UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549
                           ---------------------------

                                    FORM 10-K
                           ---------------------------


            _X_ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934 (Fee Required)
                   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 (No Fee Required)
                    For the transition period from ___ to ___

                          Commission File No. 33-31810

                        POLARIS AIRCRAFT INCOME FUND VI,
                        A California Limited Partnership
              -----------------------------------------------------
             (Exact name of registrant as specified in its charter)

                   California                           94-3102632
         -------------------------------          ----------------------
         (State or other jurisdiction of          (IRS Employer I.D. No.)
          incorporation or organization)

        201 Mission Street,27th Floor,San Francisco, California    94105
        -------------------------------------------------------  ---------
         (Address of principal executive offices)                (Zip Code)

       Registrant's telephone number, including area code: (415) 284-7400

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

           Securities registered pursuant to Section 12(g) of the Act:
   Depository Units Representing Assignments of Limited Partnership Interests

Indicate  by check  mark  whether  the  registrant:  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes _X_ No ___

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ___

No formal  market  exists  for the units of  limited  partnership  interest  and
therefore there exists no aggregate market value at December 31, 1996.

                    Documents incorporated by reference: None

                       This document consists of 42 pages.

<PAGE>

                                     PART I


Item 1.    Business

The  principal  objectives  of Polaris  Aircraft  Income  Fund VI, A  California
Limited Partnership (PAIF-VI or the Partnership), are to purchase and lease used
commercial jet aircraft in order to provide quarterly distributions of cash from
operations, to maximize the residual values of aircraft upon sale and to protect
Partnership capital through experienced  management.  PAIF-VI was organized as a
California  Limited  Partnership on October 13, 1989 and will terminate no later
than December 2020.

PAIF-VI has many competitors in the aircraft leasing market, including airlines,
aircraft leasing companies, other limited partnerships,  banks and several other
types of financial institutions.  This market is highly competitive and there is
no  single  competitor  who has a  significant  influence  on the  industry.  In
addition  to  other  competitors,   the  general  partner,   Polaris  Investment
Management Corporation (PIMC), and its affiliates, including GE Capital Aviation
Services,  Inc. (GECAS),  Polaris Aircraft Leasing Corporation  (PALC),  Polaris
Holding  Company (PHC) and General  Electric  Capital  Corporation (GE Capital),
acquire,  lease,  finance, sell and remarket aircraft for their own accounts and
for existing  aircraft and aircraft leasing  programs managed by them.  Further,
GECAS  provides a significant  range of management  services to GPA Group plc, a
public  limited  company  organized in Ireland,  together with its  consolidated
subsidiaries (GPA), which acquires, leases and sells aircraft.  Accordingly,  in
seeking to re-lease and sell its aircraft, the Partnership may be in competition
with the general partner, its affiliates, and GPA.

A brief  description  of the aircraft  owned by the  Partnership is set forth in
Item  2.  The  following   table  describes   certain   material  terms  of  the
Partnership's  leases to American Trans Air, Inc. (ATA) and British  Airways Plc
(British Airways) as of December 31, 1996:


                                      Number of    Lease
Lessee             Aircraft Type      Aircraft   Expiration  Renewal Options(1)
------             -------------      --------   ----------  -------------------

ATA         Boeing 727-200 Advanced        1      3/00 (2)    up to three one
                                                              year periods
British
Airways     Boeing 737-200 Advanced        1      3/98 (3)    None

(1)        The rental rate  during the  renewal  term  remains the same  as  the
           current rate unless otherwise noted.

(2)        This  aircraft  was  formerly  leased to USAir,  Inc.  (USAir)  until
           December 1992. The lease rate is approximately 47% of the prior rate.
           The lease includes an eleven-month  rent suspension  period beginning
           on the  delivery  date  in  March  1993.  Under  the ATA  lease,  the
           Partnership  incurred  certain  maintenance  costs  of  approximately
           $537,000 and may be required to finance an aircraft hushkit at a cost
           of  approximately  $2.6 million,  which would be partially  recovered
           with interest  through payments from ATA over an extended lease term.
           As part of the lease transaction,  ATA transferred to the Partnership
           one  unencumbered  Boeing  727-100  aircraft  in April 1993 which was
           subject to a conditional sale agreement as discussed in Note 4 to the
           financial statements (Item 8).

                                        2

<PAGE>

(3)        This aircraft was  originally  leased to British  Airways until April
           1995. The  Partnership  has negotiated a lease extension with British
           Airways for three  years  until  March 1998 at a fair  market  rental
           rate, which is approximately 40% of the prior rate.

Industry-wide, approximately 280 commercial jet aircraft were available for sale
or lease at December  31, 1996,  approximately  195 less than a year ago, and at
under 2.5% of the total available jet aircraft  fleet,  this is the lowest level
of  availability  since  1988.  From 1991 to 1994,  depressed  demand for travel
limited  airline  expansion  plans,  with  new  aircraft  orders  and  scheduled
deliveries being canceled or substantially  deferred. As profitability declined,
many airlines took action to downsize or liquidate assets and some airlines were
forced to file for bankruptcy protection.  Following three years of good traffic
growth accompanied by rising yields,  this trend is reversing with many airlines
reporting record profits.  As a result of this improving  trend,  just over 1200
new jet aircraft were ordered in 1996, making this the second highest ever order
year in the history of the industry.  To date,  this strong  recovery has mainly
benefited Stage 3 narrow-bodies and younger Stage 2 narrow-bodies, many of which
are now being  upgraded with  hushkits,  which,  when installed on the aircraft,
bring Stage 2 aircraft  into  compliance  with Federal  Aviation  Administration
(FAA) Stage 3 noise  restrictions as discussed in the Industry Update section of
Item 7. Older Stage 2  narrow-bodies  have shown only marginal signs of recovery
since the depressed 1991 to 1994 period. In 1996, several airline accidents have
also impacted the market for older Stage 2 aircraft.  The  Partnership  has been
forced to adjust  its  estimates  of the  residual  values  realizable  from its
aircraft, which resulted in an increase in depreciation expense, as discussed in
Items 7 and 8. A  discussion  of the current  market  condition  for the type of
aircraft owned by the Partnership follows:

Boeing 727-100 - The Boeing 727 was the first tri-jet introduced into commercial
service.   The  Boeing  727-100  is  a  short-  to  medium-range   jet  carrying
approximately  125  passengers  on  trips of up to 1,500  miles.  The  operating
characteristics  of the  aircraft,  as well as the  cost of aging  aircraft  and
corrosion control Airworthiness Directives (ADs), have significantly reduced the
possibility of re-leasing this type of aircraft.

Boeing 727-200  Advanced - The Boeing 727 was the first tri-jet  introduced into
commercial  service.  The  Boeing 727 is a short- to  medium-range  jet used for
trips of up to 1,500  nautical  miles.  In 1972,  Boeing  introduced  the Boeing
727-200  Advanced  model,  a higher gross weight  version  with  increased  fuel
capacity as  compared  with the  non-advanced  model.  Hushkits  which bring the
Boeing 727-200 Advanced into compliance with FAA Stage 3 noise restrictions, are
now  available at an average cost of  approximately  $2.6 million per  aircraft.
Hushkits may not be cost effective on all aircraft due to the age of some of the
aircraft  and the time  required to fully  amortize the  additional  investment.
Certain  ADs  applicable  to all models of the  Boeing  727 have been  issued to
prevent fatigue cracks and control corrosion as discussed in Item 7.

Boeing 737-200 Advanced - In 1971, Boeing introduced the Boeing 737-200 Advanced
model,  a higher gross weight  aircraft with increased fuel capacity as compared
to its predecessor, the non-advanced model. This two-engine,  two-pilot aircraft
provides  operators  with  107 to 130  seats,  meeting  their  requirements  for
economical lift up to the 2,000 nautical mile range. Hushkits which bring Boeing
737-200  aircraft into compliance with FAA Stage 3 noise  restrictions,  are now
available at a cost of approximately $1.5 million per aircraft. Hushkits may not
be cost effective on all aircraft due to the age of some of the aircraft and the
time  required  to  fully  amortize  the  additional  investment.   Certain  ADs
applicable  to all models of the Boeing 737 have been issued to prevent  fatigue
cracks and control corrosion as discussed in Item 7.

The general partner  believes that, in addition to the factors cited above,  the
deteriorated  market  for  the  Partnership's   aircraft  reflects  the  airline
industry's  reaction to the significant  expenditures  potentially  necessary to
bring these aircraft into compliance with certain ADs issued by the FAA relating
to aging aircraft,  corrosion prevention and control, and structural  inspection
and modification as discussed in the Industry Update section of Item 7.

                                        3

<PAGE>

Item 2.        Properties

At December 31, 1996,  PAIF-VI owned one Boeing 737-200 Advanced aircraft leased
to British  Airways and one Boeing 727-200  Advanced aircraft leased to ATA. One
Boeing  727-100  aircraft,  transferred  from  ATA  in  1993,  is  subject  to a
conditional  sale  agreement  to  Empresa  de  Transporte  Aereo  del Peru  S.A.
(Aeroperu)  financed by the Partnership.  The final payment was received in July
1996 and title to the aircraft is expected to be  transferred to Aeroperu or its
assignee in 1997. The Partnership's aircraft are Stage 2 aircraft and the leases
are operating leases.

The following table describes the  Partnership's  aircraft  portfolio in greater
detail:

                                                Year of           Cycles
Aircraft Type                 Serial Number   Manufacture   As of 10/31/96 (1)
-------------                 -------------   -----------   ------------------
Boeing 727-200 Advanced          21996            1980             25,561
Boeing 737-200 Advanced          22026            1980             23,000

(1) Cycle information as of 12/31/96 was not available.


Item 3.        Legal Proceedings

Kepford, et al. v. Prudential Securities,  et al. - On April 13, 1994, an action
entitled  Kepford,  et al.  v.  Prudential  Securities,  Inc.  was  filed in the
District Court of Harris County,  Texas. The complaint names Polaris  Investment
Management Corporation, Polaris Securities Corporation, Polaris Holding Company,
Polaris Aircraft Leasing Corporation,  the Partnership,  Polaris Aircraft Income
Fund I,  Polaris  Aircraft  Income Fund II,  Polaris  Aircraft  Income Fund III,
Polaris  Aircraft  Income  Fund IV,  Polaris  Aircraft  Income  Fund V,  General
Electric Capital Corporation,  Prudential Securities, Inc., Prudential Insurance
Company of America and James J. Darr, as  defendants.  Certain  defendants  were
served with a summons and original petition on or about May 2, 1994. Plaintiffs'
original petition alleges that defendants violated the Texas Securities Act, the
Texas Deceptive Trade Practices Act, sections 11 and 12 of the Securities Act of
1933  and  committed  common  law  fraud,  fraud  in the  inducement,  negligent
misrepresentation,  negligence, breach of fiduciary duty and civil conspiracy by
misrepresenting  and failing to disclose  material facts in connection  with the
sale of  limited  partnership  units in the  Partnership  and the other  Polaris
Aircraft  Income  Funds.  Plaintiffs  seek,  among  other  things,  an  award of
compensatory  damages in an unspecified amount plus interest thereon, and double
and treble damages under the Texas Deceptive Trade Practices Act.

Certain defendants,  including Polaris Investment Management Corporation and the
Partnership,  filed a general  denial on June 29,  1994 and a motion for summary
judgment  on June 17,  1994 on the basis  that the  statute of  limitations  has
expired.  On June 29, 1994 and July 14,  1994,  respectively,  plaintiffs  filed
their first amended original petition and second amended original petition, both
of which added plaintiffs. On July 18, 1994, plaintiffs filed their response and
opposition to defendants' motion for partial summary judgment and also moved for
a continuance on the motion for partial  summary  judgment.  On August 11, 1994,
after  plaintiffs again amended their petition to add numerous  plaintiffs,  the
defendants  withdrew their summary judgment motion and motion to stay discovery,
without prejudice to refiling these motions at a later date. On January 9, 1997,
the trial court issued a scheduling order setting a July 21, 1997 trial date.

Riskind,  et al. v.  Prudential  Securities,  Inc., et al. - An action  entitled
Riskind,  et al. v.  Prudential  Securities,  Inc., et al. has been filed in the
District Court of the 165 Judicial District, Maverick County, Texas. This action
is on behalf of over 3,000 individual  investors who purchased units in "various
Polaris Aircraft Income Funds,"  including the Partnership.  The Partnership and
Polaris Investment Management

                                        4

<PAGE>

Corporation  received service of plaintiffs'  second amended  original  petition
and, on June 13, 1994, filed an original answer containing a general denial.

The second amended original petition names the Partnership,  Polaris  Investment
Management Corporation, Prudential Securities, Inc. and others as defendants and
alleges that these  defendants  violated the Texas  Securities Act and the Texas
Deceptive  Trade  Practices  Act and  committed  common law fraud,  fraud in the
inducement, negligent misrepresentation,  negligent breach of fiduciary duty and
civil conspiracy by  misrepresenting  and failing to disclose  material facts in
connection with the sale of limited partnership units in the Partnership and the
other Polaris Aircraft Income Funds.  Plaintiffs  seek,  among other things,  an
award of compensatory  damages in an unspecified  amount plus interest  thereon,
and double and treble  damages under the Texas  Deceptive  Trade  Practices Act.
Kidder,  Peabody & Co.  was  added as an  additional  defendant  by virtue of an
Intervenor's Amended Plea in Intervention filed on or about April 7, 1995.

Prudential Securities,  Inc. reached a settlement with the plaintiffs. The trial
of the claims of one  plaintiff,  Robert W.  Wilson,  against  Polaris  Aircraft
Income  Funds  I-VI,  Polaris  Investment  Management  Corporation  and  various
affiliates  of Polaris  Investment  Management  Corporation,  including  General
Electric Capital Corporation,  was commenced on July 10, 1995. On July 26, 1995,
the jury returned a verdict in favor of the defendants on all counts. Subsequent
to this  verdict,  all of the  defendants  (with  the  exception  of  Prudential
Securities,  Inc., which had previously  settled) entered into a settlement with
the  plaintiffs.  On February 26, 1997, the court issued an order  notifying the
remaining plaintiffs,  who did not accept the settlement with the non-Prudential
defendants,  that the action  would be  dismissed  on April 21, 1997 for want of
prosecution  unless the  plaintiffs  showed  cause why the action  should not be
dismissed.

Howland,  et al. v. Polaris  Holding  Company,  et al. - On or about February 4,
1994,  a purported  class action  entitled  Howland,  et al. v. Polaris  Holding
Company,  et al. was filed in the United States  District Court for the District
of Arizona on behalf of investors  in Polaris  Aircraft  Income Funds I-VI.  The
complaint  names  each of Polaris  Investment  Management  Corporation,  Polaris
Securities  Corporation,  Polaris  Holding  Company,  Polaris  Aircraft  Leasing
Corporation,  the Partnership,  Polaris Aircraft Income Fund I, Polaris Aircraft
Income Fund II, Polaris  Aircraft Income Fund III,  Polaris Aircraft Income Fund
IV,  Polaris  Aircraft  Income Fund V,  General  Electric  Capital  Corporation,
Prudential  Securities,  Inc.,  Prudential  Securities Group,  Inc.,  Prudential
Insurance Company of America,  George W. Ball, Robert J. Sherman, James J. Darr,
Paul J. Proscia, Frank W. Giordano,  William A. Pittman, Joseph H. Quinn, Joe W.
Defur, James M. Kelso and Brian J. Martin, as defendants.  The complaint alleges
that   defendants   violated   federal  RICO   statutes,   committed   negligent
misrepresentations,  and breached their fiduciary duties by misrepresenting  and
failing  to  disclose  material  facts in  connection  with the sale of  limited
partnership  units in the  Partnership  and the other  Polaris  Aircraft  Income
Funds. Plaintiffs seek, among other things, an accounting of all monies invested
by plaintiffs and the class and the uses made thereof by defendants, an award of
compensatory,  punitive and treble damages in unspecified  amounts plus interest
thereon,  rescission,  attorneys'  fees and costs. On August 3, 1994, the action
was transferred to the multi-district litigation in the Southern District of New
York  entitled In re  Prudential  Securities  Limited  Partnerships  Litigation,
discussed in Part III, Item 10 below.

Mary C. Scott v.  Prudential  Securities  Inc. et al. - On or around  August 15,
1995, a complaint  entitled Mary C. Scott v.  Prudential  Securities Inc. et al.
was filed in the Court of Common Pleas,  County of Summit,  Ohio.  The complaint
names  as  defendants  Prudential  Securities  Inc.,  the  Partnership,  Polaris
Aircraft  Income Fund II, Polaris  Aircraft  Income Fund III,  Polaris  Aircraft
Income   Fund  IV,   P-Bache/A.G.   Spanos   Genesis   Income   Partners  LP  1,
Prudential-Bache  Properties,  Inc.,  A.G.  Spanos  Residential  Partners  - 86,
Polaris Securities  Corporation and Robert Bryan Fitzpatrick.  Plaintiff alleges
claims of fraud and violation of Ohio  securities  law arising out of the public
offerings of the Partnership,  Polaris Aircraft Income Fund II, Polaris Aircraft
Income  Fund III,  Polaris  Aircraft  Income  Fund IV, and  P-Bache/A.G.  Spanos
Genesis Income Partners LP 1. Plaintiff  seeks  compensatory  damages,  general,
consequential and incidental

                                        5

<PAGE>

damages,  punitive  damages,  rescission,  costs,  attorneys' fees and other and
further  relief as the Court  deems just and  proper.  On  September  15,  1995,
defendants  removed this action to the United  States  District  Court,  Eastern
District of Ohio. On September 18, 1995,  defendants sought the transfer of this
action to the Multi-District  Litigation and sought a stay of all proceedings by
the district  court,  which stay was granted on September 25, 1995. The Judicial
Panel  transferred  this  action to the  Multi-District  Litigation  on or about
February 7, 1996.

Other Proceedings - Part III, Item 10 discusses certain other actions which have
been filed  against  the  general  partner in  connection  with  certain  public
offerings, including that of the Partnership. With the exception of Novak, et al
v. Polaris Holding  Company,  et al, (which has been dismissed,  as discussed in
Item 10) where the Partnership was named as a defendant for procedural purposes,
the Partnership is not a party to these actions.



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

None.

                                        6

<PAGE>

                                     PART II

Item 5.        Market for the Registrant's Common Equity and Related Stockholder
               Matters

a)       Polaris  Aircraft Income Fund VI's (PAIF-VI or the  Partnership)  units
         representing  assignments of limited  partnership  interest (Units) are
         not publicly  traded.  The Units are held by Polaris  Depositary  VI on
         behalf  of the  Partnership's  investors  (Unit  Holders).  There is no
         formal  market for  PAIF-VI's  Units and it is unlikely that any market
         will develop.


b)       Number of Security Holders:

                                                      Number of Record Holders
                    Title of Class                     as of December 31, 1996
         -----------------------------------         ---------------------------

         Depository Units Representing Assignments
         of Limited Partnership Interest:                      2,207

         General Partnership Interest:                             1


c)       Dividends:

         Distributions  of cash from  operations  commenced on a quarterly basis
         beginning January 1991. Cash  distributions to Unit Holders during 1996
         and  1995  totaled  $1,735,449  and  $1,995,768,   respectively.   Cash
         distributions  per limited  partnership  unit were $25.00 and $28.75 in
         1996 and 1995, respectively.



                                        7

<PAGE>
<TABLE>
Item 6.           Selected Financial Data

<CAPTION>
                                                       For the years ended December 31,
                                                       --------------------------------

                                        1996           1995         1994          1993           1992
                                        ----           ----         ----          ----           ----
<S>                                <C>           <C>            <C>           <C>            <C>
Revenues                           $ 2,092,094   $  2,518,490   $ 3,449,608   $  3,151,370   $ 4,382,370

Net Income (Loss)                   (8,004,748)    (1,527,077)     (585,002)       (13,184)    2,613,379

Net Income (Loss)
  Allocated to Limited
  Partners                          (8,096,088)    (1,632,117)     (694,609)      (129,661)    2,189,158

Net Income (Loss) per
  Limited Partnership Unit             (116.63)        (23.51)       (10.01)         (1.87)        31.54

Cash Distributions per
  Limited Partnership
  Unit                                   25.00          28.75         30.00          31.88         55.00

Amount of Cash
  Distributions Included
  Above Representing
  a Return of Capital on
  a Generally Accepted
  Accounting Principle
  Basis per Limited
  Partnership Unit*                      25.00          28.75         30.00          31.88         20.00

Total Assets                         9,951,825     19,813,927    23,431,897     26,193,322    28,545,007

Partners' Capital                    9,827,231     19,658,768    23,286,653     26,063,802    28,406,508

</TABLE>

* The portion of such  distributions  which represents a return of capital on an
economic  basis  will  depend  in  part  on  the  residual  sale  value  of  the
Partnership's  aircraft and thus will not be ultimately  determinable  until the
Partnership disposes of its aircraft.  However,  such portion may be significant
and may equal, exceed or be smaller than the amount shown in the above table.

                                        8

<PAGE>

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

At December 31, 1996,  Polaris Aircraft Income Fund VI (the  Partnership)  owned
one Boeing  737-200  Advanced  aircraft  leased to British  Airways Plc (British
Airways) and one Boeing 727-200 Advanced  aircraft leased to American Trans Air,
Inc. (ATA). In addition,  the Partnership  sold one Boeing 727-100 aircraft that
ATA transferred to the Partnership as part of the ATA lease transaction in April
1993, subject to a conditional sale agreement to Empresa de Transporte Aereo del
Peru S.A. (Aeroperu) financed by the Partnership. The final payment was received
in July 1996 and title to the aircraft is expected to be transferred to Aeroperu
or its assignee in 1997.


Remarketing Update

Proposed  Sale of  Aircraft - The  Partnership  has  received,  and the  General
Partner (upon recommendation of its servicer) has determined that it would be in
the best interests of the  Partnership to accept an offer to purchase all of the
Partnership's  aircraft  (the  "Aircraft")  by a special  purpose  company  (the
"Purchaser").  The  Purchaser is managed by Triton  Aviation  Services,  Ltd., a
privately held aircraft  leasing company (the  "Purchaser's  Manager") which was
formed in 1996. Each Aircraft is to be sold subject to the existing leases,  and
as part of the  transaction the Purchaser  assumes all  obligations  relating to
maintenance reserves and security deposits,  if any, relating to such leases. At
the same time  cash  balances  related  to  maintenance  reserves  and  security
deposits, if any, will be transferred to the Purchaser.

The total  proposed  purchase  price  (the  "Purchase  Price") to be paid by the
Purchaser in the contemplated transaction would be $6,112,000 all of which would
be  allocable to the  Aircraft.  The  Purchaser  proposes to pay $688,578 of the
Purchase  Price in cash at the closing and the  balance of  $5,423,422  would be
paid by delivery of a promissory note ( the "Promissory Note") by the Purchaser.
The  Promissory  Note  would be repaid in equal  quarterly  installments  over a
period of seven years bearing interest at a rate of 12% per annum with a balloon
principal  payment at the end of year seven.  The Purchaser would have the right
to  voluntarily  prepay  the  Promissory  Note in  whole  or in part at any time
without penalty. In addition,  the Promissory Note would be subject to mandatory
partial prepayment in certain specified instances.

Under the terms of the  contemplated  transaction,  the Aircraft,  including any
income or proceeds  therefrom and any reserves or deposits with respect thereto,
constitute the sole source of payments  under the  Promissory  Note. No security
interest  over the  Aircraft  or the  leases  would be  granted  in favor of the
Partnership,  but the equity  interests in the Purchaser would be pledged to the
Partnership.  The Purchaser would have the right to sell the Aircraft, or any of
them,  without the  consent of the  Partnership,  except that the  Partnership's
consent would be required in the event that the proposed sale price is less than
the portion of the outstanding balance of the Promissory Note which is allocable
to the Aircraft in question and the Purchaser does not have sufficient  funds to
make up the  difference.  The Purchaser would undertake to keep the Aircraft and
leases free of any lien,  security  interest or other encumbrance other than (i)
inchoate  materialmen's  liens  and the  like,  and (ii) in the  event  that the
Purchaser elects to install hushkits on any Aircraft, secured debt to the extent
of the  full  cost of such  hushkit.  The  Purchaser  will  be  prohibited  from
incurring  indebtedness  other than (i) the Promissory Note; (ii) deferred taxes
not yet due and payable;  (iii) indebtedness  incurred to hushkit Aircraft owned
by the Purchaser  and,  (iv) demand loans from another SPC (defined  below) at a
market rate of interest.

It is also  contemplated  that each of Polaris  Aircraft Income Fund II, Polaris
Aircraft Income Fund III,  Polaris  Aircraft Income Fund IV and Polaris Aircraft
Income Fund V would sell certain  aircraft  assets to separate  special  purpose
companies  under common  management with the Purchaser  (collectively,  together
with the  Purchaser,  the  "SPC's") on terms  similar to those set forth  above.

                                        9

<PAGE>

Under the  terms of the  contemplated  transaction,  Purchaser's  Manager  would
undertake to make  available a working  capital  line to the  Purchaser of up to
approximately  $534,000 to fund operating  obligations  of the  Purchaser.  This
working capital line is to be guaranteed by Triton Investments, Ltd., the parent
of the Purchaser's  Manager and such guarantor will provide the Partnership with
a copy of its most recent balance sheet showing a consolidated net worth (net of
minority  interests) of at least $150-million.  Furthermore,  each of the SPC's,
including  the  Purchaser,   is  to  enter  into  a  management  agreement  with
Purchaser's  Manager  pursuant to which  Purchaser's  Manager  would provide all
normal  and  customary  management  services  including  remarketing,  sales and
repossession,  if  necessary.  Provided  that the Purchaser is not in default in
making payments due under the Promissory Note to the Partnership,  the Purchaser
would be  permitted  to  dividend  to its equity  owners an amount not to exceed
approximately  $14,300  per  month.  The  Purchaser  may  distribute  additional
dividends  to the equity  owners to the extent of the working  capital  advances
made by the Purchaser's Manager provided that the working capital line available
to the Purchaser will be deemed increased to the extent of any such dividends.

The Purchaser  would be deemed to have  purchased  the Aircraft  effective as of
April 1, 1997  notwithstanding the actual closing date. The Purchaser would have
the  right to  receive  all  income  and  proceeds,  including  rents  and notes
receivables,  from the Aircraft  accruing from and after April 1, 1997,  and the
Promissory Note would commence bearing interest as of April 1, 1997.

The Partnership has agreed to consult with Purchaser's Manager before taking any
significant  action  pertaining to the Aircraft  after the effective date of the
purchase  offer.  The  Purchaser  also has the  right  to make  all  significant
decisions  regarding  the  Aircraft  from and  after the date of  completion  of
definitive  documentation  legally  binding the Purchaser and the Partnership to
the  transaction,  even  if a  delay  occurs  between  the  completion  of  such
documentation and the closing of the title transfer to the Purchaser.

In the event the Partnership receives and elects to accept an offer for all (but
not less than  all) of the  assets  to be sold by it to the  Purchaser  on terms
which it deems  more  favorable,  the  Purchaser  has the right to (i) match the
offer,  or (ii) decline to match the offer and be entitled to compensation in an
amount equal to 1 1/2% of the Purchaser's proposed Purchase Price.

It should be noted that there can be no  assurance  that the  contemplated  sale
transaction will be consummated. The contemplated transaction remains subject to
execution of definitive documentation and various other contingencies.


Partnership Operations

The Partnership recorded net losses of $8,004,748,  $1,527,077, and $585,002, or
$116.63,  $23.51 and $10.01 per  limited  partnership  unit for the years  ended
December 31,  1996,  1995 and 1994,  respectively.  The 1996  operating  results
reflect lower rental revenues and substantially higher depreciation  expenses as
compared to 1995. The 1995 operating results reflect  substantially lower rental
revenues as compared to 1994.

Operating  results  in 1996,  1995  and  1994  were  significantly  impacted  by
increases in depreciation expense for certain of the Partnership's  aircraft. As
discussed in the Industry  Update  section,  if the  projected net cash flow for
each aircraft (projected rental revenue,  net of management fees, less projected
maintenance  costs, if any, plus the estimated  residual value) is less than the
carrying  value of the  aircraft,  the  Partnership  recognizes  the  deficiency
currently as increased depreciation expense.

The  Partnership  recognized  impairments on aircraft to be held and used by the
Partnership of approximately $8,254,000, $2,031,000 and $2,160,000 in 1996, 1995
and 1994,  respectively.  In 1996, the impairment loss was the result of several

                                       10

<PAGE>

significant  factors.  As a  result  of  industry  and  market  changes,  a more
extensive  review of the  Partnership's  aircraft  was  completed  in the fourth
quarter  of 1996 which  resulted  in revised  assumptions  of future  cash flows
including   reassessment  of  projected  re-lease  terms  and  potential  future
maintenance costs. As discussed in Note 8, the Partnership  accepted an offer to
purchase both of the Partnership's remaining aircraft subject to each aircraft's
existing lease. This offer constitutes an event that required the Partnership to
review the aircraft  carrying value  pursuant to SFAS 121. In  determining  this
additional  impairment  loss,  the  Partnership  estimated the fair value of the
aircraft based on the purchase price reflected in the offer,  less the estimated
costs and expenses of the proposed  sale.  The  Partnership is deemed to have an
impairment  loss to the extent that the carrying  value exceeded the fair value.
Management  believes the  assumptions  related to fair value of impaired  assets
represents the best estimates  based on reasonable and  supportable  assumptions
and  projections.  It should be noted  that there can be no  assurance  that the
contemplated sale transaction will be consummated.  The contemplated transaction
remains  subject to  execution of  definitive  documentation  and various  other
contingencies.

The increased  depreciation  expense  reduces the aircraft's  carrying value and
reduces the amount of future  depreciation  expense  that the  Partnership  will
recognize  over the  projected  remaining  economic  life of the  aircraft.  The
Partnership  also made downward  adjustments to the estimated  residual value of
certain of its  aircraft as of  December  31,  1995 and 1994.  For any  downward
adjustment  to the  estimated  residual  values,  depreciation  expense over the
projected   remaining   economic  life  of  the  aircraft  is   increased.   The
Partnership's  earnings are impacted by the net effect of the adjustments to the
aircraft  carrying  values  recorded  in 1996,  1995  and 1994 and the  downward
adjustments  to the  estimated  residual  values  recorded  in 1995  and 1994 as
discussed later in the Industry Update section.

Operating results in 1996 and 1995 were negatively  impacted by the reduction in
the rental rate earned on the lease extension with British Airways as previously
discussed.  The lease extension is effective from April 1995 until March 1998 at
the current fair market  rental rate,  which is  approximately  40% of the prior
rate.


Liquidity and Cash Distributions

Liquidity - The Partnership continues to receive all lease payments on a current
basis.  The  Partnership's  cash reserves have been  negatively  impacted by the
reduction in rental payments  received from British Air following the three year
lease extension in April 1995 as discussed above.

The ATA lease  specifies  that the  Partnership  may be  required  to finance an
aircraft hushkit at an estimated cost of approximately $2.6 million, which would
be partially  recovered with interest through payments from ATA over an extended
lease term.  The  Partnership's  cash  reserves are being  retained to finance a
portion of the cost that may be  incurred  under the lease with ATA and to cover
other potential cash requirements.

Cash  Distributions - Cash  distributions  to limited partners during 1996, 1995
and  1994  were  $1,735,449,  $1,995,768  and  $2,082,540,   respectively.  Cash
distributions per limited partnership unit were $25.00, $28.75 and $30.00 during
1996,  1995 and 1994,  respectively.  The  timing  and  amount  of  future  cash
distributions will depend upon the Partnership's  future cash requirements,  and
the receipt of rental payments from British Airways and ATA.


Industry Update

Maintenance  of Aging Aircraft - The process of aircraft  maintenance  begins at
the  aircraft  design  stage.  For aircraft  operating  under  Federal  Aviation
Administration  (FAA) regulations,  a review board consisting of representatives
of the manufacturer,  FAA representatives and operating airline  representatives
is responsible for specifying the aircraft's initial  maintenance  program.  The
general  partner  understands  that this  program  is  constantly  reviewed  and
modified throughout the aircraft's operational life.

                                       11

<PAGE>

Since 1988, the FAA, working with the aircraft manufacturers and operators,  has
issued a series of  Airworthiness  Directives (ADs) which mandate that operators
conduct more intensive  inspections,  primarily of the aircraft  fuselages.  The
results of these  mandatory  inspections  may result in the need for  repairs or
structural  modifications  that may not have been  required  under  pre-existing
maintenance programs.

In addition,  an AD adopted in 1990  requires  replacement  or  modification  of
certain  structural items on a specific  timetable.  These structural items were
formerly subject to periodic  inspection,  with replacement when necessary.  The
FAA  estimates  the cost of  compliance  with this AD to be  approximately  $1.0
million and $900,000 per Boeing 727 and Boeing 737  aircraft,  respectively,  if
none of the required work had been done previously.  The FAA also issued several
ADs in 1993 updating  inspection and  modification  requirements  for Boeing 737
aircraft.  The FAA estimates the cost of these  requirements to be approximately
$90,000 per  aircraft.  In general,  the new  maintenance  requirements  must be
completed by the later of March 31, 1994,  or 75,000 and 60,000  cycles for each
Boeing 737 and 727,  respectively.  The extent of  modifications  required to an
aircraft varies according to the level of  incorporation of design  improvements
at manufacture.

In December 1990, the FAA adopted  another AD intended to mitigate  corrosion of
structural components,  which would require repeated inspections from 5 years of
age throughout the life of an aircraft,  with replacement of corroded components
as needed.  Integration  of the new  inspections  into each aircraft  operator's
maintenance program was required by December 31, 1991 on Boeing aircraft.

In 1996,  the  manufacturer  proposed  certain  Boeing 737 rudder system product
improvements of which some will be mandated by the FAA. Airworthiness Directives
issued in the last quarter of 1996 and the first quarter of 1997 on this subject
have not been of  significant  maintenance  cost impact.  The cost of compliance
with future FAA maintenance  requirements  not yet issued is not determinable at
this time.

The  Partnership's  existing  lease to ATA  requires  the lessee to maintain the
Partnership's  aircraft in accordance with an FAA-approved  maintenance  program
during  the lease  term.  The  Partnership's  lease to  British  Airways,  which
operates in Great  Britain,  requires the lessee to maintain  the  Partnership's
aircraft in accordance with Civil Aviation Authority (CAA)  requirements  during
the lease term. At the end of the leases,  each lessee is generally  required to
return the aircraft in airworthy condition including compliance with all ADs for
which action is mandated by the FAA or CAA, whichever is applicable,  during the
lease term.  An  aircraft  returned  to the  Partnership  as a result of a lease
default would most likely not be returned to the  Partnership in compliance with
all return conditions  required by the lease. In negotiating  subsequent leases,
market conditions may require that the Partnership bear some or all of the costs
of  compliance  with future ADs or ADs that have been issued,  but which did not
require  action  during the  previous  lease term.  The  ultimate  effect on the
Partnership of compliance with the FAA maintenance standards is not determinable
at this time and will depend on a variety of factors, including the state of the
commercial aircraft industry,  the timing of the issuance of ADs, and the status
of compliance therewith at the expiration of the current leases.

Aircraft  Noise - Another issue which has affected the airline  industry is that
of aircraft noise levels.  The FAA has categorized  aircraft  according to their
noise  levels.  Stage 1 aircraft,  which have the highest  noise  level,  are no
longer  allowed to operate  from civil  airports in the United  States.  Stage 2
aircraft meet current FAA requirements, subject to the phase-out rules discussed
below.  Stage 3 aircraft  are the most quiet and Stage 3 is the standard for all
new aircraft.

On September  24, 1991,  the FAA issued final rules on the  phase-out of Stage 2
aircraft by the end of this decade. The key features of the rule include:

         -    Compliance can be accomplished through a gradual process of phase-
              in or phase-out  (see below) on  each of  three interim compliance
              dates:  December 31, 1994, 1996 and 1998.  All

                                       12

<PAGE>

              Stage  2  aircraft  must  be  phased  out  of  operations  in  the
              contiguous  United  States by  December  31,  1999,  with  waivers
              available in certain specific cases to December 31, 2003.

         -    All operators  have the option of achieving  compliance  through a
              gradual phase-out of Stage 2 aircraft (i.e.,  eliminate 25% of its
              Stage 2 fleet on each of the compliance  dates noted above),  or a
              gradual phase-in of Stage 3 aircraft (i.e., 55%, 65% and 75% of an
              operator's   fleet  must  consist  of  Stage  3  aircraft  by  the
              respective interim compliance dates noted above).

The federal rule does not prohibit  local  airports from issuing more  stringent
phase-out  rules.  In fact,  several local  airports have adopted more stringent
noise  requirements  which restrict the operation of Stage 2 and certain Stage 3
aircraft.

Other  countries  have also adopted  noise  policies.  The  European  Union (EU)
adopted a non-addition  rule in 1989, which directed each member country to pass
the necessary  legislation to prohibit  airlines from adding Stage 2 aircraft to
their fleets after November 1, 1990, with all Stage 2 aircraft phased-out by the
year 2002. The International  Civil Aviation  Organization has also endorsed the
phase-out of Stage 2 aircraft on a world-wide basis by the year 2002.

The Partnership's aircraft are Stage 2 aircraft.  Hushkit  modifications,  which
allow Stage 2 aircraft to meet Stage 3 requirements, are currently available for
the Partnership's  aircraft.  However, while technically feasible,  hushkits may
not be cost  effective  due to the age of the aircraft and the time  required to
fully amortize the additional  investment.  The  Partnership  may be required to
finance a hushkit for the aircraft leased to ATA, as previously  discussed.  The
general  partner  will  evaluate,  as  appropriate,  the  potential  benefits of
installing  hushkits  on  the  Partnership's  other  aircraft.  It is  unlikely,
however,  that  the  Partnership  would  incur  such  costs  unless  they can be
substantially recovered through a lease. Implementation of the Stage 3 standards
has  adversely  affected the value of Stage 2 aircraft,  as these  aircraft will
require eventual modification to be operated in the U.S. or other countries with
Stage 3 standards after the applicable dates.


Demand for Aircraft - Industry-wide,  approximately  280 commercial jet aircraft
were  available for sale or lease at December 31, 1996,  approximately  195 less
than a year ago, and at under 2.5% of the total  available  jet aircraft  fleet,
this is the  lowest  level  of  availability  since  1988.  From  1991 to  1994,
depressed demand for travel limited airline  expansion plans,  with new aircraft
orders and scheduled  deliveries  being canceled or substantially  deferred.  As
profitability  declined,  many  airlines  took action to  downsize or  liquidate
assets  and  some  airlines  were  forced  to file  for  bankruptcy  protection.
Following three years of good traffic growth accompanied by rising yields,  this
trend is reversing with many airlines  reporting record profits.  As a result of
this  improving  trend,  just over 1200 new jet  aircraft  were ordered in 1996,
making this the second  highest ever order year in the history of the  industry.
To date,  this strong recovery has mainly  benefited  Stage 3 narrow-bodies  and
younger  Stage 2  narrow-bodies,  many of  which  are now  being  upgraded  with
hushkits,  whereas older Stage 2 narrow-bodies have shown only marginal signs of
recovery since the depressed 1991 to 1994 period.

The general partner  believes that, in addition to the factors cited above,  the
deteriorated  market  for  the  Partnership's   aircraft  reflects  the  airline
industry's  reaction to the significant  expenditures  potentially  necessary to
bring these aircraft into compliance with certain ADs issued by the FAA relating
to aging aircraft,  corrosion prevention and control, and structural  inspection
and modification as previously discussed.

Effects on the Partnership's Aircraft - The Partnership periodically reviews the
estimated  realizability  of the residual  values at the  projected  end of each
aircraft's  economic  life based on  estimated  residual  values  obtained  from
independent  parties which provide current and future estimated  aircraft values
by aircraft type.  The  Partnership  made downward  adjustments to the estimated

                                       13

<PAGE>

residual  value of certain of its on-lease  aircraft as of December 31, 1995 and
1994. For any downward adjustment in estimated residual value or decrease in the
projected  remaining economic life, the depreciation  expense over the projected
remaining economic life of the aircraft is increased.

If the projected net cash flow for each aircraft (projected rental revenue,  net
of management fees, less projected maintenance costs, if any, plus the estimated
residual value) is less than the carrying value of the aircraft, the Partnership
recognizes  the  deficiency  currently as increased  depreciation  expense.  The
Partnership recognized approximately  $8,254,000,  $2,031,000 and $2,160,000, or
$118.90,  $28.96 and $30.80 per limited  Partnership unit, of this deficiency as
increased  depreciation expense in 1996, 1995 and 1994,  respectively.  In 1996,
the impairment loss was the result of several  significant  factors. As a result
of industry and market  changes,  a more extensive  review of the  Partnership's
aircraft was completed in the fourth  quarter of 1996 which  resulted in revised
assumptions of future cash flows including  reassessment  of projected  re-lease
terms and  potential  future  maintenance  costs.  As  discussed  in Note 8, the
Partnership  accepted an offer to purchase both of the  Partnership's  remaining
aircraft subject to each aircraft's  existing lease.  This offer  constitutes an
event that  required  the  Partnership  to review the  aircraft  carrying  value
pursuant  to SFAS 121. In  determining  this  additional  impairment  loss,  the
Partnership estimated the fair value of the aircraft based on the purchase price
reflected in the offer,  less the  estimated  costs and expenses of the proposed
sale.  The  Partnership  recorded  an  impairment  loss to the  extent  that the
carrying  value  exceeded the fair value.  Management  believes the  assumptions
related to fair value of impaired assets  represents the best estimates based on
reasonable and supportable assumptions and projections.  It should be noted that
there  can be no  assurance  that  the  contemplated  sale  transaction  will be
consummated.   The  contemplated   transaction   remains  subject  to  executing
definitive  documentation and various other  contingencies.  The deficiencies in
1995 and 1994 were  generally the result of declining  estimates in the residual
values  of  the  aircraft.   The  increased  depreciation  expense  reduces  the
aircraft's   carrying   value  and  therefore   reduces  the  amount  of  future
depreciation  expense that the  Partnership  will  recognize  over the projected
remaining economic life of the aircraft.

The  Partnership's  future  earnings  are  impacted  by the  net  effect  of the
adjustments to the carrying  values of the aircraft  recorded in 1996,  1995 and
1994 (which has the effect of decreasing  future  depreciation  expense) and the
downward  adjustments to the estimated residual values recorded in 1995 and 1994
(which has the effect of increasing future depreciation expense). The net effect
of the 1994 adjustments to the estimated  residual values and the adjustments to
the carrying values of the aircraft recorded in 1994 is to cause the Partnership
to recognize increased  depreciation  expense of approximately  $143,000 in 1995
and 1996.  The net  effect of the 1995  adjustments  to the  estimated  residual
values and the  adjustments to the carrying  values of the aircraft  recorded in
1995 is to cause the Partnership to recognize increased  depreciation expense of
approximately $231,000 in 1996.

Effective January 1, 1996, the Partnership adopted SFAS No. 121, "Accounting for
the  Impairment of Long-Lived  Assets and for  Long-Lived  Assets to be Disposed
Of." This statement  requires that long-lived  assets be reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be  recoverable.  In performing the review for  recoverability,
the  statement   provides  that  the  Partnership  should  estimate  the  future
undiscounted  cash flows  expected  to result  from the use of the asset and its
eventual  disposition.  If the  projected  net  undiscounted  cash flow for each
aircraft  (projected  rental  revenue,  net of management  fees,  less projected
maintenance  costs, if any, plus the estimated  residual value) is less than the
carrying value of the aircraft,  an impairment  loss is recognized.  Pursuant to
the statement,  measurement of an impairment loss for long-lived  assets will be
based on the "fair value" of the asset as defined in the statement.

SFAS No. 121  states  that the fair value of an asset is the amount at which the
asset could be bought or sold in a current  transaction between willing parties,
i.e., other than in a forced or liquidation sale. Quoted market prices in active
markets  are the best  evidence  of fair value and will be used as the basis for
the measurement,  if available.  If quoted market prices are not available,  the

                                       14

<PAGE>

estimate of fair value will be based on the best  information  available  in the
circumstances.  Pursuant  to the  statement,  the  estimate  of fair  value will
consider  prices for similar  assets and the results of valuation  techniques to
the extent  available in the  circumstances.  Examples of  valuation  techniques
include  the  present  value of  estimated  expected  future  cash flows using a
discount  rate  commensurate  with the risks  involved,  option-pricing  models,
matrix pricing, option-adjusted spread models, and fundamental analysis.

The Partnership  periodically  reviews its aircraft for impairment in accordance
with SFAS No.  121.  Using an  estimate  of the fair value of the  Partnership's
aircraft to measure  impairment may result in greater  write-downs than would be
recognized under the accounting  method  previously  applied by the Partnership.
The Partnership uses information obtained from third party valuation services in
arriving at its  estimate of fair value for  purposes  of  determining  residual
values. The Partnership will use similar information, plus available information
and estimates related to the Partnership's aircraft, to determine an estimate of
fair value to measure impairment as required by the statement.  The estimates of
fair value can vary  dramatically  depending  on the  condition  of the specific
aircraft  and the  actual  marketplace  conditions  at the  time  of the  actual
disposition  of the  asset.  If  assets  are  deemed  impaired,  there  could be
substantial write-downs in the future.

The Partnership's leases expire in March 1998 and March 2000. To the extent that
the  Partnership's  aircraft  continue to be significantly  affected by industry
events,  the  Partnership  will  evaluate each aircraft as it comes off lease to
determine whether a re-lease or a sale at the then-current market rates would be
most beneficial for Unit Holders.


                                       15

<PAGE>

Item 8.           Financial Statements and Supplementary Data












                        POLARIS AIRCRAFT INCOME FUND VI,
                        A California Limited Partnership




              FINANCIAL STATEMENTS AS OF DECEMBER 31, 1996 AND 1995


                                  TOGETHER WITH


                                AUDITORS' REPORT

















                                       16

<PAGE>











                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To the Partners of
Polaris Aircraft Income Fund VI,
A California Limited Partnership:

We have audited the accompanying  balance sheets of Polaris Aircraft Income Fund
VI, A California Limited Partnership,  as of December 31, 1996 and 1995, and the
related  statements of operations,  changes in partners'  capital and cash flows
for each of the  three  years in the  period  ended  December  31,  1996.  These
financial  statements  are  the  responsibility  of  the  general  partner.  Our
responsibility  is to express an opinion on these financial  statements 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 the
general  partner,   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 Polaris Aircraft Income Fund
VI, A California  Limited  Partnership as of December 31, 1996 and 1995, and the
results of its  operations and its cash flows for each of the three years in the
period ended December 31, 1996, in conformity with generally accepted accounting
principles.


                                                             ARTHUR ANDERSEN LLP


San Francisco, California
    March 3, 1997

                                       17

<PAGE>

                        POLARIS AIRCRAFT INCOME FUND VI,
                        A California Limited Partnership

                                 BALANCE SHEETS

                           DECEMBER 31, 1996 AND 1995


                                                     1996           1995
                                                 -----------    -----------
ASSETS:

CASH AND CASH EQUIVALENTS                        $ 3,566,009    $ 3,297,782

RENT RECEIVABLE                                      345,597        467,025

AIRCRAFT, net of accumulated depreciation
of $23,398,981 in 1996 and $13,390,080 in 1995     6,040,219     16,049,120
                                                 -----------    -----------

                                                 $ 9,951,825    $19,813,927
                                                 ===========    ===========

LIABILITIES AND PARTNERS' CAPITAL:

PAYABLE TO AFFILIATES                            $    25,425    $    26,362

ACCOUNTS PAYABLE AND ACCRUED
    LIABILITIES                                       24,169         34,797

SECURITY DEPOSITS                                     75,000         94,000
                                                 -----------    -----------

           Total Liabilities                         124,594        155,159
                                                 -----------    -----------

PARTNERS' CAPITAL:
    General Partner                                    5,656          5,656
    Limited Partners, 69,418 units
        issued and outstanding                     9,821,575     19,653,112
                                                 -----------    -----------

           Total Partners' Capital                 9,827,231     19,658,768
                                                 -----------    -----------

                                                 $ 9,951,825    $19,813,927
                                                 ===========    ===========


        The accompanying notes are an integral part of these statements.

                                       18

<PAGE>

                        POLARIS AIRCRAFT INCOME FUND VI,
                        A California Limited Partnership

                            STATEMENTS OF OPERATIONS

              FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994


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

REVENUES:
    Rent from operating leases      $  1,738,572  $  2,117,575  $  3,180,972
    Interest and other                   190,767       205,387       122,615
    Gain on sale of aircraft             162,755       195,528       146,021
                                    ------------  ------------  ------------

        Total Revenues                 2,092,094     2,518,490     3,449,608
                                    ------------  ------------  ------------

EXPENSES:
    Depreciation and amortization     10,008,901     3,927,648     3,885,603
    Operating                                409         1,930        56,586
    Administration and other              87,532       115,989        92,421
                                    ------------  ------------  ------------

        Total Expenses                10,096,842     4,045,567     4,034,610
                                    ------------  ------------  ------------

NET LOSS                            $ (8,004,748) $ (1,527,077) $   (585,002)
                                    ============  ============  ============

NET INCOME ALLOCATED
    TO THE GENERAL PARTNER          $     91,340  $    105,040  $    109,607
                                    ============  ============  ============

NET LOSS ALLOCATED
    TO LIMITED PARTNERS             $ (8,096,088) $ (1,632,117) $   (694,609)
                                    ============  ============  ============

NET LOSS PER LIMITED
    PARTNERSHIP UNIT                $    (116.63) $     (23.51) $     (10.01)
                                    ============  ============  ============

        The accompanying notes are an integral part of these statements.

                                       19

<PAGE>

                        POLARIS AIRCRAFT INCOME FUND VI,
                        A California Limited Partnership

                   STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

              FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994


                                       General       Limited
                                       Partner       Partner         Total
                                       -------       -------         -----


Balance, December 31, 1993          $      5,656  $ 26,058,146  $ 26,063,802

    Net income (loss)                    109,607      (694,609)     (585,002)

    Cash distributions to partners      (109,607)   (2,082,540)   (2,192,147)
                                    ------------  ------------  ------------

Balance, December 31, 1994                 5,656    23,280,997    23,286,653

    Net income (loss)                    105,040    (1,632,117)   (1,527,077)

    Cash distributions to partners      (105,040)   (1,995,768)   (2,100,808)
                                    ------------  ------------  ------------

Balance, December 31, 1995                 5,656    19,653,112    19,658,768

    Net income (loss)                     91,340    (8,096,088)   (8,004,748)

    Cash distributions to partners       (91,340)   (1,735,449)   (1,826,789)
                                    ------------  ------------  ------------

Balance, December 31, 1996          $      5,656  $  9,821,575  $  9,827,231
                                    ============  ============  ============

        The accompanying notes are an integral part of these statements.

                                       20

<PAGE>



                        POLARIS AIRCRAFT INCOME FUND VI,
                        A California Limited Partnership

                            STATEMENTS OF CASH FLOWS

              FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994



                                         1996          1995          1994
                                    ------------  ------------  ------------
OPERATING ACTIVITIES:
  Net loss                          $ (8,004,748) $ (1,527,077) $   (585,002)
  Adjustments to reconcile net
   loss to net cash provided by
   operating activities:
    Depreciation and amortization     10,008,901     3,927,648     3,885,603
    Gain on sale of aircraft            (162,755)     (195,528)     (146,021)
    Changes in operating assets
     and liabilities:
       Decrease in rent and
         interest receivable             121,428       292,558        49,556
       Increase (decrease) in
         payable to affiliates              (937)      (10,668)       15,510
       Increase (decrease) in
         accounts payable and
         accrued liabilities             (10,628)       20,583           214
       Decrease in security deposits     (19,000)         --            --
                                    ------------  ------------  ------------
           Net cash provided by
               operating activities    1,932,261     2,507,516     3,219,860
                                    ------------  ------------  ------------

INVESTING ACTIVITIES:
  Principal payments on finance
   sale of aircraft                      162,755       195,528       146,021
                                    ------------  ------------  ------------

       Net cash provided by
        investing activities             162,755       195,528       146,021
                                    ------------  ------------  ------------

FINANCING ACTIVITIES:
  Cash distributions to partners      (1,826,789)   (2,100,808)   (2,192,147)
                                    ------------  ------------  ------------

       Net cash used in
        financing activities          (1,826,789)   (2,100,808)   (2,192,147)
                                    ------------  ------------  ------------

CHANGES IN CASH AND CASH
  EQUIVALENTS                            268,227       602,236     1,173,734

CASH AND CASH EQUIVALENTS AT
  BEGINNING OF PERIOD                  3,297,782     2,695,546     1,521,812
                                    ------------  ------------  ------------

CASH AND CASH EQUIVALENTS AT
  END OF PERIOD                     $  3,566,009  $  3,297,782  $  2,695,546
                                    ============  ============  ============

        The accompanying notes are an integral part of these statements.

                                       21

<PAGE>

                        POLARIS AIRCRAFT INCOME FUND VI,
                        A California Limited Partnership

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1996


1.       Accounting Principles and Policies

Accounting  Method -  Polaris  Aircraft  Income  Fund VI, A  California  Limited
Partnership  (PAIF-VI or the  Partnership),  maintains its  accounting  records,
prepares its financial statements and files its tax returns on the accrual basis
of  accounting.  The  preparation  of financial  statements in  conformity  with
generally accepted  accounting  principles requires management to make estimates
and assumptions  that affect the reported  amounts of assets and liabilities and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting  period.  Actual results could differ from those  estimates.  The most
significant  estimates with regard to these financial  statements are related to
the projected cash flows analysis in determining the fair value of assets.

Cash and Cash  Equivalents - This includes  deposits at banks and investments in
money  market  funds.  Cash and  cash  equivalents  is  stated  at  cost,  which
approximates fair value.

Aircraft and  Depreciation  - The aircraft are recorded at cost,  which includes
acquisition costs. Depreciation to an estimated residual value is computed using
the straight-line  method over the estimated economic life of the aircraft which
was  originally  estimated  to  be  30  years  from  the  date  of  manufacture.
Depreciation in the year of acquisition was calculated  based upon the number of
days that the aircraft were in service.

The Partnership periodically reviews the estimated realizability of the residual
values at the projected end of each aircraft's  economic life based on estimated
residual  values  obtained from  independent  parties which provide  current and
future estimated  aircraft values by aircraft type. For any downward  adjustment
in estimated  residual  value or decrease in the  projected  remaining  economic
life, the depreciation expense over the projected remaining economic life of the
aircraft is increased.

If the projected net cash flow for each aircraft (projected rental revenue,  net
of management fees, less projected maintenance costs, if any, plus the estimated
residual  value) is less than the carrying value of the aircraft,  an impairment
loss is  recognized.  Pursuant to Statement of  Financial  Accounting  Standards
(SFAS) No. 121, as discussed in Note 3,  measurement of an impairment  loss will
be based on the "fair value" of the asset as defined in the statement.

Capitalized  Costs -  Aircraft  modification  and  maintenance  costs  which are
determined  to increase  the value or extend the useful life of the aircraft are
capitalized  and  amortized  using the  straight-line  method over the estimated
useful  life of the  improvement.  These  costs  are also  subject  to  periodic
evaluation as discussed above.

Operating  Leases - The aircraft  leases are accounted for as operating  leases.
Lease  revenues  are  recognized  in equal  installments  over the  terms of the
leases.

Operating  Expenses - Operating  expenses  include  costs  incurred to maintain,
insure, lease and sell the Partnership's aircraft.

                                       22

<PAGE>

Net Income (Loss) Per Limited  Partnership  Unit - Net income (loss) per limited
partnership  unit is based on the limited  partners' share of net income (loss),
and the number of units outstanding for the years ended December 31, 1996, 1995,
and 1994.

Income Taxes - The Partnership  files federal and state  information  income tax
returns only. Taxable income or loss is reportable by the individual partners.

Note  Receivable - The  Partnership  had recorded an allowance for credit losses
for an impaired note as a result of issues  regarding its  collection  (Note 4).
The  impaired  note was paid in full during  1996.  The  Partnership  recognizes
revenue on impaired notes only as payments are received.

                                                    1996          1995
                                                    ----          ----
      Allowance for credit losses,
         beginning of year                       $ (162,755)   $ (358,283)
      Collections                                   162,755       195,528
                                                 ----------    ----------
      Allowance for credit losses,
         end of year                             $      -      $ (162,755)
                                                 ==========    ==========


2.    Organization and the Partnership

The  Partnership was formed on October 13, 1989 for the purpose of acquiring and
leasing  aircraft.  The Partnership  will terminate no later than December 2020.
Upon organization, both the general partner and the depositary contributed $500.
The Partnership  intended to sell between 36,000 and 500,000  depositary  units,
representing  assignments of limited partnership interest (Units), at a price of
$500 per Unit.  Sales of Units  commenced  August 14,  1990.  As of December 31,
1990,  the general  partner  determined  that it was in the best interest of the
existing  investors to early terminate the offering of the Partnership's  Units.
The offering  terminated on January 22, 1991, at which time the  Partnership had
sold 69,418  Units of $500,  representing  $34,709,000.  All unit  holders  were
admitted to the Partnership on or before January 16, 1991.

Securities regulations specify a minimum percentage of gross proceeds which must
be invested in aircraft and reserves.  The  Partnership had raised slightly more
than it was able to invest in order to meet the specified percentage. Therefore,
in accordance with the Limited Partnership  Agreement  (Partnership  Agreement),
the uninvested net proceeds were returned to unit holders on a pro-rata basis in
February 1991. The  distribution  amount of $610,878,  or $8.80 per $500 limited
partnership unit, was a distribution of capital, as opposed to a distribution of
cash from operations.

Polaris Investment  Management  Corporation  (PIMC), the sole general partner of
the  Partnership,  supervises  the  day-to-day  operations  of the  Partnership.
Polaris Depositary  Company VI (PDC) serves as the depositary.  PIMC and PDC are
wholly-owned  subsidiaries  of  Polaris  Aircraft  Leasing  Corporation  (PALC).
Polaris  Holding Company (PHC) is the parent company of PALC.  General  Electric
Capital Corporation (GE Capital), an affiliate of General Electric Company, owns
100% of PHC's  outstanding  common  stock.  PIMC  has  entered  into a  services
agreement  dated as of July 1,  1994 with GE  Capital  Aviation  Services,  Inc.
(GECAS). Allocations to affiliates are described in Note 5.


3.    Aircraft Under Operating Leases

At December 31, 1996, the  Partnership  owned two used  commercial jet aircraft,
which were acquired and leased or sold as discussed below. Two of these aircraft
were  acquired  from an  affiliate  and were  purchased  within  one year of the
affiliate's  acquisition  at the  affiliate's  original price paid. The aircraft
leases are net  operating  leases,  requiring  the lessees to pay all  operating

                                       23

<PAGE>

expenses   associated   with  the  aircraft  during  the  lease  term  including
Airworthiness  Directives  (ADs) which have been or may be issued by the Federal
Aviation  Administration  (FAA) and require compliance during the lease term. In
addition, see Note 4 for discussion of sale and transfer of title to Aeroperu.

The leases generally state a minimum  acceptable  return condition for which the
lessee is liable under the terms of the lease agreement. Conversely, the British
Airways Plc  (British  Airways)  lease also  provides  that if the  aircraft are
returned at a level above the minimum  acceptable  level,  the Partnership  must
reimburse the lessee for the related excess, subject to certain limitations. The
liability to this lessee, if any, cannot be currently estimated and therefore is
not reflected in the financial  statements.  The following  table  describes the
Partnership's current aircraft portfolio in greater detail:

                                                               Year of
Aircraft Type                         Serial Number          Manufacture
-------------                         -------------          -----------
Boeing 727-200 Advanced                   21996                  1980
Boeing 737-200 Advanced                   22026                  1980


One Boeing  727-200  Advanced - This  aircraft was acquired in December 1990 for
$13,100,000 and leased to USAir,  Inc.  (USAir) until December 1992. In December
1992,  the  Partnership  negotiated a  seven-year  lease with ATA for the Boeing
727-200 Advanced  aircraft  formerly on lease to USAir at the then-current  fair
market  lease rate,  which was  approximately  47% of the prior rate.  The lease
began in March 1993 and is renewable for up to three one-year periods.  However,
ATA was not required to begin making cash rental  payments  until February 1994,
although  rental  income will be  amortized  over the entire lease term for book
purposes.

Under the ATA lease,  the  Partnership  incurred  certain  maintenance  costs of
approximately  $537,000 and may be required to finance an aircraft hushkit at an
estimated cost of approximately $2.6 million, which would be partially recovered
with interest  through payments from ATA over an extended lease term. As part of
the lease  transaction,  ATA  transferred to the  Partnership  one  unencumbered
Boeing 727-100 aircraft as discussed in Note 4.

One Boeing  737-200  Advanced - This  aircraft was acquired for  $15,800,000  in
October 1990 and leased to British  Airways  until April 1995, at which time the
lease was  extended  for three years until March 1998 at the  then-current  fair
market rental rate, which is approximately 40% of the prior rate.

The following is a schedule by year of future  minimum  rental revenue under the
existing leases:

                    Year                             Amount
                    ----                             ------
                    1997                         $ 1,738,572
                    1998                             949,239
                    1999                             778,572
                    2000                             168,691
                    2001 and thereafter                  -
                                                 -----------
                    Total                        $ 3,635,074
                                                 ===========

Effective January 1, 1996, the Partnership adopted SFAS No. 121, "Accounting for
the  Impairment of Long-Lived  Assets and for  Long-Lived  Assets to be Disposed
Of." This statement  requires that long-lived  assets be reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be  recoverable.  In performing the review for  recoverability,
the  statement   provides  that  the  Partnership  should  estimate  the  future
undiscounted  cash flows  expected  to result  from the use of the asset and its
eventual  disposition.  If the  projected  undiscounted  net cash  flow for each
aircraft  (projected  rental  revenue,  net of management  fees,  less projected
maintenance  costs, if any, plus the estimated  residual value) is less than the
carrying value of the aircraft, an impairment loss is recognized.

                                       24

<PAGE>

Pursuant to the  statement,  measurement  of an impairment  loss for  long-lived
assets  will be  based on the  "fair  value"  of the  asset  as  defined  in the
statement.

SFAS No. 121  states  that the fair value of an asset is the amount at which the
asset could be bought or sold in a current  transaction between willing parties,
i.e., other than in a forced or liquidation sale. Quoted market prices in active
markets  are the best  evidence  of fair value and will be used as the basis for
the measurement,  if available.  If quoted market prices are not available,  the
estimate of fair value will be based on the best  information  available  in the
circumstances.  Pursuant  to the  statement,  the  estimate  of fair  value will
consider  prices for similar  assets and the results of valuation  techniques to
the extent  available in the  circumstances.  Examples of  valuation  techniques
include  the  present  value of  estimated  expected  future  cash flows using a
discount  rate  commensurate  with the risks  involved,  option-pricing  models,
matrix pricing, option-adjusted spread models, and fundamental analysis.

As  discussed  in Note 1, the  Partnership  periodically  reviews the  estimated
realizability  of the residual  values at the projected  end of each  aircraft's
economic  life based on estimated  residual  values  obtained  from  independent
parties which provide current and future  estimated  aircraft values by aircraft
type. The Partnership made downward  adjustments to the estimated residual value
of certain of its  on-lease  aircraft  as of  December  31,  1995 and 1994.  The
Partnership's  future earnings are impacted by the net effect of the adjustments
to the  carrying  values of the  aircraft  (which has the  effect of  decreasing
future  depreciation  expense) and the  downward  adjustments  to the  estimated
residual  values  (which  has  the  effect  of  increasing  future  depreciation
expense).

As discussed above,  the Partnership uses information  obtained from third party
valuation  services in arriving  at its  estimate of fair value for  purposes of
determining residual values. The Partnership will use similar information,  plus
available  information and estimates related to the Partnership's  aircraft,  to
determine  an  estimate of fair value to measure  impairment  as required by the
statement.  The estimates of fair value can vary  dramatically  depending on the
condition of the specific aircraft and the actual marketplace  conditions at the
time of the  actual  disposition  of the asset.  If assets are deemed  impaired,
there could be substantial write-downs in the future.

The Partnership  recognized impairment losses on aircraft to be held and used by
the  Partnership of  approximately  $8,254,000,  $2,031,000 and  $2,160,000,  or
$118.90,   $28.96  and  $30.80  per  limited   Partnership   unit  as  increased
depreciation  expense  in  1996,  1995 and  1994,  respectively.  In  1996,  the
impairment loss was the result of several  significant  factors.  As a result of
industry  and  market  changes,  a more  extensive  review of the  Partnership's
aircraft was completed in the fourth  quarter of 1996 which  resulted in revised
assumptions of future cash flows including  reassessment  of projected  re-lease
terms and  potential  future  maintenance  costs.  As  discussed  in Note 8, the
Partnership  accepted an offer to purchase both of the  Partnership's  remaining
aircraft subject to each aircraft's  existing lease.  This offer  constitutes an
event that  required  the  Partnership  to review the  aircraft  carrying  value
pursuant  to SFAS 121. In  determining  this  additional  impairment  loss,  the
Partnership estimated the fair value of the aircraft based on the purchase price
reflected in the offer,  less the  estimated  costs and expenses of the proposed
sale.  The  Partnership  recorded  an  impairment  loss to the  extent  that the
carrying  value  exceeded the fair value.  Management  believes the  assumptions
related to fair value of impaired assets  represents the best estimates based on
reasonable and supportable assumptions and projections.  It should be noted that
there  can be no  assurance  that  the  contemplated  sale  transaction  will be
consummated.   The  contemplated   transaction   remains  subject  to  executing
definitive documentation and various other contingencies.  The impairment losses
in 1995 and 1994  were  generally  the  result  of  declining  estimates  in the
residual values of the aircraft.

                                       25

<PAGE>

4.       Sale to Aeroperu

In August  1993,  the  Partnership  negotiated a sale to Aeroperu for the Boeing
727-100  aircraft that was  transferred to the  Partnership by ATA (Note 3). The
Partnership  agreed  to  accept  payment  of the  sales  price of  approximately
$578,000 in 36 monthly  installments of $19,000,  with interest at a rate of 12%
per annum.  The  Partnership  recorded a note  receivable  and an allowance  for
credit losses equal to the discounted  sale price.  Gain on sale of aircraft was
recognized  as  payments  were  received.   During  1996,  1995  and  1994,  the
Partnership  received principal and interest payments due from Aeroperu totaling
$171,000, $228,000 and $190,000,  respectively,  of which $162,755, $195,528 and
$146,021 were recorded as gain on sale in the year ended December 31, 1996, 1995
and  1994  statements  of  operations,  respectively.  The note  receivable  and
corresponding  allowance for credit losses were reduced by the principal portion
of payments  received.  The balances of the note  receivable  and  corresponding
allowance  for credit losses was $162,755 as of December 31, 1995. In July 1996,
the  Partnership  received the final payment due from Aeroperu and the remaining
balance of the  security  deposit  posted by  Aeroperu  was  applied to the last
installment  due  from  Aeroperu.  Title  to  the  aircraft  is  expected  to be
transferred to Aeroperu or its assignee in 1997.


5.       Related Parties

Under  the  Partnership  Agreement,  the  Partnership  paid or agreed to pay the
following  amounts to PIMC and/or its  affiliates  in  connection  with services
rendered:


         a.       A subordinated  aircraft  management fee to PIMC equal to 1.5%
                  of gross  rental  revenues of the  Partnership,  payable  upon
                  receipt  of the  rent,  subordinated  each  calendar  year  to
                  receipt by unit  holders of  distributions  equaling a 10% per
                  annum,    non-compounded    return   on    adjusted    capital
                  contributions,  as defined in the Partnership  Agreement.  The
                  Partnership did not pay or incur any management fee expense in
                  1996,  1995 or 1994 as the above  subordination  threshold was
                  not met during these years.

         b.       Out-of-pocket   expenses   incurred  in  connection  with  the
                  management of the Partnership and its assets.  The Partnership
                  paid $99,505,  $106,976 and $133,268 to PIMC for such expenses
                  in 1996, 1995 and 1994, respectively. At December 31, 1996 and
                  1995,  amounts  payable  to PIMC  were  $25,425  and  $26,362,
                  respectively.

         c.       A 10%  interest  to PIMC in all cash  distributions  and sales
                  proceeds,  50% of which is  subject to  attainment  of certain
                  subordination thresholds. PIMC is allocated gross income in an
                  amount equal to the gross allocation amount, as defined in the
                  Partnership  Agreement,  in proportion to and to the extent of
                  cash  distributions  made to the partners.  Net income will be
                  allocated 1% to the General  Partner and 99% to unit  holders,
                  as such terms are defined in the Partnership Agreement.  Gains
                  from the sale or other  disposition  of aircraft are allocated
                  to PIMC according to the method  specified in the  Partnership
                  Agreement.

         d.       A subordinated  sales  commission  to  PIMC of 3% of the gross
                  sales  price  of each  aircraft  for  services  performed upon
                  disposition  and  reimbursement  of  out-of-pocket  and  other
                  disposition expenses.  Subordinated sales commissions will be
                  paid only after unit holders have received distributions in an
                  aggregate amount equal to their capital  contributions plus  a
                  cumulative  non-compounded  10%  per   annum  return on  their
                  adjusted capital contributions, as defined in the  Partnership
                  Agreement.   The Partnership  did  not pay or accrue  a  sales
                  commission  on  any   aircraft  sales   to  date  as the above
                  subordination threshold has not been met.

                                       26

<PAGE>

6.       Income Taxes

Federal and state  income tax  regulations  provide  that taxes on the income or
loss of the  Partnership  are  reportable  by the  partners in their  individual
income tax returns.  Accordingly,  no provision  for such taxes has been made in
the financial statements.

The net  differences  between  the tax basis  and the  reported  amounts  of the
Partnership's  assets  and  liabilities  at  December  31,  1996 and 1995 are as
follows:


                           Reported Amounts     Tax Basis     Net Difference
                           ----------------     ---------     --------------

1996:  Assets                $ 9,951,825       $18,323,625     $(8,371,800)
       Liabilities               124,594           124,594             -


1995:  Assets                $19,813,927       $20,685,130     $  (871,203)
       Liabilities               155,159           136,159          19,000



7.       Reconciliation of Book Net Loss to Taxable Net Income (Loss)

The following is a reconciliation  between net loss per limited partnership unit
reflected in the financial  statements and the  information  provided to limited
partners for federal income tax purposes:

                                             For the years ended December 31,
                                             --------------------------------

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

Book net loss per limited partnership unit     $(116.63)  $ (23.51)  $ (10.01)
Adjustments for tax purposes represent
   differences between book and tax
   revenue and expenses:
     Rental revenue                                1.75       1.75       0.31
     Depreciation                                108.42      20.77      20.15
     Gain or loss on sale of aircraft             (2.35)     (2.82)     (2.10)
     Capitalized costs                              -          -          -
     Other revenue and expense items              (0.04)     (0.06)      0.10
                                               --------   --------   --------

Taxable net income (loss) per limited
  partnership unit                             $  (8.85)  $  (3.87)  $   8.45
                                               ========   ========   ========

The differences between net income and loss for book purposes and net income and
loss for tax purposes  result from the temporary  differences of certain revenue
and deductions.

For book purposes, rental revenue is generally recorded as it is earned. For tax
purposes, certain temporary differences exist in the recognition of revenue. For
tax purposes,  the related management fee expense is accrued in the same year as
the tax basis rental revenue.

The  Partnership  computes  depreciation  using  the  straight-line  method  for
financial  reporting  purposes  and  generally  an  accelerated  method  for tax
purposes.   The   Partnership   also   periodically   evaluates   the   ultimate
recoverability of the carrying values and the economic lives of its aircraft for

                                       27

<PAGE>

book  purposes and  accordingly  recognized  adjustments  which  increased  book
depreciation  expense.  As a result,  the net  current  year  book  depreciation
expense is greater  than the tax  depreciation  expense.  These  differences  in
depreciation  methods result in book to tax differences on the sale of aircraft.
In addition,  certain costs were  capitalized  for tax purposes and expensed for
book purposes.


8.       Subsequent Event

Proposed  Sale of  Aircraft - The  Partnership  has  received,  and the  General
Partner (upon recommendation of its servicer) has determined that it would be in
the best interests of the  Partnership to accept an offer to purchase all of the
Partnership's  aircraft  (the  "Aircraft")  by a special  purpose  company  (the
"Purchaser").  The  Purchaser is managed by Triton  Aviation  Services,  Ltd., a
privately held aircraft  leasing company (the  "Purchaser's  Manager") which was
formed in 1996. Each Aircraft is to be sold subject to the existing leases,  and
as part of the  transaction the Purchaser  assumes all  obligations  relating to
maintenance reserves and security deposits,  if any, relating to such leases. At
the same time  cash  balances  related  to  maintenance  reserves  and  security
deposits, if any, will be transferred to the Purchaser.

The total  proposed  purchase  price  (the  "Purchase  Price") to be paid by the
Purchaser in the contemplated transaction would be $6,112,000 all of which would
be  allocable to the  Aircraft.  The  Purchaser  proposes to pay $688,578 of the
Purchase  Price in cash at the closing and the  balance of  $5,423,422  would be
paid by delivery of a promissory note ( the "Promissory Note") by the Purchaser.
The  Promissory  Note  would be repaid in equal  quarterly  installments  over a
period of seven years bearing interest at a rate of 12% per annum with a balloon
principal  payment at the end of year seven.  The Purchaser would have the right
to  voluntarily  prepay  the  Promissory  Note in  whole  or in part at any time
without penalty. In addition,  the Promissory Note would be subject to mandatory
partial prepayment in certain specified instances.

Under the terms of the  contemplated  transaction,  the Aircraft,  including any
income or proceeds  therefrom and any reserves or deposits with respect thereto,
constitute the sole source of payments  under the  Promissory  Note. No security
interest  over the  Aircraft  or the  leases  would be  granted  in favor of the
Partnership,  but the equity  interests in the Purchaser would be pledged to the
Partnership.  The Purchaser would have the right to sell the Aircraft, or any of
them,  without the  consent of the  Partnership,  except that the  Partnership's
consent would be required in the event that the proposed sale price is less than
the portion of the outstanding balance of the Promissory Note which is allocable
to the Aircraft in question and the Purchaser does not have sufficient  funds to
make up the  difference.  The Purchaser would undertake to keep the Aircraft and
leases free of any lien,  security  interest or other encumbrance other than (i)
inchoate  materialmen's  liens  and the  like,  and (ii) in the  event  that the
Purchaser elects to install hushkits on any Aircraft, secured debt to the extent
of the  full  cost of such  hushkit.  The  Purchaser  will  be  prohibited  from
incurring  indebtedness  other than (i) the Promissory Note; (ii) deferred taxes
not yet due and payable;  (iii) indebtedness  incurred to hushkit Aircraft owned
by the Purchaser  and,  (iv) demand loans from another SPC (defined  below) at a
market rate of interest.

It is also  contemplated  that each of Polaris  Aircraft Income Fund II, Polaris
Aircraft Income Fund III,  Polaris  Aircraft Income Fund IV and Polaris Aircraft
Income Fund V would sell certain  aircraft  assets to separate  special  purpose
companies  under common  management with the Purchaser  (collectively,  together
with the  Purchaser,  the  "SPC's") on terms  similar to those set forth  above.
Under the  terms of the  contemplated  transaction,  Purchaser's  Manager  would
undertake to make  available a working  capital  line to the  Purchaser of up to
approximately  $534,000 to fund operating  obligations  of the  Purchaser.  This
working capital line is to be guaranteed by Triton Investments, Ltd., the parent
of the Purchaser's  Manager and such guarantor will provide the Partnership with
a copy of its most recent balance sheet showing a consolidated net worth (net of
minority  interests) of at least $150-million.  Furthermore,  each of the SPC's,
including  the  Purchaser,   is  to  enter  into  a  management  agreement  with

                                       28

<PAGE>

Purchaser's  Manager  pursuant to which  Purchaser's  Manager  would provide all
normal  and  customary  management  services  including  remarketing,  sales and
repossession,  if  necessary.  Provided  that the Purchaser is not in default in
making payments due under the Promissory Note to the Partnership,  the Purchaser
would be  permitted  to  dividend  to its equity  owners an amount not to exceed
approximately  $14,300  per  month.  The  Purchaser  may  distribute  additional
dividends  to the equity  owners to the extent of the working  capital  advances
made by the Purchaser's Manager provided that the working capital line available
to the Purchaser will be deemed increased to the extent of any such dividends.

The Purchaser  would be deemed to have  purchased  the Aircraft  effective as of
April 1, 1997  notwithstanding the actual closing date. The Purchaser would have
the  right to  receive  all  income  and  proceeds,  including  rents  and notes
receivables,  from the Aircraft  accruing from and after April 1, 1997,  and the
Promissory Note would commence bearing interest as of April 1, 1997.

The Partnership has agreed to consult with Purchaser's Manager before taking any
significant  action  pertaining to the Aircraft  after the effective date of the
purchase  offer.  The  Purchaser  also has the  right  to make  all  significant
decisions  regarding  the  Aircraft  from and  after the date of  completion  of
definitive  documentation  legally  binding the Purchaser and the Partnership to
the  transaction,  even  if a  delay  occurs  between  the  completion  of  such
documentation and the closing of the title transfer to the Purchaser.

In the event the Partnership receives and elects to accept an offer for all (but
not less than  all) of the  assets  to be sold by it to the  Purchaser  on terms
which it deems  more  favorable,  the  Purchaser  has the right to (i) match the
offer,  or (ii) decline to match the offer and be entitled to compensation in an
amount equal to 1 1/2% of the Purchaser's proposed Purchase Price.

The Partnership adopted, effective January 1, 1996, SFAS No. 121 "Accounting for
the  Impairment of Long-Lived  Assets and for  Long-Lived  Assets to be Disposed
Of." That statement  requires that long-lived  assets be reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be  recoverable.  The purchase  offer  constitutes  a change in
circumstances  which,  pursuant to SFAS No. 121,  requires  the  Partnership  to
review the  Aircraft  for  impairment.  As  previously  discussed in Note 3, the
Partnership  has  determined  that an  impairment  loss must be  recognized.  In
determining  the amount of the impairment  loss, the  Partnership  estimated the
"fair value" of the Aircraft based on the proposed  Purchase Price  reflected in
the  contemplated  transaction  , less the  estimated  costs and expenses of the
proposed  sale.  The  Partnership  is deemed to have an  impairment  loss to the
extent that the carrying value exceeded the fair value.  Management believes the
assumptions  related to the fair value of  impaired  assets  represent  the best
estimates based on reasonable and supportable assumptions and projections.

It should be noted that there can be no  assurance  that the  contemplated  sale
transaction will be consummated. The contemplated transaction remains subject to
execution of definitive documentation and various other contingencies.


                                       29

<PAGE>

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

None.

                                       30

<PAGE>

                                    PART III


Item 10.          Directors and Executive Officers of the Registrant

Polaris Aircraft Income Fund VI, A California  Limited  Partnership  (PAIF-VI or
the Partnership) has no directors or officers. Polaris Holding Company (PHC) and
its  subsidiaries,  including  Polaris Aircraft Leasing  Corporation  (PALC) and
Polaris  Investment  Management  Corporation  (PIMC), the general partner of the
Partnership (collectively Polaris), restructured their operations and businesses
(the Polaris Restructuring) in 1994. In connection therewith,  PIMC entered into
a services  agreement dated as of July 1, 1994 (the Services  Agreement) with GE
Capital Aviation Services,  Inc. (the Servicer or GECAS), a Delaware corporation
which is a wholly owned subsidiary of General Electric  Capital  Corporation,  a
New York  corporation  (GE  Capital).  GE Capital has been PHC's parent  company
since 1986. As subsidiaries of GE Capital, the Servicer and PIMC are affiliates.

The officers and directors of PIMC are:

                Name                       PIMC Title
         ---------------------    -----------------------------

         Eric M. Dull             President; Director
         Marc A. Meiches          Vice President; Chief Financial Officer
         Richard J. Adams         Vice President; Director
         Norman C. T. Liu         Vice President; Director
         Edward Sun               Vice President
         Richard L. Blume         Vice President;  Secretary
         Robert W. Dillon         Vice President; Assistant Secretary

Substantially all of these management personnel will devote only such portion of
their  time  to the  business  and  affairs  of  PIMC  as  deemed  necessary  or
appropriate.

Mr. Dull,  36,  assumed the position of President and Director of PIMC effective
January 1, 1997. Mr. Dull  previously was a Director of PIMC from March 31, 1995
to July 31,  1995.  Mr. Dull holds the position of  Executive  Vice  President -
Portfolio  Management of GECAS,  having  previously  held the position of Senior
Vice President - Underwriting Risk Management of GECAS.  Prior to joining GECAS,
Mr. Dull held various  positions  with  Transportation  and  Industrial  Funding
Corporation (TIFC).

Mr.  Meiches,  44,  assumed the position of Vice  President and Chief  Financial
Officer of PIMC  effective  October 9, 1995.  Mr.  Meiches  presently  holds the
positions of Executive  Vice  President  and Chief  Financial  Officer of GECAS.
Prior to joining GECAS,  Mr. Meiches has been with General Electric Company (GE)
and its  subsidiaries  since 1978.  Since 1992, Mr. Meiches held the position of
Vice President of the General Electric Capital Corporation Audit Staff.  Between
1987 and 1992,  Mr.  Meiches held Manager of Finance  positions  for GE Re-entry
Systems, GE Government Communications Systems and the GE Astro-Space Division.

Mr. Adams,  63,  assumed the position of Senior Vice  President - Aircraft Sales
and Leasing of PIMC and PALC effective August 1992,  having previously served as
Vice President - Aircraft Sales & Leasing - Vice President,  North America,  and
Vice  President - Corporate  Aircraft  since he joined PALC in August 1986.  Mr.
Adams  presently  holds  the  position  of  Senior  Vice  President  -  Aircraft
Marketing,  North America, of GECAS.  Effective July 1, 1994, Mr. Adams held the
positions of Vice President and Director of PIMC.

Mr. Liu, 39,  assumed the position of Vice  President of PIMC  effective  May 1,
1995 and has assumed the position of Director of PIMC  effective  July 31, 1995.

                                       31

<PAGE>

Mr. Liu presently holds the position of Executive Vice President - Marketing and
Structured  Finance of GECAS,  having  previously held the position of Executive
Vice  President - Capital  Funding and Portfolio  Management of GECAS.  Prior to
joining GECAS, Mr. Liu was with General  Electric  Capital  Corporation for nine
years. He has held management positions in corporate Business Development and in
Syndications  and  Leasing for TIFC.  Mr. Liu  previously  held the  position of
managing director of Kidder, Peabody & Co., Incorporated.

Mr. Sun, 47,  assumed the position of Vice  President of PIMC  effective  May 1,
1995. Mr. Sun presently holds the position of Senior Vice President - Structured
Finance of GECAS.  Prior to joining GECAS,  Mr. Sun held various  positions with
TIFC since 1990.

Mr. Blume,  55,  assumed the position of Secretary of PIMC effective May 1, 1995
and Vice President of PIMC effective  October 9, 1995. Mr. Blume presently holds
the position of Executive Vice President and General Counsel of GECAS.  Prior to
joining GECAS, Mr. Blume was counsel at GE Aircraft Engines since 1987.

Mr.  Dillon,  55,  assumed the position of Vice  President - Aviation  Legal and
Insurance  Affairs,  effective  April  1989.  Previously,  he served as  General
Counsel of PIMC and PALC  effective  January 1986.  Effective  July 1, 1994, Mr.
Dillon held the positions of Vice President and Assistant Secretary of PIMC. Mr.
Dillon  presently  holds the  position of Senior  Vice  President  and  Managing
Counsel of GECAS.


Certain Legal Proceedings:

On October 27, 1992,  a class action  complaint  entitled  Weisl,  Jr. et al. v.
Polaris Holding  Company,  et al. was filed in the Supreme Court of the State of
New York for the County of New York.  The complaint sets forth various causes of
action which include  allegations  against  certain or all of the defendants (I)
for alleged fraud in connection with certain public offerings, including that of
the Partnership, on the basis of alleged misrepresentation and alleged omissions
contained in the written offering materials and all presentations allegedly made
to investors;  (ii) for alleged negligent  misrepresentation  in connection with
such offerings;  (iii) for alleged breach of fiduciary duties;  (iv) for alleged
breach of third party beneficiary  contracts;  (v) for alleged violations of the
NASD Rules of Fair Practice by certain  registered broker dealers;  and (vi) for
alleged  breach of  implied  covenants  in the  customer  agreements  by certain
registered  brokers.  The  complaint  seeks an award of  compensatory  and other
damages and remedies.  On January 19, 1993,  plaintiffs filed a motion for class
certification.  On March 1,  1993,  defendants  filed  motions  to  dismiss  the
complaint on numerous grounds,  including failure to state a cause of action and
statute of limitations.  On July 20, 1994, the court entered an order dismissing
almost all of the claims in the complaint and amended complaint. Certain claims,
however,  remain  pending.  Plaintiffs  filed a notice of appeal on September 2,
1994.  On April 25,  1996,  the  Appellate  Division  for the  First  Department
affirmed the trial court's order which had dismissed most of plaintiffs' claims.
The Partnership is not named as a defendant in this action.

On or around  February  17, 1993, a civil  action  entitled  Einhorn,  et al. v.
Polaris  Public Income Funds,  et al. was filed in the Circuit Court of the 11th
Judicial Circuit in and for Dade County,  Florida against, among others, Polaris
Investment  Management  Corporation and Polaris Depositary  Company.  Plaintiffs
seek  class  action  certification  on  behalf  of a class of  investors  in the
Partnership, Polaris Aircraft Income Fund IV, and Polaris Aircraft Income Fund V
who purchased their interests while residing in Florida.  Plaintiffs  allege the
violation of Section 517.301,  Florida Statutes, in connection with the offering
and sale of units in such Polaris  Aircraft  Income  Funds.  Among other things,
plaintiffs  assert that the defendants  sold interests in such Polaris  Aircraft
Income  Funds  while  "omitting  and  failing to  disclose  the  material  facts
questioning  the  economic  efficacy  of" such Polaris  Aircraft  Income  Funds.
Plaintiffs  seek  rescission  or damages,  in addition to interest,  costs,  and
attorneys' fees. On April 5, 1993, defendants filed a motion to stay this action
pending the final determination of a prior filed action in the Supreme Court for
the State of New York entitled Weisl v. Polaris Holding  Company.  On that date,

                                       32

<PAGE>

defendants  also  filed a motion to  dismiss  the  complaint  on the  grounds of
failure to attach necessary documents, failure to plead fraud with particularity
and failure to plead  reasonable  reliance.  On April 13, 1993, the court denied
the  defendants'  motion to stay.  On May 7, 1993,  the court  stayed the action
pending an appeal of the denial of the motion to stay.  Defendants  subsequently
filed with the Third  District Court of Appeal a petition for writ of certiorari
to review the lower  court's  order  denying the motion to stay.  On October 19,
1993, the Court of Appeal granted the writ of certiorari, quashed the order, and
remanded the action with  instruction to grant the stay. The  Partnership is not
named as a defendant in this action.

On or around May 14, 1993, a purported class action entitled  Moross,  et al. v.
Polaris  Holding  Company,  et al. was filed in the United States District Court
for the District of Arizona.  This purported class action was filed on behalf of
investors  in Polaris  Aircraft  Income  Funds I - VI by nine  investors in such
Polaris  Aircraft Income Funds. The complaint  alleges that defendants  violated
Arizona state securities statues and committed negligent  misrepresentation  and
breach of fiduciary  duty by  misrepresenting  and failing to disclose  material
facts  in  connection  with  the  sale  of  limited  partnership  units  in  the
above-named funds. An amended complaint was filed on September 17, 1993, but has
not been served upon defendants.  On or around October 4, 1993, defendants filed
a notice of removal to the United  States  District  Court for the  District  of
Arizona.  Defendants  also filed a motion to stay the action  pending  the final
determination  of a prior filed action in the Supreme Court for the State of New
York entitled Weisl v. Polaris Holding Company ("Weisl") and to defendants' time
to respond to the  complaint  until 20 days after  disposition  of the motion to
action pending resolution of the motions for class  certification and motions to
dismiss  pending in Weisl.  On January 20, 1994, the court stayed the action and
required  defendants  to file status  reports every sixty days setting forth the
status of the motions in Weisl.  On April 18, 1995,  this action was transferred
to the Multi-District  Litigation  described below. The Partnership is not named
as a defendant in this action.

On September 21, 1993, a purported  derivative  action entitled Novak, et al. v.
Polaris Holding  Company,  et al. was filed in the Supreme Court of the State of
New  York,  County  of New  York.  This  action  was  brought  on  behalf of the
Partnership,  Polaris  Aircraft Income Fund II and Polaris  Aircraft Income Fund
III. The complaint names as defendants  Polaris Holding Company,  its affiliates
and others. Each of the Partnership, Polaris Aircraft Income Fund II and Polaris
Aircraft Income Fund III is named as a nominal defendant. The complaint alleges,
among other things,  that  defendants  mismanaged the  Partnership and the other
Polaris Aircraft Income Funds,  engaged in self-dealing  transactions  that were
detrimental to the Partnership  and the other Polaris  Aircraft Income Funds and
failed to make required  disclosure in connection  with the sale of the units in
the  Partnership  and the other Polaris  Aircraft  Income  Funds.  The complaint
alleges  claims of breach of fiduciary  duty and  constructive  fraud and seeks,
among  other  things  an  award  of  compensatory  and  punitive  damages  in an
unspecified  amount,  re-judgment  interest,  and attorneys'  fees and costs. On
January 13, 1994, certain of the defendants,  including Polaris Holding Company,
filed motions to dismiss the complaint on the grounds of, among others,  failure
to state a cause of action and failure to plead the alleged wrong in detail.  On
August  11,  1994,  the court  denied in part and  granted  in part  defendants'
motions to dismiss.  Specifically, the court denied the motions as to the claims
for breach of fiduciary duty, but dismissed  plaintiffs'  claim for constructive
fraud with leave to replead.  On October 7, 1994,  defendants  filed a notice of
appeal.  On November 15, 1994,  defendants  submitted an answer to the remaining
causes of action.  On July 7, 1995,  defendants filed briefs in support of their
appeal  from that  portion  of the trial  court's  order  denying  the motion to
dismiss. On March 14, 1996, the appellate court reversed the trial court's order
denying the motion to dismiss, and dismissed the complaint.

On June 8, 1994, a consolidated  complaint captioned In re Prudential Securities
Inc.  Limited  Partnerships  Litigation was filed in the United States  District
Court for the Southern  District of New York,  purportedly  consolidating  cases
that had been  transferred  from other federal  courts by the Judicial  Panel on
Multi-  District  Litigation.  The  consolidated  complaint  names as defendants
Prudential  entities and various other sponsors of limited  partnerships sold by
Prudential,  including  Polaris  Holding  Company,  one of its former  officers,
Polaris Aircraft Leasing Corporation,  Polaris Investment Management Corporation

                                       33

<PAGE>

and Polaris  Securities  Corporation.  The complaint alleges that the Prudential
defendants created a scheme for the sale of approximately  $8-billion of limited
partnership   interests  in  700  assertedly  high-risk  limited   partnerships,
including the Partnership,  to approximately 350,000 investors by means of false
and misleading offering materials;  that the sponsoring organizations (including
the Polaris entities)  participated with the Prudential  defendants with respect
to, among other things,  the partnerships  that each sponsored;  and that all of
the defendants conspired to engage in a nationwide pattern of fraudulent conduct
in the marketing of all limited  partnerships sold by Prudential.  The complaint
alleges violations of the federal Racketeer Influenced and Corrupt Organizations
Act and the New Jersey counterpart thereof, fraud, negligent  misrepresentation,
breach of fiduciary duty and breach of contract. The complaint seeks rescission,
unspecified  compensatory  damages,  treble  damages,  disgorgement  of  profits
derived from the alleged acts,  costs and  attorneys  fees. On October 31, 1994,
Polaris  Investment  Management  Corporation and other Polaris  entities filed a
motion to dismiss the  consolidated  complaint  on the  grounds of,  inter alia,
statute of  limitations  and failure to state a claim.  The  Partnership  is not
named as a defendant in this action.  Prudential Securities,  Inc., on behalf of
itself  and its  affiliates  has made an Offer of  Settlement.  A class has been
certified for purposes of the Prudential  Settlement and notice to the class has
been sent. Any questions  concerning  Prudential's Offer of Settlement should be
directed to 1-800-327-3664, or write to the Claims Administrator at:

         Prudential Securities Limited Partnerships
         Litigation Claims Administrator
         P.O. Box 9388
         Garden City, New York 11530-9388


On June 5, 1996,  the Court  certified  a class with  respect to claims  against
Polaris Holding Company,  one of its former  officers,  Polaris Aircraft Leasing
Corporation,  Polaris Investment Management Corporation,  and Polaris Securities
Corporation. The class is comprised of all investors who purchased securities in
any of Polaris Aircraft Income Funds I through VI during the period from January
1985 until  January 29, 1991,  regardless of which  brokerage  firm the investor
purchased  from.  Excepted from the class are those investors who settled in the
SEC/Prudential  settlement or otherwise  opted for  arbitration  pursuant to the
settlement and any investor who has previously  released the Polaris  defendants
through any other  settlement.  On June 10,  1996,  the Court  issued an opinion
denying summary judgment to Polaris on  plaintiffs' Section 1964(c) and (d) RICO
claims and state causes of action,  and granting  summary judgment to Polaris on
plaintiffs'  1964(a) RICO claims and the New Jersey State RICO claims. On August
5, 1996, the Court signed an order providing for notice to be given to the class
members.  The  trial,  which  was  scheduled  for  November  11,  1996,  has not
proceeded, and no new trial date has been set.

A further  litigation  captioned  Romano v. Ball et. al, an action by Prudential
Insurance Company  policyholders  against many of the same defendants (including
Polaris   Investment   Management   Corporation  and  Polaris  Aircraft  Leasing
Corporation),  has also been  commenced  by  policy  holders  of the  Prudential
Insurance  Company as a purported  derivative action on behalf of the Prudential
Insurance  Company.  The complaint  alleges  claims under the federal  Racketeer
Influenced  and  Corrupt  Organizations  Act,  as  well  as  claims  for  waste,
mismanagement  and  intentional  and  negligent  misrepresentation,   and  seeks
unspecified compensatory, treble and punitive damages. The case, which was being
coordinated  with In re  Prudential,  has been settled and the action  dismissed
pursuant to a court order dated December 18, 1996.

On or about February 13, 1995, an action  entitled  Adams,  et al. v. Prudential
Securities,  Inc. et al. was filed in the Court of Common  Pleas,  Stark County,
Ohio. The action names Prudential Securities, Inc., Prudential Insurance Company
of  America,  Polaris  Investment  Management  Corporation,  Polaris  Securities
Corporation,  Polaris  Aircraft  Leasing  Corporation,  Polaris Holding Company,
General  Electric Capital  Corporation,  Polaris Aircraft Income Fund I, Polaris
Aircraft  Income  Fund IV,  Polaris  Aircraft  Income  Fund V and James  Darr as
defendants.  The complaint  alleges that defendants  committed common law fraud,
fraud in the  inducement,  negligent  misrepresentation,  negligence,  breach of

                                       34

<PAGE>

fiduciary duty and civil conspiracy by  misrepresenting  and failing to disclose
material  facts in  connection  with the sale of  limited  partnership  units in
Polaris  Aircraft  Income Fund I, Polaris  Aircraft  Income Fund IV, and Polaris
Aircraft Income Fund V. Plaintiffs seek, among other things, rescission of their
investments  in the Polaris  Aircraft  Income  Funds,  an award of  compensatory
damages in an unspecified amount plus interest thereon,  and punitive damages in
an unspecified  amount.  On or about March 15, 1995,  this action was removed to
the United  States  District  Court for the Northern  District of Ohio,  Eastern
Division.  Subsequently,  the  Judicial  Panel  transferred  this  action to the
Multi-District  Litigation  filed in the United  States  District  Court for the
Southern District of New York,  discussed above. The Partnership is not named as
a defendant in this action.

On or about January 12, 1995, a class action complaint entitled Cohen, et al. v.
Kidder  Peabody & Company,  Inc.,  et al. was filed in the Circuit  Court of the
Fifteenth Judicial Circuit in and for Palm Beach County,  Florida,  and on March
31,  1995 the case was  removed  to the  United  States  District  Court for the
Southern  District of Florida.  An amended class action  complaint (the "amended
complaint"),  which  renamed this action  Bashein,  et al. v. Kidder,  Peabody &
Company Inc., et al., was filed on June 13, 1995.  The amended  complaint  names
Kidder Peabody & Company,  Inc., General Electric Capital  Corporation,  General
Electric Financial  Services,  Inc., and General Electric Company as defendants.
The action purports to be on behalf of "approximately  20,000 persons throughout
the United  States" who  purchased  units in Polaris  Aircraft  Income Funds III
through  VI.  The  amended   complaint  sets  forth  various  causes  of  action
purportedly  arising in connection with the public offerings of the Partnership,
Polaris  Aircraft Income Fund III,  Polaris Aircraft Income Fund IV, and Polaris
Aircraft Income Fund V. Specifically,  plaintiffs assert claims for violation of
Sections  12(2)  and  15  of  the  Securities  Act  of  1933,  fraud,  negligent
misrepresentation,  breach of fiduciary duty,  breach of third party beneficiary
contract,  violation of NASD Rules of Fair Practice, breach of implied covenant,
and breach of contract. Plaintiffs seek compensatory damages, interest, punitive
damages,  costs and attorneys' fees, as well as any other relief the court deems
just and proper.  Defendants moved to dismiss the amended  complaint on June 26,
1995. On October 2, 1995,  the court denied the  defendants'  motion to dismiss.
While the motion to dismiss was pending,  plaintiffs filed a motion for leave to
file a  second  amended  complaint,  which  was  granted  on  October  3,  1995.
Defendants  thereafter  filed a motion to dismiss the second amended  complaint,
and  defendants'  motion was denied by Court Order dated  December 26, 1995.  On
February 12, 1996,  defendants answered.  This case was reassigned (from Hurley,
J. To Lenard, J.) on February 18, 1996, and on March 18, 1996,  plaintiffs moved
for  class  certification.  On the  eve of  class  discovery,  April  26,  1996,
plaintiffs  moved for a voluntary  dismissal of Counts I and II (claims  brought
pursuant to the  Securities  Act of 1933) of the Second  Amended  Complaint  and
simultaneously  filed a motion to remand  this action to state court for lack of
federal jurisdiction.  Plaintiff's motion for voluntary dismissal of the federal
securities  law claims and motion for remand were granted on July 10, 1996.  The
Partnership is not named as a defendant in this action.

On or around April 13, 1995, a class action complaint entitled B & L Industries,
Inc., et al. v. Polaris Holding  Company,  et al. was filed in the Supreme Court
of the State of New York.  The  complaint  names as defendants  Polaris  Holding
Company,  Polaris Aircraft Leasing  Corporation,  Polaris Investment  Management
Corporation,   Polaris  Securities  Corporation,  Peter  G.  Pfendler,  Marc  P.
Desautels,  General Electric  Capital  Corporation,  General Electric  Financial
Services, Inc., General Electric Company, Prudential Securities Inc., and Kidder
Peabody & Company  Incorporated.  The  complaint  sets forth  various  causes of
action  purportedly  arising  out of the public  offerings  of Polaris  Aircraft
Income Fund III and Polaris Aircraft Income Fund IV. Plaintiffs allege claims of
fraud, negligent misrepresentation, breach of fiduciary duty, knowingly inducing
or participating in breach of fiduciary duty,  breach of third party beneficiary
contract,  violation of NASD Rules of Fair Practice, breach of implied covenant,
and unjust enrichment.  Plaintiffs seek compensatory damages, interest, general,
consequential   and  incidental   damages,   exemplary  and  punitive   damages,
disgorgement,  rescission,  costs,  attorneys'  fees,  accountants' and experts'
fees,  and other legal and equitable  relief as the court deems just and proper.
On October 2, 1995,  defendants  moved to dismiss the  complaint.  On August 16,

                                       35

<PAGE>

1996,  defendants filed a motion to dismiss plaintiffs'  amended complaint.  The
motion  is  returnable  on July 17,  1997.  The  Partnership  is not  named as a
defendant in this action.

On or around  September  27, 1995, a complaint  entitled  Martha J.  Harrison v.
General Electric  Company,  et al. was filed in the Civil District Court for the
Parish of Orleans, State of Louisiana. The complaint names as defendants General
Electric  Company and  Prudential  Securities  Incorporated.  Plaintiff  alleges
claims of tort, breach of fiduciary duty in tort,  contract and  quasi-contract,
violation  of  sections  of the  Louisiana  Blue  Sky Law and  violation  of the
Louisiana  Civil Code  concerning the inducement and  solicitation  of purchases
arising out of the public offering of Polaris Aircraft Income Fund IV. Plaintiff
seeks compensatory damages, attorney's fees, interest, costs and general relief.
The Partnership is not named as a defendant in this action.

On or around December 8, 1995, a complaint  entitled  Overby,  et al. v. General
Electric Company, et al. was filed in the Civil District Court for the Parish of
Orleans, State of Louisiana.  The complaint names as defendants General Electric
Company and General Electric  Capital  Corporation.  Plaintiffs  allege claim of
tort, breach of fiduciary duty, in tort, contract and quasi-contract,  violation
of sections of the Louisiana  Blue Sky Law and violation of the Louisiana  Civil
Code in connection with the public offering of Polaris Aircraft Income Funds III
and IV. Plaintiffs seek compensatory damages,  attorneys' fees, interest,  costs
and general relief. The Partnership is not named as a defendant in this action.

In or around  November  1994,  a  complaint  entitled  Lucy R.  Neeb,  et al. v.
Prudential Securities  Incorporated et al. was filed in the Civil District Court
for the Parish of Orleans, State of Louisiana. The complaint named as defendants
Prudential  Securities,  Incorporated  and Stephen Derby  Gisclair.  On or about
December 20, 1995,  plaintiffs filed a First  Supplemental and Amending Petition
adding as additional  defendants  General  Electric  Company,  General  Electric
Capital  Corporation and Smith Barney,  Inc.  Plaintiffs  allege claims of tort,
breach of fiduciary  duty, in tort,  contract and  quasi-contract,  violation of
sections of the Louisiana Blue Sky Law and violation of the Louisiana Civil Code
in connection with the public offering of Polaris  Aircraft Income Funds III and
IV. Plaintiffs seek compensatory damages,  attorneys' fees, interest,  costs and
general relief. The Partnership is not named as a defendant in this action.

In or about  January of 1995,  a complaint  entitled  Albert B.  Murphy,  Jr. v.
Prudential Securities, Incorporated et al. was filed in the Civil District Court
for the Parish of Orleans, State of Louisiana. The complaint named as defendants
Prudential  Securities  Incorporated  and Stephen  Derby  Gisclair.  On or about
January 18, 1996,  plaintiff filed a First  Supplemental  and Amending  Petition
adding  defendants   General  Electric  Company  and  General  Electric  Capital
Corporation. Plaintiff alleges claims of tort, breach of fiduciary duty in tort,
contract and quasi-contract, violation of sections of the Louisiana Blue Sky Law
and violation of the Louisiana Civil Code in connection with the public offering
of  Polaris  Aircraft  Income  Funds III and IV.  Plaintiffs  seek  compensatory
damages, attorneys' fees, interest, costs and general relief.
The Partnership is not named as a defendant in this action.

On or about January 22, 1996, a complaint entitled Mrs. Rita Chambers, et al. v.
General  Electric  Co.,  et al.  was filed in the Civil  District  Court for the
Parish of Orleans, State of Louisiana. The complaint names as defendants General
Electric  Company and General Electric Capital  Corporation.  Plaintiffs  allege
claims of tort, breach of fiduciary duty in tort,  contract and  quasi-contract,
violation  of  sections  of the  Louisiana  Blue  Sky Law and  violation  of the
Louisiana Civil Code in connection with the public offering of Polaris  Aircraft
Income Fund IV. Plaintiffs seek compensatory damages, attorneys' fees, interest,
costs and general  relief.  The  Partnership is not named as a defendant in this
action.

In or  around  December  1994,  a  complaint  entitled  John J.  Jones,  Jr.  v.
Prudential Securities  Incorporated et al. was filed in the Civil District Court
for the Parish of Orleans, State of Louisiana. The complaint named as defendants
Prudential  Securities,  Incorporated  and Stephen Derby  Gisclair.  On or about
March 29, 1996,  plaintiffs  filed a First  Supplemental  and Amending  Petition

                                       36

<PAGE>

adding as additional  defendants  General  Electric Company and General Electric
Capital Corporation.  Plaintiff alleges claims of tort, breach of fiduciary duty
in tort,  contract and  quasi-contract,  violation of sections of the  Louisiana
Blue Sky Law and violation of the Louisiana Civil Code concerning the inducement
and  solicitation  of  purchases  arising out of the public  offering of Polaris
Aircraft Income Fund III. Plaintiff seeks compensatory damages, attorneys' fees,
interest,  costs and general relief. The Partnership is not named as a defendant
in this action.

On or around  February  16,  1996, a complaint  entitled  Henry Arwe,  et al. v.
General Electric  Company,  et al. was filed in the Civil District Court for the
Parish of Orleans, State of Louisiana. The complaint named as defendants General
Electric  Company and General Electric Capital  Corporation.  Plaintiffs  allege
claims of tort, breach of fiduciary duty in tort,  contract and  quasi-contract,
violation  of  sections  of the  Louisiana  Blue  Sky Law and  violation  of the
Louisiana  Civil Code  concerning the inducement and  solicitation  of purchases
arising out of the public offering of Polaris  Aircraft Income Funds III and IV.
Plaintiffs seek  compensatory  damages,  attorneys'  fees,  interest,  costs and
general relief. The Partnership is not named as a defendant in this action.

On or about April 9, 1996, a summons and First Amended  Complaint  entitled Sara
J.  Bishop,  et al. v. Kidder  Peabody & Co.,  et al. was filed in the  Superior
Court of the State of  California,  County of  Sacramento,  by over one  hundred
individual  plaintiffs  who  purchased  limited  partnership  units  in  Polaris
Aircraft Income Funds III, IV, V and VI and other limited  partnerships  sold by
Kidder  Peabody.  The complaint  names Kidder,  Peabody & Co.  Incorporated,  KP
Realty  Advisors,  Inc.,  Polaris  Holding  Company,  Polaris  Aircraft  Leasing
Corporation,  Polaris  Investment  Management  Corporation,  Polaris  Securities
Corporation,  Polaris Jet  Leasing,  Inc.,  Polaris  Technical  Services,  Inc.,
General Electric Company,  General Electric  Financial  Services,  Inc., General
Electric Capital Corporation, General Electric Credit Corporation and DOES 1-100
as defendants.  The complaint alleges  violations of state common law, including
fraud, negligent misrepresentation,  breach of fiduciary duty, and violations of
the rules of the National Association of Securities Dealers. The complaint seeks
to recover  compensatory  damages and punitive damages in an unspecified amount,
interest,  and  rescission  with  respect to the Polaris  Aircraft  Income Funds
III-VI and all other  limited  partnerships  alleged to have been sold by Kidder
Peabody  to the  plaintiffs.  On June 18,  1996,  defendants  filed a motion  to
transfer venue from Sacramento to San Francisco County.  The Court  subsequently
denied the motion.  The  Partnership is not named as a defendant in this action.
Defendants filed an answer in the action on August 30, 1996.

On  October 1, 1996,  a  complaint  entitled  Wilson et al. v.  Polaris  Holding
Company et al. was filed in the Superior  Court of the State of  California  for
the County of Sacramento by over 500 individual plaintiffs who purchased limited
partnership  units in one or more of Polaris Aircraft Income Funds I through VI.
The  complaint  names  Polaris  Holding   Company,   Polaris   Aircraft  Leasing
Corporation,  Polaris  Investment  Management  Corporation,  Polaris  Securities
Corporation,  Polaris Jet  Leasing,  Inc.,  Polaris  Technical  Services,  Inc.,
General  Electric  Company,  General Electric Capital  Services,  Inc.,  General
Electric Capital Corporation,  GE Capital Aviation Services, Inc. and DOES 1-100
as defendants.  The Partnership has not been named as a defendant. The complaint
alleges   violations   of  state   common  law,   including   fraud,   negligent
misrepresentation, negligence, breach of contract, and breach of fiduciary duty.
The complaint seeks to recover  compensatory  damages and punitive damages in an
unspecified amount, interest and rescission with respect to the Polaris Aircraft
Income Funds sold to plaintiffs. Defendants have filed an answer.

On or about May 7, 1996, a petition  entitled  Charles  Rich,  et al. v. General
Electric Company and General Electric Capital Corporation was filed in the Civil
District  Court for the Parish of Orleans,  State of  Louisiana.  The  complaint
names as  defendants  General  Electric  Company  and General  Electric  Capital
Corporation.  Plaintiffs  allege claims of tort  concerning  the  inducement and
solicitation of purchases arising out of the public offering of Polaris Aircraft
Income Funds III and IV. Plaintiffs seek compensatory damages,  attorneys' fees,
interest,  costs and general relief. The Partnership is not named as a defendant
in this action.

                                       37

<PAGE>

On or about March 4, 1996,  a petition  entitled  Richard J.  McGiven v. General
Electric Company and General Electric Capital Corporation was filed in the Civil
District  Court for the Parish of Orleans,  State of  Louisiana.  The  complaint
names as  defendants  General  Electric  Company  and General  Electric  Capital
Corporation.  Plaintiff  alleges  claims of tort  concerning  the inducement and
solicitation of purchases arising out of the public offering of Polaris Aircraft
Income Fund V. Plaintiff seeks compensatory damages,  attorneys' fees, interest,
costs and general  relief.  The  Partnership is not named as a defendant in this
action.

On or about March 4, 1996, a petition  entitled Alex M. Wade v. General Electric
Company and General Electric Capital Corporation was filed in the Civil District
Court for the Parish of Orleans,  State of  Louisiana.  The  complaint  names as
defendants  General Electric  Company and General Electric Capital  Corporation.
Plaintiff  alleges claims of tort concerning the inducement and  solicitation of
purchases  arising out of the public offering of Polaris Aircraft Income Fund V.
Plaintiff seeks  compensatory  damages,  attorneys'  fees,  interest,  costs and
general relief. The Partnership is not named as a defendant in this action.

On or about October 15, 1996, a complaint entitled Joyce H. McDevitt,  et al. v.
Polaris Holding Company,  et al. was filed in the Superior Court of the State of
California, County of Sacramento, by individual plaintiffs who purchased limited
partnership  units in Polaris  Aircraft  Income Funds I-VI. The complaint  names
Polaris  Holding  Company,   Polaris  Aircraft  Leasing   Corporation,   Polaris
Investment Management Corporation,  Polaris Securities Corporation,  Polaris Jet
Leasing,  Inc.,  Polaris  Technical  Services,  Inc.,  General Electric Company,
General Electric Financial Services, Inc., General Electric Capital Corporation,
General Electric Credit Corporation and DOES 1-100 as defendants.  The complaint
alleges   violations   of  state   common  law,   including   fraud,   negligent
misrepresentation,  breach of fiduciary duty, and violations of the rules of the
National  Association  of Securities  Dealers.  The  complaint  seeks to recover
compensatory  damages and punitive damages in an unspecified  amount,  interest,
and recision with respect to Polaris Aircraft Income Funds I-VI. The Partnership
is not named as a defendant in this action.

On or about October 16, 1996, a complaint  entitled  Mary Grant  Tarrer,  et al.
v.Kidder  Peabody & Co.,et al. was filed in the  Superior  Court of the State of
California, County of Sacramento, by individual plaintiffs who purchased limited
partnership  units in  Polaris  Aircraft  Income  Funds  I-VI and other  limited
partnerships  allegedly  sold by Kidder  Peabody.  The  complaint  names Kidder,
Peabody & Co. Incorporated,  KP Realty Advisors,  Inc., Polaris Holding Company,
Polaris Aircraft Leasing Corporation, Polaris Investment Management Corporation,
Polaris  Securities  Corporation,  Polaris Jet Leasing,  Inc., Polaris Technical
Services,  Inc., General Electric Company,  General Electric Financial Services,
Inc., General Electric Capital Corporation,  General Electric Credit Corporation
and DOES 1-100 as defendants.  The complaint alleges  violations of state common
law, including fraud, negligent misrepresentation, breach of fiduciary duty, and
violations of the rules of the National  Association of Securities Dealers.  The
complaint  seeks to recover  compensatory  damages  and  punitive  damages in an
unspecified  amount,  interest,  and recission with respect to Polaris  Aircraft
Income Funds I-VI and all other limited  partnerships  alleged to have been sold
by Kidder Peabody to the plaintiffs. The Partnership is not named as a defendant
in this action.

On or about November 6, 1996, a complaint  entitled Janet K. Johnson,  et al. v.
Polaris Holding Company,  et al. was filed in the Superior Court of the State of
California, County of Sacramento, by individual plaintiffs who purchased limited
partnership  units in Polaris  Aircraft  Income Funds I-VI. The complaint  names
Polaris  Holding  Company,   Polaris  Aircraft  Leasing   Corporation,   Polaris
Investment Management Corporation,  Polaris Securities Corporation,  Polaris Jet
Leasing,  Inc.,  Polaris  Technical  Services,  Inc.,  General Electric Company,
General Electric Financial Services, Inc., General Electric Capital Corporation,
General Electric Credit Corporation and DOES 1-100 as defendants.  The complaint
alleges   violations   of  state   common  law,   including   fraud,   negligent
misrepresentation,  breach of fiduciary duty, and violations of the rules of the
National  Association  of Securities  Dealers.  The  complaint  seeks to recover
compensatory  damages and punitive damages in an unspecified  amount,  interest,
and  recission  with  respect  to  Polaris   Aircraft  Income  Funds  I-VI.  The
Partnership is not named as a defendant in this action.

                                       38

<PAGE>

On or about November 13, 1996, a complaint  entitled  Wayne W. Kuntz,  et al. v.
Polaris Holding Company,  et al. was filed in the Superior Court of the State of
California, County of Sacramento, by individual plaintiffs who purchased limited
partnership  units in Polaris  Aircraft  Income Funds I-VI. The complaint  names
Polaris  Holding  Company,   Polaris  Aircraft  Leasing   Corporation,   Polaris
Investment Management Corporation,  Polaris Securities Corporation,  Polaris Jet
Leasing,  Inc.,  Polaris  Technical  Services,  Inc.,  General Electric Company,
General Electric Financial Services, Inc., General Electric Capital Corporation,
General Electric Credit Corporation and DOES 1-100 as defendants.  The complaint
alleges   violations   of  state   common  law,   including   fraud,   negligent
misrepresentation,  breach of fiduciary duty, and violations of the rules of the
National  Association  of Securities  Dealers.  The  complaint  seeks to recover
compensatory  damages and punitive damages in an unspecified  amount,  interest,
and  recission  with  respect  to  Polaris   Aircraft  Income  Funds  I-VI.  The
Partnership is not named as a defendant in this action.

On or about November 26, 1996, a complaint  entitled  Thelma  Abrams,  et al. v.
Polaris Holding Company,  et al. was filed in the Superior Court of the State of
California, County of Sacramento, by individual plaintiffs who purchased limited
partnership  units in Polaris  Aircraft  Income Funds I-VI. The complaint  names
Polaris  Holding  Company,   Polaris  Aircraft  Leasing   Corporation,   Polaris
Investment Management Corporation,  Polaris Securities Corporation,  Polaris Jet
Leasing,  Inc.,  Polaris  Technical  Services,  Inc.,  General Electric Company,
General Electric Financial Services, Inc., General Electric Capital Corporation,
General Electric Credit Corporation and DOES 1-100 as defendants.  The complaint
alleges   violations   of  state   common  law,   including   fraud,   negligent
misrepresentation,  breach of fiduciary duty, and violations of the rules of the
National  Association  of Securities  Dealers.  The  complaint  seeks to recover
compensatory  damages and punitive damages in an unspecified  amount,  interest,
and  recission  with  respect  to  Polaris   Aircraft  Income  Funds  I-VI.  The
Partnership is not named as a defendant in this action.

On or about  January 16, 1997, a complaint  entitled  Enita  Elphick,  et al. v.
Kidder  Peabody & Co.,et  al.  was filed in the  Superior  Court of the State of
California, County of Sacramento, by individual plaintiffs who purchased limited
partnership  units in  Polaris  Aircraft  Income  Funds  I-VI and other  limited
partnerships  allegedly  sold by Kidder  Peabody.  The  complaint  names Kidder,
Peabody & Co. Incorporated,  KP Realty Advisors,  Inc., Polaris Holding Company,
Polaris Aircraft Leasing Corporation, Polaris Investment Management Corporation,
Polaris  Securities  Corporation,  Polaris Jet Leasing,  Inc., Polaris Technical
Services,  Inc., General Electric Company,  General Electric Financial Services,
Inc., General Electric Capital Corporation,  General Electric Credit Corporation
and DOES 1-100 as defendants.  The complaint alleges  violations of state common
law, including fraud, negligent misrepresentation, breach of fiduciary duty, and
violations of the rules of the National  Association of Securities Dealers.  The
complaint  seeks to recover  compensatory  damages  and  punitive  damages in an
unspecified  amount,  interest,  and recission with respect to Polaris  Aircraft
Income Funds I-VI and all other limited  partnerships  alleged to have been sold
by Kidder Peabody to the plaintiffs. The Partnership is not named as a defendant
in this action.

On or about  February 14, 1997, a complaint  entitled  George  Zicos,  et al. v.
Polaris Holding Company,  et al. was filed in the Superior Court of the State of
California, County of Sacramento, by individual plaintiffs who purchased limited
partnership  units in Polaris  Aircraft  Income Funds I-VI. The complaint  names
Polaris  Holding  Company,   Polaris  Aircraft  Leasing   Corporation,   Polaris
Investment Management Corporation,  Polaris Securities Corporation,  Polaris Jet
Leasing,  Inc.,  Polaris  Technical  Services,  Inc.,  General Electric Company,
General Electric Financial Services, Inc., General Electric Capital Corporation,
General Electric Credit Corporation and DOES 1-100 as defendants.  The complaint
alleges   violations   of  state   common  law,   including   fraud,   negligent
misrepresentation,  breach of fiduciary duty, and violations of the rules of the
National  Association  of Securities  Dealers.  The  complaint  seeks to recover
compensatory  damages and punitive damages in an unspecified  amount,  interest,
and  recission  with  respect  to  Polaris   Aircraft  Income  Funds  I-VI.  The
Partnership is not named as a defendant in this action.

Other  Proceedings - Part I, Item 3 discusses  certain other actions arising out
of certain public  offerings,  including that of the Partnership,  to which both
the Partnership and its general partner are parties.

                                       39

<PAGE>

Disclosure pursuant to Section 16, Item 405 of Regulation S-K:

Based  solely on its  review of the  copies of such  forms  received  or written
representations  from  certain  reporting  persons that no Forms 3, 4, or 5 were
required for those  persons,  the  Partnership  believes  that,  during 1996 all
filing requirements  applicable to its officers,  directors and greater than ten
percent beneficial owners were met.


Item 11.          Executive Compensation

PAIF-VI has no directors or  officers.  PAIF-VI is managed by PIMC,  the General
Partner.  No management or advisory fees were paid to PIMC in 1996. As described
in Note 5 to the financial  statements  (Item 8), PIMC received a 5% interest in
all cash distributions of the Partnership during 1996.


Item 12.          Security Ownership of Certain Beneficial Owners and Management

     a)  No person  owns of record,  or is known by PAIF-VI to own  beneficially
         more than five percent of any class of voting securities of PAIF-VI.

     b)  The General Partner of PAIF-VI owns  the equity  securities  of PAIF-VI
         as set forth in the following table:

          Title          Name of          Amount and Nature of         Percent
         of Class    Beneficial Owner     Beneficial Ownership         of Class
         --------    ----------------     --------------------         --------

         General     Polaris Investment   Represents a 10.0% interest     100%
         Partner     Management           of all cash distributions,
         Interest    Corporation          gross income in an amount
                                          equal to 9.09% of distributed
                                          cash available from operations,
                                          and a 1% interest in net
                                          income or loss

     c)  There are no arrangements known to PAIF-VI, including any pledge by any
         person  of  securities  of  PAIF-VI,  the  operation  of which may at a
         subsequent date result in a change in control of PAIF-VI.


Item 13.      Certain Relationships and Related Transactions

None.

                                                                              40

<PAGE>

                                     PART IV

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

1.       Financial Statements.

         The following are included in Part II of this report:
                                                                       Page No.
                                                                       --------

               Report of Independent Public Accountants                   17
               Balance Sheets                                             18
               Statements of Operations                                   19
               Statements of Changes in Partners' Capital (Deficit)       20
               Statements of Cash Flows                                   21
               Notes to Financial Statements                              22


2.       Reports on Form 8-K.

         None.


3.       Exhibits required to be filed by Item 601 of Regulation S-K.

         27.   Financial Data Schedule.


4.       Financial Statement Schedules.

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

                                       41

<PAGE>

                                   SIGNATURES



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


                                      POLARIS AIRCRAFT INCOME FUND VI,
                                      A California Limited Partnership
                                      (REGISTRANT)
                                      By:    Polaris Investment
                                             Management Corporation
                                             General Partner





March 28, 1997                     By:  /S/ Eric M. Dull, President
-------------------                     ---------------------------
       Date                             Eric M. Dull, President


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


      Signature                        Title                           Date

/S/Eric M. Dull     President and Director of Polaris Investment  March 28, 1997
---------------     Management Corporation, General Partner       --------------
(Eric M. Dull)      of the Registrant

/S/Marc A. Meiches  Chief Financial Officer of Polaris Investment March 28, 1997
------------------  Management Corporation, General Partner       --------------
(Marc A. Meiches)   of the Registrant

/S/Richard J. Adams
------------------- Chief Financial Officer of Polaris Investment March 28, 1997
(Richard J. Adams)  Management Corporation, General Partner       --------------
                    of the Registrant













                                       42