<PAGE> PAGE 1
000 A000000 12/31/96
000 C000000 0000275276
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 N
000 H000000 N
000 I000000 3.0
000 J000000 A
001 A000000 IAA TRUST TAX EXEMPT BOND FUND, INC.
001 B000000 811-2840
001 C000000 3095573222
002 A000000 808 IAA DRIVE
002 B000000 BLOOMINGTON
002 C000000 IL
002 D010000 61702
003 000000 N
004 000000 N
005 000000 N
006 000000 N
007 A000000 N
007 B000000 0
007 C010100 1
007 C010200 2
007 C010300 3
007 C010400 4
007 C010500 5
007 C010600 6
007 C010700 7
007 C010800 8
007 C010900 9
007 C011000 10
008 A000001 IAA TRUST COMPANY
008 B000001 A
008 C000001 801-000000
008 D010001 BLOOMINGTON
008 D020001 IL
008 D030001 61702
010 A000001 FPS SERVICES, INC.
010 B000001 084932
010 C010001 KING OF PRUSSIA
010 C020001 PA
010 C030001 19406
010 C040001 0903
011 A000001 FPS BROKER SERVICES, INC.
011 B000001 8-084932
011 C010001 KING OF PRUSSIA
011 C020001 PA
011 C030001 19406
011 C040001 0903
012 A000001 FPS SERVICES INC.
<PAGE> PAGE 2
012 B000001 84-084932
012 C010001 KING OF PRUSSIA
012 C020001 PA
012 C030001 19406
012 C040001 0903
013 A000001 COOPERS & LYBRAND L.L.P.
013 B010001 PHILADELPHIA
013 B020001 PA
013 B030001 19103
015 A000001 IAA TRUST COMPANY
015 B000001 C
015 C010001 BLOOMINGTON
015 C020001 IL
015 C030001 61702
015 E010001 X
018 000000 Y
019 A000000 Y
019 B000000 4
019 C000000 IAATRSTFDS
020 C000001 0
020 C000002 0
020 C000003 0
020 C000004 0
020 C000005 0
020 C000006 0
020 C000007 0
020 C000008 0
020 C000009 0
020 C000010 0
021 000000 0
022 A000001 MORGAN KEEGAN & CO.
022 B000001 64-0474907
022 C000001 510
022 D000001 765
022 A000002 HUTCHINSON SHUCKLEY ERLEY & CO.
022 B000002 36-2355753
022 C000002 508
022 D000002 514
022 A000003 RAYMOND JAMES & CO.
022 B000003 59-1237041
022 C000003 487
022 D000003 468
022 C000004 0
022 D000004 0
022 C000005 0
022 D000005 0
022 C000006 0
022 D000006 0
022 C000007 0
022 D000007 0
022 C000008 0
<PAGE> PAGE 3
022 D000008 0
022 C000009 0
022 D000009 0
022 C000010 0
022 D000010 0
023 C000000 1505
023 D000000 1747
024 000000 N
025 D000001 0
025 D000002 0
025 D000003 0
025 D000004 0
025 D000005 0
025 D000006 0
025 D000007 0
025 D000008 0
026 A000000 N
026 B000000 N
026 C000000 N
026 D000000 Y
026 E000000 N
026 F000000 N
026 G010000 N
026 G020000 N
026 H000000 N
027 000000 Y
028 A010000 4
028 A020000 41
028 A030000 0
028 A040000 47
028 B010000 56
028 B020000 41
028 B030000 0
028 B040000 197
028 C010000 4
028 C020000 39
028 C030000 0
028 C040000 80
028 D010000 46
028 D020000 43
028 D030000 0
028 D040000 27
028 E010000 2012
028 E020000 41
028 E030000 0
028 E040000 2172
028 F010000 5
028 F020000 76
028 F030000 0
028 F040000 82
028 G010000 2127
<PAGE> PAGE 4
028 G020000 281
028 G030000 0
028 G040000 2605
028 H000000 0
029 000000 Y
030 A000000 0
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031 A000000 0
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034 000000 N
035 000000 0
036 B000000 0
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039 000000 N
040 000000 Y
041 000000 Y
042 A000000 0
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042 C000000 100
042 D000000 0
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043 000000 12
044 000000 0
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047 000000 Y
048 000000 0.500
048 A010000 0
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048 I010000 0
<PAGE> PAGE 5
048 I020000 0.000
048 J010000 0
048 J020000 0.000
048 K010000 0
048 K020000 0.000
049 000000 N
050 000000 N
051 000000 N
052 000000 N
053 A000000 N
054 A000000 Y
054 B000000 Y
054 C000000 N
054 D000000 N
054 E000000 N
054 F000000 N
054 G000000 N
054 H000000 Y
054 I000000 N
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054 K000000 N
054 L000000 Y
054 M000000 Y
054 N000000 N
054 O000000 Y
055 A000000 N
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056 000000 Y
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060 A000000 Y
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061 000000 1000
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<PAGE> PAGE 6
062 R000000 0.0
063 A000000 0
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068 B000000 N
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070 A010000 Y
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070 B010000 N
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070 C010000 N
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070 D010000 N
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070 E010000 N
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070 F010000 N
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070 G010000 N
070 G020000 N
070 H010000 N
070 H020000 N
070 I010000 N
070 I020000 N
070 J010000 N
070 J020000 N
070 K010000 Y
070 K020000 Y
070 L010000 N
070 L020000 N
070 M010000 N
070 M020000 N
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070 N020000 N
070 O010000 Y
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071 A000000 995
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<PAGE> PAGE 7
072 B000000 483
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<PAGE> PAGE 8
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SIGNATURE KELLY DIGAN
TITLE COMPLIANCE ADM.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000275276
<NAME> IAA TRUST TAX EXEMPT BOND FUND
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 17290357
<INVESTMENTS-AT-VALUE> 17650003
<RECEIVABLES> 316847
<ASSETS-OTHER> 3486
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 17970336
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 59804
<TOTAL-LIABILITIES> 59804
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 17618187
<SHARES-COMMON-STOCK> 2087721
<SHARES-COMMON-PRIOR> 2110571
<ACCUMULATED-NII-CURRENT> 793
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 68094
<ACCUM-APPREC-OR-DEPREC> 359646
<NET-ASSETS> 17910532
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 482911
<OTHER-INCOME> 0
<EXPENSES-NET> 101840
<NET-INVESTMENT-INCOME> 381071
<REALIZED-GAINS-CURRENT> (35661)
<APPREC-INCREASE-CURRENT> 445721
<NET-CHANGE-FROM-OPS> 791131
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 378552
<DISTRIBUTIONS-OF-GAINS> 48659
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 247405
<NUMBER-OF-SHARES-REDEEMED> 303144
<SHARES-REINVESTED> 32889
<NET-CHANGE-IN-ASSETS> 166813
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 16226
<OVERDISTRIB-NII-PRIOR> 1726
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 44883
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 101840
<AVERAGE-NET-ASSETS> 17853078
<PER-SHARE-NAV-BEGIN> 8.41
<PER-SHARE-NII> .18
<PER-SHARE-GAIN-APPREC> .19
<PER-SHARE-DIVIDEND> .18
<PER-SHARE-DISTRIBUTIONS> .02
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.58
<EXPENSE-RATIO> 1.13
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
ATTACHMENT 77.C TO FORM N-SAR, DATED 10/31/96, FOR
IAA TRUST TAX EXEMPT BOND FUND, INC.
Annual Meeting of Stockholders
An Annual Meeting of Stockholders was held on September 30, 1996 for IAA
Trust Growth Fund, Inc.; IAA Trust Asset Allocation Fund, Inc.; IAA Trust
Tax Exempt Bond Fund, Inc.; and IAA Trust Taxable Fixed Income Series
Fund, Inc. At the meetings, stockholders were asked to consider and act
upon (1) the election of seven (7) Directors for the ensuing year; (2) the
ratification or rejection of the selection by the Board of Directors of
the firm of Coopers & Lybrand, L.L.P. as auditors and accountants for the
fiscal year ending June 30, 1997.
The results of all matters voted on by stockholders of the Funds at the
Annual Meetings held on September 30, 1996, were as follows:
A. Election of Directors
IAA Trust Growth Fund, Inc.
Withhold
For Authority
Ronald R. Warfield 2,839,474 24,372
Herbert G. Allen 2,840,388 23,458
Nancy J. Erickson 2,810,877 52,969
William E. Klein, Sr. 2,812,653 51,193
Ailene Miller 2,837,542 26,304
Rollie D. Moore 2,840,091 23,755
Charlot R. Cole 2,839,401 24,445
<PAGE>
IAA Trust Asset Allocation Fund, Inc.
Withhold
For Authority
525,890 0
525,890 0
522,467 3,423
522,467 3,423
522,826 3,064
522,826 3,064
525,890 0<PAGE>
<PAGE>
B. Selection of Auditors
IAA Trust Growth Fund, Inc.
For Against Abstain
2,786,481 716 76,649
<PAGE>
IAA Trust Asset Allocation Fund, Inc.
For Against Abstain
511,931 48 13,911<PAGE>
A. Election of Directors
IAA Trust Tax Exempt Bond Fund, Inc.
Withhold
For Authority
Ronald R. Warfield 1,385,735 36,236
Herbert G. Allen 1,385,697 36,274
Nancy J. Erickson 1,385,735 36,236
William E. Klein, Sr. 1,385,735 36,236
Ailene Miller 1,385,697 36,274
Rollie D. Moore 1,381,128 40,843
Charlot R. Cole 1,384,560 37,411
<PAGE>
IAA Trust Taxable Fixed Income Series Fund, Inc.
Withhold
For Authority
20,644,395 184,337
20,641,619 187,113
20,589,207 239,525
20,586,431 242,301
20,641,619 187,113
20,644,395 184,337
20,761,033 67,699<PAGE>
<PAGE>
B. Selection of Auditors
IAA Trust Tax Exempt Bond Fund, Inc.
For Against Abstain
1,397,243 0 24,728<PAGE>
IAA Trust Taxable
Fixed Income Series
Fund, Inc.
For Against Abstain
20,599,982 0 228,750
