TMP INLAND EMPIRE IV LTD
10-K, 1998-03-30
REAL ESTATE
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<PAGE>   1

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                               ------------------


                                    FORM 10-K

(Mark One)

[X]     Annual report pursuant to Section 13 or 15 (d) of the Securities
        Exchange Act of 1934 (Fee Required)
               For the fiscal year ended December 31, 1997

[ ]     Transition report pursuant to Section 13 or 15 (d) of the Securities
        Exchange act of 1934 (No Fee Required). 
               For the transition from _________to____________

                                -----------------

                           COMMISSION FILE NO. 0-19933


                           TMP INLAND EMPIRE IV, LTD.,
                        A CALIFORNIA LIMITED PARTNERSHIP
             (Exact name of registrant as specified in its charter)

CALIFORNIA                                                       33-0341829
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

801 N. PARKCENTER DRIVE, SUITE 235                                 92705
SANTA ANA, CALIFORNIA                                            (Zip Code)
(Address of principal executive office)


                                 (714) 836-5503
              (Registrant's telephone number, including area code)

                              --------------------

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

Title of each class                               Name of each exchange on which
to be so registered                               each class is to be registered
- -------------------                               ------------------------------
       N/A                                                       N/A

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


                      UNITS OF LIMITED PARTNERSHIP INTEREST
                                (Title of Class)

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



<PAGE>   2

                                     PART I


ITEM 1(A). BUSINESS

INTRODUCTION

        TMP INLAND EMPIRE IV, LTD., a California Limited Partnership (the
"Partnership"), is a California limited partnership formed in June, 1989, of
which TMP Investments, Inc., a California corporation, and TMP Properties, a
California general partnership, are the General Partners (the "General
Partners"). The Partnership was formed to acquire, from nonaffiliated person,
parcels of unimproved real property (the "Properties") located primarily in
Riverside and San Bernardino Counties, California. Some of the Properties are or
will be planned, zoned and mapped for single family residential purposes, while
others are or will be planned, zoned and mapped for commercial or industrial
uses. Actions by the Partnership to obtain the desired general/specific plan,
zoning and parcel/tract map changes by or approvals of governmental entities,
and to subdivide and site plan, are commonly referred to as "pre-development."

        The Properties will be held for investment, appreciation, and ultimate
sale and/or improvement of all or a portion thereof either alone or in
conjunction with a joint venture partner. If the Properties or portions thereof
are developed, the Partnership intends to hold and manage the same for the
production of income until such time that they determine a sale would be in the
best interest of he Partnership and its limited partners (the "Limited
Partners"). Upon the sale of the last Property, the payment of all debts and the
distribution of any remaining proceeds, less necessary reserves, to those
persons entitled thereto pursuant to the Partnership's Agreement of Limited
Partnership (the "Partnership Agreement"), the Partnership will be dissolved.

        TMP Inland Empire IV. Ltd., a California Limited Partnership, has been
formed under the Revised Limited Partnership Act of the State of California. The
rights and obligations of the Partners in the Partnership are governed by the
Partnership's Agreement of Limited Partnership (the "Partnership Agreement").
The following statements concerning the Partnership Agreement are qualified in
their entirety by reference to the Partnership Agreement, which is being filed
as an Exhibit to this Form 10K.

        DESCRIPTION OF LIMITED PARTNERSHIP UNITS. The Partnership Agreement
authorizes the issuance and sale of Limited Partnership Units for all cash in
multiples of $1,000 per Unit. A total of 8,500 Limited Partnerships Units are
outstanding and it is not anticipated that any additional Limited Partnership
Units will be issued in the future. Outstanding Units are fully paid and
nonassessable.


                                       2
<PAGE>   3

        THE RESPONSIBILITIES OF THE GENERAL PARTNERS. The General Partners have
the exclusive management and control of all aspects of the business of the
Partnership. In the course of their management, the General Partners may, in
their absolute discretion, acquire, mortgage, encumber, hold title to, pledge,
sell, release, or otherwise dispose of real property and interests therein when
and upon such terms as they determine to be in the best interest of the
Partnership and employ such persons, including, under certain circumstances,
Affiliates of the General Partners, as they deem necessary for the efficient
operation of the Partnership. It is provided, however, that the Limited Partners
holding, in aggregate, more than 50% of the then outstanding Units must consent
to the sale of substantially all of the assets of the Partnership other than a
sale occurring in the ordinary course of the Partnership's business. The General
Partners shall receive only such compensation as is provided in the Partnership
Agreement.

        LIABILITIES OF LIMITED PARTNERS/NONASSESSABILITY OF INTERESTS. A Limited
Partner's capital contributed to the Partnership is subject to the risks of the
Partnership's business. Except as specifically provided in the Partnership
Agreement, he is not permitted to take any part in the management or control of
the business and he may not be assessed for additional capital contributions.
Assuming that the Partnership is operated in accordance with the terms of the
Partnership Agreement, a Limited Partner will not be liable for the liabilities
of the Partnership in excess of his capital contribution and share of his
undistributed profits. Notwithstanding the foregoing, a Limited Partner is
liable for any Distributions made to him if, after such Distributions, the
remaining assets of the Partnership are not sufficient to pay its then
outstanding liabilities, exclusive of liabilities of Limited Partners on account
of their contributions, and liabilities for which recourse is limited to
specific Partnership assets.

        The Partnership Agreement provides that the Limited Partners shall not
be bound by, or be personally liable for, the expenses, liabilities, or
obligations of the Partnership.

        TERM AND DISSOLUTION. The Partnership will continue for a maximum period
ending December 31, 2019, but may be dissolved at an earlier date, if certain
contingencies occur. Prior to dissolution, Limited Partners may not withdraw
from the Partnership but may, under certain circumstances, assign their Units to
others. (See "Transferability of Units," below.) The contingencies whereby the
Partnership may be dissolved are as follows:

        1.      The withdrawal, adjudication of bankruptcy, dissolution, or
                death of a General Partner, unless the remaining General Partner
                agrees to continue the business of the Partnership, or if there
                is no remaining General Partner, all the Limited Partners agree
                to continue the business of the Partnership electing, by
                unanimous consent, one or more new General Partners to continue
                the Partnership's

        2.      A Majority Vote of the total outstanding Units in favor of
                dissolution and termination of the Partnership; or

                                       3
<PAGE>   4

        3.      The removal of a General Partner, unless the remaining General
                Partner agrees to continue the business of the Partnership, or
                if there is no remaining General Partner, a majority of the
                Limited Partners agree to continue the business of the
                Partnership and elect, by a Majority Vote of the total
                outstanding Units, one or more new General Partners to continue
                the Partnership business.

        VOTING RIGHTS OF LIMITED PARTNERS. The voting rights of the Limited
Partners are set forth in Section 6 of the Partnership Agreement. The Limited
Partners have the right to vote upon the following matters affecting the basic
structure of the Partnership:

        1.      Amendment of the Partnership Agreement (except for amendments
                which do not affect the rights of the Limited Partners);

        2.      Removal of a General Partner;

        3.      Admission of a General Partner;

        4.      The sale of all, or a substantial part, of the assets of the
                Partnership other than in the ordinary course of business;

        5.      The election to continue the business of the Partnership and the
                appointment of a successor General Partner after the withdrawal,
                adjudication of bankruptcy, death or dissolution of the sole
                remaining General Partner;

        6.      The election to continue the business of the Partnership and
                appointment of a successor General Partner after the removal of
                the sole remaining General Partner, or

        7.      Termination and dissolution of the Partnership, other than after
                sale of all of the Properties and receipt of all amounts due on
                any seller carryback financing.

        A majority Vote of the Limited Partnership shall be required for the
matters set forth above to pass and become effective, except for the matters
specified in Item 5, which shall require the unanimous consent of the Limited
Partners.

        The General Partners may at any time call a meeting of the Limited
Partners or for a vote, without a meeting, of the Limited Partners on matters on
which they are entitled to vote, and shall call for such meeting or vote
following receipt of written request therefor of Limited Partners holding 10% or
more of the total outstanding Units.

        Each Limited Partnership Unit shall have equal voting rights.

                                       4
<PAGE>   5

        TRANSFERABILITY OF UNITS. Holders of Units shall have the right to
assign one or more whole Units by written instrument the terms of which are not
in contravention of any of the provisions of the Partnership Agreement.

        An assignee of record shall be entitled to receive Distributions from
the Partnership attributable to the Units acquired by reason of such assignment
from and after the effective date of the assignment of such Units to him;
however, the Partnership and the General Partners shall be entitled to treat the
assignor of such Units as the absolute owner thereof in all respects, and shall
incur no liability for allocations of Net Income, Net Loss, or Distributions, or
transmittal of reports and notices required to be given to Limited Partners
which made in good faith to such assignor until such time as written instrument
of assignment has been received by the Partnership and recorded on its books.
The effective date of an assignment of Units (of which assignment the
Partnership has actual notice) on which the Assignee shall be deemed an Assignee
of record shall not be later than the first day of the fiscal quarter following
the date set forth on the written instrument of assignment.

        Any assignment, sale, exchange or other transfer in contravention of any
of the provisions of the Partnership Agreement shall be void and ineffectual,
and shall not bind or be recognized by the Partnership.

        An Assignee may only be substituted as a Limited Partner in the place of
the assignor Limited Partner with the prior consent of the General Partners. Any
substituted Limited Partner must agree to be bound by the provisions of the
Partnership Agreement.

        BOOKS AND RECORDS. At all times during the term of the Partnership, the
General Partners will keep true and accurate books of account of all the
financial activities of the Partnership. These books of account are kept open
for inspection by the Limited Partners or their representatives at any
reasonable time. The General Partners may make such elections for federal and
state income tax purposes as they deem appropriate and the fiscal year of the
Partnership is the calendar year unless changed by the General Partners with the
consent of the Commissioner of Internal Revenue.

DISTRIBUTIONS, NET INCOME AND NET LOSS

        ALLOCATION OF NET INCOME AND NET LOSS FROM OPERATIONS. Until such time
that all Limited Partners have received allocations of Net income from the
Partnership equal to a 6% cumulative, but not compounded, preferred return on
adjusted Capital Contributions (the "Preferred Return"), Net Income shall be
allocated 99% to all Limited Partnership Units, which will be further allocated
among such Units on a pro rata basis, and 1% to the General Partners. Until such
time that all Limited Partners have received Distributions equal to their
Capital Contributions plus their Preferred Return, Net Losses shall be allocated
99% to all Limited Partnership Units, allocated among them on a pro rata basis,
and 1% to the General Partners. Thereafter, Partnership Net Income, Net Loss,
and all items of Partnership deduction and credit shall be allocated 15% to the
General Partners and 85% to all Limited Partners, pro rata, according to the
number of Units owned. The foregoing allocations are subject to certain
requirements of the Internal Revenue Code of 1986, as amended (the "Code"), as
set forth in Section 4.5 of the Partnership Agreement.

                                       5
<PAGE>   6

        ALLOCATION OF PROFITS AND LOSSES ON SALES OF PROPERTY. Profits and
Losses on Sales of Property are allocated as set forth in Section 4.5(f) and
4.5(g), respectively, of the Partnership Agreement.

        DISTRIBUTIONS. Distributions of Distributable Cash from Operations, if
any, will be made annually within 90 days after the end of the Partnership's
fiscal year and shall be allocated 99% to the Limited Partners and 1% to the
General Partners until the Limited Partners have received cumulative
Distributions in an amount equal to their Capital Contributions plus their
unpaid Preferred Return, after which time Distributions of Distributable Cash
from Operations shall be allocated 85% to the Limited Partners and 15% to the
General Partners. Except for Distributions on Dissolution described in Section
8.2 of the Partnership Agreement, Distributions of Cash from Sale or Refinancing
of Partnership Properties shall be distributed to the Partners at such times as
the General Partners shall determine in the same manner as Distributions of
Distributable Cash from Operations. The General Partners have the right to
refuse Cash from the Sale of Refinancing of Partnership Properties to pay seller
financed debt without making a Distribution to Partners; provided, however, that
sufficient funds, if available, shall be distributed to the Limited Partners to
pay any resulting state or federal income tax, assuming that all such Limited
Partners are in a 28% tax bracket.

INVESTMENT OBJECTIVES; RISKS

        In general, the investment objectives of the Partnership may be
summarized as follows:

        (a)     Preservation and return of the Partners' capital.

        (b)     Capital appreciation.

        (c)     Added value through pre-development activity (zoning,
                subdivision, site planning, engineering).

        (d)     Cash flow after return of capital.

        (e)     Minimization of risk by maintaining minimum partnership debt.

        The General Partners are, at all times, guided by a policy of realizing
profit intended to result in gain for the Limited Partners upon ultimate
disposition of the Properties. There can, however, be no assurance or guarantee
that the decisions made by the General Partners will result in the realization
of any profit.

                                       6
<PAGE>   7

        The Partnership is subject to the risks generally incident to the
ownership of real estate, including the uncertainty of cash flow to meet fixed
or variable obligation; adverse changes in national economic conditions; changes
in the investment climate for real estate investment; lack of geographic
diversification; adverse changes in local market conditions, such as changes in
the supply of, or demand for competing properties in an area; changes in
interest rates and the availability of permanent mortgage funds, which may
render the sale or refinancing of a property difficult or unattractive; changes
in real estate tax rate and other operating expenses, governmental rules
(including, without limitations, zoning laws and fiscal policies); known and
unknown environmental conditions on the property and acts of God that may result
in uninsured losses (including, without limitation, earthquakes and floods).

        The purchase of property to be developed or constructed is subject to
more risks than is involved in the purchase of property with an operating
history. In the event the General Partners decide to develop the Properties, the
Partnership will be subject to the risk that there may be unanticipated delays
in, or increases in costs of, development and construction as a result of
factors beyond the control of the General Partners. These factors may include,
among others, strikes, adverse weather, material shortages, and increases in the
cost of labor and materials. Such factors can result in the increased cost of a
project and corresponding depletion of the Partnership's working capital and
reserves, or loss of the Partnership's investment as a result of foreclosure by
a construction or other lender. Additional risks may be incurred where the
Partnership makes periodic progress payments or other advances to the builders
prior to completion of the construction. It should also be noted that the
development of unimproved real property is a time-consuming process which often
involves governmental approval of site and development plans, environmental
studies and reports, traffic studies, and similar items.

        The Partnership may enter into joint ventures in order to accomplish the
development of the Properties. Such transactions may create risks not otherwise
present, such as the joint venturer's investment objectives may be inconsistent
with the investment objectives of the partnership.

        If the Partnership develops the Properties, either alone or in
conjunction with joint venture partners, construction arrangements will be made
at that time. As of the date of this Form 10K, no arrangements have been entered
into or negotiated with any person for the development of any of the Properties.

        If the Partnership requires a loan to finance pre-development or
development activities, or to pay off or refinance an existing loan on a given
property, the availability and cost of such a loan is uncertain due to money
market fluctuations. The General Partners are unable to predict the effects of
such fluctuations on the Partnership. Money market conditions which may exist if
and when the Partnership seeks to obtain any financing with respect to the
Partnership for development or other purposes may make such financing difficult
or costly to obtain and may have an adverse effect on the Partnership's ability
to develop the Properties. Additionally, such conditions may also adversely
affect the ability of the Partnership to sell the Properties when a sale is
determined to be in the best interests of the Partnership, and may affect the
terms of any such sale.

        The Partnership's investment objectives must be considered speculative
and there is no assurance that the Partnership will fulfill them.

SELLING POLICY

        The Partnership seeks to sell all Properties for all cash. However, if
the General Partners deem it to be in the best interests of the Partnership and
its Limited Partners, the Partnership will sell one or more of the Properties in
exchange for receiving part of the purchase price in cash at the time of sale
and receiving the balance of the purchase price on a deferred basis. The
deferred amount will be evidenced by an interest-bearing promissory note secured
by a first trust deed on the Property sold. However, the 

                                       7
<PAGE>   8

Partnership does not intend to carry back any promissory notes unless it obtains
a first priority lien against the Property sold.

COMPETITION

        It is anticipated that the Partnership will encounter considerable
competition in the pre-development, development, operation, and eventual sale of
the Properties. Even under the most favorable marketing conditions, there is no
guarantee that the Properties can be pre-developed, developed, operated, or
sold, and if sold, that such sale will be made upon terms favorable to the
Partnership. Similarly, there is no guarantee that the Partnership will be able
to conduct profitable operations on the Properties, if and when they are
developed.

GOVERNMENTAL POLICIES

        The Partnership's pre-development and development plans for the
Properties, as well as the value of the Properties, are dependent in large part
on governmental action. The following is a partial list of some, but not all, of
the potential problems which could arise due to governmental action or inaction.

        ZONING/PLANS/MAPS/PERMITS. Certain of the parcels are not zoned for the
uses anticipated by the Partnership. Applications have been or will be made to
change the zoning for certain of those parcels.. As described under Item 2,
"Properties," some Properties have already been rezoned, but no assurances can
be given that all such rezoning changes will be approved. Zoning changes are
dependent on, among other things, whether or not such change would be consistent
with the General and Specific Plan for a given area. Further, final parcel/tract
maps have not been approved for all Properties, nor have any grading or building
permits been obtained. In the event that such Properties do not receive the
zoning desired by the General Partners, or if final maps are not approved or
permits not obtained, the value of those parcels to the Partnership and to
others may be reduced and the investment results of the Partnership may be
adversely affected.

        GROWTH INITIATIVES. Many counties and cities in California have been
subject to so called "slow growth" initiatives which could seriously affect the
ability to timely develop properties located within a county or city passing
such an initiative. Although no such initiatives are currently pending, such an
initiative could adversely affect the use or value of those of the Properties
located within such county or city.

                                       8
<PAGE>   9

        PROPERTY TAX REFORM AND RENT CONTROL. Statewide property tax reform has
reduced real property taxes in California. However, subsequently enacted
statewide implementing legislation may cause real property taxes in California
to increase at a more rapid rate than previously experienced and legislation
enacted in certain municipalities in response to the statewide reform requires
owners of real property to pass through property tax savings to residential and
certain commercial tenants by various means, including rent reduction. It is
also possible that legislation at the state or local level may be enacted in
California which include some form of rent control applicable to the
Partnership. In addition, certain fees and charges associated with the
acquisition and ownership of real property in California have been increased to
offset decreases in local revenue resulting from the property tax reduction.

        OTHER GOVERNMENTAL INTERVENTION. There can be no assurance that there
will be no governmental intervention with respect to the Properties that would
adversely affect the use or value of the Properties. For example, building
moratoriums, changes in general or specific plans, down-zoning of the Properties
or unanticipated environmental regulation or similar considerations could impair
the value of the Properties, either to the partnership or to others.

ENVIRONMENTAL

        The Partnership may be required in certain instances to obtain
environmental impact, biological impact or other similar reports prior to
development of the Properties. Such reports may indicate conditions which make
it more expensive (or in rare cases, impossible) to develop a Property in a
manner anticipated by the Partnership, or may cause delays in the development of
a Property. If a Property is contaminated by hazardous materials, the
Partnership could incur substantial clean up costs under federal, state and
local laws which could adversely affect the investment results of the
Partnership.

        The General Partners know of no environmental conditions on the
Properties that would adversely affect the investment results of the
Partnership.

EMPLOYEES

        The Partnership has no employees. Management of the Partnership is
provided by the General Partners. See Item 10 "Directors and Executive Officers"
for information about the General Partners.


ITEM 1(d). FOREIGN OPERATIONS

        The Partnership has no foreign operations in foreign countries.

                                       9
<PAGE>   10

ITEM 2. PROPERTIES

        The Partnership acquired for cash, free of monetary encumbrances, a
total of nine (9) Properties, some of which consist of more than one parcel. All
of the Properties are in the area of Southern California known as the "Inland
Empire." While no fixed geographical boundary identifies the Inland Empire, the
General Partners consider the Inland Empire to include most of the western
portion of Riverside and San Bernardino counties and to be roughly bounded by
the cities of Corona on the west, the Coachella Valley (Palm Springs area) on
the east, the City of Victorville on the north and Murietta (formerly Rancho
California) on the south.

        Included in this area are the communities of Perris, Sun City, Moreno
Valley, Riverside, Beaumont, San Jacinto, Palm Desert, Murietta (formerly Rancho
California) and Elsinore in Riverside County, and Fontana, Rialto, Rancho
Cucamonga, Ontario, San Bernardino Highlands and Chino in San Bernardino County.

        The Properties are unimproved and presently produce no operating income.
It is possible that future economic conditions, governmental actions or other
factors may deter or prevent the Partnership from pre-developing or developing
any or all the Properties. In such event, the potential profitability, if any,
with respect to the Properties would be dependent upon appreciation of the
Properties and the Partnership's ability to refinance and sell the same. There
can be no assurance that the Properties, even if developed by the Partnership,
can be operated or ultimately sold for a profit.

        The Partnership owns or has owned the following properties:

<TABLE>
<CAPTION>
                      Date          Purchase       Date          Sales
Property              Purchased     Price          Sold          Price
- --------              ---------     -----          ----          -----
<S>                   <C>           <C>            <C>           <C>
Beaumont 320**        06-19-89      $  625,000        *               *
                      09-14-89      $  720,000        *               *
Victorville 10        08-15-89      $  420,000     05-08-97      $  127,000
Victorville 17        07-20-89      $  700,000        *               *
Victorville 25        08-10-89      $1,202,000        *               *
Oleander 10           08-09-89      $  295,000        *               *
Elsinore 36.79**      07-10-89      $  360,000     10-06-89      $1,152,000
                      07-28-89      $  369,000     10-06-89          ***
Perris 6.44           06-20-89      $  930,000        *               *
Perris 77             10-31-89      $  750,000     02-28-90      $1,200,000
Perris 1.93           12-05-89      $   22,500     02-14-95      $   23,000
</TABLE>

- ----------

*       These Properties were still owned by the Partnership as of December 31,
        1997.
**      Beaumont 320 and Elsinore 36.79 were each acquired in two separate
        parcels.
***     The two parcels comprising Elsinore 36.79 were sold together for a total
        sales price of $1,152,000.

                                       10
<PAGE>   11

        BEAUMONT 320 ACRES. The Partnership acquired from different sellers two
adjacent 160 acre parcels of rolling land (the Beaumont-Mudd and Beaumont-Gerwyn
parcels) totaling approximately 320 acres. The Property is located approximately
1-1/4 miles south of Interstate Highway 10 (the San Bernardino Freeway). Access
to the highway is over Highland Springs Avenue from the Property.

        The Property is rectangular in shape and measures 1 mile by 1/2 mile.
The terrain varies from level meadows to rolling hills, and in some places steep
terrain. Electric power and telephone are currently to the Property. Water is
currently supplied by private well on the Property. The current zoning, W-2,
allows for one single family residential unit per 20,000 square feet of site
area. A specific plan, Environmental Impact Report and Kangaroo Rat Study were
approved, and the property has been annexed into the City of Beaumont with a R-1
zoning.

        VICTORVILLE 17 PARCEL. This approximately 17 acre parcel is located on
Rodeo Road at its intersection with Pebble Beach Drive about 1/4 mile north of
Green Tree Lane. The Property is in an already developed part of east central
Victorville. The immediate neighborhood is made up of some lower income single
family homes, a mobile home community and golf course, and scattered apartment
complexes.

        The Property is "L" shaped with 800 feet of frontage on Rodeo Road. It
is sloped and slightly rolling with a flood control channel on the north
property line. All utilities and sewer are in place to the Property. It is zoned
R-3 (multi-family residential) with a tentative map approved for 55 4-plex lots
(220 units).

        VICTORVILLE 25 PARCEL. This approximately 25 acre Property is comprised
of two parcels of approximately 12.73 and approximately 12.6 acres respectively.
The site is located in the northwest portion of the City of Victorville. The
parcels are bounded on the south by Village Drive, the east by Heartherdale and
the west by Amargosa.

        The 12.6 acre parcel is square in shape and is zoned C-2. This zoning
will permit commercial development such as office and professional, shopping or
retail uses. The 12.73 acre parcel is triangular in size and is zoned R-3, or
multi-family residential. This zoning will permit development of apartments or
condominiums as dense as fifteen units per acre.

                                       11
<PAGE>   12

        The Victorville 25 Property is approximately one mile from Interstate
15. The immediate vicinity is a mixed-use neighborhood of new residential
housing of both single family homes and apartments, although development has
slowed dramatically since the 1990-1991 recession began.

        Utilities are available to the site and Village Drive is the major
traffic corridor in the area.

        OLEANDER 10. The Partnership acquired one approximately 10 acre parcel
south of Oleander Avenue and east of Decker Road, just 1/2 mile west of
Interstate Highway 215. This parcel was zoned rural agricultural and was
adjacent to hundreds of acres of I/P zoned land. The General Partners have
obtained rezoning from the County of Riverside to I/P. I/P provides for a wide
variety of residential and professional uses, including light manufacturing,
office buildings, restaurants, motel, and other commercial uses. Water, sewer
and power are currently accessible at the Property.

        The Property is within the Perris Valley Comprehensive General Plan that
was adopted in 1983. The General Plan indicates that the subject parcel should
be developed for manufacturing or industrial use. Construction of industrial
buildings has occurred about one mile south of the Property.

        The Property and its surroundings lie within the boundaries of the
Riverside County Community Facilities district, 88-8, which facilitates the
availability of utilities and access through proposed improvement projects
including off ramps to Cajalco Road.

        PERRIS 6.44. This approximately 6.44 acre parcel is located at the
northeast corner of Perris Boulevard and Markham Street in the northern section
of the City of Perris. The area surrounding the Property is in transition from
rural vacant land to medium density residential, industrial and commercial. Both
have been dramatically slowed by the recession.

        Zoning was recently changed to C-2 to allow commercial development.
Electricity, telephone and water are to the Property and sewer is within one
mile. However, septic tank use is also currently permitted.


ITEM 3. LEGAL PROCEEDINGS

        There are no matters requiring disclosure under Item 3.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        No matters were submitted to a vote of Registrants security holders
during the fourth quarter of 1997.

                                       12
<PAGE>   13

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

        As of December 31, 1997, there were approximately 812 holders of Limited
Partnership units. There is no other class of security outstanding or
authorized. To the General Partners knowledge, there has not been, and currently
there does not exist, any trading market for the Units. Accordingly, there was
no trading activity during the fiscal year ended December 31, 1997, 1996, or
1995.

CASH DISTRIBUTIONS

        No cash distributions were made during the years ended December 31,
1997, 1996, or 1995.

        A summary of the provisions of the Partnership Agreement regarding
distributions of cash and allocations of net income and losses is set forth in
Item 1 "Business" under the subcaption "Distributions, Net Income and Net Loss."


                                       13
<PAGE>   14

ITEM 6. SELECTED FINANCIAL DATA

        The following table summarizes selected financial data of the
Partnership for the five years ended December 31, 1997, 1996, 1995, 1994, or
1993, and should be read in conjunction with the more detailed financial
statements contained in Item 8 below.

                                   (UNAUDITED)
                             YEAR ENDED DECEMBER 31
                        (Not Covered By Auditor's Report)

<TABLE>
<CAPTION>
                                    1997          1996           1995          1994         1993
                                    ----          ----           ----          ----         ----
<S>                              <C>           <C>            <C>           <C>           <C>       
Income from Sale of Property     $  127,000                   $   23,000
Less cost of Property sold         (196,491)                     (28,807)
                                                              ----------
Gross (loss)                                                      (5,807)
Interest Income                       2,325    $     1,239           473    $    1,329    $    4,921
Other income                             49
                                 ----------
Total income (loss)              $1,674,392          1,239    $   (5,334)   $    1,329         4,921
                                 ==========    -----------    ----------    ==========    ==========
Net income (loss)                $1,673,592    $(3,255,611)   $ (570,578)   $   (1,671)   $    1,921
                                 ==========    -----------    ----------    ==========    ==========
Net income (loss) per Unit*      $   194.92        (379.18)       (66.46)         (.20)   $      .23
                                 ----------    -----------    ----------    ----------    ----------
Cash distribution per Unit*      $             $              $             $             $         
                                 ==========    ===========    ==========    ==========    ==========
Total assets                     $4,203,651    $ 2,472,971    $5,559,685    $6,066,564    $6,041,009
                                 ==========    -----------    ----------    ==========    ==========
</TABLE>
- ----------
* (Based on 8,500 Units outstanding at December 31, 1997, 1996, 1995, 1994, and
  1993.)


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSES OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

RESULTS OF OPERATIONS

        During the period from inception (June 7, 1989) through December 31,
1989, the Partnership was engaged primarily in the sale of Units of Limited
Partnership Interest and the investment of the subscription proceeds to purchase
parcels of unimproved real property. The Partnership sold one Property during
1989 for a gross profit, net of all acquisition, carrying and selling costs, of
$272,129, and one Property in 1990 for a gross profit, net of all acquisition,
carrying and selling costs, of $315,081. Other revenues received during the
fiscal years ended December 31, 1997, 1996, 1995, 1994, and 1993, consisted
primarily of interest income and income from the forfeiture by potential buyers
of non-refundable escrow deposits. In 1996 and 1995, the Partnership experienced
a loss due to the write-down in value of the Partnership land. The decline in
land value was due mainly to the downturn in Southern California's real estate
market. However, in 1997 the partnership experienced a gain and recovered much
of the prior years' write-downs. This appreciation is due mainly to favorable
market conditions in the California real estate market.

                                       14
<PAGE>   15

LIQUIDITY AND CAPITAL RESOURCES

        The partnership raised a total of $7,571,386, net of syndication costs,
from the sale of Limited Partnership Units. During the period from inception
through December 31, 1995, the Partnership acquired a total of nine Properties
for all cash at a total expenditure of $7,172,389, including carrying costs
(such as interest expense and property taxes). All costs associated with the
acquisition of the Properties, as well as carrying costs and administrative
expenses, are capitalized (i.e., added to the cost of the Properties) and are
deducted form the sales prices to determine gains (or losses) when the
Properties are sold.

        The Partnership does not intend to acquire any additional Properties.
The remaining five Properties are being held for resale. Upon sale, the
Partnership intends to distribute the sales proceeds, less any reserves needed
for operations, to the Partners.

        The General Partners intend to meet currently anticipated cash
requirements by first using cash proceeds from a loan on hand; second, funds
from interest income; third, the sale of properties; and fourth, proceeds from a
loan secured by property.

        The Partnership owns land in the Riverside and San Bernardino counties.
This region of Southern California is currently recovering from a significant
economic recession that had substantially eroded the value of all real estate in
the area.

        Lower home and commercial property prices have driven down the value of
vacant land, and in many instances made new development financially unfeasible.
This has made it difficult to sell the Partnership land at anything but
liquidation prices. The general partners expect the economic recovery in this
region to be slow, and believe there are insufficient funds available to meet
anticipated cash requirements for the next 12 months. Management intends to
attempt to procure a loan for the Partnership secured by Partnership land; or,
in the alternative, to withhold payment of certain Partnership expenses such as
property taxes. In February 1996, the partnership procured a $190,000 loan
secured by Partnership land.

        Management is also attempting to sell one or more of the remaining
parcels of land to meet anticipated cash requirements. There can be no assurance
that management will be successful in either procuring a loan or selling one or
more of the remaining parcels of land.

        The Partnership has no current plans to develop any of the parcels, and
it is expected that no such plans would be undertaken unless adequate funding
therefor could be obtained, either from the sale or refinancing of parcels or
the forming of a joint venture.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The following financial statements are filed as a part of this Form 10K:

<TABLE>
<CAPTION>
                                                                                      Page No.
                                                                                      --------
<S>                                                                                   <C>
        For the fiscal years ended December 31, 1997, 1996 and 1995:

               Independent Auditor's Report                                            FS-1

               Balance Sheets as of December 31, 1997 and 1996                         FS-2

               Statement of Income for the years ended December 31, 1997, 1996
               and 1995                                                                FS-3

               Statement of Partners Capital for the years ended
               December 31, 1997, 1996, 1995 and 1994                                  FS-4

               Statements of Cash Flow for the years ended December 31,
               1997, 1996 and 1995                                                     FS-5

               Notes to Financial Statements                                           FS-6

               Financial Statement Schedules                                           FS-10
</TABLE>

                                       15
<PAGE>   16

All other schedules are omitted since the required information is not present or
is not present in amounts sufficient to require submission of the schedule, or
because the information required is included in the Financial Statements and
Notes thereto.


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

        The accounting firm of Balser, Horowitz, Frank & Wakeling ("BHF&W),
whose report is included elsewhere herein with respect to the Partnership's
financial statements for the fiscal years ended December 31, 1997 and 1996, has
provided accounting services to this Partnership and to other limited
partnerships of which the General Partners are the general partners, for many
years.

                                       16
<PAGE>   17

                                    PART III


ITEM 10.       DIRECTORS AND EXECUTIVE OFFICERS

        The Partnership has no employees and no directors or executives
officers. Management of the Partnership is provided by the General Partners.

        TMP Properties, a California general partnership, and TMP Investments,
Inc., a California corporation, are the General Partners of the Partnership. TMP
Properties was formed on July 14, 1978. TMP Properties' principal business has
been the acquisition of undeveloped land and the coordination of activities
necessary to add value to such land, primarily through the predevelopment
process. It has syndicated numerous private real estate limited partnerships,
and eleven public real estate limited partnerships. All of the properties
purchased by such partnerships were located in the State of California except
for one (an office building) which was located in Oklahoma City, Oklahoma. Each
of such limited partnerships involved a specified real property program in which
TMP Properties was the General Partner. The general partners of TMP Properties
are William O. Paso, Anthony W.
Thompson and Scott E. McDaniel.

        The individual partners of TMP Properties are listed below, together
with information regarding their employment experience and background.

        TMP Investment Inc., a California corporation, was formed on December
12, 1984. TMP Investments Inc. has served in the capacity of a co-general
partner in all of the TMP sponsored programs since December 1984. In 1993, TMP
Investments Inc. began serving as sole general partner in all TMP sponsored
partnerships. TMP Investments Inc. has been and will continue to be engaged in
asset management, real estate accounting, budgetary services, and partnership
management on behalf of existing limited partnerships and limited partnerships
which it sponsors in the future. The shareholders of TMP Investments, Inc. were
William O. Passo, Anthony W. Thompson, and Scott E. McDaniel until September
1993, when Mr. McDaniel sold his share of TMP Investments Inc. to Mr. Passo and
Mr. Thompson.

        WILLIAM O. PASSO, 56, is a Director and the President of TMP Investments
Inc. He practiced law for 18 years, has been a licensed real estate broker since
1974 and holds registered representative and general principals securities
licenses through the National Association of Securities Dealers, Inc. Mr. Passo
received his Juris Doctorate Degree from UCLA School of Law in 1967. He has been
a senior partner first of Passo, Yates, and Nissen until 1975, then of Passo &
Davis until March 1983 when he resigned from the partnership to take a leading
role in the management of the affairs of TMP Properties. Mr. Passo has been
involved in public and private real estate syndication since 1970, and has acted
as principal, investor, general partner, and counsel in real estate transactions
involving apartments, office buildings, agricultural groves, and unimproved
land. Mr. Passo is a director and officer of William O. Passo, Inc. (dba TMP
Management), a property management company, an officer of TMP Capital Corp., an
NASD registered broker-dealer, and an officer of TMP Realty, a registered real
estate broker.

                                       17
<PAGE>   18

        SCOTT E. MCDANIEL, 51, is a Director and Vice President of TMP
Investments Inc. He is a graduate of the U.S. Naval Academy at Annapolis,
majoring in engineering. Mr. McDaniel is a California licensed general
contractor and has been a licensed California real estate broker since 1976. He
was the founder and President of Scott E. McDaniel, Inc. (dba Regal Realty). Mr.
McDaniel has developed office complexes and industrial space in Southern
California and has personally brokered over $125 million of real estate since
1982. Through an affiliated company, DeVille Construction Co. Inc., Mr. McDaniel
has directed general contracting operations in Southern California since 1982.

        ANTHONY W. "TONY" THOMPSON, 51, is Director and Vice-President of TMP
Investments Inc. A graduate of Sterling College in 1969, with a Bachelors Degree
in Science and Economics, Mr. Thompson holds the professional designations of
Charter Life Underwriter and chartered Financial Consultant form the American
College. Mr. Thompson is a registered principal with the NASD and is a principal
in TMP Capital Corp., a NASD registered Broker Dealer. Mr. Thompson has been
involved in the securities and the real estate investment fields since 1970, and
a General Partner of TMP since its formation in 1978. Mr. Thompson's primary
responsibility is marketing TMP offerings through the broker dealer community.


ITEM 11. EXECUTIVE COMPENSATION

        During the period since the formation of the Partnership (June 7, 1989)
through the fiscal year ended December 31, 1997, the Partnership paid fees to
the General Partners for various services in the amount of $93,718 of which
$12,245 was paid in the year ended December 31, 1997. In addition, the General
Partners received collectively $24,040 as their share of Partnership
distributions. (See Item 13. "Certain Relationships and Related Transaction".)
The Partnership has no officers or employees and, therefore, paid no other
compensation other than that paid to the General Partners as indicated above.

                                       18
<PAGE>   19

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        As of December 31, 1997, the Partnership had 8,500 units of Limited
Partnership interest (the "Units") issued and outstanding. To the knowledge of
the General Partners, no person beneficially owns more the 5% of the Units. The
following table set forth the number of Units beneficially owned as of December
31, 1997 by each officer, director and general partner of the General Partners
and by all such persons as a group.

<TABLE>
<CAPTION>
                                            Number of            Percent of
Name of Beneficial Owner                    Units                Class
- ------------------------                    ---------            ----------
<S>                                           <C>                  <C>   
William O. Passo                              15                   0.176%

Anthony W. Thompson                           10                   0.117%

All officers, directors and                   25                   0.293%
general partners as a group
(2 persons, including the above)
</TABLE>


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

TRANSACTIONS WITH AFFILIATES

        The following information summarizes the forms and amounts of
compensation (some of which involve cost reimbursements) paid either by the
Partnership, or others, to the General Partners and their affiliates since the
formation of the Partnership (June 7, 1989) through the fiscal year ended
December 31, 1997. The information under "Operating and Liquidation Stage" and
"Summary of Compensation" below also describes the amounts of compensation to be
paid to the General Partners and their affiliates in the future. None of these
amounts were determined by arm's-length negotiations. Reference is also made to
the Notes to the Financial Statements included elsewhere in this Form 10K for
additional information regarding transactions with affiliates.

                                       19
<PAGE>   20

                 OFFERING AND ORGANIZATION STAGE OF PARTNERSHIP

<TABLE>
<CAPTION>
                                                                          Amount Paid from
 Form of Compensation                                                     Formation through
    and Recipient                    Description of  Payment              December 31, 1997
    -------------                    -----------------------              -----------------
<S>                            <C>                                         <C>
Selling Commission and         Up to a maximum of 10% of gross                 $856,738
Due Diligence Reimbursement    proceeds, a minimum of which was
(TMP Capital Corp.)            reallocated to participating Soliciting
                               Dealers (which included TMP Capital
                               Corp.) from Units sold by them. Up to
                               an additional 0.5% paid to Soliciting
                               Dealers (which included TMP Capital
                               Corp.) for due diligence activities.

Reimbursement for              Organizational Expenses paid to the              $91,091
Organizational Expenses        General Partners to reimburse them
(General Partners)             (without markup or profit) for
                               organizational costs actually incurred
                               such as advertising, mailing, printing
                               costs, clerical expenses, legal and
                               accounting fees.

Reimbursement for Property     The General Partners were reimbursed            $343,082
Expenses (General Partners)    (without markup or profit) for all out
                               of pocket expenses directly related to
                               the Properties, including the purchase
                               price of Properties acquired prior to
                               Partnership formation, out of pocket
                               carrying costs of such Properties (such as
                               interest and property taxes) including actual
                               interest incurred on all funds advanced for the
                               benefit of the Partnership, deposits, escrow
                               extension payments, appraisal fees, expenses of
                               feasibility and other studies performed by third
                               parties unaffiliated with the General Partners
                               and similar expenses, but not including the
                               General Partners' overhead, salaries, travel or
                               like expenses.
</TABLE>

                                       20
<PAGE>   21

                 OFFERING AND ORGANIZATION STAGE OF PARTNERSHIP

<TABLE>
<CAPTION>
                                                                          Amount Paid from
 Form of Compensation                                                     Formation through
    and Recipient                    Description of  Payment              December 31, 1997
    -------------                    -----------------------              -----------------
<S>                            <C>                                         <C>
Property Acquisition Fees      For services rendered in connection
(General Partners or an        with the acquisition of the Properties
affiliate)                     acquired by the Partnership, the
                               General Partners, or an affiliate,
                               received acquisition compensation
                               (either denominated as such, or as a
                               real estate brokerage commission, or
                               otherwise) in the following amounts:
                                       (i)    Acquisition fees:                $475,000
                                       (ii)   Real estate brokerage            $217,033
                                              commission

Partnership Management Fee     A Partnership Management Fee with                $93,718
(General Partners)             respect to each Property until a
                               Property is sold or improvement of the
                               Property commences in an annual amount
                               of 1/4 of 1% (.225%) of the cost of the
                               property, but not to exceed 2% of such
                               cost in the aggregate.

Leasing and Property           For leasing an improved Property, or a            $-0-
Management Fees (General       portion thereof, a commission equal to
Partners or an affiliate)      7% for the first year's rent (net
                               lease) or 6% of the first year's rent
                               (gross lease) decreasing to 2.5% (net
                               lease) or 2% (gross lease) of the rent
                               for years eleven through thirty. Upon
                               development of the Properties, or any
                               of them, an amount up to 5% of the
                               gross revenues of the Properties for
                               supervision for the operation and
                               maintenance of the Properties. Such
                               leasing and property management fees
                               shall not exceed the competitive rates
                               that would be charged by unaffiliated
                               persons.

Interest in Partnership        1% interest in all Partnership                   $24,040
Allocation of Each Material    allocations of Net Income, Net Loss and
Item (General Partners)        Distributions of Distributable Cash
                               from Operations and of Cash from Sale
                               or refinancing of the Properties.
</TABLE>

                                       21
<PAGE>   22

<TABLE>
<CAPTION>
                                                                          Amount Paid from
 Form of Compensation                                                     Formation through
    and Recipient                    Description of  Payment              December 31, 1997
    -------------                    -----------------------              -----------------
<S>                            <C>                                         <C>
Subordinated Participation     A 15% interest in all Partnership                 $-0-
(General Partners)             allocations of Net Income and
                               Distributions of Distributable Cash
                               from Operations and of Cash from the
                               Sale or Refinancing of the Properties
                               subordinated to a return of all Limited
                               Partners' Capital Contributions plus a
                               cumulative, non-compounded return of 6%
                               per annum on their Adjusted Capital
                               Contributions.

Subordinated Real Estate       Real estate commissions with respect to           $-0-
Commission (General Partners   the sale of Properties which are equal
or an Affiliate)               to the lesser of:  (I) 3% of the gross
                               sales price of a Properties; equal to
                               one-half the normal and competitive
                               rate charged by unaffiliated parties,
                               but payment shall be subordinated to a
                               return of all Limited Partners' Capital
                               contributions, plus a cumulative,
                               noncompounded return of 6% per annum on
                               their Adjusted Capital Contributions.
</TABLE>

        SUMMARY OF COMPENSATION. In summary, the Partnership paid securities
brokerage commissions for services performed by TMP Capital Corp. in the sale of
the Units in the amount of $56,738 (including due diligence fees) and reimbursed
the General Partners for expenses incurred in organizing the Partnership and
documenting the offering in the amount of $91,091. The General Partners also
received Property Acquisition Fees and real estate brokerage commissions in the
amounts set forth above, and were reimbursed for out of pocket expenditures made
in connection with the acquisition and carrying costs for the Properties or
studies related thereto. During the operating stage, the partnership will pay
the General Partners an annual Partnership Management Fee for managing the
Partnership equal to 1/4 of 1% of the cost of the Properties, payable annually
in advance with respect to each Property until such time as the Properties are
sold or improvement of the land commences; provided such fee, in the aggregate,
shall not exceed 2% of the cost of the Properties. At such time, if at all, that
the Properties, or any of them, are developed, the General Partners will receive
leasing commissions as described above, and a property management fee in an
amount up to 5% of the gross property revenues, but not to exceed the
competitive rate charged by nonaffiliated persons providing similar services.
The General Partners have a 1% interest in all allocations of Partnership Net
Income until the limited Partners have received allocations of Net Income equal
to a cumulative, noncompounded return of 6% on their Adjusted Capital
Contributions (the "Preferred Return"); and thereafter, the General Partners
will have a 15% interest in all Partnership allocations of Net Income,
Distributions of Distributable Cash from Operations, and Cash from Sale or
Refinancing of Partnership Property and the Limited partners will have an 85%
interest therein. Net Losses will be allocated to the Partners with positive
Capital Accounts, in accordance with the ratio of their positive Capital Account
balances until no Partner has a positive Capital Account; and thereafter, Net
Losses will be allocated 100% to the General Partners. If the General Partners
or an Affiliate provide a substantial amount of services with respect to the
sale of a Partnership Property, the General Partners or an Affiliate may receive
a real estate commission in an amount up to one-half of the amount of
competitive real estate commissions, not to exceed 3% of the sales price of such
Property. Both the 15% General Partners' participation and the Partners' real
estate commission on the sale are subordinated to a return of all Limited
Partners' Capital Contribution plus a cumulative, non-compounded return of 6%
per annum on their Adjusted Capital contributions.

        Thus, only after the Limited Partners have recovered their Capital
Contributions plus the cumulative 6% return discussed above, will the General
Partners' allocation of Distributions of Distributable Cash from Operations and
Cash from Sale or Refinancing of Partnership Property exceed a 

                                       22
<PAGE>   23

nominal 1% ownership interest therein. Such allocation provides a built-in
incentive for the General Partners to seek the optimum performance from the
Partnership's Properties.

CONFLICTS OF INTEREST

        The Partnership is subject to various conflicts of interest from its
relationship with the General Partners. These conflicts include, but are not
limited to:

        CONFLICTS IN GENERAL. The interests for the Limited Partners may be
inconsistent with those of the General Partners or their Affiliates when the
General Partners must make policy decisions on behalf of the Partnership. The
General Partners, for instance, might not desire to sell a Property when a sale
would be advantageous to the Limited Partners because of the General Partner's
interest in Distributions of Distributable Cash from Operations and Net Proceeds
from the Sale or Refinancing of the Property. Subject, in certain circumstances,
to the approval of the holders of a majority or other specified voting
percentage of the Units, the General Partners will have the discretion as to
when to sell a Property or portion thereof. The timing of the sale of a Property
or any portion thereof and the terms on which such sale will be made may result
in a conflict of interest. Furthermore, the sale of a Property may result in the
recognition of substantial taxable gain to the General or Limited Partners in
different ratios depending upon the timing of such sale. Accordingly, the
decisions as to when to sell a Property may be advantageous to the General
Partners and disadvantageous to the Limited Partners, or vice versa. The General
Partners in any event will be compelled to make any decisions with respect to
the sale or retention of a Property based upon the best interests of the
Partnership and its Limited Partners because of the fiduciary duty which they
owe to the Limited Partners.

        AVAILABILITY OF MANAGEMENT SERVICE. The Partnership will not have
independent management, as it will rely on the General Partners and affiliates
for all its management decisions. Other investment projects in which the General
Partners and affiliates participate, either individually or as a general
partner, real estate broker, or investment adviser, may compete with the
Partnership for the time and resources of the General Partners and their
affiliates. The General Partners will, therefore, have conflicts of interest in
allocating management time, services, and functions among the Partnership and
other existing partnerships and businesses, as well as any partnerships or
business entitles which may be organized in the future. Under the Partnership
Agreement, the General Partners are obligated to devote as much time as they, in
their sole discretion, deem to be reasonably required for the proper management
of the Partnership and its assets. The General Partners believe that they have
the capacity to discharge their responsibilities to the Partnership
notwithstanding participation in other investment programs and projects.

                                       23
<PAGE>   24

        INTERESTS IN OTHER ACTIVITIES. The General Partners, or any of their
affiliates, may engage for their own account, or for the account of others, in
other business ventures, whether real estate or otherwise, and neither the
Partnership nor any Limited Partner shall be entitled to any interest therein
solely by reason of any relationship with or to each other arising from the
Partnership.

        RECEIPT OF COMPENSATION BY THE GENERAL PARTNERS. The payments to the
General Partners set forth above have not been determined by arm's-length
negotiations.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8K

(a)     For a listing of financial statements, reference is made to Item 8
        included in this Form 10K

(b)     The Registrant filed no reports on Form 8K during the fourth quarter of
        the fiscal year ended December 31, 1997

(c)     Exhibits- Those Exhibits required by Item 601 of Regulation S-K which
        are applicable to the Registrant are as follows:

        (3),(4) and (10.1)     Agreement of Limited Partnership and other
                               material agreements are incorporated by reference
                               to Exhibits (3),(4) and (10.1) to the Form 10
                               Registration Statement, SEC File No. 0-19933
                               filed on March 19, 1992.

                        27     Financial Data Schedule


                                       24
<PAGE>   25

                                   SIGNATURES

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

Dated:  March 19, 1998

                             TMP INLAND EMPIRE IV, LTD.
                                    A California Limited Partnership

                             By:  TMP INVESTMENTS INC., a California corporation
                                    as  co-General Partner



                                    By:    /s/  WILLIAM O. PASSO
                                        ----------------------------------------
                                        William O. Passo, President


                                    By:    /s/  ANTHONY W. THOMPSON
                                        ----------------------------------------
                                        Anthony W. Thompson, 
                                        Executive Vice President


                                    By:    /s/  RICHARD T. HUTTON, JR.
                                        ----------------------------------------
                                        Richard T. Hutton, Jr.,  Controller




                             and by TMP Properties, a California General 
                                    Partnership, as co-General Partner



                                    By:    /s/  WILLIAM O. PASSO
                                        ----------------------------------------
                                        William O. Passo, General Partner



                                    By:    /s/  SCOTT E. MCDANIEL
                                        ----------------------------------------
                                        Scott E. McDaniel, General Partner



                                    By:    /s/  ANTHONY W. THOMPSON
                                        ----------------------------------------
                                        Anthony W. Thompson, General Partner


                                       25
<PAGE>   26

                           TMP INLAND EMPIRE IV, LTD.
                       (A CALIFORNIA LIMITED PARTNERSHIP)


                              FINANCIAL STATEMENTS
                           DECEMBER 31, 1997 AND 1996

<PAGE>   27

                           TMP INLAND EMPIRE IV, LTD.
                       (A California Limited Partnership)

                              Financial Statements
                           December 31, 1997 and 1996



                                Table of Contents
<TABLE>
<S>                                                                      <C>
Independent Auditor's Report............................................   1

Balance Sheets..........................................................   2

Statements of Income....................................................   3

Statements of Partners' Capital.........................................   4

Statements of Cash Flows................................................   5

Notes to Financial Statements...........................................  6-9

Supplementary Information............................................... 10-12
</TABLE>


<PAGE>   28

                [BALSER, HOROWITZ, FRANK & WAKELING LETTERHEAD]



                          Independent Auditor's Report
                          ----------------------------



To the Partners
TMP Inland Empire IV, Ltd.
(A California Limited Partnership)


We have audited the accompanying balance sheets of TMP Inland Empire IV, Ltd. (A
California Limited Partnership) as of December 31, 1997 and 1996, and the
related statements of income, partners' capital, and cash flows for the years
ended December 31, 1997, 1996 and 1995. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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 TMP Inland Empire IV, Ltd. (A
California Limited Partnership) as of December 31, 1997 and 1996, and the
results of its operations and its cash flows for the years ended December 31,
1997, 1996 and 1995, in conformity with generally accepted accounting
principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information contained
in Schedule I is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is stated fairly in all material
respects in relation to the basic financial statements taken as a whole.

Balser, Horowitz, Frank & Wakeling
BALSER, HOROWITZ, FRANK & WAKELING
                An Accountancy Corporation

Santa Ana, California
January 26, 1998


<PAGE>   29

                           TMP INLAND EMPIRE IV, LTD.
                       (A California Limited Partnership)
                                 Balance Sheets
                           December 31, 1997 and 1996


                                     Assets
                                     ------

<TABLE>
<CAPTION>
                                                    1997           1996
                                                -----------    -----------
<S>                                             <C>            <C>        
Cash                                            $    75,651    $    32,971

Investment in unimproved land,
 at lower of cost or fair value                   4,128,000      2,440,000
                                                -----------    -----------

      Total assets                              $ 4,203,651    $ 2,472,971
                                                ===========    ===========

                     Liabilities and Partners' Capital
                     ---------------------------------

Commissions payable                             $    70,560    $    70,560

Interest Payable                                      1,900              0

Property taxes payable                              124,047         69,417

Due to affiliates                                       963            405

Franchise tax payable                                   800            800

Note payable                                        190,000        190,000
                                                -----------    -----------

      Total liabilities                             388,270        331,182
                                                -----------    -----------

Partners' capital (deficit)
   General partners                                 (37,562)       (54,298)
   Limited partners; 8,500 equity units
      authorized and outstanding                  3,852,943      2,196,087
                                                -----------    -----------

      Total partners' capital                     3,815,381      2,141,789
                                                -----------    -----------

      Total liabilities and partners' capital   $ 4,203,651    $ 2,472,971
                                                ===========    ===========
</TABLE>


             See Accompanying Notes and Independent Auditor's Report

                                      FS-2
<PAGE>   30

                           TMP INLAND EMPIRE IV, LTD.
                       (A California Limited Partnership)
                              Statements of Income
              For the Years Ended December 31, 1997, 1996 and 1995


<TABLE>
<CAPTION>
                                                 1997           1996            1995
                                              -----------    -----------    -----------
<S>                                           <C>            <C>            <C>        
Income

   Sale of property                           $   127,000    $         0    $    23,000

   Cost of sales                                 (196,491)             0        (28,807)
                                              -----------    -----------    -----------

   Loss on sale of property                       (69,491)             0         (5,807)

   Appreciation in fair value of
      unimproved land                           1,741,509    $         0    $         0

   Interest income                                  2,325          1,239            473

   Other                                               49              0              0
                                              -----------    -----------    -----------

      Total income or (loss)                    1,674,392          1,239         (5,334)
                                              -----------    -----------    -----------

Expenses

   Decline in fair value of unimproved land             0      3,254,195        562,244

   Amortization                                         0          1,855          2,200
                                              -----------    -----------    -----------

      Total expenses                                    0      3,256,050        564,444
                                              -----------    -----------    -----------

   Income or (loss) before income taxes         1,674,392     (3,254,811)      (569,778)

   State Franchise tax                                800            800            800
                                              -----------    -----------    -----------

      Net income or (loss)                    $ 1,673,592    $(3,255,611)   $  (570,578)
                                              ===========    ===========    ===========

Allocation of net income or (loss):

   General partners, in the aggregate         $    16,736    $   (32,556)   $    (5,706)
                                              ===========    ===========    ===========

   Limited partners, in the aggregate         $ 1,656,856    $(3,223,055)   $  (564,872)
                                              ===========    ===========    ===========

   Limited partners, per equity unit          $    194.92    $   (379.18)   $    (66.46)
                                              ===========    ===========    ===========
</TABLE>



             See Accompanying Notes and Independent Auditor's Report

                                      FS-3
<PAGE>   31

                           TMP INLAND EMPIRE IV, LTD.
                       (A California Limited Partnership)
                         Statements of Partners' Capital
              For the Years Ended December 31, 1997, 1996 and 1995


<TABLE>
<CAPTION>
                                   General         Limited
                                  Partners         Partners           Total
                                 -----------      -----------      -----------
<S>                              <C>              <C>              <C>        
Partners' capital (deficit),
   December 31, 1994             $   (16,036)     $ 5,984,014      $ 5,967,978

Net (loss) for 1995                   (5,706)        (564,872)        (570,578)
                                 -----------      -----------      -----------

Partners' capital (deficit),
   December 31, 1995                 (21,742)       5,419,142        5,397,400

Net (loss) for 1996                  (32,556)      (3,223,055)      (3,255,611)
                                 -----------      -----------      -----------

Partners' capital (deficit)
   December 31, 1996                 (54,298)       2,196,087        2,141,789

Net income for 1997                   16,736        1,656,856        1,673,592
                                 -----------      -----------      -----------

Partners' capital (deficit)
   December 31, 1997             $   (37,562)     $ 3,852,943      $ 3,815,381
                                 ===========      ===========      ===========
</TABLE>

             See Accompanying Notes and Independent Auditor's Report

                                      FS-4
<PAGE>   32

                           TMP INLAND EMPIRE IV, LTD.
                       (A California Limited Partnership)
                            Statements of Cash Flows
              For the Years Ended December 31, 1997, 1996 and 1995

<TABLE>
<CAPTION>
                                                                 1997            1996             1995
                                                                 ----            ----             ----
<S>                                                           <C>            <C>            <C>         
Cash flow from operating activities
  Net income or (loss)                                        $ 1,673,592    $(3,255,611)   $  (570,578)
  Adjustments to reconcile net income or (loss)
   to net cash used in operating activities:
    Amortization                                                        0          1,855          2,200
    (Increase) or decrease in development costs of property             0              0             78
    Increase in carrying costs of property                       (142,981)      (153,134)       (98,228)
    Loss on sale of property                                       69,491              0          5,807
    Increase in interest payable                                    1,900              0              0
    Increase or (decrease) in property taxes payable               54,630        (21,508)        64,321
    Increase or (decrease) in due to affiliates                       557            405           (622)
    Increase or (decline) in fair value of unimproved land     (1,741,509)     3,254,195        562,244
                                                              -----------    -----------    -----------

      Net cash (used in) operating activities                     (84,320)      (173,798)       (34,778)
                                                              -----------    -----------    -----------

Cash flows from investing activities
  Proceeds from sale of properties                                127,000              0         23,000
                                                              -----------    -----------    -----------

      Net cash provided by investing activities                   127,000              0         23,000
                                                              -----------    -----------    -----------

Cash flows from financing activities
  Proceeds from notes payable                                           0        190,000              0
                                                              -----------    -----------    -----------

      Net cash provided by financing activities                         0        190,000              0
                                                              -----------    -----------    -----------

Net increase or (decrease) in cash                                 42,680         16,202        (11,778)

Cash, beginning of year                                            32,971         16,769         28,547
                                                              -----------    -----------    -----------

Cash, end of year                                             $    75,651    $    32,971    $    16,769
                                                              ===========    ===========    ===========

Supplemental disclosures of cash flow information

  Income taxes paid                                           $       800    $       800    $       800
                                                              ===========    ===========    ===========

  Interest paid                                               $    20,900    $    20,837    $         0
                                                              ===========    ===========    ===========
</TABLE>


Other disclosures

For the years ended December 31, 1997, 1996 and 1995, the Partnership did not
enter into any non-cash investing or financing activities, nor did it have any
short-term, highly liquid investments.


             See Accompanying Notes and Independent Auditor's Report

                                      FS-5
<PAGE>   33

                           TMP INLAND EMPIRE IV, LTD.
                       (A California Limited Partnership)
                          Notes to Financial Statements
                        December 31, 1997, 1996 and 1995



Note 1 - Summary of significant accounting policies

         Accounting Method - The Partnership's policy is to prepare its
         financial statements on the accrual basis of accounting.

         Organization Costs - Organization costs include expenses incurred in
         the formation of the Partnership that have been capitalized and are
         being amortized over a period of 40 years prior to 1992 and 5 years
         beginning in 1992.

         Investment in Unimproved Land - Investment in unimproved land is stated
         at lower of cost or fair value (see Note 6). All costs associated with
         the acquisition of a property are capitalized. Additionally, the
         Partnership capitalizes all carrying costs (such as interest expense
         and property taxes). These costs are added to the cost of the
         properties and are deducted from the sales prices to determine gains
         when properties are sold.

         Syndication Costs - Syndication costs (such as commissions, printing,
         and legal fees) totaling $928,614 represent costs incurred to raise
         capital and, accordingly, are recorded as a reduction in partners'
         capital (see Note 3).

         Income Taxes - The entity is treated as a partnership for income tax
         purposes and any income or loss is passed through and taxable to the
         individual partners. Accordingly, there is no provision for federal
         income taxes in the accompanying financial statements. However, the
         minimum California Franchise tax due by the Partnership was $800 for
         the years ended December 31, 1997 and 1996.

         Cash and Cash Equivalents - For purposes of the statements of cash
         flows, the Partnership considers all highly liquid debt instruments
         purchased with an original maturity of three months or less to be cash
         equivalents.

         Estimates - In preparing financial statements in conformity with
         generally accepted accounting principles, management is required to
         make estimates and assumptions that affect the reported amounts of
         assets and liabilities and the disclosure of contingent assets and
         liabilities at the date of the financial statements and revenues and
         expenses during the reporting period. Actual results could differ from
         these estimates.

         Concentration - All unimproved land parcels held for investment are
         located in the Inland Empire area of Southern California. The eventual
         sales price of all parcels is highly dependent on the real estate
         market condition. The Partnership attempts to mitigate any potential
         risk by monitoring the market condition and holding the land parcels
         until the real estate market recovers.

                                      FS-6
<PAGE>   34

                           TMP INLAND EMPIRE IV, LTD.
                       (A California Limited Partnership)
                          Notes to Financial Statements
                        December 31, 1997, 1996 and 1995

Note 2 - Organization of the Partnership

         On June 7, 1989, the Partnership was formed with TMP Properties (A
         California General Partnership) and TMP Investments, Inc. (A California
         Corporation) as the general partners. The partners of TMP Properties
         are William O. Passo, Anthony W. Thompson and Scott E. McDaniel.
         William O. Passo and Anthony W. Thompson were the shareholders of TMP
         Investments, Inc. until October 1, 1995, when they sold their shares to
         TMP Group, Inc., and then became the shareholders of TMP Group, Inc.

         The Partnership originally acquired ten separate parcels of unimproved
         real property in Riverside and San Bernardino Counties, California. The
         properties were to be held for investment, appreciation, and ultimate
         sale and/or improvement of all or a portion thereof, either alone or in
         conjunction with a joint venture partner. One parcel was sold in 1989,
         another parcel was sold in 1990, a third parcel was sold in 1995, and a
         fourth parcel was sold in 1997.

         The partnership agreement provides for two types of investments:
         Individual Retirement Accounts (IRA) and others. The IRA minimum
         purchase requirement was $2,000 and all others were a minimum purchase
         requirement of $5,000. The maximum liability of the limited partners is
         the amount of their capital contribution.


Note 3 - Partners' contributions

         The Partnership offered for sale 8,500 units at $1,000 each to
         qualified investors. As of December 31, 1989, all 8,500 units had been
         sold for total limited partner contributions of $8,500,000. There have
         been no contributions made by the general partners. As described in
         Note 1, syndication costs have been recorded as a reduction in
         partners' capital.


Note 4 - Allocation of profits, losses and cash distributions

         Profits, losses and cash distributions are allocated 99% to the limited
         partners and 1% to the general partners until the limited partners have
         received an amount equal to their capital contributions plus a
         cumulative, non-compounded return of 6% per annum on their adjusted
         capital contributions. At that point, the limited partners are
         allocated 85% and the general partners 15% of profits, losses and cash
         distributions. There were no distributions in 1997, 1996 or 1995.

                                      FS-7
<PAGE>   35

                           TMP INLAND EMPIRE IV, LTD.
                       (A California Limited Partnership)
                          Notes to Financial Statements
                        December 31, 1997, 1996 and 1995


Note 5 - Related party transactions

         Syndication costs (see Note 1) netted against partners' capital
         contributions include $850,000 in selling commissions paid in prior
         years to TMP Capital Corp. for the sale of partnership units of which a
         portion was then paid to unrelated registered representatives. William
         O. Passo and Anthony W. Thompson were the shareholders of TMP Capital
         Corp. until October 1, 1995, when they sold their shares to TMP Group,
         Inc.

         Investment in unimproved land includes acquisition fees of
         approximately $365,000 paid in prior years to TMP Properties and TMP
         Investments, Inc., the general partners, for services rendered in
         connection with the acquisition of the properties.

         The Partnership paid $12,245, $12,245, and $12,556 in partnership
         management fees to the general partners for the years ended December
         31, 1997, 1996 and 1995. The Partnership was also charged $9,876,
         $9,314, and $8,260 during the years ended December 31, 1997, 1996 and
         1995, respectively, by the general partner and an affiliated company of
         the general partner for office, secretarial and advertising expenses.
         At December 31, 1997 and 1996 the Partnership had a payable of $963 and
         $405 to the general partner and the affiliated company.

         At December 31, 1997 and 1996, $70,560 in sales commissions was payable
         to Regal Realty, a company wholly owned by Scott E. McDaniel, for
         services rendered relating to sales of properties in 1990 and 1989. Mr.
         McDaniel is a partner of TMP Properties and he was a shareholder of TMP
         Investments, Inc. until September 1993 when he sold his shares to Mr.
         Passo and Mr. Thompson. Ultimate payment of such sales commissions is
         contingent on the limited partners receiving an amount equal to their
         capital contributions plus a cumulative, non-compounded return of 6%
         per annum on their adjusted capital contribution.


Note 6 - Change in the fair value of investment in unimproved land

         As of December 31, 1996 and 1995, the total carrying amount of the
         investment in unimproved land was reduced by $3,254,195 and $562,244,
         respectively. This reduction represents the decline in fair value, as
         determined by the general partners, and is due mainly to the downturn
         in Southern California's real estate market and apparent slow recovery.

         As of December 31, 1997, the total carrying amount of the investment in
         unimproved land was increased by $1,741,509. This increase is due to
         various favorable market conditions within the Southern California real
         estate market during 1997. The general partners have thus reevaluated
         the prior years valuation of unimproved land and determined the
         corresponding recovery in value is appropriate.


                                      FS-8
<PAGE>   36

                           TMP INLAND EMPIRE IV, LTD.
                       (A California Limited Partnership)
                          Notes to Financial Statements
                        December 31, 1997, 1996 and 1995



Note 7 - Sale and related cost of property sold

         The following summarizes properties sold in 1997 and 1995:

<TABLE>
<CAPTION>
                                          1997          1995
                                          ----          ----
                                       Victorville     Perris
                                        10 acres       2 Acres
                                        --------       -------
<S>                                    <C>            <C>      
     Sale Price                        $ 127,000      $  23,000
                                       ---------      ---------

     Cost of parcel                      410,000         22,500
     Decline in fair value of land      (319,494)             0
     Acquisition fees                     33,383          1,935
     Development costs                     9,810              0
     Carrying costs                       62,792          4,372
                                       ---------      ---------

     Total costs                         196,491         28,807
                                       ---------      ---------

     Loss on sale of property          $ (69,491)     $  (5,807)
                                       =========      =========
</TABLE>


Note 8 - Notes payable

         During February 1996, the Partnership borrowed $190,000 from a private
         party. The note is secured by a deed of trust on a parcel of land owned
         by the Partnership in Beaumont, California. The note is due on February
         1, 1999. Interest accrues at 12% per annum payable in monthly
         installments of $1,900 starting March 1, 1997. As of December 31, 1997,
         $41,737 of interest had been paid and capitalized to land carrying
         cost.

Note 9 - Property taxes payable

         Property taxes payable at December 31, 1997 are as follows:

<TABLE>
<S>                   <C>                                     <C>      
                      1995                                     $  6,310
                      1996                                       27,784
                      1997                                       89,953
                                                               --------
                                                               $124,047
                                                               ========
</TABLE>


If the property taxes remain delinquent for five years, then the County can
foreclose on the property. Management plans to take the necessary action to
prevent foreclosures.


                                      FS-9
<PAGE>   37

                            SUPPLEMENTARY INFORMATION


<PAGE>   38

                           TMP INLAND EMPIRE IV, LTD.
                       (A California Limited Partnership)
              Schedule I - Real Estate and Accumulated Depreciation
              (Schedule XI, Rule 12-28, For SEC Reporting Purposes)
                      For the Year Ended December 31, 1997


<TABLE>
<CAPTION>
  COLUMN A         COLUMN B     COLUMN C        COLUMN D         COLUMN E   COLUMN F      COLUMN G      COLUMN H   COLUMN I
- ----------------------------------------------------------------------------------------------------------------------------
                                            COSTS CAPITALIZED
                                               SUBSEQUENT         Gross
                                             TO ACQUISITION       amount
                                          --------------------   at which                                         Estimated
Description of                   Initial              Carrying  Carried at  Accumulated    Date of        Date   Depreciable
    Assets        Encumbrances    Costs   Improvements  Costs    Year-End  Depreciation  Construction   Acquired    Life
    ------        ------------    -----   ------------  -----    --------  ------------  ------------   --------    ----
<S>                  <C>        <C>          <C>      <C>       <C>          <C>            <C>          <C>        <C> 
Unimproved land - 
     Perris, CA            -0-  $1,001,160      -0-   $135,945  $1,137,105     -0-            n/a        6/23/89     n/a
Unimproved land - 
     Riverside, CA         -0-     331,768      -0-    134,658     466,426     -0-            n/a         8/9/89     n/a
Unimproved land - 
     Beaumont, CA          -0-     732,567   $1,772    130,756     865,095     -0-            n/a        9/14/89     n/a
Unimproved land - 
     Beaumont, CA          -0-     821,842    3,577    127,020     952,439     -0-            n/a        6/19/89     n/a
Unimproved land - 
     Victorville, CA       -0-     769,718      -0-    140,660     910,378     -0-            n/a        7/14/89     n/a
Unimproved land - 
     Victorville, CA       -0-   1,322,099      -0-    229,923   1,552,022     -0-            n/a        8/10/89     n/a
                           ---  ----------   ------   --------  ----------     ---

                           -0-  $4,979,154   $5,349   $898,962  $5,883,465     -0-
                           ===  ==========   ======   ========  ==========     ===

Reconciliation of carrying amount
- ---------------------------------

Beginning balance               $6,256,439

Additions
  Development costs   $      0
  Carrying costs       141,115

  Total additions                  141,115
                                ----------
Deductions
  Initial costs       (451,297)
  Carrying costs       (62,792)

    Total deductions              (514,089)
                                ----------
                                 5,883,465
Less allowance for decline
 in fair value                  (1,755,465)
                                ----------

Ending balance                  $4,128,000
                                ==========
</TABLE>


             See Accompanying Notes and Independent Auditor's Report

                                      FS-10

<PAGE>   39

                           TMP INLAND EMPIRE IV, LTD.
                       (A California Limited Partnership)
              Schedule I - Real Estate and Accumulated Depreciation
              (Schedule XI, Rule 12-28, For SEC Reporting Purposes)
                      For the Year Ended December 31, 1996


<TABLE>
<CAPTION>
     COLUMN A       COLUMN B    COLUMN C        COLUMN D         COLUMN E     COLUMN F      COLUMN G     COLUMN H   COLUMN I
- -----------------------------------------------------------------------------------------------------------------------------
                                            COSTS CAPITALIZED      
                                               SUBSEQUENT          Gross
                                             TO ACQUISITION        amount
                                          ---------------------   at which                                         Estimated
Description of                  Initial                Carrying  Carried at  Accumulated     Date of       Date   Depreciable
    Assets        Encumbrances   Costs    Improvements   Costs    Year-End   Depreciation  Construction  Acquired    Life
    ------        ------------   -----    ------------   -----    --------   ------------  ------------  --------    ----
<S>                 <C>        <C>         <C>         <C>       <C>            <C>           <C>         <C>       <C> 
Unimproved land - 
     Perris, CA       -0-      $1,001,160      -0-     $118,809  $1,119,969      -0-           n/a        6/23/89    n/a
Unimproved land - 
     Riverside, CA    -0-         331,768      -0-      111,106     442,874      -0-           n/a         8/9/89    n/a
Unimproved land - 
     Beaumont, CA     -0-         732,567   $1,772      112,308     846,647      -0-           n/a        9/14/89    n/a
Unimproved land - 
     Beaumont, CA     -0-         821,842    3,577      109,197     934,616      -0-           n/a        6/19/89    n/a
Unimproved land -      
     Victorville, CA  -0-         451,297      -0-       59,115     510,412      -0-           n/a        8/17/89    n/a
Unimproved land - 
     Victorville, CA  -0-         769,718      -0-      121,121     890,839      -0-           n/a        7/14/89    n/a
Unimproved land - 
     Victorville, CA  -0-       1,322,099      -0-      188,983   1,511,082      -0-           n/a        8/10/89    n/a
                      ---      ----------   ------     --------  ----------

                      -0-      $5,430,451   $5,349     $820,639  $6,256,439      -0-
                      ===      ==========   ======     ========  ==========      ===

Reconciliation of carrying amount
- ---------------------------------

Beginning balance              $6,103,305

Additions
  Acquisitions     $  -0-
  Carrying costs    153,134
                   --------

  Total additions                 153,134
                               ----------
                                6,256,439

Less allowance for decline
 in fair value                 (3,816,439)
                               ---------- 

Ending balance                 $2,440,000
                               ==========
</TABLE>


             See Accompanying Notes and Independent Auditor's Report

                                      F-11

<PAGE>   40

                           TMP INLAND EMPIRE IV, LTD.
                       (A California Limited Partnership)
              Schedule I - Real Estate and Accumulated Depreciation
              (Schedule XI, Rule 12-28, For SEC Reporting Purposes)
                      For the Year Ended December 31, 1995



<TABLE>
<CAPTION>
   COLUMN A        COLUMN B    COLUMN C         COLUMN D         COLUMN E     COLUMN F      COLUMN G     COLUMN H   COLUMN I
- -------------------------------------------------------------------------------------------------------------------------------
                                            COSTS CAPITALIZED      
                                                SUBSEQUENT         Gross
                                             TO ACQUISITION        amount
                                          ---------------------   at which                                           Estimated
Description of                  Initial                Carrying  Carried at  Accumulated     Date of        Date    Depreciable
    Assets        Encumbrances   Costs    Improvements  Costs     Year-End   Depreciation  Construction   Acquired     Life
    ------        ------------   -----    ------------  -----     --------   ------------  ------------   --------     ----
<S>                 <C>       <C>           <C>       <C>        <C>           <C>            <C>         <C>         <C> 
Unimproved land - 
     Perris, CA        -0-    $1,001,160        -0-    $ 98,535  $1,099,695       -0-          n/a         6/23/89     n/a
Unimproved land - 
     Riverside, CA     -0-       331,768        -0-      87,858     419,626       -0-          n/a          8/9/89     n/a
Unimproved land - 
     Beaumont, CA      -0-       732,567     $1,772      89,058     823,397       -0-          n/a         9/14/89     n/a
Unimproved land - 
     Beaumont, CA      -0-       821,842      3,577      87,796     913,215       -0-          n/a         6/19/89     n/a
Unimproved land - 
     Victorville, CA   -0-       451,297        -0-      49,935     501,232       -0-          n/a         8/17/89     n/a
Unimproved land - 
     Victorville, CA   -0-       769,718        -0-     102,420     872,138       -0-          n/a         7/14/89     n/a
Unimproved land - 
     Victorville, CA   -0-     1,322,099        -0-     151,903   1,474,002       -0-          n/a         8/10/89     n/a
                              ----------     ------    --------  ----------       ---

                       -0-    $5,430,451     $5,349    $667,505  $6,103,305       -0-
                       ===    ==========     ======    ========  ==========       ===

Reconciliation of carrying amount
- ---------------------------------

Beginning balance             $6,033,962

Additions
  Carrying costs      98,228
                     -------
  Total additions                 98,228
                              ----------

Deductions
  Initial costs      (24,435)
  Carrying costs      (4,372)
  Reduction in 
   development costs     (78)
                     -------
                                 (28,885)
                              ----------
                               6,103,305
Less allowance for 
 decline in fair value          (562,244)
                              ----------

Ending balance                $5,541,061
                              ==========
</TABLE>

             See Accompanying Notes and Independent Auditor's Report

                                     FS-12

<TABLE> <S> <C>

<ARTICLE> 5
       
<S>                             <C>
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          DEC-31-1997
<PERIOD-START>                             JAN-01-1997
<PERIOD-END>                               DEC-31-1997
<CASH>                                          75,651
<SECURITIES>                                         0
<RECEIVABLES>                                        0
<ALLOWANCES>                                         0
<INVENTORY>                                  4,128,000
<CURRENT-ASSETS>                             4,203,651
<PP&E>                                               0
<DEPRECIATION>                                       0
<TOTAL-ASSETS>                               4,203,651
<CURRENT-LIABILITIES>                          388,270
<BONDS>                                              0
                                0
                                          0
<COMMON>                                             0
<OTHER-SE>                                   3,815,381
<TOTAL-LIABILITY-AND-EQUITY>                 4,203,651
<SALES>                                        127,000
<TOTAL-REVENUES>                             1,870,883
<CGS>                                          196,491
<TOTAL-COSTS>                                        0
<OTHER-EXPENSES>                                     0
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                                   0
<INCOME-PRETAX>                              1,674,392
<INCOME-TAX>                                       800
<INCOME-CONTINUING>                          1,673,592
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                 1,673,592
<EPS-PRIMARY>                                   194.92
<EPS-DILUTED>                                   194.92
        

</TABLE>


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