AMERICAN TAX CREDIT TRUST SERIES I - FORM 10-Q

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EX-32.1 - EX-32.1 - AMERICAN TAX CREDIT TRUST SERIES I	v210267_ex32-1.htm
EX-32.2 - EX-32.2 - AMERICAN TAX CREDIT TRUST SERIES I	v210267_ex32-2.htm
EX-31.2 - EX-31.2 - AMERICAN TAX CREDIT TRUST SERIES I	v210267_ex31-2.htm
EX-31.1 - EX-31.1 - AMERICAN TAX CREDIT TRUST SERIES I	v210267_ex31-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended December 30, 2010

¨	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: 0-24600

American Tax Credit Trust, a Delaware statutory business trust

Series I

(Exact Name of Registrant as Specified in its Charter)

Delaware		06-6385350
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

Richman American Credit Corp. 340 Pemberwick Road Greenwich, Connecticut		06831
(Address of Principal Executive Offices)		(Zip Code)

Registrant's Telephone Number, Including Area Code: (203) 869-0900

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 for such shorter period that the Registrant was required to file such reports), and (2) has been subject to filing requirements for the past 90 days.

Yes x No ¨

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).

Yes ¨ No ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ¨ Accelerated Filer ¨ Non-Accelerated Filer ¨ Smaller Reporting Company x

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨ No x

As of February 8, 2011, there are 18,654 units of beneficial ownership interest outstanding.

AMERICAN TAX CREDIT TRUST,

a Delaware statutory business trust

Series I

Part I - FINANCIAL INFORMATION

Table of Contents

		Page

Item 1.	Financial Statements.

Balance Sheets		3

Statements of Operations		4

Statements of Cash Flows		5

Notes to Financial Statements		6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	8

Item 3.	Quantitative and Qualitative Disclosure About Market Risk.	11

Item 4.	Controls and Procedures.	11

Item 4T.	Internal Control Over Financial Reporting.	11

AMERICAN TAX CREDIT TRUST,

a Delaware statutory business trust

Series I

BALANCE SHEETS

(UNAUDITED)

	December 30, 2010			March 30, 2010

ASSETS

Cash and cash equivalents	$	206,179		$	286,543
Investment in mutual fund		790,253			1,113,737
Investment in bond		101,238
Interest receivable		2,341
Investment in local partnerships		2,233,478			2,126,698

	$	3,333,489		$	3,526,978

LIABILITIES AND OWNERS’ EQUITY (DEFICIT)

Liabilities

Accounts payable and accrued expenses	$	20,573		$	32,561
Payable to manager and affiliates		762,123			959,099

		782,696			991,660

Commitments and contingencies

Owners’ equity (deficit)

Manager		(138,476	)		(138,529	)
Beneficial owners (18,654 units of beneficial ownership interest outstanding)		2,679,079			2,673,847
Accumulated other comprehensive income		10,190

		2,550,793			2,535,318

	$	3,333,489		$	3,526,978

See Notes to Financial Statements.

AMERICAN TAX CREDIT TRUST,

a Delaware statutory business trust

Series I

STATEMENTS OF OPERATIONS

THREE AND NINE MONTH PERIODS ENDED DECEMBER 30, 2010 AND 2009

(UNAUDITED)

	Three Months Ended December 30, 2010			Nine Months Ended December 30, 2010			Three Months Ended December 30, 2009			Nine Months Ended December 30, 2009

REVENUE

Interest	$	5,532		$	14,714		$	178		$	240
Other income from local partnerships					2,500

TOTAL REVENUE		5,532			17,214			178			240

EXPENSES

Management fee		48,036			144,107			48,036			144,107
Professional fees		9,931			25,075			8,152			29,881
Printing, postage and other		4,076			9,759			1,416			3,177

TOTAL EXPENSES		62,043			178,941			57,604			177,165

		(56,511	)		(161,727	)		(57,426	)		(176,925	)

Equity in income of investment in local partnerships		55,711			167,012			76,339			137,250

NET INCOME (LOSS)		(800	)		5,285			18,913			(39,675	)

Other comprehensive income, net		630			10,190

COMPREHENSIVE INCOME (LOSS)	$	(170	)	$	15,475		$	18,913		$	(39,675	)

NET INCOME (LOSS) ATTRIBUTABLE TO

Manager	$	(8	)	$	53		$	189		$	(397	)
Beneficial owners		(792	)		5,232			18,724			(39,278	)

	$	(800	)	$	5,285		$	18,913		$	(39,675	)

NET INCOME (LOSS) per unit of beneficial ownership interest (18,654 units of beneficial ownership interest)	$	(.04	)	$	.28		$	1.00		$	(2.11	)

See Notes to Financial Statements.

AMERICAN TAX CREDIT TRUST,

a Delaware statutory business trust

Series I

STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED DECEMBER 30, 2010 AND 2009

(UNAUDITED)

	2010			2009

CASH FLOWS FROM OPERATING ACTIVITIES

Interest received (paid)	$	15,556		$	(2,768	)
Cash paid for
Management fee		(341,083	)		(57,925	)
Professional fees		(36,157	)		(47,513	)
Printing, postage and other expenses		(10,665	)		(4,473	)

Net cash used in operating activities		(372,349	)		(112,679	)

CASH FLOWS FROM INVESTING ACTIVITIES

Distributions received from local partnerships		62,732			60,233
Investments in mutual fund		(10,484	)
Redemptions from mutual fund		340,677
Investment in bond		(100,940	)
Voluntary advances to local partnerships					(6,092	)
Transfer from restricted cash					3,008

Net cash provided by investing activities		291,985			57,149

Net decrease in cash and cash equivalents		(80,364	)		(55,530	)

Cash and cash equivalents at beginning of period		286,543			1,461,329

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	206,179		$	1,405,799

RECONCILIATION OF NET INCOME (LOSS) TO NET CASH USED IN OPERATING ACTIVITIES

Net income (loss)	$	5,285		$	(39,675	)

Adjustments to reconcile net income (loss) to net cash used in operating activities

Equity in income of investment in local partnerships		(167,012	)		(137,250	)
Other income from local partnerships		(2,500	)
Amortization of premium on investment in bond		1,433
Interest purchased at date of investment in bond		1,750
Increase in interest receivable		(2,341	)
Decrease in accounts payable and accrued expenses		(11,988	)		(18,928	)
Increase (decrease) in payable to manager and affiliates		(196,976	)		86,182
Decrease in interest payable					(3,008	)

NET CASH USED IN OPERATING ACTIVITIES	$	(372,349	)	$	(112,679	)

SIGNIFICANT NONCASH INVESTING ACTIVITIES

Unrealized gain on investment in mutual fund	$	6,709

Unrealized gain on investment in bond	$	3,481

See Notes to Financial Statements.

AMERICAN TAX CREDIT TRUST,

a Delaware statutory business trust

Series I

NOTES TO FINANCIAL STATEMENTS

DECEMBER 30, 2010

(UNAUDITED)

1.	Basis of Presentation

The accompanying unaudited financial statements of American Tax Credit Trust, a Delaware statutory business Trust Series I (the “Trust”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. They do not include all information and footnotes required by GAAP for complete financial statements. The results of operations are impacted, in part, by the combined results of operations of the Local Partnerships, which are provided by the Local Partnerships on an unaudited basis during interim periods. Accordingly, the accompanying unaudited financial statements are dependent on such unaudited information. In the opinion of the Manager, the accompanying unaudited financial statements include all adjustments necessary to present fairly the financial position as of December 30, 2010 and the results of operations and cash flows for the interim periods presented. All adjustments are of a normal recurring nature. The results of operations for the nine months ended December 30, 2010 are not necessarily indicative of the results that may be expected for the entire year.

2.	Investment in Local Partnerships

The Trust owns a 98.9% - 99% limited partner interest (the “Local Partnership Interests”) in ten Local Partnerships and has committed to make capital contribution payments in the aggregate amount of $14,837,956, which includes voluntary advances made to certain Local Partnerships and all of which has been paid. The Partnership has no legal obligation to fund any operating deficits of the Local Partnerships.

For the nine months ended December 30, 2010, the investment in local partnerships activity consists of the following:

Investment in local partnerships as of March 30, 2010	$	2,126,698

Equity in income of investment in local partnerships		167,012	*

Distributions received from Local Partnerships		(62,732	)

Distributions classified as other income		2,500

Investment in local partnerships as of December 30, 2010	$	2,233,478

In the event the operations of a Local Partnership result in a loss, equity in loss of each investment in Local Partnership allocated to the Partnership is recognized to the extent of the Partnership’s investment balance in each Local Partnership. Equity in loss in excess of the Partnership’s investment balance in a Local Partnership is allocated to other partners’ capital in any such Local Partnership.

In January 2011, Starved Rock - LaSalle Manor Limited Partnership (“Starved Rock”) entered into a purchase agreement (the “Purchase Agreement”) to sell its underlying Property to an affiliate of the Local General Partner of Starved Rock. Under the terms of the Purchase Agreement, the Partnership would receive $108,000 (subject to adjustment under the terms of the Purchase Agreement) plus $30,000 for distributions that are due to the Partnership under the terms of the partnership agreement of Starved Rock. The Purchase Agreement is subject to the approval of the United States Department of Housing and Urban Development (“HUD”) and there can be no assurance that the Property will be sold under the terms of the Purchase Agreement. The Partnership’s investment balance in Starved Rock, after cumulative equity losses, became zero during the year ended March 30, 2008.

As a result of a violation of certain terms of the regulatory agreement (the “Regulatory Agreement”) entered into in connection with its mortgage, the lender declared Vision Limited Dividend Housing Association Limited Partnership (“Vision”) in default under the terms of the mortgage. The lender granted the Local General Partner of Vision an extension to December 31, 2010 to cure the violation of the Regulatory Agreement. Although the default is not yet cured, the Local General Partner of Vision represents that the lender has provided a further extension and that payments on the mortgage and real estate taxes are current. The Partnership’s investment balance in Vision, after cumulative equity losses, became zero during the year ended March 30, 2005.

AMERICAN TAX CREDIT TRUST,

a Delaware statutory business trust

Series I

NOTES TO FINANCIAL STATEMENTS - CONTINUED

DECEMBER 30, 2010

(UNAUDITED)

2.	Investment in Local Partnerships (Continued)

Edgewood Manor Associates, L.P. (“Edgewood”) is in default under the terms of its first mortgage and a default has been declared by the lender; delinquent payments of principal, interest and certain fees represent a cumulative arrearage of approximately $38,000 as of January 2011. The Trust has made cumulative voluntary advances to Edgewood of $90,000 as of December 30, 2010 to fund operating deficits, none of which were made during the nine months then ended. The Trust’s investment balance in Edgewood, after cumulative equity losses, became zero during the year ended March 30, 2005 and voluntary advances made by the Trust were recorded as investment in local partnerships and written off as additional equity in loss of investment in local partnerships.

The Trust’s investment balance in St. John Housing Associates, L.P. (“St. John Housing”) represents more than 20% of the Trust’s total assets as of December 30, 2010 and equity in income of investment in local partnerships reflected in the accompanying unaudited statement of operations for the nine months ended December 30, 2010 is attributable to St. John Housing. The following financial information represents certain unaudited operating statement data of St. John Housing for the nine months ended September 30, 2010:

Revenue	$	1,063,476

Net income	$	168,699

3.	Investment in Mutual Fund

The Partnership carries its investment in mutual fund (the “Fund”) at estimated fair value. The fair value of the Partnership’s investment in mutual fund is classified within Level 1 of the fair value hierarchy of the guidance on Fair Value Measurements as defined in Accounting Standards Codification (“ASC”) Topic 820. Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Partnership has the ability to access. The Fund’s net asset value (“NAV”) is $10.06 per share as of December 30, 2010. The unrealized gain of $6,709 is included as a component of accumulated other comprehensive income in the accompanying unaudited financial statements as of and for the nine months ended December 30, 2010.

4.	Investment in Bond

The Partnership carries its investment in bond as available-for-sale because such investment is used to facilitate and provide flexibility for its obligations, including resolving circumstances that may arise in connection with the Local Partnerships. Investment in bond is reflected in the accompanying unaudited balance sheet as of December 30, 2010 at estimated fair value and is classified within Level 1 of the fair value hierarchy of the guidance on Fair Value Measurements (see discussion in Note 3 above). The unrealized gain of $3,481 is included as a component of accumulated other comprehensive income in the accompanying unaudited financial statements as of and for the nine months ended December 30, 2010.

As of December 30, 2010, certain information concerning investment in bond is as follows:

Description and maturity	Amortized cost		Gross unrealized gain		Gross unrealized loss		Estimated fair value

Corporate debt security
Callable in September 2013	$	97,757	$	3,481	$	—	$	101,238

5.	Additional Information

Additional information, including the audited March 30, 2010 Financial Statements and the Organization, Purpose and Summary of Significant Accounting Policies, is included in the Trust’s Annual Report on Form 10-K for the fiscal year ended March 30, 2010 on file with the Securities and Exchange Commission.

AMERICAN TAX CREDIT TRUST,

a Delaware statutory business trust

Series I

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Material Changes in Financial Condition

As of December 30, 2010, American Tax Credit Trust (the “Registrant”) has experienced a significant change in financial condition as compared to March 30, 2010 primarily as a result of the payment of deferred management fees. Principal changes in assets are comprised of periodic transactions and adjustments and equity in income (loss) from operations of the local partnerships (the “Local Partnerships”), which own low-income multifamily residential complexes (the “Properties”) that qualified for the low-income tax credit in accordance with Section 42 of the Internal Revenue Code (the “Low-income Tax Credit”). During the nine months ended December 30, 2010, Registrant received cash from interest revenue and distributions from Local Partnerships and utilized cash for operating expenses and investments in a mutual fund and a bond. Cash and cash equivalents, investment in mutual fund and investment in bond decreased, in the aggregate, by approximately $303,000 during the nine months ended December 30, 2010 (which includes unrealized gains on investment in mutual fund and investment in bond in the aggregate of approximately $10,000). Registrant intends to hold the bond until its call date (September 2013) and therefore does not expect to realize significant gains or losses on its investment in bond, if any. During the nine months ended December 30, 2010, the investment in local partnerships increased as a result of equity in the Local Partnerships’ net income for the nine months ended September 30, 2010 of $167,012, partially offset by distributions received from Local Partnerships of $60,232 (excluding $2,500 of distributions classified as other income from local partnerships). Payable to manager and affiliates in the accompanying unaudited balance sheet as of December 30, 2010 represents deferred management fees.

Results of Operations

Registrant’s operating results are dependent, in part, upon the operating results of the Local Partnerships and are impacted by the Local Partnerships’ policies. In addition, the operating results herein are not necessarily the same for tax reporting. Registrant accounts for its investment in local partnerships in accordance with the equity method of accounting. Accordingly, the investment is carried at cost and is adjusted for Registrant’s share of each Local Partnership’s results of operations and by cash distributions received. In the event the operations of a Local Partnership result in a loss, equity in loss of each investment in Local Partnership allocated to Registrant is recognized to the extent of Registrant’s investment balance in each Local Partnership. Equity in loss in excess of Registrant’s investment balance in a Local Partnership is allocated to other partners’ capital in any such Local Partnership.

Cumulative losses and cash distributions in excess of investment in local partnerships may result from a variety of circumstances, including a Local Partnership's accounting policies, subsidy structure, debt structure and operating deficits, among other things. In addition, the book value of Registrant’s investment in each Local Partnership (the “Local Partnership Carrying Value”) may be reduced if the Local Partnership Carrying Value is considered to exceed the estimated value derived by management. Accordingly, cumulative losses and cash distributions in excess of the investment or an adjustment to a Local Partnership’s Carrying Value are not necessarily indicative of adverse operating results of a Local Partnership.

Registrant’s operations for the three months ended December 30, 2010 and 2009 resulted in net income (loss) of $(800) and $18,913, respectively. The decrease in net income from fiscal 2009 to fiscal 2010 is primarily attributable to a decrease in equity in income of investment in local partnerships of approximately $21,000, which is attributable to a decrease in the net operating income of the Local Partnership in which Registrant continues to have an investment balance. Other comprehensive income for the three months ended December 30, 2010 resulted from unrealized gains (losses) on investment in mutual fund and investment in bond of $(1,122) and $1,752, respectively.

Registrant’s operations for the nine months ended December 30, 2010 and 2009 resulted in net income (loss) of $5,285 and $(39,675), respectively. The decrease in net loss from fiscal 2009 to fiscal 2010 is primarily attributable to (i) an increase in equity in income of investment in local partnerships of approximately $30,000, which is attributable to an increase in the net operating income of the Local Partnership in which Registrant continues to have an investment balance, and (ii) an increase in interest revenue and other income from local partnerships in the aggregate amount of approximately $17,000. Other comprehensive income for the nine months ended December 30, 2010 resulted from unrealized gains on investment in mutual fund and investment in bond of $6,709 and $3,481, respectively.

AMERICAN TAX CREDIT TRUST,

a Delaware statutory business trust

Series I

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued).

Local Partnership Matters

Registrant's primary objective, to provide Low-income Tax Credits to its beneficial owners (the “Beneficial Owners”), has been completed. The relevant state tax credit agency allocated each of the Local Partnerships an amount of Low-income Tax Credits, which are generally available for a ten year period from the year the Property is placed in service (the “Ten Year Credit Period”). The Ten Year Credit Period was fully exhausted with respect to all of the Properties as of December 31, 2006. The required holding period of each Property, in order to avoid Low-income Tax Credit recapture, is fifteen years from the year in which the Low-income Tax Credits commence on the last building of the Property (the "Compliance Period"). The Compliance Period of all of the Local Partnerships had expired as of December 31, 2010. In addition, certain of the Local Partnerships entered into agreements with the relevant state tax credit agencies whereby the Local Partnerships must maintain the low-income nature of the Properties for a period which exceeds the Compliance Period (in certain circumstances, up to 50 years from when the Property is placed in service, but commonly 30 years from the date any such Property is placed in service), regardless of a sale of the Properties by the Local Partnerships after the Compliance Period (the “Extended Use Provisions”). Although the Extended Use Provisions do not extend the Compliance Period of the respective Local Partnerships, such provisions limit the number and availability of potential purchasers of the Properties. Accordingly, a sale of a Property may happen well after the expiration of the Compliance Period and/or may be significantly discounted. Registrant is in the process of disposing of its limited partner interests in the Local Partnerships (the “Local Partnership Interests”). As of December 30, 2010, Registrant owns all ten of the Local Partnership Interests originally acquired. Registrant has served a demand on the local general partners (the “Local General Partners”) to commence a sale process to dispose of the Properties. In the event a sale cannot be consummated, it is the Manager’s intention to sell or assign Registrant’s Local Partnership Interests. It is not possible to ascertain the amount, if any, that Registrant will receive with respect to each specific Property from such sales or assignments. Registrant intends to dissolve after the final disposition of its Local Partnership Interests. There can be no assurance as to when Registrant will dispose of its Local Partnership Interests.

The Properties are principally comprised of subsidized and leveraged low-income multifamily residential complexes located throughout the United States. Certain of the Local Partnerships receive rental subsidy payments, including four that receive payments under Section 8 of Title II of the Housing and Community Development Act of 1974 (“Section 8”). The subsidy agreements expire at various times. Since October 1997, the United States Department of Housing and Urban Development (“HUD”) has issued a series of directives related to project based Section 8 contracts that define owners’ notification responsibilities, advise owners of project based Section 8 properties of what their options are regarding the renewal of Section 8 contracts, provide guidance and procedures to owners, management agents, contract administrators and HUD staff concerning renewal of Section 8 contracts, provide policies and procedures on setting renewal rents and handling renewal rent adjustments and provide the requirements and procedures for opting-out of a Section 8 project based contract. Registrant cannot reasonably predict legislative initiatives and governmental budget negotiations, the outcome of which could result in a reduction in funds available for the various federal and state administered housing programs including the Section 8 program. Such changes could adversely affect the future net operating income before debt service (“NOI”) and debt structure of any or all Local Partnerships currently receiving such subsidy or similar subsidies. The four Local Partnerships’ Section 8 contracts are currently subject to renewal under applicable HUD guidelines. Of the four Local Partnerships noted above, three have entered into restructuring agreements, resulting in changes to both rent subsidy and mandatory debt service.

The Local Partnerships have various financing structures which include (i) required debt service payments (“Mandatory Debt Service”) and (ii) debt service payments which are payable only from available cash flow subject to the terms and conditions of the notes, which may be subject to specific laws, regulations and agreements with appropriate federal and state agencies (“Non-Mandatory Debt Service or Interest”). Registrant has no legal obligation to fund any operating deficits of the Local Partnerships.

In January 2011, Starved Rock - LaSalle Manor Limited Partnership (“Starved Rock”) entered into a purchase agreement (the “Purchase Agreement”) to sell its underlying Property to an affiliate of the Local General Partner of Starved Rock. Under the terms of the Purchase Agreement, Registrant would receive $108,000 (subject to adjustment under the terms of the Purchase Agreement) plus $30,000 for distributions that are due to Registrant under the terms of the partnership agreement of Starved Rock. The Purchase Agreement is subject to the approval of HUD and there can be no assurance that the Property will be sold under the terms of the Purchase Agreement. Registrant’s investment balance in Starved Rock, after cumulative equity losses, became zero during the year ended March 30, 2008.

AMERICAN TAX CREDIT TRUST,

a Delaware statutory business trust

Series I

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued).

As a result of a violation of certain terms of the regulatory agreement (the “Regulatory Agreement”) entered into in connection with its mortgage, the lender declared Vision Limited Dividend Housing Association Limited Partnership (“Vision”) in default under the terms of the mortgage. The lender granted the Local General Partner of Vision an extension to December 31, 2010 to cure the violation of the Regulatory Agreement. Although the default is not yet cured, the Local General Partner of Vision represents that the lender has provided a further extension and that payments on the mortgage and real estate taxes are current. Registrant’s investment balance in Vision, after cumulative equity losses, became zero during the year ended March 30, 2005.

Edgewood Manor Associates, L.P. (“Edgewood”) is currently in default under the terms of its first mortgage and a default has been declared by the lender; delinquent payments of principal, interest and certain fees represent a cumulative arrearage of approximately $38,000 as of January 2011. Registrant has made cumulative voluntary advances of $90,000 to Edgewood to fund operating deficits as of December 30, 2010, none of which were made during the nine months then ended. Registrant’s investment balance in Edgewood, after cumulative equity losses, became zero during the year ended March 30, 2005 and voluntary advances made by Registrant were recorded as investment in local partnerships and written off as additional equity in loss of investment in local partnerships.

Critical Accounting Policies and Estimates

The accompanying unaudited financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), which requires Registrant to make certain estimates and assumptions. The following section is a summary of certain aspects of those accounting policies that may require subjective or complex judgments and are most important to the portrayal of Registrant’s financial condition and results of operations. Registrant believes that there is a low probability that the use of different estimates or assumptions in making these judgments would result in materially different amounts being reported in the accompanying unaudited financial statements.

Registrant accounts for its investment in local partnerships in accordance with the equity method of accounting.

If the book value of Registrant’s investment in a Local Partnership exceeds the estimated value derived by management, Registrant reduces its investment in any such Local Partnership and includes such reduction in equity in loss of investment in local partnerships. Registrant makes such assessment at least annually in the fourth quarter of its fiscal year or whenever there are indications that a permanent impairment may have occurred. A loss in value of an investment in a Local Partnership other than a temporary decline would be recorded as an impairment loss. Impairment is measured by comparing the investment carrying amount to the estimated residual value of the investment.

Registrant does not consolidate the accounts and activities of the Local Partnerships, which are considered Variable Interest Entities under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810; Subtopic 10, because Registrant is not considered the primary beneficiary. Registrant’s balance in investment in local partnerships represents the maximum exposure to loss in connection with such investments. Registrant’s exposure to loss on the Local Partnerships is mitigated by the condition and financial performance of the underlying Properties as well as the financial strength of the Local General Partners. In addition, the Local Partnerships’ partnership agreements grant the Local General Partners the power to direct the activities that most significantly impact the Local Partnerships’ economic success.

AMERICAN TAX CREDIT TRUST,

a Delaware statutory business trust

Series I

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued).

Forward-Looking Information

As a cautionary note, with the exception of historical facts, the matters discussed in this quarterly report on Form 10-Q are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). Forward-looking statements may relate to, among other things, current expectations, forecasts of future events, future actions, future performance generally, business development activities, capital expenditures, strategies, the outcome of contingencies, future financial results, financing sources and availability and the effects of regulation and competition. Words such as “anticipate,” “expect,” “intend,” “plan,” “seek,” “estimate” and other words and terms of similar meaning in connection with discussions of future operating or financial performance signify forward-looking statements. Registrant may also provide written forward-looking statements in other materials released to the public. Such statements are made in good faith by Registrant pursuant to the “Safe Harbor” provisions of the Reform Act. Registrant undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Such forward-looking statements involve known risks, uncertainties and other factors that may cause Registrant’s actual results of operations or actions to be materially different from future results of operations or actions expressed or implied by the forward-looking statements.

Item 3. Quantitative and Qualitative Disclosure About Market Risk.

Registrant’s investment in mutual fund (the “Fund”) is subject to certain risk. The fixed income securities in which the Fund invests are subject to interest rate risk, credit risk, prepayment risk, counterparty risk, municipal securities risk, liquidity risk, management risk, government security risk and valuation risk. Typically, when interest rates rise, the market prices of fixed income securities go down. The Fund is classified as “non-diversified,” and thus may invest most of its assets in securities issued by or representing a small number of issuers. As a result, the Fund may be more susceptible to the risks associated with these particular issuers, or to a single economic, political or regulatory occurrence affecting these issuers. These risks could adversely affect the Fund’s net asset value (“NAV”), yield and total return.

The market value of Registrant’s investment in bond is subject to fluctuation based upon changes in interest rates relative to the investment’s maturity date and the associated bond rating. Since Registrant’s investment in bond is callable in 2013, the value of such investment may be adversely impacted in an environment of rising interest rates in the event Registrant decides to liquidate the investment prior to its call date. Although Registrant may utilize the investment to pay for its operating expenses and/or for certain Local Partnership matters, it otherwise intends to hold such investment to its call date. Therefore, Registrant does not anticipate any material adverse impact in connection with such investment.

Item 4. Controls and Procedures.

Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed by Registrant in reports that Registrant files or submits under the Exchange Act is recorded, processed, summarized and timely reported as provided in SEC rules and forms. Registrant periodically reviews the design and effectiveness of its disclosure controls and procedures, including compliance with various laws and regulations that apply to its operations. Registrant makes modifications to improve the design and effectiveness of its disclosure controls and procedures, and may take other corrective action, if its reviews identify a need for such modifications or actions. In designing and evaluating the disclosure controls and procedures, Registrant recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Registrant has carried out an evaluation, under the supervision and the participation of its management, including the Chief Executive Officer and Chief Financial Officer of the Manager, of the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act), as of the three months ended December 30, 2010. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer of the Manager concluded that Registrant’s disclosure controls and procedures were effective as of December 30, 2010.

Item 4T. Internal Control Over Financial Reporting.

There were no changes in Registrant’s internal control over financial reporting during the three months ended December 30, 2010 that have materially affected, or are reasonably likely to materially affect, Registrant’s internal control over financial reporting.

AMERICAN TAX CREDIT TRUST,

a Delaware statutory business trust

Series I

PART II - OTHER INFORMATION

Item 1.

Legal Proceedings.

None.

Item 1A.

Risk Factors.

As of December 31, 2010, the Compliance Periods of all of the Local Partnerships had expired (see Part I - Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations herein). There have been no other material changes from the risk factors previously disclosed in Item 1A of Registrant’s Annual Report on Form 10-K for the year ended March 30, 2010.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3.

Defaults Upon Senior Securities.

None; see Item 2 of Part I regarding the mortgage defaults of certain Local Partnerships.

Item 4.

Removed and Reserved.

Item 5.

Other Information.

None.

Item 6.

Exhibits.

Exhibit 31.1 Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.

Exhibit 31.2 Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.

Exhibit 32.1 Section 1350 Certification of Chief Executive Officer.

Exhibit 32.2 Section 1350 Certification of Chief Financial Officer.

SIGNATURES

Pursuant to the requirements 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.

	AMERICAN TAX CREDIT TRUST,
	a Delaware statutory business trust
	Series I

	By:	Richman American Credit Corp.,
		The Manager

Dated: February 8, 2011	/s/David Salzman
	by:	David Salzman
		Chief Executive Officer

Dated: February 8, 2011	/s/James Hussey
	by:	James Hussey
		Chief Financial Officer

Dated: February 8, 2011	/s/Richard Paul Richman
	by:	Richard Paul Richman
		Director

AMERICAN TAX CREDIT TRUST SERIES I - FORM 10-Q - February 8, 2011

Attached files

AMERICAN TAX CREDIT TRUST SERIES I Reports