Attached files
file | filename |
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EX-31.1 - EXHIBIT 31.1 - WNC HOUSING TAX CREDIT FUND VI LP SERIES 10 | exihit311.htm |
EX-31.2 - EXHIBIT 31.2 - WNC HOUSING TAX CREDIT FUND VI LP SERIES 10 | exihit312.htm |
EX-32.1 - EXHIBIT 32.1 - WNC HOUSING TAX CREDIT FUND VI LP SERIES 10 | exihit321.htm |
EX-32.2 - EXHIBIT 32.2 - WNC HOUSING TAX CREDIT FUND VI LP SERIES 10 | exihit322.htm |
EX-99 - STARLIGHT 2004 - WNC HOUSING TAX CREDIT FUND VI LP SERIES 10 | starlight2004.htm |
EX-99 - STARLIGHT 2005 FS - WNC HOUSING TAX CREDIT FUND VI LP SERIES 10 | starlight2005fs.htm |
EX-99 - STARLIGHT 2006 FS - WNC HOUSING TAX CREDIT FUND VI LP SERIES 10 | starlight2006fs.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
(Mark
One)
S ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the
fiscal year ended March, 31, 2005
For the
fiscal year ended March, 31, 2006
For the
fiscal year ended March, 31, 2007
For the
fiscal year ended March, 31, 2008
For the
fiscal year ended March, 31, 2009
For the
fiscal year ended March, 31, 2010
OR
* TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the
transition period from __________ to __________
Commission
file number: 000-50837
WNC
HOUSING TAX CREDIT FUND VI, L.P., Series 10
(Exact
name of registrant as specified in its charter)
California
|
33-0974362
|
(State
or other jurisdiction of
|
(I.R.S.
Employer
|
incorporation
or organization)
|
Identification
No.)
|
17782
Sky Park Circle,
|
92614-6404
|
Irvine,
CA
|
(zip
code)
|
(Address
of principal executive offices)
|
(714)
662-5565
(Telephone
Number)
Securities
registered pursuant to Section 12(b) of the Act:
NONE
Securities
registered pursuant to section 12(g) of the Act:
UNITS OF
LIMITED PARTNERSHIP INTEREST
(Title of
Class)
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act
Yes_____
No___X__
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.
Yes_____
No___X__
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. Yes_____ No___X__
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Website, 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___X__
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (229.405 of this chapter) is not contained herein, and will not
be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.x
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
definition 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___X__ Smaller
reporting company_____
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
Yes____
No__X__
State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
last sold, or the average bid and asked price of such common equity, as of the
last business day of the registrant’s most recently completed second fiscal
quarter.
INAPPLICABLE
DOCUMENTS
INCORPORATED BY REFERENCE
List
hereunder the following documents if incorporated by reference and the Part of
the Form 10-K (e.g., Part I, Part II, etc.) into which the document is
incorporated: (1) Any annual report to security holders; (2) Any proxy or
information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or
(c) under the Securities Act of 1933. The listed documents should be clearly
described for identification purposes (e.g., annual report to security holders
for fiscal year ended December 24, 1980).
NONE
2
PART
I.
Item
1. Business
Organization
WNC
Housing Tax Credit Fund VI, L.P., Series 10 (the “Partnership”) is a California
Limited Partnership formed under the laws of the State of California on July 17,
2001 and commenced operations on February 28, 2003. The Partnership
was formed to acquire limited partnership interests in other limited
partnerships ("Local Limited Partnerships") which own multi-family housing
complexes (“Housing Complexes”) that are eligible for Federal low income housing
tax credits (“Low Income Housing Tax Credits”). The local general
partners (the “Local General Partners”) of each Local Limited Partnership retain
responsibility for maintaining, operating and managing the Housing Complex. Each
Local Limited Partnership is governed by its agreement of limited partnership
(the “Local Limited Partnership Agreement”).
The
general partner of the Partnership is WNC & Associates, Inc. (“Associates”
or the “General Partner”). The chairman and the president of Associates owns all
of the outstanding stock of Associates. The business of the Partnership is
conducted primarily through the General Partner, as the Partnership has no
employees of its own.
Pursuant
to a supplement dated February 28, 2003 to the prospectus of the Partnership
dated November 14, 2001, on March 6, 2003, the Partnership commenced
a public offering of 25,000 Units of Limited Partnership Interest ("Partnership
Units") at a price of $1,000 per Partnership Unit. As of the close of the public
offering, a total of 13,153 Partnership Units representing $13,119,270, net of
dealer discounts of $31,220 and volume discounts of $2,510, had been
sold. Holders of Partnership Units are referred to herein as “Limited
Partners”.
The
Partnership shall continue in full force and effect until December 31, 2062
unless terminated prior to that date pursuant to the Partnership Agreement (as
defined below) or law.
Description
of Business
The
Partnership's principal business objective is to provide its Limited Partners
with Low Income Housing Tax Credits. The Partnership's principal
business therefore consists of investing as a limited partner or non-managing
member in Local Limited Partnerships each of which will own and operate a
Housing Complex which will qualify for the Low Income Housing Tax
Credits. In general, under Section 42 of the Internal Revenue Code,
an owner of low income housing can receive the Low Income Housing Tax Credits to
be used to reduce Federal taxes otherwise due in each year of a ten-year credit
period. Each Housing Complex is subject to a 15-year compliance period (the
“Compliance Period”), and under state law may have to be maintained as low
income housing for 30 or more years.
3
As a
consequence of the provisions of tax law in effect for dispositions of buildings
prior to August 2008, in order to avoid recapture of Low Income Housing Credits,
the Partnership expected that it would not dispose of its interests in Local
Limited Partnerships (“Local Limited Partnership Interests”) or approve the sale
by any Local Limited Partnership of its Housing Complex prior to the end of the
applicable Compliance Period. That provision of law was amended in 2008
(i) to provide that there would be no recapture on sale of a Low Income
Housing Tax Credit building during the Compliance Period if it were reasonable
to expect at the time of sale that the building would continue to be operated as
qualified low income housing (see “Exit Strategy” below) and (ii) to
eliminate the possibility of posting a bond against potential
recapture. The Partnership is not seeking to sell its Local Limited
Partnership Interests. And, because of (i) the nature of the Housing
Complexes and the Local Limited Partnership Interests, (ii) the difficulty of
predicting the resale market for low-income housing, (iii) the current economy,
and (iv) the ability of lenders to disapprove of transfer, it is not possible at
this time to predict when the liquidation of the Partnership's assets and the
disposition of the proceeds, if any, in accordance with the Partnership's
Agreement of Limited Partnership dated July 17, 2001 (the "Partnership
Agreement"), would occur. Furthermore, the recent codification of the
economic substance doctrine as part of 2010 legislation has created some
uncertainty about the deductibility of losses from low income housing that is
not generating Low Income Housing Tax Credits, and this could have an adverse
effect on the resale market for Housing Complexes and Local Limited Partnership
Interests. Until a Local Limited Partnership Interest or the related
Housing Complex is sold, it is anticipated that the Local General Partner would
continue to operate such Housing Complex. Notwithstanding the
preceding, circumstances beyond the control of the General Partner or the Local
General Partners may occur during the ten-year credit delivery period and/or the
Compliance Period, which would require the Partnership to approve the
disposition of a Housing Complex prior to the end thereof, possibly resulting in
recapture of Low Income Housing Tax Credits.
The
Partnership invested in six Local Limited Partnerships, none of which have been
sold or otherwise disposed of as of March 31, 2010, 2009, 2008, 2007, 2006, 2005
and 2004. Each of these Local Limited Partnerships owns a single
Housing Complex that is eligible for the Low Income Housing Tax
Credits. Certain Local Limited Partnerships may also benefit from
additional government programs promoting low- or moderate-income
housing.
Exit
Strategy
The
Compliance Period for a Housing Complex is generally 15 years following
construction or rehabilitation completion. Associates was one of the first in
the industry to offer syndicated investments in Low Income Housing Tax
Credits. The initial programs have completed their Compliance
Periods.
Upon the
sale of a Local Limited Partnership Interest or Housing Complex after the end of
the Compliance Period, there would be no recapture of Low Income Housing Tax
Credits. A sale prior to the end of the Compliance Period must
satisfy the “reasonable belief” test outlined above to avoid
recapture.
The
following table reflects the end of the ten-year credit delivery period and the
Compliance Period of each Housing Complex:
Local
Limited Partnership Name
|
Expected
last year of credit delivery
|
15-year
Compliance Period
|
Catoosa
Senior Village, L.P.
|
2013
|
2017
|
FDI-Green
Manor 2003, Ltd.
|
2014
|
2018
|
FDI-Pine
Meadows 2003, Ltd.
|
2014
|
2018
|
Humboldt
Village, L.P.
|
2014
|
2018
|
Melodie
Meadows Associates, Ltd.
|
2013
|
2017
|
Starlight
Place, L.P.
|
2015
|
2019
|
With that
in mind, the General Partner is continuing its review of the Housing
Complexes. The review considers many factors, including extended use
requirements (such as those due to mortgage restrictions or state compliance
agreements), the condition of the Housing Complexes, and the tax consequences to
the Limited Partners from the sale of the Housing Complexes.
4
Upon
identifying those Housing Complexes with the highest potential for a successful
sale, refinancing or re-syndication, the Partnership expects to proceed with
efforts to liquidate them. The objective is to wind down the Partnership as Low
Income Housing Tax Credits are no longer available. Local Limited
Partnership Interests may be disposed of any time by the General Partner in its
discretion. While liquidation of the Housing Complexes continues to be
evaluated, the dissolution of the Partnership was not imminent as of March 31,
2010.
The
proceeds from the disposition of any of the Housing Complexes will be used first
to pay debts and other obligations per the respective Local Limited Partnership
Agreement. Any remaining proceeds will then be paid to the partners
of the Local Limited Partnership, including the Partnership, in accordance with
the terms of the particular Local Limited Partnership Agreement. The sale of a
Housing Complex may be subject to other restrictions and
obligations. Accordingly, there can be no assurance that a Local
Limited Partnership will be able to sell its Housing Complex. Even if
it does so, there can be no assurance that any significant amounts of cash will
be distributed to the Partnership, as the proceeds first would be used to pay
Partnership obligations and funding of reserves.
Item
1A. Risk Factors
Set forth
below are the risks the Partnership believes are the most significant to the
Limited Partners. The Partnership and the Local Limited Partnerships
operate in a continually changing business environment and, therefore, new risks
emerge from time to time. This section contains some forward-looking
statements. For an explanation of the qualifications and limitations
on forward-looking statements, see Item 7.
(a) Risks
arising from the Internal Revenue Code rules governing Low Income Housing Tax
Credits
Low Income Housing Tax Credits might
not be available. If a Housing Complex does not satisfy the
requirements of Internal Revenue Code Section 42, then the Housing Complex will
not be eligible for Low Income Housing Tax Credits.
Low Income Housing Tax Credits might
be less than anticipated. The Local General Partners calculate
the amount of the Low Income Housing Tax Credits. No opinion of
counsel will cover the calculation of the amount of Low Income Housing Tax
Credits. The IRS could challenge the amount of the Low Income Housing
Tax Credits claimed for any Housing Complex under any of a number of provisions
set forth in Internal Revenue Code Section 42. A successful challenge
by the IRS would decrease the amount of the Low Income Housing Tax Credits from
the amount paid for by the Partnership.
Unless a bond is posted or a
Treasury Direct Account is established, Low Income Housing Tax Credits may be
recaptured if Housing Complexes are not owned and operated for 15
years. Housing Complexes must comply with Internal Revenue
Code Section 42 for the 15-year Compliance Period. Low Income Housing
Tax Credits will be recaptured with interest to the extent that a Housing
Complex is not rented as low income housing or in some other way does not
satisfy the requirements of Internal Revenue Code Section 42 during the
Compliance Period. For example, unless a bond is posted or a Treasury
Direct Account is established, recapture with interest would occur
if:
·
|
a
Local Limited Partnership disposed of its interest in a Housing Complex
during the Compliance Period, or
|
·
|
the
Partnership disposed of its interest in a Local Limited Partnership during
the Compliance Period.
|
For these
purposes, disposition includes transfer by way of foreclosure.
It will
be up to the Partnership to determine whether to post a bond. There
is no obligation under the agreements with the Local Limited Partnerships that
the Local Limited Partnerships must do so.
5
There can
be no assurance that recapture will not occur. If it does, recapture
will be a portion of all Low Income Housing Tax Credits taken in prior years for
that Housing Complex, plus interest. During the first 11 years of the
Compliance Period, non-compliance results in one-third of the Low Income Housing
Tax Credits up to that point for the particular Housing Complex being
recaptured, plus interest. Between years 12 and 15, the recapture is
phased out ratably.
Sales of Housing Complexes after 15
years are subject to limitations which may impact a Local Limited Partnership’s
ability to sell its Housing Complex. Each Local Limited
Partnership executes an extended low income housing commitment with the state in
which the Housing Complex is located. The extended low income housing
commitment states the number of years that the Local Limited Partnership and any
subsequent owners must rent the Housing Complex as low income
housing. Under Federal law, the commitment must be for at least 30
years. The commitment, actually agreed to, may be significantly
longer than 30 years. In prioritizing applicants for Low Income
Housing Tax Credits, most states give additional points for commitment periods
in excess of 30 years. On any sale of the Housing Complex during the
commitment period, the purchaser would have to agree to continue to rent the
Housing Complex as low income housing for the duration of the commitment
period. This requirement reduces the potential market, and possibly
the sales price, for the Housing Complexes. The sale of a Housing
Complex may be subject to other restrictions. For example, Federal
lenders or subsidizers may have the right to approve or disapprove a purchase of
a Housing Complex. Accordingly, there can be no assurance that a
Local Limited Partnership will be able to sell its Housing
Complex. Even if it does so, there can be no assurance that any
amount of cash will be distributed to the Limited Partners. The
Partnership would first use sale proceeds to pay obligations of the
Partnership. As a result, a material portion of the Low Income
Housing Tax Credits may represent a return of the money originally invested in
the Partnership.
As part
of the recently enacted health care legislation, Congress has codified the
economic substance doctrine. Because of its recent enactment, the full reach of
this provision is unclear. Inasmuch as Housing Complexes might offer
no benefit to a purchaser other than tax benefits, it is possible that the
economic substance doctrine could be interpreted to limit deduction of tax
losses from Housing Complexes, which would be expected to have a significant
adverse effect on the sale value of the Housing Complexes and the Local Limited
Partnership Interests.
Limited Partners can only use Low
Income Housing Tax Credits in limited amounts. The ability of
an individual or other non-corporate Limited Partner to claim Low Income Housing
Tax Credits on his individual tax return is limited. For example, an individual
Limited Partner can use Low Income Housing Tax Credits to reduce his tax
liability on:
·
|
an
unlimited amount of passive income, which is income from entities such as
the Partnership, and
|
·
|
$25,000
in income from other sources.
|
However,
the use of Low Income Housing Tax Credits by an individual against these types
of income is subject to ordering rules, which may further limit the use of Low
Income Housing Tax Credits. Some corporate Limited Partners are
subject to similar and other limitations. They include corporations which
provide personal services, and corporations which are owned by five or fewer
shareholders.
Any
portion of a Low Income Housing Tax Credit which is allowed to a Limited Partner
under such rules is then aggregated with all of the Limited Partner’s other
business credits. The aggregate is then subject to the general
limitation on all business credits. That limitation provides that a
Limited Partner can use business credits to offset the Limited Partner’s annual
tax liability equal to $25,000 plus 75% of the Limited Partner’s tax liability
in excess of $25,000. However, business credits may not be used to offset any
alternative minimum tax. All of these concepts are extremely
complicated.
6
(b) Risks
related to investment in Local Limited Partnerships and Housing
Complexes
Because the Partnership has few
investments, each investment will have a great impact on the Partnership’s
results of operations. Any single Housing Complex experiencing
poor operating performance, impairment of value or recapture of Low Income
Housing Tax Credits will have a significant impact upon the Partnership as a
whole.
The failure to pay mortgage debt
could result in a forced sale of a Housing Complex. Each Local Limited
Partnership leverages the Partnership’s investment therein by incurring mortgage
debt. A Local Limited Partnership’s revenues could be less than its
debt payments and taxes and other operating costs. If so, the Local
Limited Partnership would have to use working capital reserves, seek additional
funds, or suffer a forced sale of its Housing Complex, which could include a
foreclosure. The same results could occur if government subsidies
ceased. Foreclosure would result in a loss of the Partnership’s
capital invested in the Housing Complex. Foreclosure could also
result in a recapture of Low Income Housing Tax Credits, and a loss of Low
Income Housing Tax Credits for the year in which the foreclosure occurs. If the
Housing Complex is highly-leveraged, a relatively slight decrease in the rental
revenues could adversely affect the Local Limited Partnership’s ability to pay
its debt service requirements. Mortgage debt may be repayable in a
self-amortizing series of equal installments or with a large balloon final
payment. Balloon payments maturing prior to the end of the
anticipated holding period for the Housing Complex create the risk of a forced
sale if the debt cannot be refinanced. There can be no assurance that additional
funds will be available to any Local Limited Partnership if needed on acceptable
terms or at all.
The Partnership does not control the
Local Limited Partnerships and must rely on the Local General Partners.
The Local General Partners will make all management decisions for the Local
Limited Partnerships and the Housing Complexes. The Partnership has
very limited rights with respect to management of the Local Limited
Partnerships. The Partnership will not be able to exercise any control with
respect to Local Limited Partnership business decisions and operations.
Consequently, the success of the Partnership will depend on the abilities of the
Local General Partners.
Housing Complexes subsidized by
other government programs are subject to additional rules which may make it
difficult to operate and sell Housing Complexes. Some or all
of the Housing Complexes receive or may receive government financing or
operating subsidies in addition to Low Income Housing Tax
Credits. The following are risks associated with some such subsidy
programs:
·
|
Obtaining
tenants for the Housing Complexes. Government regulations limit
the types of people who can rent subsidized housing. These regulations may
make it more difficult to rent the residential units in the Housing
Complexes.
|
·
|
Obtaining
rent increases. In many cases rents can only be increased with
the prior approval of the subsidizing
agency.
|
·
|
Limitations
on cash distributions. The amount of cash that may be
distributed to owners of subsidized Housing Complexes is less than the
amount that could be earned by the owners of non-subsidized Housing
Complexes.
|
·
|
Limitations
on sale or refinancing of the Housing Complexes. A Local
Limited Partnership may be unable to sell its Housing Complex or to
refinance its mortgage loan without the prior approval of the lender. The
lender may withhold such approval in the discretion of the lender.
Approval may be subject to conditions, including the condition that the
purchaser continues to operate the property as affordable housing for
terms which could be as long as 30 years or more. In addition, any
prepayment of a mortgage may result in the assessment of a prepayment
penalty.
|
·
|
Limitations
on transfers of interests in Local Limited Partnerships. The
Partnership may be unable to sell its interest in a Local Limited
Partnership without the prior approval of the lender. The
lender may withhold such approval in the discretion of the
lender. Approval may be subject to
conditions.
|
7
·
|
Limitations
on removal and admission of Local General Partners. The
Partnership may be unable to remove a Local General Partner from a Local
Limited Partnership except for cause, such as the violation of the rules
of the lender or state allocating authority. Regulations may
prohibit the removal of a Local General Partner or permit removal only
with the prior approval of the lender. Regulations may also
require approval of the admission of a successor Local General Partner
even upon the death or other disability of a Local General
Partner.
|
·
|
Limitations
on subsidy payments. Subsidy payments may be fixed in amount and subject
to annual legislative appropriations. The rental revenues of a Housing
Complex, when combined with the maximum committed subsidy, may be
insufficient to meet obligations. Congress or the state legislature, as
the case may be, may fail to appropriate or increase the necessary
subsidy. In those events, the mortgage lender could foreclose
on the Housing Complex unless a workout arrangement could be
negotiated.
|
·
|
Possible
changes in applicable regulations. Legislation may be enacted
which adversely revises provisions of outstanding mortgage
loans. Such legislation has been enacted in the
past.
|
·
|
Limited
Partners may not receive distributions if Housing Complexes are
sold. There is no assurance that Limited Partners will receive
any cash distributions from the sale or refinancing of a Housing
Complex. The price at which a Housing Complex is sold may not
be high enough to pay the mortgage and other expenses at the Local Limited
Partnership and Partnerships levels which must be paid at such
time. If that happens, a Limited Partner’s return would be
derived only from the Low Income Housing Tax Credits and tax
losses.
|
Uninsured casualties could result in
losses and recapture. There are casualties which are either uninsurable
or not economically insurable. These include earthquakes, floods,
wars and losses relating to hazardous materials or environmental
matters. If a Housing Complex experienced an uninsured casualty, the
Partnership could lose both its invested capital and anticipated profits in such
property. Even if the casualty were an insured loss, the Local
Limited Partnership might be unable to rebuild the destroyed
property. A portion of prior tax credits could be recaptured and
future tax credits could be lost if the Housing Complex were not restored within
a reasonable period of time. And liability judgments against the
Local Limited Partnership could exceed available insurance proceeds or otherwise
materially and adversely affect the Local Limited Partnership. The cost of
liability and casualty insurance has increased in recent
years. Casualty insurance has become more difficult to obtain and may
require large deductible amounts.
Housing Complexes without financing
or operating subsidies may be unable to pay operating expenses. If a
Local Limited Partnership were unable to pay operating expenses, one result
could be a forced sale of its Housing Complex. If a forced sale
occurs during the Compliance Period of a Housing Complex, a partial recapture of
Low Income Housing Tax Credits could occur. In this regard, some of the Local
Limited Partnerships may own Housing Complexes which have no subsidies other
than Low Income Housing Tax Credits. Those Housing Complexes do not
have the benefit of below-market-interest-rate financing or operating subsidies
which often are important to the feasibility of low income
housing. Those Housing Complexes rely solely on rents to pay
expenses. However, in order for any Housing Complex to be eligible for Low
Income Housing Tax Credits, it must restrict the rent which may be charged to
tenants. Over time, the expenses of a Housing Complex will
increase. If a Local Limited Partnership cannot increase its rents,
it may be unable to pay increased operating expenses.
The Partnership’s investment
protection policies will be worthless if the net worth of the Local General
Partners is not sufficient to satisfy their obligations. There
is a risk that the Local General Partners will be unable to perform their
financial obligations to the Partnership. The General Partner has not
established a minimum net worth requirement for the Local General
Partners. Rather, each Local General Partner demonstrates a net worth
which the General Partner believes is appropriate under the circumstances. The
assets of the Local General Partners are likely to consist primarily of real
estate holdings and similar assets. The fair market value of these types of
assets is difficult to estimate. These types of assets cannot be readily
liquidated to satisfy the financial guarantees and commitments which the Local
General Partners make to the Partnership. Moreover, other creditors
may have claims on these assets. No escrow accounts or other security
arrangements will be established to ensure performance of a Local General
Partner’s obligations. The cost to enforce a Local General Partner’s obligations
may be high. If a Local General Partner does not satisfy its obligations the
Partnership may have no remedy, or the remedy may be limited to removing the
Local General Partner as general partner of the Local Limited
Partnership.
8
Fluctuating economic conditions can
reduce the value of real estate. The Partnership’s principal business
objective is providing its Limited Partners with Low Income Housing Tax Credits,
not the generation of gains from the appreciation of real estate held by the
Local Limited Partnerships. In its financial statements,
the Partnership has carried its investments in Local Limited Partnerships at
values equal to or less than the sum of the total amount of the remaining future
Low Income Housing Tax Credits estimated to be allocated to the Partnership and
the estimated residual value to the Partnership of its interests in the Local
Limited Partnerships.
Any
investment in real estate is subject to risks from fluctuating economic
conditions. These conditions can adversely affect the ability to realize a
profit or even to recover invested capital. Among these conditions
are:
·
|
the
general and local job market,
|
·
|
the
availability and cost of mortgage
financing,
|
·
|
monetary
inflation,
|
·
|
tax,
environmental, land use and zoning
policies,
|
·
|
the
supply of and demand for similar
properties,
|
·
|
neighborhood
conditions,
|
·
|
the
availability and cost of utilities and
water.
|
For each
of the years ended March 31, 2010, 2009, 2008, 2007, 2006, 2005 and 2004, a loss
in value of an investment in a Local Limited Partnership, other than a temporary
decline, is recorded by the Partnership in its financial statements as an
impairment loss. Impairment is measured by comparing the Partnership’s carrying
amount in the investment to the sum of the total amount of the remaining future
Low Income Housing Tax Credits estimated to be allocated to the Partnership and
the estimated residual value to the Partnership. For the years ended March 31,
2010, 2009, 2008, 2007, 2006, 2005 and 2004, impairment loss related to
investments in Local Limited Partnerships was $919,953, $1,519,347, $372,414,
$278,095, $0, $0 and $0, respectively.
(c) Tax
risks other than those relating to tax credits
In
addition to the risks pertaining specifically to Low Income Housing Tax Credits,
there are other Federal income tax risks. Additional Federal income
tax risks associated with the ownership of Partnership Units and the operations
of the Partnership and the Local Limited Partnerships include, but are not
limited to, the following:
No opinion of counsel as to certain
matters. No legal opinion is obtained regarding
matters:
·
|
the
determination of which depends on future factual
circumstances,
|
·
|
which
are peculiar to individual Limited Partners,
or
|
·
|
which
are not customarily the subject of an
opinion.
|
The more
significant of these matters include:
·
|
allocating
purchase price among components of a property, particularly as between
buildings and fixtures, the cost of which is depreciable, and the
underlying land, the cost of which is not
depreciable,
|
·
|
characterizing
expenses and payments made to or by the Partnership or a Local Limited
Partnership,
|
·
|
identifying
the portion of the costs of any Housing Complex which qualify for historic
and other tax credits,
|
·
|
applying
to any specific Limited Partner the limitation on the use of tax credits
and tax losses. Limited Partners must determine for themselves
the extent to which they can use tax credits and tax losses,
and
|
·
|
the
application of the alternative minimum tax to any specific Limited
Partner, or the calculation of the alternative minimum tax by any Limited
Partner. The alternative minimum tax could reduce the tax
benefits from an investment in the
Partnership.
|
9
There can
be no assurance, therefore, that the IRS will not challenge some of the tax
positions adopted by the Partnership. The courts could sustain an IRS
challenge. An IRS challenge, if successful, could have a detrimental
effect on the Partnership’s ability to realize its investment
objectives.
Passive activity rules will limit
deduction of the Partnership’s losses and impose tax on interest income.
The Internal Revenue Code imposes limits on the ability of
most investors to claim losses from investments in real estate. An
individual may claim these so-called passive losses only as an offset to income
from investments in real estate or rental activities. An individual
may not claim passive losses as an offset against other types of income, such as
salaries, wages, dividends and interest. These passive activity rules
will restrict the ability of most Limited Partners to use losses from the
Partnership as an offset of non-passive income.
The Partnership may earn interest
income on its reserves and loans. The passive activity rules
generally will categorize interest as portfolio income, and not passive income.
Passive losses cannot be used as an offset to portfolio
income. Consequently, a Limited Partner could pay tax liability on
portfolio income from the Partnership.
At risk rules might limit deduction
of the Partnership’s losses. If a significant portion of the
financing used to purchase Housing Complexes does not consist of qualified
nonrecourse financing, the “at risk” rules will limit a Limited Partner’s
ability to claim Partnership losses to the amount the Limited Partner invests in
the Partnership. The “at risk” rules of the Internal Revenue Code
generally limit a Limited Partner’s ability to deduct Partnership losses to the
sum of:
·
|
the
amount of cash the Limited Partner invests in the Partnership,
and
|
·
|
the
Limited Partner’s share of Partnership qualified nonrecourse
financing.
|
Qualified
nonrecourse financing is non-convertible, nonrecourse debt which is borrowed
from a government, or with exceptions, any person actively and regularly engaged
in the business of lending money.
Tax liability on sale of a Housing
Complex or Local Limited Partnership Interest may exceed the cash available from
the sale. When a Local Limited Partnership sells a Housing
Complex it will recognize gain. Such gain is equal to the difference
between:
·
|
the
sales proceeds plus the amount of indebtedness secured by the Housing
Complex, and
|
·
|
the
adjusted basis for the Housing Complex. The adjusted basis for a Housing
Complex is its original cost, plus capital expenditures, minus
depreciation.
|
Similarly,
when the Partnership sells an interest in a Local Limited Partnership the
Partnership will recognize gain. Such gain is equal to the difference
between:
·
|
the
sales proceeds plus the Partnership’s share of the amount of indebtedness
secured by the Housing Complex, and
|
·
|
the
adjusted basis for the interest. The adjusted basis for an
interest in a Local Limited Partnership is the amount paid for the
interest, plus income allocations and cash distributions, less loss
allocations.
|
Accordingly,
gain will be increased by the depreciation deductions taken during the holding
period for the Housing Complex. In some cases, a Limited Partner
could have a tax liability from a sale greater than the cash distributed to the
Limited Partner from the sale.
IRS could audit the returns of the
Partnership, the Local Limited Partnerships or the Limited Partners. The
IRS can audit the Partnership or a Local Limited Partnership at the entity level
with regard to issues affecting the entity. The IRS does not have to
audit each Limited Partner in order to challenge a position taken by the
Partnership or a Local Limited Partnership. Similarly, only one
judicial proceeding can be filed to contest an IRS determination. A
contest by the Partnership of any IRS determination might result in high legal
fees.
10
An audit of the Partnership or a
Local Limited Partnership also could result in an audit of a Limited
Partner. An audit of a Limited Partner’s tax returns could
result in adjustments both to items that are related to the Partnership and to
unrelated items. The Limited Partner could then be required to file
amended tax returns and pay additional tax plus interest and
penalties.
A successful IRS challenge to tax
allocations of the Partnership or a Local Limited Partnership would reduce the
tax benefits of an investment in the Partnership. Under the
Internal Revenue Code, a partnership’s allocation of income, gains, deductions,
losses and tax credits must have substantial economic
effect. Substantial economic effect is a highly-technical
concept. The fundamental principle is two-fold. If a
partner will benefit economically from an item of partnership income or gain,
that item must be allocated to him so that he bears the correlative tax
burden. Conversely, if a partner will suffer economically from an
item of partnership deduction or loss, that item must be allocated to him so
that he bears the correlative tax benefit. If a partnership’s
allocations do not have substantial economic effect, then the partnership’s tax
items are allocated in accordance with each partner’s interest in the
partnership. The IRS might challenge the allocations made by the
Partnership:
·
|
between
the Limited Partners and the General
Partner,
|
·
|
among
the Limited Partners, or
|
·
|
between
the Partnership and a Local General
Partner.
|
If any
allocations were successfully challenged, a greater share of the income or gain
or a lesser share of the losses or tax credits might be allocated to the Limited
Partners. This would increase the tax liability or reduce the tax
benefits to the Limited Partners.
Tax liabilities could arise in later
years of the Partnership. After a period of years following
commencement of operations by a Local Limited Partnership, the Local Limited
Partnership may generate profits rather than losses. A Limited
Partner would have tax liability on his share of such profits unless he could
offset the income with:
·
|
unused
passive losses from the Partnership or other investments,
or
|
·
|
current
passive losses from other
investments.
|
In such
circumstances, the Limited Partner would not receive a cash distribution from
the Partnership with which to pay any tax liability.
IRS challenge to tax treatment of
expenditures could reduce losses. The IRS may contend that fees and
payments of the Partnership or a Local Limited Partnership:
·
|
should
be deductible over a longer period of time or in a later
year,
|
·
|
are
excessive and may not be capitalized or deducted in
full,
|
·
|
should
be capitalized and not deducted, or
|
·
|
may
not be included as part of the basis for computing tax
credits.
|
Any such
contention by the IRS could adversely impact, among other things:
·
|
the
eligible basis of a Housing Complex used to compute Low Income Housing Tax
Credits,
|
·
|
the
adjusted basis of a Housing Complex used to compute
depreciation,
|
·
|
the
correct deduction of fees,
|
·
|
the
amortization of organization and offering expenses and start-up
expenditures.
|
If the
IRS were successful in any such contention, the anticipated Low Income Housing
Tax Credits and losses of the Partnership would be reduced, perhaps
substantially.
11
Changes in tax law might reduce the
value of Low Income Housing Tax Credits. Although all Low Income Housing
Tax Credits are allocated to a Housing Complex at commencement of the 10-year
credit period, there can be no assurance that future legislation may not
adversely affect an investment in the Partnership. For example, legislation
could reduce or eliminate the value of Low Income Housing Tax
Credits. In this regard, before 1986, the principal tax benefit of an
investment in low income housing was tax losses. These tax losses
generally were used to reduce an investor’s income from all sources on a
dollar-for-dollar basis. Investments in low income housing were made
in reliance on the availability of such tax benefits. However, tax
legislation enacted in 1986 severely curtailed deduction of such
losses.
New administrative or judicial
interpretations of the law might reduce the value of Low Income Housing Tax
Credits. Many of the provisions of the Internal Revenue Code
related to low income housing and real estate investments have not been
interpreted by the IRS in regulations, rulings or public announcements, or by
the courts. In the future, these provisions may be interpreted or
clarified by the IRS or the courts in a manner adverse to the Partnership or the
Local Limited Partnerships. The IRS constantly reviews the Federal
tax rules, and can revise its interpretations of established
concepts. Any such revisions could reduce or eliminate tax benefits
associated with an investment in the Partnership.
State income tax laws may adversely
affect the Limited Partners. A Limited Partner may be required
to file income tax returns and be subject to tax and withholding in each state
or local taxing jurisdiction in which: a Housing Complex is located, the
Partnership or a Local Limited Partnership engages in business activities, or
the Limited Partner is a resident. Corporate Limited Partners may be
required to pay state franchise taxes.
The tax treatment of particular
items under state or local income tax laws may vary materially from the Federal
income tax treatment of such items. Nonetheless, many of the
Federal income tax risks associated with an investment in the Partnership may
also apply under state or local income tax law. The Partnership may
be required to withhold state taxes from distributions or income allocations to
Limited Partners in some instances.
(d) Risks
related to the Partnership and the Partnership Agreement
The Partnership may be unable to
timely provide financial reports to the Limited Partners which would adversely
affect their ability to monitor Partnership
operations. Historically, the Partnership has been unable to
timely file and provide investors with all of its required periodic
reports. In some instances, the delay has been substantial. Each Local General
Partner is required to retain independent public accountants and to report
financial information to the Partnership in a timely manner. There
cannot be any assurance that the Local General Partners will satisfy these
obligations. If not, the Partnership would be unable to provide to
the Limited Partners in a timely manner its financial statements and other
reports. That would impact the Limited Partners’ ability to monitor
Partnership operations. The Partnership’s failure to meet its filing
requirements under the Securities Exchange Act of 1934 could reduce the
liquidity for the Partnership Units due to the unavailability of public
information concerning the Partnership. The failure to file could
also result in sanctions imposed by the SEC. Any defense mounted by
the Partnership in the face of such sanctions could entail legal and other fees,
which would diminish cash reserves.
Lack of liquidity of
investment. There is no public market for the purchase and
sale of Partnership Units, and it is unlikely that one will
develop. Accordingly, Limited Partners may not be able to sell their
Partnership Units promptly or at a reasonable price. Partnership
Units should be considered as a long-term investment because the Partnership is
unlikely to sell any Local Limited Partnership Interests for at least 15
years. Partnership Units cannot be transferred to tax-exempt or
foreign entities, or through a secondary market. The General Partner
can deny effectiveness of a transfer if necessary to avoid adverse tax
consequences from the transfer. The General Partner does not
anticipate that any Partnership Units will be redeemed by the
Partnership.
12
The Limited Partners will not
control the Partnership and must rely totally on the General
Partner. The General Partner will make all management
decisions for the Partnership. Management decisions include
exercising powers granted to the Partnership by a Local Limited
Partnership. Limited Partners have no right or power to take part in
Partnership management.
Individual
Limited Partners will have no recourse if they disagree with actions authorized
by a vote of the majority. The Partnership Agreement grants to
Limited Partners owning more than 50% of the Partnership Units the right
to:
·
|
remove
the General Partner and elect a replacement general
partner,
|
·
|
amend
the Partnership Agreement,
|
·
|
terminate
the Partnership.
|
Accordingly,
a majority-in-interest of the Limited Partners could cause any such events to
occur, even if Limited Partners owning 49% of the Partnership Units opposed such
action.
Limitations on liability of the
General Partner to the Partnership. The ability of Limited
Partners to sue the General Partner and it affiliates is subject to
limitations. The Partnership Agreement limits the liability of the
General Partner and it affiliates to the Limited Partners. The
General Partner and it affiliates will not be liable to the Limited Partners for
acts and omissions: performed or omitted in good faith, and performed or omitted
in a manner which the General Partner reasonably believed to be within the scope
of its authority and in the best interest of the Limited Partners, provided such
conduct did not constitute negligence or misconduct.
Therefore,
Limited Partners may be less able to sue the General Partner and it affiliates
than would be the case if such provisions were not included in the Partnership
Agreement.
Associates and its affiliates are
serving as the general partners of many other
partnerships. Depending on their corporate area of
responsibility, the officers of Associates initially devote approximately 5% to
50% of their time to the Partnership. These individuals spend
significantly less time devoted to the Partnership after the investment of the
Partnership’s capital in Local Limited Partnerships.
The interests of Limited Partners
may conflict with the interests of the General Partner and it
affiliates. The General Partner and it affiliates are
committed to the management of more than 100 other limited partnerships that
have investments similar to those of the Partnership. The General
Partner and it affiliates receive substantial compensation from the Partnership.
The General Partner decides how the Partnership’s investments in Housing
Complexes are managed, and when the investments will be sold. The General
Partner may face a conflict in these circumstances because the General Partner’s
share of fees and cash distributions from the transaction may be more or less
than their expected share of fees if a Housing Complex was not sold. The result
of these conflicts could be that the General Partner may make investments which
are less desirable, or on terms which are less favorable, to the Partnership
than might otherwise be the case. The Partnership has not developed any formal
process for resolving conflicts of interest. However, the General Partner is
subject to a fiduciary duty to exercise good faith and integrity in handling the
affairs of the Partnership, and that duty will govern its actions in all such
matters. Furthermore, the manner in which the Partnership can operate and sell
investments is subject to substantial restrictions as outlined in the
Partnership Agreement.
13
The
Partnership’s accrued payables consist primarily of the asset management fees
payable to the General Partner. These accrued payables increased by
$82,000, $72,000, $74,000, $81,000, $73,000, $62,000 and $27,000 for the years
ended March 31, 2010, 2009, 2008, 2007, 2006, 2005 and 2004,
respectively. The Partnership’s future contractual cash obligations
consist of its obligations to pay future annual asset management fees and the
payables due to the Local Limited Partnerships. The future annual
asset management fees will equal approximately $92,000 per year through the
termination of the Partnership, which must occur no later than December 31,
2062. Though the amounts payable to the General Partner and/or its
affiliates are contractually currently payable, the
Partnership anticipates that the General Partner and/or its
affiliates will not require the payment of these
contractual obligations until capital reserves are in excess of the
aggregate of the
existing contractual obligations and
anticipated future foreseeable obligations of the
Partnership. The Partnership would be adversely affected should the
General Partner and/or its affiliates demand current payment of the existing
contractual obligations and or suspend services for this or any other
reason.
Item
1B. Unresolved Staff Comments
Not
Applicable
Item
2. Properties
Through
its investments in Local Limited Partnerships, the Partnership holds indirect
ownership interests in the Housing Complexes. The following table
reflects the status of the six Housing Complexes as of the dates or for the
periods indicated:
14
As
of March 31, 2010
|
As
of December 31, 2009
|
|||||||
Local
Limited
Partnership
Name
|
Location
|
General
Partner Name
|
Partnership’s
Total Investment in Local Limited Partnership
|
Amount
of Investment Paid to Date
|
Number
of Units
|
Estimated
Aggregate
Low
Income Housing Tax Credits (1)
|
Mortgage
Balances of Local Limited Partnership
|
|
Catoosa
Senior Village, L.P.
|
Calhoun,
Georgia
|
BC
Holdings, LLC
|
$
1,997,000
|
$
1,997,000
|
60
|
$ 2,663,000
|
$
2,281,000
|
|
FDI-Green
Manor 2003, Ltd.
|
Hempstead,
Texas
|
Fieser
Holding, Inc.
|
617,000
|
613,000
|
40
|
839,000
|
1,118,000
|
|
FDI-Pine
Meadows 2003, Ltd.
|
Prairie
View, Texas
|
Fieser
Holdings, Inc.
|
668,000
|
668,000
|
59
|
906,000
|
1,045,000
|
|
Humboldt
Village, L.P.
|
Winnemucca,
Nevada
|
Humboldt
Village, LLC
|
1,713,000
|
1,713,000
|
66
|
2,351,000
|
2,311,000
|
|
Melodie
Meadows Associates, Ltd.
|
Glencoe,
Alabama
|
Eagle
Creek Partners
|
1,569,000
|
1,569,000
|
40
|
2,135,000
|
1,215,000
|
|
Starlight
Place, L.P.
|
Americus,
Georgia
|
BC
Holdings, LLC
|
3,258,000
|
3,258,000
|
52
|
4,402,000
|
369,000
|
|
$ 9,822,000
|
$ 9,818,000
|
317
|
$ 13,296,000
|
$
8,339,000
|
(1)
|
Represents
aggregate anticipated Low Income Housing Tax Credits to be received over
the 10 year credit period if Housing Complexes are retained and rented in
compliance with credit rules for the 15-year Compliance Period. Approximately 56%
of the anticipated Low Income Housing Tax Credits have been received from
the Local Limited Partnerships and are no longer available to the
Partnership’s Limited Partners.
|
|
15
For
the Year Ended December 31, 2009
|
||||
Local
Limited Partnership Name
|
Rental
Income
|
Net
Loss
|
Low
Income Housing Tax Credits Allocated to Partnership
|
|
Catoosa
Senior Village, L.P.
|
$
271,000
|
$
(101,000)
|
99.97%
|
|
FDI-Green
Manor 2003, Ltd
|
146,000
|
(44,000)
|
99.98%
|
|
FDI-Pine
Meadows 2003, Ltd.
|
266,000
|
(1,000)
|
99.98%
|
|
Humboldt
Village, L.P.
|
349,000
|
(81,000)
|
92.06%
|
|
Melodie
Meadows Associates, Ltd.
|
140,000
|
(62,000)
|
99.98%
|
|
Starlight
Place, L.P.
|
249,000
|
(106,000)
|
99.97%
|
|
$1,421,000
|
$ (395,000)
|
|||
16
As
of March 31, 2009
|
As
of December 31, 2008
|
|||||||
Local
Limited
Partnership
Name
|
Location
|
General
Partner Name
|
Partnership’s
Total Investment in Local Limited Partnership
|
Amount
of Investment Paid to Date
|
Number
of Units
|
Estimated
Aggregate
Low
Income Housing Tax Credits (1)
|
Mortgage
Balances of Local Limited Partnership
|
|
Catoosa
Senior Village, L.P.
|
Calhoun,
Georgia
|
BC
Holdings, LLC
|
$
1,997,000
|
$
1,997,000
|
60
|
$ 2,663,000
|
$
2,297,000
|
|
FDI-Green
Manor 2003, Ltd.
|
Hempstead,
Texas
|
Fieser
Holding, Inc.
|
617,000
|
613,000
|
40
|
839,000
|
1,132,000
|
|
FDI-Pine
Meadows 2003, Ltd.
|
Prairie
View, Texas
|
Fieser
Holdings, Inc.
|
668,000
|
668,000
|
59
|
906,000
|
1,061,000
|
|
Humboldt
Village, L.P.
|
Winnemucca,
Nevada
|
Humboldt
Village, LLC
|
1,713,000
|
1,713,000
|
66
|
2,351,000
|
2,332,000
|
|
Melodie
Meadows Associates, Ltd.
|
Glencoe,
Alabama
|
Eagle
Creek Partners
|
1,569,000
|
1,569,000
|
40
|
2,135,000
|
1,216,000
|
|
Starlight
Place, L.P.
|
Americus,
Georgia
|
BC
Holdings, LLC
|
3,258,000
|
3,258,000
|
52
|
4,402,000
|
371,000
|
|
$ 9,822,000
|
$ 9,818,000
|
317
|
$ 13,296,000
|
$8,409,000
|
(1)
|
Represents
aggregate anticipated Low Income Housing Tax Credits to be received over
the 10 year credit period if Housing Complexes are retained and rented in
compliance with credit rules for the 15-year Compliance Period. Approximately 46%
of the anticipated Low Income Housing Tax Credits have been received from
the Local Limited Partnerships and are no longer available to the
Partnership’s Limited Partners.
|
17
For
the Year Ended December 31, 2008
|
||||
Local
Limited Partnership Name
|
Rental
Income
|
Net
Loss
|
Low
Income Housing Tax Credits Allocated to Partnership
|
|
Catoosa
Senior Village, L.P.
|
$
250,000
|
$
(119,000)
|
99,97%
|
|
FDI-Green
Manor 2003, Ltd
|
161,000
|
(52,000)
|
99.98%
|
|
FDI-Pine
Meadows 2003, Ltd.
|
238,000
|
(17,000)
|
99.98%
|
|
Humboldt
Village, L.P.
|
362,000
|
(67,000)
|
92.06%
|
|
Melodie
Meadows Associates, Ltd.
|
135,000
|
(62,000)
|
99.98%
|
|
Starlight
Place, L.P.
|
236,000
|
(106,000)
|
99.97%
|
|
$ 1,382,000
|
$ (423,000)
|
|||
18
As
of March 31, 2008
|
As
of December 31, 2007
|
|||||||
Local
Limited
Partnership
Name
|
Location
|
General
Partner Name
|
Partnership’s
Total Investment in Local Limited Partnership
|
Amount
of Investment Paid to Date
|
Number
of Units
|
Estimated
Aggregate
Low
Income Housing Tax Credits (1)
|
Mortgage
Balances of Local Limited Partnership
|
|
Catoosa
Senior Village, L.P.
|
Calhoun,
Georgia
|
BC
Holdings, LLC
|
$
1,997,000
|
$
1,997,000
|
60
|
$ 2,663,000
|
$
2,313,000
|
|
FDI-Green
Manor 2003, Ltd.
|
Hempstead,
Texas
|
Fieser
Holding, Inc.
|
617,000
|
613,000
|
40
|
839,000
|
1,145,000
|
|
FDI-Pine
Meadows 2003, Ltd.
|
Prairie
View, Texas
|
Fieser
Holdings, Inc.
|
668,000
|
668,000
|
59
|
906,000
|
1,075,000
|
|
Humboldt
Village, L.P.
|
Winnemucca,
Nevada
|
Humboldt
Village, LLC
|
1,713,000
|
1,713,000
|
66
|
2,351,000
|
2,353,000
|
|
Melodie
Meadows Associates, Ltd.
|
Glencoe,
Alabama
|
Eagle
Creek Partners
|
1,569,000
|
1,569,000
|
40
|
2,135,000
|
1,223,000
|
|
Starlight
Place, L.P.
|
Americus,
Georgia
|
BC
Holdings, LLC
|
3,258,000
|
3,258,000
|
52
|
4,402,000
|
372,000
|
|
$ 9,822,000
|
$ 9,818,000
|
317
|
$ 13,296,000
|
$
8,481,000
|
(1)
|
Represents
aggregate anticipated Low Income Housing Tax Credits to be received over
the 10 year credit period if Housing Complexes are retained and rented in
compliance with credit rules for the 15-year Compliance Period. Approximately 36%
of the anticipated Low Income Housing Tax Credits have been received from
the Local Limited Partnerships and are no longer available to the
Partnership’s Limited Partners.
|
19
For
the Year Ended December 31, 2007
|
||||
Local
Limited Partnership Name
|
Rental
Income
|
Net
Income (Loss)
|
Low
Income Housing Tax Credits Allocated to Partnership
|
|
Catoosa
Senior Village, L.P.
|
$
241,000
|
$
(103,000)
|
99.97%
|
|
FDI-Green
Manor 2003, Ltd
|
137,000
|
(41,000)
|
99.98%
|
|
FDI-Pine
Meadows 2003, Ltd.
|
258,000
|
12,000
|
99.98%
|
|
Humboldt
Village, L.P.
|
360,000
|
(53,000)
|
92.06%
|
|
Melodie
Meadows Associates, Ltd.
|
127,000
|
(78,000)
|
99.98%
|
|
Starlight
Place, L.P.
|
230,000
|
(63,000)
|
99.97%
|
|
$1,353,000
|
$(326,000)
|
|||
20
As
of March 31, 2007
|
As
of December 31, 2006
|
|||||||
Local
Limited
Partnership
Name
|
Location
|
General
Partner Name
|
Partnership’s
Total Investment in Local Limited Partnership
|
Amount
of Investment Paid to Date
|
Number
of Units
|
Estimated
Aggregate
Low
Income Housing Tax Credits (1)
|
Mortgage
Balances of Local Limited Partnership
|
|
Catoosa
Senior Village, L.P.
|
Calhoun,
Georgia
|
BC
Holdings, LLC
|
$
1,997,000
|
$
1,997,000
|
60
|
$ 2,663,000
|
$
2,331,000
|
|
FDI-Green
Manor 2003, Ltd.
|
Hempstead,
Texas
|
Fieser
Holding, Inc.
|
617,000
|
613,000
|
40
|
839,000
|
1,158,000
|
|
FDI-Pine
Meadows 2003, Ltd.
|
Prairie
View, Texas
|
Fieser
Holdings, Inc.
|
668,000
|
668,000
|
59
|
906,000
|
1,089,000
|
|
Humboldt
Village, L.P.
|
Winnemucca,
Nevada
|
Humboldt
Village, LLC
|
1,713,000
|
1,713,000
|
66
|
2,351,000
|
2,376,000
|
|
Melodie
Meadows Associates, Ltd.
|
Glencoe,
Alabama
|
Eagle
Creek Partners
|
1,569,000
|
1,569,000
|
40
|
2,135,000
|
1,227,000
|
|
Starlight
Place, L.P.
|
Americus,
Georgia
|
BC
Holdings, LLC
|
3,258,000
|
3,258,000
|
52
|
4,402,000
|
374,000
|
|
$ 9,822,000
|
$ 9,818,000
|
317
|
$ 13,296,000
|
$
8,555,000
|
(1)
|
Represents
aggregate anticipated Low Income Housing Tax Credits to be received over
the 10 year credit period if Housing Complexes are retained and rented in
compliance with credit rules for the 15-year Compliance Period. Approximately 26%
of the anticipated Low Income Housing Tax Credits have been received from
the Local Limited Partnerships and are no longer available to the
Partnership’s Limited Partners.
|
|
21
For
the Year Ended December 31, 2006
|
||||
Local
Limited Partnership Name
|
Rental
Income
|
Net
Income (Loss)
|
Low
Income Housing Tax Credits Allocated to Partnership
|
|
Catoosa
Senior Village, L.P.
|
$
233,000
|
$
(127,000)
|
99.97%
|
|
FDI-Green
Manor 2003, Ltd
|
153,000
|
(12,000)
|
99.98%
|
|
FDI-Pine
Meadows 2003, Ltd.
|
252,000
|
25,000
|
99.98%
|
|
Humboldt
Village, L.P.
|
402,000
|
(9,000)
|
92.06%
|
|
Melodie
Meadows Associates, Ltd.
|
122,000
|
(74,000)
|
99.98%
|
|
Starlight
Place, L.P.
|
217,000
|
(133,000)
|
99.97%
|
|
$ 1,379,000
|
$ (330,000)
|
|||
22
As
of March 31, 2006
|
As
of December 31, 2005
|
|||||||
Local
Limited
Partnership
Name
|
Location
|
General
Partner Name
|
Partnership’s
Total Investment in Local Limited Partnership
|
Amount
of Investment Paid to Date
|
Number
of Units
|
Estimated
Aggregate
Low
Income Housing Tax Credits (1)
|
Mortgage
Balances of Local Limited Partnership
|
|
Catoosa
Senior Village, L.P.
|
Calhoun,
Georgia
|
BC
Holdings, LLC
|
$
1,997,000
|
$
1,997,000
|
60
|
$ 2,663,000
|
$
2,349,000
|
|
FDI-Green
Manor 2003, Ltd.
|
Hempstead,
Texas
|
Fieser
Holding, Inc.
|
617,000
|
534,000
|
40
|
839,000
|
1,169,000
|
|
FDI-Pine
Meadows 2003, Ltd.
|
Prairie
View, Texas
|
Fieser
Holdings, Inc.
|
668,000
|
668,000
|
59
|
906,000
|
1,101,000
|
|
Humboldt
Village, L.P.
|
Winnemucca,
Nevada
|
Humboldt
Village, LLC
|
1,713,000
|
1,713,000
|
66
|
2,351,000
|
2,396,000
|
|
Melodie
Meadows Associates, Ltd.
|
Glencoe,
Alabama
|
Eagle
Creek Partners
|
1,569,000
|
1,569,000
|
40
|
2,135,000
|
1,231,000
|
|
Starlight
Place, L.P.
|
Americus,
Georgia
|
BC
Holdings, LLC
|
3,258,000
|
3,258,000
|
52
|
4,402,000
|
375,000
|
|
$ 9,822,000
|
$ 9,739,000
|
317
|
$ 13,296,000
|
$
8,621,000
|
(1)
|
Represents
aggregate anticipated Low Income Housing Tax Credits to be received over
the 10 year credit period if Housing Complexes are retained and rented in
compliance with credit rules for the 15-year Compliance Period. Approximately 16%
of the anticipated Low Income Housing Tax Credits have been received from
the Local Limited Partnerships and are no longer available to the
Partnership’s Limited Partners.
|
23
For
the Year Ended December 31, 2005
|
||||
Local
Limited Partnership Name
|
Rental
Income
|
Net
Income (Loss)
|
Low
Income Housing Tax Credits Allocated to Partnership
|
|
Catoosa
Senior Village, L.P.
|
$
218,000
|
$
(121,000)
|
99.97%
|
|
FDI-Green
Manor 2003, Ltd
|
147,000
|
(49,000)
|
99.98%
|
|
FDI-Pine
Meadows 2003, Ltd.
|
247,000
|
(29,000)
|
99.98%
|
|
Humboldt
Village, L.P.
|
409,000
|
12,000
|
92.06%
|
|
Melodie
Meadows Associates, Ltd.
|
121,000
|
(74,000)
|
99.98%
|
|
Starlight
Place, L.P.
|
106,000
|
(94,000)
|
99.97%
|
|
$ 1,248,000
|
$ (355,000)
|
|||
24
As
of March 31, 2005
|
As
of December 31, 2004
|
|||||||
Local
Limited
Partnership
Name
|
Location
|
General
Partner Name
|
Partnership’s
Total Investment in Local Limited Partnership
|
Amount
of Investment Paid to Date
|
Number
of Units
|
Estimated
Aggregate
Low
Income Housing Tax Credits (1)
|
Mortgage
Balances of Local Limited Partnership
|
|
Catoosa
Senior Village, L.P.
|
Calhoun,
Georgia
|
BC
Holdings, LLC
|
$
1,997,000
|
$
1,997,000
|
60
|
$ 2,663,000
|
$
2,366,000
|
|
FDI-Green
Manor 2003, Ltd.
|
Hempstead,
Texas
|
Fieser
Holding, Inc.
|
617,000
|
408,000
|
40
|
839,000
|
1,179,000
|
|
FDI-Pine
Meadows 2003, Ltd.
|
Prairie
View, Texas
|
Fieser
Holdings, Inc.
|
687,000
|
567,000
|
59
|
906,000
|
1,112,000
|
|
Humboldt
Village, L.P.
|
Winnemucca,
Nevada
|
Humboldt
Village, LLC
|
1,739,000
|
1,579,000
|
66
|
2,351,000
|
2,414,000
|
|
Melodie
Meadows Associates, Ltd.
|
Glencoe,
Alabama
|
Eagle
Creek Partners
|
1,569,000
|
1,569,000
|
40
|
2,135,000
|
1,244,000
|
|
Starlight
Place, L.P.
|
Americus,
Georgia
|
BC
Holdings, LLC
|
3,258,000
|
3,114,000
|
52
|
4,402,000
|
-
|
|
$ 9,867,000
|
$ 9,234,000
|
317
|
$ 13,296,000
|
$
8,315,000
|
(1)
|
Represents
aggregate anticipated Low Income Housing Tax Credits to be received over
the 10 year credit period if Housing Complexes are retained and rented in
compliance with credit rules for the 15-year Compliance Period. Approximately 7%
of the anticipated Low Income Housing Tax Credits have been received from
the Local Limited Partnerships and are no longer available to the
Partnership’s Limited Partners.
|
25
For
the Year Ended December 31, 2004
|
||||
Local
Limited Partnership Name
|
Rental
Income
|
Net
Loss
|
Low
Income Housing Tax Credits Allocated to Partnership
|
|
Catoosa
Senior Village, L.P.
|
$
215,000
|
$
(115,000)
|
99.97%
|
|
FDI-Green
Manor 2003, Ltd
|
82,000
|
(11,000)
|
99.98%
|
|
FDI-Pine
Meadows 2003, Ltd.
|
126,000
|
(9,000)
|
99.98%
|
|
Humboldt
Village, L.P.
|
199,000
|
(14,000)
|
92.06%
|
|
Melodie
Meadows Associates, Ltd.
|
117,000
|
(66,000)
|
99.98%
|
|
Starlight
Place, L.P.
|
*
|
*
|
99.97%
|
|
$ 739,000
|
$ (215,000)
|
|||
*
As of December 31, 2004 the Local Limited Partnership was under
construction.
26
WNC
Housing Tax Credit Fund VI, L.P., Series 10
|
|||||||||||||
March
31, 2010, 2009, 2008, 2007, 2006 and 2005
|
|||||||||||||
Occupancy
Rates
As
of December 31,
|
|||||||||||||
Local
Limited
Partnership
Name
|
Location
|
General
Partner Name
|
2009
|
2008
|
2007
|
2006
|
2005
|
2004
|
2003
|
2002
|
|||
Catoosa
Senior Village, L.P.
|
Calhoun,
Georgia
|
BC
Holdings, LLC
|
90%
|
98%
|
93%
|
100%
|
97%
|
100%
|
100%
|
N/A
|
|||
FDI-Green
Manor 2003, Ltd.
|
Hempstead,
Texas
|
Fieser
Holding, Inc.
|
83%
|
100%
|
68%
|
93%
|
90%
|
90%
|
N/A
|
N/A
|
|||
FDI-Pine
Meadows 2003, Ltd.
|
Prairie
View, Texas
|
Fieser
Holdings, Inc.
|
90%
|
95%
|
95%
|
100%
|
95%
|
97%
|
N/A
|
N/A
|
|||
Humboldt
Village, L.P.
|
Winnemucca,
Nevada
|
Humboldt
Village, LLC
|
97%
|
92%
|
97%
|
97%
|
97%
|
89%
|
N/A
|
N/A
|
|||
Melodie
Meadows Associates, Ltd.
|
Glencoe,
Alabama
|
Eagle
Creek Partners
|
100%
|
100%
|
100%
|
100%
|
100%
|
98%
|
100%
|
N/A
|
|||
Starlight
Place, L.P.
|
Americus,
Georgia
|
BC
Holdings, LLC
|
100%
|
100%
|
98%
|
100%
|
96%
|
**
|
N/A
|
N/A
|
|||
93%
|
97%
|
93%
|
98%
|
96%
|
95%
|
100%
|
N/A
|
N/A - The
Local Limited Partnership had not acquired its limited partnership interest in
the Local Limited Partnership as of the respective year-end.
**As of
the respective year-end the Local Limited Partnership was under
construction.
27
Item
3. Legal Proceedings
NONE
Item
4. (Removed and Reserved)
PART
II.
Item
5. Market for Registrant’s Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
Item
5a.
a)
|
The
Partnership Units are not traded on a public exchange but were sold
through a public offering. It is not anticipated that any
public market will develop for the purchase and sale of any Partnership
Units and none exists. Partnership Units can be assigned or otherwise
transferred only if certain requirements in the Partnership Agreement are
satisfied.
|
b)
|
At
March 31, 2010, 2009, 2008, 2007, 2006 and 2005, there were 640, 639, 637,
636, 633 and 633 Limited Partners, respectively, and no assignees of
Partnership Units who were not admitted as Limited Partners,
respectively.
|
c)
|
The
Partnership was not designed to provide operating cash distributions to
Limited Partners. It is possible that the Partnership could
make distributions from sale proceeds, if the Partnership is able to sell
its Local Limited Partnership Interests or Housing Complexes for more than
the related closing costs and any then accrued obligations of the
Partnership. There can be no assurance in this
regard. Any distributions would be made in accordance with the
terms of the Partnership Agreement. For all periods presented
there were no cash distributions to the Limited
Partners.
|
d)
|
No
securities are authorized for issuance by the Partnership under equity
compensation plans.
|
e)
|
The
Partnership does not issue common
stock
|
f)
|
No
unregistered securities were sold by the Partnership during the years
ended March 31, 2010, 2009, 2008, 2007, 2006 and
2005.
|
Item
5b. Use of Proceeds
NOT
APPLICABLE
Item
5c. Purchases of Equity Securities by the Issuer and Affiliated
Purchasers
NONE
28
Item
6. Selected Financial Data
Selected
balance sheet information for the Partnership is as follows:
March
31,
|
||||||||||||||||
2010
|
2009
|
2008
|
2007
|
2006
|
2005
|
2004
|
2003
|
|||||||||
ASSETS
|
||||||||||||||||
Cash
|
$
|
234,454
|
$
|
245,020
|
$
|
261,019
|
$
|
289,760
|
$
|
395,940
|
$
|
913,526
|
$
|
6,649,763
|
$
|
1,100
|
Interest
receivable
|
-
|
-
|
-
|
-
|
-
|
-
|
108
|
-
|
||||||||
Investments
in Local Limited Partnerships, net
|
5,599,397
|
6,908,262
|
8,857,368
|
9,588,104
|
10,229,463
|
10,678,095
|
6,425,082
|
-
|
||||||||
Other
assets
|
6,300
|
6,300
|
6,300
|
6,300
|
6,300
|
6,300
|
-
|
-
|
||||||||
Total
Assets
|
$
|
5,840,151
|
$
|
7,159,582
|
$
|
9,124,687
|
$
|
9,884,164
|
$
|
10,631,703
|
$
|
11,597,921
|
$
|
13,074,953
|
$
|
1,100
|
LIABILITIES
|
||||||||||||||||
Payables
to Local Limited Partnerships
|
$
|
4,233
|
$
|
4,233
|
$
|
4,233
|
$
|
4,233
|
$
|
83,318
|
$
|
633,165
|
$
|
1,822,497
|
$
|
-
|
Accrued
fees and expenses due to General Partner and affiliates
|
477,993
|
390,253
|
320,804
|
260,783
|
192,515
|
98,701
|
29,535
|
-
|
||||||||
Total
Liabilities
|
482,226
|
394,486
|
325,037
|
265,016
|
275,833
|
731,866
|
1,852,032
|
-
|
||||||||
PARTNERS'
EQUITY (DEFICIT)
|
5,357,925
|
6,765,096
|
8,799,650
|
9,619,148
|
10,355,870
|
10,866,055
|
11,222,921
|
1,100
|
||||||||
Total
Liabilities and
Partners’
Equity (Deficit)
|
$
|
5,840,151
|
$
|
7,159,582
|
$
|
9,124,687
|
$
|
9,884,164
|
$
|
10,631,703
|
$
|
11,597,921
|
$
|
13,074,953
|
$
|
1,100
|
29
Selected
results of operations, cash flows and other information for the Partnership are
as follows:
For
the Years Ended March 31,
|
||||||||||||||||
2010
|
2009
|
2008
|
2007
|
2006
|
2005
|
2004
|
For
the period from February 28, 2003 (date operations commenced) to March 31,
2003
|
|||||||||
Loss from operations (Note
1)
|
$
|
(1,018,460)
|
$
|
(1,618,917)
|
$
|
(506,664)
|
$
|
(422,037)
|
$
|
(168,544)
|
$
|
(164,754)
|
$
|
(67,031)
|
$
|
-
|
Equity
in losses of Local Limited Partnerships
|
(388,912)
|
(417,148)
|
(321,968)
|
(329,048)
|
(356,838)
|
(251,203)
|
(128,146)
|
-
|
||||||||
Interest
income
|
201
|
1,511
|
9,134
|
14,363
|
15,197
|
26,776
|
6,203
|
-
|
||||||||
Net
loss
|
$
|
(1,407,171)
|
$
|
(2,034,554)
|
$
|
(819,498)
|
$
|
(736,722)
|
$
|
(510,185)
|
$
|
(389,181)
|
$
|
(188,974)
|
$
|
-
|
Net
loss allocated to:
|
||||||||||||||||
General Partner
|
$
|
(1,407)
|
$
|
(2,035)
|
$
|
(819)
|
$
|
(737)
|
$
|
(510)
|
$
|
(389)
|
$
|
(189)
|
$
|
-
|
Limited Partners
|
$
|
(1,405,764)
|
$
|
(2,032,519)
|
$
|
(818,679)
|
$
|
(735,985)
|
$
|
(509,675)
|
$
|
(388,792)
|
$
|
(188,785)
|
$
|
-
|
Net
loss per Partnership Unit
|
$
|
(106.88)
|
$
|
(154.53)
|
$
|
(62.24)
|
$
|
(55.96)
|
$
|
(38.75)
|
$
|
(29.56)
|
$
|
(22.97)
|
$
|
-
|
Outstanding
weighted Partnership Units
|
13,153
|
13,153
|
13,153
|
13,153
|
13,153
|
13,153
|
8,220
|
-
|
Note 1 - Loss from operations for the years ended March 31, 2010, 2009, 2008, 2007, 2006, 2005, and 2004 and for the period from February 28, 2003 (date operations commenced) to March 31, 2003, include a charge for impairment losses on investments in Local Limited Partnerships of $919,953, $1,519,347, $372,414, $278,095, $0, $0, $0 and $0, respectively (see Note 2 to the financial statements).
30
For
the Years Ended March 31,
|
||||||||||||||||
2010
|
2009
|
2008
|
2007
|
2006
|
2005
|
2004
|
For
the period from February 28, 2003 (date operations commenced) to March 31,
2003
|
|||||||||
Net
cash provided by (used in):
|
||||||||||||||||
Operating
activities
|
$
|
(10,566)
|
$
|
(20,696)
|
$
|
(33,439)
|
$
|
(27,095)
|
$
|
(17,637)
|
$
|
(33,108)
|
$
|
(7,273)
|
$
|
-
|
Investing
activities
|
-
|
4,697
|
4,698
|
(79,085)
|
(499,949)
|
(5,735,444)
|
(4,754,859)
|
-
|
||||||||
Financing
activities
|
-
|
-
|
-
|
-
|
-
|
32,315
|
11,410,795
|
-
|
||||||||
Net
change in cash
|
(10,566)
|
(15,999)
|
(28,741)
|
(106,180)
|
(517,586)
|
(5,736,237)
|
6,648,663
|
-
|
||||||||
Cash,
beginning of period
|
245,020
|
261,019
|
289,760
|
395,940
|
913,526
|
6,649,763
|
1,100
|
1,100
|
||||||||
Cash,
end of period
|
$
|
234,454
|
$
|
245,020
|
$
|
261,019
|
$
|
289,760
|
$
|
395,940
|
$
|
913,526
|
$
|
6,649,763
|
$
|
1,100
|
Low
Income Housing Tax Credits per Partnership Unit were as follows for the years
ended December 31:
2009
|
2008
|
2007
|
2006
|
2005
|
2004
|
2003
|
2002
|
|||||||||
Federal
|
$
|
101
|
$
|
101
|
$
|
99
|
$
|
102
|
$
|
85
|
$
|
54
|
$
|
20
|
$
|
-
|
State
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||
Total
|
$
|
101
|
$
|
101
|
$
|
99
|
$
|
102
|
$
|
85
|
$
|
54
|
$
|
20
|
$
|
-
|
31
Item
7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Forward
Looking Statements
With the
exception of the discussion regarding historical information, this “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and
other discussions elsewhere in this Form 10-K contain forward looking
statements. Such statements are based on current expectations subject
to uncertainties and other factors which may involve known and unknown risks
that could cause actual results of operations to differ materially from those
projected or implied. Further, certain forward-looking statements are
based upon assumptions about future events which may not prove to be
accurate.
Risks and
uncertainties inherent in forward looking statements include, but are not
limited to, the Partnership’s future cash flows and ability to obtain sufficient
financing, level of operating expenses, conditions in the Low Income Housing Tax
Credits property market and the economy in general, changes in law rules and
regulations, and legal proceedings. Historical results are not
necessarily indicative of the operating results for any future
period.
Subsequent
written and oral forward looking statements attributable to the Partnership or
persons acting on its behalf are expressly qualified in their entirety by
cautionary statements in this Form 10-K and in other reports filed with the
Securities and Exchange Commission. The following discussion should
be read in conjunction with the financial statements and the notes thereto
included elsewhere in this filing.
Critical
Accounting Policies and Certain Risks and Uncertainties
The
Partnership believes that the following discussion addresses the Partnership’s
most significant accounting policies, which are the most critical to aid in
fully understanding and evaluating the Partnership’s reported financial results,
and certain of the Partnership’s risks and uncertainties.
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could materially differ from those
estimates.
Method
of Accounting for Investments in Local Limited Partnerships
The
Partnership accounts for its investments in Local Limited Partnerships using the
equity method of accounting, whereby the Partnership adjusts its investment
balance for its share of the Local Limited Partnerships’ results of operations
and for any contributions made and distributions received. The Partnership
reviews the carrying amount of an individual investment in a Local Limited
Partnership for possible impairment whenever events or changes in circumstances
indicate that the carrying amount of such investment may not be
recoverable. Recoverability of such investment is measured by the
estimated value derived by management, generally consisting of the product of
the remaining future Low Income Housing Tax Credits estimated to be allocable to
the Partnership and the estimated residual value to the
Partnership. If an investment is considered to be impaired, the
Partnership reduces the carrying value of its investment in any such Local
Limited Partnership. The accounting policies of the Local Limited Partnerships,
generally, are expected to be consistent with those of the Partnership. Costs
incurred by the Partnership in acquiring the investments were capitalized as
part of the investment account and were being amortized over 30 years. (See
Notes 2 and 3 to the financial statements.)
32
“Equity
in losses of Local Limited Partnerships” for each year ended March 31 has been
recorded by the Partnership based on the twelve months of reported results
provided by the Local Limited Partnerships for each year ended December 31.
Equity in losses from the Local Limited Partnerships allocated to the
Partnership is not recognized to the extent that the investment balance would be
adjusted below zero. For the year ended March 31, 2005, as soon as
the investment balance reached zero, the related costs of acquiring the
investment were written off and included with equity in losses. For the years
ended March 31, 2010, 2009, 2008, 2007 and 2006, the intangibles were evaluated
for impairment as discussed in footnote 1 of the financial
statements.
Distributions
received from the Local Limited Partnerships are accounted for as a reduction of
the investment balance. Distributions received after the investment
has reached zero are recognized as distribution income. If the Local
Limited Partnerships report net income in future years, the Partnership will
resume applying the equity method only after its share of such net income equals
the share of net losses not recognized during the period(s) the equity method
was suspended.
In
accordance with the accounting guidance for the consolidation of variable
interest entities, the Partnership determines when it should include the assets,
liabilities, and activities of a variable interest entity (VIE) in its financial
statements, and when it should disclose information about its relationship with
a VIE. A VIE is a legal structure used to conduct activities or hold assets,
which must be consolidated by a company if it is the primary beneficiary because
it absorbs the majority of the entity's expected losses, the majority of the
expected returns, or both. Based on this guidance, the Local Limited
Partnerships in which the Partnership invests meet the definition of a
VIE. However, management does not consolidate the Partnership’s
interests in these VIEs under this guidance, as it is not considered to be the
primary beneficiary. The Partnership currently records the amount of
its investment in these partnerships as an asset on its balance sheet,
recognizes its share of partnership income or losses in the statements of
operations, and discloses how it accounts for material types of these
investments in its financial statements. The Partnership’s balance in investment
in Local Limited Partnerships, plus the risk of recapture of tax credits
previously recognized on these investments, represents its maximum exposure to
loss. The Partnership’s exposure to loss on these partnerships is
mitigated by the condition and financial performance of the underlying
properties as well as the strength of the local general partners and their
guarantee against credit recapture.
Income
Taxes
The
Partnership has elected to be treated as a pass-through entity for income tax
purposes and, as such, is not subject to income taxes. Rather, all items of
taxable income, deductions and tax credits are passed through to and are
reported by its owners on their respective income tax returns. The
Partnership’s federal tax status as a pass-through entity is based on its legal
status as a partnership. Accordingly, the Partnership is not required to take
any tax positions in order to qualify as a pass-through entity. The Partnership
is required to file and does file tax returns with the Internal Revenue Service
and other taxing authorities. Accordingly, these financial statements do not
reflect a provision for income taxes and the Partnership has no other tax
positions which must be considered for disclosure.
In
September 2006, the FASB issued accounting guidance for Fair Value Measurements,
which defines fair value, establishes a framework for measuring fair value and
expands disclosure about fair value measurements. This guidance is effective for
financial statements issued for fiscal years beginning after November 15, 2007
and shall be applied prospectively except for very limited
transactions. In February 2008, the FASB delayed for one year
implementation of the guidance as it pertains to certain non-financial assets
and liabilities. The Partnership adopted GAAP for Fair Value Measurements
effective April 1, 2008, except as it applies to those non-financial assets and
liabilities, for which the effective date was April 1, 2009. The Partnership has
determined that adoption of this guidance has no material impact on the
Partnership’s financial statements.
33
In
February 2007, the FASB issued accounting guidance for The Fair Value Option for
Financial Assets and Financial Liabilities. This guidance permits entities to
choose to measure many financial instruments and certain other items at fair
value. The fair value election is designed to improve financial
reporting by providing entities with the opportunity to mitigate volatility in
reported earnings caused by measuring related assets and liabilities differently
without having to apply complex hedge accounting provisions. It is effective for
fiscal years beginning after November 15, 2007. On April 1,
2008, the Partnership adopted GAAP for The Fair Value Option for Financial
Assets and Financial Liabilities and elected not to apply the provisions to its
eligible financial assets and financial liabilities on the date of adoption.
Accordingly, the initial application of the guidance had no effect on the
Partnership.
In
November 2008, the FASB issued accounting guidance on Equity Method Investment
Accounting Considerations that addresses how the initial carrying value of an
equity method investment should be determined, how an impairment assessment of
an underlying indefinite-lived intangible asset of an equity method investment
should be performed, how an equity method investee’s issuance of shares should
be accounted for, and how to account for a change in an investment from the
equity method to the cost method. This guidance is effective in fiscal years
beginning on or after December 15, 2008, and interim periods within
those fiscal years. The Partnership adopted the guidance for the interim
quarterly period beginning April 1, 2009. The impact of adopting it does not
have a material impact on the Partnership’s financial condition or results of
operations.
In April
2009, the FASB issued accounting guidance for Interim Disclosures about Fair
Value of Financial Instruments. This requires disclosure about the
method and significant assumptions used to establish the fair value of financial
instruments for interim reporting periods as well as annual
statements. It became effective for as of and for the interim period
ended June 30, 2009 and has no impact on the Partnership’s financial condition
or results of operations.
In May
2009, the FASB issued guidance regarding subsequent events, which was
subsequently updated in February 2010. This guidance established general
standards of accounting for and disclosure of events that occur after the
balance sheet date but before financial statements are issued or are available
to be issued. In particular, this guidance sets forth the period after the
balance sheet date during which management of a reporting entity should evaluate
events or transactions that may occur for potential recognition or disclosure in
the financial statements, the circumstances under which an entity should
recognize events or transactions occurring after the balance sheet date in its
financial statements, and the disclosures that an entity should make about
events or transactions that occurred after the balance sheet date. This guidance
was effective for financial statements issued for fiscal years and interim
periods ending after June 15, 2009, and was therefore adopted by the
Partnership for the quarter ended June 30, 2009. The adoption did not have a
significant impact on the subsequent events that the Partnership reports, either
through recognition or disclosure, in the financial statements. In February
2010, the FASB amended its guidance on subsequent events to remove the
requirement to disclose the date through which an entity has evaluated
subsequent events, alleviating conflicts with current SEC guidance. This
amendment was effective immediately and therefore the Partnership did not
include the disclosure in this Form 10-K.
In June
2009, the FASB issued an amendment to the accounting and disclosure requirements
for the consolidation of variable interest entities (VIEs). The amended
guidance modifies the consolidation model to one based on control and economics,
and replaces the current quantitative primary beneficiary analysis with a
qualitative analysis. The primary beneficiary of a VIE will be the entity that
has (1) the power to direct the activities of the VIE that most
significantly impact the VIE’s economic performance and (2) the obligation
to absorb losses or receive benefits that could potentially be significant to
the VIE. If multiple unrelated parties share such power, as defined, no
party will be required to consolidate the VIE. Further, the amended guidance
requires continual reconsideration of the primary beneficiary of a VIE and adds
an additional reconsideration event for determination of whether an entity is a
VIE. Additionally, the amendment requires enhanced and expanded
disclosures around VIEs. This amendment is effective for fiscal years
beginning after November 15, 2009. The adoption of this guidance on
April 1, 2010 is not expected to have a material effect on the Partnership’s
financial statements.
34
In June
2009, the FASB issued the Accounting Standards Codification
(Codification). Effective July 1, 2009, the Codification is the
single source of authoritative accounting principles recognized by the FASB to
be applied by non-governmental entities in the preparation of financial
statements in conformity with GAAP. The Codification is intended to
reorganize, rather than change, existing GAAP. Accordingly, all
references to currently existing GAAP have been removed and have been replaced
with plain English explanations of the Partnership’s accounting
policies. The adoption of the Codification did not have a material
impact on the Partnership’s financial position or results of
operations.
Certain
Risks and Uncertainties
See Item
1A for a discussion of risks regarding the Partnership.
To date,
certain Local Limited Partnerships have incurred significant operating losses
and have working capital deficiencies. In the event these Local
Limited Partnerships continue to incur significant operating losses, additional
capital contributions by the Partnership and/or the Local General Partners may
be required to sustain the operations of such Local Limited
Partnerships. If additional capital contributions are not made when
they are required, the Partnership’s investment in certain of such Local Limited
Partnerships could be lost, and the loss and recapture of the related Low Income
Housing Tax Credits could occur.
Financial
Condition
For
the year ended March 31, 2010
The
Partnership’s assets at March 31, 2010 consisted of $234,000 in cash and cash
equivalents, aggregate investments in 6 Local Limited Partnerships of $5,599,000
(See “Method of Accounting for Investments in Local Limited Partnerships”) and
$6,000 of other assets. Liabilities at March 31, 2010 consisted
of $478,000 of accrued fees and expenses due to General Partner and affiliates,
(See “Future Contractual Cash Obligations” below) and $4,000 of payables to
Local Limited Partnerships.
For
the year ended March 31, 2009
The
Partnership’s assets at March 31, 2009 consisted of $245,000 in cash and cash
equivalents, aggregate investments in 6 Local Limited Partnerships of $6,908,000
(See “Method of Accounting for Investments in Local Limited Partnerships”) and
$6,000 of other assets. Liabilities at March 31, 2009 consisted
of $390,000 of accrued fees and expenses due to General Partner and affiliates,
(See “Future Contractual Cash Obligations” below) and $4,000 of payables to
Local Limited Partnerships.
For
the year ended March 31, 2008
The
Partnership’s assets at March 31, 2008 consisted of $261,000 in cash and cash
equivalents, aggregate investments in 6 Local Limited Partnerships of $8,857,000
(See “Method of Accounting for Investments in Local Limited Partnerships”) and
$6,000 of other assets. Liabilities at March 31, 2008 consisted
of $321,000 of accrued fees and expenses due to General Partner and affiliates,
(See “Future Contractual Cash Obligations” below) and $4,000 of payables to
Local Limited Partnerships.
For
the year ended March 31, 2007
The
Partnership’s assets at March 31, 2007 consisted of $290,000 in cash, aggregate
investments in 6 Local Limited Partnerships of $9,588,000 (See “Method of
Accounting for Investments in Local Limited Partnerships”) and $6,000 of other
assets. Liabilities at March 31, 2007 consisted of $261,000 of
accrued fees and expenses due to General Partner and affiliates, (See “Future
Contractual Cash Obligations” below) and $4,000 of payables to Local Limited
Partnerships.
35
For
the year ended March 31, 2006
The
Partnership’s assets at March 31, 2006 consisted of $396,000 in cash, aggregate
investments in 6 Local Limited Partnerships of $10,229,000 (See “Method of
Accounting for Investments in Local Limited Partnerships”) and $6,000 of other
assets. Liabilities at March 31, 2006 consisted of $193,000 of
accrued fees and expenses due to General Partner and affiliates, (See “Future
Contractual Cash Obligations” below) and $83,000 of payables to Local Limited
Partnerships.
For
the year ended March 31, 2005
The
Partnership’s assets at March 31, 2005 consisted of $914,000 in cash, aggregate
investments in 6 Local Limited Partnerships of $10,678,000 (See “Method of
Accounting for Investments in Local Limited Partnerships”) and $6,000 of other
assets. Liabilities at March 31, 2005 consisted of $99,000 of
accrued fees and expenses due to General Partner and affiliates, (See “Future
Contractual Cash Obligations” below) and $633,000 of payables to Local Limited
Partnerships.
Results
of Operations
Year Ended March 31, 2010 Compared to
Year Ended March 31, 2009 The Partnership’s net loss for the
year ended March 31, 2010 was $(1,407,000), reflecting a decrease of $627,000
from the net loss experienced for the year ended March 31, 2009 of $(2,034,000).
That decrease in net loss was largely due to a decrease of $599,000 in
impairment loss for the year ended March 31, 2010 compared to the year ended
March 31, 2009. The impairment loss can vary each year
depending on the annual decrease in Low Income Housing Tax Credits allocated to
the Partnership compared to the current net investment balance that is being
carried for the particular Local Limited Partnerships. For the year
ended March 31, 2010, all Local Limited Partnerships were not considered to have
any residual value in consideration of the economic conditions. The amortization
decreased by $8,000, due to the fact that the intangibles were impaired to zero
as of March 31, 2009, therefore no further amortization could be
recorded. Reporting fees decreased by $(5,000) for the year ended
March 31, 2010 due to the fact that Local Limited Partnerships pay the reporting
fees to the Partnership when the Local Limited Partnerships’ cash flow will
allow for the payment. There was also a $28,000 decrease in equity in
losses of Local Limited Partnerships. The equity in losses can vary
from year to year depending on the operations of the underlying Housing
Complexes of the Local Limited Partnerships. Interest income
decreased by $(1,000) due to the fact that interest rates declined for the year
ended March 31, 2010 compared to the year ended March 31, 2009.
Year Ended March 31, 2009 Compared to
Year Ended March 31, 2008 The Partnership’s net loss for the
year ended March 31, 2009 was $(2,034,000), reflecting an increase of
$(1,215,000) from the net loss experienced for the year ended March 31, 2008 of
$(819,000). The increase in net loss was largely due to an increase of
$(1,147,000) in impairment loss for the year ended March 31, 2009 compared to
the year ended March 31, 2008. For the year ended March 31, 2008 the
impairment analysis calculated any residual value to the Partnership in addition
to the remaining Low Income Housing Tax Credits available to the Partnership and
compared that to the current carrying value of each investment to the
Partnership. For the year ended March 31, 2009 all Local Limited Partnerships
were not considered to have any residual value in consideration of the economic
conditions. The intangibles are also evaluated for impairment in connection with
the Partnership’s investments in Local Limited
Partnerships. Impairment loss included $797,000 of impairment related
to the intangibles for the year ended March 31, 2009 while no such loss was
recorded against the intangibles during the year ended March 31, 2008. The
impairment of the intangibles also caused the amortization to decrease by
$24,000 as the intangibles were fully impairment as of June 30, 2008 and no
further amortization could be recorded for the remainder of the
year. The accounting and legal fees decreased by $10,000 for
the year ended March 31, 2009 compared to the year ended March 31, 2008 due to
the timing of the accounting work performed. Reporting fees increased
by $1,000 for the year ended March 31, 2009 due to the fact that Local Limited
Partnerships pay the reporting fees to the Partnership when the Local Limited
Partnerships’ cash flow will allow for the payment. There was also a
$(95,000) increase in equity in losses of Local Limited
Partnerships. The equity in losses of Local Limited Partnerships can
vary each year depending on the operations of the underlying Housing Complexes
of the Local Limited Partnerships. Interest income decreased by
$(7,000) for the year ended March 31, 2009 due to the fact that interest rates
declined significantly for the year ended March 31, 2009 compared to the year
ended March 31, 2008.
36
Year Ended March 31, 2008 Compared to
Year Ended March 31, 2007 The Partnership’s net loss for the
year ended March 31, 2008 was $(819,000), reflecting an increase of $(82,000)
from the net loss experienced for the year ended March 31, 2007 of
$(737,000). There was a $(94,000) increase in impairment loss for the
year ended March 31, 2008 compared to the year ended March 31,
2007. The impairment loss can vary each year depending on the
annual decrease in Low Income Housing Tax Credits allocated to the Partnership
and the current estimated residual value to the Partnership compared to the
current carrying value of each of the investments to the
Partnership. The amortization decreased by $3,000, due to the fact
that the Partnership evaluates its intangibles for impairment in connection with
its investments in Local Limited Partnerships. As impairment is recorded against
the intangibles, the amortization expense for future periods is
decreased. For the year ended March 31, 2007, the Partnership
recorded impairment against the intangibles of approximately $278,000 as
compared to $0 for the year ended March 31, 2008; thereby reducing the
amortization expense recorded for the subsequent quarters. There was
also a $2,000 decrease in accounting and legal fees for the year ended March 31,
2008 compared to the year ended March 31, 2007 due to the timing of the
accounting work performed. Reporting fees increased by $4,000 for the
year ended March 31, 2008 due to the fact that Local Limited Partnerships pay
the reporting fees to the Partnership when the Local Limited Partnerships’ cash
flow will allow for the payment. There was also a $7,000 decrease in
equity in losses of Local Limited Partnerships for the year ended March 31,
2008. The equity in losses can vary each year depending on the
operations of the underlying Housing Complexes of the Local Limited
Partnerships. Interest income decreased by $(5,000) due to the
fact that interest rates and the cash balances being maintained by the
Partnership declined significantly for the year ended March 31, 2008 compared to
the year ended March 31, 2007.
Year Ended March 31, 2007 Compared to
Year Ended March 31, 2006 The Partnership’s net loss for the
year ended March 31, 2007 was $(737,000), reflecting an increase of $(227,000)
from the net loss experienced for the year ended March 31, 2006 of $(510,000).
The increase in net loss was partially due to an increase of $(278,000) in
impairment loss for the year ended March 31, 2007 compared to the year ended
March 31, 2006. The impairment loss can vary each year
depending on the annual decrease in Low Income Housing Tax Credits allocated to
the Partnership and the current estimated residual value to the Partnership
compared to the current carrying value of each of the investments to the
Partnership. The amortization decreased by $8,000 due to the fact
that the Partnership evaluates its intangibles for impairment in connection with
its investments in Local Limited Partnerships. As impairment is recorded against
the intangibles, the amortization expense for future periods is
decreased. For the year ended March 31, 2007, the Partnership
recorded impairment against the intangibles of approximately $278,000 thereby
reducing the amortization expense recorded for the subsequent
quarters. The accounting and legal fees decreased by $12,000 for the
year ended March 31, 2007 compared to the year ended March 31, 2006 due to the
timing of the accounting work performed. Reporting fees decreased by
$(1,000) for the year ended March 31, 2007 due to the fact that Local Limited
Partnerships pay the reporting fees to the Partnership when the Local Limited
Partnerships’ cash flow will allow for the payment. There was a
$28,000 decrease of equity in losses of Local Limited
Partnerships. The equity in losses can vary each year depending on
the operations of the underlying Housing Complexes of the Local Limited
Partnerships. The asset management expenses decreased by $5,000
for the year ended March 31, 2007 due to the timing of the necessary property
inspections.
Year Ended March 31, 2006 Compared to
Year Ended March 31, 2005. The Partnership’s net loss for the year ended
March 31, 2006 was $(510,000), reflecting an increase of $(121,000) from the net
loss of $(389,000) experienced for the year ended March 31, 2005. The equity in
losses increased by $(106,000)for the year ended March 31, 2006. The equity in
losses can vary each year depending on the operations of the underlying Housing
Complexes of the Local Limited Partnerships. Also, during the
year ended March 31, 2005 several of the Local Limited Partnerships were still
leasing up and being acquired by the Partnership, therefore losses were lower
than the year ended March 31, 2006. The accounting and legal fees
decreased by $4,000 for the year ended March 31, 2006 compared to the year ended
March 31, 2005 due to the timing of the accounting work
performed. The asset management fees increased by $(15,000) for
the year ended March 31, 2006 as not all Local Limited Partnerships had been
acquired as of March 31, 2005. The asset management fees are
calculated based on invested assets, which is comprised of the equity
contributed by the Partnership and the mortgage payable. The asset
management expenses decreased by $4,000 for the year ended March 31, 2006 due to
the timing of the necessary property inspections. Reporting fees
increased by $3,000 for the year ended March 31, 2006 due to the fact that Local
Limited Partnerships pay the reporting fees to the Partnership when the Local
Limited Partnerships’ cash flow will allow for the payment. Interest
income decreased by $(12,000) due to the fact that the cash balances being
maintained by the Partnership declined significantly for the year ended March
31, 2006 compared to the year ended March 31, 2005.
37
Year
Ended March 31, 2005 Compared to Period Ended March 31, 2004 The
Partnership’s net loss for the year ended March 31, 2005 was $(389,000),
reflecting an increase of $(200,000) from the net loss of $(189,000) experienced
for the year ended March 31, 2004. The increase in net loss is
largely due to an increase in equity in losses of Local Limited Partnerships of
$(123,000) for the year ended March 31, 2005 compared to the year ended March
31, 2004. The equity in losses can vary based on the operations of the
underlying Housing Complexes of the Local Limited Partnerships. There was a
$(50,000) increase in asset management fees as not all Local Limited
Partnerships had been acquired as of March 31, 2004. The asset
management fees are calculated based on invested assets, which is comprised of
the equity contributed by the Partnership and the mortgage payable. There
was an $(18,000) increase in amortization of acquisition fees and costs due to
the fact that some fees were capitalized during the year ended March 31, 2004
and therefore a full year of amortization was not recorded for those assets.
There was also a $(21,000) increase in accounting and legal expenses due to the timing of the
accounting work performed. Asset management expenses also increased by
$(7,000) due to the
timing of the necessary property inspections. There was a $21,000
increase in interest income which was due to the fact that the
average cash balances being maintained by the Partnership increased for the year
ended March 31, 2005 compared to the year ended March 31,
2004.
Year Ended March 31, 2004 Compared to
Period Ended March 31, 2003. The Partnership commenced
operations on February 28, 2003. Therefore, as of March 31, 2003, the
Partnership had not accepted subscriptions for any Units nor made any
investments in Local Limited Partnerships. As a result there were no operations
for the period ended March 31, 2003. In addition, there were no Low Income
Housing Credits available for allocation to the partners. The two periods are
not comparable as there was no operations during the period ended March 31,
2003.
Liquidity
and Capital Resources
Year Ended March 31, 2010 Compared to
Year Ended March 31, 2009 The net decrease in cash and
cash equivalents during the year ended March 31, 2010 was $(11,000) compared to
a net decrease in cash and cash equivalents for the year ended March 31, 2009 of
$(16,000). The net change was partially due to the Partnership paying accrued
asset management fees of $10,000 during the year ended March 31, 2010 compared
to $20,000 paid during the year ended March 31, 2009. For the year
ended March 31, 2010 the Partnership reimbursed the General Partner or an
affiliate $2,000 for operating expenses paid on its behalf compared to $9,000
reimbursed during the year ended March 31, 2009. The accrued asset
management fees and reimbursement of operating expenses are paid after
management reviews the cash position of the Partnership. The
Partnership also collected $5,000 more in both reporting fees and distributions
for the year ended March 31, 2009 compared to the year ended March 31, 2010 due
to the fact that Local Limited Partnerships pay the reporting fees and
distributions to the Partnership when the Local Limited Partnerships’ cash flow
will allow for the payment.
Year Ended March 31, 2009 Compared to
Year Ended March 31, 2008 The net decrease in cash and cash
equivalents during the year ended March 31, 2009 was $(16,000) compared to a net
decrease in cash and cash equivalents for the year ended March 31, 2008 of
$(29,000). The Partnership reimbursed the General Partner of
affiliate $22,000 less for operating expenses paid on its behalf during the year
ended March 31, 2009 and paid $3,000 more in accrued asset management
fees. The accrued asset management fees and reimbursement of
operating expenses are paid after management reviews the cash position of the
Partnership. The Partnership received $1,000 more in reporting fees
for the year ended March 31, 2009, due to the fact that Local Limited
Partnerships pay the reporting fees to the Partnership when the Local Limited
Partnerships’ cash flow will allow for the payment. Additionally, the
Partnership received $7,000 less interest income during the year ended March 31,
2009 due to the fact that interest rates decreased
significantly.
38
Year Ended March 31, 2008 Compared to
Year Ended March 31, 2007 The net decrease in cash and cash
equivalents during the year ended March 31, 2008 was $(29,000) compared to a net
decrease in cash and cash equivalents for the year ended March 31, 2007 of
$(106,000). During the year ended March 31, 2007 the Partnership paid
capital contributions to Local Limited Partnerships in the amount of $79,000
compared to no capital contributions being paid during the year ended March 31,
2008. Certain benchmarks must be met by the Local Limited Partnership
in order for capital contributions to be paid. The Partnership paid
accrued asset management fees of $17,000 during the year ended March 31, 2008
compared to $11,000 paid during the year ended March 31, 2007. The Partnership
also reimbursed the General Partner or affiliate $1,000 less of operating
expenses paid on its behalf during the year ended March 31, 2008. The
accrued asset management fees and reimbursement of operating expenses are paid
after management reviews the cash position of the Partnership. The
Partnership received $4,000 more in reporting fees and $5,000 more in
distributions from Local Limited Partnerships during the year ended March 31,
2008 due to the fact that Local Limited Partnerships pay the reporting fees and
distributions to the Partnership when the Local Limited Partnerships’ cash flow
will allow for the payment. Additionally, the Partnership received $5,000 less
interest income during the year ended March 31, 2008 due to the fact that
interest rates decreased.
Year Ended March 31, 2007 Compared to
Year Ended March 31, 2006 The net decrease in cash and cash equivalents
during the year ended March 31, 2007 was $(106,000) compared to a net decrease
in cash and cash equivalents for the year ended March 31, 2006 of
$(518,000). During the year ended March 31, 2007 the Partnership paid
capital contributions to Local Limited Partnerships in the amount of $79,000
compared to $505,000 paid during the year ended March 31,
2006. Certain benchmarks must be met by the Local Limited Partnership
in order for capital contributions to be paid. The Partnership paid
accrued asset management fees of $11,000 for the year ended March 31, 2007
compared to $19,000 paid for the year ended March 31, 2006. The Partnership
reimbursed the General Partner or an affiliate $6,000 more for operating
expenses paid on its behalf during the year ended March 31, 2007. The
accrued asset management fees and reimbursement of operating expenses are paid
after management reviews the cash position of the Partnership. The
Partnership received $(1,000) less in reporting fees and $(5,000) less in
distributions from Local Limited Partnerships for the year ended March 31, 2007,
due to the fact that Local Limited Partnerships pay the reporting fees and
distribution income to the Partnership when the Local Limited Partnerships’ cash
flow will allow for the payment.
Year Ended March 31, 2006 Compared to
Year Ended March 31, 2005. Net cash and cash equivalents used during the
year ended March 31, 2006 was $(518,000) compared to net cash and cash
equivalents used during year ended March 31, 2005 of $(5,736,000). During the
year ended March 31, 2005 the Partnership received the final subscription
payment of $36,000, therefore no such payments were received during the year
ended March 31, 2006. During the year ended March 31, 2006 the Partnership paid
capital contributions to Local Limited Partnerships in the amount of $505,000
compared to $5,735,000 paid during the year ended March 31,
2006. Certain benchmarks must be met by the Local Limited Partnership
in order for capital contributions to be paid. The Partnership also
paid accrued asset management fees of $19,000 during the year ended March 31,
2006 compared to $15,000 paid during the year ended March 31, 2005. The
Partnership also reimbursed the General Partner of affiliate $20,000 less in
operating expenses paid on its behalf during the year ended March 31,
2006. The accrued asset management fees and reimbursement of
operating expenses are paid after management reviews the cash position of the
Partnership. The Partnership received $3,000 more in reporting fees
from Local Limited Partnerships for the year ended March 31, 2006 and $(5,000)
more in distributions from the Local Limited Partnerships. The
reporting fees and distributions are paid to the Partnership when the Local
Limited Partnership's’ cash flow will allow for the payment.
39
Year Ended March 31, 2005 Compared to
Period Ended March 31, 2004 Net cash and cash equivalents used during the
year ended March 31, 2005 was $(5,736,000), compared to net cash and cash
equivalents provided for the year ended March 31, 2004 of $6,649,000. During the
year ended March 31, 2004 the Partnership was selling Partnership Units and had
collected $13,083,000 in cash for subscriptions compared to only the final
payment of $36,000 that was received during the year ended March 31,
2005. As of March 31, 2004 the selling of Partnership Units had
concluded. The Partnership paid organization and offering costs and
fees to the General Partner or an affiliate in the amount of $1,257,000 during
the year ended March 31, 2004. These costs are earned and paid as Partnership
Units are sold, therefore, the final $4,000 was paid during the year ended March
31, 2005. During the year end March 31, 2004 the Partnership paid
capital contributions to Local Limited Partnerships in the amount of
$(3,498,000) compared to $(5,735,000) paid during the year ended March 31,
2005. Capital contributions are paid to Local Limited Partnerships
when certain benchmarks are met. The Partnership paid accrued asset management
fees of $15,000 for the year ended March 31, 2005 compared to no asset
management fees being paid for the year ended March 31, 2004. The Partnership
reimbursed the General Partner or an affiliate $32,000 more for operating
expenses paid on its behalf during the year ended March 31, 2005. The
accrued asset management fees and reimbursement of operating expenses are paid
after management reviews the cash position of the Partnership.
Year Ended March 31, 2004 Compared to
Period Ended March 31, 2003. The Partnership had no cash flows
from operating or investing activities for the period ended March 31,
2003. As such, the two periods are not comparable.
The
Partnership currently has insufficient working capital to fund its operations.
Associates has agreed to continue providing advances sufficient enough to fund
the operations and working capital requirements of the Partnership through May
31, 2012.
40
Future Contractual Cash Obligations
The
following table summarizes the Partnership’s future contractual cash obligations
as of March 31, 2010:
2011
|
2012
|
2013
|
2014
|
2015
|
There
after
|
Total
|
||||||||
Asset
management fees(1)
|
$
|
569,893
|
$
|
91,900
|
$
|
91,900
|
$
|
91,900
|
$
|
91,900
|
$
|
4,319,300
|
$
|
5,256,793
|
Capital
contribution payable
|
|
4,233
|
-
|
-
|
-
|
-
|
-
|
4,233
|
||||||
Total
contractual cash obligations
|
$
|
574,126
|
$
|
91,900
|
$
|
91,900
|
$
|
91,900
|
$
|
91,900
|
$
|
4,319,300
|
$
|
5,261,026
|
(1)
|
Asset
management fees are payable annually until termination of the Partnership,
which is to occur no later than December 31, 2062. The estimate of the
fees payable included herein assumes the retention of the Partnership’s
interest in all Housing Complexes until December 31, 2062. Amounts due to
the General Partner as of March 31, 2010 have been included in the 2011
column. The General Partner does not anticipate that these fees
will be paid until such time as capital reserves are in excess of the
aggregate of the existing contractual obligations and the anticipated
future foreseeable obligations of the
Partnership.
|
For
additional information regarding our asset management fees, see Note 3 to the
financial statements included elsewhere herein.
Off-Balance
Sheet Arrangements
The
Partnership has no off-balance sheet arrangements.
Exit
Strategy
See Item
1 for information in this regard.
Impact
of Recent Accounting Pronouncements
See
footnote 1 to the audited financial statements.
Item
7A. Quantitative and Qualitative Disclosures Above Market
Risk
NOT
APPLICABLE
Item
8. Financial Statements and Supplementary Data
41
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Partners
WNC
Housing Tax Credit Fund VI, L.P., Series 10
We have
audited the accompanying balance sheets of WNC Housing Tax Credit Fund VI, L.P.,
Series 10 (a California Limited Partnership) (the Partnership) as of March 31,
2010, 2009, 2008, 2007, 2006, 2005 and 2004, and the related statements of
operations, partners’ equity (deficit) and cash flows for each of the years in
the seven-year period ended March 31, 2010. The Partnership’s management is
responsible for these financial statements. Our responsibility is to express an
opinion on these financial statements based on our audits. We did not audit the
financial statements of certain local limited partnerships for which investments
represent $3,333,361, $4,018,961, $2,967,992, $0, $4,857,056, $1,814,400 and
$3,045,804 of the total Partnership assets as of March 31, 2010, 2009, 2008,
2007, 2006, 2005 and 2004, respectively and $(180,607), $(167,497), $(62,808),
$0, $(215,193), $(133,864) and ($102,514) of the total Partnership loss for the
years ended March 31, 2010, 2009, 2008, 2007, 2006, 2005 and 2004, respectively.
Those statements were audited by other auditors, whose reports have been
furnished to us, and our opinion, insofar as it relates to those local limited
partnerships, is based solely on the reports of the other auditors.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Partnership it is not required
to have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting. Accordingly, we express no such opinion. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits and the reports of
other auditors provide a reasonable basis for our opinion.
In our
opinion, based on our audits and the reports of other auditors, the financial
statements referred to above present fairly, in all material respects, the
financial position of WNC Housing Tax Credit Fund VI, L.P., Series 10 (a
California Limited Partnership) as of March 31, 2010, 2009, 2008, 2007, 2006,
2005 and 2004, and the results of its operations and its cash flows for each
of the years in the seven-year period ended March 31, 2010, in conformity with
accounting principles generally accepted in the United States of
America.
Our
audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedules listed under Item 15(a)(2)
in the index related to years above are presented for the purpose of complying
with the Securities and Exchange Commission’s rules and are not part of the
basic financial statements. These schedules have been subjected to the auditing
procedures applied to the audits of the basic financial statements and, in our
opinion, fairly state in all material respects the financial statement data
required to be set forth therein in relation to the basic financial statements
taken as a whole.
/s/ Reznick Group, P.C.
Bethesda,
Maryland
May 27,
2011
42
Child,
Van Wagoner & Bradshaw, PLLC.
Report of
Independent Registered Public Accounting Firm
To the
Partners
Humboldt
Village, L.P.
Winnemucca,
Nevada
We have
audited the accompanying balance sheets of Humboldt Village, L.P. (the
Partnership), as of December 31, 2009 and 2008, and the related statements of
operations, changes in partners' equity, and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We
conducted our audits in accordance with auditing standards generally accepted in
the United States of America, the standards of the Public Company Accounting
Oversight Board (United States of America) and the standards applicable to
financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United
States. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. The Partnership is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting. Accordingly,
we express no such opinion. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of the Partnership, at December 31,
2009 and 2008, and the results of its operations and its cash flows for the
years then ended in conformity with accounting principles generally accepted in
the United States of America.
In
accordance with Government
Auditing Standards, we have also issued a report dated March 9, 2010, on
our consideration of the Partnership's internal control over fmancial reporting.
The purpose of that report is to describe the scope of our testing of internal
control over financial reporting and the results of that testing and not to
provide an opinion on the internal control over financial reporting. That report
is an integral part of an audit performed in accordance with Government
Auditing Standards and should be read in conjunction with this report
considering the results of our audit.
Our audit
was conducted for the purpose of fonning an opinion on the basic financial
statements taken as a whole. The accompanying supplemental information shown on
page 13 is presented for purposes of additional analysis and is not a required
part of the basic financial statements of the Partnership. Such information has
been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated, in all material
respects, in relation to the basic financial statements taken as a
whole.
/s/ Child, Van Wagoner
& Bradshaw, PLLC
Kaysville,
Utah
March 9,
2010
43
INDEPENDENT AUDITORS'
REPORT
To the
Partners
Catoosa
Senior Village, LP
We have
audited the accompanying balance sheets of CATOOSA SENIOR VILLAGE, LP (a limited
partnership) as of December 31, 2005 and 2004, and the related statements of
operations, changes in partners' equity (deficit), and cash flows for the years
then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion
on these financial statements based on our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The
partnership has determined that it is not required to have, nor were we engaged
to perform, an audit of its internal control over financial
reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the partnership's internal control over
financial reporting. Accordingly, we express no such
opinion. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of CATOOSA SENIOR VILLAGE, LP as of
December 31, 2005 and 2004, and the results of its operations, its changes in
partners' equity (deficit), and its cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America.
Our
audits were made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 10
- 11 is presented for purposes of additional analysis and is not a required part
of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a
whole.
/s/ Habit Arogeti, Wynne,
LLC
Atlanta,
Georgia
February
28, 2006
44
INDEPENDENT AUDITORS'
REPORT
To
the Partners of
Starlight
Place, LP
We
have audited the accompanying balance sheet of STARLIGHT PLACE, LP
(USDA Rural Development), a limited partnership, as of December 31, 2005, and
the related statement of operations, changes in partners' equity (deficit), and
cash flows for the year then ended. These financial statements are
the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the standards applicable to
financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United
States, and the Audit
Program issued in December 1989 by the Rural Development Services Office
of the U.S. Department of Agriculture, formerly known as the Farmers Home
Administration. Those standards and the Audit
Program require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. The partnership has determined that it is not required
to have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the partnership's internal control over
financial reporting. Accordingly, we express no such
opinion. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our
opinion.
In
our opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of STARLIGHT PLACE, LP as of December
31, 2005, and the results of its operations, its changes in partners' equity
(deficit), and its cash flows for the year then ended, in conformity with
accounting principles generally accepted in the United States of
America.
In
accordance with Government
Auditing Standards, we have also issued our report dated February 28,
2006, on our consideration of STARLIGHT PLACE, LP's internal control and our
report dated February 28, 2006, on its compliance with laws and regulations
applicable to the financial statements. Those reports are an integral
part of an audit performed in accordance with Government
Auditing Standards and should be read in conjunction with this report in
considering the results of our audit.
Our
audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental information on pages 9
- 12 is presented for purposes of additional analysis and is not a required part
of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a
whole.
/s/Habit
Arogeti, Wynne, LLC
Atlanta,
Georgia
February
28, 2006
45
PAILET,
MEUNIER and
LeBLANC, L.L.P.
Certified
Public Accountants
Management
Consultants
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Partners
Starlight
Place, LP
We have
audited the accompanying balance sheet of Starlight Place, LP, as of December
31, 2007 and the related statements of operations, changes in partners' capital
and cash flows for the year then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We
conducted our audit in accordance with the Standards of the Public Accounting
Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The partnership has determined
that it is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audit included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the partnership's internal control
over financial reporting. Accordingly, we express no such opinion. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Starlight Place, LP as of December
31, 2007 and the results of its operations, changes in partners' capital and
cash flows for the year then ended in conformity with accounting principles
generally accepted in the United States of America.
/s/ PAILET, MEUNIER and
LeBLANC, L.L.P.
Metairie,
Louisiana
May 16,
2011
3421 N.
Causeway Blvd., Suite 701 ● Metairie,
LA 70002 ● Telephone (504)
837-0770 ● Fax (504)
837-7102
201 St.
Charles Ave., Ste. 2500 ● New Orleans, LA
70170 ●
Telephone (504) 599-5905 ● Fax (504)
837-7102
www.
pmlcpa.com
Member
of
Member
Firms in Principal Cities ● PCAOB - Public
Company Accounting Oversight Board
AICPA:
Center
for Public Company Audit Firms (SEC)● Governmantal Audit
Quality Center ● Private Companies
Practice Section (PCPS)
46
PAILET, MEUNIER and LeBLANC,
L.L.P.
Certified
Public Accountants
Management
Consultants
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Partners
Starlight
Place, LP
We have
audited the accompanying balance sheet of Starlight Place, LP, as of December
31, 2008 and the related statements of operations, changes in partners' capital
and cash flows for the year then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We
conducted our audit in accordance with the Standards of the Public Accounting
Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The partnership has determined
that it is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audit included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the partnership's internal control
over financial reporting. Accordingly, we express no such opinion. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Starlight Place, LP as of December
31, 2008 and the results of its operations, changes in partners' capital and
cash flows for the year then ended in conformity with accounting principles
generally accepted in the United States of America.
/s/ PAILET, MEUNIER and LeBLANC,
L.L.P.
Metairie,
LouisianaMay 18,
2011
3421 N.
Causeway Blvd., Suite 701 ● Metairie,
LA 70002 ● Telephone (504)
837-0770 ● Fax (504)
837-7102
201 St.
Charles Ave., Ste. 2500 ● New Orleans, LA
70170 ●
Telephone (504) 599-5905 ● Fax (504)
837-7102
www.
pmlcpa.com
Member
of
Member
Firms in Principal Cities ● PCAOB - Public
Company Accounting Oversight Board
AICPA:
Center
for Public Company Audit Firms (SEC)● Governmantal Audit
Quality Center ● Private Companies
Practice Section (PCPS)
47
PAILET, MEUNIER and LeBLANC,
L.L.P.
Certified
Public Accountants
Management
Consultants
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Partners Starlight Place, LP
We have
audited the accompanying balance sheet of Starlight Place, LP, as of December
31, 2009 and the related statements of operations, changes in partners' capital
and cash flows for the year then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We
conducted our audit in accordance with the Standards of the Public Accounting
Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The partnership has determined
that it is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audit included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the partnership's internal control
over financial reporting. Accordingly, we express no such opinion. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Starlight Place, LP as of December
31, 2009 and the results of its operations, changes in partners' capital and
cash flows for the year then ended in conformity with accounting principles
generally accepted in the United States of America.
/s/ PAILET, MEUNIER and LeBLANC,
L.L.P.
Metairie,
LouisianaMay 18,
2011
3421 N.
Causeway Blvd., Suite 701 ● Metairie,
LA 70002 ● Telephone (504)
837-0770 ● Fax (504)
837-7102
201 St.
Charles Ave., Ste. 2500 ● New Orleans, LA
70170 ●
Telephone (504) 599-5905 ● Fax (504)
837-7102
www.
pmlcpa.com
Member
of
Member
Firms in Principal Cities ● PCAOB - Public
Company Accounting Oversight Board
AICPA:
Center
for Public Company Audit Firms (SEC)● Governmantal Audit
Quality Center ● Private Companies
Practice Section (PCPS)
48
WNC
HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A
California Limited Partnership)
BALANCE
SHEETS
March
31,
|
|||||||||||||||
2010
|
2009
|
2008
|
2007
|
2006
|
2005
|
2004
|
|||||||||
ASSETS
|
|||||||||||||||
Cash
and cash equivalents
|
$
|
234,454
|
$
|
245,020
|
$
|
261,019
|
$
|
289,760
|
$
|
395,940
|
$
|
913,526
|
$
|
6,649,763
|
|
Interest
receivable
|
-
|
-
|
-
|
-
|
-
|
-
|
108
|
||||||||
Investments
in Local Limited Partnerships, net (Notes 2 and 3)
|
5,599,397
|
6,908,262
|
8,857,368
|
9,588,104
|
10,229,463
|
10,678,095
|
6,425,082
|
||||||||
Other
assets
|
6,300
|
6,300
|
6,300
|
6,300
|
6,300
|
6,300
|
-
|
||||||||
Total
Assets
|
$
|
5,840,151
|
$
|
7,159,582
|
$
|
9,124,687
|
$
|
9,884,164
|
$
|
10,631,703
|
$
|
11,597,921
|
$
|
13,074,953
|
|
LIABILITIES
AND PARTNERS’ EQUITY (DEFICIT)
|
|||||||||||||||
Liabilities:
|
|||||||||||||||
Payables to Local Limited
Partnerships (Note 5)
|
$
|
4,233
|
$
|
4,233
|
$
|
4,233
|
$
|
4,233
|
$
|
83,318
|
$
|
633,165
|
$
|
1,822,497
|
|
Accrued fees and expenses due to
General Partner and affiliates (Note 3)
|
477,993
|
390,253
|
320,804
|
260,783
|
192,515
|
98,701
|
29,535
|
||||||||
Total Liabilities
|
482,226
|
394,486
|
325,037
|
265,016
|
275,833
|
731,866
|
1,852,032
|
||||||||
Partners’
Equity (Deficit)
|
|||||||||||||||
General Partner
|
(5,986)
|
(4,579)
|
(2,544)
|
(1,725)
|
(988)
|
(478)
|
(89)
|
||||||||
Limited
Partners (25,000 Partnership Units authorized; 13,153, 13,153, 13,153,
13,153, 13,153, 13,153 and 8,220 Partnership Units issued and outstanding
as of March 31, 2010, 2009, 2008, 2007, 2006, 2005 and 2004,
respectively)
|
5,363,911
|
6,769,675
|
8,802,194
|
9,620,873
|
10,356,858
|
10,866,533
|
11,223,010
|
||||||||
Total Partners’ Equity
(Deficit)
|
5,357,925
|
6,765,096
|
8,799,650
|
9,619,148
|
10,355,870
|
10,866,055
|
11,222,921
|
||||||||
Total
Liabilities and Partners’ Equity (Deficit)
|
$
|
5,840,151
|
$
|
7,159,582
|
$
|
9,124,687
|
$
|
9,884,164
|
$
|
10,631,703
|
$
|
11,597,921
|
$
|
13,074,953
|
See
accompanying notes to financial statements
49
WNC
HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A
California Limited Partnership)
STATEMENTS
OF OPERATIONS
For
the Years Ended March 31,
|
||||||||||||||
2010
|
2009
|
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||
Reporting
fees
|
$
|
1,500
|
$
|
6,801
|
$
|
5,800
|
$
|
1,500
|
$
|
2,500
|
$
|
-
|
$
|
-
|
Operating
expenses and loss:
|
||||||||||||||
Amortization (Notes 2 and
3)
|
-
|
7,914
|
31,656
|
34,216
|
41,896
|
41,896
|
24,128
|
|||||||
Asset management fees (Note
3)
|
91,900
|
91,900
|
91,900
|
91,900
|
91,900
|
77,335
|
27,168
|
|||||||
Impairment
loss (Note 2)
|
919,953
|
1,519,347
|
372,414
|
278,095
|
-
|
-
|
-
|
|||||||
Accounting
and legal fees
|
3,035
|
2,966
|
12,576
|
14,647
|
26,887
|
31,182
|
10,445
|
|||||||
Asset
management expenses
|
1,742
|
-
|
103
|
575
|
5,703
|
9,382
|
2,094
|
|||||||
Other
|
3,330
|
3,591
|
3,815
|
4,104
|
4,658
|
4,959
|
3,196
|
|||||||
Total operating expenses and
loss
|
1,019,960
|
1,625,718
|
512,464
|
423,537
|
171,044
|
164,754
|
67,031
|
|||||||
Loss
from operations
|
(1,018,460)
|
(1,618,917)
|
(506,664)
|
(422,037)
|
(168,544)
|
(164,754)
|
(67,031)
|
|||||||
Equity
in losses of Local Limited Partnerships (Note 2)
|
(388,912)
|
(417,148)
|
(321,968)
|
(329,048)
|
(356,838)
|
(251,203)
|
(128,146)
|
|||||||
Interest
income
|
201
|
1,511
|
9,134
|
14,363
|
15,197
|
26,776
|
6,203
|
|||||||
Net
loss
|
$
|
(1,407,171)
|
$
|
(2,034,554)
|
$
|
(819,498)
|
$
|
(736,722)
|
$
|
(510,185)
|
$
|
(389,181)
|
$
|
(188,974)
|
Net
loss allocated to:
|
||||||||||||||
General Partner
|
$
|
(1,407)
|
$
|
(2,035)
|
$
|
(819)
|
$
|
(737)
|
$
|
(510)
|
$
|
(389)
|
$
|
(189)
|
Limited Partners
|
$
|
(1,405,764)
|
$
|
(2,032,519)
|
$
|
(818,679)
|
$
|
(735,985)
|
$
|
(509,675)
|
$
|
(388,792)
|
$
|
(188,785)
|
Net
loss per Partnership Unit
|
$
|
(106.88)
|
$
|
(154.53)
|
$
|
(62.24)
|
$
|
(55.96)
|
$
|
(38.75)
|
$
|
(29.56)
|
$
|
(22.97)
|
Outstanding
weighted Partnership Units
|
13,153
|
13,153
|
13,153
|
13,153
|
13,153
|
13,153
|
8,220
|
See
accompanying notes to financial statements
50
WNC
HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A
California Limited Partnership)
STATEMENTS
OF PARTNERS’ EQUITY (DEFICIT)
For
the Years Ended March 31, 2010, 2009, 2008, 2007, 2006, 2005 and
2004
General
Partner
|
Limited
Partners
|
Total
|
||||
Partners’
equity (deficit) at March 31, 2003
|
$
|
100
|
$
|
1,000
|
$
|
1,100
|
Sale
of Partnership Units (net of discounts of $33,730)
|
-
|
13,083,455
|
13,083,455
|
|||
Offering
expenses
|
-
|
(1,672,660)
|
(1,672,660)
|
|||
Net
loss
|
(189)
|
(188,785)
|
(188,974)
|
|||
Partners’
equity (deficit) at March 31, 2004
|
(89)
|
11,223,010
|
11,222,921
|
|||
Collection
of promissory notes receivable
|
-
|
35,815
|
35,815
|
|||
Offering
expenses
|
-
|
(3,500)
|
(3,500)
|
|||
Net
loss
|
(389)
|
(388,792)
|
(389,181)
|
|||
Partners’
equity (deficit) at March 31, 2005
|
(478)
|
10,866,533
|
10,866,055
|
|||
Net
loss
|
(510)
|
(509,675)
|
(510,185)
|
|||
Partners’
equity (deficit) at March 31, 2006
|
(988)
|
10,356,858
|
10,355,870
|
|||
Net
loss
|
(737)
|
(735,985)
|
(736,722)
|
|||
Partners’
equity (deficit) at March 31, 2007
|
(1,725)
|
9,620,873
|
9,619,148
|
|||
Net
loss
|
(819)
|
(818,679)
|
(819,498)
|
|||
Partners’
equity (deficit) at March 31, 2008
|
(2,544)
|
8,802,194
|
8,799,650
|
|||
Net
loss
|
(2,035)
|
(2,032,519)
|
(2,034,554)
|
|||
Partners’
equity (deficit) at March 31, 2009
|
(4,579)
|
6,769,675
|
6,765,096
|
|||
Net
loss
|
(1,407)
|
(1,405,764)
|
(1,407,171)
|
|||
Partners’
equity (deficit) at March 31, 2010
|
$
|
(5,986)
|
$
|
5,363,911
|
$
|
5,357,925
|
See
accompanying notes to financial statements
51
WNC
HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A
California Limited Partnership)
STATEMENTS
OF CASH FLOWS
For
The Years Ended March 31,
|
|||||||
2010
|
2009
|
2008
|
|||||
Cash
flows from operating activities:
Net
loss
|
$
|
(1,407,171)
|
$
|
(2,034,554)
|
$
|
(819,498)
|
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
|||||||
Amortization
|
-
|
7,914
|
31,656
|
||||
Impairment
loss
|
919,953
|
1,519,347
|
372,414
|
||||
Equity in losses of Local
Limited
Partnerships
|
388,912
|
417,148
|
321,968
|
||||
Increase
in accrued fees and expenses due to General Partner and
affiliates
|
87,740
|
69,449
|
60,021
|
||||
Net
cash used in operating activities
|
(10,566)
|
(20,696)
|
(33,439)
|
||||
Cash
flows from investing activities:
|
|||||||
Distributions
received from Local Limited
Partnerships
|
-
|
4,697
|
4,698
|
||||
Net
cash provided by investing activities
|
-
|
4,697
|
4,698
|
||||
Net decrease in cash and cash equivalents
|
(10,566)
|
(15,999)
|
(28,741)
|
||||
Cash
and cash equivalents, beginning of year
|
245,020
|
261,019
|
289,760
|
||||
Cash
and cash equivalents, end of year
|
$
|
234,454
|
$
|
245,020
|
$
|
261,019
|
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION
|
|||||||
Taxes
paid
|
$
|
800
|
$
|
800
|
$
|
800
|
See
accompanying notes to financial statements
52
WNC
HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A
California Limited Partnership)
STATEMENTS
OF CASH FLOWS - CONTINUED
For
The Years Ended March 31,
|
|||||||
2007
|
2006
|
2005
|
|||||
Cash
flows from operating activities:
Net
loss
|
$
|
(736,722)
|
$
|
(510,185)
|
$
|
(389,181)
|
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
|||||||
Amortization
|
34,216
|
41,896
|
41,896
|
||||
Impairment
loss
|
278,095
|
||||||
Equity in losses of Local
Limited
Partnerships
|
329,048
|
356,838
|
251,203
|
||||
Decrease
in interest receivable
|
-
|
-
|
108
|
||||
Increase
in other assets
|
-
|
-
|
(6,300)
|
||||
Increase
in accrued fees and expenses due
to
General Partner and affiliates
|
68,268
|
93,814
|
69,166
|
||||
Net
cash used in operating activities
|
(27,095)
|
(17,637)
|
(33,108)
|
||||
Cash
flows from investing activities:
|
|||||||
Capital
contributions paid to Local Limited
Partnerships
|
(79,085)
|
(505,051)
|
(5,735,444)
|
||||
Distributions
received from Local Limited Partnerships
|
-
|
5,102
|
-
|
||||
Net
cash used in investing activities
|
(79,085)
|
(499,949)
|
(5,735,444)
|
||||
Cash
flows from financing activities:
|
|||||||
Capital
contributions received
|
-
|
-
|
35,815
|
||||
Offering
expenses
|
-
|
-
|
(3,500)
|
||||
Net
cash provided by financing activities
|
-
|
-
|
32,315
|
||||
Net
decrease in cash and cash equivalents
|
(106,180)
|
(517,586)
|
(5,736,237)
|
||||
Cash
and cash equivalents, beginning of year
|
395,940
|
913,526
|
6,649,763
|
||||
Cash
and cash equivalents, end of year
|
$
|
289,760
|
$
|
395,940
|
$
|
913,526
|
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION
|
|||||||
Taxes
paid
|
$
|
800
|
$
|
800
|
$
|
800
|
|
SIGNIFICANT
NONCASH INVESTING AND
FINANCING
ACTIVITIES:
|
|||||||
The
Partnership decreased its investment in
Local
Limited Partnerships and payables to
Local
Limited Partnerships for tax credit
adjusters
|
$
|
-
|
$
|
44,796
|
$
|
15,264
|
|
The
Partnership increased its investment in Local
Limited
Partnerships for unpaid capital
contributions
payable to Local Limited
Partnerships
|
$
|
-
|
$
|
-
|
$
|
472,811
|
See
accompanying notes to financial statements
53
WNC
HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A
California Limited Partnership)
NOTES
TO FINANCIAL STATEMENTS
For
the Years Ended March 31, 2010, 2009, 2008, 2007, 2006, 2005 and
2004
For
The Year Ended March 31,
|
||||
2004
|
||||
Cash
flows from operating activities:
Net
loss
|
$
|
(188,974)
|
||
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||
Amortization
|
24,128
|
|||
Impairment
loss
|
-
|
|||
Equity in losses of Local
Limited
Partnerships
|
128,146
|
|||
Decrease
(increase) in interest receivable
|
(108)
|
|||
Increase
in accrued fees and expenses due to
General
Partner and affiliates
|
29,535
|
|||
Net
cash used in operating activities
|
(7,273)
|
|||
Cash
flows from investing activities:
|
||||
Capital
contributions paid to Local Limited
Partnerships
|
(3,498,014)
|
|||
Capitalized
acquisition costs and fees
|
(1,256,845)
|
|||
Net
cash used in investing activities
|
(4,754,859)
|
|||
Cash
flows from financing activities:
|
||||
Capital
contributions received
|
13,083,455
|
|||
Offering
expenses
|
(1,672,660)
|
|||
Net
cash provided by financing activities
|
11,410,795
|
|||
Net
increase in cash and cash equivalents
|
6,648,663
|
|||
Cash
and cash equivalents, beginning of year
|
1,100
|
|||
Cash
and cash equivalents, end of year
|
$
|
6,649,763
|
||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION
|
||||
Taxes
paid
|
$
|
800
|
||
SIGNIFICANT
NONCASH INVESTING
AND
FINANCING ACTIVITES
|
||||
The
Partnership increased its investment in Local
Limited
Partnerships for unpaid capital
contributions
payable to Local Limited
Partnerships
|
$
|
1,822,497
|
||
54
WNC
HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A
California Limited Partnership)
NOTES
TO FINANCIAL STATEMENTS
For
the Years Ended March 31, 2010, 2009, 2008, 2007, 2006, 2005 and
2004
NOTE 1 – ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
WNC
Housing Tax Credit Fund VI, L.P., Series 10 (the “Partnership”) is a California
Limited Partnership formed under the laws of the State of California on July 17,
2001, and commenced operations on February 28, 2003. The Partnership
was formed to acquire limited partnership interests in other limited
partnerships ("Local Limited Partnerships") which own multi-family housing
complexes (“Housing Complexes”) that are eligible for Federal low income housing
tax credits (“Low Income Housing Tax Credits”). The local general
partners (the “Local General Partners”) of each Local Limited Partnership retain
responsibility for maintaining, operating and managing the Housing Complex. Each
Local Limited Partnership is governed by its agreement of limited partnership
(the “Local Limited Partnership Agreement”).
The
general partner of the Partnership is WNC & Associates, Inc. (“Associates”
or the “General Partner”). The chairman and the president of Associates owns all
of the outstanding stock of Associates. The business of the Partnership is
conducted primarily through the General Partner, as the Partnership has no
employees of its own.
The
Partnership shall continue in full force and effect until December 31, 2062
unless terminated prior to that date pursuant to the partnership agreement or
law.
The
financial statements include only activity relating to the business of the
Partnership, and do not give effect to any assets that the partners may have
outside of their interests in the Partnership, or to any obligations, including
income taxes, of the partners.
The
partnership agreement authorized the sale of up to 25,000 units of limited
partnership interest (“Partnership Units”) at $1,000 per Partnership
Unit. The offering of Partnership Units has concluded, and 13,153
Partnership Units representing subscriptions in the amount of $13,119,270, net
of dealer discounts of $31,220 and volume discounts of $2,510, had been
accepted. The General Partner has a 0.1% interest in operating
profits and losses, taxable income and losses, cash available for distribution
from the Partnership and Low Income Housing Tax Credits of the
Partnership. The investors (the “Limited Partners”) in the
Partnership will be allocated the remaining 99.9% of these items in proportion
to their respective investments.
The
proceeds from the disposition of any of the Housing Complexes will be used first
to pay debts and other obligations per the respective Local Limited Partnership
Agreement. Any remaining proceeds will then be paid to the partners
of the Local Limited Partnership, including the Partnership, in accordance with
the terms of the particular Local Limited Partnership Agreement. The
sale of a Housing Complex may be subject to other restrictions and
obligations. Accordingly, there can be no assurance that a Local
Limited Partnership will be able to sell its Housing Complex. Even if
it does so, there can be no assurance that any significant amounts of cash will
be distributed to the Partnership. Should such distributions occur,
the Limited Partners will be entitled to receive distributions from the proceeds
remaining after payment of Partnership obligations and funding reserves, equal
to their capital contributions and their return on investment (as defined in the
Partnership Agreement). The General Partner would then be entitled to
receive proceeds equal to its capital contributions from the
remainder. Any additional sale or refinancing proceeds will be
distributed 90% to the Limited Partners (in proportion to their respective
investments) and 10% to the General Partner.
Risks and
Uncertainties
An
investment in the Partnership and the Partnership’s investments in Local Limited
Partnerships and their Housing Complexes are subject to risks. These
risks may impact the tax benefits of an investment in the Partnership, and the
amount of proceeds available for distribution to the Limited Partners, if any,
on liquidation of the Partnership’s investments. Some of those risks
include the following:
55
WNC
HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A
California Limited Partnership)
NOTES
TO FINANCIAL STATEMENTS – CONTINUED
For
the Years Ended March 31, 2010, 2009, 2008, 2007, 2006, 2005 and
2004
NOTE 1 – ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
The Low
Income Housing Tax Credits rules are extremely complicated. Noncompliance with
these rules results in the loss of future Low Income Housing Tax Credits and the
fractional recapture of Low Income Housing Tax Credits already taken. In most
cases the annual amount of Low Income Housing Tax Credits that an individual can
use is limited to the tax liability due on the person’s last $25,000 of taxable
income. The Local Limited Partnerships may be unable to sell the Housing
Complexes at a price which would result in the Partnership realizing cash
distributions or proceeds from the transaction. Accordingly, the
Partnership may be unable to distribute any cash to its Limited Partners. Low
Income Housing Tax Credits may be the only benefit from an investment in the
Partnership.
The
Partnership has invested in a limited number of Local Limited Partnerships. Such
limited diversity means that the results of operation of each single Housing
Complex will have a greater impact on the Partnership. With limited diversity,
poor performance of one Housing Complex could impair the Partnership’s ability
to satisfy its investment objectives. Each Housing Complex is subject
to mortgage indebtedness. If a Local Limited Partnership failed to pay its
mortgage, it could lose its Housing Complex in foreclosure. If foreclosure were
to occur during the first 15 years (the “Compliance Period”), the loss of any
remaining future Low Income Housing Tax Credits, a fractional recapture of prior
Low Income Housing Tax Credits, and a loss of the Partnership’s investment in
the Housing Complex would occur. The Partnership is a limited partner or
non-managing member of each Local Limited Partnership. Accordingly, the
Partnership will have very limited rights with respect to management of the
Local Limited Partnerships. The Partnership will rely totally on the Local
General Partners. Neither the Partnership’s investments in Local Limited
Partnerships, nor the Local Limited Partnerships’ investments in Housing
Complexes, are readily marketable. To the extent the Housing Complexes receive
government financing or operating subsidies, they may be subject to one or more
of the following risks: difficulties in obtaining tenants for the Housing
Complexes; difficulties in obtaining rent increases; limitations on cash
distributions; limitations on sales or refinancing of Housing Complexes;
limitations on transfers of interests in Local Limited Partnerships; limitations
on removal of Local General Partners; limitations on subsidy programs; and
possible changes in applicable regulations. Uninsured casualties
could result in loss of property and Low Income Housing Tax Credits and
recapture of Low Income Housing Tax Credits previously taken. The value of real
estate is subject to risks from fluctuating economic conditions, including
employment rates, inflation, tax, environmental, land use and zoning policies,
supply and demand of similar properties, and neighborhood conditions, among
others.
The
ability of Limited Partners to claim tax losses from the Partnership is limited.
The IRS may audit the Partnership or a Local Limited Partnership and challenge
the tax treatment of tax items. The amount of Low Income Housing Tax Credits and
tax losses allocable to the Limited Partners could be reduced if the IRS were
successful in such a challenge. The alternative minimum tax could
reduce tax benefits from an investment in the Partnership. Changes in
tax laws could also impact the tax benefits from an investment in the
Partnership and/or the value of the Housing Complexes.
No
trading market for the Partnership Units exists or is expected to develop.
Limited Partners may be unable to sell their Partnership Units except at a
discount and should consider their Partnership Units to be a long-term
investment. Individual Limited Partners will have no recourse if they disagree
with actions authorized by a vote of the majority of Limited
Partners.
56
WNC
HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A
California Limited Partnership)
NOTES
TO FINANCIAL STATEMENTS – CONTINUED
For
the Years Ended March 31, 2010, 2009, 2008, 2007, 2006, 2005 and
2004
NOTE 1 – ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Exit
Strategy
The
Compliance Period for a Housing Complex is generally 15 years following
construction or rehabilitation completion. Associates was one of the first in
the industry to offer syndicated investments in Low Income Housing Tax
Credits. The initial programs have completed their Compliance
Periods.
Upon the
sale of a Local Limited Partnership Interest or Housing Complex after the end of
the Compliance Period, there would be no recapture of Low Income Housing Tax
Credits. A sale prior to the end of the Compliance Period could
result in recapture if certain conditions are not met.
With that
in mind, the General Partner is continuing its review of the Housing
Complexes. The review considers many factors, including extended use
requirements (such as those due to mortgage restrictions or state compliance
agreements), the condition of the Housing Complexes, and the tax consequences to
the Limited Partners from the sale of the Housing Complexes.
Upon
identifying those Housing Complexes with the highest potential for a successful
sale, refinancing or re-syndication, the Partnership expects to proceed with
efforts to liquidate them. The objective is to wind down the Partnership as Low
Income Housing Tax Credits are no longer available. Local Limited
Partnership Interests may be disposed of any time by the General Partner in its
discretion. While liquidation of the Housing Complexes continues to be
evaluated, the dissolution of the Partnership was not imminent as of March 31,
2010.
The
proceeds from the disposition of any of the Housing Complexes will be used first
to pay debts and other obligations per the respective Local Limited Partnership
Agreement. Any remaining proceeds will then be paid to the partners
of the Local Limited Partnership, including the Partnership, in accordance with
the terms of the particular Local Limited Partnership Agreement. The sale of a
Housing Complex may be subject to other restrictions and
obligations. Accordingly, there can be no assurance that a Local
Limited Partnership will be able to sell its Housing Complex. Even if
it does so, there can be no assurance that any significant amounts of cash will
be distributed to the Partnership, as the proceeds first would be used to pay
Partnership obligations and funding of reserves.
Method of Accounting For
Investments in Local Limited Partnerships
The
Partnership accounts for its investments in Local Limited Partnerships using the
equity method of accounting, whereby the Partnership adjusts its investment
balance for its share of the Local Limited Partnerships’ results of operations
and for any contributions made and distributions received. The Partnership
reviews the carrying amount of an individual investment in a Local Limited
Partnership for possible impairment whenever events or changes in circumstances
indicate that the carrying amount of such investment may not be
recoverable. Recoverability of such investment is measured by the
estimated value derived by management, generally consisting of the sum of the
remaining future Low Income Housing Tax Credits estimated to be allocable to the
Partnership and the estimated residual value to the Partnership. If
an investment is considered to be impaired, the Partnership reduces the carrying
value of its investment in any such Local Limited Partnership. The accounting
policies of the Local Limited Partnerships, generally, are expected to be
consistent with those of the Partnership. Costs incurred by the Partnership in
acquiring the investments were capitalized as part of the investment account and
were being amortized over 30 years (see Notes 2 and 3).
57
WNC
HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A
California Limited Partnership)
NOTES
TO FINANCIAL STATEMENTS – CONTINUED
For
the Years Ended March 31, 2010, 2009, 2008, 2007, 2006, 2005 and
2004
NOTE 1 –
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
continued
“Equity
in losses of Local Limited Partnerships” for each year ended March 31 has been
recorded by the Partnership based on the twelve months of reported results
provided by the Local Limited Partnerships for each year ended December 31
Equity in losses from the Local Limited Partnerships allocated to the
Partnership is not recognized to the extent that the investment balance would be
adjusted below zero. For the years ended March 31, 2005 and 2004, as
soon as the investment balance reached zero, the related costs of acquiring the
investment were impaired.
In
accordance with the accounting guidance for the consolidation of variable
interest entities, the Partnership determines when it should include the assets,
liabilities, and activities of a variable interest entity (VIE) in its financial
statements, and when it should disclose information about its relationship with
a VIE. A VIE is a legal structure used to conduct activities or hold assets,
which must be consolidated by a company if it is the primary beneficiary because
it absorbs the majority of the entity's expected losses, the majority of the
expected returns, or both. Based on this guidance, the Local Limited
Partnerships in which the Partnership invests meet the definition of a
VIE. However, management does not consolidate the Partnership’s
interests in these VIEs under this guidance, as it is not considered to be the
primary beneficiary. The Partnership currently records the amount of
its investment in these partnerships as an asset on its balance sheet,
recognizes its share of partnership income or losses in the statements of
operations, and discloses how it accounts for material types of these
investments in its financial statements. The Partnership’s balance in investment
in Local Limited Partnerships, plus the risk of recapture of tax credits
previously recognized on these investments, represents its maximum exposure to
loss. The Partnership’s exposure to loss on these partnerships is
mitigated by the condition and financial performance of the underlying
properties as well as the strength of the local general partners and their
guarantee against credit recapture.
Distributions
received from the Local Limited Partnerships are accounted for as a reduction of
the investment balance. Distributions received after the investment has reached
zero are recognized as distribution income. As of March 31, 2010,
none of the investment accounts in Local Limited Partnerships had reached
zero.
Use of
Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could materially differ
from those estimates.
Cash and Cash
Equivalents
The
Partnership considers all highly liquid investments with original maturities of
three months or less when purchased to be cash equivalents. As of
March 31, 2010, 2009, 2008, 2007, 2006, 2005 and 2004 the Partnership had cash
equivalents of $222,068, $221,988, $251,457, $269,457, $381,457, $903,457 and
$0, respectively.
Concentration of Credit
Risk
At March
31, 2008, 2007, 2006, 2005 and 2004, the Partnership maintained cash and cash
equivalent balances at certain financial institutions in excess of the federally
insured maximum. The Partnership believes it is not exposed to any
significant financial risk on cash.
Reporting Comprehensive
Income
The
Partnership had no items of other comprehensive income for all periods
presented.
58
WNC
HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A
California Limited Partnership)
NOTES
TO FINANCIAL STATEMENTS – CONTINUED
For
the Years Ended March 31, 2010, 2009, 2008, 2007, 2006, 2005 and
2004
NOTE 1 –
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
continued
Net Loss Per Partnership
Unit
Net loss
per Partnership Unit includes no dilution and is computed by dividing loss
allocated to Limited Partners by the weighted average Partnership Units
outstanding during the period. Calculation of diluted net loss per
Partnership Unit is not required.
Income
Taxes
The
Partnership has elected to be treated as a pass-through entity for income tax
purposes and, as such, is not subject to income taxes. Rather, all items of
taxable income, deductions and tax credits are passed through to and are
reported by its owners on their respective income tax returns. The
Partnership’s federal tax status as a pass-through entity is based on its legal
status as a partnership. Accordingly, the Partnership is not required to take
any tax positions in order to qualify as a pass-through entity. The Partnership
is required to file and does file tax returns with the Internal Revenue Service
and other taxing authorities. Accordingly, these financial statements do not
reflect a provision for income taxes and the Partnership has no other tax
positions which must be considered for disclosure.
Revenue
Recognition
The
Partnership is entitled to receive reporting fees from the Local Limited
Partnerships. The intent of the reporting fees is to offset (in part)
administrative costs incurred by the Partnership in corresponding with the Local
Limited Partnerships. Due to the uncertainty of the collection of
these fees, the Partnership recognizes reporting fees as collections are
made.
Reclassifications
Certain
reclassifications have been made to the 2004 financial statements to be
consistent with the 2010, 2009, 2008, 2007, 2006 and 2005
presentations.
Amortization
Acquisition
fees and costs are being amortized over 30 years using the straight-line method.
Amortization expense for the years ended March 31, 2010, 2009, 2008, 2007, 2006,
2005 and 2004 was $0, $7,914, $31,656, $34,216, $41,896, $41,896 and $24,128,
respectively. As of March 31, 2009, all acquisition fees and costs had been
fully amortized or impaired.
Impairment
The
Partnership reviews its investments in Local Limited Partnerships for impairment
at least annually or whenever events or changes in circumstances indicate that
the carrying value of such investments may not be recoverable. Recoverability is
measured by a comparison of the carrying amount of the investment to the sum of
the total amount of the remaining Low Income Housing Tax Credits allocated to
the Partnership and any estimated residual value of the investment. As of March
31, 2009, all Local Limited Partnerships were not considered to have any
residual value in consideration of economic conditions. For the years ended
March 31, 2010, 2009, 2008, 2007, 2006, 2005 and 2004, impairment loss related
to investments in Local Limited Partnerships was $919,953, $722,303, $372,414,
$0, $0, $0, and $0, respectively.
59
WNC
HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A
California Limited Partnership)
NOTES
TO FINANCIAL STATEMENTS – CONTINUED
For
the Years Ended March 31, 2010, 2009, 2008, 2007, 2006, 2005 and
2004
NOTE 1 – ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
For the
years ended March 31, 2010, 2009, 2008, 2007 and 2006, the Partnership also
evaluated its intangibles for impairment in connection with its investments in
Local Limited Partnerships. Impairment on the intangibles is measured by
comparing the Partnership’s total investment balance after impairment of
investments in Local Limited Partnerships to the sum of the total of remaining
Low Income Housing Tax Credits allocated to the Partnership and the estimated
residual value of the investment. As of March 31, 2009, all Local Limited
Partnerships were not considered to have any residual value in consideration of
the current economic circumstances. During the years ended March 31, 2010, 2009,
2008, 2007 and 2006, an impairment loss of $0, $797,044, $0, $278,095 and $0
respectively, was recorded against the related intangibles.
For the
years ended March 31, 2005 and 2004, when the value of the Partnership’s
investment in a Local Limited Partnership had been reduced to zero, the
respective net acquisition fees and costs component of investments in Local
Limited Partnerships were written off. For each of the years ended March 31,
2005 and 2004, no such write off was recorded.
Impact of Recent Accounting
Pronouncements
In
September 2006, the Financial Accounting Standards Board (“FASB”) issued
accounting guidance for Fair Value Measurements, which defines fair value,
establishes a framework for measuring fair value and expands disclosure about
fair value measurements. This guidance is effective for financial statements
issued for fiscal years beginning after November 15, 2007 and shall be applied
prospectively except for very limited transactions. In February 2008,
the FASB delayed for one year implementation of the guidance as it pertains to
certain non-financial assets and liabilities. The Partnership adopted GAAP for
Fair Value Measurements effective April 1, 2008, except as it applies to those
non-financial assets and liabilities, for which the effective date was April 1,
2009. The Partnership has determined that adoption of this guidance has no
material impact on the Partnership’s financial statements.
In
February 2007, the FASB issued accounting guidance for The Fair Value Option for
Financial Assets and Financial Liabilities. This guidance permits entities to
choose to measure many financial instruments and certain other items at fair
value. The fair value election is designed to improve financial
reporting by providing entities with the opportunity to mitigate volatility in
reported earnings caused by measuring related assets and liabilities differently
without having to apply complex hedge accounting provisions. It is effective for
fiscal years beginning after November 15, 2007. On April 1,
2008, the Partnership adopted GAAP for The Fair Value Option for Financial
Assets and Financial Liabilities and elected not to apply the provisions to its
eligible financial assets and financial liabilities on the date of adoption.
Accordingly, the initial application of the guidance had no effect on the
Partnership.
In
November 2008, the FASB issued accounting guidance on Equity Method Investment
Accounting Considerations that
addresses how the initial carrying value of an equity method investment should
be determined, how an impairment assessment of an underlying indefinite-lived
intangible asset of an equity method investment should be performed, how an
equity method investee’s issuance of shares should be accounted for, and how to
account for a change in an investment from the equity method to the cost method.
This guidance is effective in fiscal years beginning on or after
December 15, 2008, and interim periods within those fiscal years. The
Partnership adopted the guidance for the interim quarterly period beginning
April 1, 2009. The impact of adopting it does not have a material impact on the
Partnership’s financial condition or results of operations.
60
WNC
HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A
California Limited Partnership)
NOTES
TO FINANCIAL STATEMENTS – CONTINUED
For
the Years Ended March 31, 2010, 2009, 2008, 2007, 2006, 2005 and
2004
NOTE 1 – ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
In April
2009, the FASB issued accounting guidance for Interim Disclosures about Fair
Value of Financial Instruments. This requires disclosure about the
method and significant assumptions used to establish the fair value of financial
instruments for interim reporting periods as well as annual
statements. It became effective for as of and for the interim period
ended June 30, 2009 and has no impact on the Partnership’s financial condition
or results of operations.
In May
2009, the FASB issued guidance regarding subsequent events, which was
subsequently updated in February 2010. This guidance established general
standards of accounting for and disclosure of events that occur after the
balance sheet date but before financial statements are issued or are available
to be issued. In particular, this guidance sets forth the period after the
balance sheet date during which management of a reporting entity should evaluate
events or transactions that may occur for potential recognition or disclosure in
the financial statements, the circumstances under which an entity should
recognize events or transactions occurring after the balance sheet date in its
financial statements, and the disclosures that an entity should make about
events or transactions that occurred after the balance sheet date. This guidance
was effective for financial statements issued for fiscal years and interim
periods ending after June 15, 2009, and was therefore adopted by the
Partnership for the quarter ended June 30, 2009. The adoption did not have a
significant impact on the subsequent events that the Partnership reports, either
through recognition or disclosure, in the financial statements. In February
2010, the FASB amended its guidance on subsequent events to remove the
requirement to disclose the date through which an entity has evaluated
subsequent events, alleviating conflicts with current SEC guidance. This
amendment was effective immediately and therefore the Partnership did not
include the disclosure in this Form 10-K.
In June
2009, the FASB issued an amendment to the accounting and disclosure requirements
for the consolidation of variable interest entities (VIEs). The amended
guidance modifies the consolidation model to one based on control and economics,
and replaces the current quantitative primary beneficiary analysis with a
qualitative analysis. The primary beneficiary of a VIE will be the entity that
has (1) the power to direct the activities of the VIE that most
significantly impact the VIE’s economic performance and (2) the obligation
to absorb losses or receive benefits that could potentially be significant to
the VIE. If multiple unrelated parties share such power, as defined, no
party will be required to consolidate the VIE. Further, the amended guidance
requires continual reconsideration of the primary beneficiary of a VIE and adds
an additional reconsideration event for determination of whether an entity is a
VIE. Additionally, the amendment requires enhanced and expanded
disclosures around VIEs. This amendment is effective for fiscal years
beginning after November 15, 2009. The adoption of this guidance on
April 1, 2010 is not expected to have a material effect on the Partnership’s
financial statements.
In June
2009, the FASB issued the Accounting Standards Codification
(Codification). Effective July 1, 2009, the Codification is the
single source of authoritative accounting principles recognized by the FASB to
be applied by non-governmental entities in the preparation of financial
statements in conformity with GAAP. The Codification is intended to
reorganize, rather than change, existing GAAP. Accordingly, all
references to currently existing GAAP have been removed and have been replaced
with plain English explanations of the Partnership’s accounting
policies. The adoption of the Codification did not have a material
impact on the Partnership’s financial position or results of
operations.
61
WNC
HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A
California Limited Partnership)
NOTES
TO FINANCIAL STATEMENTS – CONTINUED
For
the Years Ended March 31, 2010, 2009, 2008, 2007, 2006, 2005 and
2004
NOTE 2 - INVESTMENTS IN
LOCAL LIMITED PARTNERSHIPS
For all
periods presented, the Partnership owns Local Limited Partnership interests in 6
Local Limited Partnerships, each of which owns one Housing Complex, consisting
of an aggregate of 317 apartment units. The respective Local General Partners of
the Local Limited Partnerships manage the day-to-day operations of the entities.
Significant Local Limited Partnership business decisions require approval from
the Partnership. The Partnership, as a limited partner, is generally
entitled to 99.98%, as specified in the Local Limited Partnership agreements, of
the operating profits and losses, taxable income and losses and Low Income
Housing Tax Credits of the Local Limited Partnerships.
The
Partnership’s investments in Local Limited Partnerships as shown in the balance
sheets at March 31, 2010, 2009, 2008, 2007, 2006, 2005 and 2004 are
approximately $(2,060,000), $(1,140,000), $387,000, $791,000, $1,195,000,
$2,608,000 and $3,379,000 respectively greater than (less than) the
Partnership's equity at the preceding December 31 as shown in the Local Limited
Partnerships’ combined condensed financial statements presented
below. This difference is primarily due to acquisition, selection,
and other costs related to the acquisition of the investments which have been
capitalized in the Partnership's investment account, impairment losses recorded
in the Partnership’s investment account and capital contributions payable to the
Local Limited Partnerships which were netted against partner capital in the
Local Limited Partnership’s financial statements.
The
Partnership reviews its investments in Local Limited Partnerships for impairment
at least annually or whenever events or changes in circumstances indicate that
the carrying value of such investments may not be recoverable. Recoverability is
measured by a comparison of the carrying amount of the investment to the sum of
the total amount of the remaining Low Income Housing Tax Credits allocated to
the Partnership and any estimated residual value of the investment. As of March
31, 2009, all Local Limited Partnerships were not considered to have any
residual value in consideration of economic conditions. For the years ended
March 31, 2010, 2009, 2008, 2007, 2006, 2005 and 2004 impairment loss related to
investments in Local Limited Partnerships was $919,953, $722,303, $372,414, $0,
$0, $0, and $0, respectively.
For the
years ended March 31, 2010, 2009, 2008, 2007 and 2006, the Partnership also
evaluated its intangibles for impairment in connection with its investments in
Local Limited Partnerships. Impairment on the intangibles is measured by
comparing the Partnership’s total investment balance after impairment of
investments in Local Limited Partnerships to the sum of the total of remaining
Low Income Housing Tax Credits allocated to the Partnership and the estimated
residual value of the investments. As of March 31, 2009, all Local Limited
Partnerships were not considered to have any residual value in consideration of
the current economic circumstances. During the years ended March 31, 2010, 2009,
2008, 2007, 2006, 2005 and 2004, an impairment loss of $0, $797,044, $0,
$278,095, $0, $0 and $0, respectively, was recorded against the related
intangibles.
62
WNC
HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A
California Limited Partnership)
NOTES
TO FINANCIAL STATEMENTS – CONTINUED
For
the Years Ended March 31, 2010, 2009, 2008, 2007, 2006, 2005 and
2004
NOTE 2 - INVESTMENTS IN
LOCAL LIMITED PARTNERSHIPS, continued
The
following is a summary of the equity method activity of the investments in the
Local Limited Partnerships for the periods presented:
For
The Years Ended
March
31,
|
||||||
2010
|
2009
|
2008
|
||||
Investments
per balance sheet, beginning of period
|
$
|
6,908,262
|
$
|
8,857,368
|
$
|
9,588,104
|
Impairment
loss
|
(919,953)
|
(1,519,347)
|
(372,414)
|
|||
Equity
in losses of Local Limited Partnerships
|
(388,912)
|
(417,148)
|
(321,968)
|
|||
Amortization
of paid acquisition fees and costs
|
-
|
(7,673)
|
(30,693)
|
|||
Amortization
of warehouse interest and costs
|
-
|
(241)
|
(963)
|
|||
Distributions
received from Local Limited Partnerships
|
-
|
(4,697)
|
(4,698)
|
|||
Investment
per balance sheet, end of period
|
$
|
5,599,397
|
$
|
6,908,262
|
$
|
8,857,368
|
For
The Years Ended
March
31,
|
||||||||
2007
|
2006
|
2005
|
2004
|
|||||
Investments
per balance sheet, beginning of period
|
$
|
10,229,463
|
$
|
10,678,095
|
$
|
6,425,082
|
$
|
-
|
Capital
contributions paid, net
|
-
|
-
|
3,928,211
|
3,498,014
|
||||
Capital
contributions payable
|
-
|
-
|
633,165
|
1,822,497
|
||||
Impairment
loss
|
(278,095)
|
-
|
-
|
-
|
||||
Equity
in losses of Local Limited Partnerships
|
(329,048)
|
(356,838)
|
(251,203)
|
(128,146)
|
||||
Capitalized
acquisition fees and costs
|
-
|
-
|
-
|
1,183,770
|
||||
Amortization
of paid acquisition fees and costs
|
(31,780)
|
(39,460)
|
(39,460)
|
(22,301)
|
||||
Capitalized
warehouse interest and fees
|
-
|
-
|
-
|
73,075
|
||||
Amortization
of warehouse interest and costs
|
(2,436)
|
(2,436)
|
(2,436)
|
(1,827)
|
||||
Distributions
received from Local Limited Partnerships
|
-
|
(5,102)
|
-
|
-
|
||||
Tax
Credit adjustments
|
-
|
(44,796)
|
(15,264)
|
-
|
||||
Investment
per balance sheet, end of period
|
$
|
9,588,104
|
$
|
10,229,463
|
$
|
10,678,095
|
$
|
6,425,082
|
63
WNC
HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A
California Limited Partnership)
NOTES
TO FINANCIAL STATEMENTS – CONTINUED
For
the Years Ended March 31, 2010, 2009, 2008, 2007, 2006, 2005 and
2004
NOTE 2 - INVESTMENTS IN
LOCAL LIMITED PARTNERSHIPS, continued
For
the Years
Ended
March 31,
|
||||||
2010
|
2009
|
2008
|
||||
Investments
in Local Limited Partnerships, net
|
$
|
5,599,397
|
$
|
6,908,262
|
$
|
8,052,410
|
Acquisition
fees and costs, net of accumulated amortization of $0, $0 and
$55,398
|
-
|
-
|
804,958
|
|||
Investments
per balance sheet, end of period
|
$
|
5,599,397
|
$
|
6,908,262
|
$
|
8,857,368
|
For
the Years
Ended
March 31,
|
||||||||
2007
|
2006
|
2005
|
2004
|
|||||
Investments
in Local Limited Partnerships, net
|
$
|
8,751,490
|
$
|
9,080,538
|
$
|
9,487,274
|
$
|
5,192,365
|
Acquisition
fees and costs, net of accumulated amortization of $23,742, $107,920,
$66,024 and $ 24,128
|
836,614
|
1,148,925
|
1,190,821
|
1,232,717
|
||||
Investments
per balance sheet, end of period
|
$
|
9,588,104
|
$
|
10,229,463
|
$
|
10,678,095
|
$
|
6,425,082
|
64
WNC
HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A
California Limited Partnership)
NOTES
TO FINANCIAL STATEMENTS – CONTINUED
For
the Years Ended March 31, 2010, 2009, 2008, 2007, 2006, 2005 and
2004
NOTE 2 - INVESTMENTS IN
LOCAL LIMITED PARTNERSHIPS, continued
The
financial information from the individual financial statements of the Local
Limited Partnerships include rental and interest subsidies. Rental
subsidies are included in total revenues and interest subsidies are generally
netted in interest expense. Approximate combined condensed financial
information from the individual financial statements of the Local Limited
Partnerships as of December 31 and for the years then ended is as
follows:
COMBINED CONDENSED BALANCE SHEETS
2009
|
2008
|
2007
|
2006
|
2005
|
2004
|
2003
|
||||||||
ASSETS
|
||||||||||||||
Buildings
and improvements (net of accumulated depreciation for 2009, 2008, 2007,
2006, 2005, 2004 and 2003 of $3,426,000, $2,808,000, $2,185,000,
$1,567,000, $952,000, $414,000 and $115,00 0 respectively)
|
$
|
15,847,000
|
$
|
16,437,000
|
$
|
17,002,000
|
$
|
17,607,000
|
$
|
18,166,000
|
$
|
16,894,000
|
$
|
6,930,000
|
Land
|
1,067,000
|
1,067,000
|
1,067,000
|
1,067,000
|
1,067,000
|
1,070,000
|
665,000
|
|||||||
Other
assets
|
1,247,000
|
1,178,000
|
1,235,000
|
1,053,000
|
1,026,000
|
750,000
|
292,000
|
|||||||
Total
assets
|
$
|
18,161,000
|
$
|
18,682,000
|
$
|
19,304,000
|
$
|
19,727,000
|
$
|
20,259,000
|
$
|
18,711,000
|
$
|
7,887,000
|
LIABILITIES
|
||||||||||||||
Mortgage
payable
|
$
|
8,339,000
|
$
|
8,409,000
|
$
|
8,481,000
|
$
|
8,555,000
|
$
|
8,621,000
|
$
|
8,315,000
|
$
|
3,625,000
|
Due
to affiliates
|
220,000
|
218,000
|
433,000
|
477,000
|
968,000
|
1,208,000
|
728,000
|
|||||||
Other
liabilities
|
256,000
|
266,000
|
225,000
|
157,000
|
216,000
|
539,000
|
67,000
|
|||||||
Total
liabilities
|
8,815,000
|
8,893,000
|
9,139,000
|
9,189,000
|
9,805,000
|
10,062,000
|
4,420,000
|
|||||||
PARTNERS'
EQUITY (DEFICIT)
|
||||||||||||||
WNC
Housing Tax Credit Fund VI, L.P.,
Series
10
|
7,659,000
|
8,048,000
|
8,470,000
|
8,797,000
|
9,034,000
|
8,070,000
|
3,046,000
|
|||||||
Other
partners
|
1,687,000
|
1,741,000
|
1,695,000
|
1,741,000
|
1,420,000
|
579,000
|
421,000,
|
|||||||
Total
partners’ equity (deficit)
|
9,346,000
|
9,789,000
|
10,165,000
|
10,538,000
|
10,454,000
|
8,649,000
|
3,467,000
|
|||||||
Total
liabilities and partners’
equity
(deficit)
|
$
|
18,161,000
|
$
|
18,682,000
|
$
|
19,304,000
|
$
|
19,727,000
|
$
|
20,259,000
|
$
|
18,711,000
|
$
|
7,887,000
|
65
WNC
HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A
California Limited Partnership)
NOTES
TO FINANCIAL STATEMENTS – CONTINUED
For
the Years Ended March 31, 2010, 2009, 2008, 2007, 2006, 2005 and
2004
NOTE 2 - INVESTMENTS IN
LOCAL LIMITED PARTNERSHIPS, continued
COMBINED
CONDENSED STATEMENTS OF OPERATIONS
2009
|
2008
|
2007
|
||||
Revenues
|
$
|
1,444,000
|
$
|
1,411,000
|
$
|
1,398,000
|
Expenses:
|
||||||
Operating
expenses
|
1,053,000
|
1,056,000
|
933,000
|
|||
Interest
expense
|
163,000
|
151,000
|
168,000
|
|||
Depreciation
and amortization
|
623,000
|
627,000
|
623,000
|
|||
Total
expenses
|
|
1,839,000
|
1,834,000
|
1,724,000
|
||
Net loss
|
$
|
(395,000)
|
$
|
(423,000)
|
$
|
(326,000)
|
Net
loss allocable to the Partnership,
|
$
|
(389,000)
|
$
|
(417,000)
|
$
|
(322,000)
|
Net
loss recorded by the Partnership
|
$
|
(389,000)
|
$
|
(417,000)
|
$
|
(322,000)
|
2006
|
2005
|
2004
|
2003
|
|||||
Revenues
|
$
|
1,465,000
|
$
|
1,287,000
|
$
|
751,000
|
$
|
183,000
|
Expenses:
|
||||||||
Operating
expenses
|
990,000
|
933,000
|
552,000
|
151,000
|
||||
Interest
expense
|
185,000
|
167,000
|
112,000
|
18,000
|
||||
Depreciation
and amortization
|
620,000
|
542,000
|
302,000
|
117,000
|
||||
Total
expenses
|
|
1,795,000
|
1,642,000
|
966,000
|
286,000
|
|||
Net
loss
|
$
|
(330,000)
|
$
|
(355,000)
|
$
|
(215,000)
|
$
|
(103,000)
|
Net
loss allocable to the Partnership
|
$
|
(329,000)
|
$
|
(357,000)
|
$
|
(213,000)
|
$
|
(103,000)
|
Net
loss recorded by the Partnership
|
$
|
(329,000)
|
$
|
(357,000)
|
$
|
(251,000)
|
$
|
(128,000)
|
66
WNC
HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A
California Limited Partnership)
NOTES
TO FINANCIAL STATEMENTS – CONTINUED
For
the Years Ended March 31, 2010, 2009, 2008, 2007, 2006, 2005 and
2004
NOTE 2 - INVESTMENTS IN
LOCAL LIMITED PARTNERSHIPS, continued
Certain
Local Limited Partnerships have incurred significant operating losses and/or
have working capital deficiencies. In the event these Local Limited
Partnerships continue to incur significant operating losses, additional capital
contributions by the Partnership and/or the Local General Partner may be
required to sustain the operations of such Local Limited
Partnerships. If additional capital contributions are not made when
they are required, the Partnership's investment in certain of such Local Limited
Partnerships could be impaired, and the loss and recapture of the related Low
Income Housing Tax Credits could occur.
NOTE 3 - RELATED PARTY
TRANSACTIONS
Under the
terms of the Partnership Agreement, the Partnership has paid or is obligated to
the General Partner or its affiliates for the following fees:
|
Acquisition
fees of 7% of the gross proceeds from the sale of Partnership Units as
compensation for services rendered in connection with the acquisition of
Local Limited Partnerships. At the end of all periods presented
the Partnership incurred total acquisition fees of $920,710, which have
been included in investments in Local Limited
Partnerships. Accumulated amortization of these capitalized
costs was $0, $0, $53,711, $23,019, $78,693, $48,001 and $17,309 as of
March 31, 2010, 2009, 2008, 2007, 2006, 2005 and 2004, respectively.
Impairment on the intangibles is measured by comparing the Partnership’s
total investment balance after impairment of investments in Local Limited
Partnerships to the sum of the total of the remaining Low Income Housing
Tax Credits allocated to the Partnership and the estimated residual value
of the investments. If an impairment loss related to the acquisition
expenses is recorded, the accumulated amortization is reduced to zero at
that time.
|
|
Reimbursement
of costs incurred by of the General Partner or by an affiliate of
Associates in connection with the acquisition of Local Limited
Partnerships. These reimbursements have not exceeded 2% of the
gross proceeds. At the end of all periods presented, the
Partnership incurred acquisition costs of $263,060, which have been
included in investments in Local Limited Partnerships. Accumulated
amortization was $0, $0, $0, $0, $22,528, $13,760 and $4,992 as of March
31, 2010, 2009, 2008, 2007, 2006, 2005 and 2004, respectively. Impairment
on the intangibles is measured by comparing the Partnership’s total
investment balance after impairment of investments in Local Limited
Partnerships to the sum of the total of the remaining Low Income Housing
Tax Credits allocated to the Partnership and the estimated residual value
of the investments. If an impairment loss related to the acquisition
expenses is recorded, the accumulated amortization is reduced to zero at
that time.
|
An annual
asset management fee not to exceed 0.5% of the invested assets of the
Partnership, as defined. “Invested Assets” means the sum of the Partnership’s
investment in Local Limited Partnership interests and the Partnership’s
allocable share of mortgage loans on and other debts related to the Housing
Complexes owned by such Local Limited Partnerships. Management
fees of $91,900, $91,900, $91,900, $91,900, $91,900, $77,335 and $27,168 were
incurred during the years ended March 31, 2010, 2009, 2008, 2007, 2006, 2005 and
2004, respectively, of which $10,000, $20,000, $17,500, $11,250, $18,750,
$15,000 and $0 were paid, respectively.
A
subordinated disposition fee in an amount equal to 1% of the sale price of real
estate sold by the Local Limited Partnerships. Payment of this fee is
subordinated to the Limited Partners receiving distributions equal to their
capital contributions and their return on investment (as defined in the
Partnership Agreement) and is payable only if services are rendered in the sales
effort. No such fee was incurred for all periods
presented.
The
Partnership reimbursed the General Partner or its affiliates for operating
expenses incurred by the Partnership and paid for by the General Partner or its
affiliates on behalf of the Partnership. Operating expense
reimbursements were $2,266, $9,009, $30,873, $31,707, $25,741, $44,987 and
$13,409 during the years ended March 31, 2010, 2009, 2008, 2007, 2006, 2005 and
2004, respectively.
67
WNC
HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A
California Limited Partnership)
NOTES
TO FINANCIAL STATEMENTS – CONTINUED
For
the Years Ended March 31, 2010, 2009, 2008, 2007, 2006, 2005 and
2004
NOTE 3 - RELATED PARTY
TRANSACTIONS, continued
WNC
Holding, LLC (“Holding”), a wholly owned subsidiary of Associates, acquires
investments in Local Limited Partnerships using funds from a secured warehouse
line of credit. Such investments are warehoused by Holding until
transferred to syndicated partnerships as investors are
identified. The transfer of the warehoused investments is typically
achieved through the admittance of the syndicated partnership as the Limited
Partner of the Local Limited Partnership and the removal of Holding as the
Limited Partner. Consideration paid to Holding for the transfer of
its interest in the Local Limited Partnership generally consists of cash
reimbursement of capital contribution installment(s) paid to the Local Limited
Partnerships by Holding, assumption of the remaining capital contributions
payable due to the Local Limited Partnership and financing costs and interest
charged by Holding. For all periods presented the Partnership
incurred financing costs of $7,252 and interest of $65,823 which are included in
investments in Local Limited Partnerships. The accumulated
amortization of these financing costs and interest was $0, $0, $1,687, $723,
$6,699, $4,263 and $1,827 as of March 31, 2010, 2009, 2008, 2007, 2006, 2005 and
2004, respectively. Impairment on the intangibles is measured by
comparing the Partnership’s total investment balance after impairment of
investments in Local Limited Partnerships to the sum of the total of the
remaining Low Income Housing Tax Credits allocated to the Partnership. If an
impairment loss related to the capitalized warehouse interest and costs are
recorded, the accumulated amortization is reduced to zero at that
time.
The
accrued fees and expenses due to the General Partner and affiliates consist of
the following at:
March
31,
|
||||||||||||||
2010
|
2009
|
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||
Asset
management fee payable
|
$
|
471,503
|
$
|
389,603
|
$
|
317,703
|
$
|
243,302
|
$
|
162,653
|
$
|
89,503
|
$
|
27,209
|
Due
to affiliate
|
41
|
41
|
41
|
41
|
41
|
41
|
-
|
|||||||
Expenses
paid by the General Partner or an affiliate on behalf of the
Partnership
|
6,449
|
609
|
3,060
|
17,440
|
29,821
|
9,157
|
2,326
|
|||||||
Total
|
$
|
477,993
|
$
|
390,253
|
$
|
320,804
|
$
|
260,783
|
$
|
192,515
|
$
|
98,701
|
$
|
29,535
|
The
Partnership currently has insufficient working capital to fund its operations.
Associates has agreed to continue providing advances sufficient enough to fund
the operations and working capital requirements of the Partnership through May
31, 2012.
68
WNC
HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A
California Limited Partnership)
NOTES
TO FINANCIAL STATEMENTS – CONTINUED
For
the Years Ended March 31, 2010, 2009, 2008, 2007, 2006, 2005 and
2004
NOTE 4 – QUARTERLY RESULTS
OF OPERATIONS (UNAUDITED)
The
following is a summary of the quarterly operations for the years ended March 31
(rounded):
June
30
|
September
30
|
December
31
|
March
31
|
||||||
2010
|
|||||||||
Income
|
$
|
-
|
$
|
-
|
$
|
2,000
|
$
|
-
|
|
Operating
expenses
|
(945,000)
|
(26,000)
|
(25,000)
|
(25,000)
|
|||||
Loss
from operations
|
(945,000)
|
(26,000)
|
(23,000)
|
(25,000)
|
|||||
Equity
in losses of Local Limited Partnerships
|
(97,000)
|
(97,000)
|
(97,000)
|
(97,000)
|
|||||
Net
loss
|
(1,042,000)
|
(123,000)
|
(120,000)
|
(122,000)
|
|||||
Net
loss available to Limited Partners
|
(1,041,000)
|
(123,000)
|
(120,000)
|
(122,000)
|
|||||
Net
loss per Partnership Unit
|
(79)
|
(9)
|
(9)
|
(9)
|
June
30
|
September
30
|
December
31
|
March
31
|
||||||
2009
|
|||||||||
Income
|
$
|
5,000
|
$
|
2,000
|
$
|
-
|
$
|
-
|
|
Operating
expenses
|
(1,551,000)
|
(23,000)
|
(26,000)
|
(26,000)
|
|||||
Loss
from operations
|
(1,546,000)
|
(21,000)
|
(26,000)
|
(26,000)
|
|||||
Equity
in losses of Local Limited Partnerships
|
(104,000)
|
(104,000)
|
(104,000)
|
(105,000)
|
|||||
Interest
income
|
-
|
1,000
|
-
|
-
|
|||||
Net
loss
|
(1,650,000)
|
(124,000)
|
(130,000)
|
(131,000)
|
|||||
Net
loss available to Limited Partners
|
(1,648,000)
|
(124,000)
|
(130,000)
|
(131,000)
|
|||||
Net
loss per Partnership Unit
|
(125)
|
(10)
|
(10)
|
(10)
|
|||||
69
WNC
HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A
California Limited Partnership)
NOTES
TO FINANCIAL STATEMENTS – CONTINUED
For
the Years Ended March 31, 2010, 2009, 2008, 2007, 2006, 2005 and
2004
NOTE 4 – QUARTERLY RESULTS
OF OPERATIONS (UNAUDITED), continued
June
30
|
September
30
|
December
31
|
March
31
|
||||||
2008
|
|||||||||
Income
|
$
|
-
|
$
|
4,000
|
$
|
-
|
$
|
2,000
|
|
Operating
expenses
|
(404,000)
|
(43,000)
|
(31,000)
|
(34,000)
|
|||||
Loss
from operations
|
(404,000)
|
(39,000)
|
(31,000)
|
(32,000)
|
|||||
Equity
in losses of Local Limited Partnerships
|
(80,000)
|
(80,000)
|
(80,000)
|
(82,000)
|
|||||
Interest
income
|
3,000
|
2,000
|
2,000
|
2,000
|
|||||
Net
loss
|
(481,000)
|
(117,000)
|
(109,000)
|
(112,000)
|
|||||
Net
loss available to Limited Partners
|
(481,000)
|
(117,000)
|
(109,000)
|
(112,000)
|
|||||
Net
loss per Partnership Unit
|
(37)
|
(9)
|
(8)
|
(8)
|
|||||
2007
|
June
30
|
September
30
|
December
31
|
March
31
|
|||||
Income
|
$
|
1,000
|
$
|
-
|
$
|
-
|
$
|
-
|
|
Operating
expenses
|
(312,000)
|
(46,000)
|
(32,000)
|
(34,000)
|
|||||
Loss
from operations
|
(311,000)
|
(46,000)
|
(32,000)
|
(34,000)
|
|||||
Equity
in losses of Local Limited Partnerships
|
(82,000)
|
(82,000)
|
(82,000)
|
(83,000)
|
|||||
Interest
income
|
4,000
|
4,000
|
4,000
|
2,000
|
|||||
Net
loss
|
(389,000)
|
(124,000)
|
(110,000)
|
(108,000)
|
|||||
Net
income (loss) available to Limited Partners
|
(389,000)
|
(124,000)
|
(110,000)
|
(108,000)
|
|||||
Net
income (loss) per Partnership Unit
|
(30)
|
(9)
|
(8)
|
(8)
|
|||||
70
WNC
HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A
California Limited Partnership)
NOTES
TO FINANCIAL STATEMENTS – CONTINUED
For
the Years Ended March 31, 2010, 2009, 2008, 2007, 2006, 2005 and
2004
NOTE 4 – QUARTERLY RESULTS
OF OPERATIONS (UNAUDITED), continued
June
30
|
September
30
|
December
31
|
March
31
|
||||||
2006
|
|||||||||
Income
|
$
|
-
|
$
|
-
|
$
|
1,000
|
$
|
2,000
|
|
Operating
expenses
|
(41,000)
|
(46,000)
|
(37,000)
|
(47,000)
|
|||||
Loss
from operations
|
(41,000)
|
(46,000)
|
(36,000)
|
(45,000)
|
|||||
Equity
in losses of Local Limited Partnerships
|
(53,000)
|
(53,000)
|
(56,000)
|
(195,000)
|
|||||
Interest
income
|
4,000
|
4,000
|
4,000
|
3,000
|
|||||
Net
loss
|
(90,000)
|
(95,000)
|
(88,000)
|
(237,000)
|
|||||
Net
loss available to Limited Partners
|
(89,000)
|
(95,000)
|
(88,000)
|
(237,000)
|
|||||
Net
loss per Partnership Unit
|
(7)
|
(7)
|
(7)
|
(18)
|
June
30
|
September
30
|
December
31
|
March
31
|
||||||
2005
|
|||||||||
Income
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
|
Operating
expenses
|
(33,000)
|
(48,000)
|
(55,000)
|
(29,000)
|
|||||
Loss
from operations
|
(33,000)
|
(48,000)
|
(55,000)
|
(29,000)
|
|||||
Equity
in losses of Local Limited Partnerships
|
(31,000)
|
(63,000)
|
(35,000)
|
(122,000)
|
|||||
Interest
income
|
11,000
|
8,000
|
4,000
|
4,000
|
|||||
Net
loss
|
(53,000)
|
(103,000)
|
(86,000)
|
(147,000)
|
|||||
Net
loss available to Limited Partners
|
(53,000)
|
(103,000)
|
(86,000)
|
(147,000)
|
|||||
Net
loss per Partnership Unit
|
(4)
|
(8)
|
(7)
|
(11)
|
|||||
71
WNC
HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A
California Limited Partnership)
NOTES
TO FINANCIAL STATEMENTS – CONTINUED
For
the Years Ended March 31, 2010, 2009, 2008, 2007, 2006, 2005 and
2004
NOTE 4 – QUARTERLY RESULTS
OF OPERATIONS (UNAUDITED) CONTINUED
June
30
|
September
30
|
December
31
|
March
31
|
||||||
2004
|
|||||||||
Income
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
|
Operating
expenses
|
(4,000)
|
(21,000)
|
(20,000)
|
(22,000)
|
|||||
Loss
from operations
|
(4,000)
|
(21,000)
|
(20,000)
|
(22,000)
|
|||||
Equity
in income (losses) of Local Limited Partnerships
|
-
|
(64,000)
|
(94,000)
|
30,000
|
|||||
Interest
income
|
-
|
1,000
|
1,000
|
4,000
|
|||||
Net
income (loss)
|
(4,000)
|
(84,000)
|
(113,000)
|
12,000
|
|||||
Net
income (loss) available to Limited Partners
|
(4,000)
|
(84,000)
|
(113,000)
|
12,000
|
|||||
Net
income (loss) per Partnership Unit
|
(2)
|
(13)
|
(10)
|
2
|
NOTE 5 – PAYABLES TO LOCAL
LIMTED PARTNERSHIPS
Payables
to Local Limited Partnerships represent amounts which are due at various times
based on conditions specified in the Local Limited Partnership
agreements. These contributions are payable in installments and are
generally due upon the Local Limited Partnerships achieving certain operating
and development benchmarks (generally within two years of the Partnership’s
initial investment). As of March 31, 2010, 2009, 2008, 2007, 2006, 2005 and
2004, $4,233, $4,233, $4,233, $4,233, $83,318, $633,165 and $1,822,497,
respectively, remain payable to the Local Limited Partnerships.
72
Item
9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
NONE
Item
9A(T). Controls and Procedures
(a) Evaluation
of disclosure controls and procedures
As of the
end of the periods covered by this report, the Partnership’s General Partner,
under the supervision and with the participation of the Chief Executive Officer
and Chief Financial Officer of Associates, carried out an evaluation of the
effectiveness of the Partnership’s “disclosure controls and procedures” as
defined in Securities Exchange Act of 1934 Rules 13a-15 and 15d-15. Based on
that evaluation, the Chief Executive Officer and Chief Financial Officer have
concluded that, as of the end of the period covered by this report, the
Partnership’s disclosure controls and procedures were not effective to ensure
that material information required to be disclosed in the Partnership’s periodic
report filings with SEC is recorded, processed, summarized and reported within
the time period specified by the SEC’s rules and forms, consistent with the
definition of “disclosure controls and procedures” under the Securities Exchange
Act of 1934.
The
Partnership must rely on the Local Limited Partnerships to provide the
Partnership with certain information necessary to the timely filing of the
Partnership’s periodic reports. Factors in the accounting at the Local Limited
Partnerships have caused delays in the provision of such information during past
reporting periods, and resulted in the Partnership’s inability to file its
periodic reports in a timely manner.
Once the
Partnership has received the necessary information from the Local Limited
Partnerships, the Chief Executive Officer and the Chief Financial Officer of
Associates believe that the material information required to be disclosed in the
Partnership’s periodic report filings with SEC is effectively recorded,
processed, summarized and reported, albeit not in a timely manner. Going
forward, the Partnership will use the means reasonably within its power to
impose procedures designed to obtain from the Local Limited Partnerships the
information necessary to the timely filing of the Partnership’s periodic
reports.
(b) Management’s annual report
on internal control over financial reporting
The
management of Associates is responsible for establishing and maintaining for the
Partnership adequate internal control over financial reporting as that term is
defined in Securities Exchange Act of 1934 Rules 13a-15(f) and 15d-15(f), and
for performing an assessment of the effectiveness of internal control over
financial reporting as of March 31, 2010, 2009, 2008, 2007, 2006, 2005 and 2004.
The internal control process of Associates, as it is applicable to the
Partnership, was designed to provide reasonable assurance to Associates
regarding the preparation and fair presentation of published financial
statements, and includes those policies and procedures that:
(1)
|
Pertain
to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of the assets of the
Partnership;
|
(2)
|
Provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles in the United States, and that the Partnership’s
receipts and expenditures are being made only in accordance with
authorization of the management of Associates;
and
|
(3)
|
Provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the Partnership’s assets
that could have a material effect on the financial
statements.
|
73
All
internal control processes, no matter how well designed, have inherent
limitations. Therefore, even those processes determined to be effective can
provide only reasonable assurance with respect to the reliability of financial
statement preparation and presentation. Further, projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions or that the degree of
compliance with the policies or procedures may deteriorate.
Management
of Associates assessed the effectiveness of its internal control over financial
reporting, as it is applicable to the Partnership, as of the end of the
Partnership’s most recent fiscal year. In making this assessment, it used the
criteria set forth in Internal Control – Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based
on its assessment, management of Associates concluded that, for the reasons set
forth above under “Disclosure controls and procedures,” the internal control
over financial reporting, as it is applicable to the Partnership, was not
effective as of March 31, 2010, 2009, 2008, 2007, 2006, 2005 and 2004. This
annual report does not include an attestation report of the Partnership’s
independent registered public accounting firm regarding internal control over
financial reporting. Management’s report was not subject to attestation by the
Partnership’s independent registered public accounting firm pursuant to
temporary rules of the Securities and Exchange Commission that permit the
Partnership to provide only management’s report in this annual
report.
For
purposes of the Securities Exchange Act of 1934, the term “material weakness” is
a deficiency, or a combination of deficiencies, in a reporting company’s
internal control over financial reporting such that there is a reasonable
possibility that a material misstatement of the company's annual or interim
financial statements will not be prevented or detected on a timely
basis. For the reasons discussed above in this Item 9A, sub-section
(a) under the caption “Disclosure Controls and Procedures,” the Partnership’s
internal control over financial reporting has not been effective in permitting
timely reporting of the Partnership’s financial
information. Accordingly, the management of Associates believes that
this inability to generate timely reports constitutes a material weakness in its
internal control over financial reporting.
(c) Changes in internal
controls
There
were no changes in the Partnership’s internal control over financial reporting
that occurred during the years ended March 31, 2010, 2009, 2008, 2007, 2006,
2005 and 2004 that materially affected, or are reasonably likely to materially
affect, the Partnership’s internal control over financial
reporting.
74
Item
9B. Other Information
|
NONE
|
PART
III.
Item
10. Directors, Executive Officers and Corporate Governance
(a)
|
Identification of
Directors, (b) Identification of Executive Officers, (c) Identification of
Certain Significant Employees, (d) Family Relationships, and (e) Business
Experience
|
Neither
the General Partner nor the Partnership has directors, executives officers or
employees of its own. The business of the Partnership is conducted
primarily through Associates. Associates is a California corporation
which was organized in 1971. The following biographical information
is presented for the officers and employees of Associates with principal
responsibility for the Partnership’s affairs.
WNC &
Associates, Inc. is
a California corporation which was organized in 1971. Its officers and
significant employees are included in the following list, which also includes
certain officers of WNC Capital Corporation:
Wilfred
N. Cooper, Sr.
|
Chairman
|
Wilfred
N. Cooper, Jr.
|
President
and Chief Executive Officer
|
Michael
J. Gaber
|
Chief
Operating Officer and Executive Vice President
|
David
N. Shafer, Esq.
|
Executive
Vice President
|
Darrick
Metz
|
Senior
Vice President - Originations
|
Melanie
R. Wenk
|
Vice
President – Accounting and Finance - Chief Financial
Officer
|
Thomas
J. Hollingsworth
|
Vice
President – Portfolio Management
|
Paula
Hall
|
Vice
President – Asset Management
|
Christine
A. Cormier
|
Vice
President – Fund Management
|
Gregory
S. Hand
|
Vice
President – Acquisitions
|
Kelly
Henderson
|
Vice
President – Acquisitions
|
Thomas
F. Maxwell
|
Vice
President – Originations
|
Kay
L. Cooper
|
Director
of WNC & Associates, Inc.
|
Jennifer
E. Cooper
|
Director
of WNC & Associates, Inc.
|
In
addition to Wilfred N. Cooper, Sr., the directors of WNC & Associates, Inc.
are Wilfred N. Cooper, Jr., Kay L. Cooper and Jennifer E. Cooper.
Wilfred
N. Cooper, Sr., age 80, is the founder and Chairman of the Board of Directors of
WNC & Associates, Inc., a Director of WNC Capital Corporation, and a general
partner in some of the partnerships previously sponsored by WNC &
Associates, Inc. Mr. Cooper has been actively involved in the affordable housing
industry since 1968. Previously, during 1970 and 1971, he was founder and a
principal of Creative Equity Development Corporation, a predecessor of WNC &
Associates, Inc., and of Creative Equity Corporation, a real estate investment
firm. For 12 years before that, Mr. Cooper was employed by Rockwell
International Corporation, last serving as its manager of housing and urban
developments where he had responsibility for factory-built housing evaluation
and project management in urban planning and development. He has testified
before committees of the U.S. Senate and the U.S. House of Representatives on
matters pertaining to the affordable housing industry. Mr. Cooper is a Life
Director of the National Association of Home Builders (“NAHB”), a National
Trustee for NAHB’s Political Action Committee, and a past Chairman of NAHB’s
Multifamily Council. He is a Life Trustee of the National Housing Conference,
and a co-founder and Director Emeritus of the California Housing Consortium. He
is the husband of Kay Cooper and the father of Wilfred N. Cooper, Jr. Mr. Cooper
graduated from Pomona College in 1956 with a Bachelor of Arts
degree.
75
Wilfred
N. Cooper, Jr., age 48, is President, Chief Executive Officer, Secretary, a
Director and a member of the Acquisition Committee of WNC & Associates, Inc.
He is President and a Director of, and a registered principal with, WNC Capital
Corporation. He has been involved in real estate investment and acquisition
activities since 1988 when he joined WNC & Associates, Inc. Previously, he
served as a Government Affairs Assistant with Honda North America in Washington,
D.C. Mr. Cooper serves on the Orange County Advisory Board of U.S. Bank and the
New York State Association for Affordable Housing, the Board of Trustees of NHC,
and the Tax Policy Council of the National Trust for Historic
Preservation. He is a member of the Urban Land Institute and of
Vistage International, a global network of business leaders and chief
executives. He is the son of Wilfred Cooper, Sr. and Kay Cooper. Mr. Cooper
graduated from The American University in 1985 with a Bachelor of Arts
degree.
Michael
J. Gaber, age 44, is Chief Operating Officer, an Executive Vice President, chair
of the Acquisition Committee and oversees the Property Acquisition and
Investment Management groups of WNC & Associates, Inc. Mr. Gaber has been
involved in real estate acquisition, valuation and investment activities since
1989 and has been associated with WNC & Associates, Inc. since 1997. Prior
to joining WNC & Associates, Inc., he was involved in the valuation and
classification of major assets, restructuring of debt and analysis of real
estate taxes with a large financial institution. Mr. Gaber is a member of the
Housing Credit Group of NAHB and of National Housing and Rehabilitation
Association (“NH&RA”). Mr. Gaber graduated from the California State
University, Fullerton in 1991 with a Bachelor of Science degree in Business
Administration – Finance.
David N.
Shafer, age 58, is an Executive Vice President, chair of the Portfolio
Disposition Committee, a member of the Acquisition Committee and oversees the
New Markets Tax Credit group of WNC & Associates, Inc. Mr. Shafer has been
active in the real estate industry since 1984. Before joining WNC &
Associates, Inc. in 1990, he was engaged as an attorney in the private practice
of law with a specialty in real estate and taxation. Mr. Shafer is a Director
and past President of the California Council of Affordable Housing, a Director
of the Council for Affordable and Rural Housing and a member of the State Bar of
California. Mr. Shafer graduated from the University of California at Santa
Barbara in 1978 with a Bachelor of Arts degree, from the New England School of
Law in 1983 with a Juris Doctor degree cum laude and from the University of San
Diego in 1986 with a Master of Laws degree in Taxation.
Darrick
Metz, age 40, is Senior Vice President – Originations of WNC & Associates,
Inc. He has been involved in multifamily property underwriting, acquisition and
investment activities since 1991. Prior to joining WNC in 1999, he was employed
by a Minnesota development company specializing in Tax Credit and market rate
multifamily projects. Mr. Metz also worked with the Minnesota Housing Finance
Agency (“MHFA”), where he held the position of Senior Housing Development
Officer. While at MHFA, he was responsible for the allocation of Tax Credits,
HOME funds and state loan products. Mr. Metz is active in the Qualified
Allocation Plan Tax Credit Advisory Committee for the Wisconsin Housing and
Economic Development Authority, a member of MHFA’s Multifamily Technical
Assistance and a board member of NH&RA. He graduated from St. Cloud State
University in 1993 with a Bachelor of Science degree in
finance/economics.
Melanie
R. Wenk, age 42, is Vice President – Accounting and Finance – Chief Financial
Officer of WNC & Associates, Inc. She oversees WNC’s corporate and
partnership accounting group, which is responsible for SEC reporting and New
Markets Tax Credit compliance. Prior to joining WNC in 2003, Ms. Wenk was
associated as a public accountant with BDO Seidman, LLP. She graduated from the
California Polytechnic State University, Pomona in 1999 with a Bachelor of
Science degree in accounting.
Thomas J.
Hollingsworth, age 60, is Vice President – Portfolio Management, a member of the
Acquisition Committee, and oversees the portfolio management group of WNC &
Associates, Inc. Mr. Hollingsworth has been involved in real estate
acquisitions, operations and syndication of multifamily properties for over 28
years. Prior to joining WNC in 2005, he was the senior workout specialist at Key
Corporation Housing Management, Inc., a division of Key Bank. He has also been
responsible for structuring several tax sheltered multifamily acquisitions
during his career. Mr. Hollingsworth graduated from the University of Utah in
1973 with a Bachelor of Science degree (cum laude) in Business
Administration.
76
Paula
Hall, age 44, is Vice President – Asset Management, a member of the Acquisition
Committee, and oversees the asset management group of WNC & Associates, Inc.
She joined WNC in 1997 and has more than 21 years of property management
experience. Ms. Hall is a Certified Occupancy Specialist (CPO), Housing Credit
Certified Professional (HCCP), and Certified Property Manager (CPM) candidate.
Prior to joining WNC, she was a property manager for NHP Property Management
(AIMCO) where she oversaw operations, training and development.
Christine
A. Cormier, age 52, is Vice President – Fund Management, a member of the
Placement Committee and the Disposition Committee, and oversees the fund
management group of WNC & Associates, Inc. Ms. Cormier has been active in
the real estate industry since 1985. Prior to joining WNC in 2008, Ms. Cormier
was with another major tax credit syndicator for over 12 years where she was the
Managing Director of investor relations. Ms. Cormier graduated from Bentley
University in 1982 with a Bachelor of Science degree (summa cum laude) in
accounting and computer science.
Gregory
S. Hand, age 47, is Vice President – Acquisitions and oversees the property
underwriting activities of the Irvine office of WNC & Associates, Inc. Mr.
Hand has been involved in real estate analysis, development and management since
1987. Prior to joining WNC in 1998, he was a portfolio asset manager with a
national Tax Credit sponsor with responsibility for the management of $200
million in assets. Prior to that, he was a finance manager with The Koll Company
and a financial analyst with The Irvine Company. Mr. Hand graduated from Iowa
State University in 1987 with a Bachelor of Business Administration degree in
finance.
Kelly
Henderson, Esq., age 38, is Vice President – Acquisitions and oversees the
property underwriting activities of the New York City office of WNC &
Associates, Inc. Prior to joining WNC in 2006, she was Vice President –
Acquisitions and Senior Counsel with a national Tax Credit
syndicator. Ms. Henderson has been underwriting Tax Credit properties
since 1999. She graduated from the State University of New York at Geneseo in
1993 with a Bachelor of Arts degree in political science, and from the New
England School of Law in 1996 with a Juris Doctor degree. She is
licensed to practice law in the States of New York and
Massachusetts.
Thomas F.
Maxwell, age 59, is Vice President – Originations of the Northeast Region. He
has 17 years of experience in the Tax Credit industry, and more than 30 years of
real estate experience, including originating, structuring and closing all types
of affordable housing developments. Prior to joining WNC in 2009, he served as a
team leader for a national Tax Credit syndicator for nine years. Mr. Maxwell
graduated from Case Western Reserve University in 1974 with a Bachelor of Arts
degree in English, and from Boston University in 1980 with a Master of Business
Administration degree.
Kay L.
Cooper, age 73, is a Director of WNC & Associates, Inc. and has not
otherwise been engaged in business activities during the previous five years.
Kay Cooper was the sole proprietor of Agate 108, a manufacturer and retailer of
home accessory products from 1975 until its sale in 1998. She is the wife of
Wilfred Cooper, Sr. and the mother of Wilfred Cooper, Jr. Ms. Cooper graduated
from the University of Southern California in 1958 with a Bachelor of Science
degree.
Jennifer
E. Cooper, age 47, is a Director of WNC & Associates, Inc. and has not
otherwise been engaged in business activities during the previous five years.
She is the wife of Wilfred Cooper, Jr. and attended the University of Texas from
1981 to 1986.
77
(f)
|
Involvement in Certain
Legal Proceedings
|
|
None.
|
(g)
|
Promoters and Control
Persons
|
Inapplicable.
(h) Audit Committee Financial
Expert, and (i) Identification of the Audit Committee
Neither
the Partnership nor the General Partners, has an audit committee.
(j) Changes to Nominating
Procedures
Inapplicable.
(k) Compliance With Section
16(a) of the Exchange Act
None.
(l) Code of
Ethics
Associates
has adopted a Code of Ethics which applies to the Chief Executive Officer and
Chief Financial Officer of Associates. The Code of Ethics will be
provided without charge to any person who requests it. Such requests
should be directed to: Investor Relations at (714) 662-5565 extension
187.
Item
11. Executive Compensation
The
General Partner and its affiliates are not permitted under Section 5.6 of the
Partnership’s Agreement of Limited Partnership (the “Agreement,” incorporated as
Exhibit 3.1 to this report) to receive any salary, fees, profits, distributions
or allocations from the Partnership or any Local Limited Partnership in which
the Partnership invests except as expressly allowed by the
Agreement. The compensation and other economic benefits to the
General Partner and its Affiliates provided for in the Agreement are summarized
below.
(a) Compensation for
Services
For
services rendered by the General Partner or an affiliate of the General Partner
in connection with the administration of the affairs of the Partnership, the
General Partner or any such affiliate may receive an annual asset management fee
not to exceed 0.5% of the invested assets of the Local Limited Partnerships,
including the Partnership’s allocable share of the mortgages. The
asset management fee is payable with respect to the previous calendar quarter on
the first day of each calendar quarter during the year. Accrued but unpaid asset
management fees for any year are deferred without interest and are payable in
subsequent years from any funds available to the Partnership after payment of
all other costs and expenses of the Partnership, including any capital reserves
then determined by the General Partner to no longer be necessary to be retained
by the Partnership, or from the proceeds of a sale or refinancing of Partnership
assets. Fees of $91,900, $91,900, $91,900, $91,900, $91,900, $77,335
and $27,168 were incurred during the years ended March 31, 2010, 2009, 2008,
2007, 2006, 2005 and 2004, respectively, of which $10,000, $20,000, $17,500,
$11,250, $18,750, $15,000 and $0 were paid during the years ended March 31,
2010, 2009, 2008, 2007, 2006, 2005 and 2004, respectively.
78
Subject
to a number of terms and conditions set forth in the Agreement, the General
Partner and its affiliates may be entitled to compensation for services actually
rendered or to be rendered in connection with (i) selecting, evaluating,
structuring, negotiating and closing the Partnership's investments in Local
Limited Partnership Interests, (ii) the acquisition or development of Properties
for the Local Limited Partnerships, or (iii) property management services
actually rendered by the General Partner or its affiliates respecting the
Properties owned by Local Limited Partnerships. The Partnership has
completed its investment stage, so no compensation for the services in (i) or
(ii) has been paid during the period covered by this report and none will be
paid in the future. None of the services described in (iii) were
rendered and no such compensation was payable for such services during the
periods covered by this report.
(b) Operating
Expenses
Reimbursement
to the General Partner or any of its affiliates of Operating Cash Expenses is
subject to specific restrictions in Section 5.3.3 of the Partnership’s Agreement
of Limited Partnership (the “Agreement,” incorporated as Exhibit 3.1 to this
report). The Agreement defines “Operating Cash Expenses”
as
“ . . .
the amount of cash disbursed by the Partnership . . . in the ordinary course of
business for the payment of its operating expenses, such as expenses for
management, utilities, repair and maintenance, insurance, investor
communications, legal, accounting, statistical and bookkeeping services, use of
computing or accounting equipment, travel and telephone expenses, salaries and
direct expenses of Partnership employees while engaged in Partnership business,
and any other operational and administrative expenses necessary for the prudent
operation of the Partnership. Without limiting the generality of the foregoing,
Operating Cash Expenses shall include fees paid by the Partnership to any
General Partner or any Affiliate of a General Partner permitted by this
Agreement and the actual cost of goods, materials and administrative services
used for or by the Partnership, whether incurred by a General Partner, an
Affiliate of a General Partner or a non-Affiliated Person in performing the
foregoing functions. As used in the preceding sentence, actual cost of goods and
materials means the actual cost of goods and materials used for or by the
Partnership and obtained from entities not Affiliated with a General Partner,
and actual cost of administrative services means the pro rata cost of personnel
(as if such persons were employees of the Partnership) associated therewith, but
in no event to exceed the Competitive amount.”
The
Agreement provides that no such reimbursement shall be permitted for services
for which a General Partner or any of its Affiliates is entitled to compensation
by way of a separate fee. Furthermore, no such reimbursement is to be
made for (a) rent or depreciation, utilities, capital equipment or other such
administrative items, and (b) salaries, fringe benefits, travel expenses and
other administrative items incurred or allocated to any "controlling person" of
a General Partner or any Affiliate of a General Partner. For the purposes of
Section 5.3.4, "controlling person" includes, but is not limited to, any person,
however titled, who performs functions for a General Partner or any Affiliate of
a General Partner similar to those of: (1) chairman or member of the board of
directors; (2) executive management, such as president, vice president or senior
vice president, corporate secretary or treasurer; (3) senior management, such as
the vice president of an operating division who reports directly to executive
management; or (4) those holding 5% or more equity interest in such General
Partner or any such Affiliate of a General Partner or a person having the power
to direct or cause the direction of such General Partner or any such Affiliate
of a General Partner, whether through the ownership of voting securities, by
contract or otherwise.
The
unpaid operating expenses reimbursable to the General Partner or its affiliates
were $6,449, $609, $3,060, $17,440, $29,821, $9,157 and $2,326 for the years
ended March 31, 2010, 2009, 2008, 2007, 2006, 2005 and 2004,
respectively. The Partnership reimbursed the General Partner or its
affiliates for operating expenses of $2,266 $9,009, $30,873, $31,707, $25,741,
$44,987 and $13,409, during the years ended March 31, 2010, 2009, 2008, 2007,
2006, 2005 and 2004, respectively.
79
(c) Interest
in Partnership
The
General Partner receives 0.1% of the Partnership’s allocated Low Income Housing
Tax Credits, which approximated $1,330, $1,330, $1,308, $1,343, $1,125, $706 and
$262 for the years ended December 31, 2009, 2008, 2007, 2006, 2005, 2004
and 2003, respectively. The General Partner is also
entitled to receive 0.1% of the Partnership’s operating income or losses, gain
or loss from the sale of property and operating cash distributions. There were
no distributions of operating cash to the General Partner during the years ended
March 31, 2010, 2009, 2008, 2007, 2006, 2005 and 2004. The
General Partner has an interest in sale or refinancing proceeds as follows:
after the Limited Partners have received a return of their capital, General
Partner may receive an amount equal to its capital contribution, less any prior
distribution of such proceeds, then the General Partner may receive 10% and the
Limited Partners 90% of any remaining proceeds. There were no such
distributions of cash to the General Partner during the years ended March 31,
2010, 2009, 2008, 2007, 2006, 2005 and 2004.
(d) Subordinated
Disposition Fee
A
subordinated disposition fee in an amount equal to 1% of the sale price of real
estate sold by the Local Limited Partnerships. Payment of this fee is
subordinated to the Limited Partners receiving distributions equal to their
capital contributions and their return on investment (as defined in the
Partnership Agreement) and is payable only if services are rendered in the sales
effort. No such fee was incurred for all periods
presented.
Item
12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
(a)
|
Securities Authorized
for Issuance Under Equity Compensation
Plans
|
|
The
Partnership has no compensation plans under which interests in the
Partnership are authorized for
issuance.
|
(b)
|
Security Ownership of
Certain Beneficial Owners
|
|
No
person is known to own beneficially in excess of 5% of the outstanding
Partnership Units.
|
(c)
|
Security Ownership of
Management
|
Neither
the General Partner, Associates, its affiliates, nor any of the officers or
directors of the General Partner, Associates or its affiliates own directly or
beneficially any Partnership Units.
(d)
|
Changes in
Control
|
The
management and control of Associates and its affiliates may be changed at any
time in accordance with its respective organizational documents, without the
consent or approval of the Limited Partners. In addition, the
Partnership Agreement provides for the admission of one or more additional and
successor General Partners in certain circumstances.
First,
with the consent of the General Partner and a majority-in-interest of the
Limited Partners, the General Partner may designate one or more persons to be
successor or additional General Partners. In addition, the General Partner may,
without the consent of the Limited Partners, (i) substitute in its stead as
General Partner any entity which has, by merger, consolidation or otherwise,
acquired substantially all of its assets, stock or other evidence of equity
interest and continued its business, or (ii) cause to be admitted to the
Partnership an additional General Partner or Partners if it deems such admission
to be necessary or desirable so that the Partnership will be classified a
partnership for Federal income tax purposes. Finally, a
majority-in-interest of the Limited Partners may at any time remove the General
Partner of the Partnership and elect a successor General
Partner.
80
Item
13. Certain Relationships and Related Transactions, and Director
Independence
(a)
|
The
General Partner manages all of the Partnership’s affairs. The
transactions with the General Partner are primarily in the form of fees
paid by the Partnership for services rendered to the Partnership,
reimbursement of expenses, and the General Partner’s interests in the
Partnership, as discussed in Item 11 and in the notes to the Partnership’s
financial statements.
|
(b)
|
The
Partnership has no directors.
|
Item
14. Principal Accountant Fees and Services
The
following is a summary of fees paid to the Partnership’s principal independent
registered public accounting firm for the years ended March 31:
2010
|
2009
|
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||
Audit
Fees
|
$
|
-
|
$
|
-
|
$
|
9,765
|
$
|
11,625
|
$
|
20,105
|
$
|
23,225
|
$
|
1,000
|
Audit-related
Fees
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||
Tax
Fees
|
3,035
|
2,890
|
2,755
|
2,625
|
2,500
|
2,075
|
-
|
|||||||
All
Other Fees
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||
TOTAL
|
$
|
3,035
|
$
|
2,890
|
$
|
12,520
|
$
|
14,250
|
$
|
22,105
|
$
|
25,300
|
$
|
1,000
|
The
Partnership has no Audit Committee. All audit services and any permitted
non-audit services performed by the Partnership’s independent auditors are
preapproved by the General Partner.
81
PART
IV.
Item
15. Exhibits and Financial Statement Schedules
(a)(1)
|
List of Financial
statements included in Part II
hereof
|
|
Balance
Sheets, March 31, 2010, 2009, 2008, 2007, 2006, 2005 and
2004
|
|
Statements
of Operations for the years ended March 31, 2010, 2009, 2008, 2007, 2006,
2005 and 2004
|
|
Statements
of Partners’ Equity (Deficit) for the years ended March 31, 2010, 2009,
2008, 2007, 2006, 2005 and 2004
|
|
Statements
of Cash Flows for the years ended March 31, 2010, 2009, 2008, 2007, 2006,
2005 and 2004
|
|
Notes
to Financial Statements
|
(a)(2)
|
List of Financial
statement schedules included in Part IV
hereof:
|
Schedule III, Real Estate Owned by
Local Limited Partnerships
(a)(3)
|
Exhibits.
|
3.1
|
Articles
of incorporation and by-laws: The registrant is not
incorporated. The Partnership Agreement filed as Exhibit 28.1
to Form 10-K for fiscal year ended December 31, 1995 is hereby
incorporated herein by reference as Exhibit
3.1.
|
31.1
|
Certification
of the Chief Executive Officer pursuant to Rule 13a-14 and 15d-14 (filed
herewith)
|
31.2
|
Certification
of the Chief Financial Officer pursuant to Rule 13a-14 and 15d-14 (filed
herewith)
|
32.1
|
Section
1350 Certification of the Chief Executive Officer. (filed
herewith)
|
32.2
|
Section
1350 Certification of the Chief Financial Officer. (filed
herewith)
|
99.1
|
Second
Amendment to the Amended and Restated Agreement of Limited Partnership of
Catoosa Senior Village, L.P. as exhibit 10.3 to Form 8-K/A Current Report
dated September 5, 2003 is herein incorporated by reference as exhibit
99.1.
|
99.2
|
Amended
and Restated Agreement of Limited Partnership of Humboldt Village, L.P. as
exhibit 99.1 to Form 8-K Current Report dated June 8, 2004 is herein
incorporated by reference as exhibit
99.2.
|
99.3
|
Financial
Statements of Catoosa Senior Village, L.P., as of and for the years ended
December 31, 2005, 2004 and 2003 together with Independent Auditors’
Report thereon; a significant subsidiary of the Partnership. (filed
herewith)
|
99.4
|
Financial
Statements of Starlight, L.P., as of and for the years ended December 31,
2009, 2008, 2007, 2006, 2005, 2004 and 2003 together with Independent
Auditors’ Report thereon; a significant subsidiary of the Partnership.
(filed herewith)
|
82
WNC
Housing Tax Credit Fund VI, L.P., Series 10
|
||||||||||||||||||
Schedule
III
|
||||||||||||||||||
Real
Estate Owned by Local Limited Partnerships
|
||||||||||||||||||
March
31, 2010
|
||||||||||||||||||
As
of March 31, 2010
|
Initial
Cost to Partnership
|
As
of December 31, 2009
|
||||||||||||||||
Local
Limited Partnership Name
|
Location
|
Total Investment
in Local Limited Partnership
|
Amount
of Investment Paid to Date
|
Land
|
Building
& Improvements
|
Cost
Capitalized Subsequent to Acquisition
|
Mortgage
Balances of Local Limited Partnerships
|
Land
|
Building
& Equipment
|
Accumulated
Depreciation
|
Net
Book Value
|
|||||||
Catoosa
Senior Village, L.P.
|
Calhoun,
Georgia
|
$
1,997,000
|
$
1,997,000
|
$ 456,000
|
$ 4,352,000
|
$ 9,000
|
$ 2,281,000
|
$ 456,000
|
$ 4,361,000
|
$ 956,000
|
$ 3,861,000
|
|||||||
FDI-Green
Manor 2003, Ltd.
|
Hempstead,
Texas
|
617,000
|
613,000
|
27,000
|
1,734,000
|
36,000
|
1,118,000
|
27,000
|
1,770,000
|
243,000
|
1,554,000
|
|||||||
FDI-Pine
Meadows 2003, Ltd.
|
Prairie
View, Texas
|
668,000
|
668,000
|
47,000
|
1,693,000
|
61,000
|
1,045,000
|
47,000
|
1,754,000
|
244,000
|
1,557,000
|
|||||||
Humboldt
Village, L.P.
|
Winnemucca,
Nevada
|
1,713,000
|
1,713,000
|
79,000
|
4,223,000
|
37,000
|
2,311,000
|
79,000
|
4,260,000
|
748,000
|
3,591,000
|
|||||||
Melodie
Meadows Associates, Ltd.
|
Glencoe,
Alabama
|
1,569,000
|
1,569,000
|
209,000
|
2,693,000
|
1,000
|
1,215,000
|
209,000
|
2,694,000
|
550,000
|
2,353,000
|
|||||||
Starlight
Place, L.P.
|
Americus,
Georgia
|
3,258,000
|
3,258,000
|
249,000
|
4,396,000
|
38,000
|
369,000
|
249,000
|
4,434,000
|
685,000
|
3,998,000
|
|||||||
$ 9,822,000
|
$ 9,818,000
|
$ 1,067,000
|
$ 19,091,000
|
$ 182,000
|
$ 8,339,000
|
$ 1,067,000
|
$ 19,273,000
|
$ 3,426,000
|
$ 16,914,000
|
83
WNC
Housing Tax Credit Fund VI, L.P., Series 10
|
|||||||||||||
Schedule
III
|
|||||||||||||
Real
Estate Owned by Local Limited Partnerships
|
|||||||||||||
March
31, 2010
|
|||||||||||||
For
the Year Ended December 31, 2009
|
|||||||||||||
Local
Limited
Partnership
Name
|
Rental
Income
|
Net
Loss
|
Year
Investment Acquired
|
Estimated
Useful Life (Years)
|
|||||||||
Catoosa
Senior Village, L.P.
|
$
271,000
|
$
(101,000)
|
2003
|
40
|
|||||||||
FDI-Green
Manor 2003, Ltd.
|
146,000
|
(44,000)
|
2004
|
40
|
|||||||||
FDI-Pine
Meadows 2003, Ltd.
|
266,000
|
(1,000)
|
2004
|
40
|
|||||||||
Humboldt
Village, L.P.
|
349,000
|
(81,000)
|
2004
|
40
|
|||||||||
Melodie
Meadows Associates, Ltd.
|
140,000
|
(62,000)
|
2003
|
40
|
|||||||||
Starlight
Place, L.P.
|
249,000
|
(106,000)
|
2004
|
40
|
|||||||||
$1,421,000
|
$ (395,000)
|
84
WNC
Housing Tax Credit Fund VI, L.P., Series 10
|
||||||||||||||||||
Schedule
III
|
||||||||||||||||||
Real
Estate Owned by Local Limited Partnerships
|
||||||||||||||||||
March
31, 2009
|
||||||||||||||||||
As
of March 31, 2009
|
Initial
Cost to Partnership
|
As
of December 31, 2008
|
||||||||||||||||
Local
Limited Partnership Name
|
Location
|
Total Investment
in Local Limited Partnership
|
Amount
of Investment Paid to Date
|
Land
|
Building
& Improvements
|
Cost
Capitalized Subsequent to Acquisition
|
Mortgage
Balances of Local Limited Partnerships
|
Land
|
Building
& Equipment
|
Accumulated
Depreciation
|
Net
Book Value
|
|||||||
Catoosa
Senior Village, L.P.
|
Calhoun,
Georgia
|
$
1,997,000
|
$
1,997,000
|
$ 456,000
|
$ 4,352,000
|
$ 1,000
|
$ 2,297,000
|
$ 456,000
|
$ 4,353,000
|
$ 804,000
|
$ 4,004,000
|
|||||||
FDI-Green
Manor 2003, Ltd.
|
Hempstead,
Texas
|
617,000
|
613,000
|
27,000
|
1,734,000
|
32,000
|
1,132,000
|
27,000
|
1,766,000
|
196,000
|
1,597,000
|
|||||||
FDI-Pine
Meadows 2003, Ltd.
|
Prairie
View, Texas
|
668,000
|
668,000
|
47,000
|
1,693,000
|
51,000
|
1,061,000
|
47,000
|
1,744,000
|
196,000
|
1,595,000
|
|||||||
Humboldt
Village, L.P.
|
Winnemucca,
Nevada
|
1,713,000
|
1,713,000
|
79,000
|
4,223,000
|
31,000
|
2,332,000
|
79,000
|
4,254,000
|
610,000
|
3,723,000
|
|||||||
Melodie
Meadows Associates, Ltd.
|
Glencoe,
Alabama
|
1,569,000
|
1,569,000
|
209,000
|
2,693,000
|
1,000
|
1,216,000
|
209,000
|
2,694,000
|
469,000
|
2,434,000
|
|||||||
Starlight
Place, L.P.
|
Americus,
Georgia
|
3,258,000
|
3,258,000
|
249,000
|
4,396,000
|
38,000
|
371,000
|
249,000
|
4,434,000
|
532,000
|
4,151,000
|
|||||||
$ 9,822,000
|
$ 9,818,000
|
$ 1,067,000
|
$ 19,091,000
|
$ 154,000
|
$ 8,409,000
|
$ 1,067,000
|
$ 19,245,000
|
$ 2,808,000
|
$ 17,504,000
|
85
WNC
Housing Tax Credit Fund VI, L.P., Series 10
|
|||||||||||||
Schedule
III
|
|||||||||||||
Real
Estate Owned by Local Limited Partnerships
|
|||||||||||||
March
31, 2009
|
|||||||||||||
For
the Year Ended December 31, 2008
|
|||||||||||||
Local
Limited
Partnership
Name
|
Rental
Income
|
Net
Loss
|
Year
Investment Acquired
|
Estimated
Useful Life (Years)
|
|||||||||
Catoosa
Senior Village, L.P.
|
$
250,000
|
$
(119,000)
|
2003
|
40
|
|||||||||
FDI-Green
Manor 2003, Ltd.
|
161,000
|
(52,000)
|
2004
|
40
|
|||||||||
FDI-Pine
Meadows 2003, Ltd.
|
238,000
|
(17,000)
|
2004
|
40
|
|||||||||
Humboldt
Village, L.P.
|
362,000
|
(67,000)
|
2004
|
40
|
|||||||||
Melodie
Meadows Associates, Ltd.
|
135,000
|
(62,000)
|
2003
|
40
|
|||||||||
Starlight
Place, L.P.
|
236,000
|
(106,000)
|
2004
|
40
|
|||||||||
$ 1,382,000
|
$ (423,000)
|
86
WNC
Housing Tax Credit Fund VI, L.P., Series 10
|
||||||||||||||||||
Schedule
III
|
||||||||||||||||||
Real
Estate Owned by Local Limited Partnerships
|
||||||||||||||||||
March
31, 2008
|
||||||||||||||||||
As
of March 31, 2008
|
Initial
Cost to Partnership
|
As
of December 31, 2007
|
||||||||||||||||
Local
Limited Partnership Name
|
Location
|
Total Investment
in Local Limited Partnership
|
Amount
of Investment Paid to Date
|
Land
|
Building
& Improvements
|
Cost
Capitalized Subsequent to Acquisition
|
Mortgage
Balances of Local Limited Partnerships
|
Land
|
Building
& Equipment
|
Accumulated
Depreciation
|
Net
Book Value
|
|||||||
Catoosa
Senior Village, L.P.
|
Calhoun,
Georgia
|
$
1,997,000
|
$
1,997,000
|
$ 456,000
|
$ 4,352,000
|
$ 1,000
|
$ 2,313,000
|
$ 456,000
|
$ 4,353,000
|
$ 655,000
|
$ 4,154,000
|
|||||||
FDI-Green
Manor 2003, Ltd.
|
Hempstead,
Texas
|
617,000
|
613,000
|
27,000
|
1,734,000
|
$ 12,000
|
1,145,000
|
27,000
|
1,746,000
|
150,000
|
1,623,000
|
|||||||
FDI-Pine
Meadows 2003, Ltd.
|
Prairie
View, Texas
|
668,000
|
668,000
|
47,000
|
1,693,000
|
35,000
|
1,075,000
|
47,000
|
1,728,000
|
147,000
|
1,628,000
|
|||||||
Humboldt
Village, L.P.
|
Winnemucca,
Nevada
|
1,713,000
|
1,713,000
|
79,000
|
4,223,000
|
9,000
|
2,353,000
|
79,000
|
4,232,000
|
466,000
|
3,845,000
|
|||||||
Melodie
Meadows Associates, Ltd.
|
Glencoe,
Alabama
|
1,569,000
|
1,569,000
|
209,000
|
2,693,000
|
1,000
|
1,223,000
|
209,000
|
2,694,000
|
388,000
|
2,515,000
|
|||||||
Starlight
Place, L.P.
|
Americus,
Georgia
|
3,258,000
|
3,258,000
|
249,000
|
4,396,000
|
38,000
|
372,000
|
249,000
|
4,434,000
|
379,000
|
4,304,000
|
|||||||
$ 9,822,000
|
$ 9,818,000
|
$ 1,067,000
|
$ 19,091,000
|
$ 96,000
|
$ 8,481,000
|
$ 1,067,000
|
$ 19,187,000
|
$ 2,185,000
|
$ 18,069,000
|
87
WNC
Housing Tax Credit Fund VI, L.P., Series 10
|
|||||||||||||
Schedule
III
|
|||||||||||||
Real
Estate Owned by Local Limited Partnerships
|
|||||||||||||
March
31, 2008
|
|||||||||||||
For
the Year Ended December 31, 2007
|
|||||||||||||
Local
Limited
Partnership
Name
|
Rental
Income
|
Net
Income
(Loss)
|
Year
Investment Acquired
|
Estimated
Useful Life (Years)
|
|||||||||
Catoosa
Senior Village, L.P.
|
$
241,000
|
$
(103,000)
|
2003
|
40
|
|||||||||
FDI-Green
Manor 2003, Ltd.
|
137,000
|
(41,000)
|
2004
|
40
|
|||||||||
FDI-Pine
Meadows 2003, Ltd.
|
258,000
|
12,000
|
2004
|
40
|
|||||||||
Humboldt
Village, L.P.
|
360,000
|
(53,000)
|
2004
|
40
|
|||||||||
Melodie
Meadows Associates, Ltd.
|
127,000
|
(78,000)
|
2003
|
40
|
|||||||||
Starlight
Place, L.P.
|
230,000
|
(63,000)
|
2004
|
40
|
|||||||||
$1,353,000
|
$(326,000)
|
88
WNC
Housing Tax Credit Fund VI, L.P., Series 10
|
||||||||||||||||||
Schedule
III
|
||||||||||||||||||
Real
Estate Owned by Local Limited Partnerships
|
||||||||||||||||||
March
31, 2007
|
||||||||||||||||||
As
of March 31, 2007
|
Initial
Cost to Partnership
|
As
of December 31, 2006
|
||||||||||||||||
Local
Limited Partnership Name
|
Location
|
Total Investment
in Local Limited Partnership
|
Amount
of Investment Paid to Date
|
Land
|
Building
& Improvements
|
Cost
Capitalized Subsequent to Acquisition
|
Mortgage
Balances of Local Limited Partnerships
|
Land
|
Building
& Equipment
|
Accumulated
Depreciation
|
Net
Book Value
|
|||||||
Catoosa
Senior Village, L.P.
|
Calhoun,
Georgia
|
$
1,997,000
|
$
1,997,000
|
$ 456,000
|
$ 4,352,000
|
$ 1,000
|
$ 2,331,000
|
$ 456,000
|
$ 4,353,000
|
$ 503,000
|
$ 4,306,000
|
|||||||
FDI-Green
Manor 2003, Ltd.
|
Hempstead,
Texas
|
617,000
|
613,000
|
27,000
|
1,734,000
|
8,000
|
1,158,000
|
27,000
|
1,742,000
|
106,000
|
1,663,000
|
|||||||
FDI-Pine
Meadows 2003, Ltd.
|
Prairie
View, Texas
|
668,000
|
668,000
|
47,000
|
1,693,000
|
26,000
|
1,089,000
|
47,000
|
1,719,000
|
103,000
|
1,663,000
|
|||||||
Humboldt
Village, L.P.
|
Winnemucca,
Nevada
|
1,713,000
|
1,713,000
|
79,000
|
4,223,000
|
9,000
|
2,376,000
|
79,000
|
4,232,000
|
322,000
|
3,989,000
|
|||||||
Melodie
Meadows Associates, Ltd.
|
Glencoe,
Alabama
|
1,569,000
|
1,569,000
|
209,000
|
2,693,000
|
1,000
|
1,227,000
|
209,000
|
2,694,000
|
307,000
|
2,596,000
|
|||||||
Starlight
Place, L.P.
|
Americus,
Georgia
|
3,258,000
|
3,258,000
|
249,000
|
4,396,000
|
38,000
|
374,000
|
249,000
|
4,434,000
|
226,000
|
4,457,000
|
|||||||
$ 9,822,000
|
$ 9,818,000
|
$ 1,067,000
|
$ 19,091,000
|
$ 83,000
|
$ 8,555,000
|
$ 1,067,000
|
$ 19,174,000
|
$ 1,567,000
|
$ 18,674,000
|
89
WNC
Housing Tax Credit Fund VI, L.P., Series 10
|
|||||||||||||
Schedule
III
|
|||||||||||||
Real
Estate Owned by Local Limited Partnerships
|
|||||||||||||
March
31, 2007
|
|||||||||||||
For
the Year Ended December 31, 2006
|
|||||||||||||
Local
Limited
Partnership
Name
|
Rental
Income
|
Net
Income
(Loss)
|
Year
Investment Acquired
|
Estimated
Useful Life (Years)
|
|||||||||
Catoosa
Senior Village, L.P.
|
$
233,000
|
$
(127,000)
|
2003
|
40
|
|||||||||
FDI-Green
Manor 2003, Ltd.
|
153,000
|
(12,000)
|
2004
|
40
|
|||||||||
FDI-Pine
Meadows 2003, Ltd.
|
252,000
|
25,000
|
2004
|
40
|
|||||||||
Humboldt
Village, L.P.
|
402,000
|
(9,000)
|
2004
|
40
|
|||||||||
Melodie
Meadows Associates, Ltd.
|
122,000
|
(74,000)
|
2003
|
40
|
|||||||||
Starlight
Place, L.P.
|
217,000
|
(133,000)
|
2004
|
40
|
|||||||||
$ 1,379,000
|
$ (330,000)
|
90
WNC
Housing Tax Credit Fund VI, L.P., Series 10
|
||||||||||||||||||
Schedule
III
|
||||||||||||||||||
Real
Estate Owned by Local Limited Partnerships
|
||||||||||||||||||
March
31, 2006
|
||||||||||||||||||
As
of March 31, 2006
|
Initial
Cost to Partnership
|
As
of December 31, 2005
|
||||||||||||||||
Local
Limited Partnership Name
|
Location
|
Total Investment
in Local Limited Partnership
|
Amount
of Investment Paid to Date
|
Land
|
Building
& Improvements
|
Cost
Capitalized Subsequent to Acquisition
|
Mortgage
Balances of Local Limited Partnerships
|
Land
|
Building
and Equipment
|
Accumulated
Depreciation
|
Net
Book Value
|
|||||||
Catoosa
Senior Village, L.P.
|
Calhoun,
Georgia
|
$
1,997,000
|
$
1,997,000
|
$ 456,000
|
$ 4,352,000
|
$ 1,000
|
$ 2,349,000
|
$ 456,000
|
$ 4,353,000
|
$ 352,000
|
$ 4,457,000
|
|||||||
FDI-Green
Manor 2003, Ltd.
|
Hempstead,
Texas
|
617,000
|
534,000
|
27,000
|
1,734,000
|
5,000
|
1,169,000
|
27,000
|
1,739,000
|
61,000
|
1,705,000
|
|||||||
FDI-Pine
Meadows 2003, Ltd.
|
Prairie
View, Texas
|
668,000
|
668,000
|
47,000
|
1,693,000
|
12,000
|
1,101,000
|
47,000
|
1,705,000
|
59,000
|
1,693,000
|
|||||||
Humboldt
Village, L.P.
|
Winnemucca,
Nevada
|
1,713,000
|
1,713,000
|
79,000
|
4,223,000
|
8,000
|
2,396,000
|
79,000
|
4,231,000
|
178,000
|
4,132,000
|
|||||||
Melodie
Meadows Associates, Ltd.
|
Glencoe,
Alabama
|
1,569,000
|
1,569,000
|
209,000
|
2,693,000
|
1,000
|
1,231,000
|
209,000
|
2,694,000
|
227,000
|
2,676,000
|
|||||||
Starlight
Place, L.P.
|
Americus,
Georgia
|
3,258,000
|
3,258,000
|
249,000
|
4,396,000
|
-
|
375,000
|
249,000
|
4,396,000
|
75,000
|
4,570,000
|
|||||||
$ 9,822,000
|
$ 9,739,000
|
$ 1,067,000
|
$ 19,091,000
|
$ 27,000
|
$ 8,621,000
|
$ 1,067,000
|
$ 19,118,000
|
$ 952,000
|
$ 19,233,000
|
91
WNC
Housing Tax Credit Fund VI, L.P., Series 10
|
|||||||||||||
Schedule
III
|
|||||||||||||
Real
Estate Owned by Local Limited Partnerships
|
|||||||||||||
March
31, 2006
|
|||||||||||||
For
the Year Ended December 31, 2005
|
|||||||||||||
Local
Limited
Partnership
Name
|
Rental
Income
|
Net
Income
(Loss)
|
Year
Investment Acquired
|
Estimated
Useful Life (Years)
|
|||||||||
Catoosa
Senior Village, L.P.
|
$
218,000
|
$
(121,000)
|
2003
|
40
|
|||||||||
FDI-Green
Manor 2003, Ltd.
|
147,000
|
(49,000)
|
2004
|
40
|
|||||||||
FDI-Pine
Meadows 2003, Ltd.
|
247,000
|
(29,000)
|
2004
|
40
|
|||||||||
Humboldt
Village, L.P.
|
409,000
|
12,000
|
2004
|
40
|
|||||||||
Melodie
Meadows Associates, Ltd.
|
121,000
|
(74,000)
|
2003
|
40
|
|||||||||
Starlight
Place, L.P.
|
106,000
|
(94,000)
|
2004
|
40
|
|||||||||
$ 1,248,000
|
$ (355,000)
|
92
WNC
Housing Tax Credit Fund VI, L.P., Series 10
|
||||||||||||||||||
Schedule
III
|
||||||||||||||||||
Real
Estate Owned by Local Limited Partnerships
|
||||||||||||||||||
March
31, 2005
|
||||||||||||||||||
As
of March 31, 2005
|
Initial
Cost to Partnership
|
As
of December 31, 2004
|
||||||||||||||||
Local
Limited Partnership Name
|
Location
|
Total Investment
in Local Limited Partnership
|
Amount
of Investment Paid to Date
|
Land
|
Building
& Improvements
|
Cost
Capitalized Subsequent to Acquisition
|
Mortgage
Balances of Local Limited Partnerships
|
Land
|
Building,
Construction in Progress & Equipment
|
Accumulated
Depreciation
|
Net
Book Value
|
|||||||
Catoosa
Senior Village, L.P.
|
Calhoun,
Georgia
|
$ 1,997
,000
|
$ 1,997,000
|
$ 456,000
|
$ 4,352,000
|
$ 1
,000
|
$ 2,366,000
|
$ 456,000
|
$ 4,353,000
|
$ 201,000
|
$ 4,608,000
|
|||||||
FDI-Green
Manor 2003, Ltd.
|
Hempstead,
Texas
|
617,000
|
408,000
|
27,000
|
1,734,000
|
-
|
1,179,000
|
27,000
|
1,734,000
|
18,000
|
1,743,000
|
|||||||
FDI-Pine
Meadows 2003, Ltd.
|
Prairie
View, Texas
|
687,000
|
567,000
|
47,000
|
1,693,000
|
-
|
1,112,000
|
47,000
|
1,693,000
|
15,000
|
1,725,000
|
|||||||
Humboldt
Village, L.P.
|
Winnemucca,
Nevada
|
1,739,000
|
1,579,000
|
79,000
|
4,223,000
|
-
|
2,414,000
|
79,000
|
4,223,000
|
35,000
|
4,267,000
|
|||||||
Melodie
Meadows Associates, Ltd.
|
Glencoe,
Alabama
|
1,569,000
|
1,569,000
|
209,000
|
2,693,000
|
1,000
|
1,244,000
|
209,000
|
2,694,000
|
145,000
|
2,758,000
|
|||||||
Starlight
Place, L.P.
|
Americus,
Georgia
|
3,258,000
|
3,114,000
|
249,000*
|
2,611,000*
|
-
|
-
|
249,000
|
2,611,000
|
-
|
2,860,000
|
|||||||
$ 9,867,000
|
$ 9,234,000
|
$ 1,067,000
|
$ 17,306,000
|
$ 2,000
|
$ 8,315,000
|
$ 1,067,000
|
$ 17,308,000
|
$ 414,000
|
$ 17,961,000
|
* The
Local Limited Partnership is still under construction therefore significant
additional costs are going to be incurred.
93
WNC
Housing Tax Credit Fund VI, L.P., Series 10
|
|||||||||||||
Schedule
III
|
|||||||||||||
Real
Estate Owned by Local Limited Partnerships
|
|||||||||||||
March
31, 2005
|
|||||||||||||
For
the Year Ended December 31, 2004
|
|||||||||||||
Local
Limited
Partnership
Name
|
Rental
Income
|
Net
Loss
|
Year
Investment Acquired
|
Status
|
Estimated
Useful Life (Years)
|
||||||||
Catoosa
Senior Village, L.P.
|
$ 215,000
|
$ (115,000)
|
2003
|
Completed
|
40
|
||||||||
FDI-Green
Manor 2003, Ltd.
|
82,000
|
(11,000)
|
2004
|
Completed
|
40
|
||||||||
FDI-Pine
Meadows 2003, Ltd.
|
126,000
|
(9,000)
|
2004
|
Completed
|
40
|
||||||||
Humboldt
Village, L.P.
|
199,000
|
(14,000)
|
2004
|
Completed
|
40
|
||||||||
Melodie
Meadows Associates, Ltd.
|
117
,000
|
(66,000)
|
2003
|
Completed
|
40
|
||||||||
Starlight
Place, L.P.
|
**
|
**
|
2004
|
Construction
|
40
|
||||||||
$ 739
,000
|
$ (215,000)
|
** As of
December 31, 2004 the Local Limited Partnership was under
construction.
94
WNC
Housing Tax Credit Fund VI, L.P., Series 10
|
||||||||||||
Schedule
III
|
||||||||||||
Real
Estate Owned by Local Limited Partnerships
|
||||||||||||
March
31, 2004
|
||||||||||||
As
of March 31, 2004
|
As
of December 31, 2003
|
|||||||||||
Local
Limited
Partnership
Name
|
Location
|
Total Investment
in Local Limited Partnership
|
Amount
of Investment Paid to Date
|
Mortgage
Balances of Local Limited Partnerships
|
Land
|
Building,
Construction in Progress & Equipment
|
Accumulated
Depreciation
|
Net
Book Value
|
||||
Catoosa
Senior Village, L.P.
|
Calhoun,
Georgia
|
$ 1,997,000
|
$ 1,579,000
|
$ 2,382,000
|
$
456,000
|
$ 4,353,000
|
$ 50,000
|
$ 4,758,000
|
||||
Humboldt
Village, L.P.
|
Winnemucca,
Nevada
|
1,754,000
|
350,000
|
**
|
**
|
**
|
**
|
**
|
||||
Melodie
Meadows Associates, Ltd.
|
Glencoe,
Alabama
|
1,569,000
|
1,568,000
|
1,243,000
|
209,000
|
2,693,000
|
65,000
|
2,837,000
|
||||
$ 5,320,000
|
$ 3,497,000
|
$ 3,625,000
|
$ 665,000
|
$ 7,045,000
|
$ 115,000
|
$ 7,595,000
|
** The
Local Limited Partnership was not acquired until February 2004.
95
WNC
Housing Tax Credit Fund VI, L.P., Series 10
|
|||||||||||
Schedule
III
|
|||||||||||
Real
Estate Owned by Local Limited Partnerships
|
|||||||||||
March
31, 2004
|
|||||||||||
For
the Year Ended December 31, 2003
|
|||||||||||
Local
Limited
Partnership
Name
|
Rental
Income
|
Net
Income
(Loss)
|
Year
Investment Acquired
|
Status
|
Estimated
Useful Life (Years)
|
||||||
Catoosa
Senior Village, L.P.
|
$ 89,000
|
$ (39,000)
|
2003
|
Completed
|
40
|
||||||
Humboldt
Village, L.P.
|
**
|
**
|
2004
|
**
|
**
|
||||||
Melodie
Meadows Associates, Ltd.
|
89,000
|
(64,000)
|
2003
|
Completed
|
40
|
||||||
$ 178,000
|
$ (103,000)
|
** The
Local Limited Partnership was not acquired until February 2004.
96
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
WNC
HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
By: WNC
& ASSOCIATES, INC. General Partner
By: /s/ Wilfred N. Cooper,
Jr.
Wilfred
N. Cooper, Jr.,
President
of WNC & Associates, Inc.
Date: May
27, 2011
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
By: /s/ Wilfred N. Cooper,
Jr.
Wilfred
N. Cooper, Jr.,
Chief
Executive Officer, President and Director of WNC & Associates, Inc.
(principal executive officer)
Date: May
27, 2011
By: /s/ Melanie R.
Wenk
Melanie
R. Wenk,
Vice-President
- Chief Financial Officer of WNC & Associates, Inc. (principal financial
officer and principal accounting officer)
Date: May
27, 2011
By: /s/ Wilfred N. Cooper,
Sr.
Wilfred
N. Cooper, Sr.,
Chairman
of the Board of WNC & Associates, Inc.
Date: May
27, 2011
By: /s/ Kay L.
Cooper
Kay L.
Cooper
Director
of WNC & Associates, Inc.
Date: May
27, 2011
97