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


Form 12b-25                                   SEC File Number 0-15623
                                              CUSIP Number


                          NOTIFICATION OF LATE FILING


                                  (Check One):

[ ] Form 10-K  [ ] Form 11-K  [ ] Form 2-F  [XX] Form 10-Q  [ ] Form N-SAR

For Period Ended:  September 30, 1996

_______________________________________________________________________________ 

     Read Attached Instruction Sheet Before Preparing Form.  Please Print or
     Type.

     Nothing in this Form Shall be construed to imply that the Commission has
     verified any information contained herein.
 
_______________________________________________________________________________

     If the Notification relates to a portion of the filing checked above,
     identify the Item(s) to which the notification relates:  All Items.
                                                            --------------------
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________________________________________________________________________________

Part I--Registrant Information
- ------------------------------ 

_______________________________________________________________________________

Full Name of Registrant
- -----------------------

  American Income 7 Limited Partnership

  Former Name, if Applicable:  N/A

  98 North Washington Street
  -----------------------------------------------------------------------------
  Address of Principal Executive Office (Street and Number)

  Boston, MA  02114  
  -----------------------------------------------------------------------------
  City, State and Zip



 
Form 12b-25
Page Two


Part II--Rules 12b-25 (b) and (c)
- ---------------------------------
 
_______________________________________________________________________________

If the subject report could not be filed without unreasonable effort or expense
and the registrant seeks relief pursuant to Rule 12b-25(b), the following should
be completed.  (Check box, if appropriate)

     (a)   The reasons described in reasonable detail in Part III of this form
           could not be eliminated without unreasonable effort or expense;

[XX] (b)   The subject annual report or semiannual report/portion thereof will
           be filed on or before the fifteenth calendar day following the
           prescribed due date; or the subject quarterly report/portion thereof
           will be filed on or before the fifth calendar day following the
           prescribed due date; and

     (c)   The accountant's statement or other exhibit required by Rule 12b-
           25(c) has been attached if applicable.

 

Part III--Narrative
- -------------------
 
_______________________________________________________________________________

State below in reasonable detail the reasons why the Form 10-K, 11-K, 20-F, 10-Q
or N-SAR or portion thereof could not be filed within the prescribed time
period.

  The Registrant requires additional time to prepare a complete and accurate
  accounting of the quarter ended September 30, 1996 due to the Registrant's
  recent disposal of all of its equipment assets and the anticipated wind-up of
  its operations.

 
_______________________________________________________________________________

Part IV--Other Information
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_______________________________________________________________________________

(1)  Name and telephone number of person to contact in regard to this
     notification.

     Michael J. Butterfield         617                 854-5846
     ----------------------------------------------------------------
            (Name)              (Area Code)        (Telephone Number)



 
Form 12b-25
Page Three



(2)  Have all other periodic reports required under Section 13 or 15(d) of the
     Securities Exchange Act of 1934 or Section 30 of the Investment Company Act
     of 1940 during the preceding 12 months or for such shorter period that the
     registrant was required to file such report(s) been filed?

     If the answer is no, identify report(s).
                                                  [X] Yes  [ ] No

(3)  Is it anticipated that any significant change in results of operations from
     the corresponding period for the last fiscal year will be reflected by the
     earnings statements to be included in the subject report or portion
     thereof?

                                                  [X] Yes  [ ] No

     If so:  Attach an explanation of the anticipated change, both narratively
     and quantitatively, and, if appropriate, state the reasons why a reasonable
     estimate of the results can not be made.



                       American Income 7 Limited Partnership
- -------------------------------------------------------------------------------
                    (Name of Registrant as specified in charter)

has caused this notification to be signed on its behalf by the undersigned
thereunto duly authorized.


Date:  November 13, 1996          By: AFG Leasing IV Incorporated, a
       -----------------              Massachusetts corporation and the
                                      Managing General Partner of the
                                      Registrant.



                                  By: /s/ Michael J. Butterfield
                                      --------------------------
                                      Treasurer of AFG Leasing IV Incorporated
                                      (Duly Authorized Officer and
                                      Principal Accounting Officer)



 
                              RIDER TO FORM 12b-25



Part IV--Other Information
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American Income 7 Limited Partnership had total revenues, total expenses and net
income/(loss) of approximately $944,457, $880,659 and $63,798, respectively, for
the nine months ended September 30, 1996.  This is compared to total revenues,
total expenses and net income/(loss) of $1,290,352, $855,796 and $434,556,
respectively, for the nine months ended September 30, 1995.  Total assets at
September 30, 1996 are approximately $3,744,579.