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022 A000001 GOLDMAN SACHS & CO.
022 B000001 13-5108880
022 C000001 505099
022 D000001 480956
022 A000002 PAINEWEBBER INC
<PAGE> PAGE 2
022 B000002 13-2638166
022 C000002 271469
022 D000002 282052
022 A000003 LEHMAN BROTHERS INC.
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022 C000003 255336
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022 C000004 230974
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<PAGE> PAGE 4
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<PAGE> PAGE 7
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SIGNATURE LESLIE L. OGG
TITLE GENERAL COUNSEL
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<NAME> TAX-FREE HIGH YIELD PORTFOLIO
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> NOV-30-1997
<INVESTMENTS-AT-COST> 5300390986
<INVESTMENTS-AT-VALUE> 5863084228
<RECEIVABLES> 132709496
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 5995793724
<PAYABLE-FOR-SECURITIES> 5627528
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1766701
<TOTAL-LIABILITIES> 7394229
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
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<OVERDISTRIBUTION-GAINS> 0
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<DIVIDEND-INCOME> 0
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<OTHER-INCOME> 0
<EXPENSES-NET> 26570654
<NET-INVESTMENT-INCOME> 361599248
<REALIZED-GAINS-CURRENT> (34,205,753)
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<NET-CHANGE-FROM-OPS> 464718548
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</TABLE>
Independent Auditors' Report on Internal Accounting Control
The Board of Trustees
Tax Free Income Trust:
In planning and performing our audit of the financial statements of Tax Free
High Yield Portfolio (portfolio within Tax Free Income Trust) for the year ended
November 30, 1997, we considered their internal control, including control
activities for safeguarding securities, in order to determine our auditing
procedures for the purpose of expressing our opinion on the financial statements
and to comply with the requirements of Form N-SAR, not to provide assurance on
the internal control.
The management of Tax Free Income Trust is responsible for establishing and
maintaining internal control. In fulfilling this responsibility, estimates and
judgments by management are required to assess the expected benefits and related
costs of controls. Generally, controls that are relevant to an audit pertain to
the entity's objective of preparing financial statements for external purposes
that are fairly presented in conformity with generally accepted accounting
principles. Those controls include the safeguarding of assets against
unauthorized acquisition, use or disposition.
Because of inherent limitations in internal control, errors or irregularities
may occur and not be detected. Also, projection of any evaluation of internal
control to future periods is subject to the risk that it may become inadequate
because of changes in conditions or that the effectiveness of the design and
operation may deteriorate.
Our consideration of the internal control would not necessarily disclose all
matters in the internal control that might be material weaknesses under
standards established by the American Institute of Certified Public Accountants.
A material weakness is a condition in which the design or operation of one or
more of the internal control components does not reduce to a relatively low
level the risk that errors or irregularities in amounts that would be material
in relation to the financial statements being audited may occur and not be
detected within a timely period by employees in the normal course of performing
their assigned functions. However, we noted no matters involving the internal
control and its operation, including controls for safeguarding securities, that
we consider to be a material weakness as defined above.
This report is intended solely for the information and use of management, the
Board of Trustees of Tax Free Income Trust, and the Securities and Exchange
Commission.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
January 2, 1998
