderdale, Florida.

              -       Lakeshore  Business  Center  Phase II - a business  center
                      -------------------------------------
                      with approximately 97,000 net rentable square feet located
                      in Fort Lauderdale, Florida.

              -       Outparcel  Building Site - approximately 3.8 acres of land
                      ------------------------
                      adjacent to the Lakeshore Business Center development upon
                      which  construction  of Lakeshore  Business Center III has
                      commenced.

                                     - 36 -

<PAGE>

1.   Significant Accounting Policies - Continued
     -------------------------------------------

     C)  Allocation of Net Income (Loss) and Cash Distributions
         ------------------------------------------------------

         Net Cash Receipts made  available for  distribution,  as defined in the
         partnership  agreement,  will  be  distributed  1) 99%  to the  limited
         partners and 1% to the General Partner until the limited  partners have
         received their 8% Preference Distribution as defined in the partnership
         agreement;   2)  to  the  General   Partner  in  an  amount   equal  to
         approximately 10% of the limited partners' 8% Preference  Distribution;
         and  3) the  remainder,  90% to the  limited  partners  and  10% to the
         General  Partner.  Starting  December 31,  1996,  the  Partnership  has
         indefinitely interrupted distributions.

         Net Cash Proceeds, as defined in the partnership  agreement,  which are
         available for  distribution  will be  distributed 1) 99% to the limited
         partners and 1% to the General Partner until the limited  partners have
         received distributions from all sources equal to their Original Capital
         plus the amount of any  deficiency in their 8% Cumulative  Distribution
         as defined in the partnership agreement;  and 2) the remainder,  75% to
         the limited partners and 25% to the General Partner.  Net income (loss)
         is to be  allocated  99% to the limited  partners and 1% to the General
         Partner  for  all  periods  presented  in  the  accompanying  Financial
         Statements.

     D)  Tax Status
         ----------

         The Partnership has received a ruling from the Internal Revenue Service
         stating that the Partnership is classified as a limited partnership for
         federal  income  tax  purposes.  As  such,  the  Partnership  makes  no
         provision  for  income  taxes.  The  taxable  income  or loss is passed
         through to the holders of interests for  inclusion on their  individual
         income tax returns.

         A reconciliation  of net loss for financial  statement  purposes versus
         that for income tax reporting is as follows:

                                  1999         1998         1997
                                  ----         ----         ----
Net income (loss)             $  (2,691)    $  98,296     $ (49,050)
Items handled differently
 for tax purposes:
 Gain on sale of assets          (9,274)     (329,513)           --
  Depreciation and
   amortization                (107,141)      (46,238)       (1,014)
  Capitalized leasing
   costs                            526           324           237
  Rental income                  10,779        28,217       138,433
  Write-off of unamortized
   tenant improvements               --       (25,037)      (28,620)
  Allowance for doubtful
   accounts                      (2,032)        1,865        (7,372)
  Other                          23,071            --            --
                              ---------     ---------     ---------

Taxable income (loss)         $ (86,762)    $(272,086)    $  52,614
                              =========     =========     =========

                                     - 37 -

<PAGE>

1.   Significant Accounting Policies - Continued
     -------------------------------------------

     E)  Use of Estimates in the Preparation of Financial Statements
         -----------------------------------------------------------

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

     F)  Joint Venture Accounting
         ------------------------

         The Partnership has adopted the proportionate  consolidation  method of
         accounting   for   joint   venture   properties.    The   Partnership's
         proportionate  interest  in the joint  venture's  assets,  liabilities,
         revenues,  expenses and cash flows are combined on a line-by-line basis
         with the Partnership's own assets,  liabilities,  revenues and expenses
         and cash flows.  All intercompany  accounts and transactions  have been
         eliminated in consolidation.

         Proportionate  consolidation  is utilized by the Partnership due to the
         fact that the ownership of joint venture properties,  in substance,  is
         not subject to joint control. The managing General Partners of the sole
         partner  of the NTS  sponsored  partnerships  which have  formed  joint
         ventures  are  substantially  the same.  As such,  decisions  regarding
         financing,  development, sale or operations do not require the approval
         of different partners.  Additionally,  the joint venture properties are
         in  the  same  business/industry  as  their  respective  joint  venture
         partners  and their  asset,  liability,  revenue and  expense  accounts
         correspond with the accounts of such partners.  It is the belief of the
         General  Partner  of  the  Partnership  that  the  financial  statement
         disclosures  resulting from  proportionate  consolidation  provides the
         most meaningful presentation of assets, liabilities, revenues, expenses
         and cash flows for the years  presented  given the  commonality  of the
         Partnership's operations.

     G)  Cash and Equivalents - Restricted
         ---------------------------------

         Cash and  equivalents  -  restricted  represent  1) funds  received for
         residential  security deposits,  2) funds which have been escrowed with
         mortgage  companies for property taxes and insurance in accordance with
         the loan agreements with said mortgage companies and 3) funds which the
         Partnership  has reserved  for the  repurchase  of limited  partnership
         Units (1998 only).

     H)  Investment Securities
         ---------------------

         Investment  securities represent investments in Certificates of Deposit
         or securities issued by the U.S.  Government with initial maturities of
         greater than three months.  The  investments  are carried at cost which
         approximates  market value.  The Partnership  held the securities until
         maturity.

                                     - 38 -

<PAGE>

1.   Significant Accounting Policies - Continued
     -------------------------------------------

     H)  Investment Securities - Continued
         ---------------------------------

         The  following  provides  details  regarding  the  investments  held at
         December 31, 1998:

                                  Amortized   Maturity     Value at
                  Type               Cost       Date       Maturity
                  ----               ----       ----       --------
        Certificate of deposit    $ 40,797    01/04/99     $ 40,815
        Certificate of deposit      50,886    01/04/99       50,907
        Certificate of deposit      50,886    02/01/99       51,111
                                 ---------                 --------
                                 $ 142,569                 $142,833
                                 =========                 ========


    I)   Basis of Property and Depreciation
         ----------------------------------

         Land,  buildings and  amenities are stated at cost to the  Partnership.
         Costs  directly  associated  with  the  acquisition,   development  and
         construction  of a project are  capitalized.  Depreciation  is computed
         using the  straight-line  method over the estimated useful lives of the
         assets  which are 5-30  years  for land  improvements,  5-30  years for
         building and improvements, 5-30 years for amenities and the life of the
         lease for tenant improvements.

         Statement of Financial  Accounting Standards (SFAS) No. 121, Accounting
         for the  Impairment of Long-Lived  Assets and for Long- Lived Assets to
         be Disposed Of,  specifies  circumstances  in which certain  long-lived
         assets must be reviewed for impairment.  If such review  indicates that
         the carrying  amount of an asset exceeds the sum of its expected future
         cash flows,  the asset's  carrying  value must be written  down to fair
         market value.  Application  of this  standard by management  during the
         years  ended  December  31,  1999,  1998 and 1997 did not  result in an
         impairment loss.

    J)   Rental Income and Capitalized Leasing Costs
         -------------------------------------------

         Certain  of the  Partnership's  lease  agreements  for  the  commercial
         properties  are  structured to include  scheduled  and  specified  rent
         increases over the lease term. For financial  reporting  purposes,  the
         income from these leases is being  recognized on a straight-line  basis
         over the lease term.  Accrued  income  connected  with these  leases is
         included in accounts  receivable  and totaled  $113,359 and $124,909 at
         December 31, 1999 and 1998, respectively.

         All commissions  paid to commercial  leasing agents and incentives paid
         to tenants are deferred and amortized on a straight-line basis over the
         applicable lease term.

    K)   Advertising
         -----------

         The   Partnership   expenses   advertising-type   costs  as   incurred.
         Advertising  expense was immaterial to the Partnership during the years
         ended December 31, 1999, 1998 and 1997.

    L)   Statements of Cash Flows
         ------------------------

         For purposes of reporting cash flows, cash and equivalents include cash
         on  hand  and  short-term,   highly  liquid  investments  with  initial
         maturities of three months or less.

                                     - 39 -

<PAGE>

1.   Significant Accounting Policies - Continued
     -------------------------------------------

     M)  Reclassification of 1998 and 1997 Financial Statements
         ------------------------------------------------------

         Certain  reclassifications  have been made to the December 31, 1998 and
         1997   financial   statements   to  conform  with   December  31,  1999
         classifications.  These  classifications  had  no  material  effect  on
         previously reported operations.

2.   Concentration of Credit Risk
     ----------------------------

     NTS-Properties  IV owns and operates  commercial  properties in Louisville,
     Kentucky   and  Ft.   Lauderdale,   Florida.   Substantially   all  of  the
     Partnership's  tenants are local  businesses or are  businesses  which have
     operations  in the  location  in which they  lease  space.  In  Louisville,
     Kentucky,  one tenant occupies 100% of the Blankenbaker  Business Center 1A
     property. The Partnership also owns and operates,  either wholly or through
     a  joint  venture,  residential  properties  in  Louisville,  Kentucky  and
     Orlando,  Florida.  The apartment unit is generally the principal residence
     of the tenant.

3.   Interest Repurchase Reserve
     ---------------------------

     Pursuant  to  Section  16.4  of  the  Partnership's  Amended  and  Restated
     Agreement of Limited Partnership,  the Partnership  established an Interest
     Repurchase  Reserve in June 1996. During the years ended December 31, 1998,
     1997 and 1996, the  Partnership  funded  $201,565,  $45,000,  and $575,070,
     respectively,  to the reserve.  Through November 20, 1998 (the commencement
     date of the "First Tender Offer"),  the  Partnership had repurchased  4,436
     Units for  $700,920  at a price  ranging  from  $150 to $205 per Unit.  The
     offering price per Unit was  established by the General Partner in its sole
     discretion  and does not  purport to  represent  the fair  market  value or
     liquidation  value of the  Units.  Repurchased  Units  are  retired  by the
     Partnership,  thus increasing the percentage of ownership of each remaining
     investor.  The Interest  Repurchase  Reserve was funded from cash reserves.
     The balance in the reserve at December 31, 1999 was $0.

4.   Tender Offer
     ------------

     On November 20, 1998, the  Partnership  and ORIG,  LLC, an affiliate of the
     Partnership  (the  "bidders"),  commenced a tender offer (the "First Tender
     Offer") to purchase up to 1,200 of the  Partnership's  limited  partnership
     Units at a price of $205 per Unit as of the date of the First Tender Offer.
     The First Tender Offer expired February 19, 1999, at which time 1,259 Units
     were  tendered   pursuant  to  the  First  Tender  Offer.  The  Partnership
     repurchased  600 Units and ORIG, LLC purchased 659 Units at a total cost of
     $258,095 plus offering expenses.

     On July 28,  1999,  the  Partnership  commenced a second  tender offer (the
     "Second Tender Offer") to purchase up to 1,000 of the Partnership's limited
     partnership  Units at a price of $205 per Unit as of the date of the Second
     Tender Offer.  The initial  expiration  date of the Second Tender Offer was
     October 29, 1999 and this expiration date was extended to December 8, 1999.
     A total of 2,245 Units were tendered,  pursuant to the Second Tender Offer,
     and the bidders accepted all Units.  The Partnership  repurchased 500 Units
     and ORIG,  LLC  purchased  1,745  Units at a total  cost of  $460,225  plus
     offering expenses.

                                     - 40 -

<PAGE>

5.   Investment in Joint Ventures
     ----------------------------

     A)  NTS/Willows Phase II Joint Venture
         ----------------------------------

         In 1984, the  Partnership  entered into a joint venture  agreement with
         NTS-Properties   V,  an  affiliate  of  the  General   Partner  of  the
         Partnership,  to develop  and  construct  a 144-unit  luxury  apartment
         complex  on an 8.29  acre  site in  Louisville,  Kentucky  known as The
         Willows of Plainview Phase II. The Partnership  contributed land valued
         at $800,000 and NTS-Properties V contributed  approximately $7,455,000,
         the  construction  and carrying  costs of the  apartment  complex.  The
         project  was  completed  in  August  1985.  Net  income  or net loss is
         allocated each calendar  quarter based on the respective  partnership's
         contribution. The Partnership's ownership share was 10% at December 31,
         1999.  The  Partnership's  share of the joint  venture's  revenues  was
         $130,143 (1999), $130,126 (1998) and $137,881 (1997). The Partnership's
         share of the joint  venture's  expenses was $130,211  (1999),  $129,696
         (1998) and $135,431 (1997).

     B)  NTS Ft. Lauderdale Office Joint Venture
         ---------------------------------------

         In 1985, the  Partnership  entered into a joint venture  agreement with
         NTS-Properties  V  to  develop  an  approximately  103,000  square-foot
         commercial  business center known as Lakeshore Business Center Phase I,
         located in Fort Lauderdale,  Florida. The Partnership  contributed land
         valued at $1,752,982  and  NTS-Properties  V contributed  approximately
         $9,170,000,  the cost of constructing and leasing the building. The net
         income or net loss was  allocated  each  calendar  quarter based on the
         respective partnership's contribution.

         On January 23,  1995,  the  partners of the NTS Ft.  Lauderdale  Office
         Joint  Venture  contributed  Lakeshore  Business  Center Phase I to the
         newly formed  Lakeshore/University  II (L/U II) Joint Venture. Refer to
         Note 5F for a further discussion of the new joint venture.

     C)  NTS Sabal Golf Villas Joint Venture
         -----------------------------------

         In 1985, the  Partnership  entered into a joint venture  agreement with
         NTS-Properties   VI,  an  affiliate  of  the  General  Partner  of  the
         Partnership,  to develop  and  construct  a 158-unit  luxury  apartment
         complex  on a 13.15  acre site in  Orlando,  Florida to be known as the
         Golf Brook Apartments Phase I. The Partnership  contributed land valued
         at $1,900,000 with an outstanding  note payable to a bank of $1,200,000
         which was secured by the land.  On January 1, 1987,  the joint  venture
         agreement  was  amended to include  Golf Brook  Apartments  Phase II, a
         37-unit luxury apartment  complex located on a 3.069 acre site adjacent
         to  Golf  Brook  Apartments  Phase  I.  NTS-Properties  VI  contributed
         approximately  $15,800,000,  the cost of  constructing  and leasing the
         complexes.  NTS-Properties  VI also  contributed  funds to  retire  the
         $1,200,000 note payable to the bank.

         Net  income  or  net  loss  is  allocated   based  on  the   respective
         contribution  of  each  partnership  as of  the  end of  each  calendar
         quarter. The Partnership's ownership share was 4% at December 31, 1999.
         The  Partnership's  share of the joint venture's  revenues was $118,307
         (1999), $120,971 (1998) and $113,579 (1997). The Partnership's share of
         the joint  ventures  expenses was $82,377  (1999),  $78,511  (1998) and
         $73,649 (1997).

                                     - 41 -

<PAGE>

5.   Investment in Joint Ventures - Continued
     ----------------------------------------

     D)  Plainview Point III Joint Venture
         ---------------------------------

         In 1987, the  Partnership  entered into a joint venture  agreement with
         NTS-Properties  VI to develop and  construct  an  approximately  63,000
         square foot office building located in Louisville, Kentucky to be known
         as Plainview Point Phase III Office Center. The Partnership contributed
         land valued at $790,000 with an  outstanding  note payable to a bank of
         $550,000 which was secured by the land.  NTS-Properties  VI contributed
         approximately $4,100,000, the cost to construct and lease the building.
         NTS-Properties  VI also  contributed  funds to retire the $550,000 note
         payable to the bank.

         Net  income  or  net  loss  is  allocated   based  on  the   respective
         partnership's  contribution as of the end of each calendar quarter. The
         Partnership's  ownership  share  was  5%  at  December  31,  1999.  The
         Partnership's share of the joint venture's revenues was $42,301 (1999),
         $40,779 (1998) and $38,512 (1997). The Partnership's share of the joint
         venture's  expenses  was  $35,236  (1999),  $44,273  (1998) and $42,023
         (1997).

     E)  Blankenbaker Business Center Joint Venture
         ------------------------------------------

         On August 16, 1994,  the  Blankenbaker  Business  Center Joint  Venture
         agreement was amended to admit the  Partnership  to the Joint  Venture.
         The Joint  Venture was  originally  formed on December 28, 1990 between
         NTS-Properties  Plus Ltd. and NTS-Properties  VII, Ltd.,  affiliates of
         the General Partner of the Partnership, to own and operate Blankenbaker
         Business  Center 1A and to acquire an  approximately  2.49 acre parking
         lot that was being leased by the  business  center from an affiliate of
         the General  Partner.  The use of the parking lot is a provision of the
         tenants's lease agreement with the business center.

         In  accordance  with  the  Joint  Venture  Agreement   Amendment,   the
         Partnership   contributed   $1,100,000  and  NTS-Properties  VII,  Ltd.
         contributed $500,000. The General Partner of the Partnership determined
         the  utilization  of a portion of the  Partnership's  cash  reserves to
         participate  in  the  Joint  Venture  would  be  consistent   with  the
         investment  objectives  set  forth  in  the  Partnership's  partnership
         agreement, and should enhance the future returns of the Partnership.

         The need for  additional  capital by the Joint  Venture was a result of
         the lease renewal and expansion which was signed April 28, 1994 between
         the Joint Venture and Prudential Service Bureau,  Inc.  ("Prudential").
         The lease expanded  Prudential's  leased space by approximately  15,000
         square feet and  extended  its current  lease term  through  July 2005.
         Approximately  12,000  square feet of the  expansion was into new space
         which  had  to be  constructed  on the  second  level  of the  existing
         business center.  With this expansion,  Prudential occupied 100% of the
         business center (approximately  101,000 square feet). The tenant finish
         and leasing costs  connected  with the lease renewal and expansion were
         approximately $1,400,000.

         In order to calculate the revised joint venture  percentage  interests,
         the assets of the Joint Venture were  revalued in  connection  with the
         admission  of the  Partnership  as a  joint  venture  partner  and  the
         additional  capital  contributions.  The value of the  Joint  Venture's
         assets  immediately prior to the additional  capital  contributions was
         $6,764,322 and its outstanding debt was

                                     - 42 -

<PAGE>

5.   Investment in Joint Ventures - Continued
     ----------------------------------------

     E)  Blankenbaker Business Center Joint Venture - Continued
         ------------------------------------------------------

         $4,650,042,  with net equity being $2,114,280.  The difference  between
         the value of the Joint  Venture's  assets  and the value at which  they
         were  carried on the books of the Joint  Venture has been  allocated to
         NTS-Properties  VII, Ltd. and  NTS-Properties  Plus Ltd. in determining
         each Joint Venture partner's percentage interest.

         As a result of its capital contribution, the Partnership obtained a 30%
         interest in the Joint Venture.  NTS-Properties  Plus Ltd.'s interest in
         the Joint Venture  decreased from 69% to 39% as a result of the capital
         contributions  made by  NTS-Properties  VII, Ltd. and the  Partnership.
         NTS-Properties  VII, Ltd.'s  interest in the Joint Venture  remained at
         31%.

         Net  income  or  net  loss  is  allocated   based  on  the   respective
         contribution  of each partner as of the end of each  calendar  quarter.
         The  Partnership's  ownership  share was 30% at December 31, 1999.  The
         Partnership's  share  of the  joint  venture's  revenues  was  $270,791
         (1999), $276,575 (1998) and $277,712 (1997). The Partnership's share of
         the joint venture's  expenses was $298,365 (1999),  $310,531 (1998) and
         $329,529 (1997).

     F)  Lakeshore/University II Joint Venture
         -------------------------------------

         On January 23, 1995, a joint venture known as the  Lakeshore/University
         II  Joint  Venture  (L/U  II  Joint   Venture)  was  formed  among  the
         Partnership and NTS-Properties V, NTS-Properties Plus Ltd. and NTS/Fort
         Lauderdale, Ltd., affiliates of the General Partner of the Partnership,
         for  purposes  of owning  Lakeshore  Business  Center  Phases I and II,
         University  Business  Center Phase II (sold October 1998 - see Note 11)
         and  certain  undeveloped  tracts  of land  adjacent  to the  Lakeshore
         Business  Center   development.   The  table  below   identifies  which
         properties  were  contributed  to the  L/U II  Joint  Venture  and  the
         respective  owners of such  properties  prior to the  formation  of the
         joint venture.

         Property (Net Asset Contributed)           Contributing Owner
         --------------------------------           ------------------

         Lakeshore Business Center               NTS-Properties IV and NTS-
         Phase I ($6,249,667)                    Properties V

         Lakeshore Business Center               NTS-Properties Plus Ltd.
         Phase II (-$1,023,535)

         Undeveloped land adjacent to the        NTS-Properties Plus Ltd.
         Lakeshore Business Center
         development (3.8 acres)(-$670,709)

         Undeveloped land adjacent to the        NTS/Fort Lauderdale, Ltd.
         Lakeshore Business Center
         development (2.4 acres)($27,104)

         University Business Center              NTS-Properties V and NTS-
         Phase II ($953,236)                     Properties Plus Ltd.

                                     - 43 -

<PAGE>

5.   Investment in Joint Ventures - Continued
     ----------------------------------------

     F)  Lakeshore/University II Joint Venture - Continued
         -------------------------------------------------

         Each of the  properties  were  contributed  to the L/U II Joint Venture
         subject to existing indebtedness,  except for Lakeshore Business Center
         Phase I which was  contributed  to the joint  venture free and clear of
         any mortgage liens, and all such indebtedness was assumed by the L/U II
         joint venture.  Mortgages were recorded on University  Business  Center
         Phase II in the amount of $3,000,000,  in favor of the banks which held
         the  indebtedness  on University  Business  Center Phase II,  Lakeshore
         Business  Center Phase II and the  undeveloped  tracts of land prior to
         the  formation of the joint  venture and on Lakeshore  Business  Center
         Phase I in the amount of $5,500,000  subsequent to the formation of the
         L/U II Joint Venture.  In addition to the above,  the Partnership  also
         contributed  $750,000 to the L/U II Joint  Venture.  The  Partnership's
         ownership share was 12% at December 31, 1999. Net income or net loss is
         allocated  based on the respective  contribution  of each partner as of
         the end of each calendar quarter.  The Partnership's share of the joint
         venture's  revenues was $422,797  (1999),  $908,593 (1998) and $654,897
         (1997).  The  Partnership's  share of the joint venture's  expenses was
         $429,063 (1999), $830,675 (1998) and $790,607 (1997).

         On July 1, 1999,  NTS-Properties V contributed $1,737,000 to the L/U II
         Joint  Venture.  The other  partners  in the Joint  Venture,  including
         NTS-Properties  IV, did not make  capital  contributions  at that time.
         Accordingly,  the ownership  percentages  of the other  partners in the
         Joint Venture decreased.  Effective July 1, 1999,  NTS-Properties  IV's
         percentage of ownership in the Joint Venture is 11.93%,  as compared to
         17.86% prior to July 1, 1999.

6.   Land, Buildings and Amenities
     -----------------------------

     The following schedule provides an analysis of the Partnership's investment
     in property held for lease as of December 31:

                                     1999           1998
                                     ----           ----
Land and improvements            $ 4,101,742    $ 5,486,714
Buildings, improvements and
amenities                         17,653,734     17,426,923
                                 -----------    -----------
                                  21,755,476     22,913,637
Less accumulated depreciation     11,275,283     11,346,726
                                 -----------    -----------
                                 $10,480,193    $11,566,911
                                 ===========    ===========

7.   Asset Held for Development
     --------------------------

     As of December 31, 1999,  the L/U II Joint  Venture  intends to use the 3.8
     acres of the land it owns at the Lakeshore  Business Center  development to
     construct  Lakeshore  Business Center Phase III. See Note 12 for discussion
     of the contract for the construction of Lakeshore Business Center Phase III
     signed December 6, 1999.

                                     - 44 -

<PAGE>

8.   Mortgages Payable
     -----------------

Mortgages payable as of December 31 consist of the following:

                                                1999              1998
                                                ----              ----
Mortgage payable with an insurance
company,  bearing interest at a fixed
rate of 8.8%, due October 1, 2004,
secured by land and building                 $1,715,679        $1,988,590

Mortgage payable with an insurance
company, bearing interest at a fixed
rate of 7.15%, due January 5, 2013,
secured by land, buildings and
amenities                                     1,845,116         1,927,484

Mortgage payable with an insurance
company, bearing interest at a fixed
rate of 7.15%, due January 5, 2013,
secured by land, buildings and
amenities                                     1,756,462         1,834,872

Mortgage payable with an insurance
company, bearing interest at a fixed
rate of 8.5%, due November 15, 2005,
secured by land and building                    940,500         1,058,249

Mortgage payable with an insurance
company, bearing interest at a fixed
rate of 8.125% due August 1, 2008,
secured by land and building                    583,180           939,811

Mortgage payable with an insurance
company bearing interest at a fixed
rate of 8.125%, due August 1, 2008,
secured by land and building                    542,043           873,517

Mortgage payable with an insurance
company, bearing interest at a fixed
rate of 7.2%, due January 5, 2013,
secured by land, buildings and
amenities                                       299,682           312,698

Mortgage payable with an insurance
company, bearing interest at a fixed
rate of 7.2%, due January 5, 2013,
secured by land, buildings and
amenities                                       178,983           186,758
                                             ----------        ----------
                                             $7,861,645        $9,121,979
                                             ==========        ==========

                                     - 45 -

<PAGE>

8.   Mortgages Payable - Continued
     -----------------------------

     Scheduled maturities of debt are as follows:

     For the Years Ended December 31,                       Amount
     --------------------------------                       ------

              2000                                       $   714,508
              2001                                           775,430
              2002                                           841,586
              2003                                           913,428
              2004                                           918,333
              Thereafter                                   3,698,360
                                                         -----------
                                                         $ 7,861,645
                                                         ===========

     Based on the borrowing  rates  currently  available to the  Partnership for
     mortgages  with  similar  terms and average  maturities,  the fair value of
     long-term debt is approximately $7,670,000.

     The 1998 extraordinary  item - early  extinguishment of debt relates to the
     sale of University  Business Phase II (see discussion  below). A portion of
     the  proceeds  from the sale was used to  retire  the  $5,128,872  mortgage
     payable prior to its maturity (August 2008). As a result of the prepayment,
     a $763,995  penalty,  of which the  Partnership's  proportionate  share was
     $136,449,  was  required by the  insurance  company who held the  mortgage.
     Unamortized  loan costs  connected with this loan were also expensed due to
     the fact that the mortgage was paid prior to its maturity.

     The 1997  extraordinary  item - early  extinguishment  of debt  relates  to
     unamortized loan costs associated with The Willows of Plainview Phase I and
     II note payable.  The unamortized  loan costs were expensed due to the fact
     that the mortgages were retired in 1997 prior to their  maturity  (December
     5, 2003).

9.   Rental Income Under Operating Lease
     -----------------------------------

     The   following  is  a  schedule  of  minimum   future   rental  income  on
     noncancellable operating leases as of December 31, 1999:

     For the Years Ended December 31,                          Amount
     --------------------------------                          ------

              2000                                          $ 1,533,272
              2001                                            1,378,740
              2002                                            1,233,374
              2003                                            1,146,115
              2004                                              869,489
              Thereafter                                        207,198
                                                            -----------
                                                            $ 6,368,188
                                                            ===========

10.  Related Party Transactions
     --------------------------

     Property  management fees of $186,264 (1999),  $204,498 (1998) and $208,837
     (1997) were paid to NTS  Development  Company,  an affiliate of the General
     Partner of the  Partnership.  The fee is equal to 5% of gross revenues from
     residential  properties and 6% of gross revenues from commercial properties
     pursuant  to  an  agreement  with  the  Partnership.  As  permitted  by  an
     agreement,  NTS  Development  Company will receive a repair and maintenance
     fee equal to 5.9% of costs incurred  which relate to capital  improvements.
     The  Partnership  has  incurred   $21,620  and  $17,697  as  a  repair  and
     maintenance  fee  during  the  years  ended  December  31,  1999  and  1998
     respectively,  and has capitalized  this cost as a part of land,  buildings
     and amenities.

                                     - 46 -

<PAGE>

10.  Related Party Transactions - Continued
     --------------------------------------

     As  permitted  by an  agreement,  the  Partnership  was  also  charged  the
     following amounts from NTS Development Company for the years ended December
     31,  1999,  1998 and 1997.  These  charges  include  items  which have been
     expensed  as  operating   expenses  -  affiliated   or   professional   and
     administrative  expenses - affiliated and items which have been capitalized
     as other assets or as land, buildings and amenities.

                           1999           1998            1997
                           ----           ----            ----

Leasing                 $148,888        $127,001        $121,834
Administrative           208,739         195,908         196,182
Property manager         340,261         292,427         261,511
Other                     13,804          30,301           5,015
                        --------        --------        --------

                        $711,692        $645,637        $584,542
                        ========        ========        ========

11.  Sale of Asset
     -------------

     On July 23, 1999,  the L/U II Joint Venture closed on the sale of 2.4 acres
     of land adjacent to the Lakeshore  Business  Center for a purchase price of
     $528,405.  The  Partnership  had a 12% interest in the Joint Venture at the
     date of the sale. The Partnership reflects a gain of approximately  $11,300
     associated  with this sale in the third  quarter of 1999 and expects to use
     the net  proceeds  from the land  sale to help  fund  the  construction  of
     Lakeshore Business Center Phase III as described below.

     On October 6, 1998  pursuant to a contract  executed on  September 8, 1998,
     the  Lakeshore  /University  II Joint  Venture  ("L/U II") sold  University
     Business  Center Phase II Office building to Silver City  Properties,  Ltd.
     ("the Purchaser") for $8,975,000.  University  Business Center Phase II was
     owned by the L/U II Joint  Venture  of which the  Partnership  owned an 18%
     interest at the date of the sale.  Portions of the  proceeds  from the sale
     were immediately used to pay the remainder of the outstanding debt recorded
     on the joint  venture's  books of  approximately  $5,933,382  on University
     Business  Center  Phase II  (including  interest and  prepayment  penalty).
     NTS-Properties  IV reflected a gain of  approximately  $208,000  associated
     with this sale in the fourth quarter of 1998. Net cash proceeds received by
     the  Partnership  from  the L/U II  Joint  Venture  as a  result  of a cash
     distribution of the proceeds from the sale were approximately $442,000.

12.  Commitments and Contingencies
     -----------------------------

     Pursuant to a contract signed on December 6, 1999, the Lakeshore/University
     II Joint has a commitment  to construct a building to be known as Lakeshore
     Business Center Phase III on the 3.8 acres of land it owns at the Lakeshore
     Business Center Development. The construction costs are currently estimated
     to be $4,000,000  and will be funded by a $1,737,000  capital  contribution
     from  NTS-Properties V made in July 1999 and approximately  $2,680,000 debt
     financing  obtained  subsequent to December 31, 1999. The  Partnership  and
     NTS-Properties  Plus,  which  prior  to  July  1,  1999  had an 18% and 12%
     interest respectively,  in the L/U II Joint Venture, were not in a position
     to contribute additional capital required for the construction of Lakeshore
     Business Center Phase III. The  Partnership,  together with  NTS-Properties
     Plus agreed that  NTS-Properties  V would make the capital  contribution to
     the L/U II Joint  Venture  with the  knowledge  that  their  Joint  Venture
     interest would, as a result, decrease to 12% and 8% respectively.  See Note
     14 for  information  of debt  financing  obtained for the  construction  of
     Lakeshore Business Center Phase III subsequent to December 31, 1999.

                                     - 47 -

<PAGE>

13.  Segment Reporting
     -----------------

     The Partnership's  reportable  operating  segments include  Residential and
     Commercial real estate operations. The Residential operations represent the
     Partnership's  ownership  and  operating  results  relative to an apartment
     complex  known as Golf Brook and the Willows of Plainview  Phases I and II.
     The  Commercial  operations  represent  the  Partnership's   ownership  and
     operating  results  relative to suburban  commercial  office space known as
     Commonwealth  Business Center Phase I, Plainview Point Office Center Phases
     I, II and III,  Blankenbaker  Business  Center  1A and  Lakeshore  Business
     Center  Phases I and II, and  University  Business  Center Phase II through
     October 6, 1998.

     The  financial  information  of the  operating  segments have been prepared
     using a management approach,  which is consistent with the basis and manner
     in which the Partnership's  management internally  disaggregates  financial
     information  for the  purposes of assisting  in making  internal  operating
     decisions.  The  Partnership  evaluates  performance  based on  stand-alone
     operating segment net income.

<TABLE>


                                                    1999

                                Residential       Commercial             Total
                                -----------       ----------             -----

<S>                             <C>                <C>                <C>
Rental income                   $ 1,428,605        $ 1,832,840        $ 3,261,445
Other income                          2,417              8,613             11,030
                                -----------        -----------        -----------

Total net revenues              $ 1,431,022        $ 1,841,453        $ 3,272,475
                                ===========        ===========        ===========

Operating expenses              $   491,490        $   744,445        $ 1,235,935
Write-off of unamortized
 improvements                        27,259             28,003             55,262
Interest expense                     33,583             83,535            117,118
Management fees                      76,037            110,227            186,264
Real estate taxes                    78,536            119,491            198,027
Professional and
 administrative                      14,550             64,661             79,211
Depreciation expense                231,198            431,740            662,938
                                -----------        -----------        -----------

Net income                      $   478,369        $   259,351        $   737,720
                                ===========        ===========        ===========

Land, buildings and
 amenities, net                 $ 4,540,968        $ 5,915,004        $10,455,972
                                ===========        ===========        ===========

Expenditures for land,
 buildings and amenities        $    94,770        $   296,729        $   391,499
                                ===========        ===========        ===========

Segment liabilities             $   563,408        $ 1,223,517        $ 1,786,925
                                ===========        ===========        ===========

</TABLE>

                                     - 48 -

<PAGE>

13.  Segment Reporting - Continued
     -----------------------------

<TABLE>

                                                       1998

                                 Residential          Commercial              Total
                                 -----------          ----------              -----

<S>                              <C>                 <C>                  <C>
Rental income                    $  1,391,996        $  2,169,346         $  3,561,342
Other income                            7,301              10,907               18,208
Gain of sale of assets                     --             208,608              208,608
                                 ------------        ------------         ------------

Total net revenues               $  1,399,297        $  2,388,861         $  3,788,158
                                 ============        ============         ============

Operating expenses               $    540,065        $    712,150         $  1,252,215
Write-off of unamortized
 improvements                          11,213               1,868               13,081
Interest expense                       35,493             302,724              338,217
Management fees                        70,246             134,252              204,498
Real estate taxes                      67,275             145,221              212,496
Professional and
 administrative                         8,730              68,179               76,909
Depreciation expense                  227,003             579,007              806,010
                                 ------------        ------------         ------------

Net income (loss)before
 extraordinary item              $    439,272        $    445,460         $    884,732

Extraordinary item -early
 extinguishment of debt                    --            (154,062)            (154,062)
                                 ------------        ------------         ------------

Net income (loss)                $    439,272        $    291,398         $    730,670
                                 ============        ============         ============
Land, buildings and
 amenities, net                  $  4,014,293        $  7,539,422         $ 11,553,715
                                 ============        ============         ============
Expenditures for land,
 buildings and amenities         $     61,872        $    259,495         $    321,367
                                 ============        ============         ============
Segment liabilities              $    555,247        $  3,084,149         $  3,639,396
                                 ============        ============         ============

</TABLE>

<TABLE>


                                                         1997

                                  Residential           Commercial             Total

<S>                               <C>                  <C>                 <C>
Rental income                     $  1,423,067         $  2,193,816        $  3,616,883
Other income                            59,542                7,142              66,684
                                  ------------         ------------        ------------

Total net revenues                $  1,482,609         $  2,200,958        $  3,683,567
                                  ============         ============        ============

Operating expenses                $    525,978         $    686,063        $  1,212,041
Interest expense                        36,672              342,662             379,334
Management fees                         70,486              138,351             208,837
Real estate taxes                       66,752              157,593             224,345
Professional and
  administrative                        12,610               51,156              63,766
Depreciation expense                   224,440              678,075             902,515
                                  ------------         ------------        ------------

Net income (loss) before
 extraordinary item               $    545,671         $    147,058        $    692,729
Extraordinary item - early
  extinguishment of debt                (5,291)                  --              (5,291)
                                  ------------         ------------        ------------
Net income (loss)                 $    540,380         $    147,058        $    687,438
                                  ============         ============        ============
Land, buildings and
  amenities, net                  $  4,084,220         $  9,236,812        $ 13,321,032
                                  ============         ============        ============
Expenditures for land,
  buildings and amenities         $      8,750         $     90,511        $     99,261
                                  ============         ============        ============
Segment liabilities               $    579,395         $  4,286,836        $  4,866,231
                                  ============         ============        ============

</TABLE>

                                     - 49 -

<PAGE>

13. Segment Reporting - Continued
    -----------------------------

A  reconciliation  of the totals  reported  for the  operating  segments  to the
applicable  line items in the  consolidated  financial  statements  is necessary
given  amounts  recorded  at the  Partnership  level  and not  allocated  to the
operating properties for internal reporting purposes:

<TABLE>

                                                           1999                  1998                1997
                                                           ----                  ----                ----
NET REVENUES
------------
<S>                                                      <C>                 <C>                 <C>
 Total revenues for reportable segments                  $ 3,272,475         $ 3,788,158         $ 3,683,567
 Other income for partnership                                 33,988              39,543              25,030
 Gain on sale of assets for partnership                       11,256                  --                  --
                                                         -----------         -----------         -----------
Total consolidated net revenues                          $ 3,317,719         $ 3,827,701         $ 3,708,597
                                                         ===========         ===========         ===========

INTEREST EXPENSE
----------------
 Interest expense for reportable segments                $   117,118         $   338,217         $   379,334
 Interest expense for partnership                            539,117             464,923             476,154
                                                         -----------         -----------         -----------
Total interest expense                                   $   656,235         $   803,140         $   855,488
                                                         ===========         ===========         ===========

REAL ESTATE TAXES
-----------------
 Total real estate taxes for reportable segments         $   198,027         $   212,496         $   224,345
 Real estate taxes for partnership                             5,321                 267                  --
                                                         -----------         -----------         -----------
Total real estate expense                                $   203,348         $   212,763         $   224,345
                                                         ===========         ===========         ===========

PROFESSIONAL AND ADMINISTRATIVE
-------------------------------
 Total professional and administrative for
  reportable segments                                    $    79,211         $    76,909         $    63,766
 Professional and administrative for partnership             220,840             192,652             189,294
                                                         -----------         -----------         -----------
Total professional and administrative                    $   300,051         $   269,561         $   253,060
                                                         ===========         ===========         ===========

DEPRECIATION AND AMORTIZATION
-----------------------------
 Total depreciation and amortization for
  reportable segments                                    $   662,938         $   806,010         $   902,515
 Depreciation and amortization for partnership                14,559               8,257              18,540
 Eliminations                                                  5,818               5,818               5,817
                                                         -----------         -----------         -----------
Total depreciation and amortization                      $   683,315         $   820,085         $   926,872
                                                         ===========         ===========         ===========

NET INCOME (LOSS)BEFORE EXTRAORDINARY ITEM
------------------------------------------
 Net income (loss) before extraordinary  item for
  reportable segments                                    $   737,720         $   884,732         $   692,729
 Net income (loss) before extraordinary item for
  partnership                                               (725,509)           (543,243)           (807,615)
 Eliminations                                                (14,902)            (89,131)            142,840
                                                         -----------         -----------         -----------
Total net income (loss) before extraordinary item        $    (2,691)        $   252,358         $    27,954
                                                         ===========         ===========         ===========

EXTRAORDINARY ITEM - EARLY EXTINGUISHMENT OF DEBT
-------------------------------------------------
 Total extraordinary item for reportable segments        $        --         $  (154,062)        $    (5,291)
 Extraordinary item for partnership                               --                  --             (71,713)
                                                         -----------         -----------         -----------
Total extraordinary item - early extinguishment
 of debt                                                 $        --         $  (154,062)        $   (77,004)
                                                         ===========         ===========         ===========

TOTAL NET INCOME (LOSS)                                  $    (2,691)        $    98,296         $   (49,050)
                                                         ===========         ===========         ===========

</TABLE>

                            (Continued on next page)

                                     - 50 -

<PAGE>

13. Segment Reporting - Continued
    -----------------------------

<TABLE>

                                                          1999               1998               1997
                                                          ----               ----               ----
LAND, BUILDINGS AND AMENITIES
-----------------------------
<S>                                                    <C>                <C>                <C>
Total land, buildings and amenities for
  reportable segments                                  $10,455,972        $11,553,715        $13,321,032
 Partnership                                                24,221             13,196                 --
                                                       -----------        -----------        -----------
Total land, buildings and amenities                    $10,480,193        $11,566,911        $13,321,032
                                                       ===========        ===========        ===========

TOTAL EXPENDITURES
------------------
 Total expenditures for land, buildings and
  amenities for reportable segments                    $   391,499        $   321,367        $    99,261
 Expenditures for land, buildings and amenities
  for partnership                                           13,715             13,196                 --
                                                       -----------        -----------        -----------
Total expenditures for land, buildings and
 amenities                                             $   405,214        $   334,563        $    99,261
                                                       ===========        ===========        ===========

LIABILITIES
-----------
 Total liabilities for reportable segments             $ 1,786,925        $ 3,639,396        $ 4,866,231
 Liabilities for partnership                             6,416,942          5,726,312          6,111,852
                                                       -----------        -----------        -----------
Total liabilities                                      $ 8,203,867        $ 9,365,708        $10,978,083
                                                       ===========        ===========        ===========

</TABLE>


14.      Subsequent Events
         -----------------

         Subsequent  to December  31,  1999,  ORIG,  LLC.,  an  affiliate of the
         partnership  purchased  Interests  in the  Partnership  pursuant  to an
         Agreement,  Bill of Sale and Assignment  dated February 7, 2000, by and
         among  the  Affiliate  and  four  investors  in  the  Partnership  (the
         "Purchase  Agreement").  The  Affiliate  purchased 565 Interests in the
         Partnership  from  one of the  investors  for  total  consideration  of
         $136,629 for an average  price of $241.82 per  Interest.  The Affiliate
         paid these  investors a premium  above the  purchase  price  previously
         offered for  Interests  pursuant to prior  tender  offers  because this
         purchase  allowed the  Affiliate  to purchase a  substantial  number of
         Interests  without  incurring the expenses involved with a tender offer
         and multiple transfers.

         Subsequent  to  December  31,  1999,   NTS-Properties  Plus,  with  the
         Lakeshore/University II Joint Venture,  serving as guarantor obtained a
         commitment  from a bank for an amount not exceeding  $2,680,000 to fund
         the construction of Lakeshore Business Center Phase III. The funds will
         be used by the  Lakeshore/University  II  Joint  Venture  to  construct
         Lakeshore Business Center Phase III. The loan bears a variable interest
         rate  equal  to a daily  floating  LIBOR  rate  as  quoted  for  30-day
         investments,  plus 230 basis points and is secured by 3.8 acres of land
         located  at  the  Lakeshore   Business   Center   Development  and  the
         improvements now and hereafter located on the land.

                                     - 51 -

<PAGE>

Item 9. Changes in and Disagreements with Accountants on Accounting and
        ---------------------------------------------------------------
        Financial Disclosure
        --------------------

None.


                                     - 52 -

<PAGE>

                                    PART III

Item 10. Directors and Executive Officers of the Registrant
         --------------------------------------------------

Because the Partnership is a limited  partnership and not a corporation,  it has
no  directors  or  officers  as  such.  Management  of  the  Partnership  is the
responsibility  of  the  General  Partner,  NTS-Properties  Associates  IV.  The
Partnership has entered into a management contract with NTS Development Company,
an affiliate of the General Partner, to provide property management services.

The General Partners of NTS-Properties Associates IV are as follows:

J. D. Nichols
-------------

Mr.  Nichols  (age  58)  is  the  managing  General  Partner  of  NTS-Properties
Associates IV and is Chairman of the Board of NTS  Corporation  (since 1985) and
NTS Development Company (since 1977).

NTS Capital Corporation
-----------------------

NTS Capital  Corporation  (formerly NTS  Corporation) is a Kentucky  corporation
formed in October  1979. At the present time its capital is $1,000 and it is not
anticipated that such capital will be significantly  increased. J. D. Nichols is
Chairman of the Board and the sole director of NTS Capital Corporation.

NTS Sub-Partnership IV
----------------------

NTS  Sub-partnership IV is a Kentucky limited partnership whose primary business
purpose is to acquire, own and hold an interest in NTS-Properties Associates IV.
The partners of NTS  Sub-partnership IV include various management  personnel of
NTS Corporation and its affiliates.

Alliance Realty Corporation
---------------------------

Alliance Realty  Corporation was formed in September 1982, and is a wholly-owned
subsidiary of SN Alliance, Inc. SN Alliance, Inc. is also the parent corporation
of Stifel,  Nicolaus  &  Company,  Inc.  which  acted as the  Dealer  Manager in
connection with the offering for the interests.

The Manager of the Partnership's properties is NTS Development Company, the
executive officers and/or directors of which are Messrs. J. D. Nichols, Brian F.
Lavin and Gregory A. Wells.

Brian F. Lavin
--------------

Mr. Lavin (age 46)  President of NTS  Corporation  and NTS  Development  Company
joined the Manager in June 1997. From November 1994 through June 1997, Mr. Lavin
served as President of the Residential Division of Paragon Group, Inc., and as a
Vice  President of Paragon's  Midwest  Division  prior to November 1994. In this
capacity,  he  directed  the  development,  marketing,  leasing  and  management
operations for the firms expanding portfolios. Mr. Lavin attended the University
of Missouri where he received his Bachelor's Degree in Business  Administration.
He has served as a Director of the  Louisville  Apartment  Association.  He is a
licensed Kentucky Real Estate Broker and Certified  Property Manager.  Mr. Lavin
is a member of the Institute of Real Estate  Management,  and council  member of
the Urban Land  Institute.  He currently  serves on the University of Louisville
Board  of  Overseers   and  is  on  the  Board  of  Directors  of  the  National
Multi-Housing Council and the Louisville Science Center.

Gregory A. Wells
----------------

Mr. Wells (age 41),  Senior Vice  President and Chief  Financial  Officer of NTS
Corporation and NTS Development  Company joined the Manager in July,  1999. From
May 1998 through  July 1999,  Mr.  Wells  served as Chief  Financial  Officer of
Hokanson Companies, Inc. and as Secretary and Treasurer of Hokanson Construction
Inc.,  Indianapolis,  Indiana  from  January  1995  through  May 1998.  In these
capacities,  he directed  financial and  operational  activities  for commercial
rental real estate,  managed property,  building and suite  renovations,  out of
ground commercial and residential construction and third party property


                                     - 53 -

<PAGE>

Item 10. Directors and Executive Officers of the Registrant - Continued
         --------------------------------------------------------------

management.  Mr. Wells  previously  served as Vice  President of Operations  and
Treasurer  of Executive  Telecom  Systems,  Inc. a  subsidiary  of the Bureau of
National  Affairs,  Inc.  (Washington,  D.C.).  Mr. Wells attended  George Mason
University,  where he received a Bachelor's  Degree in Business  Administration.
Mr. Wells is a Certified  Public  Accountant in both Virginia and Indiana and is
active in various  charitable and philanthropic  endeavors in the Louisville and
Indianapolis areas.

Mr. Richard L. Good,  who was Vice Chairman and former  President of NTS Capital
Corporation and NTS Development Company, retired effective September 3, 1999.

Item 11. Management Remuneration and Transactions
         ----------------------------------------

The officers and/or directors of the corporate General Partner receive no direct
remuneration in such  capacities.  The Partnership is required to pay a property
management fee based on gross revenues to NTS Development  Company, an affiliate
of  the  General  Partner.  The  Partnership  is  also  required  to  pay to NTS
Development  Company a repair and  maintenance  fee on costs related to specific
projects and a refinancing  fee on Net Cash Proceeds from the refinancing of any
Partnership  property.  Also, NTS  Development  Company  provides  certain other
services to the Partnership.  See Note 10 to the financial statements which sets
forth  transactions  with  affiliates of the General Partner for the years ended
December 31, 1999, 1998 and 1997.

The General Partner is entitled to receive cash distributions and allocations of
profits and losses from the Partnership. See Note 1C to the financial statements
which  describes  the methods  used to  determine  income  allocations  and cash
distributions.

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

The following  provides  details  regarding  owners of more than 5% of the total
outstanding limited partnership Units as of February 25, 2000.

     ORIG, LLC                                   3,058 Units (12.63%)
     10172 Linn Station Road
     Louisville, Kentucky 40223

ORIG, LLC is a Kentucky limited liability company, the members of which are J.D.
Nichols, and Brian F. Lavin, Chairman and President of NTS Capital Corporations,
a general  partner of NTS  Properties  Associates,  the  general  partner of the
Partnership.

The  General  Partner  is  NTS-Properties  Associates  IV,  a  Kentucky  limited
partnership,  10172 Linn Station Road, Louisville,  Kentucky 40223. The partners
of the General Partner and their total  respective  interests in  NTS-Properties
Associates IV are as follows:

     J. D. Nichols                                 69.69%
     10172 Linn Station Road
     Louisville, Kentucky 40223

     NTS Sub-partnership IV                        30.00%
     10172 Linn Station Road
     Louisville, Kentucky 40223

     NTS Capital Corporation                         .30%
     10172 Linn Station Road
     Louisville, Kentucky 40223

     Alliance Realty Corporation                     .01%
     500 North Broadway
     St. Louis, Missouri 63102

                                     - 54 -

<PAGE>

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

Property management fees of $186,264 (1999), $204,498 (1998) and $208,837 (1997)
were paid to NTS Development Company, an affiliate of the General Partner of the
Partnership.  The  fee  is  equal  to  5% of  gross  revenues  from  residential
properties and 6% of gross revenues from  commercial  properties  pursuant to an
agreement with the  Partnership.  As permitted by an agreement,  NTS Development
Company  will  receive  a  repair  and  maintenance  fee  equal to 5.9% of costs
incurred  which relate to capital  improvements.  The  Partnership  has incurred
$21,620  and  $17,697 as a repair  and  maintenance  fee during the years  ended
December 31, 1999 and 1998,  respectively,  and has  capitalized  this cost as a
part of land, buildings and amenities.

As permitted by an  agreement,  the  Partnership  was also charged the following
amounts from NTS Development Company for the years ended December 31, 1999, 1998
and 1997.  These  charges  include  items which have been  expensed as operating
expenses - affiliated or professional and  administrative  expenses - affiliated
and items which have been capitalized as other assets or as land,  buildings and
amenities.

                          1999            1998            1997
                          ----            ----            ----

Leasing                 $148,888        $127,001        $121,834
Administrative           208,739         195,908         196,182
Property manager         340,261         292,427         261,511
Other                     13,804          30,301           5,015
                        --------        --------        --------

                        $711,692        $645,637        $584,542
                        ========        ========        ========


There are no other  agreements or  relationships  between the  Partnership,  the
General Partner and its affiliates other than those previously described.

                                     - 55 -

<PAGE>

                                     PART IV

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

1.   Financial statements

     The financial  statements for the years ended  December 31, 1999,  1998 and
     1997 together with the report of Arthur  Andersen LLP dated March 24, 2000,
     appear in Item 8. The following  financial  statement  schedules  should be
     read in conjunction with such financial statements.

2.   Financial statement schedules

     Schedules:                                                         Page No.
     ----------                                                         --------

     III-Real Estate and Accumulated Depreciation                         57-60

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

3.   Exhibits

     Exhibit No.                                                        Page No.
     -----------                                                        --------

      3. Amended and Restated Agreement and Certificate                    *
         of Limited Partnership of NTS-Properties IV

     10. Property Management Agreement and Construction                    *
         Management Agreement between NTS Development
         Company and NTS-Properties IV

     27. Financial Data Schedule                                        Included
                                                                        herewith

      *  Incorporated  by reference to documents  filed with the  Securities and
         Exchange  Commission in connection with the filing of the  Registration
         Statements  on Form S-11 on May 16,  1983  (effective  August 1,  1983)
         under Commission File No. 2-83771.

4.   Reports on Form 8-K

     No reports on Form 8-K were filed during the three  months  ended  December
     31, 1999.

                                     - 56 -

<PAGE>

<TABLE>

                                NTS-PROPERTIES IV
                                -----------------

             SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
             -------------------------------------------------------

                             AS OF DECEMBER 31, 1999
                             -----------------------
<CAPTION>

                                                       Commonwealth        Plainview
                                                         Business        Point Office       The Willows        The Willows
                                                          Center         Center Phases     of Plainview       of Plainview
                                                          Phase I          I and II           Phase I           Phase II
                                                          -------          --------           -------           --------
<S>                                                     <C>               <C>               <C>               <C>
Encumbrances                                                (A)               None              (B)                 (B)

Initial cost to partnership:
  Land                                                  $  928,867        $  356,048        $1,798,292        $  170,808
  Buildings and improvements                             1,419,653         2,214,001         5,447,513           585,917

Cost capitalized subsequent to
 acquisition:
  Improvements                                           1,740,691         1,024,916           319,638            70,102
  Other                                                         --                --                --                --
  Other                                                         --                --                --                --

Gross amount at which carried
 December 31, 1999:
  Land                                                  $  949,932        $  455,804        $1,841,525        $  183,609
  Buildings and improvements                             3,139,279         3,139,161         5,723,918           643,218
                                                        ----------        ----------        ----------        ----------

  Total                                                 $4,089,211        $3,594,965        $7,565,443        $  826,827
                                                        ==========        ==========        ==========        ==========

Accumulated depreciation                                $2,514,292        $1,624,550        $3,833,881        $  413,498
                                                        ==========        ==========        ==========        ==========

Date of construction                                         06/84               N/A             03/85             08/85

Date Acquired                                                  N/A             04/84               N/A               N/A

Life at which depreciation in
 latest income statement is
 computed                                                      (C)               (C)               (C)               (C)

</TABLE>

     (A)      First mortgage held by an insurance company.

     (B)      First mortgage held by two insurance companies.

     (C)      Depreciation is computed using the  straight-line  method over the
              estimated useful lives of the assets which are 5-30 years for land
              improvements,  5-30 years for  buildings  and  improvements,  5-30
              years  for  amenities  and  the  life  of  the  lease  for  tenant
              improvements.

                                     - 57 -

<PAGE>

<TABLE>

                                NTS-PROPERTIES IV
                                -----------------

             SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
             -------------------------------------------------------

                             AS OF DECEMBER 31, 1999
                             -----------------------

<CAPTION>

                                                                                                                   Lakeshore
                                                                             Plainview          Blankenbaker        Business
                                                        Golf Brook           Point III            Business          Center
                                                        Apartments          Office Center        Center 1A          Phase I
                                                        ----------          -------------        ---------          -------

<S>                                                     <C>                <C>                <C>                <C>
Encumbrances                                                    (A)                (B)                (A)                (A)

Initial cost to partnership:
  Land                                                  $   175,557        $    65,211        $   582,561        $   422,983
  Buildings and improvements                                474,566            116,284          2,263,506            662,259

Cost capitalized subsequent to
 acquisition:
  Improvements                                                4,144             52,736             97,240            585,284
  Other (C)                                                      --                 --                 --            184,250
  Other (D)                                                      --                 --                 --           (549,932)

Gross amount at which carried
 December 31, 1999:
  Land                                                  $   175,316        $    66,065        $   673,482        $   320,279
  Buildings and improvements                                478,951            168,166          2,269,825            984,565
                                                        -----------        -----------        -----------        -----------

  Total                                                 $   654,267        $   234,231        $ 2,943,307        $ 1,304,844
                                                        ===========        ===========        ===========        ===========

Accumulated depreciation                                $   258,185        $    89,228        $ 1,261,834        $   663,793
                                                        ===========        ===========        ===========        ===========

Date of construction                                          05/88              01/88                N/A              05/86

Date Acquired                                                   N/A                N/A              08/94                N/A

Life at which depreciation in
 latest income statement is
 computed                                                       (E)                (E)                (E)                (E)

</TABLE>

     (A)      First mortgage held by an insurance company.

     (B)      First mortgage held by a bank.

     (C)      Represents  NTS-Properties  IV's  increased  interest in Lakeshore
              Business  Center  Phase  I as a  result  of the  formation  of the
              Lakeshore/University II Joint Venture in 1995.

     (D)      Represents  NTS-Properties  IV's  decreased  interest in Lakeshore
              Business Center Phase I as a result of a capital contribution made
              to the  Lakeshore/University  II Joint Venture by NTS-Properties V
              in July 1999.

     (E)      Depreciation is computed using the  straight-line  method over the
              estimated useful lives of the assets which are 5-30 years for land
              improvements,  5-30 years for  buildings  and  improvements,  5-30
              years  for  amenities  and  the  life  of  the  lease  for  tenant
              improvements.

                                     - 58 -

<PAGE>

<TABLE>

                                NTS-PROPERTIES IV
                                -----------------

             SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
             -------------------------------------------------------

                             AS OF DECEMBER 31, 1999
                             -----------------------

<CAPTION>


                                        Lakeshore            Land Held
                                         Business             for Sale
                                          Center               and/or                Total
                                         Phase II            Development          Pages 57-59
                                         --------            -----------          -----------
<S>                                   <C>                  <C>                  <C>
Encumbrances                                (A)

Initial cost to partnership:
  Land                                $    658,760         $    297,418         $  5,456,505
  Buildings and improvements             1,508,328                   --           14,692,027

Cost capitalized subsequent to
 acquisition:
  Improvements                              72,084              (28,855)           3,937,980
  Other                                         --                   --              184,250
  Other (B)                               (734,784)             (98,750)          (1,383,466)

Gross amount at which carried
 December 31, 1999 (C):
  Land                                $    440,280         $    154,181         $  5,260,473
  Buildings and improvements             1,064,108               15,632           17,626,823
                                      ------------         ------------         ------------

  Total (E)                           $  1,504,388         $    169,813         $ 22,887,296
                                      ============         ============         ============

Accumulated depreciation              $    613,331         $         --         $ 11,272,592
                                      ============         ============         ============

Date of construction                       N/A

Date Acquired                             01/95

Life at which depreciation in
 latest income statement is
 computed                                  (D)

</TABLE>

(A)  First mortgage held by an insurance company.

(B)  Represents  NTS-Properties  IV's decreased  interest in Lakeshore  Business
     Center Phase II and land held by the  Lakeshore/University II Joint Venture
     as a result of a capital  contribution made to the Lakeshore  University II
     Joint Venture by NTS-Properties V in July 1999.

(C)  Aggregate cost of real estate for tax purposes is $21,447,190.

(D)  Depreciation is computed using the straight-line  method over the estimated
     useful lives of the assets which are 5-30 years for land  improvements,  5-
     30 years for buildings and  improvements,  5-30 years for amenities and the
     life of the lease for tenant improvements.

(E)  Total gross cost at December 31, 1999                        $  22,887,296
     Additions to Partnership for computer
       hardware and software in 1998 and 1999                            26,911

     Adjust land contribution from fair
      market value to cost:
       Golf Brook Apartments                                           (662,731)
       Plainview Point III Office Center                               (496,000)
                                                                    ------------

     Balance at December 31, 1999                                    21,755,476

      Less accumulated depreciation                                 (11,272,592)
      Less accumulated depreciation for
       computer hardware and software in 1999                            (2,691)
                                                                    ------------

     Land, Buildings and Amenities, net at
      December 31, 1999                                            $  10,480,193
                                                                    ============

                                     - 59 -

<PAGE>

<TABLE>


                                NTS-PROPERTIES IV
                                -----------------

             SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
             -------------------------------------------------------

              FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
              ----------------------------------------------------

<CAPTION>


                                         Real             Accumulated
                                        Estate            Depreciation
                                        ------            ------------

<S>                                 <C>                  <C>
Balances at December 31, 1996        $ 24,605,889         $ 10,507,387

Additions during period:
 Improvements (a)                          99,673                   --
 Depreciation (b)                              --              877,005

Deductions during period:
 Retirements                              (50,298)             (50,160)
                                     ------------         ------------

Balances at December 31, 1997          24,655,264           11,334,232

Additions during period:
 Improvements (a)                         350,567                   --
 Depreciation (b)                              --              747,221

Deductions during period:
 Retirements (c)                       (2,092,194)            (734,727)
                                     ------------         ------------

Balances at December 31, 1998          22,913,637           11,346,726

Additions during period:
 Improvements (a)                         453,194                   --
 Depreciation (b)                              --              650,738

Deductions during period:
 Retirements (c)                         (227,889)            (128,200)
 Other (d)                             (1,383,466)            (593,981)
                                     ------------         ------------

Balances at December 31, 1999        $ 21,755,476         $ 11,275,283
                                     ============         ============

</TABLE>



     (a)      The  additions to  improvements  on this schedule will differ from
              the additions to land,  buildings,  amenities and  construction in
              progress on the Statements of Cash Flows primarily due to the fact
              that changes in accounts  payable - construction  are not included
              in the real estate balance above.

     (b)      The additions to  accumulated  depreciation  on this schedule will
              differ from the depreciation and amortization on the Statements of
              Cash Flows due to the amortization of loan costs.

     (c)      Result of the sale of University Business Center Phase II on
              October 6, 1998.

     (d)      Represents   NTS-Properties   IV's   decreased   interest  in  the
              Lakeshore/University  II Joint  Venture  as a result  of a capital
              contribution made to the Joint Venture by NTS-Properties V in July
              1999.

                                     - 60 -

<PAGE>

                                   SIGNATURES
                                   ----------

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  NTS-Properties  IV has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                     NTS-PROPERTIES IV
                                     -----------------
                                       (Registrant)

                                      BY:      NTS-Properties Associates IV,
                                               General Partner
                                               BY:     NTS Capital Corporation,
                                                       General Partner


                                                /s/ Gregory A. Wells
                                                --------------------------------
                                                Gregory A. Wells
                                                Senior Vice President and
                                                Chief Financial Officer of
                                                NTS Capital Corporation

Date: March 30, 2000



Pursuant to the  requirements  of the Securities and Exchange Act of 1934,  this
Form  10-K has been  signed  below by the  following  persons  on  behalf of the
registrant in their capacities and on the date indicated above.

              Signature                                   Title
              ---------                                   -----

/s/ J. D. Nichols                             General Partner of NTS-Properties
------------------------------
J. D. Nichols                                 Associates IV and Chairman of the
                                              Board and Sole Director of NTS
                                              Capital Corporation

/s/ Brian F. Lavin                            President and Chief Operating
------------------------------
Brian F. Lavin                                Officer of NTS Capital Corporation



/s/ Gregory A. Wells                          Senior Vice President and
------------------------------
Gregory A. Wells                              Chief Financial Officer of
                                              NTS Capital Corporation

The Partnership is a limited  partnership and no proxy material has been sent to
the limited partners.

                                     - 61 -

<PAGE>