Attached files

file filename
EX-31.1 - RULE 13A-14(A)/15D-14(A) CERTIFICATION OF CHIEF EXECUTIVE OFFICER - AMERICAN TAX CREDIT TRUST SERIES Iatct10k20110330ex31-1.htm
EX-32.2 - SECTION 1350 CERTIFICATION OF CHIEF FINANCIAL - AMERICAN TAX CREDIT TRUST SERIES Iatct10k20110330ex32-2.htm
EX-32.1 - SECTION 1350 CERTIFICATION OF CHIEF EXECUTIVE OFFICER. - AMERICAN TAX CREDIT TRUST SERIES Iatct10k20110330ex32-1.htm
EX-31.2 - RULE 13A-14(A)/15D-14(A) CERTIFICATION OF CHIEF FINANCIAL OFFICER - AMERICAN TAX CREDIT TRUST SERIES Iatct10k20110330ex31-2.htm


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

FORM 10-K
 
   
(Mark One)
 
[X]
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
   
OF THE SECURITIES EXCHANGE ACT OF 1934
   
For the fiscal year ended March 30, 2011
 
OR

 
 
[  ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
   
OF THE SECURITIES EXCHANGE ACT OF 1934
   
For the transition period from ______ to ____________

           0-24600         
(Commission File Number)

American Tax Credit Trust, a Delaware statutory business trust
Series I
(Exact Name of Registrant as Specified in its Governing Instruments)

                               Delaware                        
                     06-6385350                 
 
(State or Other Jurisdiction of Organization)
(I.R.S. Employer Identification No.)
 
 
Richman American Credit Corp.
340 Pemberwick Road
Greenwich, Connecticut
 
 
 
06831                      
 
(Address of Principal Executive Offices)
(Zip Code)                    
 
 
Registrant's Telephone Number, Including Area Code:
 
(203) 869-0900
 
 
Securities Registered Pursuant to Section 12(b) of the Act:
   
 
         None            
 
                                None                           
 
(Title of Each Class)
(Name of Each Exchange on Which Registered)
 
     
Securities registered pursuant to Section 12(g) of the Act:
   
 
Units of Beneficial Ownership 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 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 requirement for the past 90 days.  Yes      X      No ___  

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).  Yes  ___  No ___  

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in a 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 the definitions of “accelerated filer,” large accelerated filer and smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer         Accelerated Filer          Non-Accelerated Filer ___  Smaller Reporting Company     X    

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

Registrant has no voting common equity.  There is no established public trading market for Registrant’s Units.  Accordingly, accurate information as to the market value of a Unit at any given date is not available.  As of June 28, 2011, there are 18,654 units outstanding.  The aggregate sales price for such units was $18,654,000.

Documents incorporated by reference:
Pages 11 through 21, 26 through 48 and 63 through 65 of Registrant’s prospectus dated September 7, 1993, as supplemented by Supplement No. 1, Supplement No. 2, Supplement No. 3 and Supplement No. 4 dated September 7, 1993, November 16, 1993, November 23, 1994 and December 28, 1994, respectively, filed pursuant to Rule 424(b)(3) under the Securities Act of 1933, and filed as Exhibits hereto, are incorporated by reference into Part I of this Annual Report.

 
 

 

PART I

Item 1.  Business.

General Development of Business and Narrative Description of Business

American Tax Credit Trust, a Delaware statutory business trust (the "Registrant"), was formed on February 4, 1993 to invest primarily in leveraged low-income multifamily residential complexes (the "Property" or "Properties") that qualified for the low-income tax credit in accordance with Section 42 of the Internal Revenue Code (the "Low-income Tax Credit"), through the acquisition of limited partner equity interests (the “Local Partnership Interests”) in partnerships (the "Local Partnership" or "Local Partnerships") that are the owners of the Properties.  The Local Partnerships hold their respective Properties in fee.    Registrant considers its activity to constitute a single industry segment.

Richman American Credit Corp. (the "Manager"), a Delaware corporation, was formed on April 5, 1993, under Chapter 1, Title 8 of the Delaware Code, to act as the Manager of Registrant.  The majority owner of the Manager is Richard Paul Richman.  The Manager is an affiliate of The Richman Group, Inc. ("Richman Group"), a Delaware corporation founded by Richard Paul Richman in 1988.

The Amendment No. 4 to the Registration Statement on Form S-11 was filed with the Securities and Exchange Commission (the "SEC") on August 25, 1993 pursuant to the Securities Act of 1933 under Registration Statement No. 33-58032 and was declared effective on August 26, 1993.  Reference is made to the prospectus dated September 7, 1993, as supplemented by Supplement No. 1, Supplement No. 2, Supplement No. 3 and Supplement No. 4 dated September 7, 1993, November 16, 1993, November 23, 1994 and December 28, 1994, respectively, filed with the SEC pursuant to Rule 424(b)(3) under the Securities Act of 1933 (the "Prospectus"). Pursuant to Rule 12b-23 of the SEC's General Rules and Regulations promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the description of Registrant's business set forth under the heading "Investment Objectives and Policies" at pages 30 through 48 of the Prospectus is hereby incorporated into this Annual Report by reference.

On September 13, 1993, Registrant commenced, through Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and PaineWebber Incorporated (“PaineWebber”), the offering of up to 150,000 units of beneficial ownership interest (the "Units") at $1,000 per Unit to investors (the "Beneficial Owners") in one to twenty series (each a “Series”).  This filing is presented for Series I only and as used herein, the term Registrant refers to Series I of the Trust.  On November 29, 1993, January 28, 1994 and May 25, 1994 the closings for 8,460, 4,909 and 5,285 Units, respectively, took place, amounting to aggregate Beneficial Owners’ capital contributions of $18,654,000.

Registrant's primary objective, to provide Low-income Tax Credits to the Beneficial Owners, has been completed.  The relevant state tax credit agency allocated each of the Local Partnerships an amount of Low-income Tax Credits, which are generally available for a ten year period from the year the Property is placed in service (the “Ten Year Credit Period”).  The Ten Year Credit Period was fully exhausted with respect to all of the Properties as of December 31, 2006.  The required holding period of each Property, in order to avoid Low-income Tax Credit recapture, is fifteen years from the year in which the Low-income Tax Credits commence on the last building of the Property (the "Compliance Period").  The Compliance Period for all of the Local Partnerships had expired as of December 31, 2010.  In addition, certain of the Local Partnerships entered into agreements with the relevant state tax credit agencies whereby the Local Partnerships must maintain the low-income nature of the Properties for a period which exceeds the Compliance Period (in certain circumstances, up to 50 years from when the Property is placed in service, but commonly 30 years from the date any such Property is placed in service), regardless of a sale of the Properties by the Local Partnerships after the Compliance Period (the “Extended Use Provisions”).  Note that the existence of Extended Use Provisions does not extend the Compliance Period of the respective Local Partnerships.  However, such provisions may limit the number and availability of potential purchasers of the Properties.  Accordingly, a sale of a Property may happen well after the expiration of the Compliance Period and/or may be significantly discounted.

Disposal of Local Partnership Interests

Registrant is in the process of disposing of its Local Partnership Interests.  As of June 2011, Registrant owns all ten of the Local Partnership Interests originally acquired.  Registrant has served a demand on the local general partners (the “Local General Partners”) to commence a sale process to dispose of the Properties.  In the event a sale cannot be consummated, it is the Manager’s intention to sell or assign Registrant’s Local Partnership Interests.  It is not possible to ascertain the amount, if any, that Registrant will receive with respect to each specific Property from such sales or assignments.  Registrant intends to dissolve after the final disposition of its Local Partnership Interests.  There can be no assurance as to when Registrant will dispose of its Local Partnership Interests.

 
2

 

Item 1.  Business (Continued).

Financial Information About Industry Segments

Registrant is engaged solely in the business of owning a Local Partnership Interest in each of the Local Partnerships.  A presentation of information regarding industry segments is not applicable and would not be material to an understanding of Registrant’s business taken as a whole.  See Item 8 below - Financial Statements and Supplementary Data.

Competition

Pursuant to Rule 12b-23 of the SEC's General Rules and Regulations promulgated under the Exchange Act, the description of Registrant’s competition, general risks, tax risks and partnership risks set forth under the heading "Risk Factors" at pages 11 through 21 of the Prospectus is hereby incorporated into this Annual Report by reference.

Employees of Registrant

Registrant employs no personnel and incurs no payroll costs.  All management activities of Registrant are conducted by the Manager.  An affiliate of the Manager employs individuals who perform the management activities of Registrant.  This entity also performs similar services for other affiliates of the Manager.

Regulation

The following is a brief summary of certain regulations applicable to Registrant and is not, nor should it be considered, a full summary of the law or all related issues.  Other than as set forth above and below, Registrant is not aware of any existing or probable federal, state or local governmental regulations, or any recent changes to such governmental regulations, which would have an effect on Registrant’s business.

Virtually all of the Properties owned by the Local Partnerships have some form of a government funded rental subsidy that affords the low-income tenants the ability to reside at the Properties.  During the period that a subsidy agreement between the United States Department of Housing and Urban Development (“HUD”) and a Local Partnership is in existence, the Local Partnership Interest of such Local Partnership may not be sold, and the Property may not be transferred by the Local Partnership to another entity, without HUD’s approval, which may be subject to various conditions.  In particular, the transfer of title of the Properties by the Local Partnerships is expected to be required to be closed in escrow pending HUD approval.  In addition, as a condition to certain disposals, Registrant anticipates that HUD will require the Local Partnerships to dedicate resources to maintenance in order to correct deficiencies in the physical condition of the Properties. Correction of such deficiencies will probably require expenditures of significant amounts of funds, thus effectively reducing the amount of any net proceeds from the sale of the Property.  There can be no assurance that the required governmental agencies will approve any of the requested transfers, that such approvals will be received in a timely manner or that other conditions will not be imposed for such approvals. The failure to obtain or a delay in obtaining any required approvals would have adverse consequences to the Beneficial Owners.

In the case of certain of the Local Partnerships, the local housing authority has the right, for a period of time, to find a purchaser for the Property prior to the Local General Partner beginning its own efforts to sell the Property.  There can be no assurance that the local housing authorities will be successful in finding purchasers for such Properties, which may adversely impact the timing of Property sales.

Certain of the Local Partnerships are subject to restrictions on the amount of annual cash distributions to partners under the terms of such Local Partnerships’ loan, regulatory or other agreements.

Registrant is not aware of any non-compliance by the Local Partnerships with respect to federal, state and local provisions regulating the discharge of material into the environment or otherwise relating to the protection of the environment, and is not aware of any condition that would have a material effect on the capital expenditures or competitive position of Registrant.

 
3

 

Item 1A.  Risk Factors.

Risks Relating to Registrant’s Business and Industry

There is no guarantee that the Properties will be sold or, if sold, that Registrant would receive any proceeds.

As noted above in Item 1 - Business, Registrant has served a demand on the Local General Partners to commence a sale process to dispose of the Properties.  However, the market of interested buyers of the Properties is limited.  Some of the factors which negatively impact the marketability of the Properties, or equivalently, the Local Partnership Interests, include:

 
·
the Extended Use Provisions;

 
·
the substantial remaining mortgage balances on the Properties, which are typically very near the initial balances as a result of the heavily subsidized debt of the Local Partnership and the lengthy (usually near 40-year) amortization period of the debt; and

 
·
poor economic conditions.

It is generally expected, therefore, that in the event a sale of a Property by a Local Partnership can be consummated, the net proceeds of such sale, after repayment of any outstanding debt and other liabilities, are not likely to be significant.  Moreover, a portion of the net proceeds from the sale of a Property by a Local Partnership may be payable to the Local General Partner and/or affiliates thereof for prior operating advances or deferred fees.  As such, there will likely not be significant proceeds, if any, upon a sale of a Property that will be available for distribution by the Local Partnership to Registrant.  In the event a sale cannot be consummated, it is the Manager’s intention to sell or assign Registrant’s Local Partnership Interests.  However, it is not possible to ascertain the amount, if any, that Registrant will receive with respect to each specific Property from such sales or assignments.

The Local Partnerships may be required to continue to maintain the low-income nature of the Properties beyond the Compliance Period under agreements with state tax credit agencies.

As noted above in Item 1 - Business, certain of the Local Partnerships entered into agreements containing Extended Use Provisions with the relevant state tax credit agencies whereby the Local Partnerships must maintain the low-income nature of the Properties for a period which exceeds the Compliance Period (in certain circumstances, up to 50 years from when the Property is placed in service, but commonly 30 years from the date any such Property is placed in service), regardless of a sale of the Properties by the Local Partnerships after the Compliance Period.  Although the Extended Use Provisions do not extend the Compliance Period of the respective Local Partnerships, such provisions may limit the number and availability of potential purchasers of the Properties.  Accordingly, a sale of a Property may happen well after the expiration of the Compliance Period and/or may be significantly discounted.

Properties owned by the Local Partnerships are subject to certain risks relating to the real estate industry in general that are outside of the control of the Local Partnerships or Registrant and that may have an adverse effect on Registrant’s investment in such Local Partnerships.

Registrant’s investment in the Local Partnerships is subject to the risks associated with multi-family rental property and real estate in general, including retail, commercial and residential real estate.  Such risks, which are subject to change and are not in the control of Registrant, include risks relating to:

 
·
the adverse use of adjacent or neighborhood real estate;

 
·
regulated rents, which may adversely impact rent increases;

 
·
utility allowances, which may adversely impact rents charged to tenants from year to year in certain locations;
 
 
·
the inability of tenants to pay rent in light of current market conditions;
 
 
·
changes in the demand for or supply of competing properties;

 
·
changes in state or local tax rates and assessments;

 
4

 

Item 1A.  Risk Factors (Continued).

 
·
increases in utility charges;

 
·
unexpected expenditures for repairs and maintenance;

 
·
the discovery of previously undetected environmentally hazardous conditions;

 
·
costs associated with complying with the Americans with Disabilities Act;

 
·
uninsured losses relating to real property or excessively expensive premiums for insurance coverage;
 
 
·
lawsuits from tenants or guests in connection with injuries that occur on the Properties;
 
 
·
changes in local economic conditions; and

 
·
changes in interest rates and the availability of financing (including changes resulting from current market conditions).

The occurrence of any of the above risks could have a negative impact on the operating results of such Properties and the respective Local Partnerships and, in turn, may render the sale or refinancing of the Properties difficult or unattractive, which could adversely affect Registrant’s investment in such Local Partnerships.

The modification or elimination of government rental subsidies on which the Local Partnerships rely would require the Local Partnerships to use existing funds or obtain additional funds to continue to operate the respective Properties.  Because Registrant’s investments in the Local Partnerships are highly leveraged, it would be highly difficult to obtain such additional funds.

Virtually all of the Properties owned by the Local Partnerships have some form of a government funded rental subsidy, which affords the low-income tenants the ability to reside at the Properties.  The Local Partnerships are extremely reliant on such subsidies.  If the respective rental subsidy programs were to be materially modified or eliminated, the Local Partnerships’ rental revenue would likely be significantly reduced.  To the extent that revenues are not sufficient to meet operating expenses and service the respective mortgages of the Properties, such Local Partnership would be required to use reserves and any other funds available to avoid foreclosure of the subject Property.  Registrant’s investments in the Local Partnerships are highly leveraged, and there can be no assurance that additional funds would be available to any Local Partnership or Registrant, if needed.  In addition, there can be no assurance that, when a Property is sold, the proceeds from a sale will be sufficient to pay the balance due on the mortgage loans or any other outstanding indebtedness to which the Local Partnership is subject.

Beneficial Owners may not be able to use all of the carried forward Low-income Tax Credits.

While a limited exception is provided for Low-income Tax Credits in the case of individuals, tax losses and credits allocated to a Beneficial Owner who is an individual, trust, estate or personal service corporation generally may be used to reduce the Beneficial Owner’s tax liability only to the extent that such liability arises from passive activities.  Therefore, tax losses and credits allocated to such a Beneficial Owner are not expected to be available to offset tax liabilities that arise from salaries, dividends and interest and other forms of income.  In addition, Low-income Tax Credits cannot be used to offset alternative minimum tax.  Accordingly, there is no guarantee that Beneficial Owners will receive or be able to utilize all of the carried forward Low-income Tax Credits.

Risks Relating to Ownership of Units of Beneficial Ownership Interest of Registrant

There is no existing market for the Units.

There is no trading market for Units and there are no assurances that any market will develop.  In addition, the Units may be transferred only if certain requirements are satisfied, including requirements that such transfer would not impair Registrant’s tax status for federal income tax purposes and would not be a violation of federal or state securities laws.  Accordingly, Beneficial Owners may not be able to sell their Units promptly and bear the economic risk of their investment for an indefinite period of time.

 
5

 

Item 1A.  Risk Factors (Continued).

Under certain circumstances, Beneficial Owners of Registrant may incur out-of-pocket tax costs.

At some point, Registrant’s operations (including the sale or refinancing of the Properties owned by the Local Partnerships) may generate less cash flow than taxable income, and the income, as well as the income taxes payable with respect to Registrant’s taxable income, may exceed cash flow available for distribution to the Beneficial Owners in such years.  This may result in an out-of-pocket tax cost to the Beneficial Owners.  In addition, a Beneficial Owner may experience taxable gain on disposition of Units or upon a disposition of the Local Partnership Interests or of the Properties even though no cash is realized on the disposition; in such circumstances, the Beneficial Owners may experience an out-of-pocket tax cost.

Beneficial Owners of Registrant may not receive a return of any portion of their original capital investment in Registrant.

To date, the Beneficial Owners of Registrant have not received a return of any portion of their original capital.  Accordingly, the only benefit of this investment may be the Low-income Tax Credits.

Item 1B.  Unresolved Staff Comments.

Not applicable.

Item 2.  Properties.

The executive offices of Registrant and the Manager are located at 340 Pemberwick Road, Greenwich, Connecticut 06831.  Registrant does not own or lease any properties.  Registrant pays no rent; all charges for leased space are borne by affiliates of the Manager.

Registrant originally acquired Local Partnership Interests in ten Local Partnerships.  As discussed above in Item 1 - Business, the Compliance Period of all of the Local Partnerships had expired as of December 31, 2010 and, accordingly, Registrant is in the process of disposing of its Local Partnership Interests.  As of June 2011, Registrant owns all ten of the Local Partnership Interests originally acquired.  Registrant has served a demand on the Local General Partners of the Local Partnerships to commence a sale process to dispose of the Properties, which Registrant intends will result in a termination of Registrant’s Local Partnership Interests and ultimately the dissolution of Registrant.

In the event a sale of the Properties cannot be consummated, it is the Manager’s intention to sell or assign Registrant’s Local Partnership Interests.  It is not possible to ascertain the amount, if any, that Registrant will receive with respect to each specific Property from such sales or assignments.  In addition, certain of the Local Partnerships entered into agreements with Extended Use Provisions with the relevant state tax credit agencies whereby the Local Partnerships must maintain the low-income nature of the Properties for a period which exceeds the Compliance Period (in certain circumstances, up to 50 years from when the Property is placed in service, but commonly 30 years from the date any such Property is placed in service), regardless of a sale of the Properties by the Local Partnerships after the Compliance Period.  While the Extended Use Provisions do not extend the Compliance Period of the respective Local Partnerships, such provisions may limit the number and availability of potential purchasers of the Properties.  Accordingly, a sale of a Property may happen well after the expiration of the Compliance Period and/or may be significantly discounted.  There can be no assurance as to when the Local Partnerships will dispose of the Properties, when Registrant will dispose of the Local Partnership Interests or the amount of proceeds which may be received in such dispositions.  In addition to amounts that remain outstanding under the terms of the debt structure of the respective Local Partnerships, certain Local Partnerships have outstanding obligations to the Local General Partners and/or affiliates thereof for operating advances made over the years and for certain fees that were deferred.

 
6

 

Item 2.  Properties (Continued).

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

Registrant owns a 98.9% to 99% Local Partnership Interest in the Local Partnerships reflected below, all of which were acquired from 1993 to 1995.
 
 
7

 

Item 2.  Properties (Continued).
                         
 
Name of Local Partnership
Name of apartment complex
 
Number
of rental
   
 
Capital
   
Mortgage
loans payable as of
December 31,
   
Subsidy
(see
 
Apartment complex location
 
units
   
contribution
   
2010
   
footnotes)
 
ACP Housing Associates, L.P.
ACP Housing Apartments
New York, New York
   28     $ 737,222     $ 1,456,344      (1b)  
Creative Choice Homes VII, Ltd.
Coral Gardens
Homestead, Florida
   91         2,382,812          1,388,244    
 
(1a&c)
 
Edgewood Manor Associates, L.P. (2)
Edgewood Manor Apartments
Philadelphia, Pennsylvania
   49         2,053,799         1,817,774      (1b)  
Ledge/McLaren Limited Partnership
Ledge/McLaren Apartments
Nashua, New Hampshire
   8         343,079         404,479      (1b)  
Penn Apartment Associates
Penn Apartments
Chester, Pennsylvania
   15         852,180         954,000      (1b)  
SB-92 Limited Partnership
Shaker Boulevard Gardens
Cleveland, Ohio
   73         795,255         2,956,230    
 
(1a,b,c&d)
 
St Christopher’s Associates, L.P. V
   (2)
Lehigh Park
Philadelphia, Pennsylvania
       29           2,081,877           2,180,000      (1b)  
St. John Housing Associates, L.P.
St. John Homes
Gary, Indiana
   144         3,546,861         3,280,465    
 
(1a,c&d)
 
Starved Rock - LaSalle Manor
   Limited Partnership
LaSalle Manor
LaSalle, Illinois
       48           634,327           1,895,357    
 
 
   (1a,c&e)
 
Vision Limited Dividend Housing
   Association Limited Partnership
Helen Odean Butler Apartments
Detroit, Michigan
       97             1,410,544             3,164,138      (1b)  
          $ 14,837,956     $ 19,497,031        

 
(1)
Description of Subsidies:

 
(a)
Section 8 of Title II of the Housing and Community Development Act of 1974 allows qualified low-income tenants to pay thirty percent of their monthly income as rent with the balance paid by the federal government.

 
(b)
The Local Partnership’s debt structure includes a principal or interest payment subsidy.

 
(c)
The Local Partnership’s Section 8 contracts are currently subject to renewal under applicable HUD guidelines.

 
8

 

Item 2.  Properties (Continued).

 
(d)
The Local Partnership entered into a restructuring agreement of its Section 8 contract and debt structure under applicable HUD guidelines in 2005.

 
(e)
The Local Partnership entered into a restructuring agreement of its Section 8 contract and debt structure under applicable HUD guidelines in 2007.

 
(2)
Capital contribution includes voluntary advances made to the Local Partnership.

Item 3.  Legal Proceedings.

None.

Item 4.  Removed and Reserved.
 
 
9

 
 
PART II

Item 5.  Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information and Holders

There is no established public trading market for the Units.  Accordingly, accurate information as to the market value of a Unit at any given date is not available.  The number of record holders of Units as of May 31, 2011 was approximately 785 holding an aggregate of 18,654 Units.

Merrill Lynch and PaineWebber follow internal guidelines for providing estimated values of limited partnerships and other direct investments reported on client account statements.  Pursuant to such guidelines, estimated values for limited partnership interests reported on Merrill Lynch and PaineWebber client account statements (such as Registrant’s Units) are separately provided to Merrill Lynch and PaineWebber by independent valuation services, whose estimated values are based on financial and other information available to them.  In addition, Registrant may provide an estimate of value to Unit holders from time to time in Registrant's reports to Beneficial Owners.  The estimated values provided by the independent services and Registrant, which may differ, are not market values and Unit holders may not be able to sell their Units or realize either amount upon a sale of their Units.  Unit holders may not realize such estimated values upon the liquidation of Registrant.

Distributions

Registrant owns a Local Partnership Interest in Local Partnerships that are the owners of Properties that are leveraged and receive government assistance in various forms of rental and debt service subsidies.  The distribution of cash flow generated by the Local Partnerships may be restricted, as determined by each Local Partnership's financing and subsidy agreements.  Accordingly, Registrant does not anticipate that it will provide significant cash distributions to its Beneficial Owners in the future.  There were no cash distributions to the Beneficial Owners during the years ended March 30, 2011 and 2010.

Low-income Tax Credits, which are subject to various limitations, may be used by the Beneficial Owners to offset federal income tax liabilities.  The cumulative Low-income Tax Credits per Unit for each of the three closings generated by Registrant and allocated to the Beneficial Owners, net of circumstances which have given rise to recapture, are as follows:

First closing
   
Second closing
   
   Third closing
November 29, 1993
   
January 28, 1994
   
May 25, 1994
             
$ 1,377.87     $ 1,375.59     $ 1,363.07

The Ten Year Credit Period with respect to all of the Properties was fully exhausted as of December 31, 2006 and the Compliance Periods of all of the Local Partnerships had expired as of December 31, 2010.  Registrant has served a demand on the Local General Partners of the Local Partnerships to commence a sale process to dispose of the Properties.  In the event a sale cannot be consummated, it is the Manager’s intention to sell or assign Registrant’s Local Partnership Interests.  It is not possible to ascertain the amount, if any, that Registrant will receive with respect to each specific Property from such sales or assignments.
 
Recent Sales of Unregistered Securities

None.

Item 6.  Selected Financial Data.

Registrant is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this Item.

 
10

 

Item 7.  Management's Discussion and Analysis of Financial Condition and Results of Operations.

As used herein, the term Registrant refers to Series I of American Tax Credit Trust, a Delaware statutory business trust.  References to any right, obligation, action, asset or liability of Series I mean such right, obligation, action, asset or liability of Registrant in connection with Series I.

Capital Resources and Liquidity

Registrant admitted beneficial owners (the “Beneficial Owners”) in three closings with aggregate Beneficial Owners’ capital contributions of $18,654,000.  In connection with the offering of the sale of units (the “Units”) of beneficial ownership, Registrant incurred organization and offering costs of approximately $2,331,000 and established a working capital reserve of approximately $1,287,000. The remaining net proceeds of approximately $15,036,000 (the “Net Proceeds”) were available to be applied to the acquisition of limited partner interests (the “Local Partnership Interests”) in partnerships (the “Local Partnerships”) which own low-income multifamily residential complexes (the “Property” or “Properties”) that qualified for the low-income tax credit in accordance with Section 42 of the Internal Revenue Code (the “Low-income Tax Credit”).  The Net Proceeds were utilized in acquiring a Local Partnership Interest in ten Local Partnerships.

As of March 30, 2011, Registrant has cash and cash equivalents, investment in Pemberwick Fund (“Pemberwick”) (a short duration bond fund) and investment in bond totaling $1,104,778, which is available for operating expenses of Registrant and circumstances which may arise in connection with the Local Partnerships.  Future sources of Registrant funds are expected to be primarily from interest earned on working capital and limited cash distributions from Local Partnerships.  In addition, although it is not possible to ascertain the amount, if any, that Registrant will receive with respect to each specific Local Partnership, Registrant may be entitled to sales proceeds of certain Local Partnerships’ Properties and may receive proceeds in the event of a sale of its Local Partnership Interests.

During the year ended March 30, 2011, Registrant received cash from interest revenue, distributions from Local Partnerships and redemptions from Pemberwick and utilized cash for operating expenses and investments in Pemberwick and a bond.  Cash and cash equivalents, investment in Pemberwick and investment in bond decreased, in the aggregate, by approximately $296,000 during the year ended March 30, 2011, (which includes unrealized gains on investment in Pemberwick and investment in bond in the aggregate of approximately $14,000).  Registrant intends to hold the bond until its call date (September 2013) and therefore does not expect to realize significant gains or losses on its investment in bond, if any.

During the year ended March 30, 2011, the investment in local partnerships increased as a result of Registrant’s equity in the Local Partnerships’ net income for the year ended December 31, 2010 of $231,447, partially offset by cash distributions received from Local Partnerships of $60,233 (excluding $2,500 of distributions classified as other income from local partnerships).    Payable to manager and affiliates in the accompanying balance sheet as of March 30, 2011 represents deferred management fees.

Results of Operations

Registrant’s operating results are dependent, in part, upon the operating results of the Local Partnerships and are impacted by the Local Partnerships’ policies.  In addition, the operating results herein are not necessarily the same for tax reporting.  Registrant accounts for its investment in local partnerships in accordance with the equity method of accounting.  Accordingly, the investment is carried at cost and is adjusted for Registrant’s share of each Local Partnership’s results of operations and by cash distributions received.  In the event the operations of a Local Partnership result in a loss, equity in loss of each investment in Local Partnership allocated to Registrant is recognized to the extent of Registrant’s investment balance in each Local Partnership.  Equity in loss in excess of Registrant’s investment balance in a Local Partnership is allocated to other partners’ capital in any such Local Partnership.  However, the combined statements of operations of the Local Partnerships reflected in Note 6 to Registrant’s financial statements include the operating results of all Local Partnerships, irrespective of Registrant’s investment balances.

Cumulative losses and cash distributions in excess of investment in local partnerships may result from a variety of circumstances, including a Local Partnership's accounting policies, subsidy structure, debt structure and operating deficits, among other things.  In addition, the book value of Registrant’s investment in each Local Partnership (the “Local Partnership Carrying Value”) may be reduced if the Local Partnership Carrying Value is considered to exceed the estimated value derived by management.  Accordingly, cumulative losses and cash distributions in excess of the investment or an adjustment to a Local Partnership’s Carrying Value are not necessarily indicative of adverse operating results of a Local Partnership.
 
 
11

 

Item 7.  Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued).

Registrant’s operations for the years ended March 30, 2011, 2010 and 2009 resulted in net income (loss) of $13,297, $(137,903) and $(151,904), respectively.  The increase in net income from fiscal 2010 to fiscal 2011 is primarily attributable to (i) an increase in equity in income of investment in local partnerships of approximately $128,000, which is attributable to an increase in the net operating income of the Local Partnership in which Registrant continues to have an investment balance and (ii) an increase in interest revenue and other income from local partnerships in the aggregate of approximately $23,000.  Other comprehensive income for the year ended March 30, 2011 resulted from unrealized gains on investment in Pemberwick and investment in bond of $10,969 and $2,730, respectively.  Registrant did not experience a significant change in results of operations from fiscal 2009 to fiscal 2010.

The Local Partnerships’ net loss of approximately $291,000 for the year ended December 31, 2010 includes depreciation and amortization expense of approximately $1,089,000 and interest on non-mandatory debt of approximately $430,000, and does not include principal payments on permanent mortgages of approximately $497,000.  The Local Partnerships’ net loss of approximately $600,000 for the year ended December 31, 2009 includes depreciation and amortization expense of approximately $1,116,000 and interest on non-mandatory debt of approximately $423,000, and does not include principal payments on permanent mortgages of approximately $474,000.  The Local Partnerships’ net income of approximately $32,000 for the year ended December 31, 2008 includes depreciation and amortization expense of approximately $1,120,000 and interest on non-mandatory debt of approximately $399,000, and does not include principal payments on permanent mortgages of approximately $455,000.   The 2008 net income also includes approximately $700,000 of income recorded by Creative Choice Homes VII, Ltd. (“Creative Choice”) resulting from a reduction in accrued expenses to an affiliate of the Local General Partner of Creative Choice; such expenses were accrued in a prior year in connection with damages resulting from a major hurricane.  The results of operations of the Local Partnerships for the year ended December 31, 2010 are not necessarily indicative of the results that may be expected in future periods.

Local Partnership Matters

Registrant's primary objective, to provide Low-income Tax Credits to its Beneficial Owners, has been completed.  The relevant state tax credit agency allocated each of the Local Partnerships an amount of Low-income Tax Credits, which are generally available for a ten year period from the year the Property is placed in service (the “Ten Year Credit Period”).  The Ten Year Credit Period was fully exhausted with respect to all of the Properties as of December 31, 2006.  The required holding period of each Property, in order to avoid Low-income Tax Credit recapture, is fifteen years from the year in which the Low-income Tax Credits commence on the last building of the Property (the "Compliance Period").  The Compliance Period of all of the Local Partnerships had expired as of December 31, 2010.  In addition, certain of the Local Partnerships entered into agreements with the relevant state tax credit agencies whereby the Local Partnerships must maintain the low-income nature of the Properties for a period which exceeds the Compliance Period (in certain circumstances, up to 50 years from when the Property is placed in service, but commonly 30 years from the date any such Property is placed in service), regardless of a sale of the Properties by the Local Partnerships after the Compliance Period (the “Extended Use Provisions”).  Although the Extended Use Provisions do not extend the Compliance Period of the respective Local Partnerships, such provisions may limit the number and availability of potential purchasers of the Properties.  Accordingly, a sale of a Property may happen well after the expiration of the Compliance Period and/or may be significantly discounted.  Registrant is in the process of disposing of its Local Partnership Interests.  As of June 2011, Registrant owns all ten of the Local Partnership Interests originally acquired (see discussion below regarding the potential sale of a Local Partnership Interest).  Registrant has served a demand on the local general partners (the “Local General Partners”) to commence a sale process to dispose of the Properties.  In the event a sale cannot be consummated, it is the Manager’s intention to sell or assign Registrant’s Local Partnership Interests.  It is not possible to ascertain the amount, if any, that Registrant will receive with respect to each specific Property from such sales or assignments.  Registrant intends to dissolve after the final disposition of its Local Partnership Interests.  There can be no assurance as to when Registrant will dispose of its Local Partnership Interests.

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

 
12

 

Item 7.  Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued).
 
The Local Partnerships have various financing structures which include (i) required debt service payments (“Mandatory Debt Service”) and (ii) debt service payments which are payable only from available cash flow subject to the terms and conditions of the notes, which may be subject to specific laws, regulations and agreements with appropriate federal and state agencies (“Non-Mandatory Debt Service or Interest”).  Registrant has no legal obligation to fund any operating deficits of the Local Partnerships.

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

Edgewood Manor Associates, L.P. (“Edgewood”) is currently in default under the terms of its first mortgage and a default has been declared by the lender; delinquent payments of principal, interest and certain fees represent a cumulative arrearage of approximately $41,000 as of June 2011.  Registrant has made cumulative voluntary advances of $90,000 to Edgewood to fund operating deficits as of March 30, 2011, none of which were made during the year then ended.  Registrant’s investment balance in Edgewood, after cumulative equity losses, became zero during the year ended March 30, 2005 and voluntary advances made by Registrant were recorded as investment in local partnerships and written off as additional equity in loss of investment in local partnerships.

Inflation

Inflation is not expected to have a material adverse impact on Registrant’s operations.

Contractual Obligations

Registrant is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this Item.

Off - Balance Sheet Arrangements

Registrant does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on Registrant’s financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to the Beneficial Owners.

Critical Accounting Policies and Estimates

The accompanying financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), which requires Registrant to make certain estimates and assumptions.  A summary of significant accounting policies is provided in Note 1 to the accompanying financial statements.  The following section is a summary of certain aspects of those accounting policies that may require subjective or complex judgments and are most important to the portrayal of Registrant’s financial condition and results of operations.  Registrant believes that there is a low probability that the use of different estimates or assumptions in making these judgments would result in materially different amounts being reported in the accompanying financial statements.

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

 
13

 

Item 7.
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued).

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

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

Forward-Looking Information

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

Item 7A.  Quantitative and Qualitative Disclosure About Market Risk.

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

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

 
14

 


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


Item 8.  Financial Statements and Supplementary Data.


Table of Contents
     Page
   
Report of Independent Registered Public Accounting Firm
16
   
Balance Sheets
17
   
Statements of Operations
18
   
Statements of Changes in Owners' Equity (Deficit)
19
   
Statements of Cash Flows
20
   
Notes to Financial Statements
22
   


No financial statement schedules are included because of the absence of the conditions under which they are required or because the information is included in the financial statements or the notes thereto.
 
 
15

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Manager and Beneficial Owners
American Tax Credit Trust, a Delaware statutory business trust Series I

We have audited the accompanying balance sheets of American Tax Credit Trust, a Delaware statutory business trust Series I (the “Trust”) as of March 30, 2011 and 2010, and the related statements of operations, changes in owners' equity (deficit) and cash flows for the years ended March 30, 2011, 2010 and 2009.  These financial statements are the responsibility of the Trust'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 Trust 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 audits 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 Trust’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.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of American Tax Credit Trust, a Delaware statutory business trust Series I as of March 30, 2011 and 2010, and the results of its operations, changes in owners’ equity (deficit) and its cash flows for the years ended March 30, 2011, 2010 and 2009, in conformity with accounting principles generally accepted in the United States of America.



/s/Reznick Group, P.C.

Sacramento, California
June 28, 2011
 
 
16

 

AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
BALANCE SHEETS
MARCH 30, 2011 AND 2010


             
   
2011
   
2010
 
 
ASSETS
           
             
Cash and liquid investments
           
             
Cash and cash equivalents
  $ 205,400     $ 286,543  
Investment in Pemberwick Fund
    799,505       1,113,737  
Investment in bond
    99,873          
                 
Total cash and liquid investments
    1,104,778       1,400,280  
                 
Interest receivable
    123          
Investment in local partnerships
    2,297,912       2,126,698  
                 
    $ 3,402,813     $ 3,526,978  
 
LIABILITIES AND OWNERS' EQUITY (DEFICIT)
               
                 
Liabilities
               
                 
Accounts payable and accrued expenses
  $ 31,628     $ 32,561  
Payable to manager and affiliates
    808,871       959,099  
                 
      840,499       991,660  
                 
Commitments and contingencies
               
                 
Owners' equity (deficit)
               
                 
Manager
    (138,396 )     (138,529 )
Beneficial owners (18,654 units of beneficial ownership interest outstanding)
    2,687,011       2,673,847  
Accumulated other comprehensive income
    13,699          
                 
      2,562,314       2,535,318  
                 
    $ 3,402,813     $ 3,526,978  
 
See Notes to Financial Statements.

 
17

 

AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
STATEMENTS OF OPERATIONS
YEARS ENDED MARCH 30, 2011, 2010 AND 2009


   
2011
   
2010
   
2009
 
                   
REVENUE
                 
                   
Interest
  $ 21,728     $ 751     $ 15,736  
Other income from local partnerships
    2,500               750  
                         
TOTAL REVENUE
    24,228       751       16,486  
                         
EXPENSES
                       
                         
Management fee - affiliate
    192,141       192,141       192,141  
Professional fees
    37,251       42,659       51,333  
Printing, postage and other
    12,986       6,887       4,243  
                         
TOTAL EXPENSES
    242,378       241,687       247,717  
                         
      (218,150 )     (240,936 )     (231,231 )
 
                       
Equity in income of investment in local partnerships
    231,447       103,033       79,327  
                         
NET INCOME (LOSS)
    13,297       (137,903 )     (151,904 )
                         
Other comprehensive income (loss)
    13,699               (903 )
                         
COMPREHENSIVE INCOME (LOSS)
  $ 26,996     $ (137,903 )   $ (152,807 )
                         
NET INCOME (LOSS) ATTRIBUTABLE TO
                       
                         
Manager
  $ 133     $ (1,379 )   $ (1,519 )
Beneficial owners
    13,164       (136,524 )     (150,385 )
                         
    $ 13,297     $ (137,903 )   $ (151,904 )
                         
NET INCOME (LOSS) per unit of beneficial ownership interest (18,654 units of beneficial ownership interest)
  $  .71     $ (7.32 )   $ (8.06 )

See Notes to Financial Statements.
 
 
18

 
 
AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
STATEMENTS OF CHANGES IN OWNERS' EQUITY (DEFICIT)
YEARS ENDED MARCH 30, 2011, 2010 AND 2009


   
 
 
 
Manager
   
 
 
Beneficial
Owners
   
Accumulated
Other
Comprehensive
 Income (Loss)
   
 
 
 
Total
 
                         
Owners' equity (deficit), March 30, 2008
  $ (135,631 )   $ 2,960,756     $ 903     $ 2,826,028  
                                 
Net loss
    (1,519 )     (150,385 )             (151,904 )
                                 
Other comprehensive loss
                    (903 )     (903 )
                                 
Owners' equity (deficit), March 30, 2009
    (137,150 )     2,810,371               2,673,221  
                                 
Net loss
    (1,379 )     (136,524 )             (137,903 )
                                 
Owners' equity (deficit), March 30, 2010
    (138,529 )     2,673,847               2,535,318  
                                 
Net income
    133       13,164               13,297  
                                 
Other comprehensive income
                    13,699       13,699  
                                 
Owners' equity (deficit), March 30, 2011
  $ (138,396 )   $ 2,687,011     $ 13,699     $ 2,562,314  

See Notes to Financial Statements.

 
19

 

AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
STATEMENTS OF CASH FLOWS
YEARS ENDED MARCH 30, 2011, 2010 AND 2009


   
2011
   
2010
   
2009
 
                   
CASH FLOWS FROM OPERATING ACTIVITIES
                 
                   
Interest received (paid)
  $ 25,402     $ (2,257 )   $ 11,042  
Cash paid for
                       
Management fee
    (342,369 )     (59,076 )     (189,924 )
Professional fees
    (38,274 )     (50,533 )     (46,726 )
Printing, postage and other expenses
    (12,896 )     (6,332 )     (14,981 )
                         
Net cash used in operating activities
    (368,137 )     (118,198 )     (240,589 )
                         
CASH FLOWS FROM INVESTING ACTIVITIES
                       
                         
Voluntary advances made to local partnerships
            (6,092 )        
Distributions received from local partnerships
    62,733       60,233       56,190  
Investments in Pemberwick Fund
    (13,444 )     (1,114,401 )        
Redemptions from Pemberwick Fund
    338,645       664          
Investment in bond
    (100,940 )                
Transfer from restricted cash
            3,008       6,227  
Proceeds from maturities/redemptions and sales of investments in bonds
                    59,276  
                         
Net cash provided by (used in) investing activities
    286,994       (1,056,588 )     121,693  
                         
Net decrease in cash and cash equivalents
    (81,143 )     (1,174,786 )     (118,896 )
                         
Cash and cash equivalents at beginning of year
    286,543       1,461,329       1,580,225  
                         
CASH AND CASH EQUIVALENTS AT END OF YEAR
  $ 205,400     $ 286,543     $ 1,461,329  
                         
                         
SIGNIFICANT NONCASH INVESTING AND FINANCING ACTIVITIES
                       
                         
Unrealized gain on investment in Pemberwick Fund
  $ 10,969                  
                         
Unrealized gain (loss) on investments in bonds
  $ 2,730             $ (903 )
                         
See reconciliation of net income (loss) to net cash used in operating activities on page 21.
 
See Notes to Financial Statements.

 
20

 

AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
STATEMENTS OF CASH FLOWS - CONTINUED
YEARS ENDED MARCH 30, 2011, 2010 AND 2009


   
2011
   
2010
   
2009
 
               
RECONCILIATION OF NET INCOME (LOSS) TO NET
CASH USED IN OPERATING ACTIVITIES
             
                   
Net income (loss)
  $ 13,297     $ (137,903 )   $ (151,904 )
                         
Adjustments to reconcile net income (loss) to net cash used in operating activities
                       
                         
Equity in income of investment in local partnerships
    (231,447 )     (103,033 )     (79,327 )
Other income from local partnerships
    (2,500 )             (750 )
Accrued interest purchased at date of investment in bond
    1,750                  
Amortization of premium on investment in bond
    2,047                  
Gain on sale of investments in bonds
                    (158 )
Decrease (increase) in interest receivable
    (123 )             1,691  
Decrease in accounts payable and accrued expenses
    (933 )     (7,319 )     (6,131 )
Increase (decrease) in payable to manager and affiliates
    (150,228 )     133,065       2,217  
Decrease in interest payable
            (3,008 )     (6,227 )
                         
NET CASH USED IN OPERATING ACTIVITIES
  $ (368,137 )   $ (118,198 )   $ (240,589 )
 
See Notes to Financial Statements.

 
21

 

AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
NOTES TO FINANCIAL STATEMENTS
MARCH 30, 2011, 2010 AND 2009

1.
Organization, Purpose and Summary of Significant Accounting Policies

American Tax Credit Trust, a Delaware statutory business trust (the "Trust") was formed on February 4, 1993 under Chapter 38 of Title 12 of the Delaware Code.  There was no operating activity until admission of the investors (the “Beneficial Owners”) on November 29, 1993.  The Trust was formed to invest primarily in leveraged low-income multifamily residential complexes (the "Property" or "Properties") that qualified for the low-income tax credit in accordance with Section 42 of the Internal Revenue Code (the "Low-income Tax Credit"), through the acquisition of limited partner equity interests (the “Local Partnership Interests”) in partnerships (the "Local Partnership" or "Local Partnerships") that are the owners of the Properties.  Such interests were acquired from 1993 to 1995.  Richman American Credit Corp. (the "Manager") was formed on April 5, 1993 to act as the Manager of the Trust.

On September 13, 1993, the Trust commenced the offering for sale of units of beneficial ownership (the "Units") to Beneficial Owners in one to twenty series ("Series I through Series XX"; each a "Series").  These notes and the accompanying financial statements are presented for Series I only.

Basis of Accounting and Fiscal Year

The Trust’s records are maintained on the accrual basis of accounting for both financial reporting and tax purposes.  For financial reporting purposes, the Trust's fiscal year ends March 30 and its quarterly periods end June 29, September 29 and December 30.  The Local Partnerships have a calendar year for financial reporting purposes.  The Trust and the Local Partnerships each have a calendar year for income tax purposes.

Investment in Local Partnerships

The Trust accounts for its investment in local partnerships in accordance with the equity method of accounting, under which the investment is carried at cost and is adjusted for the Trust's share of each Local Partnership's results of operations and by cash distributions received.  Equity in loss of each investment in Local Partnership allocated to the Trust is recognized to the extent of the Trust’s investment balance in each Local Partnership.  Equity in loss in excess of the Trust’s investment balance in a Local Partnership is allocated to other partners' capital in any such Local Partnership.  Previously unrecognized equity in loss of any Local Partnership is recognized in the fiscal year in which equity in income is earned by such Local Partnership or additional investment is made by the Trust.  Distributions received subsequent to the elimination of an investment balance for any such investment in a Local Partnership are recorded as other income from local partnerships.

The Trust assesses the carrying value of its investment in local partnerships at least annually in the fourth quarter of its fiscal year or whenever there are indications that a permanent impairment may have occurred.  If the carrying value of an investment in a Local Partnership exceeds the estimated value derived by management, the Trust reduces its investment in any such Local Partnership (unless the impairment is considered to be temporary) and includes such reduction in equity in loss of investment in local partnerships.  Impairment is measured by comparing the investment carrying amount to the estimated residual value of the investment.

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

Advances and additional capital contributions (collectively the “Advances”) that are not required under the terms of the Local Partnerships’ partnership agreements but which are made to the Local Partnerships are recorded as investment in local partnerships.  Certain Advances are considered by the Trust to be voluntary loans to the respective Local Partnerships and the Trust may be reimbursed at a future date to the extent such Local Partnerships generate distributable cash flow or receive proceeds from sale or refinancing.

 
22

 

AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
NOTES TO FINANCIAL STATEMENTS - CONTINUED
MARCH 30, 2011, 2010 AND 2009
 
 
1.
Organization, Purpose and Summary of Significant Accounting Policies (Continued)

Cash and Cash Equivalents

The Trust considers all highly liquid investments purchased with an original maturity of three months or less at the date of acquisition to be cash equivalents.  Cash and cash equivalents are stated at cost, which approximates market value.

Restricted Cash

Restricted cash had been set aside to pay accrued interest on a previously outstanding capital contribution to a Local Partnership; such amount was paid in full during the year ended March 30, 2010.

Fair Value Measurements

ASC Topic 820 clarifies the principle that fair value should be based on the assumptions that market participants would use when pricing the asset or liability and establishes the following fair value hierarchy:

 
·
Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Partnership has the ability to access;

 
·
Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as interest rates and yield curves that are observable at commonly quoted intervals; and

 
·
Level 3 inputs are unobservable inputs for the asset or liability that are typically based on an entity’s own assumptions as there is little, if any, related market activity.

For instances in which the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the fair value measurement will fall within the lowest level input that is significant to the fair value measurement in its entirety.

Investment in Pemberwick Fund

The Trust carries its investment in Pemberwick Fund (“Pemberwick”), an investment grade institutional short duration bond fund, at estimated fair value.  Realized capital gains (losses) are included in (offset against) interest revenue.  Investment in Pemberwick is classified as available-for-sale and unrealized gains or losses are included as items of comprehensive income (loss) and are reported as a separate component of owners' equity (deficit).

Investment in Bond

Investment in bond is classified as available-for-sale and represents an investment that the Trust intends to hold for an indefinite period of time but not necessarily to maturity.  Any decision to sell such investment would be based on various factors, including significant movements in interest rates and liquidity needs.  Investment in bond is carried at estimated fair value and unrealized gains or losses are included as items of comprehensive income (loss) and are reported as a separate component of owners’ equity (deficit).

The premium on investment in bond is amortized using the effective yield method over the life of the investment.  The amortized premium offsets interest revenue.  Realized gain (loss) on redemption or sale of investment in bond is included in, or offset against, interest revenue on the basis of the adjusted cost of the investment at the date of redemption or sale.

Interest on Capital Contributions Payable to Local Partnerships

Pursuant to agreements with certain Local Partnerships, interest was accrued on certain installments of capital contributions.  Such amounts were recorded as a liability and an offset to interest revenue.

 
23

 

AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
NOTES TO FINANCIAL STATEMENTS - CONTINUED
MARCH 30, 2011, 2010 AND 2009

1.
Organization, Purpose and Summary of Significant Accounting Policies (Continued)

Income Taxes

The Trust is a pass-through entity for income tax purposes and, as such, is not subject to income taxes.  Rather, all items of taxable income and deductions are passed through to and are reported by its owners on their respective income tax returns.  The Trust’s federal tax status as a pass-through entity is based on its legal status as a trust.  Accordingly, the Trust is not required to take any tax positions in order to qualify as a pass-through entity.  The Trust 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 Trust has no other tax positions which must be considered for disclosure.  In accordance with ASC Topic 740; Subtopic 10, the Trust has included in Note 8 disclosures related to differences in the financial and tax bases of accounting.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.  Actual results could differ from those estimates.

Reclassifications

Certain prior year balances have been reclassified to conform to the current year presentation.

2.
Capital Contributions

On September 13, 1993, the Trust commenced the offering of Units through Merrill Lynch, Pierce, Fenner & Smith Incorporated and PaineWebber Incorporated (the “Selling Agents”).  On November 29, 1993, January 28, 1994 and May 25, 1994, under the terms of the Fourth Amended and Restated Agreement of Trust of the Trust (the "Trust Agreement"), the Manager admitted Beneficial Owners to the Trust in three closings.  At these closings, subscriptions for a total of 18,654 Units representing $18,654,000 in Beneficial Owners’ capital contributions were accepted.  In connection with the offering of Units, the Trust incurred organization and offering costs of $2,330,819, of which $75,000 was capitalized as organization costs and $2,255,819 was charged to the Beneficial Owners' equity as syndication costs.  The Manager contributed $100 to the Trust.

Net loss is allocated 99% to the Beneficial Owners and 1% to the Manager in accordance with the Trust Agreement.

3.
Cash and Cash Equivalents

As of March 30, 2011, the Trust has cash and cash equivalents of $205,400.  Of such amount, $195,469 is held in accounts at two financial institutions in which all non-interest bearing transaction accounts are fully insured by the Federal Deposit Insurance Corporation (“FDIC”) and the aggregate of all other accounts at each institution is insured up to $250,000 by the FDIC.  The entire amount is FDIC insured as of March 30, 2011.  The remaining $9,931 is held in an account at a financial institution in which such amount is invested in a portfolio of securities that are direct obligations of the U.S. Treasury and are backed by the full faith and credit of the United States of America.
 
 
24

 

AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
NOTES TO FINANCIAL STATEMENTS - CONTINUED
MARCH 30, 2011, 2010 AND 2009

4.
Investment in Pemberwick Fund

The Trust carries its investment in Pemberwick, an investment grade institutional short duration bond fund, at estimated fair value.  Pemberwick was organized in February 2010 as a non-diversified open-end management investment company registered under the Investment Company Act of 1940, as amended, that seeks maximum current income consistent with liquidity and stability of principal.  In selecting portfolio securities for Pemberwick, the investment advisor of Pemberwick (the "Advisor") will select investments so that approximately 90% of Pemberwick’s assets will be rated "A" or better by a nationally recognized statistical rating organization ("NRSRO") such as Moody's Investor Services, Inc. ("Moody's") and/or by Standard & Poor's Financial Services, LLC ("S&P") or, if a rating is not available, deemed to be of comparable quality by the Advisor.  It is anticipated that approximately 95% or more of Pemberwick’s assets (excluding floating rate or fixed to float securities issued by banking institutions having assets in excess of $200 billion) will be rated "AA" or better by an NRSRO or, if a rating is not available, deemed to be of comparable quality by the Advisor.  In executing this strategy, as of March 30, 2011 approximately 57% of Pemberwick’s assets have a duration of 90 days or less or are securities with LIBOR based floating rates.  The weighted average duration of Pemberwick’s assets is approximately 2.5 years as of March 30, 2011.  Redemptions from Pemberwick are immediately liquid and unrestricted.  Pemberwick’s net asset value ("NAV") is $10.14 and $10.00 per share as of March 30, 2011 and 2010, respectively.  The Trust’s investment in Pemberwick as of March 30, 2011 and 2010 is $799,505 and $1,113,737, respectively.  The unrealized gain of $10,969 as of March 30, 2011 is included as a component of accumulated other comprehensive income in the accompanying financial statements as of and for the year ended March 30, 2011.  There was no unrealized gain or loss as of March 30, 2010.  The fair value of the Trust’s investment in Pemberwick is classified within Level 1 of the fair value hierarchy of the guidance on Fair Value Measurements (see Note 1).
 
 The Advisor is an affiliate of the Manager.  For its services, the Advisor is entitled to receive an annual advisory fee of 0.50% of the average daily net assets of Pemberwick. The Advisor may, in its discretion, voluntarily waive its fees or reimburse certain Pemberwick expenses; however, the Advisor is not required to do so. The Advisor has waived 70% of its fee earned since Pemberwick’s inception and earned $1,567 and $167 from the Trust’s investment in Pemberwick for the years ended March 30, 2011 and 2010, respectively.  The Advisor’s asset management affiliate, Richman Asset Management, Inc. (“RAM”) has agreed to reduce its management fee (see Note 7) payable from the Trust to the extent any fee of the Advisor payable by Pemberwick would be duplicative of any profit that RAM would receive from the Trust.

5.
Investment in Bond

The Trust carries its investment in bond as available-for-sale because such investment is used to facilitate and provide flexibility for its obligations, including resolving circumstances that may arise in connection with the Local Partnerships.  Investment in bond is reflected in the accompanying balance sheet as of March 30, 2011 at estimated fair value and is classified within Level 1 of the fair value hierarchy of the guidance on Fair Value Measurements (see Note 1).  The unrealized gain of $2,730 is included as a component of accumulated other comprehensive income in the accompanying financial statements as of and for the year ended March 30, 2011.

As of March 30, 2011, certain information concerning investment in bond is as follows:

 
 
Description and maturity
 
Amortized
cost
   
Gross
unrealized gain
   
Gross
unrealized loss
   
Estimated
fair value
 
                         
Corporate debt security
                       
Callable in September 2013
  $ 97,143     $ 2,730     $ --     $ 99,873  
                                 
 
 
25

 

AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
NOTES TO FINANCIAL STATEMENTS - CONTINUED
MARCH 30, 2011, 2010 AND 2009

6.
Investment in Local Partnerships

As of March 30, 2011, the Trust owns a 98.9% to 99% Local Partnership Interest in the following Local Partnerships:

  1.
ACP Housing Associates, L.P.;
  2.
Creative Choice Homes VII, Ltd. (“Creative Choice”);
  3.
Edgewood Manor Associates, L.P. (“Edgewood”);
  4.
Ledge/McLaren Limited Partnership;
  5.
Penn Apartment Associates;
  6.
SB-92 Limited Partnership;
  7.
St. Christopher's Associates, L.P. V (“St. Christopher’s”);
  8.
St. John Housing Associates, L.P. (“St. John Housing”);
  9.
Starved Rock - LaSalle Manor Limited Partnership (“Starved Rock”); and
10.
Vision Limited Dividend Housing Association Limited Partnership.

The Properties are principally comprised of subsidized and leveraged low-income multifamily residential complexes located throughout the United States.  The rents of the Properties are controlled by federal and state agencies pursuant to applicable laws and regulations.  Under the terms of each of the Local Partnership’s partnership agreements, the Trust has committed to make capital contribution payments in the aggregate of $14,837,956, which includes Advances made to certain Local Partnerships (see discussion below) and all of which has been paid.  As of December 31, 2010 the Local Partnerships have outstanding mortgage loans payable totaling approximately $19,497,000 and accrued interest payable on such loans totaling approximately $4,456,000, which are secured by security interests and liens common to mortgage loans on the Local Partnerships' real property and other assets.

Equity in loss of investment in local partnerships is limited to the Trust’s investment balance in each Local Partnership; any excess is applied to other partners' capital in any such Local Partnership (see Note 1).  The amount of such excess losses applied to other partners' capital was $519,259, $696,720, and $47,615 for the years ended December 31, 2010, 2009 and 2008, respectively, as reflected in the combined statements of operations of the Local Partnerships herein Note 6.

The difference between the Trust’s investment in local partnerships as of March 30, 2011 and 2010 and the amounts reflected as the Trust’s investment balance in the combined balance sheets of the Local Partnerships as of December 31, 2010 and 2009 herein Note 6 represents cumulative carrying value adjustments made by the Trust (see Note 1) in the amount of $1,667,948.

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

Edgewood is currently in default under the terms of its first mortgage and a default has been declared by the lender; delinquent payments of principal, interest and certain fees represent a cumulative arrearage of approximately $41,000 as of June 2011.  The Trust has made cumulative Advances of $90,000 to Edgewood to fund operating deficits as of March 30, 2011, none of which were made during the three years then ended.  The Trust’s investment balance in Edgewood, after cumulative equity losses, became zero during the year ended March 30, 2005 and Advances made by the Trust were recorded as investment in local partnerships and written off as additional equity in loss of investment in local partnerships.
 
 
26

 

AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
NOTES TO FINANCIAL STATEMENTS - CONTINUED
MARCH 30, 2011, 2010 AND 2009

6.
Investment in Local Partnerships (Continued)

During the year ended March 30, 2010, the Trust made Advances of $6,092 to St. Christopher's to fund operating deficits.  Cumulative Advances as of March 30, 2011 and 2010 are $6,092.  The Trust’s investment balance in St. Christopher’s, after cumulative equity losses, became zero during the year ended March 30, 2004 and Advances made by the Trust were recorded as investment in local partnerships and written off as additional equity in loss of investment in local partnerships.

Creative Choice reported net income for the year ended December 31, 2008 resulting from a reduction in accrued expenses to an affiliate of the Local General Partner of Creative Choice of approximately $700,000, which amount is included in interest and other revenue in the combined statement of operations of the Local Partnerships for the year ended December 31, 2008 herein Note 6.  Such expenses were accrued in a prior year in connection with damages resulting from a major hurricane.  Such adjustment to the accounts of Creative Choice had no impact on the financial statements of the Trust.  The Trust’s investment balance in Creative Choice, after cumulative equity losses, became zero during the year ended March 30, 2006.

The Trust’s investment in St. John Housing represents more than 20% of the Trust’s total assets as of March 30, 2011 and 2010 and the equity in income recognized by the Trust for the years ended March 30, 2011 and 2010 in connection with St. John Housing represents more than 20% of the Trust’s net income (loss) for such years.  The following financial information represents certain balance sheet and operating statement data of St. John Housing as of and for the years ended December 31, 2010 and 2009:

   
2010
   
2009
 
             
Total assets
  $ 5,769,162     $ 5,794,519  
                 
Total liabilities
  $ 3,482,169     $ 3,680,470  
                 
Revenue
  $ 1,430,713     $ 1,393,140  
                 
Net income
  $ 233,785     $ 110,227  

The combined balance sheets of the Local Partnerships as of December 31, 2010 and 2009 and the combined statements of operations of the Local Partnerships for the years ended December 31, 2010, 2009 and 2008 are reflected on pages 28 and 29, respectively.

 
27

 

AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
NOTES TO FINANCIAL STATEMENTS - CONTINUED
MARCH 30, 2011, 2010 AND 2009

6.
Investment in Local Partnerships (Continued)

The combined balance sheets of the Local Partnerships as of December 31, 2010 and 2009 are as follows:

   
2010
   
2009
 
             
ASSETS
           
             
Cash and cash equivalents
  $ 821,860     $ 427,374  
Rents receivable
    71,782       70,342  
Escrow deposits and reserves
    1,934,303       1,982,368  
Land
    1,213,303       1,213,303  
Buildings and improvements (net of accumulated depreciation of $17,738,375 and $16,718,268)
    17,222,078       18,204,730  
Intangible assets (net of accumulated amortization of $179,568 and $193,618)
    225,773       238,362  
Other assets
    469,815       457,981  
                 
    $ 21,958,914     $ 22,594,460  
                 
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
               
                 
Liabilities
               
                 
Accounts payable and accrued expenses
  $ 739,419     $ 743,491  
Due to related parties
    2,547,157       2,616,670  
Mortgage loans
    19,497,031       20,046,007  
Notes payable
    100,000       100,000  
Accrued interest
    4,455,768       4,119,368  
Other liabilities
    146,928       144,733  
                 
      27,486,303       27,770,269  
                 
Partners' equity (deficit)
               
                 
American Tax Credit Trust, Series I
               
Capital contributions, net of distributions
    13,795,233       13,855,466  
Cumulative loss
    (9,829,373 )     (10,060,820 )
                 
      3,965,860       3,794,646  
                 
General partners and other limited partners
               
Capital contributions, net of distributions
    471,617       472,225  
Cumulative loss
    (9,964,866 )     (9,442,680 )
                 
      (9,493,249 )     (8,970,455 )
                 
      (5,527,389 )     (5,175,809 )
                 
    $ 21,958,914     $ 22,594,460  

 
28

 

AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
NOTES TO FINANCIAL STATEMENTS - CONTINUED
MARCH 30, 2011, 2010 AND 2009

6.
Investment in Local Partnerships (Continued)

The combined statements of operations of the Local Partnerships for the years ended December 31, 2010, 2009 and 2008 are as follows:

   
2010
   
2009
   
2008
 
                   
REVENUE
                 
                   
Rental
  $ 4,790,746     $ 4,558,362     $ 4,381,951  
Interest and other
    263,948       309,213       1,041,420  
                         
TOTAL REVENUE
    5,054,694       4,867,575       5,423,371  
                         
EXPENSES
                       
                         
Administrative
    1,110,818       1,071,204       1,023,796  
Utilities
    732,869       743,172       856,384  
Operating and maintenance
    1,147,203       1,224,343       1,095,304  
Taxes and insurance
    454,494       470,561       555,088  
Financial
    810,922       842,269       741,004  
Depreciation and amortization
    1,089,127       1,115,729       1,119,777  
                         
TOTAL EXPENSES
    5,345,433       5,467,278       5,391,353  
                         
NET INCOME (LOSS)
  $ (290,739 )   $ (599,703 )   $ 32,018  
                         
NET INCOME (LOSS) ATTRIBUTABLE TO
                       
                         
American Tax Credit Trust, Series I
  $ 231,447     $ 103,033     $ 79,327  
General partners and other limited partners (includes $519,259, $696,720 and $47,615 of Trust loss in excess of investment)
    (522,186 )     (702,736 )     (47,309 )
                         
    $ (290,739 )   $ (599,703 )   $ 32,018  
 
 
29

 

AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
NOTES TO FINANCIAL STATEMENTS - CONTINUED
MARCH 30, 2011, 2010 AND 2009

6.
Investment in Local Partnerships (Continued)

Investment and capital contribution activity with respect to each Local Partnership for the year ended March 30, 2011 is as follows:

 
 
 
 
 
 
 
Name of Local Partnership
 
Investment in
Local
Partnership
 balance as of
March 30,
2010
   
Investments
(voluntary
 advances)
 during the year
ended
March 30,
2011
   
Trust's
equity in 
income for the
year ended
March 30,
2011
   
Cash
distributions
 received during
the year ended
March 30,
2011 (2)
   
Investment in
Local
 Partnership
 balance as of
 March 30,
 2011
 
                               
ACP Housing Associates, L.P.
  $ --     $ --     $ -- (1)   $ --     $ --  
                                         
Creative Choice Homes VII, Ltd.
    --       --       -- (1)     --       --  
                                         
Edgewood Manor Associates, L.P.
    --       --       -- (1)     --       --  
                                         
Ledge/McLaren Limited Partnership
    --       --       -- (1)     --       --  
                                         
Penn Apartment Associates
    --       --       -- (1)     --       --  
                                         
SB-92 Limited Partnership
    --       --       -- (1)     --       --  
                                         
St. Christopher’s Associates, L.P. V
    --       --       -- (1)     --       --  
                                         
St. John Housing Associates, L.P.
    2,126,698       --       231,447       (60,233 )     2,297,912  
                                         
Starved Rock - LaSalle Manor Limited Partnership
    --       --       -- (1)     --       --  
                                         
Vision Limited Dividend Housing Association Limited Partnership
    --       --       -- (1)     --       --  
                                         
    $ 2,126,698     $ --     $ 231,447     $ (60,233 )   $ 2,297,912  

 
(1)
Additional equity in loss of investment is not allocated to the Trust until equity in income is earned or additional investment is made by the Trust
 
(2)
Does not include $2,500 classified as other income from local partnerships.
 
 
30

 
 
AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
NOTES TO FINANCIAL STATEMENTS - CONTINUED
MARCH 30, 2011, 2010 AND 2009

6.
Investment in Local Partnerships (Continued)

Investment and capital contribution activity with respect to each Local Partnership for the year ended March 30, 2010 is as follows:

 
 
 
 
 
 
 
Name of Local Partnership
 
 
 
Investment in
 Local
Partnership
balance as of
March 30,
2009
   
Investments
 (voluntary
advances)
during the year
 ended
March 30,
2010
   
Trust's
equity in
income (loss)
for the year
ended
March 30,
2010
   
 
Cash
distributions
received during
the year ended
March 30,
2010
   
 
Investment in
Local
 Partnership
balance as of
March 30,
2010
 
                               
ACP Housing Associates, L.P.
  $ --     $ --     $ -- (1)   $ --     $ --  
                                         
Creative Choice Homes VII, Ltd.
    --       --       -- (1)     --       --  
                                         
Edgewood Manor Associates, L.P.
    --       --       -- (1)     --       --  
                                         
Ledge/McLaren Limited Partnership
    --       --       -- (1)     --       --  
                                         
Penn Apartment Associates
    --       --       -- (1)     --       --  
                                         
SB-92 Limited Partnership
    --       --       -- (1)     --       --  
                                         
St. Christopher’s Associates, L.P. V
    --       6,092       (6,092 ) (2)     --       --  
                                         
St. John Housing Associates, L.P.
    2,077,806       --       109,125       (60,233 )     2,126,698  
                                         
Starved Rock - LaSalle Manor Limited Partnership
    --       --       -- (1)     --       --  
                                         
Vision Limited Dividend Housing Association Limited Partnership
    --       --       -- (1)     --       --  
                                         
    $ 2,077,806     $ 6,092     $ 103,033     $ (60,233 )   $ 2,126,698  

 
(1)
Additional equity in loss of investment is not allocated to the Trust until equity in income is earned or additional investment is made by the Trust
 
(2)
The Trust’s equity in loss of an investment in a Local Partnership is limited to the remaining investment balance.
 
 
31

 

AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
NOTES TO FINANCIAL STATEMENTS - CONTINUED
MARCH 30, 2011, 2010 AND 2009

6.
Investment in Local Partnerships (Continued)

Property information for each Local Partnership as of December 31, 2010 is as follows:
 
 
 
Name of Local Partnership
 
 
Mortgage
loans payable
   
 
 
Land
   
 
Buildings and
improvements
   
 
Accumulated
 depreciation
 
                         
ACP Housing Associates, L.P.
  $ 1,456,344     $ 14,000     $ 2,505,364     $ (977,204 )
Creative Choice Homes VII, Ltd.
    1,388,244       500,000       4,137,851       (1,850,440 )
Edgewood Manor Associates, L.P.
    1,817,774       --       8,551       --  
Ledge/McLaren Limited Partnership
    404,479       123,673       695,545       (327,261 )
Penn Apartment Associates
    954,000       13,357       1,841,829       (803,899 )
SB-92 Limited Partnership
    2,956,230       73,000       4,534,111       (2,226,347 )
St. Christopher’s Associates, L.P. V
    2,180,000       31,829       2,882,473       (2,092,045 )
St. John Housing Associates, L.P.
    3,280,465       74,800       8,279,308       (3,939,504 )
Starved Rock – LaSalle Manor Limited Partnership
    1,895,357       202,845       3,110,141       (1,254,997 )
Vision Limited Dividend Housing Association Limited Partnership
    3,164,138       179,799       6,965,280       (4,266,678 )
                                 
    $ 19,497,031     $ 1,213,303     $ 34,960,453     $ (17,738,375 )

Property information for each Local Partnership as of December 31, 2009 is as follows:
 
 
 
Name of Local Partnership
 
 
Mortgage
loans payable
   
 
 
Land
   
 
Buildings and
improvements
   
 
Accumulated
depreciation
 
                         
ACP Housing Associates, L.P.
  $ 1,461,862     $ 14,000     $ 2,505,364     $ (916,937 )
Creative Choice Homes VII, Ltd.
    1,481,636       500,000       4,137,851       (1,737,811 )
Edgewood Manor Associates, L.P.
    1,817,774       --       8,551       --  
Ledge/McLaren Limited Partnership
    416,139       123,673       695,545       (310,130 )
Penn Apartment Associates
    963,000       13,357       1,839,906       (759,902 )
SB-92 Limited Partnership
    2,978,923       73,000       4,534,111       (2,059,291 )
St. Christopher’s Associates, L.P. V
    2,180,000       31,829       2,868,893       (1,980,733 )
St. John Housing Associates, L.P.
    3,456,631       74,800       8,279,308       (3,740,696 )
Starved Rock – LaSalle Manor Limited Partnership
    1,938,112       202,845       3,088,189       (1,205,629 )
Vision Limited Dividend Housing Association Limited Partnership
    3,351,930       179,799       6,965,280       (4,007,139 )
                                 
    $ 20,046,007     $ 1,213,303     $ 34,922,998     $ (16,718,268 )
 
 
32

 

AMERICAN TAX CREDIT TRUST,
a Delaware statutory business trust
Series I
NOTES TO FINANCIAL STATEMENTS - CONTINUED
MARCH 30, 2011, 2010 AND 2009

6.
Investment in Local Partnerships (Continued)

The summary of property activity during the year ended December 31, 2010 is as follows:

   
Balance as of
December 31,
2009
   
Net change during
the year ended
December 31,
2010
   
Balance as of
December 31,
2010
 
                   
Land
  $ 1,213,303     $ --     $ 1,213,303  
Buildings and improvements
    34,922,998       37,455       34,960,453