INDEPENDENCE TAX CREDIT PLUS LP III - FORM 10-Q

Attached files

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EX-31.2 - CEO CERTIFICATION - INDEPENDENCE TAX CREDIT PLUS LP III	exh31-2.htm
EX-32.1 - SECTION 1350 CFO CERTIFICATION - INDEPENDENCE TAX CREDIT PLUS LP III	exh32-1.htm
EX-32.2 - SECTION 1350 CEO CERTIFICATION - INDEPENDENCE TAX CREDIT PLUS LP III	exh32-2.htm
EX-31.1 - CFO CERTIFICATION - INDEPENDENCE TAX CREDIT PLUS LP III	exh31-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________

FORM 10-Q

______________

(Mark One)

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

For the quarterly period ended December 31, 2010

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

For the transition period from

Commission File Number 0-24650

INDEPENDENCE TAX CREDIT PLUS L.P. III

(Exact name of registrant as specified in its charter)

Delaware		13-3746339
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

625 Madison Avenue, New York, New York		10022
(Address of principal executive offices)		(Zip Code)

(212) 317-5700

Registrant’s telephone number, including area code

(Former name, former address and former fiscal year, if changed since last report)

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 such filing requirements for the past 90 days. þ Yes o 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). o Yes o 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 o		Accelerated filer o
Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes þ No

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

INDEPENDENCE TAX CREDIT PLUS L.P. III

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	December 31, 2010			March 31, 2010
	(Unaudited)			(Audited)
ASSETS
Operating Assets
Property and equipment, at cost, net of accumulated depreciation of $23,717,349 and $24,907,752, respectively	$	13,548,083		$	14,210,626
Cash and cash equivalents		1,699,332			2,168,916
Cash held in escrow		4,875,476			4,709,839
Deferred costs, net of accumulated amortization of $598,799 and $579,257, respectively		380,821			430,299
Other assets		1,143,252			858,666
Total assets	$	21,646,964		$	22,378,346
LIABILITIES AND PARTNERS’ CAPITAL (DEFICIT)
Operating Liabilities
Mortgage notes payable	$	30,901,027		$	33,056,050
Accounts payable		1,184,694			955,138
Accrued interest payable		9,222,571			11,409,657
Security deposits payable		358,450			372,137
Due to local general partners and affiliates		1,899,775			2,074,690
Due to general partners and affiliates		5,951,359			5,786,301
Total liabilities		49,517,876			53,653,973
Commitments and contingencies (Note 6)
Partners’ capital (deficit)
Limited partners (43,440 BACs issued and outstanding)		(24,642,382	)		(28,126,901	)
General partners		(225,519	)		(273,217	)
Independence Tax Credit Plus L.P. III total		(24,867,901	)		(28,400,118	)
Noncontrolling interests		(3,003,011	)		(2,875,509	)
Total partners’ capital (deficit)		(27,870,912	)		(31,275,627	)
Total liabilities and partners’ capital (deficit)	$	21,646,964		$	22,378,346
See accompanying notes to consolidated financial statements.

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INDEPENDENCE TAX CREDIT PLUS L.P. III

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended December 31,						Nine Months Ended December 31,
	2010			2009*			2010			2009*

Revenues
Rental income	$	1,435,480		$	1,401,306		$	4,399,973		$	4,295,318
Other income		47,920			52,214			154,988			189,894
Gain on extinguishment of debt (Note 6)		0			0			0			172,373
Total revenues		1,483,400			1,453,520			4,554,961			4,657,585
Expenses
General and administrative		423,824			464,131			1,490,014			1,493,401
General and administrative-related parties (Note 2)		167,618			223,467			553,094			635,674
Repairs and maintenance		283,240			266,914			860,700			824,916
Operating		180,641			169,871			628,484			581,956
Taxes		69,274			75,939			209,340			218,890
Insurance		95,850			106,331			303,384			324,467
Financial, principally interest		355,844			364,706			1,052,248			1,053,424
Depreciation and amortization		174,588			473,934			523,608			1,440,012
Total expenses from operations		1,750,879			2,145,293			5,620,872			6,572,740
Loss from operations		(267,479	)		(691,773	)		(1,065,911	)		(1,915,155	)
Income (loss) from discontinued operations		4,725,656			(144,278	)		4,560,497			110,178
Net income (loss)		4,458,177			(836,051	)		3,494,586			(1,804,977	)
Net loss attributable to noncontrolling interests from operations		25,294			56,835			57,624			177,164
Net (income) loss attributable to noncontrolling interests from discontinued operations		(34,151	)		1,446			(32,493	)		(147,255	)
Net (income) loss attributable to noncontrolling interests		(8,857	)		58,281			25,131			29,909
Net income (loss) attributable to Independence Tax Credit Plus L.P. III	$	4,449,320		$	(777,770	)	$	3,519,717		$	(1,775,068	)
Loss from operations – limited partners	$	(239,763	)	$	(628,588	)	$	(998,204	)	$	(1,720,611	)
Income (loss) from discontinued operations – limited partners		4,644,590			(141,404	)		4,482,723			(36,706	)
Net income (loss) – limited partners	$	4,404,827		$	(769,992	)	$	3,484,519		$	(1,757,317	)
Number of BACs outstanding		43,440			43,440			43,440			43,440
Loss from operations per BAC	$	(5.52	)	$	(14.47	)	$	(22.98	)	$	(39.61	)
Income (loss) from discontinued operations per BAC		106.92			(3.25	)		103.19			(0.84	)
Net income (loss) per BAC	$	101.40		$	(17.72	)	$	80.21		$	(40.45	)

* Reclassified for comparative purpose.

See accompanying notes to consolidated financial statements.

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INDEPENDENCE TAX CREDIT PLUS L.P. III

AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS’ (DEFICIT) CAPITAL

(Unaudited)

	Total			Limited Partners			General Partner			Noncontrolling Interests
Partners’ capital (deficit) – April 1, 2010	$	(31,275,627	)	$	(28,126,901	)	$	(273,217	)	$	(2,875,509	)
Net income (loss) – nine months ended December 31, 2010		3,494,586			3,484,519			35,198			(25,131	)
Contribution – write-off of related party debt		12,500			0			12,500			0
Distributions		(102,371	)		0			0			(102,371	)
Partners’ (deficit) capital – December 31, 2010	$	(27,870,912	)	$	(24,642,382	)	$	(225,519	)	$	(3,003,011	)

See accompanying notes to consolidated financial statements.

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INDEPENDENCE TAX CREDIT PLUS L.P. III

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended December 31,
	2010			2009

Cash flows from operating activities:
Net income (loss)	$	3,494,586		$	(1,804,977	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Gain on sale of property		(4,789,772	)		(638,380	)
Gain on extinguishment of debt		0			(172,373	)
Depreciation and amortization		530,731			1,779,100
Increase in accounts payable		237,801			360,984
Increase in accrued interest payable		966,240			972,404
Increase (decrease) in security deposit payable		5,370			(13,363	)
Increase in cash held in escrow		(180,308	)		(198,876	)
(Increase) decrease in other assets		(348,101	)		56,728
Increase (decrease) in due to local general partners and affiliates		87,987			(42,987	)
Increase (decrease) in due to general partner and affiliates		197,558			(518,657	)
Total adjustments		(3,292,494	)		1,584,580
Net cash provided by (used in) operating activities		202,092			(220,397	)
Cash flows from investing activities:
Purchase of property and equipment		(3,563	)		(58,336	)
Proceeds from sale of property		25,000			250,000
Costs related to sale of property		(22,804	)		(59,235	)
(Increase) decrease in cash held in escrow		(55,013	)		67,064
Decrease in due to local general partners and affiliates		(110,836	)		(101,028	)
Net cash (used in) provided by investing activities		(167,216	)		98,465
Cash flows from financing activities:
Repayments of mortgage notes		(255,023	)		(280,394	)
Repayment of advances/advances to local general partners and affiliates		(147,066	)		4,000
Distributions to noncontrolling interests		(102,371	)		(118,061	)
Net cash used in financing activities		(504,460	)		(394,455	)
Net decrease in cash and cash equivalents		(469,584	)		(516,387	)
Cash and cash equivalents at beginning of period		2,168,916			2,920,187
Cash and cash equivalents at end of period	$	1,699,332		$	2,403,800
Summarized below are the components of the gain on sale of property:
Proceeds from sale of property – net	$	(2,196	)	$	(190,765	)
Decrease in property and equipment, net of accumulated depreciation		179,068			1,371,465
Decrease in deferred costs		5,785			1,808
Decrease in prepaid expenses and other assets		63,515			0
Decrease in cash held in escrow		69,685			104,666
Decrease in accounts payable and other liabilities		(8,246	)		(21,268	)
Decrease in accrued interest payable		(3,153,326	)		0
Decrease in security deposit payable		(19,057	)		(26,381	)
Decrease in mortgage note payable		(1,900,000	)		(1,877,905	)
Decrease in due to local general partners and affiliates		(5,000	)		0
Decrease in due to General Partners and affiliates		(32,500	)		(5,000	)
Capital contribution – General Partners		12,500			5,000

* Reclassified for comparative purpose.

See accompanying notes to consolidated financial statements.

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INDEPENDENCE TAX CREDIT PLUS L.P. III

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2010

(Unaudited)

NOTE 1 – General

The consolidated financial statements include the accounts of Independence Tax Credit Plus L.P. III (the “Partnership”) and eighteen other limited partnerships (“subsidiary partnerships”, “subsidiaries” or “Local Partnerships”) owning apartment complexes that are eligible for the federal low-income housing tax credit (“Tax Credit”). The general partner of the Partnership is Related Independence Associates III L.P., a Delaware limited partnership (the “General Partner”), which is managed by an affiliate of Centerline Holding Company (“Centerline”), the ultimate parent of the general partner of the General Partner. Through the rights of the Partnership and/or an affiliate of the General Partner, which affiliate has a contractual obligation to act on behalf of the Partnerships, to remove the general partner of the Local Partnerships and to approve certain major operating and financial decisions, the Partnership has a controlling financial interest in the subsidiary partnerships (“Local General Partners”). During the nine months ended December 31, 2010, the Partnership sold its limited partnership interest in one Local Partnership. As of December 31, 2010, the Partnership has sold its limited partnership interests in four Local Partnerships (see Note 4).

For financial reporting purposes, the Partnership’s fiscal quarter ends December 31, 2010. All subsidiaries have fiscal quarters ending September 30, 2010. Accounts of the subsidiaries have been adjusted for intercompany transactions from October 1 through December 31. The Partnership’s fiscal quarter ends December 31 in order to allow adequate time for the subsidiaries’ financial statements to be prepared and consolidated.

All intercompany accounts and transactions with the subsidiary partnerships have been eliminated in consolidation.

In accordance with FASB Accounting Standards Codification (“ASC”) Topic 810, Noncontrolling Interests in Consolidated Financial Statements (“ASC 810”), (income) loss income attributable to noncontrolling interests amounted to approximately $(9,000) and $58,000 and $25,000 and $30,000 for the three and nine months ended December 31, 2010 and 2009, respectively. The Partnership’s investment in each subsidiary is equal to the respective subsidiary’s partners’ equity less noncontrolling interest capital, if any.

Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted or condensed. These condensed financial statements should be read in conjunction with the financial statements and notes thereto included in the Partnership’s Annual Report on Form 10-K for the year ended March 31, 2010.

The books and records of the Partnership are maintained on the accrual basis of accounting in accordance with GAAP. In the opinion of the General Partner of the Partnership, the accompanying unaudited financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the financial position of the Partnership as of December 31, 2010 and the results of operations for the three and nine months ended December 31, 2010 and 2009 and its cash flows for the nine months ended December 31, 2010 and 2009. However, the operating results and cash flows for the nine months ended December 31, 2010 may not be indicative of the results for the year.

NOTE 2 – Related Party Transactions

An affiliate of the General Partner has a .01% interest, as a special limited partner, in each of the Local Partnerships.

The costs incurred to related parties from operations for the three and nine months ended December 31, 2010 and 2009 were as follows:

	Three Months Ended December 31,				Nine months Ended December 31,
	2010		2009*		2010		2009*

Partnership management fees (a)	$	54,325	$	86,000	$	184,443	$	253,632
Expense reimbursement (b)		38,955		64,577		144,109		161,224
Local administrative fee (c)		16,214		15,403		48,642		47,458
Total general and administrative-General Partner		109,494		165,980		377,194		462,314
Property management fees incurred to affiliates of the subsidiary partnerships' general partners		58,124		57,487		175,900		173,360
Total general and administrative-related parties	$	167,618	$	223,467	$	553,094	$	635,674
* Reclassified for comparative purposes.

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INDEPENDENCE TAX CREDIT PLUS L.P. III

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2010

(Unaudited)

The costs incurred to related parties from discontinued operations for the three and nine months ended December 31, 2010 and 2009 were as follows:

	Three Months Ended December 31,				Nine Months Ended December 31,
	2010		2009*		2010		2009*
Local administrative fee (c)	$	625	$	1,875	$	1,875	$	5,625
Total general and administrative-General Partner		625		1,875		1,875		5,625
Property management fees incurred to affiliates of the subsidiary partnerships' general partners		6,531		14,330		25,566		38,604
Total general and administrative-related parties	$	7,156	$	16,205	$	27,441	$	44,229
* Reclassified for comparative purposes.

(a)

The General Partner is entitled to receive a partnership management fee, after payment of all Partnership expenses, which together with the annual local administrative fees will not exceed a maximum of 0.5% per annum of invested assets (as defined in the Partnership Agreement), for administering the affairs of the Partnership. Subject to the foregoing limitation, the partnership management fee will be determined by the General Partner in its sole discretion based upon its review of the Partnership’s investments. Unpaid partnership management fees for any year are to be deferred without interest and will be payable out of sales or refinancing proceeds only to the extent of available funds after payments on all Partnership liabilities have been made other than to those owed to the General Partner and its affiliates, and after the Limited Partners have received a 10% return on their capital contributions. Partnership management fees owed to the General Partner amounting to approximately $4,029,000 and $3,845,000 were accrued and unpaid as of December 31, 2010 and March 31, 2010, respectively, and are included in the line item Due to general partners and affiliates in the consolidated balance sheets. Current year partnership management fees may be paid out of operating reserves or refinancing and sales proceeds. As such the General Partner cannot demand payment of the deferred fees except as noted above. During the year ended March 31, 2010, the General Partner deemed the unpaid partnership management fees that were related to the property sold during the year ended March 31, 2010 uncollectible and as a result, the Partnership wrote them off in the amount of approximately $107,000, resulting in a non-cash General Partner contribution of the same amount.

(b)

The Partnership reimburses the General Partner and its affiliates for actual Partnership operating expenses incurred by the General Partner and its affiliates on the Partnership’s behalf. The amount of reimbursement from the Partnership is limited by the provisions of the Partnership Agreement. Another affiliate of the General Partner performs asset monitoring for the Partnership. These services include site visits and evaluations of the subsidiary partnerships’ performance. Expense reimbursements and asset monitoring fees owed to the General Partners and its affiliates amounting to approximately $860,000 and $864,000 were accrued and unpaid as of December 31, 2010 and March 31, 2010, respectively. The General Partner does not intend to demand payment of the deferred payables beyond the Partnership’s ability to pay them. The Partnership anticipates that these will be paid from working capital reserves or future sales proceeds.

(c)

Independence SLP III L.P., a limited partner of the subsidiary partnerships, is entitled to receive a local administrative fee of up to $5,000 per year from each subsidiary partnership. Local administrative fee owed to Independence SLP III L.P. amounting to $555,000 and $582,000 were accrued and unpaid as of December 31, 2010 and March 31, 2010, respectively. These fees have been deferred in certain cases and the Partnership anticipates that they will be paid from working capital reserves or future sales proceeds. As of December 31, 2010 and March 31, 2010, the Partnership owed $20,000 and $2,000, respectively, to Independence SLP III L.P. for the fees it received from one Local Partnership on its behalf.

As of December 31, 2010 and March 31, 2010, the Partnership owed Related Capital, an affiliate of the General Partner, approximately $86,000 for expenditures paid on its behalf and voluntary operating advances made by the General Partner and its affiliates to fund operations of the Partnership. Payment of these operating advances have been deferred and may be paid out of operating reserves or refinancing and sales proceeds. The General Partner does not intend to demand payment of the deferred advances beyond the Partnership’s ability pay them.

As of December 31, 2010 and March 31, 2010, the Partnership owed Centerline Corporate Partners V LP, an affiliate of the General Partner, approximately $142,000 and the General Partner approximately $259,000 for advances made to two Local Partnerships. These advances represent historical amounts loaned in conjunction with the initial capital contributions to the Local Partnerships. Payment of these operating advances has been deferred and may be paid out of operating reserves or refinancing and sales proceeds. The General Partner and its affiliates do not intend to demand payment of the deferred advances beyond the Partnership’s ability pay them.

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INDEPENDENCE TAX CREDIT PLUS L.P. III

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2010

(Unaudited)

B) Due to Local General Partners and Affiliates

Due to local general partners and affiliates from operating liabilities consists of the following:

	December 31, 2010		March 31, 2010

Operating advances	$	798,071	$	704,044
Development fee payable		701,238		817,074
Other capitalized costs		16,335		16,335
Construction costs payable		146,487		146,487
General Partner loan payable		54,942		202,008
Management and other operating fees		182,702		188,742

	$	1,899,775	$	2,074,690

C) Advances from Partnership to Local Partnerships

As of December 31, 2010 and March 31, 2010, the Partnership has advanced certain Local Partnership operating loans (non-interest bearing) amounting to approximately $878,000 primarily in conjunction with the Local Partnership’s contribution agreements. Such advances are eliminated in consolidation and are included in the line item Due to local general partners and affiliates. The following table summarizes these advances:

	December 31, 2010		March 31, 2010

New Zion	$	2,655	$	2,655
Knickerbocker Avenue		454,441		454,441
Lafayette Avenue		416,094		416,094
Sumpter Commons		5,075		5,075

	$	878,265	$	878,265

NOTE 3 – Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair value of each class of financial instruments (all of which are held for nontrading purposes) for which it is practicable to estimate that value:

Cash and Cash Equivalents, Investments Available-for-Sale and Cash Held in Escrow

The carrying amount approximates fair value.

Mortgage Notes Payable

The Partnership adopted FASB ASC 820 – “Fair Value Measurements” for financial assets and liabilities. ASC 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard does not require any new fair value measurements of reported balances.

As permitted, we chose not to elect the fair value option as prescribed by FASB ASC 825 – “Financial Instruments” – Including an Amendment of ASC 320 – “Investments – Debt and Equity Securities”, for our financial assets and liabilities that had not been previously carried at fair value. Therefore, we did not elect to fair value any additional items under ASC 825.

The estimated fair value of financial instruments has been determined using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop estimates of fair value. Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange. The following are financial instruments for which the Partnership’s estimate of fair value differs from the carrying amounts:

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INDEPENDENCE TAX CREDIT PLUS L.P. III

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2010

(Unaudited)

	At December 31, 2010						At March 31, 2010
	Carrying Amount			Fair Value			Carrying Amount			Fair Value
LIABILITIES:
Mortgage notes		$	30,901,027		$	14,917,983		$	33,056,050		$	13,900,141

For the mortgage notes, fair value is calculated using present value cash flow models based on a discount rate. It was determined that the Tender Option Bond market, through which these bonds have been securitized in the past, continued to see a dramatic slowdown with limited liquidity and significantly reduced transaction levels. To assist in valuing these notes, the Partnership held separate discussions with various third party investment banks who are leaders in the municipal bond business. The discussions produced assumptions that were based on market conditions as well as the credit quality of the underlying property partnerships, which held the mortgage notes, to determine what discount rates to utilize.

NOTE 4 – Sale of Properties

The Partnership is in the process of developing a plan to dispose of all of its investments. It is anticipated that this process will continue to take a number of years. During the nine months ended December 31, 2010, the Partnership sold its limited partnership interest in one Local Partnership. As of December 31, 2010, the Partnership has sold its limited partnership interests in four Local Partnerships. There can be no assurance as to when the Partnership will dispose of its remaining investments or the amount of proceeds which may be received. However, based on the historical operating results of the Local Partnerships and the current economic conditions, including changes in tax laws, it is unlikely that the proceeds from such sales received by the Partnership will be sufficient to return to the limited partners their original investment.

On December 31, 2010, the Partnership sold its limited partnership interest in Jefferis Square Housing Partnership L.P. (“Jefferis”) to an affiliate of the Local General Partner for a sales price of $25,000. The Partnership received approximately $2,000 after the repayment of other liabilities of approximately $23,000. The sale resulted in a gain of approximately $4,832,000, resulting from the write-off of the deficit basis in the Local Partnership of approximately $4,830,000 at the date of the sale and the $2,000 cash received from the sale, which was recorded during the quarter ended December 31, 2010. In addition, the sale resulted in a non-cash contribution to the Local Partnership from the General Partner of approximately $12,500 as a result of the write-off of fees owed by the Local Partnership to an affiliate of the General Partner.

On March 31, 2010, the Partnership sold its limited partnership interest in Livingston Manor Urban Renewal Associates, L.P. (“Livingston Manor”) to an affiliate of the Local General Partner for a sales price of $20,000. The Partnership received approximately $7,000 after the repayment of other liabilities of approximately $13,000. The sale resulted in a loss of approximately $1,870,000, resulting from the write-off of the basis in the Local Partnership of approximately $1,877,000 at the date of the sale and the $7,000 cash received from the sale, which was recorded during the year ended March 31, 2010. An adjustment to the loss of approximately $42,000 was recorded during the quarter ended June 30, 2010, resulting in an overall loss of approximately $1,912,000. In addition, the sale resulted in a non-cash contribution to the Local Partnership from the Local General Partner of approximately $324,000 as a result of the write-off of fees owed by the Local Partnership to the Local General Partner.

On August 26, 2009, the Partnership sold its limited partnership interest in Pacific-East L.P. (“Eastern Parkway”) to an affiliate of the Local General Partner for a sales price of $250,000. The Partnership received approximately $191,000 after the repayment of other liabilities of approximately $59,000. The sale resulted in a gain of approximately $638,000, resulting from the write-off of the deficit basis in the Local Partnership of approximately $388,000 at the date of the sale and the $191,000 cash received from the sale, which was recorded during the quarter ended September 30, 2009. An adjustment to the gain of approximately $(120,000) was recorded during the quarter ended March 31, 2010, resulting in an overall gain of $518,000. The sale also resulted in a write-off of operating advances of approximately $1,016,000 owed to the Partnership which are eliminated in consolidation. In addition, the sale resulted in a non-cash contribution to the Local Partnership from the General Partner of approximately $2,500 as a result of the write-off of fees owed by the Local Partnership to an affiliate of the General Partner.

NOTE 5 – Discontinued Operations

The following table summarizes the results of operations of the Local Partnerships that are classified as discontinued operations. For the three and nine months ended December 31, 2010, Jefferis Square, which was sold during the nine months ended December 31, 2010, and Livingston Manor, which was sold on March 31, 2010, were classified as discontinued operations in the consolidated financial statements. For the three and nine months ended December 31, 2009, Eastern Parkway, which was sold during the year ended March 31, 2010, and Jefferies Square and Livingston Manor, in order to present comparable results to the three and nine months ended December 31, 2010, were classified as discontinued operations in the consolidated financial statements.

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INDEPENDENCE TAX CREDIT PLUS L.P. III

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2010

(Unaudited)

Consolidated Statements of Discontinued Operations:

	Three Months Ended December 31,						Nine Months Ended December 31,
	2010			2009*		*	2010			2009*
Revenues
Rental income	$	66,747		$	144,080		$	283,321		$	648,274
Other		1,032			2,150			5,715			8,398
Gain (loss) on sale of property (Note 4)		4,832,226			0			4,789,772			638,380
Total revenue		4,900,005			146,230			5,078,808			1,295,052
Expenses
General and administrative		25,879			22,309			106,145			156,596
General and administrative-related parties (Note 2)		7,156			16,205			27,441			44,229
Repairs and maintenance		38,522			30,532			72,386			125,710
Operating and other		8,187			20,900			22,354			171,035
Insurance		627			8,466			8,047			42,652
Taxes		6,477			9,174			19,433			43,792
Interest		85,127			82,608			255,382			261,772
Depreciation and amortization		2,374			100,314			7,123			339,088
Total expenses		174,349			290,508			518,311			1,184,874
Income (loss) from discontinued operations		4,725,656			(144,278	)		4,560,497			110,178
Noncontrolling interest in (income) loss of subsidiaries from discontinued operations		(34,151	)		1,446			(32,493	)		(147,255	)
Income (loss) from discontinued operations – Independence Tax Credit Plus LP III	$	4,691,505		$	(142,832	)	$	4,528,004		$	(37,077	)
Income (loss) — limited partners from discontinued operations	$	4,644,590		$	(141,404	)	$	4,482,723		$	(36,706	)
Income of BACs outstanding		43,440			43,440			43,440			43,440
Income (loss) from discontinued operations per BAC	$	106.92		$	(3.25	)	$	103.19		$	(0.84	)

*	Reclassified for comparative purposes.

Cash flows from Discontinued Operations:

	Nine months Ended September 30,
	2010			2009*
Net cash (used in) provided by operating activities	$	(15,850	)	$	520,737
Net cash (used in) provided by investing activities	$	(7,817	)	$	1,378,568
Net cash provided by (used in) financing activities	$	1,246		$	(1,915,398	)

*	Reclassified for comparative purposes.

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INDEPENDENCE TAX CREDIT PLUS L.P. III

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2010

(Unaudited)

NOTE 6 – Commitments and Contingencies

a)	Going Concern Consideration

At December 31, 2010, the Partnership’s liabilities exceeded assets by $27,870,912. This factor raises substantial doubt about the Partnership’s ability to continue as a going concern. As discussed in Note 2, partnership management fees of approximately $4,029,000 will be payable out of sales or refinancing proceeds only to the extent of available funds after payments on all other Partnership liabilities have been made and after the Limited Partners have received a 10% return on their capital contributions. As such, the General Partner cannot demand payment of these deferred fees beyond the Partnership’s ability to pay them. In addition, where the Partnership has unpaid partnership management fees related to sold properties, such management fees are written off and recorded as capital contributions. During the year ended March 31, 2010, the Partnership wrote off approximately $107,000 of such management fees.

All of the mortgage payable balance of $30,901,027 and the accrued interest payable balance of $9,222,571 is of a nonrecourse nature and secured by the respective properties. The Partnership is currently in the process of developing a plan to dispose all of its investments. Historically, the mortgage notes and accrued interest thereon have been assumed by the buyer in instances of sales of the Partnership’s interest or have been paid off from sales proceeds in instances of sales of the property. In most instances when the Partnership’s interest was sold and liabilities were assumed, the Partnership recognized a gain from the sale. The Partnership owns the limited partner interest in all its investments, and as such has no financial responsibility to fund operating losses incurred by the Local Partnerships. The maximum loss the Partnership would incur is its net investment in the respective Local Partnerships and the potential recapture of Tax Credits if the investment is lost before the expiration of the Compliance Period. Dispositions of any investment in a Local Partnership should not impact the future results of operations, liquidity, or financial condition of The Partnership.

The Partnership has working capital reserves of approximately $993,000 at December 31, 2010. Such amount is considered sufficient to cover the Partnership’s day to day operating expenses, excluding fees to the General Partner, for at least the next year. The Partnership’s operating expenses, excluding the Local Partnerships’ expenses and related party expenses amounted to approximately $92,000 for the nine months ended December 31, 2010.

Management believes the above mitigating factors enable the Partnership to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

b)	Subsidiary Partnerships – Going Concerns and Uncertainties

Mansion Court Phase II Venture (“Mansion Court”)

In prior years and in 2010, Mansion Court has sustained operating losses and has not generated sufficient cash flow from operations to meet its obligations. The Local General Partner has provided funding in the past years; however, there is no obligation to do so. Mansion Court also has experienced a high number of vacancies due to deteriorating conditions in the area. Management of Mansion Court continues to explore options to mitigate increased crime and deteriorating neighborhood conditions. These options include assistance from local government housing agencies and could include transfer of ownership.

The Partnership’s investment in Mansion Court at December 31, 2010 and March 31, 2010 was reduced to zero as a result of prior years’ losses and the noncontrolling interests balance was $(164,000) at each date. Mansion Court’s net loss after noncontrolling interests amounted to approximately $47,000 and $49,000 for the nine months ended December 31, 2010 and 2009, respectively.

Brannon Group, L.C. (“Keys”)

Keys has obligations that matured on January 1, 2011 in the amount of $1,246,798. This fact raises substantial doubt about its ability to continue as a going concern. Keys’ management is currently exploring the options available to meet these obligations.

The Partnership’s investment in Keys at December 31, 2010 and March 31, 2010 was reduced to zero as a result of prior years’ losses and the noncontrolling interests balance was approximately $(2,383,000) and approximately $(2,307,000), respectively. Keys’ net loss after noncontrolling interests amounted to approximately $70,000 and $145,000 for the nine months ended December 31, 2010 and 2009, respectively.

c)	Subsidiary Partnerships – Gain on Extinguishment of Debt

During the year ended March 31, 2010, BK-10K Partners L.P. (“Knickerbocker”) recognized a gain on extinguishment of debt on its New York City Department of Housing Preservation and Development (“HPD”) Third Mortgage, which had a balance of $172,373 and a construction period interest rate of 0.25% per annum, and subsequent rate of 0%. No regular payments of principal were required under the HPD mortgage. The terms included provisions that the HPD mortgage would be canceled and extinguished if Knickerbocker did not default on its first and second mortgages during the first fifteen years of their terms, which Knickerbocker complied with in 2009.

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INDEPENDENCE TAX CREDIT PLUS L.P. III

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2010

(Unaudited)

Leases

Savannah Park Housing L.P. (“Tobias”), one of the subsidiary partnerships, is leasing the land on which its apartment complex is located for a term of 50 years, which commenced in August 1996, with monthly rent payments of $1,771. As of December 31, 2010, the lease agreement was current. Estimated aggregate future minimum payments due under the term of the lease were $763,301 as of September 30, 2010.

e)	Uninsured Cash and Cash Equivalents

The Partnership maintains its cash and cash equivalents in various banks. The accounts at each bank are guaranteed by the Federal Deposit Insurance Corporation up to $250,000.

f)	Cash Distributions

Cash distributions from the Local Partnerships to the Partnership are restricted by the provisions of the respective limited partnership agreements of the Local Partnerships and/or the U.S. Department of Housing and Urban Development (“HUD”) based on operating results and a percentage of the owner’s equity contribution. Such cash distributions are typically made from surplus cash flow.

g)	Property Management Fees

Property management fees incurred by Local Partnerships amounted to $92,591 and $106,654 and $330,315 and $344,090 for the three and nine months ended December 31, 2010 and 2009, respectively. Of these fees, $64,656 and $71,817 and $201,466 and $211,964 were incurred to affiliates of the subsidiary partnerships’ general partners, which includes $6,531 and $14,330 and $25,566 and $38,604 of fees relating to discontinued operations.

Other

The Partnership and BACs holders began to recognize Tax Credits with respect to a property when the credit period for such Property (generally ten years from the date of investment or, if later, the date the property was leased to qualified tenants) commenced. Because of the time required for the acquisition, completion and rent-up of Properties, the amount of Tax Credits per BAC gradually increased over the first three years of the Partnership. Tax Credits not recognized in the first three years were recognized in the 11th through 13th years. As of December 31, 2009, all the Local Partnerships had completed their Credit Periods. The Compliance Periods will continue through December 31, 2014 with respect to the Properties depending upon when the Credit Period commenced.

The Partnership is subject to the risks incident to potential losses arising from the management and ownership of improved real estate. The Partnership can also be affected by poor economic conditions generally; however, no more than 31% of the Properties are located in any single state. There are also substantial risks associated with owning interests in properties, as does the Partnership, which receive government assistance, for example the possibility that Congress may not appropriate funds to enable the Department of Housing and Urban Development (“HUD”) to make rental assistance payments. HUD also restricts annual cash distributions to partners based on operating results and a percentage of the owner’s equity contribution. The Partnership cannot sell or substantially liquidate its investments in subsidiary partnerships during the period that the subsidy agreements are in existence without HUD’s approval. Furthermore, there may not be market demand for apartments at full market rents when the rental assistance contracts expire.

i)	Subsequent Events

There were no events or transactions occurring during the subsequent event reporting period which require recognition or disclosure in the financial statements.

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

Liquidity and Capital Resources

The Partnership originally invested all of its net proceeds in twenty Local Partnerships of which approximately $120,000 remains to be paid to the Local Partnerships (including approximately $115,000 being held in escrow). The Partnership is in the process of developing a plan to dispose of all of its investments. It is anticipated that the process will continue to take a number of years. During the nine months ended December 31, 2010, the Partnership sold its limited partnership interest in one Local Partnership. As of December 31, 2010, the Partnership has sold its limited partnership interests in four Local Partnerships. There can be no assurance as to when the Partnership will dispose of its remaining investments or the amount of proceeds which may be received. However, based on the historical operating results of the Local Partnerships and the current economic conditions, including changes in tax laws, it is unlikely that the proceeds from such sales received by the Partnership will be sufficient to return to the BACs holders their original investments. All gains and losses on sales are included in discontinued operations.

Short-term

The Partnership’s primary sources of funds included: (i) working capital reserves; (ii) interest earned on the working capital reserves; (iii) cash distributions from operations of the Local Partnerships; and (iv) sales proceeds and distributions. Such funds are available to meet the obligations of the Partnership. The Partnership does not anticipate providing cash distributions to BACs holders in circumstances other than refinancing or sales. Cash distributions received from the Local Partnerships, as well as the working capital reserves referred to above, will be used towards the future operating expenses of the Partnership. During the nine months ended December 31, 2010 and 2009, the amounts received from operations of the Local Partnerships were approximately $91,000 and $48,000, respectively. Additionally, during the nine months ended December 31, 2010 and 2009, the Partnership received approximately $25,000 and $250,000, respectively, of distributions from the sale of Local Partnerships. The Partnership does not anticipate being able to make distributions sufficient to return to BACs holders their original capital contributions.

During the nine months ended December 31, 2010, cash and cash equivalents of the Partnership and its consolidated Local Partnerships decreased approximately $470,000. This decrease was due to principal payments of mortgage notes ($255,000), purchases of property and equipment ($4,000), costs related to sale of property ($23,000), an increase in cash held in escrow relating to investing activities ($55,000), a net decrease in due to local general partners and affiliates relating to investing and financing activities ($258,000) and a decrease in capitalization of consolidated subsidiaries attributable to noncontrolling interests ($102,000), which exceeded cash provided by operating activities ($202,000) and proceeds from sale of property ($25,000). Included in the adjustment to reconcile the net loss to cash provided by operating activities is depreciation and amortization of approximately $531,000 and gain on sale of property of approximately $4,790,000.

Total expenses for the three and nine months ended December 31, 2010 and 2009, respectively, excluding depreciation and amortization, interest, general and administrative – related parties, totaled $1,052,829 and $1,083,186 and $3,491,922 and $3,443,630, respectively.

Accounts payable as of December 31, 2010 and March 31, 2010 were $1,184,694 and $955,138, respectively. Accounts payable are short term liabilities which are expected to be paid from operating cash flows, working capital balances at the Local Partnership level, Local General Partner advances and in certain circumstances advances from the Partnership. Accrued interest as of December 31, 2010 and March 31, 2010 was $9,222,571 and $11,409,657, respectively. Such amount represents the accrued interest on all mortgage loans, which include primary and secondary loans. Certain secondary loans have provisions such that interest is accrued but not payable until a future date. The Partnership anticipates the payment of accrued interest on the secondary loans (which make up the majority of the accrued interest payable amount and which have been accumulating since the Partnership’s investment in the respective Local Partnership) will be made from future refinancings or sales proceeds of the respective Local Partnerships. In addition, each Local Partnership’s mortgage notes are collateralized by the land and buildings of the respective Local Partnership, and are without further recourse to the Partnership.

Because the provisions of the secondary loans defer the payment of accrued interest of the respective Local Partnerships, the Partnership believes it (and the applicable Local Partnerships) has sufficient liquidity and ability to generate cash and to meet existing and known or reasonably likely future cash requirements over both the short and long term. In addition, assuming the General Partner continues to defer the payment of fees as discussed below and in Note 2 to the Financial Statements, the Partnership believes it has sufficient liquidity and ability to generate cash and to meet existing and known or reasonably likely future cash requirements over both the short and long term.

The Partnership has an unconsolidated working capital reserve of approximately $993,000 at December 31, 2010.

Long-term

Partnership management fees owed to the General Partner amounting to approximately $4,029,000 and $3,845,000 were accrued and unpaid as of December 31, 2010 and March 31, 2010, respectively, and are included in the line item Due to general partners and affiliates in the consolidated balance sheets. During the year ended March 31, 2010, the General Partner deemed the unpaid partnership management fees that were related to the property sold during the year ended March 31, 2010, uncollectible and as a result, the Partnership wrote them off in the amount of approximately $107,000, resulting in a non-cash General Partner contribution of the same amount. Unpaid partnership management fees for any year are to be deferred without interest and will be payable out of sales or refinancing proceeds only to the extent of available funds after payments on all Partnership liabilities have been made other than to those owed to the General Partner and its affiliates, and after the Limited Partners have received a 10% return on their capital contributions.

All other payables included in due to general partners and affiliates are expected to be paid, if at all, from working capital reserves. See Note 2 in Item 1 for further discussion of amounts due to the General Partner and its affiliates. The General Partner does not anticipate advancing going forward any operating funds to any of the Local Partnerships in which the Partnership has invested. Even if a situation arose where the General Partner and its affiliates needed to but were not able to make operating advances in the future due to lack of funds, the only impact on the Partnership would be that it would lose its investment in that particular Local Partnership. The Partnership’s ability to continue its operations would not be affected.

- 13 -

Based on the foregoing, the Partnership’s going concern consideration is mitigated by factors as discussed in Note 6a in Item 1.

For discussion of contingencies affecting certain subsidiary partnerships, see Results of Operations of Certain Local Partnerships, below. Since the maximum loss the Partnership would be liable for is its net investment in the respective subsidiary partnerships, the resolution of the existing contingencies is not anticipated to impact future results of operations, liquidity or financial condition in a material way. However, the Partnership’s loss of its investment in a Local Partnership may result in recapture of Tax Credits if the investment is lost before the expiration of the Compliance Period. Through March 31, 2010, only Mansion Court Phase II Venture (“Mansion Court”) was required to recapture $489,362 of low-income housing Tax Credits.

Except as described above, management is not aware of any trends or events, commitments or uncertainties, which have not otherwise been disclosed that will or are likely to impact liquidity in a material way. Management believes the only impact would be for laws that have not yet been adopted. The portfolio is diversified by the location of the Properties around the United States so that if one area of the country is experiencing downturns in the economy, the remaining Properties in the portfolio may be experiencing upswings. However, the geographic diversification of the portfolio may not protect against a general downturn in the national economy. The Partnership has invested the proceeds of its Offering in twenty Local Partnerships, all of which, other than Mansion Court, had their Tax Credits fully in place. As of December 31, 2009, the Credit Periods have expired and the Partnership has met its objective of generating Tax Credits for qualified BACs holders. The Compliance Periods will continue through December 31, 2014 with respect to the Properties depending upon when the Credit Period commenced.

Off-Balance Sheet Arrangements

The Partnership has no off-balance sheet arrangements.

Tabular Disclosure of Contractual Obligations

The Partnership disclosed in Item 7 of the Partnership’s Annual Report on Form 10-K for the year ended March 31, 2010, the Partnership’s commitments to make future payments under its debt agreements and other contractual obligations. There are no material changes to such disclosure or amounts as of December 31, 2010.

Fair Market Valuations

Cash and Cash Equivalents, Investments Available-for-Sale and Cash Held in Escrow

The carrying amount approximates fair value.

Mortgage Notes Payable

	At December 31, 2010						At March 31, 2010
	Carrying Amount			Fair Value			Carrying Amount			Fair Value
LIABILITIES:
Mortgage notes		$	30,901,027		$	14,917,983		$	33,056,050		$	13,900,141

Critical Accounting Policies and Estimates

In preparing the consolidated financial statements, management has made estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Set forth below is a summary of the accounting policies that management believes are critical to the preparation of the consolidated financial statements. The summary should be read in conjunction with the more complete discussion of the Partnership’s accounting policies included in Item 8, Note 2 to the consolidated financial statements in its Annual Report on Form 10-K for the year ended March 31, 2010.

- 14 -

Property and Equipment

Property and equipment to be held and used are carried at cost which includes the purchase price, acquisition fees and expenses, construction period interest and any other costs incurred in acquiring the properties. The cost of property and equipment is depreciated over their estimated useful lives using accelerated and straight-line methods. Expenditures for repairs and maintenance are charged to expense as incurred; major renewals and betterments are capitalized. At the time property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are eliminated from the assets and accumulated depreciation accounts and the profit or loss on such disposition is reflected in earnings. The Partnership complies with ASC 360, Property, Plant and Equipment. A loss on impairment of assets is recorded when management estimates amounts recoverable through future operations and sale of the property on an undiscounted basis are below depreciated cost. At that time, property investments themselves are reduced to estimated fair value (generally using discounted cash flows) when the property is considered to be impaired and the depreciation cost exceeds estimated fair value.

Through December 31, 2010, the Partnership has recorded approximately $28,472,000 as an aggregate loss on impairment of assets or reduction to estimated fair value.

At the time management commits to a plan to dispose of assets, said assets are adjusted to the lower of carrying amount or fair value less costs to sell. These assets are classified as property and equipment-held for sale and are not depreciated. There are no Local Partnerships whose assets are classified as property and equipment as held for sale as of December 31, 2010.

Revenue Recognition

Rental income is earned primarily under standard residential operating leases and is typically due the first day of each month, but can vary by property due to the terms of the tenant leases. Rental income is recognized when earned and charged to tenants’ accounts receivable if not received by the due date. Rental payments received in advance of the due date are deferred until earned. Rental subsidies are recognized as rental income during the month in which it is earned.

Other revenues are recorded when earned and consist of the following items: Interest income earned on cash and cash equivalent balances and cash held in escrow balances, income from forfeited security deposits, late charges, laundry and vending income and other rental-related items.

Income Taxes

The Partnership is not required to provide for, or pay, any federal income taxes. Net income or loss generated by the Partnership is passed through to the partners and is required to be reported by them. The Partnership may be subject to state and local taxes in jurisdictions in which it operates. For income tax purposes, the Partnership has a fiscal year ending December 31.

Results of Operations

The Partnership’s results of operations for the three and nine months ended December 31, 2010 and 2009 consisted of the results of the Partnership’s investment in Local Partnerships. The following discussion excludes the Partnership’s results of its discontinued operations which is not reflected below (see Note 5 to the financial statements in Item 1).

Rental income increased by approximately 2% for the three and nine months ended December 31, 2010 as compared to the corresponding periods in 2009, primarily due to an increase in rental rates, tenant assistance payments and occupancies at several Local Partnerships.

Other income decreased approximately $4,000 and $35,000 for the three and nine months ended December 31, 2010 as compared to the corresponding periods in 2009, primarily due to insurance proceeds received in the prior year resulting from a water pipe damage at one Local Partnership and a decrease in interest income due to lower reserve balances at a second Local Partnership.

Total expenses excluding general and administrative-related parties expense and depreciation and amortization expense remained consistent with a decrease of approximately 3% and an increase of approximately 1% for the three and nine months ended December 31, 2010 as compared to the corresponding periods in 2009.

Depreciation and amortization expense decreased approximately $299,000 and $916,000 for the three and nine months ended December 31, 2010 as compared to the corresponding periods in 2009, primarily due to the reduction in carrying amounts relating to impairment of assets recorded during the year ended March 31, 2010 at twelve Local Partnerships.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

The Partnership has mortgage notes that are payable in aggregate monthly installments including principal and interest at rates varying from 0% to 10% per annum. The Partnership does not believe there is a material risk associated with the various interest rates associated with the mortgage notes as the majority of the Local Partnership mortgage notes have fixed rates. The Partnership disclosed in Item 8, Note 3 to the consolidated financial statements in the Partnership’s Annual Report on Form 10-K for the year ended March 31, 2010, as well as in Item 2, the fair value of the mortgage notes payable. There are no material changes to such disclosure or amounts as of December 31, 2010.

The Partnership does not have any other market risk sensitive instruments.

- 15 -

Item 4. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures. The Chief Executive Officer and Chief Financial Officer of Related Independence Associates III, L.P., the general partner of the Partnership, have evaluated the effectiveness of the Partnership’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”) as of the end of the period covered by this report. Based on such evaluation, such officers have concluded that, as of the end of such period, the Partnership’s disclosure controls and procedures are effective.

(b) Changes in Internal Controls over Financial Reporting. During the period ended December 31, 2010, there were no changes in the Partnership’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

- 16 -

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings. – None

Item 1A.	Risk Factors. – No changes

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds. – None

Item 3.	Defaults upon Senior Securities. – None

Item 4.	(Removed and Reserved)

Item 5.	Other Information. – None

Item 6.	Exhibits.

	(3A)	Agreement of Limited Partnership of Independence Tax Credit Plus L.P. III as adopted on December 23, 1993*

	(3B)	Form of Amended and Restated Agreement of Limited Partnership of Independence Tax Credit Plus L.P. III, attached to the Prospectus as Exhibit A**

	(3C)	Certificate of Limited Partnership of Independence Tax Credit Plus L.P. III as filed on December 23, 1993*

	(10A)	Form of Subscription Agreement attached to the Prospectus as Exhibit B**

	(10B)	Escrow Agreement between Independence Tax Credit Plus L.P. III and Bankers Trust Company*

	(10C)	Form of Purchase and Sales Agreement pertaining to the Partnership’s acquisition of Local Partnership Interests*

	(10D)	Form of Amended and Restated Agreement of Limited Partnership of Local Partnerships*

	(31.1)+	Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a)

	(31.2)+	Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a)

	(32.1)+	Certification Pursuant to Section 1350 of Title 18 of the United States Code (18 U.S.C. 1350)

	(32.2)+	Certification Pursuant to Section 1350 of Title 18 of the United States Code (18 U.S.C. 1350)

	*	Incorporated herein as an exhibit by reference to exhibits filed with Post-Effective Amendment No. 4 to the Registration Statement on Form S-11 {Registration No. 33-37704}.

	+	Filed herewith.

	**	Incorporated herein as an exhibit by reference to exhibits filed with Post-Effective Amendment No. 8 to the Registration Statement on Form S-11 {Registration No. 33-37704}.

- 17 -

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.

INDEPENDENCE TAX CREDIT PLUS L.P. III

(Registrant)

		By:	RELATED INDEPENDENCE ASSOCIATES III L.P.,
			General Partner



			By:	RELATED INDEPENDENCE ASSOCIATES III INC.,
				General Partner



Date:	February 9, 2011			By:	/s/ Robert A. Pace
					Robert A. Pace
					Chief Financial Officer and Principal Accounting Officer



Date:	February 9, 2011			By:	/s/ Andrew J. Weil
					Andrew J. Weil
					President and Chief Executive Officer

- 18 -

INDEPENDENCE TAX CREDIT PLUS LP III - FORM 10-Q - February 9, 2011

Attached files

INDEPENDENCE TAX CREDIT PLUS LP III Reports