<PAGE>



PAGE 1
                   SECURITIES AND EXCHANGE COMMISSION
                        WASHINGTON, D.C.  20549
                               FORM 10-K

(Mark one)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
          For the fiscal year ended December 31, 1996.

                           OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
          For the fiscal year ended


                   COMMISSION FILE NUMBER 33-13375


                                 OF
                     IDS LIFE INSURANCE COMPANY

         (Exact name of registrant as specified in its charter)

               MINNESOTA                         41-0823832

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

      IDS TOWER 10, MINNEAPOLIS, MINNESOTA             55440-0010

    (Address of principal executive offices)           (Zip Code)


Registrant's telephone number, including area code   (612) 671-3309


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 shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.        Yes   X     No

Indicate by check mark if disclosure of delinquent  filers  pursuant to item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best  of  the  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in part  III of this  form  10-K or any
amendment to this form 10-K: Not applicable

Aggregate market value of the voting stock held by non-affiliates:
Not applicable

Documents  incorporated  by  reference:  Certain  pages  of  the  Prospectus  of
Registrant  included in Form S-1 (as amended),  file number 33-13375 to be filed
April 3, 1997,  are  incorporated  by reference in Parts I and II of this Annual
Report on Form 10-K.



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PAGE 2
               PART I

Item 1. BUSINESS

General

IDS Life Account RE (the Account) was  established  by a resolution of the Board
of  Directors  of IDS Life  Insurance  Company  (IDS Life) as a  separate  asset
account,  pursuant to Minnesota  law. The Account was formed to make real estate
related  investments in connection with the sale of individual deferred variable
annuity  contracts  (Contracts)  offered  by IDS  Life.  The  Account  commenced
operations on August 7, 1987 when the annuity  contracts  were first offered for
sale to the public. Effective May 1, 1995, the Account discontinued new contract
sales. The Account holds assets that are segregated from all of IDS Life's other
assets and are not chargeable with liabilities arising out of any other business
of IDS Life.

The Account is not  registered  as an  investment  management  company under the
Investment  Company Act of 1940. The Account is under the control and management
of the  Board of  Directors  of IDS Life and its  officers.  The  owners  of the
Contracts have no voting rights with respect to the Account.

IDS Life does not guarantee the investment performance of the Account and is not
responsible for the liabilities of the Account. However, IDS Life is responsible
for the  fulfillment of the terms of each Contract,  including  payment of death
benefits and the guarantees of the minimum  annuity  purchase rates contained in
the Contracts.

Investment Objective

The investment  objectives of the Account previously were to provide for payment
of retirement income under the Contracts by seeking to: (i) preserve and protect
the Account's assets in real (i.e.,  inflation-adjusted) terms; (ii) provide for
compounding of income through  reinvestment of cash flow from  investments;  and
(iii)  provide for  increases in income  through  capital  appreciation  of real
property investments and, to the extent available,  through participation in the
capital appreciation, gross revenues or income of the real properties subject to
mortgage  loans  or land  sale-  leasebacks.  There  is no  guarantee  that  the
investment objectives of the Account will be attained. The assets of the Account
have been invested  primarily in real estate  related  investments in accordance
with the diversification  requirements regarding variable annuities contained in
Section 817(h) of the Internal Revenue Code (the "Code").

The  Account  previously  sought to have  approximately  50 to 70 percent of the
Account's assets invested in income-producing  real property investments such as
office  buildings,   shopping  centers,   apartment  complexes  and  other  real
properties, with approximately 15 to 40 percent of the Account's assets invested
in mortgage  loans and land  sale-leaseback  investments,  which  could  include
participation in


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PAGE 3
the appreciation or the gross revenues or income of the real properties that are
subject to the mortgage loans or land sale-leaseback investments.  The remaining
portion of the Account's assets generally were to be invested in short-term debt
instruments and intermediate term bonds with maturities of up to five years.

Since the Account has experienced substantial net contract terminations over the
past several years the Account does not intend to acquire additional real estate
related  investments.  Further, the Account intends to liquidate the real estate
related  investments  that it currently  holds when it becomes  advantageous  or
necessary to do so. During 1996, the Account  liquidated two real estate related
investments.

IDS Life has purchased and expects to continue to purchase accumulation units in
order to maintain the Account's liquidity. IDS Life makes these payments so that
no contract  holder is  disadvantaged  because sales of new contracts  have been
discontinued. These payments for accumulation units have been made to enable the
Account to pay off amounts  borrowed  under its line of credit with IDS Life and
as needed in order to fund all of the Account's  obligations under the contracts
such as paying  surrenders.  By purchasing  accumulation  units, IDS Life has an
ownership  interest in the Account and  participates in the increase or decrease
in value of the Account's investments just as other owners of accumulation units
do. IDS Life may realize a gain or loss on its accumulation units when redeemed.

IDS Life currently expects to hold the accumulation units it purchases until the
surrender of all outstanding contracts or until the Account's liquidity improves
(through,  for example,  one or more sales of real estate  related  investments)
thereby permitting the Account to satisfy its anticipated contract  obligations.
Because IDS Life may purchase a significant  amount of accumulation  units,  IDS
Life may be subject to certain conflicts of interest it would not otherwise have
if it had not purchased such accumulation units, including,  among other things,
a conflict in approving periodic  valuations of real estate related  investments
made by the Investment Adviser, JMB Annuity Advisers.

Competition

As of December  31,  1996,  IDS Life was aware of 3 other real  estate  variable
annuity  products that have been  registered  with the  Securities  and Exchange
Commission  and that are being offered for sale by  competitors.  These products
differed  from the Account in various  features  although  their  structure  and
investment  objectives were similar to the Account's prior to its termination of
new contract sales. In addition,  the Account competed against other real estate
investment  funds  and  registered   investment   companies   including  limited
partnerships, real estate investment trusts, unit investment trusts, pension and
profit  sharing  trusts,  corporations,  etc.,  all of  which  may or may not be
offered  for sale by  commercial  and  investment  banks,  realty  corporations,
insurance  companies,  savings  and  loan  associations,  diversified  financial
service companies, and other financial service intermediaries.



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PAGE 4
The Account had been in  competition  for real  property  investments,  mortgage
loans and land  sale-leasebacks  with numerous other  entities,  as well as with
individuals,   corporations,   real  estate  investment   trusts,   real  estate
partnerships  and other entities engaged in real estate  investment  activities,
including  certain  affiliates  of the  JMB  Annuity  Advisers  (the  Investment
Adviser) and IDS Life. The real properties that are the subject of the Account's
real estate related  investments  are in competition  with other real properties
(including those in which the Investment  Adviser,  IDS Life or their affiliates
may have an interest) in the areas in which they are located,  particularly with
respect to obtaining  new tenants and the  retention of existing  tenants.  Such
competition is based upon, among other things, effective rents charged, services
to tenants and the facilities available.

Employees

IDS Life  Account RE does not directly  employ any persons.  The business of the
Account is under the control and  management  of IDS Life's Board of  Directors,
its  principal  officers,  and its  investment  committee  to the  Account.  The
Investment Adviser, an affiliate of JMB Realty Corporation,  provides investment
selection, management,  disposition, and consulting services with respect to the
real  estate  related  investments  of the  Account  pursuant  to an  investment
advisory agreement.

Item 2. PROPERTIES

Description  of  the  Account's  real  estate  related   investments  is  hereby
incorporated  herein  by  reference  to  pages  21  to 41  of  the  Registrant's
prospectus  included in Form S-1 (as amended),  File number 33-13375 to be filed
April 3, 1997, which pages are filed herewith as Exhibit 99.2 to this report.


Item 3. LEGAL PROCEEDINGS

There are no material  legal  proceedings  to which the Account is a party or to
which the  assets of the  Account  are  subject.  IDS Life is engaged in various
kinds of routine  litigation that, in IDS Life's judgement,  are not of material
importance in relation to its total assets.  None of such litigation  relates to
the Account.


Item 4. SUBMISSIONS OF MATTERS TO VOTE OF SECURITY HOLDERS

Not applicable.



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PAGE 5
               PART II


Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
SECURITY HOLDERS MATTERS

The Contracts  were offered for sale through the registered  representatives  of
IDS Life.  There is no established  public trading market for the Contracts.  In
addition, the Contracts were not bid for, but were sold at the Account's current
accumulation  unit value. A contract owner may elect to surrender all or part of
the  Contract  while  the  Contract  is in  force  prior to the  earlier  of the
retirement  date or the death of the first to die of the  annuitant or owner.  A
description  of  surrenders,  withdrawals  and transfers is hereby  incorporated
herein by reference to pages 58 to 60 under the heading "Contract Surrender" and
63 to 65 under the headings  "Suspension and Delay of Payments" and "Transfer of
Ownership"  in the  Registrant's  prospectus  included in Form S-1 (as amended),
File Number 33-13375,  to be filed April 3, 1997, which pages are filed herewith
as Exhibit 99.1 to this report.  For the year ended  December 31, 1996, the high
and low accumulation unit values were $1.01 and $.98 per unit, respectively. The
number of contract owners at December 31, 1996 was 824.


Item 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>



                                                  Years ended December 31,

                                  1996          1995          1994          1993          1992
                                  ----          ----          ----          ----          ----

Contract Purchase Payments
<S>                           <C>           <C>           <C>           <C>           <C>         
   (Terminations), Net        $(2,207,498)  $ 2,291,255   $(5,184,527)  $(6,873,380)  $(6,257,432)

Net Income (Loss)             $  (153,491)  $(2,378,521)  $  (946,390)  $ 1,816,417   $(5,761,830)

Total Contract Owners'
    Equity (A)                $33,545,476   $35,906,465   $35,993,731   $42,124,648   $47,181,611

Accumulation Units
    Outstanding (A)            34,144,955    36,353,929    34,238,180    39,000,431    45,475,432

Accumulation Unit
    Value                     $       .98   $       .99   $      1.05   $      1.08   $      1.04



(A)  As of December 31, 1996, IDS Life's  portion of the Total Contract  Owners'
     Equity was  $24,492,773  (73%) and IDS Life owned  24,969,872  (73%) of the
     total Accumulation Units Outstanding.

</TABLE>



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PAGE 6
Item 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS

Financial Condition and Results of Operations
For the Year Ended December 31, 1996 Compared to the Year Ended
December 31, 1995 -
Net assets  decreased  from  $35,906,465  at December 31, 1995 to $33,545,476 at
December 31, 1996.  During this same time period,  the  accumulation  unit value
decreased from $.99 to $.98. The Account experienced net terminations  amounting
to  $2,207,498  for the year ended  December  31, 1996  compared to net sales of
$2,291,255 for the year ended December 31, 1995.  The net  terminations  for the
year ended  December 31, 1996 and the net sales for the year ended  December 31,
1995,  included  approximately  $2,000,000 and  $24,700,000,  respectively,  for
accumulation  units  purchased  by IDS  Life,  which  have  been  used to  repay
principal and accrued  interest on the Account's  revolving  loan payable to IDS
Life and to pay for contract surrenders, as discussed more fully below.

Recorded net loss for the year ended December 31, 1996 was $153,491  compared to
$2,378,521 for the year ended December 31, 1995.

Interest  income for the year  ended  December  31,  1996  primarily  represents
interest  income earned on the Account's  investment in the  participation  in a
mortgage  loan  (Riverpoint  Shopping  Center).  Interest  income also  includes
interest earned on short term investments. The borrower had notified the Lenders
that it was  experiencing  financial  difficulties  and  approached  the Lenders
regarding a loan modification. During the third quarter of 1996, the Lenders and
Borrowers  finalized a loan  modification  whereby  they reached an agreement to
defer payment of a portion of the scheduled debt service from September 15, 1995
to July 15, 1996.  In  conjunction  with the loan  modification  agreement,  the
scheduled  maturity  date of the loan was  accelerated  to  December  31,  1997.
Finally,  the Lenders  agreed to accept at certain  dates  through June 30, 1997
repayment of the loan at specified  amounts.  On December 24, 1996, the borrower
repaid the lenders  $27,400,000 (of which the Account's share was  approximately
$2,800,000) in full satisfaction of the loan as agreed upon.

For the year ended December 31, 1996, the Account's  recorded equity in earnings
of its unconsolidated  joint ventures (N/S Associates,  Monmouth  Associates and
1225  Connecticut)  was  $2,167,460,  compared to $1,924,741  for the year ended
December 31, 1995.  However,  after eliminating the effect of the recognition in
the first quarter of 1995 of income  attributable  to certain lease  termination
fees received by N/S Associates,  the equity in earnings of unconsolidated joint
ventures showed an increase for 1996 of  approximately  12.9 percent compared to
the recorded  equity in earnings for 1995.  The increase is due primarily to (i)
an increase in interest  earned which is now currently  being paid from Monmouth
Associates,  (ii) an increase in rental  income at 1225  Connecticut  due to the
property being 100 percent  leased,  and (iii) lower  interest  expense from N/S
Associates  in 1996 as a result  of  prepayment  charges  incurred  in the first
quarter of 1995 in connection with the repayment and refinancing of the mortgage
loans on Northridge and Southridge Malls. The increase in earnings was partially
offset by lower rental income achieved at Southridge and


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PAGE 7
Northridge Malls due to lower occupancy.

Northridge Mall continues to be adversely  affected by the perception that it is
an unsafe place to shop.  This  perception  has resulted in declining  sales and
occupancy over a three-year  period.  Compounding the problem of declining sales
are the high  operating  costs for  tenants at the mall due to high real  estate
taxes. Occupancy has also been affected by tenant bankruptcies during 1993, 1994
and 1995. As of December 31, 1996, occupancy of the mall shops was approximately
77%, including temporary tenants under short term leases.

To counter the negative  perception  of  Northridge  Mall,  N/S  Associates  has
implemented certain capital improvements and operational programs to improve the
shopping center's safety and appearance, as well as instituted certain marketing
efforts to enhance its image.  Certain  recent  positive  sales trends appear to
indicate a modest improvement;  however,  elimination of the negative perception
is expected to take some time. In addition N/S Associates is seeking to increase
occupancy at the shopping  center by  aggressively  marketing  space for new and
renewal tenants through leasing  incentives,  as well as continuing to cooperate
with existing  tenants who need  short-term  rent  reductions in order to retain
occupancy  of their  space.  Part of the  leasing  strategy  includes  targeting
certain  well-recognized  retailers as a group that would become  tenants at the
shopping  center.  It is expected  that the draw of this group of tenants  would
help the  shopping  center  gain  leasing  momentum  and aid in  future  leasing
efforts.

Kohl's  Department  Store, a successful  tenant occupying  approximately  66,000
square feet of space at Southridge Mall,  approached N/S Associates regarding an
expansion  of its tenant  space and a reduction  in its overall  leasing  costs.
During the third  quarter of 1995,  N/S  Associates  and Kohl's  entered into an
amendment  of its lease.  Pursuant  to the lease  amendment,  the term of Kohl's
lease has been  extended  from 2001  until  2015 and the  tenant  space has been
increased by  approximately  19,000 square feet to  approximately  85,000 square
feet,  exclusive of storage space. Kohl's is required to pay annual base rent of
$9.25 per square foot, as well as one-half of its pro rata share for real estate
taxes and a fixed  amount for common area  maintenance  expense.  Kohl's is also
obligated to pay as additional rent a percentage of its gross receipts in excess
of a minimum amount of annual sales determined after the tenant has occupied the
entire leased space.  N/S  Associates  was  responsible  for paying the costs of
asbestos  removal for the tenant space.  Kohl's was obligated to pay other costs
associated  with the  leased  space,  including  tenant  improvements  and lease
buy-out and  relocation  costs.  The lease  amendment also contains an operating
covenant  pursuant to which  Kohl's is  obligated to operate its retail store at
Southridge  Mall  until  2005,  subject  to earlier  termination  under  certain
circumstances.  Although the lease  amendment  reduces  Kohl's overall rent, the
expansion  of its space and the  extension of its lease term is expected to help
stabilize the shopping center on a long-term basis by ensuring Kohl's  continued
occupancy and  contribution to customer.  As of December 31, 1996,  occupancy of
the portion of Southridge  Mall owned by N/S Associates was  approximately  94%,
including temporary tenants under short-term leases.



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PAGE 8
For the year ended  December 31, 1996,  the Account  recognized  net  unrealized
depreciation of  participation in mortgage loan of $147,608 as a result of lower
effective rents achieved from the mortgage property upon releasing.  The Account
recognized  net realized  depreciation  on its investment in  wholly-owned  real
estate  property  of  $2,146,691  primarily  as a result of the sale of the West
Springfield  Terrace  apartments,  as discussed below. In addition,  the Account
recognized net unrealized depreciation on its investment in unconsolidated joint
ventures  of  $1,206,750  primarily  a result of (i) a decrease  in the  current
assets of Monmouth  Associates,  which partially resulted from a $4,000,000 cash
distribution  paid in 1996 in which the  Account's  share was  $278,800;  (ii) a
decrease  in  the  estimated  value  of  N/S  Associates  (Northridge  Mall  and
Southridge Mall); and (iii) a decrease in the value of 1225  Connecticut.  These
decreases  were a result of valuations  of the  properties  which  indicated the
properties fair market values.  In addition,  the lower values at Northridge and
Southridge  can be  attributable  to the  factors  discussed  above.  Also,  the
decrease in value at 1225  Connecticut  is partially  due to 80% of the building
being leased to one tenant. This increased the property's risk factor.

The Account paid asset management and mortality  expense risk fees of $1,011,135
and $1,086,516 for the years ended December 31, 1996 and 1995, respectively.

Distributions from unconsolidated  joint ventures increased for 1996 compared to
1995 primarily due to the Account's share of Monmouth Associates'  distributions
of $278,800.  The increase was partially offset by decreased  distributions from
N/S Associates.

On September  30, 1996 the Account sold land and related  improvements  known as
the West Springfield Terrace  Apartments.  The purchaser was not affiliated with
the Account and the sale price was determined by arm's-length negotiations.  The
sale  price for the land and  improvements  was  $16,100,000  (before  deducting
selling  costs)  and was  paid in cash at  closing.  A  portion  of the net sale
proceeds  was  utilized to retire the first  mortgage  debt with an  outstanding
balance of $7,704,000.

For the Year Ended  December  31, 1995  Compared to the Year Ended  December 31,
1994 -

Net assets  decreased  from  $35,993,731  at December 31, 1994 to $35,906,465 at
December 31, 1995.  During this same time period,  the  accumulation  unit value
decreased from $1.05 to $.99.  The Account  experienced  net sales  amounting to
$2,291,255 for the year ended December 31, 1995 compared to net  terminations of
$5,184,527  for the year ended  December  31,  1994.  The net sales for the year
ended December 31, 1995 include approximately $24,700,000 for accumulation units
purchased  by IDS  Life,  which  has been used to repay  principal  and  accrued
interest  on the  Account's  revolving  loan  payable to IDS Life and to pay for
contract surrenders, as discussed more fully below.

Recorded net loss for the year ended December 31, 1995 was  $2,378,521  compared
to $946,390 for the year ended December 31, 1994.



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PAGE 9
Interest income for the year ended December 31, 1995 primarily represents income
earned on the  Account's  investment  in the  participation  in a mortgage  loan
(Riverpoint  Shopping  Center).  Income  generated  from  participation  in  the
mortgage loan remained relatively unchanged compared to the corresponding period
in 1994.  Interest  income for the year ended  December  31, 1994 also  included
interest earned on short-term investments of approximately $21,000.

For the year ended December 31, 1995, the Account's  recorded equity in earnings
of its unconsolidated  joint ventures (N/S Associates,  Monmouth  Associates and
1225  Connecticut)  was  $1,924,741,  compared to $2,094,682  for the year ended
December 31, 1994.  The  decrease in earnings  was  primarily  the result of N/S
Associates'  reduced  earnings as a result of lower  rental  income  achieved at
Northridge Mall due to lower occupancy and higher interest expense  attributable
to prepayment  charges  incurred in the first quarter of 1995 in connection with
the repayment and refinancing of the mortgage loans on Northridge and Southridge
Malls. The decrease was partially offset by the recognition in the first quarter
of 1995 of income attributable to certain lease termination fees received by N/S
Associates in the prior quarter.  In addition,  during 1995 Monmouth  Associates
wrote off the receivable balance of $3,576,000  primarily related to the accrued
interest  resulting  from the  difference  between  the  accrual  and pay  rates
recorded prior to April 1992, due to the uncertainty as to the collectibility of
these amounts.

In addition, the Account recorded rental income of $2,379,439 for the year ended
December 31, 1995 from its wholly-owned real estate investment, West Springfield
Terrace Apartments, compared to $2,235,867 for the year ended December 31, 1994,
was  primarily  due to a modest  increase in effective  rental  rates.  Expenses
related to the wholly-owned  real estate investment  totaled  $1,756,139 for the
year ended December 31, 1995 compared to $1,792,255 for the corresponding period
in 1994.

For the year ended  December 31, 1995,  the Account  recognized  net  unrealized
depreciation of  participation  in mortgage loan of $27,817,  and net unrealized
appreciation on its investment in wholly-owned  real estate property of $138,764
due to a reduction in estimated  capital  expenditures  to be required in future
years at the property,  and net  unrealized  depreciation  on its  investment in
unconsolidated  joint  ventures  of  approximately   $4,000,000.   Approximately
$2,199,000,  $1,748,000 and $53,000 of unrealized depreciation recognized by the
Account  was  attributable  to  the  Account's  investments  in  N/S  Associates
(Northridge  Mall and  Southridge  Mall),  Monmouth  Mall and 1225  Connecticut,
respectively.   The  unrealized   depreciation  recognized  was  the  result  of
reductions in the estimated  value of each of the  investments.  The decrease in
estimated  value for the  investment in Northridge  Mall was  attributed to poor
sales,  a  number  of  tenant  bankruptcies,  lower  occupancy  and the  leasing
challenges it faces as discussed  below. In addition,  the decrease in estimated
value for the  investment  in  Southridge  Mall was  attributed to recent tenant
bankruptcies  and the amendment of Kohl's lease as discussed above. In addition,
the trend of recent  bankruptcies  and general  market  conditions for retailers
could have an adverse  effect on both revenues and occupancy at both  Northridge
and  Southridge  Malls in the future.  The decrease in  estimated  value for the
investment in Monmouth Mall


<PAGE>



PAGE 10
was  attributable to lower sales, the slow lease up of renovated mall space, and
the uncertainty of Macy's renewing their operating covenant. While Macy's has an
obligation  to operate a retail  store at this  location  through the year 2005,
their  obligation to operate the store as a Macy's  Department  Store expired in
1995. The Macy's store continues to operate at the Monmouth Mall.

For the year ended  December 31, 1994,  the Account  recognized  net  unrealized
depreciation of investments in  unconsolidated  joint ventures of  approximately
$2,362,000.  Approximately  $217,000,  $751,000  and  $1,428,000  of  unrealized
depreciation  recognized  by the  Account  was  attributable  to  the  Account's
investments  in  the  1225  Connecticut  office  building,   Monmouth  Mall  and
Northridge Mall, respectively, partially offset by a slight amount of unrealized
appreciation of approximately  $34,000 in the Account's investment in Southridge
Mall for the year.

Federated  Department  Stores  converted  the Abraham & Straus store at Monmouth
Mall  to a  Stern's  store  in  early  1995.  Monmouth  Associates  may  provide
additional  financing to the borrower/lessee to pay future costs necessary for a
long-term  solution to replace Abraham & Straus as a department  store tenant at
Monmouth  Mall.  The  recognition  of  unrealized  depreciation  in 1994 for the
Account's   investment  in  Monmouth  Mall  primarily  reflected  the  Account's
estimated  share of the  financing  expected  to be needed in the  future to pay
these costs.

The decrease in the estimated  value of the  investment in the 1225  Connecticut
office building in 1994 was primarily attributable to a reduction in the assumed
long-term  rental rate growth that could be achieved  for the property in future
years.  The decrease in the estimated value for the investment in the Northridge
Mall in 1994 was primarily  attributable  to a reduction in anticipated  leasing
activity and the expected rents to be achieved for the property.  In general, in
1994, it was expected  that the vacancy at  Northridge  Mall would lease up more
slowly and the rents obtained would be lower than previously anticipated.

The Account paid asset management and mortality  expense risk fees of $1,086,516
and $1,268,164 for the years ended December 31, 1995 and 1994, respectively. The
decrease  in  fees  is  primarily  due to the  payment  of the  incentive  asset
management  fees of $137,299 paid in 1994 to the  Investment  Adviser based upon
the performance of the Account's real property  investments  relative to the FRC
Property Index. No incentive asset management fee was payable in 1995.

Liquidity and Capital Resources

For the Year Ended  December  31, 1996  Compared to the Year Ended  December 31,
1995 -

At December 31, 1996, the Account had cash of approximately $103,000 as compared
to  approximately  $587,000 at December 31, 1995. The Account financed a portion
of the contract terminations during 1996 and 1995 through additional investments
made by IDS Life Insurance  Company (IDS Life).  The Account had experienced net
contract  terminations  in 14  consecutive  quarters  with net sales  (including
accumulation units purchased by IDS Life) in six of the last seven quarters.


<PAGE>





PAGE 11
The  liquidity  requirements  of the Account  have  generally  been met by funds
provided from the Account's  short-term  investments,  cash  distributions  from
unconsolidated  joint ventures,  operating cash flow, interest income,  proceeds
from the sale of West Springfield  Terrace  apartments,  the Loan repayment from
Riverpoint  Shopping  Center,  proceeds from sales of contracts,  and borrowings
under the line of credit from IDS Life and  purchases of  accumulation  units by
IDS Life discussed below. The primary uses of funds currently are expected to be
for property operating expenses, asset management and mortality and expense risk
fees and payments for contract terminations.

In March  1994,  the Account  obtained a revolving  line of credit for up to $10
million from IDS Life to pay for contract surrenders and other obligations under
the contracts. In June 1995, the revolving credit loan balance of $9,500,000 and
accrued interest were repaid as discussed below.

Effective  May 1, 1995,  new contract  sales of the Account  were  discontinued.
Additional  purchase payments continue to be accepted for existing  contracts in
amounts  specified  in  the  Account's  prospectus,  whether  by  means  of  the
previously established bank authorizations or otherwise. Existing contracts also
continue to be serviced and surrender requests will be honored.

IDS Life  continues  to purchase  accumulation  units in order to  maintain  the
Account and its  liquidity.  IDS Life makes  these  payments so that no contract
holder is disadvantaged  because sales of new contracts have been  discontinued.
The initial payments for accumulation  units that IDS Life made into the Account
in 1995 were used to pay off the amount that the Account had borrowed  under its
revolving  line of credit.  IDS Life  expects  to  continue  to make  additional
payments into the Account for accumulation  units as needed in order to fund all
of the Account's  obligations  under the contracts such as paying death benefits
and  contract  terminations.  As of December 31,  1996,  IDS Life had  purchased
approximately 24,969,872 accumulation units.

By  purchasing  accumulation  units,  IDS Life has an ownership  interest in the
Account.  Since IDS Life does not  purchase  a  contract,  it is not  subject to
surrender  charges.   However,  IDS  Life,  as  holder  of  accumulation  units,
participates  in the  increase  or  decrease  in  the  value  of  the  Account's
investments just as other owners of accumulation  units do. IDS Life may realize
a gain or loss on its accumulation units when redeemed.

IDS Life currently expects to hold the accumulation units it purchases until the
surrender of all outstanding contracts or until the Account's liquidity improves
(through,  for example,  one or more sales of real estate  related  investments)
thereby permitting the Account to satisfy its anticipated contract  obligations.
Because IDS Life may purchase a significant  amount of accumulation  units,  IDS
Life may be subject to certain conflicts of interest it would not otherwise have
if it had not purchased such accumulation units, including,  among other things,
a conflict in approving  periodic  valuations of real estate investments made by
the Investment Adviser.



<PAGE>




PAGE 12
Since the Account has experienced substantial net contract terminations over the
past  several  years,  the Account  does not intend to acquire  additional  real
estate related investments.  During 1996, the Account liquidated two real estate
related  investments.  Further, the Account intends to liquidate the real estate
related  investments  that it currently  holds when it becomes  advantageous  or
necessary  to do so.  To the  extent  funds of the  Account  are not used to pay
obligations of the Account,  including  those under existing  contracts,  or the
redemption  of  accumulation  units  purchased  by IDS Life,  such funds will be
invested in short-term  debt  instruments and possibly  intermediate-term  bonds
with maturities of up to five years.

Through  December  31,  1996,  Monmouth  Associates  had  funded   approximately
$24,615,000 of the renovation  loan for Monmouth Mall.  Fundings of principal on
the loan have been made from cash  reserves  held by Monmouth  Associates,  cash
flow from  interest and ground rent payments  received from the  borrower/lessee
and capital  contributions made to Monmouth  Associates by its partners pro rata
based  upon  their  respective  interests.   The  aggregate  amount  of  capital
contributions  to finance the loan, is approximately  $9,830,000.  The Account's
share of these capital  contributions is approximately  $685,000.  The aggregate
amount of the  renovation  loan,  including  accrued  and  deferred  interest of
approximately $1,300,000, is currently expected to be approximately $29,100,000.
Remaining  fundings  for the  renovation  loan are expected to be made from cash
flow and funds currently held by Monmouth  Associates.  Monmouth  Associates may
also be required to make certain  additional loans to pay a portion of the costs
of certain  tenant  improvements  or other  ordinary  capital  expenditures.  In
addition,   Monmouth   Associates  may  provide  additional   financing  to  the
borrower/lessee  in order to pay costs to be  incurred  in  connection  with the
replacement of a department  store tenant at Monmouth Mall.  However,  it is not
currently expected that this would occur during 1997.

The renovation is nearing completion with tenant improvement work for one of the
larger  tenants and retainage  work  remaining.  The occupancy of mall shops and
outparcel space at the shopping center as of December 31, 1996 was approximately
83 percent.  However,  the mall shops and outparcel space are  approximately  86
percent leased. Leasing and occupancy at the shopping center have been adversely
affected by tenant bankruptcies occurring in 1995.

The Account had a loan  outstanding  in the  principal  amount of  approximately
$7,770,000,  prior to its  payoff  in  September  1996 as a result  of the sale,
secured by its wholly-owned  real estate  investment,  West Springfield  Terrace
Apartments.  The loan had an original term of seven years and bore interest at a
rate of 9.5 percent per annum.  The loan required  monthly payments of principal
and  interest  aggregating  $824,000  per  annum  until  November  1996 when the
remaining principal balance was due.

In  February  1995,  N/S  Associates  obtained a new  mortgage  loan  secured by
Southridge Mall in the principal  amount of  $35,000,000.  The new mortgage loan
has a term of seven years, bears interest at 8.35 percent per annum and requires
monthly  payments of interest only prior to maturity.  A portion of the proceeds
from the new mortgage loan was used to repay the two mortgage loans secured by


<PAGE>




PAGE 13
Northridge  Mall as well as the mortgage loan  previously  secured by Southridge
Mall.  Remaining net proceeds from the refinancing have been and will be used to
pay tenant  improvement  and other capital costs at  Northridge  and  Southridge
Malls.

N/S Associates currently expects that it will incur approximately  $5,312,000 in
1997 for  tenant  improvement,  asbestos  removal  and  other  capital  items at
Northridge  and  Southridge  Malls.  Actual  amounts  expended  in 1997 may vary
depending on a number of factors,  including actual leasing activity, results of
property  operations,  liquidity  considerations  and market conditions over the
course of the year. N/S Associates undertakes asbestos removal from time to time
at portions of the Northridge and Southridge  Malls as tenant spaces are vacated
and prior to occupancy by new tenants. The cost of tenant improvements, asbestos
removal and other  capital  items  generally  will be provided out of cash flows
from the properties. N/S Associates expended approximately $2,236,000 for tenant
improvements, asbestos removal and other capital projects in 1996.

At December 31, 1996,  real  property  investments (through two  unconsolidated
joint ventures,  N/S Associates and 1225 Connecticut), land sale-leaseback
investment (through an unconsolidated joint venture, Monmouth Associates) and
short-term  investments  represented 42.4 percent,  26.9  percent  and 30.7
percent  of total  assets,  respectively.  At December  31,  1995,  
real  property   investments,   mortgage  loan  and  land sale-leaseback
investments and short-term investments represented 70.6 percent, 27.2 percent
and 2.2 percent of total assets, respectively.

For the Year Ended  December  31, 1995  Compared to the Year Ended  December 31,
1994 -

At December 31, 1995, the Account had cash of approximately $587,000 as compared
to  approximately  $205,000 at December 31, 1994. The Account financed a portion
of the  contract  terminations  during  the third and  fourth  quarters  of 1995
through  additional  investments made by IDS Life Insurance  Company (IDS Life).
The Account had experienced net contract terminations in 14 consecutive quarters
with net sales (including  accumulation units purchased by IDS Life) in the last
three quarters.

The  liquidity  requirements  of the Account  have  generally  been met by funds
provided from the Account's  short-term  investments,  cash  distributions  from
unconsolidated  joint ventures,  operating cash flow, interest income,  proceeds
from sales of contracts,  and borrowings  under the line of credit from IDS Life
and purchases of  accumulation  units by IDS Life discussed  below.  The primary
uses of funds  currently  are  expected to be for property  operating  expenses,
asset  management  and mortality and expense risk fees and payments for contract
terminations.

In March  1994,  the Account  obtained a revolving  line of credit for up to $10
million from IDS Life to pay for contract surrenders and other obligations under
the contracts. In June 1995, the revolving credit loan balance of $9,500,000 and
accrued interest were repaid as discussed below.

Effective  May 1, 1995,  new contract  sales of the Account  were  discontinued.
Additional  purchase payments continue to be accepted for existing  contracts in
amounts specified in the Account's


<PAGE>




PAGE 14
prospectus,  whether by means of the previously  established bank authorizations
or  otherwise.  Existing  contracts  also  continue to be serviced and surrender
requests will be honored.

IDS Life  continues  to purchase  accumulation  units in order to  maintain  the
Account and its  liquidity.  IDS Life makes  these  payments so that no contract
holder is disadvantaged  because sales of new contracts have been  discontinued.
The initial payments for accumulation  units that IDS Life made into the Account
were  used to pay off the  amount  that  the  Account  had  borrowed  under  its
revolving  line of credit.  IDS Life  expects  to  continue  to make  additional
payments into the Account for accumulation  units as needed in order to fund all
of the Account's  obligations  under the contracts such as paying death benefits
and  contract  terminations.  As of December 31,  1995,  IDS Life had  purchased
approximately 22,955,910 accumulation units.

By  purchasing  accumulation  units,  IDS Life has an ownership  interest in the
Account.  Since IDS Life does not  purchase  a  contract,  it is not  subject to
surrender  charges.   However,  IDS  Life,  as  holder  of  accumulation  units,
participates  in the  increase  or  decrease  in  the  value  of  the  Account's
investments just as other owners of accumulation  units do. IDS Life may realize
a gain or loss on its accumulation units when redeemed.

IDS Life currently expects to hold the accumulation units it purchases until the
surrender of all outstanding contracts or until the Account's liquidity improves
(through,  for example,  one or more sales of real estate  related  investments)
thereby permitting the Account to satisfy its anticipated contract  obligations.
Because IDS Life may purchase a significant  amount of accumulation  units,  IDS
Life may be subject to certain conflicts of interest it would not otherwise have
if it had not purchased such accumulation units, including,  among other things,
a conflict in approving  periodic  valuations of real estate investments made by
the Investment Adviser.

Since the Account has experienced substantial net contract terminations over the
past  several  years,  the Account  does not intend to acquire  additional  real
estate related  investments.  Further, the Account intends to liquidate the real
estate related investments that it currently holds when it becomes  advantageous
or  necessary  to do so. To the extent  funds of the Account are not used to pay
obligations of the Account,  including  those under existing  contracts,  or the
redemptions  of  accumulation  units  purchased by IDS Life,  such funds will be
invested in short-term  debt  instruments and possibly  intermediate-term  bonds
with maturities of up to five years.

Through  December  31,  1995,  Monmouth  Associates  had  funded   approximately
$21,476,000 of the renovation  loan for Monmouth Mall.  Fundings of principal on
the loan have been made from cash  reserves  held by Monmouth  Associates,  cash
flow from interest and ground rent payments  received from  borrower/lessee  and
capital contributions made to Monmouth Associates by its partners pro rata based
upon their respective  interests.  The aggregate amount of capital contributions
to  finance  the  loan,  including  one  made in  July  1995,  is  approximately
$9,830,000.  The Account's share of these capital contributions is approximately
$685,000. The


<PAGE>




PAGE 15
aggregate  amount  of  the  renovation  loan,  including  accrued  and  deferred
interest,  is  currently  expected to be  approximately  $28,500,000.  Remaining
fundings  for the  renovation  loan are  expected  to be made from cash flow and
funds  currently held by Monmouth  Associates.  Monmouth  Associates may also be
required  to make  certain  additional  loans to pay a  portion  of the costs of
certain tenant improvements or other ordinary capital expenditures. In addition,
Monmouth  Associates may provide additional  financing to the borrower/lessee in
order to pay  costs to be  incurred  in  connection  with the  replacement  of a
department store tenant at Monmouth Mall.  However, it is not currently expected
that this would occur during 1996.

The renovative is nearing completion with tenant improvement work for one of the
larger  tenants and retainage  work  remaining.  The occupancy of mall shops and
outparcel space at the shopping center as of December 31, 1995 was approximately
77 percent.  However,  the mall shops and outparcel space are  approximately  86
percent leased,  including  leases whose terms will commence after renovation of
the tenant space permits occupancy.

The Account has a loan  outstanding  in the  principal  amount of  approximately
$7,770,000  as of December 31,  1995,  secured by its  wholly-owned  real estate
investment,  West Springfield Terrace Apartments.  The loan has an original term
of seven years and bears  interest at a rate of 9.5 percent per annum.  The loan
requires  monthly  payments of principal and interest  aggregating  $824,000 per
annum  until  November  of  1996  when  the  remaining   principal   balance  of
approximately  $7,704,000  and any accrued and unpaid  interest  will be due and
payable.   The  current   budget  for  capital   expenditures   during  1996  is
approximately $207,000 for painting, carpet replacement and other capital costs.

In  February  1995,  N/S  Associates  obtained a new  mortgage  loan  secured by
Southridge Mall in the principal  amount of  $35,000,000.  The new mortgage loan
has a term of seven years, bears interest at 8.35 percent per annum and requires
monthly  payments of interest only prior to maturity.  A portion of the proceeds
from the new mortgage  loan was used to repay the two mortgage  loans secured by
Northridge  Mall as well as the mortgage loan  previously  secured by Southridge
Mall.  Remaining net proceeds from the refinancing have been and will be used to
pay tenant  improvement  and other capital costs at  Northridge  and  Southridge
Malls.

N/S Associates currently expects that it will incur approximately  $4,369,000 in
1996 for  tenant  improvements,  asbestos  removal  and other  capital  items at
Northridge  and  Southridge  Malls.  Actual  amounts  expended  in 1996 may vary
depending on a number of factors,  including actual leasing activity, results of
property  operations,  liquidity  considerations  and market conditions over the
course of the year. N/S Associates undertakes asbestos removal from time to time
at portions of the Northridge and Southridge  Malls as tenant spaces are vacated
and prior to occupancy by new tenants. The cost of tenant improvements, asbestos
removal and other  capital  items  generally  will be provided out of cash flows
from the properties. N/S Associates expended approximately $1,967,000 for tenant
improvements, asbestos removal and other capital projects in 1995.

At December 31, 1995, real property investments (through two


<PAGE>




PAGE 16
unconsolidated  joint  ventures,  N/S  Associates  and  1225  Connecticut  and a
wholly-owned property,  West Springfield Terrace Apartments),  mortgage loan and
land  sale-leaseback  investments  (through  an  unconsolidated  joint  venture,
Monmouth Associates,  and a participation in the loan for Riverpoint Center) and
short-term investments represented 70.6 percent, 27.2 percent and 2.2 percent of
total assets,  respectively.  At December 31, 1994,  real property  investments,
mortgage loan and land  sale-leaseback  investments  and short-term  investments
represented   72  percent,   27.3  percent  and  .7  percent  of  total  assets,
repsectively.


<PAGE>





PAGE 17
Item 8. FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

                       IDS LIFE ACCOUNT RE
                                of
                    IDS LIFE INSURANCE COMPANY

                              Index


Independent Auditors' Report
Balance Sheets, December 31, 1996 and 1995
Statements of Operations, years ended December 31, 1996, 1995
 and 1994
Statements of Changes in Contract Owners' Equity, years ended December 31, 1996,
 1995 and 1994
Statements of Cash Flows, years ended December 31, 1996, 1995
 and 1994
Notes to Financial Statements
Participation in Mortgage Loan on Real Estate and Interest Earned
 on Participation in Mortgage - Schedule III
Real Estate Owned and Rental Income - Schedule IV

Schedules not Filed:
    All schedules  other than those  indicated in the index have been omitted as
    the required  information is inapplicable or the information is presented in
    financial statements or the related notes.



 N/S ASSOCIATES, MONMOUTH ASSOCIATES & 1225 INVESTMENT CORPORATION
                   UNCONSOLIDATED JOINT VENTURES
                               of
                       IDS LIFE ACCOUNT RE

                              Index


Independent Auditors' Report
Combined  Balance  Sheets,  December 31, 1996 and 1995  Combined  Statements  of
Operations, years ended December 31, 1996,
 1995 and 1994
Combined  Statements of Partners'  Capital  Accounts,  years ended  December 31,
 1996, 1995 and 1994
Combined Statements of Cash Flows, years ended December 31, 1996,
 1995 and 1994
Notes to Combined Financial Statements
Participation in Mortgage Loan on Real Estate and Interest Earned
 on Participation in Mortgage - Schedule III
Combined Real Estate Owned and Rental Income - Schedule IV

Schedules not Filed:
    All schedules  other than those  indicated in the index have been omitted as
    the required  information is inapplicable or the information is presented in
    financial statements or the related notes.


<PAGE>



PAGE 18
                        INDEPENDENT AUDITORS' REPORT



TheBoard of Directors of IDS Life Insurance  Company and Contract  Owners of IDS
   Life Account RE:


We have audited the financial statements of IDS Life Account RE as listed in the
accompanying  index. In connection with our audits of the financial  statements,
we also  have  audited  the  financial  statement  schedules  as  listed  in the
accompanying index. These financial statements and financial statement schedules
are the  responsibility  of the  management of IDS Life Insurance  Company.  Our
responsibility  is to  express  an opinion  on these  financial  statements  and
financial statement schedules based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of IDS Life Account RE at December
31, 1996 and 1995 and the results of its  operations and its cash flows for each
of the years in the three-year period ended December 31, 1996 in conformity with
generally  accepted  accounting  principles.  Also, in our opinion,  the related
financial  statement  schedules,  when  considered  in  relation  to  the  basic
financial statements taken as a whole, present fairly, in all material respects,
the information set forth therein.



                                    KPMG Peat Marwick LLP


Minneapolis, Minnesota
March 21, 1997



<PAGE>
<TABLE>
<CAPTION>



PAGE 19
                           IDS LIFE ACCOUNT RE
                                   of
                        IDS LIFE INSURANCE COMPANY

                             BALANCE SHEETS

                                                                    December 31,   December 31,
                                                                        1996           1995


    Assets:
<S>                                                                 <C>            <C>        
     Cash                                                           $   102,737    $   586,729
     Receivable from IDS Life for contracts sold                             --        300,000

     Investments in securities, at value (Note 2)
      (identified cost $10,254,310)                                     10,254,310              --
     Investments in unconsolidated joint ventures,
       at fair value (cost of $36,299,366 and
       $35,858,482 at December 31, 1996
       and December 31, 1995, respectively) (Note 4)                 23,384,605     24,150,472
     Participation in mortgage loan, at fair
       value (cost of $0 and $3,047,188 at December 31, 1996
       and December 31, 1995, respectively) (Note 4)                         --      2,960,806
     Investment in wholly-owned real estate
      property (Note 5):
       Building, at fair value (cost of $0
         and $14,174,329 at December 31, 1996 and
         December 31, 1995, respectively)                                    --     12,380,339
       Land, at fair value (cost of $0 and $3,915,263
         at December 31, 1996 and December 31, 1995, respectively)           --      3,915,263
       Deferred borrowing costs, net of accumulated
         amortization of $157,577 at
         December 31, 1995                                                   --         23,879
     Other assets                                                         4,277         43,135
                                                                    ------------   -----------

         Total assets                                               $33,745,929    $44,360,623
                                                                    ============   ===========


    Liabilities:
     Payable to IDS Life for:
       Operating expenses                                           $    42,340    $    76,619
       Contract terminations                                              4,793        271,318
     Accrued mortality and expense risk fee                              32,991         40,420
     Accrued asset management fee                                        41,239         50,525
     Liabilities related to wholly-owned
      real estate property (Note 5):
       Accounts payable and other liabilities                            79,090        244,937
       Mortgage payable                                                     --       7,770,339
                                                                    -----------    -----------

        Total liabilities                                               200,453      8,454,158
                                                                    ===========   ============


    Contract Owners' Equity:
     Net assets applicable to Variable Annuity
       contracts in accumulation period                             $33,545,476    $35,906,465
                                                                    ============   ===========


    Accumulation units outstanding                                   34,144,955     36,353,929
                                                                    ============   ===========

    Net asset value per accumulation unit                           $       .98    $       .99
                                                                    ============   ===========


    See accompanying notes to financial statements.

</TABLE>


<PAGE>


<TABLE>
<CAPTION>

PAGE 20
                            IDS LIFE ACCOUNT RE
                                    of
                         IDS LIFE INSURANCE COMPANY

                          STATEMENTS OF OPERATIONS



                                                                For the years ended

                                                     December 31,   December 31,   December 31,
                                                         1996           1995           1994


    Income (Note 4):
<S>                                                  <C>            <C>            <C>        
     Interest income                                 $   385,026    $    264,581   $   286,386
     Account's equity in earnings of
       unconsolidated joint ventures                   2,167,460       1,924,741     2,094,682
     Rental income                                     1,887,995       2,379,439     2,235,867
     Realized loss on payoff of participation
       in mortgage loan                                  (24,533)             --            --
     Unrealized depreciation of
       participation in mortgage loan                   (147,608)        (27,817)       (1,577)
     Unrealized appreciation of investment
       in wholly-owned real estate property                   --         138,764            --
     Unrealized depreciation of
       investments in unconsolidated joint ventures   (1,206,750)     (3,999,782)   (2,361,701)
     Realized loss on sale of wholly-owned real estate
       property                                            (725,436)             --            --
                                                         -----------   -------------  -----------

         Total income                                  2,336,154         679,926     2,253,657
                                                     ------------   -------------  -----------


    Expenses (Note 3):
     Asset management fee                                561,742         603,620       765,557
     Mortality and expense risk fee                      449,393         482,896       502,607
     Professional services                                42,133          39,715        36,384
     Amortization of deferred borrowing costs             19,602          25,851        25,852
     Salaries                                             17,562          28,218        34,091
     Revolving loan interest                                  --          94,124        26,169
     Other operating expenses                             17,823          27,884        17,132
     Operating expenses related to wholly-owned
      real estate property:
       Interest                                          551,434         741,811       749,268
       Utilities                                         139,334         153,416       194,543
       Repairs and maintenance                           158,047         219,829       144,472
       Property and other taxes                          160,633         186,440       200,243
       Salaries                                          174,075         181,540       216,137
       Management fees                                    89,712         118,983       112,234
       Other                                             108,155         154,120       175,358
                                                     ------------   -------------  -----------

         Total expenses                                2,489,645       3,058,447     3,200,047
                                                     ------------   -------------  -----------


    Net loss                                         $  (153,491)    $(2,378,521)   $ (946,390)
                                                     =============   ============   ===========



</TABLE>

    See accompanying notes to financial statements.



<PAGE>


<TABLE>
<CAPTION>

PAGE 21

                            IDS LIFE ACCOUNT RE
                                    of
                         IDS LIFE INSURANCE COMPANY

               STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY





                                                                 For the years ended

                                                      December 31,  December 31,   December 31,
                                                          1996          1995           1994


<S>                                                  <C>            <C>            <C>         
    Net loss                                         $   (153,491)  $ (2,378,521)  $  (946,390)
    Contract purchase proceeds                          2,049,160     24,922,267     1,452,798
    Contract termination payments                      (4,256,658)   (22,631,012)   (6,637,325)
                                                       -----------   ------------     ---------

    Decrease in net assets                             (2,360,989)       (87,266)   (6,130,917)

    Contract owners' equity at
      beginning of year                                35,906,465     35,993,731     42,124,648
                                                     -------------  -------------  ------------

    Contract owners' equity at end of year           $ 33,545,476   $ 35,906,465   $ 35,993,731
                                                     =============  =============  ============





    Accumulation Unit Activity

      Units purchased with proceeds from sale
        of contracts                                    2,063,252     23,170,080      1,334,632
      Units redeemed for contract terminations         (4,272,226)   (21,054,331)    (6,096,883)
                                                     -------------  -------------  -------------

      Net increase (decrease) in units                 (2,208,974)     2,115,749     (4,762,251)

      Units outstanding at beginning of year           36,353,929     34,238,180     39,000,431
                                                     -------------  -------------  ------------

      Units outstanding at end of year                 34,144,955     36,353,929     34,238,180
                                                     =============  =============  ============


</TABLE>

    See accompanying notes to financial statements.



<PAGE>

<TABLE>
<CAPTION>


PAGE 22
                              IDS LIFE ACCOUNT RE
                                      of
                           IDS LIFE INSURANCE COMPANY

                            STATEMENTS OF CASH FLOWS


                                                                For the years ended

                                                      December 31,   December 31,   December 31,
                                                          1996           1995           1994


    Cash flows from operating activities:
<S>                                                  <C>             <C>             <C>         
     Net loss                                        $   (153,491)   $ (2,378,521)   $  (946,390)
     Adjustments to reconcile net loss to
     net cash used in operating activities:
       Account's equity in earnings of
         unconsolidated joint ventures                 (2,167,460)     (1,924,741)    (2,094,682)
       Change in accrued interest on participation
         in mortgage loan                                  (5,400)          5,400             --
       Amortization of borrowing costs                     19,602          25,851         25,852
       Change in cumulative discount amortization
         on short-term investments                        (10,926)            --          12,590
       Change in unrealized depreciation of investments
         in unconsolidated joint ventures               1,206,750       3,999,782      2,361,701
       Change in unrealized depreciation (appreciation)
         of participation in mortgage loan                147,608          27,817          1,577
       Loss on payoff of participation in mortgage loan    24,533              --             --
       Change in unrealized (appreciation)
         depreciation of investment in wholly-owned
         real estate property                                  --        (138,764)            --
       Loss on sale of wholly-owned
       real estate property                               725,436              --             --
       Change in other assets                              38,858          (8,628)         1,505
       Change in payable to IDS Life-operating expenses   (34,279)         18,219         (3,889)
       Change in accrued mortality and expense risk fees   (7,429)            284         (4,531)
       Change in accrued asset management fees             (9,286)            354         (5,663)
       Change in payables and other liabilities related
         to wholly-owned real estate property            (165,847)         32,740         49,580
       Change in payable to IDS Life for revolving
         loan interest                                         --          (9,224)         9,224
                                                     -------------  --------------  ------------
           Total adjustments to net loss                 (237,840)      2,029,090        353,264
                                                     -------------  --------------  ------------
           Net cash used in operating activities         (391,331)       (349,431)      (593,126)
                                                     -------------  --------------  -------------

    Cash flows from investing activities:
     Net sales (purchases) of short-term securities   (10,243,384)             --      2,481,059
     Sale of wholly-owned real estate property            15,574,443           --             --
     Capital improvements to wholly-owned real estate          --        (163,781)      (110,874)
     Distributions received from joint ventures         1,726,577       1,504,514      1,457,190
                                                     -------------  --------------  ------------
           Net cash provided by investing activities    7,057,636       1,340,733      3,827,375

    Cash flows from financing activities:
     Proceeds from sales of contracts                   2,349,160      24,627,492      1,448,173
     Payments for contract terminations                (4,523,183)    (22,369,833)    (6,674,263)
     Decrease in mortgage payable                      (7,770,339)        (81,940)       (74,542)
     Change in payable to IDS Life for revolving loan          --      (2,100,000)     2,100,000
     Contributions to Monmouth renovation                      --        (685,151)            --
     Payoff of participation in mortgage loan           2,794,065              --             --
                                                     -------------  --------------  ------------
           Net cash used in financing activities       (7,150,297)       (609,432)    (3,200,632)
                                                     -------------  --------------  -------------
    Net increase (decrease) in cash                      (483,992)        381,870         33,617
    Balance of cash at beginning of year                  586,729         204,859        171,242
                                                     -------------  --------------  ------------
    Balance of cash at end of year                   $    102,737   $     586,729   $    204,859
                                                     =============  ==============  ============


    Supplemental cash flow disclosure:
     Cash paid for mortgage and revolving
      loan interest                                  $    551,434   $     835,935   $    775,437
                                                     =============  ==============  ============



</TABLE>

    See accompanying notes to financial statements.






<PAGE>



PAGE 23
                      IDS LIFE ACCOUNT RE
                              of
                   IDS LIFE INSURANCE COMPANY

                       December 31, 1996

                  NOTES TO FINANCIAL STATEMENTS

1. Organization

   IDS Life Account RE (the  Account) is a segregated  asset account of IDS Life
   Insurance  Company (IDS Life) under  Minnesota law. A registration  statement
   under the  Securities Act of 1933 relative to the deferred  variable  annuity
   contracts (the Contracts) issued by the Account became effective on August 6,
   1987.  Effective May 1, 1995, the Account  discontinued  new contract  sales.
   Although  additional  purchase payments may be made into existing  contracts,
   prior to making any additional  purchase  payment an existing  contract owner
   should bear in mind that the  Account  intends to  liquidate  its real estate
   related  investments  over time.  The assets of the  Account are held for the
   exclusive  benefit of contract owners and are not chargeable with liabilities
   arising out of any other business conducted by IDS Life.

2. Summary of Significant Accounting Policies

   The accompanying financial statements have been prepared on the accrual basis
   of accounting.  Significant  accounting  policies followed by the Account are
   summarized below.

   Investments in Securities
   Investments  in  short-term  securities  maturing  more than 60 days from the
   valuation date are valued at the market price or approximate fair value based
   on current  interest  rates;  those maturing in 60 days or less are valued at
   amortized cost. The Account also may invest in  intermediate-term  bonds with
   maturities  of up to five years which are valued at fair value as  determined
   by reference to market  quotations,  market  indices,  matrices and data from
   independent brokers.

   Security  transactions are accounted for on the date securities are purchased
   or sold. Interest income,  including amortization of premium and discount, is
   accrued daily.

   Consolidation  and  Unconsolidated  Joint Ventures The Account's policy is to
   consolidate  the underlying  assets,  liabilities  and operations of property
   investments  where 50 percent or greater  ownership  position is  maintained.
   Investments  in  unconsolidated  joint  ventures  with less  than 50  percent
   ownership interest are accounted for on the equity method of accounting.

   Investments  in Real Property,  Mortgage Loans and Land/Sale-  Leasebacks The
   Account  initially  values  real  estate  related  investments  at their cost
   (including  acquisition or mortgage  placement fees and other  acquisition or
   placement expenses) unless circumstances  otherwise indicate that a different
   value should be used. Subsequently, the value of these investments


<PAGE>



PAGE 24
   will be  periodically  determined  by JMB Annuity  Advisers  (the  Investment
   Adviser).  Procedures  utilized to determine the estimated  value include the
   following:  (i) at the time of purchase and once every two years  thereafter,
   each  real  property   investment   and  each  real  property   underlying  a
   participating  mortgage  loan  or  land  sale-leaseback  investment  will  be
   appraised  by an  independent  appraiser  or an  existing  appraisal  will be
   updated,  (ii) various assumptions  including,  but not limited to, occupancy
   and rental rates, expense levels, net operating income, average capital costs
   and capitalization rates upon sale will be used in determining the discounted
   present value of an  investment's  estimated cash flow and its estimated sale
   proceeds or its asset value under a direct  capitalization  methodology,  and
   (iii) for fixed  interest  rate  mortgage  loans and fixed  rental  rate land
   sale-leaseback investments, estimated values will be determined by comparison
   to  current  interest  rates on U.S.  Treasury  debt as  adjusted  for a risk
   differential of the Account's investments. The relative weight to be given to
   a  particular  methodology  or other  relevant  factors  in  determining  the
   estimated  asset  value of a  particular  real  property  will depend upon an
   assessment of the existing and  anticipated  market  conditions  and property
   specific factors  relevant to such real property.  There is no assurance that
   the assumptions,  estimates and  methodologies  used in valuing the Account's
   real  estate  related  investments  will in fact prove  accurate or that such
   values would in fact be realized. Such estimates involve subjective judgments
   as the actual price of real estate can only be determined between independent
   third parties in sales  transactions.  In addition,  any expenses that may be
   borne by the  Account in  connection  with the  disposition  of a real estate
   related investment are not deducted in determining its estimated value.

   Because the Account  values its real property  investments  at estimated fair
   values, no provision for depreciation expense is recorded.

   Each day the Account will record estimated  income and expenses  attributable
   to real  estate  related  assets.  Periodically,  adjustments  to reflect the
   difference between estimated and actual income and expenses will be made.

   Federal Income Taxes
   IDS Life is taxed as a life insurance company. The Account is treated as part
   of IDS Life for Federal income tax purposes.  Under  existing  Federal income
   tax law,  no income  taxes are  payable  with  respect  to any  income of the
   Account.

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



<PAGE>



PAGE 25
3. Fees and Expenses

   The  Account  pays a  mortality  and  expense  risk fee to IDS Life  which is
   accrued  daily  and is equal,  on an annual  basis,  to 1.00  percent  of the
   average daily asset value, as defined, of the Account.  The mortality risk is
   IDS Life's  guarantee to make retirement  payments  according to the terms of
   the Contract, no matter how long annuitants live. The expense risk portion of
   the fee is paid to IDS Life for its  guarantee  that the various fees paid by
   the Account to IDS Life will not be  increased  in the future.  For the years
   ended December 31, 1996, 1995 and 1994, the Account paid IDS Life a mortality
   and expense risk fee of $449,393, $482,896 and $502,607, respectively.

   The Account also pays IDS Life an asset  management  fee equal,  on an annual
   basis, to 1.25 percent of the average daily asset value,  as defined,  of the
   Account.  A portion of this fee,  equal to 0.95 percent of the average  daily
   asset value, is paid by IDS Life to the Investment Adviser. The total fee may
   be  adjusted  upward  to  a  maximum  of  1.50  percent  depending  upon  the
   performance  of the Account's real property  investments as measured  against
   the  FRC  Property  Index.  The  performance-related  portion  of the  fee is
   calculated  and recorded on an annual  basis when the FRC  Property  Index is
   released each year for the preceding  calendar year. No performance fees were
   paid by the Account in 1996 for 1995 or in 1995 for 1994. The performance fee
   paid by the  Account  in 1994 for  1993 was  $137,299.  Any  performance  fee
   adjustment  will be paid  to the  Investment  Adviser.  For the  years  ended
   December 31,  1996,  1995 and 1994,  the Account paid total asset  management
   fees of $561,742, $603,620 and $765,557, respectively.

   IDS Life receives from the Account an acquisition and mortgage  placement fee
   equal to 3.75 percent of the total cash to be paid or advanced by the Account
   (net  of  any  borrowings  in the  case  of  real  property  investments)  in
   connection  with  each  real  property  investment,  mortgage  loan  or  land
   sale-leaseback  investment made by the Account.  A portion of this fee, equal
   to 3.50 percent,  is paid to the Investment  Adviser in consideration for its
   services in  connection  with the  acquisition  or  placement  of real estate
   related  investments of the Account.  No acquisition  and mortgage  placement
   fees were paid in 1996, 1995 or 1994.

   The Account pays for all operational expenses incurred on its behalf. For the
   years  ended  December  31,  1996,  1995 and  1994,  IDS Life was  reimbursed
   $35,385, $56,102 and $51,223,  respectively,  for personnel-related  expenses
   incurred in the administration of the Account.

4. Investments in Unconsolidated Joint Venture Partnerships and
   Participation in Mortgage Loan

   Joint Venture Partnership - N/S Associates

   IDS Life, on behalf of the Account,  entered into a joint venture partnership
   called N/S Associates, which on April 4, 1988


<PAGE>



PAGE 26
   acquired  interests in two enclosed  super  regional  shopping malls that are
   described below.

   The terms of N/S Associates'  partnership  agreement  provide that its annual
   net cash  flows  and net  sales or  refinancing  proceeds  generally  will be
   distributed  among all of the partners in  accordance  with their  respective
   percentage ownership interests in N/S Associates.

   The Account  contributed  approximately  $12,008,000 to N/S Associates as its
   capital  contribution.   The  percentage  interest  of  the  Account  in  N/S
   Associates is 5.92 percent.  In connection  with the purchase of the shopping
   malls,  the  Account  paid to IDS  Life  and  the  Investment  Adviser  their
   respective  portions  of  the  acquisition  fee  amounting  to  approximately
   $450,000.

   Summary of Real Estate Investments Made Through N/S Associates

   Milwaukee, Wisconsin - Northridge Mall

   The Account, through N/S Associates, owns an interest in an existing enclosed
   super regional shopping center in Milwaukee,  Wisconsin,  known as Northridge
   Mall.  The mall shops and four  adjacent  department  stores  comprising  the
   shopping center contain approximately 1,053,000 square feet of gross leasable
   area,  of  which  N/S  Associates  owns  approximately  399,000  square  feet
   consisting  of mall shops  (approximately  388,000  square  feet) and storage
   space  (approximately  11,000 square feet). The remaining 654,000 square feet
   of gross leasable area are occupied by four department stores, three of which
   own their own stores and a portion of the parking area. The fourth department
   store leases its space from an unaffiliated third party.

   N/S Associates acquired its interest in the shopping center in April 1988 for
   a purchase price of approximately $108,107,000, of which $89,653,000 was paid
   in cash at  closing,  subject  to the  existing  mortgage  loans  with a then
   outstanding  aggregate balance of approximately  $18,454,000.  In addition to
   the purchase price, a reserve of $8,900,000 was established, all of which had
   been  used to pay  for  certain  capital  improvements  made at the  shopping
   center. In February 1995, the two mortgage loans secured by the property were
   repaid with a portion of the proceeds from the  refinancing of the Southridge
   Mall mortgage loan.

   The  shopping  center is being  managed  by an  affiliate  of the  Investment
   Adviser under a management agreement. The affiliate of the Investment Adviser
   receives  an annual fee equal to 3.75  percent of the gross  receipts  of the
   property plus reimbursement of certain direct expenses in connection with the
   property management.

   Greendale, Wisconsin - Southridge Mall

   The Account, through N/S Associates, owns an interest in an existing enclosed
   super regional shopping center in Greendale,  Wisconsin,  known as Southridge
   Mall.  The mall shops and five  adjacent  department  stores  comprising  the
   shopping center



<PAGE>



PAGE 27
   contain approximately  1,297,000 square feet of gross leasable area, of which
   N/S Associates owns  approximately  437,000 square feet,  including the space
   leased to one of the department  stores. The remaining 860,000 square feet of
   gross leasable area are occupied by four other  department  stores,  three of
   which own their own  stores  and a portion of the  parking  area.  The fourth
   department store leases its space from an unaffiliated third party.

   N/S  Associates  acquired its interest in the shopping  center for a purchase
   price of approximately $115,401,000, of which $96,865,000 was paid in cash at
   closing.  In  addition  to the  purchase  price,  a reserve of  approximately
   $7,250,000 was  established for capital  improvements,  all of which had been
   used to pay for certain capital  improvements made at the shopping center. In
   February  1995,  the mortgage  loan secured by the property was repaid with a
   portion of the proceeds from a new mortgage  loan in the principal  amount of
   $35,000,000.  The new mortgage loan has a term of seven years, bears interest
   at 8.35  percent per annum and  requires  monthly  payments of interest  only
   prior to  maturity.  Proceeds  from the new  mortgage  loan were also used to
   repay the two mortgage  loans secured by Northridge  Mall.  The remaining net
   proceeds  from the new loan  were  used to pay  approximately  $2,900,000  of
   tenant  improvement  and other  capital  costs  incurred for  Northridge  and
   Southridge Malls.

   The  shopping  center is being  managed  by an  affiliate  of the  Investment
   Adviser under a management agreement. The affiliate of the Investment Adviser
   receives  an annual fee equal to 3.75  percent of the gross  receipts  of the
   property plus reimbursement of certain direct expenses in connection with the
   property management.

   Joint Venture Partnership - Monmouth Associates

   IDS Life, on behalf of the Account,  entered into a joint venture partnership
   called Monmouth  Associates,  which on October 27, 1988 (i) acquired  certain
   land  underlying a super regional  shopping  center in Eatontown,  New Jersey
   known as Monmouth  Mall,  (ii)  leased the land to the owner of the  shopping
   center  pursuant  to a long-term  ground  lease,  and (iii)  executed a first
   leasehold  mortgage loan to the owner of the shopping  center  secured by the
   leasehold real estate and the  improvements  thereon as more fully  described
   below.  The  owner  of  the  shopping  center  (the   Borrower/Lessee)  is  a
   partnership whose partners are not affiliated with Monmouth Associates.

   The terms of Monmouth  Associates'  partnership  agreement  provide  that its
   annual net cash flows and net sales or refinancing proceeds generally will be
   distributed  among all of the partners in  accordance  with their  respective
   percentage  interests  in  Monmouth   Associates.   The  Account  contributed
   approximately  $10,000,000  to Monmouth  Associates  as its  initial  capital
   contribution.  The  Account  has made  additional  capital  contributions  of
   approximately  $685,000.  The percentage  interest of the Account in Monmouth
   Associates is 6.97 percent.


<PAGE>



PAGE 28
   In  connection  with the  investment,  the  Account  paid to IDS Life and the
   Investment Adviser their respective  portions of the acquisition and mortgage
   placement fee amounting to approximately $375,000.

   Summary of Real Estate Investment Made Through Monmouth
   Associates

   Eatontown, New Jersey - Monmouth Mall

   The Account,  through Monmouth  Associates,  acquired an interest in the land
   underlying a shopping center in Eatontown, New Jersey known as Monmouth Mall.
   The mall is  located on  approximately  90 acres of land,  of which  Monmouth
   Associates owns approximately 88.5 acres, subject to the rights of one of the
   department  store  tenants to acquire the land  underlying  its store and the
   improvements thereon for nominal consideration. The remaining acres are owned
   by 2 department stores. Monmouth Associates acquired its interest in the land
   for a purchase price of approximately $13,000,000.

   Monmouth Associates entered into an agreement whereby the land underlying the
   mall is leased back to the  Borrower/Lessee  under a long-term  ground lease.
   The  long-term  ground  lease,  which  has a term of 75 years,  provides  for
   monthly base rent  aggregating  $1,170,000  annually with minimum payments of
   $650,000.  The  long-term  ground lease also  provides for  contingent  rent,
   payable  quarterly  out of the excess,  if any, of  substantially  all of the
   gross receipts from the shopping center received by the Borrower/Lessee  over
   certain  base  amounts,  equal to the sum of (x) a  specified  annual  amount
   (commencing  in the fourth lease year at $390,000 per annum and increasing in
   the sixth lease year to  $520,000  per  annum),  increased  until paid at the
   "applicable rate" of interest payable under the first leasehold mortgage loan
   described  below  (such  amount  as so  increased  herein  called  the  "rent
   shortfall  amount"),  plus (y) 15 percent of the balance of such excess gross
   receipts  remaining after deducting the aggregate amount paid at such time of
   the rent shortfall  amount under the long-term ground lease and the "interest
   shortfall amount" under the first leasehold mortgage loan as described below.

   In  addition,  Monmouth  Associates  made  a  first  leasehold  participating
   mortgage  loan  in the  original  principal  amount  of  $128,920,000  to the
   Borrower/Lessee  which  is  secured  by the  leasehold  real  estate  and the
   improvements thereon. The current loan amount is $127,670,000. The loan has a
   term of 15 years,  which may be  extended  from time to time at the option of
   Monmouth  Associates  for up to an  additional 20 years.  The loan  currently
   provides  for  monthly   payments  of  base   interest  at  a  base  rate  of
   approximately  5.00 percent per annum for each loan year. The first leasehold
   mortgage also provides for quarterly payments of contingent interest, payable
   out of the excess, if any, of substantially all of the gross receipts from


<PAGE>



PAGE 29
   the  shopping  center  received  by the  Borrower/Lessee  over  certain  base
   amounts,  equal  to the sum of (x)  the  difference  between  the  amount  of
   interest payable on the loan at the "applicable rate" and that payable at the
   base rate described above,  increased until paid at the applicable rate (such
   amount as so increased herein called the "interest shortfall  amount"),  plus
   (y) 45 percent of the balance of such excess gross receipts  remaining  after
   deducting the aggregate amount paid at such time of the rent shortfall amount
   under the ground  lease and the  interest  shortfall  amount  under the first
   leasehold  mortgage loan. The  "applicable  rate" under the loan currently is
   8.97 percent per annum for each loan year.  In  addition,  upon a
   joint sale  or  refinancing  of the  land  and  improvements  or at maturity
   of the leasehold  mortgage  loan,  Monmouth  Associates is entitled to 
   receive  certain participations  in the proceeds from such sale or 
   refinancing  after payment of its  investment  in the land and/or  repayment
   of the  principal  amount of the leasehold mortgage loan. For financial 
   reporting  purposes,  Monmouth Associates discontinued the accrual of 
   contingent  interest on the leasehold  mortgage loan in April  1992 as a 
   result  of  uncertainty  as to the  collectibility  of such contingent
   interest in light of the previous decrease in the estimated value of
   Monmouth Mall. In addition, for financial reporting purposes, no contingent 
   rent was accrued  under the ground lease for 1996,  1995 or 1994.  In 1995,
   Monmouth Associates wrote off the receivable  balance of $3,576,000
   primarily related to the accrued interest  resulting from the difference
   between the accrual and pay rates ("contingent  interest") recorded prior to
   1992, due to the uncertainty as to the collectibility of these amounts.

   Monmouth  Associates  is obligated to make  certain  additional  loans to the
   Borrower/Lessee under certain circumstances to finance the cost of 60 percent
   of tenant improvements or other ordinary capital  expenditures.  In addition,
   in May  1994,  Monmouth  Associates  made a loan  to  finance  the  cost of a
   renovation of the shopping  center,  which commenced during the third quarter
   of 1994.  The renovation  consists of, among other things,  the addition of a
   food court and  cinema  and the  re-merchandising  of  approximately  300,000
   square  feet of gross  leasable  area.  The  renovation  loan  from  Monmouth
   Associates bears interest at a fixed interest rate of 10.5 percent per annum.
   In addition,  Monmouth Associates' participation in certain levels of sale or
   refinancing  proceeds  from the  property  will be increased  until  Monmouth
   Associates  has  received  aggregate  payments  equal to an internal  rate of
   return of 11  percent  per annum on its  investments  in the land  and/or the
   first  leasehold  mortgage loan. The maximum amount of the renovation loan is
   $29,100,000,  and the cost of the  renovation  is  currently  estimated to be
   $27,800,000,   including  accrued  and  deferred  interest  of  approximately
   $1,300,000.   As  of  December  31,  1996,  Monmouth  Associates  had  funded
   approximately $24,615,000,  using its cash reserves, cash flow and additional
   capital  contributions  made pro rata based upon the respective  interests of
   the joint  venture  partners  in Monmouth  Associates.  The  renovation  loan
   requires monthly payments of interest only until




<PAGE>



   PAGE 30
   maturity when the entire principal amount and any accrued and unpaid interest
   will be due. The renovation loan will mature contemporaneously with the first
   leasehold mortgage loan in October 2003, subject to acceleration or extension
   of the loan by Monmouth Associates under certain circumstances.

   Joint Venture - 1225 Connecticut Avenue, N.W.

   Washington, D.C. - 1225 Connecticut Avenue, N.W.

   In May 1990,  IDS Life,  on behalf of the Account,  acquired an interest in a
   newly  formed  Delaware   corporation,   1225  Investment   Corporation  (the
   Corporation)  owned jointly with certain other persons  described  below. The
   Corporation acquired an office building located in Washington,  D.C. known as
   1225 Connecticut Avenue, N.W. (1225 Connecticut).

   The  office  building,  which  was  completed  in  1968,  is  an  eight-story
   reinforced concrete frame building containing 184,432 square feet of rentable
   office space,  18,498 square feet of rentable retail space, 6,416 square feet
   of below grade  storage space and 100,024  square feet of subsurface  parking
   space for over 300 automobiles.

   The  Corporation  has  elected to qualify as a real estate  investment  trust
   (REIT)  pursuant to sections 856 through 860 of the Internal  Revenue Code of
   1986,  as amended  (the Code).  For each  taxable  year that the  Corporation
   qualifies  as a REIT,  the  Corporation  in  general  will not be  subject to
   federal corporate income tax or the District of Columbia corporate  franchise
   tax on its regular taxable income and will not be taxed on long-term  capital
   gain  income to the extent its income is  distributed  as  dividends.  If the
   Corporation  were to fail to  qualify  as a REIT,  it would be taxed at rates
   applicable  to  a  corporation  on  its  taxable   income,   whether  or  not
   distributed.

   The Account  owns  approximately  16.3 percent of the  outstanding  shares of
   common stock of the Corporation.  Certain of the outstanding shares of common
   stock of the  Corporation  not owned by the Account are owned by an affiliate
   of the Investment Adviser.

   The  Corporation  purchased 1225  Connecticut  from the seller for a purchase
   price of  approximately  $54,125,000  (net of  prorations  and  miscellaneous
   closing  costs),  consisting of  $51,425,000  paid in cash and  assumption of
   approximately  $2,700,000  of  mortgage  indebtedness  then  encumbering  the
   property.  The  Corporation  paid  approximately  $2,130,000  for real estate
   brokerage  commissions  to an  independent  third party and  certain  closing
   costs.   The  Account   contributed   $9,000,000  for  its  interest  in  the
   Corporation.  The  Account  has  also  paid  acquisition  fees  amounting  to
   $337,500.

   In January 1994,  the  Corporation  refinanced its mortgage loan with a first
   mortgage loan in the principal amount of $7,000,000  bearing interest at 6.98
   percent per annum. The new loan


<PAGE>



PAGE 31
   requires  monthly  payments of interest only  aggregating  $488,600 per annum
   until  maturity in February  2001 when the  principal  amount  together  with
   accrued interest will be due and payable.  Under certain  circumstances,  the
   principal  amount  of the loan may be  prepaid  in whole  (but not in  part),
   subject to a prepayment  premium.  Pursuant to the deed of trust securing the
   mortgage loan, the  Corporation is prohibited  from modifying Ernst & Young's
   primary lease or from  entering into certain other tenant leases  without the
   lender's  consent.  Prior to selling the property or encumbering the property
   with any  additional  debt,  the  Corporation  must obtain the consent of the
   lender,  which may be  arbitrarily  withheld.  However,  subject  to  certain
   restrictions,  the  Corporation has a one-time right to transfer title to the
   property together with an assumption of the mortgage loan.

   The  property  is being  managed  under an  agreement  pursuant  to which the
   manager is obligated to manage 1225 Connecticut,  collect all of the receipts
   from operations and, to the extent  available from such receipts,  pay all of
   the  expenses  of 1225  Connecticut.  The  manager is paid a fee equal to 2.5
   percent of the gross revenues of 1225  Connecticut,  plus  reimbursement  for
   certain  direct  expenses of the manager.  The property had  previously  been
   managed by JMB Properties Company, an affiliate of the Investment Adviser. In
   December 1994, JMB Properties Company sold substantially all of its assets to
   an  unaffiliated  third  party,  and  certain  management  personnel  of  JMB
   Properties  Company  became  management  personnel of the third  party.  As a
   result of the sale, the successor to JMB Properties  Company's  assets became
   the  property  manager of the 1225  Connecticut  office  building on the same
   terms that existed prior to the sale.

   1225  Connecticut  leases  approximately 80 percent of the available space of
   the property to one tenant under leases,  all with terms of 12 years. For the
   year ended  December  31,  1996,  such tenant  represented  approximately  77
   percent of total revenues.

   Pursuant to a lease currently in effect,  an unaffiliated  third party leases
   and operates the entire  parking  garage  (subject to certain  parking rights
   provided for tenants of the property) until November 1997. The lease provides
   for a fixed rent payment of $485,000 a year,  provided  that the lessee shall
   pay the  operating  expenses of the parking  garage and does not provide such
   lessee with an option to extend the term of the lease.


<PAGE>



PAGE 32

   Unconsolidated Joint Ventures - Summary Information
<TABLE>
<CAPTION>

   Summary  information  for the Account of its  investments  in  Unconsolidated
   Joint Ventures as of and for the years ended December 31, 1996 and 1995 is as
   follows:

                                                       As of and for     As of and for
                                                       the year ended    the year ended
                                                       Dec. 31, 1996     Dec. 31, 1995


Account's investment in Unconsolidated
<S>                                                    <C>               <C>          
    Joint Ventures                                     $  23,384,605     $  24,150,472

Account's share of net investment income from
    Unconsolidated Joint Ventures                      $   2,167,460     $   1,924,741

Net depreciation in Unconsolidated Joint Ventures      $  (1,206,750)    $  (3,999,782)

Total net investment income of Unconsolidated
    Joint Ventures                                     $  27,455,000     $  20,070,000

Total assets of Unconsolidated Joint Ventures          $ 343,717,000     $ 346,343,000

Total liabilities of Unconsolidated Joint Ventures     $  52,691,000     $  54,722,000

</TABLE>


   Participation in Mortgage Loan - Riverpoint Associates

   Chicago, Illinois - Riverpoint Center

   In August  1989,  IDS Life,  on behalf of the  Account,  participated  in the
   initial  funding of a non-recourse  participation  first mortgage loan in the
   principal  amount of $26,000,000.  The Account's share of the initial funding
   was  $2,666,660 or 10.26 percent of this loan.  The remaining  portion of the
   loan was funded by affiliates of the Investment Adviser (herein,  the Account
   and said  affiliates  are  collectively  called  the  Lenders).  The Loan was
   secured by a first mortgage on a shopping  center known as Riverpoint  Center
   in Chicago,  Illinois.  The shopping  center was owned by a partnership  (the
   Borrower) whose general partners were not affiliated with any of the Lenders.
   In connection  with the loan,  the Account paid to the  Investment  Adviser a
   mortgage placement fee amounting to approximately  $108,000,  less $37,500 in
   loan origination fees paid to the Investment  Adviser by the Borrower,  for a
   net fee paid of approximately $70,500 paid by the Account.

   Additional  amounts  aggregating   approximately  $2,040,000  (of  which  the
   Account's share was approximately $209,000) had been funded since the Initial
   Funding.  The Borrower did not qualify for any additional  fundings above the
   $28,040,000  which had been funded to date,  and no additional  fundings were
   made by the Lenders.

   The ten-year loan required  periodic payments of interest only and bore basic
   interest at the rate of 8.84  percent per annum in the first loan year,  8.75
   percent per annum  during the second loan year,  increasing  0.50 percent per
   annum in the fourth and 0.25  percent per annum in the seventh loan year to a
   maximum


<PAGE>



PAGE 33
   rate of 9.50  percent per annum,  payable  monthly in advance.  The loan also
   provided for additional annual simple accrual of interest at the rate of 2.00
   percent  per  annum  payable  upon  prepayment  or  maturity.  For  financial
   reporting  purposes,  commencing  in August of 1991,  the  Account  suspended
   recognition  of income  related to the  simple  accrual  interest  receivable
   (deferred until  maturity).The loan also provided for additional  interest in
   an amount  equal to a percentage  of annual gross income from the  underlying
   property (exclusive of tenant  reimbursement of expenses) in excess of a base
   amount and, on sale or repayment of the loan, an amount equal to a percentage
   of the subsequent  increase in the value of the underlying property in excess
   of a specified amount.  Such amounts of additional  interest payments made by
   the Borrower would have been used to offset,  on a  dollar-for-dollar  basis,
   the amount of accrued interest payable.  The loan was generally  non-recourse
   to the Borrower and its partners.

   The borrower had  notified  the Lenders  that it was  experiencing  financial
   difficulties and approached the Lenders regarding a loan modification. During
   the third  quarter  of 1996,  the  Lenders  and  Borrowers  finalized  a loan
   modification  whereby they reached an agreement to defer payment of a portion
   of the  scheduled  debt service from  September 15, 1995 to July 15, 1996. In
   conjunction with the loan modification agreement, the scheduled maturity date
   of the loan was accelerated to December 31, 1997. Finally, the Lenders agreed
   to accept at certain  dates  through  June 30, 1997  repayment of the loan at
   specified  amounts.  On December  24, 1996,  the borrower  repaid the lenders
   $27,400,000  (of which the Account's share was  approximately  $2,800,000) in
   full satisfaction of the loan as agreed upon.

   The shopping center,  completed in 1989, is located on approximately 17 acres
   and consists of approximately 200,800 square feet of gross leasable area.

5. Investments in Wholly-owned Real Estate Property

   Fairfax County, Virginia - West Springfield Terrace Apartments

   In August  1989,  IDS Life,  on behalf of the  Account,  acquired  a 244-unit
   garden apartment complex known as West Springfield Terrace Apartments,  which
   is located in Fairfax County, Virginia.

   The apartment complex,  which was completed in 1978,  consists of 17 separate
   three and four-story  buildings of wood frame with brick veneer  construction
   containing  52  one-bedroom   units,  22  one-bedroom  and  den  units,   118
   two-bedroom units, 22 two-bedroom and den units, and 30 three-bedroom  units.
   The  complex   contains  a  swimming  pool,   tennis  court,   clubhouse  and
   approximately 380 parking spaces.

   The Account paid  $15,222,278  for the apartment  complex in cash at closing,
   excluding closing costs and prorations. In connection with the acquisition of
   the property,  the Account paid a prepayment  charge at closing of $92,221 to
   the lender that held the mortgage loan on the property. The Account also paid
   to IDS Life and the Investment Adviser their respective


<PAGE>




   PAGE 34
   portions of the  acquisition  fee  amounting to $274,834.  At the time of the
   acquisition it was  anticipated  that an additional  amount of  approximately
   $1,450,000 would be used by the Account to pay the cost of upgrading kitchens
   and  bathrooms  and certain other  upgrades and capital  improvements  at the
   complex.  The  renovation  project  was  subsequently  increased  to  include
   replacing certain carpets in units as they were renovated and to increase the
   number of units that received certain  upgrades.  The renovation  project was
   completed during 1992 at an aggregate cost of approximately  $1,900,000.  The
   Account paid IDS Life and the Investment Adviser their respective portions of
   the  acquisition  fee amounting to $18,000 in connection  with the renovation
   project.

   In November 1989, the Account obtained a loan from an institutional lender in
   the  principal  amount  of  $8,000,000  secured  by a first  mortgage  on the
   property.  The loan was repaid in  September  1996 as a result of the sale of
   this  property,  as discussed  below.  The loan had a term of seven years and
   bore interest at a rate of 9.50 percent per annum.  The loan required monthly
   payments  of interest  only during the first three loan years and  thereafter
   was amortizable over a 27-year schedule through monthly payments of principal
   and interest  aggregating  $824,400 per annum until November  1996,  when the
   remaining  principal  balance and any accrued and unpaid interest was due and
   payable.

   On September 30, 1996 the Account sold land and related improvements known as
   the West  Springfield  Terrace  Apartments.  The purchaser was not affiliated
   with  the  Account  and  the  sale  price  was  determined  by   arm's-length
   negotiations.  The sale price for the land and  improvements  was $16,100,000
   (before deducting  selling costs) and was paid in cash at closing.  A portion
   of the net sale proceeds was utilized to retire the first  mortgage debt with
   an outstanding balance of $7,704,000.

   The  apartment  complex was being  managed for a fee equal to 5.00 percent of
   the gross revenues from the property,  plus  reimbursement  of certain direct
   expenses of the  manager.  The property  had  previously  been managed by JMB
   Properties  Company,  an  affiliate  of the  Investment  Adviser,  but  since
   December  1994 has been  managed on the same terms by an  unaffiliated  third
   party that purchased substantially all of JMB Properties Company's assets, as
   discussed in Note 4 in connection with the 1225 Connecticut office building.

6. Liquidity Arrangements with IDS Life

   The Account has experienced  substantial net contract  terminations  over the
   past several  years,  which have adversely  affected its liquidity.  In March
   1994,  the Account  obtained a short-term  revolving line of credit for up to
   $10  million  from  IDS  Life  to  pay  for  contract  surrenders  and  other
   obligations  under the  Contracts.  On June 2,  1995,  the line of credit was
   terminated and the Account repaid the  outstanding  balance under the line of
   credit with the proceeds from accumulation units purchased by IDS Life. As of
   December 31, 1996, IDS Life had cumulatively  contributed  $26,700,000 toward
   the purchase of accumulation units. IDS


<PAGE>



   PAGE 35
   Life  expects to continue to make  additional  payments  into the Account for
   accumulation units in order to maintain the Account and its liquidity.  As of
   December 31, 1996,  IDS Life's  portion of the  Contract  Owners'  Equity was
   $24,492,773, which represents 73% of total Contract Owners' Equity.



<PAGE>



PAGE 36
<TABLE>
<CAPTION>

Schedule III

                                               IDS LIFE ACCOUNT RE
                                       of
                           IDS LIFE INSURANCE COMPANY


                Participation in Mortgage Loan on Real Estate and
                           Interest Earned on Participation in Mortgage


                                December 31, 1996



                           Part 1 - Participation in Mortgage           Part 2 - Interest Earned on
                          Loan on Real Estate at Close of Year          Participation in Mortgage

Liens on Shopping Center:
                                      Principal unpaid    Amount of        Interest due
Riverpoint Center        Carrying         at close      mortgage being     & accrued at      Interest
Chicago, Illinois       Amount (A)        of period       foreclosed      end of period    Income Earned

<S>    <C>             <C>            <C>                 <C>             <C>              <C>         
       1996            $          --  $         --        $    --         $         --     $    256,843
                       -------------  =============       =========       =============    ============

       1995            $   2,966,206  $   2,875,853       $    --         $     (5,400)    $    264,581
                       =============  =============       =========       =============    ============

       1994            $   2,994,023  $   2,875,853       $    --         $         --     $    265,288
                       =============  =============       =========       =============    ============






</TABLE>


<TABLE>
<CAPTION>

(A) - Reconciliation  of the carrying value of the participation in the mortgage
loan:

                                                             1996              1995              1994
                                                        -------------     -------------     ---------

<S>                                                     <C>               <C>               <C>          
      Balance at the beginning of year...........       $   2,966,206     $   2,994,023     $   2,995,600

      Changes during year:
        Unrealized depreciation..................            (147,608)          (27,817)           (1,577)
        Loan repayment...........................          (2,794,065)               --                --
        Realized loss............................             (24,533)               --                --
                                                        --------------     -------------    -------------

      Balance at end of year.....................                  --         2,966,206         2,994,023
                                                        --------------     -------------    -------------





</TABLE>

<PAGE>



PAGE 37
<TABLE>
<CAPTION>

Schedule IV
                               IDS LIFE ACCOUNT RE
                                                of
                           IDS LIFE INSURANCE COMPANY


                       Real Estate Owned and Rental Income

                                December 31, 1996

                  Part 1 - Real Estate Owned at End of Year (A)
Apartment Complex:

 West Springfield                        Amount at                                                         Amount at
Terrace Apartments                    which carried      Cost of                        Carrying value     which carried
  Fairfax County,       Amount of     at beginning     improvements,     Unrealized    of real estate    at close of
    Virginia           encumbrances   of period (A)         etc.         Appreciation       sold           period (B)

<S>   <C>              <C>            <C>               <C>               <C>           <C>              <C>         
      1996             $         --   $ 16,295,602      $    136,544      $         --  $(16,432,146)    $         --
                       ============   =============     ============      ============= =============    ============

      1995             $  7,770,339   $ 15,993,057      $    163,781      $    138,764            --     $ 16,295,602
                       ============   =============     ============      ============= =============    ============

      1994             $  7,852,279   $ 15,882,183      $    110,874      $          --           --     $ 15,993,057
                       ============   ============      ============      ============= =============    ============

</TABLE>

<TABLE>
<CAPTION>
                                 Part 2 - Rental Income

                         Rents due         Total rental      Expended for
                        and accrued           income        interest taxes,    Net income
                         at end of          applicable       repairs, and      applicable
                           period           to period          expenses        to period

<S>   <C>               <C>                <C>               <C>              <C>       
      1996              $        --        $ 1,760,141       $ 1,381,391      $  378,750
                        ============       ===========       ===========      ==========

      1995              $     4,016        $ 2,379,439       $ 1,756,139      $  623,300
                        ============       ===========       ===========      ==========

      1994              $    (1,895)       $ 2,235,867       $ 1,792,255      $  443,612
                        ============       ===========       ===========      ==========

</TABLE>
<TABLE>
<CAPTION>

(A) Reconciliation of real estate owned:
                                                              1996               1995            1994
                                                          ------------      ------------     --------

<S>                                                       <C>               <C>             <C>         
      Balance at the beginning of period..........        $ 16,295,602      $ 15,993,057    $ 15,882,183

      Additions (deductions) during the year:
        Improvements, etc.........................             136,544           163,781          110,874
        Unrealized appreciation...................                  --           138,764               --
        Carrying value of real estate sold........         (16,432,146)               --               --
                                                          -------------     -------------    ------------

      Balance at end of year......................        $         --      $ 16,295,602     $ 15,993,057
                                                          =============     =============    ============
</TABLE>

(B)   Reserve for  depreciation is not applicable as real estate owned is stated
      at estimated fair market value.





<PAGE>



PAGE 38

                Independent Auditors' Report

The Board of Directors of IDS Life Insurance  Company and Contract Owners of IDS
Life Account RE:

We  have  audited  the  accompanying   combined  financial   statements  of  N/S
Associates, Monmouth Associates and 1225 Investment Corporation,  unconsolidated
joint  ventures of IDS Life  Account RE (Note 1), as listed in the  accompanying
index. In connection with our audits of the combined  financial  statements,  we
also have audited the combined  financial  statement  schedules as listed in the
accompanying  index. These combined financial  statements and combined financial
statement  schedules  are the  responsibility  of the  Investment  Adviser.  Our
responsibility is to express an opinion on these combined  financial  statements
and combined financial statement schedules based on our audits.

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

In our opinion,  the combined  financial  statements  referred to above  present
fairly,  in all  material  respects,  the  combined  financial  position  of N/S
Associates,  Monmouth Associates and 1225 Investment Corporation, as of December
31, 1996 and 1995 and the results of their combined operations and combined cash
flows for each of the years in the three year period ended December 31, 1996, in
conformity with generally accepted accounting principles.  Also, in our opinion,
the related combined financial statement schedules,  when considered in relation
to the basic combined financial  statements taken as a whole, present fairly, in
all material respects, the information set forth therein.



                              KPMG PEAT MARWICK LLP

Chicago, Illinois
March 21, 1997


<PAGE>


<TABLE>
<CAPTION>

PAGE 39
                       IDS LIFE ACCOUNT RE
                  OF IDS LIFE INSURANCE COMPANY
N/S Associates, Monmouth Associates and 1225 Investment Corporation
      Unconsolidated Joint Ventures of IDS Life Account RE

                     Combined Balance Sheets

                    December 31, 1996 and 1995


                                      Assets

                                                                          1996            1995
                                                                     -------------   ---------
<S>                                                                   <C>             <C>         
Investments in real estate                                            $323,484,000    $328,270,000
Cash and cash equivalents (note 1)                                      14,603,000      12,908,000
Short-term investments                                                          --              --
Rents, interest, and other receivables                                   2,966,000       2,754,000
Other assets                                                             2,664,000       2,411,000
                                                                     -------------   -------------

                                                                      $343,717,000    $346,343,000


                      Liabilities and Partners' Capital Accounts

Mortgage notes payable (note 3)                                       $ 42,000,000    $ 42,000,000
Accounts payable and other accrued expenses                             10,691,000      12,722,000
                                                                      -------------   ------------

         Total liabilities                                              52,691,000      54,722,000
                                                                      -------------   ------------

Commitments and contingencies (notes 2 and 4)

Partners' capital accounts (notes 1 and 2): IDS Life Account RE:
  Capital contributions                                                 32,856,000      32,856,000
  Cumulative net investment income                                      15,951,000      13,783,000
  Cumulative share of net unrealized depreciation                      (12,915,000)    (11,708,000)
  Cumulative cash distributions                                        (12,507,000)    (10,781,000)
                                                                      -------------   -------------
                                                                        23,385,000      24,150,000

Venture partners:
  Capital contributions                                                379,954,000     379,954,000
  Cumulative net investment income                                     191,319,000     166,032,000
  Cumulative share of net unrealized depreciation                     (155,581,000)   (148,138,000)
  Cumulative cash distributions                                       (148,051,000)   (130,377,000)
                                                                      -------------   -------------
                                                                       267,641,000     267,471,000

         Total partners' capital accounts                              291,026,000     291,621,000
                                                                      -------------   ------------

                                                                      $343,717,000    $346,343,000



</TABLE>

                       See accompanying notes to combined financial statements.



<PAGE>


<TABLE>
<CAPTION>

PAGE 40
                        IDS LIFE ACCOUNT RE
                   OF IDS LIFE INSURANCE COMPANY
 N/S Associates, Monmouth Associates and 1225 Investment Corporation
        Unconsolidated Joint Ventures of IDS Life Account RE

                  Combined Statements of Operations

             Years Ended December 31, 1996, 1995 and 1994



                                                         1996             1995            1994
                                                    --------------   -------------   ---------

Investment income:
<S>                                                   <C>              <C>             <C>       
 Rental income                                        $38,715,000      38,008,000      41,706,000
 Interest                                               9,827,000       7,685,000       8,083,000
                                                     -------------   -------------   ------------

                                                       48,542,000      45,693,000      49,789,000
                                                     -------------   -------------   ------------

Investment expenses:
 Mortgage and other interest                            3,410,000       4,250,000       3,224,000
 Real estate taxes                                      6,639,000       7,401,000       8,106,000
 Property operating expenses                           10,908,000      13,789,000      10,657,000
 General and administrative                               130,000         183,000         320,000
                                                     -------------   -------------   ------------

                                                       21,087,000      25,623,000      22,307,000
                                                     -------------   -------------   ------------

    Net investment income                            $ 27,455,000      20,070,000      27,482,000
                                                     =============   =============   ============

Unrealized depreciation on investments
 in real estate (note 1)                             $ (8,650,000)    (65,938,000)    (34,437,000)
                                                     =============   =============   =============




</TABLE>

























                       See accompanying notes to combined financial statements.



<PAGE>


<TABLE>
<CAPTION>

PAGE 41
                       IDS LIFE ACCOUNT RE
                 OF IDS LIFE INSURANCE COMPANY
N/S Associates, Monmouth Associates and 1225 Investment Corporation
       Unconsolidated Joint Ventures of IDS Life Account RE

        Combined Statements of Partners' Capital Accounts

          Years Ended December 31, 1996, 1995 and 1994



                                                      Combined         IDS Life        Venture
                                                        Total         Account RE       Partners

<S>                                                  <C>               <C>           <C>        
Balance at December 31, 1993                         369,546,000       28,769,000    340,777,000

Net investment income                                 27,482,000        2,094,000     25,388,000
Net unrealized depreciation on investments
  in real estate                                     (34,437,000)      (2,361,000)   (32,076,000)
Cash distributions and dividends                     (17,432,000)      (1,457,000)   (15,975,000)
                                                    -------------      -----------   ------------

Balance at December 31, 1994                         345,159,000       27,045,000    318,114,000

Net investment income                                 20,070,000        1,925,000     18,145,000
Cash contributions                                     9,830,000          685,000      9,145,000
Net unrealized depreciation on investments
  in real estate                                     (65,938,000)      (4,000,000)   (61,938,000)
Cash distributions and dividends                     (17,500,000)      (1,505,000)   (15,995,000)
                                                    -------------      -----------   ------------

Balance at December 31, 1995                        $291,621,000       24,150,000    267,471,000
                                                    -------------      ----------    -----------

Net investment income                                 27,455,000        2,168,000     25,287,000
Net unrealized depreciation on investments
   in real estate                                     (8,650,000)      (1,207,000)    (7,443,000)
Cash distributions and dividends                     (19,400,000)      (1,726,000)   (17,674,000)
                                                    -------------      -----------   ------------

Balance at December 31, 1996                        $291,026,000       23,385,000    267,641,000
                                                    ============       ==========    ===========







</TABLE>













                       See accompanying notes to combined financial statements.



<PAGE>


<TABLE>
<CAPTION>

PAGE 42
                      IDS LIFE ACCOUNT RE
                 OF IDS LIFE INSURANCE COMPANY
N/S Associates, Monmouth Associates and 1225 Investment Corporation
       Unconsolidated Joint Ventures of IDS Life Account RE

               Combined Statements of Cash Flows

          Years Ended December 31, 1996, 1995 and 1994





                                                         1996            1995            1994
                                                    -------------  --------------    --------

Cash flows from operating activities:
<S>                                                  <C>             <C>               <C>       
 Net investment income                               $ 27,455,000    $ 20,070,000      27,482,000
 Provision for uncollectible accrued interest                  --       3,576,000              --
 Adjustments to reconcile net investment
 income to net cash provided by operating
 activities represented by changes in:
  Rents, interest and other receivables                  (212,000)        135,000        (598,000)
  Other assets                                           (253,000)     (2,129,000)        222,000
  Accounts payable and accrued expenses                  (735,000)     (1,713,000)       (201,000)
                                                     -------------    ------------   -------------

     Net cash provided by operations                   26,255,000      19,939,000      26,905,000
                                                     -------------    ------------   ------------

Cash flows from investing activities:
  Net (purchases) sales of short-term investments              --       7,589,000       1,720,000
  Additions to investments in real estate, net of
  related accounts payable and accrued expenses        (5,160,000)    (16,748,000)    (14,834,000)
                                                     -------------    ------------   -------------

     Net cash provided by (used in)
      investing activities                             (5,160,000)     (9,159,000)    (13,114,000)
                                                     -------------    ------------   -------------

Cash flows from financing activities:
 Principal payments on mortgages payable                       --     (30,929,000)     (2,843,000)
 Cash distributions to partners                       (14,250,000)    (13,000,000)    (13,500,000)
 Cash contributions                                            --       9,830,000           --
 Proceeds from mortgage note payable                           --      35,000,000       7,000,000
 Cash dividends paid to shareholders                   (5,150,000)     (4,500,000)     (3,932,000)
                                                     -------------    ------------   -------------

     Net cash used in financing activities            (19,400,000)     (3,599,000)    (13,275,000)
                                                     -------------    ------------   -------------
     Net increase in cash and cash
       equivalents                                   $  1,695,000       7,181,000         516,000
     Cash and cash equivalents beginning
       of year                                         12,908,000       5,727,000       5,211,000
                                                     -------------    ------------   ------------
     Cash and cash equivalents end
       of year                                       $ 14,603,000      12,908,000       5,727,000
                                                     =============    ============   ============

Supplemental disclosure of cash flow information:
 Cash paid for mortgage and other interest           $  3,412,000       3,759,000       3,201,000
                                                     =============    ============   ============
 Non-cash investing and financing activities:
  Unrealized depreciation on
    investments in real estate                       $ (8,650,000)    (65,938,000)    (34,437,000)
                                                     =============    ============   =============




</TABLE>

                       See accompanying notes to combined financial statements.





<PAGE>



PAGE 43
                      IDS LIFE ACCOUNT RE
                 OF IDS LIFE INSURANCE COMPANY
N/S Associates, Monmouth Associates and 1225 Investment Corporation
       Unconsolidated Joint Ventures of IDS Life Account RE

              Notes to Combined Financial Statements

           Years ended December 31, 1996, 1995, and 1994


(1)       Organization and Basis of Accounting

          The accompanying  combined financial statements have been prepared for
the purpose of complying  with Rule 3.09 of Regulation S-X of the Securities and
Exchange  Commission.  The combined financial statements include the accounts of
the  unconsolidated  joint  ventures  in which IDS Life  Account  RE of IDS Life
Insurance Company owns an equity interest. The unconsolidated joint ventures are
N/S Associates, Monmouth Associates and 1225 Investment Corporation.

          The accompanying  combined financial  statements have been prepared on
the market value accrual basis of accounting.

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

          The ventures have implemented Statement of Accounting Standards No. 95
"Statement of Cash Flows" which  classifies  receipts and payments  according to
whether  they  stem from  operating,  investing  or  financing  activities.  The
ventures  records  amounts held in U.S.  Government  obligations at cost,  which
approximates market. For the purposes of these statements,  the ventures' policy
is to consider all such amounts held with original maturities of three months or
less ($12,084,000 and $2,200,000 at December 31, 1996 and 1995, respectively) as
cash equivalents with any remaining amounts reflected as short-term investments.

          Investments  in real  estate are stated at  estimated  fair  value.  A
description  of the  valuation  process  is  contained  in  Note 2 of  Notes  to
Financial  Statements  of the  Account.  Such  note is  incorporated  herein  by
reference.

         Market  values have been  estimated  by the  Investment  Adviser.  Such
market  values  involve  subjective  judgments and the actual values can only be
determined by negotiations with independent third parties.

          No provision  for State or Federal  income taxes has been made for N/S
Associates or Monmouth  Associates  as the liability for such taxes,  if any, is
expected  to be that of the  venture  partners  rather  than the  venture.  1225
Investment  Corporation has elected and qualifies to be treated as a real estate
investment trust for Federal income tax purposes. The Corporation had no Federal
income tax liabilities for taxable years ended December 31, 1996, 1995 and 1994.


<PAGE>



PAGE 44
                      IDS LIFE ACCOUNT RE
                 OF IDS LIFE INSURANCE COMPANY
N/S Associates, Monmouth Associates and 1225 Investment Corporation
      Unconsolidated Joint Ventures of IDS Life Account RE

       Notes to Combined Financial Statements - (Continued)


          Maintenance and repair expenses are charged to operations as incurred.
Significant   costs  of  physical   improvements  are  capitalized  as  part  of
investments in real estate.

          Fixed rental income is recorded when the obligation for the payment of
rent is incurred according to the terms of the lease agreements.

          Statement  of Financial  Accounting  Standards  No. 107 ("SFAS  107"),
"Disclosures  about Fair Value of Financial  Instruments",  requires entities to
disclose the SFAS 107 value of all financial assets and liabilities for which it
is practicable  to estimate.  Value is defined in the Statement as the amount at
which the instrument could be exchanged in a current transaction between willing
parties,  other than in a forced or liquidation  sale. The ventures  believe the
carrying  amount of its assets and  liabilities  (excluding  current  portion of
long-term debt) approximates SFAS 107 value due to the relatively short maturity
of these  instruments.  There is no quoted market value available for any of the
ventures'  other  instruments.  Based upon estimates of current market rates for
debt with similar terms, the ventures  discounted the scheduled loan payments to
maturity.  Based upon this  calculation,  the ventures believe that the carrying
value of the mortgage  notes  payable  approximate  market value at December 31,
1996 and 1995.

(2)       Venture Agreements

     A description of the venture agreements are contained in Note 4 of Notes to
Financial  Statements of the Account for the year ended December 31, 1996.  Such
note is incorporated herein by reference.



<PAGE>

<TABLE>
<CAPTION>


PAGE 45
                      IDS LIFE ACCOUNT RE
                 OF IDS LIFE INSURANCE COMPANY
N/S Associates, Monmouth Associates and 1225 Investment Corporation
      Unconsolidated Joint Ventures of IDS Life Account RE

       Notes to Combined Financial Statements - (Continued)

(3)       Mortgage Notes Payable

          (a)  Mortgage notes payable consist of the following at
December 31, 1996 and 1995:


                                                                          1996            1995
                                                                     -------------   ---------
8.35% mortgage note, secured by Southridge Mall; payable in
 monthly installments of $244,000 (interest only) until
<S>                   <C>          <C>                                  <C>            <C>       
 maturity on February 1, 2002 (see 3 (b) below)                         35,000,000     35,000,000

6.98% mortgage note, due February 1, 2001, secured by 1225
Connecticut Avenue; interest only, payable monthly                       7,000,000       7,000,000
                                                                       -----------    ------------

           Total mortgage notes payable                                $42,000,000      42,000,000
                                                                       ===========    ============

</TABLE>

      (b) Refinancing - Southridge

    On February 1, 1995, the Partnership  refinanced the existing  mortgage note
on Southridge  Mall in the amount of $35,000,000.  Proceeds,  net of transaction
costs,  were  used to  repay  the  existing  mortgage  notes at  Southridge  and
Northridge  Malls  (including  prepayment  penalties of $155,000  and  $240,000,
respectively).  The remaining  proceeds  which were reserved for future  leasing
costs, capital improvements and other related costs, have been expended.

    Five year maturities of mortgage notes payable are as follows:

        1997 . . . . . . . . . .            $        --
        1998 . . . . . . . . . .                     --
        1999 . . . . . . . . . .                     --
        2000 . . . . . . . . . .                     --
        2001 . . . . . . . . . .              7,000,000

(4)       Leases - As Property Lessor

          The venture has determined  that all leases relating to the two retail
properties and the office building are properly  classified as operating leases;
therefore,  rental income is reported when earned.  Leases with tenants range in
term from one to thirty-two years and provide for fixed minimum rent and partial
to full reimbursement of operating costs. In addition,  substantially all retail
leases  provide for  additional  rent based upon  percentage  of  tenants'  sale
volumes over certain specified amounts.


<PAGE>



PAGE 46
                      IDS LIFE ACCOUNT RE
                 OF IDS LIFE INSURANCE COMPANY
N/S Associates, Monmouth Associates and 1225 Investment Corporation
      Unconsolidated Joint Ventures of IDS Life Account RE

       Notes to Combined Financial Statements - (Continued)

          Minimum  lease  payments to be received in the future  under the above
operating lease agreements, are as follows:
          1997 . . . . . . . . . .        $ 20,371,162
          1998 . . . . . . . . . .          18,498,130
          1999 . . . . . . . . . .          16,920,740
          2000 . . . . . . . . . .          15,213,911
          2001 . . . . . . . . . .          12,889,407
          Thereafter . . . . . . .          57,575,215
                                          ------------
                                          $141,468,565

         Contingent  rent (based on sales by property  tenants)  from the retail
investments included in rental income is $578,000,  $1,058,000 and $1,010,000 in
1996, 1995 and 1994, respectively.

         Monmouth   Associates  entered  into  an  agreement  whereby  the  land
underlying  the  Monmouth  shopping  center is leased  under a long-term  ground
lease.  The long-term ground lease,  which has a term of 75 years,  provides for
accrual of annual base rent of $1,170,000 with minimum  payments of $650,000 per
annum.

(5)      Related Party Transactions

         N/S  Associates  has entered  into a  management  agreement  with Urban
Retail  Properties  Company,  (the  "Retail  Manager").  The  Retail  Manager is
entitled to receive a fee of 3.75% of gross  receipts from the operations of the
Malls.  Management  fees earned by the Retail  Manager are  included in property
operating  expenses and aggregated  approximately  $1,132,000 and $1,174,000 for
the periods ended December 31, 1996 and 1995, respectively.

         1225  Investment  Corporation  had entered into a management  agreement
with JMB Properties  Company.  During  December  1994,  JMB  Properties  Company
assigned the management  agreement to Heitman Washington D.C.  Properties,  Ltd.
("Office  Manager").  The Office Manager is entitled to receive a fee of 2.5% of
gross  receipts from the operations of the Property.  Management  fees earned by
the Office  Manager are included in property  operating  expenses and aggregated
approximately  $188,000 and  $175,000 for the years ended  December 31, 1996 and
1995, respectively.



<PAGE>



PAGE 47
                      IDS LIFE ACCOUNT RE
                 OF IDS LIFE INSURANCE COMPANY
N/S Associates, Monmouth Associates and 1225 Investment Corporation
      Unconsolidated Joint Ventures of IDS Life Account RE

       Notes to Combined Financial Statements - (Continued)

(6)      Subsequent Events

         (a)  N/S Associates

              In February  1997, the  Investment  Adviser  authorized and paid a
              cash  distribution to the partners  aggregating  $2,500,000.  Each
              partner received its  proportionate  share based on its respective
              ownership percentage.

         (b)  1225 Investment Corporation

              In February 1997, 1225 Investment  Corporation  paid a dividend of
              $1,250,000  ($22.67 per share) to the shareholders of record as of
              December 31, 1996.

         (c)  Monmouth Associates

              In February  1997, the  Investment  Advisor  authorized and paid a
              cash  distribution to the partners  aggregating  $7,500,000.  Each
              partner received its  proportionate  share based on its respective
              ownership percentage.


<PAGE>

<TABLE>
<CAPTION>


PAGE 48

Schedule III

                             IDS LIFE ACCOUNT RE of
                           IDS LIFE INSURANCE COMPANY
                               Monmouth Associates
                Unconsolidated Joint Venture of IDS Life Account RE
                 Participation in Mortgage Loan on Real Estate and
                   Interest Earned on Participation in Mortgage

                               December 31, 1996



                           Part 1 - Participation in Mortgage           Part 2 - Interest Earned on
                          Loan on Real Estate at Close of Year         on Participation in Mortgage

Liens on Shopping Center:
                                      Principal unpaid    Amount of        Interest due
  Monmouth Mall          Carrying         at close      mortgage being     & accrued at      Interest
Eatontown, New Jersey    Amount (A)       of period       foreclosed      end of period    Income Earned

<S>    <C>             <C>            <C>                 <C>             <C>              <C>         
       1996            $ 109,556,000  $ 160,033,000       $    --         $    772,000     $  9,159,000

       1995            $ 108,000,000  $ 158,373,000       $    --         $    742,000     $  6,994,000

       1994            $ 119,154,000  $ 141,056,000       $    --         $  3,960,000     $  7,641,000





</TABLE>

<TABLE>
<CAPTION>



(A) - Reconciliation  of the carrying value of the participation in the mortgage
loan:

                                                             1996              1995              1994
                                                        -------------     -------------     ---------

<S>                                                     <C>               <C>               <C>          
      Balance at the beginning of year...........       $ 108,000,000     $ 119,154,000     $ 119,650,000

      Changes during year:
        Additional fundings......................           1,556,000        17,317,000         9,318,000
        Unrealized depreciation..................                  --       (28,471,000)       (9,814,000)
                                                        --------------     -------------    --------------

      Balance at end of year.....................       $ 109,556,000     $ 108,000,000     $ 119,154,000
                                                        ==============    ==============    =============



</TABLE>

<PAGE>


<TABLE>
<CAPTION>

PAGE 49
Schedule IV
                       IDS LIFE ACCOUNT RE of
                     IDS LIFE INSURANCE COMPANY
 N/S Associates, Monmouth Associates and 1225 Investment Corporation
        Unconsolidated Joint Ventures of IDS Life Account RE

            Combined Real Estate Owned and Rental Income

                         December 31, 1996

                  Part 1 - Real Estate Owned at End of Year (C)
                                                                                            Amount at
                                                          Cost of                          which carried
                         Amount of                      improvements,       Unrealized      at close of
                       encumbrances   Initial Cost           etc.          Depreciation    period (A)(B)
Retail properties:
Northridge Mall,
<S>                    <C>            <C>               <C>               <C>              <C>         
 Milwaukee, WI         $         --   $108,107,000      $ 15,469,000      $(80,976,000)    $ 42,600,000
Southridge Mall,
 Greendale, WI         $ 35,000,000   $115,401,000      $ 16,702,000      $(25,775,000)    $106,328,000
Office Building:
 1225 Connecticut Ave.,
  Washington, D.C.     $  7,000,000   $ 54,775,000      $  7,638,000      $ (10,413,000)    $ 52,000,000
Ground Lease:
 Monmouth Mall,
  Eatontown, NJ        $         --   $ 13,000,000      $         --      $         --     $ 13,000,000
                       ------------   ------------      ------------      --------------   ------------
                       $ 42,000,000   $291,283,000      $ 39,809,000      $(117,164,000)   $213,928,000
                       ============   ============      ============      ==============   ============
</TABLE>


                                 Part 2 - Rental Income

                                       Rents due
                                      and accrued
                                       at end of
                                         period
Retail Properties:
 Northridge Mall,
  Milwaukee, WI                        $   158,000
 Southridge Mall,
  Greendale, WI                        $   185,000
 Office Building:
  1225 Connecticut Ave.,
   Washington, D.C.                    $    92,000
                                       -----------

                                       $   435,000



(A)   The  aggregate  cost of real estate owned at December 31, 1996 for Federal
      Income tax purposes was approximately $466,855,400.
<TABLE>
<CAPTION>

(B) Reconciliation of real estate owned:
                                                            1996               1995            1994
                                                        ------------      ------------     --------

<S>                                                     <C>               <C>              <C>         
      Balance at the beginning of period..........      $220,270,000      $254,500,000     $272,660,000

      Additions (deductions), including
        unrealized depreciation...................        (6,342,000)      (34,230,000)     (18,160,000)
                                                        -------------     -------------    -------------

      Balance at end of year......................      $213,928,000      $220,270,000     $254,500,000
                                                        =============     =============    ============
</TABLE>

(C)   -  Reconciliation  for depreciation is not applicable as real estate owned
      is stated at estimated market value.



<PAGE>



PAGE 50
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE

Not applicable.

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The Account has no directors or officers.  The directors and principal executive
officers of IDS Life Insurance Company are listed below.

  David R. Hubers,  born in 1943:  Director,  IDS Life,  since  September  1989;
  president and chief executive  officer,  AEFC, since August 1993, and director
  since  January  1984.  Senior  vice  president,  Finance  and chief  financial
  officer, AEFC, from January 1984 to August 1993.

  Richard W. Kling,  born in 1940:  Director,  IDS Life,  since  February  1984;
  president,  IDS Life,  since March 1994;  Senior vice  president,  AEFC,  from
  January  1988 to March 1994.  Senior  vice  president,  AEFC,  since May 1994.
  Director of IDS Life Series  Fund,  Inc. and chairman of the board of managers
  of IDS Life Variable Annuity Funds A & B.

  Paul F. Kolkman,  born in 1946: Director,  IDS Life, since May 1984; executive
  vice president, IDS Life, since March 1994; vice president,  Finance, IDS Life
  from May 1984 to March 1994; vice president, AEFC, since January 1987.

  James A. Mitchell, born in 1941: Chairman of the Board since March 1994; chief
  executive officer since November 1986; president from July 1984 to March 1994;
  executive vice president,  AEFC, since March 1994; Director,  AEFC, since July
  1984; senior vice president, AEFC, from July 1984 to March 1994.

  Barry J. Murphy, born in 1951:  Director and executive vice president,  Client
  Service since March 1994;  senior vice president,  Operations,  Travel Related
  Services  (TRS) a subsidiary of American  Express  Company,  from July 1992 to
  April 1994; vice president, TRS, from November 1989 to July 1992.

  Stuart A.  Sedlacek,  born in 1957:  Director and  executive  vice  president,
  Assured Assets since March 1994; vice president, AEFC, since September 1988.

  Melinda S. Urion,  born in 1953:  Director  and  controller,  IDS Life,  since
  September 1991;  executive vice president since March 1994; vice president and
  treasurer from September 1991 to March 1994;  director,  senior vice president
  and chief financial officer,  AEFC, since November 1995; corporate controller,
  AEFC, from April 1994 to November 1995;  vice president,  AEFC, from September
  1991 to November  1995;  chief  accounting  officer,  AEFC,  from July 1988 to
  September 1991.

  Morris  Goodwin Jr., born in 1951:  Vice  president and treasurer  since March
  1994; vice president and corporate  treasurer,  AEFC,  since July 1989;  chief
  financial officer and treasurer,  American Express Trust Company, from January
  1988 to July 1989.






<PAGE>




PAGE 51
  William A. Stoltzmann, born in 1945: Vice President, general counsel and
  secretary since 1989; vice president and assistant general counsel, AEFC,
  since November 1985. Vice president, general counsel and secretary, American
  Enterprise Life Insurance Company, American Partners Life Insurance
  Company.



The  directors,  executive  officers  and certain  other  officers of JMB Realty
Corporation  (JMB), the managing partner of the Investment  Adviser,  are listed
below.  Many of such  persons are also  officers  and/or  directors  of numerous
affiliated  companies  of JMB and/or  partners of certain  partnerships  (herein
collectively  referred to as the  Associate  Partnerships)  which are  partners,
directly or indirectly,  in publicly  offered real estate  limited  partnerships
sponsored by JMB.

  Judd D.  Malkin,  59,  Chairman  and  Director  of JMB, is a director of Urban
  Shopping Centers, Inc., an affiliate of JMB engaged in the business of owning,
  managing  and  developing  shopping  centers,  an officer  and/or  director of
  various  other JMB  affiliates  and a partner of the  Associate  Partnerships.
  Until  December  1994,  he was also a Trustee of JMB Group  Trust I, JMB Group
  Trust II, JMB Group Trust III, JMB Group Trust IV and JMB Group Trust V, which
  until that time had been advised by an affiliate  of the  Investment  Adviser.
  Mr. Malkin has been  associated with JMB since October 1969. He is a Certified
  Public Accountant.

  Neil G.  Bluhm,  59,  President  and  Director  of JMB, is a director of Urban
  Shopping Centers, Inc., an affiliate of JMB engaged in the business of owning,
  managing  and  developing  shopping  centers,  an officer  and/or  director of
  various  other JMB  affiliates  and a partner of the  Associate  Partnerships.
  Until  December  1994,  he was also a Trustee of JMB Group  Trust I, JMB Group
  Trust II, JMB Group Trust III, JMB Group Trust IV and JMB Group Trust V, which
  until that time has been advised by an affiliate  of the  Investment  Adviser.
  Mr. Bluhm has been  associated  with JMB since August 1970.  He is a member of
  the Bar of the State of Illinois and is a Certified Public Accountant.



<PAGE>



PAGE 52
  Burton E. Glazov,  58, Director of JMB, was until December 1990 also Executive
  Vice  President of JMB.  Mr.  Glazov has been  associated  with JMB since June
  1971.  He is  member of the Bar of the State of  Illinois  and is a  Certified
  Public Accountant.

  Stuart C. Nathan,  55,  Executive  Vice  President  and Director of JMB, is an
  officer  and/or  director  of  various  JMB  affiliates  and a partner  of the
  Associate  Partnerships.  Mr. Nathan has been  associated  with JMB since July
  1972. He is also a director of Sportmart  Inc., a retailer of sporting  goods.
  He is member of the Bar of the State of Illinois.

  John G.  Schreiber,  50, Director of JMB, is also a director of Urban Shopping
  Centers, Inc., an affiliate of JMB engaged in the business of owning, managing
  and developing shopping centers,  and was, until December 1990, Executive Vice
  President of JMB. Mr.  Schreiber has been  associated  with JMB since December
  1970.  Mr.  Schreiber is President of Schreiber  Investments,  Inc., a company
  which is engaged in the real estate  investing  business.  He is also a senior
  advisor and partner of Blackstone  Real Estate  Partners,  an affiliate of the
  Blackstone  Group,  L.P.  Mr.  Schreiber  also  serves  as a  Trustee  of Amli
  Residential  Property Trust, a  publicly-traded  real estate  investment trust
  that invests in multi-family properties.  He is also a director of a number of
  investment  companies  advised or managed by T. Rowe Price  Associates and its
  affiliates.  He holds a master's  degree in business  administration  from the
  Harvard University Graduate School of Business.

  A. Lee Sacks, 63, Director of JMB, is President and Director of
  JMB Insurance Agency, Inc. and a partner of various Associate
  Partnerships.  Mr. Sacks has been associated with JMB since
  December 1972.

  H. Rigel Barber,  48, Chief Executive  Officer and Executive Vice President of
  JMB,  is an  officer  of  various  JMB  affiliates  and a partner  of  various
  Associate  Partnerships.  Mr. Barber has been  associated with JMB since March
  1982. He holds a law degree from the Northwestern University Law School and is
  a member of the Bar of the State of Illinois.

  Ira J. Schulman, 45, Executive Vice President of JMB, is an officer of various
  JMB affiliates and a partner of various Associate  Partnerships.  Mr. Schulman
  has been  associated  with JMB since February 1983. He holds a master's degree
  in business administration from the University of Pittsburgh.

  Gary Nickele,  44,  Executive Vice President and General Counsel of JMB, is an
  officer  and/or  director of various JMB  affiliates  and a partner of various
  Associate  Partnerships.  Mr.  Nickele  has been  associated  with  JMB  since
  February  1984.  He holds a law degree from the  University  of  Michigan  Law
  School and is a member of the Bar of the State of Illinois.

  Glenn E. Emig, age 49, Executive Vice President and Chief Operating Officer of
  JMB,  is an  officer  of  various  JMB  affiliates  and a partner  of  various
  Associate  Partnerships.  Mr. Emig has been associated with JMB since December
  1979. He holds a master's degree in business  administration  from the Harvard
  University Graduate School of Business.


<PAGE>



PAGE 53
Item 11. EXECUTIVE COMPENSATION

Not applicable.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
         MANAGEMENT

IDS Life has purchased and expects to continue to purchase accumulation units in
order to maintain the Account's liquidity. By purchasing accumulation units, IDS
Life has an ownership  interest in the Account and  participates in the increase
or  decrease  in value of the  Account's  investments  just as other  owners  of
accumulation  units  do.  As of  March  19,  1997,  IDS  Life  owned  24,969,872
accumulation units.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Account  incurred asset management fees for the year ended December 31, 1996
of  $561,742  of which  $426,924  was  paid to the  Investment  Adviser  and the
remainder  to IDS  Life.  Asset  management  fees  incurred  for the year  ended
December 31, 1995 were  $603,620,  of which  $458,751 was paid to the Investment
Adviser and the remainder to IDS Life.

For the years ended  December 31, 1996 and 1995, IDS Life was paid or reimbursed
$449,393 and  $482,896,  respectively,  for  mortality  and expense risk fee and
$35,385 and $56,102,  respectively,  for personnel-related  expenses incurred in
the administration of the Account.

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

   (A.1) See Item 8 for required financial statements.

   (A.2) See Item 8 for required financial statements schedules.

   (B) Report on Form 8-K.

         No reports on Form 8-K were required by the Registrant  during the year
         ended December 31, 1996.

         No annual  report for the fiscal  year 1996 or proxy  material  for the
         current year has been  distributed  to the contract  owners as of March
         31, 1997. An annual report for the period ending December 31, 1996 will
         be distributed to contract owners subsequent to this filing, and copies
         of such annual report will be furnished to the  Securities and Exchange
         Commission at such time.


<PAGE>



PAGE 54 (C) Exhibits.

          3.1 Copy of Articles of  Incorporation  of IDS Life Insurance  Company
              are hereby  incorporated herein by reference to Exhibit A(6)(b) to
              Form N-8B-2, File Number 2-97637, filed April 28, 1986.

          3.2 Copy  of  By-laws  of  IDS  Life  Insurance   Company  are  hereby
              incorporated  herein  by  reference  to  Exhibit  A(6)(b)  to Form
              N-8b-2, File Number 2-97637, filed
              April 28, 1986.

          3.3 Copy of Resolution of the Board of Directors of IDS Life Insurance
              Company  establishing  IDS Life Account RE is hereby  incorporated
              herein by reference to Exhibit 3.3 to the Account's Form S-1, File
              Number 33-13375, filed April 13, 1987.

          4.1 Form of Deferred Variable Annuity Contract is hereby  incorporated
              herein by  reference  to Exhibit 4 to the  Account's  Form S-1 (as
              amended), File Number 33-13375, filed July 17, 1987.

          4.2 Copy of  mortgage  loan  documents  relating  to West  Springfield
              Terrace Apartments is hereby  incorporated  herein by reference to
              Exhibit 4.2 to the Account's  Form S-1 (as  amended),  File Number
              33-13375, filed April 12, 1990.

          4.3 Copy of the line of credit agreement, dated March 30, 1994 between
              IDS  Life  and  the  Account  (including  a copy  of the  executed
              promissory note, dated March 30, 1994), filed April 5, 1994.

         10.1 Copy of  Investment  Advisory  Agreement  between IDS Life and JMB
              Annuity  Advisors is hereby  incorporated  herein by  reference to
              Exhibit 10.1 to the Account's  Form S-1 (as amended),  File Number
              33-13375, filed April 29, 1988.

         10.2 Copy of N/S  Associates  Joint  Venture  Agreement  together  with
              certain  documents  relating  to the  purchase  of an  interest in
              Northridge  Mall is hereby  incorporated  herein by  reference  to
              Exhibit 10.2 to the Account's  Form S-1 (as amended),  File Number
              33-13375, filed April 29, 1988.

       10.2.1 Copy of Second Amended and Restated Articles of Partnership of N/S
              Associates  hereby  incorporated  herein by  reference  to Exhibit
              10.2.1  to the  Account's  Form  S-1  (as  amended),  File  Number
              33-13375, filed April 20, 1989.

         10.3 Copy of N/S  Associates  Joint  Venture  Agreement  together  with
              certain  documents  relating  to the  purchase  of an  interest in
              Southridge  Mall is hereby  incorporated  herein by  reference  to
              Exhibit 10.3 to Form S-1 (as amended), File Number 33-13375, filed
              April 29, 1988.


<PAGE>



PAGE 55
         10.4 Copy  of   Commitment   Letter   relating  to  the  funding  of  a
              participating mortgage loan secured by Riverpoint Center is hereby
              incorporated  herein by  reference to Exhibit 10.4 to Form S-1 (as
              amended), File Number 33-13375, filed October 11, 1988.

         10.5 Copy of Amended and Restated  Articles of  Partnership of Monmouth
              Associates are hereby  incorporated herein by reference to Exhibit
              10.5 to the Account's Form S-1 (as amended), File Number 33-13375,
              filed April 12, 1990.

       10.5.1 Copy of Amended and Restated  Articles of  Partnership of Monmouth
              Associates are hereby  incorporated herein by reference to Exhibit
              10.5.2  to the  Account's  Form  S-1  (as  amended),  File  Number
              33-13375, filed April 12, 1990.

         10.6 Copy of Agreement  together with certain other documents  relating
              to the purchase of West Springfield  Terrace  Apartments is hereby
              incorporated  herein by  reference to Exhibit 10.6 to Form S-1 (as
              amended), File Number 33-13375, filed
              October 16, 1989.

         10.7 Copy of Agreement  together with certain documents relating to the
              purchase  of an  interest  in 1225  Connecticut  Avenue  is hereby
              incorporated  herein by  reference to the  Account's  Form S-1 (as
              amended), File Number 33-13375, filed June 29, 1990.

         10.8 Copy of Purchase  Agreement  for the sale of the West  Springfield
              Terrace Apartments is hereby  incorporated  herein by reference to
              the Accounts Report on Form 10-Q (File No. 33-13375) for September
              30, 1996 dated
              November 14, 1996.

         21.1 List of subsidiaries of IDS Life Insurance Company:
              American Centurion Life Assurance Company, American
              Enterprise Life Insurance Company, American Partners
              Life Insurance Company, and IDS Life Insurance Company
              of New York

         27.1 Financial  Data  Schedule  of the  Account  for the  period  ended
              December 31, 1995 is filed herewith.

         99.1 Copy of description of surrenders,  withdrawals and transfers from
              pages 61 to 62 and 66 to 67 of the Account's  prospectus  included
              in its Form S-1 (as  amended),  File  Number  33-13375 to be filed
              March 31, 1997, is filed herewith.

         99.2 Copy  of   description   of  the  Account's  real  estate  related
              investments  from  pages  21  to 44 of  the  Account's  prospectus
              included in its Form S-1 (as amended),  File Number 33-13375 to be
              filed March 31, 1997, is filed herewith.



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PAGE 56

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 officers of IDS Life Insurance Company, thereunto duly
authorized.

        IDS LIFE ACCOUNT RE of IDS LIFE INSURANCE COMPANY


                                           Registrant

     March 29, 1997       By   /S/ James A. Mitchell
         Date                  James A. Mitchell, Chairman of the
                                Board and Chief Executive Officer

     March 29, 1997       By   /S/ Melinda S. Urion
         Date                  Melinda S. Urion, Executive Vice
                                President and Controller


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been duly signed below by the following  persons on behalf of the registrant
and in the capacities and on the dates indicated.


     March 29, 1997       By   /S/ David R. Hubers
         Date                  David R. Hubers, Director


     March 29, 1997       By   /S/ Richard W. Kling
         Date                  Richard W. Kling, President


     March 29, 1997       By   /S/ Paul F. Kolkman
         Date                  Paul F. Kolkman, Executive
                                Vice President


     March 29, 1997       By   /S/ James A. Mitchell
         Date                  James A. Mitchell, Chairman of the
                                Board and Chief Executive Officer


     March 29, 1997       By   /S/ Melinda S. Urion
         Date                  Melinda S. Urion, Executive Vice
                                President and Controller