INLAND CAPITAL FUND L P
None   -5-
We acquired fee ownership of the following real property investments:    Gross Acres Remaining Purchase/Sales  Parcel & Location Purchased/Sold Acres Date       Parcel 1, Kendall County, Illinois 108.8960 -     07/22/92    (108.8960  sold 01/11/02)            Parcel 2, McHenry County, Illinois 201.0000 22.8000 11/09/93    (17.7420  sold 08/02/95)   (8.6806  sold various 1997)   (1.9290  sold various 1998)   (13.5030  sold various 1999)   (3.6400  sold 11/29/01)   (10.1600  sold various 2002)   (116.8454  sold various 2004)   (5.7000  sold various 2005)       Parcel 3, Will County, Illinois 34.0474 -     03/04/94    (34.0474  sold 02/04/99)       Parcel 4, Will County, Illinois 86.9195 -     03/30/94    (2.3050  sold various 1997)   (3.3600  sold various 1998)   (1.0331  sold 08/19/99)   (60.1000  sold various 2001)   (20.1214  sold 11/01/04)       Parcel 5, LaSalle County, Illinois 190.9600 -     04/01/94    (2.0600  sold 04/08/98)   (188.9000  sold 10/07/99)       Parcel 6, DeKalb County, Illinois 59.0800 -     05/11/94    (4.9233  sold Apr 1998)   (54.1567  sold 07/23/98)       Parcel 7, Kendall County, Illinois 200.8210 -     07/28/94   (168.1740  sold 09/18/03)   (32.6470  sold various 2005)       Parcel 8, Kendall County, Illinois 133.0000 -     08/17/94   (133.0000  sold 04/11/05)       Parcel 9, LaSalle County, Illinois 335.9600 -     08/30/94    (335.9600  sold 04/18/03)       Parcel 10, Kendall County, Illinois 230.7860 -     09/16/94    (7.0390  sold 04/21/95)   (2.9770  sold 11/03/99)   (127.4000  sold 08/14/02)   (84.3900  sold 01/09/04)   (8.9800  sold 12/15/05)     -6-      Gross Acres Remaining Purchase/Sales  Parcel & Location Purchased/Sold Acres Date       Parcel 11, Kane County, Illinois 123.0000 -     09/26/94    (123.0000  sold 11/30/00)       Parcel 12, Kendall County, Illinois 110.2530 -     09/28/94    (59.9050  sold 04/16/01)   (50.3480  sold 09/18/03)       Parcel 13, LaSalle County, Illinois 352.7390 -     10/06/94    (10.0000  sold 07/27/98)   (342.7390  sold 08/31/98)       Parcel 14, Kendall County, Illinois 134.7760 -     10/26/94    (10.6430  sold 05/21/99)   (124.1330  sold 12/17/04)       Parcel 15, McHenry County, Illinois 169.5400 -     10/31/94    (169.5400  sold 02/26/04)       Parcel 16, McHenry County, Illinois 207.0754 -     11/30/94    (207.0754  sold 02/26/04)       Parcel 17, LaSalle County, Illinois 236.4400 -     12/07/94    (236.4400  sold various 2005)       Parcel 18, Kendall County, Illinois 386.9900 -     11/02/95    (386.9900  sold 08/31/98)    The general partner anticipated that the land we acquired would produce sufficient income to pay property taxes, insurance and other miscellaneous expenses, with surplus funds, if any, to be retained in the working capital reserve for pre-development activities. Income was derived from leases to farmers or from other activities compatible with our business plan for land parcels. It was not expected that we would generate cash distributions to the partners from farm leases or other leasing activities. Through December 31, 2005, our land has generated sufficient revenues from leasing to cover real estate taxes and insurance expense. However, our remaining parcel has been developed and zoned as a business park and therefore we do not receive any income on this parcel.  Our general partner has agreed to make a supplemental capital contribution to us if and to the extent that real estate taxes and insurance payable with respect to our land during a give n year exceed the revenue earned by us from leasing our land during such year. Any supplemental capital contribution will be repaid only after limited partners have received, over the life of our partnership, a return of their original capital plus the 15% cumulative return.        -7-
We are not subject to any material pending legal proceedings.
Consistent with our limited partnership agreement, there were no matters submitted to a vote of our security holders during 2005.   PART II
As of March 15, 2006, there were 2,572 holders of our units. There is no public market for units nor is it anticipated that any public market for units will develop.  For the years ended December 31, 2005 and 2004, we paid the following distributions:        Distributions to:  2005 2004       General partners $ 3,414,495 4,888,109  Limited partners  22,007,872 27,330,331       Total $ 25,422,367 32,218,440        -8-
INLAND CAPITAL FUND, L.P. (a limited partnership)  For the years ended December 31, 2005, 2004, 2003, 2002 and 2001  (not covered by the Report of Independent Registered Public Accounting Firm)     2005 2004 2003 2002 2001          Total assets $ 1,951,152 12,126,007 17,909,721 21,039,772 22,117,537          Total income $ 19,080,193 38,589,683 8,404,317 8,125,941 2,320,989          Net income $ 15,354,614 26,702,695 4,791,865 5,522,385 729,463          Net income (loss) allocated to the   one general partner unit $ 3,413,794 4,889,586 396,565 375,864 (3,218)          Net income allocated per limited   partnership unit  $ 369.26 674.56 135.93 159.15 22.66          Distributions per limited   partnership unit from sales $ 680.58 845.17 227.11 209.68 46.39          Weighted average limited   partnership units  32,337 32,337 32,337 32,337 32,337            The above selected financial data should be read in conjunction with the financial statements and related notes appearing elsewhere in this annual report.  The net income per unit, basic and diluted, and distributions per unit are based upon the weighted average number of units outstanding.   All distributions from sales represent a return of original capital until such time as the limited partners have received distributions totaling their original capital. As of March 2004, the limited partners had received distributions in excess of their original capital           -9-
Not Applicable.   -15-
INLAND CAPITAL FUND, L.P. (a limited partnership)   Index    Page     Report of Independent Registered Public Accounting Firm 16     Report of Independent Registered Public Accounting Firm 17     Financial Statements:       Balance Sheets, December 31, 2005 and 2004 18       Statements of Operations, for the years ended December 31, 2005, 2004 and 2003 20       Statements of Partners' Capital, for the years ended December 31, 2005, 2004 and 2003 22       Statements of Cash Flows, for the years ended December 31, 2005, 2004 and 2003 23       Notes to Financial Statements 25     Schedules not filed:  All schedules have been omitted as the required information is inapplicable or the information is presented in the financial statements or related notes.                     -16-  Report of Independent Registered Public Accounting Firm   To the Partners of  InLand Capital Fund, L.P.  We have audited the accompanying balance sheets of InLand Capital Fund, L.P. (a limited partnership) (“the Partnership”) as of December 31, 2005 and 2004, and the related statements of operations, partners’ capital, and cash flows for the years then ended.  The 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 the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Partnership is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting.  Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements,  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 InLand Capital Fund, L.P. as of December 31, 2005 and 2004, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.   Grant Thornton LLP  Chicago, Illinois March 23, 2006      -17-         REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM   To the Partners of    InLand Capital Fund, L.P.   We have audited the accompanying statements of operations, partners' capital, and cash flows of InLand Capital Fund, L.P. (a limited partnership) (the "Partnership") for the year ended December 31, 2003.  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 audit.    We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audit provides a reasonable basis for our opinion.  In our opinion, such financial statements present fairly, in all material respects, the results of operations and cash flows of InLand Capital Fund, L.P. for the year ended December 31, 2003 in conformity with accounting principles generally accepted in the United States of America.     Deloitte & Touche LLP   March 26, 2004 Chicago, Illinois     -18-  INLAND CAPITAL FUND, L.P. (a limited partnership)  Balance Sheets  December 31, 2005 and 2004  Assets      2005 2004  Current assets:       Cash and cash equivalents (Note 1) $ 829,410 7,679,088    Accrued interest and other receivables  9,079 10,242    Other current assets  4,299 7,942       Total current assets  842,788 7,697,272       Other assets  233,074 221,266  Investment properties and improvements (including acquisition fees paid   to Affiliates of $11,668 and $191,267 at December 31, 2005 and 2004,    respectively) (Notes 3 and 4)  875,290 4,207,469       Total assets $ 1,951,152 12,126,007                                See accompanying notes to financial statements.   -19-  INLAND CAPITAL FUND, L.P. (a limited partnership)  Balance Sheets (continued)  December 31, 2005 and 2004   Liabilities and Partners' Capital      2005 2004  Current liabilities:       Accounts payable $ 314,452  419,683     Accrued real estate taxes  1,522  11,243     Due to Affiliates (Note 3)  29,223  16,377     Unearned income  -  4,996        Total current liabilities  345,197  452,299        Partners' capital:       General Partner:         Capital contribution  500  500       Cumulative cash distributions  (9,546,406) (6,131,911)      Cumulative net income  9,558,547  6,144,753          12,641  13,342          Limited Partners:         Units of $1,000. Authorized 60,000 Units, 32,337 outstanding at       December 31, 2005 and 2004, (net of offering costs of $4,466,765,        of which $3,488,574 was paid to Affiliates)  27,876,265  27,876,265       Cumulative cash distributions  (78,171,193) (56,163,321)      Cumulative net income  51,888,242  39,947,422          1,593,314  11,660,366        Total Partners' capital  1,605,955  11,673,708        Total liabilities and Partners' capital $ 1,951,152  12,126,007               See accompanying notes to financial statements.   -20-   INLAND CAPITAL FUND, L.P. (a limited partnership)  Statements of Operations  For the years ended December 31, 2005, 2004 and 2003      2005 2004 2003  Income:        Sale of investment properties and improvements $ 18,854,392  37,505,082  7,877,469     Recognition of deferred gain on sale of     investment properties and improvements  -  477,783  239,462     Rental income  13,872  83,500  166,615     Interest income  203,180  518,118  108,928     Other income  8,749  5,200  11,843           19,080,193  38,589,683  8,404,317   Expenses:        Cost of investment properties sold  3,429,636  11,427,904  3,255,302     Professional services to Affiliates  17,283  30,387  30,299     Professional services to non-affiliates  50,451  41,262  32,725     General and administrative expenses to Affiliates  21,779  19,365  19,683     General and administrative expenses to non-    affiliates  30,265  17,204  18,151     Tax expense  108,615  218,863  42,773     Marketing expenses to Affiliates  12,748  13,546  13,781     Marketing expenses to non-affiliates  30,103  58,302  55,609     Land operating expenses to Affiliates  1,032  16,913  31,332     Land operating expenses to non-affiliates  23,667  30,481  90,826     Bad debt expense  -  12,761  21,971           3,725,579  11,886,988  3,612,452         Net income $ 15,354,614  26,702,695  4,791,865                          See accompanying notes to financial statements.    -21-  INLAND CAPITAL FUND, L.P. (a limited partnership)  Statements of Operations (continued)  For the years ended December 31, 2005, 2004 and 2003      2005 2004 2003        Net income allocated to (Note 2):        General Partner $ 3,413,794 4,889,586 396,345    Limited Partners  11,940,820 21,813,109 4,395,520        Net income $ 15,354,614 26,702,695 4,791,865        Net income per the one General        Partner Unit $ 3,413,794 4,889,586 396,345        Net income per Unit, basic and diluted, allocated to   Limited Partners per weighted average Limited   Partnership Units (32,337 for the years ended December   31, 2005, 2004, and 2003) $ 369.26 674.56 135.93                                     See accompanying notes to financial statements.   -22-  INLAND CAPITAL FUND, L.P. (a limited partnership)  Statements of Partners' Capital  For the years ended December 31, 2005, 2004 and 2003      General Limited     Partner Partners Total        Balance at January 31, 2003 $ 12,563  20,126,054  20,138,617         Distributions to Partners ($227.11 per weighted average   Limited Partnership Units of 32,337) (Note 2)  (397,043) (7,343,986) (7,741,029)  Net income  396,345  4,395,520  4,791,865         Balance at December 31, 2003  11,865  17,177,588  17,189,453         Distributions to Partners ($845.17 per weighted average   Limited Partnership Units of 32,337) (Note 2)  (4,888,109) (27,330,331) (32,218,440)  Net income   4,889,586  21,813,109  26,702,695         Balance at December 31, 2004  13,342  11,660,366  11,673,708         Distributions to Partners ($680.58 per weighted average   Limited Partnership Units of 32,337) (Note 2)  (3,414,495) (22,007,872) (25,422,367)  Net income  3,413,794  11,940,820  15,354,614         Balance at December 31, 2005 $ 12,641  1,593,314  1,605,955                          See accompanying notes to financial statements.   -23-  INLAND CAPITAL FUND, L.P. (a limited partnership)  Statements of Cash Flows  For the years ended December 31, 2005, 2004 and 2003      2005 2004 2003  Cash flows from operating activities:        Net income $ 15,354,614  26,702,695  4,791,865     Adjustments to reconcile net income to net cash provided     by (used in) operating activities:          Gain on sale of investment properties  (15,424,756) (26,077,178) (4,622,167)      Recognition of deferred gain  -  (477,783) (239,462)      Bad debt expense  -  12,761  21,971       Changes in assets and liabilities:            Accrued interest and other receivables  1,163  174,172  (82,260)        Other current assets  3,643  (1,523) (6,419)        Accounts payable  (105,231) 415,806  (11,254)        Accrued real estate taxes  (9,721) (38,743) 7,113         Due to Affiliates  12,846  (7,436) 11,585         Unearned income  (4,996) (146,439) 74,160         Other assets  (11,808) (218,192) -         Net cash provided by (used in) operating activities  (184,246) 338,140  (54,868)        Cash flows from investing activities:        Additions to investment properties  (97,457) (194,552) (412,195)    Principal payments collected on mortgage loans     receivable  -  846,737  448,675     Proceeds from sale of investment properties  18,854,392  37,505,082  7,877,469         Net cash provided by investing activities  18,756,935  38,157,267  7,913,949         Cash flows from financing activities:        Distributions paid  (25,422,367) (32,218,440) (7,741,029)        Net cash used in financing activities  (25,422,367) (32,218,440) (7,741,029)        Net increase (decrease) in cash and cash equivalents  (6,849,678) 6,276,967  118,052   Cash and cash equivalents at beginning of year  7,679,088  1,402,121  1,284,069   Cash and cash equivalents at end of year $ 829,410  7,679,088  1,402,121                  See accompanying notes to financial statements.   -24-  INLAND CAPITAL FUND, L.P. (a limited partnership)  Statements of Cash Flows (continued)  For the years ended December 31, 2005, 2004 and 2003      2005 2004 2003        Supplemental schedule of noncash investing activities:            Reduction of investment properties $ 3,429,636 11,427,904 3,255,302  Gain on sale of land  15,424,756 26,077,178 4,622,167        Proceeds from sale of investment properties $ 18,854,392 37,505,082 7,877,469                                          See accompanying notes to financial statements.   -25-  INLAND CAPITAL FUND, L.P. (a limited partnership)  Notes to Financial Statements  For the years ended December 31, 2005, 2004 and 2003   (1)  Organization and Basis of Accounting  InLand Capital Fund, L.P. (the "Partnership") was organized on June 21, 1991 by the filing of a Certificate of Limited Partnership under the Revised Uniform Limited Partnership Act of the State of Delaware.  On December 13, 1991, the Partnership commenced an Offering of 60,000 Limited Partnership Units pursuant to a Registration under the Securities Act of 1933. The Amended and Restated Agreement of Limited Partnership  (the "Partnership Agreement") provides for Inland Real Estate Investment Corporation to be the General Partner.   The Offering terminated on August 23, 1993, with total sales of 32,399.28 Units, at $1,000 per Unit, resulting in $32,399,282 in gross offering proceeds, not including the General Partner's capital contribution of  $500.  All of the holders of these Units have been admitted to the Partnership. The Limited Partners of the Partnership share in their portion of benefits of ownership of the Partnership's real property investments accor ding to the number of Units held. As of December 31, 2005, the Partnership had repurchased and canceled a total of 62 Units for $56,253 from various Limited Partners through the Unit Repurchase Program.  Under this program, Limited Partners could under certain circumstances have their Units repurchased for an amount equal to their Invested Capital.  The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.   Offering costs have been offset against the Limited Partners' capital accounts.  The Partnership considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.  The Partnership recognizes income from the sale of land parcels in accordance with Statement of Financial Accounting Standards No. 66, "Accounting for Sales of Real Estate".  For vacant land parcels and parcels with insignificant buildings and improvements, the Partnership uses the area method of allocation, which approximates the relative sales method of allocation, whereby a per acre price is used as the standard allocation method for land purchases and sales. The total cost of the parcel is divided by the total number of acres to arrive at a per acre price. For parcels with significant buildings and improvements (Parcel 10, described in Note 4), the Partnership recorded the buildings and improvements at a cost based upon the appraised value at the date of acquisition.  Repair and maintenance expenses are charged to operations as incurred.       -26-  INLAND CAPITAL FUND, L.P. (a limited partnership)  Notes to Financial Statements (continued)   A presentation of information about operating segments as required in SFAS No. 131 "Disclosures About Segments of an Enterprise and Related Information" would not be material to an understanding of the Partnership's business taken as a whole as the Partnership is engaged in the business of real estate investment which management considers to be a single operating segment.  No provision for Federal income taxes has been made as the liability for such taxes is that of the Partners rather than the Partnership.  The Partnership records are maintained on the accrual basis of accounting in accordance with GAAP. The Federal income tax return has been prepared from such records after making appropriate adjustments, if any, to reflect the Partnership's accounts as adjusted for Federal income tax reporting purposes. Such adjustments are not recorded on the records of the Partnership.  The net effect of these items is summarized as follows:    2005 2004    GAAP Tax Basis GAAP Tax Basis    Basis (unaudited) Basis (unaudited)         Total assets $ 1,951,152 6,184,700 12,126,007 16,374,580         Partners' capital:         General Partner  12,641 14,722 13,342 15,454    Limited Partners  1,593,314 1,591,461 11,660,366 11,661,699         Net income:         General Partner  3,413,794 3,413,762 4,889,586 4,890,607    Limited Partners  11,940,820 11,922,603 21,813,109 20,904,746         Net income per Limited Partnership Unit,   basic and diluted  369.26 368.70 674.56 646.47    The net income per Unit is based upon the weighted average number of Units of 32,337 during 2005 and 2004.  The Partnership is required to pay a withholding tax to the Internal Revenue Service with respect to a Partner's allocable share of the Partnership's taxable net income, if the Partner is a foreign person. The Partnership will first pay the withholding tax from the distributions to any foreign person, and to the extent that the tax exceeds the amount of distributions withheld, or if there have been no distributions to withhold, the excess will be accounted for as a distribution to the foreign person. Future withholding tax payments will be made every April, June, September and December.    -27-  INLAND CAPITAL FUND, L.P. (a limited partnership)  Notes to Financial Statements (continued)   New Accounting Pronouncements  In December 2004, the FASB issued SFAS No. 153: Exchange of Nonmonetary Assets, an amendment of APB Opinion No. 29. The amendments made by SFAS No. 153 are based on the principle that exchanges of nonmonetary assets should be measured on the fair value of assets exchanged. It eliminates the exceptions for nonmonetary exchanges of similar productive assets and replaces it with a broader exception for exchanges of nonmonetary assets that do not have commercial substance. The statement is effective for nonmonetary exchanges occurring in fiscal periods beginning after June 15, 2005. The Partnerhsip does not believe that the adoption of SFAS No. 153 will have a material impact on its financial statements.  Emerging Issues Task Force ("EITF") Issue No. 04-5: Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity when the Limited Partners Have Certain Rights, was ratified by the FASB in June 2005. At issue is what rights held by the limited partner(s) preclude consolidation in circumstances in which the sole general partner would consolidate the limited partnership in accordance with U.S. generally accepted accounting principles. The assessment of limited partners' rights and their impact on the presumption of control of the limited partnership by the sole general partner should be made when an investor becomes the sole general partner and should be reassessed if (a) there is a change to the terms or in the exercisability of the rights of the limited partners, (b) the sole general partner increases or decreases its ownership of limited partnership interests,  or (c) there is an increase or decrease in the number of outstanding limited partnership interests. This consensus applies to limited partnerships or similar entities, such as limited liability companies that have governing provisions that are the functional equivalent of a limited partnership. This Issue is effective no later than for fiscal years beginning after December 15, 2005 and as of June 29, 2005 for new or modified arrangements. The Partnership does not expect that this EITF Issue will have a material effect on its financial statements.  In June 2005, the FASB issued EITF Issue No. 04-10: Determining Whether to Aggregate Operating Segments that do not meet the Quantitative Thresholds.  The EITF provides clarification regarding SFAS No. 131: Disclosure about Segments of an Enterprise and Related Information.  The consensus states that operating segments that do not meet the quantitative thresholds can be aggregated only if aggregation is consistent with the objective and basic principles provided in SFAS No. 131, the segments have similar economic characteristics, and the segments share a majority of the aggregation criteria listed in SFAS No. 131.  This should be applied for fiscal years ending after September 15, 2005.  The corresponding information for earlier periods, including interim periods, should be restated unless it is impractical to do so.  Early application of the consensus is permitted.  The adoption of this consensu s did not have a significant impact on the Partnerhsip’s segment disclosure.  In March 2005, the FASB issued FIN No. 47: Accounting for Conditional Asset Retirement Obligations.  This interpretation clarifies that the term conditional asset retirement obligation as used in SFAS No. 143: Accounting for Asset Retirement Obligation, refers to a legal obligation to perform an asset retirement activity in which the timing and (or) method of settlement are conditional on a future event that may or may not be within the control of the entity.  Thus, the timing and (or) method of settlement may be conditional on a future event.  This interpretation also clarifies when an entity would have sufficient information to reasonably estimate the fair value of an asset retirement obligation.  This interpretation is effective no later than the end of fiscal years ending after December 15, 2005.  The adoption of this interpretation did not have a significant impact on the Partnership’s finan cial statements.     -28-  INLAND CAPITAL FUND, L.P. (a limited partnership)  Notes to Financial Statements (continued)    (2)  Partnership Agreement  The Partnership Agreement defines the allocation of profits and losses, and available cash. If and to the extent that real estate taxes and insurance payable with respect to the Partnership's land during a given year exceed revenues of the Partnership, the General Partner will make a Supplemental Capital Contribution of such amount to the Partnership to ensure that it has sufficient funds to make such payments.  Distributions of Net Sale Proceeds will be allocated between the General Partner and the Limited Partners based upon both an aggregate overall return to the Limited Partners and a separate return with respect to each parcel of land purchased by the Partnership.  Profits and losses from operations (other than capital transactions) will be allocated 99% to the Limited Partners and 1% to the General Partner. The net gain from a sale of Partnership properties is first allocated among the Partners in proportion to the negative balances, if any, in their respective capital accounts. Thereafter, except as provided below, net gain is allocated to the General Partner in an amount equal to the proceeds distributable to the General Partner from such sale and the balance of any net gain is allocated to the Limited Partners. If the amount of net gain realized from a sale is less than the amount of cash distributed to the General Partner from such sale, the Partnership will allocate income or gain to the General Partner in an amount equal to the excess of the cash distributed to the General Partner with respect to such sale as quickly as permitted by law. Any net loss from a sale will be allocated to the Limited Partners.  As a general rule, Net Sale Proceeds will be distributed 90% to the Limited Partners and 10% to the General Partner until the Limited Partners have received from Net Sale Proceeds  (i) a return of their Original Capital plus (ii) a noncompounded Cumulative Preferred Return of 15% on their Invested Capital. However, with respect to each parcel of land, the General Partner's 10% share will be subordinated until the Limited Partners receive a return of the Original Capital attributed to such parcel ("Parcel Capital") plus a 6% per annum noncompounded cumulative preferred return thereon.   After the amounts described in items  (i) and  (ii) above and any previously subordinated distributions to the General Partner have been paid, and the amount of any Supplemental Capital Contributions have been repaid to the General Partner, subsequent distributions shall be paid 75% to the Limited Partners and 25% to the General Partner without considering Parcel Capital.  If, after all Net Sale Proceeds have been distributed, the General Partner has received more than 25% of all Net Sale Proceeds  (exclusive of distributions made to the Limited Partners to return their Original Capital), the General Partner shall contribute to the Partnership for distribution to the Limited Partners an amount equal to such excess.  Any distributions from Net Sales Proceeds at a time when Invested Capital is greater than zero shall be deemed applied first to reduction of such Invested Capital before application to payment of any deficiency in the 15% noncompounded Cumulative Preferred Return.     -29-  INLAND CAPITAL FUND, L.P. (a limited partnership)  Notes to Financial Statements (continued)   (3)  Transactions with Affiliates  The General Partner and its Affiliates are entitled to reimbursement for salaries and expenses of employees of the General Partner and its Affiliates relating to the administration of the Partnership.  Such costs are included in professional services and general and administrative expenses to Affiliates, of which $7,686 and $6,792 was unpaid as of December 31, 2005 and 2004, respectively.  The General Partner is entitled to receive Asset Management Fees equal to one-quarter of 1% of the original cost to the Partnership of undeveloped land annually, limited to a cumulative total over the life of the Partnership of 2% of the land's original cost to the Partnership.  Such fees of $1,032, $16,913 and $31,332 have been incurred and paid for the years ended December 31, 2005, 2004 and 2003, respectively and are reported as land operating expenses to Affiliates on the statement of operations.  As of March 31, 2005, we had met the limit on this fee.  An Affiliate of the General Partner performed sales marketing and advertising services for the Partnership and was reimbursed  (as set forth under terms of the Partnership Agreement) for direct costs. Such costs of $12,748, $13,546 and $13,781 have been incurred and are included in marketing expenses to affiliates for the years ended December 31, 2005, 2004 and 2003, respectively.  An Affiliate of the General Partner performed property upgrades, rezoning, annexation and other activities to prepare the Partnership's land investments for sale and was reimbursed (as set forth under terms of the Partnership Agreement) for salaries and direct costs. For the years ended December 31, 2005 and 2004, the Partnership incurred $84,245 and $111,621, respectively, of such costs. The Affiliate did not take a profit on any project. Such costs are included in investment properties of which $21,537 and $9,585 was unpaid at December 31, 2005 and 2004, respectively.             INLAND CAPITAL FUND, L.P. (a limited partnership)  Notes to Financial Statements (continued)  (4)  Investment Properties      Initial Costs  Parcel Illinois Gross Acres Purchased Purchase/Sales Original Acquisition Total Costs Capitalized Subsequent to Costs of Property  Total Remaining Costs of Parcels  Current Year Gain On Sale  # County /(Sold) Date Costs Costs Costs Acquisition Sold at 12/31/05 Recognized  1 Kendall 108.8960  07/22/92 $   707,566 57,926 765,492 186,333 951,825 -     -        (108.8960) 01/11/02                     2 McHenry 201.0000  11/09/93 2,020,314 122,145 2,142,459 2,650,552 3,917,721 875,290 221,880    (17.7420) 08/02/95           (8.6806) Var 1997           (1.9290) Var 1998           (13.5030) Var 1999           (3.6400) 11/29/01           (10.1600) Var 2002           (2.0320) 06/07/04           (114.8134) 08/12/04           (5.7000) Var 2005                     3 Will 34.0474  03/04/94 1,235,830 88,092 1,323,922 37,857 1,361,779 -     -        (34.0474) 02/04/99                     4 Will 86.9195  03/30/94 1,778,820 143,817 1,922,637 416,096 2,338,733 -     -        (2.3050) Var 1997           (3.3600) Var 1998           (1.0331) 08/19/99           (60.1000) Var 2001           (20.1214) 11/01/04                     5 LaSalle 190.9600  04/01/94 532,000 18,145 550,145 69,391 619,536 -     -        (2.0600) 04/08/98           (188.9000) 10/07/99                     6 DeKalb 59.0800  05/11/94 670,207 58,373 728,580 486,869 1,215,449 -     -        (4.9233) Apr 1998           (54.1567) 07/23/98                     7 Kendall 200.8210  07/28/94 1,506,158 82,999 1,589,157 460,282 2,049,439 -     5,683,347    (168.1740) 09/18/03           (32.6470) Var 2005                     8 Kendall 133.0000  08/17/94 1,300,000 106,949 1,406,949 44,331 1,451,280 -     4,069,240    (133.0000) 04/11/05                        -30-  INLAND CAPITAL FUND, L.P. (a limited partnership)  Notes to Financial Statements (continued) (4)  Investment Properties (continued)       Initial Costs  Parcel Illinois Gross Acres Purchased Purchase/Sales Original Acquisition Total Costs Capitalized Subsequent to Costs of Property Total Remaining Costs of Parcels  Current Year Gain On Sale  # County /(Sold) Date Costs Costs Costs Acquisition Sold at 12/31/05 Recognized  9 LaSalle 335.9600  08/30/94 993,441 79,329 1,072,770 130,045 1,202,815 -     -        (335.9600) 04/18/03                     10 Kendall 223.7470  09/16/94 $   2,693,025 205,660 2,898,685 362,769 3,261,454 -     1,406,628    (2.9770) 11/03/99           (127.4000) 08/14/02           (84.39) 01/09/04           (8.98) 12/15/05                     10A(a) Kendall 7.0390  09/16/94 206,975 15,806 222,781 1,327 224,108 -     -        (7.0390) 04/21/95                     11 Kane 123.0000  09/26/94 1,353,000 75,551 1,428,551 17,466 1,446,017 -     -        (123.000) 11/30/00                     12 Kendall 110.2530  09/28/94 600,001 51,220 651,221 157,198 808,419 -     -        (59.9050) 04/16/01           (50.3480) 09/18/03                     13 LaSalle 352.7390  10/06/94 1,032,666 91,117 1,123,783 22,723 1,146,506 -     -         (10.0000) 07/27/98            (342.7390) 08/31/98                     14 Kendall 134.7760  10/26/94 1,000,000 81,674 1,081,674 36,734 1,118,408 -     -         (10.6430) 05/21/99           (124.1330) 12/17/04                     15 McHenry 169.5400  10/31/94 2,900,000 79,196 2,979,196 332,922 3,312,118 -     -        (169.5400) 02/26/04                     16 McHenry 207.0754  11/30/94 1,760,256 101,388 1,861,644 315,664 2,177,308 -     -        (207.0754) 02/26/04                     17 LaSalle 236.4400  12/07/94 1,060,286 74,735 1,135,021 100,869 1,235,890 -     4,043,661    (236.4400) Var 2005                     18 Kendall 386.9900  11/02/95            (386.9900) 08/31/98      934,993      126,329     1,061,322                501           1,061,823             -               -       Total     $24,285,538 1,660,451 25,945,989 5,829,929 30,900,628 875,290 15,424,756      -31-  INLAND CAPITAL FUND, L.P. (a limited partnership)  Notes to Financial Statements (continued)   (4)  Investment Properties (continued)  (a) Included in the purchase of Parcel 10 was a house and several outbuildings, located on approximately seven acres, which were sold on April 21, 1995.  (b) The aggregate cost of real estate owned at December 31, 2005 for Federal income tax purposes was approximately $900,000(unaudited).  (c) Reconciliation of real estate owned:     2005 2004       Balance at January 1, $ 4,207,469  15,440,821   Additions during year  97,457  194,552   Sales during year  (3,429,636) (11,427,904)       Balance at December 31, $ 875,290  4,207,469           (5)  Farm Rental Income  The Partnership has determined that all leases relating to the farm parcels are operating leases. Accordingly, rental income is reported when earned.  As of December 31, 2005, the Partnership did not have a farm lease for the remaining 23 acres owned.   (6) Mortgage Loans Receivable  The General Partner determined that the maximum value of Parcel 1, 6 and 12 could be realized if the parcels were developed and sold as individual lots. However, if we had followed that plan, there is a possibility that it could have increased income taxes. Therefore, the Partnership sold the parcels to a third party developer whereby 100% of the sales price was represented by notes receivable from the buyer. These transactions were deemed installment sales. After the sale, the developer, through limited liability companies or LLCs, secured third party financing to cover the deferred down payment owed to us as well as provide proceeds to begin the development of the project. These sales were structured so that the deferred down payment received at the time of the sale was sufficient to provide a distribution to the Limited Partners that equated to the invested capital allocated to the parcel (parcel capital) plus approximately a 6% return  per annum on the parcel capital through the date of the distribution.    -32-   INLAND CAPITAL FUND, L.P. (a limited partnership)  Notes to Financial Statements (continued)  The velocity of the developer's individual home sales at Parcels 6 and 12 was slower than was originally projected and consequently, the developer's carrying costs were higher.  As a result of the development's financial difficulties, the net sale proceeds available to the Partnership were lower than projected.  As of December 31, 2003, the Partnership had recorded allowances for doubtful accounts of $135,000 relating to the mortgage receivable and $62,289 relating to accrued interest receivable, relating to the sale of Parcel 12.  A portion of the related deferred gain for Parcel 12 of $68,829, as of December 31, 2003, was also written off against bad debt expense. The General Partner continued to monitor this transaction throughout 2004 and, based on its review of the developments’ financial situation during the fourth quarter of 2004, it did not anticipate receiving any additional proceeds on Parcel 12.  As of December 31, 2004, the partnership had written off the mortgage receiva ble and related accrued interest receivable.  The General Partner guaranteed the third party development loans owed by these limited liability companies.   In reviewing the developments' financial situation, our general partner determined that it would be in its best interest to have an affiliate acquire the interests in the LLCs. The general partner and its affiliates concluded that they could better control the continuing costs to complete these developments and would therefore have the best opportunity to limit their exposure under the guarantee agreements and possibly recover a portion of the amount owed. An affiliate of our general partner contributed approximately $50,000 to acquire the interests in the LLC that owned Parcel 12. The affiliate of the general partner will complete the development and sale of these projects. Our limited partners received distributions that equated to the invested capital allocated to each parcel (parcel capital) plus approximately a 6% return per annum on the parcel capital through the date of the distribut ion.                       -33-
Not applicable.     -34-   PART III
Our general partner, Inland Real Estate Investment Corporation (IREIC), was organized in 1984 for the purpose of acting as general partner of limited partnerships formed to acquire, own and operate real properties. Our general partner is a wholly owned subsidiary of The Inland Group, Inc. The general partner has responsibility for all aspects of our operations.   During 2004, the board of directors of our general partner formalized the audit committee. The Audit Committee is not independent of our general partner and consists of Catherine L. Lynch, committee chair and financial expert, Brenda G. Gujral, Roberta S. Matlin and Gary Pechter. The audit committee is responsible for engaging our independent registered public accounting firm, reviewing the plans and results of the audit engagement with our independent registered public accounting firm and consulting with the independent registered public accounting firm regarding the adequacy of our internal accounting controls.  During 2004, our general partner adopted a Code of Ethics that applies to all of its employees.   Officers and Directors  The officers, directors, and key employees of IREIC and its affiliates that are likely to provide services to us are as follows. Ages are listed as of January 1, 2006.    Functional Title     Daniel L. Goodwin Director  Robert H. Baum Director, General Counsel of IREIC  Robert D. Parks Chairman   Brenda G. Gujral Director, President and principal executive officer of the Partnership  Catherine L. Lynch Treasurer  Roberta S. Matlin Director, Senior Vice President-Investments  Guadalupe Griffin Vice President-Asset Management  Kelly Tucek Vice President-Partnership Accounting and principal financial officer of the Partnership  Gary E. Pechter Senior Vice President, The Inland Group,  Counsel to the Partnership      -35-  DANIEL L. GOODWIN (age 62) has been with Inland since 1968 and is a founding and controlling stockholder of, and the chairman of the board and chief executive officer of, The Inland Group. Mr. Goodwin also serves as a director or officer of entities wholly owned or controlled by The Inland Group. In addition, Mr. Goodwin is the chairman of the board of Inland Real Estate Corporation, chairman of the board and chief executive officer of Inland Mortgage Investment Corporation and chairman of the board and chief executive officer of Inland Bancorp Holding Company, a bank holding company. Mr. Goodwin also serves on the management committee of Inland Real Estate Corporation.  Mr. Goodwin is a member of the National Association of Realtors, the Illinois Association of Realtors and the Northern Illinois Commercial Association of Realtors.  He is also the author of a nationally recognized real estate reference book for the management of residential properties.  Mr. Goodwin serves on the Board of the Illinois State Affordable Housing Trust Fund. He has served as an advisor for the Office of Housing Coordination Services of the State of Illinois, and as a member of the Seniors Housing Committee of the National Multi-Housing Council. He has served as Chairman of the DuPage County Affordable Housing Task Force and presently serves as chairman of New Directions Affordable Housing Corporation.   Mr. Goodwin obtained his bachelor's and master's degrees from Illinois state universities. Following graduation, he taught for five years in the Chicago public schools system. More recently, Mr. Goodwin has served as a member of the board of governors of Illinois State Colleges and Universities.  He is vice chairman of the board of trustees of Benedictine University, vice chairman of the board of trustees of Springfield College and chairman of the board of Northeastern Illinois University.   ROBERT H. BAUM (age 62) has been with Inland since 1968 and is one of the founding stockholders. Mr. Baum is vice chairman and executive vice president and general counsel of The Inland Group. In his capacity as general counsel, Mr. Baum is responsible for the supervision of the legal activities of The Inland Group and its affiliates. This responsibility includes the supervision of The Inland Law Department and serving as liaison with outside counsel. Mr. Baum has served as a member of the North American Securities Administrators Association Real Estate Advisory Committee and as a member of the Securities Advisory Committee to the Secretary of State of Illinois. He is a member of the American Corporation Counsel Association and has also been a guest lecturer for the Illinois State Bar Association. Mr. Baum has been admitted to practice before the Supreme Court of the United States, as well as the bars of several federal courts of appea ls and federal district courts and the State of Illinois. He is also a licensed real estate broker. He has served as a director of American National Bank of DuPage and currently serves as a director of Inland Bancorp Holding Company and of Westbank. Mr. Baum also is a member of the Governing Council of Wellness House, a charitable organization that exists to improve the quality of life for people whose lives have been affected by cancer and its treatment by providing psychosocial and educational support for cancer patients, their families and friends.   ROBERT D. PARKS  (age 62) has been with Inland since 1968 and is one of the founding stockholders. He also is chairman of Inland Real Estate Investment Corporation, director of Inland Securities Corporation and a director of Inland Investment Advisors, Inc.  Mr. Parks is president, chief executive officer, and a director of Inland Real Estate Corporation and serves on its management committee.  He is also chairman and an affiliated director of Inland Western Retail Real Estate Trust, Inc. He is chairman and an affiliated director of Inland American Real Estate Trust, Inc. Mr. Parks is responsible for the ongoing administration of existing investment programs, corporate budgeting and administration for Inland Real Estate Investment Corporation. He oversees and coordinates the marketing of all investments and investor relations.  Prior to joining Inland, Mr. Parks was a school teacher in Chicago's public schools. He received his B.A. Degree from Northeastern Illinois University and his M.A. Degree from the University of Chicago. He is a registered Direct Participation Program Limited Principal with the National Association of Securities Dealers, Inc. He is also a member of the Real Estate Investment Association, the Financial Planning Association, the Foundation for Financial Planning, as well as a member of the National Association of Real Estate Investment Trusts.   BRENDA G. GUJRAL (age 63) is president, chief operating officer and a director of Inland Real Estate Investment Corporation (IREIC). She is also president, chief operating officer and a director of Inland Securities Corporation (ISC), a member firm of the National Association of Securities Dealers (NASD). Mrs. Gujral is also a director of Inland Investment Advisors, Inc., an investment advisor. She is also Chief Executive Officer and an affiliated director of Inland Western Retail Real Estate Trust, Inc., chairman of the board of Inland Real Estate Exchange Corporation and President and chief operating officer and an affiliated director of Inland American Retail Real Estate Trust, Inc.  Mrs. Gujral has overall responsibility for the operations of IREIC, including the distribution of checks to over 70,000 investors, review of periodic communications to those investors, the filing of quarterly and annual reports for Inland’s publicly registered investment programs with the Securities and Exchange Commission, compliance with other SEC and NASD securities regulations both for IREIC and ISC, review of asset management activities, and marketing and communications with the independent broker/dealer firms selling Inland’s current and prior programs.  Mrs. Gujral works with internal and outside legal counsel in structuring and registering the prospectuses for IREIC’s investment programs and in connection with the preparation of its offering documents and registering the related securities with the Securities and Exchange Commission and state securities commissions.  Mrs. Gujral has been with the Inland organization for more than 20 years, becoming an officer in 1982. Prior to joining Inland, she worked for the Land Use Planning Commission establishing an office in Portland, Oregon, to implement land use legislation for that state.  She is a graduate of California State University.  She holds Series 7, 22, 39 and 63 licenses withthe NASD.  Mrs. Gujral is a member of the National Association of Real Estate Investment Trusts (NAREIT) and the National Association for Female Executives.   CATHERINE L. LYNCH (age 47) joined Inland in 1989 and is the treasurer of Inland Real Estate Investment Corporation. Ms. Lynch is responsible for managing the corporate accounting department. Prior to joining Inland, Ms. Lynch worked in the field of public accounting for KPMG LLP since 1980. She received her B.S. Degree in Accounting from Illinois State University. Ms. Lynch is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants and the Illinois CPA Society. She is registered with the National Association of Securities Dealers as a Financial Operations Principal.   ROBERTA S. MATLIN (age 61) joined Inland Real Estate Investment Corporation (IREIC) in 1984 as director of investor administration and currently serves as senior vice president of IREIC, directing the day-to-day internal operations.  Ms. Matlin is a director of IREIC and president of Inland Investment Advisors, Inc., and Intervest Southern Real Estate Corporation, and a director and vice president of Inland Securities Corporation. She is the president of Inland American Advisory Services, Inc. Since 2003, she has been vice president of administration of Inland Western Retail Real Estate Trust, Inc., and since 2004, vice president of administration of Inland American Real Estate Trust, Inc.  She was vice president of administration of Inland Real Corporation from 1995 until 2000 and of Inland Retail Real Estate Trust, Inc from 1998 until 2004. From June 2001 until April 2004, she was a trustee and executive vice president of I nland Mutual Fund Trust. Prior to joining Inland, she worked for the Chicago Region of the Social Security Administration of the Untied States Department of Health and Human Services.  Ms. Matlin is a graduate of the University of Illinois. She holds Series 7, 22, 24, 39, 63 and 65 licenses with the National Association of Securities Dealers.   GUADALUPE GRIFFIN (age 41) joined Inland in 1994. Ms. Griffin serves as vice president of Inland Real Estate Investment Corporation and assistant vice president of Inland Midwest Investment Corporation. Ms. Griffin is responsible for the asset management and day-to-day operations of the public and private partnerships which include the development of operating and disposition strategies for the partnerships and investor communications. Prior to joining Inland, Ms. Griffin was employed by the University of Illinois at Chicago Center for Urban Educational Research and Development as Assistant to the Director of the Nation of Tomorrow Program; a privately funded multi-million dollar program, which provided educational and empowerment services to youths and their families in four inner-city schools. Ms. Griffin holds an Illinois Real Estate Sales License.   KELLY TUCEK (age 43) joined Inland in 1989 and is a vice president of Inland Real Estate Investment Corporation and beginning in 2006, vice president, controller of Inland Western Retail Real Estate Advisory Services, Inc.  As of August 1996, Ms. Tucek is responsible for the investment accounting department which includes all public partnership accounting functions along with quarterly and annual SEC filings. Prior to joining Inland, Ms. Tucek was on the audit staff of Coopers and Lybrand since 1984. She received her B.A. Degree in Accounting and Computer Science from North Central College.   GARY E. PECHTER (age 54) joined Inland in 1985 and is a Senior Vice President and Assistant General Counsel of The Inland Real Estate Group, Inc., and a member of the Audit Committee for all public partnerships sponsored by IREIC. In his capacity as their counsel, Mr. Pechter has been admitted to practice law in the State of Illinois and the federal district court.  He is also a licensed real estate broker. Mr. Pechter received his undergraduate degree from the University of Illinois and his law degree from John Marshall Law School.   Section 16(a) Beneficial Ownership Reporting Compliance  Section 16(a) of the Exchange Act requires directors, executive officers and beneficial owners of more than ten percent of our partnership units to file initial reports of ownership and reports of changes in ownership with the Securities and Exchange Commission and to provide us with copies of such reports. Based solely on a review of the copies provided to us and written representations from such reporting persons, we believe that all applicable Section 16(a) filing requirements have been met for such reporting persons.
Our general partner is entitled to receive a share of cash distributions of net sales proceeds based upon both an aggregate overall return to the limited partners and a separate return with respect to each parcel of land purchased by us.   Our partnership agreement defines the allocation of profits and losses, and available cash. If and to the extent that real estate taxes and insurance payable with respect to our land during a given year exceed our revenues, our general partner will make a supplemental capital contribution of such amount to us to ensure that we have sufficient funds to make such payments.  Distributions of net sale proceeds will be allocated between the general partner and the limited partners based upon both an aggregate overall return to the limited partners and a separate return with respect to each parcel of land we purchased.  Profits and losses from operations (other than capital transactions) will be allocated 99% to the limited partners and 1% to the general partner. The net gain from a sale of our properties is first allocated among the partners in proportion to the negative balances, if any, in their respective capital accounts. Thereafter, except as provided below, net gain is allocated to the general partner in an amount equal to the proceeds distributable to the general partner from such sale and the balance of any net gain is allocated to the limited partners. If the amount of net gain realized from a sale is less than the amount of cash distributed to the general partner from such sale, we will allocate income or gain to the general partner in an amount equal to the excess of the cash distributed to the general partner with respect to such sale as quickly as permitted by law. Any net loss from a sale will be allocated to the limited partners.  As a general rule, net sale proceeds will be distributed 90% to the limited partners and 10% to the general partner until the limited partners have received from net sale proceeds  (i) a return of their original capital plus (ii) a noncompounded cumulative preferred return of 15% on their invested capital. However, with respect to each parcel of land, the general partner's 10% share will be subordinated until the limited partners receive a return of the original capital attributed to such parcel ("parcel capital") plus a 6% per annum noncompounded cumulative preferred return thereon.   After the amounts described in items  (i) and  (ii) above and any previously subordinated distributions to the general partner have been paid, and the amount of any supplemental capital contributions have been repaid to the general partner, subsequent distributions shall be paid 75% to the limited partners and 25% to the general partner without considering parcel capital.  If, after all net sale proceeds have been distributed, the general partner has received more than 25% of all net sale proceeds  (exclusive of distributions made to the limited partners to return their original capital), the general partner shall contribute to us for distribution to the limited partners an amount equal to such excess.  Any distributions from net sales proceeds at a time when invested capital is greater than zero shall be deemed applied first to reduction of such invested capital before application to payment of any deficiency in the 15% noncompounded cumulative preferred return.  We are permitted to engage in various transactions involving affiliates of our general partner.   Our general partner and its affiliates may be reimbursed for its expenses or out-of-pocket costs relating to our administration. As of December 31, 2005, such costs were $39,062, of which $7,686 was unpaid.  Our general partner is entitled to receive asset management fees equal to one-quarter of 1% of the original cost  of our undeveloped land annually, limited to a cumulative total over our life of 2% of the land's original cost to us. For the year ended December 31, 2005, we incurred $1,032 in asset management fees, all of which was paid.  As of March 31, 2005, we had met the limit on this fee.  An affiliate of our general partner performed sales marketing and advertising services for us and was reimbursed  (as set forth under terms of the partnership agreement) for direct costs.  For the year ended December 31, 2005, such costs were $12,748 all of which was paid.  An affiliate of the general partner performed property upgrades, rezoning, annexation and other activities to prepare our land investments for sale and was reimbursed  (as set forth under terms of the partnership agreement) for salaries and direct costs. For the year ended December 31, 2005, we incurred $84,245 of such costs, of which $21,537 was unpaid, and are included in investment properties.       -36-
(a) No person or group is known by us to own beneficially more than 5% of the outstanding units of our partnership.  (b) The officers and directors of the general partner of our partnership own as a group the following units of our partnership as of December 31, 2005:    Amount and Nature of Beneficial Percent  Title of Class Ownership of Class      Limited partnership units 11.09 Units directly Less than 1/2%    No officer or director of our general partner possesses a right to acquire beneficial ownership of units of our partnership.  All of the outstanding shares of our general partner are owned by an affiliate or its officers and directors as set forth above in Item 10.  (c) There exists no arrangement, known to us, the operation of which may, at a subsequent date, result in a change in our control.
There were no significant transactions or business relationships with the general partner, affiliates or their management other than those described in Items 10 and 11 above. Reference is made to Note 3 of the Notes to Financial Statements (Item 8 of this annual report) for information regarding related party transactions.
Fees.  Aggregate fees for professional services rendered by our independent registered public accounting firm were as follows:     Years ended December 31,    2005 2004       Audit fees for professional services rendered for the audit of our   annual financial statements and quarterly reviews of our   financial statements. $ 27,768 31,900  Tax fees for professional services rendered for tax return   preparation and review of our K-1s.  6,000 6,090       Total fees  $ 33,768 37,990              -37-  PART IV
(a) The financial statements listed in the index at page 16 of this annual report are filed as part of this annual report.  (b) Exhibits.    The following exhibits are incorporated herein by reference:      3 Amended and Restated Agreement of Limited Partnership, included in Post-Effective Amendment #3 dated February 16, 1993, and as Exhibit A of the Prospectus dated December 13, 1991, as amended, is incorporated herein by reference thereto.     31.1 Rule 13a-14(a)/15d-14(a) Certification by principal executive officer     31.2 Rule 13a-14(a)/15d-14(a) Certification by principal financial officer     32.1 Section 1350 Certification by principal executive officer     32.2 Section 1350 Certification by principal financial officer       (c) Financial Statement Schedules:  All schedules have been omitted as the required information is inapplicable or the information is presented in the financial statements or related notes.  (d)  Reports on Form 8-K.  None.      No annual report or proxy material for the year 2005 has been sent to our limited partners.  An annual report will be sent to the limited partners subsequent to this filing and we will furnish copies of such report to the Commission when it is sent to the limited partners.             -38-  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.    INLAND CAPITAL FUND, L.P.   Inland Real Estate Investment Corporation   General Partner     /s/ Brenda G. Gujral     By: Brenda G. Gujral   President and director  Date: March 23, 2005    Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:   By: Inland Real Estate Investment Corporation    General Partner     /s/ Brenda G. Gujral     By: Brenda G. Gujral   President and director  Date: March 23, 2005     /s/ Guadalupe Griffin     By: Guadalupe Griffin    Vice President  Date: March 23, 2005     /s/ Kelly Tucek     By: Kelly Tucek    Vice President and  principal financial officer  Date: March 23, 2005     /s/ Robert D. Parks     By: Robert D. Parks    Chairman   Date: March 23, 2005     /s/ Daniel L. Goodwin     By: Daniel L. Goodwin    Director  Date: March 23, 2005         -39-       EX-31 2 cap311.htm     SECTION 302 CERTIFICATION     EXHIBIT 31.1 CERTIFICATION  Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002  I, Brenda G. Gujral, President, certify that: (1) I have reviewed this report on Form 10-K of InLand Capital Fund, L.P.; (2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; (3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report. (4) The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) and we have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principals; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrants fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and  (5) The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and  (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.   By:  Inland Real Estate Investment Corporation       General Partner         /S/ Brenda G. Gujral                                        Name:  Brenda G. Gujral  Title:  President of the General Partner and principal executive officer of InLand Capital Fund, L.P.     Date:  March 23, 2006           EX-31 3 cap312.htm     SECTION 302 CERTIFICATION     EXHIBIT 31.2 CERTIFICATION  Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002  I, Kelly Tucek, Vice President, certify that: (1) I have reviewed this report on Form 10-K of InLand Capital Fund, L.P.; (2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; (3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report. (4) The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) and we have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principals; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrants fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and  (5) The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and  (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.   By: Inland Real Estate Investment Corporation       General Partner      /S/ Kelly Tucek     Name: Kelly Tucek  Title: Vice President of the General Partner and   principal financial officer of InLand Capital Fund, L.P.  Date: March 23, 2006      1        EX-32 4 cap321.htm     Exhibit [___]     Exhibit 32.1   Certification   Pursuant to Section 1350 of Title 18 of the United States Code, the undersigned hereby certifies that:  (1) I have reviewed the Annual Report on Form 10-K of InLand Capital Fund, L.P. (the "Report") to which this statement is an Exhibit;  (2) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and  (3) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of InLand Capital Fund, L.P.     By: Inland Real Estate Investment Corporation   General Partner         /S/ Brenda G. Gujral                                 Name: Brenda G. Gujral  Title: President of the General Partner and   principal executive officer of InLand Capital Fund, L.P  Date:  March 23, 2006           EX-32 5 cap322.htm     Exhibit 99       Exhibit 32.2  Certification  Pursuant to Section 1350 of Title 18 of the United States Code, the undersigned hereby certifies that:  (1) I have reviewed the Annual Report on Form 10-K of  InLand Capital Fund, L.P. (the "Report") to which this statement is an Exhibit;  (2) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and  (3) The information contained in the Report fairly represents, in all material respects, the financial condition and results of operations of InLand Capital Fund, L.P.      By: Inland Real Estate Investment Corporation   General Partner      /S/ Kelly Tucek                                         Name: Kelly Tucek  Title: Vice President of the General Partner and   principal financial officer of InLand Capital Fund, L.P.  Date: March 23, 2006                 -----END PRIVACY-ENHANCED MESSAGE-----