IDS LIFE ACCOUNT RE OF IDS LIFE INSURANCE CO, 424B3, 1994-05-04

IDS LIFE ACCOUNT RE OF IDS LIFE INSURANCE CO
424B3, 1994-05-04
LIFE INSURANCE

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1994 PROSPECTUS

Real Estate Variable Annuity

A tax-deferred real estate investment providing retirement income

Issued by IDS Life Insurance Company
Investment Adviser: JMB Annuity Advisers
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Message from the Executive Vice President

(Photo of) Janis Miller

With the recent increase in personal taxes for the highest-income
earners, the need for reducing one's tax liability has become even
more evident -- no matter what tax bracket you're in. That's where
tax-advantaged investments such as IDS Life's Real Estate Variable
Annuity (REVA) come in.

An annuity allows you to invest for your retirement without paying
any income taxes on your investment earnings until you begin to
receive payments. Money that otherwise would have gone to the IRS
goes to work for you instead, making it possible for your nest egg
to grow faster than it would in a taxable investment providing a
similar return. Over time, that tax deferment can make a
substantial difference in the amount of your retirement money.

But the most important benefit of an annuity is more basic than tax
advantages. What an annuity is designed to do is help you achieve
a goal that we all share -- to live comfortably and be financially
independent when our working years are over.

While it's true that Social Security and, if you're fortunate
enough to have one, a pension also provide retirement income, many
people find that the amount they receive from those sources falls
far short of their needs. They simply need more money to maintain
a lifestyle similar to what they enjoyed when they were working.
The solution is to build your own independent retirement fund by
systematic saving and prudent investing.

Real estate (the core of REVA's investments) has long been
considered an attractive investment because, in addition to adding
diversification to your portfolio -- a fundamental aspect of any
person's financial strategy -- it historically has provided
protection against rising inflation.

While it's generally true that real estate has not kept pace with
may other types of investments in recent years, REVA did provide
investors with a solid return in 1993. Typically, real estate
values move in slow cycles, which is why we think real estate could
be on a modest uptrend for some time. But regardless of the market
outlook, it's important to remember that this annuity should
comprise only a small part of your overall investment portfolio.

JMB Realty Corporation, one of America's largest real estate
investment companies, serves as the managing partner of the
investment adviser. IDS Life is continuing to work closely with
them to provide a solid, long-term investment for REVA contract
holders. All the features of the contract, including descriptions
of the properties, are explained in the attached prospectus.

Sincerely,

Janis Miller
Executive Vice President
Variable Assets
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Real Estate Variable Annuity

Prospectus/April 29, 1994

This prospectus describes Individual Deferred Variable Annuity
Contracts (the Contracts) offered by IDS Life Insurance Company
(IDS Life), in which purchase payments accumulate on a variable
basis and pay retirement benefits to the owner. The Contracts are
available for non-qualified retirement plans only. The Contracts
are not available for Individual Retirement Annuities (IRAs),
401(k) plans, 403(b) plans or other qualified plans.

The minimum initial purchase payment for a Contract is $5,000; or
$2,000 if concurrently the owner agrees to make additional monthly
purchase payments of not less than $100 each by means of a bank
authorization. Additional purchase payments may be made in amounts
of at least $2,000 each or, if made by means of a bank
authorization, of not less than $100 per month. The maximum
aggregate additional purchase payments in any one contract year
after the first may not exceed $50,000. Purchase payments are
allocated to IDS Life Account RE (the Account), a segregated asset
account of IDS Life. See The Account section. Contract values of
the Account and annuity payments from the Account will vary with
the performance of the investments of the Account. There is no
guaranteed minimum contract value. Owners of the Contracts bear
the complete investment risk of the Account.

IDS Life Account RE
Individual Deferred Variable
Annuity Contracts

Sold by:
IDS Life Insurance Company
IDS Tower 10
Minneapolis, MN 55440-0010
Telephone: (612) 671-3733

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE. THIS PROSPECTUS SHOULD BE RETAINED FOR FUTURE REFERENCE.

IDS LIFE IS NOT A BANK, AND THE SECURITIES IT OFFERS ARE NOT
DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY ANY BANK
NOR ARE THEY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
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The assets of the Account will be invested primarily in real estate
related investments. It is currently anticipated that
approximately 50 percent to 70 percent of the Account's assets will
be invested in income-producing real property such as office
buildings, shopping centers, apartment complexes and other real
properties, and approximately 15 percent to 40 percent of the
Account's assets will be invested in mortgage loans and land
sale-leaseback investments, which may include participations in the
appreciation or the gross revenues or income of the real properties
that are the subject of the mortgage loans or land sale-leaseback
investments. Such percentages may vary from time to time at the
discretion of IDS Life. The remaining assets of the Account will
be invested in short-term debt instruments and intermediate-term
bonds with maturities of up to five years, in order to meet the
liquidity needs of the Account.

The investment objectives of the Account are to (i) preserve and
protect the Account's assets in real (i.e., inflation-adjusted)
terms; (ii) provide for compounding of income through the
reinvestment of cash flow from investments; and (iii) provide for
increases in income through capital appreciation of the real
property owned by the Account or, to the extent available, through
participations in the capital appreciation or gross revenues or
income of the real properties subject to mortgage loans or land
sale-leaseback investments of the Account. There is no assurance
that the investment objectives of the Account will be achieved.

IDS Life will furnish to each owner an annual report showing the
current number of accumulation or annuity units, the value per unit
and the contract value. In addition, IDS Life will send to each
owner annual financial statements for the Account audited by
independent auditors.

Any Contract may be returned for cancellation at any time within 10
days after it has been delivered to the owner, and the full
contract value will be returned.

The Contracts involve a substantial degree of risk, particularly
due to the illiquidity of the assets of the Account. Over the past
few years the Account has experienced substantial contract
surrenders in excess of contract purchase payments. The Account
has therefore obtained a revolving line of credit of up to $10
million from IDS Life to pay contract surrenders and other
obligations under the Contracts. See the Other Investment
Policies--Borrowing Policies, Risk Factors, Conflicts of Interest-
Borrowings from IDS Life; and Management's Discussion and Analysis
of Financial Condition and Results of Operations sections. The
ability of an owner of a Contract to withdraw the contract value is
subject to certain restrictions and, under certain circumstances,
payments under the Contracts may be suspended. See the Contract
Charges and Deductions and the Suspension and Delay of Payments
sections. In addition, the investment and operation of the assets
of the Account involve certain conflicts of interest. See the
Conflicts of Interest section.

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Summary of Contents

This prospectus offers Individual Deferred Variable Annuity
Contracts designed primarily to allow owners to participate in the
investment performance of a pool of real estate related investments
held or owned by the Account. An owner will receive variable
retirement payments depending upon his choice of annuity.

See the Definitions section, page 7, for the definition of many of
the terms used in this prospectus.

The Account is a segregated asset account of IDS Life established
pursuant to the laws of the State of Minnesota. The assets of the
Account are not subject to any liabilities arising out of any other
assets or business of IDS Life. Income, gains and losses of the
Account are credited to or charged against the Account without
regard to any other income, gains or losses of IDS Life. IDS Life
is not liable for any obligations of the Account. IDS Life is
liable for fulfillment of the terms of the Contracts, including the
obligations to pay death benefits and to guarantee the annuity
purchase rates in the Contracts. See The Account section.

The minimum initial purchase payment for a Contract is $5,000; or
$2,000 if concurrently the owner agrees to make additional monthly
purchase payments of not less than $100 each by means of a bank
authorization. Additional purchase payments may be made in amounts
of at least $2,000 each or, if made by means of a bank
authorization, of not less than $100 per month. The maximum
aggregate additional purchase payments in any one contract year
after the first may not exceed $50,000. The maximum aggregate
purchase payments for the first contract year depend upon the issue
age on the effective date. Up to age 75, the maximum is $1
million. For ages 76-85, it is $500,000 and for ages 86-90, the
maximum is $50,000. IDS Life, at its discretion, may permit
greater maximum initial or additional purchase payments in certain
instances. No sales charge is deducted from any purchase payment
when made. See The Contract -- Accumulation Period section.

A Contract may be returned for cancellation at any time within 10
days after it is delivered to the owner, in which event the entire
contract value (without assessment of any charges or deductions)
will be refunded. However, if applicable state law so requires,
the full amount of the aggregate purchase payments received by IDS
Life will be refunded. After the initial 10-day period of the
Contract and during the first eight years after any purchase
payment, surrender of the Contract will be subject to assessment of
a surrender charge, based upon the number of payment years that
have elapsed since the purchase payment. The surrender charge,
which is a contingent deferred sales charge, is 8 percent of the
amount surrendered during the first payment year and decreases by 1
percent per year thereafter to 1 percent in the eighth payment
year. There is no surrender charge on amounts surrendered after
the eighth payment year. See The Contract -- Accumulation Period
section.

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IDS Life assesses the Account a daily charge for mortality and
expense risks that amounts to an aggregate of 1 percent on an
annual basis of the average daily asset value. IDS Life assesses
the Account a daily charge for an asset management fee that amounts
to an aggregate of 1.25 percent on an annual basis of the average
daily asset value of the Account, subject to increase by not more
than 0.25 percent per year in the event the Account's real property
investments exceed a certain rate of return on an annual basis.
IDS Life also assesses the Account an acquisition and mortgage
placement fee that amounts to 3.75 percent of the total cash
investment to be paid or advanced by the Account in connection with
each real property investment, mortgage loan and land
sale-leaseback investment. Portions of the asset management and
acquisition and mortgage placement fees will be paid by IDS Life to
the Investment Adviser, JMB Annuity Advisers. See the Contract
Charges and Deductions section.

The investment objectives of the Account are to provide for payment
of retirement income under the Contracts by seeking to preserve and
protect the Account's assets in real (i.e., inflation-adjusted)
terms; to provide for compounding of income through the
reinvestment of cash flow from investments; and to provide for
increases in income through capital appreciation of real property
investments and, to the extent available, through participations in
the capital appreciation or gross revenues or income of the real
properties subject to mortgage loans or land sale-leaseback
investments of the Account. IDS Life will seek to achieve these
objectives by investing approximately 50 percent to 70 percent of
the Account's assets in such income-producing real property
investments as office buildings, shopping centers, apartment
complexes and other real properties, and approximately 15 percent
to 40 percent of the Account's assets in mortgage loans and land
sale-leaseback investments. However, IDS Life is permitted to
alter such percentages in accordance with changing market
conditions or under other circumstances. To enable the Account to
meet its needs for liquidity, it is expected that approximately 5
percent to 20 percent of the Account's assets will be invested in
short-term debt instruments and intermediate-term bonds with
maturities of up to five years. See the Investment Objectives of
the Account section.

There is no assurance that enough suitable investments will be
found or that the investment objectives of the Account will be
achieved. Owners bear the complete investment risk of the
Contracts. Contract values will fluctuate depending upon the
investment performance of the Account, which will reflect the
performance of the Account's portfolio of investments and the
charges and deductions assessed under the Contracts.

Under present law, an owner is not taxed on the increases in
contract value until distributions occur, either through the
surrender of the Contract or the receipt of annuity payments, or
until a change of ownership occurs. Under certain circumstances,
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a tax penalty of 10 percent of the portion of a distribution
representing income to the owner may be assessed for distributions
made prior to age 59-1/2. See the Certain Federal Income Tax
Considerations section.

Because the assets of the Account will be invested primarily in
real estate related investments, the investment performance of the
Account will be subject to all of the risks generally incident to
investments in real estate, such as the uncertainty of cash flow to
meet obligations, the uncertainty in making market valuations of
properties, adverse changes in national or local economic
conditions, the cost of funds and other factors affecting real
estate. See the Risk Factors -- General Risks of Real Property
Investments section. Owners will bear all investment risk of the
Account's portfolio. In addition, the real estate related
investments made or to be made by the Account are illiquid
investments. Accordingly, owners will bear the risk that benefits
under the Contracts will not be immediately payable in the event
that a substantial portion of the Account's assets is required to
be used to redeem Contracts. It is generally expected that the
Account will have approximately 5 percent to 20 percent of its
assets invested in liquid assets and the Account has obtained a
revolving line of credit from IDS Life to pay for contract
surrenders and other obligations under the Contracts. However, it
is possible that necessary funds for the payment of benefits under
the Contracts may not be readily obtainable by the Account either
through borrowings by the Account or through the disposition of
real estate related investments on commercially reasonable terms.
In such event, payments may be suspended for up to six months. In
the event of any suspension of payments, the cash available will be
used first to pay any obligations of the Account (other than
contract obligations); second, to make annuity payments; third, to
pay death benefits; and finally, to pay any contract surrenders.
See the Suspension and Delay of Payments section. For information
regarding certain other risk factors that may affect the operation
and performance of the Account and the value of its investments,
see the Risk Factors section. IDS Life, the Investment Adviser and
their respective affiliates may have potential conflicts of
interest with respect to operating the Account, including the fact
that the arrangements relating to the compensation of IDS Life
under the Contracts are not the result of arm's-length negotiations
and that IDS Life, the Investment Adviser and their affiliates may
make real estate investments for their own accounts or those of
other entities and may render real estate investment services to
other entities that may have the same or substantially similar
investment objectives as those of the Account. See the Conflicts
of Interest section.

Premium taxes of up to 3.5 % or other taxes that may be payable to
a state or other government agency in connection with the purchase
of Contracts may be deducted from purchase payments or from the
contract value. Premium taxes depend on the owner's state of
residence or the state in which the Contract was sold.

See page 17, where a description of the real estate related
investments made for IDS Life Account RE begins.
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Table of Contents Page

Summary of Contents.......................................... 3
Definitions.................................................. 7
IDS Life..................................................... 8
The Account.................................................. 8
Description of the Investment Adviser and Affiliates......... 9
Investment Objectives of the Account......................... 11
Investment Restrictions...................................... 16
Other Investment Policies.................................... 16
Real Estate Related Investments.............................. 17
Risk Factors................................................. 36
Conflicts of Interest........................................ 44
The Contract -- Accumulation Period.......................... 48
Contract Charges and Deductions.............................. 50
Suspension and Delay of Payments............................. 53
Transfer of Ownership........................................ 54
Beneficiary.................................................. 54
Annuity Period............................................... 55
Certain Federal Income Tax Considerations.................... 58
Valuation of Assets.......................................... 59
Distribution of Contracts.................................... 64
State Regulation............................................. 64
Experts...................................................... 64
Registration Statement....................................... 65
Reports...................................................... 65
Financial Statements......................................... 65
Legal Proceedings............................................ 65
Appendix A................................................... 66
Appendix B................................................... 67
Summary of Selected Financial Information.................... 69
Management's Discussion and Analysis of
Financial Condition and Results of Operations.............. 70
Index to Financial Statements................................ 76
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Definitions

Some terms used in this prospectus:

Account -- IDS Life Account RE, a segregated asset account of IDS
Life.

Accumulation Unit -- An accumulation unit is an accounting unit of
measure. It is used to calculate the contract value prior to
settlement.

Accumulation Unit Value -- The accumulation unit value is
determined by dividing the Account's net asset value by the number
of accumulation units outstanding at the end of the valuation
period.

Annuitant -- The person on whose life monthly payments depend.

Annuity Unit -- An annuity unit is an accounting unit of measure.
It is used to calculate the value of annuity payments from the
Account on and after the retirement date.

Asset Value -- The Account's asset value is determined by
calculating (i) the total value of the Account's assets less (ii)
the amount of any accrued expenses or liabilities other than any
borrowings in connection with the purchase, financing, improvement,
development or refinancing of real property investments.

Beneficiary -- The beneficiary is the party entitled to receive the
benefits to be paid at the death of the annuitant or owner.

Contract -- An Individual Deferred Variable Annuity Contract
offered by means of this prospectus.

Contract Value -- The sum of the value of the accumulation units
attributable to the Contract.

Contract Year -- A period of 12 months, starting on the effective
date of the Contract and on each anniversary of the effective date.

Land Sale-Leaseback -- Land sale-leaseback means a transaction
involving the purchase of land on which improvements are
constructed, are under construction or are under contract to be
constructed, and the lease of such land pursuant to a land or
ground lease generally to the owner or developer of the
improvements on the land. Such land sale-leasebacks may be
subordinated to a first mortgage and other liens or security
interests (whether or not also held by the Account) that are liens
on the entire property including the land.

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Mortgage Loan -- Mortgage loan means a first mortgage loan,
subordinated or junior mortgage loan or wrap-around mortgage
evidenced by notes, bonds, debentures and other evidences of
indebtedness, and which is secured by a mortgage, trust deed, deed
of trust, deed to secure debt or other liens on interests,
including leasehold interests in land and/or improvements that are
constructed, are being constructed or are under contract to be
constructed.

Net Asset Value -- The Account's net asset value is determined by
calculating the total value of the Account's assets, less the
amount of any expenses or liabilities, including tax liabilities,
mortgage indebtedness, administrative expenses, that portion of
organizational and offering expenses being amortized and the
accrued but unpaid daily charges for mortality and expense risk and
asset management fees.

Organizational and Offering Expenses -- Organizational and offering
expenses means the following expenses that are incurred in
connection with the formation and qualification of the Account, in
the registration of the Contracts under applicable Federal and
state law, and in marketing the Contracts: (a) registration fees,
filing fees and taxes, (b) the costs of qualifying, printing,
amending, supplementing, mailing and distributing the registration
statement and prospectus, (c) direct expenses (including salaries
and related salary expenses) of officers and employees of IDS Life,
the Investment Adviser and their affiliates while directly engaged
in organizing the Account and in registering and qualifying the
Contracts, and (d) accounting and legal fees and expenses
(including those fees and expenses of the Investment Adviser's
attorneys and accountants) incurred in connection therewith,
provided, however, that organizational and offering expenses will
not include selling commissions or any other costs or expenses
relating to marketing the Contracts.

Owner -- The person or party having ownership of the annuity and
who is entitled to receive its benefits.

Purchase Payment -- Payment made to IDS Life for the annuity.

Real Property Investments -- Real property investments are equity
interests in existing real properties that are completed at the
time of commitment for purchase and, to a lesser extent, properties
that are under construction or under contract for development.

Retirement Date -- The date shown on the Contract on which annuity
payments are to begin. The date may be changed as provided in the
Contract.

Surrender Charge -- A deferred sales charge is applied if the
annuity is surrendered within a certain number of years from when a
purchase payment is made.

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Surrender Value -- The total value of the annuity after any
applicable surrender charge has been deducted.

Valuation Date -- A normal business day, Monday through Friday,
except for the following holidays: New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.

Valuation Period -- The interval of time commencing at the close of
business on each valuation date and ending at the close of business
on the next valuation date.

IDS Life

IDS Life is a stock life insurance company organized in 1957 under
the laws of the State of Minnesota. IDS Life is a wholly owned
subsidiary of IDS Financial Corporation (IDS), which itself is a
wholly owned subsidiary of the American Express Company. IDS Life
acts as a direct writer of life insurance policies and annuities
and as the investment manager of various investment companies. IDS
Life is licensed to write life insurance and annuity contracts in
49 states and the District of Columbia. The headquarters of IDS
Life is IDS Tower 10, Minneapolis, MN 55440-0010. For information
concerning the directors and principal executive officers of IDS
Life, see Appendix A. For information concerning the financial
statements of IDS Life, see Index to Financial Statements.

The Account

The Account was established in March 1987 by a resolution of the
Board of Directors of IDS Life as a segregated asset account,
pursuant to Minnesota law, and commenced operations in August 1987.
IDS Life purchased the initial 200,000 accumulation units of the
Account. Such units were subsequently redeemed by IDS Life at the
then current accumulation unit value. The Account holds assets
that are segregated from all of IDS Life's other assets and is not
chargeable with liabilities arising out of any other business of
IDS Life. The Account is not registered as an investment company
under the Investment Company Act of 1940 (the 1940 Act).

The Account is under the control and management of IDS Life. The
board of directors and officers of IDS Life are responsible for
management of the Account. The owners of the Contracts have no
voting rights with respect to the Account. For information
regarding the directors and principal executive officers of IDS
Life, see Appendix A. For information concerning the financial
statements of IDS Life, see Index to Financial Statements.

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

Description of the Investment Adviser and Affiliates

IDS Life will provide services in connection with the acquisition
or placement and management of the assets of the Account. IDS
Life, in turn, has contracted with JMB Annuity Advisers (the
Investment Adviser), an Illinois general partnership, to provide
investment selection, management, disposition and consulting
services with respect to the real estate related investments of the
Account. The Investment Adviser is primarily responsible for the
identification, evaluation, investigation, negotiation, selection
and recommendation for purchase or placement of any real estate
related assets for the Account. IDS Life maintains an investment
committee that is responsible for approving all real estate related
investments or dispositions on behalf of the Account. A quorum of
such investment committee consists of any two members, who may act
on behalf of the committee.

The partners of the Investment Adviser are JMB Realty Corporation
(JMB), which is the managing partner of the Investment Adviser, and
an affiliate of JMB. The Investment Adviser is responsible for the
day-to-day administration and management of the real estate related
investments of the Account. For information regarding the
directors and principal executive officers of JMB, see Appendix B.
JMB has been engaged principally in real estate investment,
brokerage, management and sales since December 1968. Through Dec.
31, 1993, JMB has managed or advised, directly or through
affiliates, real estate investment partnerships that had purchased
real estate (directly or through other entities) for an aggregate
purchase price (including mortgage indebtedness), plus other
initial cash payments, of approximately $11.3 billion. Through
Dec. 31, 1993, JMB, directly or through affiliates, had purchased
real estate for its own corporate accounts and affiliated accounts
having an aggregate purchase price (including mortgage
indebtedness) of approximately $5.3 billion. In addition, officers
and affiliates of JMB are the trustees, advisers, officers and
general partners of five qualified tax-exempt trusts and a
corporation formed for investment in commercial real estate by
qualified pension and profit-sharing plans, a partnership and four
corporate real estate investment trusts formed for investment in
commercial real estate by tax-exempt foundations and endowments and
other investors and two partnerships formed for investment in
residential rental property by qualified tax-exempt entities.
Affiliates of the Investment Adviser also provide investment
advisory services for individual accounts of institutional
investors. Through Dec. 31, 1993, these group trusts, corporation,
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PAGE 13
partnerships, corporate real estate investment trusts and
individual accounts, as well as certain other real estate
investment entities previously advised or managed by affiliates of
the Investment Adviser, had purchased or had commitments to
purchase real estate (directly or through other entities) for an
aggregate purchase price (including mortgage indebtedness) of
approximately $8.4 billion.

See the Conflicts of Interest section for a description of
conflicts of interest arising out of the activities of the
Investment Adviser and its affiliates.

The Investment Adviser is not liable for any error of investment
selection, judgment or law except for willful misfeasance, bad
faith or negligence on the part of the Investment Adviser in the
performance of its obligations or duties under the investment
advisory agreement. See the Conflicts of Interest -- Limitation on
Liability section.

Compensation of IDS Life, the Investment Adviser and their
Affiliates in Connection with Real Estate Related Services

IDS Life is paid an asset management fee for its services in
connection with the management of the assets of the Account. This
fee is accrued on a daily basis and deducted on a monthly basis and
is equal on an annual basis to 1.25 percent of the average daily
asset value of the Account, subject to increase as described below.
A portion of the asset management fee equal to 0.95 percent of the
average daily asset value is paid by IDS Life to the Investment
Adviser for its services in connection with the management of the
real estate related assets of the Account. In the event that the
Account's real property investments have produced a rate of return
for the Account (measured for each calendar year) that exceeds the
rate of return as measured for such period by the FRC Property
Index (which is released in April of each year for the preceding
calendar year) by 0.5 percent per year, then the Investment Adviser
shall be entitled to an additional amount equal to 0.05 percent of
the average daily asset value of the Account for such calendar
year. The Investment Adviser also will be entitled to an
additional amount equal to 0.01 percent (up to a maximum of 0.2
percent) of the average daily asset value of the Account for each
0.1 percent by which the rate of return of the Account's real
property investments for such calendar year exceeds the rate of
return as measured for such period by such index plus 0.5 percent
per year. Rate of return shall be calculated on a quarterly basis
and in general shall mean the sum of all net income from operations
of the Account's real property investments (without deducting any
asset management fees or certain other expenses of the Account) and
realized and unrealized capital appreciation on the Account's real
property investments (net of all acquisition and mortgage placement
fees) for the calendar quarter taken as a percentage of the
aggregate asset value of such investments (net of all acquisition
and mortgage placement fees) as of the beginning of such calendar
quarter. Additionally, IDS Life and the Investment Adviser will
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not be entitled to, and will forego, that portion of the asset
management fee, as calculated above, attributable to the use of
indebtedness in excess of 40 percent of the aggregate value of all
of the Account's real property investments.

IDS Life receives an acquisition and mortgage placement fee of 3.75
percent of the total cash investment to be paid or advanced by the
Account, including all cash down payments, interest, points,
special reserves and all other initial cash payments in connection
with each real property investment, mortgage loan and land
sale-leaseback made by the Account. The amount paid to IDS Life is
measured by the cash investment to be paid by the Account for real
property investments or land sale-leasebacks or the amount to be
borrowed under a mortgage loan by the borrower for mortgage loans.
A portion of the acquisition and mortgage placement fee equal to
3.50 percent of the total cash investment to be paid or advanced by
the Account in connection with each real property investment,
mortgage loan and land sale-leaseback made by the Account is paid
to the Investment Adviser in consideration of the services of the
Investment Adviser and its affiliates in connection with the
identification, evaluation, investigation, negotiation, selection
and recommendation for purchase or placement of real estate related
investments for the Account. In addition, certain expenses of IDS
Life, the Investment Adviser and their affiliates are reimbursed as
described under the Contract Charges and Deductions section. At
its discretion, the Investment Adviser may provide any or all of
its services to the Account through affiliates, in which event fees
may be payable to such affiliates.

In some instances, some or all of the acquisition and mortgage
placement fee may be paid by the sellers of properties or
borrowers. This fee will indirectly affect the Account because the
payment of the fee by the seller of property or borrower may affect
the terms on which the seller of property or borrower is willing to
close the transaction. To the extent that the seller or borrower
pays less than 3.75 percent, the additional amount will be paid
directly by the Account to IDS Life. Fees and expenses paid to IDS
Life or the Investment Adviser and its affiliates will reduce the
assets of the Account for purposes of calculating the accumulation
or annuity unit value.

Property Management, Insurance Brokerage and Mortgage Brokerage

Certain of the Account's properties may be managed by JMB or
affiliates of JMB such as JMB Properties Company or JMB Retail
Properties Co. Under property management agreements, the company
employed to manage the property usually collects the rental income
on the property and deducts its fee and the costs of operating the
property such as insurance premiums, taxes, repairs and
improvements and other costs related to the maintenance and
operation of the property. The balance of rental income is
remitted to the owner of the property.

<PAGE>
PAGE 15
To the extent agreements are entered into with JMB affiliates to
manage the real property investments owned directly by the Account,
such agreements are subject to the approval of IDS Life and are
expected to be on terms no less favorable to the Account than those
customarily charged for similar services in the relevant
geographical area. For real property investments in which the
Account owns an interest through a joint venture, such agreements
are subject to the approval of the joint venture.

JMB Insurance Agency, Inc., which is engaged in the insurance
brokerage business, may provide insurance brokerage services in
connection with certain of the Account's investments. JMB
Insurance Agency, Inc. will receive commissions and/or fees for
such services at rates that are set by the insurance companies for
the classes of coverage involved. JMB or its affiliates may
provide mortgage brokerage services in connection with the
financing or refinancing of certain of the Account's real property
investments. To the extent that services are provided, such
affiliates will receive a fee equal to 1 percent of the proceeds
advanced under such financing or refinancing.

JMB or its affiliates also may provide other real estate related
services to the Account. Any such additional services and the
terms thereof with respect to real estate related investments owned
directly by the Account will be subject to the approval of IDS
Life.

Investment Objectives of the Account

The investment objectives of the Account are to provide for payment
of retirement income under the Contracts by seeking to: (1)
preserve and protect the Account's assets in real (i.e.,
inflation-adjusted) terms; (2) provide for compounding of income
through reinvestment of cash flow from investments; and (3) provide
for increases in income through capital appreciation of real
property investments and, to the extent available, through
participations in the capital appreciation, gross revenues or
income of the real properties subject to mortgage loans or land
sale-leasebacks. There is no guarantee that the investment
objectives of the Account will be attained. The assets of the
Account will be invested primarily in real estate related
investments. It is anticipated that approximately 50 percent to 70
percent of the Account's assets will be invested in such
income-producing real property investments as office buildings,
shopping centers, apartment complexes and other real properties,
and approximately 15 percent to 40 percent of the Account's assets
will be invested in mortgage loans and land sale-leaseback
investments, which may include participations in the appreciation
or the gross revenues or income of the real properties that are the
subject of the mortgage loans or land sale-leaseback investments.
However, IDS Life will have the discretion to alter such
percentages in accordance with changing market conditions or under
<PAGE>
PAGE 16
certain other circumstances if it deems it advisable given the
Account's investment objectives and portfolio or the liquidity
considerations of the Account. IDS Life expects to diversify the
Account's investments consistent with the Treasury regulations
regarding diversification for variable annuities. Other than
meeting the diversification requirements of Section 817(h) of the
Internal Revenue Code of 1986, as amended, there are no limits on
the percentage of Account assets that may be invested in one
property. See the Certain Federal Income Tax Considerations --
Diversification Requirements section.

Real Property Investments

The Account will seek to diversify its investments geographically
and will consider and review investments in areas throughout the
United States. Some of the Account's real property investments may
be owned jointly by the Account, on one hand, and the seller of a
property (or an affiliate of the seller), on the other hand. The
Account also may enter into joint investments with affiliates of
the Investment Adviser. Such joint ownership may take the form of
joint venture partnerships, tenancies-in-common or other legal
arrangements. The Account may acquire existing properties that are
debt-financed, thereby assuming leverage, or may incur indebtedness
in connection with the acquisition of such real property
investments, but it is currently anticipated that the aggregate
indebtedness on all real property investments of the Account will
not exceed 50 percent of the purchase price (i.e., total
consideration paid for properties including all liens and mortgages
on the properties, but excluding points and prepaid interest) plus
other initial cash payments in connection with the purchase of all
properties. However, in connection with the refinancing of real
property investments, the aggregate indebtedness of the Account may
exceed the maximum level currently contemplated. See the Risk
Factors -- Risks of Leverage section.

Types of Real Property Investments. The Account is expected to
acquire real property investments only of the following types:
shopping centers, office buildings, multi-use complexes and other
commercial properties, apartment complexes and buildings, mobile
home parks and industrial properties. The Account does not intend
to invest in agricultural properties or single family dwellings.

To attain the Account's stated objectives, it will be necessary for
the Account to acquire properties that will generate cash in excess
of that required to meet the gross operating expenses of the
Account. To do this it is currently anticipated that a significant
portion of the Account's assets will be invested in existing real
properties that are completed at the time of commitment for
purchase or investment. The Account also may acquire recently
constructed properties that may in some instances be subject to
agreements with sellers (or affiliates of sellers) providing for
<PAGE>
PAGE 17
certain minimum levels of income or funding of cash deficits during
the early years of the Account's ownership. In the event such
agreements are negotiated, there can be no guarantee that the
sellers or other parties will be able to carry out such
obligations. Upon the expiration of or default under such
agreements, there can be no assurance that the Account will be able
to maintain the level of operating income that is necessary to
produce the return it was previously experiencing or anticipated.

It is currently anticipated that the property acquired by the
Account generally will be real estate that is ready for occupancy.
Additionally, the Account may, to a lesser extent, invest in
developmental real estate deemed consistent with the Account's
objectives, and the Account then will be subject to the risks
inherent in such properties.

Mortgage Loans

Types of Mortgage Loans. Mortgage loans made by the Account may
include conventional mortgage loans that pay fixed or variable
rates of interest and, to the extent available, mortgage loans that
have a participation (as defined below).

The properties to be subject to mortgage loans are anticipated to
consist of commercial properties (such as office buildings and
shopping centers), residential properties (such as garden apartment
complexes, high-rise apartment buildings and mobile home parks) and
industrial properties. The mortgage loans generally will be
secured by properties with an income producing potential based on
historical or projected data. Mortgage loans generally will not be
personal obligations of the borrower and generally will not be
insured or guaranteed by governmental agencies or otherwise. The
Account will not make mortgage loans to IDS Life, the Investment
Adviser or their affiliates.

First Mortgage Loans. It is expected that the Account may make
first mortgage loans secured by mortgages on existing
income-producing property. Such first mortgage loans may provide
for interest-only payments and a balloon payment at maturity.

The yield on a traditional first mortgage loan has historically
been less than that of a wrap-around mortgage loan on the same
property. However, because of innovations involving the terms and
conditions of first mortgage loans, such as the use of variable
interest rates, equity participations and similar devices, the
yield on a first mortgage loan may, in certain instances, be
greater than that of a wrap-around mortgage loan on the same
property.

Wrap-around Mortgage Loans. The Account also may make wrap-around
mortgage loans on income-producing real properties that are already
subject to prior mortgage indebtedness. A wrap-around mortgage
<PAGE>
PAGE 18
loan is one having a principal amount equal to the outstanding
balance under the prior existing mortgage loan plus the amount
actually to be advanced by the lender under the wrap-around
mortgage loan, thereby providing the owner of a property with
additional funds without disturbing the existing loan. The terms
of a wrap-around mortgage loan made by the Account typically will
require the borrower to make all principal and interest payments on
the underlying loan to the Account, which in turn will pay the
holder of the existing first mortgage loan. Because the existing
first mortgage loan is preserved, the lien of the wrap-around
mortgage loan is necessarily junior to it.

Junior Mortgage Loans. The Account also may invest in other junior
mortgage loans. Junior mortgage loans will be secured by mortgages
that are subordinate to one or more prior liens on the real
property and generally, but not in all cases, will provide for
repayment in full prior to the end of the amortization period or
maturity of the senior mortgages. Recourse on such loans will
include the real property encumbered by the Account's mortgage and
additionally may, in some instances, include other collateral or
personal guarantees by the borrower or its affiliates.

The Account generally will make junior or wrap-around mortgage
loans only if the senior mortgage or mortgages, when combined with
the amount of the mortgage loan, would not exceed the maximum
amount that the Account would be willing to commit to a first
mortgage loan and only under such circumstances and on such
property as to which the Account would otherwise make a first
mortgage loan.

Participations. The Account will seek to make mortgage loans that,
in addition to charging a base rate of interest, will include
provisions permitting the Account to participate (a participation)
in the economic benefits of the underlying property through the
receipt of additional interest in the form of a percentage of the
gross or net revenues derived from operation of the property and/or
of the increase in the value of the property realized by the
borrower, such as through sale or refinancing of the property.
Such arrangements also may involve the grant to the Account of an
option to acquire the property or an undivided interest in the
property securing the loan. To the extent that the Account
negotiates the right to receive additional interest in the form of
a percentage of the gross revenues or otherwise, the current fixed
cash return to the Account from such an investment generally will
be less than would otherwise be the case. It is expected that the
Account generally will be entitled to such percentage
participations when the gross or net revenues derived from
operation of the property exceed a certain base amount, which may
be subject to adjustment upon an increase in real estate taxes or
other similar operating expenses. The form and extent of such
additional interest to be received by the Account will vary with
each transaction depending on such factors as the equity investment
of the owner or developer of the property, other financing or
credit obtained by the owner or developer, the fixed base interest
rate on the mortgage loan by the Account, any other security
<PAGE>
PAGE 19
arrangement and the cash flow and pro forma cash flow from the
property. It is intended that the Account would utilize such
additional interest as a hedge against inflation on the assumption
that as prices increase in the economy generally, the rental prices
obtained by properties, such as shopping centers or office
buildings, will increase and that there should be a corresponding
increase in the value of such properties. There can be no
assurance, however, that participations will be negotiated on
behalf of the Account or, if obtained, that, even allowing for
inflation, such additional interest or increased values will in
fact be received. In that event, the Account would be entitled to
receive only the fixed portion of its return.

Standards for Mortgage Loan Investments. In making mortgage loans,
the Investment Adviser will consider, among other things, a
loan-to-value ratio, operating cash income from the property, the
real estate management and operating experience of the borrower,
the financial strength of the borrower, and expectations for the
property in the market. In addition, the Investment Adviser will
analyze any available historical expenses and the projected
expenses of the property, present and expected levels of rentals
and occupancy rates, general economic conditions in the area where
the property is located, competition and potential competition from
other properties in the area, compatibility with the general
investment objectives of the Account and any other factors that the
Investment Adviser believes are relevant. In general, the amount
of each mortgage loan made by the Account will not exceed, when
added to the amount of any existing indebtedness, 90 percent of the
estimated or appraised value of the property mortgaged.

Investments in Land Sale-Leasebacks

A portion of the Account's investments may consist of real property
land sale-leasebacks. In a transaction of this type, the Account
will typically purchase the land on which income-producing
improvements are constructed and simultaneously lease the land,
generally to the seller, under a long-term lease (sometimes known
as a ground lease). The Account's land sale-leasebacks will
involve properties similar to those as to which it will make
mortgage loans. Ground leases may be for terms ranging up to 99
years and may provide for payments from the ground leases in
escalating amounts.

Generally, under the terms of a ground lease, the tenant will
operate, or provide for the operation of, the property and be
responsible for the payment of all costs, including taxes, mortgage
debt service, maintenance and repair of the improvements and
insurance. Upon termination of the ground lease and any renewals
thereof, the improvements may become the property of the Account,
although the ground lease may be for a substantial period of time,
and there can be no assurance as to the value of the improvements
at the end of such period.

<PAGE>
PAGE 20
The Investment Adviser often will seek to obtain for the Account,
in addition to base rents in its land sale-leasebacks,
participations in the appreciation of the improvements or the gross
revenues or income therefrom. The participations may take such
forms as a percentage of the gross revenues of the ground lessee
above a base amount (which may be subject to adjustment upon an
increase in real property taxes or upon other events), a share of
the proceeds of future mortgage financings or refinancings that are
not used for construction or the reduction of existing mortgage
indebtedness, a share of the proceeds from the eventual sale of the
improvements, or other interests.

The Account may invest in land sale-leasebacks that are
subordinated to other interests in the land or improvements, such
as a first or other mortgage or lien. In those situations, the
Account's land sale-leaseback interest will be subject to greater
risks. In general, the aggregate amount of such first or other
mortgage or lien and the value of the land subject to the land
sale-leaseback will not exceed 90 percent of the estimated or
appraised value of the land and improvements thereon at the time of
financing. In some cases, the Account may grant to the ground
lessee an option to acquire the land from the Account after a
period of years. The option exercise price would generally be
based upon the fair market value of the land, considering such
factors as the increase in the gross revenues from the property,
the rental payments actually received by the Account or other
objective criteria reflecting the increased value of the property.
In making investments in land sale-leasebacks, the Investment
Adviser will consider factors similar to those described under the
Standards for Mortgage Loan Investments section above.

Liquid Assets

It is expected that the Account will invest approximately 5 percent
to 20 percent of its assets in short-term liquid instruments such
as U.S. government securities, securities issued or fully
guaranteed by U.S. government agencies, securities issued or fully
guaranteed by states or municipalities, certificates of deposit and
time or demand deposits in commercial banks, bankers' acceptances,
savings and loan association deposits, deposits in members of the
Federal Home Loan Bank System or commercial paper. The Account
also may invest in intermediate-term bonds with maturities of up to
five years when IDS Life determines the extension of the maturity
period for the liquid assets is warranted. (For information
regarding the valuation of the liquid asset investments, see the
Valuation of Assets -- Liquid Assets section.)

Investment Restrictions

The Account may not:

1. Purchase common stock, warrants, or other equity securities or
invest in any company for the purpose of exercising control or
management (except for joint ventures or partnerships relating
to real estate related investments as described herein or <PAGE>
PAGE 21
except where real property is the principal asset of a company
and its acquisition can best be effected by the acquisition of
the securities of the company).

2. Engage in underwriting of securities issued by others.

3. Purchase or sell oil, gas or other mineral exploration or
development programs.

These investment restrictions may be changed only by a resolution
adopted by the Board of Directors of IDS Life. The Account intends
to make only investments that will not result in the Account being
deemed to be an investment company under the 1940 Act.

Other Investment Policies

Borrowing Policies

It is contemplated that the Account will incur indebtedness in
connection with the purchase, improvement, development and
refinancing of properties. Generally, the Account will attempt to
make real property investments in which aggregate mortgage
indebtedness of all real property investments does not exceed
approximately 50 percent of the purchase price (i.e., total
consideration paid for the properties including all liens and
mortgages on the properties but excluding points and prepaid
interest) plus other initial cash payments in connection with the
purchase of all properties. There can be no assurance, however,
that such a degree of leverage will be obtained, and the Account
may acquire some properties that, when completed, will be owned on
an unleveraged basis or on a basis of leverage substantially in
excess of 50 percent. There is no limit on the amount of leverage
that can be used to acquire any one property.

The Account also may acquire real property investments for which no
permanent financing has been obtained and for which the Investment
Adviser, subject to market conditions, intends to obtain permanent
financing on behalf of the Account in the future. There is no
assurance that the Investment Adviser will be successful in
obtaining such financing on favorable terms. The proceeds of such
financings may be invested in additional investments of the
Account.

The Account also may borrow in order to meet working capital or
liquidity requirements. Some of those borrowings may be secured by
mortgages or liens on real property investments or other
investments made by the Account. The Account will not obtain
permanent mortgage financing from IDS Life or its affiliates, but
may obtain short-term borrowings from IDS Life or its affiliates
for working capital, liquidity or other purposes.

In March 1994 the Account obtained a revolving line of credit for
up to $10 million from IDS Life to pay for contract surrenders and
other obligations under the Contracts. The line of credit is for a
one-year term and is automatically renewed at each anniversary for <PAGE>
PAGE 22
an additional one-year term subject to termination by one party
giving 30 days' prior written notice of termination to the other
party. Borrowings under the line of credit must be made in
increments (or multiples) of $100,000. Outstanding borrowings
under the line of credit will bear interest at a floating rate
equal to the 30-day London Interbank Offered Rate (LIBOR), changing
with a change in such interest rate determined on a monthly basis.
The line of credit requires monthly payments of interest only until
the earlier of maturity or termination of the line of credit, when
the entire outstanding principal plus any accrued and unpaid
interest on the line of credit will be due and payable.
Outstanding principal may be repaid in whole or in part in
increments (or multiples) of $100,000, together with any accrued
and unpaid interest thereon, at any time without premium or
penalty. Borrowings under the line of credit are generally
unsecured, although IDS Life has a right of set off against any
deposits or credits of the Account held by IDS Life for outstanding
borrowings. See the Management's Discussion and Analysis of
Financial Condition and Results of Operations section.

Borrowing requires the Account to pay interest to the lender and
thus may, in certain instances, inhibit the Account from achieving
its investment objectives and may increase the Account's risk.

In addition, to the extent that borrowing is incurred, the
Account's income may be reduced because of the need to service any
such indebtedness. Also, the amount of fees paid to IDS Life and
the Investment Adviser and its affiliates may be increased due to
the fact that certain of such fees are calculated as a percentage
of the Account's assets, including those attributable to the
Account's mortgage indebtedness. See the Conflicts of Interest --
Receipt of Commissions, Fees and Other Compensation by IDS Life,
the Investment Adviser and Affiliates section.

Joint Venture Investments

The Account may invest in real property investments, land
sale-leaseback transactions or mortgage loans jointly with
others, including affiliates of IDS Life or the Investment Adviser,
through joint venture partnerships or otherwise. See the Conflicts
of Interest -- Possible Joint Venture Investments with Affiliates
of the Investment Adviser or IDS Life section. The Account
reserves the right to participate in such joint investments either
at the initiation of investment or during the time it holds an
investment.

Real Estate Related Investments

The Account has made the real estate related investments described
below. There is no assurance that additional real estate related
investments will be obtained.

Summary of Investments

The following is a table which sets forth all real estate related
investments presently made or committed to be made by the Account
as of the date of this prospectus.
<PAGE>
PAGE 23
Real Property Investments
Long-Term
Cash payments made Indebtedness
or to be made (a) Amount Rate
Shopping Centers
Northridge Mall
Milwaukee, Wis. (b)........ $5,838,000 $914,000 9.125%
22,000 10.00

Southridge Mall
Greendale/Greenfield
Milwaukee, Wis. (b)........ 6,170,000 941,000 8.42

Office Building
1225 Connecticut Avenue
Washington, D.C. (b)........ 9,000,000 1,141,000 6.98

Apartment Complex
West Springfield Terrace
Fairfax County, VA.......... 9,214,000 7,903,000 9.50
$30,222,000 $10,921,000

Mortgage Loan and Land Sale-Leaseback Investments
Cash payments made
or to be made (a)
Shopping Centers
Monmouth Mall
Eatontown, New Jersey (b)...................... $11,986,000

Riverpoint Center
Chicago, Illinois (c).......................... 2,876,000
$14,862,000

(a) Includes cash down payments, amounts funded or committed to be
funded for mortgage loans, prepayment premiums, special
reserves and other cash payments made or expected to be made
out of the Account's net assets but does not include
acquisition and mortgage placement fees, mortgage financing
fees and other acquisition, placement or financing costs.
(b) The interest of the Account in this investment is owned by the
Account through a joint venture. The amount shown for the
property under "Cash payments made or to be made" includes
only the cash investment of the Account in the joint venture
for this investment and does not reflect any investment by any
other joint venturers in the investment owned by the joint
venture. For real property investments in which the Account
has an equity interest, the amount shown for the investment
under Long-Term Indebtedness reflects the Account's
proportionate share, based upon its percent interest in the
joint venture, of the amount of financing which is encumbering
the property held by the joint venture.
(c) The interest of the Account in this investment is as a
participant in the funding of a mortgage loan secured by the
property.
<PAGE>
PAGE 24
The Account's investments in Northridge Mall and Southridge Mall
and in the land sale-leaseback investment and first leasehold
mortgage loan secured by Monmouth Mall have been made through two
joint venture partnerships, the other partners of which include
institutional investors advised or managed by affiliates of the
Investment Adviser. The percent interest of each partner in these
two joint ventures is determined generally based on the timing and
amount of capital contributed by all partners.

The Account has contributed approximately $12,008,000 as its
capital contribution in return for an approximate 5.92 percent
interest in N/S Associates, which owns interests in Northridge Mall
and Southridge Mall, and has contributed $10,000,000 as its capital
contribution in return for an approximate 6.97 percent interest in
Monmouth Associates, which owns the underlying land subject to a
ground lease of, and holds a first leasehold mortgage on, Monmouth
Mall. JMB Group Trust IV, which is managed by an affiliate of the
Investment Adviser, owns the majority percent interest in each of
N/S Associates and Monmouth Associates.

Monmouth Associates has agreed in principle to finance the cost of
a proposed renovation of Monmouth Mall. The renovation is
currently expected to cost approximately $28,500,000, which would
be funded by additional capital contributions made pro rata based
upon the respective interests of the joint venture partners. The
Account's share of such additional capital contributions would be
approximately $1,986,000 based on its approximate 6.97 percent
interest in Monmouth Associates. The proposed renovation of the
shopping center contemplates, among other things, the addition of a
food court and cinema and the renovation of a former certain anchor
tenant's space into smaller tenant spaces.

In general, these joint venture partnership agreements provide that
decisions concerning the joint ventures and their real property
investments are to be made by the vote or approval of the joint
venture partner or partners holding a majority of the percent
interests in the respective joint ventures.

Under the respective joint venture partnership agreements, in the
event that one or more, but less than all, of the joint venture
partners propose to sell the joint venture's entire interest in a
real estate related investment during a specified period commencing
generally not earlier than the end of the fourth year after the
funding of the investment and ending 10 years after such funding,
each other joint venture partner not approving such sale will have
a right of first offer to purchase such investment on the terms set
forth in a notice of the proposed sale from the joint venture
partners desiring such sale. If more than one joint venture
partner elects to exercise a right of first offer, each of the
joint venture partners making such election will have the right to
purchase an interest in such investment based upon the proportion
of its percent interest in the respective joint venture to the
aggregate percent interests of all joint venture partners making
such election. If no joint venture partner elects to exercise the
<PAGE>
PAGE 25
right of first offer, the joint venture partners approving the sale
may effect such sale on behalf of the respective joint venture for
a sales price of not less than 90 percent of the proposed sales
price and on other terms at least as favorable to the respective
joint venture as those set forth in the notice of proposed sale.

In general, each joint venture partner may sell its interest in the
respective joint venture subject to each other joint venture
partner's right of first refusal to purchase the interest, and any
such sale may not be made without the consent of all other joint
venture partners unless it is to be made to an affiliate of the
selling joint venture partner or to certain institutional
investors, a "Fortune 500" corporation or an affiliate thereof, or
to an entity of similar financial standing or sophistication of the
foregoing or of the selling joint venture partner.

Northridge Mall
Milwaukee, Wisconsin

Northridge Mall, located in Milwaukee, Wisconsin, was completed in
1972. The mall shops and four adjacent department stores
comprising the shopping center contain approximately 1,053,000
square feet of gross leasable area, of which N/S Associates owns
approximately 399,000 square feet. The remaining 654,000 square
feet of gross leasable area are occupied by four department stores,
three of which own their own stores and a portion of the parking
area. These four stores are Younkers, which leases its store from
an unaffiliated third party (approximately 166,000 square feet),
J.C. Penney (approximately 168,000 square feet), Sears
(approximately 169,000 square feet) and Boston Store (approximately
151,000 square feet). Existing operating covenants for occupancy
of their stores by Younkers extend through January 1999 and by
Boston Store through 2000. J.C. Penney and Sears, whose operating
covenants expired in August 1992, continue to operate their
respective stores at the shopping center.

In October 1993, Carson Pirie Scott & Co. (formerly known as P.A.
Bergner), the parent company of the Boston Store, completed its
plan of reorganization under Chapter 11 of the United States
Bankruptcy Code. The Boston Store continued to operate at the
shopping center during the bankruptcy proceeding, and in November
1993 completed a renovation of its store, which included the
installation of new marble flooring, carpeting, ceilings and
lighting.
<PAGE>
PAGE 26
The shopping center is located on an approximate 105-acre site, of
which N/S Associates owns approximately 32 acres, at the northwest
corner of West Brown Deer Road and North 76th Street on the north
side of Milwaukee. The shopping center is a two-level center of
masonry construction and contains a large center court atrium with
a fountain and skylights. The entire parking lot contains parking
for approximately 7,800 automobiles.

Real estate taxes on the portion of the shopping center owned by
N/S Associates were approximately $3,845,000 for the 1993 tax year
and are estimated to decrease to approximately $3,334,000 for the
1994 tax year as a result of a recent successful appeal of the
property's assessed valuation. In 1988 real estate taxes for the
property increased by more than 110 percent over the prior year's
taxes as a result of a reassessment of the property. Although N/S
Associates had previously sought a reduction in the property's tax
assessment, it was able to obtain only a modest reduction in the
real estate taxes for 1991.

The shopping center is subject to competition from other retail
properties in the vicinity. In the opinion of the Investment
Adviser, the portion of the shopping center owned by N/S Associates
is adequately insured.

The portion of the shopping center owned by N/S Associates consists
of approximately 388,000 square feet of mall space and 11,000
square feet of storage space. The mall space is currently
approximately 85 percent leased and occupied by 126 tenants. Tenant
leases for mall space have minimum terms, not including renewal
options, ranging from one to 20 years, with current annual base
rents ranging from approximately $4 to $150 per square foot. The
current average annual base rent for mall space is approximately
$22.10 per square foot. The average annual occupancy rates (based
upon occupancy at the end of each month during the year) and
approximate average annual base rents per square foot for the mall
space for the past five years are as follows:

Average Annual
Average Annual Base Rent
Year Occupancy Rate Per Square Foot
1989 91% $19.50
1990 93 20.60
1991 93 21.50
1992 87 22.10
1993 87 22.30

Substantially all of the leases contain provisions pursuant to
which N/S Associates is entitled to participate in tenant gross
receipts above fixed minimum amounts and to receive tenants'
contributions for operating expenses and real estate taxes, subject
in some instances to certain limitations for tenant contributions
for real estate taxes due to the 1988 reassessment of the property
previously described.
<PAGE>
PAGE 27
N/S Associates acquired its interest in the shopping center in
April 1988 for a purchase price of approximately $89,653,000 paid
in cash at closing, subject to the existing mortgage loans with a
then outstanding aggregate balance of approximately $18,454,000.
At closing, N/S Associates established a reserve of approximately
$8.9 million that has been used to pay for certain capital
improvements made at the shopping center, including certain
asbestos removal, construction of a food court and center and side
court improvements. It is expected that additional asbestos removal
will be undertaken from time to time. For 1994 N/S Associates has
currently budgeted approximately $1,630,000 for certain capital
improvements, including improving the interior lighting and partial
roof replacement, tenant improvements and asbestos abatement for
certain tenant spaces. Such amount is expected to be paid out of
cash flow from the property.

The portion of the shopping center owned by N/S Associates is
subject to an existing first mortgage securing two loans from an
institutional lender with outstanding principal balances at April
30, 1994, of approximately $15,446,000 and $368,000, respectively.
The first loan bears interest at a rate of 9.125 percent per annum
and requires monthly payments of principal and interest aggregating
approximately $1,975,000 per annum until maturity in January 2008,
when the outstanding principal balance will have been fully
amortized. The second loan bears interest at a rate of 10 percent
per annum and requires monthly payments of principal and interest
aggregating approximately $44,000 per annum until maturity in
September 2012, when the outstanding principal balance will have
been fully amortized. Prepayment of either loan in full is
permitted subject to the payment of a premium calculated as a
percentage of the outstanding principal balance of the loan being
prepaid. The remedies under the first mortgage securing the loans
are limited to the property securing such obligations.

The portion of the shopping center owned by N/S Associates is being
managed by an affiliate of the Investment Adviser under an
agreement pursuant to which it is obligated to manage the property
and collect all receipts from operations of the property. The
affiliate of the Investment Adviser is paid an annual fee equal to
3.75 percent of the gross receipts of the property plus
reimbursement of certain direct expenses in connection with the
management of the property.

The following is a schedule of expiration of leases (exclusive of
storage space and assuming no renewals or cancellations) and
current annual base rents allocable thereto as of April 1994:
<PAGE>
PAGE 28
Year of Number Current Percentage of
Expiration of Square Annual Current Annual
of Leases Tenants Feet Base Rent Base Rent
1994.......... 22 26,738 $ 502,314 6.9%
1995.......... 9 24,175 362,098 4.9
1996.......... 9 15,940 472,393 6.5
1997.......... 8 42,162 394,938 5.4
1998.......... 25 63,736 1,699,748 23.3
1999.......... 18 51,000 1,254,155 17.2
2000.......... 12 29,138 787,762 10.8
2001.......... 6 16,358 359,215 4.9
2002.......... 10 31,204 704,988 9.7
2003.......... 4 17,903 485,638 6.6
2004.......... 2 4,463 128,502 1.8
2008.......... 1 7,500 146,160 2.0

Southridge Mall
Greendale/Greenfield (Milwaukee),
Wisconsin

Southridge Mall, completed in 1970, is located in the Village of
Greendale and City of Greenfield south of Milwaukee, Wisconsin.
The mall shops and five adjacent department stores comprising the
shopping center contain approximately 1,301,000 square feet of
gross leasable area, of which N/S Associates owns approximately
441,000 square feet, including the space leased to Kohl's
Department Store, one of the anchor tenants, and approximately
2,000 square feet of storage space. The remaining approximately
860,000 square feet of gross leasable area are occupied by four
department stores, three of which own their own stores and a
portion of the parking area. These four stores are Younkers, which
leases its store from an unaffiliated third party (approximately
203,000 square feet), Boston Store (approximately 221,000 square
feet), Sears (approximately 251,000 square feet) and J.C. Penney
(approximately 185,000 square feet). Existing operating covenants
for occupancy of their stores by Younkers extend through January
1999 and by Boston Store through 2000. J.C. Penney and Sears,
whose operating covenants have expired, continue to operate their
respective stores at Southridge Mall.

During the third quarter of 1992, Younkers acquired the twenty-five
unit department store division of H.C. Prange Co., including the
two department stores that had been operating at the Northridge and
Southridge Malls. These two former Prange's stores are now
operating as Younkers department stores. Under a prior commitment
made by the previous owner, Younkers is obligated to renovate its
department store at the Southridge Mall. The renovation is
expected to include replacements of the upper level ceiling and the
carpeting, removal of certain barrier walls to increase visibility
and enhancement of the lighting fixtures.
<PAGE>
PAGE 29
In October 1993, Carson Pirie Scott & Co. (formerly known as P.A.
Bergner), the parent company of the Boston Store, completed its
plan of reorganization under Chapter 11 of the United States
Bankruptcy Code. The Boston Store continued to operate at the
shopping center during the bankruptcy proceeding.

The shopping center is located on an approximately 105-acre site,
of which N/S Associates owns approximately 34 acres, at the
intersection of West Grange Avenue and South 76th Street in
Milwaukee County. It is a two-level center of masonry construction
and contains a large center court atrium with a fountain and
skylights. The entire parking lot contains parking for
approximately 6,900 automobiles.

Real estate taxes on the portion of the shopping center owned by
N/S Associates were approximately $4,014,000 for the 1993 tax year
and are estimated to be approximately $4,215,000 for the 1994 tax
year. In 1989 real estate taxes for the property increased by
approximately 60 percent over the prior year's taxes as a result of
a reassessment of the property. Although N/S Associates had sought
a reduction in the property's tax assessment, it was able to
negotiate only a modest reduction for the 1991 taxes for the
property with the local taxing authority.

The portion of the shopping center owned by N/S is currently
approximately 94 percent leased by 135 tenants with current
occupancy at 92%. Kohl's Department Store occupies approximately
66,000 square feet pursuant to a lease that has an original term of
30 years and requires annual base rent of $120,000. Other tenant
leases (exclusive of storage space) have minimum terms, not
including renewal options, ranging from 3 to 15 years, with current
annual base rents ranging from $8.00 to $116.00 per square foot.
The current average annual base rent (exclusive of storage space)
is approximately $21.55 per square foot. The average annual
occupancy rates (based upon occupancy at the end of each month
during the year) and approximate average annual base rents per
square foot for tenant space (inclusive of Kohl's Department Store
but exclusive of storage space) for the past five years are as
follows:

Average Annual
Average Annual Base Rent
Year Occupancy Rate Per Square Foot
1989 92% $15.80
1990 93 16.60
1991 94 19.30
1992 87 20.90
1993 90 21.20

<PAGE>
PAGE 30
Substantially all of the leases contain provisions pursuant to
which N/S Associates is entitled to participate in tenant gross
receipts above fixed minimum amounts and to receive tenants'
contributions for operating expenses and real estate taxes, subject
in some instances to certain limitations for tenant contributions
for real estate taxes due to the reassessment of the property
previously described.

N/S Associates acquired its interest in the shopping center in
April 1988 for a purchase price of approximately $96,865,000 paid
in cash at closing, subject to the existing first mortgage loan
with a then outstanding balance of approximately $18,536,000. N/S
Associates established a reserve of approximately $7,250,000, most
of which has been used for certain capital improvements at the
shopping center including, among other things, asbestos removal and
center and side court improvements. It is expected that additional
asbestos removal will be undertaken from time to time. For 1994
N/S Associates has currently budgeted approximately $950,000 for
replacement of escalators, tenant improvement costs and asbestos
abatement for certain tenant spaces. Such amount is expected to be
paid out of remaining reserves and cash flow from the property.

The portion of the shopping center owned by N/S Associates is
subject to a first mortgage loan from an institutional lender with
an outstanding principal balance at April 30, 1994, of
approximately $15,891,000. The loan bears interest at the rate of
8.42 percent per annum and requires monthly payments of principal
and interest aggregating approximately $1,901,000 per annum until
maturity in October 2008, when the outstanding principal balance
will have been fully amortized. The first mortgage loan permits
only a prepayment in full, subject to the payment of a premium of 1
percent of the outstanding principal balance of the loan. The
remedies under the first mortgage loan are limited to the property
securing the obligation.

The portion of the shopping center owned by N/S Associates is being
managed by an affiliate of the Investment Adviser under an
agreement pursuant to which it is obligated to manage the property
and collect all receipts from operations of the property. The
affiliate of the Investment Adviser is paid a fee equal to 3.75
percent of the gross receipts of the property plus reimbursement of
certain direct expenses in connection with the management of the
property.

The following is a schedule of expiration of leases (inclusive of
Kohl's Department Store but exclusive of storage space and assuming
no renewals or cancellations) and current annual base rents
allocable thereto as of April 1994:
<PAGE>
PAGE 31

Year of Number Current Percentage of
Expiration of Square Annual Current Annual
of Leases Tenants Feet Base Rent Base Rent
1994.......... 14 22,720 $ 674,988 7.6%
1995.......... 11 27,494 650,025 7.3
1996.......... 18 34,499 927,584 10.5
1997.......... 8 24,358 612,176 6.9
1998.......... 17 40,578 1,188,529 13.4
1999.......... 9 24,750 520,450 5.9
2000.......... 20 49,521 1,340,730 15.1
2001.......... 17 102,908 1,021,034 11.5
2002.......... 8 16,879 522,979 5.9
2003.......... 8 32,651 722,316 8.1
2004.......... 3 22,423 409,782 4.6
2006.......... 1 6,000 120,000 1.3
2009.......... 1 7,507 165,154 1.9

Monmouth Mall
Eatontown, New Jersey

In October 1988 Monmouth Associates (i) acquired certain land
underlying a super regional shopping center in Eatontown, New
Jersey known as Monmouth Mall, (ii) leased the land to the owner of
the shopping center pursuant to a long-term ground lease, and (iii)
made a first mortgage loan to the owner of the shopping center
secured by the leasehold estate and the improvements thereon. The
borrower under the first leasehold mortgage loan and lessee under
the ground lease (hereinafter the "borrower/lessee") is a
partnership whose partners are not affiliated with Monmouth
Associates or any of its joint venture partners.

The shopping center contains approximately 1,520,000 square feet of
gross leasable area, of which approximately 505,000 square feet
consist of mall shops (approximately 411,000 square feet),
outparcel buildings (approximately 46,000 square feet) and storage
area (approximately 48,000 square feet). The remaining gross
leasable area currently includes four department stores, which are
Macy's (approximately 262,000 square feet), J.C. Penney
(approximately 221,000 square feet), Abraham & Straus
(approximately 265,000 square feet) and Lord & Taylor
(approximately 159,000 square feet), which opened its store in July
1990. Other department store space (approximately 108,000 square
feet), which had been leased to Caldor at an annual base rent of
approximately $583,000 until its lease termination in July 1990 and
currently is vacant, is expected to be renovated for additional
mall space in connection with a proposed renovation of the shopping
center. Existing operating covenants of the anchor department
stores for reimbursement of common area maintenance expenses and
operation of a retail business at their stores (which may be
different from the current retail business), generally extend to
1998 for Abraham & Straus, 2005 for Macy's and Lord & Taylor, and
2006 for J.C. Penney, with certain option or renewal rights
thereafter in favor of Abraham & Straus and Lord & Taylor.
<PAGE>
PAGE 32
The shopping center is located on an approximately 104-acre site
located at the intersection of Routes 35 and 36 and Wyckoff Road in
Eatontown, New Jersey. Macy's owns its own department store and
approximately 2.4 acres of underlying land, and J.C. Penney owns
its own store, including an outparcel building, and approximately
13.1 acres of underlying land. The remaining approximately 88.5
acres of land underlying the shopping center were acquired by
Monmouth Associates subject to the right of Abraham & Straus to
acquire the land underlying its store. Abraham & Straus, which
currently leases its store and the approximately 14 acres of
underlying land for nominal rent, has the right to acquire the
underlying land at any time after 1998 and to acquire its store at
any time after 2028, in each case for nominal consideration. The
shopping center is a multi-level super regional center constructed
of structural steel framing with concrete block facing. The entire
parking lot (a portion of which is owned by certain of the
department stores) contains combined surface and deck parking for
approximately 8,225 automobiles.

The Lord & Taylor lease provides for annual base rent of
approximately $60,400 and an initial term of 16 years with six
10-year renewal options at the same annual base rent. In January
1992, R.H. Macy and Company, the owner of Macy's, filed for
protection from creditors under Chapter 11 of the United States
Bankruptcy Code. While the long-term effect of the bankruptcy
filing cannot currently be determined, Macy's continues to operate
its department store. Macy's also leases approximately 36,400
square feet of space from the borrower/lessee for its children's
store at the shopping center.

Real estate taxes on the portion of the shopping center owned by
the borrower/lessee were approximately $2,051,000 for the 1993 tax
year and are expected to be approximately $2,134,000 for the 1994
tax year. The shopping center is subject to competition from other
retail properties in the area, including an approximately 1,300,000
square foot shopping center that opened in the general vicinity in
August 1990. In the opinion of the Investment Adviser, the portion
of the shopping center owned by the borrower/lessee is adequately
insured.

The shopping center, excluding the anchor department store tenant
and storage space, is currently 81 percent leased and occupied by
111 tenants with current annual base rents ranging from
approximately $1.00 to $97.00 per square foot and a current average
annual base rent of approximately $21.05 per square foot. Leases
for mall shops and outparcel space have minimum terms, not
including renewal options, ranging from 5 to 15 years. Due to the
proposed renovation of the shopping center discussed below,
approximately 14 percent of the total mall and outparcel space is
being held vacant of long-term tenants and certain tenants (which
are reflected in the above leasing and occupancy information) have
short-term leases for the occupancy of space on a temporary basis.
The average annual occupancy rates (based upon occupancy at the end
of each month during the year) and approximate average annual base
rents per square foot for the mall and outparcel space for the past
five years are as follows:
<PAGE>
PAGE 33
Average Annual
Average Annual Base Rent
Year Occupancy Rate Per Square Foot
1989 89% $15.95
1990 91 15.50
1991 83 18.25
1992 82 19.85
1993 81 19.95

Substantially all of the leases contain provisions pursuant to
which tenants are required to pay specified percentages of their
gross receipts above certain minimum amounts as additional rent and
to pay their pro rata share of the operating expenses and real
estate taxes of the shopping center.

At the closing, Monmouth Associates (i) purchased approximately
88.5 acres of land underlying the shopping center (subject to the
right of Abraham & Straus to acquire the approximately 14 acres
underlying its store) for $13,000,000 paid in cash; (ii) leased the
land back to the borrower/lessee pursuant to a long-term ground
lease; and (iii) made a first mortgage loan in the principal amount
of $128,920,000 to the borrower/lessee secured by the leasehold
estate and the improvements thereon. The ground lease, which has a
term of 75 years commencing in October 1988 (subject to earlier
termination in the event of a sale of the land as described below),
provides for monthly base rent aggregating $780,000 per annum for
the first two lease years, $1,040,000 per annum for the third lease
year, and $650,000 per annum for each lease year thereafter. The
ground lease also provides for contingent rent (payable quarterly
out of the excess, if any, of substantially all of the gross
receipts from the operations of the shopping center received by the
borrower/lessee over certain base amounts) equal to the sum of (x)
a specified annual amount (commencing in the fourth lease year at
$390,000 per annum and increasing in the sixth lease year to
$520,000 per annum), increased until paid at the "applicable rate"
of interest payable under the first leasehold mortgage loan
described below (such amount as so increased herein called the
"rent shortfall amount"), plus (y) 15 percent of the balance of
such excess gross receipts remaining after deducting the aggregate
amount paid at such time of the rent shortfall amount under the
ground lease and the "interest shortfall amount" under the first
leasehold mortgage loan as described below.

Under the terms of the ground lease, upon a joint sale or
refinancing of the land and the improvements thereon, Monmouth
Associates will be entitled to receive out of the proceeds of such
sale or refinancing the sum of (a) any accrued and unpaid rent
shortfall amount plus $13,000,000, plus (b) after payment of
principal and any accrued and unpaid interest on the first
leasehold mortgage loan and payment of any outstanding additional
loans by Monmouth Associates and any advances by the
borrower/lessee to pay the cost of certain capital or tenant
improvements described below, together with any accrued and unpaid
interest thereon, 15 percent of such remaining sale or refinancing
proceeds until Monmouth Associates has received aggregate payments
<PAGE>
PAGE 34
under the ground lease equal to an internal rate of return of 11
percent per annum on its investment in the land, plus (c)
thereafter, 12.5 percent of any such remaining sale or refinancing
proceeds. In general, the remedies under the ground lease are
limited to the property securing such obligation.

The first leasehold mortgage loan has a term of 15 years commencing
in October 1988, which may be extended from time to time at the
option of Monmouth Associates for up to an additional 20 years,
subject to acceleration of the loan in the event of a joint sale of
the property or a purchase by either Monmouth Associates or the
borrower/lessee of the other party's entire interest in the
property.

The loan provides for monthly payments of base interest at a base
rate of 5.98 percent per annum for the first two loan years, 7.97
percent per annum for the third loan year and 5 percent per annum
for each loan year thereafter. The first leasehold mortgage loan
also provides for quarterly payments of contingent interest
(payable out of the excess, if any, of substantially all of the
gross receipts from the operations of the shopping center received
by the borrower/lessee over certain base amounts) equal to the sum
of (x) the difference between the amount of interest payable on the
loan at the "applicable rate" and that payable at the base rate
described above, increased until paid at the applicable rate (such
amount as so increased herein called the "interest shortfall
amount"), plus (y) 45 percent of the balance of such excess gross
receipts remaining after deducting the aggregate amount paid at
such time of the rent shortfall amount under the ground lease and
the interest shortfall amount under the first leasehold mortgage
loan. The "applicable rate" under the loan is 5.98 percent per
annum for the first two loan years, 7.97 percent per annum for the
next three loan years and 8.97 percent per annum for each loan year
thereafter. In connection with the termination of the Caldor
lease, Monmouth Associates has agreed with the borrower/lessee that
it may defer payment of approximately $729,000 of base interest.
This amount, which bears interest at 13 percent per annum, is
payable out of available cash flow from the property.

Under the terms of the first leasehold mortgage loan, upon a joint
sale or refinancing of the land and the improvements thereon,
Monmouth Associates will be entitled to receive out of the proceeds
of such sale or refinancing, after deducting the accrued and unpaid
rent shortfall amount plus $13,000,000 payable to Monmouth
Associates pursuant to the terms of the ground lease, the sum of
(a)(i) any accrued and unpaid interest shortfall amount, (ii) the
outstanding principal amount of the loan plus any accrued and
unpaid base interest thereon, and (iii) after repayment of any
additional loans by Monmouth Associates and any advances by the
borrower/lessee to pay the cost of certain capital or tenant
improvements described below, together with any accrued and unpaid
interest thereon, 45 percent of such remaining sale or refinancing
proceeds until Monmouth Associates has received aggregate payments
under the first leasehold mortgage loan equal to an internal rate
of return of 11 percent per annum on the principal amount of such
loan, plus (b) thereafter, 37.5 percent of any such remaining sale
<PAGE>
PAGE 35
or refinancing proceeds. In the event that the loan continues
until its stated maturity date (as it may be extended from time to
time) without a joint sale of the property or a sale of Monmouth
Associates' entire interest in the property, Monmouth Associates
will be entitled to receive an amount that would provide it the
same consideration payable to it as the first leasehold mortgage
lender (but not as the ground lessor) under a joint sale of the
property described above, assuming that the property were sold for
its appraised fair market value. Aggregate interest payable may
not exceed a specified simple interest rate per annum.

In general, except for a prepayment in connection with a joint sale
of the property or a sale to the borrower/lessee of Monmouth
Associates' entire interest in the property as described below, no
prepayment of the first leasehold mortgage loan may be made. In
general, the remedies under the first leasehold mortgage loan are
limited to the property securing such obligation. The
borrower/lessee is obligated, at its own expense, to remove any
asbestos from the portion of the shopping center owned by the
borrower/lessee under certain circumstances.

Monmouth Associates has agreed in principle to finance the cost of
a proposed renovation of the shopping center. The current
renovation proposal contemplates, among other things, the
elimination of certain outparcels, the addition of a food court and
cinema, and the reconfiguration of the former Caldor department
store space into smaller tenant spaces for national retail tenants.
As currently contemplated, it is expected that the renovation would
reposition the shopping center against its competition by adding a
more upscale tenant component, utilizing the former Caldor space
and adding food and entertainment uses. The renovation is
currently expected to commence in the second quarter of 1994 and to
be completed in late 1995.

It is expected that the costs of the renovation would be financed
by a loan from Monmouth Associates to the borrower/lessee that
would bear a fixed interest rate of 10.5 percent per annum. In
addition, Monmouth Associates' participation in certain levels of
sale or refinancing proceeds from the property would be increased
until Monmouth Associates had received aggregate payments equal to
an internal rate of return of 11 percent per annum on its original
investments in the first leasehold mortgage loan and ground lease.
The amount of financing for the renovation is currently estimated
to be $28,500,000, which would be provided by additional capital
contributions made pro rata based upon the respective interests of
the joint venture partners in Monmouth Associates. As currently
contemplated, under certain circumstances Monmouth Associates could
be required to loan up to an additional $600,000 for the
renovation.

Required approvals of department stores as well as zoning approvals
for the proposed renovation have been obtained. However,
finalization of the renovation plan is subject to, among other
things, obtaining certain other governmental approvals including
building permits, as well as negotiation and execution of final
<PAGE>
PAGE 36
documentation, and the terms of the financing for the renovation
are subject to, among other things, negotiation and execution of
final documentation. There is no assurance that the renovation
plan will be approved and implemented or that the final terms of
the financing therefor will be agreed upon or that any final plan
and/or the financing therefor will be on the terms described.

Monmouth Associates also is required to make other additional loans
to finance the cost of 60 percent of tenant improvements or other
ordinary capital expenditures that exceed the amounts reserved by
the borrower/lessee for such expenditures, provided that the
borrower/lessee advances the remaining 40 percent of such
expenditures.

The interest payable on any such additional loans (as well as on
any advances made by the borrower/lessee) is to be at the greater
of the applicable rate under the first leasehold mortgage loan as
in effect from time to time or the market rate of interest charged
by institutional lenders for similar loans. These additional loans
generally require payments of interest only until maturity of the
first leasehold mortgage loan (including any extension thereof
described above), at which time the outstanding principal and any
accrued and unpaid interest under the additional loans will be due
and payable. The additional loans may be prepaid prior to maturity
without a prepayment charge. Pursuant to such requirements,
Monmouth Associates has loaned the borrower/lessee an aggregate of
approximately $2,737,000 at fixed interest rates ranging from 8.25
percent to 10.5 percent per annum in connection with the cost of
tenant improvements and ordinary capital expenditures, including
tenant lease expenditures and termination payments. Monmouth
Associates has also advanced an additional $1,250,000 as an
expansion/renovation loan in connection with the termination of the
Caldor lease, which together with accrued interest through October
1991, bears interest at 13 percent per annum. These amounts have
been advanced out of interest and lease payments received under the
leasehold mortgage loan and ground lease along with the reserves of
Monmouth Associates.

Under the terms of the ground lease, at any time after the
thirteenth year of the lease Monmouth Associates has the right, and
at any time after the fourteenth year the borrower/lessee has the
right, to cause a joint sale of the land and the portion of the
shopping center owned by the borrower/lessee, subject to the right
of first refusal of the other party to the ground lease to acquire
the entire interest in the property of the party proposing such
joint sale. In the event that the first leasehold mortgage loan
continues until its stated maturity date (including any extension
of such maturity date described above), the borrower/lessee has the
option to purchase Monmouth Associates' interest in both the land
and the first leasehold mortgage loan for an aggregate amount that
would provide Monmouth Associates the same consideration payable to
it as ground lessor and first leasehold mortgage lender under a
joint sale of the property described above, assuming that the
property were sold for its appraised fair market value.
<PAGE>
PAGE 37
In general, except for certain transfers by Monmouth Associates to
an affiliate, neither Monmouth Associates nor the borrower/lessee
may transfer its entire interest in the property (including its
interest in the first leasehold mortgage loan) during the first
five years after the closing, and thereafter may only transfer its
entire interest in the property, subject to the consent of the
other party and the other party's right of first refusal to acquire
such interest. In general, neither Monmouth Associates nor the
borrower/lessee may transfer a portion of its interest in the
property.

The portion of the shopping center owned by the borrower/lessee is
being managed by an affiliate of the borrower/lessee under a
long-term agreement pursuant to which it is obligated to manage the
property and collect all receipts from operations of the property
for a fee equal to 3.5 percent of the base and percentage rents
from the property. In addition, the manager is entitled to
compensation for leasing and re-leasing services at the shopping
center. The following is a schedule of expiration of present
leases (other than those of any anchor department store tenants and
exclusive of storage space and assuming no renewals or
cancellations) and current annual base rents allocable thereto as
of April 1994:

Year of Number Current Percentage of
Expiration of Square Annual Current Annual
of Leases Tenants Feet Base Rent Base Rent
1994.......... 27 64,897 $1,131,654 14.6%
1995.......... 4 25,776 153,993 2.0
1996.......... 9 17,449 476,726 6.1
1997.......... 8 18,430 398,074 5.1
1998.......... 9 29,616 729,403 9.4
1999.......... 6 11,503 271,856 3.5
2000.......... 8 54,849 889,129 11.5
2001.......... 16 34,446 1,290,610 16.6
2002.......... 13 68,081 1,382,510 17.8
2003.......... 10 34,995 964,517 12.4
2006.......... 1 9,169 77,391 1.0

1225 Connecticut Avenue
Washington, D.C.

In May 1990 the Account acquired an interest in a newly formed
Delaware corporation (the Corporation) owned jointly with certain
other persons, as described below. The Corporation has acquired an
office building located in Washington, D.C. known as 1225
Connecticut Avenue, N.W. (1225 Connecticut), an eight-story
reinforced concrete frame building containing 184,432 square feet
of rentable office space, 18,498 square feet of rentable retail
space, 6,416 square feet of below grade storage space and 100,024
square feet of subsurface parking space for over 300 automobiles.
The building is located on an approximately 33,000 square foot site
that fronts Connecticut Avenue, 18th Street and "N" Street, N.W.
1225 Connecticut was completed in 1968.
<PAGE>
PAGE 38

The office and retail space of 1225 Connecticut is currently
approximately 95 percent leased and occupied under leases having
original minimum terms (not including renewal options) which vary
in duration from 1-1/2 to 29 years with current annual base rents
ranging from approximately $17.50 to $45.00 per rentable square
foot. The current average annual base rent for the office and
retail space is approximately $33.25 per square foot. The storage
space is currently 80 percent leased and occupied under leases
having original minimum terms (not including renewal options) that
vary in duration from 5 to 12 years with the current annual base
rents ranging from approximately $10.00 to $16.25 per square foot.
The current average annual base rent for the storage space is
approximately $11.80 per square foot. The average annual occupancy
rates (based upon occupancy at the end of each month during the
year) and approximate average annual base rents per square foot for
the office and retail space for the past three years are as
follows:

Average Annual
Average Annual Base Rent
Year Occupancy Rate Per Square Foot
1991 99% $20.05
1992 99 20.35
1993 95 28.60

Substantially all of the office and retail leases contain
provisions, subject to certain limitations, requiring tenants to
pay, in addition to their annual base rent, their pro-rata share of
real estate taxes and operating expenses over certain base amounts.
In addition, leases covering a majority of the office and retail
space contain provisions, subject to certain limitations, pursuant
to which rents may be increased based upon changes in a consumer
price index from a base year.

During 1993 and 1994 the annual base rents under the Ernst & Young
leases were scheduled to increase to $34 per square foot from rates
ranging from $8.75 to $29.00 per square foot. In 1993 Ernst &
Young agreed to extend the original term of a majority of its
existing leased space from June 2000 to June 2007, subject to the
termination of approximately 9,000 square feet of this space in
December 1994, and to increase the rent for all of the space to $34
per square foot effective upon the agreement. Ernst & Young also
agreed to lease an additional approximately 17,000 square feet of
space through December 1994 and an additional approximately 1,700
square feet of first floor space through June 2007. As a result,
the Ernst & Young leases generally are as follows:
<PAGE>
PAGE 39
Current
Annual
Square Base Expiration
Tenant Feet Rent Date
Ernst & Young.......... 1,676 $17.50 June 2007
(1st Floor)
Ernst & Young.......... 131,640 34.00 June 2007
(2nd, 5th, 6th, 7th
and 8th Floors)
Ernst & Young.......... 26,328 34.00 December 1994
(4th Floor)

The primary lease for Ernst & Young (which does not include the
first and fourth floor space) provides for two optional renewal
periods of five years each with annual base rent to be based on 90
percent of the fair market rent as determined at such time. Ernst
& Young also has a right of first opportunity and certain expansion
options to lease any space on the third floor.

The real estate and vault taxes on 1225 Connecticut were
approximately $912,000 for the tax year ended June 30, 1993 and are
expected to decrease to approximately $877,000 for the tax year
ended September 30, 1994 as a result of assessment appeals. 1225
Connecticut is subject to competition from several other commercial
projects in its vicinity, including a number of office buildings
owned by entities either sponsored or advised by an affiliate of
the Investment Adviser. In the opinion of the Investment Adviser,
the building is adequately insured.

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

The officers and directors of the Corporation are persons
affiliated with the Investment Adviser or its affiliates. The
Account owns approximately 16.3 percent of the outstanding shares
of common stock of the Corporation. The outstanding shares of
common stock of the Corporation not owned by the Account are owned
by persons who are affiliated or associated with, or are advised or<PAGE>
PAGE 40
managed by affiliates of, the Investment Adviser. There is no
other class of stock of the Corporation authorized or outstanding,
and no other shares of common stock may be issued without the
consent of shareholders owning at least 96 percent of the then
outstanding shares of common stock of the Corporation. The major
shareholders of the Corporation (including the Account) owning in
excess of 99 percent of the Corporation's outstanding stock have
entered into a shareholders' agreement which provides, among other
things, that upon a proposed sale of shares the non-selling major
shareholders shall have a right of first refusal to buy out the
selling major shareholders' shares in the Corporation; the approval
of shareholders owning at least 96 percent of the outstanding
common stock of the Corporation is required to make certain major
decisions; and, in the event of a disagreement regarding a proposed
sale of 1225 Connecticut, the major shareholders not desiring to
sell would have a right of first refusal to purchase the other
major shareholders' shares in the Corporation and if all of such
shares are not acquired pursuant to the exercise of such right of
first refusal, the Corporation may conclude a sale of the property.

The Corporation purchased 1225 Connecticut from the seller for a
purchase price of approximately $54,125,000, consisting of
$51,425,000 paid in cash and approximately $2,700,000 of mortgage
indebtedness then encumbering the property. In connection with the
acquisition of the property, the Corporation paid approximately
$2,130,000 for real estate brokerage commissions to an independent
third party and certain closing costs. In addition, the
Corporation has created reserves in the amount of approximately
$1,500,000 for working capital and certain possible capital
improvements to the property, including removal of asbestos from
the building. The Account contributed $9,000,000 for its interest
in the Corporation.

In January 1994 the Corporation refinanced its mortgage loan, which
had an outstanding principal balance of approximately $1,667,000 at
the time of refinancing, with a new first mortgage loan in the
principal amount of $7,000,000 that bears interest at 6.98 percent
per annum. The new loan requires monthly payments of interest only
aggregating $488,600 per annum until maturity in February 2001 when
the entire outstanding principal amount together with accrued
interest will be due and payable. Under certain circumstances, the
principal amount of the loan may be prepaid in whole (but not in
part), subject to a prepayment premium based upon the present value
of the difference, if any, between the remaining scheduled monthly
payments on the loan at the date of prepayment and the amount such
monthly payments would be if the interest rate on the loan were
equal to the yield on a U.S. government security with a comparable
maturity date. Pursuant to the deed of trust securing the mortgage
loan, the Corporation is prohibited from modifying Ernst & Young's
primary lease or from entering into certain other tenant leases
without the lender's consent. Prior to selling the property or
encumbering the property with any additional debt, the Corporation
must obtain the consent of the lender, which may be arbitrarily
withheld. However, subject to certain restrictions, the
Corporation has a one-time right to transfer title to the property
<PAGE>
PAGE 41
together with an assumption of the mortgage loan. The Corporation
intends to use the excess proceeds from the refinancing in the
amount of approximately $5,300,000 to pay for lobby and other
common area renovation costs, a sprinkler system and certain tenant
improvement costs related to the Ernst & Young lease extension as
well as a reserve for additional tenant improvement costs and lease
commissions anticipated to be incurred upon the expiration of
certain existing leases.

An affiliate of the Investment Adviser has entered into a
management agreement under which it is obligated to manage 1225
Connecticut, collect all of the receipts from operations and, to
the extent available from such receipts, pay all of the expenses of
the property. The manager is paid a fee equal to 2.5 percent of
the gross revenues of the property, plus reimbursement for certain
direct expenses of the manager.

An unaffiliated third party leases and operates the entire parking
garage (subject to certain parking rights provided for tenants of
the property) for a term extending until November 1997. The lease
provides for a fixed rent payment of $485,000 a year (which
reflects an increase at the end of 1993 from $430,000 a year),
provides that the lessee shall pay the operating expenses of the
parking garage and does not provide such lessee with an option to
extend the term of the lease.

The following is a schedule of expiration of leases for office and
retail space (assuming no renewals or cancellations) and current
annual base rents allocable thereto as of April 1994:

Year of Current Percentage of
Expiration Number of Square Annual Current Annual
of Leases Tenants Feet Base Rent Base Rent
1994.......... 2 31,591 $1,055,150 16.6%
1995.......... 1 2,023 40,965 0.6
1996.......... 1 3,071 138,195 2.2
2000.......... 3 21,783 633,753 9.9
2007.......... 1 133,316 4,505,090 70.7

Riverpoint Center
Chicago, Illinois

The Account entered into a participation agreement to fund up to
$3,000,000 of a first mortgage loan in the maximum principal amount
of $29,250,000. The remaining portion of the loan has been funded
by JMB Mortgage Partners, Ltd.-IV and JMB Mortgage Partners,
Ltd.-III, which are affiliates of the Investment Adviser. (The
Account, JMB Mortgage Partners, Ltd.-IV and JMB Mortgage Partners,
Ltd.-III are collectively called the Lenders). The loan is secured
by a first mortgage on a shopping center known as Riverpoint Center
and located on an approximately 17-acre site at the intersection of
Wood Street and Fullerton Avenue in Chicago, Illinois. The
shopping center is owned by a partnership (the Borrower) whose
general partners are not affiliated with any of the Lenders and is
managed by an affiliate of the Borrower.
<PAGE>
PAGE 42

The initial funding (the Initial Funding) of the loan, in the
amount of $26,000,000 (of which the Account's share was
$2,666,660), occurred in August 1989. Additional amounts,
aggregating approximately $2,040,000 (of which the Account's share
was approximately $209,000), have been funded since the Initial
Funding. The Borrower did not qualify for any additional fundings
above the $28,040,000 which has been funded to date, and no
additional fundings will be made by the Lenders. The shopping
center, which was completed in June 1989, has masonry walls with
interior steel frames and a brick facade with metal detailing and
includes a parking lot for approximately 860 cars. Real estate
taxes on the shopping center were approximately $1,092,000 for the
1992 tax year and are expected to be approximately $1,056,000 for
the 1993 tax year, the most recent year of assessment.

In the opinion of the Investment Advisor, the shopping center is
adequately insured. The shopping center is subject to competition
from other retail properties in the area.

The shopping center, which is currently approximately 97 percent
leased and occupied by 26 tenants, consists of approximately
200,800 square feet of gross leasable area. Existing tenant leases
have minimum terms, not including renewal options, ranging from 3
to 20 years with current annual base rents ranging from $11.60 to
$25.00 per square foot. The current average annual base rent is
approximately $14.75 per square foot.

Substantially all existing leases contain provisions pursuant to
which each tenant is required to pay its pro-rata share of
operating expenses and real estate taxes of the shopping center and
additional rent in the form of a percentage of tenant gross
receipts above a certain base amount. The following is a schedule
of major tenant leases:

Current
Annual
Square Base Original
Tenant Feet Rent Term
Dominick's Omni Superstore
(grocery store).......... 85,498 $992,496 20 years
Marshalls
(clothing)............... 36,157 506,198 15 years
Silo Electronics
(consumer electronics)... 12,100 229,900 10 years

The first mortgage loan requires periodic payments of interest
only, matures 10 years after the date of the Initial Funding, and
bears interest as follows:
<PAGE>
PAGE 43
(1) Basic Interest: Basic Interest is payable monthly in advance
at the rates per annum set forth below:

Loan Years Interest Rate
1............ 8.84%
2-3.......... 8.75
4-6.......... 9.25
7-10.......... 9.50

(2) Accrual Interest: In addition to Basic Interest, interest
accrues at a simple rate of 2.0 percent per annum. The
Accrual Interest is due at maturity (subject to earlier
payment upon sale of the shopping center or prepayment of the
loan). The Accrual Interest is reduced dollar-for-dollar by
the amount of Additional Interest paid as described below.

(3) Additional Interest: The Lenders are entitled to receive
Additional Interest for each calendar year (or portion
thereof) equal to 50 percent of the gross income (exclusive of
tenant reimbursements of expenses) from the shopping center in
excess of a base amount of $2,737,000. The Lenders are also
entitled to receive Additional Interest equal to 50 percent of
the amount by which the value of the shopping center exceeds
$28,040,000, to be paid as follows: (i) upon sale (if any) of
the shopping center, an amount equal to 50 percent of the
amount by which the gross sale proceeds from such sale (net of
customary closing prorations and seller's closing expenses)
exceed the greater of (A) $28,040,000, or (B) the highest
gross proceeds from any single prior sale made after the
Initial Funding in connection with which Additional Interest
was paid, and (ii) at maturity or upon prepayment, an amount
equal to 50 percent of the amount by which the then current
fair market value of the shopping center (determined by
appraisal) exceeds the greater of (A) $28,040,000, or (B) the
highest gross proceeds from any single prior sale made after
the Initial Funding in connection with which Additional
Interest was paid. Aggregate interest payable over the term
of the loan may not exceed that which would be obtained from a
certain specified simple interest rate per annum.

The loan is generally non-recourse to the Borrower and its
partners. The entire principal balance of the loan and all Accrual
and Additional Interest not previously paid will be due at
maturity. In the event that the Borrower sells or further
encumbers the shopping center without the Lenders' consent, the
Lenders will have the option to accelerate the loan. The loan is
not prepayable by the Borrower for eight years following the
Initial Funding. Thereafter, the loan may be prepaid in full upon
payment of a prepayment charge in an amount equal to 7 percent of
the loan's principal balance in the ninth loan year and 4 percent
in the first six months of the tenth loan year. Thereafter, no
prepayment charge will be due. Any action taken or consent to be
given by the Lenders under the loan documents generally requires
<PAGE>
PAGE 44
the vote or consent of the Lenders representing a majority of the
principal amount of the loan outstanding. In general, in the event
that a Lender proposes to sell or transfer its interest in the
loan, the other Lenders will have a right of first refusal to
acquire such interest. The following is a schedule of expiration
of leases (assuming no renewals or cancellations) and current
annual base rents allocable thereto as of April 1994:

Year of Number Current Percentage of
Expiration of Square Annual Current Annual
of Leases Tenants Feet Base Rent Base Rent
1994.......... 3 6,210 $130,665 4.5%
1995.......... 1 1,067 19,393 0.7
1996.......... 2 3,630 57,310 2.0
1997.......... 4 4,988 92,000 3.2
1998.......... 2 13,530 267,740 9.3
1999.......... 4 13,490 305,978 10.6
2000.......... 2 7,374 114,507 4.0
2001.......... 3 6,930 116,688 4.0
2002.......... 2 6,707 112,485 3.9
2003.......... 1 9,460 162,617 5.7
2007.......... 1 36,157 506,198 17.6
2009.......... 1 85,498 992,496 34.5

West Springfield
Terrace Apartments
Fairfax County, Virginia

In August 1989, the Account acquired a 244-unit garden apartment
complex known as the West Springfield Terrace Apartments, which is
located on an approximately 13.2-acre site at the intersection of
Old Keene Mill Road and Bauer Road in Springfield, Fairfax County,
Virginia.

The apartment complex, which was completed in 1978, consists of 17
separate three- and four-story buildings of wood frame with brick
veneer construction containing 52 one-bedroom units, 22 one-bedroom
and den units, 118 two-bedroom units, 22 two-bedroom and den units
and 30 three-bedroom units. Each unit has either a patio or
balcony and a washer/dryer. The complex contains a swimming pool,
tennis court, clubhouse and approximately 380 parking spaces. The
complex at present is approximately 98 percent occupied. The
average annual occupancy rates (based upon occupancy at the end of
each week during the year) and approximate average annual rents per
unit for the past four years are as follows:

Average Annual
Average Annual Base Rent Per
Year Occupancy Rate Square Foot
1990 90% $780
1991 92 793
1992 95 797
1993 96 806

Current monthly rentals range from $720 to $1,005 per unit.
<PAGE>
PAGE 45
Real estate taxes on the complex were approximately $186,000 for
the 1993 tax year and are expected to be approximately $186,000 for
the 1994 tax year.

The complex is subject to competition from other apartment
complexes in the area. The Investment Adviser estimates that there
is at present an approximate 4 percent vacancy rate in the area for
apartment complexes that have sufficient operating experience after
initial rent-up and that might be deemed competitive. In the
opinion of the Investment Adviser, the apartment complex is
adequately insured.

The Account paid $15,222,278 for the apartment complex in cash at
closing (exclusive of closing costs and prorations). In connection
with the acquisition of the property, the Account paid a prepayment
charge at closing of $92,221 to the lender that held the mortgage
loan on the property at the time of its purchase. At the time of
the acquisition it was anticipated that an additional amount of
approximately $1,450,000 would be used by the Account to pay the
cost of upgrading kitchens and bathrooms and certain other upgrades
and capital improvements at the complex. The renovation project
was subsequently increased to include replacing certain carpets in
units as they were renovated and to increase the number of units
that received certain upgrades. The renovation project was
completed in 1992 at a cost of approximately $1,900,000.

In November 1989 the Account obtained a loan from an institutional
lender in the principal amount of $8,000,000 secured by a first
mortgage on the property. The current outstanding balance of the
loan is approximately $7,903,000. The loan has a term of seven
years and bears interest at a rate of 9.50 percent per annum. The
loan required monthly payments of interest only until November 1992
and thereafter is amortizable over a 27-year schedule through
monthly payments of principal and interest aggregating $824,400 per
annum through November 1996 when the remaining principal balance of
approximately $7,690,000, together with accrued and unpaid
interest, is due and payable. The loan permits a prepayment in
whole or in part upon payment of a prepayment charge equal to the
present value of the difference, if any, between the remaining
scheduled monthly payments on the loan at the date of prepayment
and the amount such monthly payments would be if the interest rate
on the loan were equal to the yield on a U.S. Treasury obligation
with a comparable maturity date, plus 1 percent per annum. In
general, the remedies under the first mortgage loan are limited to
the property securing such obligation.

The apartment complex is being managed by an affiliate of the
Investment Adviser for a fee equal to 5 percent of the gross
revenues from the property, plus reimbursement of certain direct
expenses. Under the terms of the management agreement, the manager
is obligated to manage the complex, collect all receipts from
operations and, to the extent available from such receipts, pay all
expenses of the property.
<PAGE>
PAGE 46
For a description of all types of fees and compensation payable by
the Account to IDS Life or the Investment Adviser in connection
with the acquisition or placement of real estate related
investments on behalf of the Account, see Compensation of IDS Life,
the Investment Adviser and their Affiliates in Connection with Real
Estate Related Services under the Description of the Investment
Adviser and Affiliates section.

For further information regarding the Account's real estate related
investments and their operations see the Management's Discussion
and Analysis of Financial Condition and Results of Operations
section.

Risk Factors

There are certain risk factors that may affect owners participating
in the Account or the Account's investments.

General Risks of Real Property Investments

A portion of the liquid assets of the Account and purchase payments
that may be made in the future may be invested in properties that,
as of the date of this prospectus, have not been selected. The
uncertainty and risk of investment in the Account will be increased
to the extent that owners are unable to evaluate for themselves the
economic merit of the real estate related assets that may be
acquired. In addition, the real property investments will be
subject to the risks generally incident to the ownership of real
property, including the uncertainty of cash flow to meet
obligations, adverse changes in national economic conditions,
changes in the investment climate for real estate investment,
adverse changes in local market conditions due to changes in
general or local economic conditions and neighborhood
characteristics, changes affecting rental rates and property values
arising from changes in interest rates and in the availability,
cost and terms of mortgage funds, the need for unanticipated
renovations, particularly in older structures, changes in real
estate tax rates and other operating expenses, adverse changes in
governmental rules and fiscal policies, acts of God such as
earthquakes or other natural disasters or man-made events such as
environmental hazards (that may result in uninsured losses), the
financial condition of the sellers and tenants of properties and
other factors that are beyond the control of the Account. The
holding of real estate is also subject to increases in the cost of
ownership. For example, unexpected increases in the cost of energy
that could not be passed through to tenants could reduce the
operating income for some properties. Currently, earthquake
insurance coverage for the full value of real properties is
generally not available on economic terms. Earthquake insurance
for the Account's real property investments is generally provided
under a blanket policy that includes coverage for various
properties in which the Account or entities affiliated with, or
sponsored, advised or managed by, the Investment Adviser or its
affiliates have an interest, and coverage may be diluted over time
<PAGE>
PAGE 47
as a result of the acquisition of additional properties. In
certain areas, it is possible that real estate taxes or other
expenses will increase at more rapid rates than in the past. Most
of the Account's real property investments will be in rental
properties and are subject to the risk of inability to attract or
retain tenants, with a consequent decline in rental income, as a
result of adverse changes in local real estate markets or other
factors and the risk of inability of tenants to meet their lease
obligations, with a consequent decline in rental income, as a
result of adverse conditions or events affecting their business
operations. In certain real estate markets, available space
currently exceeds the demand for such space. Consequently, Account
investments in these markets may rent-up or release more slowly,
and operating income for such investments may be less than
anticipated.

To the extent that the Account's rental income is based on a
percentage of the gross receipts of retail tenants, its cash flow
is dependent on the retail success achieved by such tenants.

While one of the Account's objectives is to obtain reinvestment of
cash flow from investments, there can be no guarantee that the
Account's investments will generate sufficient revenue to cover
operating and other expenses of the Account. The opportunities for
sale, and the profitability of any sale, of any particular
investment by the Account will be subject to the risk of adverse
changes in real estate market conditions, which may vary by the
size, location and type of such investments.

Mortgage Loans

All mortgage loans are subject to the risk of default by the
borrowers, in which event the Account may be required to foreclose,
or pursue other remedies, on the underlying property to protect the
value of its investment. The borrower's ability to make mortgage
payments and the amount realizable by the Account upon default
depend on the risks generally associated with real estate
investments as described above under the General Risks of Real
Property Investments section, as well as under the Uninsured Losses
section below.

Generally, mortgage loans will not be personal obligations of the
borrower, so the Account will generally rely solely on the value of
the property as security for the obligations of the borrower to the
Account. If the Account must foreclose, there can be no assurance
as to the amount of investment that will be recovered. Also, there
may be additional delays in receiving payments during any period of
default or foreclosure.

The principal amount due under a mortgage loan typically will be
payable in a lump sum payment at the end of the loan term, and the
borrower's ability to make such repayment may, particularly in the
absence of a borrower with substantial additional assets, be
dependent upon the borrower's ability to refinance the mortgage
<PAGE>
PAGE 48
loan with another lender. A borrower's inability to obtain such
refinancing may require a modification or extension of the existing
loan made by the Account or a foreclosure by the Account.

Volatility in interest rates during the investment period may
result in a delay in the making of mortgage loans or possibly a
lower yield to the Account on its mortgage loans. Because a
mortgage loan is a long-term investment, the receipt of interest
payments by the Account during the term of the loan might be below
what it would otherwise be able to receive under the then
prevailing market conditions. Volatility in interest rates after
investment by the Account may result in prepayment of mortgage
loans to the extent not prohibited by the terms of such
investments.

Mortgage loans made by the Account to finance an owner or developer
of a property that is newly constructed, under construction or
under contract for development will generally involve greater risks
than mortgage loans made to finance a property with an operating
history. The Account's commitment to make a mortgage loan may be
permitted to be pledged to a construction lender, and the proceeds
to be disbursed under the commitment may be placed in escrow at a
fixed interest rate in connection with such pledge.

The Investment Adviser will obtain an independent appraisal of the
appraised value of the real estate subject to each mortgage loan in
connection with the placement of such loan. It should be noted,
however, that appraisals are only estimates of value, and there can
be no assurance that, in the event of a default, the Account will
realize an amount equal to the amount of its mortgage loan. In the
event of a default by a borrower that requires the Account to
foreclose upon the property or otherwise pursue its remedies in
order to protect the Account's investment, the Investment Adviser
may seek to obtain a purchaser for the property upon such terms as
the Investment Adviser deems reasonable. However, there can be no
assurance that the amount realized upon any such sale of the
property underlying a mortgage loan will result in financial profit
or prevent loss to the Account. In addition, because of potential
adverse changes in the real estate market for residential,
commercial or industrial properties, locally or nationally, the
Account may be forced to operate the property for a period of time
to protect the value of its investment. In that event, the Account
may be required to invest additional sums to maintain and manage
the property. Under certain circumstances, the Account may retain
and operate the property on its own behalf.

Wrap-around and junior mortgage loans and subordinated land
sale-leaseback transactions of the Account, if any, will be subject
to greater risks than first mortgage loans and unsubordinated land
sale-leaseback transactions because such investments are
subordinate to the liens of senior mortgages or ground leases. All
mortgage loans, including first mortgage loans, may in certain
circumstances be subordinate to mechanics', materialmen's, brokers'
or government liens. The Account may elect to make payments, if it
has the legal right to do so, on a prior lien, including a senior
<PAGE>
PAGE 49
mortgage, in the event of a default by the borrower, in order to
prevent a default on such prior lien or to discharge it entirely.
In the event that the Account forecloses upon a junior or
wrap-around mortgage loan or subordinated land sale-leaseback after
a default by the borrower or lessee, it is possible that a "due on
sale" clause contained in a senior mortgage or ground lease, which
accelerates the outstanding principal balance under such senior
mortgage or terminates a ground lease in the case of a sale of
property, may be deemed to apply, increasing the risk of an
insufficient amount of funds being available to the Account after a
foreclosure sale. To the extent that the Account invests in
leasehold mortgage loans that are subordinate to ground leases not
owned by the Account, a default by the tenant in its payments under
the lease to the lessor may result in the Account losing all or
part of its investment.

The Account, as the holder of a preferred position in the event of
a default, should be entitled to foreclose a mortgage and/or
terminate a lease. However, debt moratoria and other restrictions
on lenders (such as those in some jurisdictions on "due on sale"
clauses) may restrict the Account's ability to enforce specifically
the terms of the obligations of its borrowers. In addition, under
some circumstances the Account might be treated as liable, along
with the owner-borrower, to third parties. Further, the amount of
interest that may be charged by the Account may be limited by state
usury laws, the violation of which may result in various remedies,
including restitution of excessive interest and unenforceability of
loans. While the Investment Adviser will use diligence in
determining whether interest rates comply with applicable laws,
uncertainties may exist with respect to interest payable to the
Account, including additional interest based upon a percentage of
the gross revenues, income or sale or refinancing proceeds from the
underlying property.

Land Sale-Leaseback Transactions

In land sale-leaseback transactions, land and improvements may be
subject to the lien of a first mortgage and other mortgages that
may have priority over the Account's equity interest in the land.
If the ground lessee is unable to meet its mortgage payments, the
Account may be forced to make such payments to prevent foreclosure
and possible loss of investment. If the ground lessee subleases
space to subtenants, the ground lessee's ability to meet its
mortgage payments and rental obligations is subject to the risk
that subtenants may be unable to meet their sublease payments to
the ground lessee. In addition, subleases with subtenants may have
shorter terms than the ground lease and the ground lessee's ability
to meet its mortgage payments and rental obligations may be subject
to its ability to obtain renewals of existing subtenant leases or
to enter into new subtenant leases. The financial stability,
business judgment and management skill of the ground lessee may
provide additional risks.

As with mortgage loans, in the event of default under a ground
lease the Account may be unable to recover its investment and,
<PAGE>
PAGE 50
additionally, there may be a delay in receipt of payments and loss
of revenues in the event of default or subsequent exercise of
default remedies. Also, because the ground lessee's ability to
repay the Account may be affected by the ground lessee's recovery
of rental payments from subtenants, the Account's ultimate ability
to collect will be affected by all normal rental risks, as set
forth in the General Risks of Real Property Investments section and
by all other risks routinely inherent in real estate investments.

Because a land sale-leaseback is a long-term investment, the
receipt of payments by the Account during the lease term might be
below what it would otherwise be able to receive under the then
prevailing market conditions. However, to the extent the Account
is able to enter into participating ground leases, such risks may
be reduced.

Participations

In seeking participations as described under Mortgage Loans --
Participations in the Investment Objectives of the Account section,
the Account may accept a lower base interest or rental rate in
order to obtain such participations and the potential benefit that
could result therefrom. Such benefit could be in the form of a
participation in property appreciation or increases in rental
income. The value of any participations depends on the success of
the borrower or lessee in the leasing of the underlying property,
the management and operation of such property by the borrower or
lessee, the market value of such property and the factors generally
affecting real estate investments described in the General Risks of
Real Property Investments section. As a result, there can be no
assurance as to how much may be realized by the Account from
participations. Additionally, it is possible that the Account's
interest through participations in certain proceeds may result in
the characterization of the Account as a partner or a joint
venturer with the borrower or lessee, and the Account could,
accordingly, lose the priority of its security interest or position
as lender or lessor that it would otherwise have and may be subject
to liabilities that it would otherwise not have as a lender or
lessor. Care will be exercised in the negotiation of
participations to reduce this risk, but there may be a greater risk
in these situations than if there were no participations.

Liquidity Considerations

Real property investments, mortgage loans and land sale-leaseback
investments generally are illiquid compared to investments more
commonly made by insurance company annuity separate accounts. The
investments of the Account will produce income on a periodic basis.
Additionally, the liquid assets (see the Investment Objectives of
the Account -- Liquid Assets section) and the Account's line of
credit with IDS Life will provide certain protection against
illiquidity. However, there can be no assurance that such
short-term investments and borrowings under the Account's line of
credit with IDS Life will be sufficient to meet the requirements of
the Account. Over the past few years the Account has experienced
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substantial contract surrenders in excess of contract purchase
payments. In addition, contract charges and deductions (except for
surrender charges) and interest paid on borrowings under the line
of credit will deplete the Account's liquid assets, while income
from the Account's investments will increase the Account's liquid
assets. To the extent that the Account's liquid assets are
depleted, the Account may have to borrow money under its line of
credit or pledge its real estate related investments for additional
borrowings or dispose of those assets in order to replenish its
liquid assets. See the Management's Discussion and Analysis of
Financial Condition and Results of Operations section.

If such a disposition should be required, the Account may not be
able to dispose of its investments promptly or on commercially
reasonable terms. To avoid a sale on unreasonable terms or if a
sale cannot be made on a timely basis, it may be necessary to
suspend payments to be made under the Contracts. See the
Suspension and Delay of Payments section. During the period of any
suspension, the mortality and expense risk fee, the asset
management fee and other charges provided for in the Contracts will
continue to accrue. Even with a suspension of payments, it may not
be possible to generate sufficient cash to replenish the Account's
liquid assets or to meet its obligations, and a forced liquidation
of assets might be necessary. A liquidation in these circumstances
could result in a realization of less than the full value of the
assets so liquidated. Therefore the Account could experience
substantial losses.

Although IDS Life believes that the existence of the liquid assets
and line of credit of the Account provide additional flexibility
and protection for owners, it is possible that the return on the
liquid assets may be substantially less than that available from
real estate related investments. It is also possible that it could
be higher. Thus, the Account, because of the liquid assets, will
not be completely invested in real estate investments at any time.
See the Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Liquidity and Capital Resources
section for additional information on the Account's liquidity
situation.

Competition for Investments

The Account will be competing for real property investments,
mortgage loans and land sale-leasebacks with numerous other
entities, as well as with individuals, corporations, real estate
partnerships and other entities engaged in real estate investment
activities, including certain affiliates of the Investment Adviser
and IDS Life. See the Conflicts of Interest -- Competition by the
Account with Affiliates of the Investment Adviser and IDS Life for
Real Property Investments, Mortgage Loans and Land Sale-Leasebacks
section.

Competition among private and institutional investors of real
property investments, mortgage loans and land sale-leasebacks has
increased substantially over the years, with resulting increases in
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the purchase price paid for real property and consequent higher
fixed costs in the case of equity investments in real property and
potentially greater credit risks assumed and reduced yields
available in connection with mortgage lending and land
sale-leaseback investments for such properties. There is no
assurance that the Account will be successful in obtaining suitable
investments for the purchase payments or will be able to obtain
alternative investments in the event any investment that may be
subject to an agreement in principle, a letter of intent or
commitment, a contract to acquire or other agreement should not be
consummated or retained for any reason.

Risks of Leverage

The real property investments of the Account may be leveraged,
i.e., the Account may finance a portion of the cost of the
acquisition of properties by borrowing. See the Other Investment
Policies -- Borrowing Policies section.

The Account may refinance various properties, consequently
increasing the aggregate leverage of the Account's investments
beyond that currently contemplated. Such borrowing permits the
acquisition of properties of greater aggregate cost than could have
been financed solely from the Account's capital, but it also
increases the Account's exposure to losses. The degree of risk
associated with leverage could increase if the Account were to
purchase a property subject to an indebtedness that had a non-fixed
interest rate or a shorter maturity with a resulting balloon
payment. Mortgages requiring balloon payments involve greater
risks than mortgages in which the principal amount is fully
amortized over the term of the loan, since the ability of the
Account to repay at maturity the outstanding principal amount of
the balloon loan may be dependent upon the Account's ability to
obtain adequate refinancing. This ability will in turn be
dependent upon economic conditions and the availability of mortgage
money in general and the value of the underlying properties in
particular, all of which will be beyond the control of the Account.
There is no assurance that financing will be available to refinance
such balloon payments or that any such financing available will be
on favorable terms. Principal and interest payments on such
indebtedness will generally have to be made regardless of rental
income from the Account's investment. If mortgage payments are not
paid when due, the Account may sustain a loss on its investment as
a result of foreclosure by the mortgagee. See the Other Investment
Policies -- Borrowing Policies and Conflicts of Interest -- Receipt
of Commissions, Fees and Other Compensation by IDS Life, the
Investment Adviser and Affiliates sections.

In addition, the Account has a revolving line of credit with IDS
Life to pay contract surrenders and other obligations under the
Contracts. Amounts drawn under the line of credit increase the
leverage of the Account, with the attendant requirement that a
portion of the Account's income will be required to service its
debt. The existence of an unpaid balance on the line of credit
also could result in a required repayment which could force the <PAGE>
PAGE 53
liquidation of an investment under circumstances which could result
in a realization of less than the full value of the asset so
liquidated. See the Management's Discussion and Analysis of
Financial Condition and Results of Operation, Liquidity and Capital
Resources section for additional information on the Account's
liquidity situation.

At the time of acquisition of real property investments, aggregate
mortgage indebtedness in connection with the purchase of all real
property investments by the Account is not expected to exceed 50
percent of the purchase price (i.e., total consideration paid for
properties including all liens and mortgages on the properties, but
excluding points and prepaid interest) plus other initial cash
payments in connection with the purchase of all properties.

Risks of Joint Ownership

Some of the Account's investments may be owned jointly by the
Account and the seller of the property (or an affiliate of the
seller), and/or through investments in which entities sponsored,
advised or managed by the Investment Adviser, IDS Life or their
affiliates own an interest in the property.

The investment by the Account in joint venture partnerships or
other entities that own properties or through other forms of joint
ownership, instead of investing directly in the properties
themselves, may under certain circumstances involve risks not
otherwise present, including, for example, risks associated with
the possibility that the Account's co-venturer in a property might
become bankrupt, that such co-venturer may at any time have
economic or business interests or goals that are inconsistent with
the business interests or goals of the Account, that the
co-venturer may be in a position to take actions contrary to the
instructions or requests of the Account or contrary to the
Account's policies or objectives that may subject the properties
and consequently the Account to liabilities greater than those
contemplated or that the joint ownership arrangement or a
co-venturer may limit the Account's ability to transfer its
interest in the joint form of ownership. In connection with such
joint ownership arrangements, the co-venturer may have the right to
take certain actions with respect to the jointly owned property,
including under some circumstances the right to determine whether
and when the property will be sold. Ownership of real estate
related investments through joint ownership arrangements may be
even more illiquid than direct ownership of such investments, and
as a consequence the Account may experience difficulties or delays
in attempting to sell such joint ownership investments when such
time comes. The Account may enter into joint ownership
arrangements with entities sponsored, advised or managed by the
Investment Adviser, IDS Life or their affiliates. See the
Conflicts of Interest -- Possible Joint Venture Investments with
Affiliates of the Investment Adviser or IDS Life section.

In connection with such an investment, both parties may be required
to approve some or all of the major decisions concerning the
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investment by voting on the basis of their respective capital
contributions to, or shareholdings or ownership interests in, the
joint venture or otherwise. Thus, there exists the possibility of
an impasse in the event the joint owners disagree. The Investment
Adviser, on behalf of the Account, will attempt to negotiate a
right of first offer or refusal to enable the Account, in the event
of a disagreement regarding a proposed sale of the investment, to
purchase the joint owner's interest in the investment in the event
the Account does not wish to sell the investment. However, there
is no assurance that a right of first offer or refusal can be
obtained in all cases. The exercise of any right of first offer or
refusal would be subject to the Account's having the financial
resources to effect such a purchase, and there can be no assurance
that it would have such resources.

Reliance on IDS Life and the Investment Adviser

The owner of a Contract does not have a vote in determining any
policy of the Account. IDS Life, acting with the advice of the
Investment Adviser with respect to real estate related investments,
will make all decisions with respect to the management of the
Account, including the determination as to what real estate related
investments to make, subject to the investment restrictions. See
the Investment Restrictions section. Owners will have no right or
power to take part in the management of the Account. No person
should purchase the Contracts offered hereby unless such purchaser
is willing to entrust all aspects of the management of the Account
to IDS Life acting with advice from the Investment Adviser.

Evaluation and Appraisal Risk

There are risks associated with the method of valuing the assets of
the Account, including the fact that the valuations are based
substantially on appraisals to be made by independent real estate
appraisers and the application of formulae by the Investment
Adviser. Appraisals represent only the opinions of experts as to
the value of the property and may not represent the true or
realizable value of the investment. The Investment Adviser also
will make certain determinations regarding valuation of assets.
There may be variations between the amount realizable upon
disposition and the stated value of assets. Owners may be
adversely affected if the valuation method results in either
overvaluing or undervaluing the Account's investments. Both the
number of accumulation units credited at purchase and the amount
payable under a Contract are based on the value of the assets of
the Account. See the Valuation of Assets -- Real Property
Investments, Mortgage Loans and Land Sale-Leasebacks section.

If the Account investments are overvalued or undervalued, the fees
paid to IDS Life and the Investment Adviser and its affiliates will
be greater or less than the amount that should have been paid to
them.

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Continuous Offering

IDS Life intends to offer Contracts participating in the Account
continuously. If there are substantial and continuing future sales
in excess of redemptions, the Account will have additional funds to
invest. These funds will provide the Account with the opportunity
to purchase additional investments, but there is no assurance that
the ability to purchase such future investments will be of an
incremental economic benefit to the owners. Nevertheless, the
continuity of offering provides an opportunity for the Account to
purchase more advantageous investments if they are available. If
additional purchase payments are received at an accelerated rate,
delays in the investment of the Account's funds or in the receipt
of a return from real estate related investments may result, with
the consequence that the percentage of assets of the Account held
in liquid assets may be increased. However, to the extent that
additional purchase payments are received, the Account may have
greater liquidity during certain periods and, at such times, it is
less likely that either premature sale of investments will be
forced or the suspension-of-payments provision will be invoked.

Size of Account

In the event that IDS Life is able to sell a greater amount of
Contracts, the Account will be more diversified than would be the
case if fewer Contracts were sold, and the owners will be
proportionately less exposed to the risks of any particular
investment. In such case, the risk of loss to the Account and
owners from defaults by borrowers or tenants will be
proportionately smaller than if the Account's investments are less
diversified.

A significant amount of subsequent contract surrenders has the
effect of reducing the amount available for investments and
limiting diversification. Over the past few years the Account has
experienced substantial contract surrenders in excess of contract
purchase payments. As a result the Account does not expect to
acquire additional real estate related investments until contract
purchase proceeds exceed contract termination payments. See the
Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Liquidity and Capital Resources section.

Uninsured Losses

The Investment Adviser will arrange for, or require proof of,
comprehensive insurance including liability, fire and extended
coverage, which is customarily obtained by owners of similar
properties for the real property investments and properties which
are security for the mortgage loans or subject to the land
sale-leaseback transactions of the Account. Generally, under the
terms of the mortgage or ground lease, such insurance will be
required to be maintained at the expense of the mortgagor or ground
lessee. However, there are certain types of losses, generally of a
catastrophic nature such as earthquakes, floods, wars or
environmental hazards or accidents, which are either uninsurable or
<PAGE>
PAGE 56
not economically insurable. Should such a disaster occur, the
Account could lose both its invested principal and anticipated
profits from investments.

Environmental and Regulatory Problems

The availability of suitable investments and the cost of
construction and operation of properties in which the Account may
invest may be adversely affected by legislative, regulatory,
administrative and enforcement action at the local, state and
national levels in the areas, among others, of housing and
environmental controls. In addition to possible increasingly
restrictive zoning regulations and related land use controls, such
restrictions may relate to air and water quality standards, noise
pollution and indirect environmental impacts such as increased
motor vehicle activity. In addition, the cost of, or liability
arising from, investments in properties (whether as owner, lender
or lessor) may be increased or incurred as a result of current or
future environmental laws or regulations at the national or local
level, or environmental concerns, relating to, among other matters,
the use or presence of hazardous or toxic materials or waste; and
the ownership, sale, financing or refinancing of such properties,
or an interest therein held through a mortgage loan or land
sale-leaseback, may be adversely affected by such increased costs
or environmental liabilities.

Federal Income Tax Matters

IDS Life believes that the Contracts will be treated as annuities
under the Code, and that an owner will not be subject to Federal
income tax on any income or earnings of the Account until
distributions are made or a change of ownership of the Contract
occurs. However, an owner generally will be subject to Federal
income taxation on the portion of distributions received that
represents income to the owner and may be subject to an additional
10 percent penalty in certain circumstances related to early
withdrawals. IDS Life has not sought a ruling from the Internal
Revenue Service regarding any of the Federal income tax
consequences relevant to the ownership of the Contracts. See the
Certain Federal Income Tax Considerations section.

Investment Company Act of 1940

IDS Life proposes to operate the Account so that it will not be
subject to registration under the 1940 Act. This will require
monitoring the proportion of the Account's funds to be placed in
various investments so that the Account does not become subject to
the 1940 Act. As a result, the Account may forgo certain
investments that could produce a more favorable return for the
Account.

<PAGE>
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Conflicts of Interest

Competition by the Account with Affiliates of the Investment
Adviser and IDS Life for Real Property Investments, Mortgage Loans
and Land Sale-Leasebacks

IDS Life and the Investment Adviser will be subject to various
conflicts of interest in carrying out their responsibilities to the
Account. Affiliates of the Investment Adviser and IDS Life also
may be in competition with the Account in connection with the
acquisition, sale or operation of properties or the making of
mortgage loan or land sale-leaseback investments under some
circumstances.

The Investment Adviser, its affiliates and affiliates of IDS Life
currently perform investment management and advisory and other
services for other real estate investment funds (e.g., pension and
profit sharing trusts, corporations, partnerships and segregated
asset accounts) similar to the services to be performed for the
Account and expect to provide such services to additional real
estate investment funds in the future. Affiliates of the
Investment Adviser and IDS Life also invest in real estate for
their own accounts. IDS Life, the Investment Adviser and their
affiliates may sponsor, advise or manage real estate investment
funds that have investment objectives nearly identical to the
Account's. The Investment Adviser, IDS Life or their affiliates
also may make investments meeting such investment objectives for
their own accounts. The Investment Adviser, IDS Life and such
affiliates and real estate investment funds sponsored, advised or
managed by the Investment Adviser, IDS Life or their affiliates may
be in competition with the Account for investments under certain
circumstances. Competition in the acquisition or placement of real
estate related investments could arise, for example, between the
Account and either the Investment Adviser, IDS Life or their
affiliates seeking to make an investment for their own account or
between the Account and another real estate investment fund
sponsored, advised or managed by the Investment Adviser, IDS Life
or their affiliates having investment objectives substantially
identical to the Account or even with different investment
objectives. The Account also may acquire properties adjacent to
properties owned by entities affiliated with, or advised or managed
by, the Investment Adviser or IDS Life or purchase a phase of a
multi-phase development in which an affiliated entity has or
subsequently acquires an investment interest in another phase. The
Account and one or more entities affiliated with, or advised or
managed by, the Investment Adviser or IDS Life may be competing in
certain geographical markets for commercial tenants. There also
may be similar sorts of competition for the sale of properties in
certain markets. The Investment Adviser, IDS Life and their
affiliates may provide services to, and otherwise deal or do
business with, persons who may be engaged in transactions with the
Account. In addition, the Account may borrow from, purchase goods
and services from and otherwise do business with persons who may be
engaged in transactions with the Investment Adviser, IDS Life and
their affiliates.
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In the event the Investment Adviser, IDS Life or their affiliates
are presented with a potential investment that might be made by the
Account and another investment fund that the Investment Adviser,
IDS Life or an affiliate sponsors, advises or manages, the decision
as to the suitability of the investment by a particular fund may
take into account such factors as its cash flow, the effect of the
acquisition on diversification of its portfolio, the estimated
income tax effects of the investment on it, its policies relating
to leverage, any regulatory restrictions upon investment policies,
funds available for investment and other factors. Neither the
Investment Adviser, IDS Life nor any of their affiliates will be
obligated to present to the Account any particular investment
opportunity that comes to its attention, even if such opportunity
is of a character that might be suitable for investment by the
Account, and each of the Investment Adviser, IDS Life and their
affiliates shall have the right to take for its own account
(individually or otherwise) or to take for, or recommend to, others
any such particular investment opportunity.

Except as described under the Conflicts of Interest -- Possible
Joint Venture Investments with Affiliates of the Investment Adviser
or IDS Life section, the Account will not purchase from or sell to
IDS Life, the Investment Adviser or their affiliates any real
estate related investments. The Account will not make mortgage
loans to IDS Life, the Investment Adviser or their affiliates and
will not obtain permanent mortgage financing from IDS Life or its
affiliates. The Account may obtain short-term financing from IDS
Life for working capital, liquidity or other purposes.

Other activities of the Investment Adviser, IDS Life and their
affiliates may utilize the time, effort, financial or other
resources of the Investment Adviser and IDS Life and their
personnel that might otherwise be available to the Account.

The Investment Adviser, IDS Life, their affiliates and any of their
employees, directors or officers, may engage from time to time for
their own account, or for the account of others, in other business
ventures of any nature, or render services of any kind to other
business ventures of any nature. No owner, by virtue of his
interest in the Account, will have any interest or be entitled to
participate in such other ventures.

Receipt of Commissions, Fees and Other Compensation by IDS Life,
the Investment Adviser and Affiliates

The Investment Adviser, its affiliates and IDS Life will receive,
directly or indirectly, acquisition and mortgage placement fees
from the Account for services and advice in connection with the
identification, evaluation, investigation, negotiation, selection
and acquisition or placement of the Account's initial investments
and in connection with any reinvestment of income and sale,
financing or refinancing proceeds of real property investments and
proceeds on the principal and interest or rent payments on mortgage
loans or land sale-leaseback investments. Since the Account is a
segregated asset account of IDS Life, the agreements and
<PAGE>
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arrangements relating to the compensation of IDS Life under the
Contracts are not the result of arm's-length negotiations. Because
the Investment Adviser, its affiliates and IDS Life will be
entitled to acquisition and mortgage placement fees upon
reinvestment of funds in real estate related investments, there may
be conflicts of interest in determining whether to invest in
shorter-term or longer-term investments, since the shorter the term
of investment the sooner funds will be available for reinvestment.
Conflicts of interest could arise between the Investment Adviser
and IDS Life, on the one hand, and the Account, on the other,
because the receipt of fees and other compensation by the
Investment Adviser, its affiliates and IDS Life may be affected by
various determinations made by IDS Life, with the advice of the
Investment Adviser, including whether to sell, finance or refinance
any real property investment and the timing of any such sale,
financing or refinancing.

Certain Account properties may be managed by JMB or affiliates of
JMB such as JMB Properties Company or JMB Retail Properties Co.
Under property management agreements, the company employed to
manage the property usually collects the rental income on the
property and deducts from such income its fee and the costs of
operating the property such as insurance premiums, taxes, repairs
and improvements and other costs related to the maintenance and
operation of the property. The balance of rental income is
remitted to the owner of the property. To the extent agreements
are entered into with JMB affiliates to manage properties owned
directly by the Account, such agreements are subject to the
approval of IDS Life and are expected to be on terms no less
favorable to the Account than those customarily charged for similar
services in the relevant geographical area. For real property
investments in which the Account owns an interest through a joint
venture, such agreements are subject to the approval of the joint
venture.

JMB Insurance Agency, Inc., an affiliate of JMB engaged in the
insurance brokerage business, may provide insurance brokerage
services in connection with the Account's investments. JMB
Insurance Agency, Inc. will receive commissions and/or fees for
such services at rates that are set by the insurance companies for
the classes of coverage involved.

In addition, JMB or its affiliates may provide mortgage brokerage
services in connection with the financing or refinancing of the
Account's real property investments. Since JMB or its affiliates
may receive a mortgage brokerage fee, conflicts of interest could
arise in determining whether any of the Account's real property
investments should be debt-financed or whether any such property
should be refinanced prior to its sale and the amount of any such
financing or refinancing.

The compensation of IDS Life and the Investment Adviser may be
affected by the timing of acquisitions, the valuation of the assets
of the Account, the amount of leverage employed in connection with
the Account's investments, the timing of the sale of properties of
<PAGE>
PAGE 60
the Account or other factors that are subject to the influence or
determination of the Investment Adviser and IDS Life, and as to
which the interests of the Investment Adviser, its affiliates or
IDS Life may under certain circumstances be different from those of
the Account.

In addition, to the extent that the investments of the Account are
overvalued at any time, the fees paid to IDS Life and the
Investment Adviser (including the incentive portion of the asset
management fee) and its affiliates will be greater than the amount
that should have been paid to them.

Affiliates of JMB also may provide other real estate related
services to the Account that may result in conflicts of interest
with respect to the provision of such services.

Possible Joint Venture Investments with Affiliates of the
Investment Adviser or IDS Life

The Account may enter into joint ownership arrangements with
entities sponsored, advised or managed by IDS Life, the Investment
Adviser or their affiliates, including other segregated asset
accounts established by IDS Life or its affiliates or advised or
managed by the Investment Adviser or its affiliates. Other than as
described in the preceding sentence, the Account will not enter
into joint venture investments with IDS Life, the Investment
Adviser or their affiliates investing for their own account except
for investments expected to be made on a temporary basis to
facilitate the making of the joint venture investment. IDS Life,
the Investment Adviser or their respective affiliates, as a result
of their relationships with more than one joint owner, may be
involved in various conflicts of interests with respect to the
acquisition, financing, operation or sale of any such joint
investment, including making decisions or rendering advice
regarding the timing of any financing, refinancing or sale of such
joint investment.

In connection with such an investment, both joint owners may be
required to approve some or all of the major decisions concerning
the property by voting on the basis of their respective capital
contributions to, or shareholdings or ownership interests in, the
joint venture or otherwise. Thus, there exists the possibility of
an impasse in the event the joint owners disagree or that a joint
owner may be able to take certain actions with respect to the
jointly owned investment. Additionally, there exists the
possibility under limited circumstances that at some future time a
joint owner would no longer be affiliated with or advised or
managed by either IDS Life or the Investment Adviser, as the case
may be. The Investment Adviser, on behalf of the Account,
generally will attempt to negotiate a right of first offer or
refusal to enable the Account, in the event of a disagreement
regarding a proposed sale of the investment, to purchase the joint
owner's interest in the investment in the event the Account does
not wish to sell the investment. However, there is no assurance
that such a right of first offer or refusal can be obtained. The
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exercise of any right of first offer or refusal would be subject to
the Account having the financial resources to effect such a
purchase, and there can be no assurance that it would have such
resources.

Borrowings From IDS Life

The Account has obtained a revolving line of credit for up to $10
million from IDS Life to pay for contract surrenders and other
obligations under the Contracts. Borrowings under the line of
credit bear interest at a floating rate equal to the 30-day London
Interbank Offered Rate (LIBOR), changing with a change in such
interest rate determined monthly. The term of the line of credit
is for one year and is automatically renewed on its anniversary
date for a succeeding one-year period, subject to termination by
either the Account or IDS Life on 30 days' prior written notice of
termination to the other. IDS Life may have a conflict of interest
in causing amounts to be repaid under, or in determining whether or
when to terminate, the line of credit at any time, particularly
since borrowings under the line of credit are generally unsecured.

Limitation on Liability

The Investment Advisory Agreement between IDS Life and the
Investment Adviser provides that the Investment Adviser will be
liable only for willful misfeasance, bad faith or negligence on the
part of the Investment Adviser in the performance of its
obligations or duties to the Account.

In addition, IDS Life has agreed to indemnify the Investment
Adviser and its affiliates, including their officers and directors,
against certain liabilities, including liabilities under the
Securities Act of 1933 (the 1933 Act). Any such indemnification by
IDS Life may be made out of the assets of the Account.

IDS Life as Distributor of the Contracts

IDS Life is the principal distributor of the Contracts, and
accordingly there will be no independent review of the structure,
formation or operation of the Account conducted by a non-affiliated
broker-dealer acting as distributor.

The Contract -- Accumulation Period

The Contract accumulation period commences with the date on which
the Contract is issued and ends on the retirement date.

Purchase Payments

The minimum initial purchase payment for a Contract is $5,000; or
$2,000 if concurrently the owner agrees to make additional monthly
purchase payments of not less than $100 each by means of a bank
authorization. Additional purchase payments may be made by means
of a bank authorization, if not less than $100 per month. The
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maximum aggregate purchase payment in the first contract year
depends upon the issue age on the effective date. Up to age 75,
the maximum is $1 million. For ages 76-85, it is $500,000 and for
ages 86-90, the maximum is $50,000. Additional purchase payments
of at least $2,000 each may be made, and the maximum aggregate
additional purchase payment in any one contract year after the
first year may not exceed $50,000. However, additional purchase
payments are not required under a Contract. IDS Life, in its
discretion, may agree to permit a greater maximum initial purchase
payment or greater maximum aggregate additional purchase payments
in certain instances.

Allocation of Purchase Payment and Contract Value

An IDS Life representative will assist an applicant in preparing an
application for a Contract. The contract application, together
with the initial purchase payment, must be sent to IDS Life, IDS
Tower 10, Minneapolis, MN 55440-0010. If the contract application
is complete, IDS Life will allocate the initial purchase payment to
the Account at the price determined for accumulation units as of
the end of the valuation period during which IDS Life has either
accepted the completed contract application or received the initial
purchase payment, whichever is later. Upon acceptance of a
contract application and allocation of the initial purchase payment
to the Account, IDS Life will issue the Contract. Subsequent
purchase payments, if any, will be allocated to the Account at the
price determined for accumulation units as of the end of the
valuation period during which IDS Life receives each such purchase
payment. If IDS Life does not accept a contract application within
five days after its receipt, IDS Life will decline to accept the
contract application and will return it together with the amount of
the initial purchase payment to the applicant.

When a purchase payment is allocated to the Account, it is
converted into accumulation units. The number of accumulation
units to be credited to a Contract as a result of a purchase
payment is determined by dividing that purchase payment, after
deducting any applicable premium taxes, by the accumulation unit
value on the date that the purchase payment is allocated to the
Account. The contract value on any valuation date can be
determined by multiplying the number of accumulation units credited
to the Contract by the value of an accumulation unit on that
valuation date.

Contract Surrender

An election to surrender a Contract may be made in writing to the
home office of IDS Life in Minneapolis, MN. If required by IDS
Life, the request for surrender must be accompanied by the Contract
if a request for the full surrender value is being made. An
election to surrender a Contract can be made only while the
Contract is in force prior to the earlier of the retirement date or
the death of the first to die of the annuitant or owner. The
surrender value is determined on the basis of the accumulation unit
value in effect on the date on which a request for surrender is
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received by IDS Life in proper order. A partial surrender request
not exceeding $50,000 may be made by contacting IDS Life by
telephone.

IDS Life has the authority to honor any telephone partial surrender
request it believes to be authentic and will use reasonable
procedures to confirm that they are. This includes asking
identifying questions and tape recording calls. As long as the
procedures are followed, neither IDS Life nor its affiliates will
be liable for any loss resulting from fraudulent requests. At
times when the volume of telephone requests is unusually high, IDS
Life will take special measures to ensure your call is answered as
promptly as possible. A telephone surrender request will not be
allowed within 30 days of a phoned-in address change. You may
request that telephone withdrawals not be authorized from your
account by writing IDS Life. The surrender value will be paid
within seven days after the date on which a proper request is
received by IDS Life, except that under certain circumstances IDS
Life may delay or suspend payments. See the Suspension and Delay
of Payments section.

An owner may surrender all or a portion of the contract value. Any
partial surrender must be for at least $250, and no partial
surrender can be made if it would reduce the contract value after
such surrender to less than $600.

Automated partial surrenders may be made through a one-time written
request (or other method acceptable to IDS Life). The minimum
surrender amount from the Contract is $50, and such surrender can
be made on a monthly, quarterly, semi-annual or annual basis. You
may start or stop this service at any time, but you must give IDS
Life 30 days' notice to change any automated surrender instructions
that are currently in place. Automated partial surrenders are
subject to all of the other contract provisions and terms.
Automated partial surrenders may be restricted by applicable law.
In addition, the payment of additional purchase payments, if
allowed under the Contract, while automated partial surrenders are
in effect, may not be appropriate and therefore is not permitted.
Automated partial surrenders may result in taxes and penalties
being applied to all or a portion of the amount surrendered. See
the Certain Federal Income Tax Considerations section. You should
consult your tax adviser if you have any questions about the
taxation of your annuity.

No surrender can be made after the retirement date or the death of
the first to die of the annuitant or owner. Any amounts
surrendered and charges that may apply cannot be repaid. A
surrender charge, which is a contingent deferred sales charge, will
be imposed for any surrender made during the first eight payment
years of any purchase payment. The surrender charge applies
separately to the initial purchase payment and to each additional
purchase payment. Regardless of when a purchase payment is made,
the contract year in which a purchase payment is made is the first
payment year for that purchase payment, and succeeding payment
years continue to be measured separately for that purchase payment.
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For a partial surrender, accumulation units attributable to the
earliest payment year are surrendered first. The surrender charge
is 8 percent of the amount surrendered during the first payment
year and decreases by 1 percent per year thereafter to 1 percent in
the eighth payment year. There is no surrender charge on amounts
surrendered after the eighth payment year. In no event will the
aggregate surrender charges imposed exceed 8.5 percent of the
aggregate purchase payments received. IDS Life may, in its
discretion, reduce or eliminate surrender charges for certain group
sales of the Contracts. See the Contract Charges and Deductions --
Surrender Charges section. Owners should also be aware that, under
certain circumstances, a surrender before the owner has reached the
age of 59-1/2 may be subject to a penalty under the Code. See the
Certain Federal Income Tax Considerations section.

An owner may return his Contract for cancellation and receive a
full refund of the contract value within 10 days after the Contract
has been delivered to the owner and no fees or charges will be
deducted. The owner will bear the investment risk of his Contract
until the contract value is determined at the next valuation date
after the Contract has been received by IDS Life for cancellation.
However, if applicable state law so requires, the full amount of
the aggregate purchase payments received by IDS Life will be
refunded. A Contract may be returned for cancellation to the
owner's IDS Life representative or to the IDS Life home office.

Contract Charges and Deductions

The following sets forth the deductions from purchase payments and
the charges against the Account provided for in the Contract. See
the Notes to the Financial Statements of the Account for further
information concerning fees paid by the Account to IDS Life and the
Investment Adviser.

Mortality and Expense Risk Fee

This charge is applied daily to the Account. The fee equals 1
percent of the average daily asset value of the Account on an
annual basis. It covers the mortality risk and expense risk. IDS
Life estimates that approximately two-thirds of this fee is for
assumption of the mortality risk, and one-third is for assumption
of the expense risk. IDS Life will not be entitled to, and will
forgo, that portion of the mortality and expense risk fee
attributable to the use of indebtedness in excess of 40 percent of
the aggregate value of all of the Account's real property
investments.

The mortality risk is IDS Life's guarantee to make retirement
payments according to the terms of the Contract, no matter how long
a specific annuitant lives and no matter how long the entire group
of IDS Life annuitants live. If, as a group, IDS Life annuitants
outlive the life expectancy assumed in IDS Life's actuarial tables,
then IDS Life must take money from its general assets to meet its
obligations. If, as a group, IDS Life annuitants do not live as
long as expected, IDS Life will profit from the mortality risk fee.
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The expense risk portion of the mortality and expense risk fee is
paid to IDS Life for its guarantee that the mortality and expense
risk fee, asset management fee and acquisition and mortgage
placement fee will not increase over the life of the Account and
that no new fees payable to IDS Life will be added to the Account.
To the extent such fee does not cover IDS Life's expenses (other
than any expenses that may be reimbursed as described under the
Organizational and Offering Expenses and Operational Expenses
section below), any deficit would have to be made up from IDS
Life's general assets. IDS Life also could profit from the expense
risk fee if it is more than sufficient to meet such expenses.

Asset Management Fee

IDS Life is paid an asset management fee for its services in
connection with the management of the assets of the Account. This
fee is accrued on a daily basis and deducted on a monthly basis and
is equal on an annual basis to 1.25 percent of the average daily
asset value of the investments of the Account, subject to increase
as described below. A portion of the asset management fee equal to
0.95 percent of the average daily asset value is paid by IDS Life
to the Investment Adviser for its services in connection with the
management of the assets of the Account. In the event that the
Account's real property investments have produced a rate of return
for the Account (measured for each calendar year) that exceeds the
rate of return as measured for such period by the FRC Property
Index (which is released in April of each year for the preceding
calendar year) by 0.5 percent per year, then the Investment Adviser
shall be entitled to an additional amount equal to 0.05 percent of
the average daily asset value of the Account for such calendar
year. The Investment Adviser also will be entitled to an
additional amount equal to 0.01 percent (up to a maximum of 0.2
percent) of the average daily asset value of the Account for each
0.1 percent by which the rate of return of the Account's real
property investments for such calendar year exceeds the rate of
return as measured for such period by such index plus 0.5 percent
per annum. Rate of return will be calculated on a quarterly basis
and in general will be the sum of all net income from operations of
the Account's real property investments (without deducting any
asset management fees or certain other expenses of the Account) and
realized and unrealized capital appreciation on the Account's real
property investments (net of all acquisition and mortgage placement
fees) for the calendar quarter taken as a percentage of the
aggregate asset value of such investments (net of all acquisition
and mortgage placement fees) as of the beginning of such calendar
quarter.

IDS Life and the Investment Adviser will not be entitled to, and
will forgo, that portion of the asset management fee, as calculated
above, attributable to the use of indebtedness in excess of 40
percent of the aggregate value of all the Account's real property
investments.

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The initial term of the investment advisory agreement extended
through the period ending July 1, 1993 and was renewed at the
option of the Investment Adviser for an additional five-year term.
The investment advisory agreement may be renewed at the option of
the Investment Adviser for additional three-year terms for as long
as the Account's real property investments have produced a rate of
return for the Account for the 10-year period (or, in the case of
the initial term, the five-year period) ending at the end of any
expiring term equal to or in excess of 90 percent of the rate of
return for such period as measured by the FRC Property Index or a
successor index. IDS Life may terminate the investment advisory
agreement upon six months' prior written notice in the event the
Account's rate of return does not equal or exceed 90 percent of the
rate of the return of such index as calculated above. Based upon
the performance of the Account's real property investments vis a
vis the FRC Property Index, the Investment Adviser had the option,
which it exercised, to extend the investment advisory agreement for
an additional five-year term upon expiration of the initial term.

The investment advisory agreement may be terminated by IDS Life in
the event there is change in control of JMB under certain
circumstances or in the event there is a determination that the
Investment Adviser has acted with gross negligence, bad faith or
willful misfeasance in the performance of the duties of the
Investment Adviser under the terms of the investment advisory
agreement.

Acquisition and Mortgage Placement Fee

IDS Life will receive an acquisition and mortgage placement fee of
3.75 percent of the total cash investment to be paid or advanced by
the Account in connection with each real property investment,
mortgage loan and land sale-leaseback made by the Account. The
amount paid to IDS Life is measured by the cash investment to be
paid by the Account (including all cash down payments, interest,
points, special reserves and all other cash payments) for real
property investments or land sale-leasebacks or the amount to be
borrowed under a mortgage loan by the borrower for mortgage loans.
A portion of the acquisition and mortgage placement fee equal to
3.5 percent of the total cash investment to be paid or advanced by
the Account in connection with each real property investment,
mortgage loan and land sale-leaseback will be paid to the
Investment Adviser in consideration of the Investment Adviser's
services in connection with the identification, evaluation,
investigation, negotiation, selection and recommendation for
purchase or placement of real estate related investments for the
Account. In some instances, some or all of this fee may be paid by
the sellers of properties or borrowers. However, to the extent
that the seller or borrower pays less than 3.75 percent, that
amount will be paid directly by the Account to IDS Life.

Organizational and Offering Expenses and Operational Expenses

All organizational and offering expenses are charged to the
Account. All costs of acquisition, administration and disposition
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of investments are charged to the Account. These costs include
brokerage fees and commissions, appraisal fees, attorneys' fees,
accountants' fees and other similar fees and expenses (such as
travel and travel-related expenses) incurred in connection with the
investment process.

Expenses incurred by IDS Life because of the existence of the
Account -- such as regulatory fees and reports, and taxes -- also
are charged to the Account. Under current law, IDS Life does not
expect to incur any tax because of the Account's investment income,
but IDS Life reserves the right to charge the Account for any taxes
IDS Life does incur. Finally, IDS Life will charge the Account for
expenses incurred in administering the assets of the Account.
These expenses include periodic valuation appraisal costs, legal,
accounting and auditing fees and expenses, interest, insurance
costs, data processing costs, taxes, mortgage servicing, mortgage
brokerage, property management, travel and travel-related expenses
and litigation costs. To the extent such services are provided by
officers or employees of IDS Life, the Investment Adviser or their
affiliates, the Account will reimburse such entities for
specifically identified direct costs (including salary and salary
related expenses) associated with administering the assets of the
Account.

Operational income and expenses will be estimated periodically and
credited or deducted ratably on a daily basis in determining
accumulation and annuity unit values with periodic adjustments, if
necessary, to credit or charge the differences between actual and
estimated operational income and expenses.

Premium Taxes

Certain state and local governments impose premium taxes. These
taxes generally range in an amount of up to 3.5 percent and depend
on the owner's state of residence or the state in which the
Contract was sold. In some cases, the premium taxes will be
deducted from the purchase payment before it is allocated to the
Account. In other cases, the deduction will not be made until the
owner surrenders the Contract or retirement payments begin.

Surrender Charges

A surrender charge, which is a contingent deferred sales charge
payable to IDS Life, will be assessed against the Contract after
the initial 10-day period of the Contract and during the first
eight years after any purchase payment. The surrender charge is 8
percent of the amount surrendered during the first payment year and
decreases by 1 percent per year thereafter to 1 percent in the
eighth payment year. There is no surrender charge on amounts
surrendered after the eighth payment year. See the Contract
Surrender section.

Suspension and Delay of Payments

IDS Life will attempt to make payments under the Contracts within
seven days whenever the Account has cash available. However, IDS
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Life reserves the right to defer making any such payments under the
Contracts for up to six months. This reservation of the right to
suspend payments is only intended to be utilized in the emergency
circumstances set forth in the remainder of this section. Subject
to any suspension of payments described below, IDS Life guarantees
that payments on death of the first to die of the annuitant or
owner prior to the retirement date will be made within seven days
of receipt by IDS Life of its death claim requirements after the
death of the annuitant or owner, whichever occurs first. In
addition, payment of surrender values may be delayed if a check for
a purchase payment has not cleared the bank on which it was drawn.

IDS Life may suspend any payments due under the Contracts beyond
the seven-day period for up to six months when IDS Life determines
that there is insufficient cash available to meet all current
surrender requests and other payment obligations of the Account and
the sale of the real estate related assets of the Account could not
be made on a timely basis on commercially reasonable terms. In the
event of any suspension of payments, the cash available will be
used in the following order of priority:

First -- to meet any obligations the Account has other than
Contract obligations. Such obligations would include those
expenses necessary to continue the operation of the Account, other
than fees to IDS Life, which fees will be deferred until ALL
Contract obligations are satisfied.

Second -- to make annuity payments in full or pro rata depending on
the cash available. All annuitants will be treated as a class,
including those who annuitize during the suspension. No other
payments will be made until all unpaid annuity payments are made.

Third -- to make payments due on the death of the annuitant or the
owner that became due and payable after the declaration of
suspension. All payees of payments on death will be treated as a
class and payments may be made pro rata depending upon the cash
available.

Finally -- no payments of surrender values will be permitted during
such a suspension while any annuity payments or payments on death
remain unpaid. Depending upon the cash available, any payments of
surrender values during such suspension will be made in accordance
with the order in which surrender requests are received by IDS
Life.

If a payment of a surrender or an annuity payment is deferred, the
amount will be determined as of the end of the valuation period
during which the surrender request was received or the annuity
payment was due, and, with respect to such amount, participation in
the investment experience of the Account will cease. If IDS Life
defers a payment of a surrender or an annuity payment for 30 days
or more, IDS Life will credit interest on the amount of the payment
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at a rate of 3 percent per year or such higher rate as IDS Life, in
its discretion, establishes. If IDS Life defers payment on death
for more than seven days, IDS Life will credit interest on the
amount of payment at a rate of 3 percent per year or such higher
rate as IDS Life, in its discretion, establishes or that which is
required by law.

Owners who remain in the Account will bear the investment risk that
real estate related investments of the Account will have to be sold
under emergency circumstances that could result in the realization
by the Account of less than the investment value of such
investments notwithstanding any suspension or delay in payments as
permitted under the Contracts.

Transfer of Ownership

The owner may transfer ownership of his Contract, at any time while
the annuitant is living, by filing a transfer of ownership with IDS
Life at its home office. IDS Life will not be bound by any
transfer of ownership until the written transfer in form and
substance acceptable to IDS Life is received by it. IDS Life is
not responsible for the validity of any transfer. A transfer will
be effective as of the date of request for the transfer, subject to
any action taken or payment made by IDS Life prior to receipt of
the transfer. IDS Life is not liable as to any payment or other
settlement made by it before receipt of the transfer.

INASMUCH AS A TRANSFER MAY BE A TAXABLE EVENT, OWNERS SHOULD
CONSULT THEIR OWN TAX ADVISERS SHOULD THEY WISH TO TRANSFER THEIR
CONTRACTS.

Beneficiary

The beneficiary is the party named by the owner, in a form
satisfactory to IDS Life, to receive the benefits of the Contract
if the owner or the annuitant dies while the Contract is in force.
Only those beneficiaries who are living when death benefits become
payable may share in the benefits, if any. If no beneficiary is
then living, IDS Life will pay the benefits to the owner, if
living, otherwise to the owner's estate. The owner may change the
beneficiary anytime while the annuitant is living by satisfactory
written request to IDS Life. Once the change is received by IDS
Life, it will take effect as of the date of the owner's request,
subject to any action taken or payment made by IDS Life before such
receipt.

If the annuitant or owner dies before the retirement date while the
Contract is in force, IDS Life will pay to the beneficiary:

1. the greater of the contract value or the purchase payments
paid less any amounts surrendered (if death occurred prior to
the annuitant's attaining age 75); otherwise

2. the contract value (if death occurred on or after the
annuitant reached age 75).
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3. if, under a Contract issued to a resident of Pennsylvania, an
annuitant or owner dies before the retirement date while the
Contract is in force, IDS Life will pay to the beneficiary the
contract value only. This is true whether or not death occurs
prior to the annuitant attaining age 75 or after the annuitant
reaches age 75.

These amounts will be payable in a lump sum upon the receipt of IDS
Life's death claim requirements after the death of the annuitant or
owner, whichever occurs first.

In lieu of a lump sum payment, the beneficiary may elect to receive
payment under any annuity option available under the Contract
provided:

1. the beneficiary elects the plan within 60 days after IDS Life
receives due proof of death; and

2. payments begin no later than one year after the date of death;
and

3. the plan provides payments over a period which does not exceed
the life of the beneficiary or the life expectancy of the
beneficiary.

In this event, the reference to annuitant in the annuity provisions
shall apply to the beneficiary. Any amounts payable or applied by
IDS Life as described in this section will be based on the contract
value as of the valuation period during which IDS Life's death
claim requirements are fulfilled.

In order for the beneficiary to receive the death benefit, the
beneficiary must send, or have sent, due proof of death of the
annuitant or owner to IDS Life, IDS Tower 10, Minneapolis, MN
55440-0010. The beneficiary should clearly indicate whether a lump
sum payment is desired or if the beneficiary is selecting one of
the available annuity options under the Contract.

If the owner's death occurs prior to the retirement date, the
owner's spouse, if designated as sole beneficiary, may elect in
writing to forgo receipt of the death benefit and instead continue
the Contract in force as its owner. The election by the spouse
must be made within 60 days after IDS Life receives due proof of
death.

If the annuitant dies after the retirement date, the amount
payable, if any, will be as provided in the annuity option then in
effect.

Annuity Period

Variable Annuity

A variable annuity is an annuity with payments that are not
predetermined as to dollar amount. Payments will vary according to
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the investment results of the Account. Annuity payments will be
made to the owner unless different instructions are specified in
writing. The owner may or may not be the annuitant. The choice is
made by the owner in the application for the Contract.

Retirement Date and Annuity Options

A retirement date is established at the time of application. An
owner must give IDS Life written instructions for paying retirement
benefits at least 30 days before the annuitant's retirement date.
In the event no instructions are given, IDS Life will make payments
under Plan B described below with 120 monthly payments guaranteed.

The retirement date may not be after the later of the annuitant's
85th birthday or the tenth Contract anniversary. The retirement
date cannot be earlier than the fifth Contract anniversary.

Change of Retirement Date or Annuity Option

An owner may change the retirement date or the annuity option on
written notice received at IDS Life's home office at least 30 days
prior to the current retirement date.

Settlement Value of Annuity

Retirement payments generally are made to the owner, who may be the
same as the annuitant. The amount available on the retirement date
is called the settlement value. The settlement value equals the
current value of your investment, called the contract value.
Before annuity payments begin, IDS Life will require satisfactory
proof that the annuitant is living. IDS Life also may require that
an owner exchange his Contract for a supplemental contract that
provides for annuity payments.

Because the investments of the Account fluctuate in value each day,
IDS Life will not guarantee that the settlement value or the total
of the retirement payments will exceed or even equal the amount of
the purchase payments.

The owners will receive statements on the value of their
investments and any other required information at least annually.
An owner has the right to determine whether annuity payments are to
be made on a fixed-dollar or variable basis, or a combination of
fixed and variable. A fixed annuity is one with payments that are
guaranteed by IDS Life as to dollar amount. Fixed annuity payments
after the first payment will never be less than the amount of the
first payment. At settlement, subject to the conditions then set
by IDS Life as to minimum dollar amounts and settlement rates, part
or all of the contract value may be used to provide a fixed-dollar
annuity. Only variable payments are described in the remainder of
this section.

Annuity Options

The owner of a Contract has the right to decide how retirement
payments are to be made. The owner may select one of the
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retirement payment plans outlined below, or IDS Life and the owner
may mutually agree on other payment arrangements. Amounts of
variable payments depend on:

` the annuity table in the Contract;
` the annuitant's age;
` the retirement payment plan selected; and
` the investment performance of the Account.

Because the performance of the Account will fluctuate, payments
will vary from month to month. The assumed investment rate
referred to in the following annuity options is 5 percent per year.

`Plan A -- Life Annuity -- No Refund -- Monthly payments are made
until the annuitant's death. Payments end with the last monthly
payment before the annuitant's death. No further payments will be
made. An owner should understand that if the annuitant dies after
even the first monthly payment, no more payments would be made.

`Plan B -- Life Annuity with Five, 10 or 15 Years Certain --
Monthly payments are made until the annuitant's death. However,
payments are guaranteed for five, 10 or 15 years, depending upon
the term selected by the owner. If the annuitant dies before those
guaranteed payments have been made, then IDS Life will keep on
making payments to a designated secondary payee. If a secondary
payee is not named, or if the secondary payee dies before the
annuitant, then the value of the remaining guaranteed payments,
based on the assumed investment rate, will be paid to the
annuitant's estate.

`Plan C -- Life Annuity -- Installment Refund -- Monthly payments
are made until the annuitant's death, with IDS Life's guarantee
that payments will continue for at least the number of months
determined by dividing the amount of the contract value being
applied under the plan by the amount of the first monthly payment.
If the annuitant dies before those guaranteed payments have been
made, IDS Life will continue to make payments to the designated
secondary payee. If a secondary payee is not named, or if the
secondary payee dies before the annuitant, then the value of the
remaining guaranteed payments, based on the assumed investment
rate, will be paid to the annuitant's estate.

`Plan D -- Joint and Last Survivor Life Annuity -- No Refund --
Monthly payments are made to the annuitant and a joint annuitant
while both are living. If either annuitant dies, monthly payments
continue at the full amount until the death of the surviving
annuitant. Payments end with the death of the second annuitant,
and no further payments will be made.

Minimum Annuity Payments

Annuity payments will be made monthly. The annuity's contract
value will be calculated at the retirement date. If the
calculations show that monthly payments would be under $20, IDS
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Life reserves the right to pay the contract value in one lump sum.
For tax consequences of a lump sum payment, see the Certain Federal
Income Tax Considerations section.

First Variable Annuity Payment

When retirement payments are to begin, IDS Life will compute the
number of annuity units to be credited to the owner. This is
accomplished by determining the contract value of the annuity as of
the valuation date on or next preceding the seventh calendar day
before the retirement date and then deducting any applicable
premium tax.

The result is applied to the annuity table contained in the
Contract or another table at least as favorable. The lifetime
variable annuity payments are then calculated according to the
retirement payment plan chosen. The annuity table assumes an
investment rate of 5 percent and shows the amount of the first
monthly payment for each $1,000 of value according to the age and,
when applicable, sex of the annuitant (unisex table of settlement
rates will apply when the annuity is being purchased by a resident
of Montana or Massachusetts).

These calculations give the total of the first monthly payment.
This amount is divided by the annuity unit value on the valuation
date on or next preceding the seventh calendar day before the
retirement date. The result is the number of annuity units to be
credited to the owner.

Annuity Unit Value

The annuity unit value for the Account was originally set at $1.
IDS Life determines current annuity unit values by multiplying the
last annuity unit value by the product of:

`the net investment factor and
`the neutralizing factor.

The net investment factor measures the change in the Account's net
asset value from one valuation period to the next and is equal to
the quotient of the net asset value determined as of the current
valuation date divided by the net asset value on the immediately
preceding valuation date. See the Valuation of Assets section.
The purpose of the neutralizing factor is to offset the effect of
the assumed investment rate built into the annuity table. With an
assumed investment rate of 5 percent, the neutralizing factor is
0.999866 for a one-day valuation period.

The value of an annuity unit reflects the investment performance of
the Account and will vary.

Substitution of 3.5 Percent Annuity

If requested at least 30 days before the retirement date, IDS Life
will substitute an annuity table based upon an assumed 3.5 percent
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investment rate for the 5 percent investment rate annuity table
contained in the Contract.

The assumed investment rate affects both the amount of the first
payment and the extent to which subsequent payments increase or
decrease. Using the 5 percent table results in a higher initial
payment, but later payments will increase more slowly when annuity
unit values are rising and decrease more rapidly when they are
declining.

Subsequent Variable Annuity Payments

The method of calculation of the first monthly payment is explained
in the First Variable Annuity Payment section above. Subsequent
variable payments will vary according to the investment performance
of the Account. Amounts of later monthly payments are calculated
by multiplying:

`the annuity unit value on the valuation date on or immediately
preceding the seventh calendar day before the payment is due; by

`the fixed number of annuity units credited to the owner.

Certain Federal Income Tax Considerations

The following summary is a general discussion of certain Federal
income tax consequences under present law that may involve owners.
This summary does not discuss all aspects of Federal income
taxation that may be relevant. Each prospective investor should
consult his own tax adviser as to the specific Federal income tax
consequences of the ownership of the Contracts, as well as the
application of other Federal, state, local and foreign income and
other tax laws. IDS Life believes that the Contracts will be
treated as annuities under the Code, and, therefore, an owner
should not be subject to Federal income tax on any income or
earnings of the Account until distributions are made to such owner
or a change of ownership of the Contract occurs. IDS Life has not
sought a ruling from the Internal Revenue Service (the Service)
regarding the tax status of the Account. See the Risk Factors --
Federal Income Tax Matters section.

In addition, the qualification of the Contracts as annuities
depends upon IDS Life and the Account meeting the detailed factual
and legal requirements of the Code and regulations on a continuing
basis, including the maintenance of certain diversification
requirements as discussed below. No assurance can be given that
the actual operations of IDS Life and the Account will satisfy such
requirements or that the applicable law will not change and
adversely affect IDS Life, the Account or the owners.

Taxation of the Account

The Account is not a separate taxpayer for purposes of Federal
income taxation. Although investment income derived by the Account
is technically includable in IDS Life's gross income for Federal
<PAGE>
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income tax purposes, IDS Life is not expected to have any income
tax payable as a result of such investment income provided it
continues to comply with certain requirements. In the event IDS
Life does incur Federal or state income taxes attributable to the
Account, IDS Life will receive appropriate reimbursement from the
Account for such taxes.

Diversification Requirements

In order for the Contracts to be treated as annuities for Federal
income tax purposes, the Account must meet certain diversification
requirements regarding variable annuities contained in Section
817(h) of the Code and regulations promulgated thereunder. If the
Account does not satisfy these requirements, the owners would be
subject to current Federal income taxation on any earnings or
income derived by the Account.

IDS Life intends to maintain the Account's investments in such a
manner as to satisfy the diversification requirements contained in
Section 817(h) of the Code and regulations thereunder. In order to
do so, the Account must meet the following requirements: (i) no
more than 55 percent of its assets may be invested in any one
investment; (ii) no more than 70 percent of its assets may be
invested in any two investments; (iii) no more than 80 percent of
its assets may be invested in any three investments; and (iv) no
more than 90 percent of its assets may be invested in any four
investments. All interests in the same real property project will
be treated as a single investment for purposes of these
requirements. In addition, in the case of government securities,
each government agency or instrumentality shall be treated as a
separate issuer for purposes of these requirements. After an
initial start-up period, the Account must satisfy the above
requirements within 30 days after the end of each calendar quarter.

Taxation of Distributions

Section 72 of the Code governing distributions from annuity
contracts provides that the recipient of an annuity distribution
does not include in gross income that part of any amount received
as an annuity that bears the same ratio to such amount as the
investment in the contract on the annuity starting date (as
adjusted for any refund feature) bears to the expected return under
the contract. In the event that the total amount of payments to be
received under an annuity contract varies in accordance with the
investment experience of the variable annuity account after the
recipient's annuity starting date, the recipient will not include
in gross income any amount received in a taxable year to the extent
such amount does not exceed the recipient's investment in the
contract (as adjusted for any refund feature) divided by the number
of years over which the payments are anticipated to be received.
Such exclusion from the recipient's gross income, however, cannot
exceed the recipient's unrecovered investment in the contract
immediately prior to the receipt of such amount. Any amount
received upon the surrender of an annuity contract (that may
include the proceeds of a loan when the annuity contract is used as
<PAGE>
PAGE 76
collateral) generally is included in the gross income of the
recipient to the extent that the cash value of the contract
(determined without regard to any surrender charge) exceeds the
investment in the contract.

In addition, the owner of an annuity contract may be subject to an
IRS penalty equal to 10 percent of the amount of a distribution
that is includable in gross income (in addition to income taxes),
unless, among other things, the distribution (1) is made on or
after the owner reaches the age 59-1/2; (2) is made on or after the
death of the owner of the contract or the primary annuitant if the
owner is not an individual; (3) is attributable to the owner
becoming disabled; or (4) is part of a series of substantially
equal periodic payments made at least annually for the life or life
expectancy of the owner.

Valuation of Assets

Accumulation unit value is determined as of the close of the
business day on each day that IDS Life is open for business.

The accumulation unit value for the Account was originally set at
$1. The current accumulation unit value is determined by taking
the last accumulation unit value for the Account and multiplying it
by the current net investment factor. The net investment factor
measures the Account's investment performance for the valuation
period. The net investment factor is determined by first
calculating the net investment income for the period (i.e., the
Account's income, net realized and unrealized capital gains or
losses on investments and expenses), items that may be estimated
periodically and credited or deducted ratably on a daily basis with
periodic adjustments to credit or charge the differences between
actual and estimated items of income, gains or losses as described
below. The Account's net investment income then is divided by the
Account's net asset value at the beginning of the valuation period
to determine the net investment rate. The Account's net asset
value is determined by calculating the total gross value of the
Account's assets and reducing that amount by any expenses or
liabilities, including tax liabilities, mortgage indebtedness,
administrative expenses, that portion of organizational and
offering expenses being amortized and the accrued but unpaid daily
charges for mortality and expense risk and asset management fees.
Finally, the net investment factor is calculated. The net
investment factor for any valuation period is the sum of one plus
the net investment rate. If the Account has a negative net
investment rate for the period, the net investment factor will be
less than one. Because the net investment factor may be greater or
less than one, the accumulation unit value may increase or
decrease.

Accumulation unit value will vary with the value of the underlying
assets in the Account and in accordance with the charges and
deductions assessed. These charges and deductions will be assessed
directly against the assets of the Account itself rather than by
<PAGE>
PAGE 77
liquidating accumulation units. Assessments of premium taxes and
the surrender charges are made separately for each Contract and do
not affect the accumulation unit value.

The amount of the Account's net income from its real estate and
other investments will be based upon estimates of the Account's
revenues and expenses for its real estate and other investments and
the Account's operations on a monthly basis. The value of the
Account's assets will be increased on a daily basis by a
proportionate amount of the estimated net income for the month.
The Account will receive on a periodic basis reports of the actual
operating results for its real estate and other investments, and
appropriate adjustments to credit or charge the differences between
actual and estimated operating results will be made to the
Account's assets. Because the daily accrual of estimated net
income is based on estimates that may not reflect the actual
revenues and expenses of the Account, owners will bear the risk
that this procedure will result in an overvaluing or undervaluing
of the Account's assets.

Real Property Investments, Mortgage Loans and Land Sale-Leasebacks

The asset values of the Account's real property investments and
mortgage loans and land sale-leaseback investments initially will
be their cost (including the acquisition and mortgage placement
fees, legal fees and expenses, closing costs and other acquisition
or placement expenses), unless circumstances otherwise indicate
that a different asset value should be used. Thereafter,
periodically or upon the occurrence of events that indicate a
change in the asset value of a real property investment, mortgage
loan or land sale-leaseback investment held by the Account, the
Investment Adviser will determine the asset value of such
investments in accordance with the procedures described below. The
Account's asset value will take into account the current values of
any notes receivable held by the Account in connection with the
previous sale of any real estate related investments. Such values
will be estimated by the application of discount rate or rates
deemed appropriate by the Investment Adviser in light of the then
current market conditions. The Account's asset value also will
include the income and expenses attributable to the real estate
related assets which will be determined or estimated periodically
and credited or deducted ratably on a daily basis with periodic
adjustments to credit or charge the differences between actual and
estimated income or expenses as described above. At the time of
purchase, and at least once every two years thereafter, the
Investment Adviser shall cause each real estate related investment
(other than fixed interest rate mortgage loans) owned by the
Account or the real property underlying such investment to be
appraised by an independent appraiser or appraisers or an existing
appraisal to be updated. The cost of such appraisals will be
charged to the Account.

The Investment Adviser will determine the asset values of the
Account's real property investments and its mortgage loans and land
<PAGE>
PAGE 78
sale-leaseback investments with participation features based upon
certain methodologies and various other factors. A discounted cash
flow methodology used by the Investment Adviser is based upon
various assumptions, including, but not limited to, occupancy
rates, rental rates, expense levels and capitalization rates upon
sale, which are used to make projections of each such investment's
estimated cash flow (including the fixed interest or fixed rental
income from a mortgage loan or land sale-leaseback with a
participation feature) over an 11-year period. For this purpose,
it also is assumed that the real property comprising or underlying
each such investment is sold at the end of the tenth year based on
the anticipated cash flow of the real property for the eleventh
year. (The use of this time period does not mean that such
investments will be held for any specific period but was chosen as
an acceptable frame of reference for estimating asset values.)
After these estimated cash flow and sale proceeds amounts are
calculated, they are discounted to their present value (using a
rate or rates then deemed appropriate by the Investment Adviser
based upon the current market conditions) in order to estimate what
a buyer would be willing to pay for each such real property on a
current basis.

Given the decline in the real estate markets generally over the
past few years and the consequent difficulty in estimating, among
other things, occupancy rates and rental rates over extended
periods of time, the Investment Adviser also employs a "direct
capitalization" methodology. Under this methodology, the
Investment Adviser generally determines the preliminary asset
values of the Account's real property investments and its mortgage
loans and land sale-leaseback investments with participation
features by estimating the stabilized annual Net Operating Income
After Average Capital Costs for the real property comprising or
underlying each such investment and applying a current
capitalization rate (as deemed appropriate by the Investment
Adviser for the particular real property and the relevant market
conditions) to such Net Operating Income After Average Capital
Costs. A preliminary asset value determined for a particular real
property as described above is reduced by the aggregate deficiency
(if any) in the estimated net operating income after capital costs
relative to the stabilized annual Net Operating Income After
Average Capital Costs of such real property for any year(s)
preceding the year in which the stabilized annual Net Operating
Income After Average Capital Costs is expected to be achieved in
order to estimate what a buyer would pay for such real property on
a current basis.

In addition to using the foregoing methodologies, the Investment
Adviser also considers a number of other factors, including, among
others, periodic independent appraisals of the real properties and
comparisons of existing rental rates relative to estimated market
rental rates. The relative weight to be given a particular
methodology or any other relevant factors in determining the
estimated asset value of a particular real property will depend
upon the Investment Adviser's assessment of the existing and
anticipated market conditions and property specific factors
<PAGE>
PAGE 79
relevant to such real property. In the case of real property
investments jointly owned with other entities and mortgage loans
and land sale-leaseback investments with participation features,
the asset value of any such investment will be based on the
Account's share of the current asset value of each such real
property determined by its joint ownership or equity participation
arrangement.

The Account's fixed interest mortgage loans and fixed rental rate
land sale-leaseback investments without participation features are
valued by the Investment Adviser. The Investment Adviser
determines the value by comparing the interest rates on the
Account's mortgage loans or the rentals under the Account's ground
leases with interest rates on U.S. Treasury debt instruments, plus
an additional amount determined by the Investment Adviser
representing its judgment as to the differential between the amount
at which commercial lenders would make similar mortgage loans or
land sale-leaseback investments of such duration and the rate on
U.S. Treasury debt instruments. The differential is selected by
the Investment Adviser based upon the Investment Adviser's
evaluation of both the activities of commercial mortgage lenders at
such time and the features of the particular investment, including
the underlying property, its rent structure and the nature of its
tenants.

A formula is applied periodically to adjust the value based upon
changes in the U.S. Treasury debt instrument rates originally used
to value the investments. The valuation resulting from the formula
generally will continue in effect until the next periodic
application of the formula. The Investment Adviser will evaluate
quarterly (unless the Investment Adviser becomes aware of
circumstances that would warrant a more frequent evaluation) the
interest differential at which commercial lenders are making fixed
interest rate mortgage loans or fixed rental rate land
sale-leaseback investments to determine whether an adjustment needs
to be made in the formula. The Investment Adviser will obtain
information relative to commercial lenders by surveys of lending
institutions considered to be representative, as well as from other
sources.

It should be noted that the determination of the Account's asset
value will not necessarily reflect the true or realizable value of
the Account's assets. Although IDS Life and the Investment Adviser
believe that the assumptions, estimates and methodologies used in
determining the asset values of the Account's investments are
reasonable, there can be no assurance that such assumptions,
estimates and methodologies will in fact prove correct or that such
values would in fact be realized. In addition, it is unlikely that
all real properties in which the Account has an interest would be
sold for cash, but rather certain properties may in fact be sold
for cash and notes. Furthermore, although at least once every two
years the Investment Adviser will use independent appraisals of the
real properties in determining asset values, appraisals are only
estimates and do not necessarily reflect the true or realizable
value of an investment. Moreover, such appraisals are only one
<PAGE>
PAGE 80
factor that is considered by the Investment Adviser to determine
the value of the real estate related investments of the Account.
In addition, the expenses that may be borne by the Account in
connection with the acquisition, placement or disposition of a real
estate related investment will not be deducted in determining asset
value by the Investment Adviser. The valuation of investments made
by the Account also may be adjusted by the Investment Adviser based
upon events that come to its attention affecting the real property
investments or the properties subject to mortgage loans or land
sale-leaseback investments, which it believes will increase or
decrease realizable value, or events or market conditions generally
affecting the values of the real property investments, mortgage
loans or land sale-leaseback investments. For example, adjustments
may be made for the events that affect the property comprising a
real property investment or the surrounding area or events
indicating an impairment of the borrower's or lessee's ability to
make payments with respect to a mortgage loan or land
sale-leaseback investment.

There can be no assurance that the factors for which an adjustment
should be made will come to the attention of the Investment
Adviser. Additionally, because the evaluation of such factors may
be subjective, there can be no assurance that adjustments will be
made in all cases in which the value of the real property
investments, mortgage loans or land sale-leaseback investments may
be affected. If the Investment Adviser believes it to be
necessary, more frequent appraisals will be conducted.

The above method of valuation may be changed by IDS Life (after
consultation with the Investment Adviser) should it determine that
another method would more accurately reflect the value of the
Account's investments. Changes in the method of valuation could
result in a change in the contract value that may have an adverse
effect on either or both existing owners and new purchasers of
Contracts. As a result of a change in the valuation method, there
may be variations between the values at which owners purchase
Contracts based upon a different valuation method adopted by IDS
Life. Written notice (included in this section of the prospectus
or otherwise) of any material change in the valuation method will
be mailed to all owners. Although the valuation method has been
selected because IDS Life and the Investment Adviser believe it
will provide a reasonable approximation of the value of the
Account's investments, there may be variations between the amount
realizable upon disposition and the stated value of such assets.
Owners may be adversely affected if the valuation method results in
either overvaluing or undervaluing the Account's investments. Both
the number of accumulation units credited to an owner at the time a
Contract is purchased and the amount payable under the Contract are
based on the value of the assets of the Account. Should the
valuation method overstate the value of the investments, a new
owner at the time of purchase will be credited with fewer
accumulation units than if the value were correctly stated and a
person receiving payments under the Contract during the time such
valuation is in effect will receive payments in excess of those to
which the person was entitled, to the detriment of other owners.
<PAGE>
PAGE 81
Alternatively, if the valuation method understates the value of the
assets, a new owner will be credited with more accumulation units
at the time of purchase, to the detriment of other owners, and a
person receiving payments under a Contract will receive less than
the person otherwise would receive had the assets been correctly
valued. See also the Risk Factors -- Evaluation and Appraisal Risk
and the Conflicts of Interest -- Receipt of Commissions, Fees and
Other Compensation by IDS Life, the Investment Adviser and
Affiliates sections.

Liquid Assets

The liquid assets of the Account, including accrued income, gains
or losses on such investments, also will be taken into account in
determining the Account's asset value. Short-term investments of
the Account will be held to maturity unless the circumstances
warrant otherwise. Instruments for which market quotations are
readily available are valued at the last reported sales price on
the principal market for the instrument. Other instruments are
valued at fair market value as determined in good faith by IDS
Life.

IDS Life has concluded that for short-term instruments with
remaining maturities of 60 days or less, including instruments with
penalties for early withdrawal, the fair market value shall be
their amortized cost value unless the particular circumstances of
an instrument indicate otherwise. If any short-term instrument
containing early withdrawal penalties is redeemed prior to
maturity, the related expense will be recorded as incurred.

Distribution of Contracts

The Contracts are offered by IDS Life. IDS Life is a broker-dealer
registered under the Securities Exchange Act of 1934 and a member
of the National Association of Securities Dealers, Inc. Sales of
the Contracts will be made by registered representatives of IDS
Life who are also licensed insurance agents. IDS Life will pay
from its general account commissions which may vary, but in the
aggregate are not anticipated to exceed an amount equal to 6
percent of the purchase payments. Registered representatives of
IDS Life may receive direct sales incentive items and may
participate in marketing incentive programs in connection with the
sale of the Contracts. It is possible that certain marketing
incentive programs may be based in part on the sale of Contracts
and in part on the sale of other securities. IDS Life will pay the
costs (or an allocable share of such costs) incurred for such sales
incentive items and marketing incentive programs.

State Regulation

IDS Life is subject to the laws of the State of Minnesota governing
insurance companies and to the regulations of the Department of
Commerce of the State of Minnesota. An annual statement in the
prescribed form is filed with the Department of Commerce of the
State of Minnesota each year covering IDS Life's operation for the
<PAGE>
PAGE 82
preceding year and its financial condition at the end of such year.
Regulation by the Department of Commerce of the State of Minnesota
includes periodic examination to determine IDS Life's contract
liabilities and reserves so that the Department of Commerce of the
State of Minnesota may certify that these items are correct. IDS
Life's books and accounts are subject to review by the Department
of Commerce of the State of Minnesota at all times. A full
examination of IDS Life's operations is conducted periodically by
the National Association of Insurance Commissioners. Such
regulation does not, however, involve any supervision of the
Account's management or IDS Life's investment practices or
policies. In addition, IDS Life is subject to regulation under the
insurance laws of other jurisdictions in which it operates.

Experts

The financial statements of the Account as of Dec. 31, 1993 and
1992 and for each of the years in the three-year period ended Dec.
31, 1993, were audited by KPMG Peat Marwick.

The financial statements of N/S Associates (an unconsolidated joint
venture of the Account) as of Dec. 31, 1993 and 1992 and for each
of the years in the three-year period ended Dec. 31, 1993, were
audited by KPMG Peat Marwick.

The consolidated balance sheet of IDS Life as of Dec. 31, 1993 and
1992 and the related consolidated statements of income and cash
flows for each of the three years in the period ended Dec. 31,
1993, were audited by Ernst & Young.

All of the above financial statements have been included herein in
reliance on the reports of the respective independent auditors,
appearing elsewhere herein, and given upon their authority as
experts in accounting and auditing.

Registration Statement

A registration statement has been filed with the Securities and
Exchange Commission under the 1933 Act with respect to the
Contracts. This prospectus does not contain all information set
forth in the registration statement, its amendments and exhibits,
to all of which reference is made for further information
concerning the Account, IDS Life and the Contract. Statements
contained in this prospectus as to the content of the Contract and
other legal instruments are summaries. For a complete statement of
the terms thereof, reference is made to such instruments as filed.

Reports

Owners will receive a confirmation of each purchase payment made
with respect to the Contracts. Additionally, IDS Life will, at
least annually, mail a report containing such information as may be
required by any applicable law or regulation and a statement
showing the owner's current number of accumulation units or annuity
units, the accumulation unit value or annuity unit value and the
total contract value.
<PAGE>
PAGE 83
Financial Statements

The contract values under a Contract will be affected solely by the
investment results of the Account. Financial statements of IDS
Life included herein should be considered only as bearing on the
ability of IDS Life to meet its obligations under the Contract.

Legal Proceedings

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

<PAGE>
PAGE 84
Appendix A

The members of the Board of Directors and the principal executive
officers of IDS Life,* together with the principal occupation of
each during the last five years, are as follows:

Louis C. Fornetti, 44
Director since March 1994; Senior Vice President and Director, IDS,
since February 1985.

David R. Hubers, 51
Director since September 1989; President and Chief Executive
Officer, IDS, since August 1993, and Director, IDS, since January
1984. Senior Vice President, Finance and Chief Financial Officer,
IDS, from January 1984 to August 1993.

Richard W. Kling, 53
Director since February 1984; President since March 1994.
Executive Vice President from January 1988 to March 1994. Vice
President, IDS, since January 1988. Director of IDS Life Series
Fund, Inc. and Manager of IDS Life Variable Annuity Funds A & B.

Paul F. Kolkman, 47
Director since May 1984; Executive Vice President since March 1994;
Vice President, Finance from May 1984 to March 1994; Vice
President, IDS, since January 1987.

Peter A. Lefferts, 52
Director and Executive Vice President, Marketing since March 1994;
Senior Vice President and Director, IDS, since February 1986.

Janis E. Miller, 42
Director and Executive Vice President, Variable Assets since March
1994; Vice President, IDS, since June 1990; Director, Mutual Funds
Product Development and Marketing, IDS, from May 1987 to May 1990;
Director of IDS Life Series Fund, Inc. and Manager of IDS Life
Variable Annuity Funds A & B.

James A. Mitchell, 52
Chairman of the Board since March 1994; Director since July 1984;
Chief Executive Officer since November 1986; President from July
1984 to March 1994; Executive Vice President, IDS, since March
1994; Director, IDS, since July 1984; Senior Vice President, IDS,
from July 1984 to March 1994.

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PAGE 85
Barry J. Murphy, 43
Director and Executive Vice President, Client Service since March
1994; Senior Vice President, Operations, Travel Related Services
(TRS), a subsidiary of American Express Company, since July 1992;
Vice President, TRS, from November 1989 to July 1992; Chief
Operating Officer, TRS, from March 1988 to November 1989.

Stuart A. Sedlacek, 36
Director and Executive Vice President, Assured Assets since March
1994; Vice President, IDS, since September 1988.

Melinda S. Urion, 40
Director and Controller since September 1991; Executive Vice
President since March 1994; Vice President and Treasurer from
September 1991 to March 1994; Vice President, IDS, since September
1991; Chief Accounting Officer, IDS, from July 1988 to September
1991.

Officers Other Than Directors

Morris Goodwin Jr., 42
Vice President and Treasurer since March 1994; Vice President and
Corporate Treasurer, IDS, since July 1989; Chief Financial Officer
and Treasurer, IDS Bank & Trust, from January 1988 to July 1989.

William A. Stoltzmann, 45
Vice President, General Counsel and Secretary since 1985.

*The address for all of the directors and principal officers is:
IDS Tower 10, Minneapolis, MN 55440-0010.
<PAGE>
PAGE 86
Appendix B

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

Judd D. Malkin, 56, is Chairman and Director of JMB, an officer
and/or director of various JMB affiliates and a partner of the
Associate Partnerships. He is also a trustee of JMB Group Trust I,
JMB Group Trust II, JMB Group Trust III, JMB Group Trust IV and JMB
Group Trust V. Mr. Malkin has been associated with JMB since
October 1969. He is a Certified Public Accountant.

Neil G. Bluhm, 56, is President and Director of JMB, an officer
and/or director of various JMB affiliates and a partner of the
Associate Partnerships. He is also a trustee of JMB Group Trust I,
JMB Group Trust II, JMB Group Trust III, JMB Group Trust IV and JMB
Group Trust V. Mr. Bluhm has been associated with JMB since August
1970. He is a member of the Bar of the State of Illinois and a
Certified Public Accountant.

Burton E. Glazov, 55, is Director of JMB and until December 1990
served as an Executive Vice President of JMB. Mr. Glazov has been
associated with JMB since June 1971. He is a member of the Bar of
the State of Illinois and a Certified Public Accountant.

Stuart C. Nathan, 52, is Executive Vice President and Director of
JMB, an officer and/or director of various JMB affiliates and a
partner of the Associate Partnerships. Mr. Nathan has been
associated with JMB since July 1972. He is a member of the Bar of
the State of Illinois.

John G. Schreiber, 47, is Director of JMB and until December 1990
served as an Executive Vice President of JMB. Mr. Schreiber has
been associated with JMB since December 1970. He holds a master's
degree in business administration from the Harvard University
Graduate School of Business.

Jerome J. Claeys III, 51, is Director of JMB, Chairman and Director
of JMB Institutional Realty Corporation, an officer and/or director
of various other JMB affiliates and a partner of various Associate
Partnerships. He is also a trustee of JMB Group Trust I, JMB Group
Trust II, JMB Group Trust III, JMB Group Trust IV and JMB Group
Trust V. Mr. Claeys has been associated with JMB since September
1977. He holds a master's degree in business administration from
the University of Notre Dame.

<PAGE>
PAGE 87
A. Lee Sacks, 60, is Director of JMB, President and Director of JMB
Insurance Agency, Inc. and a partner of various Associate
Partnerships. Mr. Sacks has been associated with JMB since
December 1972.

H. Rigel Barber, 45, is Chief Executive Officer and Executive Vice
President of JMB, an officer of various JMB affiliates and a
partner of various Associate Partnerships. Mr. Barber has been
associated with JMB since March 1982. He holds a law degree from
the Northwestern University Law School and is a member of the Bar
of the State of Illinois.

Ira J. Schulman, 42, is Executive Vice President of JMB, an officer
of various JMB affiliates and a partner of various Associate
Partnerships. Mr. Schulman has been associated with JMB since
February 1983. He holds a master's degree in business
administration from the University of Pittsburgh.

Gary Nickele, 41, is Executive Vice President and General Counsel
of JMB, an officer and/or director of various JMB affiliates and a
partner of various Associate Partnerships. Mr. Nickele has been
associated with JMB since February 1984. He holds a law degree
from the University of Michigan Law School and is a member of the
Bar of the State of Illinois.

Jeffrey R. Rosenthal, 43, is Chief Financial Officer and Managing
Director -- Corporate of JMB, an officer of various JMB affiliates
and a partner of various Associate Partnerships. Mr. Rosenthal has
been associated with JMB since December 1987. He is a Certified
Public Accountant.

Charles H. Wurtzebach, 44, has been President and Director of JMB
Institutional Realty Corporation and an officer and/or director of
various other JMB affiliates since March 1994. He also became a
trustee of JMB Group Trust I, JMB Group Trust II, JMB Group Trust
III, JMB Group Trust IV and JMB Group Trust V in March 1994. Prior
to March 1994, Mr. Wurtzebach was Managing Director/Director of
Investment Research of JMB Institutional Realty Corporation. He
has been associated with JMB Institutional Realty Corporation since
July 1991. Prior to joining JMB Institutional Realty Corporation,
Mr. Wurtzebach was Senior Research Professional for Prudential Real
Estate Investors, Inc. Mr. Wurtzebach has a doctorate degree in
finance and real estate from the University of Illinois.

Kelley A. Bergstrom, 51, is Senior Vice President of JMB, President
of JMB Properties Company, an officer and/or director of various
other JMB affiliates and a partner of various Associate
Partnerships. Mr. Bergstrom has been associated with JMB since
April 1972. He is a Certified Property Manager.
<PAGE>
PAGE 88
Summary of Selected Financial Information

The following selected financial information of the Account has
been derived from the audited financial statements and should be
read in conjunction with those statements and the related notes to
financial statements.
<TABLE>
<CAPTION>
Years ended Dec. 31,
1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Contract Purchase Payments
(Terminations) net...................... $(6,873,380) $(6,257,432) $ (575,134) $ 4,740,257 $16,532,329
Net Income (loss)....................... $ 1,816,417 $(5,761,830) $ 628,297 $ 1,835,465 $ 1,736,522
Total Contract Owners' Equity........... $42,124,648 $47,181,611 $59,200,873 $59,147,710 $52,571,988
Accumulation Units Outstanding.......... 39,000,431 45,475,432 51,202,112 51,693,083 47,458,468
Accumulation Unit Value................. $ 1.08 $ 1.04 $ 1.16 $ 1.14 $ 1.11
</TABLE>
<PAGE>
PAGE 89
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

Financial Condition and Results of Operations

For the Year Ended December 31, 1993

Net assets decreased from $47,181,611 at the beginning of the year
to $42,124,648 at December 31, 1993. During this same time period
the accumulation unit value increased from $1.04 to $1.08. The
Account experienced net terminations amounting to $6,873,380 for
the year ended December 31, 1993, compared to $6,257,432 for the
prior year.

Total income (loss) for the year ended December 31, 1993, was
$5,069,388 compared to $(2,202,884) for the year ended December 31,
1992. The difference was primarily due to the Account's
recognition of unrealized depreciation on its participation in a
mortgage loan, investments in unconsolidated joint ventures and
wholly-owned real estate property in the aggregate amount during
1992 of approximately $7,206,000.

For the year ended December 31, 1993, the Account's equity in
earnings of its unconsolidated joint ventures (N/S Associates,
Monmouth Associates and 1225 Connecticut) was $2,097,089 which
represents a slight increase from the prior year's amount of
$2,072,715.

The Account generated rental income of $2,251,285 from its
wholly-owned real estate investment for the year ended December 31,
1993, compared to rental income from the prior year of $2,202,548.
The increase is due to higher average occupancy and higher rental
rates. Expenses related to the wholly-owned real estate investment
totaled $1,770,999 for the year ended December 31, 1993, compared
to $1,730,533 for the year ended December 31, 1992.

The unrealized appreciation of participation in mortgage loan in
the amount of approximately $172,000 for the year ended December
31, 1993 was primarily due to the application of a lower discount
rate and capitalization rate used in valuing the Riverpoint Center
loan during 1993 as a result of an improvement in leasing at the
property. The unrealized depreciation of investments in
unconsolidated joint ventures is primarily due to the Account's
share of approximately $370,000 in a write down of the estimated
value of Northridge Mall. Sales per square foot at the mall <PAGE>
PAGE 90
declined approximately 5 percent for 1992 from the previous year
and declined approximately 5.4 percent for 1993 as compared to
1992. In part, the decrease is attributable to a negative image
for Northridge Mall among shoppers. The property is also subject
to high real estate taxes and to increasing competition from other
malls in the area. As a result, it is expected that either
occupancy rates or rental rates may decline moderately while the
other remains relatively flat. Currently, the mall space at
Northridge Mall, including short-term temporary tenants, is
approximately 85 percent leased and occupied. Southridge Mall,
including short-term temporary tenants, is approximately 95 percent
leased and 92 percent occupied. The Account's share of the
unrealized depreciation recorded by N/S Associates has been
partially offset by the Account's share of unrealized appreciation
of approximately $120,000 attributable to a slight adjustment in
the capitalization rate used in valuing the 1225 Connecticut office
building. The Account also recorded unrealized appreciation of
approximately $60,000 in order to adjust the carrying value of
Monmouth Mall to its present current value. Additionally, the
Account recognized unrealized appreciation of investment in
wholly-owned real estate property of approximately $310,000 related
to the West Springfield Apartment property. The increase in
carrying value is primarily due to an increase in rental rates at
the property.

The Account paid asset management fees of $773,849 and $988,698 for
the years ended December 31, 1993 and 1992, respectively. The
decrease in asset management fees was due to a decrease in the
Account's assets.

The mortality and expense risk fee was $549,250 for the year ended
December 31, 1993, compared to $649,173 for the corresponding
period in 1992, which decreased due to the decrease in the
Account's assets.

For the Year Ended December 31, 1992

Net assets decreased from $59,200,873 at the beginning of the year
to $47,181,611 at December 31, 1992. During this same time period
the accumulation unit value decreased from $1.16 to $1.04. The
Account experienced net terminations amounting to $6,257,432 for
the year ended December 31, 1992, compared to $575,134 for the
prior year.

Total income (loss) for the year ended December 31, 1992, was
$(2,202,884) compared to $4,356,932 for the year ended December 31,
1991. The primary reason for the decrease was the Account's
recognition of unrealized depreciation on its participation in a
mortgage loan, investments in unconsolidated joint ventures and
wholly-owned real estate property in the aggregate amount during
1992 of approximately $7,206,000. The Account recognized
unrealized depreciation with respect to its investments in
unconsolidated joint ventures during 1992 in an aggregate amount of
approximately $5,560,000, of which $3,272,000, $1,230,000 and
$1,058,000 were attributable to its investment in N/S Associates,
Monmouth Associates and 1225 Connecticut, respectively. These
devaluations were primarily attributable to increases in the <PAGE>
PAGE 91
capitalization rates used to determine the estimated current values
of the Northridge, Southridge and Monmouth Malls and the 1225
Connecticut office building. They also reflect, in the case of
Monmouth Mall, the competition in the market area for that property
and, in the case of Northridge Mall, a greater than five percent
decrease in comparable 1992 sales per square foot versus the year
earlier period, which has resulted in a decrease in demand for
space at that property. The Account also recognized unrealized
depreciation in 1992 of approximately $1,570,000 related to its
wholly owned real estate investment, West Springfield Terrace
Apartments, and $76,000 related to its participation in the
Riverpoint Center mortgage loan. The devaluation relating to West
Springfield Terrace Apartments also reflects an increase in the
capitalization rate used by the Investment Adviser in deriving its
estimated current value.

Interest income represents income earned on the Account's
investment in short-term securities and the participation in a
mortgage loan. Interest generated from short-term investments
decreased to $470,565 from $871,680 for the years ended December
31, 1992 and 1991, respectively. This decrease reflects the lower
yields earned on these investments during the year as well as a
lower average amount invested in short-term securities. Income
generated from participation in the mortgage loan was $256,846 for
the year ended December 31, 1992, compared to $286,986 for the
prior year. The decrease is due to the Account's suspension in
August 1991, for financial reporting purposes, of the recognition
of income related to the simple accrual interest receivable
(payment of which is deferred until maturity) on the loan secured
by Riverpoint Center, partially offset by an increase in the base
rate of interest on the loan from 8.75 percent to 9.25 percent per
annum commencing in August, 1992.

For the year ended December 31, 1992, $2,072,715 of total income
was derived from the Account's equity in earnings of its
unconsolidated joint ventures (N/S Associates, Monmouth Associates
and 1225 Connecticut) which represents a slight decrease from the
prior year's amount of $2,103,315.

In addition, the Account generated rental income of $2,202,548 for
the year ended December 31, 1992, which increased compared to
rental income from the prior year of $2,113,539, from its
wholly-owned real estate investment. The increase is primarily due
to higher average occupancy and higher rental rates. Expenses
related to the wholly-owned real estate investment totaled
$1,730,533 for the year ended December 31, 1992, compared to
$1,829,863 for the year ended December 31, 1991. The decrease in
expense was primarily due to a reduction in repairs and maintenance
and other operating expenses.

The Account paid asset management fees of $988,698 and $1,053,490
for the years ended December 31, 1992 and 1991, respectively. The
decrease in asset management fees was due to a decrease in the
Account's assets.

The mortality and expense risk fee was $649,173 for the year ended
December 31, 1992, compared to $708,856 for the corresponding <PAGE>
PAGE 92
period in 1991, which also decreased due to the decrease in the
Account's assets.

Liquidity and Capital Resources

For the Year Ended December 31, 1993

At December 31, 1993, the Account had cash and investments in
short-term securities of approximately $2,665,000 as compared to
$8,369,000 at December 31, 1992. The decrease is primarily
attributable to net contract terminations during the year ended
December 31, 1993. Both a decrease in contract sales and an
increase in contract terminations contributed to an increase of
$616,000 in net contract terminations for the year ended December
31, 1993 over the prior year. The Account has experienced net
contract terminations in each of the last nine quarters. As of
March 15, 1994, net contract terminations were $807,472 for 1994
and the Account had cash and short-term securities of approximately
$1,944,220.

The liquidity requirements of the Account are generally met by
funds provided from the Account's short-term investments, cash
distributions from unconsolidated joint ventures, operating cash
flow, interest income and proceeds from sales of contracts. The
primary uses of funds currently are expected to be for property
operating expenses, asset management and mortality and expense risk
fees, payments for contract terminations and contributions to pay
the Account's share of the financing of the Monmouth Mall
renovation discussed below.

In March 1994 the Account obtained a revolving line of credit for
up to $10 million from IDS Life to pay for contract surrenders and
other obligations under the Contracts. The line of credit is for a
one-year term and is automatically renewed at each anniversary for
an additional one-year term subject to termination by one party
giving 30 days' prior written notice of termination to the other
party. Borrowings under the line of credit must be made in
increments (or multiples) of $100,000. Outstanding borrowings
under the line of credit will bear interest at a floating rate
equal to the 30-day London Interbank Offered Rate (LIBOR), adjusted
on a monthly basis. The line of credit requires monthly payments
of interest only until the earlier of maturity or termination of
the line of credit, when the entire outstanding principal plus any
accrued and unpaid interest on the line of credit will be due and
payable. Outstanding principal may be repaid in whole or in part
in increments (or multiples) of $100,000, together with any accrued
and unpaid interest thereon, at any time without premium or
penalty. Borrowings under the line of credit are generally
unsecured, although IDS Life will have a right of set off against
any deposits or credits of the Account held by IDS Life for
outstanding borrowings.

If borrowings under the line of credit do not provide sufficient
liquidity, the Account expects to consider additional options,
which could include, among other things, the sale of real estate
related investment(s). In such event, a sale or sales of real <PAGE>
PAGE 93
estate related assets may be required under circumstances that
could result in a realization of less than the full value of the
asset or assets sold. The Account does not expect to acquire
additional real estate related investments until contract purchase
proceeds exceed contract termination payments.

During the year ended December 31, 1993, the Account incurred
capital improvement costs of approximately $25,000 in relation to
its wholly-owned real estate property. These capital improvements
included the cost of upgrading kitchens, bathrooms and certain
other areas in West Springfield Terrace Apartments.

Monmouth Associates has agreed in principle to finance the cost of
a proposed renovation of Monmouth Mall. As currently contemplated,
the renovation plan is intended to reposition the shopping center
against its competition by adding a more upscale component to the
tenant base, adding a food court and cinema and reconfiguring the
former Caldor anchor tenant space into smaller tenant spaces. It
is expected that the costs of the renovation would be financed by a
loan from Monmouth Associates that would bear interest at a fixed
rate of 10.5 percent per annum. In addition, Monmouth Associates'
participation in certain levels of sale or refinancing proceeds
from the property would be increased until Monmouth Associates has
received aggregate payments equal to an internal rate of return of
11 percent per annum on its original investments in the first
leasehold mortgage loan and ground lease. The estimated cost of the
renovation is $28,500,000, which would be provided by additional
capital contributions to Monmouth Associates made pro rata based
upon the respective interests of its joint venture partners. Based
upon its 6.97 percent interest in Monmouth Associates, the
Account's share of the additional capital contributions would be
approximately $1,986,000. Required approvals of department stores
as well zoning approvals for the renovation have been obtained. It
is currently expected that the renovation will commence in the
second quarter of 1994 and not be completed until 1995. However,
the renovation plan and its proposed financing are subject to
various conditions, and there is no assurance that either will be
finalized or will be on the terms as described. In addition to
financing the renovation, Monmouth Associates may be required to
make certain additional loans to pay a portion of the costs of
certain tenant improvements or other ordinary capital expenditures.
Such additional loans for tenant or other ordinary capital
improvements are expected to be provided from ground rent and
interest payments received by the joint venture with respect to
Monmouth Mall.

Until the renovation is finished, it is expected that there will be
lower than normal leasing and occupancy at the shopping center,
primarily as a result of the need to hold some tenant spaces vacant
and to have certain tenants occupy spaces on a temporary basis.
The current leasing and occupancy of the mall and outparcel space,
including short-term leases with tenants on a temporary basis, is
approximately 81 percent. Approximately 14 percent of the space at
the mall continues to be held vacant of long-term tenants pending
renovation of the mall.

<PAGE>
PAGE 94
The Account has a loan outstanding in the principal amount of
approximately $7,927,000 as of December 31, 1993, secured by its
wholly-owned real estate investment. The loan has an original term
of seven years and bears interest at a rate of 9.5 percent per
annum. The loan requires monthly payments of principal and
interest aggregating $824,000 per annum until August of 1996 when
the remaining principal balance of approximately $7,690,000 and any
accrued and unpaid interest will be due and payable.

In January 1994, 1225 Investment Corporation refinanced its
mortgage loan, which had an outstanding principal balance of
approximately $1,667,000, with a new first mortgage loan in the
principal amount of $7,000,000 that bears interest at 6.98 percent
per annum. The new loan requires monthly payments of interest only
aggregating approximately $489,000 per annum until maturity in
February 2001 when the entire principal amount together with
accrued and unpaid interest will be due and payable. 1225
Investment Corporation intends to use the approximately $5,300,000
of excess proceeds from the refinancing to pay for lobby and other
common area renovation costs, a sprinkler system and certain tenant
improvement costs related to the Ernst & Young lease extension, as
well as a reserve for additional tenant improvement costs and
leasing commissions anticipated to be incurred upon the expiration
of certain existing leases. Leases for approximately 17 percent of
the office and retail space at the building expire in 1994.

Ernst & Young agreed to an extension of the original term of a
majority (approximately 132,000 square feet) of its existing leased
space at the 1225 Connecticut office building from June 2000 to
June 2007, subject to the termination of approximately 9,000 square
feet of its existing space in December 1994, and to increase the
annual base rent for all its existing space to $34 per square foot
effective with the extension agreement. Ernst & Young also agreed
to lease an additional approximately 17,000 square feet of space
through December 1994 at $34 per square foot. Prior to the lease
extension agreement, the annual base rents under the Ernst & Young
leases were scheduled to increase to $34 per square foot at
different times during 1993 and 1994 from annual base rents ranging
from $8.75 to $29.00 per square foot.

N/S Associates undertakes asbestos removal from time to time at
portions of the Northridge and Southridge Malls as tenant spaces
are vacated and prior to occupancy by new tenants. The cost of such
asbestos removal is provided out of cash flows from the properties
and, in the case of Southridge, out of its remaining reserves
(approximately $167,000) for capital improvements. For 1994, N/S
Associates has budgeted approximately $2,600,000 for certain
capital improvements at its malls, including replacement of
escalators at Southridge Mall, tenant improvements and asbestos
removal at both properties. Such amount also includes funds for a
continuation of a program at Northridge Mall to enhance its
appearance in an effort to reverse its negative perception among
shoppers. To date, parking lot lighting and painting of the
interior of the mall have been completed. During 1994 it is
expected that additional improvements at Northridge Mall will
include improving the interior lighting and partial roof
replacement.
<PAGE>
PAGE 95
At December 31, 1993, real property investments (through two
unconsolidated joint ventures, N/S Associates and 1225 Connecticut
and a wholly-owned property, West Springfield Terrace Apartments),
mortgage loan and land sale-leaseback investments (through an
unconsolidated joint venture, Monmouth Associates, and a
participation in the loan for Riverpoint Center) and short-term
investments represented 69 percent, 26 percent and 5 percent of
total assets, respectively. The Account currently intends to
maintain an asset mix of 50 percent to 70 percent in real property
investments, 15 percent to 40 percent in mortgage loans or
sale-leaseback investments, and the remaining portion in short-term
or intermediate-term liquid debt securities.

For the Year Ended December 31, 1992

At December 31, 1992, the Account had cash and investments in
short-term securities of approximately $8,369,000 as compared to
$14,040,000 at December 31, 1991. The decrease was primarily
attributable to net contract terminations during the year ended
December 31, 1992.

The liquidity requirements of the Account were met by the funds
provided from the Account's cash distributions from unconsolidated
joint ventures, operating cash flow from its wholly owned real
estate investment, interest income and from sales of short-term
investments. The primary uses of such funds were for property
operating expenses, asset management and mortality and expense risk
fees and payments for contract terminations.

During the year ended December 31, 1992, the Account incurred
capital improvement costs of approximately $448,000 in relation to
its wholly-owned real estate property. During the year ended
December 31, 1991, the Account incurred capital improvements costs
of approximately $861,000 related to the property. These capital
improvements included the cost of upgrading kitchens, bathrooms and
certain other upgrades in West Springfield Terrace Apartments.
During 1992, the renovation program at the property was virtually
completed at an aggregate cost of approximately $1,900,000.

The Account had a loan outstanding in the principal amount of
approximately $7,995,000 as of December 31, 1992, secured by its
wholly-owned real estate investment.

At December 31, 1992, real property investments, mortgage loan and
land sale-leaseback investments and short-term investments
represented 62 percent, 23 percent and 15 percent of total assets,
respectively. At December 31, 1991, real property investments,
mortgage loan and land sale-leaseback investments and short-term
investments represented 58 percent, 20 percent, and 21 percent of
total assets, respectively.
<PAGE>
PAGE 96
Index to Financial Statements

Page

IDS Life Account RE
Independent Auditors' Report............................ 77
Balance Sheets
Dec. 31, 1993 and 1992............................... 78
Statements of Operations, years ended
Dec. 31, 1993, 1992 and 1991......................... 79
Statements of Changes in Contract Owners' Equity, years ended
Dec. 31, 1993, 1992 and 1991......................... 80
Statements of Cash Flows, years ended
Dec. 31, 1993, 1992 and 1991......................... 81
Notes to Financial Statements........................... 82

N/S Associates (an unconsolidated joint venture
of IDS Life Account RE)
Independent Auditors' Report............................ 90
Balance Sheets
Dec. 31, 1993 and 1992............................... 91
Statements of Operations, years ended
Dec. 31, 1993, 1992 and 1991......................... 92
Statements of Partners' Capital Accounts,
years ended Dec. 31, 1993, 1992 and 1991............. 93
Statements of Cash Flows, years ended
Dec. 31, 1993, 1992 and 1991......................... 94
Notes to Financial Statements........................... 95

IDS Life Insurance Company
Consolidated Balance Sheets, Dec. 31, 1993 and 1992..... 98
Consolidated Statements of Income, years ended
Dec. 31, 1993, 1992 and 1991......................... 99
Consolidated Statements of Cash Flows, years ended
Dec. 31, 1993, 1992 and 1991......................... 100
Notes to Consolidated Financial Statements.............. 101
Report of Independent Auditors.......................... 112

<PAGE>
PAGE 97
Independent Auditors' Report

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

We have audited the financial statements of IDS Life Account RE as
listed in the accompanying index. These financial statements are
the responsibility of the management of IDS Life Insurance Company.
Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of IDS
Life Account RE at December 31, 1993 and 1992 and the results of
its operations and its cash flows for each of the years in the
three-year period ended December 31, 1993 in conformity with
generally accepted accounting principles.

As discussed in Note 2, the financial statements include real
estate related investments which represent 94% and 84% of total
assets at December 31, 1993 and 1992, respectively, that are stated
at fair value as estimated by the investment adviser. Such fair
value estimates involve subjective judgments and the actual market
price of real estate can only be determined by negotiation between
independent third parties in a sales transaction.

KPMG PEAT MARWICK
Minneapolis, Minnesota
March 18, 1994
<PAGE>
PAGE 98
<TABLE><CAPTION>
IDS LIFE ACCOUNT RE
of
IDS LIFE INSURANCE COMPANY

BALANCE SHEETS

December 31,

1993 1992
<S> <C> <C>
Assets:
Cash $ 171,242 $ 321,420
Investments in short-term securities,
at amortized cost 2,493,649 8,047,678
Receivable from IDS Life for contracts sold 600 11,941
Investments in unconsolidated joint ventures,
at fair value (cost of $34,115,612 and
$33,763,863 at Dec. 31, 1993 and 1992,
respectively) (Note 4) 28,769,085 28,605,415
Participation in mortgage loan, at fair
value (cost of $3,047,188 at Dec. 31, 1993
and 1992) (Note 4) 2,995,600 2,823,227
Accrued interest on participation in mortgage loan - 21,977
Investment in wholly-owned real estate
property (Note 5):
Building, at fair value (cost of $13,899,674
and $13,874,849 at Dec. 31, 1993 and
1992, respectively) 11,966,920 11,633,855
Land, at fair value (cost of $3,915,263
at December 31, 1993 and 1992) 3,915,263 3,915,263
Deferred borrowing costs, net of accumulated
amortization of $105,874 and $79,952
at Dec. 31, 1993 and 1992, respectively 75,582 101,504
Other assets 36,012 103,720
Total assets $ 50,423,953 $ 55,586,000

See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 99
<TABLE><CAPTION>
IDS LIFE ACCOUNT RE
of
IDS LIFE INSURANCE COMPANY

BALANCE SHEETS (continued)

December 31,

Liabilities: 1993 1992
<S> <C> <C>
Payable to IDS Life for:
Operating expenses $ 62,289 $ 68,035
Contract terminations 47,077 61,752
Accrued mortality and expense risk fee 44,667 50,470

Accrued asset management fee 55,834 63,087
Liabilities related to wholly-owned
real estate property (Note 5):
Accounts payable and other liabilities 162,617 166,412
Mortgage payable 7,926,821 7,994,633
Total liabilities 8,299,305 8,404,389

Contract Owners' Equity:
Net assets applicable to Variable Annuity
contracts in accumulation period $ 42,124,648 $ 47,181,611

Accumulation units outstanding 39,000,431 45,475,432

Net asset value per accumulation unit $ 1.08 $ 1.04

See accompanying notes to financial statements.
/TABLE
<PAGE>
PAGE 100
<TABLE><CAPTION>
IDS LIFE ACCOUNT RE
of
IDS LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS
Years ended December 31,

1993 1992 1991
<S> <C> <C> <C>
Income:
Interest income $ 428,480 $ 727,411 $1,158,666
Account's equity in earnings of
unconsolidated joint ventures (Note 4) 2,097,089 2,072,715 2,103,315
Rental income 2,251,285 2,202,548 2,113,539
Unrealized appreciation (depreciation) of
participation in mortgage loan 172,373 (75,735) (199,705)
Unrealized depreciation of investments
in unconsolidated joint ventures (188,079) (5,560,069) (147,643)
Unrealized appreciation (depreciation) of investment
in wholly-owned real estate property 308,240 (1,569,754) (671,240)
Total income (loss) 5,069,388 (2,202,884) 4,356,932

Expenses (Note 3):
Asset management fee 773,849 988,698 1,053,490
Mortality and expense risk fee 549,250 649,173 708,856
Professional services 49,829 64,748 46,691
Amortization of deferred organizational
and borrowing costs 25,922 60,504 84,249
Salaries 37,980 43,929 4,913
Other operating expenses 45,142 21,361 573
Operating expenses related to wholly-owned
real estate property (Note 5):
Interest 756,051 759,957 760,000
Utilities 139,974 141,924 161,894
Repairs and maintenance 177,047 147,667 195,651
Property and other taxes 197,478 197,847 169,404
Salaries 243,220 217,948 221,460
Management fees 112,765 108,762 105,509
Other 144,464 156,428 215,945
Total expenses 3,252,971 3,558,946 3,728,635

Net income (loss) $ 1,816,417 $(5,761,830) $ 628,297

See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 101
<TABLE><CAPTION>
IDS LIFE ACCOUNT RE
of
IDS LIFE INSURANCE COMPANY
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY

Years ended December 31, 1993 1992 1991
<S> <C> <C> <C>
Net income (loss) $ 1,816,417 $(5,761,830) $ 628,297
Contract purchase proceeds 1,766,368 1,865,041 3,673,323
Contract termination payments (8,639,748) (8,122,473) (4,248,457)

Increase (decrease) in net assets (5,056,963) (12,019,262) 53,163

Contract owners' equity at
beginning of year 47,181,611 59,200,873 59,147,710

Contract owners' equity at end of year $42,124,648 $47,181,611 $59,200,873

Accumulation Unit Activity

Units purchased with proceeds from sale
of contracts 1,661,478 1,622,774 3,164,203
Units redeemed for contract terminations (8,136,479) (7,349,454) (3,655,174)

Net decrease in units (6,475,001) (5,726,680) (490,971)

Units outstanding at beginning of year 45,475,432 51,202,112 51,693,083

Units outstanding at end of year 39,000,431 45,475,432 51,202,112

See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 102
<TABLE><CAPTION>
IDS LIFE ACCOUNT RE
of
IDS LIFE INSURANCE COMPANY
STATEMENTS OF CASH FLOWS
Years ended December 31,

1993 1992 1991
<S> <C> <C> <C>
Cash flows from operating activities:
Net Income (loss) $ 1,816,417 $(5,761,830) $ 628,297
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Account's equity in earnings of unconsolidated
joint ventures (2,097,089) (2,072,715) (2,103,315)
Change in accrued interest on participation
in mortgage loan 21,977 (21,977) (33,199)
Amortization of organizational and borrowing 25,922 60,504 84,249
Change in cumulative discount amortization
on short-term investments 94,160 (43,632) 39,314
Change in unrealized depreciation of investments
in unconsolidated joint ventures 188,079 5,560,069 147,643
Change in unrealized (appreciation) depreciation of
participation in mortgage loan (172,373) 75,735 199,705
Change in unrealized (appreciation) depreciation
of investment in wholly-owned real estate (308,240) 1,569,754 671,240
Change in other assets 67,708 39,064 (22,419)
Change in payable to IDS Life for operating expenses (5,746) (8,052) (59,412)
Change in accrued mortality and expense risk fee (5,803) (67,688) 58,881
Change in accrued asset management fee (7,253) (84,612) 73,603
Change in payables and other liabilities related
to wholly-owned real estate property (3,795) 7,724 26,324
Total adjustments to net income (loss) (2,202,453) 5,014,174 (917,386)
Net cash used in operating activities (386,036) (747,656) (289,089)

Cash flows from investing activities:
Net sales (purchases) of short-term securities 5,459,869 5,900,549 (113,715)
Capital contribution for participation in mortgage loan - - (71,968)
Capital improvements to wholly-owned real estate
property (24,825) (448,422) (860,960)
Acquisition and mortgage placement fees paid - - (23,922)
Distributions received from joint ventures 1,745,340 1,685,350 1,851,652
Net cash provided by investing activities 7,180,384 7,137,477 781,087

Cash flows from financing activities:
Proceeds from sales of contracts 1,777,709 1,862,285 3,702,475
Payments for contract terminations (8,654,423) (8,060,721) (4,264,677)
Decrease in mortgage payable (67,812) (5,367) -

Net cash used in financing activities (6,944,526) (6,203,803) (562,202)
Net increase (decrease) in cash (150,178) 186,018 (70,204)
Balance of cash at beginning of year 321,420 135,402 205,606
Balance of cash at end of year $ 171,242 $ 321,420 $ 135,402

Supplemental cash flow disclosure:
Cash paid for mortgage interest $ 756,051 $ 759,957 $ 760,000

See accompanying notes to financial statements.
/TABLE
<PAGE>
PAGE 103

IDS LIFE ACCOUNT RE
of
IDS LIFE INSURANCE COMPANY

DECEMBER 31, 1993

NOTES TO FINANCIAL STATEMENTS

1. Organization

IDS Life Account RE (the Account) is a segregated asset account of
IDS Life Insurance Company (IDS Life) under Minnesota law. A
registration statement under the Securities Act of 1933 relative to
the deferred variable annuity contracts (the Contracts) issued by
the Account became effective on August 6, 1987. The assets of the
Account are held for the exclusive benefit of contract owners and
are not chargeable with liabilities arising out of any other
business conducted by IDS Life.

2. Summary of Significant Accounting Policies

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

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

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

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

Investments in Real Property, Mortgage Loans and Land/Sale-
Leasebacks
The Account will initially value real estate related investments at
their cost (including acquisition or mortgage placement fees and
other acquisition or placement expenses) unless circumstances
otherwise indicate that a different value should be used.
Subsequently, the value of these investments will be periodically
determined by JMB Annuity Advisers (the Investment Adviser).
Procedures utilized to determine the value include the following: <PAGE>
PAGE 104
(i) at the time of purchase and once every two years thereafter,
each real property investment will be appraised by an independent
appraiser or an existing appraisal will be updated, (ii) various
assumptions including, but not limited to, occupancy and rental
rates, expense levels, net operating income, average capital costs
and capitalization rates upon sale will be used in determining the
discounted present value of an investment's estimated cash flow and
its estimated sale proceeds or its asset value under a direct
capitalization methodology, and (iii) for fixed interest rate
mortgage loans and fixed rental rate land sale-leaseback
investments, values will be determined by comparison to current
interest rates on U.S. Treasury debt as adjusted for a risk
differential of the Account's investments.

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

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

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

3. Fees and Expenses

The Account pays a mortality and expense risk fee to IDS Life which
is accrued daily and is equal, on an annual basis, to 1.00 percent
of the average daily asset value, as defined, of the Account. The
mortality risk is IDS Life's guarantee to make retirement payments
according to the terms of the Contract, no matter how long
annuitants live. The expense risk portion of the fee is paid to
IDS Life for its guarantee that the various fees paid by the
Account to IDS Life will not be increased in the future. For the
years ended December 31, 1993, 1992 and 1991, the Account paid IDS
Life a mortality and expense risk fee of $549,250, $649,173 and
$708,856, respectively.

The Account also pays IDS Life an asset management fee equal, on an
annual basis, to 1.25 percent of the average daily asset value, as
defined, of the Account. A portion of this fee, equal to 0.95
percent of the average daily asset value, is paid by IDS Life to
the Investment Adviser. The total fee may be adjusted upward to a
maximum of 1.50 percent depending upon the performance of the
Account's real property investments as measured against the FRC
Property Index. The performance-related portion of the fee is
calculated and recorded on an annual basis when the FRC Property
Index is released each year for the preceding calendar year. The
performance fee paid by the Account in 1993 for 1992 was $87,287.
The performance fee paid by the Account in 1992 for 1991 was <PAGE>
PAGE 105
$177,202. The performance fee paid by the Account in 1991 for 1990
was $167,418. Any performance fee adjustment will be paid to the
Investment Adviser. For the years ended December 31, 1993, 1992
and 1991, the Account paid total asset management fees of $773,849,
$988,698, and $1,053,490, respectively.

IDS Life will receive from the Account an acquisition and mortgage
placement fee equal to 3.75 percent of the total cash to be paid or
advanced by the Account (net of any borrowings in the case of real
property investments) in connection with each real property
investment, mortgage loan or land sale-leaseback investment made by
the Account. A portion of this fee, equal to 3.50 percent, will be
paid to the Investment Adviser in consideration for its services in
connection with the acquisition or placement of real estate related
investments of the Account. No acquisition and mortgage placement
fees were paid in 1993 and 1992. The Account paid acquisition and
mortgage placement fees amounting to $23,922 in 1991.

The Account will pay for all operational expenses incurred on
behalf of the Account. For the years ended December 31, 1993, 1992
and 1991, IDS Life was reimbursed $83,122, $65,290, and $5,486,
respectively, for personnel related expenses incurred in the
administration of the Account.

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

Joint Venture Partnership - N/S Associates

IDS Life, on behalf of the Account, entered into a joint venture
partnership called N/S Associates, which on April 4, 1988 acquired
interests in two enclosed super regional shopping malls that are
described below.

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

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

Summary of Real Estate Investments Made Through N/S Associates

Milwaukee, Wisconsin - Northridge Mall

The Account, through N/S Associates, owns an interest in an
existing enclosed super regional shopping center in Milwaukee,
Wisconsin, known as Northridge Mall. The mall shops and four
adjacent department stores comprising the shopping center contain <PAGE>
PAGE 106
approximately 1,053,000 square feet of gross leasable area, of
which N/S Associates owns approximately 399,000 of mall shops
(approximately 388,000 square feet) and storage space
(approximately 11,000 square feet). The remaining 654,000 square
feet of gross leasable area are occupied by four department stores,
three of which own their own stores and a portion of the parking
area. The fourth department store leases its space from an
unaffiliated third party.

N/S Associates acquired its interest in the shopping center in
April 1988 for a purchase price of approximately $108,107,000, of
which $89,653,000 was paid in cash at closing, subject to the
existing mortgage loans with a then outstanding aggregate balance
of approximately $18,454,000. The property is encumbered by two
mortgage loans with outstanding principal balances at December 31,
1993 of approximately $15,631,000 and $371,000, respectively. In
addition to the purchase price, a reserve of $8,900,000 was
established, all of which has been used to pay for certain capital
improvements made at the shopping center.

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

Greendale, Wisconsin - Southridge Mall

The Account, through N/S Associates, owns an interest in an
existing enclosed super regional shopping center in Greendale,
Wisconsin, known as Southridge Mall. The mall shops and five
adjacent department stores comprising the shopping center contain
approximately 1,301,000 square feet of gross leasable area, of
which N/S Associates owns approximately 441,000 square feet,
including the space leased to one of the department stores. The
remaining 860,000 square feet of gross leasable area are occupied
by four other department stores, three of which own their own
stores and a portion of the parking area. The fourth department
store leases its space from an unaffiliated third party.

N/S Associates acquired its interest in the shopping center for a
purchase price of approximately $115,401,000, of which $96,865,000
was paid in cash at closing. The property is encumbered by a first
mortgage loan with an outstanding principal balance at December 31,
1993 of approximately $16,075,000. In addition to the purchase
price, a reserve of approximately $7,250,000 was established for
capital improvements, of which approximately $7,017,000 has been
spent as of December 31, 1993.

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

<PAGE>
PAGE 107
Joint Venture Partnership - Monmouth Associates

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

The terms of Monmouth Associates' partnership agreement provide
that its annual net cash flows and net sales or refinancing
proceeds generally will be distributed among all of the partners in
accordance with their respective percentage interests in Monmouth
Associates. The Account contributed approximately $10,000,000 to
Monmouth Associates as its capital contribution. The percentage
interest of the Account in Monmouth Associates is 6.97 percent. In
connection with the investment, the Account paid to IDS Life and
the Investment Adviser their respective portions of the acquisition
and mortgage placement fee amounting to approximately $375,000.

Summary of Real Estate Investment Made Through Monmouth Associates

Eatontown, New Jersey - Monmouth Mall

The Account, through Monmouth Associates, acquired an interest in
the land underlying a shopping center in Eatontown, New Jersey
known as Monmouth Mall. The mall is located on approximately 104
acres of land, of which Monmouth Associates owns approximately 88.5
acres, subject to the rights of one of the department store tenants
to acquire the land underlying its store and the improvements
thereon for nominal consideration. The remaining acres are owned
by 2 department stores. Monmouth Associates acquired its interest
in the land for a purchase price of approximately $13,000,000 which
was paid in cash at the time of closing.

Monmouth Associates entered into an agreement whereby the land
underlying the mall is leased back to the Borrower/Lessee under a
long-term ground lease. The long-term ground lease, which has a
term of 75 years, provides for monthly base rent aggregating
$780,000 per annum for the first two lease years, $1,040,000 per
annum for the third lease year, and $650,000 per annum for each
lease year thereafter. The long-term ground lease also provides
for contingent rent, payable quarterly out of the excess, if any,
of substantially all of the gross receipts from the shopping center
received by the Borrower/Lessee over certain base amounts, equal to
the sum of (x) a specified annual amount (commencing in the fourth
lease year at $390,000 per annum and increasing in the sixth lease
year to $520,000 per annum), increased until paid at the
"applicable rate" of interest payable under the first leasehold
mortgage loan described below (such amount as so increased herein <PAGE>
PAGE 108
called the "rent shortfall amount"), plus (y) 15 percent of the
balance of such excess gross receipts remaining after deducting the
aggregate amount paid at such time of the rent shortfall amount
under the long-term ground lease and the "interest shortfall
amount" under the first leasehold mortgage loan as described below.

In addition, Monmouth Associates made a first leasehold
participating mortgage loan in the principal amount of $128,920,000
to the Borrower/Lessee which is secured by the leasehold real
estate and the improvements thereon. The loan has a term of 15
years, which may be extended from time to time at the option of
Monmouth Associates for up to an additional 20 years. The loan
provides for monthly payments of base interest at a base rate of
approximately 5.98 percent per annum for the first two loan years,
approximately 7.97 percent per annum for the third loan year and
approximately 5.00 percent per annum for each loan year thereafter.
The first leasehold mortgage also provides for quarterly payments
of contingent interest, payable out of the excess, if any, of
substantially all of the gross receipts from the shopping center
received by the Borrower/Lessee over certain base amounts, equal to
the sum of (x) the difference between the amount of interest
payable on the loan at the "applicable rate" and that payable at
the base rate described above, increased until paid at the
applicable rate (such amount as so increased herein called the
"interest shortfall amount"), plus (y) 45 percent of the balance of
such excess gross receipts remaining after deducting the aggregate
amount paid at such time of the rent shortfall amount under the
ground lease and the interest shortfall amount under the first
leasehold mortgage loan. The "applicable rate" under the loan is
5.98 percent per annum for the first two loan years, 7.97 percent
per annum for the next three loan years and 8.97 percent per annum
for each loan year thereafter. No contingent rent or interest was
accrued as of December 31, 1993 or 1992. In April 1992, Monmouth
Associates discontinued the accrual of contingent interest on the
leasehold mortgage loan as a result of uncertainty as to the
collectibility of such contingent interest in light of the previous
decrease in the estimated value of Monmouth Mall. In addition no
contingent rent was accrued under the ground lease for 1993 or
1992.

Monmouth Associates is obligated to make certain additional loans
to the Borrower/Lessee under certain circumstances to finance the
cost of 60 percent of tenant improvements or other ordinary capital
expenditures. In addition, Monmouth Associates has agreed in
principle to finance the cost of a proposed renovation of the
shopping center. The current plan contemplates the elimination of
certain outparcels, the addition of a food court and cinema, and
the reconfiguration of a former anchor tenant's space into smaller
tenant spaces. It is expected that the costs of the renovation
would be financed by a loan from Monmouth Associates that would
bear interest at a fixed interest rate of 10.5 percent per annum.
In addition, Monmouth Associates' participation in certain levels
of sale or refinancing proceeds from the property would be
increased until Monmouth Associates had received aggregate payments
equal to an internal rate of return of 11 percent per annum on its <PAGE>
PAGE 109
original investments in the first leasehold mortgage loan and
ground lease. The amount of financing for the renovation is
currently estimated to be $28,500,000, which would be provided by
additional capital contributions made pro rata based upon the
respective interests of the joint venture partners in Monmouth
Associates. The renovation plan and its proposed financing are
subject to various conditions, and there is no assurance that
either will be finalized or will be on the terms described.

Joint Venture - 1225 Connecticut Avenue, N.W.

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

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

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

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

The Corporation purchased 1225 Connecticut from the seller for a
purchase price of approximately $54,125,000, consisting of
$51,425,000 paid in cash and assumption of approximately $2,700,000
of mortgage indebtedness then encumbering the property. The
Corporation paid approximately $2,130,000 for real estate brokerage
commissions to an independent third party and certain closing
costs. In addition, the Corporation has established a reserve in
the amount of approximately $1,500,000 for working capital and
certain possible capital improvements to the property, including <PAGE>
PAGE 110
removal of asbestos from the building. The Account contributed
$9,000,000 for its interest in the Corporation. The Account has
also paid acquisition fees amounting to $337,500.

At December 31, 1993, the current outstanding balance of the
mortgage loan encumbering the property was approximately
$1,695,000. The mortgage loan bears interest at a rate of 6.50
percent per annum and requires monthly payments of principal and
interest aggregating approximately $426,300 per annum, until
maturity of the loan in March 1998. In January 1994 the
Corporation refinanced its mortgage loan with a first mortgage loan
in the principal amount of $7,000,000 bearing interest at a rate of
6.98 percent per annum. The new loan requires monthly payments of
interest only aggregating $488,600 per annum until maturity in
February 2001 when the principal amount together with accrued
interest will be due and payable. Under certain circumstances, the
principal amount of the loan may be prepaid in whole (but not in
part), subject to a prepayment premium. Pursuant to the deed of
trust securing the mortgage loan, the Corporation is prohibited
from modifying Ernst & Young's primary lease or from entering into
certain other tenant leases without the lender's consent. Prior to
selling the property or encumbering the property with any
additional debt, the Corporation must obtain the consent of the
lender, which may be arbitrarily withheld. However, subject to
certain restrictions, the Corporation has a one-time right to
transfer title to the property together with an assumption of the
mortgage loan. An affiliate of the Investment Adviser has entered
into a management agreement under which it is obligated to manage
1225 Connecticut, collect all of the receipts from operations and,
to the extent available from such receipts, pay all of the expenses
of 1225 Connecticut. The manager is paid a fee equal to 2.5
percent of the gross revenues of 1225 Connecticut, plus
reimbursement for certain direct expenses of the manager.

Pursuant to a lease currently in effect, an unaffiliated third
party leases and operates the entire parking garage (subject to
certain parking rights provided for tenants of the property) until
November 1997. The lease provides for a fixed rent payment of
$485,000 a year (which reflects an increase at the end of 1993 from
$430,000 a year), provides that the lessee shall pay the operating
expenses of the parking garage and does not provide such lessee
with an option to extend the term of the lease.

Unconsolidated Joint Ventures - Summary Information

Summary information for the Account of its investments in
Unconsolidated Joint Ventures for the years ended December 31, 1993
and 1992 is as follows:
<PAGE>
PAGE 111
<TABLE><CAPTION>

Year ended Year ended
Dec. 31, 1993 Dec. 31, 1992
____________________________________________________________________________________________
<S> <C> <C>
Account's investment in Unconsolidated Joint Ventures $ 28,769,085 $ 28,605,415

Account's share of net investment income from
Unconsolidated Joint Ventures $ 2,097,089 $ 2,072,715

Net depreciation in Unconsolidated Joint Ventures $ (188,079) $ (5,560,069)

Total net investment income of Unconsolidated
Joint Ventures $ 25,638,000 $ 28,099,000

Total assets of Unconsolidated Joint Ventures $414,148,000 $422,403,000

Total liabilities of Unconsolidated Joint Ventures $ 44,602,000 $ 47,264,000
____________________________________________________________________________________________
</TABLE>

Participation in Mortgage Loan - Riverpoint Associates

Chicago, Illinois - Riverpoint Center

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

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

The ten-year loan requires periodic payments of interest only and
bears basic interest at the rate of 8.84 percent per annum in the
first loan year, 8.75 percent per annum during the second loan
year, increasing 0.50 percent per annum in the fourth and 0.25
percent per annum in the seventh loan year to a maximum rate of
9.50 percent per annum, payable monthly in advance. The loan also
provides for additional annual simple accrual of interest at the
rate of 2.00 percent per annum payable upon prepayment or maturity.
For financial reporting purposes, commencing in August of 1991, the
Account suspended recognition of income related to the simple
accrual interest (deferred until maturity). The loan also provides
for additional interest in an amount equal to a percentage of <PAGE>
PAGE 112
annual gross income from the underlying property (exclusive of
tenant reimbursement of expenses) in excess of a base amount and,
on sale or repayment of the loan, an amount equal to a percentage
of the subsequent increase in the value of the underlying property
in excess of a specified amount. Such amounts of additional
interest payments made by the Borrower will be used to offset, on a
dollar-for-dollar basis, the amount of accrued interest payable.
The loan is generally non-recourse to the Borrower and its
partners.

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

5. Investments in Wholly-owned Real Estate Property

Fairfax County, Virginia - West Springfield Terrace Apartments

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

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

The Account paid $15,222,278 for the apartment complex in cash at
closing, excluding closing costs and prorations. In connection
with the acquisition of the property, the Account paid a prepayment
charge at closing of $92,221 to the lender that held the mortgage
loan on the property. The Account also paid to IDS Life and the
Investment Adviser their respective portions of the acquisition fee
amounting to $274,834. At the time of the acquisition it was
anticipated that an additional amount of approximately $1,450,000
would be used by the Account to pay the cost of upgrading kitchens
and bathrooms and certain other upgrades and capital improvements
at the complex. The renovation project was subsequently increased
to include replacing certain carpets in units as they are renovated
and to increase the number of units that received certain upgrades.
The renovation project was completed during 1992 at an aggregate
cost of approximately $1,900,000. To date the Account has paid IDS
Life and the Investment Adviser their respective portions of the
acquisition fee amounting to $18,000 in connection with the
renovation project.

In November 1989, the Account obtained a loan from an institutional
lender in the principal amount of $8,000,000 secured by a first
mortgage on the property. At December 31, 1993, the current
balance of the mortgage loan encumbering the property was
approximately $7,927,000. The loan has a term of seven years and
bears interest at a rate of 9.50 percent per annum. The loan
required monthly payments of interest only during the first three
loan years and thereafter is amortizable over a 27-year schedule
through monthly payments of principal and interest aggregating <PAGE>
PAGE 113
$824,400 per annum through the end of the seventh loan year when
the remaining principal balance and any accrued and unpaid interest
of approximately $7,690,000 are due and payable.

The apartment complex is being managed by an affiliate of the
Investment Adviser for a fee equal to 5.00 percent of the gross
revenues from the property, plus reimbursement of certain direct
expenses of the manager.

6. Subsequent Event

In March 1994 the Account obtained a revolving line of credit for
up to $10 million from IDS Life to pay for contract surrenders and
other obligations under the Contracts. The line of credit is for a
one-year term and is automatically renewed at each anniversary for
an additional one-year term subject to termination by one party
giving 30 days' prior written notice of termination to the other
party. Borrowings under the line of credit must be made in
increments (or multiples) of $100,000. Outstanding borrowings
under the line of credit will bear interest at a floating rate
equal to the 30-day London Interbank Offered Rate (LIBOR), adjusted
on a monthly basis. The line of credit requires monthly payments
of interest only until the earlier of maturity or termination of
the line of credit, when the entire outstanding principal plus any
accrued and unpaid interest on the line of credit will be due and
payable. Outstanding principal may be repaid in whole or in part
in increments (or multiples) of $100,000, together with any accrued
and unpaid interest thereon, at any time without premium or
penalty. Borrowings under the line of credit are generally
unsecured, although IDS Life will have a right of set off against
any deposits or credits of the Account held by IDS Life for
outstanding borrowings.
<PAGE>
PAGE 114

Independent Auditors' Report

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

We have audited the accompanying financial statements of N/S
Associates, an unconsolidated joint venture of IDS Life Account RE
(Note 1), as listed in the accompanying index. These financial
statements are the responsibility of the Investment Adviser. Our
responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by the Investment Adviser, 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 N/S
Associates at December 31, 1993 and 1992 and the results of its
operations and its cash flows for each of the three years ended
December 31, 1993, in conformity with generally accepted accounting
principles.

As discussed in Note 1, the financial statements include real
estate investments stated at fair values which have been estimated
by the Investment Adviser. Such fair value estimates involve
subjective judgments and the actual market price of real estate can
only be determined by negotiation between independent third parties
in a sales transaction.

KPMG PEAT MARWICK
Chicago, Illinois
March 18, 1994
<PAGE>
PAGE 115
<TABLE><CAPTION>
IDS LIFE ACCOUNT RE
OF IDS LIFE INSURANCE COMPANY
N/S Associates, An Unconsolidated Joint Venture of IDS Life Account RE

Balance Sheets

December 31, 1993 and 1992

Assets
1993 1992
<S> <C> <C>

Investments in real estate owned . . . . . . . . . . . . . . . . $209,168,000 215,726,000

Cash and cash equivalents (note 1) . . . . . . . . . . . . . . . 1,784,000 918,000
Short-term investments . . . . . . . . . . . . . . . . . . . . . 4,435,000 7,824,000
Rents and other receivables. . . . . . . . . . . . . . . . . . . 1,980,000 2,582,000
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . 136,000 120,000
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . $217,503,000 227,170,000

</TABLE>
<TABLE><CAPTION>

Liabilities and Partners' Capital Accounts
<S> <C> <C>
Mortgage notes payable (note 3). . . . . . . . . . . . . . . . . $ 32,077,000 33,130,000
Accounts payable and other accrued expenses. . . . . . . . . . . 9,286,000 10,691,000
Due to affiliates (note 5) . . . . . . . . . . . . . . . . . . . 93,000 103,000
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . 41,456,000 43,924,000

Partners' capital accounts (notes 1 and 2):
IDS Life Account RE:
Capital contributions. . . . . . . . . . . . . . . . . . . . . 12,008,000 12,008,000
Cumulative net investment income . . . . . . . . . . . . . . . 4,436,000 3,630,000
Cumulative share of unrealized depreciation. . . . . . . . . . (2,395,000) (1,874,000)
Cumulative cash distributions. . . . . . . . . . . . . . . . . (3,646,000) (2,935,000)
10,403,000 10,829,000

Venture partners:
Capital contributions. . . . . . . . . . . . . . . . . . . . . 191,081,000 191,081,000
Cumulative net investment income . . . . . . . . . . . . . . . 69,927,000 57,130,000
Cumulative share of unrealized depreciation. . . . . . . . . . (38,047,000) (29,766,000)
Cumulative cash distributions. . . . . . . . . . . . . . . . . (57,317,000) (46,028,000)
165,644,000 172,417,000

Total partners' capital accounts . . . . . . . . . . . . . . . . 176,047,000 183,246,000
Commitments and contingencies (notes 2 and 4)
Total liabilities and partners' capital accounts . . . . . . . . $217,503,000 227,170,000

See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 116
<TABLE><CAPTION>
IDS LIFE ACCOUNT RE
OF IDS LIFE INSURANCE COMPANY
N/S Associates, An Unconsolidated Joint Venture of IDS Life Account RE

Statements of Operations

Years Ended December 31, 1993, 1992 and 1991

1993 1992 1991

<S> <C> <C> <C>
Investment income:
Rental income . . . . . . . . . . . . . . $32,662,000 34,183,000 31,166,000
Interest. . . . . . . . . . . . . . . . . 174,000 465,000 565,000
Total investment income. . . . . . . . . . 32,836,000 34,648,000 31,731,000

Investment expenses
Mortgage and other interest . . . . . . . 2,860,000 2,949,000 3,030,000
Real estate taxes . . . . . . . . . . . . 7,858,000 7,704,000 7,416,000
Property operating expenses . . . . . . . 8,438,000 7,849,000 8,017,000
General and administrative. . . . . . . . 77,000 52,000 71,000
Total investment expenses. . . . . . . . . 19,233,000 18,554,000 18,534,000

Net investment income. . . . . . . . . . . $13,603,000 16,094,000 13,197,000

Unrealized depreciation on investments
in real estate (note 1) . . . . . . . . . $(8,802,000) (31,201,000) (22,304,000)

See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 117
<TABLE><CAPTION>
IDS LIFE ACCOUNT RE
OF IDS LIFE INSURANCE COMPANY
N/S Associates, An Unconsolidated Joint Venture of IDS Life Account RE

Statements of Partners' Capital Accounts

Years Ended December 31, 1993, 1992 and 1991

IDS Life Venture
Account RE Partners
<S> <C> <C>
Capital contributions. . . . . . . . . . . . . . . . . . . . . . $13,773,000 219,187,000

Net investment income. . . . . . . . . . . . . . . . . . . . . . 782,000 12,415,000
Unrealized depreciation on investments
in real estate . . . . . . . . . . . . . . . . . . . . . . . . (1,321,000) (20,983,000)
Cash distributions . . . . . . . . . . . . . . . . . . . . . . . (770,000) (12,230,000)

Balance at December 31, 1991 . . . . . . . . . . . . . . . . . . 12,464,000 198,389,000

Net investment income. . . . . . . . . . . . . . . . . . . . . . 953,000 15,141,000
Unrealized depreciation on investments
in real estate . . . . . . . . . . . . . . . . . . . . . . . . (1,848,000) (29,353,000)
Cash distributions . . . . . . . . . . . . . . . . . . . . . . . (740,000) (11,760,000)

Balance at December 31, 1992 . . . . . . . . . . . . . . . . . . 10,829,000 172,417,000

Net investment income. . . . . . . . . . . . . . . . . . . . . . 806,000 12,797,000
Unrealized depreciation on investments
in real estate . . . . . . . . . . . . . . . . . . . . . . . . (521,000) (8,281,000)
Cash distributions . . . . . . . . . . . . . . . . . . . . . . . (711,000) (11,289,000)

Balance at December 31, 1993 . . . . . . . . . . . . . . . . . . $10,403,000 165,644,000

See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 118
<TABLE><CAPTION>
IDS LIFE ACCOUNT RE
OF IDS LIFE INSURANCE COMPANY
N/S Associates, An Unconsolidated Joint Venture of IDS Life Account RE

Statements of Cash Flows

Years Ended December 31, 1993, 1992 and 1991

1993 1992 1991
<S> <C> <C> <C>
Cash flows from operating activities:
Net investment income . . . . . . . . . . $13,603,000 16,094,000 13,197,000
Adjustments to reconcile net investment
income to net cash provided by operating
activities represented by changes in:
Rents and other receivables. . . . . . . 602,000 (803,000) 1,071,000
Other assets . . . . . . . . . . . . . . (16,000) (10,000) (49,000)
Accounts payable and accrued expenses (1,405,000) (1,149,000) 336,000
Due to affiliates. . . . . . . . . . . . (10,000) (18,000) (67,000)

Net cash provided by operating activities. 12,774,000 14,114,000 14,488,000

Cash flows from investing activities:
Net sales of short-term investments. . . 3,389,000 1,113,000 1,139,000
Additions to investments in real estate (2,244,000) (1,537,000) (1,682,000)

Net cash provided by (used in)
investing activities. . . . . . . . . . 1,145,000 (424,000) (543,000)

Cash flows from financing activities:
Principal payments on mortgages payable (1,053,000) (965,000) (883,000)
Cash distributions to partners. . . . . . (12,000,000) (12,500,000) (13,000,000)

Net cash used in financing activities . . (13,053,000) (13,465,000) (13,883,000)

Net increase in cash and cash
equivalents . . . . . . . . . . . . . . $ 866,000 225,000 62,000

Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest $ 2,868,000 2,956,000 3,037,000
Non-cash investing and financing activities:
Unrealized depreciation on
investments in real estate . . . . . $(8,802,000) (31,201,000) (22,304,000)

See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 119

IDS LIFE ACCOUNT RE
OF IDS LIFE INSURANCE COMPANY
N/S Associates, An Unconsolidated Joint Venture of
IDS Life Account RE

Notes to Financial Statements

1. Organization and Basis of Accounting

The accompanying financial statements have been prepared for the
purpose of complying with Rule 3.09 of Regulation S-X of the
Securities and Exchange Commission.

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

The venture has implemented Statement of Accounting Standards No.
95 "Statement of Cash Flows" which classifies receipts and payments
according to whether they stem from operating, investing or
financing activities. The venture records amounts held in U.S.
Government obligations at cost, which approximates market. For the
purposes of these statements, the venture's policy is to consider
all such amounts held with original maturities of three months or
less ($794,000 and $0 at December 31, 1993 and 1992, respectively)
as cash equivalents with any remaining amounts reflected as short-
term investments.

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

No provision for State or Federal income taxes has been made as the
liability for such taxes, if any, is expected to be that of the
venture partners rather than the venture.

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

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

Statement of Financial Accounting Standards No. 107 ("SFAS
107"), "Disclosures about Fair Value of Financial Instruments",
requires entities with total assets exceeding $150 million at
December 31, 1993 to disclose the SFAS 107 value of all financial
assets and liabilities for which it is practicable to estimate.
Value is defined in the Statement as the amount at which the
instrument could be exchanged in a current transaction between
willing parties, other than in a forced or liquidation sale. The
venture believes the carrying amount of its current assets and
liabilities (excluding current portion of long-term debt)
approximates SFAS 107 value due to the relatively short maturity of
<PAGE>
PAGE 120
IDS LIFE ACCOUNT RE
OF IDS LIFE INSURANCE COMPANY
N/S Associates, An Unconsolidated Joint Venture of
IDS Life Account RE

Notes to Financial Statements - (Continued)

these instruments. There is no quoted market value available for
any of the venture's other instruments. Based upon estimates of
current market rates for debt with similar terms, the venture
discounted the scheduled loan payments to maturity. Based upon
this calculation, the venture believes that the carrying value of
the mortgage notes payable approximates market value.

Certain reclassifications have been made to the 1992 and 1991
financial statements to conform with the 1993 presentation.

2. Venture Agreements

A description of the venture agreement is contained in Note
4 of Notes to Financial Statements of the Account for the year
ended December 31, 1993. Such note is incorporated herein by
reference.

3. Mortgage Notes Payable

Mortgage notes payable consist of the following at December
31, 1993 and 1992:
<TABLE><CAPTION>

1993 1992
<S> <C> <C>
9.125% mortgage note, secured by Northridge Mall; payable
in monthly installments of principal and interest of
$165,000 until January 1, 2008, at which time the loan
will be fully paid $15,631,000 16,154,000

10% mortgage note, secured by Northridge Mall; payable
in monthly installments of principal and interest of
$4,000 until October 1, 2012, at which time the loan
will be fully paid 371,000 377,000

8.42% mortgage note, secured by Southridge Mall; payable
in monthly installments of principal and interest of
$158,000 until October 1, 2008, at which time the loan
will be fully paid 16,075,000 16,599,000

Total mortgage notes payable $32,077,000 33,130,000
</TABLE>

Five year maturities of mortgage notes payable are as follows:

1994 . . . . . . . . . . .$1,149,000
1995 . . . . . . . . . . . 1,254,000
1996 . . . . . . . . . . . 1,369,000
1997 . . . . . . . . . . . 1,494,000
1998 . . . . . . . . . . . 1,631,000

<PAGE>
PAGE 121
IDS LIFE ACCOUNT RE
OF IDS LIFE INSURANCE COMPANY
N/S Associates, An Unconsolidated Joint Venture of
IDS Life Account RE

Notes to Financial Statements - (Continued)

4. Leases - As Property Lessor

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

Minimum lease payments, including amounts representing executory
costs (e.g. taxes, maintenance, insurance), and any related profit
in excess of the specific reimbursements, to be received in the
future under the above operating lease agreements, are as follows:

1994 $15,917,000
1995 15,805,000
1996 14,972,000
1997 13,679,000
1998 11,233,000
Thereafter 28,165,000

$99,771,000

Contingent rent (based on sales by property tenants) from the
shopping center investments included in rental income is
$1,000,000, $1,224,000 and $1,146,000 in 1993, 1992 and 1991,
respectively.

5. Related Party Transactions

The venture has entered into a management agreement with JMB
Properties Company ("Manager"), an affiliate of JMB Annuity
Advisers. The Manager is entitled to receive a fee of 3.75% of
gross receipts from the activities of the malls. Management fees
earned by the Manager are included in property operating expenses
and aggregated approximately $1,186,000, $1,209,000 and $1,237,000
for the periods ended December 31, 1993, 1992 and 1991,
respectively. Unpaid management fees approximated $93,000 and
$103,000 at December 31, 1993 and 1992, respectively.

6. Subsequent Events

On February 15, 1994, cash flow from operations was distributed to
the partners in the aggregate amount of $3,000,000. Each partner
received its proportionate share based on its respective ownership
percentage.

<PAGE>
PAGE 122
IDS Life Financial Information

The Financial statements shown below are those of the insurance
company and not those of the Account. They are included in the
prospectus for the purpose of informing investors as to the
financial condition of the insurance company and its ability to
carry out its obligations under the variable annuity contracts.
<TABLE><CAPTION>
IDS Life Insurance Company

Consolidated Balance Sheets Dec. 31, 1993 Dec. 31, 1992
<S> <C> <C>
Assets (Thousands)
______________________________________________________________________________________________________________________________
Investments
Fixed maturities (Fair value: 1993, $20,425,979; 1992, $17,896,374) $19,392,424 $17,185,879
Mortgage loans on real estate (Fair value: 1993, $2,125,686; 1992, $1,785,970) 2,055,450 1,688,490
Policy loans 350,501 320,016
Other investments 56,307 51,955
______________________________________________________________________________________________________________________________
Total investments 21,854,682 19,246,340
______________________________________________________________________________________________________________________________
Cash and cash equivalents 146,281 73,563
Receivables:
Reinsurance 55,298 -
Amounts due from brokers 5,719 20,202
Other accounts receivable 21,459 20,095
Premiums due 1,329 1,361
______________________________________________________________________________________________________________________________
Total receivables 83,805 41,658
______________________________________________________________________________________________________________________________
Accrued investment income 307,177 285,120
Deferred policy acquisition costs 1,652,384 1,440,875
Other assets 21,730 18,672
Assets held in segregated asset accounts, primarily common stocks at market 8,991,694 6,189,545
______________________________________________________________________________________________________________________________
Total assets $33,057,753 $27,295,773
______________________________________________________________________________________________________________________________
Liabilities and Stockholder's Equity
______________________________________________________________________________________________________________________________
Liabilities:
Fixed annuities - future policy benefits $18,492,135 $16,342,419
Universal life-type insurance - future policy benefits 2,753,455 2,567,687
Traditional life-type insurance - future policy benefits 210,205 210,886
Disability income, health and long-term care insurance - future policy benefits 185,272 104,896
Policy claims and other policyholders' funds 44,516 49,899
Deferred federal income taxes 43,620 87,913
Amounts due to brokers 351,486 258,654
Other liabilities 292,024 235,509
Liabilities related to segregated asset accounts 8,991,694 6,189,545
______________________________________________________________________________________________________________________________
Total liabilities 31,364,407 26,047,408
______________________________________________________________________________________________________________________________
Stockholder's equity:
Capital stock, $30 per value per share; 100,000 shares authorized, issued and outstanding 3,000 3,000
Additional paid-in capital 222,000 22,000
Net unrealized appreciation on equity securities 114 214
Retained earnings 1,468,232 1,223,151
______________________________________________________________________________________________________________________________
Total stockholder's equity 1,693,346 1,248,365
______________________________________________________________________________________________________________________________
Total liabilities and stockholder's equity $33,057,753 $27,295,773
Commitments and contingencies (Note 6)
______________________________________________________________________________________________________________________________
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
PAGE 123
<TABLE><CAPTION>
Consolidated Statements of Income Years ended Dec. 31,
1993 1992 1991
<S> <C> <C> <C>
(Thousands)
__________________________________________________________________________________________________________________________________
Revenues:
Premiums
Traditional life insurance $ 48,137 $ 49,719 $ 49,706
Disability income and long-term care insurance 79,108 64,660 52,632
__________________________________________________________________________________________________________________________________
127,245 114,379 102,338
Policyholder and contractholder charges 184,205 156,368 137,202
Management and other fees 120,139 84,591 61,142
Net investment income 1,783,219 1,616,821 1,422,866
Net loss on investments (6,737) (3,710) (5,837)
__________________________________________________________________________________________________________________________________
Total revenues 2,208,071 1,968,449 1,717,711
__________________________________________________________________________________________________________________________________
Benefits and expenses
Death and other benefits - traditional life insurance 32,136 34,139 30,170
Death and other benefits - universal life-type insurance
and investment contracts 49,692 42,174 38,529
Death and other benefits - disability income, health and
long-term care insurance 13,148 10,701 8,242
Increase (decrease) in liabilities for future policy benefits -
traditional life insurance (4,513) (5,788) (6,425)
Increase (decrease) in liabilities for future policy benefits -
disability income, health and long-term care insurance 32,528 27,172 19,700
Interest credited on universal life-type insurance and investment contracts 1,218,647 1,188,379 1,098,281
Amortization of deferred policy acquisition costs 211,733 140,159 116,078
Other insurance and operating expenses 241,974 215,692 153,669
__________________________________________________________________________________________________________________________________
Total benefits and expenses 1,795,345 1,652,628 1,458,244
__________________________________________________________________________________________________________________________________
Income before income taxes 412,726 315,821 259,467
Income taxes 142,647 104,651 77,430
__________________________________________________________________________________________________________________________________
Net income $ 270,079 $ 211,170 $ 182,037
__________________________________________________________________________________________________________________________________
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
PAGE 124
<TABLE><CAPTION>
Consolidated Statements of Cash Flows Years ended Dec. 31,
1993 1992 1991
(Thousands)
__________________________________________________________________________________________________________________________________
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 270,079 $ 211,170 $ 182,037
Adjustments to reconcile net income to net cash provided by operating activities:
Issuance - policy loans, excluding universal life-type insurance (35,886) (32,881) (29,309)
Repayment - policy loans, excluding universal life-type insurance 29,557 26,750 19,928
Change in reinsurance receivable (55,298) - -
Change in other accounts receivable (1,364) (4,772) (1,558)
Change in accrued investment income (22,057) (15,853) (26,022)
Change in deferred policy acquisition costs, net (211,509) (229,252) (175,442)
Change in liabilities for future policy benefits for traditional life, disability
income, health and long-term care insurance 79,695 21,384 13,275
Change in policy claims and other policyholders' funds (5,383) (1,347) 11,801
Change in deferred federal income taxes (44,237) (30,385) (29,207)
Change in other liabilities 56,515 88,997 45,323
Amortization of premium (accretion of discount), net (27,438) (4,289) 19,726
Net loss on investments 6,737 3,710 5,837
Premiums related to universal life-type insurance 397,883 312,621 264,504
Surrenders and death benefits related to universal life-type insurance (255,133) (166,162) (109,307)
Interest credited to account balances related to universal life-type insurance 156,885 161,873 160,585
Policyholder and contractholder charges, non-cash (115,140) (100,975) (96,211)
Other, net (1,907) (10,647) 2,258
__________________________________________________________________________________________________________________________________
Net cash provided by operating activities $ 221,999 $ 229,942 $ 258,218
__________________________________________________________________________________________________________________________________
Cash flows from investing activities:
Acquisition of investments, excluding policy loans $(7,102,546) $(7,001,348) $(5,518,481)
Maturities, sinking fund payments and calls of investments, excluding policy loans 3,931,819 2,700,479 838,589
Sale of investments, excluding policy loans 613,571 1,073,950 2,274,401
Change in amounts due from brokers 14,483 289,335 (134,312)
Change in amounts due to brokers 92,832 42,182 72,382
__________________________________________________________________________________________________________________________________
Net cash used in investing activities (2,449,841) (2,895,402) (2,467,421)
__________________________________________________________________________________________________________________________________
Cash flows from financing activities:
Considerations received related to investment contracts 2,843,668 2,821,069 2,316,333
Surrenders and death benefits related to investment contracts (1,765,869) (1,168,633) (871,808)
Interest credited to account balances related to investment contracts 1,071,917 1,026,506 937,696
Issuance - universal life-type insurance policy loans (70,304) (72,007) (76,010)
Repayment - universal life-type insurance policy loans 46,148 40,351 31,860
Capital contribution from parent 200,000 - -
Cash dividend to parent (25,000) (20,000) (20,000)
__________________________________________________________________________________________________________________________________
Net cash provided by financing activities 2,300,560 2,627,286 2,318,071
__________________________________________________________________________________________________________________________________
Net increase (decrease) in cash and cash equivalents 72,718 (38,174) 108,868
Cash and cash equivalents at beginning of year 73,563 111,737 2,869
__________________________________________________________________________________________________________________________________
Cash and cash equivalents at end of year $ 146,281 $ 73,563 $ 111,737
__________________________________________________________________________________________________________________________________
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
PAGE 125
Notes to Consolidated Financial Statements ($ Thousands)
Dec. 31, 1993, 1992, 1991

1. Summary of significant accounting policies

Nature of business
IDS Life Insurance Company (the Company) is engaged in the
insurance and annuity business. The Company sells various forms of
fixed and variable individual life insurance, group life insurance,
individual and group disability income insurance, long-term care
insurance, and single and installment premium fixed and variable
annuities.

Basis of presentation
The Company is a wholly owned subsidiary of IDS Financial
Corporation (IDS), which is a wholly owned subsidiary of American
Express Company. The accompanying consolidated financial
statements include the accounts of the Company and its wholly owned
subsidiaries, IDS Life Insurance Company of New York and American
Enterprise Life Insurance Company. All material intercompany
accounts and transactions have been eliminated in consolidation.

The accompanying consolidated financial statements have been
prepared in conformity with generally accepted accounting
principles which vary in certain respects from reporting practices
prescribed or permitted by state insurance regulatory authorities.
Also, the consolidated financial statements are presented on a
historical cost basis without adjustment of the net assets
attributable to the 1984 acquisition of IDS by American Express
Company.

Investments
Investments in fixed maturities are carried at cost, adjusted where
appropriate for amortization of premiums and accretion of
discounts. Mortgage loans on real estate are carried principally
at the unpaid principal balances of the related loans. Policy
loans are carried at the aggregate of the unpaid loan balances
which do not exceed the cash surrender values of the related
policies. Other investments include interest rate caps, real
estate and equity securities. When evidence indicates a decline,
which is other than temporary, in the underlying value or earning
power of individual investments, such investments are written down
to the estimated realizable value by a charge to income. Equity
securities are carried at market value and the related net
unrealized appreciation or depreciation is reported as a credit or
charge to stockholder's equity.

The Company has the ability and the intent to recover the costs of
these investments by holding them for the foreseeable future. The
ability to hold investments to scheduled maturity dates is
dependent on, among other things, annuity contract owners
maintaining their annuity contracts in force.

The Company will implement, effective January 1, 1994, Statement of
Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." Under the new rules,
debt securities that the Company has both the positive intent and
ability to hold to maturity will be carried at amortized cost.
Debt securities that the Company does not have the positive intent <PAGE>
PAGE 126
1. Summary of significant accounting policies (continued)

and ability to hold to maturity and all marketable equity
securities will be classified as available-for-sale and carried at
fair value. Unrealized gains and losses on securities classified
as available-for-sale will be carried as a separate component of
stockholder's equity. The effect of the new rules will be to
increase stockholder's equity by approximately $181 million, net of
taxes, as of January 1, 1994, but the new rules will have no
material impact on the Company's results of operations.

Realized investment gain or loss is determined on an identified
cost basis.

Interest rate cap contracts are purchased to reduce the Company's
exposure to rising interest rates which would increase the cost of
future policy benefits for interest sensitive products. Costs
are amortized over the lives of the agreements and benefits are
recognized when realized.

Prepayments are anticipated on certain investments in
mortgage-backed securities in determining the constant effective
yield used to recognize interest income. Prepayment estimates
are based on information received from brokers who deal in
mortgage-backed securities.

Statement of cash flows
The Company considers investments with a maturity at the date of
their acquisition of three months or less to be cash equivalents.
These securities are carried principally at amortized cost which
approximates fair value.

Supplementary information to the consolidated statement of cash
flows for the years ended Dec. 31 is summarized as follows:

1993 1992 1991
___________________________________________________________________
Cash paid during the year for:
Income taxes $188,204 $140,445 $111,809
Interest on borrowings 2,661 1,265 108
___________________________________________________________________

Recognition of profits on annuity contracts and insurance policies

The Company issues single premium deferred annuity contracts that
provide for a service fee (surrender charge) at annually decreasing
rates upon withdrawal of the annuity accumulation value by the
contract owner. No sales fee is deducted from the contract
considerations received on these contracts ("no load" annuities).
Single premium deferred annuities issued prior to 1980 had a sales
fee and no surrender charge. All of the Company's single premium
deferred annuity contracts provide for crediting the contract
owners' accumulations at specified rates of interest. Such rates
are revised by the Company from time to time based on changes in
the market investment yield rates for fixed-income securities.

Profits on single premium deferred annuities and installment
annuities are recognized by the Company over the lives of the
contracts and represent the excess of investment income earned<PAGE>
PAGE 127
1. Summary of significant accounting policies (continued)

from investment of contract considerations over interest credited
to contract owners and other expenses.

The retrospective deposit method is used in accounting for
universal life-type insurance. This method recognizes profits over
the lives of the policies in proportion to the estimated gross
profits expected to be realized.

Premiums on traditional life, disability income, health and
long-term care insurance policies are recognized as revenue when
collected or due, and related benefits and expenses are associated
with premium revenue in a manner that results in recognition of
profits over the lives of the insurance policies. This association
is accomplished by means of the provision for future policy
benefits and the deferral and subsequent amortization of policy
acquisition costs.

Deferred policy acquisition costs
The costs of acquiring new business, principally sales
compensation, policy issue costs, underwriting and certain sales
expenses, have been deferred on insurance and annuity contracts.
The deferred acquisition costs for single premium deferred
annuities and installment annuities are amortized based upon
surrender charge revenue and a portion of the excess of investment
income earned from investment of the contract considerations over
the interest credited to contract owners. The costs for universal
life-type insurance are amortized over the lives of the policies as
a percentage of the estimated gross profits expected to be
realized on the policies. For traditional life, disability income,
health and long-term care insurance policies, the costs are
amortized over an appropriate period in proportion to premium
revenue.

Liabilities for future policy benefits
Liabilities for universal life-type insurance, single premium
deferred annuities and installment annuities are accumulation
values.

Liabilities for fixed annuities in a benefit status are based on
the Progressive Annuity Table with interest at 5 percent, the 1971
Individual Annuity Table with interest at 7 percent or 8.25
percent, or the 1983a Table with various interest rates ranging
from 5.5 percent to 9.5 percent, depending on year of issue.

Liabilities for future benefits on traditional life insurance have
been computed principally by the net level premium method, based on
anticipated rates of mortality (approximating the 1965-1970 Select
and Ultimate Basic Table for policies issued after 1980 and the
1955-1960 Select and Ultimate Basic Table for policies issued prior
to 1981), policy persistency derived from Company experience data
(first year rates ranging from approximately 70 percent to 90
percent and increasing rates thereafter), and estimated future
investment yields of 4 percent for policies issued before 1974 and
5.25 percent for policies issued from 1974 to 1980. Cash value
plans issued in 1980 and later assume future investment rates that
grade from 9.5 percent to 5 percent over 20 years. Term insurance
<PAGE>
PAGE 128
1. Summary of significant accounting policies (continued)

issued from 1981 to 1984 assumes an 8 percent level investment rate
and term insurance issued after 1984 assumes investment rates that
grade from 10 percent to 6 percent over 20 years.

Liabilities for future disability income policy benefits have been
computed principally by the net level premium method, based on the
1964 Commissioners Disability Table with the 1958 Commissioners
Standard Ordinary Mortality Table at 3 percent interest for 1980
and prior, 8 percent interest for persons disabled from 1981 to
1991 and 6 percent interest for persons disabled after 1991.

Liabilities for future benefits on long-term care insurance have
been computed principally by the net level premium method, using
morbidity rates based on the 1985 National Nursing Home Survey and
mortality rates based on the 1983a Table. The interest rate basis
is 9.5 percent grading to 7 percent over ten years for policies
issued from 1989 to 1992, 7.75 percent grading to 7 percent over
four years for policies issued after 1992, 8 percent for claims
incurred in 1989 to 1991 and 6 percent for claims incurred after
1991.

At Dec. 31, 1993 and 1992, the carrying amount and fair value of
fixed annuities future policy benefits, after excluding life
insurance-related contracts carried at $913,127 and $834,909, were
$17,579,008 and $15,507,510, and $16,881,747 and $14,867,066,
respectively. The fair value is net of policy loans of $59,132 and
$51,394 at Dec. 31, 1993 and 1992, respectively. The fair value of
these benefits is based on the status of the annuities at Dec. 31,
1993 and 1992. The fair value of deferred annuities is estimated
as the carrying amount less any surrender charges and related
loans. The fair value for annuities in non-life contingent payout
status is estimated as the present value of projected benefit
payments at the rate appropriate for contracts issued in 1993 and
1992.

Reinsurance
The maximum amount of life insurance risk retained by the Company
on any one life is $750 of life and waiver of premium benefits plus
$50 of accidental death benefits. The maximum amount of disability
income risk retained by the Company on any one life is $6 of
monthly benefit for benefit periods longer than three years. The
excesses are reinsured with other life insurance companies on a
yearly renewable term basis. Graded premium whole life policies
and long term care are primarily reinsured on a coinsurance basis.

In 1993 the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 113, "Accounting and Reporting for Reinsurance
of Short-Duration and Long-Duration Contracts." Under SFAS No.
113, amounts paid or deemed to have been paid for reinsurance
contracts are recorded as reinsurance receivables. Prior to 1993,
these amounts were recorded as a reduction of the liability for
future insurance policy benefits. The cost of reinsurance is
accounted for over the period covered by the reinsurance contract.

Federal income taxes
The Company's taxable income is included in the consolidated
<PAGE>
PAGE 129
1. Summary of significant accounting policies (continued)

federal income tax return of American Express Company. The Company
provides for income taxes on a separate return basis, except that,
under an agreement between IDS and American Express Company, tax
benefit is recognized for losses to the extent they can be used on
the consolidated tax return. It is the policy of IDS and its
subsidiaries that IDS will reimburse a subsidiary for any tax
benefit.

Included in other liabilities at Dec. 31, 1993 and 1992 are $14,709
and $18,181, respectively, payable to IDS for federal income taxes.

Segregated asset account business
The segregated asset account assets and liabilities represent funds
held for the exclusive benefit of the variable annuity and variable
life insurance contract owners. The Company receives investment
management and mortality and expense assurance fees from the
variable annuity and variable life insurance mutual funds and
segregated asset accounts. The Company also deducts a monthly cost
of insurance charge and receives a minimum death benefit guarantee
fee and issue and administrative fee from the variable life
insurance segregated asset accounts.

The Company makes contractual mortality assurances to the variable
annuity contract owners that the net assets of the segregated asset
accounts will not be affected by future variations in the actual
life expectancy experience of the annuitants and the beneficiaries
from the mortality assumptions implicit in the annuity contracts.
The Company makes periodic fund transfers to, or withdrawals from,
the segregated asset accounts for such actuarial adjustments for
variable annuities that are in the benefit payment period. The
Company guarantees, for the variable life insurance policyholders,
the cost of the contractual insurance rate and that the death
benefit will never be less than the death benefit at the date of
issuance.

At Dec. 31, 1993 and 1992 the fair value of liabilities related to
segregated asset accounts was $8,305,209 and $5,727,402,
respectively. The fair value of these liabilities at Dec. 31, 1993
and 1992 is estimated as the carrying amount less variable
insurance contracts carried at $346,276 and $226,946, respectively,
and surrender charges, if applicable.

Reclassification
Certain 1992 and 1991 amounts have been reclassified to conform to
the 1993 presentation.

2. Investments

Market values of investments in fixed maturities represent quoted
market prices and estimated fair values when quoted prices are not
available. Estimated fair values are determined by established
procedures involving, among other things, review of market indices,
price levels of current offerings of comparable issues, price
estimates and market data from independent brokers and financial
files.
<PAGE>
PAGE 130
2. Investments (continued)

Net gain (loss) on investments for the years ended Dec. 31 is
summarized as follows:
<TABLE><CAPTION>
1993 1992 1991
________________________________________________________________________________________________
<S> <C> <C> <C>
Fixed maturities $ 5,460 $ 14,474 $ 22,750
Mortgage loans (11,422) (5,004) (1,064)
Other investments (6,606) (8,265) (5,695)
________________________________________________________________________________________________
(12,568) 1,205 15,991
Net (increase) decrease in allowance for losses 5,831 (4,915) (21,828)
________________________________________________________________________________________________
$ (6,737) $ (3,710) $ (5,837)
________________________________________________________________________________________________

Changes in net unrealized appreciation
(depreciation) of investments for the years
ended Dec. 31 are summarized as follows:

1993 1992 1991
________________________________________________________________________________________________
Fixed maturities $323,060 $(128,683) $861,355
Equity securities (156) 300 418
________________________________________________________________________________________________

Fair values of and gross unrealized gains
and losses on investments in fixed maturities
carried at amortized cost at Dec. 31 are as follows:

Gross Gross
Amortized Unrealized Unrealized Fair
1993 Cost Gains Losses Value
________________________________________________________________________________________________
U.S. Government agency obligations $ 63,532 $ 3,546 $ 1,377 $ 65,701
State and municipal obligations 11,072 2,380 - 13,452
Corporate bonds and obligations 9,362,074 768,747 45,706 10,085,115
Mortgage-backed securities 9,978,523 341,067 57,879 10,261,711
________________________________________________________________________________________________
19,415,201 1,115,740 104,962 20,425,979
Less allowance for losses 22,777 - 22,777 -
________________________________________________________________________________________________
$19,392,424 $1,115,740 $ 82,185 $20,425,979
________________________________________________________________________________________________

Gross Gross
Amortized Unrealized Unrealized Fair
1992 Cost Gains Losses Value
________________________________________________________________________________________________
U.S. Government agency obligations $ 36,753 $ 3,658 $ 4 $ 40,407
State and municipal obligations 11,234 1,542 - 12,776
Corporate bonds and obligations 7,688,190 431,781 104,707 8,015,264
Mortgage-backed securities 9,487,601 377,539 37,213 9,827,927
________________________________________________________________________________________________
17,223,778 814,520 141,924 17,896,374
Less allowance for losses 37,899 - 37,899 -
________________________________________________________________________________________________
$17,185,879 $ 814,520 $104,025 $17,896,374
________________________________________________________________________________________________

The amortized cost and fair value of investments in fixed maturities at Dec. 31, 1993 by
contractual maturity are shown below. Expected maturities will differ from contractual
maturities because borrowers may have the right to call or prepay obligations with or without
call or prepayment penalties.
Amortized Fair
Cost Value
________________________________________________________________________________________________
Due in one year or less $ 89,160 $ 90,928
Due from one to five years 1,430,756 1,532,298
Due from five to ten years 5,488,955 5,924,580
Due in more than ten years 2,427,807 2,616,462
Mortgage-backed securities 9,978,523 10,261,711
________________________________________________________________________________________________
$19,415,201 $20,425,979
/TABLE
<PAGE>
PAGE 131
2. Investments (continued)

Proceeds from sales of investments in fixed maturities during 1993
and 1992 were $482,523 and $996,619, respectively. During 1993 and
1992, gross gains of $48,499 and $94,915, respectively, and gross
losses of $43,039 and $80,441, respectively, were realized on those
sales.

At Dec. 31, 1993, the amount of net unrealized appreciation on
equity securities included $160 of gross unrealized appreciation,
$nil of gross unrealized depreciation and deferred tax credits of
$46. At Dec. 31, 1992, the amount of net unrealized appreciation
on equity securities included $328 of gross unrealized
appreciation, $12 of gross unrealized depreciation and deferred tax
credits of $102. The fair value of equity securities was $1,900
and $2,005 at Dec. 31, 1993 and 1992, respectively.

Included in other investments at Dec. 31, 1993 are interest rate
caps at amortized cost of $26,923 with a fair value of $14,201.
These interest rate caps carry a notional amount of $4,400,000 and
expire on various dates from 1994 to 1998.

At Dec. 31, 1993, bonds carried at $4,184 were on deposit with
various states as required by law.

Net investment income for the years ended Dec. 31 is summarized as
follows:
<TABLE><CAPTION>
1993 1992 1991
______________________________________________________________________________________
<S> <C> <C> <C>
Interest on fixed maturities $1,589,802 $1,449,234 $1,279,317
Interest on mortgage loans 175,063 148,693 122,723
Other investment income 29,345 24,281 20,005
Interest on cash equivalents 2,137 5,363 8,729
______________________________________________________________________________________
1,796,347 1,627,571 1,430,774
Less investment expenses 13,128 10,750 7,908
______________________________________________________________________________________
$1,783,219 $1,616,821 $1,422,866
______________________________________________________________________________________
</TABLE>
At Dec. 31, 1993, investments in fixed maturities comprised 89
percent of the Company's total invested assets. These securities
are rated by Moody's and Standard & Poor's (S&P), except for
approximately $2.1 billion which is rated by IDS internal analysts
using criteria similar to Moody's and S&P. A summary of
investments in fixed maturities by rating on Dec. 31 is as follows:
<TABLE><CAPTION>
Dec. 31, Dec. 31,
Rating 1993 1992
________________________________________________________________________
<S> <C> <C>
Aaa/AAA $ 9,959,884 $ 9,480,345
Aa/AA 258,659 219,370
Aa/A 160,638 109,806
A/A 2,021,177 1,735,750
A/BBB 654,949 447,592
Baa/BBB 3,936,366 3,352,192
Baa/BB 717,606 392,361
Below investment grade 1,705,922 1,486,362
________________________________________________________________________
$19,415,201 $17,223,778
________________________________________________________________________
/TABLE
<PAGE>
PAGE 132
2. Investments (continued)
At Dec. 31, 1993, 99 percent of the securities rated Aaa/AAA are
GNMA, FNMA and FHLMC mortgage-backed securities. No holdings of
any other issuer are greater than 1 percent of the Company's total
investments in fixed maturities.

At Dec. 31, 1993, approximately 9.4 percent of the Company's
invested assets were mortgage loans on real estate. Summaries of
mortgage loans by region of the United States and by type of real
estate at Dec. 31, 1993 and 1992 are as follows:
<TABLE><CAPTION>
Dec. 31, 1993 Dec. 31, 1992
On Balance Commitments On Balance Commitments
Region Sheet to Purchase Sheet to Purchase
______________________________________________________________________________________
<S> <C> <C> <C> <C>
East North Central $ 552,150 $ 20,933 $ 484,808 $ 21,728
West North Central 361,704 16,746 357,388 14,327
South Atlantic 452,679 52,440 320,593 32,022
Middle Atlantic 260,239 41,090 188,294 56,816
New England 155,214 17,620 114,170 24,677
Pacific 120,378 15,492 89,636 5,148
West South Central 43,948 525 46,296 716
East South Central 73,748 - 83,994 10,085
Mountain 70,410 14,594 26,906 8,882
______________________________________________________________________________________
2,090,470 179,440 1,712,085 174,401
Less allowance for losses 35,020 - 23,595 -
______________________________________________________________________________________
$2,055,450 $179,440 $1,688,490 $174,401
______________________________________________________________________________________
Dec. 31, 1993 Dec. 31, 1992
On Balance Commitments On Balance Commitments
Property type Sheet to Purchase Sheet to Purchase
______________________________________________________________________________________
Apartments $ 744,788 $ 79,153 $ 541,855 $ 70,198
Department/retail stores 624,651 65,402 504,331 74,671
Office buildings 234,042 15,583 327,216 12,950
Industrial buildings 217,648 9,279 203,361 15,150
Nursing/retirement homes 83,768 917 56,431 716
Hotels/motels 33,138 - 34,631 716
Medical buildings 30,429 5,954 23,006 -
Residential 78 - 6,618 -
Other 121,928 3,152 14,636 -
______________________________________________________________________________________
2,090,470 179,440 1,712,085 174,401
Less allowance for losses 35,020 - 23,595 -
______________________________________________________________________________________
$2,055,450 $179,440 $1,688,490 $174,401
______________________________________________________________________________________
</TABLE>
Mortgage loan fundings are restricted by state insurance regulatory
authorities to 80 percent or less of the market value of the real
estate at the time of origination of the loan. The Company holds
the mortgage document, which gives the right to take possession of
the property if the borrower fails to perform according to the
terms of the agreement. The fair value of the mortgage loans is
determined by a discounted cash flow analysis using mortgage
interest rates currently offered for mortgages of similar
maturities. Commitments to purchase mortgages are made in the
ordinary course of business. The fair value of the mortgage
commitments is $nil.

3. Income taxes

The Company qualifies as a life insurance company for federal
income tax purposes. As such, the Company is subject to the
Internal Revenue Code provisions applicable to life insurance
companies.<PAGE>
PAGE 133
3. Income taxes (continued)

The income tax expense consists of the following:
<TABLE><CAPTION>
1993 1992 1991
_______________________________________________________________________________
Federal income taxes:
<S> <C> <C> <C>
Current $180,558 $130,998 $104,292
Deferred (44,237) (30,385) (29,207)
_______________________________________________________________________________
136,321 100,613 75,085
State income taxes-Current 6,326 4,038 2,345
_______________________________________________________________________________
Income tax expense $142,647 $104,651 $ 77,430
_______________________________________________________________________________
</TABLE>
Increases (decreases) to the federal tax provision applicable to
pre-tax income based on the statutory rate are attributable to:
<TABLE><CAPTION>

1993 1992 1991
_________________________________________________________________________________________________________
Provision Rate Provision Rate Provision Rate
_________________________________________________________________________________________________________
<S> <C> <C> <C>
Federal income taxes based on
the statutory rate $144,454 35.0% $107,379 34.0% $88,219 34.0%
Increases (decreases) are attributable to:
Tax-excluded interest and dividend income (11,002) (2.7) (8,209) (2.6) (9,496) (3.7)
Other, net 2,869 0.7 1,443 0.4 (3,638) (1.4)
_________________________________________________________________________________________________________
Federal income taxes $136,321 33.0% $100,613 31.8% $75,085 28.9%
_________________________________________________________________________________________________________
</TABLE>
A portion of life insurance company income earned prior to 1984 was
not subject to current taxation but was accumulated, for tax
purposes, in a "policyholders' surplus account." At Dec. 31, 1993,
the Company had a policyholders' surplus account balance of
$19,032. The policyholders' surplus account is only taxable if
dividends to the stockholder exceed the stockholder's surplus
account or if the Company is liquidated. Deferred income taxes of
$6,661 have not been established because no distributions of such
amounts are contemplated.

Significant components of the Company's deferred tax assets and
liabilities as of Dec. 31 are as follows:
<TABLE><CAPTION>
Deferred tax assets: 1993 1992
______________________________________________________________________________________
<S> <C> <C>
Policy reserves $453,436 $356,712
Life insurance guarantee fund assessment reserve 35,000 21,794
______________________________________________________________________________________
Total deferred tax assets 488,436 378,506
______________________________________________________________________________________

Deferred tax liabilities:
______________________________________________________________________________________
Deferred policy acquisition costs 509,868 446,579
Investments 10,105 2,435
Other 12,083 17,405
______________________________________________________________________________________
Total deferred tax liabilities 532,056 466,419
______________________________________________________________________________________
Net deferred tax liabilities $ 43,620 $ 87,913
______________________________________________________________________________________
/TABLE
<PAGE>
PAGE 134
4. Stockholder's equity

Retained earnings available for distribution as dividends to parent
are limited to the Company's surplus as determined in accordance
with accounting practices prescribed by state insurance regulatory
authorities. Statutory unassigned surplus aggregated $922,246 as
of Dec. 31, 1993 and $685,103 as of Dec. 31, 1992 (see Note 3 with
respect to the income tax effect of certain distributions). In
addition, any dividend distributions in 1994 in excess of
approximately $259,063 would require approval of the Department of
Commerce of the State of Minnesota.

Statutory net income for 1993, 1992 and 1991 and stockholder's
equity as of Dec. 31, 1993, 1992 and 1991 are summarized as
follows:
<TABLE><CAPTION>
1993 1992 1991
___________________________________________________________________________________
<S> <C> <C> <C>
Statutory net income $ 275,015 $180,296 $200,704
Statutory stockholder's equity 1,157,022 714,942 551,939
___________________________________________________________________________________

Dividends paid to IDS were $25,000 in 1993, $20,000 in 1992 and
$20,000 in 1991.

5. Related party transactions

The Company has loaned funds or agreed to loan funds to IDS under
two separate loan agreements. The balance of the first loan was
$75,000 and $nil at Dec. 31, 1993 and 1992, respectively. This
loan can be increased to a maximum of $100,000 and pays interest at
a rate equal to the preceding month's effective new money rate for
the Company's permanent investments. It is collateralized by
equities valued at $96,790 at Dec. 31, 1993. The second loan was
used to fund the construction of the IDS Operations Center. This
loan had an outstanding balance of $84,588 and $85,278 at Dec. 31,
1993 and 1992, respectively. The loan is secured by a first lien
on the IDS Operations Center property and has an interest rate of
9.89 percent. The Company also has a loan to an affiliate which
was used to fund construction of the IDS Learning Center. At Dec.
31, 1993 and 1992, the balance outstanding was $22,573 and $22,755,
respectively. The loan is secured by a first lien on the IDS
Learning Center property and has an interest rate of 9.82 percent.

Interest income on the above loans totaled $11,116, $10,711 and
$14,783 in 1993, 1992 and 1991, respectively.

The Company purchased a five year secured note from an affiliated
company which had an outstanding balance of $27,222 and $31,111 at
Dec. 31, 1993 and 1992, respectively. The note bears a market
interest rate, revised semi-annually, which at Dec. 31, 1993 was
8.42 percent.

The Company has a reinsurance agreement whereby it assumed 100
percent of a block of single premium life insurance business from
an affiliated company. The accompanying consolidated balance sheet
at Dec. 31, 1993 and 1992 includes $759,714 and $746,060,
respectively, of future policy benefits related to this agreement.
<PAGE>
PAGE 135
5. Related party transactions (continued)

The accompanying consolidated statement of income includes revenue
from policyholder charges of $21, $109 and $243, and expenses of
$4,931, $5,897 and $6,445 related to this agreement for 1993, 1992
and 1991, respectively.

The Company has a reinsurance agreement to cede 50 percent of its
long-term care insurance business to an affiliated company. The
accompanying consolidated balance sheet at Dec. 31, 1993 includes
$44,086 of reinsurance receivables related to this agreement.
Liabilities for future policy benefits were reduced by $27,028 at
Dec. 31, 1992 for the effect of this agreement. Premiums ceded
amounted to $16,230, $12,499 and $6,365 and reinsurance recovered
from reinsurers amounted to $404, $250 and $187 for the years ended
Dec. 31, 1993, 1992 and 1991, respectively.

The Company participates in the retirement plan of IDS which covers
all permanent employees age 21 and over who have met certain
employment requirements. The benefits are based on the number of
years the employee participates in the plan, their final average
monthly salary, the level of social security benefits the employee
is eligible for and the level of vesting the employee has earned in
the plan. IDS' policy is to fund retirement plan costs accrued
subject to ERISA and federal income tax considerations. The
Company's share of the total net periodic pension cost was $nil in
1993, 1992 and 1991.

The Company also participates in defined contribution pension plans
of IDS which cover all employees who have met certain employment
requirements. Company contributions to the plans are a percent of
either each employee's eligible compensation or basic
contributions. Costs of these plans charged to operations in 1993,
1992 and 1991 were $2,008, $1,826 and $1,682, respectively.

The Company participates in defined benefit health care plans of
IDS that provide health care and life insurance benefits to retired
employees and retired financial planners. The plans include
participant contributions and service-related eligibility
requirements. Upon retirement, such employees are considered to
have been employees of IDS. IDS expenses these benefits and
allocates the expenses to its subsidiaries. Accordingly, costs of
such benefits to the Company are included in employee compensation
and benefits and cannot be identified on a separate company basis.

Charges by IDS for use of joint facilities and other services
aggregated $243,346, $204,675 and $174,500 for 1993, 1992 and 1991,
respectively. Certain of these costs are included in deferred
policy acquisition costs. In addition, the Company rents its home
office space from IDS on an annual renewable basis. Such rentals
aggregated $4,513, $4,074 and $3,469 for 1993, 1992 and 1991,
respectively.

Certain commission and marketing services expenses are allocated to
the Company by its affiliates. The expenses for 1993, 1992 and
1991 were $127,000, $110,064 and $95,367, respectively. Certain of
the costs assessed to the Company are included in deferred policy
acquisition costs.
<PAGE>
PAGE 136
6. Commitments and contingencies

At Dec. 31, 1993 and 1992, traditional life insurance and universal
life-type insurance in force aggregated $46,125,515 and
$40,904,345, respectively, of which $3,038,426 and $2,937,590 were
reinsured at the respective year ends. The Company also reinsures
a portion of the risks assumed under disability income policies.
Under the agreements, premiums ceded to reinsurers amounted to
$28,276, $24,222 and $16,908 and reinsurance recovered from
reinsurers amounted to $3,345, $6,766 and $6,447 for the years
ended Dec. 31, 1993, 1992 and 1991.

Reinsurance contracts do not relieve the Company from its primary
obligation to policyholders.

The Company is a defendant in various lawsuits, none of which, in
the opinion of the Company counsel, will result in a material
liability.

The Company received the revenue agent's report for the tax years
1984 through 1986 in February 1992, and has settled on all agreed
audit issues. The Company will protest the remaining open issues
and, while the outcome of the appeal is not known at this time,
management does not believe there will be any material impact as a
result of this audit.

7. Lines of credit

The Company has available lines of credit with two banks
aggregating $75,000 at 45 to 80 basis points over the banks' cost
of funds or equal to the prime rate, depending on which line of
credit agreement is used. Borrowings outstanding under these
agreements were $1,519 and $nil at Dec. 31, 1993 and 1992,
respectively.

8. Segment information

The Company's operations consist of two business segments; first,
individual and group life insurance, disability income, health and
long-term care insurance, and second, annuity products designed for
individuals, pension plans, small businesses and employer-sponsored
groups. The consolidated statement of income for the years ended
Dec. 31, 1993, 1992 and 1991 and total assets at Dec. 31, 1993,
1992 and 1991 by segment are summarized as follows:
<PAGE>
PAGE 137
8. Segment information (continued)

</TABLE>
<TABLE><CAPTION>
1993 1992 1991
___________________________________________________________________________________________________________
Net investment income:
<S> <C> <C> <C>
Life, disability income, health and long-term care insurance $ 250,224 $ 246,676 $ 233,828
Annuities 1,532,995 1,370,145 1,189,038
___________________________________________________________________________________________________________
$ 1,783,219 $ 1,616,821 $ 1,422,866
___________________________________________________________________________________________________________
Premiums and other considerations:
Life, disability income and long-term care insurance $ 281,284 $ 250,386 $ 220,754
Annuities 143,876 104,952 79,928
___________________________________________________________________________________________________________
$ 425,160 $ 355,338 $ 300,682
___________________________________________________________________________________________________________
Income before income taxes:
Life, disability income, health and long-term care insurance $ 104,127 $ 96,215 $ 90,050
Annuities 315,336 223,316 175,254
Net loss on investments (6,737) (3,710) (5,837)
___________________________________________________________________________________________________________
$ 412,726 $ 315,821 $ 259,467
___________________________________________________________________________________________________________
Total assets:
Life, disability income, health and long-term care insurance $ 4,810,145 $ 4,093,778 $ 3,670,197
Annuities 28,247,608 23,201,995 18,888,612
___________________________________________________________________________________________________________
$33,057,753 $27,295,773 $22,558,809
___________________________________________________________________________________________________________
</TABLE>
Allocations of net investment income and certain general expenses
are based on various assumptions and estimates.

Assets are not individually identifiable by segment and have been
allocated principally based on the amount of future policy benefits
by segment.

Capital expenditures and depreciation expense are not material, and
consequently, are not reported.
<PAGE>
PAGE 138

Report of Independent Auditors

The Board of Directors
IDS Life Insurance Company

We have audited the accompanying consolidated balance sheets of IDS
Life Insurance Company (a wholly owned subsidiary of IDS Financial
Corporation) as of December 31, 1993 and 1992, and the related
consolidated statements of income and cash flows for each of the
three years in the period ended December 31, 1993. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial
position of IDS Life Insurance Company at December 31, 1993 and
1992, and the consolidated results of its operations and its cash
flows for each of the three years in the period ended December 31,
1993, in conformity with generally accepted accounting principles.

Ernst & Young
Minneapolis, Minnesota
February 3, 1994
<PAGE>
PAGE 139

1994 PROSPECTUS

Real Estate Variable Annuity

__________________________________________________________________

IDS Life Insurance Company
IDS Tower 10
Minneapolis, Minnesota 55440-0010

<PAGE>