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

                                Form 10-Q


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

For the quarterly period ended      September 30, 1997                    

                                   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                      33-17577                     


U.S. Realty Income Partners L.P.                                         
      (Exact name of small business issuer as specified in its charter)

            DELAWARE                                         62-1331754  

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

  P.O. Box 50507, Nashville, TN                                      37205 

(Address of principal executive offices)                     (Zip Code)

                                  (615) 665-5959                         

          (Registrant's telephone number, including area code)
  
                                                                         

(Former name, former address and former fiscal year,  
if changed since last report)

      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          


                    U.S. REALTY INCOME PARTNERS L.P.

                                  INDEX



PART I      Financial Information


Item l.    Financial Statements                                         3

           Compilation Report                                           4
           
           Balance Sheets at September 30, 1997 and December                 
           31, 1996                                                     5
                
           Statements of Partnership Equity for the period 
           January 1, 1996 through September 30, 1997                   6

           Statements of Operations for the three months and nine         
           months ended September 30, 1997 and 1996                     7
                                                                       
           Statements of Cash Flows for the nine months ended       
           September 30, 1997 and 1997                                  8    
   
           Notes to Financial Statements                           9 - 10
               

Item 2.    Management's Discussion and Analysis of Financial
           Condition and Results of Operations                    11 - 13

PART II    Other Information

Item 1.    Legal Proceedings                                           14

Item 2.    Changes in Securities                                       14

Item 3.    Default Upon Senior Securities                              14
                      
Item 4.    Submissions of Matters to a Vote of Security Holders        14

Item 5.    Other Information                                           14 
   
Item 6.    Exhibits and Reports on Form 8-K                            14

SIGNATURES                                                             15







                     PART I - FINANCIAL INFORMATION


ITEM 1.  Financial Statements

          The following balance sheet at September 30, 1997 (unaudited) and  
statements of operations, partnership equity, and cash flows for the three and
nine months ended September 30, 1997 (unaudited), for U.S. Realty IncomePartners
L.P. (a Delaware limited partnership) (the "Partnership"), have not beenexamined
by independent public accountants but reflect, in the opinion of management, all
adjustments (consisting ofnormal recurring accruals) necessary to present fairly
the information required.

         These financial statements should be read in conjunction with the
financial statements and notes thereto included in the Partnership's 1996
Annual Report, as reported on Form 10-K.




























<PAGE>



                           OSBORNE & CO., P.C.
                    761 OLD HICKORY BLVD., SUITE 201
                          BRENTWOOD, TN  37027





To the Partners
U.S. Realty Income Partners L.P.
P. O. Box 50507
Nashville, TN  37205

We have compiled the accompanying balance sheet of U.S. Realty Income Partners
L.P.(a limited partnership) as of September 30, 1997, and the related statements
of operations, partnership equity, and cash flows for the three months and nine
months then ended, in accordance with Statements on Standards for Accounting and
ReviewServices issued by the American Institute of Certified Public Accountants.

A compilation is limited to presenting in the form of financial statements
information that is the representation of management.  We have not audited or
reviewed the accompanying financial statements and, accordingly, do not express
an opinion or any other form of assurance on them.

We are not considered to be independent with respect to U.S. Realty Income
Partners L.P. according to Securities and Exchange Commission regulations.

The financial statements for the year ended December 31, 1996, were audited by
other accountants, and they expressed an unqualified opinion on them in their
report dated January 21, 1997, but they have not performed any auditing
procedures since that date.

November 8, 1997


                              
                                    Osborne & Co., P.C 
                                    Certified Public Accountants




<PAGE>
                       U.S. REALTY INCOME PARTNERS L.P.

                            (A LIMITED PARTNERSHIP)

                                BALANCE SHEETS

                                          Unaudited            Audited
                                         September 30,       December 31, 
                                             1997               1996    

                  ASSETS

CASH                                      $  400,524        $  291,829

TENANT RECEIVABLES                            10,358             6,035         
                               

PROPERTY AND IMPROVEMENTS, net of
  accumulated depreciation of         
  $1,385,830 and $1,269,294                3,924,097         4,040,633

INVESTMENT IN LIMITED PARTNERSHIP              1,000             1,000

OTHER ASSETS                                 251,832           266,984

     TOTAL ASSETS                         $4,587,811        $4,606,481


       LIABILITIES AND PARTNERSHIP EQUITY

ACCOUNTS PAYABLE                          $       13        $    2,548

ACCRUED EXPENSES                              66,482            83,492

NOTES PAYABLE                              3,565,205         3,600,032

     TOTAL LIABILITIES                     3,631,700         3,686,072


MINORITY PARTNER'S INTEREST IN JOINT
  VENTURE                                (    99,899)      (   121,073)

PARTNERSHIP EQUITY
  General Partners, no units authorized  (   183,577)      (   184,303)
  Limited Partners, 4,858 units
    authorized, issued, and outstanding    1,239,587         1,225,785

     TOTAL PARTNERSHIP EQUITY                956,111           920,409

  TOTAL LIABILITIES & PARTNERSHIP EQUITY  $4,587,811        $4,606,481<PAGE>
 
                   U.S. REALTY INCOME PARTNERS L.P.

                         (A LIMITED PARTNERSHIP)

                    STATEMENTS OF PARTNERSHIP EQUITY

              Period from January 1, 1996 to September 30, 1997               


                                      Limited     General
                                     Partners     Partner       Total

Distributive share of 
  net earnings                         95%           5%          100%    

Balance at January 1, 1996        $1,275,793    ($181,671)   $1,094,122

Net loss                         (    50,008)   (   2,632)  (    52,640)

Balance at December 31, 1996       1,225,785    ( 184,303)    1,041,482

Net income (loss)                     13,802          726        14,528 

Balance at September 30, 1997     $1,239,587    ($183,577)   $1,056,010 



<PAGE>
                       U.S. REALTY INCOME PARTNERS L.P.

                            (A LIMITED PARTNERSHIP)
                           STATEMENTS OF OPERATIONS

    For the Three Months and Nine Months Ended September 30, 1997 and 1996

                            Unaudited    Unaudited    Unaudited    Unaudited
                            3 Months     3 Months     9 Months     9 Months
                              1997         1996          1997         1996     
Revenues
  Rental income             $ 156,227    $ 149,350    $ 498,288    $ 478,997
  CAM reimbursements           27,223       22,574       85,366       88,870
  Miscellaneous                     0          276          144          373
  Interest income                 821          959        2,619        2,733
 
                              184,271      173,159      586,417      570,973
Expenses
  Interest                    119,171       90,518      268,860      272,720
  Loan costs                      500            0        2,000            0
  Professional fees            15,095        9,220       18,152       20,568 
  Depreciation                 38,845       38,857      116,536      116,572
  Amortization                  2,607        5,214        8,655       15,642
  Property taxes               17,012       17,012       51,035       51,035
  Leasing & admin.             23,808       28,365       59,576       91,086
  Management fees               6,433        6,446       21,168       20,628
  Repairs                       6,713        9,203       27,903       23,740
  Insurance                         1            0        7,539        5,535

                              230,185      204,835      581,424      617,526
Net Income Before
  Minority Partner's 
    Share of Income        (   45,914)  (   31,676)       4,993    (  46,553)

Minority Partner's 
  Interest in  
    Operating Profit            3,406   (      658)   (  21,174)   (  16,719)

Income (Loss) from 
  Operations               (   42,508)  (   32,334)   (  16,181)   (  63,272)

Income from Investment
  in Joint Venture                  0            0       30,709            0

Net Income (Loss)          ($  42,508   ($  32,334)    $ 14,528    ($ 63,272)

Net Income (Loss) per
  Unit                     ($    8.31)  ($    6.32)    $   2.84    ($  12.37)

Weighted Average
  Number of Units               4,858        4,858        4,858        4,858
                       U.S. REALTY INCOME PARTNERS L.P.

                         (A LIMITED PARTNERSHIP)

                        STATEMENTS OF CASH FLOWS
  
                                              Unaudited         Unaudited
                                              Nine Months       Nine Months  
                                                Ending            Ending
                                            Sept. 30, 1997    Sept. 30, 1996

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                            $ 14,528        ($ 63,272)
  Adjustments to reconcile net income (loss)
    to net cash provided by (used in) 
    operating activities:                                 
    Minority partner's interest in net loss
        of consolidated partnership              21,174           16,719
      Depreciation                              116,536          116,572
      Amortization                                8,655           15,642
      (Increase) decrease in:
        Tenant receivables                    (   4,323)           1,246 
        Other assets                              6,497           25,792 
      Increase (decrease) in:
        Accounts payable                      (   2,535)           1,169 
        Accrued expenses                      (  17,012)       (  17,012)
        Tenant Deposits                               0            1,625 
NET CASH PROVIDED (USED) BY OPERATING
    ACTIVITIES                                  143,520           98,481 

CASH FLOWS FROM INVESTING ACTIVITIES:
  Distributions from Limited Partnership              -           20,845

NET CASH PROVIDED BY INVESTING ACTIVITIES             -           20,845

CASH FLOWS FROM FINANCING ACTIVITIES:
  Payments on mortgage note                   (  34,825)       (  31,468)

  NET CASH USED IN FINANCING ACTIVITIES       (  34,825)       (  31,468)
                                    
NET INCREASE IN CASH/EQUIVALTNES                108,695           87,858 
  
CASH & CASH EQUIVALENTS AT BEGINNING PERIOD     291,829          155,184

CASH & CASH EQUIVALENTS AT END OF PERIOD      $ 400,524        $ 243,042
 
SUPPLEMENTAL DISCLOSURES:

  INTEREST PAID                               $ 268,860        $ 272,720







                    U.S. REALTY INCOME PARTNERS L.P.

                         (A LIMITED PARTNERSHIP)

                      NOTES TO FINANCIAL STATEMENTS

                                Unaudited
                             September 30, 1997  

A.  ACCOUNTING POLICIES

    Refer to the Partnership's annual financial statements for the year
ended December 31, 1996 for a description of the accounting policies which
have been continued without change.  Also, refer to the footnotes of these
annual statements for additional details of the Partnership's financial
condition.  The details in those notes have not significantly changed
except as a result of normal transactions in the interim.  In the opinion
of management, all adjustments (consisting of normal recurring accruals)
considered necessary have been included.  Operating results are not
necessarily indicative of the results that may be expected for the year
ending December 31, 1997.

B.  INVESTMENT IN JOINT VENTURES

    The Partnership had a 50% interest in DR/US West End General
Partnership, a joint venture formed to own and operate a commercial office
building in Nashville, Tennessee.  The Company's initial investment of
$900,000 in the general partner joint venture was made on November 1,
1988.  Effective December 31, 1991, the Partnership adopted the
liquidation method of accounting for its investment in the joint venture.
Accordingly, the basis has been held at $1,000 since December 31, 1991.

Effective July 28, 1995, the partnership exchanged its interest in the assets of
DR/US West End General Partnership (DR/US) for an indirect 4.17% equity interest
(held through a limited partnership interest in Daniel S. E. Office Limited
Partnership) in Prudential/Daniel Office Venture, LLC (the LLC).  The LLC owns
six office buildings (including the DR/US property) located in Nashville,
Tennessee and Raleigh, North Carolina. Management believes the fair value of the
partnership's interest in the LLC approximates capital contributions recognized
by the LLC (for the 4.17% interest) amounting to $1,361,445.  Such capital
contributions were valued based on management's (unaudited) estimated values of
the contributed properties.  










                       U.S. REALTY INCOME PARTNERS L.P.

                            (A LIMITED PARTNERSHIP)

                         NOTES TO FINANCIAL STATEMENTS

                                   Unaudited
                              September 30, 1997


C.  TRANSACTIONS WITH AFFILIATES

    Fees and other costs and expense paid to the general partner or its
affiliates were as follows:
                                       
                                  Nine Months           Year Ended        
                                Ended Sept. 30,         December 31,
                                     1997                  1996    
   
   Administrative expenses          $ 36,000            $ 65,000


      In 1996, the Partnership paid $29,000, in deferred payments in addition to
normal recurring charges.

      The Partnership believes the amounts paid to affiliates are
representative of amounts which would have been paid to independent
parties for similar services.



<PAGE>
                     PART I - FINANCIAL INFORMATION
                                continued



ITEM 2.  Management's Discussion and Analysis of Financial Condition  and
Results of Operations  


Liquidity and Capital Resources
         
         At December 31, 1996, the partnership had $291,829 in cash and
cash equivalents.  This represents 6.01% of capital raised.  At September 30,
1997, the Partnership had $400,524 in cash and cash equivalents.  This
represents 8.24% of capital raised.  The Partnership had established a
working capital reserve of 5% of the gross proceeds of the offering. 
After May 15, 1990, the Partnership's Prospectus provided that the working
capital reserve could be reduced to 3% of capital raised depending upon
the Partnership's experience with its properties.  The working capital was
reduced to allow the Partnership to pay costs associated with the DR/US
refinancing.  In the event such reserves are insufficient to satisfy
unanticipated costs, the Partnership will be required to borrow additional
funds to meet such costs.  The General Partner does not anticipate having
to borrow for working capital reserves in 1997.

          The General Partner has deemed it advisable not to make any cash
distributions since May 1990.  The General Partner cannot determine whether any
cash will be available for distribution until the Bellevue mortgage is
refinanced.


                                    
Bellevue


      In October 1988, the Partnership acquired a 66.67% interest in a Tennessee
joint venture known as Bellevue Plaza Partners holding as its primary asset a
shopping center located in Nashville, Tennessee ("Bellevue") which was renovated
in 1988.The Bellevue property was 100% leased at the end of 1993 - 1996.  Lease
rent from the tenants amounts to $48,367 per occupancy month.  In addition, the
tenants pay common area maintenance charges of $5,881 per month for a total of
$54,248 per month.

     On February 1, 1989, the joint venture obtained a $3,800,000 first mortgage
loan on this property from an unaffiliated lender.  The mortgage bears interest
at a rate of 10% per annum and requires monthly installments of interest only
through February 1, 1991.  Monthly debt service was $31,667 until March 1991 at
which time monthly installments of principal and interest rose to $33,743.  The
loan became due on February 1, 1997.  However, the lender has extended the
maturity date, with the expectation of additional extensions.  The Partnership
is currently negotiating refinancing this loan.  The Partnership has paid debt
service on a current basis.

      The pollution problem is moving slowly.  The State of Tennessee plans to
promulgate rules and regulations pertaining to state-wide pollution problems by
year end.  Hopefully, we would then know what it takes to resolve the problem. 
As part of the overall solution, a "super fund" of money would be made available
forparticipants suchas Ted's Cleaners to pay for the cleanup of the pollutants. 
In the meantime, Ted's has accepted responsibility and has funded various
expenses.  In any event, management anticipates no liability to the partnership
due to the existence of this fund since management believes the current tenant
is responsible for the cost of cleanup.

      In January, Haverty's did not extend their lease by exercising their
option.This means their lease terminates at the end of October 1997.  They have
requested to remain in the center for an additional year from October 1996 at a
slightly higher rental rate but with a thirty-day termination rate.  Their lease
would essentially be a month to month lease.  At this time, we do not feel that
we need to commit to this.  A search was made for a replacement tenant who could
go into the center as early as November 1997.  Two tenants have been secured to
replace the Haverty lease.

      In the meantime, Mass Mutual as part of their mortgage extension, is
requiring that all cash-flow be placed in escrow in case the partnership has any
expense for Ted's Cleaners and for tenant improvements and commissions for re-
leasing the Haverty's space.  Unfortunately, this provision prevents the
partnership from paying any distributions from Bellevue Plaza.


DR/US WEST END

      In November 1988, the Partnership acquired a 50% ownership interest in a
joint venture known as DR/US West End General Partnership (the "Joint Venture")
which ownsan office building located in Nashville, Tennessee.  The Partnership's
Joint Venturepartner is Daniel West End Limited Partnership, the general partner
of which is the Daniel Corporation (Daniel").  The property was 95% occupied at
December 31, 1994, 1995 and 1996.  

      The partnership contributed 3310 West End office building to a new
partnership inJuly 1995.  A major reason for this was we had one tenant, Gresham
and Smith, leasing 65,000 square feet out of a total of 107,000 square feet with
their lease endingin 1998.  They have terminated their lease and are moving from
the building.  Of course, they are still liable for the rent until their lease
termination.  Management has known about their planned move for several months
and all of the space has been re-leased.  The positive aspect of this is the
building will not have any loss of rental revenue.  However, their is a cost of
over $1,300,000 that must be paid for tenant improvements and commissions.  This
expense will be paid for from rental cash flow.

      Our contribution of 3310 in 1995 to the new partnership with Prudential
Life Insurance paying off the mortgage was a wise decision.  It now enables that
partnership tohave sufficient cash flow to pay their these costs.  If we had not
made that change, our partnership would not have the cash flow to pay these
expenses and the partnership would stand a good chance of losing the building.


                     PART I - FINANCIAL INFORMATION
                                continued


          Results of Operations

              The Partnership holds a majority joint venture interests in
Bellevue Plaza Partners (66 2/3%).  The operational results of the Partnership
for the nine months ending September 30, 1997 are summarized below.

                          Bellevue         Partnership     Total 

Revenues                  $585,069          $ 32,057      $617,126

Operating expenses         136,150            51,223       187,373
Interest                   268,860              -          268,860
Depreciation & amort.      116,536             8,655       125,191
                           521,546            59,878       581,424

Net income (loss)           63,523         (  27,821)       35,702 

Partnership share           66 2/3%              100%

Partnership net income
  (loss)                  $ 42,349         ($ 27,821)     $ 14,528  
Partnership Oper. cash        
  flow                    $162,686         ($ 19,166)     $143,520

          Operational results for the comparable nine month period ended
September 30, 1996 were:
                          Bellevue         Partnership      Total    

Revenues                  $569,639          $  1,334      $570,973

Operating expenses         126,319            87,590       213,909
Interest                   272,720              -          272,720
Depreciation & amort.      124,393             7,821       132,214
                           523,432            95,411       618,843

Net income (loss)           46,207         (  94,077)    (  47,870)

Partnership share           66 2/3%              100%             

Partnership net income
  (loss)                  $ 30,805         ($ 94,077)    ($ 63,272)

Partnership Operating
  cash flow               $190,070         ($ 91,589)     $ 98,481         

      The Partnership utilized the proceeds of the offering to acquire,
operate and hold for investment existing income producing commercial real
estate properties.  Since the proceeds of the offering were less than the
maximum amount, the Partnership was unable to diversify its investments to
the extent initially desired.
                       PART II - OTHER INFORMATION


ITEM 1.    Legal Proceedings

               None.

ITEM 2.    Changes in Securities

               None.

ITEM 3.    Default Upon Senior Securities

               None.

ITEM 4.    Submission of Matters to a Vote of Security Holders
 
               None.

ITEM 5.    Other Information
          
               None.

ITEM 6.    Exhibits and Reports on Form 8-K

               1.  Exhibits

                     None.
                                               
               2.  Form 8-K.

                     None.



                            


















                               SIGNATURES




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


                                 U.S. REALTY INCOME PARTNERS L.P.
                                 By:  Vanderbilt Realty Joint Venture,
                                      the General Partner

                                 By:  Vanderbilt Realty Associates, Inc.
                                      its Managing General Partner


                                 By:      Robert Bond Miller             
                                      Robert Bond Miller
                                      President, Director, Chief Executive 
                                      Officer, Chief Financial Officer and
                                      Chief Accounting Officer



November 12, 1997