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

~~[X]~~SECURITIES ~~Annual~~AND ~~Report~~EXCHANGE ~~Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934~~COMMISSION

~~For The Fiscal Year Ended December 31~~WASHINGTON, ~~2001~~ D.C. 20549

~~[ ]~~FORM ~~Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934~~10-K

Commission File #0-21606 InLand Capital Fund, L.P.

ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE YEAR ENDED DECEMBER 31, 2006

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO

Delaware	36-3767977
(State of organization)	(I.R.S. Employer Identification Number)
2901 Butterfield Road, Oak Brook, Illinois	60523
(Address of principal executive office)	(Zip Code)

COMMISSION FILE NUMBER: 0-21606

~~Registrant's~~InLand ~~telephone~~Capital ~~number~~Fund, ~~including area code: 630-218-8000~~L.P.

(Exact name of registrant as specified in its charter)


Delaware	36-3767977
(State of Incorporation)	(I.R.S. Employer Identification No.)

2901 Butterfield Road, Oak Brook, IL 60523

(Address of principal executive offices)(Zip Code)

630-218-8000

(Registrant’s telephone number, including area code)

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


Title of each class:	Name of each exchange on which registered:
None	None

Securities registered pursuant to Section 12(g) of the Act: ~~LIMITED PARTNERSHIP UNITS (Title of class)~~

~~Indicate~~Limited byPartnership 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 Units

~~Indicate~~(Title ~~by check mark if disclosure~~ of ~~delinquent~~each 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. [X]class)

~~State~~Indicate by check mark if the ~~aggregate~~registrant ~~market~~is ~~value~~a ofwell-known ~~the~~seasoned ~~voting~~issuer, ~~stock~~as ~~held~~defined byin ~~nonaffiliates~~Rule 405 of the ~~registrant.~~Securities ~~Not applicable~~Act.

~~The~~Yes o No ~~Prospectus~~X of the Registrant dated December 13, 1991, filed pursuant to Rule 424(b) and 424(c) under the Securities Act of 1933 is incorporated by reference in Parts I, II and III of this Annual Report on Form 10-K.

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15 (d) of the Act.

Yes o No X

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 the filing requirements for at least the past 90 days.

Yes X No o

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. [ X ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer (See definition of "accelerated filer" in Rule 12b-2 of the Exchange Act).

Large accelerated filer o Accelerated filer o Non-accelerated filer X

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No X

-1-

INLAND CAPITAL FUND, L.P.
(a limited partnership)

TABLE OF CONTENTS

	Part I	Page
Item 1.	Business	3
Item 2.	Properties	5
Item 1(a).	Risk Factors	4
Item 3.	Legal Proceedings	5
Item 1(b).	Unresolved Staff Comments	5
Item 4.	Submission of Matters to a Vote of Security Holders	5
Item 2.	Properties	6
Item 3.	Legal Proceedings	8
Item 4.	Submission of Matters to a Vote of Security Holders	8
	Part II
Item 5.	Market for Partnership's Limited Partnership Units and Related Security Holder Matters	58
Item 6.	Selected Financial Data	69
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	710
Item 7(a)	Quantitative and Qualitative Disclosures About Market Risk	10
Item 7(a).	Quantitative and Qualitative Disclosures About Market Risk	13
Item 8.	Financial Statements and Supplementary Data	1114
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	2831
Item 9(a).	Controls and Procedures	31
	Part III
Item 10.	Directors and Executive Officers of the Registrant	2832
Item 11.	Executive Compensation	3335
Item 12.	Security Ownership of Certain Beneficial Owners and Management	3437
Item 13.	Certain Relationships and Related Transactions	3437
Item 14.	Principal Accountant Fees and Services	37
	Part IV
Item 14.	Exhibits, Financial Statement Schedules, and Reports on Form 8-K	35
Item 15.	Exhibits, Financial Statement Schedules, and Reports on Form 8-K	38
SIGNATURES		3639

-2-

PART I

Item 1. Business

~~The Registrant,~~ InLand Capital Fund, L.P. ~~(the~~was ~~"Partnership"), is a limited partnership~~ formed on June 21, 1991 ~~pursuant~~ to ~~the Delaware Revised Uniform Limited Partnership Act, to~~ invest in multiple parcels of land on an all-cash basis. ~~The Partnership intends to engage in a number of preliminary development activities with the objective of maximizing the resale value of the land parcels.~~ On December 13, 1991, ~~the~~we ~~Partnership~~ commenced an ~~Offering~~offering of 60,000 ~~Limited~~limited ~~Partnership~~partnership ~~Units~~units ~~("Units")~~or units at $1,000 per ~~Unit~~unit, pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933. The ~~Offering~~offering terminated on August 23, 1993, ~~with~~after ~~total~~we ~~sales~~sold of 32,399.28 ~~Units~~units, at $1,000 per ~~Unit~~unit, resulting in $32,399,282 in gross offering proceeds, not including ~~the~~our ~~General~~general ~~Partner~~partner's capital contribution of $500. All of the holders of these ~~Units~~units have been admitted to ~~the~~our ~~Partnership~~partnership. Inland Real Estate Investment Corporation is ~~the~~our ~~General~~general ~~Partner~~partner. ~~The~~Our ~~Limited~~limited ~~Partners~~partners ~~of the Partnership will~~ share in their portion of benefits of ownership of ~~the~~our ~~Partnership's~~ real property investments according to the number of ~~Units~~units held. As of December 31, ~~2001~~2006, ~~the~~we ~~Partnership~~have ~~has~~ repurchased a total of 62 ~~Units~~units for $56,253 from various ~~Limited~~limited ~~Partners~~partners through the ~~Unit~~unit ~~Repurchase~~repurchase ~~Program~~program. Under this program, ~~Limited~~limited ~~Partners~~partners ~~may~~could, under certain circumstances, have their ~~Units~~units repurchased for an amount equal to their ~~Invested~~original ~~Capital~~capital as reduced by distributions from net sale proceeds.

~~The~~We ~~Partnership~~purchased ison an all-cash basis, 18 parcels of undeveloped land and one building and are engaged in the ~~business~~rezoning and resale of ~~real~~the ~~estate~~parcels. All ~~investment~~of the investments were made in the collar counties surrounding the Chicago metropolitan area. The Aanticipated ~~presentation~~holding period of ~~information~~the ~~about~~land ~~industry~~was ~~segments~~approximately ~~would~~two ~~not~~to beseven ~~material~~years tofrom anthe ~~understanding~~completion of the ~~Partnership's~~land ~~business~~portfolio ~~taken~~acquisitions. asAs a ~~whole~~result of the lengthy rezoning and entitlement processes and the no growth mentality of the municipalities where the land is located, our holding period has exceeded our original estimates. ~~The~~ ~~Partnership~~As ~~acquired~~of ~~fee~~December ~~ownership~~31, 2006, we have had multiple sales transactions through which we have disposed of a building and approximately 3,283 acres of the ~~following~~approximately ~~real~~3,302 ~~property~~acres ~~investments:~~originally owned. We continue to market the remaining acres for sale.

	Gross Acres	Purchase/Sales
Parcel & Location	Purchased/Sold	Date
Parcel 1, Kendall County, Illinois	108.8960	07/22/92
Parcel 2, McHenry County, Illinois	201.0000	11/09/93
	(17.7420	sold 08/02/95)
	(8.6806	sold Var 1997)
	(1.9290	sold Var 1998)
	(13.5030	sold Var 1999)
	(3.6400	sold 11/29/01)
Parcel 3, Will County, Illinois	34.0474	03/04/94
	(34.0474	sold 02/04/99)
Parcel 4, Will County, Illinois	86.9195	03/30/94
	(2.3050	sold Var 1997)
	(3.3600	sold Var 1998)
	(1.0331	sold 08/19/99)
	(60.1000	sold Var 2001)
Parcel 5, LaSalle County, Illinois	190.9600	04/01/94
	(2.0600	sold 04/08/98)
	(188.9000	sold 10/07/99)
Parcel 6, DeKalb County, Illinois	59.0800	05/11/94
	(4.9233	sold Apr 1998)
	(54.1567	sold 07/23/98)

We are engaged in the business of real estate investment which management considers being a single operating segment. A presentation of information about operating segments would not be material to an understanding of our business taken as a whole.

We believe we enhanced the value of our land through pre-development activities such as rezoning, annexation and land planning and have been successful in pre-development activity on several of our land investments. Our remaining parcel, Parcel 2, was annexed to the Village of McHenry and zoned for a business park. There are two phases of improvements complete and sites are being marketed to potential buyers. As of December 31, 2006, 17 lots remain to be sold.

In 2006, we sold 3 lots of Parcel 2. Undistributed net sales proceeds will be used to cover our operations, including property upgrades. We will evaluate our cash needs throughout the year to determine future distributions.

We had no employees during 2006.

Our general partner and its affiliates provide services to us. Our general partner and its affiliates are reimbursed for salaries and expenses of employees of the general partner and its affiliates relating to our administration. An affiliate of the general partner performs marketing and advertising services for us and is reimbursed for direct costs. An affiliate of the general partner performs property upgrades, rezoning, annexation and other activities to prepare our parcels for sale and is reimbursed for salaries and direct costs.

-3-

	Gross Acres	Purchase/Sales
Parcel & Location	Purchased/Sold	Date
Parcel 7, Kendall County, Illinois	200.8210	07/28/94
Parcel 8, Kendall County, Illinois	133.0000	08/17/94
Parcel 9, LaSalle County, Illinois	335.9600	08/30/94
Parcel 10, Kendall County, Illinois	230.7860	09/16/94
	(7.0390	sold 04/21/95)
	(2.9770	sold 11/03/99)
Parcel 11, Kane County, Illinois	123.0000	09/26/94
	(123.0000	sold 11/30/00)
Parcel 12, Kendall County, Illinois	110.2530	09/28/94
	(59.9050	sold 04/16/01)
Parcel 13, LaSalle County, Illinois	352.7390	10/06/94
	(10.0000	sold 07/27/98)
	(342.7390	sold 08/31/98)
Parcel 14, Kendall County, Illinois	134.7760	10/26/94
	(10.6430	sold 05/21/99)
Parcel 15, McHenry County, Illinois	169.5400	10/31/94
Parcel 16, McHenry County, Illinois	207.0754	11/30/94
Parcel 17, LaSalle County, Illinois	236.4400	12/07/94
Parcel 18, Kendall County, Illinois	386.9900	11/02/95
	(386.9900	sold 08/31/98)

Access to Our Information

~~Reference~~We iselectronically ~~made~~file our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to ~~Note~~those 4reports ofwith the ~~Notes~~Securities toand ~~Financial~~Exchange ~~Statements~~Commission (~~Item~~SEC). 8The public may read and copy any of ~~this~~the ~~Annual~~reports ~~Report)~~that ~~for~~are ~~additional~~filed ~~descriptions~~with ofthe SEC at the ~~Partnership~~SEC's ~~real~~Public ~~property~~Reference ~~investments~~Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at (800)-SEC-0330. The SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically.

~~The~~We ~~Partnership~~make ~~purchased~~available, ~~primarily~~free onof ~~an all-cash basis~~charge, ~~eighteen~~by ~~parcels~~responding ofto ~~undeveloped~~requests ~~land~~addressed ~~and~~to ~~one~~our ~~building~~director ~~and is engaged in the rezoning and resale~~ of ~~the~~investor ~~parcels. All~~relations, of the ~~investments~~annual ~~were~~report ~~made~~on inForm ~~the~~10-K, ~~collar~~quarterly ~~counties~~reports ~~surrounding~~on ~~the~~Form ~~Chicago~~10-Q, ~~metropolitan~~current ~~area. The~~reports ~~anticipated~~on ~~holding~~Form ~~period~~8-K ofand ~~the~~all ~~land~~amendments ~~is approximately two~~ to ~~seven~~those ~~years from the completion of the land portfolio acquisitions~~reports. As ofThese ~~December~~reports ~~31,~~are ~~2001,~~available ~~the~~as ~~Partnership~~soon ~~has~~as ~~had~~reasonably ~~multiple~~practical ~~sales~~after ~~transactions~~such ~~through~~material ~~which~~is itelectronically ~~has~~filed ~~disposed~~or offurnished ~~the~~to ~~building and approximately 1,339 acres of~~ the ~~approximately 3,302 acres originally owned~~SEC.

~~The~~Limited ~~General~~partners ~~Partner~~wishing ~~anticipates that land purchased by the Partnership will produce sufficient income~~ to ~~pay~~communicate ~~property taxes, insurance and other miscellaneous expenses,~~ with ~~surplus~~our ~~funds,~~general ifpartner ~~any,~~can todo beso ~~retained~~by inwriting ~~the working capital reserve for pre-development activities. Income is expected~~ to ~~be derived from leases to farmers or from other activities compatible with~~ the ~~Partnership's~~attention ~~business~~of ~~plan for land parcels. Although~~ the ~~General~~general ~~Partner~~partner ~~believes~~care ~~that~~of ~~leasing~~our ~~the~~partnership ~~Partnership's~~at ~~land~~2901 ~~will~~Butterfield ~~generate~~Road, ~~sufficient~~Oak ~~revenues to pay these expenses~~Brook, ~~there~~IL ~~can be no assurance that this will in fact occur~~60523.

Item 1(a). Risk Factors

Pre-Development Stage Land

The net proceeds of the offering were invested in pre-development stage land. An investment in such land involves a number of potential risks, which include the following:

Environmental Risks. Federal and state environmental laws can impose substantial liability on owners of real estate without regard to fault, even when other parties are or were responsible for the environmental impairment. Environmental liabilities could cause us to incur significant expenses, including (but not limited to) the obligation to remedy or clean up hazardous substances (such as pesticides commonly used on farmland) or other pollutants, regardless of fault. Such liabilities could require us to dispose of a property at a loss, which could be substantial.

In addition, the value of our land is affected by the drainage pattern of such land and the surrounding area, the susceptibility of such land to flooding and the possibility that such land might be classified as "wetlands" by a government agency, thereby inhibiting or precluding development of the parcel.

Nature of Farm Leases and Limited Current Income. With the exception of limited amounts of cash which may be generated from leasing the land as farmland or for other revenue-producing activities, pre-development land does not generate current income. Nevertheless, we incur ongoing expenses in connection with the ownership of such land (for example, real estate taxes). At the same time, our farm rental revenue is subject to a farm tenant's ability to pay the contracted rent, which depends on fluctuations in commodity prices, bad weather, competition from other producers, changes in government farm policy (including price supports), pests and crop diseases. As of December 31, 2006, the Partnership did not have a farm lease for the remaining 19 acres owned.

Lack of Geographic Diversification. All of our land investments are located in the Chicago metropolitan area. The success of the partnership will, therefore, depend to a great extent upon the rate and amount of economic growth in the Chicago metropolitan area.

-4-

~~However, the General Partner has agreed to make a Supplemental Capital Contribution to the~~ Partnership-Related if and to the extent that real estate taxes and insurance payable with respect to the Partnership's land during a given year exceed the revenue earned by the Partnership from leasing its land during such year. Any Supplemental Capital Contribution will be repaid only after Limited Partners have received, over the life of the Partnership, a return of their Original Capital plus the 15% Cumulative Return. All of the parcels purchased by the Partnership consist of land, which generates revenue from farming or other leasing activities. It is not expected that the Partnership will generate cash distributions to the partners from farm leases or other activities.Risks

~~The~~Risk ~~Partnership~~of ~~had~~Installment noSale. We ~~employees~~may sell some land parcels on an installment basis (which means that the sale price will be received in installments during ~~2001~~the term of the agreement). In the event we find it necessary or desirable to provide such financing upon the resale of our parcels, a liquidation of the partnership may be delayed beyond the time of disposition of the parcels until any such loans are repaid or otherwise liquidated. In the event of a default on an installment sale, we may be forced to reacquire a property.

~~The~~No ~~terms~~Market offor ~~transactions~~Units. Our ~~between~~units ~~the~~are ~~Partnership~~subject ~~and~~to ~~Affiliates~~certain ofrestrictions ~~the~~on ~~General~~transferability. As ~~Partner~~a result of ~~the~~these ~~Partnership~~restrictions, ~~are~~no ~~set~~public ~~forth~~trading inmarket ~~Item~~is 11likely ~~below~~to ~~and~~develop ~~Note~~for 3these ofsecurities, ~~the~~nor ~~Notes~~is toone ~~Financial~~intended ~~Statements~~to ~~(Item~~develop. Purchasers 8 of ~~this~~units ~~Annual~~may ~~Report)~~not, totherefore, ~~which~~be ~~reference~~able isto ~~hereby~~liquidate ~~made~~their ~~for~~investment ain ~~description~~the event of ~~such~~an ~~terms~~emergency, and ~~transactions~~units may not be readily acceptable as collateral for a loan.

Conflicts of Interest. We may be subject to various conflicts of interest arising out of our relationship with our general partners and its affiliates. If the general partner or its affiliates breach their fiduciary obligations to us, or do not resolve these conflicts of interest to our benefit, we could suffer consequences which we might not otherwise be subject to if such conflicts of interest did not exist.

Federal Income Tax Aspects

Potential Receipt of UBTI. The incurrence of debt in connection with our pre-development and/or sales activities could cause the gain on the sale of parcels to constitute unrelated business taxable income ("UBTI") and affect limited partners that are tax-exempt entities.

Item 1(b). Unresolved Staff Comments

None

-5-

Item 2. Properties

~~The~~We ~~Partnership~~acquired ~~owns~~fee ~~directly~~ownership ~~the parcels~~ of ~~land referred to in Item 1 and in Note 4 of~~ the ~~Notes~~following toreal ~~Financial~~property ~~Statements (Item 8 of this Annual Report) to which reference is hereby made for a description of said parcels.~~investments:


	Gross Acres	Remaining	Purchase/Sales
Parcel & Location	Purchased/Sold	Acres	Date
Parcel 1, Kendall County, Illinois	108.8960	-	07/22/92
	(108.8960		sold 01/11/02)


Parcel 2, McHenry County, Illinois	201.0000	19.3800	11/09/93
	(17.7420		sold 08/02/95)
	(8.6806		sold various 1997)
	(1.9290		sold various 1998)
	(13.5030		sold various 1999)
	(3.6400		sold 11/29/01)
	(10.1600		sold various 2002)
	(116.8454		sold various 2004)
	(5.7000		sold various 2005)
	(3.4200		sold 06/11/06)

Parcel 3, Will County, Illinois	34.0474	-	03/04/94
	(34.0474		sold 02/04/99)

Parcel 4, Will County, Illinois	86.9195	-	03/30/94
	(2.3050		sold various 1997)
	(3.3600		sold various 1998)
	(1.0331		sold 08/19/99)
	(60.1000		sold various 2001)
	(20.1214		sold 11/01/04)

Parcel 5, LaSalle County, Illinois	190.9600	-	04/01/94
	(2.0600		sold 04/08/98)
	(188.9000		sold 10/07/99)

Parcel 6, DeKalb County, Illinois	59.0800	-	05/11/94
	(4.9233		sold Apr 1998)
	(54.1567		sold 07/23/98)

Parcel 7, Kendall County, Illinois	200.8210	-	07/28/94
	(168.1740		sold 09/18/03)
	(32.6470		sold various 2005)

Parcel 8, Kendall County, Illinois	133.0000	-	08/17/94
	(133.0000		sold 04/11/05)

Parcel 9, LaSalle County, Illinois	335.9600	-	08/30/94
	(335.9600		sold 04/18/03)

Parcel 10, Kendall County, Illinois	230.7860	-	09/16/94
	(7.0390		sold 04/21/95)
	(2.9770		sold 11/03/99)
	(127.4000		sold 08/14/02)
	(84.3900		sold 01/09/04)
	(8.9800		sold 12/15/05)

-6-


	Gross Acres	Remaining	Purchase/Sales
Parcel & Location	Purchased/Sold	Acres	Date

Parcel 11, Kane County, Illinois	123.0000	-	09/26/94
	(123.0000		sold 11/30/00)

Parcel 12, Kendall County, Illinois	110.2530	-	09/28/94
	(59.9050		sold 04/16/01)
	(50.3480		sold 09/18/03)

Parcel 13, LaSalle County, Illinois	352.7390	-	10/06/94
	(10.0000		sold 07/27/98)
	(342.7390		sold 08/31/98)

Parcel 14, Kendall County, Illinois	134.7760	-	10/26/94
	(10.6430		sold 05/21/99)
	(124.1330		sold 12/17/04)

Parcel 15, McHenry County, Illinois	169.5400	-	10/31/94
	(169.5400		sold 02/26/04)

Parcel 16, McHenry County, Illinois	207.0754	-	11/30/94
	(207.0754		sold 02/26/04)

Parcel 17, LaSalle County, Illinois	236.4400	-	12/07/94
	(236.4400		sold various 2005)

Parcel 18, Kendall County, Illinois	386.9900	-	11/02/95
	(386.9900		sold 08/31/98)

The general partner anticipated that the land we acquired would produce sufficient income to pay property taxes, insurance and other miscellaneous expenses, with surplus funds, if any, to be retained in the working capital reserve for pre-development activities. Income was derived from leases to farmers or from other activities compatible with our business plan for land parcels. It was not expected that we would generate cash distributions to the partners from farm leases or other leasing activities. Through December 31, 2006, we have earned total revenue from leasing our land or other revenue producing activities to cover real estate taxes and insurance expense. However, our remaining parcel has been developed and zoned as a business park and therefore we do not receive any rental income on this parcel. Our general partner has agreed to make a supplemental capital contribution to us if and to the extent that real estate taxes and insurance payable with respect to our land during a given year exceed the revenue earned by us during such year. Any supplemental capital contribution will be repaid only after limited partners have received, over the life of our partnership, a return of their original capital plus the 15% cumulative return. As of December 31, 2006, the general partner has not made any supplemental capital contributions.

-7-

Item 3. Legal Proceedings

~~The~~We ~~Partnership~~are is not subject to any material pending legal proceedings.

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

There were no matters submitted to a vote of our security holders during ~~2001~~2006.

PART II

Item 5. Market for ~~the~~our ~~Partnership's~~ Limited Partnership Units and Related Security Holder Matters

As of ~~December~~February 3124, ~~2001~~2007, there were 2,~~637~~575 holders of ~~Units~~our ~~of the Partnership~~units. There is no public market for ~~Units~~units nor is it anticipated that any public market for ~~Units~~units will develop.

~~Although~~For the ~~Partnership~~years ~~has~~ended ~~established a Unit Repurchase Program, funds for repurchase of Units are limited. Reference is made to "Unit Repurchase Program" on page 61 of the Prospectus of the Partnership dated~~ December ~~13, 1991, as amended, which is incorporated herein by reference. As of December~~ 31, ~~2001,~~2006 ~~the~~and ~~Partnership had approximately $172~~2005,~~000~~ ~~available~~we ~~for~~paid the ~~repurchase~~following ~~of Units.~~distributions:

-5-



Distributions to:		2006	2005

General partners	$	-	3,414,495
Limited partners		-	22,007,872

Total	$	-	25,422,367

Item 6. Selected Financial Data

INLAND CAPITAL FUND, L.P. (a limited partnership) For the years ended December 31, 2001, 2000, 1999, 1998 and 1997 (not covered by the Report of Independent Accountants)

		2001	2000	1999	1998	1997
Total assets	$	22,117,537	22,681,550	23,494,350	25,966,480	28,953,356
		=========	=========	=========	=========	=========
Total income	$	2,320,989	3,853,281	5,264,045	5,259,595	1,717,766
		=========	=========	=========	=========	=========
Net income	$	729,463	2,138,739	2,399,704	1,207,517	1,066,944
		=========	=========	=========	=========	=========
Net income (loss) allocated to the one General Partner Unit	$	(3,218)	211,500	260,957	44	635
		=========	=========	=========	=========	=========
Net income allocated per Limited Partnership Unit(b)	$	22.66	59.59	66.11	37.32	32.94
		=========	=========	=========	=========	=========
Distributions per Limited Partnership Unit from sales (b)(c):	$	46.39	81.53	145.50	130.39	30.89
		=========	=========	=========	=========	=========
Weighted average Limited Partnership Units		32,337	32,341	32,351	32,352	32,369
		=========	=========	=========	=========	=========

The above selected financial data should be read in conjunction with the financial statements and related notes appearing elsewhere in this Annual Report.

The net income per Unit, basic and diluted, and distributions per Unit are based upon the weighted average number of Units outstanding.

Distributions from sales represents a return of Invested Capital, as defined in the Partnership Agreement.

-6-

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

Certain statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this annual report on Form 10-K constitute "forward-looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Partnership's actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by these forward-looking statements. These factors include, among other things, federal, state or local regulations; adverse changes in general economic or local conditions; uninsured losses; and potential conflicts of interest between the Partnership and its Affiliates, including the General Partner.

Liquidity and Capital Resources

On December 13, 1991, the Partnership commenced an Offering of 60,000 Limited Partnership Units ("Units") at $1,000 per Unit, pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933. The Offering terminated on August 23, 1993, with total sales of 32,399.28 Units, at $1,000 per Unit, resulting in $32,399,282 in gross offering proceeds, not including the General Partner's capital contribution of $500. All of the holders of these Units have been admitted to the Partnership. The Limited Partners of the Partnership will share in their portion of benefits of ownership of the Partnership's real property investments according to the number of Units held.

The Partnership used $25,945,989 of gross offering proceeds to purchase, on an all-cash basis, eighteen parcels of land and one building. These investments include the payment of the purchase price, acquisition fees and acquisition costs of such properties. One of the parcels was purchased during 1992, one during 1993, fifteen during 1994 and one during 1995. As of December 31, 2001, the Partnership has had multiple sales transactions through which it has disposed of the building and approximately 1,339 acres of the 3,302 acres originally owned. As of December 31, 2001, cumulative distributions to the Limited Partners have totaled $14,708,504 (which represents a return of Invested Capital, as defined in the Partnership Agreement) and $470,240 to the General Partner. Through December 31, 2001, the Partnership has used $4,757,722 of working capital reserve for rezoning and other activities and such amount is included in investment properties.

The Partnership's capital needs and resources will vary depending upon a number of factors, including the extent to which the Partnership conducts rezoning and other activities relating to utility access, the installation of roads, subdivision and/or annexation of land to a municipality, changes in real estate taxes affecting the Partnership's land, and the amount of revenue received from leasing. As of December 31, 2001, the Partnership owns, in whole or in part, twelve of its original parcels, the majority of which are leased to local farmers and are generating sufficient cash flow from farm leases to cover property taxes and insurance.

-7-

At December 31, 2001, the Partnership had cash and cash equivalents of $552,394, of which approximately $172,000 is reserved for the repurchase of Units through the Unit Repurchase Program. The remaining $380,394 is available, upon maturity, to be used for Partnership expenses and liabilities, cash distributions to partners, and other activities with respect to some or all of its land parcels. The Partnership plans to maximize its parcel sales effort in anticipation of rising land values.

The Partnership plans to enhance the value of its land through pre-development activities such as rezoning, annexation and land planning. The Partnership has already been successful in, or is in the process of pre-development activity on a majority of the Partnership's land investments. Parcel 2, annexed to the village of McHenry and zoned for a business park, has two phases of improvements complete and sites are being marketed to potential buyers, of which 30 of the 183 lots were sold as of December 31, 2001. Parcel 4, zoned for a variety of business uses, has improvements underway and sites are being marketed to potential buyers, of which one site consisting of .87 acres was sold to a hotel chain on June 6, 1997, another site consisting of 1.435 acres was sold to a combination gas station/convenient store on August 12, 1997, a third site consisting of 1.5 acres was sold to a national fast-food chain on August 13, 1998, a fourth site consisting of 1.86 acres was sold to a different national fast-food chain on October 16, 1998 and a fifth site consisting of 1.033 acres was sold to a national discount tire retailer on August 19, 1999 and on March 19, 2001 a site containing 59 acres was sold. Parcels 15 and 16 have been annexed to the village of Huntley and zoned for residential and commercial development. Parcel 7 and portions of Parcel 12 were annexed and zoned in the city of Plano in 2000.

Results of Operations

As of December 31, 2001, the Partnership owned twelve parcels of land consisting of approximately 1,963 acres. Of the 1,963 acres owned, approximately 1,848 acres are tillable and leased to local farmers and are generating sufficient cash flow to cover property taxes, insurance and other miscellaneous property expenses. Income from the sale of investment properties and the cost of investment properties sold for the year ended December 31, 2001 is the result of the additional sales at Parcels 2 and 4. In addition, on April 16, 2001, the Partnership sold approximately 59 acres of Parcel 12 to an unaffiliated third party on an installment basis and recorded a deferred gain of $447,529. As of December 31, 2001 the Partnership has recognized $179,012 of the deferred gain. The balance of the deferred gain will be recognized as payments are received. (See Note 6 of the Notes to Financial Statements). Income from the sale of investment properties and cost of investment properties sold for the year ended December 31, 2000 is the result of the sale of Parcel 11 on November 30, 2000. Income from the sale of investment properties and the cost of investment properties sold for the year ended December 31, 1999 is the result of the sale of Parcel 3 and Parcel 5, additional lot sales of Parcel 2, the sale of 1.033 acres of Parcel 4, the sale of 2.977 acres of Parcel 10, and the sale of 10.643 acres of Parcel 14.

Rental income decreased for the year ended December 31, 2001, as compared to the year ended December 31, 2000, due to the decrease in tillable acres due to land sales and pre-development activity on the Partnership's land investments. This decrease was partially offset by the annual increase in lease amounts from tenants. Rental income increased for the year ended December 31, 2000, as compared to the year ended December 31, 1999, due to an increase in the lease amounts from tenants.

Interest income increased for the year ended December 31, 2001, as compared to the year ended December 31, 2000, due primarily as a result of the interest income earned on short term investments and interest income earned on the mortgage loan receivable the Partnership. Interest income decreased for the year ended December 31, 2000, as compared to the year ended December 31, 1999, due to the timing of the distribution in relation to the receipt of sales proceeds. Sales proceeds for 2000 were received in November 2000 and were distributed in December 2000. In 1999, sales proceeds were received throughout the year but were not distributed until December 1999.

-8-

~~The~~Item ~~other~~6. ~~income~~Selected ~~recorded~~Financial ~~for the years ended December 31, 2001, 2000 and 1999 is the result of the Partnership receiving non-refundable deposits on land sales which did not occur.~~ Data

~~Professional~~INLAND ~~services~~CAPITAL toFUND, ~~non-affiliates~~L.P. (a ~~increased~~limited ~~for~~partnership) For the ~~year~~years ended December 31, ~~2001~~2006, ~~as compared to the year ended December 31~~2005, ~~2000~~2004, ~~due~~2003 toand an2002 (not ~~increase~~covered inby ~~accounting services. Professional services to non-affiliates increased for~~ the ~~year~~Report ~~ended~~of ~~December~~Independent ~~31,~~Registered ~~2000,~~Public asAccounting ~~compared to the year ended December 31, 1999, due to an increase in accounting fees.~~Firm)

General and administrative expenses to Affiliates decreased for the year ended December 31, 2001, as compared to the year ended December 31, 2000, due to decreases in data processing and investor services expenses. General and administrative expenses to non-affiliates increased for the year ended December 31, 2001, as compared to the year ended December 31, 2000, due primarily to an increase in postage expense. General and administrative expenses to non-affiliates increased for the year ended December 31, 2000, as compared to the year ended December 31, 1999, due primarily to an increase in the Illinois Replacement Tax.


		2006	2005	2004	2003	2002

Total assets	$	1,925,692	1,951,152	12,126,007	17,909,721	21,039,772

Total income	$	382,476	19,080,193	38,589,683	8,404,317	8,125,941

Net income	$	72,309	15,354,614	26,702,695	4,791,865	5,522,385

Net income (loss) allocated to the one general partner unit	$	(535)	3,413,794	4,889,586	396,565	375,864

Net income allocated per limited partnership unit	$	2.25	369.26	674.56	135.93	159.15

Distributions per limited partnership unit from sales	$	-	680.58	845.17	227.11	209.68

Weighted average limited partnership units		32,337	32,337	32,337	32,337	32,337

~~Marketing~~The ~~expenses~~above toselected ~~Affiliates~~financial ~~and~~data ~~non-affiliates~~should ~~increased~~be ~~for~~read ~~the year ended December 31, 2001, as compared to the year ended December 31, 2000, due to an increase~~ in ~~marketing,~~conjunction ~~advertising~~with ~~and travel expenses relating to marketing~~ the ~~land~~financial ~~portfolio~~statements ~~to prospective purchasers. Marketing expenses to Affiliates~~ and ~~non-affiliates~~related ~~decreased~~notes ~~for~~appearing ~~the~~elsewhere ~~year ended December 31, 2000, as compared to the year ended December 31, 1999, due to a decrease~~ in ~~non-recurring~~this ~~marketing,~~annual ~~advertising and travel expenses relating to marketing the land portfolio to prospective purchasers, as well as an increase in the capitalization of marketing costs to specific land parcels~~report.

~~Land~~The ~~operating~~net ~~expenses~~income toper ~~Affiliates decreased for the years ended December 31~~unit, ~~2001~~basic and ~~2000~~diluted, as compared to the year ended December 31, 1999, due to a decrease in acres due to land sales. Land operating expenses to non-affiliates increased for the year ended December 31, 2001, as compared to the year ended December 31, 2000, due primarily to an increase in real estate tax expense and andistributions ~~increase~~per inunit ~~grounds~~are ~~maintenance~~based ~~expense.~~upon ~~Land operating expenses to non-affiliates decreased for~~ the ~~year~~weighted ~~ended~~average ~~December~~number ~~31,~~of ~~2000,~~units ~~as compared to the year ended December 31, 1999, due primarily to a decrease in real estate tax expense~~outstanding.

~~Bad~~ All ~~debt~~distributions ~~expense~~from ~~for~~sales ~~the~~represent ~~year~~a ~~ended~~return ~~December~~of ~~31,~~original ~~2001~~capital isuntil ~~the~~such ~~result~~time ofas the ~~Partnership~~limited ~~writing~~partners ~~off~~have ~~the~~received ~~remaining~~distributions ~~principal~~totaling ~~and~~their ~~accrued~~original ~~interest~~capital. ~~receivable~~As ~~from~~of March 2004, the ~~sale~~limited ofpartners ~~Parcel~~had 6received ~~because~~distributions ~~such~~in ~~amounts~~excess ~~were~~of ~~deemed~~their ~~uncollectable.~~original capital

-9-

~~Selected~~Item ~~Quarterly~~7. Management's Discussion and Analysis of Financial ~~Data~~Condition ~~(unaudited)~~and Results of Operations Certain statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this annual report on Form 10-K constitute "forward-looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by these forward-looking statements. These factors include, among other things; adverse changes in real estate, financing and general economic or local conditions; eminent domain proceedings; changes in the environmental conditions or changes in the environmental positions of governmental bodies; and potential conflicts of interest between us and our affiliates, including our general partner.

~~The~~ Critical ~~following~~Accounting ~~represents the results of operations for each quarter during the years ended December 31, 2001 and 2000.~~Policies

		2001
		12/31	09/30	06/30	03/31
Total income	$	422,624	514,504	76,678	1,307,183
Net income		173,172	373,453	(32,903)	215,741
Net income per common share, basic and diluted:		5.36	11.55	(1.02)	6.67
		2000
		12/31	09/30	06/30	03/31
Total income	$	3,603,537	92,036	74,710	82,998
Net income (loss)		2,096,950	38,386	19,824	(16,421)
Net income per common share, basic and diluted:		64.85	1.19	0.61	(0.51)

On December 12, 2001, the Securities and Exchange Commission issued Financial Reporting Release or FRR No. 60 "Cautionary Advice Regarding Disclosure About Critical Accounting Policies." A critical accounting policy is one that would materially affect our operations or financial condition, and requires management to make estimates or judgements in certain circumstances. We believe that our most critical accounting policies relate to how we value our investment properties and mortgage loans receivable and revenue recognition. These judgements often result from the need to make estimates about the effect of matters that are inherently uncertain. The purpose of the FRR is to provide investors with an understanding of how management forms these policies. Critical accounting policies discussed in this section are not to be confused with accounting principles and methods disclosed in accordance with accounting principles generally accepted in the United States of America or GAAP. GAAP requires information in financial statements about accounting principles, methods used and disclosures pertaining to significant estimates. The following disclosure discusses judgements known to management pertaining to trends, events or uncertainties known which were taken into consideration upon the application of those policies and the likelihood that materially different amounts would be reported upon taking into consideration different conditions and assumptions.

~~Inflation~~ Valuation of Investment Properties - On a quarterly basis, in accordance with Statement of Financial Accounting Standards No. 144, we conduct an impairment analysis to ensure that the carrying value of each property does not exceed its estimated fair value. If this were to occur, we would be required to record an impairment loss equal to the excess of carrying value over fair value.

~~Inflation~~ In indetermining ~~future~~the ~~periods~~value ~~may~~of ~~cause~~an ~~capital~~investment ~~appreciation~~property ofand whether the ~~Partnership's~~property ~~investments~~is inimpaired, ~~land. Rental~~management ~~income~~considers ~~levels~~several ~~(from~~factors ~~leases~~such toas ~~new~~projected ~~tenants~~capital orexpenditures ~~renewals~~and ofsales ~~existing~~prices. ~~tenants)~~The ~~are~~aforementioned ~~expected~~factors toare ~~rise~~considered ~~and~~by ~~fall~~management in ~~accordance~~determining ~~with~~the ~~normal~~value ~~agricultural~~of ~~market~~any ~~conditions~~particular ~~and~~property. The ~~may~~value orof ~~may~~any ~~not~~particular beproperty ~~affected~~is bysensitive ~~inflation. To~~to ~~date,~~ the ~~operations~~actual results of any of these uncertain factors, either individually or taken as a whole. Should the ~~Partnership~~actual ~~have~~results ~~not~~differ ~~been~~from ~~significantly~~management's ~~affected~~judgement, bythe ~~inflation~~valuation could be negatively or positively affected.

The valuation and possible subsequent impairment of investment properties is a significant estimate that can and does change based on management's continuous process of analyzing each property. For the year ended December 31, 2006, we had recorded no such impairment.

Cost Allocation - We use the area method of cost allocation, which approximates the relative sales method of cost allocation, whereby a per acre price is used as the standard allocation method for land purchases and sales. The total cost of the parcel is divided by the total number of acres to arrive at a per acre price.

Revenue Recognition - We recognize income from the sale of land parcels in accordance with Statement of Financial Accounting Standards No. 66, "Accounting for Sales of Real Estate".

-10-

Liquidity and Capital Resources

On December 13, 1991, we commenced an offering of 60,000 limited partnership units or units at $1,000 per unit, pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933. The offering terminated on August 23, 1993, after we had sold 32,399.28 units, at $1,000 per unit, resulting in $32,399,282 in gross offering proceeds, not including our general partner's capital contribution of $500. All of the holders of these units have been admitted to our partnership. Our limited partners share in their portion of benefits of ownership of our real property investments according to the number of units held.

We used $25,945,989 of gross offering proceeds to purchase, on an all-cash basis, 18 parcels of land and one building. These investments include the payment of the purchase price, acquisition fees and acquisition costs of such properties. One of the parcels was purchased during 1992, one during 1993, fifteen during 1994 and one during 1995. As of December 31, 2006, we have had multiple sales transactions through which we have disposed of a building and approximately 3,283 acres of the 3,302 acres originally owned. As of December 31, 2006, cumulative distributions to the limited partners have totaled $78,171,193 (which exceeds the original capital) and $9,546,406 to the general partner. Through December 31, 2006, we have used $5,867,262 of working capital for rezoning and other activities and such amount is included in investment properties.

As of December 31, 2006, we own in part one of our original parcels. At December 31, 2006, we had cash and cash equivalents of $910,350, which is available to be used for our costs and liabilities, cash distributions to partners, and other activities with respect to some or all of our land parcels.

In 2006, we sold 3.42 acres of Parcel 2. Undistributed net sales proceeds will be used to cover our operations. We will evaluate our cash needs throughout the year to determine future distributions.

We believe we enhanced the value of our land through pre-development activities such as rezoning, annexation and land planning. Our remaining parcel, Parcel 2, was annexed to the Village of McHenry and zoned for a business park. There are two phases of improvements complete and sites are being marketed to potential buyers. As of December 31, 2006, 17 lots remain to be sold.

Transactions with Related Parties

Our general partner and its affiliates are entitled to reimbursement for salaries and expenses of employees of the general partner and its affiliates relating to our administration. Such costs of $30,244, $43,569 and $49,752 for the years ended December 31, 2006, 2005 and 2004, respectively, are included in professional services and general and administrative expenses to affiliates, of which $3,358 and $7,686 was unpaid as of December 31, 2006 and 2005, respectively.

Our general partner is entitled to receive asset management fees equal to one-quarter of 1% of the original cost of our undeveloped parcels annually, limited to a cumulative total over our life of 2% of the parcels' original cost to us. Such fees of $1,032 and $16,913 have been incurred and paid for the years ended December 31, 2005 and 2004, respectively. As of March 31, 2005, we had met the limitation on this fee.

An affiliate of our general partner performed sales marketing and advertising services for us and was reimbursed for direct costs. Such costs of $8,218, $12,748, and $13,546 have been incurred and are included in marketing expenses to affiliates for the years ended December 31, 2006, 2005, and 2004, respectively.

An affiliate of the general partner performed property upgrades, rezoning, annexation and other activities to prepare our land investments for sale and was reimbursed for salaries and direct costs. For the years ended December 31, 2006 and 2005, we incurred $15,008 and $84,245, respectively, of such costs. The affiliate did not take a profit on any project. Such costs are included in investment properties, of which $3,000 and $21,537 was unpaid at December 31, 2006 and 2005, respectively.

-11-

Results of Operations

As of December 31, 2006, we owned one parcel of land consisting of approximately 19 acres.

Sales of investment properties of $260,805 and cost of investment properties sold of $134,998 for the year ended December 31, 2006 are the result of the sale of three lots of Parcel 2. Sales of investment properties of $18,854,392 and the cost of investment properties sold of $3,429,636 for the year ended December 31, 2005 are the result of sales at Parcels 2, 7, 8, 10 and 17. Sales of investment properties of $37,505,082 and the cost of investment properties sold of $11,427,904 for the year ended December 31, 2004 are the result of sales at Parcels 2, 4,10,14,15 and 16. The sales activity for the years ended December 31, 2005 and 2004 is the result of favorable zoning and a change in our marketing approach to target homebuilders, commercial users and land developers.

Rental income was $0, $13,872, and $83,500 for the years ended December 31, 2006, 2005, and 2004, respectively. These decreases are due to decreases in tillable acres as a result of land sales and pre-development activity on our land investments. In 2006, we did not have a farm lease for the remaining 19 acres owned of Parcel 2.

Interest income was $35,541, $203,180, and $518,118 for the years ended December 31, 2006, 2005, and 2004, respectively. Interest income is primarily a result of the interest income earned on short term investments prior to the distribution of the sales proceeds. The decrease in interest income for 2006 is due to a decrease in cash available for investing due to the decrease in sales. The increase in interest income in 2004 is the result of the interest received on the installment sale of Parcel 1.

Income tax expenses were $43,291, $108,615, and $218,863 for the years ended December 31, 2006, 2005, and 2004, respectively, and is due to state taxes paid and accrued as a result of the land sales.

Marketing expenses to non-affiliates were $2,016, $30,103, and $58,302 for the years ended December 31, 2006, 2005, and 2004. In 2004, we fully implemented the change in our marketing approach to target homebuilders, industrial users and land developers through direct mailings, newspaper and trade publication advertising and an enhanced website. In 2005 and 2006, marketing expenses decreased as we took advantage of our established marketing plans.

Land operating expenses to affiliates were $0, $1,032 and $16,913 for the years ended December 31, 2006, 2005 and 2004, respectively and relate to asset management fees paid. Our general partner is entitled to receive asset management fees equal to one-quarter of 1% of the original cost of our undeveloped parcels annually, limited to a cumulative total over our life of 2% of the parcels' original cost to us. These amounts decrease as acres are sold. As of March 31, 2005, we had met the limit on this fee.

Land operating expenses to non-affiliates were $23,475, $23,667, and $30,481 for the years ended December 31, 2006, 2005, and 2004, respectively. These costs primarily include real estate tax expense and ground maintenance expense and insurance expense on the parcels owned. These amounts decrease as acres are sold.

-12-

Our Partnership Agreement

Our partnership agreement defines the allocation of profits and losses, and available cash. If and to the extent that real estate taxes and insurance payable with respect to our land during a given year exceed our revenues, our general partner will make a supplemental capital contribution of such amount to us to ensure that we have sufficient funds to make such payments.

Distributions of net sale proceeds will be allocated between the general partner and the limited partners based upon both an aggregate overall return to the limited partners and a separate return with respect to each parcel of land we purchased.

Profits and losses from operations (other than capital transactions) will be allocated 99% to the limited partners and 1% to the general partner. The net gain from a sale of our properties is first allocated among the partners in proportion to the negative balances, if any, in their respective capital accounts. Thereafter, except as provided below, net gain is allocated to the general partner in an amount equal to the proceeds distributable to the general partner from such sale and the balance of any net gain is allocated to the limited partners. If the amount of net gain realized from a sale is less than the amount of cash distributed to the general partner from such sale, we will allocate income or gain to the general partner in an amount equal to the excess of the cash distributed to the general partner with respect to such sale as quickly as permitted by law. Any net loss from a sale will be allocated to the limited partners.

As a general rule, net sale proceeds will be distributed 90% to the limited partners and 10% to the general partner until the limited partners have received from net sale proceeds (i) a return of their original capital plus (ii) a noncompounded cumulative preferred return of 15% on their invested capital. However, with respect to each parcel of land, the general partner's 10% share was subordinated until the limited partners receive a return of the original capital attributed to such parcel ("parcel capital") plus a 6% per annum noncompounded cumulative preferred return thereon.

After the amounts described in items (i) and (ii) above and any previously subordinated distributions to the general partner have been paid, and the amount of any supplemental capital contributions have been repaid to the general partner, subsequent distributions shall be paid 75% to the limited partners and 25% to the general partner without considering parcel capital. If, after all net sale proceeds have been distributed, the general partner has received more than 25% of all net sale proceeds (exclusive of distributions made to the limited partners to return their original capital), the general partner shall contribute to us for distribution to the limited partners an amount equal to such excess.

Any distributions from net sales proceeds at a time when invested capital is greater than zero shall be deemed applied first to reduction of such invested capital before application to payment of any deficiency in the 15% noncompounded cumulative preferred return.

Off-Balance Sheet Arrangements, Contractual Obligations, Liabilities and Contracts and Commitments

None

Item 7(a). Quantitative and Qualitative Disclosures About Market Risk

Not Applicable.

-1013-

Item 8. Financial Statements and Supplementary Data

INLAND CAPITAL FUND, L.P.
(a limited partnership)

Index

		Page
Independent Auditors' Reports		12
Report of Independent Registered Public Accounting Firm		15
Financial Statements:
Balance Sheets, December 31, 2001 and 2000	13
	Balance Sheets, December 31, 2006 and 2005	16
Statements of Operations, for the years ended December 31, 2001, 2000 and 1999	15
	Statements of Operations, for the years ended December 31, 2006, 2005, and 2004	18
Statements of Partners' Capital, for the years ended December 31, 2001, 2000 and 1999	17
	Statements of Partners' Capital, for the years ended December 31, 2006, 2005, and 2004	20
Statements of Cash Flows, for the years ended December 31, 2001, 2000 and 1999	18
	Statements of Cash Flows, for the years ended December 31, 2006, 2005, and 2004	21
~~Notes to Financial Statements~~	20Notes to Financial Statements	22

Schedules not filed:

All schedules have been omitted as the required information is inapplicable or the information is presented in the financial statements or related notes.

-11-

INDEPENDENT AUDITORS' REPORT

To the Partners of InLand Capital Fund, L.P.

We have audited the accompanying balance sheets of InLand Capital Fund, L.P. (a limited partnership) (the "Partnership") as of December 31, 2001 and 2000, and the related statements of operations, partners' capital, and cash flows for each of the three years in the period ended December 31, 2001. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.

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

In our opinion, such financial statements present fairly, in all material respects, the financial position of InLand Capital Fund, L.P. as of December 31, 2001 and 2000, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States of America.

February 5, 2002 (March 15, 2002 as to Note 7) Chicago, Illinois

-12-

INLAND CAPITAL FUND, L.P. (a limited partnership) Balance Sheets December 31, 2001 and 2000 Assets

		2001	2000
Current assets:
Cash and cash equivalents	$	552,394	734,794
Accrued interest and other receivables		41,645	120,236
Other current assets		5,405	2,029
Total current assets		599,444	857,059
Other assets		3,074	3,074
Mortgage loan receivable (Note 6)		525,000	400,000
Investment properties and improvements (including acquisition fees paid to Affiliates of $938,804 and $1,002,170 at December 31, 2001 and 2000, respectively) (Notes 3 and 4)		20,990,019	21,421,417
Total assets	$	22,117,537	22,681,550

See accompanying notes to financial statements.

-13-

INLAND CAPITAL FUND, L.P. (a limited partnership) Balance Sheets (continued) December 31, 2001 and 2000 Liabilities and Partners' Capital

		2001	2000
Current liabilities:
Accounts payable	$	14,260	338
Accrued real estate taxes		50,346	53,932
Due to Affiliates (Note 3)		5,324	14,687
Unearned income		5,839	66,000
Total current liabilities		75,769	134,957
Deferred gain on sale (Note 6)		268,517	2,805
Partners' capital:
General Partner:
Capital contribution		500	500
Cumulative cash distributions		(470,240)	(470,240)
Cumulative net income		482,958	486,176
		13,218	16,436
Limited Partners:
Units of $1,000. Authorized 60,000 Units, 32,337 and 32,337 outstanding at December 31, 2001 and 2000, respectively (net of offering costs of $4,466,765, of which $3,488,574 was paid to Affiliates)		27,876,265	27,876,265
Cumulative cash distributions		(14,708,504)	(13,208,504)
Cumulative net income		8,592,272	7,859,591
		21,760,033	22,527,352
Total Partners' capital		21,773,251	22,543,788
Total liabilities and Partners' capital	$	22,117,537	22,681,550
		==========	==========

See accompanying notes to financial statements.

-14-

~~INLAND~~Report ~~CAPITAL FUND, L.P. (a limited partnership) Statements~~ of ~~Operations For~~Independent ~~the~~Registered ~~years~~Public ~~ended~~Accounting ~~December 31, 2001, 2000 and 1999~~ Firm

		2001	2000	1999
Income:
Sale of investment properties	$	1,751,704	3,516,946	4,848,387
Recognition of deferred gain on sale of investments in land and improvements		181,817	-	-
Rental income		226,318	245,828	237,072
Interest income		95,075	69,707	139,586
Other income		66,075	20,800	39,000
		2,320,989	3,853,281	5,264,045
Expenses:
Cost of investment properties sold		882,285	1,446,017	2,602,552
Professional services to Affiliates		32,325	32,976	31,333
Professional services to non-affiliates		30,726	27,718	24,139
General and administrative expenses to Affiliates		15,479	21,283	19,402
General and administrative expenses to non- affiliates		30,289	28,433	21,391
Marketing expenses to Affiliates		26,674	12,342	(2,259)
Marketing expenses to non-affiliates		43,294	16,950	34,345
Land operating expenses to Affiliates		45,473	50,123	50,421
Land operating expenses to non-affiliates		112,714	78,700	83,017
Bad debt expense		372,267	-	-
		1,591,526	1,714,542	2,864,341
Net income	$	729,463	2,138,739	2,399,704
		==========	==========	=========

To the Partners of

~~See~~InLand ~~accompanying~~Capital ~~notes~~Fund, ~~to financial statements~~L.P.

We have audited the accompanying balance sheets of InLand Capital Fund, L.P. (a limited partnership) (“the Partnership”) as of December 31, 2006 and 2005, and the related statements of operations, partners’ capital, and cash flows for the years then ended. The financial statements are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of InLand Capital Fund, L.P. as of December 31, 2006 and 2005, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Grant Thornton LLP

Chicago, Illinois

March 22, 2007

-15-

INLAND CAPITAL FUND, L.P. (a limited partnership) ~~Statements~~Balance ~~of Operations~~Sheets ~~(continued)~~ ~~For the years ended~~ December 31, ~~2001,~~2006 ~~2000~~ and ~~1999~~2005

		2001	2000	1999
Net income (loss) allocated to (Note 2):
General Partner	$	(3,218)	211,500	260,957
Limited Partners		732,681	1,927,239	2,138,747
Net income	$	729,463	2,138,739	2,399,704
		=========	==========	=========
Net income (loss) per the one General
Partner Unit	$	(3,218)	211,500	260,957
		=========	=========	=========
Net income per Unit, basic and diluted, allocated to Limited Partners per weighted average Limited Partnership Units (32,337, 32,341, and 32,351 for the years ended December 31, 2001, 2000, and 1999, respectively)	$	22.66	59.59	66.11
		=========	=========	=========

Assets


		2006	2005
Current assets:
Cash and cash equivalents (Note 1)	$	910,350	829,410
Accrued interest and other receivables		917	9,079
Other current assets		3,726	4,299

Total current assets		914,993	842,788

Other assets		233,074	233,074
Investment properties and improvements (including acquisition fees paid to Affiliates of $9,918 and $11,668 at December 31, 2006 and 2005 respectively) (Notes 3 and 4)		777,625	875,290

Total assets	$	1,925,692	1,951,152

See accompanying notes to financial statements.

-16-

INLAND CAPITAL FUND, L.P. (a limited partnership) ~~Statements~~Balance ~~of Partners' Capital~~Sheets (continued) ~~For the years ended~~ December 31, ~~2001,~~2006 ~~2000~~ and ~~1999~~2005 Liabilities and Partners' Capital

		General	Limited
		2006	2005
		Partner	Partners	Total
Current liabilities:
Balance at January 1, 1999	$	14,219	25,815,535	25,829,754
Accounts payable	$	239,444	314,452
Repurchase of Limited Partnership Units		-	(2,205)	(2,205)
Accrued real estate taxes		1,626	1,522
Distributions to Partners ($145.50 per weighted average Limited Partnership Units of 32,351) (Note 2)		(259,418)	(4,707,085)	(4,966,503)
Due to Affiliates (Note 3)		6,358	29,223
Net income		260,957	2,138,747	2,399,704
Total current liabilities		247,428	345,197
Balance December 31, 1999		15,758	23,244,992	23,260,750
Partners' capital:
Repurchase of Limited Partnership Units		-	(8,081)	(8,081)
General Partner:
Distributions to Partners ($81.53 per weighted average Limited Partnership Units of 32,341) (Note 2)		(210,822)	(2,636,798)	(2,847,620)
Capital contribution		500	500
Net income		211,500	1,927,239	2,138,739
Cumulative cash distributions		(9,546,406)	(9,546,406)
Balance at December 31, 2000		16,436	22,527,352	22,543,788
Cumulative net income		9,558,012	9,558,547
Distributions to Partners ($46.39 per weighted average Limited Partnership Units of 32,337) (Note 2)		-	(1,500,000)	(1,500,000)
		12,106	12,641
Net income (loss)		(3,218)	732,681	729,463
Limited Partners:
Balance December 31, 2001	$	13,218	21,760,033	21,773,251
Units of $1,000. Authorized 60,000 Units, 32,337 outstanding at December 31, 2006 and 2005, (net of offering costs of $4,466,765, of which $3,488,574 was paid to Affiliates)		27,876,265	27,876,265
		=========	=========	==========
Cumulative cash distributions		(78,171,193)	(78,171,193)
Cumulative net income		51,961,086	51,888,242
		1,666,158	1,593,314
Total Partners' capital		1,678,264	1,605,955
Total liabilities and Partners' capital	$	1,925,692	1,951,152

See accompanying notes to financial statements.

-17-

INLAND CAPITAL FUND, L.P. (a limited partnership) Statements of ~~Cash Flows~~Operations For the years ended December 31, ~~2001~~2006, ~~2000~~2005, and ~~1999~~ 2004

		2001	2000	1999
		2006	2005	2004
Cash flows from operating activities:
Income:
Net income	$	729,463	2,138,739	2,399,704
Sale of investment properties and improvements	$	260,805	18,854,392	37,505,082
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Recognition of deferred gain on sale of investment properties and improvements		-	-	477,783
Gain on sale of investment properties		(869,419)	(2,070,929)	(2,245,835)
Rental income		-	13,872	83,500
Recognition of deferred gain		(181,817)	-	-
Interest income		35,541	203,180	518,118
Bad debt expense		372,267	-	-
Other income		86,130	8,749	5,200
Changes in assets and liabilities:
		382,476	19,080,193	38,589,683
Accrued interest and other receivables		(38,153)	(38,117)	(37,318)
Expenses:
Other current assets		(3,376)	(192)	(43,911)
Cost of investment properties sold		134,998	3,429,636	11,427,904
Accounts payable		13,922	(75,028)	57,242
Professional services to Affiliates		14,673	21,790	30,387
Accrued real estate taxes		(3,586)	738	(27,795)
Professional services to non-affiliates		45,043	45,944	41,262
Due to Affiliates		(9,363)	(13,011)	7,902
General and administrative expenses to Affiliates		15,571	21,779	19,365
Unearned income		(60,161)	(8,537)	59,525
General and administrative expenses to non- affiliates		22,882	30,265	17,204
Net cash provided by (used in) operating activities		(50,223)	(66,337)	169,514
Income tax expense		43,291	108,615	218,863
Cash flows from investing activities:
Marketing expenses to Affiliates		8,218	12,748	13,546
Additions to investment properties		(878,358)	(192,616)	(330,834)
Marketing expenses to non-affiliates		2,016	30,103	58,302
Other assets		-	44,480	-
Land operating expenses to Affiliates		-	1,032	16,913
Principal payments collected on mortgage loans receivable		494,477	-	-
Land operating expenses to non-affiliates		23,475	23,667	30,481
Proceeds from sale of investment properties		1,751,704	3,516,946	4,848,387
Bad debt expense		-	-	12,761
Net cash provided by investing activities		1,367,823	3,368,810	4,517,553
		310,167	3,725,579	11,886,988
Net income	$	72,309	15,354,614	26,702,695

Cash flows from financing activities:
Repurchase of Limited Partnership Units		-	(8,081)	(2,205)
Distributions paid		(1,500,000)	(2,847,620)	(4,966,503)
Net cash used in financing activities		(1,500,000)	(2,855,701)	(4,968,708)
Net increase (decrease) in cash and cash equivalents		(182,400)	446,772	(281,641)
Cash and cash equivalents at beginning of year		734,794	288,022	569,663
Cash and cash equivalents at end of year	$	552,394	734,794	288,022
		=========	=========	=========

See accompanying notes to financial statements.

-18-

INLAND CAPITAL FUND, L.P. (a limited partnership) Statements of ~~Cash Flows~~Operations (continued) For the years ended December 31, ~~2001~~2006, ~~2000~~2005, and ~~1999~~ 2004

		2001	2000	1999
		2006	2005	2004
Supplemental schedule of noncash investing activities:
Net income (loss) allocated to (Note 2):
Reduction of investment properties	$	882,285	1,446,017	2,602,552
General Partner	$	(535)	3,413,794	4,889,586
Gain on sale of land		869,419	2,070,929	2,245,835
Limited Partners		72,844	11,940,820	21,813,109
Proceeds from sale of investment properties	$	1,751,704	3,516,946	4,848,387
Net income	$	72,309	15,354,614	26,702,695
		=========	=========	=========
Net income (loss) per the one General
Partner Unit	$	(535)	3,413,794	4,889,586
Net income per Unit, basic and diluted, allocated to Limited Partners per weighted average Limited Partnership Units (32,337 for the years ended December 31, 2006, 2005, and 2004)	$	2.25	369.26	674.56

See accompanying notes to financial statements.

-19-

INLAND CAPITAL FUND, L.P. (a limited partnership) ~~Notes~~Statements toof ~~Financial~~Partners' ~~Statements~~Capital For the years ended December 31, ~~2001~~2006, ~~2000~~2005, and ~~1999~~ 2004


		General	Limited
		Partner	Partners	Total

Balance at January 1, 2004	$	11,865	17,177,588	17,189,453

Distributions to Partners ($845.17 per weighted average Limited Partnership Units of 32,337) (Note 2)		(4,888,109)	(27,330,331)	(32,218,440)
Net income		4,889,586	21,813,109	26,702,695

Balance at December 31, 2004		13,342	11,660,366	11,673,708

Distributions to Partners ($680.58 per weighted average Limited Partnership Units of 32,337) (Note 2)		(3,414,495)	(22,007,872)	(25,422,367)
Net income		3,413,794	11,940,820	15,354,614

Balance at December 31, 2005	$	12,641	1,593,314	1,605,955

Net income (loss)		(535)	72,844	72,309

Balance at December 31, 2006	$	12,106	1,666,158	1,678,264

See accompanying notes to financial statements.

-20-

INLAND CAPITAL FUND, L.P.
(a limited partnership)

Statements of Cash Flows

For the years ended December 31, 2006, 2005, and 2004


		2006	2005	2004
Cash flows from operating activities:
Net income	$	72,309	15,354,614	26,702,695
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Gain on sale of investment properties		(125,807)	(15,424,756)	(26,077,178)
Recognition of deferred gain		-	-	(477,783)
Bad debt expense		-	-	12,761
Changes in assets and liabilities:
Accrued interest and other receivables		8,162	1,163	174,172
Other current assets		573	3,643	(1,523)
Accounts payable		(75,008)	(105,231)	415,806
Accrued real estate taxes		104	(9,721)	(38,743)
Due to Affiliates		(22,865)	12,846	(7,436)
Unearned income		-	(4,996)	(146,439)
Other assets		-	(11,808)	(218,192)

Net cash provided by (used in) operating activities		(142,532)	(184,246)	338,140

Cash flows from investing activities:
Additions to investment properties		(37,333)	(97,457)	(194,552)
Principal payments collected on mortgage loans receivable		-	-	846,737
Proceeds from sale of investment properties		260,805	18,854,392	37,505,082

Net cash provided by investing activities		223,472	18,756,935	38,157,267

Cash flows from financing activities:
Distributions paid		-	(25,422,367)	(32,218,440)

Net cash used in financing activities		-	(25,422,367)	(32,218,440)

Net increase (decrease) in cash and cash equivalents		80,940	(6,849,678)	6,276,967
Cash and cash equivalents at beginning of year		829,410	7,679,088	1,402,121
Cash and cash equivalents at end of year	$	910,350	829,410	7,679,088

See accompanying notes to financial statements.

-21-

INLAND CAPITAL FUND, L.P.
(a limited partnership)

Notes to Financial Statements

For the years ended December 31, 2006, 2005, and 2004

(1) Organization and Basis of Accounting

InLand Capital Fund, L.P. (the "Partnership") was organized on June 21, 1991 by the filing of a Certificate of Limited Partnership under the Revised Uniform Limited Partnership Act of the State of Delaware. On December 13, 1991, the Partnership commenced an Offering of 60,000 Limited Partnership Units pursuant to a Registration under the Securities Act of 1933. The Amended and Restated Agreement of Limited Partnership (the "Partnership Agreement") provides for Inland Real Estate Investment Corporation to be the General Partner. The Offering terminated on August 23, 1993, with total sales of 32,399.28 Units, at $1,000 per Unit, resulting in $32,399,282 in gross offering proceeds, not including the General Partner's capital contribution of $500. All of the holders of these Units have been admitted to the Partnership. The Limited Partners of the Partnership ~~will~~ share in their portion of benefits of ownership of the Partnership's real property investments according to the number of Units held. As of December 31, ~~2001~~2006, the Partnership ~~has~~had repurchased and canceled a total of 62 Units for $56,253 from various Limited Partners through the ~~Units~~Unit Repurchase Program. Under this program, Limited Partners ~~may~~could under certain circumstances have their Units repurchased for an amount equal to their Invested Capital.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") 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 periods. Actual results could differ from those estimates. Certain reclassifications were made to the 2005 financial statements to conform to the 2006 presentation.

Offering costs have been offset against the Limited Partners' capital accounts.

The Partnership considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

~~For~~ The ~~vacant land parcels and parcels with insignificant buildings and improvements, the~~ Partnership ~~uses~~recognizes ~~the~~income ~~area~~from ~~method of allocation, which approximates~~ the ~~relative~~sale ~~sales method~~ of ~~allocation, whereby a per acre price is used as the standard allocation method for~~ land ~~purchases~~parcels ~~and~~in ~~sales.~~accordance ~~The~~with ~~total~~Statement ~~cost~~ of ~~the~~Financial ~~parcel~~Accounting isStandards ~~divided by the total number of acres to arrive at a per acre price~~No. ~~For parcels with significant buildings and improvements (Parcel 10~~66, ~~described~~"Accounting infor ~~Note~~Sales ~~4), the Partnership recorded the buildings and improvements at a cost based upon the appraised value at the date~~ of ~~acquisition. Repair~~Real ~~and maintenance expenses are charged to operations as incurred~~Estate". ~~Significant improvements are capitalized and depreciated over their estimated useful lives.~~

~~Statement~~ For ofvacant ~~Financial~~land ~~Accounting~~parcels ~~Standards~~and ~~No. 121 "Accounting~~parcels ~~for~~with ~~the~~insignificant ~~Impairment~~buildings ~~of Long-Lived Assets~~ and ~~for~~improvements, ~~Long-Lived~~the ~~Assets~~Partnership touses bethe ~~Disposed~~area method of" ~~("SFAS~~allocation, ~~121")~~which ~~requires~~approximates the ~~Partnership~~relative tosales ~~record~~method anof ~~impairment~~allocation, ~~loss~~whereby ona ~~its~~per ~~property~~acre toprice beis ~~held~~used ~~for~~as ~~investment~~the ~~whenever~~standard ~~its~~allocation ~~carrying~~method ~~value~~for ~~cannot~~land bepurchases ~~fully~~and ~~recovered~~sales. ~~through~~The ~~estimated~~total ~~undiscounted~~cost ~~future~~of ~~cash~~the ~~flows~~parcel ~~from~~is ~~their~~divided ~~operations~~by ~~and~~the ~~sale. The~~total ~~amount~~number of ~~the~~acres ~~impairment loss~~ to bearrive ~~recognized~~at ~~would~~a beper ~~the~~acre ~~difference~~price. ~~between~~For ~~the~~parcels ~~property's~~with ~~carrying~~significant ~~value~~buildings and ~~the~~improvements ~~properties~~(Parcel ~~estimated~~10, ~~fair~~described ~~value. The~~in ~~adoption~~Note of4), ~~SFAS~~the ~~121~~Partnership ~~did~~recorded ~~not have any effect on~~ the ~~Partnership's~~buildings ~~financial~~and ~~position,~~improvements ~~results~~at ofa ~~operations~~cost orbased ~~liquidity. For~~upon the ~~years~~appraised ~~ended~~value ~~December~~at ~~31,~~the ~~2001,~~date ~~2000~~of acquisition. Repair and ~~1999,~~maintenance ~~the~~expenses ~~Partnership~~are ~~has~~charged ~~not~~to ~~recognized~~operations ~~any~~as ~~such impairment~~incurred.

-2022-

INLAND CAPITAL FUND, L.P.
(a limited partnership)

Notes to Financial Statements
(continued)

A presentation of information about operating segments as required in ~~Statement~~SFAS ~~of Financial Accounting Standards~~ No. 131 "Disclosures About Segments of an Enterprise and Related Information" would not be material to an understanding of the Partnership's business taken as a whole as the Partnership is engaged in the business of real estate investment which management considers to be a single operating segment.

Effective January 1, 2001, the Partnership adopted the provisions of SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities", as amended by SFAS Nos. 137 and 138. This statement standardizes the accounting for derivative instruments by requiring that an entity recognize those items as assets or liabilities in the statement of financial position and measure them at fair value. It also provides for matching the timing of gain or loss recognition on the hedging instrument with the recognition of (a) the changes in fair value of the hedged asset or liability attributable to the hedged risk or (b) the earnings effect of the hedged forecasted transaction. The net impact of the adoption of SFAS No. 133 had no effect on the Partnership's financial statements.

In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, (SFAS No. 144"). SFAS 144 addresses accounting and reporting for the impairment or disposal of long-lived assets. This statement supersedes FASB Statement No. 121, Accounting for the Impairment of Long-Lived Assets to be Disposed Of. The provisions of this statement are effective for the Partnership beginning January 1, 2002. In the opinion of management, this statement, when adopted, is not expected to have a material impact on the financial position or results of operations of the Partnership.

No provision for Federal income taxes has been made as the liability for such taxes is that of the Partners rather than the Partnership.

The Partnership records are maintained on the accrual basis of accounting in accordance with ~~generally accepted accounting principles ("~~GAAP"). The Federal income tax return has been prepared from such records after making appropriate adjustments, if any, to reflect the Partnership's accounts as adjusted for Federal income tax reporting purposes. Such adjustments are not recorded on the records of the Partnership. The net effect of these items is summarized as follows:

2001	2000
	2006			2005
		GAAP	~~GAAP~~Tax Basis	~~Tax Basis~~GAAP	~~GAAP~~Tax Basis	~~Tax Basis~~
		Basis	~~Basis~~(unaudited)	~~(unaudited)~~Basis	~~Basis~~(unaudited)	~~(unaudited)~~
Total assets	$	$1,925,692	226,~~117~~162,~~537~~458	221,~~117~~951,~~537~~152	226,~~681~~184,~~550~~700	~~22,681,550~~
Partners' capital:
General Partner		12,106	1314,~~218~~189	1512,~~779~~641	1614,~~436~~722	~~16,436~~
Limited Partners		1,666,158	211,~~760~~664,~~033~~302	211,~~757~~593,~~542~~314	221,~~527~~591,~~352~~461	~~22,527,422~~
Net income (loss):
Net income:
General Partner		(535)	(~~3,218~~533)	~~154~~3,413,794	~~211~~3,~~500~~413,762	~~211,500~~
Limited Partners		72,844	~~732~~72,~~681~~841	111,~~051~~940,~~716~~820	111,~~927~~922,~~239~~603	~~1,927,239~~
Net income per Limited Partnership Unit, basic and diluted		2.25	222.6625	32369.5226	59368.5970	~~59.59~~

The net income per ~~Limited Partnership~~ Unit is based upon the weighted average number of Units of 32,337 ~~and 32,341~~ during ~~2001~~2006 and ~~2000, respectively~~2005.

-21-

INLAND CAPITAL FUND, L.P. (a limited partnership) Notes to Financial Statements (continued)

The Partnership is required to pay a withholding tax to the Internal Revenue Service with respect to a Partner's allocable share of the Partnership's taxable net income, if the Partner is a foreign person. The Partnership will first pay the withholding tax from the distributions to any foreign person, and to the extent that the tax exceeds the amount of distributions withheld, or if there have been no distributions to withhold, the excess will be accounted for as a distribution to the foreign person. Future withholding tax payments will be made every April, June, September and December.

-23-

INLAND CAPITAL FUND, L.P.
(a limited partnership)

Notes to Financial Statements
(continued)

New Accounting Pronouncements

In April 2006, the FASB issued FASB Staff Position ("FSP") 46R-6: Determining the Variability to Be Considered in Applying FASB Interpretation No. 46(R). This FSP addresses certain implementation issues related to FIN 46(R). Specifically, FSP FIN 46R-6 addresses how a reporting enterprise would determine the variability to be considered in applying FIN 46(R). The variability that is considered in applying FIN 46(R) affects the determination of (a) whether an entity is a variable interest entity (VIE), (b) which interests are "variable interests" in the entity, and (c) which party, if any, is the primary beneficiary of the VIE. That variability affects any calculation of expected losses and expected residual returns, if such a calculation is necessary. The Partnership does not believe that this will have a material impact on its financial statements.

In June 2006, the FASB ratified the EITF's consensus on Issue No. 06-3: How Taxes Collected from Customers and Remitted to Governmental Authorities should be Presented in the Income Statement (That is, Gross versus Net Presentation). Specifically, EITF No. 06-3 addresses any tax assessed by a governmental authority that is directly imposed on a revenue-producing transaction between a seller and a customer and may include, but is not limited to, sales, use, value added, and some excise taxes. An accounting policy decision determines if the presentation should be on a gross or a net basis in the income statement. The Partnership does not believe that this will have a material impact on its financial statements.

Also in June 2006, the FASB issued Interpretation No. 48: Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109. This Interpretation defines a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This Interpretation also provides guidance on derecognizing, classification, interest and penalties, accounting in interim periods, disclosure and transition. This Interpretation is effective for fiscal years beginning after December 15, 2006. The Partnership is currently evaluating and has not yet completed our evaluation on whether the adoption of Interpretation No. 48 will have a material effect on our financial statements.

In September 2006, the SEC's staff issued SAB No. 108: Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements. This Bulletin provides guidance on the consideration of the effects of prior year misstatements in quantifying current year misstatements for the purpose of a materiality assessment. The guidance in this Bulletin must be applied to financial reports covering the first fiscal year ending after November 15, 2006. The Partnership determined that the adoption of SAB 108 did not have a material impact on its financial statements.

-24-

INLAND CAPITAL FUND, L.P.
(a limited partnership)

Notes to Financial Statements
(continued)

(2) Partnership Agreement

The Partnership Agreement defines the allocation of profits and losses, and available cash. If and to the extent that real estate taxes and insurance payable with respect to the Partnership's land during a given year exceed revenues of the Partnership, the General Partner will make a Supplemental Capital Contribution of such amount to the Partnership to ensure that it has sufficient funds to make such payments.

Distributions of Net Sale Proceeds will be allocated between the General Partner and the Limited Partners based upon both an aggregate overall return to the Limited Partners and a separate return with respect to each parcel of land purchased by the Partnership.

Profits and losses from operations (other than capital transactions) will be allocated 99% to the Limited Partners and 1% to the General Partner. The net gain from a sale of Partnership properties is first allocated among the Partners in proportion to the negative balances, if any, in their respective capital accounts. Thereafter, except as provided below, net gain is allocated to the General Partner in an amount equal to the proceeds distributable to the General Partner from such sale and the balance of any net gain is allocated to the Limited Partners. If the amount of net gain realized from a sale is less than the amount of cash distributed to the General Partner from such sale, the Partnership will allocate income or gain to the General Partner in an amount equal to the excess of the cash distributed to the General Partner with respect to such sale as quickly as permitted by law. Any net loss from a sale will be allocated to the Limited Partners.

As a general rule, Net Sale Proceeds will be distributed 90% to the Limited Partners and 10% to the General Partner until the Limited Partners have received from Net Sale Proceeds (i) a return of their Original Capital plus (ii) a noncompounded Cumulative Preferred Return of 15% on their Invested Capital. However, with respect to each parcel of land, the General Partner's 10% share will be subordinated until the Limited Partners receive a return of the Original Capital attributed to such parcel ("Parcel Capital") plus a 6% per annum noncompounded cumulative preferred return thereon.

At the conclusion of Partnership operations, after all Parcels have been sold, if Limited Partners have not received the return of their Original Capital, plus a 6% annual, noncompounded return on their Invested Capital, the General Partner has agreed to rebate to the Partnership, for distribution to the Limited Partners, sales proceeds received by the General Partner in an amount equal to the deficiency in the Limited Partners' return, plus 6% noncompounded annual interest. The amount of this rebate by the General Partner, exclusive of the 6% noncompounded annual interest to be paid on the rebate, will not exceed the amount of sales proceeds received by the General Partner over the life of the Partnership.

-22-

INLAND CAPITAL FUND, L.P. (a limited partnership) Notes to Financial Statements (continued)

After the amounts described in items (i) and (ii) above and any previously subordinated distributions to the General Partner have been paid, and the amount of any Supplemental Capital Contributions have been repaid to the General Partner, subsequent distributions shall be paid 75% to the Limited Partners and 25% to the General Partner without considering Parcel Capital. If, after all Net Sale Proceeds have been distributed, the General Partner has received more than 25% of all Net Sale Proceeds (exclusive of distributions made to the Limited Partners to return their Original Capital), the General Partner shall contribute to the Partnership for distribution to the Limited Partners an amount equal to such excess.

Any distributions from Net Sales Proceeds at a time when Invested Capital is greater than zero shall be deemed applied first to reduction of such Invested Capital before application to payment of any deficiency in the 15% noncompounded Cumulative Preferred Return.

-25-

INLAND CAPITAL FUND, L.P.
(a limited partnership)

Notes to Financial Statements
(continued)

(3) Transactions with Affiliates

The General Partner and its Affiliates are entitled to reimbursement for salaries and expenses of employees of the General Partner and its Affiliates relating to the administration of the Partnership. Such costs are included in professional services and general and administrative expenses to Affiliates, of which $53,~~324~~358 and $57,~~893~~686 was unpaid as of December 31, ~~2001~~2006 and ~~2000~~2005, respectively.

The General Partner is entitled to receive Asset Management Fees equal to one-quarter of 1% of the original cost to the Partnership of undeveloped land annually, limited to a cumulative total over the life of the Partnership of 2% of the land's original cost to the Partnership. Such fees of $451,~~473,~~032 ~~$50,123,~~ and $5016,~~421~~913 have been incurred and paid for the years ended December 31, ~~2001,~~2005 ~~2000~~and 2004, respectively and ~~1999~~are reported as land operating expenses to Affiliates on the statement of operations. As of March 31, ~~respectively~~2005, ~~all~~we ofhad ~~which~~met ~~was~~the ~~paid~~limit on this fee.

An Affiliate of the General Partner performed sales marketing and advertising services for the Partnership and was reimbursed (as set forth under terms of the Partnership Agreement) for direct costs. Such costs of $268,~~674~~218, $12,~~342~~748, and $(213,~~259)~~546 have been incurred and are included in marketing expenses to ~~Affiliates~~affiliates for the years ended December 31, ~~2001~~2006, ~~2000~~2005, and ~~1999~~2004, respectively~~, all of which was paid~~.

An Affiliate of the General Partner performed property upgrades, rezoning, annexation and other activities to prepare the Partnership's land investments for sale and was reimbursed (as set forth under terms of the Partnership Agreement) for salaries and direct costs. For the years ended December 31, 2006 and 2005, the Partnership incurred $15,008, and $84,245, respectively, of such costs. The Affiliate did not take a profit on any project. Such costs are included in investment properties of which $3,000 and $21,537 was unpaid at December 31, 2006 and 2005, respectively.

-2326-

INLAND CAPITAL FUND, L.P.
(a limited partnership)

Notes to Financial Statements
(continued)

(4) Investment Properties

~~Initial Costs~~				Initial Costs
Parcel	Illinois	Gross Acres Purchased	Purchase/Sales	Original	Acquisition	Total	Costs Capitalized Subsequent to	~~Cumulative~~ Costs of Property ~~Sold~~	Total Remaining Costs of Parcels at	Current Year Gain On Sale
#	County	/(Sold)	Date	Costs	Costs	Costs	Acquisition	Sold	at 12/31/0106	Recognized
1	Kendall	108.8960	07/22/92	$ 707,566	57,926	765,492	~~169~~186,~~613~~333	-951,825	~~935,105~~-	-
2	McHenry	201.0000	11/09/93	2,020,314	122,145	2,142,459	2,238,712	1,137,665	3,243,506	146,729
		(108.8960)	01/11/02
		(7.7420)	08/02/95
2	McHenry	201.0000	11/09/93	2,020,314	122,145	2,142,459	2,687,885	4,052,719	777,625	125,807
		(17.7420)	08/02/95
		(8.6806)	Var 1997
		(1.9290)	Var 1998
		(13.5030)	Var 1999
		(3.6400)	11/29/01
		(10.1600)	Var 2002
		(2.0320)	06/07/04
		(114.8134)	08/12/04
		(5.7000)	Var 2005
		(3.4200)	06/11/2006
3	Will	34.0474	03/04/94	1,235,830	88,092	1,323,922	37,857	1,361,779	-	-
		(34.0474)	02/04/99
4	Will	86.9195	03/30/94	1,778,820	143,817	1,922,637	~~457~~416,~~750~~096	~~948~~2,~~389~~338,733	~~1,431,998~~-	~~722,690~~-
		(2.3050)	Var 1997
		(3.3600)	Var 1998
		(1.0331)	08/19/99
		(60.1000)	Var 2001
		(20.1214)	11/01/04
5	LaSalle	190.9600	04/01/94	532,000	18,145	550,145	69,391	619,536	-	-
		(2.0600)	04/08/98
		(188.9000)	10/07/99
6	DeKalb	59.0800	05/11/94	670,207	58,373	728,580	486,869	1,215,449	-	-
		(4.9233)	Apr 1998
		(54.1567)	07/23/98
7	Kendall	200.8210	07/28/94	1,506,158	82,999	1,589,157	43460,~~175~~282	-2,049,439	~~1,632,332~~-	-
8	Kendall	133.0000	08/17/94	1,300,000	106,949	1,406,949	15,335	-	1,422,284	-
		(168.1740)	09/18/03
9	LaSalle	335.9600	08/30/94	993,441	79,329	1,072,770	120,686	-	1,193,456	-
		(32.6470)	Var 2005
8	Kendall	133.0000	08/17/94	1,300,000	106,949	1,406,949	44,331	1,451,280	-	-
		(133.0000)	04/11/05

-2427-

INLAND CAPITAL FUND, L.P.
(a limited partnership)

Notes to Financial Statements
(continued)

(4) Investment Properties (continued)

~~Initial Costs~~				Initial Costs
Parcel	Illinois	Gross Acres Purchased	Purchase/Sales	Original	Acquisition	Total	Costs Capitalized Subsequent to	~~Cumulative~~ Costs of Property ~~Sold~~	Total Remaining Costs of Parcels at	Current Year Gain On Sale
#	County	/(Sold)	Date	Costs	Costs	Costs	Acquisition	Sold	at 12/31/0106	Recognized
10	Kendall	223.7470	09/16/94	2,693,025	205,660	2,898,685	312,737	38,989	3,172,433	-
9	LaSalle	335.9600	08/30/94	993,441	79,329	1,072,770	130,045	1,202,815	-	-
		(335.9600)	04/18/03
10	Kendall	223.7470	09/16/94	$ 2,693,025	205,660	2,898,685	362,769	3,261,454	-	-
		(2.9770)	11/03/99
		(127.4000)	08/14/02
		(84.39)	01/09/04
		(8.98)	12/15/05
10A(a)	Kendall	7.0390	09/16/94	206,975	15,806	222,781	1,327	224,108	-	-
		(7.0390)	04/21/95
11	Kane	123.0000	09/26/94	1,353,000	75,551	1,428,551	17,466	1,446,017	-	-
		(123.000)	11/30/00
12	Kendall	110.2530	09/28/94	600,001	51,220	651,221	~~134~~157,~~860~~198	~~427~~808,~~471~~419	~~358,610~~-	-
		(59.9050)	04/16/01
		(50.3480)	09/18/03
13	LaSalle	352.7390	10/06/94	1,032,666	91,117	1,123,783	22,723	1,146,506	-	-
		(10.0000)	07/27/98
		(342.7390)	08/31/98
14	Kendall	134.7760	10/26/94	1,000,000	81,674	1,081,674	1536,~~548~~734	851,~~960~~118,408	~~1,011,262~~-	-
		(10.6430)	05/21/99
15	McHenry	169.5400	10/31/94	2,900,000	79,196	2,979,196	290,720	-	3,269,916	-
		(124.1330)	12/17/04
16	McHenry	207.0754	11/30/94	1,760,256	101,388	1,861,644	278,954	-	2,140,598	-
15	McHenry	169.5400	10/31/94	2,900,000	79,196	2,979,196	332,922	3,312,118	-	-
17	LaSalle	236.4400	12/07/94	1,060,286	74,735	1,135,021	43,498	-	1,178,519	-
		(169.5400)	02/26/04
18	Kendall	386.9900	11/02/95	934,993	126,329	1,061,322	501	1,061,823	-	-
16	McHenry	207.0754	11/30/94	1,760,256	101,388	1,861,644	315,664	2,177,308	-	-
		(386.9900)	08/31/98
		(207.0754)	02/26/04
	Total			$24,285,539	1,660,450	25,945,989	4,757,722	9,713,692	20,990,019	869,419
17	LaSalle	236.4400	12/07/94	1,060,286	74,735	1,135,021	100,869	1,235,890	-	-
				========	========	========	=========	===========	==========	========
		(236.4400)	Var 2005
18	Kendall	386.9900	11/02/95
		(386.9900)	08/31/98	934,993	126,329	1,061,322	501	1,061,823	-	-
	Total			$24,285,538	1,660,451	25,945,989	5,867,262	31,035,626	777,625	125,807

-2528-

INLAND CAPITAL FUND, L.P.
(a limited partnership)

Notes to Financial Statements
(continued)

(4) Investment Properties (continued)

~~Included in the purchase of Parcel 10 was~~ (a ~~house and several outbuildings, located on approximately seven acres, which was sold on April 21, 1995.~~)

~~The~~Included ~~aggregate~~in ~~cost~~the purchase of ~~real~~Parcel ~~estate~~10 ~~owned~~was ata ~~December~~house 31and several outbuildings, ~~2001~~located ~~for~~on ~~Federal~~approximately ~~income~~seven ~~tax~~acres, ~~purposes~~which ~~was~~were ~~approximately~~sold ~~$20~~on April 21,~~990,000~~ ~~(unaudited)~~1995.

(b)

The aggregate cost of real estate owned at December 31, 2006 for Federal income tax purposes was approximately $830,000(unaudited).

(c)

Reconciliation of real estate owned:

		2001	2000
		2006	2005
Balance at January 1,	$	21875,~~421,417~~290	224,~~674~~207,~~818~~469
Additions during year		~~878~~37,~~358~~333	~~192~~97,~~616~~457
Sales during year		(1134,~~309,756~~998)	(13,~~446~~429,~~017~~636)
Balance at December 31,	$	20777,~~990,019~~625	21875,~~421,417~~290
		=========	==========

(d)

On a quarterly basis, in accordance with Statement of Financial Accounting Standards No. 144, the Partnership conducts an impairment analysis to ensure that the carrying value of each property does not exceed its estimated fair value. If this were to occur, the Partnership would be required to record an impairment loss equal to the excess of carrying value over fair value.

In determining the value of an investment property and whether the property is impaired, management considers several factors such as projected capital expenditures and sales prices. The aforementioned factors are considered by management in determining the value of any particular property. The value of any particular property is sensitive to the actual results of any of these uncertain factors, either individually or taken as a whole. Should the actual results differ from management's judgment, the valuation could be negatively or positively affected.

(5) Farm Rental Income

The Partnership has determined that all leases relating to the farm parcels ~~are~~were operating leases. Accordingly, rental income iswas reported when earned.

As of December 31, ~~2001~~2006, the Partnership ~~had~~did ~~farm~~not ~~leases~~have ofa ~~generally~~farm ~~one~~lease ~~year in duration,~~ for ~~approximately 1,848 acres of~~ the ~~approximately~~remaining ~~1,963~~19 acres owned.

~~(6) Mortgage Loans Receivable~~-29-

AsNLAND aCAPITAL ~~result of the sale of the remaining acres of Parcel 6 for a sales price of $1~~FUND,~~125,000~~ ~~on July 7, 1998, the Partnership received a mortgage loan receivable of $1,125,000 and recorded a deferred gain on sale of $7,889~~L. ~~The deferred gain was recognized over the life of the related mortgage loan receivable as principal payments were received, of which $6,097 was recognized as of December 31, 2001~~P. ~~Of the $1,125,000 mortgage loan receivable the Partnership has received $725,000. The remaining $400,000 accrued interest at 9% per annum and had~~ (a ~~maturity~~limited ~~date~~partnership) Notes ofto ~~July~~Financial 7, 2001, at which time all accrued interest, as well as principal, was due. In April 2001, the Partnership received $124,199 as final settlement for this mortgage loan receivable. The Partnership has written off the remaining principal balance of $255,523, as well as the accrued interest of $116,744.Statements (continued)

~~-26-~~(6) Selected Quarterly Financial Data (unaudited)

As The afollowing ~~result~~represents of the ~~sale~~results of ~~approximately~~operations ~~60 acres of Parcel 12~~ for aeach ~~sales~~quarter ~~price~~during ~~of $875,000 on April 16, 2001,~~ the ~~Partnership~~years ~~received~~ended aDecember ~~mortgage loan receivable of $875~~31,~~000~~ ~~and recorded a deferred gain on sale of $447~~2006,~~528. On~~ ~~July 18~~2005, ~~2001, the Partnership received a $350,000 paydown on the mortgage receivable~~ and ~~recognized gain of $179,011. The remaining deferred gain will be recognized over the life of the related mortgage loan receivable as principal payments are received.~~ 2004

The fair market value of the mortgage loans receivable was approximately $568,000 and $402,000, at December 31, 2001 and 2000, respectively.


		12/31/06	09/30/06	06/30/06	03/31/06
Total income	$	89,386	14,694	267,538	10,858
Net income (loss)		65,763	(23,673)	107,706	(77,487)
Net income (loss) allocated to the limited partners		65,105	(23,436)	107,887	(76,712)
Net income (loss) per limited partnership unit, basic and diluted		2.00	(0.72)	3.34	(2.37)

		12/31/05	09/30/05	06/30/05	03/31/05
Total income	$	6,097,864	94,615	12,101,818	785,896
Net income		5,613,945	53,091	9,145,259	542,319
Net income allocated to the limited partners		2,517,200	52,560	9,145,932	225,128
Net income per limited partnership unit, basic and diluted		77.84	1.63	282.83	6.96

		12/31/04	09/30/04	06/30/04	03/31/04
Total income	$	9,204,616	4,447,527	634,768	24,302,772
Net income		6,191,320	2,783,675	509,280	17,218,420
Net income allocated to the limited partners		4,473,358	2,780,078	510,345	14,049,328
Net income per limited partnership unit, basic and diluted		138.34	85.97	15.78	434.47

			Principal Balance	Principal Balance	Accrued Interest Receivable	Deferred Gain
Parcel	Maturity	Interest Rate	12/31/01	12/31/00	12/31/01	12/31/01
6	07/07/01	9.00%	$ -	400,000	-	-
12	03/31/04	9.00%	525,000	-	41,554	268,517
			$ 525,000	400,000	41,554	268,517
			=========	========	=========	=======

-30-

(7) Subsequent Events

On January 11, 2002, the Partnership sold approximately 108 acres of Parcel 1 for $2,150,000 to an unaffiliated third party. The Partnership received a note for $2,150,000 and recorded a deferred gain of approximately $1,200,000. On March 15, 2002, the Partnership received a principal paydown of $955,000 on the note receivable and recognized approximately $530,000 of gain. The balance of the deferred gain will be recognized as additional principal payments are received.

-27-

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

There were no disagreements on accounting or financial disclosure matters during ~~2001~~2006.

Item 9(a). Controls and Procedures

Our general partner conducted, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, the principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective in timely alerting them to material information that is required to be disclosed in the periodic reports that we must file with the Securities and Exchange Commission.

There were no significant changes in our internal controls over financial reporting during the fourth quarter of 2006 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

Item 9 (b). Other Information

Not applicable.

-31-

PART III

Item 10. Directors and Executive Officers of the Registrant

~~The~~ Our ~~General~~general ~~Partner of the Partnership~~partner, Inland Real Estate Investment Corporation (IREIC), was organized in 1984 for the purpose of acting as general partner of limited partnerships formed to acquire, own and operate real properties. ~~The~~Our ~~General~~general ~~Partner~~partner is a wholly owned subsidiary of The Inland Group, Inc. In ~~1990, Inland Real Estate Investment Corporation became the replacement General Partner for an additional 301 privately owned real estate limited partnerships syndicated by Affiliates.~~ The ~~General~~general ~~Partner~~partner has responsibility for all aspects of ~~the~~our ~~Partnership's~~ operations. ~~The~~ relationship of the General Partner to its Affiliates is described under the caption "Conflicts of Interest" at pages 11 to 13 of the Prospectus, a copy of which description is hereby incorporated herein by reference.

During 2004, the board of directors of our general partner formalized the audit committee. The Audit Committee is not independent of our general partner and consists of Catherine L. Lynch, committee chair and financial expert, Brenda G. Gujral, Roberta S. Matlin and Gary Pechter. The audit committee is responsible for engaging our independent registered public accounting firm, reviewing the plans and results of the audit engagement with our independent registered public accounting firm and consulting with the independent registered public accounting firm regarding the adequacy of our internal accounting controls.

During 2004, our general partner adopted a Code of Ethics that applies to all of its employees.

Officers and Directors

The officers, directors, and key employees of ~~The~~IREIC ~~Inland Group, Inc.~~ and its ~~Affiliates~~affiliates ~~("Inland")~~ that are likely to provide services to ~~the~~us ~~Partnership~~ are as follows:. Ages are listed as of January 1, 2007.

Functional Title Daniel L. Goodwin ~~Chairman~~Director ~~and Chief Executive Officer~~ Robert H. Baum ~~Executive~~Director, ~~Vice President-~~General Counsel G.of ~~Joseph~~IREIC ~~Cosenza Senior Vice President-Acquisitions~~ Robert D. Parks ~~Senior~~Chairman ~~Vice President-Investments~~ Brenda G. Gujral Director, President and ~~Chief~~principal ~~Operating~~executive ~~Officer-IREIC~~officer of the Partnership Catherine L. Lynch Treasurer Roberta S. Matlin ~~Assistant~~Director, Senior Vice President-Investments ~~Patricia~~Guadalupe A.Griffin ~~DelRosso~~ Vice President-Asset Management Kelly Tucek ~~Assistant~~ Vice President-Partnership Accounting and principal financial officer of the Partnership Cathleen M. Hrtanek Assistant Counsel, The Inland Real Estate Group, Inc., Counsel to the Partnership

-28-

DANIEL L. GOODWIN (age 58) is Chairman of the Board of Directors of The Inland Group, Inc., a billion-dollar real estate and financial organization located in Oak Brook, Illinois. Among Inland's subsidiaries is the largest property management firm in Illinois and one of the largest commercial real estate and mortgage banking firms in the Midwest.

Mr. Goodwin has served as Director of the Avenue Bank of Oak Park and as a director of the Continental Bank of Oakbrook Terrace. He was Chairman of the Bank Holding Company of American National Bank of DuPage. Currently he is the Chairman of the Board of Inland Mortgage Corporation.

Mr. Goodwin has been in the housing industry for more than 30 years, and has demonstrated a lifelong interest in housing-related issues. He is a licensed real estate broker and a member of the National Association of Realtors, the Illinois Association of Realtors and the Northern Illinois Commercial Association of Realtors. He has developed thousands of housing units in the Midwest, New England, Florida, and the Southwest. He is also the author of a nationally recognized real estate reference book for the management of residential properties.

Mr. Goodwin has served on the Board of the Illinois State Affordable Housing Trust Fund for six years and was recently appointed to serve once again by Governor George Ryan. He is an advisor for the Office of Housing Coordination Services of the State of Illinois, and a member of the Seniors Housing Committee of the National Multi-Housing Council. He was appointed Chairman of the Housing Production Committee for the Illinois State Affordable Housing Conference by former Governor Edgar. He also served as a member of the Cook County Commissioner's Economic Housing Development Committee, and he was the Chairman of the DuPage County Affordable Housing Task Force. The 1992 Catholic Charities Award was presented to Mr. Goodwin for his work in addressing affordable housing needs. The City of Hope designated him as the Man of the Year for the Illinois construction industry. In 1989, the Chicago Metropolitan Coalition on Aging presented Mr. Goodwin with an award in recognition of his efforts in making housing more affordable to Chicago's Senior Citizens. On May 4, 1995, PADS, Inc. (Public Action to Deliver Shelter) presented Mr. Goodwin with the affordable housing award, recognizing The Inland Group as the leading corporate provider of transitional housing for the homeless people of DuPage County. Mr. Goodwin also serves as Chairman of New Directions Housing Corporation, which provides affordable housing in the Midwest.

Mr. Goodwin is a product of Chicago-area schools, and obtained his Bachelor's and Master's Degrees from Illinois Universities. Following graduation, he taught for five years in the Chicago Public Schools. His commitment to education has continued through his work with the BBF Family Services' Pilot Elementary School in Chicago, and the development of the Inland Vocational Training Center for the Handicapped located at Little City in Palatine, Illinois. He personally established an endowment which funds a perpetual scholarship program for inner-city disadvantaged youth. In 1990 he received the Northeastern Illinois University President's Meritorious Service Award. Mr. Goodwin holds a Master's Degree in Education and in 1986, he was awarded an Honorary Doctorate from Northeastern Illinois University College of Education. More than 12 years ago, under Mr. Goodwin's direction, Inland instituted a program to educate disabled students about the workplace. Most of those original students are employed at Inland today, and Inland continues as one of the largest employers of the disabled in DuPage County. Mr. Goodwin has served as a member of the Board of Governors of Illinois State Colleges and Universities, and he is currently Vice Chairman of the Board of Trustees of Benedictine University. Since January 1996, he has been Chairman of the Northeastern Illinois University Board of Trustees.

-29-

In 1988 Mr. Goodwin received the Outstanding Business Leader Award from the Oak Brook Jaycees and in March 1994 he won the Excellence in Business Award from the DuPage Area Association of Business and Industry. Additionally, he was honored by Little Friends on May 17, 1995 for rescuing their Parent-Handicapped Infant Program. He was the recipient of the 1995 March of Dimes Life Achievement Award and was recognized as the 1998 Corporate Leader of the Year by the Oak Brook Area Association of Commerce and Industry. The Ray Graham Association for People with Disabilities honored Mr. Goodwin as the 1999 Employer of the Year. Also, in 1999, the YWCA DuPage District bestowed the Corporate Recognition Award for Inland's policies and practices that demonstrate a commitment to the advancement of women in the workplace. For many years, he has been Chairman of the National Football League Players Association Mackey Awards for the benefit of inner-city youth and he served as the recent Chairman of the Speakers Club of the Illinois House of Representatives.

ROBERT H. BAUM (age 57) has been with The Inland Group, Inc. and its affiliates since 1968 and is one of the four original principals. Mr. Baum is Vice Chairman and Executive Vice President-General Counsel of The Inland Group, Inc. In his capacity as General Counsel, Mr. Baum is responsible for the supervision of the legal activities of The Inland Group, Inc. and its affiliates. This responsibility includes the supervision of The Inland Law Department and serving as liaison with outside counsel. Mr. Baum has served as a member of the North American Securities Administrators Association Real Estate Advisory Committee and as a member of the Securities Advisory Committee to the Secretary of State of Illinois. He is a member of the American Corporation Counsel Association and has also been a guest lecturer for the Illinois State Bar Association. Mr. Baum has been admitted to practice before the Supreme Court of the United States, as well as the bars of several federal courts of appeals and federal district courts and the State of Illinois and is a licensed real estate broker. He has served as a director of American National Bank of DuPage and currently serves as a director of Westbank. Mr. Baum also is a member of the Governing Council of Wellness House, a charitable organization that provides educational and emotional support for cancer patients and their families.

G. JOSEPH COSENZA (age 57) has been with The Inland Group, Inc. and its affiliates since 1968 and is one of the four original principals. Mr. Cosenza is a Director and Vice Chairman of The Inland Group, Inc. and oversees, coordinates and directs Inland's many enterprises. In addition, Mr. Cosenza immediately supervises a staff of ten persons who engage in property acquisition. Mr. Cosenza has been a consultant to other real estate entities and lending institutions on property appraisal methods. He has directly overseen the purchase of close to $4 billion of income producing real estate from 1968 to the present.

Mr. Cosenza received his B.A. Degree from Northeastern Illinois University and his M.S. Degree from Northern Illinois University. From 1967 to 1968, he taught in the LaGrange, Illinois School District and from 1968 to 1972, he served as Assistant Principal and taught in the Wheeling, Illinois School District. Mr. Cosenza has been a licensed real estate broker since 1968 and an active member of various national and local real estate associations, including the National Association of Realtors and the Urban Land Institute.

Mr. Cosenza has also been Chairman of the Board of American National Bank of DuPage, and has served on the Board of Directors of Continental Bank of Oakbrook Terrace. He was the Chairman and is presently a Director on the Board of Westbank in Westchester, Hillside and Lombard, Illinois.

-30-

ROBERT D. PARKS (age 58) has been with The Inland Group Inc. ("Inland") and its affiliates since 1968 and is one of the four original principals; Chairman of Inland Real Estate Investment Corporation and Director of Inland Securities Corporation. Mr. Parks is president, chief executive officer, and a director of Inland Real Estate Corporation. He is Chairman, Chief Executive Officer and Affiliated Director of Inland Retail Real Estate Trust, Inc. He is a director of Inland Real Estate Advisory Services, Inc., Inland Investment Advisors, Inc., Partnership Ownership Corp., Inland Southern Acquisitions, Inc. and Inland Southeast Investment Corp., and he is a Trustee of Inland Mutual Fund Trust.

Mr. Parks is responsible for the ongoing administration of existing investment programs, corporate budgeting and administration for Inland Real Estate Investment Corporation. He oversees and coordinates the marketing of all investments and investor relations.

Prior to joining Inland, Mr. Parks was a school teacher in Chicago's public schools. He received his B.A. Degree from Northeastern Illinois University and his M.A. Degree from the University of Chicago. He is a registered Direct Participation Program Limited Principal with the National Association of Securities Dealers, Inc. He is also a member of the Real Estate Investment Association, the Financial Planning Association, the Foundation for Financial Planning, as well as a member of the National Association of Real Estate Investments Trusts, Inc.

BRENDA G. GUJRAL (age 60) is President and Chief Operating Officer of Inland Real Estate Investment Corporation (IREIC). She is also President and Chief Operating Officer of Inland Securities Corporation (ISC), a member firm of the National Association of Securities Dealers (NASD).

Mrs. Gujral has overall responsibility for the operations of IREIC, including the distribution of checks to over 50,000 investors, review of periodic communications to those investors, the filing of quarterly and annual reports for Inland's publicly registered investment programs with the Securities and Exchange Commission, compliance with other SEC and NASD securities regulations both for IREIC and ISC, review of asset management activities, and marketing and communications with the independent broker/dealer firms selling Inland's current and prior programs. Mrs. Gujral works with internal and outside legal counsel in structuring and registering the prospectuses for IREIC's investment programs.

Mrs. Gujral began her career with Inland in 1977, becoming an officer in 1982. Prior to joining Inland, she worked for the Land Use Planning Commission establishing an office in Portland, Oregon, to implement land use legislation for that state.

CATHERINE L. LYNCH (age 43) joined Inland in 1989 and is the Treasurer of Inland Real Estate Investment Corporation. Ms. Lynch is responsible for managing the Corporate Accounting Department. Prior to joining Inland, Ms. Lynch worked in the field of public accounting for KPMG Peat Marwick since 1980. She received her B.S. Degree in Accounting from Illinois State University. Ms. Lynch is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants and the Illinois CPA Society. She is registered with the National Association of Securities Dealers as a Financial Operations Principal.

-31-

ROBERTA S. MATLIN (age 57) joined Inland in 1984 as Director of Investor Administration and currently serves as Senior Vice President--Investments of IREIC, directing the day-to-day internal operations of the General Partner. Ms. Matlin is a Director of IREIC and ISC. She is President and Director of Inland Investment Advisors, Inc. and Intervest Southern Real Estate Corporation and a trustee of Inland Mutual Fund Trust. Until December 31, 2001, she was a Director of Inland Apartment Acquisitions, Inc. Prior to joining Inland, she spent 11 years with the Chicago Region of the Social Security Administration of the United States Department of Health and Human Services. Ms. Matlin received her B.A. Degree from the University of Illinois. She is registered with the NASD as a general securities principal and investment advisor.

PATRICIA A. DELROSSO (age 49) joined Inland in 1985. Ms. DelRosso serves as Senior Vice President of Inland Real Estate Investment Corporation in the area of Asset Management. As head of the Asset Management Department, she develops operating and disposition strategies for all investment-owned properties. Ms. DelRosso also serves as President of the newly formed Inland Real Estate Exchange Corporation. In this capacity, she develops, implements and evaluates business plans for tenant-in-common and customized 1031 tax-deferred exchange replacement property offerings. Ms. DelRosso received her Bachelor's degree from George Washington University and her Master's from Virginia Tech University. Ms. DelRosso is a licensed real estate broker, NASD registered securities sales representative, a member of the Urban Land Institute and a member of the Northern Illinois Commercial Association of Realtors.

KELLY TUCEK (age 39) joined Inland in 1989 and is an Assistant Vice President of Inland Real Estate Investment Corporation. As of August 1996, Ms. Tucek is responsible for the Investment Accounting Department which includes all public partnership accounting functions along with quarterly and annual SEC filings. Prior to joining Inland, Ms. Tucek was on the audit staff of Coopers and Lybrand since 1984. She received her B.A. Degree in Accounting and Computer Science from North Central College.

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~~Item~~DANIEL 11L. ~~Executive~~ ~~Compensation~~GOODWIN (age 63) has been with Inland since 1968 and is a founding and controlling stockholder of, and the chairman of the board and chief executive officer of, The Inland Group. Mr. Goodwin also serves as a director or officer of entities wholly owned or controlled by The Inland Group. In addition, Mr. Goodwin is the chairman of the board of Inland Real Estate Corporation, chairman of the board and chief executive officer of Inland Mortgage Investment Corporation and chairman of the board and chief executive officer of Inland Bancorp Holding Company, a bank holding company. Mr. Goodwin also serves on the management committee of Inland Real Estate Corporation.

~~The~~Mr. ~~General~~Goodwin ~~Partner~~ is ~~entitled~~a tomember ~~receive~~of athe ~~share~~National Association of ~~cash~~Realtors, ~~distributions~~the Illinois Association of ~~Net~~Realtors ~~Sales~~and ~~Proceeds~~the ~~based~~Northern ~~upon~~Illinois ~~both~~Commercial anAssociation ~~aggregate~~of ~~overall~~Realtors. He ~~return~~is toalso the ~~Limited~~author ~~Partners~~of ~~and~~ a ~~separate~~nationally ~~return~~recognized ~~with~~real ~~respect~~estate toreference ~~each~~book ~~parcel~~for the management of ~~land~~residential ~~purchased~~properties. Mr. byGoodwin ~~the~~serves ~~Partnership~~on asthe ~~described~~Board ~~under~~of the ~~caption~~Illinois ~~"Cash~~State ~~Distributions"~~Affordable ~~and~~Housing aTrust ~~share~~Fund. ofHe ~~profits~~has orserved ~~losses~~ as ~~described~~an ~~under~~advisor for the ~~caption~~Office ~~"Allocation~~ of ~~Profits~~Housing orCoordination ~~Losses"~~Services atof ~~pages~~the ~~41-42~~State of ~~the Prospectus~~Illinois, and atas ~~pages~~a ~~A-10~~member toof ~~A-11~~the Seniors Housing Committee of the ~~Partnership~~National ~~Agreement,~~Multi-Housing ~~included~~Council. He has served as ~~an exhibit to~~ Chairman of the ~~Prospectus,~~ aDuPage ~~copy~~County ofAffordable ~~which~~Housing ~~descriptions~~Task isForce ~~incorporated~~and ~~herein~~presently byserves ~~reference~~as chairman of New Directions Affordable Housing Corporation.

~~The~~Mr. ~~Partnership~~Goodwin isobtained ~~permitted~~his tobachelor's ~~engage~~and inmaster's ~~various~~degrees ~~transactions~~from ~~involving~~Illinois ~~Affiliates~~state ofuniversities. ~~the~~Following ~~General~~graduation, ~~Partner~~he oftaught ~~the~~for ~~Partnership,~~five asyears ~~described~~in ~~under~~ the ~~captions~~Chicago ~~"Compensation~~public ~~and~~schools ~~Fees"~~system. atMore ~~pages~~recently, ~~14-16~~Mr. ~~and~~Goodwin ~~"Conflicts~~has ofserved ~~Interest"~~as ata ~~pages~~member ~~16-18~~ of the ~~Prospectus,~~board ~~and~~of atgovernors ~~pages A-13 to A-22~~ of ~~the~~Illinois ~~Partnership~~State ~~Agreement,~~Colleges ~~included~~and asUniversities. He anis ~~exhibit~~vice tochairman of the ~~Prospectus,~~board aof ~~copy~~trustees of ~~which~~Benedictine ~~descriptions~~University, isvice ~~incorporated~~chairman ~~herein by reference. The relationship~~ of the ~~General~~board ~~Partner~~of ~~(and~~trustees ~~its~~of ~~directors~~Springfield College and ~~officers)~~chairman toof ~~its~~the ~~Affiliates~~board isof ~~set~~Northeastern ~~forth~~Illinois ~~above in Item 10~~University.

~~The~~ROBERT ~~General~~H. ~~Partner~~BAUM (age 63) has been with Inland since 1968 and ~~its~~is ~~Affiliates~~one ~~may~~of bethe ~~reimbursed~~founding stockholders. Mr. Baum is vice chairman and executive vice president and general counsel of The Inland Group. In his capacity as general counsel, Mr. Baum is responsible for the supervision of the legal activities of The Inland Group and its ~~expenses~~affiliates. orThis ~~out-~~responsibility includes the supervision of~~-pocket~~ ~~costs~~The ~~relating~~Inland Law Department and serving as liaison with outside counsel. Mr. Baum has served as a member of the North American Securities Administrators Association Real Estate Advisory Committee and as a member of the Securities Advisory Committee to the ~~administration~~Secretary of State of Illinois. He is a member of the ~~Partnership~~American Corporation Counsel Association and has also been a guest lecturer for the Illinois State Bar Association. AsMr. Baum has been admitted to practice before the Supreme Court of ~~December~~the ~~31,~~United ~~2001~~States, ~~such~~as ~~costs~~well ~~were~~as ~~$47~~the bars of several federal courts of appeals and federal district courts and the State of Illinois. He is also a licensed real estate broker. He has served as a director of American National Bank of DuPage and currently serves as a director of Inland Bancorp Holding Company and of Westbank. Mr. Baum also is a member of the Governing Council of Wellness House,~~804,~~ a charitable organization that exists to improve the quality of ~~which~~life $5for people whose lives have been affected by cancer and its treatment by providing psychosocial and educational support for cancer patients,~~324~~ ~~was~~their ~~unpaid~~families and friends.

~~The~~ROBERT ~~General~~D. ~~Partner~~PARKS (age is63) ~~entitled~~has tobeen ~~receive~~with ~~Asset~~Inland ~~Management~~since ~~Fees~~1968 ~~equal~~and tois one~~-quarter~~ of 1%the founding stockholders. He also is chairman of ~~the~~Inland ~~original~~Real ~~cost~~Estate toInvestment ~~the~~Corporation, ~~Partnership~~director of ~~undeveloped~~Inland ~~land~~Securities ~~annually~~Corporation and a director of Inland Investment Advisors, ~~limited~~Inc. Mr. toParks ais ~~cumulative~~president, ~~total~~chief ~~over~~executive ~~the~~officer, ~~life~~and a director of ~~the~~Inland ~~Partnership~~Real ofEstate 2%Corporation and serves on its management committee. He is also chairman and an affiliated director of ~~the~~Inland ~~land's~~Western ~~original~~Retail ~~cost~~Real toEstate ~~the~~Trust, ~~Partnership~~Inc. ~~For~~He ~~the~~is ~~year~~chairman ~~ended~~and ~~December~~an ~~31,~~affiliated ~~2001~~director of Inland American Real Estate Trust, Inc. Mr. Parks is responsible for the ~~Partnership~~ongoing ~~incurred~~administration ~~$45~~of existing investment programs,~~473~~ incorporate ~~Asset~~budgeting ~~Management~~and ~~Fees,~~administration ~~all~~for Inland Real Estate Investment Corporation. He oversees and coordinates the marketing of ~~which~~all ~~was~~investments ~~paid~~and investor relations.

AnPrior ~~Affiliate~~to ofjoining ~~the~~Inland, ~~General~~Mr. ~~Partner~~Parks ~~performed~~was ~~sales~~a ~~marketing~~school ~~and~~teacher ~~advertising~~in ~~services~~Chicago's ~~for~~public ~~the~~schools. ~~Partnership~~He received his B.A. Degree from Northeastern Illinois University and ~~was~~his ~~reimbursed (as~~M.A. ~~set~~Degree ~~forth~~from ~~under~~the ~~terms~~University of Chicago. He is a registered Direct Participation Program Limited Principal with the ~~Partnership~~National ~~Agreement)~~Association ~~for~~of ~~direct~~Securities ~~costs~~Dealers, Inc. ~~For~~ He is also a member of the ~~year~~Real ~~ended~~Estate ~~December~~Investment 31Association, ~~2001~~the Financial Planning Association, ~~such~~the ~~costs~~Foundation ~~were~~for ~~$26~~Financial Planning,~~674,~~ ~~all~~as well as a member of ~~which~~the ~~was~~National ~~paid~~Association of Real Estate Investment Trusts.

An Affiliate of the General Partner performed property upgrades, rezoning, annexation and other activities to prepare the Partnership's land investments for sale and was reimbursed (as set forth under terms of the Partnership Agreement) for salaries and direct costs. For the year ended December 31, 2001, the Partnership incurred $124,719 of such costs, all of which was paid, and are included in investment properties.

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BRENDA G. GUJRAL (age 64) is president, chief operating officer and a director of Inland Real Estate Investment Corporation (IREIC). She is also president, chief operating officer and a director of Inland Securities Corporation (ISC), a member firm of the National Association of Securities Dealers (NASD). Mrs. Gujral is also a director of Inland Investment Advisors, Inc., an investment advisor. She is also Chief Executive Officer and an affiliated director of Inland Western Retail Real Estate Trust, Inc., chairperson of the board of Inland Real Estate Exchange Corporation and President and an affiliated director of Inland American Retail Real Estate Trust, Inc.

Mrs. Gujral has overall responsibility for the operations of IREIC, including the distribution of checks to over 70,000 investors, review of periodic communications to those investors, the filing of quarterly and annual reports for Inland’s publicly registered investment programs with the Securities and Exchange Commission, compliance with other SEC and NASD securities regulations both for IREIC and ISC, review of asset management activities, and marketing and communications with the independent broker/dealer firms selling Inland’s current and prior programs. Mrs. Gujral works with internal and outside legal counsel in structuring and registering the prospectuses for IREIC’s investment programs and in connection with the preparation of its offering documents and registering the related securities with the Securities and Exchange Commission and state securities commissions.

Mrs. Gujral has been with the Inland organization for more than 20 years, becoming an officer in 1982. Prior to joining Inland, she worked for the Land Use Planning Commission establishing an office in Portland, Oregon, to implement land use legislation for that state.

She is a graduate of California State University. She holds Series 7, 22, 39 and 63 licenses with the NASD. Mrs. Gujral is a member of the National Association of Real Estate Investment Trusts (NAREIT) and the National Association for Female Executives.

CATHERINE L. LYNCH (age 48) joined Inland in 1989 and is the treasurer of Inland Real Estate Investment Corporation. Ms. Lynch is responsible for managing the corporate accounting department. Prior to joining Inland, Ms. Lynch worked in the field of public accounting for KPMG LLP since 1980. She received her B.S. Degree in Accounting from Illinois State University. Ms. Lynch is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants and the Illinois CPA Society. She is registered with the National Association of Securities Dealers as a Financial Operations Principal.

ROBERTA S. MATLIN (age 62) joined Inland Real Estate Investment Corporation (IREIC) in 1984 as director of investor administration and currently serves as senior vice president of IREIC, directing the day-to-day internal operations. Ms. Matlin is a director of IREIC and president and director of Inland Investment Advisors, Inc., and Intervest Southern Real Estate Corporation, and a director and vice president of Inland Securities Corporation. She is the president of Inland American Advisory Services, Inc. Since 2003, she has been vice president of administration of Inland Western Retail Real Estate Trust, Inc., and since 2004, vice president of administration of Inland American Real Estate Trust, Inc. She was vice president of administration of Inland Real Estate Corporation from 1995 until 2000 and of Inland Retail Real Estate Trust, Inc from 1998 until 2004. From June 2001 until April 2004, she was a trustee and executive vice president of Inland Mutual Fund Trust. Prior to joining Inland, she worked for the Chicago Region of the Social Security Administration of the Untied States Department of Health and Human Services. Ms. Matlin is a graduate of the University of Illinois. She holds Series 7, 22, 24, 39, 63 and 65 licenses with the National Association of Securities Dealers.

GUADALUPE GRIFFIN (age 42) joined Inland in 1994. Ms. Griffin serves as vice president of Inland Real Estate Investment Corporation and assistant vice president of Inland Midwest Investment Corporation. Ms. Griffin is responsible for the asset management and day-to-day operations of the public and private partnerships which include the development of operating and disposition strategies for the partnerships and investor communications. Prior to joining Inland, Ms. Griffin was employed by the University of Illinois at Chicago Center for Urban Educational Research and Development as Assistant to the Director of the Nation of Tomorrow Program; a privately funded multi-million dollar program, which provided educational and

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empowerment services to youths and their families in four inner-city schools. Ms. Griffin holds an Illinois Real Estate Sales License.

KELLY TUCEK (age 44) joined Inland in 1989 and is a vice president of Inland Real Estate Investment Corporation and beginning in 2006, vice president, controller of Inland Western Retail Real Estate Advisory Services, Inc. As of August 1996, Ms. Tucek is responsible for the investment accounting department which includes all public partnership accounting functions along with quarterly and annual SEC filings. Prior to joining Inland, Ms. Tucek was on the audit staff of Coopers and Lybrand since 1984. She received her B.A. Degree in Accounting and Computer Science from North Central College.

CATHLEEN M. HRTANEK (age 30) joined Inland in 2005 and is an Assistant Counsel of The Inland Real Estate Group, Inc., and a member of the Audit Committee for all public partnerships sponsored by IREIC. In her capacity as their counsel, Ms. Hrtanek has been admitted to practice law in the State of Illinois. She is also a licensed real estate broker. Ms. Hrtanek received her undergraduate degree from the University of Notre Dame and her law degree from Loyola University of Chicago School of Law.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires directors, executive officers and beneficial owners of more than ten percent of our partnership units to file initial reports of ownership and reports of changes in ownership with the Securities and Exchange Commission and to provide us with copies of such reports. Based solely on a review of the copies provided to us and written representations from such reporting persons, we believe that all applicable Section 16(a) filing requirements have been met for such reporting persons.

Item 11. Executive Compensation

Our general partner is entitled to receive a share of cash distributions of net sales proceeds based upon both an aggregate overall return to the limited partners and a separate return with respect to each parcel of land purchased by us.

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(ii) a noncompounded cumulative preferred return of 15% on their invested capital. However, with respect to each parcel of land, the general partner's 10% share will be subordinated until the limited partners receive a return of the original capital attributed to such parcel ("parcel capital") plus a 6% per annum noncompounded cumulative preferred return thereon.

We are permitted to engage in various transactions involving affiliates of our general partner.

Our general partner and its affiliates may be reimbursed for its expenses or out-of-pocket costs relating to our administration. As of December 31, 2006, such costs were $30,244, of which $3,358 was unpaid.

Our general partner is entitled to receive asset management fees equal to one-quarter of 1% of the original cost of our undeveloped land annually, limited to a cumulative total over our life of 2% of the land's original cost to us. For the year ended December 31, 2005, we incurred $1,032 in asset management fees, all of which was paid. As of March 31, 2005, we had met the limit on this fee.

An affiliate of our general partner performed sales marketing and advertising services for us and was reimbursed (as set forth under terms of the partnership agreement) for direct costs. For the year ended December 31, 2006, such costs were $8,218, all of which was paid.

An affiliate of the general partner performed property upgrades, rezoning, annexation and other activities to prepare our land investments for sale and was reimbursed (as set forth under terms of the partnership agreement) for salaries and direct costs. For the year ended December 31, 2006, we incurred $15,008 of such costs, of which $3,000 was unpaid, and are included in investment properties.

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Item 12. Security Ownership of Certain Beneficial Owners and Management

~~No person or group is known by the Partnership to own beneficially more than 5% of the outstanding Units of the Partnership.~~(a)

~~The~~No ~~officers~~person ~~and~~or ~~directors~~group ofis ~~the~~known ~~General~~by ~~Partner~~us ofto ~~the Partnership~~ own asbeneficially amore ~~group~~than ~~the~~5% ~~following Units~~ of the ~~Partnership~~outstanding asunits of ~~December~~our ~~31, 2001:~~partnership.

	Amount and Nature of Beneficial	Percent
Title of Class	Ownership	of Class
Limited Partnership Units	11.09 Units directly	Less than 1/2%

(b)

NoThe ~~officer~~officers orand ~~director~~directors of the ~~General~~ ~~Partner~~general partner of ~~the~~our ~~Partnership~~partnership ~~possesses~~own as a ~~right~~group tothe ~~acquire~~following ~~beneficial~~units ~~ownership~~ of ~~Units~~our partnership as of ~~the~~December ~~Partnership.~~31, 2006:

All of the outstanding shares of the General Partner of the Partnership are owned by an Affiliate or its officers and directors as set forth above in Item 10.


	Amount and Nature of Beneficial	Percent
Title of Class	Ownership	of Class

Limited partnership units	11.09 Units directly	Less than 1/2%

~~There~~No ~~exists~~officer noor ~~arrangement,~~director ~~known to the Partnership, the operation~~ of ~~which~~our ~~may,~~general atpartner possesses a ~~subsequent~~right ~~date,~~to ~~result~~acquire inbeneficial aownership ~~change~~of inunits ~~control~~ of ~~the~~our ~~Partnership~~partnership.

All of the outstanding shares of our general partner are owned by an affiliate or its officers and directors as set forth above in Item 10.

(c)

There exists no arrangement, known to us, the operation of which may, at a subsequent date, result in a change in our control.

Item 13. Certain Relationships and Related Transactions

There were no significant transactions or business relationships with the ~~General~~general ~~Partner~~partner, ~~Affiliates~~affiliates or their management other than those described in Items 10 and 11 above. Reference is made to Note 3 of the Notes to Financial Statements (Item 8 of this ~~Annual~~annual ~~Report~~report) for information regarding related party transactions.

~~-34-~~ Item 14: Principal Accountant Fees and Services

Fees. Aggregate fees for professional services rendered by our independent registered public accounting firm were as follows:


		Years ended December 31,
		2006	2005

Audit fees for professional services rendered for the audit of our annual financial statements and quarterly reviews of our financial statements.	$	25,344	27,271
Tax fees for professional services rendered for tax return preparation and review of our K-1s.		6,600	6,000

Total fees	$	31,944	33,271

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PART IV

Item 1415. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

~~The financial statements listed in the index at page 11 of this Annual Report are filed as part of this Annual Report.~~(a)

The financial statements listed in the index at page 14 of this annual report are filed as part of this annual report.

(b)

Exhibits.

The following exhibits are incorporated herein by reference:
3	Amended and Restated Agreement of Limited Partnership, included in Post-Effective Amendment #3 dated February 16, 1993, and as Exhibit A of the Prospectus dated December 13, 1991, as amended, is incorporated herein by reference thereto.
28	Prospectus, to Form S-11 Registration Statement, File No. 33-42245, as filed with Securities and Exchange Commission on December 13, 1991, as supplemented to date, is incorporated herein by reference thereto.
31.1	Rule 13a-14(a)/15d-14(a) Certification by principal executive officer
31.2	Rule 13a-14(a)/15d-14(a) Certification by principal financial officer
32.1	Section 1350 Certification by principal executive officer
32.2	Section 1350 Certification by principal financial officer

(c)

Financial Statement Schedules:

All schedules have been omitted as the required information is inapplicable or the information is presented in the financial statements or related notes.

~~Reports~~(d) ~~on Form 8-K:~~

~~None~~Reports on Form 8-K.

~~No Annual Report or proxy material for the year 2001 has been sent to the Partners of the Partnership~~None. ~~An Annual Report will be sent to the Partners subsequent to this filing and the Partnership will furnish copies of such report to the Commission when it is sent to the Partners.~~

~~-35-~~ No annual report or proxy material for the year 2006 has been sent to our limited partners. An annual report will be sent to the limited partners subsequent to this filing and we will furnish copies of such report to the Commission when it is sent to the limited partners.

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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.

	INLAND CAPITAL FUND, L.P.
	Inland Real Estate Investment Corporation
	General Partner
/s/	~~Robert~~Brenda DG. ~~Parks~~Gujral
By:	~~Robert~~Brenda DG. ~~Parks~~Gujral
	Chairman of the Board and Chief Executive Officer
	President and director
Date:	March 2522, ~~2002~~2007

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:

By: Inland Real Estate Investment Corporation General Partner /s/ ~~Robert~~Brenda DG. ~~Parks~~Gujral By: ~~Robert~~Brenda DG. ~~Parks~~Gujral ~~Chairman~~President ~~of the Board~~ and ~~Chief~~director ~~Executive Officer~~ Date: March 2522, ~~2002~~2007 /s/ ~~Patricia~~Guadalupe A.Griffin ~~DelRosso~~ By: ~~Patricia~~Guadalupe A.Griffin ~~DelRosso Senior~~ Vice President Date: March 2522, ~~2002~~2007 /s/ Kelly Tucek By: Kelly Tucek ~~Principal~~Vice ~~Financial~~President ~~Officer~~ and ~~Principal~~principal ~~Accounting~~financial ~~Officer~~officer Date: March 2522, ~~2002~~2007 /s/ ~~Daniel~~Robert LD. ~~Goodwin~~Parks By: ~~Daniel~~Robert LD. ~~Goodwin~~Parks ~~Director~~Chairman Date: March 2522, ~~2002~~2007 /s/ ~~Robert~~Daniel HL. ~~Baum~~Goodwin By: ~~Robert~~Daniel HL. ~~Baum~~Goodwin Director Date: March 2522, ~~2002~~2007

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Filing Compare · INLAND CAPITAL FUND L P