FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


             (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 1998
             -------------------------------------------------------


                                       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
                                     0-19141
                          ----------------------------


                             CNL Income Fund V, Ltd.
         ---------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                  Florida                             59-2922869
        (State of other jurisdiction               (I.R.S. Employer
     of incorporation or organization)            Identification No.)


            400 E. South Street
              Orlando, Florida                           32801
  (Address of principal executive offices)            (Zip Code)


        Registrant's telephone number
        (including area code)                        (407) 650-1000


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by  Sections  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


<PAGE>








                                    CONTENTS




Part I                                                          Page

    Item 1.  Financial Statements:

       Condensed Balance Sheets                                 1

       Condensed Statements of Income                           2

       Condensed Statements of Partners' Capital                3

       Condensed Statements of Cash Flows                       4-5

       Notes to Condensed Financial Statements                  6-10

    Item 2.  Management's Discussion and Analysis
                  of Financial Condition and
                  Results of Operations                         11-18


Part II

    Other Information                                           19


<PAGE>





                             CNL INCOME FUND V, LTD.
                         (A Florida Limited Partnership)
                            CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                    September 30,            December 31,
                                                                         1998                    1997
                                                                   -----------------       ------------------
<S> <C>
                       ASSETS

Land and buildings on operating leases,
    less accumulated depreciation and
    allowance for loss on land and buildings                            $10,855,678              $12,421,143
Net investment in direct financing leases                                 1,717,763                2,277,481
Investment in joint ventures                                              2,231,902                1,558,709
Mortgage notes receivable, less deferred
    gain of $320,536 and $323,157                                         1,742,233                1,758,167
Cash and cash equivalents                                                   481,185                1,361,290
Receivables, less allowance for doubtful
    accounts of $152,102 and $137,892                                        61,221                  108,261
Prepaid expenses                                                              8,458                    9,307
Accrued rental income                                                       221,988                  169,726
Other assets                                                                 54,346                   54,346
                                                                   -----------------        -----------------


                                                                        $17,374,774              $19,718,430
                                                                   =================        =================


                LIABILITIES AND PARTNERS' CAPITAL

Accounts payable                                                    $         2,315           $       24,229
Accrued construction costs payable                                               --                  125,000
Accrued and escrowed real estate
    taxes payable                                                            17,217                   93,392
Distributions payable                                                       500,000                  575,000
Due to related parties                                                      216,395                  143,867
Rents paid in advance                                                        35,485                   13,479
                                                                   -----------------        -----------------
       Total liabilities                                                    771,412                  974,967

Minority interest                                                           209,524                  222,929

Partners' capital                                                        16,393,838               18,520,534
                                                                   -----------------        -----------------

                                                                        $17,374,774              $19,718,430
                                                                   =================        =================

</TABLE>


                 See accompanying notes to financial statements.

                                       1
<PAGE>


                             CNL INCOME FUND V, LTD.
                         (A Florida Limited Partnership)
                         CONDENSED STATEMENTS OF INCOME
<TABLE>
<CAPTION>

                                                                     Quarter Ended                 Nine Months Ended
                                                                     September 30,                   September 30,
                                                                  1998           1997             1998           1997
                                                                ----------     ----------      -----------    -----------
<S> <C>
Revenues:
    Rental income from operating leases                          $287,742       $344,772      $   875,920     $1,042,771
    Earned income from direct financing leases                     50,326         33,396          152,669        117,863
    Contingent rental income                                       10,084         15,404           33,412         68,056
    Interest and other income                                      58,791         93,169          223,647        227,320
                                                               -----------     ----------     ------------   ------------
                                                                  406,943        486,741        1,285,648      1,456,010
                                                               -----------     ----------     ------------   ------------

Expenses:
    General operating and administrative                           35,693         52,181          113,010        128,730
    Bad debt expense                                                   --             --            5,882          9,007
    Professional services                                           3,235          4,866           13,314         17,695
    Real estate taxes                                              10,138         10,776           26,558         32,298
    State and other taxes                                              --             --            9,658         11,897
    Depreciation                                                   71,743         82,425          201,720        249,225
                                                               -----------     ----------     ------------   ------------
                                                                  120,809        150,248          370,142        448,852
                                                               -----------     ----------     ------------   ------------

Income Before Minority Interest in Loss of
    Consolidated Joint Venture, Equity in
    Earnings of Unconsolidated Joint Ventures,
    Gain on Sale of Land and Buildings and
    Provision for Loss on Land and Buildings                      286,134        336,493          915,506      1,007,158

Minority Interest in Loss of Consolidated
    Joint Venture                                                   3,955          6,092           13,405         16,124

Equity in Earnings of Unconsolidated Joint Ventures                40,315         11,144          112,418         33,549

Gain on Sale of Land and Buildings                                    838        267,076          443,443        369,570

Provision for Loss on Land and Buildings                         (120,508 )           --         (273,141 )     (142,990 )
                                                               -----------     ----------     ------------   ------------

Net Income                                                       $210,734       $620,805       $1,211,631     $1,283,411
                                                               ===========     ==========     ============   ============

Allocation of Net Income:
    General partners                                           $      179       $  6,060       $    6,534     $   10,548
    Limited partners                                              210,555        614,745        1,205,097      1,272,863
                                                               -----------     ----------     ------------   ------------

                                                                 $210,734       $620,805       $1,211,631     $1,283,411
                                                               ===========     ==========     ============   ============

Net Income Per Limited Partner Unit                            $     4.21       $  12.29       $    24.10     $    25.46
                                                               ===========     ==========     ============   ============

Weighted Average Number of Limited
    Partner Units Outstanding                                      50,000         50,000           50,000         50,000
                                                               ===========     ==========     ============   ============
</TABLE>

                 See accompanying notes to financial statements.

                                       2
<PAGE>


                             CNL INCOME FUND V, LTD.
                         (A Florida Limited Partnership)
                    CONDENSED STATEMENTS OF PARTNERS' CAPITAL

<TABLE>
<CAPTION>


                                                                  Nine Months Ended                Year Ended
                                                                    September 30,                  December 31,
                                                                         1998                         1997
                                                              ---------------------------        ----------------
<S> <C>
  General partners:
      Beginning balance                                              $     493,982                $     376,173
      Contributions                                                             --                      106,000
      Net income                                                             6,534                       11,809
                                                                   ----------------              ---------------
                                                                           500,516                      493,982
                                                                   ----------------              ---------------

  Limited partners:
      Beginning balance                                                 18,026,552                   18,606,446
      Net income                                                         1,205,097                    1,720,106
      Distributions ($66.77 and
         $46.00 per limited partner
         unit, respectively)                                            (3,338,327 )                 (2,300,000 )
                                                                   ----------------              ---------------
                                                                        15,893,322                   18,026,552
                                                                   ----------------              ---------------

  Total partners' capital                                              $16,393,838                  $18,520,534
                                                                   ================              ===============

</TABLE>
                 See accompanying notes to financial statements.

                                       3
<PAGE>


                             CNL INCOME FUND V, LTD.
                         (A Florida Limited Partnership)
                       CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                              Nine Months Ended
                                                                                September 30,
                                                                         1998                    1997
                                                                    ---------------         ---------------
<S> <C>
Increase (Decrease) in Cash and Cash
   Equivalents:

      Net Cash Provided by Operating Activities                       $  1,230,725            $  1,297,828
                                                                   ----------------         ---------------

      Cash Flows from Investing Activities:
         Proceeds from sale of land and buildings                        2,125,220               4,082,166
         Additions to land and buildings on
             operating leases                                             (125,000 )              (120,365 )
         Investment in joint venture                                      (713,480 )                    --
         Collections on mortgage notes receivable                           15,757                   5,503
         Increase in restricted cash                                            --              (2,487,115 )
                                                                   ----------------         ---------------
                Net cash provided by investing
                   activities                                            1,302,497               1,480,189
                                                                   ----------------         ---------------

      Cash Flows from Financing Activities:
         Distributions to limited partners                              (3,413,327 )            (1,725,000 )
                                                                   ----------------         ---------------
                Net cash used in financing
                   activities                                           (3,413,327 )            (1,725,000 )
                                                                   ----------------         ---------------

Net Increase (Decrease) in Cash and Cash
   Equivalents                                                            (880,105 )             1,053,017

Cash and Cash Equivalents at Beginning
   of Period                                                             1,361,290                 362,922
                                                                   ----------------         ---------------

Cash and Cash Equivalents at End of
   Period                                                            $     481,185            $  1,415,939
                                                                   ================         ===============
</TABLE>

                 See accompanying notes to financial statements.

                                       4
<PAGE>


                             CNL INCOME FUND V, LTD.
                         (A Florida Limited Partnership)
                 CONDENSED STATEMENTS OF CASH FLOWS - CONTINUED

<TABLE>
<CAPTION>

                                                                              Nine Months Ended
                                                                                September 30,
                                                                         1998                    1997
                                                                    ---------------         ---------------
<S> <C>
Supplemental Schedule of Non-Cash
    Investing and Financing Activities:

       Net investment  in  direct financing
          lease reclassified to land and
          building on operating lease as a
          result of lease termination                               $      530,498           $          --
                                                                   ================        ================

       Deferred real estate disposition fees
          incurred and unpaid at end of period                      $       65,400           $          --
                                                                   ================        ================

       Distributions declared and unpaid at
          end of period                                              $     500,000           $     575,000
                                                                   ================        ================

</TABLE>

                 See accompanying notes to financial statements.

                                       5
<PAGE>


                             CNL INCOME FUND V, LTD.
                         (A Florida Limited Partnership)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
           Quarters and Nine Months Ended September 30, 1998 and 1997

1.       Basis of Presentation:

         The accompanying  unaudited  condensed  financial  statements have been
         prepared in accordance  with the  instructions  to Form 10-Q and do not
         include  all  of the  information  and  note  disclosures  required  by
         generally  accepted  accounting  principles.  The financial  statements
         reflect all adjustments,  consisting of normal  recurring  adjustments,
         which are, in the opinion of management,  necessary to a fair statement
         of the results for the interim periods presented. Operating results for
         the  quarter and nine  months  ended  September  30,  1998,  may not be
         indicative  of the  results  that may be  expected  for the year ending
         December  31, 1998.  Amounts as of December  31, 1997,  included in the
         financial   statements,   have  been  derived  from  audited  financial
         statements as of that date.

         These unaudited financial statements should be read in conjunction with
         the financial statements and notes thereto included in Form 10-K of CNL
         Income Fund V, Ltd. (the "Partnership") for the year ended December 31,
         1997.

         The Partnership  accounts for its 66.5% interest in CNL/Longacre  Joint
         Venture using the consolidation  method.  Minority interest  represents
         the minority joint venture partner's  proportionate share of the equity
         in  the  Partnership's  consolidated  joint  venture.  All  significant
         intercompany accounts and transactions have been eliminated.

         In May  1998,  the  Financial  Accounting  Standards  Board  reached  a
         consensus in EITF 98-9, entitled "Accounting for Contingent Rent in the
         Interim Financial  Periods."  Adoption of this consensus did not have a
         material effect on the Partnership's  financial  position or results of
         operations.

2.       Land and Buildings on Operating Leases:

         Land and buildings on operating leases consisted of the following at:
<TABLE>
<CAPTION>

                                                                             September 30,           December 31,
                                                                                  1998                   1997
                                                                           -------------------    -------------------
<S> <C>
                       Land                                                    $  5,340,524          $  6,069,665
                       Buildings                                                  7,869,209             8,546,530
                                                                           -----------------      ----------------
                                                                                 13,209,733            14,616,195
                       Less accumulated depreciation                             (1,830,220 )          (1,944,358 )
                                                                           -----------------      ----------------
                                                                                 11,379,513            12,671,837
                       Less allowance for loss on land
                           and buildings                                           (523,835 )            (250,694 )
                                                                           -----------------      ----------------

                                                                                $10,855,678           $12,421,143
                                                                           =================      ================

</TABLE>
                                       6
<PAGE>


                             CNL INCOME FUND V, LTD.
                         (A Florida Limited Partnership)
               NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
           Quarters and Nine Months Ended September 30, 1998 and 1997


2.       Land and Buildings on Operating Leases - Continued:

         During the nine months ended September 30, 1998, the  Partnership  sold
         its properties in Port Orange, Florida, and Tyler, Texas to the tenants
         for  a  total  of  $2,180,000   and  received  net  sales  proceeds  of
         $2,125,220,  resulting  in a  total  gain  of  $440,822  for  financial
         reporting  purposes.  These properties were originally  acquired by the
         Partnership  in 1988  and  1989 and had  costs  totaling  approximately
         $1,791,300,  excluding  acquisition fees and miscellaneous  acquisition
         expenses;  therefore, the Partnership sold these properties for a total
         of approximately  $333,900 in excess of their original purchase prices.
         In connection with the sale of the properties, the Partnership incurred
         deferred,  subordinated,  real estate  disposition fees of $65,400 (see
         Note 6).

         As of December 31, 1997, the  Partnership  had established an allowance
         for loss on land and  buildings of $250,694,  for  financial  reporting
         purposes,  relating to the properties in Belding, Michigan and Lebanon,
         New  Hampshire.  During the nine months ended  September 30, 1998,  the
         Partnership  increased  the  allowance  by $152,633 for the property in
         Belding,  Michigan. In addition, during the nine months ended September
         30, 1998, the Partnership established an allowance for loss on land and
         building of $120,508,  relating to the property  located in  Daleville,
         Indiana.  The  allowances  represent  the  difference  between  the net
         carrying  values of the  properties  at September  30, 1998 and current
         estimates of net realizable values for these properties.

3.        Net Investment in Direct Financing Leases:

         During the nine  months  ended  September  30,  1998,  the  Partnership
         terminated  its lease with the  tenant of the  property  in  Daleville,
         Indiana.  As a result,  the Partnership  reclassified these assets from
         net  investment  in  direct  financing  lease to land and  building  on
         operating  lease. In accordance with Statement of Financial  Accounting
         Standards #13,  "Accounting for Leases," the  Partnership  recorded the
         reclassified  assets at the lower of original cost, present fair value,
         or present  carrying value. No loss on termination of direct  financing
         lease was recorded for financial reporting purposes.

4.       Investment in Joint Ventures:

         In May 1998, the Partnership entered into a joint venture  arrangement,
         RTO Joint  Venture,  with an  affiliate  of the  general  partners,  to
         construct and hold one restaurant  property.  As of September 30, 1998,
         the Partnership  had contributed  $713,480 to purchase land and pay for
         construction  relating to the joint venture.  As of September 30, 1998,
         the  Partnership  has  agreed to  contribute  approximately  $40,900 in
         additional  construction costs to the joint venture.  When construction
         is completed, the Partnership


                                       7
<PAGE>


                             CNL INCOME FUND V, LTD.
                         (A Florida Limited Partnership)
               NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
           Quarters and Nine Months Ended September 30, 1998 and 1997


4.       Investment in Joint Ventures - Continued:

         will have an approximate 53 percent  interest in the profits and losses
         of the joint venture.  The  Partnership  accounts for its investment in
         this joint venture under the equity method since the Partnership shares
         control with an affiliate.

         The following presents the combined,  condensed  financial  information
         for all of the  Partnership's  joint  ventures and  properties  held as
         tenants-in-common at:
<TABLE>
<CAPTION>

                                                                             September 30,             December 31,
                                                                                  1998                     1997
                                                                           -------------------      -------------------
<S> <C>
                   Land and buildings on operating
                       leases, less accumulated depreciation                      $4,817,939                $4,277,972
                   Net investment in direct financing
                       leases                                                        802,097                        --
                   Cash                                                               14,653                    24,994
                   Receivables                                                           527                     4,417
                   Prepaid expenses                                                      458                       270
                   Accrued rental income                                              97,074                    68,819
                   Liabilities                                                       105,316                     1,250
                   Partners' capital                                               5,627,432                 4,375,222
                   Revenues                                                          386,391                   151,242
                   Net income                                                        305,686                   121,605
</TABLE>

         The Partnership recognized income totaling $112,418 and $33,549 for the
         nine months ended September 30, 1998 and 1997, respectively, from these
         joint  ventures,  $40,315  and  $11,144 of which was earned  during the
         quarters ended September 30, 1998 and 1997, respectively.

5.       Allocations and Distributions:

         Generally, all net income and net losses of the Partnership,  excluding
         gains and losses from the sale of properties,  are allocated 99 percent
         to the  limited  partners  and one  percent  to the  general  partners.
         Distributions  of net  cash  flow are made 99  percent  to the  limited
         partners and one percent to the general  partners;  provided,  however,
         that the one percent of net cash flow to be  distributed to the general
         partners  is  subordinated  to receipt by the  limited  partners  of an
         aggregate,  ten percent,  noncompounded annual return on their adjusted
         capital  contributions  (the "10%  Preferred  Return") on a  cumulative
         basis.

                                       8
<PAGE>


                             CNL INCOME FUND V, LTD.
                         (A Florida Limited Partnership)
               NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
           Quarters and Nine Months Ended September 30, 1998 and 1997


5.       Allocations and Distributions - Continued:

         Generally,  net  sales  proceeds  from the sale of  properties,  to the
         extent  distributed,  will be distributed first to the limited partners
         in an amount  sufficient to provide them with the 10% Preferred Return,
         on a  cumulative  basis,  plus the  return  of their  adjusted  capital
         contributions.  The general  partners will then receive,  to the extent
         previously subordinated and unpaid, a one percent interest in all prior
         distributions   of  net  cash  flow  and  a  return  of  their  capital
         contributions.  Any remaining  sales  proceeds will be  distributed  95
         percent  to the  limited  partners  and  five  percent  to the  general
         partners.

         Any gain from the sale of a property  is, in general,  allocated in the
         same manner as net sales proceeds are distributable.  Any loss from the
         sale of a  property  is, in  general,  allocated  first,  on a pro rata
         basis,  to partners with positive  balances in their capital  accounts;
         and thereafter,  95 percent to the limited partners and five percent to
         the general partners.

         During  the  nine  months  ended  September  30,  1998  and  1997,  the
         Partnership   declared   distributions   to  the  limited  partners  of
         $3,338,327 and $1,725,000, respectively, ($500,000 and $575,000 for the
         quarters  ended  September  30,  1998  and  1997,  respectively).  This
         represents  distributions  for the nine months ended September 30, 1998
         and 1997,  of $66.77  and  $34.50 per unit,  respectively  ($10.00  and
         $11.50 per unit for the  quarters  ended  September  30, 1998 and 1997,
         respectively).  Distributions  for the nine months ended  September 30,
         1998,  included $1,838,327 as a result of the distribution of net sales
         proceeds  from the 1997 and 1998 sales of the  properties  in Tampa and
         Port  Orange,  Florida.  This  amount was  applied  toward the  limited
         partners'  cumulative 10% Preferred Return. No distributions  have been
         made to the general partners to date.

6.       Related Party Transactions:

         An  affiliate  of the  Partnership  is  entitled to receive a deferred,
         subordinated real estate  disposition fee, payable upon the sale of one
         or more  properties  based on the lesser of one-half  of a  competitive
         real  estate  commission  or three  percent  of the sales  price if the
         affiliate  provides a substantial amount of services in connection with
         the sale. Payment of the real estate disposition fee is subordinated to
         receipt by the  limited  partners  of their  aggregate  cumulative  10%
         Preferred Return,  plus their adjusted capital  contributions.  For the
         nine months ended September 30, 1998, the Partnership  incurred $65,400
         in deferred,  subordinated, real estate disposition fees as a result of
         the sale of properties  (see Note 2). No deferred,  subordinated,  real
         estate  disposition  fees  were  incurred  for the  nine  months  ended
         September 30, 1997.


                                       9
<PAGE>


                             CNL INCOME FUND V, LTD.
                         (A Florida Limited Partnership)
               NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
           Quarters and Nine Months Ended September 30, 1998 and 1997


7.       Concentration of Credit Risk:

         The  following  schedule  presents  total rental and earned income from
         individual  lessees,  each  representing  more than ten  percent of the
         Partnership's  total rental,  earned and interest income (including the
         Partnership's  share of total  rental  and  earned  income  from  joint
         ventures and the properties  held as  tenants-in-common),  for at least
         one of the nine months ended September 30:
<TABLE>
<CAPTION>

                                                         1998              1997
                                                     -------------     -------------
<S> <C>
                   Golden Corral Corporation             $146,633          $146,633
                   Slaymaker Group, Inc.                  139,005                --
                   DenAmerica, Inc.                        95,713           127,484
                   Shoney's, Inc.                          83,051           180,044
                   Tampa Foods, L.P.                       70,219           133,923
</TABLE>

         In addition,  the following schedule presents total rental,  earned and
         interest income from individual  restaurant  chains,  each representing
         more than ten percent of the Partnership's total rental,  earned income
         and interest  income from its properties  (including the  Partnership's
         share of total  rental and earned  income from joint  ventures  and the
         properties held as  tenants-in-common)  and mortgage notes for at least
         one of the nine months ended September 30:
<TABLE>
<CAPTION>

                                                              1998                   1997
                                                          -------------          -------------
<S> <C>
                   Golden Corral Family Steakhouse
                        Restaurants                           $146,633               $146,633
                   Tony Roma's Famous for Ribs                 139,005                     --
                   Wendy's Old Fashioned
                        Hamburger Restaurants                  128,616                193,319
                   Denny's                                     103,736                228,498
                   Perkins                                      77,728                280,805
</TABLE>

         Although  the  Partnership's   properties  are  geographically  diverse
         throughout the United States and the  Partnership's  lessees  operate a
         variety of  restaurant  concepts,  default by any one of these  lessees
         could   significantly   impact  the  results  of   operations   of  the
         Partnership.  However,  the general  partners  believe that the risk of
         such a default is reduced due to the  essential or important  nature of
         these properties for the on-going operations of the lessees.


                                       10

<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

         CNL  Income  Fund V, Ltd.  (the  "Partnership")  is a  Florida  limited
partnership  that was organized on August 17, 1988, to acquire for cash,  either
directly or through  joint  venture  arrangements,  both newly  constructed  and
existing restaurant  properties,  as well as land upon which restaurants were to
be constructed, which are leased primarily to operators of national and regional
fast-food and family-style  restaurant chains (collectively,  the "Properties").
The leases are generally triple-net leases, with the lessees responsible for all
repairs  and  maintenance,  property  taxes,  insurance  and  utilities.  As  of
September 30, 1998, the Partnership owned 28 Properties which included interests
in four  Properties  owned  by joint  ventures  in which  the  Partnership  is a
co-venturer and two Properties owned with affiliates as tenants-in-common.

Liquidity and Capital Resources

         During  the  nine  months  ended  September  30,  1998  and  1997,  the
Partnership  generated cash from  operations  (which includes cash received from
tenants,  distributions  from joint  ventures,  and  interest  and other  income
received,   less  cash  paid  for  expenses)  of  $1,230,725   and   $1,297,828,
respectively.  The  decrease in cash from  operations  for the nine months ended
September  30,  1998,  is  primarily  a result of changes  in the  Partnership's
working  capital and changes in income and  expenses as described in "Results of
Operations" below.

         Other  sources and uses of capital  included the  following  during the
nine months ended September 30, 1998.

         In July 1997, the Partnership entered into a new lease for the Property
in Connersville, Indiana, with a new tenant to operate the Property as an Arby's
restaurant. In connection therewith,  during the nine months ended September 30,
1998, the Partnership paid $125,000 in renovation costs, which had been incurred
and accrued as construction costs payable at December 31, 1997.

         During the nine months ended September 30, 1998, the  Partnership  sold
its Properties in Port Orange,  Florida,  and Tyler,  Texas to the tenants for a
total of $2,180,000 and received net sales proceeds of $2,125,220,  resulting in
a total gain of $440,822 for financial reporting purposes. These Properties were
originally  acquired by the  Partnership in 1988 and 1989 and had costs totaling
approximately   $1,791,300,   excluding   acquisition  fees  and   miscellaneous
acquisition  expenses;  therefore,  the  Partnership  sold  the  Properties  for
approximately   $333,900  in  excess  of  their  original  purchase  prices.  In
connection with the sales, the Partnership incurred deferred, subordinated, real
estate disposition fees of $65,400.  The Partnership  distributed  $1,838,327 of
the net sales  proceeds from the 1997 and 1998 sales of the  Properties in Tampa
and Port Orange, Florida, respectively, as a special distribution to the limited
partners in April 1998. In addition,  in May 1998, the  Partnership  contributed
the remainder of the net sales  proceeds from the sale of the Property in Tyler,
Texas  in a joint  venture  arrangement  as  described  below.  The  Partnership
anticipates  that it will  distribute  amounts  sufficient to enable the limited
partners to pay federal and state income  taxes,  if any (at a level  reasonably
assumed by
                                       11
<PAGE>


Liquidity and Capital Resources - Continued

the general partners), resulting from the sale of the Properties in Port Orange,
Florida and Tyler,  Texas.  The  Partnership  will use the  remaining  net sales
proceeds to fund additional  amounts to RTO Joint Venture,  as described  below,
and to meet the Partnership's working capital and other Partnership's purposes.

         As described  above, in May 1998, the Partnership  entered into a joint
venture,  RTO Joint  Venture,  a joint  venture with an affiliate of the general
partners,  to construct and hold one  restaurant  Property.  As of September 30,
1998,  the  Partnership  had  contributed  $713,480 to purchase land and pay for
construction  relating to the joint  venture.  As of  September  30,  1998,  the
Partnership has agreed to contribute approximately $40,900 in construction costs
to the joint venture. When construction is completed, the Partnership expects to
have an approximate  53 percent  interest in the profits and losses of the joint
venture.

         Currently,  rental income from the Partnership's Properties is invested
in money market accounts or other short-term,  highly liquid investments pending
the  Partnership's  use of such  funds to pay  Partnership  expenses  or to make
distributions  to the  partners.  At September  30, 1998,  the  Partnership  had
$481,185  invested in such  short-term  investments as compared to $1,361,290 at
December  31,  1997.  The  decrease in cash and cash  equivalents  is  primarily
attributable  to the  fact  that the  Partnership  distributed  amounts  held at
December 31, 1997 relating to the net sales proceeds received from the 1997 sale
of the  Property in Tampa,  Florida,  as a special  distribution  to the limited
partners  during the nine months ended  September 30, 1998, as described  below.
The funds remaining at September 30, 1998, will be used to pay distributions and
other liabilities.

         Total liabilities of the Partnership decreased to $771,412 at September
30, 1998,  from  $974,967 at December 31, 1997,  partially  due to a decrease in
construction  costs  payable as a result of the  payment  during the nine months
ended  September 30, 1998, of  construction  costs accrued at December 31, 1997,
for  renovation  costs  relating  to  the  Partnership's   Property  located  in
Connorsville,  Indiana,  as described above. The decrease in liabilities is also
partially  attributable  to a decrease in  distributions  payable to the limited
partners  at  September  30,  1998 as  compared  to  December  31,  1997.  Total
liabilities  at  September  30,  1998,  to the extent  they exceed cash and cash
equivalents  at  September  30,  1998,  will  be  paid  from  future  cash  from
operations.

         Based on current and anticipated  future cash from operations,  and for
the nine months ended  September 30, 1998,  proceeds  received from the sales of
Properties,  the  Partnership  declared  distributions  to limited  partners  of
$3,338,327 and $1,725,000 for the nine months ended September 30, 1998 and 1997,
respectively  ($500,000 and $575,000 for the quarters  ended  September 30, 1998
and 1997, respectively). This represents distributions for the nine months ended
September 30, 1998 and 1997 of $66.77 and $34.50 per unit,  respectively ($10.00
and  $11.50  per  unit for the  quarters  ended  September  30,  1998 and  1997,
respectively).  Distributions  for the nine months  ended  September  30,  1998,
included  $1,838,327 as a result of the  distribution of net sales proceeds from
the sale of  Properties,  as  described  above.  This special  distribution  was
effectively a return of a portion of the limited partners' investment, although,
in

                                       12
<PAGE>


Liquidity and Capital Resources - Continued

accordance  with  the  Partnership  agreement,  it was  applied  to the  limited
partners' unpaid  cumulative  preferred  return.  As a result of the sale of the
Properties,  the Partnership's total revenue was reduced,  while the majority of
the Partnership's operating expenses remained fixed. Therefore, distributions of
net cash flow were adjusted for the quarter and nine months ended  September 30,
1998. No  distributions  were made to the general  partners for the quarters and
nine months ended  September  30, 1998 and 1997. No amounts  distributed  to the
limited  partners for the nine months  ended  September  30, 1998 and 1997,  are
required to be or have been  treated by the  Partnership  as a return of capital
for  purposes of  calculating  the limited  partners'  return on their  adjusted
capital contributions. The Partnership intends to continue to make distributions
of cash available for distribution to the limited partners on a quarterly basis.

         The general  partners  have been  informed by CNL  American  Properties
Fund, Inc.  ("APF"),  an affiliate of the general  partners,  that it intends to
significantly  increase its asset base by proposing to acquire affiliates of the
general partners which have similar restaurant  property  portfolios,  including
the Partnership. APF is a real estate investment trust whose primary business is
the ownership of restaurant properties leased on a long-term, "triple-net" basis
to  operators  of national  and regional  restaurant  chains.  Accordingly,  the
general  partners  anticipate  that  APF  will  make an  offer  to  acquire  the
Partnership  in  exchange  for  securities  of APF.  The general  partners  have
recently retained  financial and legal advisors to assist them in evaluating and
negotiating  any offer that may be proposed by APF.  However,  at this time, APF
has made no such offer. In the event that an offer is made, the general partners
will  evaluate it and if the general  partners  believe  that the offer is worth
pursuing,  the general partners will promptly inform the limited  partners.  Any
agreement  to sell the  Partnership  would be  subject  to the  approval  of the
limited partners in accordance with the terms of the partnership agreement.

         The Partnership's  investment strategy of acquiring Properties for cash
and  leasing  them under  triple-net  leases to  operators  who  generally  meet
specified financial  standards  minimizes the Partnership's  operating expenses.
The general partners believe that the leases will continue to generate cash flow
in excess of operating expenses.

         The general  partners have the right,  but not the obligation,  to make
additional capital  contributions if they deem it appropriate in connection with
the operations of the Partnership.

Results of Operations

         During the nine months ended  September 30, 1997, the  Partnership  and
its consolidated joint venture,  CNL/Longacre Joint Venture, owned and leased 26
wholly owned  Properties  (including six Properties which were sold during 1997)
and during the nine  months  ended  September  30,  1998,  the  Partnership  and
CNL/Longacre   Joint  Venture  owned  and  leased  25  wholly  owned  Properties
(including  two  Properties  sold  in  1998),  to  operators  of  fast-food  and
family-style restaurant chains. In connection therewith,  during the nine months
ended  September  30, 1998 and 1997,  the  Partnership  and  CNL/Longacre  Joint
Venture earned  $1,028,589 and $1,160,634,  respectively,  in rental income from
operating leases and earned income from direct

                                       13
<PAGE>


Results of Operations - Continued

financing leases,  $338,068 and $378,168 of which was earned during the quarters
ended  September  30,  1998 and 1997,  respectively.  Rental and  earned  income
decreased approximately $142,600 and $481,600 during the quarter and nine months
ended  September  30,  1998,  respectively,  as compared to the quarter and nine
months ended  September 30, 1997, as a result of the sales of Properties  during
1997 and 1998. The decrease in rental and earned income was partially  offset by
an increase of  approximately  $81,200 and $243,600  during the quarter and nine
months ended  September 30, 1998,  respectively,  due to the  reinvestment  of a
portion of net sales proceeds from the 1997 sales, in two Properties in Houston,
Texas and Sandy, Utah, in November 1997 and December 1997, respectively.

         The  decrease in rental  income was  partially  offset by the fact that
during the nine months ended September 30, 1997, the  Partnership  increased its
allowance for doubtful  accounts for the Properties  located in Connorsville and
Richmond, Indiana, due to financial difficulties the tenant was experiencing. No
such allowance was established  during the nine months ended September 30, 1998,
due to  the  fact  that  the  Partnership  re-leased  the  Property  located  in
Connorsville,  Indiana,  to a new tenant for which rent commenced  subsequent to
September  30,  1997 and sold the  Property  located  in  Richmond,  Indiana  in
November 1997.

         Rental and earned  income  also  decreased  during the quarter and nine
months  ended  September  30,  1998,  by   approximately   $9,000  and  $26,300,
respectively, due to the fact that in August 1998, the Partnership retroactively
terminated the lease with the tenant of the Property in Daleville,  Indiana. The
Partnership  is currently  seeking a new tenant or purchaser for this  Property.
Rental and earned  income are expected to remain at reduced  amounts  until such
time as the  Partnership  executes a new lease or until the Property is sold and
the proceeds from such sale is reinvested in an additional Property.

         Rental and earned  income  during the nine months ended  September  30,
1998 and 1997,  continued to remain at reduced  amounts due to the fact that the
Partnership  is not receiving any rental  income  relating to the  Properties in
Belding,  Michigan,  and  Lebanon,  New  Hampshire.  The  general  partners  are
currently  seeking  purchasers or new tenants for these  Properties.  Rental and
earned  income are expected to remain at reduced  amounts until such time as the
Partnership executes new leases for these Properties or until the Properties are
sold and the proceeds from such sales are reinvested in additional Properties.

         For the nine months ended  September 30, 1998 and 1997, the Partnership
also earned  $33,412 and $68,056,  respectively,  in contingent  rental  income,
$10,084 and $15,404  which were earned during the quarters  ended  September 30,
1998 and 1997, respectively. The decrease in contingent rental income during the
quarter and nine months ended September 30, 1998, as compared to the quarter and
nine months ended  September  30, 1997,  is primarily  attributable  to Property
sales during 1997 and 1998 and decreases in restaurant sales of Properties,  the
leases of which require the payment of contingent rental income.




                                       14
<PAGE>


Results of Operations - Continued

         During the nine months ended September 30, 1997, the Partnership  owned
and leased two Properties  indirectly through other joint venture  arrangements.
During the nine months ended  September  30,  1998,  the  Partnership  owned and
leased two  Properties  as  tenants-in-common  with  affiliates  of the  general
partners and three Properties indirectly through joint venture arrangements.  In
connection therewith,  during the nine months ended September 30, 1998 and 1997,
the Partnership earned $112,418 and $33,549,  respectively,  attributable to net
income earned by  unconsolidated  joint  ventures in which the  Partnership is a
co-venturer,  $40,315 and $11,144 of which were earned during the quarters ended
September 30, 1998 and 1997, respectively.  The increase in net income earned by
these joint  ventures  during the quarter and nine months  ended  September  30,
1998,  as compared to the quarter and nine months ended  September  30, 1997, is
primarily  attributable  to the fact that  subsequent to September 30, 1997, the
Partnership  reinvested a portion of the net sales proceeds it received from the
1997 and 1998 sales of several Properties in two Properties in Mesa, Arizona and
Vancouver,   Washington,   with   affiliates   of  the   general   partners   as
tenants-in-common  and  acquired  an  interest  in RTO  Joint  Venture  with  an
affiliate of the general partners,  as described above in "Liquidity and Capital
Resources."

         During at least one of the nine  months  ended  September  30, 1998 and
1997, five lessees of the Partnership and its consolidated joint venture, Golden
Corral Corporation, Slaymaker Group, Inc., DenAmerica, Inc., Shoney's, Inc., and
Tampa Foods,  L.P., each contributed more than ten percent of the  Partnership's
total rental income (including rental income from the Partnership's consolidated
joint  venture,  the  Partnership's  share of the rental income from  Properties
owned by unconsolidated joint ventures in which the Partnership is a co-venturer
and Properties owned with affiliates as tenants-in-common).  As of September 30,
1998, Golden Corral  Corporation was the lessee under the leases relating to two
restaurants,  Slaymaker Group, Inc. was the lessee under a lease relating to one
restaurant,  DenAmerica,  Inc.  was the  lessee  under  leases  relating  to two
restaurants,  Shoney's,  Inc.  was the lessee  under the leases  relating to two
restaurants,  and Tampa Foods,  L.P. was the lessee under the leases relating to
one  restaurant.  It is anticipated  that based on the minimum  rental  payments
required by the leases, Slaymaker Group, Inc. and Golden Corral Corporation each
will continue to  contribute  more than ten percent of the  Partnership's  total
rental income during the remainder of 1998 and  subsequent  years.  In addition,
during at least one of the nine months ended  September 30, 1998 and 1997,  five
restaurant  chains,   Golden  Corral  Family  Steakhouse   Restaurants  ("Golden
Corral"),  Wendy's Old Fashioned Hamburger Restaurants ("Wendy's"),  Tony Roma's
Famous for Ribs Restaurant ("Tony Roma's"),  Denny's, and Perkins each accounted
for more than ten  percent  of the  Partnership's  total  rental  income.  It is
anticipated  that, based on the minimum rental payments  required by the leases,
Golden  Corral and Tony Roma's each will  continue to  contribute  more than ten
percent of the  Partnership's  total rental  income during the remainder of 1998
and subsequent  years.  Any failure of these lessees or restaurant  chains could
materially affect the Partnership's income.

         Interest and other income was $223,647 and $227,320 for the nine months
ended  September 30, 1998 and 1997,  respectively,  $58,791 and $93,169 of which
was earned during the quarters ended September 30, 1998 and 1997,  respectively.
The decrease in interest and other income during the quarter ended September 30,
1998, as compared to the quarter ended

                                       15
<PAGE>


Results of Operations - Continued

September 30, 1997, is primarily  attributable  to interest  earned on the sales
proceeds  received  during the quarter ended  September 30, 1997,  from the 1997
sales of Properties which had not been reinvested as of September 30, 1997.

         Operating expenses,  including  depreciation expense, were $370,142 and
$448,852 for the nine months ended September 30, 1998 and 1997, respectively, of
which $120,809 and $150,248 were incurred for the quarters  ended  September 30,
1998 and 1997,  respectively.  The  decrease in  operating  expenses  during the
quarter and nine months ended September 30, 1998, as compared to the quarter and
nine months ended  September 30, 1997, was primarily  attributable to a decrease
in depreciation  expense due to the sales of several  Properties during 1997 and
1998.

         Due to the  tenant  defaults  under the leases  for the  Properties  in
Belding,   Michigan,  and  Lebanon,  New  Hampshire,  the  Partnership  and  its
consolidated joint venture,  CNL/Longacre  Joint Venture,  expect to continue to
incur operating  expenses  relating to such Properties  until the Properties are
sold or re-leased to new tenants.

         As a result  of the  sale of the  Properties  in  Myrtle  Beach,  South
Carolina and St. Cloud, Florida, in August 1995 and October 1996,  respectively,
and  recording  the gains  from such sales  using the  installment  method,  the
Partnership  recognized  gains for  financial  reporting  purposes of $2,621 and
$758,  during the nine months ended  September 30, 1998 and 1997,  respectively,
$838 and $259 of which were  recognized  during the quarters ended September 30,
1998 and 1997, respectively.

         As a result of the sales of two Properties during the nine months ended
September 30, 1998, as described above in "Liquidity and Capital Resources," the
Partnership recognized total gains of $440,822 for financial reporting purposes.
As a result  of the sale of  three  Properties  during  the  nine  months  ended
September 30, 1997, the Partnership  recognized a gain of $368,812 for financial
reporting  purposes,  $266,817 of which was recognized  during the quarter ended
September 30, 1997.

         During the nine  months  ended  September  30,  1997,  the  Partnership
recorded an allowance  for loss on land and  building of $142,990 for  financial
reporting  purposes,  relating to the  Property in Richmond,  Indiana.  The loss
represented  the  difference  between  the  Property's  net  carrying  value  at
September  30, 1997 and the estimated net  realizable  value.  This Property was
sold in November 1997.

         In  addition,  during the quarter and nine months ended  September  30,
1998, the Partnership established an allowance for loss on land and buildings of
$120,508 and $273,141,  respectively,  for financial reporting purposes relating
to the Properties in Daleville, Indiana and Belding, Michigan, respectively. The
allowances  represent the aggregate difference between the net carrying value at
September 30, 1998 and the current  estimated net realizable  value at September
30, 1998 for each Property.


                                       16
<PAGE>


Results of Operations - Continued

         In May  1998,  the  Financial  Accounting  Standards  Board  reached  a
consensus in EITF 98-9, entitled  "Accounting for Contingent Rent in the Interim
Financial Periods." Adoption of this consensus did not have a material effect on
the Partnership's financial position or results of operations.

         The Year 2000 problem is the result of information  technology  systems
and embedded  systems  (products which are made with  microprocessor  (computer)
chips such as HVAC systems,  physical  security  systems and elevators)  using a
two-digit  format,  as  opposed  to four  digits,  to  indicate  the year.  Such
information  technology and embedded systems may be unable to properly recognize
and process date-sensitive information beginning January 1, 2000.

         The  Partnership  does  not have any  information  technology  systems.
Affiliates  of the general  partners  provide all services  requiring the use of
information  technology  systems  pursuant to a  management  agreement  with the
Partnership.  The maintenance of embedded systems,  if any, at the Partnership's
properties is the  responsibility of the tenants of the properties in accordance
with the terms of the Partnership's  leases. The general partners and affiliates
have  established  a  team  dedicated  to  reviewing  the  internal  information
technology systems used in the operation of the Partnership, and the information
technology  and  embedded  systems  and the Year  2000  compliance  plans of the
Partnership's  tenants,   significant  suppliers,   financial  institutions  and
transfer agent.

         The  information  technology  infrastructure  of the  affiliates of the
general  partners  consists of a network of personal  computers and servers that
were  obtained   from  major   suppliers.   The   affiliates   utilize   various
administrative  and financial  software  applications on that  infrastructure to
perform the business functions of the Partnership.  The inability of the general
partners  and  affiliates  to identify  and timely  correct  material  Year 2000
deficiencies  in  the  software  and/or   infrastructure   could  result  in  an
interruption in, or failure of, certain of the Partnership's business activities
or operations.  Accordingly,  the general partners and affiliates have requested
and are evaluating  documentation from the suppliers of the affiliates regarding
the Year  2000  compliance  of  their  products  that  are used in the  business
activities or operations of the  Partnership.  The costs expected to be incurred
by the general  partners and  affiliates to become Year 2000  compliant  will be
incurred by the general  partners and  affiliates;  therefore,  these costs will
have no impact on the Partnership's financial position or results of operations.

         The  Partnership  has  material  third  party  relationships  with  its
tenants,  financial  institutions and transfer agent. The Partnership depends on
its  tenants  for  rents  and  cash  flows,   its  financial   institutions  for
availability  of cash and its  transfer  agent to  maintain  and track  investor
information.  If any of these third parties are unable to meet their obligations
to the  Partnership  because of the Year 2000  deficiencies,  such a failure may
have a material impact on the  Partnership.  Accordingly,  the general  partners
have requested and are evaluating  documentation from the Partnership's tenants,
financial  institutions,   and  transfer  agent  relating  to  their  Year  2000
compliance  plans.  At this time,  the general  partners  have not yet  received
sufficient   certifications   to  be  assured   that  the   tenants,   financial
institutions, and transfer agent

                                       17
<PAGE>


Results of Operations - Continued

have fully  considered and mitigated any potential  material  impact of the Year
2000 deficiencies. Therefore, the general partners do not, at this time, know of
the potential  costs to the  Partnership  of any adverse impact or effect of any
Year 2000 deficiencies by these third parties.

         The general  partners  currently  expect that all year 2000  compliance
testing  and any  necessary  remedial  measures  on the  information  technology
systems used in the business  activities and operations of the Partnership  will
be completed prior to June 30, 1999.  Based on the progress the general partners
and affiliates  have made in identifying and addressing the  Partnership's  Year
2000 issues and the plan and timeline to complete the  compliance  program,  the
general  partners  do  not  foresee   significant   risks  associated  with  the
Partnership's  Year 2000 compliance at this time.  Because the general  partners
and affiliates  are still  evaluating the status of the systems used in business
activities  and  operations  of the  Partnership  and the  systems  of the third
parties with which the Partnership  conducts its business,  the general partners
have not yet  developed  a  comprehensive  contingency  plan and are  unable  to
identify "the most  reasonably  likely worst case scenario" at this time. As the
general partners identify  significant  risks related to the Partnership's  Year
2000 compliance or if the Partnership's Year 2000 compliance  program's progress
deviates  substantially from the anticipated timeline, the general partners will
develop appropriate contingency plans.

                                       18
<PAGE>


                           PART II. OTHER INFORMATION


Item 1.          Legal Proceedings.  Inapplicable.

Item 2.          Changes in Securities.  Inapplicable.

Item 3.          Defaults upon Senior Securities.  Inapplicable.

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

                      Inapplicable.

Item 5.          Other Information.  Inapplicable.

Item 6.          Exhibits and Reports on Form 8-K.

                 (a)  Exhibits - None.

                 (b)  No reports on Form 8-K were filed during the quarter ended
                      September 30, 1998.

                                       19
<PAGE>



                                   SIGNATURES


         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended,  the  registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

                  DATED this 10th day of November, 1998.


                     CNL INCOME FUND V, LTD.

                         By:  CNL REALTY CORPORATION
                               General Partner


                               By:  /s/ James M. Seneff, Jr.
                                    -------------------------------
                                    JAMES M. SENEFF, JR.
                                    Chief Executive Officer
                                    (Principal Executive Officer)


                               By:  /s/ Robert A. Bourne
                                    -------------------------------
                                    ROBERT A. BOURNE
                                    President and Treasurer
                                    (Principal Financial and
                                    Accounting Officer)