WNC HOUSING TAX CREDIT FUND VI LP SERIES 7 - FORM 10-K - EX-99 - UNITED DEVELOPMENT 2000 AUDIT 2007

Attached files

file	filename
EX-32.2 - EXHIBIT 32.2 - WNC HOUSING TAX CREDIT FUND VI LP SERIES 7	exhibit322.htm
EX-31.2 - EXHIBIT 31.2 - WNC HOUSING TAX CREDIT FUND VI LP SERIES 7	exhibit312.htm
EX-32.1 - EXHIBIT 32.1 - WNC HOUSING TAX CREDIT FUND VI LP SERIES 7	exhibit321.htm
EX-31.1 - EXHIBIT 31.1 - WNC HOUSING TAX CREDIT FUND VI LP SERIES 7	exhibit311.htm
EX-99 - UNITED DEVELOPMENT 2000 AUDIT 2008 - WNC HOUSING TAX CREDIT FUND VI LP SERIES 7	uniteddev_2000-123108.htm
EX-99 - UNITED DEVELOPMENT 2000 AUDIT 2009 - WNC HOUSING TAX CREDIT FUND VI LP SERIES 7	uniteddev_2000-123107.htm
10-K - NAT 6-7 10K 03-31-10 - WNC HOUSING TAX CREDIT FUND VI LP SERIES 7	nat6710k033110.htm

FINANCIAL STATEMENTS AND

INDEPENDENT AUDITOR'S REPORT

UNITED DEVELOPMENT CO., L.P.-2000

DECEMBER 31, 2009

UNITED DEVELOPMENT CO., L.P.-2000

TABLE OF CONTENTS

	PAGE

INDEPENDENT AUDITOR'S REPORT	3

FINANCIAL STATEMENTS:

BALANCE SHEET	4

STATEMENT OF OPERATIONS	5

STATEMENT CF CHANGES IN PARTNERS' CAPITAL	6

STATEMENT OF CASH FLOWS	7

NOTES TO FINANCIAL STATEMENTS	8

PAILET, MEUNIER and LeBLANC, L.L.P.

Certified Public Accountants

Management Consultants

INDEPENDENT AUDITOR'S REPORT

To the Partners

UNITED DEVELOPMENT CO., L.P.-2000

We have audited the accompanying balance sheet of UNITED DEVELOPMENT CO., L.P.-2000, as of December 31, 2009 and the related statements of operations, changes in partners' capital and cash flows for the year then ended. These financial statements are the responsibility of the partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the Standards of the Public Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the partnership's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of UNITED DEVELOPMENT CO., L.P.-2000 as of December 31, 2009 and the results of its operations, changes in partners' capital and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ PAILET, MEUNIER and LeBLANC, L.L.P.

Metairie, Louisiana

September 3, 2010

UNITED DEVELOPMENT CO., L.P.-2000

BALANCE SHEET

DECEMBER 31, 2009

ASSETS

Assets

Cash and equivalents	$	27,895
Security Deposits		3,773
Accounts receivable		19,710
Due from General Partner		93,658
Land		195,000
Fixed Assets, net of accumulated depreciation		2,551,620
Intangible assets, net of accumulated amortization		6,713

Total Assets	$	2,898,369

LIABILITIES AND PARTNERS' CAPITAL

Liabilities

Accounts payable	$	28,462
Security deposits payable		12,831
Due to related parties		7,476
Mortgage payable		982,419

Total Liabilities		1,031,188

Partners' Capital		1,867,161

Total Liabilities and Partners' Capital	$	2,898,369

See accompanying notes

UNITED DEVELOPMENT CO., L.P. -2000

STATEMENT OF OPERATIONS

DECEMBER 31, 2009

Revenue
Rental revenue	$	300,362
Other revenue		5,944

Total Revenue		306,306

Operating expenses

General and administrative		12,118
Payroll		28,601
Utilities		2,311
Tax and insurance		37,689
Management fee		48,132
Repairs and maintenance		72,231
Marketing and advertising		698
Legal and other professional fees		6,375

Total Operating Expenses		208,155

Operating Income		98,151

Other Expenses
Interest expense		54,321
Depreciation and amortization		129,759
Reporting Fee		2,500
State credit partner asset management fee		300

Net Other Expenses		186,880

Net Income (Loss)	$	(88,729	)

See accompanying notes

UNITED DEVELOPMENT CO., L.P.-2000

STATEMENT OF CHANGES IN PARTNERS' CAPITAL

DECEMBER 31, 2009

	General Partner			Limited Partners			Total Partners' Capital
Balance - January 1, 2009	$	112,268		$	1,843,642		$	1,955,910

Net Income (Loss)		(4	)		(88,725	)		(88,729	)

Balance - December 31, 2009	$	112,264		$	1,754,917		$	1,867,181

See accompanying notes

UNITED DEVELOPMENT CO., L.P.-2000

STATEMENT OF CASH FLOWS

DECEMBER 31, 2009

Cash flows from operating activities:
Net Income	$	(88,729	)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		129,759
(Increase) decrease in accounts receivable		(9,132	)
Increase (decrease) in accounts payable		8,690
Increase (decrease) in security deposits payable		(594	)
Increase (decrease) in management fee payable		(5,950	)
Increase (decrease) in accrued reporting fee		2,500
Increase (decrease) in accrued expenses		(697	)
Total adjustments		124,576
Net cash provided (used) by operating activities		35,847

Cash flows from financing activities:
Principal payments on long-term debt		(22,670	)
Net cash provided (used) by financing activities		(22,670	)

Net increase (decrease) in cash and equivalents		13,177
Cash and equivalents, beginning of year		14,718

Cash and equivalents, end of year	$	27,895
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest Expense	$	54,321

See accompanying notes

UNITED DEVELOPMENT CO., L.P.-2000

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2009

NOTE A - NATURE OF OPERATIONS

United Development Co., L.P.-2000 (the "Partnership") was formed under the laws of the State of Arkansas to conduct the business of owning and operating real property located in West Memphis, Arkansas. The Partnership owns Families First, a 51-home scattered site residential rental property (the "Property") developed and operated under Federal and State of Arkansas low-income housing tax credit programs.

The Partnership is 99.98% owned by the limited partner, WNC Housing Tax Credit Fund VI, Series 7, a California limited partnership, 0.01% owned by the special limited partner, WNC Housing, L.P., and 0.005% owned by Arkansas Low-Income Housing State Tax Credit Partnership 2003-A, collectively, the "Limited Partners." Harold E. Buehler, Sr. and Jo Ellen Buehler, collectively, the "General Partner", own 0.005% of the Partnership.

Profits and losses are generally allocated 0.005% and 99.995% to the General Partner and Limited Partners, respectively, pursuant to the Second Amended and Restated Agreement of Limited Partnership dated March 12, 2004 (the "Partnership Agreement"). Under the terms of the Partnership Agreement, the Limited Partners provided or otherwise received credit for capital contributions totaling $2,151,732, which reflects an overpayment of $35,935 as a result of a tax credit adjuster pursuant to the Partnership Agreement. The General Partner provided cumulative capital contributions totaling $112,280. The total capital contributions required pursuant to the Partnership Agreement are subject to adjustment based on the amount of low-income housing tax credits allocated to the Partnership. During 2009, the Limited Partners provided no capital contributions.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of accounting

The Partnership prepares its financial statements on the accrual basis of accounting consistent with accounting principles generally accepted in the United States of America.

Cash and cash equivalents

Cash and cash equivalents include all cash balances and highly liquid investments with a maturity of three months or less at the acquisition date. Restricted cash is not considered cash equivalents.

Concentration of credit risk

The Partnership places its temporary cash investments with high credit quality financial institutions. At times, the account balances may exceed the institution's federally insured limits. The Partnership has not experienced any losses in such accounts.

UNITED DEVELOPMENT CO., L.P.-2000

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2009

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates.

Revenue recognition

Rental revenue attributable to residential leases is recorded when due from residents, generally upon the first day of each month. Leases are for periods of up to one year, with rental payments due monthly. Other revenue results from fees for late payments, cleaning and damages and is recorded when earned.

Fixed assets

Fixed assets are recorded at cost. Buildings are depreciated over their estimated useful lives of 27.5 years under the straight-line method. Depreciation expense for the year ended December 31, 2009 was $128,854.

Fixed assets consist of:

Buildings	$	3,543,453
Less: Accumulated Depreciation		(991,833	)

Net Fixed Assets	$	2,551,620

Intangible assets

Permanent loan costs of $13,576 are being amortized using the straight-line method over 30 years. Tax credit monitoring fees of $18,000 are being amortized using the straight-line method over 15 years. Amortization expense for the year ended December 31, 2009 was $905. As of December 31, 2009, accumulated amortization was $24,863.

Impairment of long-lived assets

The Partnership reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Recoverability is measured by a comparison of the carrying amount to the future net undiscounted cash flow expected to be generated and any estimated proceeds from the eventual disposition. If the long-lived asset is considered to be impaired, the impairment to be recognized is measured at the amount by which the carrying amount exceeds the fair value as determined from an appraisal, discounted cash flows analysis, or other valuation technique. There were no impairment losses recognized during 2009.

UNITED DEVELOPMENT CO., L.P.-2000

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2009

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Income Taxes

Incomes taxes on Partnership income are levied on the partners at the partner level. Accordingly, no income tax provision has been included in the financial statements since profit or loss of the Partnership is required to be reported by the respective partners on their income tax returns.

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires the Partnership to report information regarding its exposure to various tax positions taken by the Partnership. The Partnership has determined whether any tax positions have met the recognition threshold and have measured the Partnership's exposure to those tax positions. Management believes that the Partnership has adequately addressed all relevant tax positions and that there are no unrecorded tax liabilities. Federal and state tax authorities generally have the right to examine and audit the previous three years of tax returns filed. Any interest or penalties assessed to the Partnership are recorded in operating expenses. No interest or penalties from federal or state tax authorities were recorded in the accompanying financial statements.

Economic concentrations

The Partnership operates a scattered site property in West Memphis, Arkansas. Future operations could be affected by changes in economic or other conditions in that geographical area or by changes in the demand for such housing.

NOTE C - RELATED PARTY TRANSACTIONS

Due from General Partner

On April 1, 2008 and December 16, 2008, the General Partner borrowed $40,000 and $53,658, respectively, from the operating reserve of the Partnership. The withdrawal of funds represented a violation of the terms of the Partnership Agreement. As of December 31, 2009, the General Partner owed $93,658 to the Partnership.

Management fee

Buehler Enterprises. Inc., an affiliate of the General Partner, manages the Property pursuant to a management agreement dated October 20, 2000. The management agreement provides for a management fee of 8% of monthly gross rental collections plus an annual fee of $25,000. During 2009, a management fee of $48,132 was expensed to operations. As of December 31, 2009, the management fee payable was $2,476, which is included in due to related parties on the accompanying balance sheet.

Reporting fee

Pursuant to the Partnership Agreement, the Partnership shall pay to the Limited Partners, or an affiliate thereof, a fee of $2,500 each year for its services in connection with the Partnership's accounting matters. During 2009, a reporting fee of $2,500 was expensed to operations. As of December 31, 2009, $5,000 is included in due to related parties on the accompanying balance sheet.

UNITED DEVELOPMENT CO., L.P.-2000

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2009

NOTE C - RELATED PARTY TRANSACTIONS (CONTINUED)

State credit partner asset management fee

Pursuant to the Partnership Agreement, the Partnership shall pay to the Limited Partners, a fee of $300 per year out of available cash flow in accordance with the Partnership Agreement. During 2009, a state credit partner asset management fee of $300 was expensed to operations. As of December 31, 2009, the state credit partner asset management fee payable was $300, which is included in the due to related parties on the accompanying balance sheet.

NOTE D - MORTGAGE PAYABLE

The balance sheet reflects a mortgage payable from Fidelity National Bank secured by the Property. The mortgage payable has been allocated to each of the 51 homes by Fidelity National Bank and a mortgage deed has been executed for each separate building. The terms are set forth below:

Loan Amount:	$1,100,000
Maturity Date:	May 1, 2017
Interest Rate:	4.25%

As of December 31, 2009, the mortgage payable balance was $982,419 and accrued interest was $0. Principal and interest payments of $8,806 are due on the first day of each month until May 1, 2017 when all unpaid interest and principal will be due and payable.

Future minimum principal payments of the mortgage payable over each of the next five years are as follows:

Year ending December 31,
2010	$	27,457
2011		28,646
2012		29,888
2013		31,183
2014		32,535
Thereafter		632,710

	$	982,419

UNITED DEVELOPMENT CO., L.P.-2000

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2009

NOTE E - LOW-INCOME HOUSING TAX CREDITS

The Partnership expects to generate an aggregate of $3,000,000 of federal low-income housing tax credits ("Federal Tax Credits"). Generally, such Federal Tax Credits become available for use by its partners pro-rata over a ten-year period that began in 2002. To qualify for the Federal Tax Credits, the Partnership must meet certain requirements, including attaining a qualified eligible basis sufficient to support the allocation and renting the Property pursuant to Internal Revenue Code Section 42 ("Section 42") which regulates the use of the Property as to occupant eligibility and unit gross rent, among other requirements. In addition, the Partnership executed a land use restriction agreement, which requires the Property to be in compliance with Section 42 for a minimum of 30 years.

The Partnership expects to generate an aggregate of $600,000 of Arkansas state low-income housing tax credits ("State Tax Credits"). Generally, such State Tax Credits become available for use by the State Tax Credit Limited Partner over a ten-year period that began in 2002. To qualify for the State Tax Credits, the Partnership must meet certain requirements, including attaining a qualified eligible basis sufficient to support the allocation and renting the Property pursuant to Section 42.

Because the Tax Credits are subject to complying with certain requirements, there can be no assurance that the aggregate amount of Tax Credits will be realized and failure to meet all such requirements may result in generating a lesser amount of Tax Credits than expected. As of December 31, 2009, the Partnership had generated $2,270,437 of Federal Tax Credits and $454,087 of cumulative State Tax Credits.

The Partnership anticipates generating Tax Credits as follows:

Year ending December 31,	Federal		State
2010		300,000		60,000
2011		300,000		60,000
2012		129,563		25,913

	$	729,563	$	145,913

NOTE F - SUBSEQUENT EVENTS

FASB Accounting Standards Codification Topic 855, "Subsequent Events" addresses events which occur after the balance sheet date but before the issuance of financial statements. An entity must record the effects of subsequent events that provide evidence about conditions that existed at the balance sheet date and must disclose but not record the effects of subsequent events which provide evidence about conditions that existed after the balance sheet date. Additionally, Topic 855 requires disclosure relative to the date through which subsequent events have been evaluated and whether that is the date on which the financial statements were issued or were available to be issued. Management evaluated the activity of UNITED DEVELOPMENT CO., L.P.-2000 through September 3, 2010, the date the financial statements were issued, and concluded that no subsequent events have occurred that would require recognition in the Financial Statements or disclosure in the Notes to the Financial Statements.

Attached files

WNC HOUSING TAX CREDIT FUND VI LP SERIES 7 Reports

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