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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

For the fiscal year ended December 31, 2002

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from to


Commission file number 0-15666

CNL INCOME FUND, LTD.
(Exact name of registrant as specified in its charter)

Florida 59-2666264
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

450 South Orange Avenue
Orlando, Florida 32801-3336
(Address of principal executive offices, including zip code)

Registrant's telephone number, including area code: (407) 540-2000

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

Title of each class: Name of exchange on which registered:
None Not Applicable

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

Units of limited partnership interest ($500 per Unit)
(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 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

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]

Indicate by check mark whether the registrant is an accelerated filer
(as defined in Exchange Act Rule 12b-2):Yes___ No X

Aggregate market value of the voting stock held by nonaffiliates of the
registrant: The registrant registered an offering of 30,000 units of limited
partnership interest (the "Units") on Form S-11 under the Securities Act of
1933, as amended. Since no established market for such Units exists, there is no
market value for such Units. Each Unit was originally sold at $500 per Unit.

DOCUMENTS INCORPORATED BY REFERENCE:
None




PART I


Item 1. Business

CNL Income Fund, Ltd. (the "Registrant" or the "Partnership") is a
limited partnership which was organized pursuant to the laws of the State of
Florida on November 26, 1985. The general partners of the Partnership are Robert
A. Bourne, James M. Seneff, Jr. and CNL Realty Corporation, a Florida
corporation (the "General Partners"). Beginning on April 16, 1986, the
Partnership offered for sale up to $15,000,000 in limited partnership interests
(the "Units") (30,000 Units at $500 per Unit) pursuant to a registration
statement on Form S-11 under the Securities Act of 1933, as amended. The
offering terminated on December 31, 1986, as of which date the maximum offering
proceeds of $15,000,000 had been received from investors who were admitted to
the Partnership as limited partners (the "Limited Partners").

The Partnership was organized to acquire both newly constructed and
existing restaurant properties, as well as properties upon which restaurants
were to be constructed (the "Properties"), which are leased primarily to
operators of selected national and regional fast-food restaurant chains (the
"Restaurant Chains"). Net proceeds to the Partnership from its offering of
Units, after deduction of organizational and offering expenses, totaled
$13,284,970, and were used to acquire 20 Properties, including interests in
three Properties owned by joint ventures in which the Partnership is a
co-venturer. As of December 31, 1999, the Partnership owned 13 Properties
directly and owned three Properties indirectly through joint venture or tenancy
in common arrangements. During 2000, the Partnership sold its Property in
Merritt Island, Florida to a third party and distributed the sales proceeds as a
special distribution to the Limited Partners. In addition, during 2000, the
Partnership sold its Property in Salisbury, Maryland to a third party and during
2001 distributed the majority of the net sales proceeds as a special
distribution to the Limited Partners and used the remaining net sales proceeds
to pay Partnership liabilities. During 2002, the Partnership sold its Property
in Mesquite, Texas to a third party and distributed the net sales proceeds as a
special distribution to the Limited Partners. In addition, during 2002, the
Partnership and the joint venture partner liquidated Sand Lake Joint Venture and
the Partnership received its pro rata share of the liquidation proceeds from the
joint venture. As of December 31, 2002, the Partnership owned 10 Properties
directly and held interests in one Property owned by a joint venture in which
the Partnership is a co-venturer and one Property owned with affiliates of the
General Partners as tenants-in-common. In January 2003, the Partnership sold its
Property in Angleton, Texas to the tenant. Generally, the Properties are leased
on a triple-net basis with the lessees responsible for all repairs and
maintenance, property taxes, insurance and utilities.

The Partnership holds its Properties until the General Partners
determine that the sale or other disposition of the Properties is advantageous
in view of the Partnership's investment objectives. In deciding whether to sell
Properties, the General Partners consider factors such as potential capital
appreciation, net cash flow and federal income tax considerations. Certain
lessees also have been granted options to repurchase Properties, generally at
the Property's then fair market value after a specified portion of the lease
term has elapsed. The Partnership has no obligation to sell all or any portion
of a Property at any particular time, except as may be required under property
or joint venture purchase options granted to certain lessees.

Leases

Although there are variations in the specific terms of the leases, the
following is a summarized description of the general structure of the
Partnership's leases. The leases of the Properties owned by the Partnership and
joint ventures in which the Partnership is a co-venturer provide for initial
lease terms, ranging from 10 to 20 years (the average being 15 years), and
expire between 2004 and 2018. Generally, the leases are on a triple-net basis,
with the lessees responsible for all repairs and maintenance, property taxes,
insurance and utilities. The leases of the Properties provide for minimum base
annual rental payments (payable in monthly installments) ranging from
approximately $16,000 to $222,800. Generally, the leases provide for percentage
rent, based on sales in excess of a specified amount, to be paid annually. In
addition, certain leases provide for increases in the annual base rent during
the lease term.

Generally, the leases of the Properties provide for two to five
five-year renewal options subject to the same terms and conditions as the
initial lease. Lessees of six of the Partnership's 12 Properties also have been
granted options to purchase Properties at the Property's then fair market value,
or pursuant to a formula based on the original cost of the Property, after a
specified portion of the lease term has elapsed. Fair market value will be
determined through an appraisal by an independent appraisal firm. Under the
terms of certain leases, the option purchase price may equal the Partnership's
original cost to purchase the Property (including acquisition costs), plus a
specified percentage from the date of the lease or a percentage of the
Partnership's purchase price, if that amount is greater than the Property's fair
market value at the time the purchase option is exercised. Additionally, certain
leases provide the lessees the option to purchase up to a 49% joint venture
interest in the Property, after a specified portion of the lease term has
elapsed, at an option purchase price similar to those described above multiplied
by the percentage interest in the Property with respect to which the option is
being exercised.

The leases provide that, in the event the Partnership wishes to sell
the Property subject to that lease, the Partnership first must offer the lessee
the right to purchase the Property on the same terms and conditions, and for the
same price, as any offer which the Partnership has received for the sale of the
Property.

Major Tenants

During 2002, AJZ, Inc., Wen-Atlanta, Inc., Wendy's Old Fashioned
Hamburgers of New York, Inc. and The Ground Round, Inc. each contributed more
than 10% of the Partnership's total rental revenues (including the Partnership's
share of the rental revenues from Properties owned by joint ventures and the
Property owned with affiliates of the General Partners as tenants-in-common). As
of December 31, 2002, AJZ, Inc., Wen-Atlanta, Inc., Wendy's Old Fashioned
Hamburgers of New York, Inc. and The Ground Round, Inc. were each the lessee
under a lease relating to one restaurant. It is anticipated that based on the
minimum rental payments required by the leases, these four lessees will each
continue to contribute 10% or more of the Partnership's total rental revenues in
2003. In addition, three Restaurant Chains, A.J. Gators Restaurants, Wendy's Old
Fashioned Hamburger Restaurants ("Wendy's"), and The Ground Round each accounted
for more than 10% of the Partnership's total rental revenues in 2002 (including
the Partnership's share of the rental revenues from Properties owned by joint
ventures and the Property owned with affiliates of the General Partners as
tenants-in-common). In 2003, it is anticipated that each of these Restaurant
Chains will continue to account for more than 10% of the total rental revenues
to which the Partnership is entitled under the terms of its leases. Any failure
of these lessees or Restaurant Chains will materially affect the Partnership's
income if the Partnership is not able to re-lease the Properties in a timely
manner. No single tenant or groups of affiliated tenants lease Properties with
an aggregate carrying value in excess of 20% of the total assets of the
Partnership.

Joint Venture and Tenancy in Common Arrangements

The Partnership has entered into the following joint venture and
tenancy in common arrangements as of December 31, 2002:




Entity Name Year Ownership Partners Property

Orange Avenue Joint Venture 1986 50.00 % Various Third Party Partners Orlando, FL

CNL Income Fund, Ltd., CNL 1997 12.17 % CNL Income Fund II, Ltd. Vancouver, WA
Income Fund II, Ltd., CNL Income Fund V, Ltd.
CNL Income Fund V, Ltd., CNL Income Fund VI, Ltd.
and CNL Income Fund VI,
Ltd., Tenants in Common


Each joint venture or tenancy in common was formed to hold one
Property. Each CNL Income Fund is an affiliate of the General Partners and is a
limited partnership organized pursuant to the laws of the state of Florida. The
Partnership shares management control equally with the affiliates of the General
Partners





The joint venture and tenancy in common arrangements provide for the
Partnership and its joint venture or tenancy in common partners to share in all
costs and benefits in proportion to each partner's percentage interest in the
business entity. The Partnership and its partners are also jointly and severally
liable for all debts, obligations and other liabilities of the joint venture or
tenancy in common. Net cash flow from operations is distributed to each joint
venture or tenancy in common partner in accordance with its respective
percentage interest in the business entity.

The joint venture has an initial term of 20 years and, after the
expiration of the initial term, continues in existence from year to year unless
terminated at the option of either joint venturer or by an event of dissolution.
Events of dissolution include the bankruptcy, insolvency or termination of any
joint venturer, sale of the Property owned by the joint venture and mutual
agreement of the Partnership and its joint venture partner to dissolve the joint
venture. Any liquidation proceeds, after paying joint venture debts and
liabilities and funding reserves for contingent liabilities, will be distributed
first to the joint venture partners with positive capital account balances in
proportion to such balances until such balances equal zero, and thereafter in
proportion to each joint venture partner's percentage interest in the joint
venture.

The joint venture and tenancy in common agreements restrict each
party's ability to sell, transfer or assign its joint venture or tenancy in
common interest without first offering it for sale to its partner, either upon
such terms and conditions as to which the parties may agree or, in the event the
parties cannot agree, on the same terms and conditions as any offer from a third
party to purchase such joint venture or tenancy in common interest.

In June 2002, Sand Lake Road Joint Venture, in which the Partnership
owned a 50% interest, sold its Property to the tenant and received net sales
proceeds of approximately $1,227,100 resulting in a gain of approximately
$604,000 to the joint venture. The Partnership and the joint venture partner
liquidated Sand Lake Road Joint Venture and the Partnership received its pro
rata share of the liquidation proceeds from the joint venture.

The use of joint venture and tenancy in common arrangements allows the
Partnership to fully invest its available funds at times at which it would not
have sufficient funds to purchase an additional Property, or at times when a
suitable opportunity to purchase an additional Property is not available. The
use of joint venture and tenancy in common arrangements also provides the
Partnership with increased diversification of its portfolio among a greater
number of Properties. In addition, tenancy in common arrangements may allow the
Partnership to defer the gain for federal income tax purposes upon the sale of a
Property if the proceeds are reinvested in an additional Property.

Certain Management Services

RAI Restaurants, Inc. (formerly known as CNL Restaurants XVIII, Inc.),
an affiliate of the General Partners, provided certain services relating to
management of the Partnership and its Properties pursuant to a management
agreement with the Partnership. CNL APF Partners, LP assigned its rights in, and
its obligations under, the management agreement with the Partnership to RAI
Restaurants, Inc. ("Advisor") effective January 1, 2002. All of the terms and
conditions of the management agreement, including the payment of fees, remained
unchanged. Under this agreement, the Advisor is responsible for collecting
rental payments, inspecting the Properties and the tenants' books and records,
assisting the Partnership in responding to tenant inquiries and notices, and
providing information to the Partnership about the status of the leases and the
Properties. The Advisor also assists the General Partners in negotiating the
leases. For these services, the Partnership had agreed to pay the Advisor an
annual fee of one-half of one percent of Partnership assets (valued at cost)
under management, not to exceed the lesser of one percent of gross rental
revenues or competitive fees for comparable services. Under the property
management agreement, the property management fee is subordinated to receipt by
the Limited Partners of an aggregate, ten percent, cumulative, noncompounded
annual return on their adjusted capital contributions (the "10% Preferred
Return"), calculated in accordance with the Partnership's limited partnership
agreement (the "Partnership Agreement"). In any year in which the Limited
Partners have not received the 10% Preferred Return, no property management fee
will be paid.

The property management agreement continues until the Partnership no
longer owns an interest in any Properties unless terminated at an earlier date
upon 60 days' prior notice by either party.






Competition

The fast-food and family-style restaurant business is characterized by
intense competition. The restaurants on the Partnership's Properties compete
with independently owned restaurants, restaurants which are part of local or
regional chains, and restaurants in other well-known national chains, including
those offering different types of food and service.

Employees

The Partnership has no employees. The officers of CNL Realty
Corporation and the officers and employees of CNL American Properties Fund, Inc.
("APF"), the parent company of the Advisor, perform certain services for the
Partnership. In addition, the General Partners have available to them the
resources and expertise of the officers and employees of CNL Financial Group,
Inc., a diversified real estate company, and its affiliates, who may also
perform certain services for the Partnership.


Item 2. Properties

As of December 31, 2002, the Partnership owned 12 Properties. Of the 12
Properties, 10 are owned by the Partnership in fee simple, one is owned through
a joint venture arrangement and one is owned through a tenancy in common
arrangement. See Item 1. Business - Joint Venture and Tenancy in Common
Arrangements. The Partnership is not permitted to encumber its Properties under
the terms of its Partnership Agreement. Reference is made to the Schedule of
Real Estate and Accumulated Depreciation for a listing of the Properties and
their respective costs, including acquisition fees and certain acquisition
expenses.

Description of Properties

Land. The Partnership's Property sites range from approximately 16,200
to 58,500 square feet depending upon building size and local demographic
factors. Sites purchased by the Partnership are in locations zoned for
commercial use which have been reviewed for traffic patterns and volume.

The following table lists the Properties owned by the Partnership,
either directly or indirectly, as of December 31, 2002 by state. More detailed
information regarding the location of the Properties is contained in the
Schedule of Real Estate and Accumulated Depreciation.






State Number of Properties

Alabama 1
Arizona 2
Florida 1
Georgia 1
Louisiana 1
Oklahoma 1
Pennsylvania 1
Texas 2
Virginia 1
Washington 1
--------------
TOTAL PROPERTIES 12
==============

Buildings. Each of the Properties owned by the Partnership includes a
building that is one of a Restaurant Chain's approved designs. The buildings
generally are rectangular and are constructed from various combinations of
stucco, steel, wood, brick and tile. Building sizes range from approximately
1,900 to 7,400 square feet. All buildings on Properties acquired by the
Partnership are freestanding and surrounded by paved parking areas. Buildings
are suitable for conversion to various uses, although modifications may be
required prior to use for other than restaurant operations. As of December 31,
2002, the Partnership had no plans for renovation of the Properties.
Depreciation expense is computed for buildings and improvements using the
straight line method using depreciable lives of 19, 31.5, and 39 years for
federal income tax purposes.

As of December 31, 2002, the aggregate cost of the Properties owned,
either directly or indirectly, by the Partnership and joint ventures (including
the Property owned through a tenancy in common arrangement) for federal income
tax purposes was $6,508,481 and $2,705,664, respectively.

The following table lists the Properties owned by the Partnership,
either directly or indirectly, as of December 31, 2002 by Restaurant Chain.

Properties Number of Properties

Chevy's Fresh Mex 1
Ground Round 1
Pizza Hut 2
Wendy's 4
Other 4
--------------
TOTAL PROPERTIES 12
==============

The General Partners consider the Properties to be well-maintained and
sufficient for the Partnership's operations.

The General Partners believe that the Properties are adequately covered
by insurance. In addition, the General Partners have obtained contingent
liability and property coverage for the Partnership. This insurance is intended
to reduce the Partnership's exposure in the unlikely event a tenant's insurance
policy lapses or is insufficient to cover a claim relating to the Property.

Leases

The Partnership leases the majority of the Properties to operators of
selected national and regional fast-food Restaurant Chains. The Properties are
generally leased on a long-term "triple net" basis, meaning that the tenant is
responsible for repairs, maintenance, property taxes, utilities and insurance.

As of December 31, 2002, 2001, 2000, 1999, and 1998 the Properties were
100% occupied. The following is a schedule of the average annual rent per
Property for each of the years ended December 31:



2002 2001 2000 1999 1998
------------- -------------- --------------- -------------- -------------

Rental Revenues (1) $ 731,860 $ 871,579 $ 1,047,257 $ 1,126,114 $ 1,154,410
Properties 12 14 14 16 17
Average Rent per
Property $ 60,988 $ 62,256 $ 74,804 $ 70,382 $ 67,906



(1) Rental revenues include the Partnership's share of rental revenues from
the Properties owned indirectly through joint venture and a tenancy in
common arrangement.





The following is a schedule of lease expirations for leases in place as
of December 31, 2002 for each year for the next ten years and thereafter.



Percentage of
Expiration Number Annual Rental Gross Annual
Year of Leases Revenues Rental Income
----------------- ---------------- ------------------ --------------------------

2003 -- $ -- --
2004 -- -- --
2005 -- --
2006 3 191,069 30.47%
2007 1 15,960 2.55%
2008 -- -- --
2009 -- -- --
2010 1 56,644 9.04%
2011 3 175,025 27.90%
2012 1 47,119 7.51%
Thereafter 2 141,323 22.53%
---------- ------------------ ----------------
Totals(1) 11 $ 627,140 100.00%
========== ================== ================


(1) Excludes one Property that was sold in January 2003.

Leases with Major Tenants

The terms of the leases with the Partnership's major tenants as of
December 31, 2002 (see Item 1. Business - Major Tenants), are substantially the
same as those described in Item 1. Business - Leases.

AJZ, Inc. leases one A.J. Gators restaurant. The initial term of the
lease is 10 years (expiring in 2011) and the minimum base annual rent is
approximately $78,900.

Wen-Atlanta, Inc. leases one Wendy's restaurant. The initial term of
the lease is 20 years (expiring in 2006) and the minimum base annual rent is
approximately $80,500.

Wendy's Old Fashioned Hamburgers of New York, Inc. leases one Wendy's
restaurant. The initial term of the lease is 17 years (expiring in 2006) and the
minimum base annual rent is approximately $82,000.

The Ground Round, Inc. leases one Ground Round restaurant. The initial
term of the lease is 20 years (expiring in 2017) and the minimum base annual
rent is approximately $88,500.


Item 3. Legal Proceedings

Neither the Partnership, nor its General Partners or any affiliate of
the General Partners, nor any of their respective properties, is a party to, or
subject to any material pending legal proceedings.


Item 4. Submission of Matters to a Vote of Security Holders

Not applicable.







PART II


Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

(a) As of March 10, 2003, there were 1,052 holders of record of the Units.
There is no public trading market for the Units, and it is not anticipated that
a public market for the Units will develop. During 2002, Limited Partners who
wished to sell their Units could have offered the Units for sale pursuant to the
Partnership's distribution reinvestment plan (the "Plan"), and Limited Partners
who wished to have their distributions used to acquire additional Units (to the
extent Units were available for purchase), could have done so pursuant to such
Plan. The General Partners have the right to prohibit transfers of Units. From
January 1997 through April 1998, due primarily to sales of Properties in prior
years, the price paid for any Unit transferred pursuant to the Plan was $422 per
Unit. Effective with the date of sale of the Property in Kissimmee, Florida, the
price paid for any Unit transferred pursuant to the Plan ranged from $292 to
$410. The price paid for any Unit transferred other than pursuant to the Plan
was subject to negotiation by the purchaser and the selling Limited Partner. The
Partnership will not redeem or repurchase Units.

The following table reflects, for each calendar quarter, the high, low
and average sales prices for transfers of Units during 2002 and 2001 other than
pursuant to the Plan, net of commissions.



2002 (1) 2001 (1)
-------------------------------- ---------------------------------
High Low Average High Low Average
------- ------- ---------- ------- ------- ----------

First Quarter $232 $175 $195 $195 $195 $ 195
Second Quarter (2) (2) (2) 251 206 248
Third Quarter 209 209 209 (2) (2) (2)
Fourth Quarter (2) (2) (2) (2) (2) (2)


(1) A total of 160 and 187 Units were transferred other than pursuant to
the Plan for the years ended December 31, 2002 and 2001, respectively.

(2) No transfer of Units took place during the quarter other than pursuant
to the Plan.

The capital contribution per Unit was $500. All cash available for
distribution will be distributed to the partners pursuant to the provisions of
the Partnership Agreement.

For the years ended December 31, 2002 and 2001, the Partnership
declared cash distributions of $2,210,861 and $1,428,668 respectively, to the
Limited Partners. Distributions during the year ended December 31, 2002 included
$1,550,000 in a special distribution, as a result of the distribution of net
sales proceeds from the sale of the Property in Mesquite, Texas and the
liquidation proceeds from Sand Lake Joint Venture. Distributions during the year
ended December 31, 2001 included $600,000 in a special distribution, as a result
of the distribution of net sales proceeds from the 2000 sale of the Property in
Salisbury, Maryland. These special distributions in 2002 and 2001, were
effectively a return of a portion of the Limited Partners' investment; although,
in accordance with the Partnership agreement, $468,077 and $183,820,
respectively, were applied towards the 10% Preferred Return, on a cumulative
basis, and the balances of $1,081,923 and $416,180, respectively, were treated
as a return of capital for purposes of calculating the 10% Preferred Return. As
a result of the returns of capital and the returns of capital in prior years,
the amount of the Limited Partners' invested capital contributions (which
generally is the Limited Partners' capital contributions, less distributions
from the sale of Properties that are considered to be a return of capital) was
decreased; therefore, the amount of the Limited Partners' invested capital
contributions on which the 10% Preferred Return is calculated was lowered
accordingly. As a result of the sales of these Properties, the Partnership's
total revenues were reduced during 2002 and 2001 and are expected to remain
reduced in subsequent years, while the majority of the Partnership's operating
expenses remain fixed. Therefore, distributions of net cash flow were adjusted
commencing during the quarters ended March 31, 2002 and 2001. No distributions
have been made to the General Partners to date.

As indicated in the chart below, distributions were declared at the
close of each of the Partnership's calendar quarters. These amounts include
monthly distributions made in arrears for the Limited Partners electing to
receive such distributions on this basis.

Quarter Ended 2002 2001
-------------------- -------------- ---------------

March 31 $1,069,399 $ 807,167
June 30 818,778 207,167
September 30 161,342 207,167
December 31 161,342 207,167

The Partnership intends to continue to make distributions of cash
available for distribution to the Limited Partners on a quarterly basis.

(b) Not applicable.

Item 6. Selected Financial Data



Year Ended December 31: 2002 2001 2000 1999 1998
------------- --------------- -------------- ------------ -------------

Continuing Operations (4):
Revenues $ 618,515 $ 810,506 $ 974,759 $ 1,041,283 $ 1,030,752
Equity in earnings of joint ventures 373,110 95,251 95,658 95,251 95,252
Income from continuing operations (1) 1,033,418 610,682 1,094,167 1,055,136 986,100

Discontinued Operations (4):
Revenues 34,085 30,615 33,600 33,118 27,820
Income (loss) from discontinued
operations (3) (58,246 ) 15,635 18,352 20,635 15,337

Net income 975,172 626,317 1,112,519 1,075,771 1,001,437

Net income (loss) per Unit:
Continuing operations $ 34.45 $ 20.36 $ 36.47 $ 35.17 $ 32.87
Discontinued operations (1.94 ) 0.52 0.61 0.69 0.51
------------- --------------- -------------- ------------ -------------
Total $ 32.51 $ 20.88 $ 37.08 $ 35.86 $ 33.38
============= =============== ============== ============ =============

Cash distributions declared (2): $ 2,210,861 $ 1,428,668 $ 2,162,878 $ 1,067,928 $ 1,703,468

Cash distributions declared per
unit (2) 73.70 47.62 72.10 35.60 56.78

At December 31:
Total assets $ 5,631,651 $ 6,884,715 $7,672,948 $ 8,825,685 $ 8,760,926
Total partners' capital 5,246,463 6,482,152 7,284,503 8,334,862 8,327,019


(1) Income from continuing operations for the years ended December 31,
2002, 2000, 1999 and 1998 includes $348,026, $306,715, $315,649, and
$235,804, respectively, from gains on sale of real estate properties.

(2) Distributions for the years ended December 31, 2002, 2001, 2000 and
1998 include $1,550,000, $600,000, $1,200,000 and $586,300,
respectively, as a result of the distribution of a portion of the net
sales proceeds from the sales of Properties.

(3) Income from discontinued operations for the year ended December 31,
2002 includes a provision for write-down of assets of $79,245.

(4) Certain items in the prior years' financial statements have been
reclassified to conform to 2002 presentation. These reclassifications
had no effect on net income. The results of operations relating to
Properties that were either disposed for were classified as held for
sale as of December 31, 2002 are reported as discontinued operations.
The results of operations relating to Properties that were identified
for sale of December 31, 2001 but sold subsequently are reported as
continuing operations.

The above selected financial data should be read in conjunction with
the financial statements and related notes contained in Item 8 hereof.


Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

The Partnership was organized on November 26, 1985, to acquire for
cash, either directly or through joint venture arrangements, both newly
constructed and existing restaurant Properties, as well as land upon which
restaurant Properties were to be constructed, which are leased primarily to
operators of selected national and regional fast-food Restaurant Chains. The
leases are generally triple-net leases, with the lessees generally responsible
for all repairs and maintenance, property taxes, insurance and utilities. The
leases provide for minimum base annual rental amounts (payable in monthly
installments) ranging from approximately $16,000 to $222,800. The majority of
the leases provide for percentage rent based on sales in excess of a specified
amount. In addition, the majority of the leases provide that, commencing in
specified lease years (generally the sixth lease year), the annual base rent
required under the terms of the lease will increase.

As of December 31, 2001 and 2000, the Partnership owned 11 Properties
directly and owned three Properties indirectly through joint venture or tenancy
in common arrangements. As of December 31, 2002, the Partnership owned 10
Properties directly and owned two Properties indirectly through joint venture or
tenancy in common arrangements.


Capital Resources

For the years ended December 31, 2002, 2001, and 2000, the Partnership
generated cash from operating activities of $583,258, $831,136 and $881,410,
respectively. The decrease in cash from operating activities during 2002 and
2001 each as compared to the previous year, was primarily a result of changes in
income and expenses.

Other sources and uses of cash included the following during the years
ended December 31, 2002, 2001, and 2000.

In September and November 2000, the Partnership sold its Properties in
Merritt Island, Florida and Salisbury, Maryland, and received net sales proceeds
totaling approximately $1,305,600, resulting in a total gain of $306,715. Also,
in connection with the sale of the Property in Salisbury, Maryland, the
Partnership received $35,863 from the former tenant as consideration for the
Partnership releasing the tenant from its obligation under the terms of the
lease. In connection with the sales, the Partnership incurred deferred, real
estate disposition fees of $39,345. Payment of the real estate disposition fees
are subordinated to receipt by the Limited Partners of their 10% Preferred
Return, plus their adjusted capital contributions. The Partnership distributed a
portion of the net sales proceeds received as a special distribution to the
Limited Partners and used the remaining net sales proceeds to pay Partnership
liabilities, including quarterly distributions.

During 2000, the Partnership entered into a promissory note with the
corporate General Partner for a loan in the amount of $70,000 in connection with
the operations of the Partnership. The note was uncollateralized, non-interest
bearing and due on demand. As of December 31, 2000, the Partnership had repaid
the loan in full to the corporate General Partner. No such promissory notes were
entered into during 2002 and 2001.

During 2002, the Partnership sold its Property in Mesquite, Texas to a
third party and received net sales proceeds of approximately $1,032,000,
resulting in a gain of $348,026. The Partnership distributed the net sales
proceeds as a special distribution to the Limited Partners, as described below.

In June 2002, Sand Lake Road Joint Venture, in which the Partnership
owned a 50% interest, in accordance with the purchase option under the lease
agreement, sold its Property to the tenant and received net sales proceeds of
approximately $1,227,100 resulting in a gain of approximately $604,000. Sand
Lake Road Joint Venture was dissolved in accordance with the joint venture
agreement. As a result, the Partnership received $613,554 representing its
pro-rata share of the liquidation proceeds and recognized a loss of $30,579 on
the dissolution. The Partnership used the liquidation proceeds received to make
distributions to the Limited Partners.

None of the Properties owned by the Partnership, or the joint ventures
and tenancy in common arrangements in which the Partnership owns an interest, is
or may be encumbered. Subject to certain restrictions on borrowings from the
General Partners, however, the Partnership may borrow, at the discretion of the
General Partners, for the purpose of maintaining the operations of the
Partnership. The Partnership will not encumber any of the Properties in
connection with any borrowings or advances. The Partnership will not borrow for
the purpose of returning capital to the Limited Partners. The Partnership also
will not borrow under circumstances which would make the Limited Partners liable
to creditors of the Partnership. Affiliates of the General Partners from time to
time incur certain operating expenses on behalf of the Partnership for which the
Partnership reimburses the affiliates without interest.

Currently, rental income from the Partnership's Properties and any net
sales proceeds from the sale of Properties are invested in money market accounts
or other short-term, highly liquid investments such as demand deposit accounts
at commercial banks, money market accounts and certificates of deposit with less
than a 90-day maturity date, pending the Partnership's use of such funds to pay
Partnership expenses or to make distributions to the partners. At December 31,
2002, the Partnership had $419,385 invested in such short-term investments as
compared to $414,999 at December 31, 2001. As of December 31, 2002, the average
interest rate earned by the Partnership on rental income deposited in demand
deposit accounts at commercial banks was approximately one percent annually. The
funds remaining at December 31, 2002 after payment of distributions and other
liabilities will be used to meet the Partnership's working capital needs.

In November 2002, the Partnership entered into an agreement with the
tenant to sell its Property in Angleton, Texas. In January 2003, the Partnership
sold the Property and received net sales proceeds of approximately $288,900
resulting in a loss of approximately $1,400 which will be recognized in the
first quarter of 2003. The Partnership intends to use the proceeds received from
the sale for distributions to the Limited Partners and to pay Partnership
liabilities.

Short-Term Liquidity

The Partnership's investment strategy of acquiring Properties for cash
and generally leasing them under triple-net leases to operators who generally
meet specified financial standards minimizes the Partnership's operating
expenses. The General Partners believe that the leases will continue to generate
net cash flow in excess of operating expenses.

The Partnership's short-term liquidity requirements consist primarily
of the operating expenses of the Partnership.

The General Partners have the right, but not the obligation, to make
additional capital contributions if they deem it appropriate in connection with
the operations of the Partnership, in which event such contributions will be
returned to the General Partners from distributions of net sales proceeds at the
same time that their initial capital contributions of $1,000 are returned.

Due to low ongoing operating expenses and ongoing cash flow, the
General Partners do not believe that working capital reserves are necessary at
this time. In addition, because the leases for the Partnership's Properties are
generally on a triple-net basis, it is not anticipated that a permanent reserve
for maintenance and repairs will be established at this time. The General
Partners may determine to establish reserves in the future. To the extent,
however, that the Partnership has insufficient funds for such purposes, the
General Partners will contribute to the Partnership an aggregate amount of up to
one percent of the offering proceeds for maintenance and repairs.

The Partnership generally distributes cash from operating activities
remaining after the payment of the operating expenses of the Partnership, to the
extent that the General Partners determine that such funds are available for
distribution. Based primarily on current and anticipated future cash from
operating activities, and for 2002, 2001 and 2000 proceeds from the sale of
Properties as described above, the Partnership declared distributions to Limited
Partners of $2,210,861, $1,428,668, and $2,162,878, for 2002, 2001 and 2000,
respectively. This represents distributions of $73.70, $47.62, and $72.10, per
Unit for the years ended December 31, 2002, 2001 and 2000, respectively. The
distribution to the Limited Partners for 2000 was also based on a loan received
from the General Partners of $70,000 which was subsequently repaid, as described
above. Distributions during 2002, 2001 and 2000 included $1,550,000, $600,000
and $1,200,000, respectively, of net sales proceeds from the sale of the
Properties in Mesquite, Texas, Salisbury, Maryland, Merritt Island, Florida, and
Kent Island, Maryland. These special distributions were effectively a return of
a portion of the Limited Partners investment; although, in accordance with the
Partnership Agreement, $468,077, $183,820, and $509,695, respectively, was
applied towards the 10% Preferred Return, on a cumulative basis, and the
balances of $1,081,923, $416,180 and $690,305, respectively, were treated as a
return of capital for purposes of calculating the 10% Preferred Return. As a
result of the sales of these Properties, the Partnership's total revenues were
reduced during 2002, 2001, and 2000 and are expected to remain reduced in
subsequent years, while the majority of the Partnership's operating expenses
remained fixed. Therefore, distributions of net cash flow were adjusted
commencing during the quarters ended September 30, 2000 and March 31, 2001 and
2002. The Partnership intends to continue to make distributions of cash
available for distribution to the Limited Partners on a quarterly basis.

During 2000, the General Partners waived their right to receive future
distributions from the Partnership, including both distributions of operating
cash flow and distributions of liquidation proceeds, to the extent that the
cumulative amount of such distributions would exceed the balance in the General
Partners' capital account as of December 31, 1999. Accordingly, the General
Partners were not allocated any net income and did not receive any distributions
during the years ended December 31, 2002, 2001 and 2000.

As of December 31, 2002, 2001, and 2000, the Partnership owed $7,846,
$3,783, and $2,484, respectively, to affiliates for operating expenses and
accounting and administrative services. As of March 15, 2003, the Partnership
had reimbursed the affiliates for these amounts. In addition, as of December 31,
2002, the Partnership owed affiliates $158,710 in real estate disposition fees
as a result of services rendered in connection with the sales of one Property in
2002 and five Properties in previous years. The payment of such fees is deferred
until the Limited Partners have received the sum of their cumulative 10%
Preferred Return and their adjusted capital contributions. Other liabilities,
including distributions payable, decreased to $218,632 at December 31, 2002,
from $272,285 at December 31, 2001. The decrease was primarily the result of a
decrease in distributions payable at December 31, 2002. The decrease was
partially offset by an increase in amounts due to related parties at December
31, 2002. The General Partners believe that the Partnership has sufficient cash
on hand to meet its current working capital needs.

Long-Term Liquidity

The Partnership has no long-term debt or other long-term liquidity
requirements.

Critical Accounting Policies

The Partnership's leases are accounted for under the provisions of
Statement of Accounting Standard No. 13, "Accounting for Leases" ("FAS 13"), and
have been accounted for using either the direct financing or the operating
method. FAS 13 requires management to estimate the economic life of the leased
property, the residual value of the leased property and the present value of
minimum lease payments to be received from the tenant. In addition, management
assumes that all payments to be received under its leases are collectible.
Changes in management's estimates or assumption regarding collectibility of
lease payments could result in a change in accounting for the lease at the
inception of the lease.

The Partnership accounts for its unconsolidated joint ventures using
the equity method of accounting. Under generally accepted accounting principles,
the equity method of accounting is appropriate for entities that are partially
owned by the Partnership, but for which operations of the investee are shared
with other partners. The Partnership's joint venture agreements require the
consent of all partners on all key decisions affecting the operations of the
underlying Property.

Management reviews the Partnership's Properties and investments in
unconsolidated entities periodically for impairment at least once a year or
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. The assessment is based on the carrying amount
of the Property or investment at the date it is tested for recoverability
compared to the sum of the estimated future cash flows expected to result from
its operation and sale through the expected holding period. If an impairment is
indicated, the asset is adjusted to its estimated fair value.

When the Partnership makes the decision to sell or commits to a plan to
sell a Property within one year, its operating results are reported as
discontinued operations.

Results of Operations

Comparison of year ended December 31, 2002 to year ended December 31, 2001

Total rental revenues were $562,331 for the year ended December 31,
2002 as compared to $679,428 for the same period of 2001. Rental revenues were
lower because during 2001 the Partnership re-leased the Properties in Virginia
Beach, Virginia; Jasper, Alabama and Eunice, Louisiana to three new tenants and
rents under the new leases are lower than rents due under the previous leases.
Therefore, the Partnership expects that rental revenue in future periods will
remain at reduced amounts. However, the General Partners do not anticipate that
the decrease in rental revenue will have a material adverse affect on the
Partnership's financial position or results of operations. In addition, the
decrease in rental revenue during 2002 was partially due to the sale of the
Mesquite, Texas Property in February 2002.

The Partnership also earned $49,919 in contingent rental income for the
year ended December 31, 2002 as compared to $44,692 for the same period of 2001.
The increase in contingent rental income during 2002 was attributable to an
increase in gross sales of certain restaurant Properties, the leases of which
require the payment of contingent rent.

For the years ended December 31, 2002 and 2001, the Partnership earned
$373,110 and $95,251, respectively, attributable to net income earned by the
joint ventures and one Property owned indirectly with affiliates of the General
Partners. The increase in net income in 2002 as compared to 2001 was
attributable to the fact that in June 2002, Sand Lake Road Joint Venture, in
which the Partnership owned a 50% interest, sold its Property to the tenant and
received net sales proceeds of $1,227,100, resulting in a gain of approximately
$604,000. The Partnership dissolved the joint venture in accordance with the
joint venture agreement and recorded an approximate $30,600 loss on the
dissolution. The Partnership received $613,554 representing its pro rata share
of the liquidation proceeds from the joint venture.

During 2002, AJZ, Inc., Wen-Atlanta, Inc., Wendy's Old Fashioned
Hamburgers of New York, Inc. and The Ground Round, Inc. each contributed more
than 10% of the Partnership's total rental revenues (including the Partnership's
share of the rental revenues from Properties owned by joint ventures and the
Property owned with affiliates of the General Partners as tenants-in-common). As
of December 31, 2002, AJZ, Inc., Wen-Atlanta, Inc., Wendy's Old Fashioned
Hamburgers of New York, Inc. and The Ground Round, Inc. were each the lessee
under a lease relating to one restaurant. It is anticipated that based on the
minimum rental payments required by the leases, these four lessees will each
continue to contribute 10% or more of the Partnership's total rental revenues in
2003. In addition, three Restaurant Chains, A.J. Gators Restaurants, Wendy's Old
Fashioned Hamburger Restaurants ("Wendy's"), and The Ground Round each accounted
for more than 10% of the Partnership's total rental revenues in 2002 (including
the Partnership's share of the rental revenues from Properties owned by joint
ventures and the Property owned with affiliates of the General Partners as
tenants-in-common). In 2003, it is anticipated that each of these Restaurant
Chains will continue to account for more than 10% of the total rental revenues
to which the Partnership is entitled under the terms of its leases. Any failure
of these lessees or Restaurant Chains will materially affect the Partnership's
income if the Partnership is not able to re-lease the Properties in a timely
manner. No single tenant or groups of affiliated tenants lease Properties with
an aggregate carrying value in excess of 20% of the total assets of the
Partnership.

During the years ended December 31, 2002 and 2001, the Partnership also
earned $6,265 and $25,628 respectively, in interest and other income. The
decrease in interest and other income during 2002, as compared to the same
period of 2001, was primarily attributable to a decrease in the average cash
balance due to the payment of a special distribution of $1,550,000 to the
limited partners, during 2002 and due to a decline in interest rates.

Operating expenses, including depreciation and amortization expense,
were $275,654 and $295,075 for the years ended December 31, 2002 and 2001,
respectively. The decrease in operating expenses during 2002 was primarily due
to a decrease in depreciation expense as the result of the sale of the Property
in Mesquite, Texas.

As a result of the sale of the Property in Mesquite, Texas, during
2002, the Partnership recognized a gain of $348,026. As of December 31, 2001,
this Property had been identified as held for sale. No Properties were sold
during 2001.

Effective January 1, 2002, the Partnership adopted Statement of
Financial Accounting Standards No. 144 "Accounting for the Impairment or
Disposal of Long-Lived Assets." This statement requires that a long-lived asset
be tested for recoverability whenever events or changes in circumstances
indicate that its carrying amount may not be recoverable. The carrying amount of
a long-lived asset is not recoverable if it exceeds the sum of the undiscounted
cash flows expected to result from the use and eventual disposition of the
asset. The assessment is based on the carrying amount of the asset at the date
it is tested for recoverability. An impairment loss is recognized when the
carrying amount of a long-lived asset exceeds its estimated fair value. If an
impairment is recognized, the adjusted carrying amount of a long-lived asset is
its new cost basis. The statement also requires that the results of operations
of a component of an entity that either has been disposed of or is classified as
held for sale be reported as a discontinued operation if the disposal activity
was initiated subsequent to the adoption of the Standard.

As of December 31, 2002, the Partnership identified a Property that met
the criteria of this standard. In November 2002, the Partnership entered into an
agreement with the tenant to sell the Property in Angleton, Texas. During 2002,
the Partnership recorded a provision for write-down of assets in the amount of
$79,245. The provision represented the difference between the carrying value of
the Property and its estimated fair value. The financial results of this
Property were classified as Discontinued Operations in the accompanying
financial statements. In addition, during 2002, Sand Lake Joint Venture
identified and sold its Property that also met the criteria of this standard.
The joint venture recognized a gain of approximately $604,000 from the sale of
its Property during 2002. The joint venture was dissolved and the Partnership
received its pro rata share of the liquidation proceeds which were used to pay a
special distribution to the Limited Partners. The financial results of this
Property were classified as Discontinued Operations in the condensed joint
venture financial information presented in the footnotes to the accompanying
financial statements.

Comparison of year ended December 31, 2001 to year ended December 31, 2000

Total rental revenues were $679,428 for the year ended December 31,
2001 as compared to $842,358 for the same period of 2000. Rental revenues were
lower because during 2001 the Partnership re-leased three Properties to three
new tenants and rents under the new leases are lower than rents due under the
previous leases, as described above. In addition, the Partnership sold two
Properties in 2000.

The Partnership also earned $44,692 in contingent rental income for the
year ended December 31, 2001 as compared to $54,453 for the same period of 2000.
The decrease in contingent rental income during 2001 was due to of the sale of
Properties during 2000.

During the years ended December 31, 2001 and 2000, the Partnership
recognized $60,758, and $35,863, respectively, in lease termination income from
former tenants as consideration for the Partnership releasing the former tenants
from their obligations under the terms of their respective leases.

During the years ended December 31, 2001 and 2000, the Partnership also
earned $25,628 and $42,085 respectively, in interest and other income. The
decrease in interest and other income during 2001, as compared to the same
period of 2000, was primarily attributable to reduced cash balances due to the
payment of a special distribution of $600,000 during 2001.

Operating expenses, including depreciation and amortization expense,
were $295,075 and $282,965 for the years ended December 31, 2001 and 2000,
respectively. The increase in operating expenses during 2001, as compared to
2000, was primarily attributable to an increase in the costs incurred for
administrative expenses for servicing the Partnership and its Properties. The
increase in operating expenses during 2001 was partially offset by a decrease in
depreciation expense as a result of the 2000 sales of the Properties in Merritt
Island, Florida and Salisbury, Maryland and the 1999 sale of the Property in
Kent Island, Maryland. During 2000, the Partnership incurred $15,558 of
transaction costs related to the General Partners retaining financial and legal
advisors to assist them in evaluating and negotiating a proposed merger with
APF. The merger negotiations were terminated in March 2000.

The restaurant industry has been relatively resilient during this
volatile time with steady performance during 2002. However, the industry remains
in a state of cautious optimism. Restaurant operators expect their business to
be better in 2003, according to a nationwide survey conducted by the National
Restaurant Association, but are concerned by the budget deficits being
experienced by many states and the potential of new taxes on the industry to
alleviate the situation.

The Partnership's leases as of December 31, 2002, are, in general,
triple-net leases and contain provisions that the General Partners believe
mitigate the adverse effect of inflation. Such provisions include clauses
requiring the payment of percentage rent based on certain restaurant sales above
a specified level and/or automatic increases in base rent at specified times
during the term of the lease. Inflation has had a minimal effect on results of
operations of the Partnership. Continued inflation may cause capital
appreciation of the Partnership's Properties. Inflation and changing prices,
however, also may have an adverse impact on the sales of the restaurants and on
potential capital appreciation of the Properties.

In January 2003, FASB issued FASB Interpretation No. 46 ("FIN 46"),
"Consolidation of Variable Interest Entities" to expand upon and strengthen
existing accounting guidance that addresses when a company should include the
assets, liabilities and activities of another entity in its financial
statements. To improve financial reporting by companies involved with variable
interest entities (more commonly referred to as special-purpose entities or
off-balance sheet structures), FIN 46 requires that a variable interest entity
be considered by a company if that company is subject to a majority risk of loss
from the variable interest entity's activities or entitled to receive a majority
of the entity's residual returns or both. Prior to FIN 46, a company generally
included another entity in its consolidated financial statements only if it
controlled the entity through voting interests. Consolidation of variable
interests entities will provide more complete information about the resources,
obligations, risks and opportunities of the consolidated company. The
consolidation requirements of FIN 46 apply immediately to variable interest
entities created after January 31, 2003, and to older entities in the first
fiscal year or interim period beginning after June 15, 2003. Management believes
adoption of this standard may result in either consolidation or additional
disclosure requirements with respect to the Partnership's unconsolidated joint
ventures or Properties held with affiliates of the General Partners as
tenants-in-common, which are currently accounted for under the equity method.
However, such consolidation is not expected to significantly impact the
Partnership's results of operations.


Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.


Item 8. Financial Statements and Supplementary Data





CNL INCOME FUND, LTD.
(A Florida Limited Partnership)

CONTENTS








Page

Report of Independent Certified Public Accountants 16

Financial Statements:

Balance Sheets 17

Statements of Income 18

Statements of Partners' Capital 19

Statements of Cash Flows 20-21

Notes to Financial Statements 22-33












Report of Independent Certified Public Accountants




To the Partners
CNL Income Fund, Ltd.


In our opinion, the accompanying balance sheets and the related statements of
income, of partners' capital and of cash flows present fairly, in all material
respects, the financial position of CNL Income Fund, Ltd. (a Florida limited
partnership) at December 31, 2002 and 2001, and the results of its operations
and its cash flows for each of the three years in the period ended December 31,
2002 in conformity with accounting principles generally accepted in the United
States of America. In addition, in our opinion, the financial statement schedule
listed in the index appearing under item 15(a)(2) presents fairly, in all
material respects, the information set forth therein when read in conjunction
with the related financial statements. These financial statements and financial
statement schedule are the responsibility of the Partnership's management; our
responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audits. We conducted our audits of
these statements in accordance with auditing standards generally accepted in the
United States of America, which 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, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

As described in Note 1 to the financial statements, on January 1, 2002, the
Partnership adopted Statement of Financial Accounting Standard No. 144
"Accounting for the Impairment or Disposal of Long-Lived Assets."



/s/ PricewaterhouseCoopers LLP



Orlando, Florida
January 31, 2003





CNL INCOME FUND, LTD.
(A Florida Limited Partnership)

BALANCE SHEETS




December 31,
2002 2001
------------------ ------------------

ASSETS

Real estate properties with operating leases $ 4,408,184 $ 5,199,438
Real estate held for sale 290,280 382,094
Investment in joint ventures 435,495 787,721
Cash and cash equivalents 419,385 414,999
Receivables 19,656 36,415
Accrued rental income 54,479 42,944
Other assets 4,172 21,104
------------------ ------------------

$ 5,631,651 $ 6,884,715
================== ==================

LIABILITIES AND PARTNERS' CAPITAL

Accounts payable $ 831 $ 4,840
Real estate taxes payable 13,433 13,688
Distributions payable 161,343 207,167
Due to related parties 166,556 130,278
Rents paid in advance and deposits 43,025 46,590
------------------ ------------------
Total liabilities 385,188 402,563

Commitment (Note 10)

Partners' capital 5,246,463 6,482,152
------------------ ------------------

$ 5,631,651 $ 6,884,715
================== ==================

See accompanying notes to financial statements.







CNL INCOME FUND, LTD.
(A Florida Limited Partnership)

STATEMENTS OF INCOME




Year Ended December 31,
2002 2001 2000
---------------- --------------- ----------------

Revenues:
Rental income from operating leases $ 562,331 $ 679,428 $ 842,358
Contingent rental income 49,919 44,692 54,453
Lease termination income -- 60,758 35,863
Interest and other income 6,265 25,628 42,085
---------------- --------------- ----------------
618,515 810,506 974,759
---------------- --------------- ----------------
Expenses:
General operating and administrative 136,719 131,641 95,277
Property expenses 9,832 10,729 --
State and other taxes 3,743 11,089 8,600
Depreciation and amortization 125,360 141,616 163,530
Transaction costs -- -- 15,558
---------------- --------------- ----------------
275,654 295,075 282,965
---------------- --------------- ----------------

Income Before Gain on Sale of Real Estate Properties,
Equity in Earnings of Joint Ventures and Loss on
Dissolution of Joint Venture 342,861 515,431 691,794

Gain on Sale of Real Estate Properties 348,026 -- 306,715

Equity in Earnings of Joint Ventures 373,110 95,251 95,658

Loss on Dissolution of Joint Venture (30,579 ) -- --
---------------- --------------- ----------------

Income from Continuing Operations 1,033,418 610,682 1,094,167
---------------- --------------- ----------------

Discontinued Operations (Note 6):
Income (Loss) from discontinued operations (58,246 ) 15,635 18,352
---------------- --------------- ----------------

Net Income $ 975,172 $ 626,317 $ 1,112,519
================ =============== ================

Income (Loss) Per Limited Partner Unit
Continuing operations $ 34.45 $ 20.36 $ 36.47
Discontinued operations (1.94 ) 0.52 0.61
---------------- --------------- ----------------

$ 32.51 $ 20.88 $ 37.08
================ =============== ================

Weighted Average Number of
Limited Partner Units Outstanding 30,000 30,000 30,000
================ =============== ================


See accompanying notes to financial statements.





CNL INCOME FUND, LTD.
(A Florida Limited Partnership)

STATEMENTS OF PARTNERS' CAPITAL

Years Ended December 31, 2002, 2001, and 2000




General Partners Limited Partners
----------------------------- -----------------------------------------------------------
Accumulated Accumulated Syndication
Contributions Earnings Contributions Distributions Earnings Costs
---------------- ------------ ------------- ------------- ------------ -----------

Balance, December 31, 1999 $ 193,400 $ 147,368 $ 12,944,586 $ (18,360,303 ) $ 15,072,951 $ (1,663,140 )

Distributions to limited
partners ($72.10 per
limited partner unit) -- -- (690,305 ) (1,472,573 ) -- --
Net income -- -- -- -- 1,112,519 --
-------------- ------------- -------------- -------------- -------------- -------------

Balance, December 31, 2000 193,400 147,368 12,254,281 (19,832,876 ) 16,185,470 (1,663,140 )

Distributions to limited
partners ($47.62 per
limited partner unit) -- -- (416,180 ) (1,012,488 ) -- --
Net income -- -- -- -- 626,317 --
-------------- ------------- -------------- -------------- -------------- -------------

Balance, December 31, 2001 193,400 147,368 11,838,101 (20,845,364 ) 16,811,787 (1,663,140 )

Distributions to limited
partners ($73.70 per
limited partner unit) -- -- (1,081,923 ) (1,128,938 ) -- --
Net income -- -- -- -- 975,172 --
-------------- ------------- -------------- -------------- -------------- -------------

Balance, December 31, 2002 $ 193,400 $ 147,368 $ 10,756,178 $ (21,974,302 ) $ 17,786,959 $(1,663,140 )
============== ============= ============== ============== ============== =============





Total
- -------------

$8,334,862



(2,162,878 )
1,112,519
- --------------

7,284,503



(1,428,668 )
626,317
- --------------

6,482,152



(2,210,861 )
975,172
- --------------

$5,246,463
==============


See accompanying notes to financial statements.





CNL INCOME FUND, LTD.
(A Florida Limited Partnership)

STATEMENTS OF CASH FLOWS




Years Ended December 31,
2002 2001 2000
--------------- --------------- --------------

Increase (Decrease) in Cash and Cash Equivalents:

Cash Flows from Operating Activities:
Net Income $ 975,172 $ 626,317 $ 1,112,519
--------------- --------------- --------------
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation 137,107 154,096 176,010
Amortization 208 2,500 2,500
Equity in earnings of joint
ventures, net of distributions (291,907 ) 17,136 18,136
Gain on sale of assets (348,026 ) -- (306,715 )
Provision for write-down of assets 79,245 -- --
Loss on dissolution of joint venture 30,579 -- --
Decrease (increase) in receivables 15,200 8,927 (26,574 )
Increase in due from related parties 1,559 -- --
Increase in accrued rental income (10,920 ) (5,688 ) (4,171 )
Decrease (increase) in other assets (1,193 ) 6,440 (1,097 )
(Increase) decrease in accounts
payable and escrowed real
estate taxes payable (4,264 ) 4,582 (58,975 )
(Increase) decrease in due to related parties 4,063 1,299 (33,843 )
Increase (decrease) in rents paid in
advance and deposits (3,565 ) 15,527 3,620
--------------- --------------- --------------
Total adjustments (391,914 ) 204,819 (231,109 )
--------------- --------------- --------------

Net Cash Provided by Operating Activities 583,258 831,136 881,410

Cash Flows from Investing Activities:
Proceeds from sale of real estate properties 1,064,259 -- 1,305,640
Liquidating distribution from joint venture 613,554 -- --
--------------- --------------- --------------
Net cash provided by investing activities 1,677,813 -- 1,305,640

Cash Flows from Financing Activities:
Proceeds from loan from corporate general
partner -- -- 70,000
Repayment of loan from corporate general
partner -- -- (70,000 )
Distributions to limited partners (2,256,685 ) (1,435,958 ) (2,215,403 )
--------------- --------------- --------------
Net cash used in financing activities (2,256,685 ) (1,435,958 ) (2,215,403 )
--------------- --------------- --------------

Net Increase (Decrease) in Cash and Cash Equivalents 4,386 (604,822 ) (28,353 )

Cash and Cash Equivalents at Beginning of Year 414,999 1,019,821 1,048,174
--------------- --------------- --------------

Cash and Cash Equivalents at End of Year $ 419,385 $ 414,999 $ 1,019,821
=============== =============== ==============


See accompanying notes to financial statements.




CNL INCOME FUND, LTD.
(A Florida Limited Partnership)

STATEMENTS OF CASH FLOWS - CONTINUED




Years Ended December 31,
2002 2001 2000
--------------- --------------- --------------


Supplemental Schedule of Non-Cash
Investing and Financing Activities:

Deferred real estate disposition fee
incurred and unpaid at end of year $ 32,215 $ -- $ 39,345
=============== =============== ==============

Distributions declared and unpaid at
December 31 $ 161,343 $ 207,167 $ 214,457
=============== =============== ==============

See accompanying notes to financial statements.




CNL INCOME FUND, LTD.
(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS

Years Ended December 31, 2002, 2001, and 2000


1. Significant Accounting Policies:
-------------------------------

Organization and Nature of Business - CNL Income Fund, Ltd. (the
"Partnership") is a Florida limited partnership that was organized for
the purpose of acquiring both newly constructed and existing restaurant
properties, as well as properties upon which restaurants were to be
constructed, which are leased primarily to operators of national and
regional fast-food restaurant chains.

The general partners of the Partnership are CNL Realty Corporation (the
"Corporate General Partner"), James M. Seneff, Jr. and Robert A.
Bourne. Mr. Seneff and Mr. Bourne are also 50% shareholders of the
Corporate General Partner. The general partners have responsibility for
managing the day-to-day operations of the Partnership.

Real Estate and Lease Accounting - The Partnership records the
acquisitions of real estate properties at cost, including acquisition
and closing costs. Real estate properties are generally leased to third
parties on a triple-net basis, whereby the tenant is generally
responsible for all operating expenses relating to the property,
including property taxes, insurance, maintenance and repairs. During
the years ended December 2002, 2001 and 2000 tenants paid directly to
real estate taxing authorities approximately $75,600, $73,900 and
$72,000 in real estate taxes in accordance with the terms of their
triple net leases with the Partnership.

The leases of the Partnership provide for base minimum annual rental
payments payable in monthly installments. In addition, certain leases
provide for contingent rental revenues based on the tenants' gross
sales in excess of a specified threshold. The Partnership defers
recognition of the contingent rental revenues until the defined
thresholds are met. Leases are accounted for using the operating
method. Under the operating method, property leases are recorded at
cost, revenue is recognized as rentals are earned and depreciation is
charged to operations as incurred. Buildings are depreciated on the
straight-line method over their estimated useful lives of 30 years.
When scheduled rentals vary during the lease term, income is recognized
on a straight-line basis so as to produce a constant periodic rent over
the lease term commencing on the date the property is placed in
service.

Accrued rental income represents the aggregate amount of income
recognized on a straight-line basis in excess of scheduled rental
payments to date.

The leases are for 10 to 20 years and provide for minimum and
contingent rentals. The lease options generally allow tenants to renew
the leases for two to five successive five-year periods subject to the
same terms and conditions as the initial lease. Most leases also allow
the tenant to purchase the property at fair market value after a
specified portion of the lease has elapsed.

When the properties are sold, the related cost and accumulated
depreciation plus any accrued rental income, are removed from the
accounts and gains or losses from sales reflected in income. The
general partners of the Partnership review the properties for
impairment whenever events or changes in circumstances indicate that
the carrying amount of the assets may not be recoverable through
operations. The general partners determine whether an impairment in
value has occurred by comparing the estimated future undiscounted cash
flows, including the residual value of the property, with the carrying
cost of the individual property. If an impairment is indicated, the
assets are adjusted to their estimated fair value.






CNL INCOME FUND, LTD.
(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS

Years Ended December 31, 2002, 2001, and 2000


1. Significant Accounting Policies - Continued:
-------------------------------------------

When the collection of amounts recorded as rental or other income is
considered to be doubtful, a provision is made to increase the
allowance for doubtful accounts. If amounts are subsequently determined
to be uncollectible, the corresponding receivable and the allowance for
doubtful accounts are decreased accordingly.

Investment in Joint Ventures - The Partnership's investments in Orange
Avenue Joint Venture and the property in Vancouver, Washington, which
is held as tenants-in-common with affiliates of the General Partners
are accounted for using the equity method since each joint venture
agreement requires the consent of all partners on all key decisions
affecting the operations of the underlying property.

Cash and Cash Equivalents - The Partnership considers all highly liquid
investments with a maturity of three months or less when purchased to
be cash equivalents. Cash and cash equivalents consist of demand
deposits at commercial banks and money market funds (some of which are
backed by government securities). Cash equivalents are stated at cost
plus accrued interest, which approximates market value.

Cash accounts maintained on behalf of the Partnership in demand
deposits at commercial banks and money market funds may exceed
federally insured levels; however, the Partnership has not experienced
any losses in such accounts.

Lease Costs - Other assets include lease incentive costs and brokerage
and legal fees associated with negotiating leases and are amortized
over the terms of the new leases using the straight-line method.

Income Taxes - Under Section 701 of the Internal Revenue Code, all
income, expenses and tax credit items flow through to the partners for
tax purposes. Therefore, no provision for federal income taxes is
provided in the accompanying financial statements. The Partnership is
subject to certain state taxes on its income and property.

Additionally, for tax purposes, syndication costs are included in
Partnership equity and in the basis of each partner's investment.
Syndication costs represent a reduction of Partnership equity and a
reduction in the basis of each partner's investment.

Use of Estimates - The general partners of the Partnership have made a
number of estimates and assumptions relating to the reporting of assets
and liabilities and the disclosure of contingent assets and liabilities
to prepare these financial statements in conformity with generally
accepted accounting principles. The more significant areas requiring
the use of management estimates relate to the allowance for doubtful
accounts and future cash flows associated with long-lived assets.
Actual results could differ from those estimates.

Reclassification - Certain items in the prior years' financial
statements have been reclassified to conform to 2002 presentation
including a change in presentation of the statement of cash flows from
the direct to the indirect method. These reclassifications had no
effect on partners capital, net income or cash flows.






CNL INCOME FUND, LTD.
(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS

Years Ended December 31, 2002, 2001, and 2000


1. Significant Accounting Policies - Continued:
-------------------------------------------

Statement of Financial Accounting Standards No. 144 ("FAS 144") -
Effective January 1, 2002, the Partnership adopted Statement of
Financial Accounting Standards No. 144 "Accounting for the Impairment
or Disposal of Long-Lived Assets." This statement requires that a
long-lived asset be tested for recoverability whenever events or
changes in circumstances indicate that its carrying amount may not be
recoverable. The carrying amount of a long-lived asset is not
recoverable if it exceeds the sum of the undiscounted cash flows
expected to result from the use and eventual disposition of the asset.
The assessment is based on the carrying amount of the asset at the date
it is tested for recoverability. An impairment loss is recognized when
the carrying amount of a long-lived asset exceeds its fair value. If an
impairment is recognized, the adjusted carrying amount of a long-lived
asset is its new cost basis. The statement also requires that the
results of operations of a component of an entity that either has been
disposed of or is classified as held for sale be reported as a
discontinued operation if the disposal activity was initiated
subsequent to the adoption of the Standard.

FASB Interpretation No. 46 ("FIN 46") - In January 2003, FASB issued
FASB Interpretation No. 46 ("FIN 46"), "Consolidation of Variable
Interest Entities" to expand upon and strengthen existing accounting
guidance that addresses when a company should include the assets,
liabilities and activities of another entity in its financial
statements. To improve financial reporting by companies involved with
variable interest entities (more commonly referred to as
special-purpose entities or off-balance sheet structures), FIN 46
requires that a variable interest entity be considered by a company if
that company is subject to a majority risk of loss from the variable
interest entity's activities or entitled to receive a majority of the
entity's residual returns or both. Prior to FIN 46, a company generally
included another entity in its consolidated financial statements only
if it controlled the entity through voting interests. Consolidation of
variable interests entities will provide more complete information
about the resources, obligations, risks and opportunities of the
consolidated company. The consolidation requirements of FIN 46 apply
immediately to variable interest entities created after January 31,
2003, and to older entities in the first fiscal year or interim period
beginning after June 15, 2003. Management believes adoption of this
standard may result in either consolidation or additional disclosure
requirements with respect to the Partnership's unconsolidated joint
ventures or properties held with affiliates of the general partners as
tenants-in-common, which are currently accounted for under the equity
method. However, such consolidation is not expected to significantly
impact the Partnership's results of operations.


2. Real Estate Properties with Operating Leases:
--------------------------------------------

Real estate properties on operating leases consisted of the following
at December 31:



2002 2001
----------------- -----------------

Land $ 2,501,220 $ 2,945,176
Buildings 3,712,538 4,169,521
----------------- -----------------
6,213,758 7,114,697
Less accumulated depreciation (1,805,574 ) (1,915,259 )
----------------- -----------------

$ 4,408,184 $ 5,199,438
================= =================







CNL INCOME FUND, LTD.
(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS

Years Ended December 31, 2002, 2001, and 2000


2. Real Estate Properties with Operating Leases -Continued:
-------------------------------------------------------

During 2000, the Partnership sold its properties in Merritt Island,
Florida and Salisbury, Maryland to separate third parties and received
total net sales proceeds of approximately $1,305,600, resulting in a
total gain of $306,715. In connection with the sales, the Partnership
incurred deferred, subordinated, real estate disposition fees of
$39,345, and received $35,863 from the former tenant of the Salisbury,
Maryland property in consideration of the Partnership releasing the
tenant from its obligation under the terms of its lease.

During 2002, the Partnership sold its property in Mesquite, Texas to a
third party and received net sales proceeds of approximately
$1,064,300, resulting in a gain of $348,026. In connection with the
sale, the Partnership incurred a deferred, subordinated, real estate
disposition fee of $32,215. As of December 31, 2001, this property had
been identified as held for sale.

The following is a schedule of the future minimum lease payments to be
received on noncancellable operating leases at December 31, 2002:

2003 $ 543,387
2004 543,387
2005 543,387
2006 487,531
2007 404,539
Thereafter 2,231,902
-------------------

$ 4,754,133 (1)
===================

(1) Excludes one property which was classified as real estate held for
sale.

3. Investment in Joint Ventures:
----------------------------

In June 2002, Sand Lake Road Joint Venture, in accordance with the
option under the lease agreement, sold its property to the tenant and
received net sales proceeds of approximately $1,227,100, resulting in a
gain of approximately $604,000. The Partnership owned a 50% interest in
this joint venture. The joint venture was dissolved and as a result,
the Partnership received $613,554 representing its pro-rata share of
the liquidation proceeds. The Partnership recognized a $30,579 loss on
the dissolution. The financial results for this property are reflected
as Discontinued Operations in the condensed financial information
presented below.

As of December 31, 2002, the Partnership had a 50% interest in the
profits and losses of Orange Avenue Joint Venture and owned a 12.17%
interest in a property in Vancouver, Washington, with affiliates of the
general partners. This joint venture, and the tenancy-in-common with
affiliates of the general partners, as tenants-in-common, each owns and
leases one property to an operator of national fast-food or
family-style restaurant. The following presents the combined, condensed
financial information for the joint venture and the property held as
tenants-in-common with affiliates at December 31:






CNL INCOME FUND, LTD.
(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS

Years Ended December 31, 2002, 2001, and 2000

3. Investment in Joint Ventures - Continued:
----------------------------------------



December 31, December 31,
2002 2001
--------------- ---------------

Real estate properties with operating leases, net $ 2,344,593 $ 2,398,707
Real estate held for sale -- 630,814
Cash 4,442 3,232
Receivables -- 1,539
Accrued rental income 115,129 92,131
Other assets 24 335
Liabilities 2,250 3,110
Partners' Capital 2,461,938 3,123,648


Years Ended December 31,
2002 2001 2000
--------------- -------------- ---------------
Continuing Operations:
Revenues $ 303,278 $ 302,778 $ 303,756
Expenses (57,212 ) (56,533 ) (55,791 )
--------------- -------------- ---------------

Income from Continuing Operations 246,066 246,245 247,965
--------------- -------------- ---------------

Discontinued Operations:

Revenues 54,993 117,162 117,191
Expenses (9,525 ) (23,476 ) (23,668 )
Gain on disposal of real estate
properties 604,015 -- --
--------------- -------------- ---------------
649,483 93,686 93,523
--------------- -------------- ---------------
Net Income $ 895,549 $ 339,931 $ 341,488
=============== ============== ===============


The Partnership recognized income totaling $373,110, $95,251 and
$95,658 for the years ended December 31, 2002, 2001 and 2000,
respectively, from these joint ventures.

4. Allocations and Distributions:
-----------------------------

From inception through December 31, 1999, all net income and net losses
of the Partnership, excluding gains and losses from the sale of
properties, were allocated 99% to the limited partners and one percent
to the general partners. From inception through December 31, 1999,
distributions of net cash flow were made 99% to the limited partners
and one percent to the general partners. However, the one percent of
net cash flow to be distributed to the general partners was
subordinated to receipt by the limited partners of an aggregate, 10%,
noncumulative, noncompounded annual return on their adjusted capital
contributions (the "10% Preferred Return").






CNL INCOME FUND, LTD.
(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS

Years Ended December 31, 2002, 2001, and 2000


4. Allocations and Distributions - Continued:
-----------------------------------------

From inception through December 31, 1999, generally, net sales proceeds
from the sale of properties not in liquidation of the Partnership, to
the extent distributed, were distributed first to the limited partners
in an amount sufficient to provide them with their cumulative 10%
Preferred Return, plus the return of their adjusted capital
contributions. The general partners then received, to the extent
previously subordinated and unpaid, a one percent interest in all prior
distributions of net cash flow and a return of their capital
contributions. Any remaining sales proceeds were distributed 95% to the
limited partners and five percent to the general partners. Any gain
from the sale of a property not in liquidation of the Partnership was,
in general, allocated in the same manner as net sales proceeds are
distributable. Any loss from the sale of a property was, in general,
allocated first, on a pro rata basis, to partners with positive
balances in their capital accounts; and thereafter, 95% to the limited
partners and five percent to the general partners.

Generally, net sales proceeds from a liquidating sale of properties,
will be used in the following order: (i) first to pay and discharge all
of the Partnership's liabilities to creditors, (ii) second, to
establish reserves that may be deemed necessary for any anticipated or
unforeseen liabilities or obligations of the Partnership, (iii) third,
to pay all of the Partnership's liabilities, if any, to the general and
limited partners, (iv) fourth, after allocations of net income, gains
and/or losses, to distribute to the partners with positive capital
account balances, in proportion to such balances, up to amounts
sufficient to reduce such positive balances to zero, and (v)
thereafter, any funds remaining shall then be distributed 95% to the
limited partners and five percent to the general partners.

Effective January 2000, the general partners waived their right to
receive future distributions from the Partnership, including both
distributions of operating cash flow and distributions of liquidation
proceeds, to the extent that the cumulative amount of such
distributions would exceed the balance in the general partners' capital
account as of December 31, 1999. Accordingly, for years commencing
January 1, 2000 and after, the Partnership's net income will be
allocated entirely among the limited partners. However, if losses are
allocated to the general partners in a year, an amount of income equal
to the sum of such losses may be allocated to the general partners in
succeeding years. Accordingly, the general partners were not allocated
any net income and did not receive any distributions during the years
ended December 31, 2002, 2001 and 2000.

During the years ended December 31, 2002, 2001, and 2000, the
Partnership declared distributions to the limited partners of
$2,210,861, $1,428,668, and $2,162,878, respectively. Distributions
during the year ended December 31, 2002 included $1,550,000 in a
special distribution, as a result of the distribution of net sales
proceeds from the sales of Properties in Mesquite, Texas and the
liquidation proceeds from Sand Lake Joint Venture. Distributions for
the years ended December 31, 2001 and 2000 included $600,000 and
$1,200,000, respectively, in special distributions, as a result of the
distribution of net sales proceeds from the sales of the properties in
Salisbury, Maryland, Merritt Island, Florida and Kent Island, Maryland.
These special distributions in 2002, 2001 and 2000, were effectively a
return of a portion of the limited partners' investment, although in
accordance with the partnership agreement, $468,077, $183,820 and
$509,695, respectively, were applied toward the limited partners' 10%
Preferred Return and the balances of $1,081,923 $416,180 and $690,305,
respectively, were treated as a return of capital for purposes of
calculating the limited partners' 10% Preferred Return. As a result of
the returns of capital in 2002, 2001 and 2000, the amount of the
limited partners' invested capital contributions (which generally is
the limited partners' capital contributions, less distributions from
the sale of a property that are considered to be a return of capital)
was decreased; therefore, the amount of the limited partners' invested
capital contributions





CNL INCOME FUND, LTD.
(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2002, 2001, and 2000


4. Allocations and Distributions - Continued:
-----------------------------------------

on which the 10% Preferred Return is calculated was lowered
accordingly. As a result of the sales of the properties, the
Partnership's total revenue was reduced, while the majority of the
Partnership's operating expenses remained fixed. Therefore,
distributions of net cash flow were adjusted during the quarters ended
March 31, 2002 and 2001 and September 30, 2000. No distributions have
been made to the general partners to date.

5. Income Taxes:
------------

The following is a reconciliation of net income for financial reporting
purposes to net income for federal income tax purposes for the years
ended December 31:



2002 2001 2000
------------ ------------- -------------

Net income for financial reporting purposes $ 975,172 $ 626,317 $ 1,112,519

Effect of timing differences relating
to depreciation (52,986 ) (54,364 ) (67,844 )

Effect of timing differences relating to
gains on real estate property sales 136,917 -- 226,810

Effect of timing differences relating to
equity in earnings of
unconsolidated joint ventures 96,749 (10,061 ) (14,938 )

Provision for write-down of assets 79,245 -- --

Deduction of transaction costs for tax
reporting purposes -- -- (90,484 )

Accrued rental income (8,497 ) (5,688 ) (4,171 )

Rents paid in advance 435 (1,044 ) 3,620

Effect of timing differences relating to
allowance for doubtful accounts -- -- (1,236 )
------------ ------------- -------------

Net income for federal income tax purposes $ 1,227,035 $ 555,160 $1,164,276
============ ============= =============







CNL INCOME FUND, LTD.
(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2002, 2001, and 2000


6. Discontinued Operations:

During 2002, the Partnership entered into an agreement with the tenant
to sell the property in Angleton, Texas. As a result, the Partnership
reclassified the assets from real estate properties with operating
leases to real estate held for sale. The Partnership recorded a
provision for write-down of assets of $79,245 based on the anticipated
sales price. In addition, the Partnership stopped recording
depreciation and accrued rental income once the property was identified
for sale. The financial results for this property are reflected as
Discontinued Operations in the accompanying financial statements.

The operating results of the discontinued operations for the above
property are as follows:



Year Ended December 31,
2002 2001 2000
-------------- ------------- --------------

Rental revenues $34,085 $ 30,615 $ 33,600
Expenses (13,086 ) (14,980 ) (15,248 )
Provision for write-down of assets (79,245 ) -- --
-------------- ------------- --------------
Income (Loss) from discontinued
operations $ (58,246 ) $ 15,635 $ 18,352
============== ============= ==============


7. Related Party Transactions:
--------------------------

One of the individual general partners, James M. Seneff, Jr., is one of
the principal shareholders of CNL Holdings, Inc. The other individual
general partner, Robert A. Bourne, serves as President and Treasurer of
CNL Financial Group, Inc., a wholly owned subsidiary of CNL Holdings,
Inc. CNL APF Partners, LP, a wholly owned subsidiary of CNL American
Properties Fund, Inc. ("APF") served as the Partnership's advisor until
January 1, 2002, when it assigned its rights and obligations under a
management agreement to RAI Restaurants, Inc. (formerly known as CNL
Restaurants XVIII, Inc.). RAI Restaurants, Inc. ("the Advisor") is a
wholly owned subsidiary of APF. The individual general partners are
stockholders and directors of APF.

The Advisor provides services pursuant to a management agreement with
the Partnership. In connection therewith, the Partnership has agreed to
pay the Advisor an annual, noncumulative, subordinated property
management fee of one-half of one percent of the Partnership assets
under management (valued at cost) annually. The property management fee
is limited to one percent of the sum of gross operating revenues from
properties wholly owned by the Partnership and the Partnership's
allocable share of gross operating revenues from joint ventures or
competitive fees for comparable services. In addition, these fees will
be incurred and will be payable only after the limited partners receive
their aggregate, noncumulative 10% Preferred Return. Due to the fact
that these fees are noncumulative, if the limited partners do not
receive their 10% Preferred Return in any particular year, no
management fees will be due or payable for such year. As a result of
such threshold, no management fees were incurred during the years ended
December 31, 2002, 2001, and 2000.





CNL INCOME FUND, LTD.
(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2002, 2001, and 2000


7. Related Party Transactions - Continued:
--------------------------------------

The Advisor is also entitled to receive a deferred, subordinated real
estate disposition fee, payable upon the sale of one or more properties
based on the lesser of one-half of a competitive real estate commission
or three percent of the sales price if the Advisor provides a
substantial amount of services in connection with the sale. However, if
the net sales proceeds are reinvested in a replacement property, no
such real estate disposition fees will be incurred until such
replacement property is sold and the net sales proceeds are
distributed. Payment of the real estate disposition fee is subordinated
to the receipt by the limited partners of their aggregate 10% Preferred
Return on a cumulative basis, plus their adjusted capital
contributions. For the year ended December 31, 2002, the Partnership
incurred $32,215 in a deferred, subordinated real estate disposition
fee as a result of the sale of one property and for the year ended
December 31, 2000, the Partnership incurred $39,345 in deferred,
subordinated real estate disposition fees as a result of the sale of
two properties. No deferred, subordinated real estate disposition fees
were incurred for the year ended December 31, 2001.

During the years ended December 31, 2002, 2001, and 2000, the
Partnership's advisor and its affiliates provided accounting and
administrative services to the Partnership. The Partnership incurred
$108,019, $93,447, and $60,102, for the years ended December 31, 2002,
2001, and 2000, respectively, for such services.

The due to related parties consisted of the following at December 31:



2002 2001
-------------- -------------

Due to the Advisor and its affiliates:
Deferred, subordinated real estate
disposition fee $ 158,710 $ 126,495
Accounting and administrative services 7,846 3,783
-------------- -------------

$ 166,556 $ 130,278
============== =============


The deferred, subordinated real estate disposition fees will not be
paid until after the limited partners have received their cumulative
10% Preferred Return, plus their adjusted capital contributions.





CNL INCOME FUND, LTD.
(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2002, 2001, and 2000


8. Concentration of Credit Risk:
----------------------------

The following schedule presents total rental revenues from individual
lessees, each representing more than 10% of the Partnership's total
rental revenues (including the Partnership's share of rental revenues
from joint ventures and the property held as tenants-in-common with
affiliates of the general partners) for each of the years ended
December 31:



2002 2001 2000
--------------- -------------- --------------

Wen - Atlanta Inc. $ 89,603 $ N/A $ N/A
The Ground Round, Inc. 88,523 88,523 N/A
AJZ, Inc. 84,774 N/A N/A
Wendy's Old Fashioned
Hamburgers of New York, Inc. 82,112 N/A N/A
Golden Corral Corporation N/A 165,460 352,128


In addition, the following schedule presents total rental revenues from
individual restaurant chains, each representing more than 10% of the
Partnership's total rental revenues (including the Partnership's share
of rental revenues from joint ventures and the property held as
tenant-in-common with an affiliate of the general partners) for each of
the years ended December 31:



2002 2001 2000
------------- ------------ ------------

Wendy's Old Fashioned Hamburger Restaurants $312,432 $374,154 $374,416
Ground Round 88,523 88,523 N/A
A.J. Gators Restaurant 84,774 N/A N/A
Golden Corral Family Steakhouse Restaurants N/A 165,460 352,128


Although the Partnership's properties are geographically diverse
throughout the United States and the Partnership's lessees operate a
variety of restaurant concepts, default by any one of these lessees or
restaurant chains could significantly impact the results of operations
of the Partnership if the Partnership is not able to re-lease the
properties in a timely manner.

The information denoted by N/A indicates that for each period
presented, the tenant or restaurant chain did not represent more than
10% of the Partnership's total rental revenues.





CNL INCOME FUND, LTD.
(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2002, 2001, and 2000


9. Selected Quarterly Financial Data:
---------------------------------

The following table presents selected unaudited quarterly financial
data for each full quarter during the years ended December 31, 2002 and
2001:



2002 Quarter First Second Third Fourth Year
------------------------------- ----------- ------------- -------------- ------------- -------------

Continuing Operations (1):
Revenues $ 166,423 $ 143,654 $ 151,040 $ 157,398 $ 618,515
Equity in earnings of joint
ventures 23,410 325,454 12,181 12,065 373,110
Income from continuing
operations 455,827 369,763 101,314 106,514 1,033,418
Discontinued Operations (1):
Revenues 7,654 7,654 7,654 11,123 34,085
Income (Loss) from
discontinued operations 3,178 3,908 (75,735 ) 10,403 (58,246 )

Net Income 459,005 373,671 25,579 116,917 975,172

Net Income (Loss) per limited partner unit:

Continuing operations $ 15.19 $ 12.32 $ 3.38 3.56 34.45
Discontinued operations 0.11 0.14 (2.51 ) .32 (1.94 )
----------- ------------- -------------- ------------- -------------
Total $ 15.30 $ 12.46 $ 0.87 $ 3.88 $ 32.51
=========== ============= ============== ============= =============







CNL INCOME FUND, LTD.
(A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS - CONTINUED

Years Ended December 31, 2002, 2001, and 2000


9. Selected Quarterly Financial Data - Continued:
---------------------------------------------



2001 Quarter First Second Third Fourth Year
------------------------------- ------------- ------------- ------------- -------------- -------------

Continuing Operations (1):
Revenues $ 199,419 $ 241,850 $ 170,032 $ 199,205 $ 810,506
Equity in earnings of joint
ventures 23,701 23,956 23,713 23,881 95,251
Income from continuing
operations 127,320 186,698 133,743 162,921 610,682
Discontinued Operations (1):
Revenues 8,400 8,400 8,400 5,415 30,615
Income from discontinued
operations 4,655 4,655 4,655 1,670 15,635

Net Income 131,975 191,353 138,398 164,591 626,317

Net Income per limited partner unit:

Continuing operations $ 4.24 $ 6.22 $ 4.45 $ 5.45 $ 20.36
Discontinued operations 0.16 0.16 0.16 0.04 0.52
------------- ------------- ------------- -------------- -------------
Total $ 4.40 $ 6.38 $ 4.61 $ 5.49 $ 20.88
============= ============= ============= ============== =============


(1) Certain items in the quarterly financial data have been reclassified to
conform to 2002 presentation. These reclassifications had no effect on
net income. The results of operations relating to properties that were
either disposed of or that were classified as held for sale as of
December 31, 2002 are reported as discontinued operations for all
periods presented. The results of operations relating to properties
that were identified for sale as of December 31, 2001 but sold
subsequently are reported as continuing operations.

10. Commitment:
----------

In November 2002, the Partnership entered into an agreement with a
third party to sell the property in Angleton, Texas.

11. Subsequent Event:
----------------

In January 2003, the Partnership sold the property in Angleton, Texas
for $300,000 and received net sales proceeds of approximately $288,900
resulting in a loss of approximately $1,400, which will be recognized
in the first quarter of 2003.






Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

None.


PART III


Item 10. Directors and Executive Officers of the Registrant

The General Partners of the Registrant are James M. Seneff, Jr., Robert
A. Bourne and CNL Realty Corporation, a Florida corporation. The General
Partners manage and control the Partnership's affairs and have general
responsibility and the ultimate authority in all matters affecting the
Partnership's business. The Partnership has available to it the services,
personnel and experience of CNL American Properties Fund, Inc. ("APF"), CNL Fund
Advisors, Inc., CNL Financial Group, Inc. and their affiliates, all of which are
affiliates of the General Partners.

James M. Seneff, Jr., age 56. Since 1971, Mr. Seneff has been active in
the acquisition, development, and management of real estate projects and,
directly or through an affiliated entity, has served as a general partner or
co-venturer in over 100 real estate ventures. These ventures have involved the
financing, acquisition, construction, and leasing of restaurants, office
buildings, apartment complexes, hotels, and other real estate. Mr. Seneff has
served as Director and Chairman of the Board of APF, a public, unlisted real
estate investment trust, since 1994. Mr. Seneff served as Chief Executive
Officer of APF from 1994 through August 1999, and has served as co-Chief
Executive Officer of APF since December 2000. Mr. Seneff served as Chairman of
the Board and Chief Executive Officer of CNL Fund Advisors, Inc., formerly the
Partnership's advisor, until it merged with a wholly-owned subsidiary of APF in
September 1999, and in June 2000, was re-elected to those positions of CNL Fund
Advisors, Inc. Mr. Seneff is a principal stockholder of CNL Holdings, Inc., the
parent company of CNL Financial Group, Inc. (formerly CNL Group, Inc.), a
diversified real estate company, and has served as a Director, Chairman of the
Board and Chief Executive Officer of CNL Financial Group, Inc. since its
formation in 1980. CNL Financial Group, Inc. is the parent company, either
directly or indirectly through subsidiaries, of CNL Real Estate Services, Inc.,
CNL Capital Markets, Inc., CNL Investment Company and CNL Securities Corp., all
of which are engaged in the business of real estate finance. Mr. Seneff also
serves as a Director, Chairman of the Board and Chief Executive Officer of CNL
Hospitality Properties, Inc., a public, unlisted real estate investment trust,
as well as, CNL Hospitality Corp., its advisor. In addition, he serves as a
Director, Chairman of the Board and Chief Executive Officer of CNL Retirement
Properties, Inc., a public, unlisted real estate investment trust and its
advisor, CNL Retirement Corp. Since 1992, Mr. Seneff has also served as a
Director, Chairman of the Board and Chief Executive Officer of Commercial Net
Lease Realty, Inc., a public real estate investment trust that is listed on the
New York Stock Exchange. Mr. Seneff has also served as a Director, Chairman of
the Board and Chief Executive Officer of CNL Securities Corp. since 1979; CNL
Investment Company since 1990; and CNL Institutional Advisors, Inc., a
registered investment advisor for pension plans, since 1990. Mr. Seneff formerly
served as a Director of First Union National Bank of Florida, N.A., and
currently serves as the Chairman of the Board of CNL Bank, an independent,
state-chartered commercial bank. Mr. Seneff previously served on the Florida
State Commission on Ethics and is a former member and past Chairman of the State
of Florida Investment Advisory Council, which recommends to the Florida Board of
Administration investments for various Florida employee retirement funds. The
Florida Board of Administration, Florida's principal investment advisory and
money management agency, oversees the investment of more than $60 billion of
retirement funds. Mr. Seneff received his degree in Business Administration from
Florida State University in 1968.

Robert A. Bourne, age 55. Mr. Bourne has participated as a general
partner or co-venturer in over 100 real estate ventures involved in the
financing, acquisition, construction, and leasing of restaurants, office
buildings, apartment complexes, hotels, and other real estate. Mr. Bourne is a
Director of APF. Mr. Bourne served as President of APF from 1994 through
February 1999. He also served as Treasurer from February 1999 through August
1999 and from May 1994 through December 1994. He also served in various
executive positions with CNL Fund Advisors, Inc. prior to its merger with a
wholly-owned subsidiary of APF including, President from 1994 through September
1997, and Director from 1994 through August 1999. Mr. Bourne serves as President
and Treasurer of CNL Financial Group, Inc.; Director, Vice Chairman of the
Board, and Treasurer , and from 1997 until June 2002 served as President, of CNL
Hospitality Properties, Inc., a public, unlisted real estate investment trust;
as well as, Director, Vice Chairman of the Board, and Treasurer, and from 1997
until June 2002 served as President, of CNL Hospitality Corp., its advisor. In
addition, Mr. Bourne serves as Director, Vice Chairman of the Board, and
Treasurer, and from 1997 until June 2002 served as President, of CNL Retirement
Properties, Inc., a public, unlisted real estate investment trust; as well as, a
Director, Vice Chairman of the Board, and Treasurer, and from 1997 until June
2002 served as President, of its advisor, CNL Retirement Corp. Mr. Bourne also
serves as a Director of CNL Bank. He has served as a Director since 1992, Vice
Chairman of the Board since February 1996, Secretary and Treasurer from February
1996 through 1997, and President from July 1992 through February 1996, of
Commercial Net Lease Realty, Inc., a public real estate investment trust listed
on the New York Stock Exchange. Mr. Bourne also serves as Director, President
and Treasurer for various affiliates of CNL Financial Group, Inc. including, CNL
Investment Company, CNL Securities Corp. and CNL Institutional Advisors, Inc., a
registered investment advisor for pension plans. Mr. Bourne began his career as
a certified public accountant employed by Coopers & Lybrand, Certified Public
Accountants, from 1971 through 1978, where he attained the position of Tax
Manager in 1975. Mr. Bourne graduated from Florida State University in 1970
where he received a B.A. in Accounting, with honors.

Curtis B. McWilliams, age 47. Mr. McWilliams has served as Co-Chief
Executive Officer of APF since December 2000 and previously served as Chief
Executive Officer from September 1999 through December 2000. Prior to the
acquisition of CNL Fund Advisors, Inc., Mr. McWilliams served as President of
APF from February 1999 until September 1999. From February 1998 to February
1999, he served as Executive Vice President of APF. Mr. McWilliams joined CNL
Financial Group, Inc. in April 1997 and served as an Executive Vice President
from October 1997 until September 1999. In addition, Mr. McWilliams served as
President of CNL Fund Advisors, Inc. and CNL Financial Services, Inc., a
corporation engaged in the business of real estate financing, from April 1997
until the acquisition of such entities by wholly-owned subsidiaries of APF in
September 1999. From September 1983 through March 1997, Mr. McWilliams was
employed by Merrill Lynch & Co. The majority of his career at Merrill Lynch &
Co. was in the Investment Banking division where he served as a Managing
Director. Mr. McWilliams received a B.S.E. in Chemical Engineering from
Princeton University in 1977 and a Master of Business Administration degree with
a concentration in finance from the University of Chicago in 1983.

Steven D. Shackelford, age 39. Mr. Shackelford was promoted to
Executive Vice President of APF in June 2000. He served as Senior Vice President
from September 1999 until his promotion in June 2000. Mr. Shackelford has served
as Chief Financial Officer since January 1997 and has served as Secretary and
Treasurer of APF since September 1999. He also served as Chief Financial Officer
of CNL Fund Advisors, Inc. from September 1996 to September 1999. From March
1995 to July 1996, Mr. Shackelford was a senior manager in the national office
of Price Waterhouse LLP where he was responsible for advising foreign clients
seeking to raise capital and a public listing in the United States. From August
1992 to March 1995, he was a manager in the Paris, France office of Price
Waterhouse, serving several multi-national clients. Mr. Shackelford was an audit
staff and senior from 1986 to 1992 in the Orlando, Florida office of Price
Waterhouse. Mr. Shackelford received a Bachelor of Arts degree in Accounting,
with honors, and a Master of Business Administration degree from Florida State
University and is a certified public accountant.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires the General Partners, the
officers of the corporate General Partner, and persons who own more than ten
percent of a registered class of the Partnership's equity securities
(collectively, the "Reporting Persons"), to file reports of ownership and
changes in ownership on Forms 3, 4 and 5 with the SEC. Reporting Persons are
required by SEC regulation to furnish the Partnership with copies of all Forms
3, 4 and 5 that they file.

Based solely on the General Partners' review of the copies of such
forms the Partnership has received and written representations from certain
Reporting Persons that they were not required to file Forms 5 for the last
fiscal year, the General Partners believe that all Reporting Persons complied
with all filing requirements applicable to them with respect to transactions
during fiscal 2002.







Item 11. Executive Compensation

Other than as described in Item 13, the Partnership has not paid and
does not intend to pay any executive compensation to the General Partners or any
of their affiliates. There are no compensatory plans or arrangements regarding
termination of employment or change of control.


Item 12. Security Ownership of Certain Beneficial Owners and Management

As of March 10, 2002, no person was known to the Registrant to be a
beneficial owner of more than five percent of the Units.

The following table sets forth, as of March 10, 2002, the beneficial
ownership interests of the General Partners in the Registrant.



Title of Class Name of Partner Percent of Class

General Partnership Interests James M. Seneff, Jr. 45%
Robert A. Bourne 45%
CNL Realty Corporation 10%
--------
100%
========


Neither the General Partners, nor any of their affiliates, owns any
interest in the Registrant, except as noted above.

The Partnership does not have any equity compensation plans.





Item 13. Certain Relationships and Related Transactions

The table below summarizes the types, recipients, methods of
computation and amounts of compensation, fees and distributions paid or payable
by the Partnership to the General Partners and their affiliates for the year
ended December 31, 2002, exclusive of any distributions to which the General
Partners or their affiliates may be entitled by reason of their purchase and
ownership of Units.



Amount Incurred
Type of Compensation For the Year
and Recipient Method of Computation Ended December 31, 2002
- ------------------------------------ ---------------------------------- ------------------------------

Reimbursement to affiliates for Operating expenses are Accounting and
operating expenses reimbursed at the lower of cost administrative services:
or 90% of the prevailing rate at $108,019
which comparable services could
have been obtained in the same
geographic area. If the General
Partners or their affiliates
loan funds to the Partnership,
the General Partners or their
affiliates will be reimbursed
for the interest and fees
charged to them by unaffiliated
lenders for such loans.
Affiliates of the General
Partners from time to time incur
certain operating expenses on
behalf of the Partnership for
which the Partnership reimburses
the affiliates without interest.

Annual, subordinated property One-half of one percent per year $-0-
management fee to affiliates of Partnership assets under
management (valued at cost),
subordinated to certain minimum
returns to the Limited Partners. The
property management fee will not
exceed the lesser of one percent of
gross operating revenues or
competitive fees for comparable
services. Due to the fact that these
fees are non-cumulative, if the
Limited Partners do not receive their
10% Preferred Return in any
particular year, no property
management fees will be due or
payable for such year.









Amount Incurred
Type of Compensation For the Year
and Recipient Method of Computation Ended December 31, 2002
- ------------------------------------ ---------------------------------- ------------------------------

Deferred, subordinated real estate A deferred, subordinated real $32,215
disposition fee payable to estate disposition fee, payable
affiliates upon sale of one or more
Properties, in an amount equal to the
lesser of (i) one-half of a
competitive real estate commission,
or (ii) three percent of the sales
price of such Property or Properties.
Payment of such fee shall be made
only if affiliates of the General
Partners provide a substantial amount
of services in connection with the
sale of a Property or Properties and
shall be subordinated to certain
minimum returns to the Limited
Partners. However, if the net sales
proceeds are reinvested in a
replacement Property, no such real
estate disposition fee will be
incurred until such replacement
Property is sold and the net sales
proceeds are distributed.

General Partners' deferred, A deferred, subordinated share $-0-
subordinated share of Partnership equal to one percent of
net cash flow Partnership distributions of net
cash flow, subordinated to
certain minimum returns to the
Limited Partners.

General Partners' deferred, A deferred, subordinated share $-0-
subordinated share of Partnership equal to five percent of
net sales proceeds from a sale or Partnership distributions of
sales not in liquidation of the such net sales proceeds,
Partnership subordinated to certain minimum
returns to the Limited Partners.









Amount Incurred
Type of Compensation For the Year
and Recipient Method of Computation Ended December 31, 2002
- ------------------------------------ ---------------------------------- ------------------------------

General Partners' share of Distributions of net sales $-0-
Partnership net sales proceeds proceeds from a sale or sales of
from a sale or sales in substantially all of the
liquidation of the Partnership Partnership's assets will be
distributed in the following order or
priority: (i) first, to pay all debts
and liabilities of the Partnership
and to establish reserves; (ii)
second, to Partners with positive
capital account balances, determined
after the allocation of net income,
net loss, gain and loss, in
proportion to such balances, up to
amounts sufficient to reduce such
balances to zero; and (iii)
thereafter, 95% to the Limited
Partners and 5% to the General
Partners.



Item 14. Controls and Procedures

The General Partners maintain a set of disclosure controls and procedures
designed to ensure that information required to be disclosed in the
Partnership's filings under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms. The principal executive
and financial officers of the corporate General Partner have evaluated the
Partnership's disclosure controls and procedures within 90 days prior to the
filing of this Annual Report on Form 10-K and have determined that such
disclosure controls and procedures are effective.

Subsequent to the above evaluation, there were no significant changes in
internal controls or other factors that could significantly affect these
controls, including any corrective actions with regard to significant
deficiencies and material weaknesses.






PART IV


Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a) The following documents are filed as part of this report.

1. Financial Statements



Report of Independent Certified Public Accountants

Balance Sheets at December 31, 2002 and 2001

Statements of Income for the years ended December 31, 2002, 2001, and 2000

Statements of Partners' Capital for the years ended December 31, 2002, 2001, and 2000

Statements of Cash Flows for the years ended December 31, 2002, 2001, and 2000

Notes to Financial Statements

2. Financial Statement Schedule

Schedule III - Real Estate and Accumulated Depreciation at December 31, 2002

Notes to Schedule III - Real Estate and Accumulated Depreciation at December 31, 2002

All other Schedules are omitted as the required information is
inapplicable or is presented in the financial statements or
notes thereto.


3. Exhibits

**3.1 Certificate of Limited Partnership of CNL Income Fund,
Ltd., as amended. (Included as Exhibit 3.1 to Amendment
No. 1 to Registration Statement No. 33-2850 on Form S-11
and incorporated herein by reference.)

**3.2 Amended and Restated Certificate and Agreement of Limited
Partnership of CNL Income Fund, Ltd. (Included as Exhibit
3.2 to Form 10-K filed with the Securities and Exchange
Commission on March 27, 1998, and incorporated herein by
reference.)

**4.1 Certificate of Limited Partnership of CNL Income Fund,
Ltd., as amended. (Included as Exhibit 4.1 to Amendment
No. 1 to Registration Statement No. 33-2850 on Form S-11
and incorporated herein by reference.)

**4.2 Form of Amended and Restated Certificate and Agreement of
Limited Partnership of CNL Income Fund, Ltd. (Included as
Exhibit 3.2 to Form 10-K filed with the Securities and
Exchange Commission on March 27, 1998, and incorporated
herein by reference.)

**10.1 Property Management Agreement. (Included as Exhibit 10.1
to Form 10-K filed with the Securities and Exchange
Commission on March 27, 1998, and incorporated herein by
reference.)

**10.2 Assignment of Property Management Agreement from CNL
Investment Company to CNL Income Fund Advisors, Inc.
(Included as Exhibit 10.2 to Form 10-K filed with the
Securities and Exchange Commission on March 30, 1995, and
incorporated herein by reference.)






**10.3 Assignment of Property Management Agreement from CNL
Income Fund Advisors, Inc. to CNL Fund Advisors, Inc.
(Included as Exhibit 10.3 to Form 10-K filed with the
Securities and Exchange Commission on March 29, 1996, and
incorporated herein by reference.)

**10.4 Assignment of Management Agreement from CNL Fund Advisors,
Inc. to CNL APF Partners, LP. (Included as Exhibit 10.4 to
Form 10-Q filed with the Securities and Exchange
Commission on August 9, 2001, and incorporated herein by
reference.)

**10.5 Assignment of Management Agreement from CNL Income Fund
Advisors, Inc. to CNL Fund Advisors, Inc. (Included as
Exhibit 10.3 to Form 10-K filed with the Securities and
Exchange Commission on April 1, 1996, and incorporated
herein by reference.)

**10.6 Assignment of Management Agreement from CNL APF Partners,
LP to CNL Restaurants XVIII, Inc. (Included as Exhibit
10.5 to Form 10-Q filed with the Securities and Exchange
Commission on August 14, 2002, and incorporated herein by
reference.)

99.1 Certification of Chief Executive Officer of Corporate
General Partner Pursuant to 18 U.S.C. Section 1350 as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002. (Filed herewith.)

99.2 Certification of Chief Financial Officer of Corporate
General Partner Pursuant to 18 U.S.C. Section 1350 as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002. (Filed herewith.)

(b) The Registrant filed no reports on Form 8-K during the period from
October 1, 2002 through December 31, 2002.

** previously filed







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, on the 26th day of
March, 2003.

CNL INCOME FUND, LTD.

By:CNL REALTY CORPORATION
General Partner

/s/ Robert A. Bourne
------------------------------------
ROBERT A. BOURNE, President


By:ROBERT A. BOURNE
General Partner

/s/ Robert A. Bourne
------------------------------------
ROBERT A. BOURNE


By:JAMES M. SENEFF, JR.
General Partner

/s/ James M. Seneff, Jr.
------------------------------------
JAMES M. SENEFF, JR.







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.



Signature Title Date

/s/ Robert A. Bourne President, Treasurer and Director March 26, 2003
- --------------------------- (Principal Financial and Accounting
Robert A. Bourne Officer)


/s/ James M. Seneff, Jr. Chief Executive Officer and Director March 26, 2003
- --------------------------- (Principal Executive Officer)
James M. Seneff, Jr.






CERTIFICATION OF CHIEF EXECUTIVE OFFICER
OF CORPORATE GENERAL PARTNER

PURSUANT TO RULE 13a-14 AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


I, James M. Seneff, Jr., the Chief Executive Officer of CNL Realty
Corporation, the corporate general partner of CNL Income Fund, Ltd. (the
"registrant"), certify that:

1. I have reviewed this annual report on Form 10-K of the registrant;

2. Based on my knowledge, this annual 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 annual report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual 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 annual 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-14 and 15d-14) for the registrant
and have:

a. designed such disclosure controls and procedures 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 annual report is being prepared;

b. evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this annual report (the "Evaluation
Date"); and

c. presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures
based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrant's auditors
and the audit committee of registrant's board of directors (or
persons performing the equivalent functions):

a. all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and

b. any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and

6. The registrant's other certifying officer and I have indicated in
this annual report whether or not there were significant changes in
internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

Date: March 26, 2003


/s/ James M. Seneff, Jr.
- ---------------------------
James M. Seneff, Jr.
Chief Executive Officer






CERTIFICATION OF CHIEF FINANCIAL OFFICER
OF CORPORATE GENERAL PARTNER

PURSUANT TO RULE 13a-14 AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert A. Bourne, President and Treasurer of CNL Realty Corporation,
the corporate general partner of CNL Income Fund, Ltd. (the "registrant")
certify that:

1. I have reviewed this annual report on Form 10-K of the registrant;

2. Based on my knowledge, this annual 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 annual report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual 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 annual 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-14 and 15d-14) for the registrant
and have:

a. designed such disclosure controls and procedures 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 annual report is being prepared;

b. evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this annual report (the "Evaluation
Date"); and

c. presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures
based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrant's auditors
and the audit committee of registrant's board of directors (or
persons performing the equivalent functions):

a. all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and

b. any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and

6. The registrant's other certifying officer and I have indicated in
this annual report whether or not there were significant changes in
internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

Date: March 26, 2003


/s/ Robert A. Bourne
Robert A. Bourne
President and Treasurer




CNL INCOME FUND, LTD.
(A Florida Limited Partnership)
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2002






Costs Capitalized
Subsequent To
Initial Cost Acquisition
------------------------ ------------------
Encum- Buildings andImprove- Carrying
brances Land Improvements ments Costs
---------- ------------ ---------------------- -------


Properties the Partnership
has Invested in:

Ground Round Restaurant:
Camp Hill, Pennsylvania - 331,962 531,174 - -

Pizza Hut Restaurant:
Bowie, Texas - 29,683 106,042 10,897 -

Wendy's Old Fashioned
Hamburger Restaurants:
Mesa, Arizona - 440,339 328,579 - -
Oklahoma City, Oklahoma - 278,878 393,423 20,000 -
Stockbridge, Georgia - 282,482 363,008 - -
Payson, Arizona - 391,076 427,218 - -

Other:
Eunice, Louisiana - 186,009 477,947 - -
Jasper, Alabama - 220,665 473,818 - -
Virginia Beach, Virginia - 340,126 580,432 - -
------------ ----------- --------- -------

$2,501,220 $3,681,641 $30,897
============ =========== ========= =======


Properties of Joint Ventures in
Which the Partnership has
a 50% Interest:

Pizza Hut Restaurant:
Orlando, Florida - $206,575 $234,064 - -
============ =========== ========= =======



Property in Which the Partnership
has a 12.17% Interest as
Tenants-in-Common and has
Invested in Under an Operating
Lease:

Chevy's Fresh Mex Restaurant:
Vancouver, Washington - $875,659 $1,389,366 - -
============ =========== ========= =======










Life on Which
Net Cost Basis at Which Depreciation in
Carried at Close of Period (c) Date Latest Income
- --------------------------------------
Buildings and Accumulated of Con- Date Statement is
Land Improvements Total DepreciationstructioAcquired Computed
- ------------ ----------- ----------- ---------- --------------- ------------






331,962 531,174 863,136 92,051 1983 10/97 (b)


29,683 116,939 146,622 58,634 1976 12/87 (b)



440,339 328,579 768,918 179,806 1986 08/86 (b)
278,878 413,423 692,301 224,075 1986 08/86 (b)
282,482 363,008 645,490 198,646 1986 08/86 (b)
391,076 427,218 818,294 229,037 1986 12/86 (b)


186,009 477,947 663,956 254,905 1987 01/87 (b)
220,665 473,818 694,483 254,019 1986 12/86 (b)
340,126 580,432 920,558 314,401 1986 10/86 (b)
- ------------ ----------- ----------- ----------

$2,501,220 $3,712,538 $6,213,758 $1,805,574
============ =========== =========== ==========







$206,575 $234,064 $440,639 $121,661 1986 06/86 (b)
============ =========== =========== ==========










$875,659 $1,389,366 $2,265,025 $231,685 1994 12/97 (b)
============ =========== =========== ==========







CNL INCOME FUND, LTD.
(A Florida Limited Partnership)

NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2002


(a) Transactions in real estate and accumulated depreciation are summarized
below. The balances in 1999, 2000, and 2001 have been adjusted to
reflect the reclassification of properties accounted for as
discontinued operations.



Accumulated
Cost Depreciation
----------------- ------------------

Properties the Partnership has Invested in:

Balance, December 31, 1999 $ 8,462,097 $ 2,002,933
Disposition (1,347,400) (387,820)
Depreciation expense -- 161,030
----------------- ------------------

Balance, December 31, 2000 7,114,697 1,776,143
Depreciation expense -- 139,116
----------------- ------------------

Balance, December 31, 2001 7,114,697 1,915,259
Dispositions (900,939) (234,837)
Depreciation expense -- 125,152
----------------- ------------------

Balance, December 31, 2002 $ 6,213,758 $ 1,805,574
================= ==================

Property of Joint Venture in Which the Partnership has a 50%
Interest:

Balance, December 31, 1999 $ 1,426,831 $ 415,022
Depreciation expense -- 30,969
----------------- ------------------

Balance, December 31, 2000 1,426,831 445,991
Depreciation expense -- 30,969
----------------- ------------------

Balance, December 31, 2001 1,426,831 476,960
Disposition (986,192) (363,101)
Depreciation expense -- 15,527
----------------- ------------------

Balance, December 31, 2002 $ 440,639 $ 129,386
================= ==================







CNL INCOME FUND, LTD.
(A Florida Limited Partnership)

NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED
DEPRECIATION - CONTINUED

December 31, 2002





Accumulated
Cost Depreciation
--------------- -----------------

Property in Which the Partnership has a 12.17% Interest as
Tenants-in-Common and has Invested in Under an Operating Lease:

Balance, December 31, 1999 $ 2,265,025 $ 92,749
Depreciation expense -- 46,312
--------------- -----------------

Balance, December 31, 2000 2,265,025 139,061
Depreciation expense -- 46,312
--------------- -----------------

Balance, December 31, 2001 2,265,025 185,373
Depreciation expense -- 46,312
--------------- -----------------

Balance, December 31, 2002 $ 2,265,025 $ 231,685
=============== =================



(b) Depreciation expense is computed for buildings and improvements based
upon estimated lives of 30 years.

(c) As of December 31, 2002, the aggregate cost of the Properties owned by
the Partnership and joint ventures for federal income tax purposes was
$6,508,481 and $2,705,664, respectively. All of the leases are treated
as operating leases for federal income tax purposes.







EXHIBIT INDEX


Exhibit Number

(c) Exhibits

**3.1 Certificate of Limited Partnership of CNL Income Fund, Ltd.,
as amended. (Included as Exhibit 3.1 to Amendment No. 1 to
Registration Statement No. 33-2850 on Form S-11 and
incorporated herein by reference.)

**3.2 Amended and Restated Certificate and Agreement of Limited
Partnership of CNL Income Fund, Ltd. (Included as Exhibit 3.2
to Form 10-K filed with the Securities and Exchange Commission
on March 27, 1998, and incorporated herein by reference.)

**4.1 Certificate of Limited Partnership of CNL Income Fund, Ltd.,
as amended. (Included as Exhibit 4.1 to Amendment No. 1 to
Registration Statement No. 33-2850 on Form S-11 and
incorporated herein by reference.)

**4.2 Form of Amended and Restated Certificate and Agreement of
Limited Partnership of CNL Income Fund, Ltd. (Included as
Exhibit 3.2 to Form 10-K filed with the Securities and
Exchange Commission on March 27, 1998, and incorporated herein
by reference.)

**10.1 Property Management Agreement. (Included as Exhibit 10.1 to
Form 10-K filed with the Securities and Exchange Commission on
March 27, 1998, and incorporated herein by reference.)

**10.2 Assignment of Property Management Agreement from CNL
Investment Company to CNL Income Fund Advisors, Inc. (Included
as Exhibit 10.2 to Form 10-K filed with the Securities and
Exchange Commission on March 30, 1995, and incorporated herein
by reference.)

**10.3 Assignment of Property Management Agreement from CNL Income
Fund Advisors, Inc. to CNL Fund Advisors, Inc. (Included as
Exhibit 10.3 to Form 10-K filed with the Securities and
Exchange Commission on March 29, 1996, and incorporated herein
by reference.)

**10.4 Assignment of Management Agreement from CNL Fund Advisors,
Inc. to CNL APF Partners, LP. (Included as Exhibit 10.4 to
Form 10-Q filed with the Securities and Exchange Commission on
August 9, 2001, and incorporated herein by reference.)

**10.5 Assignment of Management Agreement from CNL Income Fund
Advisors, Inc. to CNL Fund Advisors, Inc. (Included as Exhibit
10.3 to Form 10-K filed with the Securities and Exchange
Commission on April 1, 1996, and incorporated herein by
reference.)

**10.6 Assignment of Management Agreement from CNL APF Partners, LP
to CNL Restaurants XVIII, Inc. (Included as Exhibit 10.5 to
Form 10-Q filed with the Securities and Exchange Commission on
August 14, 2002, and incorporated herein by reference.)

99.1 Certification of Chief Executive Officer of Corporate General
Partner Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002. (Filed
herewith.)

99.2 Certification of Chief Financial Officer of Corporate General
Partner Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002. (Filed
herewith.)






EXHIBIT 99.1







EXHIBIT 99.2