LANDMARK TAX FREE INCOME FUNDS, N-30B-2, 1996-03-04

LANDMARK TAX FREE INCOME FUNDS
N-30B-2, 1996-03-04

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<PAGE>

TRUSTEES AND OFFICERS
Philip W. Coolidge*, President
H. B. Alvord
Elliott J. Berv
Mark T. Finn
Riley C. Gilley
Diana R. Harrington
Susan B. Kerley
C. Oscar Morong, Jr.
Walter E. Robb, III
E. Kirby Warren
William S. Woods, Jr.

SECRETARY
Thomas M. Lenz*

TREASURER
John R. Elder*
*Affiliated Person of Administrator and Distributor
===============================================================================
INVESTMENT ADVISER
Citibank, N.A.
153 East 53rd Street, New York, NY 10043

ADMINISTRATOR AND DISTRIBUTOR
The Landmark Funds Broker-Dealer Services, Inc.
6 St. James Avenue, Boston, MA 02116
(617) 423-1679

TRANSFER AGENT AND CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110

AUDITORS
Deloitte & Touche LLP
125 Summer Street, Boston, MA 02110

LEGAL COUNSEL
Bingham, Dana & Gould
150 Federal Street, Boston, MA 02110

================================================================================
SHAREHOLDER SERVICING AGENTS
(See Inside Cover)

This report is prepared for the information of shareholders. It is authorized
for distribution to prospective investors only when preceded or accompanied by
an effective prospectus.

NYTFI/A/95 Printed on Recycled Paper [recycle logo]

LANDMARK\SM/ FUNDS
Advised by Citibank, N.A.

LANDMARK
NEW YORK TAX FREE
INCOME FUND

ANNUAL
REPORT
December 31, 1995
<PAGE>
________________________________________________________________________________
A Letter To Our Shareholders
________________________________________________________________________________
Dear Shareholder:

1995 was an excellent year for the U.S. bond markets. Contrary to many
investors' expectations at the end of 1994, this year was characterized by
modest economic growth, low inflation and declining interest rates. This
combination of economic influences was a recipe for above-average gains in the
financial markets, and investors who exercised patience and discipline during
1994's difficult market conditions reaped the rewards provided by stronger
markets in 1995.

The Landmark Funds' investment adviser, Citibank, N.A., manages the
Landmark New York Tax Free Income Fund to generate high levels of current income
exempt from federal, New York State and New York City personal income taxes, and
to preserve the value of its shareholders' investment. Consistent with this
objective, the Fund seeks to provide an attractive yield from a high-quality
investment portfolio consisting of municipal obligations primarily of New York
State, its municipalities and their agencies.

This Annual Report reviews the Fund's investment activities and performance
and provides a summary of Citibank's perspective on and outlook for the U.S.
financial markets. On behalf of the Board of Trustees of the Landmark Funds, I
want to thank you for your confidence and participation. We look forward to
serving you in the months and years ahead.

/s/ Philip W. Coolidge
Philip W. Coolidge
President
January 20, 1996

Remember that Mutual Fund Shares:
o Are not bank deposits or FDIC insured
o Are not obligations of or guaranteed by Citibank or Citicorp Investment
Services
o Are subject to investment risks, in clud ing possible loss of the
principal amount invested.

TABLE OF CONTENTS

1 Letter to Shareholders

2 Market Environment
Fund Snapshot

3 Portfolio Manager
The Portfolio Manager Responds
Fund Quotes

4 Strategy and Outlook
Landmark New York Tax Free Income Fund--by the Numbers

5 Fund Data
Performance Highlights

6 Portfolio of Investments

8 Statement of Assets and Liabilities

9 Statement of Operations

10 Statement of Changes in Net Assets

11 Financial Highlights

12 Notes to Financial Statements

14 Independent Auditors' Report
<PAGE>
________________________________________________________________________________
MARKET ENVIRONMENT
________________________________________________________________________________
When 1995 began, the prospects for municipal bonds appeared to be
excellent. A declining supply of new issues, combined with steady demand for
tax-advantaged investments, was expected to create a situation in which
investors bid up the price of municipal bonds. Unfortunately, this scenario has
not yet occurred. While municipal bonds remain in short supply, proposals in
Congress for replacing the current federal income tax with a flat tax have
constrained demand. Because many investors are uncertain of the tax advantages
municipal bonds will provide in the future, they are reluctant to invest in
longer term municipal securities.

Yet, in our view, the current environment is ripe with opportunity. At
year-end, 30-year AAA-rated municipal bonds were yielding an average of 5.25% of
comparable, taxable U.S. Treasury securities. In effect, investors in the 36%
tax bracket holding a tax-free bond yielding 5.25% would have to own a taxable
bond yielding 8.20% to earn the same amount of investment income on an after-tax
basis. In our view, municipal bonds represent one of the most undervalued and
attractive sectors of the fixed-income marketplace.

What's more, we believe that economic and fiscal conditions in New York
State are positive for locally issued municipal bonds. First, in our opinion,
tax-exempt bonds issued in New York are particularly undervalued because the
lack of demand stemming from the flat tax proposals is particularly severe in
high-tax states such as New York. In addition, although New York's rate of
economic growth continues to lag that of the nation as a whole, the state
appears to be managing its finances effectively.
<PAGE>

- --------------------------------------------------------------------------------
FUND SNAPSHOT

COMMENCEMENT OF OPERATIONS
September 8, 1986

NET ASSETS AS OF 12/31/95
$90.3 million

FUND OBJECTIVE
To generate high levels of current income exempt from federal, New York State
and New York City personal income taxes,+ and to preserve the value of its
shareholders' investment through investing in debt obligations consisting
primarily of municipal bonds and notes.

DIVIDENDS
Paid monthly, if any

CAPITAL GAINS
Distributed annually, if any

BENCHMARKS
o Lipper New York Municipal Bond Funds Average
o Lehman Municipal Bond Index

INVESTMENT ADVISER
Citibank, N.A.

+A portion of the income may be subject to the Federal Alternative Minimum Tax.
Consult your personal tax advisor.

<PAGE>

- -------------------------------------------------------------------------------
PORTFOLIO MANAGER

CARLA WROCKLAGE
Vice President, Citibank, N.A.

Ms. Wrocklage assumed responsibility for the management of the Fund on July 1,
1995. Ms. Wrocklage has over 9 years of tax exempt portfolio management
experience. Prior to joining the Adviser in 1995, she was a municipal bond fund
portfolio manager for Prudential Insurance Company of America. She began her
career with Keystone Group.

- -------------------------------------------------------------------------------
THE PORTFOLIO MANAGER RESPONDS

Because yields on municipal bonds remained high throughout most of 1995, we
took advantage of the situation by maintaining a longer-than-average duration (a
measure of sensitivity to interest rate changes) for most of the year. This
strategy enabled us to capture prevailing yields while positioning the portfolio
to participate in the potential for capital gains when municipal bond yields
return to more normal levels relative to taxable bonds.

We also took advantage of these unusual conditions to improve the quality
of the portfolio while sacrificing only minimal yield. For example, the
percentage of bonds rated BBB/Baa declined from 52% at mid-year to 39% at
year-end. Conversely, the percentage of the portfolio rated AAA/Aaa increased
from 21% to 29%.

- -------------------------------------------------------------------------------
FUND QUOTES FROM THE PORTFOLIO MANAGER

"When the year began, we expected the municipal bond market to outperform the
taxable bond market. But the flat tax proposals in Congress changed all that."

"New supply of tax-free bonds continues to decline. We estimate that about $50
billion came out of the municipal market in 1995."

"New York municipal bonds are particularly undervalued in today's marketplace,
making them excellent investments for New York residents seeking tax-free
income."
<PAGE>

- -------------------------------------------------------------------------------
STRATEGY AND OUTLOOK

We are quite optimistic regarding the prospects for municipal bonds in 1996
and beyond. As long as uncertainty persists regarding tax reform, tax-free
investments probably will not return to their true valuation levels relative to
taxable bonds. However, as investors become increasingly convinced that a flat
tax may not be adopted, we believe that the demand for municipal bonds should
increase, causing yields to fall and prices to rise. At the same time, the
supply of new bonds should decrease as municipalities retire debt, refinance or
turn to the short-term markets for their financing needs.

We will continue to manage the portfolio actively with an eye toward
maintaining competitive levels of tax-free income and acquiring good values in
New York municipal bonds. We also intend to maintain the high credit quality of
the portfolio, which is especially important in an economic environment
characterized by a modest growth rate.

Landmark New York Tax Free Income Fund
- -------------------------------------------------------------------------------
BY THE NUMBERS

CHANGES IN PORTFOLIO COMPOSITION

Portfolio of Investments
as of 12/31/95 . . . Compared to 12/31/94

GENERAL OBLIGATION BONDS 12% GENERAL OBLIGATION BONDS 7%
CASH/SHORT TERM/OTHER 2% CASH/SHORT TERM/OTHER 1%
OTHER REVENUE 16% OTHER REVENUE 13%
STATE AGENCIES 17% STATE AGENCIES 17%
WATER/SEWER REVENUE 13% WATER/SEWER REVENUE 16%
TRANSPORTATION REVENUE 13% TRANSPORTATION REVENUE 12%
POWER REVENUE 5% POWER REVENUE 4%
HOUSING REVENUE 9% HOUSING REVENUE 10%
GTD./PREREFUNDED 13% GTD./PREREFUNDED 20%
<PAGE>

- --------------------------------------------------------------------------------
FUND DATA All Periods Ending December 31, 1995

TOTAL RETURNS
---------------------------
SINCE
ONE FIVE 9/8/86
YEAR YEARS* (INCEPTION)*
---- ---- ----------
Landmark New York Tax Free Income Fund
without Sales Charge........................ 17.89% 8.17% 7.20%
Lipper New York Municipal Bond Funds Average.. 16.73% 8.69% 7.41%+
Lehman Municipal Bond Index................... 17.46% 8.82% 8.29%+
Landmark New York Tax Free Income Fund
with Maximum Sales Charge of 4.00%.......... 13.17% 7.29% 6.73%
* Average annual total return
+ From 8/31/86

30-Day SEC Yield 4.83%
Income Dividends Per Share $0.60

- --------------------------------------------------------------------------------
PERFORMANCE HIGHLIGHTS

A $10,000 investment in the Fund made on inception date would have grown to
$17,069 with sales charge (as of 12/31/95). The graph shows how this compares to
our bench mark over the same period.

The graph includes the initial charge on the Fund (no comparable charge exists
for the other indices) and assumes all dividends and distributions from the Fund
are reinvested at Net Asset Value.

NY TAX FREE INCOME

Landmark Landmark
N.Y. N.Y.
Tax Free Tax Free Lipper NY Lehman
Income Fund Income Fund State Muni Muni Bond
Without With Funds Index
Sales Charge Sales Charge Average (Unmanaged)

$10,000 $9,600 $10,000 $10,000
Sep-86 $9,900 $9,504 $9,956 $9,958
Oct-86 $10,141 $9,735 $10,198 $10,064
Nov-86 $10,329 $9,915 $10,370 $10,135
Dec-86 $10,331 $9,917 $10,375 $10,156
Jan-87 $10,535 $10,113 $10,586 $10,233
Feb-87 $10,603 $10,179 $10,679 $10,283
Mar-87 $10,556 $10,134 $10,631 $10,289
Apr-87 $9,731 $9,342 $9,887 $10,176
May-87 $9,608 $9,224 $9,779 $10,178
Jun-87 $9,973 $9,574 $10,019 $10,293
Jul-87 $10,042 $9,641 $10,120 $10,338
Aug-87 $10,053 $9,651 $10,157 $10,339
Sep-87 $9,453 $9,075 $9,681 $10,266
Oct-87 $9,430 $9,052 $9,725 $10,502
Nov-87 $9,804 $9,412 $9,991 $10,572
Dec-87 $9,996 $9,596 $10,205 $10,653
Jan-88 $10,399 $9,983 $10,608 $10,851
Feb-88 $10,514 $10,094 $10,709 $10,950
Mar-88 $10,187 $9,779 $10,480 $10,946
Apr-88 $10,219 $9,810 $10,529 $10,948
May-88 $10,249 $9,839 $10,535 $10,921
Jun-88 $10,431 $10,014 $10,701 $11,053
Jul-88 $10,490 $10,071 $10,766 $11,044
Aug-88 $10,523 $10,102 $10,805 $11,056
Sep-88 $10,737 $10,308 $11,012 $11,208
Oct-88 $11,011 $10,571 $11,255 $11,337
Nov-88 $10,879 $10,444 $11,123 $11,278
Dec-88 $11,111 $10,666 $11,293 $11,292
Jan-89 $11,250 $10,800 $11,454 $11,386
Feb-89 $11,082 $10,639 $11,353 $11,366
Mar-89 $11,120 $10,675 $11,336 $11,413
Apr-89 $11,443 $10,986 $11,626 $11,624
May-89 $11,713 $11,245 $11,846 $11,806
Jun-89 $11,862 $11,388 $12,003 $12,063
Jul-89 $12,017 $11,536 $12,128 $12,277
Aug-89 $11,837 $11,363 $12,009 $12,155
Sep-89 $11,696 $11,228 $11,955 $12,221
Oct-89 $11,862 $11,387 $12,058 $12,442
Nov-89 $12,073 $11,591 $12,242 $12,556
Dec-89 $12,191 $11,704 $12,341 $12,600
Jan-90 $12,058 $11,576 $12,210 $12,570
Feb-90 $12,111 $11,627 $12,314 $12,627
Mar-90 $12,115 $11,630 $12,283 $12,652
Apr-90 $11,924 $11,447 $12,130 $12,653
May-90 $12,246 $11,756 $12,442 $12,880
Jun-90 $12,415 $11,919 $12,588 $13,030
Jul-90 $12,691 $12,183 $12,823 $13,205
Aug-90 $12,389 $11,893 $12,558 $13,219
Sep-90 $12,319 $11,826 $12,507 $13,219
Oct-90 $12,485 $11,986 $12,631 $13,498
Nov-90 $12,888 $12,372 $12,919 $13,654
Dec-90 $12,915 $12,398 $12,961 $13,830
Jan-91 $13,131 $12,606 $13,138 $13,964
Feb-91 $13,114 $12,589 $13,210 $14,048
Mar-91 $13,113 $12,588 $13,259 $14,135
Apr-91 $13,318 $12,785 $13,466 $14,279
May-91 $13,432 $12,895 $13,571 $14,363
Jun-91 $13,420 $12,883 $13,557 $14,398
Jul-91 $13,618 $13,073 $13,777 $14,542
Aug-91 $13,816 $13,264 $13,975 $14,780
Sep-91 $14,036 $13,474 $14,185 $14,981
Oct-91 $14,183 $13,616 $14,321 $15,157
Nov-91 $14,197 $13,629 $14,341 $15,328
Dec-91 $14,508 $13,928 $14,636 $15,624
Jan-92 $14,457 $13,879 $14,556 $15,544
Feb-92 $14,493 $13,914 $14,610 $15,584
Mar-92 $14,449 $13,871 $14,656 $15,547
Apr-92 $14,542 $13,961 $14,812 $15,698
May-92 $14,787 $14,195 $15,028 $15,889
Jun-92 $15,086 $14,482 $15,339 $16,096
Jul-92 $15,605 $14,981 $15,900 $16,347
Aug-92 $15,379 $14,764 $15,659 $16,512
Sep-92 $15,431 $14,814 $15,706 $16,709
Oct-92 $15,153 $14,547 $15,445 $16,541
Nov-92 $15,498 $14,878 $15,823 $16,485
Dec-92 $15,648 $15,022 $16,026 $16,670
Jan-93 $15,896 $15,260 $16,223 $16,933
Feb-93 $16,505 $15,845 $16,866 $17,131
Mar-93 $16,369 $15,714 $16,694 $17,190
Apr-93 $16,494 $15,834 $16,877 $17,320
May-93 $16,531 $15,869 $16,995 $17,261
Jun-93 $16,804 $16,132 $17,281 $17,448
Jul-93 $16,810 $16,138 $17,276 $17,479
Aug-93 $17,099 $16,415 $17,652 $17,689
Sep-93 $17,297 $16,605 $17,848 $17,747
Oct-93 $17,327 $16,634 $17,882 $17,790
Nov-93 $17,170 $16,483 $17,682 $17,751
Dec-93 $17,530 $16,829 $18,053 $17,822
Jan-94 $17,701 $16,993 $18,245 $17,970
Feb-94 $17,264 $16,574 $17,787 $17,786
Mar-94 $16,482 $15,823 $16,986 $17,612
Apr-94 $16,513 $15,852 $17,003 $17,510
May-94 $16,652 $15,986 $17,170 $17,529
Jun-94 $16,450 $15,792 $17,050 $17,555
Jul-94 $16,778 $16,107 $17,350 $17,747
Aug-94 $16,856 $16,182 $17,407 $17,802
Sep-94 $16,526 $15,865 $17,073 $17,706
Oct-94 $16,209 $15,561 $16,701 $17,729
Nov-94 $15,845 $15,211 $16,246 $17,640
Dec-94 $16,221 $15,572 $16,696 $17,681
Jan-95 $16,672 $16,005 $17,167 $17,949
Feb-95 $17,157 $16,471 $17,720 $18,253
Mar-95 $17,353 $16,659 $17,871 $18,355
Apr-95 $17,368 $16,673 $17,892 $18,544
May-95 $18,024 $17,303 $18,468 $18,971
Jun-95 $17,777 $17,065 $18,221 $19,084
Jul-95 $17,863 $17,148 $18,334 $19,126
Aug-95 $18,097 $17,373 $18,541 $19,256
Sep-95 $18,148 $17,422 $18,637 $19,364
Oct-95 $18,551 $17,809 $18,939 $19,552
Nov-95 $18,956 $18,198 $19,303 $19,755
Dec-95 $19,126 $18,361 $19,502 $19,927

Notes: All Fund performance numbers represent past performance, and are no
guarantee of future results. The Fund's share price and investment return will
fluctuate, so that the value of an investor's shares, when redeemed, may be
worth more or less than their original cost. Total returns include change in
share price and reinvestment of dividends and distributions, if any. Total
return figures "with sales charge" are provided in accordance with SEC
guidelines for comparative purposes for prospective investors.

Landmark New York Tax Free Income Fund
- --------------------------------------------------------------------------------
Portfolio Of Investments December 31, 1995

MOODY'S
BOND PRINCIPAL
RATING AMOUNT
(UNAUDITED) ISSUER (000'S OMITTED) VALUE
- --------------------------------------------------------------------------------
MUNICIPAL BONDS--98.1%
GENERAL OBLIGATION BONDS -- 11.6%
BAA1 New York City, NY Series F,
7.65% due 2/1/06............... $3,000 $ 3,318,360
BAA1 New York City, NY Series F,
8.40% due 11/15/06............. 620 726,249
BAA1 New York City, NY Series B,
6.375% due 8/15/11............. 1,500 1,549,635
BAA1 New York City, NY Series F,
6.625% due 2/15/25............. 1,250 1,303,588
A New York State,
5.80% due 10/1/12.............. 1,615 1,666,438
AAA Puerto Rico, Public Building
Authority Series A,
6.25% due 7/1/13............... 1,700 1,928,701
-----------
10,492,971
-----------
GUARANTEED/PREREFUNDED AND ETM -- 13.3%
AAA New York City, NY Series F,
8.40% due 11/15/06............. 1,380 1,682,496
AAA New York State Housing
Finance Agency, ETM,
7.90% due 11/1/06.............. 5,750 7,058,010
AAA Puerto Rico Commonwealth
Highway Authority,
8.00% due 7/1/05............... 2,900 3,228,715
-----------
11,969,221
-----------
HOUSING REVENUE -- 9.1%
AA New York State Mortgage
Agency Revenue, AMT,
7.25% due 10/1/07.............. 6,075 6,599,516
AA New York State Mortgage
Agency Revenue, AMT,
7.75% due 10/1/23.............. 1,470 1,587,409
-----------
8,186,925
-----------
POWER REVENUE -- 5.1%
AAA New York State Energy
Research & Development
Authority, AMT,
5.95% due 12/1/27.............. 2,000 2,008,240
BAA1 Puerto Rico Electric
Power Authority,
6.125% due 7/1/09.............. 1,000 1,097,840
BAA1 Puerto Rico Electric
Power Authority,
5.25% due 7/1/21............... 1,500 1,447,020
-----------
4,553,100
-----------
STATE AGENCIES -- 17.3%
BAA1 New York State Dormitory
Authority, 5.25% due 5/15/13... 2,000 1,922,060
AAA New York State Dormitory
Authority, 5.375% due 7/1/14... 1,000 995,840
AAA New York State Dormitory
Authority, 5.75% due 7/1/18.... 3,000 3,176,460
AAA New York State Dormitory
Authority, 5.00% due 7/1/20.... 2,000 1,889,500
BAA1 New York State Dormitory
Authority, 5.25% due 5/15/21... 1,000 926,080
BAA1 New York State Dormitory
Authority, 5.40% due 5/15/23... 1,690 1,602,340
BAA1 New York State Urban
Development Revenue,
5.875% due 4/1/09.............. 1,245 1,269,141
BAA1 New York State Urban
Development Revenue,
5.50% due 1/1/14............... 2,000 1,974,720
BAA1 New York State Urban
Development Revenue,
5.25% due 1/1/21............... 2,000 1,863,240
-----------
15,619,381
-----------

TRANSPORTATION REVENUE -- 12.4%
BAA1 Metropolitan Transportation
Authority, NY, 5.75% due 7/1/13 4,000 4,047,400
BAA1 New York State Thruway
Authority, 5.875% due 4/1/14... 1,000 1,009,760
BAA1 Puerto Rico Commonwealth
Highway Authority,
5.50% due 7/1/13............... 1,125 1,126,091
BAA1 Puerto Rico Commonwealth
Highway Authority,
5.50% due 7/1/15............... 1,000 999,930
BAA1 Triborough Bridge & Tunnel
Authority, 7.25% due 1/1/10.... 3,500 4,035,185
-----------
11,218,366
-----------
WATER AND SEWER REVENUE -- 13.3%
AAA New York City Municipal Water
Finance, 5.50% due 6/15/15..... 1,500 1,507,545
AAA New York City Municipal Water
Finance, 5.50% due 6/15/23..... 1,000 982,150
AA New York State Environmental
Facilities, 7.00% due 6/15/12.. 3,360 3,806,006
AA New York State Environmental
Facilities, 7.50% due 6/15/12.. 3,000 3,407,220
A1 New York State Environmental
Facilities, 7.125% due 7/1/12.. 2,100 2,323,397
-----------
12,026,318
-----------
OTHER REVENUE -- 16.0%
N/R New York City Industrial
Development Agency,
7.00% due 5/1/08............... 800 840,560
A New York City Industrial
Development Agency, AMT,
6.00% due 1/1/15............... 2,000 2,027,480
BAA1 New York State Dormitory
Authority, Canisius College,
5.60% due 7/1/23.............. 1,900 1,905,605
A New York State Local Government
Assistance Series D,
5.00% due 4/1/23............... 4,000 3,768,160
A New York State Local Government
Assistance Series E,
6.00% due 4/1/14............... $2,000 $2,157,240
AAA New York State Medical
Care Facilities,
6.90% due 8/15/34.............. 1,000 1,109,400
BAA Onondaga County, NY Resource
Recovery Revenue, AMT,
7.00% due 5/1/15............... 2,500 2,615,350
-----------
14,423,795
-----------
TOTAL MUNICIPAL BONDS
(Identified Cost $81,578,762)........ 88,490,077
-----------
________________________________________________________________________________
VARIABLE RATE DEMAND NOTES*--0.3%
________________________________________________________________________________
New York State Job Development
Authority, AMT, due 3/1/07.......... 100 100,000
New York City Municipal Water
Finance Authority, due 6/15/24...... 200 200,000
-----------
TOTAL VARIABLE RATE DEMAND NOTES
at Amortized Cost................... 300,000
-----------
TOTAL INVESTMENTS
(Identified Cost $81,878,762)....... 98.4% $88,790,077
OTHER ASSETS,
LESS LIABILITIES..................... 1.6% 1,474,163
----- -----------
NET ASSETS............................ 100.0% $90,264,240
===== ===========

AMT - Subject to Alternate Minimum Tax

ETM - Escrow to Maturity for timely payment of principal

*Variable rate demand notes have a demand feature under which the Fund could
tender them back to the issuer on no more than 7 days' notice.

See notes to financial statements
<PAGE>

Landmark New York Tax Free Income Fund
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES December 31, 1995

<TABLE>
<CAPTION>
ASSETS:
<S> <C> <C>
Investments, at value (Note 1A) (Identified Cost, $81,878,762)............. $88,790,077
Cash....................................................................... 67,200
Interest receivable........................................................ 1,598,929
Receivable for shares of beneficial interest sold.......................... 25,245
-----------
Total assets........................................................... 90,481,451
-----------

LIABILITIES:
Payable for shares of beneficial interest repurchased...................... 115,032
Payable to affiliates:
Investment advisory fees (Note 2)........................................ $12,535
Shareholder servicing agents' fees (Note 3B)............................. 19,130 31,665
-------
Accrued expenses and other liabilities..................................... 70,514
-----------
Total liabilities...................................................... 217,211
-----------

NET ASSETS for 8,021,739 shares of beneficial interest outstanding......... $90,264,240
===========

NET ASSETS CONSIST OF:
Paid-in capital............................................................ $89,822,740
Accumulated net realized loss on investments............................... (6,527,062)
Unrealized appreciation of investments..................................... 6,911,315
Undistributed net investment income........................................ 57,247
-----------
Total.................................................................. $90,264,240
===========

NET ASSET VALUE AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST...... $11.25
======

COMPUTATION OF OFFERING PRICE:
Maximum Offering Price per share based on a 4.00% sales charge ($11.25 / 0.96) $11.72
======
</TABLE>

See notes to financial statements

<PAGE>
Landmark New York Tax Free Income Fund
- -------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995

<TABLE>
<CAPTION>
INVESTMENT INCOME (Note 1B):
<S> <C> <C>
Interest................................................................... $5,681,787

EXPENSES:
Investment advisory fees (Note 2).......................................... $ 354,135
Shareholder servicing agents' fees (Note 3B)............................... 354,135
Administrative fees (Note 3A).............................................. 177,067
Custodian fees............................................................. 72,587
Distribution fees (Note 4)................................................. 44,267
Auditing services.......................................................... 35,400
Shareholder reports........................................................ 26,440
Legal services............................................................. 20,868
Trustee fees............................................................... 20,569
Transfer agent fees........................................................ 12,000
Miscellaneous.............................................................. 10,670
---------
Total expenses......................................................... 1,128,138

Less aggregate amount waived by Investment Adviser,
Administrator, Shareholder Servicing Agents and Distributor
(Notes 2, 3A, 3B, and 4) ................................................ (416,884)
Less fees paid indirectly (Note 1G)........................................ (3,028)
---------
Net expenses........................................................... 708,226
---------
Net investment income.................................................. 4,973,561
----------

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investment transactions............................... 2,495,369
Unrealized appreciation (depreciation) of investments--
Beginning of period...................................................... (166,553)
End of period............................................................ 6,911,315
---------
Net change in unrealized appreciation (depreciation)....................... 7,077,868
-----------
Net realized and unrealized gain (loss) on investments..................... 9,573,237
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ...................... $14,546,798
===========
</TABLE>

See notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
Landmark New York Tax Free Income Fund
- --------------------------------------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
----------------- -----------------
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
<S> <C> <C>
Net investment income..................................................... $ 4,973,561 $ 5,816,426
Net realized gain (loss) on investment transactions....................... 2,495,369 (6,997,961)
Net change in unrealized appreciation (depreciation) of investments....... 7,077,868 (7,584,448)
----------- ------------
Net increase (decrease) in net assets resulting from operations........... 14,546,798 (8,765,983)
----------- ------------

DIVIDENDS DECLARED TO SHAREHOLDERS FROM:
Net investment income..................................................... (4,916,314) (5,834,049)
------------ ------------

TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST (Note 6):
Net proceeds from sale of shares.......................................... 3,497,861 10,231,447
Net asset value of shares issued to shareholders from
reinvestment of dividends............................................... 4,906,229 5,829,596
Cost of shares repurchased................................................ (14,169,410) (35,886,289)
----------- ------------
Net decrease in net assets from
transactions in shares of beneficial interest......................... (5,765,320) (19,825,246)
----------- ------------
NET INCREASE (DECREASE) IN NET ASSETS .................................... 3,865,164 (34,425,278)

NET ASSETS:
Beginning of period....................................................... 86,399,076 120,824,354
------------ -------------
End of period (including undistributed net investment
income of $57,247 and $44,856, respectively)............................ $ 90,264,240 $ 86,399,076
============ ============

See notes to financial statements
</TABLE>
<PAGE>
Landmark New York Tax Free Income Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOUR MONTHS
YEAR YEAR ENDED
ENDED ENDED DECEMBER 31, YEAR ENDED AUGUST 31
DECEMBER 31, DECEMBER 31, 1993 -------------------------------
1995 1994 (NOTE 1D) 1993 1992 1991
----- ----- ------ ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, beginning of period $ 10.09 $ 11.54 $ 11.44 $ 10.82 $ 10.27 $ 9.77
------- ------- -------- -------- ------- -------
Income From Operations:
Net investment income............ 0.607 0.566 0.210 0.567 0.589 0.583
Net realized and unrealized gain (loss)
on investments................. 1.153 (1.415) 0.076 0.610 0.541 0.510
------- ------- -------- -------- ------- -------
Total from operations........ 1.760 (0.849) 0.286 1.177 1.130 1.093
------- ------- -------- -------- ------- -------
Less Dividends From:
Net investment income.......... (0.600) (0.601) (0.186) (0.557) (0.580) (0.593)
------- ------- -------- -------- ------- -------
Net Asset Value, end of period. $ 11.25 $ 10.09 $ 11.54 $ 11.44 $ 10.82 $ 10.27
======= ======= ======== ======== ======= =======

RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $90,264 $86,399 $120,824 $111,583 $81,185 $73,884
Ratio of expenses to average net assets 0.80% 0.80% 0.80%+ 0.80% 0.80% 0.81%
Ratio of net investment income to
average net assets............. 5.62% 5.52% 4.84%+ 5.11% 5.58% 5.82%
Portfolio turnover............... 98% 150% 46%+ 149% 143% 337%
Total return..................... 17.89% (7.47)% 2.52%** 11.19% 11.31% 11.52%

Note: If Agents of the Fund had not voluntarily agreed to waive all or a
portion of their fees for the periods indicated and the expenses were not
reduced for fees paid indirectly for the Fiscal year ended December 31,
1995, the net investment income per share and the ratios would have been as
follows:

Net investment income per share.. $0.555 $0.508 $0.191 $0.515 $0.537 $0.540

Ratios:
Expenses to average net assets... 1.27% 1.27% 1.23%+ 1.27% 1.30% 1.24%
Net investment income to
average net assets............. 5.15% 5.05% 4.40%+ 4.64% 5.09% 5.39%
</TABLE>

+ Annualized
** Not annualized

See notes to financial statements
<PAGE>

Landmark New York Tax Free Income Fund
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS

(1) SIGNIFICANT ACCOUNTING POLICIES
The Landmark New York Tax Free Income Fund (the "Fund") is a separate
non-diversified series of Landmark Tax Free Income Funds (the "Trust"), a
Massachusetts business trust. The Trust is registered under the Investment
Company Act of 1940, as amended, as an open-end, management investment company.
The Investment Adviser of the Fund is Citibank, N.A. ("Citibank"). The Landmark
Funds Broker-Dealer Services, Inc. ("LFBDS") acts as the Fund's Administrator
and Distributor. Citibank also serves as Sub-Administrator and makes shares
available to customers as Shareholder Servicing Agent.

The significant accounting policies consistently followed by the Fund are in
conformity with generally accepted accounting prin ciples and are as follows:

A. INVESTMENT SECURITY VALUATIONS -- Debt securities (other than short-term
obligations maturing in 60 days or less) are valued on the basis of valuations
furnished by a pricing service which takes into account appropriate factors such
as institutional-size trading in similar groups of securities, yield, quality,
coupon rate, maturity, type of issue, and other market data, without exclusive
reliance upon quoted prices or exchange or over-the-counter prices, since such
valuations are believed to reflect more accurately the fair value of the
securities. Short-term obligations (maturing in 60 days or less) are valued at
amortized cost, which approximates market value. Securities, if any, for which
there are no such valuations or quotations are valued at fair value as
determined in good faith by or under guidelines established by the Trustees.

B. INCOME -- Interest income is determined on the basis of interest accrued and
discount earned, adjusted for amortization of premium or discount on long-term
debt securities when required for federal income tax purposes.

C. FEDERAL TAXES -- The Fund's policy is to comply with the provisions of the
Internal Revenue Code available to regulated investment companies and to
distribute to shareholders all of its taxable income, including any net realized
gain on investment transactions. Accordingly, no provision for federal income or
excise tax is necessary. Dividends by the Fund from net interest received on
tax-exempt municipal bonds are not includable by shareholders as gross income
for federal income tax purposes because the Fund intends to meet certain
requirements of the Internal Revenue Code applicable to regulated investment
companies which will enable the Fund to pay exempt interest dividends. The
portion of such interest, if any, earned on private activity bonds issued after
August 7, 1986, may be considered a tax preference item to shareholders. At
December 31, 1995, the Fund, for federal income tax purposes, had a capital loss
carryover of $6,527,062 of which $933,500 will expire on December 31, 1996 and
$5,593,562 will expire on December 31, 2002. Such capital loss carryover will
reduce the Fund's taxable income arising from future net realized gain on
investment transactions, if any, to the extent permitted by the Internal Revenue
Code, and thus will reduce the amount of the distributions to shareholders which
would otherwise be necessary to relieve the Fund of any liability for federal
income or excise tax.

D. CHANGE IN FISCAL YEAR END -- Effective September 1, 1993, the Fund changed
its fiscal year end from August 31 to December 31.

E. DISTRIBUTIONS -- The Fund distinguishes between distributions on a tax basis
and a financial reporting basis and requires that only distributions in excess
of tax basis earnings and profits be reported in the financial statements as a
return of capital. Differences in the recognition or classification of income
between the financial statements and tax earnings and profits which result in
temporary over-distributions for financial statement purposes, are classified as
distributions in excess of net investment income or accumulated net realized
gains.

F. OTHER -- Investment transactions are accounted for on the date the
investments are purchased or sold. Realized gains and losses are determined on
the identified cost basis. Distributions to shareholders and shares issuable to
shareholders electing to receive distributions in shares are recorded on the
ex-dividend date.

G. FEES PAID INDIRECTLY -- The Fund's custodian bank calculates its fee based on
the Fund's average daily net assets. The fee is reduced according to a fee
arrangement, which provides for custody fees to be reduced based on a formula
developed to measure the value of cash deposited with the custodian by the Fund.
This amount is shown as a reduction of expenses on the Statement of Operations.

H. EXPENSES -- The Fund bears all costs of its operations other than expenses
specifically assumed by Citibank and LFBDS. Expenses incurred by the Trust with
respect to any two or more funds or series are allocated in proportion to the
average net assets of each fund, except when allocations of direct expenses to
each fund can otherwise be made fairly. Expenses directly attributable to a fund
are charged to that fund.

(2) INVESTMENT ADVISORY FEES
The investment advisory fee paid to Citibank, as compensation for overall
investment management services amounted to $354,135, of which $191,039 was
voluntarily waived for the year ended December 31, 1995. The investment advisory
fee is computed at the annual rate of 0.40% of average daily net assets.

(3) ADMINISTRATIVE SERVICES PLAN
The Trust, on behalf of the Fund, has adopted an Administrative Services Plan
(the "Administrative Services Plan") which provides that the Trust may obtain
the services of an Administrator, one or more Shareholder Servicing Agents and
other Servicing Agents and may enter into agreements providing for the payment
of fees for such services. Under the Administrative Services Plan, the aggregate
of the fee paid to the Administrator from the Fund, the fees paid to the
Shareholder Servicing Agents from the Fund and the Basic Distribution Fee paid
from the Fund to the Distributor under the Distribution Plan may not exceed
0.65% of the Fund's average daily net assets on an annualized basis for the
Fund's then-current fiscal year.

A. ADMINISTRATIVE FEES -- Under the terms of an Administrative Services
Agreement, the administrative fee paid to the Administrator, as compensation for
overall administrative services and general office facilities, is accrued daily
and paid monthly at an annual rate of 0.20% of the Fund's average daily net
assets. The Administrative fee amounted to $177,067, of which $48,777 was
voluntarily waived for the year ended December 31, 1995. Citibank acts as
Sub-Administrator and performs such duties and receives such compensation from
LFBDS as from time to time is agreed to by LFBDS and Citibank. The Fund pays no
compensation directly to any Trustee or any officer who is affiliated with the
Administrator, all of whom receive remuneration for their services to the Fund
from the Administrator or its affiliates. Certain of the officers and a Trustee
of the Fund are officers and directors of the Administrator or its affiliates.

B. SHAREHOLDER SERVICING AGENTS FEES -- The Trust, on behalf of the Fund, has
entered into shareholder servicing agreements with each Shareholder Servicing
Agent pursuant to which that Shareholder Servicing Agent acts as an agent for
its customers and provides other related services. For their services, each
Shareholder Servicing Agent receives fees from the Fund, which may be paid
periodically, but may not exceed, on an annualized basis, an amount equal to
0.40% of the average daily net assets of the Fund represented by shares owned
during the period for which payment is being made by investors for whom such
Shareholder Servicing Agent maintains a servicing relationship. Shareholder
Servicing Agents' fees amounted to $354,135, of which $132,801 was voluntarily
waived for the year ended December 31, 1995.

(4) DISTRIBUTION FEES
The Trust has adopted a Plan of Distribution pursuant to Rule
12b-1 under the Investment Company Act of 1940, as amended, in which the Fund
reimburses the Distributor for expenses incurred or anticipated in connection
with sales of shares of the Fund, at an annual rate not to exceed 0.15% of the
Fund's average daily net assets. The Distributor may also receive an additional
fee from the Fund at an annual rate not to exceed 0.05% of the Fund's average
daily net assets in anticipation of, or as reimbursement for, advertising
expenses incurred by the Distributor in connection with the sale of shares of
the Fund. No payment of such additional fees has been made during the period.
Under the Administrative Services Plan distribution fees were computed at an
annual rate of 0.05% of the Fund's average daily net assets, which amounted to
$44,267, all of which was voluntarily waived for the year ended December 31,
1995.

(5) PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of investments, other than U.S. Government securities and
short-term obligations, aggregated $84,272,526 and $90,797,652, respectively.

(6) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional Shares of Beneficial Interest (without par value).
Transactions in shares of beneficial interest were as follows:

<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, December 31,
1995 1994
----------- -----------
<S> <C> <C>
Shares sold............ ................................................ 323,585 921,675
Shares issued to shareholders from reinvestment of dividends............ 457,160 549,080
Shares repurchased ..................................................... (1,319,122) (3,381,031)
---------- ----------
Net decrease............................................................ (538,377) (1,910,276)
========== ==========
</TABLE>

(7) FEDERAL INCOME TAX BASIS OF INVESTMENTS
The cost and unrealized appreciation (depreciation) in value of the investment
securities owned at December 31, 1995, as computed on a federal income tax
basis, are as follows:

Aggregate cost...................... $81,878,762
===========
Gross unrealized appreciation....... $ 6,920,005
Gross unrealized depreciation....... (8,690)
-----------
Net unrealized appreciation....... $ 6,911,315
===========

(8) LINE OF CREDIT
The Fund, along with other Landmark Funds, entered into an ongoing agreement
with a bank which allows the Funds collectively to borrow up to $40 million for
temporary or emergency purposes. Interest on borrowings, if any, is charged to
the specific fund executing the borrowing at the base rate of the bank. In
addition, the committed portion of the line of credit requires a quarterly
payment of a commitment fee based on the average daily unused portion of the
line of credit. For the year ended December 31, 1995, the commitment fee
allocated to the Fund was $485. Since the line of credit was established there
have been no borrowings.
<PAGE>
Landmark New York Tax Free Income Fund
- --------------------------------------------------------------------------------
INDEPENDENT
AUDITORS' REPORT

TO THE TRUSTEES AND SHAREHOLDERS OF LANDMARK NEW YORK TAX FREE INCOME FUND:

We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of Landmark New York Tax Free Income
Fund, a separate series of Landmark Tax Free Income Funds (the "Trust") (a
Massachusetts business trust), as of December 31, 1995, the related statement of
operations for the year ended December 31, 1995, the statements of changes in
net assets for the years ended December 31, 1995 and 1994, and the financial
highlights for the years ended December 31, 1995 and 1994, the four months ended
December 31, 1993 and for each of the years in the three-year period ended
August 31, 1993. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of the securities owned as of
December 31, 1995, by correspondence with the Custodian. 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 and financial highlights present
fairly, in all material respects, the financial position of Landmark New York
Tax Free Income Fund at December 31, 1995, the results of its operations, the
changes in its net assets, and its financial highlights for the respective
stated periods in conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP

Boston, Massuchusetts
February 1, 1996
- -------------------------------------------------------------------------------
<PAGE>
________________________________________________________________________________
Shareholder
Servicing Agents
________________________________________________________________________________

FOR CITIBANK NEW YORK RETAIL BANKING AND
BUSINESS AND PROFESSIONAL CUSTOMERS:
Citibank, N.A.
450 West 33rd Street, New York, NY 10001
(212) 564-3456 or (800) 846-5300

FOR CITIGOLD CUSTOMERS:
Citibank, N.A.
Citigold
P.O. Box 5130, New York, NY 10126-5130
Call Your Citigold Executive or, in NY or CT (800) 285-1701
or for all other States (800) 285-1707

FOR PRIVATE BANKING CLIENTS:
Citibank, N.A.
The Citibank Private Bank
153 East 53rd Street, New York, NY 10043
Call Your Citibank Private Banking Account Officer,
Registered Representative or (212) 559-5959

FOR CITIBANK GLOBAL ASSET MANAGEMENT CLIENTS:
Citibank, N.A.
Citibank Global Asset Management
153 East 53rd Street, New York, NY 10043
(212) 559-7117

FOR NORTH AMERICAN INVESTOR SERVICES CLIENTS:
Citibank, N.A.
111 Wall Street, New York, NY 10043
Call Your Account Manager or (212) 657-9100

FOR CITICORP INVESTMENT SERVICES CUSTOMERS:
Citicorp Investment Services
One Court Square, Long Island City, NY 11120
Call Your Investment Consultant or (800) 846-5200
(212) 736-8170 in New York City
<PAGE>
[LOGO]
LANDMARK
FUNDS

MONEY MARKET FUNDS:
Cash Reserves
Premium Liquid Reserves
Institutional Liquid Reserves

U.S. Treasury Reserves
Premium U.S. Treasury Reserves
Institutional U.S. Treasury Reserves

Tax Free Reserves
California Tax Free Reserves
Connecticut Tax Free Reserves
New York Tax Free Reserves

STOCK & BOND FUNDS:
U.S. Government Income Fund
Intermediate Income Fund
National Tax Free Income Fund
New York Tax Free Income Fund

Balanced Fund
Equity Fund
International Equity Fund
Small Cap Equity Fund
Emerging Asian Markets Equity Fund
<PAGE>

SECRETARY
Thomas M. Lenz*

ADMINISTRATOR AND DISTRIBUTOR
The Landmark Funds Broker-Dealer Services, Inc.
6 St. James Avenue, Boston, MA 02116
(617) 423-1679

TRANSFER AGENT AND CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110

AUDITORS
Deloitte & Touche LLP
125 Summer Street, Boston, MA 02110

LEGAL COUNSEL
Bingham, Dana & Gould
150 Federal Street, Boston, MA 02110

================================================================================

SHAREHOLDER SERVICING AGENTS
(See Inside Cover)

This report is prepared for the information of shareholders. It is authorized
for distribution to prospective investors only when preceded or accompanied by
an effective prospectus.

[recycle logo]

<PAGE>

LANDMARK(SM) FUNDS
Advised by Citibank, N.A.

LANDMARK
NATIONAL TAX FREE
INCOME FUND

ANNUAL
REPORT
DECEMBER 31, 1995

<PAGE>
- -------------------------------------------------------------------------------
A LETTER TO OUR SHAREHOLDERS
- -------------------------------------------------------------------------------

Dear Shareholder:

The Landmark Funds' investment adviser, Citibank, N.A., manages the
Landmark National Tax Free Income Fund to generate high levels of current income
exempt from federal personal income taxes, and to preserve the value of its
shareholders' investment. Consistent with this objective, the Fund seeks to
provide an attractive yield from a high-quality investment portfolio consisting
of municipal obligations primarily of states, municipalities and their agencies.

This Annual Report reviews the Fund's investment activities and performance
since commencement of operations in August, 1995, and provides a summary of
Citibank's perspective on and outlook for the U.S. financial markets. On behalf
of the Board of Trustees of the Landmark Funds, I want to thank you for your
confidence and participation. We look forward to serving you in the months and
years ahead.

/s/Philip W. Coolidge
President
January 20, 1996
________________________________________________________________________________

Remember that Mutual Fund Shares:
o Are not bank deposits or FDIC insured
o Are not obligations of or guaranteed by Citibank or Citicorp Investment
Services
o Are subject to investment risks, including possible loss of the principal
amount invested.

TABLE OF CONTENTS

1 Letter to Shareholders
- -------------------------------------------------------------------------------
2 Market Environment
Fund Snapshot
- -------------------------------------------------------------------------------
3 Portfolio Manager
The Portfolio Manager Responds
Fund Quotes
- -------------------------------------------------------------------------------
4 Strategy and Outlook
Landmark National Tax Free
Income Fund--by the Numbers
- -------------------------------------------------------------------------------
5 Fund Data
Performance Highlights
- -------------------------------------------------------------------------------
6 Portfolio of Investments
- -------------------------------------------------------------------------------
7 Statement of Assets and Liabilities
- -------------------------------------------------------------------------------
8 Statement of Operations
- -------------------------------------------------------------------------------
9 Statement of Changes in Net Assets
- -------------------------------------------------------------------------------
10 Financial Highlights
- -------------------------------------------------------------------------------
11 Notes to Financial Statements
- -------------------------------------------------------------------------------
14 Independent Auditors' Report
- -------------------------------------------------------------------------------
<PAGE>

- -------------------------------------------------------------------------------
MARKET ENVIRONMENT
- -------------------------------------------------------------------------------

When 1995 began, the prospects for municipal bonds appeared to be
excellent. A declining supply of new issues, combined with steady demand for
tax-advantaged investments, was expected to create a situation in which
investors bid up the price of municipal bonds. Unfortunately, this scenario has
not yet occurred. While municipal bonds remain in relatively short supply,
proposals in Congress for replacing the current federal income tax with a flat
tax have constrained demand. Because many investors are uncertain of the tax
advantages municipal bonds will provide in the future, they are reluctant to
invest in longer term municipal securities.

Yet, in our view, the current environment is ripe with opportunity. At
year-end, 30 year AAA-rated municipal bonds were yielding an average of 5.25% of
comparable, taxable U.S. Treasury securities. In effect, investors in the 36%
tax bracket holding a tax-free bond yielding 5.25% would have to own a taxable
bond yielding 8.20% to earn the same amount of investment income on an after-tax
basis. In our view, municipal bonds represent one of the most undervalued and
attractive sectors of the fixed-income marketplace.

- -------------------------------------------------------------------------------
FUND SNAPSHOT
- -------------------------------------------------------------------------------

COMMENCEMENT OF OPERATIONS
August 17, 1995

NET ASSETS AS OF 12/31/95
$1.3 million

FUND OBJECTIVE
To generate high levels of current income exempt from federal income taxes+ and
to preserve the value of its shareholders' investment. The Fund invests
primarily in municipal obligations that pay interest that is exempt from federal
income taxes.

DIVIDENDS
Paid monthly

CAPITAL GAINS
Distributed annually, if any

BENCHMARKS

o Lipper General Municipal Bond Funds Average
o Lehman Municipal Bond Index

INVESTMENT ADVISER
Citibank, N.A.

+A portion of the income may be subject to the Federal Alternative Minimum
Tax. Consult your personal tax advisor.
<PAGE>

- -------------------------------------------------------------------------------
PORTFOLIO MANAGER
- -------------------------------------------------------------------------------

CARLA WROCKLAGE
Vice President, Citibank, N.A.

Ms. Wrocklage has been responsible for the management of the Fund since the
Fund's commencement of operations August17, 1995. Ms. Wrocklage has over 9 years
of tax exempt portfolio management experience. Prior to joining the Adviser in
1995, she was a municipal bond fund portfolio manager for Prudential Insurance
Company of America. She began her career at Keystone Group.

- -------------------------------------------------------------------------------
THE PORTFOLIO MANAGER RESPONDS
- -------------------------------------------------------------------------------

In addition, since the Fund commenced operations in August, we have built a
broadly diversified portfolio of municipal bonds representing a broad
cross-section of states, municipalities and their agencies. As of year-end, the
portfolio contained bonds of municipal issuers in 13 states.

- -------------------------------------------------------------------------------
FUND QUOTES FROM THE PORTFOLIO MANAGER
- -------------------------------------------------------------------------------

"When the year began, we expected the municipal bond market to outperform the
taxable bond market. But the flat tax proposals in Congress changed all that."

"New supply of tax-free bonds continues to decline. We estimate that about $50
billion came out of the municipal market in 1995."

"Municipal bonds are particularly undervalued in today's marketplace, making
them excellent investments for investors seeking tax-free income."

- -------------------------------------------------------------------------------
STRATEGY AND OUTLOOK
- -------------------------------------------------------------------------------
We are quite optimistic regarding the prospects for municipal bonds in 1996
and beyond. As long as uncertainty persists regarding tax reform, tax-free
investments probably will not return to their true valuation levels relative to
taxable bonds. However, as investors become increasingly convinced that a flat
tax may not be adopted, we believe that demand for municipal bonds should
increase, causing yields to fall and prices to rise. At the same time, the
supply of new bonds should decrease as municipalities retire debt, refinance or
turn to the short-term markets for their financing needs.

We will continue to manage the portfolio actively with an eye toward
maintaining competitive levels of tax-free income and acquiring good values in
municipal bonds. We also intend to maintain the high credit quality of the
portfolio, which is especially important in an economic environment
characterized by a modest growth rate.

Landmark National Tax Free Income Fund
- -------------------------------------------------------------------------------
BY THE NUMBERS
- -------------------------------------------------------------------------------

PORTFOLIO COMPOSITION

Portfolio of Investments
as of 12/31/95

General Obligation Bonds 31%
Transportation Revenue 16%
Other Revenue 15%
Water/Sewer Revenue 12%
Cash/Short Term/Other 10%
State Agencies 7%
Power Revenue 5%
Housing Revenue 4%

- -------------------------------------------------------------------------------
FUND DATA Period Ending December 31, 1995
- -------------------------------------------------------------------------------
Total Returns
-------------
Since
8/17/95
(Inception)*
------------

Landmark National Tax Free Income Fund without Sales Charge.... 7.43%
Lipper General Municipal Bond Funds Average.................... 6.45%+
Lehman Municipal Bond Index.................................... 6.11%+
Landmark National Tax Free Income Fund with Maximum
Sales Charge of 4.00% ........................................ 3.10%
*Total Return from 8/17/95 (Commencement of Operations)
to December 31, 1995
+From 8/31/95

30-Day SEC Yield 5.39%
Income Dividends Per Share $0.1875

- -------------------------------------------------------------------------------
PERFORMANCE HIGHLIGHTS
- -------------------------------------------------------------------------------

A $10,000 investment in the Fund made on inception date would have grown to
$10,052 with sales charge (as of 12/31/95). The graph shows how this compares to
our bench mark over the same period.

The graph includes the initial charge on the Fund (no comparable charge exists
for the other indices) and assumes all dividends and distributions from the Fund
are reinvested at Net Asset Value.

Notes: All Fund Performance numbers represent past performance, and are no
guarantee of future results. The Fund's share price and investment return will
fluctuate, so that the value of an investor's shares, when redeemed, may be
worth more or less than their original cost. Total returns include change in
share price and reinvestment of dividends and distributions, if any. Total
return figures "with sales charge" are provided in accordance with SEC guide-
lines for comparative purposes for prospective investors.

NATIONAL TAX FREE INCOME FUND

Landmark
National Tax Landmark
Free Income National Tax Lipper
Fund - Free Income General Lehman
Without Fund - with Municipal Municipal
Sales Sales Bond Funds Bond Index
Charge Charge Average (Unmanaged)

$10,000 $ 9,600 $10,000 $10,000
Aug-95 $10,190 $ 9,782 $10,110 $10,127
Sep-96 $10,248 $ 9,838 $10,170 $10,191
Oct-95 $10,456 $10,038 $10,327 $10,339
Nov-95 $10,636 $10,211 $10,527 $10,510
Dec-95 $10,743 $10,314 $10,644 $10,611

<PAGE>
Landmark National Tax Free Income Fund
Portfolio Of Investments December 31, 1995

MOODY'S
BOND PRINCIPAL
RATING AMOUNT
(UNAUDITED) ISSUER (000'S OMITTED) VALUE
- -------------------------------------------------------------------------------

MUNICIPAL BONDS--90.7%

GENERAL OBLIGATION BONDS -- 31.3%
Aaa Massachusetts State, Construction Loan,
5.625% due 8/1/13...........................$ 50 $ 51,309
Aa Metro, Oregon Open Space Program
Series A, 5.50% due 9/1/10.................. 50 51,536
Baa1 New York, New York, 6.25% due 8/1/17 ....... 200 203,052
Aaa San Anselmo, California, 5.60% due 8/1/11.... 50 51,464
Aa1 Winston Salem, North Carolina,
5.40% due 6/1/11............................ 50 51,840
----------
409,201
----------
HOUSING REVENUE -- 3.9%
Aa Hawaii State Housing Finance & Development
Authority, 5.70% due 7/1/13................ 50 50,465
----------
POWER REVENUE -- 5.0%
A1 New York State Energy Research & Development
Authority, 7.50% due 7/1/25................. 60 65,720
----------
STATE AGENCIES -- 7.3%
Baa1 New York State Dormitory Authority,
5.50% due 5/15/23........................... 100 95,784
----------
TRANSPORTATION REVENUE -- 16.2%
Baa Arapahoe County, Colorado Capital
Improvement, 7.00% due 8/31/26.............. 150 161,394
A1 Port Authority of New York & New Jersey,
4.50% due 10/1/04........................... 50 49,507
----------
210,901
----------
WATER AND SEWER REVENUE -- 11.7%
Aaa Bexar, Texas Metropolitan Water
District, 6.00% due 5/1/15.................. 50 52,580
Aaa Pittsburgh, Pennsylvania Water & Sewer
Systems, 5.50% due 9/1/14................... 50 50,380
Aa Virginia State Resource Authority Water
& Sewer Authority, 5.60% due 10/1/25........ 50 50,255
----------
153,215
----------
OTHER REVENUE -- 15.3%
Aaa Connecticut State Special Tax Obligation,
4.70% due 10/1/04........................... 50 50,120
Aaa Oregon State Department
Administration Services Series A, 5.375%
due 11/1/16................................ 50 49,592
Aaa Pleasanton, California School District,
5.60% due 8/1/11............................ 50 52,014
Aaa University of Montana Revenue Facility,
5.00% due 11/15/17.......................... 50 47,570
----------
199,296
----------
TOTAL MUNICIPAL BONDS (Identified Cost $1,121,666) $1,184,582
----------
VARIABLE RATE DEMAND NOTES*
AT AMORTIZED COST -- 3.8%

Jackson County, Mississippi Pollution Control
Authority, 5.90% due 6/1/23..................... 50 50,000
----------
TOTAL INVESTMENTS (Identified Cost $1,171,666)....94.5% 1,234,582
OTHER ASSETS, LESS LIABILITIES................... 5.5 71,545
----------
NET ASSETS.......................................100.0% $1,306,127
====== ==========

* Variable rate demand notes have a demand feature under which the Fund could
tender them back to the issuer on no more than 7 days' notice.

See notes to financial statements
<PAGE>

Landmark National Tax Free Income Fund

Statement Of Assets And Liabilities December 31, 1995

ASSETS:
Investments, at value (Note 1A)
(Identified Cost, $1,171,666)................... $1,234,582
Cash............................................. 13,473
Interest receivable.............................. 22,154
Receivable for shares of beneficial interest sold 37,609
----------
Total assets................................. 1,307,818
----------

LIABILITIES:
Dividends Payable................................ 1,691
----------
Total liabilities............................ 1,691
----------
NET ASSETS for 123,773 shares of beneficial
interest outstanding........................... $1,306,127
==========
NET ASSETS CONSIST OF:
Paid-in capital.................................. $1,243,211
Unrealized appreciation of investments........... 62,916
----------
Total........................................ $1,306,127
==========
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
OF BENEFICIAL INTEREST......................... $10.55
======
COMPUTATION OF OFFERING PRICE:
Maximum Offering Price per share based on a
4.00% sales charge ($10.55 / 0.96)............ $10.99
======

See notes to financial statements
<PAGE>
Landmark National Tax Free Income Fund
- ------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Period August 17, 1995 (Commencement of Operations) to December 31, 1995

INVESTMENT INCOME (Note 1B):
Interest.................................... $22,587

EXPENSES:
Custodian fees.............................. $15,749
Auditing services........................... 15,000
Legal services.............................. 6,190
Trustee fees................................ 3,600
Transfer agent fees......................... 3,000
Shareholder reports......................... 3,000
Investment advisory fees (Note 2)........... 1,723
Shareholder servicing agents' fees (Note 3B) 1,723
Administrative fees (Note 3A)............... 862
Distribution fees (Note 4).................. 216
Miscellaneous............................... 1,080
-------
Total expenses.......................... 52,143

Less expenses assumed by the administrator.. (46,895)
Less fees paid indirectly (Note 1E)......... (724)
Less aggregate amount waived by Investment
Adviser, Administrator, Shareholder Servicing
Agents and Distributor (Notes 2, 3A, 3B, and 4) (4,524)
-------
Net expenses........................... --
-------
Net investment income.................. 22,587
-------

NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss) on investment
transactions............................. --
Unrealized appreciation (depreciation) of
investments--
Beginning of period...................... --
End of period............................ 62,916
-------
Net change in unrealized appreciation
(depreciation)............................ 62,916
-------
Net realized and unrealized gain (loss)
on investments........................... 62,916
-------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ......................... $85,503
=======

See notes to financial statements
<PAGE>

Landmark National Tax Free Income Fund
- ------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS

AUGUST 17, 1995
(COMMENCEMENT OF
OPERATIONS) TO
DECEMBER 31, 1995
-----------------
INCREASE (DECREASE) IN NET ASSETS FROM:

OPERATIONS:
Net investment income..................................... $ 22,587
Net realized gain (loss) on investment transactions....... --
Net change in unrealized appreciation
(depreciation) of investments............................ 62,916
----------
Net increase (decrease) in net assets
resulting from operations................................ 85,503
----------

DIVIDENDS DECLARED TO SHAREHOLDERS FROM:
Net investment income..................................... (22,707)
----------

TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST (Note 6):
Net proceeds from sale of shares.......................... 1,477,019
Net asset value of shares issued to shareholders from
reinvestment of dividends............................... 21,014
Cost of shares repurchased................................ (254,702)
----------
Net increase in net assets from
transactions in shares of beneficial interest......... 1,243,331
----------
NET INCREASE (DECREASE) IN NET ASSETS .................... 1,306,127

NET ASSETS:
Beginning of period....................................... --
----------
End of period............................................. $1,306,127
==========

See notes to financial statements
<PAGE>

Landmark National Tax Free Income Fund
- -----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS

AUGUST 17, 1995
(COMMENCEMENT OF
OPERATIONS) TO
DECEMBER 31, 1995
-----------------
Net Asset Value, beginning of period.......................... $ 10.00
-------
Income From Operations:
Net investment income......................................... 0.187
Net realized and unrealized gain (loss) on investments........ 0.551
-------
Total from operations................................. 0.738
-------
Less Dividends From:
Net investment income....................................... (0.188)
-------
Net Asset Value, end of period.............................. $ 10.55
=======

RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)..................... $1,306
Ratio of expenses to average net assets....................... 0%
Ratio of net investment income to average net assets.......... 5.20%+
Portfolio turnover............................................ 0%
Total return.................................................. 7.43%**

Note: If Agents of the Fund had not voluntarily agreed to waive all of their
fees for the period, the expenses were not reduced for fees paid indirectly
and had expenses been limited to that required by certain state securities
law, the net investment income per share and the ratios would have been as
follows:
Net investment income per share............................... $0.098
-------

Ratios:
Expenses to average net assets................................ 2.50%+
Net investment income to average net assets................... 2.70%+

+ Annualized
** Not annualized

See notes to financial statements
<PAGE>

Landmark National Tax Free Income Fund
- ----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS

(1) SIGNIFICANT ACCOUNTING POLICIES
The Landmark National Tax Free Income Fund (the "Fund") is a separate
non-diversified series of Landmark Tax Free Income Funds (the "Trust"), a
Massachusetts business trust. The Trust is registered under the Investment
Company Act of 1940, as amended, as an open-end, management investment company.
The Investment Adviser of the Fund is Citibank, N.A. ("Citibank"). The Landmark
Funds Broker-Dealer Services, Inc. ("LFBDS") acts as the Fund's Administrator
and Distributor. Citibank also serves as Sub-Administrator and makes shares
available to customers as Shareholder Servicing Agent.

The significant accounting policies consistently followed by the Fund are in
conformity with generally accepted accounting principles and are as follows:

D. DISTRIBUTIONS -- The Fund distinguishes between distributions on a tax basis
and a financial reporting basis and requires that only distributions in excess
of tax basis earnings and profits be reported in the financial statements as a
return of capital. Differences in the recognition or classification of income
between the financial statements and tax earnings and profits which result in
temporary over-distributions for financial statement purposes, are classified as
distributions in excess of net investment income or accumulated net realized
gains.

E. FEES PAID INDIRECTLY -- The Fund's custodian bank calculates its fee based on
the Fund's average daily net assets. The fee is reduced according to a fee
arrangement, which provides for custody fees to be reduced based on a formula
developed to measure the value of cash deposited with the custodian by the Fund.
This amount is shown as a reduction of expense on the Statement of Operations.

F. EXPENSES -- The Fund bears all costs of its operations other than expenses
specifically assumed by Citibank and LFBDS. Expenses incurred by the Trust with
respect to any two or more funds or series are allocated in proportion to the
average net assets of each fund, except when allocations of direct expenses to
each fund can otherwise be made fairly. Expenses directly attributable to a fund
are charged to that fund.

G. OTHER -- Investment transactions are accounted for on the date the
investments are purchased or sold. Realized gains and losses are determined on
the identified cost basis. Distributions to shareholders and shares issuable to
shareholders electing to receive distributions in shares are recorded on the
ex-dividend date.

(2) INVESTMENT ADVISORY FEES
The investment advisory fee paid to Citibank, as compensation for overall
investment management services amounted to $1,723, all of which was voluntarily
waived for the period ending December 31, 1995. The investment advisory fee is
computed at the annual rate of 0.40% of average daily net assets.

A. ADMINISTRATIVE FEES -- Under the terms of an Administrative Services
Agreement, the administrative fee paid to the Administrator, as compensation for
overall administrative services and general office facilities, is accrued daily
and paid monthly at an annual rate of 0.20% of the Fund's average daily net
assets. The Administrative fee amounted to $862, all of which was voluntarily
waived for the period ending December 31, 1995. Citibank acts as
Sub-Administrator and performs such duties and receives such compensation from
LFBDS as from time to time is agreed to by LFBDS and Citibank. The Fund pays no
compensation directly to any Trustee or any officer who is affiliated with the
Administrator, all of whom receive remuneration for their services to the Fund
from the Administrator or its affiliates. Certain of the officers and a Trustee
of the Fund are officers and directors of the Administrator or its affiliates.

B. SHAREHOLDER SERVICING AGENTS FEES -- The Trust, on behalf of the Fund, has
entered into shareholder servicing agreements with each Shareholder Servicing
Agent pursuant to which that Shareholder Servicing Agent acts as an agent for
its customers and provides other related services. For their services, each
Shareholder Servicing Agent receives fees from the Fund, which may be paid
periodically, but may not exceed, on an annualized basis, an amount equal to
0.40% of the average daily net assets of the Fund represented by shares owned
during the period for which payment is being made by investors for whom such
Shareholder Servicing Agent maintains a servicing relationship. Shareholder
Servicing Agents' fees amounted to $1,723, all of which was voluntarily waived
for the period ending December 31, 1995.

(4) DISTRIBUTION FEES
The Trust has adopted a Plan of Distribution pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended, in which the Fund reimburses the
Distributor for expenses incurred or anticipated in connection with sales of
shares of the Fund, at an annual rate not to exceed 0.15% of the Fund's average
daily net assets. The Distributor may also receive an additional fee from the
Fund at an annual rate not to exceed 0.05% of the Fund's average daily net
assets in anticipation of, or as reimbursement for, advertising expenses
incurred by the Distributor in connection with the sale of shares of the Fund.
No payment of such additional fees has been made during the period. Under the
Administrative Services Plan distribution fees were computed at an annual rate
of 0.05% of the Fund's average daily net assets, which amounted to $216, all of
which was voluntarily waived for the period ending December 31, 1995.

(5) PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of investments, other than U.S. Government securities and
short-term obligations, aggregated $1,121,666 and $0, respectively.

<PAGE>

August 17, 1995
(Commencement of
Operations) to
December 31, 1995
------------------
Shares sold.............................. 146,053
Shares issued to shareholders from
reinvestment of dividends.............. 2,033
Shares repurchased....................... (24,313)
-------
Net increase............................. 123,773
=======

Aggregate cost............................ $1,171,666
==========
Gross unrealized appreciation............. $ 62,916
Gross unrealized depreciation............. --
----------
Net unrealized appreciation............. $ 62,916
==========
<PAGE>

Landmark National Tax Free Income Fund
- -----------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT

TO THE TRUSTEES AND SHAREHOLDERS OF LANDMARK NATIONAL TAX FREE INCOME FUND:

We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of Landmark National Tax Free Income
Fund, a separate series of Landmark Tax Free Income Funds (the "Trust") (a
Massachusetts business trust), as of December 31, 1995, the related statement of
operations, the statement of changes in net assets and the financial highlights
for the period August 17, 1995 (commencement of operations) to December 31,
1995. These financial statements and financial highlights are the responsibility
of the Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of the securities owned as of
December 31, 1995, by correspondence with the Custodian. 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 audit provides a reasonable basis for our opinion.

In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Landmark National
Tax Free Income Fund at December 31, 1995, and the results of its operations,
the change in its net assets, and its financial highlights for the period August
17, 1995 (commencement of operations) to December 31, 1995 in conformity with
generally accepted accounting principles.

DELOITTE & TOUCHE LLP
Boston, Massachusetts
February 1, 1996

- -------------------------------------------------------------------------------
<PAGE>
_______________________________________________________________________________
Shareholder
Servicing Agents
_______________________________________________________________________________