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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

xAnnual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the fiscal year ended March 31, 2012 or

 

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

 

For the transition period from _______ to _______

 

Commission file number        0-21718

 

BOSTON CAPITAL TAX CREDIT FUND III L.P.

(Exact name of registrant as specified in its charter)

 

Delaware 52-1749505
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)

 

One Boston Place, Suite 2100, Boston, Massachusetts  02108

(Address of principal executive offices)  (Zip Code)

 

Registrants telephone number, including area code (617)624-8900

 

Securities registered pursuant to Section 12(b) of the Act:

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class - Name of each exchange on which registered

None

 

Securities registered pursuant to Section 12(g) of the Act:

Title of class

Beneficial Assignee Certificates

 

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

 

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes 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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

 

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

 

Large accelerated filer ¨ Accelerated filer ¨
   
Non-accelerated filer ¨ Smaller reporting company x

 

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

 

DOCUMENTS INCORPORATED BY REFERENCE

 

None.

 

 
 

 

BOSTON CAPITAL TAX CREDIT FUND III L.P.

Form 10-K ANNUAL REPORT

FOR THE YEAR ENDED MARCH 31, 2012

 

TABLE OF CONTENTS

 

  PART I  
     
Item 1. Business 3
Item 1A. Risk Factors 5
Item 1B. Unresolved Staff Comments 8
Item 2. Properties 8
Item 3. Legal Proceedings 19
Item 4. Mine Safety Disclosures 19
     
  PART II  
     
Item 5. Market for the Fund's Limited Partnership Interests and Related Partnership Matters 20
Item 6. Selected Financial Data 21
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 22
Item 7a. Quantitative and Qualitative Disclosure About Market Risk 50
Item 8. Financial Statements and Supplementary Data 50
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 50
Item 9a. Controls and Procedures 51
     
  PART III  
     
Item 10. Directors, Executive Officers, and Corporate Governance 52
Item 11. Executive Compensation 54
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 55
Item 13. Certain Relationships and Related Transactions, Director Independence 55
Item 14. Principal Accounting Fees and Services 56
     
  PART IV  
     
Item 15. Exhibits and Financial Statement Schedules 57
     
  Signatures 61

 

2
 

 

PART I

 

Item 1. Business

 

Organization

 

Boston Capital Tax Credit Fund III L.P. (the "Fund") is a limited partnership formed under the Delaware Revised Uniform Limited Partnership Act as of September 19, 1991. Effective as of June 1, 2001, there was a restructuring and, as a result, the Fund’s general partner was reorganized as follows. The general partner of the Fund continues to be Boston Capital Associates III L.P., a Delaware limited partnership. The general partner of the general partner is now BCA Associates Limited Partnership, a Massachusetts limited partnership, whose sole general partner is C&M Management, Inc., a Massachusetts corporation. John P. Manning is the principal of Boston Capital Partners, Inc. The limited partner of the general partner is Capital Investment Holdings, a general partnership whose partners are certain officers and employees of Boston Capital Partners, Inc., and its affiliates. The assignor limited partner is BCTC III Assignor Corp., a Delaware corporation which is wholly-owned by John P. Manning.

 

The assignor limited partner was formed for the purpose of serving in that capacity for the Fund and will not engage in any other business. Units of beneficial interest in the limited partnership interest of the assignor limited partner are assigned by the assignor limited partner by means of beneficial assignee certificates ("BACs") to investors and investors are entitled to all the rights and economic benefits of a limited partner of the Fund, including rights to a percentage of the income, gains, losses, deductions, credits and distributions of the Fund.

 

A Registration Statement on Form S-11 and the related prospectus,(together with each subsequently filed prospectus, the "Prospectus") was filed with the Securities and Exchange Commission and became effective January 24, 1992 in connection with a public offering (together with each subsequent offering of BACs described herein, the "Offering") in one or more series of a minimum of 250,000 BACs and a maximum of 20,000,000 BACs at $10 per BAC. On September 4, 1993 the Fund filed Form S-11 with the Securities and Exchange Commission which registered an additional 2,000,000 BACs at $10 per BAC for sale to the public in one or more series. The registration for additional BACs became effective on October 6, 1993. As of March 31, 2012, subscriptions had been received and accepted by the General Partner in Series 15, 16, 17, 18 and 19 for 21,996,102 BACs, representing capital contributions of $219,961,020. The Fund issued the last BACs in Series 19 on December 17, 1993. This concluded the Offering of the Fund.

 

3
 

 

Description of Business

 

The Fund's principal business is to invest as a limited partner in other limited partnerships (the "Operating Partnerships") each of which will own or lease and will operate an apartment complex exclusively or partially for low- and moderate-income tenants. Each Operating Partnership in which the Fund invests owns apartment complexes, which are completed, newly constructed, under construction or rehabilitation, or to-be constructed or rehabilitated, and which are expected to receive government assistance. Each apartment complex is expected to qualify for the low-income housing tax credit under Section 42 of the Code (the "Federal Housing Tax Credit"), providing tax benefits over a period of ten to twelve years in the form of tax credits which investors may use to offset income, subject to strict limitations, from other sources. Some apartment complexes may also qualify for the historic rehabilitation tax credit under Section 47 of the Code (the "Rehabilitation Tax Credit"). Section 236 (f) (ii) of the National Housing Act, as amended, and Section 101 of the Housing and Urban Development Act of 1965, as amended, each provide for the making by HUD of rent supplement payments to low income tenants in properties which receive other forms of federal assistance including tax credits. The payments for each tenant, which are made directly to the owner of their property, generally are in amounts to enable the tenant to pay rent equal to 30% of the adjusted family income. Some of the apartment complexes in which the Fund has invested are receiving such rent supplements from HUD. HUD has been in the process of converting rent supplement assistance to assistance paid not to the owner of the apartment complex, but directly to the individuals. At this time, the Fund is unable to predict whether Congress will continue rent supplement programs payable directly to owners of apartment complexes.

 

As of March 31, 2012 the Fund had invested in 30 Operating Partnerships on behalf of Series 15, 38 Operating Partnerships on behalf of Series 16, 27 Operating Partnerships on behalf of Series 17, 23 Operating Partnerships on behalf of Series 18 and 16 Operating Partnerships on behalf of Series 19. A description of these Operating Partnerships is set forth in Item 2 herein.

 

The business objectives of the Fund are to:

 

(1)Provide current tax benefits to investors in the form of Federal Housing Tax Credits and, in limited instances, a small amount of Rehabilitation Tax Credits, which an investor may apply, subject to strict limitations, against the investor's federal income tax liability from active, portfolio and passive income;

 

(2)Preserve and protect the Fund's capital and provide capital appreciation and cash distributions through increases in value of the Fund's investments and, to the extent applicable, equity buildup through periodic payments on the mortgage indebtedness with respect to the apartment complexes;

 

(3)Provide tax benefits in the form of passive losses which an investor may apply to offset his passive income (if any); and

 

(4)Provide cash distributions (except with respect to the Fund's investment in some non-profit Operating Partnerships) from capital transaction proceeds. The Operating Partnerships intend to hold the apartment complexes for appreciation in value. The Operating Partnerships may sell the apartment complexes after a period of time if financial conditions in the future make such sales desirable and if such sales are permitted by government restrictions.

 

4
 

 

Employees

 

The Fund does not have any employees. Services are performed by the general partner and its affiliates and agents retained by them.

 

Item 1A. Risk Factors

 

As used in this Item 1A, references to “we, “us” and “our” mean the Fund.

 

An investment in our BACs and our investments in Operating Partnerships are subject to risks. These risks may impact the tax benefits of an investment in our BACs, and the amount of proceeds available for distribution to our limited partners, if any, on liquidation of our investments.

 

In addition to the other information set forth in this report, you should carefully consider the following factors which could materially affect our business, financial condition or results of operations. The risks described below are not the only risks we face. Additional factors not presently known to us or that we currently deem to be immaterial also may materially adversely affect our business operations.

 

The ability of limited partners to claim tax losses from their investment in us is limited.

 

The IRS may audit us or an Operating Partnership and challenge the tax treatment of tax items. The amount of Low Income Housing Tax Credits and tax losses allocable to the investors could be reduced if the IRS were successful in such a challenge. The alternative minimum tax could reduce tax benefits from an investment in our BACs. Changes in tax laws could also impact the tax benefits from an investment in our BACs and/or the value of the Operating Partnerships. Until the Operating Partnerships have completed a mandatory fifteen year Low Income Housing Tax Credit compliance period, investors are at risk for potential recapture of Low Income Housing Tax Credits that have already been claimed.

 

The Low Income Housing Tax Credits rules are extremely complicated and noncompliance with these rules may have adverse consequences for BAC holders.

 

Noncompliance with applicable tax regulations may result in the loss of future Low Income Housing Tax Credits and the fractional recapture of Low Income Housing Tax Credits already taken. In most cases the annual amount of Low Income Housing Tax Credits that an individual can use is limited to the tax liability due on the person’s last $25,000 of taxable income. The Operating Partnerships may be sold at a price which would not result in our realizing cash distributions or proceeds from the transaction. Accordingly, we may be unable to distribute any cash to our investors. Low Income Housing Tax Credits may be the only benefit from an investment in our BACs.

 

5
 

 

Poor performance of one housing complex, or the real estate market generally, could impair our ability to satisfy our investment objectives.

 

Each housing complex is subject to mortgage indebtedness. If an Operating Partnership failed to pay its mortgage, it could lose its housing complex in foreclosure. If foreclosure were to occur during the first 15 years of the existence of the Fund, the loss of any remaining future Low Income Housing Tax Credits, a fractional recapture of previously claimed Low Income Housing Tax Credits, and a loss of our investment in the housing complex would occur. To the extent the Operating Partnerships receive government financing or operating subsidies, they may be subject to one or more of the following risks:

-difficulties in obtaining rent increases;
-limitations on cash distributions;
-limitations on sales or refinancing of Operating Partnerships;
-limitations on transfers of interests in Operating Partnerships;
-limitations on removal of local general partners;
-limitations on subsidy programs; and
-possible changes in applicable regulations.

 

The value of real estate is subject to risks from fluctuating economic conditions, including employment rates, inflation, tax, environmental, land use and zoning policies, supply and demand of similar properties, and neighborhood conditions, among others.

 

No trading market for the BACs exists or is expected to develop.

 

There is currently no active trading market for the BACs. Accordingly, limited partners may be unable to sell their BACs or may have to sell BACs at a discount. Limited partners should consider their BACs to be a long-term investment.

 

Investors may realize taxable gain on sale or disposition of BACs.

 

Upon the sale or other taxable disposition of BACs, investors will realize taxable income to the extent that their allocable share of the non-recourse mortgage indebtedness on the apartment complexes, together with the money they receive from the sale of the BACs, is greater than the original cost of their BACs. This realized taxable income is reduced to the extent that investors have suspended passive losses or credits. It is possible that the sale of BACs may not generate enough cash to pay the tax obligations arising from the sale.

 

Investors may have tax liability in excess of cash.

 

Investors eventually may be allocated profits for tax purposes, which exceed any cash distributed to them. Under these circumstances, unless an investor has passive losses or credits to reduce this tax liability, the investor will have to pay federal income tax without a corresponding cash distribution. Similarly, in the event of a sale or foreclosure of an apartment complex or a sale of BACs, an investor may be allocated taxable income, resulting in tax liability, in excess of any cash distributed to him or her as a result of the event.

 

6
 

 

Investors may not receive cash if apartment complexes are sold.

 

There is no assurance that investors will receive any cash distributions from the sale or refinancing of an apartment complex. The price at which an apartment complex is sold may not be large enough to pay the mortgage and other expenses which must be paid at such time. Even if there are net cash proceeds from a sale distributed to the Fund, expenses such as accrued management fees and unpaid loans will be deducted pursuant to Section 4.02(a) of the Fund Agreement. If any of these events happen, investors will not get all of their investment back, and the only benefit from an investment will be the tax credits received.

 

The sale or refinancing of the apartment complexes is dependent upon the following material factors:

 

-The necessity of obtaining the consent of the operating general partners;
-The necessity of obtaining the approval of any governmental agency(ies) providing government assistance to the apartment complex; and
-The uncertainty of the market.

 

Any sale may occur well after the fifteen-year federal housing tax credit compliance period.

 

We have insufficient sources of cash to pay our existing liabilities.

 

We currently do not have sufficient cash resources to satisfy our financial liabilities. Furthermore, we do not anticipate that we will have sufficient available cash to pay our future financial liabilities. Substantially all of our existing liabilities are payable to our general partner and its affiliates. Though the amounts payable to the General Partner and its affiliates are contractually currently payable, we do not believe that the General Partner or its affiliates will demand immediate payment of these contractual obligations in the near term; however, there can be no assurance that this will be the case. We would be materially adversely affected if the general partner or its affiliates demanded payment in the near term of our existing contractual liabilities or suspended the provision of services to us because of our inability to satisfy these obligations. All monies currently deposited, or that will be deposited in the future, into the Fund's working capital reserves are intended to be utilized to pay our existing and future liabilities.

 

7
 

 

Item 1B.   Unresolved Staff Comments

 

Not applicable.

 

Item 2.   Properties

 

The Fund has acquired a limited partnership interest in 134 Operating Partnerships in five series, identified in the table set forth below. In each instance the apartment complexes owned by the applicable Operating Partnership is eligible for the Federal Housing Tax Credit. Initial occupancy of a unit in each apartment complex which complied with the minimum set-aside test (i.e., initial occupancy by tenants with incomes equal to no more than a designated percentage of area median income) and the rent restriction test (i.e., gross rent charged tenants does not exceed 30% of the applicable income standards) is referred to as "Qualified Occupancy." The general partner believes that there is adequate casualty insurance on the properties.

 

Please refer to Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" for a more detailed discussion of operational difficulties experienced by certain of the Operating Partnerships.

 

8
 

 

Boston Capital Tax Credit Fund III L.P. - Series 15

 

PROPERTY PROFILES AS OF MARCH 31, 2012

 

Property

Name

  Location  Units  

Mortgage

Balance

As of

12/31/11

  

Acq

Date

  

Const

Comp

  

Qualified

Occupancy

3/31/12

  

Cap Con

Paid

Thru

3/31/12

 
April Gardens Apts. III  Las Piedras, PR   32   $1,385,274    09/92    05/93    100%  $279,823 
                                  
Barton Village  Apartments  Arlington, GA   18    480,084    10/92    03/93    100%   101,154 
                                  
Bergen Meadows  Bergen, NY   24    934,543    07/92    07/92    100%   199,420 
                                  
Bridlewood Terrace  Horse Cave, KY   24    732,576    01/94    01/95    100%   167,679 
                                  
Calexico Senior Apts.  Calexico, CA   38    1,817,383    09/92    09/92    100%   366,220 
                                  
Chestnut Hills Estates  Altoona, AL   24    690,279    09/92    09/92    100%   146,500 
                                  
Columbia Heights Apts.  Camden, AR   32    1,202,724    10/92    09/93    100%   247,599 
                                  
Deerfield Commons  Crewe, VA   39    1,159,705    04/92    06/92    100%   242,430 
                                  
East Park Apts. I  Dilworth, MN   24    420,770    06/94    01/94    100%   406,100 
                                  
Graham Village Apts.  Graham, NC   50    986,756    10/94    06/95    100%   919,461 
                                  
Greenwood Village  Fort Gaines, GA   24    630,588    08/92    05/93    100%   131,268 
                                  
Hadley's  Lake Apts.  East Machias, ME   18    982,563    09/92    01/93    100%   291,400 
                                  
Hammond Heights Apts.  Westernport, MD   35    1,399,262    07/92    02/93    100%   327,944 
                                  
Harvest Point  Apts.  Madison, SD   30    1,130,183    03/95    12/94    100%   268,760 
                                  
Lakeside Apts.  Lake Village, AR   32    1,146,822    08/94    08/95    100%   282,004 
                                  
Laurelwood  Apartments, Phase II  Winnsboro,  SC   32    1,007,711    03/92    02/92    100%   229,986 

 

9
 

 

Boston Capital Tax Credit Fund III L.P. - Series 15

 

PROPERTY PROFILES AS OF MARCH 31, 2012

Continued

 

Property

Name

  Location  Units  

Mortgage

Balance

As of

12/31/11

  

Acq

Date

  

Const

Comp

  

Qualified

Occupancy

3/31/12

  

Cap Con

Paid

Thru

3/31/12

 
Livingston Plaza  Livingston, TX   24   $623,769    12/92    11/93    100%  $176,534 
                                  
Manning Lane Apts.  Manning, SC   42    1,384,366    08/92    03/93    100%   296,436 
                                  
Marshall Lane Apts.   Marshallville,GA   18    520,288    08/92    12/92    100%   114,200 
                                  
Meadow View Apts.  Grantsville, MD   36    1,397,461    05/92    02/93    100%   291,322 
                                  
North Trail Apts.  Arkansas City, KS   24    764,192    09/94    12/94    100%   194,118 
                                  
Payson Senior Center Apts.   Payson, AZ   39    1,405,314    08/92    08/92    100%   365,755 
                                  
Ridgeview Apartments  Brainerd, MN   24    816,954    03/92    01/92    100%   165,434 
                                  
Rio Mimbres II Apts  Deming, NM   24    729,871    04/92    04/92    100%   149,811 
                                  
Shenandoah Village  Shenandoah, PA   34    1,384,872    08/92    02/93    100%   317,136 
                                  
Sunset Sq. Apts.  Scottsboro, AL   24    694,113    09/92    08/92    100%   143,900 
                                  
University Meadows   Detroit, MI   53    2,325,073    06/92    12/92    100%   1,676,750 
                                  
Village Woods   Healdton, OK   24    649,963    08/94    12/94    100%   173,616 
                                  
Villas Del Mar   Urb.Corales de Hatillo, PR   32    1,388,316    08/92    08/92    100%   307,200 
                                  
Whitewater Village Apts.   Ideal, GA   18    494,523    08/92    11/92    100%   108,000 

 

10
 

 

Boston Capital Tax Credit Fund III L.P. - Series 16

 

PROPERTY PROFILES AS OF MARCH 31, 2012

 

Property

Name

  Location  Units  

Mortgage

Balance

As of

12/31/11

  

Acq

Date

  

Const

Comp

  

Qualified

Occupancy

3/31/12

  

Cap Con

Paid

Thru

3/31/12

 
Bernice Villa Apts.  Bernice, LA   32   $794,601    05/93    10/93    100%  $200,476 
                                  
Canterfield Manor  Denmark, SC   20    721,874    11/92    01/93    100%   175,959 
                                  
Carriage Park Village  Westville, OK   24    631,686    02/93    07/93    100%   144,714 
                                  
Cumberland Woods Apts.  Middlesboro, KY   40    1,364,531    12/93    10/94    100%   412,700 
                                  
Fairmeadow Apts.  Latta, SC   24    825,989    01/93    07/93    100%   195,400 
                                  
Falcon Ridge Apts.  Beattyville, KY   32    969,380    04/94    01/95    100%   247,200 
                                  
Forest Pointe Apts.  Butler, GA   25    696,211    12/92    09/93    100%   162,397 
                                  
Greenfield Properties  Greenfield, MO   20    493,210    01/93    05/93    100%   126,046 
                                  
Harmony House Apts.  Galax, VA   40    1,351,180    11/92    07/93    100%   285,588 
                                  
Holly Tree Manor  Holly Hill, SC   24    832,291    11/92    02/93    100%   201,490 
                                  
Isola Square Apartments  Isola, MS   32    911,056    11/93    04/94    100%   246,722 
                                  
Joiner Manor  Joiner, AR   25    696,945    01/93    06/93    100%   149,670 
                                  
Landview Manor  Bentonia, MS   28    789,590    07/93    02/94    100%   190,109 
                                  
Laurel Ridge Apts.  Idabel, OK   52    1,278,142    04/93    12/93    100%   282,606 
                                  
Lawtell Manor Apts.  Lawtell, LA   32    814,864    04/93    08/93    100%   202,603 
                                  
Logan Lane Apts  Ridgeland, SC   36    1,222,066    09/92    03/93    100%   274,750 

 

11
 

 

Boston Capital Tax Credit Fund III L.P. - Series 16

 

PROPERTY PROFILES AS OF MARCH 31, 2012

 

Continued

 

Property

Name

  Location  Units  

Mortgage

Balance

As of

12/31/11

  

Acq

Date

  

Const

Comp

  

Qualified

Occupancy

3/31/12

  

Cap Con

Paid

Thru

3/31/12

 
Meadows of Southgate  Southgate, MI   83   $1,849,050    07/93    05/94    100%  $1,716,000 
                                  
Mendota Village Apts  Mendota, CA   44    1,845,396    12/92    05/93    100%   438,300 
                                  
Mid City Apts.  Jersey City,  NJ   58    2,219,350    09/93    06/94    100%   3,097,210 
                                  
Newport  Elderly Apts.  Newport, VT   24    880,969    02/93    10/93    100%   221,626 
                                  
Oak Forest Apts.  Eastman,  GA   41    1,089,805    12/92    10/93    100%   251,269 
                                  
Parkwoods Apts.  Anson,  ME   24    1,203,421    12/92    09/93    100%   320,206 
                                  
Plantation Manor  Tchula, MS   28    768,415    07/93    12/93    100%   195,030 
                                  
Ransom St. Apartments  Blowing Rock,  NC   13    485,305    12/93    11/94    100%   100,249 
                                  
Simmesport Square Apts.  Simmesport, LA   32    823,892    04/93    06/93    100%   198,500 
                                  
St. Croix Commons Apts.  Woodville, WI   40    736,861    10/94    12/94    100%   534,847 
                                  
St. Joseph Square Apts.  St. Joseph, LA   32    885,513    05/93    09/93    100%   206,086 
                                  
Stony Ground Villas  St. Croix, VI   22    1,328,052    12/92    06/93    100%   358,414 
                                  
Talbot Village II  Talbotton, GA   24    636,036    08/92    04/93    100%   129,683 
                                  
Tan Yard Branch Apts. I  Blairsville, GA   24    719,440    12/92    09/94    100%   151,154 

 

12
 

 

Boston Capital Tax Credit Fund III L.P. - Series 16

 

PROPERTY PROFILES AS OF MARCH 31, 2012

 

Continued

 

Property

Name

  Location  Units  

Mortgage

Balance

As of

12/31/11

  

Acq

Date

  

Const

Comp

  

Qualified

Occupancy

3/31/12

  

Cap Con

Paid

Thru

3/31/12

 
Tan Yard Branch Apts. II  Blairsville, GA   25   $705,295    12/92    07/94    100%  $144,304 
                                  
The Woodlands  Tupper Lake, NY   18    884,410    09/94    02/95    100%   214,045 
                                  
Tuolumne City Senior Apts.  Tuolumne, CA   30    1,498,412    12/92    08/93    100%   376,535 
                                  
Turtle Creek Apts.  Monticello, AR   27    796,839    05/93    10/93    100%   185,392 
                                  
Vista Linda Apartments  Sabana Grande, PR   50    2,384,347    01/93    12/93    100%   445,530 
                                  
West End Manor  Union, SC   28    924,908    05/93    05/93    100%   231,741 
                                  
Willcox Senior Apts.  Willcox, AZ   30    1,034,020    01/93    06/93    100%   268,747 
                                  
Woods Landing Apts.  Damascus, VA   40    1,349,499    12/92    09/93    100%   286,171 

 

13
 

 

Boston Capital Tax Credit Fund III L.P. - Series 17

 

PROPERTY PROFILES AS OF MARCH 31, 2012

 

Property

Name

  Location  Units  

Mortgage

Balance

As of

12/31/11

  

Acq

Date

  

Const

Comp

  

Qualified

Occupancy

3/31/12

  

Cap Con

Paid

Thru

3/31/12

 
Annadale Apartments  Fresno, CA   222   $15,472,819    01/96    06/90    100%  $1,108,873 
                                  
Briarwood Apartments  Clio,  SC   24    837,892    12/93    08/94    100%   211,133 
                                  
Briarwood Apartments of DeKalb   DeKalb,  IL   48    687,289    10/93    06/94    100%   1,041,834 
                                  
Briarwood Village  Buena Vista,  GA   38    1,066,028    10/93    05/94    100%   252,700 
                                  
Cairo Senior Housing  Cairo,  NY   24    1,008,358    05/93    04/93    100%   201,711 
                                  
Deerwood Village  Apts   Adrian, GA   20    598,962    02/94    07/94    100%   160,900 
                                  
Doyle Village  Darien, GA   38    1,099,382    09/93    04/94    100%   235,509 
                                  
Fuera Bush Senior Housing   Fuera Bush, NY   24    1,028,847    07/93    05/93    100%   189,364 
                                  
Glenridge  Apartments  Bullhead City, AZ   52    1,929,953    06/94    06/94    100%   520,500 
                                  
Green Acres Estates  West Bath, ME   48    820,537    01/95    11/94    100%   135,849 
                                  
Green Court Apartments  Mt. Vernon, NY   76    2,103,908    11/94    11/94    100%   964,813 
                                  
Henson  Creek  Manor  Fort Washington, MD   105    3,603,457    05/93    04/94    100%   2,980,421 
                                  
Hill Estates, II  Bladenboro, NC   24    948,031    03/95    07/95    100%   132,300 
                                  
Houston Village  Alamo,  GA   24    631,025    12/93    05/94    100%   169,418 
                                  
Isola Square Apts.  Greenwood, MS   36    1,009,855    11/93    08/94    100%   304,556 

 

14
 

 

Boston Capital Tax Credit Fund III L.P. - Series 17

 

PROPERTY PROFILES AS OF MARCH 31, 2012

 

Continued

 

Property

Name

  Location  Units  

Mortgage

Balance

As of

12/31/11

  

Acq

Date

  

Const

Comp

  

Qualified

Occupancy

3/31/12

  

Cap Con

Paid

Thru

3/31/12

 
Jonestown Manor Apts.  Jonestown, MS   28   $817,339     12/93     12/94    100%  $243,605 
                                  
Largo Ctr. Apartments  Largo, MD   100    3,628,584     03/93     06/94    100%   2,753,475 
                                  
Oakwood Manor of Bennetts-ville   Bennetts-ville, SC   24    821,339      09/93      12/93    100%   89,200 
                                  
Opelousas Point Apts.  Opelousas, LA   44    1,286,573     11/93     03/94    100%   439,277 
                                  
Pinehurst Senior Apts.   Farwell, MI   24    746,842      02/94      02/94    100%   183,176 
                                  
Quail Village  Reedsville, GA   31    815,706     09/93     02/94    100%   171,855 
                                  
Royale Townhomes  Glen Muskegon, MI   79    1,924,003      12/93      12/94    100%   909,231 
                                  
Soledad Senior Apts.   Soledad, CA   40    1,807,583      10/93      01/94    100%   407,894 
                                  
Waynesburg House Apts.  Waynesburg, PA   34    1,405,054     07/94     12/95    100%   501,140 
                                  
West Front Residence  Skowhegan, ME   30    1,248,828     09/94     08/94    100%   487,390 
                                  
West Oaks Apartments  Raleigh, NC   50    1,487,486     06/93     07/93    100%   811,994 
                                  
White Castle Manor  White Castle, LA   24    732,401      06/94      05/94    100%   198,684 

 

15
 

 

Boston Capital Tax Credit Fund III L.P. - Series 18

 

PROPERTY PROFILES AS OF MARCH 31, 2012

 

Property

Name

  Location  Units  

Mortgage

Balance

As of

12/31/11

  

Acq

Date

  

Const

Comp

  

Qualified

Occupancy

3/31/12

  

Cap Con

Paid

Thru

3/31/12

 
Bear Creek Apartments  Naples,  FL   118   $4,625,800    03/94    04/95    100%  $3,586,687 
                                  
Briarwood Apartments  Humbolt,  IA   20    674,886    08/94    04/95    100%   162,536 
                                  
California Apartments  San Joaquin, CA   42    1,696,268    03/94    12/94    100%   519,100 
                                  
Chelsea Sq. Apartments  Chelsea,  MA   6    301,393    08/94    12/94    100%   451,929 
                                  
Clarke School  Newport,  RI   56    2,282,667    12/94    12/94    100%   1,804,536 
                                  
Cox Creek Apartments  Ellijay,  GA   25    793,478    01/94    01/95    100%   214,824 
                                  
Harris Music Building  West Palm Beach, FL   38    1,464,971    06/94    11/95    100%   1,286,304 
                                  
Kristine Apartments  Bakersfield, CA   60    890,616    10/94    10/94    100%   1,636,293 
                                  
Lakeview Meadows II  Battle Creek, MI   60    1,359,314    08/93    05/94    100%   1,029,000 
                                  
Leesville Elderly Apts.  Leesville,  LA   54    1,976,718    06/94    06/94    100%   776,500 
                                  
Lockport Seniors Apts.  Lockport,  LA   40    1,101,398    07/94    09/94    100%   595,439 
                                  
Marengo Park Apts.  Marengo,  IA   24    701,925    10/93    03/94    100%   133,552 
                                  
Meadowbrook Apartments  Oskaloosa,  IA   16    454,619    11/93    09/94    100%   96,908 
                                  
Meadows Apartments  Show Low,  AZ   40    1,398,507    03/94    05/94    100%   420,302 
                                  
Natchitoches Senior Apartments  Natchitoches, LA   40    1,480,209    06/94    12/94    100%   644,175 

 

16
 

 

Boston Capital Tax Credit Fund III L.P. - Series 18

 

PROPERTY PROFILES AS OF MARCH 31, 2012

 

Continued

 

Property

Name

  Location  Units  

Mortgage

Balance

As of

12/31/11

  

Acq

Date

  

Const

Comp

  

Qualified

Occupancy

3/31/12

  

Cap Con

Paid

Thru

3/31/12

 
Newton Plaza Apts.  Newton, IA   24   $761,596    11/93    09/94    100%  $166,441 
                                  
Oakhaven Apartments  Ripley, MS   24    453,475    01/94    07/94    100%   116,860 
                                  
Peach Tree Apartments  Felton, DE   32    1,388,530    01/94    07/93    100%   206,100 
                                  
Pepperton Villas  Jackson, GA   29    812,559    01/94    06/94    100%   222,762 
                                  
Rio Grande Apartments  Eagle Pass, TX   100    1,861,506    06/94    05/94    100%   666,840 
                                  
Vista Loma Apartments  Bullhead City, AZ   41    1,516,840    05/94    09/94    100%   465,650 
                                  
Vivian Seniors Apts.  Vivian, LA   40    1,550,213    07/94    09/94    100%   625,691 
                                  
Westminster Meadow  Grand Rapids, MI   64    1,753,190    12/93    11/94    100%   1,378,000 

 

17
 

 

Boston Capital Tax Credit Fund III L.P. - Series 19

 

PROPERTY PROFILES AS OF MARCH 31, 2012

 

Property

Name

  Location  Units  

Mortgage

Balance

As of

12/31/11

  

Acq

Date

  

Const

Comp

  

Qualified

Occupancy

3/31/12

  

Cap Con

Paid

Thru

3/31/12

 
Callaway Villa  Holt's Summit, MO   48   $869,343    06/94    12/94    100%  $1,181,010 
                                  
Carrollton Villa  Carrollton,  MO   48    1,322,464    06/94    03/95    100%   1,121,758 
                                  
Clarke School  Newport,  RI   56    2,282,667    12/94    12/94    100%   1,153,719 
                                  
Coopers Crossing  Irving,  TX   93    2,902,266    06/96    12/95    100%   2,145,000 
                                  
Hebbronville Senior  Hebbronville, TX   20    480,321    12/93    04/94    100%   82,592 
                                  
Jefferson Square  Denver,  CO   64    1,963,200    05/94    08/95    100%   1,715,351 
                                  
Lone Star Senior  Lone Star,  TX   24    566,795    12/93    05/94    100%   138,740 
                                  
Mansura  Villa II Apartments   Mansura,  LA   32    899,698    05/94    08/95    100%   227,910 
                                  
Martindale Apts.  Martindale,  TX   24    619,411    12/93    01/94    100%   154,790 
                                  
Munford Village  Munford,  AL   24    753,719    10/93    04/94    100%   165,800 
                                  
Northpoint Commons  Kansas City, MO   158    3,595,266    07/94    06/95    100%   2,124,024 
                                  
Poplar Ridge Apts.  Madison,  VA   16    612,473    12/93    10/94    100%   124,704 
                                  
Prospect Villa III Apartments   Hollister,  CA   30    1,646,921    03/95    05/95    100%   499,104 
                                  
Sherwood Knoll  Rainsville,  AL   24    731,658    10/93    04/94    100%   162,500 
                                  
Summerset Apartments  Swainsboro,  GA   30    887,197    01/94    11/95    100%   223,029 
                                  
Village North I  Independence, KS   24    794,339    06/94    12/94    100%   190,471 

 

18
 

 

Item 3. Legal Proceedings

 

None.

 

Item 4. Mine Safety Disclosures

 

Not Applicable.

 

19
 

 

PART II

 

Item 5.Market for the Fund's Limited Partnership Interests, Related Fund Matters and Issuer Purchases of Fund Interests

 

(a)   Market Information
     
    The Fund is classified as a limited partnership and does not have common stock.  There is no established public trading market for the BACs and it is not anticipated that any public market will develop.
     
(b)   Approximate number of security holders
     
    As of March 31, 2012 the Fund has 12,933 BAC holders for an aggregate of 21,996,102 BACs, at a subscription price of $10 per BAC, received and accepted.
     
    The BACs were issued in series.  Series 15 consists of 2,397 investors holding 3,870,500 BACs, Series 16 consists of 3,311 investors holding 5,429,402 BACs, Series 17 consists of 2,837 investors holding 5,000,000 BACs, Series 18 consists of 2,056 investors holding 3,616,200 BACs, and Series 19 consists of 2,332 investors holding 4,080,000 BACs at March 31, 2012.
     
(c)   Dividend history and restriction 
     
    The Fund has made no distributions of net cash flow to its BAC holders from its inception, September 19, 1991 through March 31, 2012.
     
    During the year ended March 31, 2005, the Fund made a return of equity distribution to the Series 15 and 17 BAC holders in the amount of $107,567 and $24,767, respectively.  The distributions were the result of proceeds available from the sale or transfer of one or more Operating Partnerships.
     
    During the year ended March 31, 2007, the Fund made a return of equity distribution to the Series 15 and 17 BAC holders in the amount of $940,481 and $865,443, respectively.  The distributions were the result of proceeds available from the sale or transfer of one or more Operating Partnerships.
     
    During the year ended March 31, 2011, the Fund made a return of equity distribution to the Series 19 BAC holders in the amount of $1,500,000.  The distributions were the result of proceeds available from the sale or transfer of one or more Operating Partnerships.
     
    During the year ended March 31, 2012, the Fund made a return of equity distribution to the Series 19 BAC holders in the amount of $261,830.  The distributions were the result of proceeds available from the sale or transfer of one or more Operating Partnerships.
     
    The Fund Agreement provides that profits, losses and credits will be allocated each month to the holder of record of a BAC as of the last day of such month.  Allocation of profits, losses and credits among BAC holders are made in proportion to the number of BACs held by each BAC holder.

 

20
 

 

    Any distributions of net cash flow or liquidation, sale or refinancing proceeds will be made within 180 days of the end of the annual period to which they relate.  Distributions will be made to the holders of record of a BAC as of the last day of each month in the ratio which (i) the BACs held by the holder on the last day of the calendar month bears to (ii) the aggregate number of BACs outstanding on the last day of such month.

 

Item 6.Selected Financial Data

 

Not applicable.

 

21
 

 

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

 

This Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements including our intentions, hopes, beliefs, expectations, strategies and predictions of our future activities, or other future events or conditions. These statements are "forward looking statements" within the meaning of Section 27A of the Securities Act of 1993, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbors created by these acts. Investors are cautioned that all forward-looking statements involve risks and uncertainty, including, for example, the factors identified in Part I, Item 1A of this Report. Although we believe that the assumptions underlying these forward-looking statements are reasonable, any of the assumptions could be inaccurate, and there can be no assurance that the forward-looking statements included in this Report will prove to be accurate. In light of the significant uncertainties inherent in these forward-looking statements, the inclusion of this information should not be regarded as a representation by us or any other person that our objectives and plans will be achieved.

 

Liquidity

 

The Fund's primary source of funds is the proceeds of each Offering. Other sources of liquidity include (i) interest earned on capital contributions held pending investment or on working capital reserves and (ii) cash distributions from operations of the Operating Partnerships in which the Fund has and will invest. All sources of liquidity are available to meet the obligations of the Fund. The Fund does not anticipate significant cash distributions in the long or short term from operations of the Operating Partnerships.

 

The Fund is currently accruing the annual fund management fee to enable each series to meet current and future third party obligations. Fund management fees accrued during the year ended March 31, 2012 were $1,280,366, and total fund management fees accrued as of March 31, 2012 were $23,715,718. During the year ended March 31, 2012 the Fund paid fees of $1,492,661 which were applied to prior year accruals.

 

Pursuant to the Partnership Agreement, such liabilities will be deferred until the Fund receives sale or refinancing proceeds from Operating Partnerships, and at that time proceeds from such sales or refinancing would be used to satisfy such liabilities.

 

Capital Resources

 

The Fund offered BACs in the Offering declared effective by the Securities and Exchange Commission on January 24, 1992. The Fund received and accepted subscriptions for $219,961,020 representing 21,996,102 BACs from investors admitted as BAC holders in Series 15 through 19 of the Fund. The Fund issued the last BACs in Series 19 on December 17, 1993. This concluded the Public Offering of the Fund.

 

(Series 15). The Fund commenced offering BACs in Series 15 on January 24, 1992. The Fund received and accepted subscriptions for $38,705,000 representing 3,870,500 BACs from investors admitted as BAC holders in Series 15. Offers and sales of BACs in Series 15 were completed and the last of BACs in Series 15 were issued by the Fund on June 26, 1992.

 

22
 

 

During the fiscal year ended March 31, 2012, the Fund did not use any of Series 15 net offering proceeds to pay outstanding installments of its capital contributions. As of March 31, 2012, proceeds from the offer and sale of BACs in Series 15 had been used to invest in a total of 68 Operating Partnerships in an aggregate amount of $29,390,546. As of March 31, 2012, 38 of the properties have been disposed of and 30 remain. The Fund had completed payment of all installments of its capital contributions to the Operating Partnerships.

 

(Series 16). The Fund commenced offering BACs in Series 16 on July 10, 1992. The Fund received and accepted subscriptions for $54,293,000, representing 5,429,402 BACs in Series 16. Offers and sales of BACs in Series 16 were completed and the last of the BACs in Series 16 were issued by the Fund on December 28, 1992.

 

During the fiscal year ended March 31, 2012, the Fund did not use any of Series 16 net offering proceeds to pay outstanding installments of its capital contributions. As of March 31, 2012, the net proceeds from the offer and sale of BACs in Series 16 had been used to invest in a total of 64 Operating Partnerships in an aggregate amount of $40,829,228. As of March 31, 2012, 26 of the properties have been disposed of and 38 remain. The Fund had completed payment of all installments of its capital contributions to 63 of the 64 Operating Partnerships. Series 16 has $50,008 in capital contributions that remain to be paid to 1 Operating Partnership. The remaining contributions will be released when the Operating Partnership has achieved the conditions set forth in their partnership agreements.

 

(Series 17). The Fund commenced offering BACs in Series 17 on January 24, 1993. The Fund received and accepted subscriptions for $50,000,000 representing 5,000,000 BACs from investors admitted as BAC holders in Series 17. Offers and sales of BACs in Series 17 were completed and the last of the BACs in Series 17 were issued on June 17, 1993.

 

During the fiscal year ended March 31, 2012, the Fund did not use any of Series 17 net offering proceeds to pay outstanding installments of its capital contributions. As of March 31, 2012, proceeds from the offer and sale of BACs in Series 17 had been used to invest in a total of 49 Operating Partnerships in an aggregate amount of $37,062,980. As of March 31, 2012, 22 of the properties have been disposed of and 27 remain. The Fund had completed payments of all installments of its capital contributions to 46 of the 49 Operating Partnerships. Series 17 has outstanding contributions payable to 3 Operating Partnerships in the amount of $22,798 as of March 31, 2012. The remaining contributions will be released when the Operating Partnerships have achieved the conditions set forth in their partnership agreements.

 

(Series 18). The Fund commenced offering BACs in Series 18 on June 17,1993. The Fund received and accepted subscriptions for $36,162,000 representing 3,616,200 BACs from investors admitted as BAC holders in Series 18. Offers and sales of BACs in Series 18 were completed and the last of the BACs in Series 18 were issued on September 22, 1993.

 

During the fiscal year ended March 31, 2012, the Fund did not use any of Series 18 net offering proceeds to pay outstanding installments of its capital contributions. As of March 31, 2012, proceeds from the offer and sale of BACs in Series 18 had been used to invest in a total of 34 Operating Partnerships in an aggregate amount of $26,652,205. As of March 31, 2012, 11 of the properties have been disposed of and 23 remain. The Fund had completed payments of all installments of its capital contributions to 32 of the 34 Operating Partnerships. Series 18 has $18,554 in capital contributions that remain to be paid to the other 2 Operating Partnerships. The remaining contributions will be released when the Operating Partnerships have achieved the conditions set forth in their partnership agreements.

 

23
 

 

(Series 19). The Fund commenced offering BACs in Series 19 on October 8, 1993. The Fund received and accepted subscriptions for $40,800,000 representing 4,080,000 BACs from investors admitted as BAC holders in Series 19. Offers and sales of BACs in Series 19 were completed and the last of the BACs in Series 19 were issued on December 17, 1993.

 

During the fiscal year ended March 31, 2012, the Fund did not use any of Series 19 net offering proceeds to pay outstanding installments of its capital contributions. As of March 31, 2012, proceeds from the offer and sale of BACs in Series 19 had been used to invest in a total of 26 Operating Partnerships in an aggregate amount of $30,164,485. As of March 31, 2012, 10 of the properties have been disposed of and 16 remain. The Fund had completed payments of all installments of its capital contributions to the Operating Partnerships.

 

Results of Operations

 

The Fund incurred an annual fund management fee to the general partner and/or its affiliates in an amount equal to 0.5% of the aggregate cost of the apartment complexes owned by the Operating Partnerships, less the amount of various partnership management and reporting fees paid or payable by the Operating Partnerships. The annual fund management fee incurred, net of reporting fees received for the fiscal years ended March 31, 2012 and 2011, was $541,340 and $1,200,472, respectively.

 

The Fund's investment objectives do not include receipt of significant cash distributions from the Operating Partnerships in which it has invested or intends to invest. The Fund's investments in Operating Partnerships have been and will be made principally with a view towards realization of Federal Housing Tax Credits for allocation to its partners and BAC holders.

 

(Series 15). As of March 31, 2012 and 2011, the average Qualified Occupancy for the series was 100%. The series had a total of 30 properties at March 31, 2012, all of which were at 100% Qualified Occupancy.

 

For the tax years ended December 31, 2011 and 2010, the series, in total, generated $1,856,626 and $(206,305), respectively, in passive tax income (losses) that were passed through to the investors. All of the Operating Partnerships in the Series have completed their respective credit periods prior to the year ended December 31, 2008, and it is not expected that any additional tax credits will be generated.

 

As of March 31, 2012 and 2011, Investments in Operating Partnerships for Series 15 was $0. Investments in Operating Partnerships was affected by the way the Fund accounts for its investments, the equity method. By using the equity method the Fund adjusts its investment cost for its share of each Operating Partnership's results of operations and for any distributions received or accrued.

 

For the years ended March 31, 2012 and 2011, the net income (loss) for series 15 was $133,226 and $(105,519), respectively. The major components of these amounts are the Fund's share of income from Operating Partnerships and the partnership management fee.

 

24
 

 

Beckwood Manor Eight Limited Partnership (Lakeside Apartments) is a 32-unit, senior property, located in Lake Village, Arkansas. The property receives rental assistance for 23 units and is generally able to rent these units. It remains difficult to rent the units that do not have rental assistance. There are several other low income tax credit developments in the area offering rental assistance, and the property’s continued low occupancy is attributed to this competition. Management advertises the property in Lake Village’s local paper and in several other regional newspapers. The property also distributes fliers to all surrounding communities. In 2011, occupancy averaged 53%, down from 61% in 2010. The property generated an $18,715 deficit in 2011, which was primarily funded by accruing management fees and management payroll due to an affiliate of the operating general partner. The operating general partner has historically funded operating deficits in this manner. Through March 2012, the property is averaging 47% occupancy and is operating below breakeven. In February 2011, the property experienced a common area fire on the second floor of the apartment complex. All displaced tenants relocated temporarily to live with family or moved into vacant units at the property. All displaced residents moved back to the property by October 2011. The cost to repair the fire damage was approximately $160,000 and was covered entirely by insurance proceeds. Repairs were completed by mid-November 2011. On November 12, 2011, another fire occurred at the property, which started as a grease fire in a resident’s kitchen. One apartment was a total loss, and another suffered smoke and water damage. One resident had their lease terminated, and the other resident was moved into a vacant unit. Management is awaiting the results of three separate repair estimates, as required by Rural Development. The mortgage payments, taxes, insurance, and accounts payable are all current. On December 31, 2010, the 15-year low income housing tax credit compliance period expired with respect to Beckwood Manor Eight.

 

Livingston Plaza, Limited (Livingston Plaza) is a 24-unit, family property located in Livingston, Texas. The property has struggled with occupancy levels for several years. Despite efforts to improve the reputation of the property and reduce resident turnover and evictions, occupancy averaged 52% in both 2011 and 2010. For the quarter ended March 31, 2012, average occupancy improved slightly to 64%. The continued low occupancy is partially due to economic conditions in the area and lack of qualified applicants. Management reports that trailer home ownership is very affordable in the area and often the monthly mortgage payment is in line with the rent at Livingston Plaza. There are also several competitive properties less than a mile from the property. Marketing consists of advertisements in local newspapers and distributing fliers to local businesses, churches, and schools. Despite operating expenses that are tightly controlled and below the state’s average, the property operated below breakeven for the quarter ended March 31, 2012 and in 2011. Operating deficits were funded primarily by withdrawals from the replacement reserve. The property operated at about breakeven in 2010. The mortgage payments, real estate taxes, insurance, and accounts payable are current as of March 31, 2012. The operating general partner guarantee is unlimited in time and amount. On December 31, 2008, the 15-year low income housing tax credit compliance period expired with respect to Livingston Plaza. The investment general partner is in the process of exploring various disposition opportunities consistent with the investment objectives of the investment partnership. It is unlikely that any proceeds will be available to the investment limited partners from the disposition of the property or partnership.

 

25
 

 

Greentree Apartments Limited (Sue-Ellen Apartments) is a 24-unit, family property located in Utica, OH. The operating general partner passed away in the second quarter of 2007 and his widow assumed the operating general partner responsibilities. During 2008, communication with the new operating general partner became extremely difficult while operations declined below breakeven. During the first quarter of 2009, the operating general partner learned that the current management company’s contract had been terminated as of December 31, 2008. In addition, Rural Development accelerated the note and started foreclosure proceedings. Although the operating general partner appealed, the appeal was denied. The investment general partner learned of these developments from the real estate broker engaged by the operating general partner. The affiliated management company of a potential replacement operating general partner was placed on-site by Rural Development during May 2009. The potential operating general partner had been interested in acquiring the operating general partner and investment general partner interests but attempts by the potential operating general partner to develop a workout plan with Rural Development failed. The foreclosure was completed when the property was sold to a third party on June 8, 2011. The 15-year low income housing tax credit compliance period expired on December 31, 2009, and no recapture is anticipated. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, no gain on the foreclosure of the Operating Partnership was recorded as of June 30, 2011.

 

In April 2011, the operating general partner of Showboat Manor LDHA entered into an agreement to sell the property to a non-affiliated entity and the transaction closed on July 7, 2011. The sales price of the property was $818,348, which included the outstanding mortgage balance of approximately $772,998 and cash proceeds to the investment partnership of $11,000. Of the total proceeds received by the investment partnership, $6,000 represents reporting fees due to an affiliate of the investment partnership and the balance represents proceeds from the sale. Of the remaining proceeds, $5,000 was paid to BCAMLP for expenses related to the sale, which includes third party legal costs. There are no remaining proceeds from the sale to be returned to cash reserves held by Series 15. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, no gain on the sale of the Operating Partnership was recorded as of September 30, 2011.

 

In February 2010, the operating general partner of Rainier Manor Associates LP approved an agreement to sell the property and the transaction closed on September 29, 2010. The sales price for the property was $3,300,000, which included the outstanding mortgage balance of approximately $3,293,443 and cash proceeds to the investment partnerships of $0. No proceeds were returned to cash reserves held by Boston Capital Tax Credit Fund II, LP Series 14 and Series 15, respectively. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, no gain on the sale of the Operating Partnership was recorded as of September 30, 2010.

 

26
 

 

In October 2010, the investment general partner transferred its interest in Hearthside II L.D.H.A. LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,698,026 and cash proceeds to the investment partnership of $120,000. Of the total proceeds received, $27,000 represents reporting fees due to an affiliate of the investment partnership and the balance represents proceeds from the transfer. Of the remaining proceeds, $15,000 was paid to BCAMLP for expenses related to the transfer, which includes third party legal costs. The remaining proceeds of approximately $78,000 will be returned to cash reserves held by Series 15. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $78,000 as of December 31, 2010.

 

In February 2010, the operating general partner of North Prairie Manor L.D.H.A. LP approved an agreement to sell the property and the transaction closed on March 30, 2011. The sales price for the property was $939,566, which included the outstanding mortgage balance of approximately $829,566 and cash proceeds to the investment partnership of $69,038. Of the total proceeds received by the investment partnership, $3,000 represents reporting fees due to an affiliate of the investment partnership and the balance represents proceeds from the sale. Of the remaining proceeds, $15,000 was paid to BCAMLP for expenses related to the sale, which includes third party legal costs. The remaining proceeds from the sale of $51,038 were returned to cash reserves held by Series 15. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. The sale proceeds were received April 2011; so a receivable in the amount of $69,038 was recorded for Series 15 as of March 31, 2011. Accordingly, a gain on the sale of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $51,038 as of March 31, 2011.

 

In March 2011, the investment general partner transferred its interest in Monark Properties, LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $291,250 and cash proceeds to the investment partnership of $15,000. Of the total proceeds received, $7,500 represents reporting fees due to an affiliate of the investment partnership and the balance represents proceeds from the transfer. Of the remaining proceeds, $7,500 was paid to BCAMLP for expenses related to the transfer, which includes third party legal costs. There were no remaining proceeds returned to cash reserves held by Series 15. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, no gain or loss on the sale of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded as of March 31, 2011.

 

27
 

 

In October 2011, the investment general partner transferred its interest in Autumnwood LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,187,795 and cash proceeds to the investment partnership of $128,000. Of the total proceeds received, $6,924 represents reporting fees due to an affiliate of the investment partnership and the balance represents proceeds from the transfer. Of the remaining proceeds, $5,000 was paid to BCAMLP for expenses related to the transfer, which includes third party legal costs. The remaining proceeds of approximately $116,076 will be returned to cash reserves held by Series 15. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $116,076 as of December 31, 2011.

 

In October 2011, the investment general partner transferred its interest in Brunswick LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $739,986 and cash proceeds to the investment partnership of $76,800. Of the total proceeds received, $3,321 represents reporting fees due to an affiliate of the investment partnership and the balance represents proceeds from the transfer. Of the remaining proceeds, $5,000 was paid to BCAMLP for expenses related to the transfer, which includes third party legal costs. The remaining proceeds of approximately $68,479 will be returned to cash reserves held by Series 15. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $68,479 as of December 31, 2011.

 

In October 2011, the investment general partner transferred its interest in Lebanon II LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $855,578 and cash proceeds to the investment partnership of $76,800. Of the total proceeds received, $16,305 represents reporting fees due to an affiliate of the investment partnership and the balance represents proceeds from the transfer. Of the remaining proceeds, $5,000 was paid to BCAMLP for expenses related to the transfer, which includes third party legal costs. The remaining proceeds of approximately $55,495 will be returned to cash reserves held by Series 15. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $55,495 as of December 31, 2011.

 

28
 

 

In December 2011, the investment general partner transferred its interest in Weedpatch Investment Group, CA LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,857,960 and cash proceeds to the investment partnership of $90,000. Of the total proceeds received, $5,000 will be paid to BCAMLP for expenses related to the transfer, which includes third party legal costs. The remaining proceeds of approximately $85,000 were returned to cash reserves held by Series 15. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $85,000 as of December 31, 2011.

 

(Series 16). As of March 31, 2012 and 2011, the average Qualified Occupancy for the series was 100%. The series had a total of 38 properties at March 31, 2012, all of which were at 100% Qualified Occupancy.

 

For the tax years ended December 31, 2011 and 2010, the series, in total, generated $(838,708) and $(1,307,518), respectively, in passive tax income (losses) that were passed through to the investors. All of the Operating Partnerships in the Series have completed their respective credit periods prior to the year ended December 31, 2008, and it is not expected that any additional tax credits will be generated.

 

As of March 31, 2012 and 2011, Investments in Operating Partnerships for Series 16 was $0. Investments in Operating Partnerships was affected by the way the Fund accounts for these investments, the equity method. By using the equity method the Fund adjusts its investment cost for its share of each Operating Partnership's results of operations and for any distributions received or accrued.

 

For the years ended March 31, 2012, and 2011, the net income (loss) for series 16 was $(166,198) and $(271,999), respectively. The major components of these amounts are the Fund's share of income from Operating Partnerships and the partnership management fee.

 

Woodlands Apartments Limited Partnership (Woodlands Apartments) is an 18-unit elderly property located in Tupper Lake, New York. The property operated below breakeven in 2011 primarily due to low occupancy, marketing, and turnover costs. Through the first quarter of 2012 occupancy has averaged 94% and the property is again operating above breakeven. All taxes, mortgage, and insurance payments are current. The invesment general partner intends to continue to monitor the property until it achieves consecutive quarters of above breakeven operations. On August 31, 2009, the 15-year low income housing tax credit compliance period expired for Woodlands Apartments. The investment general partner is in the process of exploring various disposition opportunities consistent with the investment objectives of the investment partnership.

 

29
 

 

Blairsville Rental Housing, Limited Partnership (Tan Yard Branch Apartments I) is a 24-unit Low Income Housing Tax Credit family property located in Blairsville, GA. Due to weak and declining economic conditions, which began in 2009 and have continued through the first quarter of 2012, many employers have either closed or significantly reduced employee hours. As a result of a large portion of the tenant base being composed of hourly-wage employees, evictions and move outs have increased. Management reported that residents who are no longer able to afford rent continue to move back in with friends or family. In addition, other tenants requiring greater personal care have transferred to nursing home facilities, causing occupancy to decline further. Due to the property’s rural location, traffic has been limited. Management has been aggressively marketing the community by distributing fliers throughout the area and having brightly colored directional signage installed. Additionally, a tenant referral program and move-in specials are being offered. Despite these efforts, occupancy declined steadily throughout 2011, for an annual average of 76% compared to 81% in 2010. Occupancy remained stagnant in the first quarter of 2012, ending March 2012 at 79%. The investment general partner intends to continue to work with management in an effort to stabilize operations in 2012. The mortgage, real estate taxes, and insurance payments are current. On December 31, 2009, the 15-year low income housing tax credit compliance period expired with respect to Blairsville Rental Housing. The investment general partner is in the process of exploring various disposition opportunities consistent with the investment objectives of the investment partnership.

 

St. Croix Commons Limited Partnership (St. Croix Commons Apartments) is a 40-unit family property located in Woodville, Wisconsin. Occupancy at the end of the first quarter of 2012 was 100%. Although expenses remain below the state averages for the investment limited partnership’s portfolio of properties, low rental rates in the area have prevented the property from achieving breakeven operations. The property’s taxes and insurance are current; however, the operating general partner stopped making debt service payments in 2011 due to cash flow shortfalls. In the first quarter of 2012, the investment general partner learned that the property was ten months in arrears on its mortgage and the lender had issued a notice of default. The operating general partner contacted the lender in the hope of gaining an interest only forbearance for a four year period. The lender did not agree to modify the terms of the loan and demanded a payment of $736,851 to be made by November 15, 2011 to cure the default. The operating general partner failed to make the payment and the lender has commenced foreclosure proceedings. On December 31, 2009, the 15-year low income housing tax credit compliance period expired with respect to St. Croix Commons. A foreclosure sale occurring in 2012 would not result in any recapture or penalties because the property is beyond the compliance period.

 

In August 2011, the investment general partner transferred its interest in Sable Chase of McDonough to a non-affiliated entity for its assumption of the outstanding mortgage balance of approximately $3,077,178 and cash proceeds to the investment partnership of $150,000. Of the total proceeds received, $63,990 represents reporting fees due to an affiliate of the investment partnership and the balance represents proceeds from the transfer. Of the remaining proceeds, $17,500 was paid to BCAMLP for expenses related to the transfer, which includes third party legal costs. The remaining proceeds of approximately $68,510 were returned to cash reserves held by Series 16. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $68,510 as of September 30, 2011.

 

30
 

 

In December 2010, the investment general partner transferred its interest in Branson Christian County II LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,050,618 and cash proceeds to the investment partnership of $59,920. Of the total proceeds received, $5,000 was paid to BCAMLP for expenses related to the transfer, which includes third party legal costs. The remaining proceeds of approximately $54,920 were returned to cash reserves held by Series 16. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $54,920 as of December 31, 2010.

 

In December 2008, the investment general partner of Davenport Housing Associates LP approved an agreement to sell the property and the transaction closed in April 2010. The sales price for the property was $4,190,000, which includes the outstanding mortgage balance of approximately $3,210,351 and cash proceeds to the investment limited partners of $147,105. Of the total proceeds received, $15,000 was paid to BCAMLP for expenses related to the sale, which includes third party legal costs. The remaining proceeds from the sale of $132,105 were returned to cash reserves held by Series 16. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $132,105 as of June 30, 2010.

 

Joiner Elderly, Limited Partnership (Joiner Manor) is a 25-unit development in Joiner, AR. Occupancy was at a low of 56% in January and February 2011, but reached 100% by December 2011, averaging 79% for 2011. The property received approval from the Arkansas Development Finance Authority and Rural Development in April 2011 to convert the property from senior to family tenancy. Management increased advertising in the local paper and distributed fliers to promote the change, and reported a steady increase in occupancy for the remainder of the year. In addition to the increase in occupancy, Rural Development approved a $15 rent increase effective January 1, 2011, which also helped to improve operations at the property. Management scaled back on leasing incentives in the fourth quarter of 2011 to keep revenue strong, but is currently offering reduced rates on units with no rental assistance. The property operated above breakeven for the year. An additional rent increase of $20 was approved by Rural Development and went into effect on January 1, 2012. The real estate taxes, mortgage and insurance are all current. On December 31, 2007, the 15-year low income housing tax credit compliance period expired with respect to Joiner Elderly. The investment general partner is in the process of exploring various disposition opportunities consistent with the investment objectives of the investment partnership.

 

31
 

 

In January 2011, the investment general partner transferred its interest in Deer Run LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $511,791 and cash proceeds to the investment partnership of $25,000. Of the total proceeds received, $7,500 was paid to BCAMLP for expenses related to the transfer, which includes third party legal costs. The remaining proceeds of approximately $17,500 were returned to cash reserves held by Series 16. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $17,500 as of March 31, 2011.

 

Greenfield Properties, Limited Partnership (Greenfield Properties) is a 20-unit elderly property located in Greenfield, Missouri. Through the first quarter of 2012, the property continues to operate below breakeven. The property was 85% occupied as of March 31, 2012 and averaged 87% for the year. Low average occupancy and high operating expenses continued to be an issue on performance. All taxes, insurance and mortgage payments are current. On December 31, 2008, the 15-year low income housing tax credit compliance period expired with respect to Greenfield Properties, Limited Partnership. The investment general partner is in the process of exploring various disposition opportunities consistent with the investment objectives of the investment partnership.

 

In April 2011, the investment general partner transferred its interest in Lawrenceville Manor LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,340,119 and cash proceeds to the investment partnership of $60,000. Of the total proceeds received, $5,000 will be paid to BCAMLP for expenses related to the transfer, which includes third party legal costs. The remaining proceeds of approximately $55,000 were returned to cash reserves held by Series 16. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. In addition, the investment general partner on behalf of the investment partnership entered into a partner interest pledge agreement with the Operating Partnership for receipt of a residual payment. Under the terms of the partner interest pledge agreement, if the property owned by the Operating Partnership is sold, within 5 years from the initial transfer date, there would be a residual payment of up to $200,000 distributable to the investment partnership in accordance with the Operating Partnership Agreement in effect at the date the investment limited partner transferred its interest. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $55,000 as of June 30, 2011. In addition, equity outstanding for the Operating Partnership in the amount of $1,784 was recorded as gain on the sale of the Operating Partnership as of June 30, 2011.

 

32
 

 

In June 2011, the investment general partner transferred its interest in Victoria Pointe RRH to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,374,232 and cash proceeds to the investment partnership of $28,000. Of the total proceeds received, $5,000 was paid to BCAMLP for expenses related to the transfer, which includes third party legal costs. The remaining proceeds of approximately $23,000 were returned to cash reserves held by Series 16. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. In addition, the investment general partner on behalf of the investment partnership entered into a residual receipt promissory note (RRN) with the Operating Partnership for receipt of a residual payment. Under the terms of the RRN, if there is a capital transaction involving the property owned by the Operating Partnership at any time within 5 years from the initial transfer date, there would be a residual payment of up to $75,000 distributable to the investment partnership in accordance with the Operating Partnership Agreement in effect at the date the investment limited partner transferred its interest. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $23,000 as of June 30, 2011.

 

In July 2011, the investment general partner transferred its interest in Haynes House Associates II LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $7,853,800 and cash proceeds to the investment partnership of $10,000. Of the total proceeds received, $10,000 was paid to BCAMLP for expenses related to the transfer, which includes third party legal costs. No remaining proceeds were returned to cash reserves held by Series 16. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, no gain on the sale of the Operating Partnership was recorded as of September 30, 2011.

 

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In August 2011, the investment general partner transferred its interest in Cedar Trace L.D.H.A. LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $471,680 and cash proceeds to the investment partnership of $1,500. Of the total proceeds received, $1,500 was paid to BCAMLP for expenses related to the transfer, which includes third party legal costs. There were no remaining proceeds returned to cash reserves held by Series 16. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, no gain on the sale of the Operating Partnership was recorded as of September 30, 2011.

 

Meadows of Southgate L.D.H.A., LP (Meadows of Southgate) is an 83-unit elderly property located in Southgate, Michigan. During the first quarter of 2012 the property continued to operate below breakeven largely due to ongoing occupancy challenges and a weak rental market. As of March 2012, the property was 54% occupied and it averaged 58% occupancy in 2011. The management agent, an affiliate of the operating general partner, continues to focus on improving occupancy through curb appeal enhancements, new marketing initiatives, and expanded leasing office hours of operation. The investment general partner intends to continue to monitor occupancy and operations. All real estate tax, mortgage, and insurance payments are current. On December 31, 2009, the 15-year low income housing tax credit compliance period expired with respect to Meadows of Southgate. The investment general partner is in the process of exploring various disposition opportunities consistent with the investment objectives of the investment partnership.

 

(Series 17). As of March 31, 2012 and 2011, the average Qualified Occupancy for the Series was 100%. The series had a total of 27 properties at March 31, 2012, all of which were at 100% Qualified Occupancy.

 

For the tax years ended December 31, 2011 and 2010, the series, in total, generated $250,150 and $1,145,271, respectively, in passive tax income (losses) that were passed through to the investors. All of the Operating Partnerships in the Series have completed their respective credit periods prior to the year ended December 31, 2008, and it is not expected that any additional tax credits will be generated.

 

As of March 31, 2012 and 2011, Investments in Operating Partnerships for Series 17 was $0. Investments in Operating Partnerships was affected by the way the Fund accounts for these investments, the equity method. By using the equity method the Fund adjusts its investment cost for its share of each Operating Partnership's results of operations and for any distributions received or accrued.

 

For the years ended March 31, 2012 and 2011, the net income (loss) for series 17 was $(25,508) and $457,716, respectively. The major components of these amounts are the Fund's share of income from Operating Partnerships and the partnership management fee.

 

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Skowhegan Housing, LP (West Front Residence) is a 30-unit, 100% LIHTC property located in Skowhegan, Maine. The property operated below breakeven through the fourth quarter of 2011 due to low rental rates and a high interest rate on the debt. The property was 97% occupied as of March 31, 2012. Management has proposed rent increases in its 2012 budget to partially offset high debt service and they are awaiting approval of the budget by the operating general partner. As of the end of the first quarter of 2012, the mortgage is current, but insurance and real estate taxes are delinquent. On October 11, 2011, the lender issued a notice of default due to unpaid taxes, delays in past insurance payments, and underfunded tax, insurance, and replacement reserve escrow accounts. On November 11, 2011, the investment general partner issued a letter to the operating general partner stating that they are in violation of the Partnership Agreement for failure to advance funds to meet operating expenses and debt service, including replacement reserves, as the operating general partner’s operating deficit guaranty is unlimited in time and amount. As of the end of the fourth quarter of 2011, the insurance payment issue has been resolved and the operating general partner has submitted a payment plan to the lender to address the remaining default issues. The operating general partner is awaiting the lender’s decision regarding the plan. There has been no word as to the lender’s decision as of the end of the first quarter 2012. The investment general partner intends to continue to stress to the operating general partner that all taxes must be paid when due and all reserves must be fully funded. On December 31, 2008, the 15-year low income housing tax credit compliance period expired with respect to Skowhegan Housing, LP. The investment general partner is in the process of exploring various disposition opportunities consistent with the investment objectives of the investment partnership.

 

Green Acres Limited Partnership (Green Acres Estates) is a 48-unit (of which 20 are tax credit units) property located in West Bath, Maine. The property operated below breakeven through the fourth quarter of 2011 due to low occupancy, high maintenance expenses, and a high interest rate on the debt. The property was 77% occupied as of March 31, 2012 as it continues to be challenged by its poor condition, the lack of available rent-ready units, and its isolated location. Management indicated that the closing of the nearby Brunswick Naval Air Station in May 2011 has affected occupancy through subsequent high local unemployment and relocation of some tenants. Higher maintenance expenses are related to management’s efforts to turn over additional units. Though still high, bad debt improved significantly in 2011, falling 54% through December 31, 2011. Management is working to improve collections and the initial resident screening process. As of the end of the first quarter of 2012, mortgage payments are current, but real estate taxes and insurance are delinquent. On October 11, 2011, the lender issued a notice of default due to unpaid taxes, delays in past insurance payments, and underfunded tax, insurance, and replacement reserve escrow accounts. On November 11, 2011, the investment general partner issued a letter to the operating general partner stating that they are in violation of the Partnership Agreement for failure to advance funds to meet operating expenses and debt service, including replacement reserves, as the operating general partner’s operating deficit guaranty is unlimited in time and amount. The operating general partner submitted a payment plan to the Maine State Housing Authority during the fourth quarter of 2011 to address these default issues; however, we are not aware of any decisions by the lender as of the end of the first quarter 2012. The operating general partner is awaiting the lender’s decision regarding the plan. The investment general partner intends to continue to stress to the operating general partner that all taxes must be paid when due and all reserves must be fully funded. On December 31, 2009, the 15-year low income housing tax credit compliance period expired with respect to Green Acres Limited Partnership. The investment general partner is in the process of exploring various disposition opportunities consistent with the investment objectives of the investment partnership.

 

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In June 2011, the investment general partner transferred its interest in Park Place II, Limited to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,284,456 and cash proceeds to the investment partnership of $23,000. Of the total proceeds received, $5,000 was paid to BCAMLP for expenses related to the transfer, which includes third party legal costs. The remaining proceeds of approximately $18,000 were returned to cash reserves held by Series 17. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. In addition, the investment general partner on behalf of the investment partnership entered into a RRN with the Operating Partnership for receipt of a residual payment. Under the terms of the RRN, if there is a capital transaction involving the property owned by the Operating Partnership at any time within 5 years from the initial transfer date, there would be a residual payment of up to $75,000 distributable to the investment partnership in accordance with the Operating Partnership Agreement in effect at the date the investment limited partner transferred its interest. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $18,000 as of June 30, 2011.

 

In July 2010, the investment general partner transferred its interest in Palmetto Properties LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,525,467 and cash proceeds to the investment partnership of $1,000. Of the total proceeds received, $1,000 will be paid to BCAMLP for expenses related to the transfer, which includes third party legal costs. No proceeds were returned to cash reserves held by Series 17. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, no gain on the sale of the Operating Partnership was recorded as of September 30, 2010.

 

In December 2006, the investment general partner of Boston Capital Tax Credit Fund II – Series 14, Series 17 and Boston Capital Tax Credit Fund IV - Series 20 transferred 33% of their interest in College Greene Rental Associates Limited Partnership to entities affiliated with the operating general partners for their assumption of one third of the outstanding mortgage balance. The cash proceeds received by Series 14, Series 17, and Series 20 were $25,740, $7,919, and $65,341, respectively. Of the proceeds received, $1,950, $599, and $4,951 for Series 14, Series 17, and Series 20, respectively, was paid to BCAMLP for expenses related to the transfer, which includes third party legal costs. The remaining proceeds received by Series 14, Series 17, and Series 20 of $23,790, $7,320 and $60,390, respectively, were applied against the investment limited partners' investment in the Operating Partnership in accordance with the equity method of accounting. In April 2010, the investment limited partner transferred 49% of its interest for $68,174, $20,977, and $173,058 for Series 14, Series 17 and Series 20, respectively. Of the proceeds received, $7,000, $3,400 and $15,000 for Series 14, Series 17 and Series 20, respectively, was paid to BCAMLP for expenses related to the transfer. The remaining proceeds of $61,174, $17,577 and $158,058, respectively, were returned to the cash reserves held by Series 14, Series 17 and Series 20, respectively. The proceeds were allocated to the investment limited partnerships based on their original equity investments in the Operating Partnership. The remaining investment limited partner interest was transferred on March 31, 2011. Accordingly, a gain on the sale of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $61,174, $17,577 and $158,058, respectively, for BCTC II Series 14, Series 17, and BCTC IV Series 20, as of March 31, 2011.

 

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In June 2011, the operating general partner of Cypress Pointe LP entered into an agreement to sell the property to a non-affiliated entity and the transaction closed on June 21, 2011. The sales price of the property was $3,320,000, which included the outstanding mortgage balance of approximately $2,438,528 and cash proceeds to the investment partnership of $181,310. Of the total proceeds received by the investment partnership, $45,000 represents reporting fees due to an affiliate of the investment partnership and the balance represents proceeds from the sale. Of the remaining proceeds, $20,000 was paid to BCAMLP for expenses related to the sale, which includes third party legal costs. The remaining proceeds of approximately $116,310 were returned to cash reserves held by Series 17. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. In September 2011, the investment partnership received its share of the Operating Partnership’s cash account in the amount of $12,836, which was returned to the cash reserves held by Series 17. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $129,146 as of September 30, 2011.

 

In September 2008, the operating general partner of Crofton Associates I, Limited Partnership approved an agreement to sell the property to an entity affiliated with the operating general partner and the transaction closed on December 21, 2010. The sales price for the property was $823,333 which includes the outstanding mortgage balance of approximately $746,333 and cash proceeds to the investment partnership of $73,150. Of the total proceeds received by the investment partnership, $7,500 was paid to BCAMLP for expenses related to the sale, which includes third party legal costs. The remaining proceeds from the sale of $65,650 were returned to cash reserves held by Series 17. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $65,650 as of December 31, 2010.

 

In September 2008, the operating general partner of Hickman Associates II, Limited Partnership approved an agreement to sell the property to an entity affiliated with the operating general partner and the transaction closed on December 7, 2010. The sales price for the property was $556,597, which included the outstanding mortgage balance of approximately $495,597 and cash proceeds to the investment partnership of $57,950. Of the total proceeds received by the investment partnership, $7,500 was paid to BCAMLP for expenses related to the sale, which includes third party legal costs. The remaining proceeds from the sale of $50,450 were returned to cash reserves held by Series 17. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $50,450 as of December 31, 2010.

 

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In May 2009, the investment general partner of Gallaway Associates LP approved an agreement to sell the property and the transaction closed on June 29, 2010. The sales price for the property was $1,109,173, which includes the outstanding mortgage balance of approximately $1,001,173 and cash proceeds to the investment limited partners of $106,560. Of the total proceeds received, $3,960 represents reporting fees due to an affiliate of the investment partnership and the balance represents proceeds from the sale. Of the remaining proceeds, $15,000 was paid to BCAMLP for expenses related to the sale, which includes third party legal costs. The remaining proceeds from the sale of $87,600 were returned to cash reserves held by Series 17. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. The sale proceeds were received on July 1, 2010; so a receivable in the amount of $87,600 has been recorded for Series 17 as of June 30, 2010. Accordingly, a gain on the sale of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $87,600 as of June 30, 2010.

 

In July 2010, the investment general partner transferred its interest in Sixth Street Partners, LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $2,030,745 and cash proceeds to the investment partnership of $684,000. Of the total proceeds received, $30,000 represents reporting fees due to an affiliate of the investment partnership and the balance represents proceeds from the transfer. Of the remaining proceeds, $56,362 was paid to BCAMLP for expenses related to the transfer, which includes third party legal costs. The remaining proceeds of $597,638 were returned to cash reserves held by Series 17. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $597,638 as of September 30, 2010.

 

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In December 2010, the investment general partner transferred its interest in Artesia Limited Partnership to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,344,488 and cash proceeds to the investment partnership of $42,800. Of the total proceeds received, $5,000 was paid to BCAMLP for expenses related to the transfer, which includes third party legal costs. The remaining proceeds of approximately $37,800 were returned to cash reserves held by Series 17. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $37,800 as of December 31, 2010.

 

In April 2011, the investment general partner transferred its interest in Lee Terrace LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,411,220 and cash proceeds to the investment partnership of $60,000. Of the total proceeds received, $5,000 will be paid to BCAMLP for expenses related to the transfer, which includes third party legal costs. The remaining proceeds of approximately $55,000 were returned to cash reserves held by Series 17. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. In addition, the investment general partner on behalf of the investment partnership entered into a partner interest pledge agreement with the Operating Partnership for receipt of a residual payment. Under the terms of the partner interest pledge agreement, if the property owned by the Operating Partnership is sold, within 5 years from the initial transfer date, there would be a residual payment of up to $200,000 distributable to the investment partnership in accordance with the Operating Partnership Agreement in effect at the date the investment limited partner transferred its interest. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $55,000 as of June 30, 2011.

 

In June 2011, the investment general partner transferred its interest in Seabreeze Manor RRH Limited to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,175,097 and cash proceeds to the investment partnership of $23,000. Of the total proceeds received, $5,000 was paid to BCAMLP for expenses related to the transfer, which includes third party legal costs. The remaining proceeds of approximately $18,000 were returned to cash reserves held by Series 17. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. In addition, the investment general partner on behalf of the investment partnership entered into a RRN with the Operating Partnership for receipt of a residual payment. Under the terms of the RRN, if there is a capital transaction involving the property owned by the Operating Partnership at any time within 5 years from the initial transfer date, there would be a residual payment of up to $75,000 distributable to the investment partnership in accordance with the Operating Partnership Agreement in effect at the date the investment limited partner transferred its interest. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $18,000 as of June 30, 2011.

 

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In November 2011, the investment general partner transferred its interest in Midland Housing LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $763,796 and cash proceeds to the investment partnership of $55,000. Of the total proceeds received, $20,000 represents reporting fees due to an affiliate of the investment partnership and the balance represents proceeds from the transfer. Of the remaining proceeds, $7,500 will be paid to BCAMLP for expenses related to the transfer, which includes third party legal costs. The remaining proceeds of approximately $27,500 were returned to cash reserves held by Series 17. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $27,500 as of December 31, 2011.

 

(Series 18). As of March 31, 2012 and 2011, the average Qualified Occupancy for the series was 100%. The series had a total of 23 properties at March 31, 2012, all of which were at 100% Qualified Occupancy.

 

For the tax years ended December 31, 2011 and 2010, the series, in total, generated $(1,437,190) and $(867,625), respectively, in passive tax income (losses) that were passed through to the investors. All of the Operating Partnerships in the Series have completed their respective credit periods prior to the year ended December 31, 2008, and it is not expected that any additional tax credits will be generated.

 

As of March 31, 2012 and 2011, Investments in Operating Partnerships for Series 18 was $0. Investments in Operating Partnerships were affected by the way the Fund accounts for these investments, the equity method. By using the equity method the Fund adjusts its investment cost for its share of each Operating Partnership's results of operations and for any distributions received or accrued.

 

For the years ended March 31, 2012 and 2011, the net income (loss) for series 18 was $169,974 and $(211,851), respectively. The major components of these amounts are the Fund's share of reporting fees from Operating Partnerships and the partnership management fee.

 

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Ripley Housing, Limited Partnership (Oakhaven Apartments) is a 24-unit, family property located in Ripley, Mississippi. The property operated below breakeven in 2011 due to low occupancy as it averaged 80% occupancy for the year. The continued struggle with vacancy is a direct reflection of economic conditions in Ripley, where ongoing job losses have led to increased evictions and migration from the area. Management continues to focus marketing efforts on internet advertising and they also perform outreach to the local HUD office, the Mississippi Housing Authority, and the Tippah County housing agencies. At the end of the first quarter of 2012, occupancy was 83% with below breakeven operations. All real estate taxes, mortgage and insurance payments are current. On December 31, 2008, the 15-year low income housing tax credit compliance period expired with respect to Ripley Housing, LP. The investment general partner is in the process of exploring various disposition opportunities consistent with the investment objectives of the investment partnership.

 

Lakeview Meadows II L.D.H.A. Limited Partnership (Lakeview Meadows II) is a 60-unit, elderly property located in Battle Creek, Michigan. Through March 2012, the property was 95% occupied and was operating slightly above breakeven. The investment general partner will continue to monitor occupancy and operations. All real estate tax, mortgage, and insurance payments are current. On December 31, 2008, the 15-year low income housing tax credit compliance period expired with respect to Lakeview Meadows II L.D.H.A. Limited Partnership. The investment general partner is in the process of exploring various disposition opportunities consistent with the investment objectives of the investment partnership.

 

Natchitoches Elderly Apartments LP (Natchitoches Seniors Apartments) is a 40-unit property located in Natchitoches, Louisiana. The property operated below breakeven in 2010 due to low occupancy of 84% and high operating expenses. Occupancy increased throughout 2011 and ended the year at 95%, largely due to the efforts of a new management team. Despite the improvement in occupancy, the property continues to operate below breakeven. As of March 30, 2012, occupancy remains at 95%. All real estate tax, mortgage, and insurance payments are current. On December 31, 2009, the 15-year low income housing tax credit compliance period expired with respect to Natchitoches Elderly Apartments LP. The investment general partner is in the process of exploring various disposition opportunities consistent with the investment objectives of the investment partnership.

 

Newton I, Limited Partnership (Newton Plaza Apartments) is a 24-unit family development in Newton, Iowa. Occupancy has trended downward since 2006, and the increased vacancy along with high operating expenses has caused below breakeven operations. In 2010, management hired a new on-site manager to aid in stabilizing operations, and refocused its marketing efforts outside the local area. Operations improved in 2011 due to increased occupancy and a decrease in operating expenses. The property averaged 88% occupancy for the year. Despite the improvement over the past year, the property should continue to be monitored as occupancy has decreased to 79% through the first quarter of 2012. On December 31, 2009, the 15-year low income housing tax credit compliance period expired with respect to Newton I. The investment general partner is in the process of exploring various disposition opportunities consistent with the investment objectives of the investment partnership.

 

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Bear Creek of Naples (Bear Creek Apartments) is a 120-unit family development located in Naples, Florida. Occupancy remained strong in the first quarter of 2012, with March occupancy ending at 95%. However, the property continued to operate below breakeven through the first quarter due to high administrative, maintenance, and real estate tax expenses as well as a court ordered special assessment fee. The property’s insurance payments are current but the real estate taxes are delinquent. The local tax authority has issued a tax certificate for the delinquent taxes, which will accrue interest until paid. The operating general partner has three years to pay the delinquent taxes before the property goes to tax sale. The operating general partner paid the 2010 real estate taxes in the first quarter of 2011, paid the 2011 real estate taxes in November 2011 and anticipates paying the 2009 real estate taxes in late 2012, which is within the allotted three year deadline before the property could face a tax sale. The 2012 taxes should be paid when due. The mortgage was also delinquent until a settlement was reached at the end of May 2012 as the operating general partner stopped making mortgage payments in June 2010 in an attempt to focus the lender’s attention on the property. The operating general partner was attempting to force the lender to reconsider their previous decision to reject any workout plan. In the third quarter 2010, the lender initiated foreclosure proceedings. During the proceedings, the operating general partner argued that a foreclosure would terminate the Operating Partnership’s Land Use Restriction Agreement and do a disservice to the community by eliminating the stipulation that the property remain affordable. This strategy was successful in delaying foreclosure as the court issued a denial of the lender’s motion to appoint a receiver on September 20, 2010. During the second quarter of 2011, the operating general partner discussed with the investment general partner whether the Operating Partnership should declare bankruptcy in order to delay a foreclosure and to maintain control of the property. The investment general partner advised the operating general partner not to file for bankruptcy. However, on June 6, 2011 Bear Creek of Naples, Ltd. filed for Chapter 11 bankruptcy. Authority to do so was vested solely with the operating general partner; the investment limited partner did not consent to this action. The court ordered a monthly “special assessment” payment of $20,000 to the lender starting in July 2011 and continuing until a settlement was reached. In December 2011 and March 2012 there were hearings with regard to a motion to reach an agreement on the appraised value of the property. During the May 23, 2012 hearing, the property value and new monthly payment of principal and interest were determined. The operating general partner is now attempting to find a buyer to acquire the operating general partner and investment limited partner interest.  The investment general partner intends to continue to monitor the process. On December 31, 2009, the 15-year low income housing tax credit compliance period expired with respect to Bear Creek of Naples. The investment general partner is in the process of exploring various disposition opportunities consistent with the investment objectives of the investment partnership.

 

In August 2011, the operating general partner of Parvin’s Limited Partnership approved an agreement to sell the property to a non-affiliated entity and the transaction closed on January 30, 2012. The sales price for the property was $900,000, which included the outstanding mortgage balance of approximately $319,948 and cash proceeds to the investment partnership of $450,000. Of the proceeds received by the investment partnership, $445,000 represents reporting fees due to an affiliate of the investment partnership and the balance represents proceeds from the sale. Of the remaining proceeds, $5,000 will be paid to BCAMLP for expenses related to the sale, which includes third party legal costs. No proceeds were returned to cash reserves held by Series 18. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, no gain on the sale of the Operating Partnership was recorded as of March 31, 2012.

 

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In March 2010, the operating general partner of Preston Wood Associates LP approved an agreement to sell the property and the transaction closed on August 9, 2010. The sales price for the property was $992,000, which included the outstanding mortgage balance of approximately $449,928 and cash proceeds to the investment partnership of $7,500. Of the total proceeds received, $7,500 was paid to BCAMLP for expenses related to the sale, which includes third party legal costs. No proceeds were returned to cash reserves held by Series 18. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, no gain on the sale of the Operating Partnership was recorded as of September 30, 2010.

 

Humboldt I, LP (Briarwood Apartments) is a 20-unit property located in Humboldt, IA. Operations have struggled at the property for the past several years due to low occupancy and high maintenance expenses related to resident turnover. Lack of cash flow and withdrawals to finance capital expenditures have resulted in an underfunding of the replacement reserve escrow. Historical and ongoing challenges cited by management include problem tenants that require eviction, difficulty attracting quality tenants, and the poor state of the local economy. Management relies heavily on outside contacts and referrals from the local housing authority, but also runs advertisements on a weekly basis in a free weekly advertiser that is distributed throughout town. Advertising has been expanded into surrounding towns to increase interest in the property. The property is operating under a Servicing Workout Plan approved by Rural Development on March 1, 2011. The Plan aims to fully fund the replacement reserve escrow, pay down accounts payable, and increase occupancy. The Plan has helped as average occupancy in 2011 was 92%, and the property operated above breakeven. Through the first quarter of 2012, average occupancy is 93% and the property is generating cash. On December 31, 2010, the 15-year low income housing tax credit compliance period expired with respect to Humboldt I, LP. The mortgage, taxes, and insurance are current.

 

Marengo Park Apartments LP (West Pine Homes) is a 24-unit property located in Marengo Park, IA. Occupancy has historically been an issue at this property, mainly due to evictions for nonpayment of rent and residents vacating because of job losses. The property is operating under a Servicing Workout Plan approved by Rural Development on October 1, 2010, which aims to fund the replacement reserves, make payables current, and resolve capital improvement issues through expanded marketing efforts to improve occupancy. In the summer of 2010 the operating general partner hired a new property manager and changed the name of the community to West Pine Homes with the hopes of improving the reputation of the property. Current marketing includes advertising on Rent.com, advertising in the Local Free Shopper (which covers three cities/towns), posting fliers in the local community and frequent contacts with local agencies, as well as ‘for rent’ signs located on the property. Occupancy averaged 83% in 2011 and the property operated above breakeven. Through the first quarter of 2012, occupancy has averaged 85%. Accounts payable remain high through February of 2012 but are trending downward due to the recent cash flow. The investment general partner intends to work closely with the operating general partner until occupancy improves and operations stabilize. On December 31, 2009, the 15-year low income housing tax credit compliance period expired with respect to Marengo Park Apartments. The investment general partner is in the process of exploring various disposition opportunities consistent with the investment objectives of the investment partnership.

 

43
 

 

In May 2010, the investment general partner of Series 18 and Boston Capital Tax Credit Fund IV LP – Series 20, respectively, transferred their interests in Evergreen Hills Associates, Limited Partnership to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $2,635,694 and cash proceeds to the investment partnerships of $29,680 and $12,720 in Series 18 and Series 20, respectively. Of the total proceeds received, $22,680 and $9,720, for Series 18 and Series 20, respectively, represents reporting fees due to an affiliate of the investment partnerships and the balance represents proceeds from the transfer. Of the remaining proceeds, $7,000 and $3,000, for Series 18 and Series 20, respectively, was paid to BCAMLP for expenses related to the transfer, which includes third party legal costs. No proceeds were returned to cash reserves held by Series 18 and Series 20, respectively. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, no gain on the sale of the Operating Partnership was recorded as of June 30, 2010.

 

(Series 19). As of March 31, 2012 and 2011, the average Qualified Occupancy for the series was 100%. The series had a total of 16 properties at March 31, 2012, all of which were at 100% Qualified Occupancy.

 

For the tax year ended December 31, 2011 and 2010, the series, in total, generated $3,724,924 and $155,714, respectively, in passive tax income (losses) that were passed through to the investors. All of the Operating Partnerships in the Series have completed their respective credit periods prior to the year ended December 31, 2008, and it is not expected that any additional tax credits will be generated.

 

As of March 31, 2012 and 2011, Investments in Operating Partnerships for Series 19 was $0. Investments in Operating Partnerships are affected by the way the Fund accounts for these investments, the equity method. By using the equity method the Fund adjusts its investment cost for its share of each Operating Partnership's results of operations and for any distributions received or accrued.

 

For the years ended March 31, 2012 and 2011, the net income (loss) for series 19 was $(39,453) and $4,848,054, respectively. The major components of these amounts are the Fund's share of income from Operating Partnerships and partnership management fee.

 

Carrollton Villa, L.P. (Meadow Ridge Apartments), is a 35-unit family project located in Carrollton, Missouri. The property has historically operated below breakeven, due to low rental rates. The property also suffers from high operating expenses, specifically utilities. Over the past six years the City of Carrollton has increased water and sewer rates significantly to cover the repair of water lines. Since 2005, water and sewer rates have increased over 300%. To alleviate the pressure on cash flow, in 2004, the lender agreed to make the mortgage cash flow only. This has allowed the property to reduce operating deficits. Also, the maturity dates for the first and second mortgages were extended from December 2008 and November 2008 to December 2013 and November 2013, respectively. In 2011, the property operated above breakeven due to a decline in operating expenses. Utilities decreased after management discovered and repaired an underground water leak. Site staff wages were also reduced $5 and $2 per hour for the manager and maintenance technician, respectively. Operations have remained above breakeven through the first quarter of 2012. The average annual occupancy was 99% in 2011 and has remained stable in 2012, ending the first quarter at 100%. The real estate taxes, mortgage and insurance are all current. On December 31, 2009, the 15-year low income housing tax credit compliance period expired with respect to Carrollton Villas. The investment general partner is in the process of exploring various disposition opportunities consistent with the investment objectives of the investment partnership.

 

44
 

 

Forest Associates Limited (Sharon Apartments) is a 24-unit apartment complex for families located in Forest, OH. The operating general partner passed away in the second quarter of 2007 and his widow assumed the operating general partner responsibilities. During 2008, communication with the new operating general partner became extremely difficult. The operations declined and the property operated below breakeven for 2008 with occupancy ending at 63% for December 2008. During the first quarter of 2009, the investment general partner learned that the current management company’s contract had been terminated as of December 31, 2008. In addition, Rural Development accelerated the note and started foreclosure proceedings. Although the operating general partner appealed, the appeal was denied. The investment general partner learned of these developments from the real estate broker engaged by the operating general partner. The affiliated management company of a potential replacement operating general partner was placed on-site by Rural Development during May 2009. The potential operating general partner had been interested in acquiring the operating general partner and investment general partner interests, but attempts by the potential operating general partner to develop a workout plan failed and Rural Development foreclosed on the property on September 16, 2011. On December 31, 2010, the 15-year low income housing tax credit compliance period expired with respect to Forest Associates. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, no gain on the foreclosure of the Operating Partnership was recorded as of December 31, 2011.

 

Jeremy Associates, LP (Coopers Crossing Apartments) is a 93-unit family development located in Las Colinas, Texas. Despite years of maintaining very strong occupancy, the property consistently operates below breakeven due to high expenses. Occupancy averaged 99% in 2011 and as of March 30, 2012 occupancy remained at 99%. Expenses are high mainly due to high maintenance costs as a result of physical deficiencies in a number of buildings on site. Since construction, a number of the buildings have had differential settlement issues resulting in cracked floor slabs, cracked brick veneer, cracking windows and doors and sagging balconies. These concerns have been addressed on an ongoing basis via advances by the operating general partner. Cost control efforts include staffing reduction, reduced marketing and the shutting down of one boiler during warmer months. The operating general partner continues to fund operating deficits despite the expiration of the operating deficit guarantee. So far the operating general partner has advanced over $2,100,000 for repairs and operating deficits in addition to deferring its affiliated company’s property management fee. The mortgage, trade payables, property taxes and insurance are current. The low income housing tax credit compliance period expired on December 31, 2010. The investment general partner is in the process of exploring various disposition opportunities consistent with the investment objectives of the investment partnership.

 

Sherwood Knoll L.P. (Sherwood Knoll Apartments) is a 24-unit project in Rainsville, Alabama. Occupancy averaged 95% and 91% in 2010 and 2011, respectively. As of March 30, 2012, occupancy was 92%. In order to improve occupancy and increase traffic at the property, management has been advertising in the local newspaper as well as posting fliers throughout the immediate area. A new site manager was hired in the second quarter of 2011, and regional management reports that she is very effective at collecting current and delinquent rents. To assist in improving property operations, Rural Development approved a $10 rent increase effective January 1, 2011. This caused 2011 revenue to improve by 9% despite the fact that occupancy decreased by 5%. Although operating expenses were well below state averages, they increased by 15% and the property continued to suffer a deficit in 2011. Rural Development approved an additional rent increase of $15 that began on January 1, 2012. The investment general partner intends to continue to work with the operating general partner to bring operations back above breakeven in 2012 by monitoring occupancy and operating expenses. The operating deficit guarantee is unlimited in time and amount. The real estate taxes, mortgage and insurance are all current. On December 31, 2008, the 15-year low income housing tax credit compliance period expired with respect to Sherwood Knoll, L.P. The investment general partner is in the process of exploring various disposition opportunities consistent with the investment objectives of the investment partnership.

 

45
 

 

Northpointe, L.P. (Northpointe Apartments) is a 158-unit family property located in Kansas City, MO. Rents have been kept below the maximum allowable to remain competitive with two nearby tax credit properties developed within the past five years. Occupancy in 2012 remains strong averaging 94%, with operations remaining below breakeven status. Move-outs continue due to the struggling local economy. The main reason for residents moving out is that they cannot afford to pay the rent or eviction for non-payment. In 2012, rental rates continue to remain insufficient to cover expenses. Management continues to advertise in For Rent Magazine, online, and has temporarily reduced selected one and two bedroom rents in order to improve occupancy. The operating general partner and investment general partner have explored refinancing and disposition options, but the significant prepayment penalty of $770,000 associated with the debt has prevented a sale or refinance from being a feasible option. The operating general partner plans to continue funding the property to the best of his ability until the mortgage maturity date of August 2014. Most recently, the operating general partner contacted the lender to see if they could modify the loan terms during the winter months by delaying payment requirements to a later date. Unfortunately, the lender has not been responsive to the request. The property’s mortgage, real estate taxes and insurance payments are all current through December, 2011. On December 31, 2009, the 15-year low income housing tax credit compliance period expired with respect to Green Acres Limited Partnership. The investment general partner is in the process of exploring various disposition opportunities consistent with the investment objectives of the investment partnership.

 

In February 2010, the investment general partner entered into an agreement to transfer its interest in Ankeny Housing Associates Two LP to a non-affiliated entity for its assumption of the outstanding mortgage balance of approximately $2,566,333 and cash proceeds to the investment partnership of $1,544,780. The transaction closed as of April 2010. Of the total proceeds received, $10,000 represents reporting fees due to an affiliate of the investment partnership and the balance represents proceeds from the transfer. Of the remaining proceeds, $20,400 was paid to BCAMLP for expenses related to the transfer, which includes third party legal costs. The remaining proceeds of $1,514,380 were returned to cash reserves held by Series 19. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $1,514,380 as of June 30, 2010.

 

46
 

 

In October 2010, the operating general partner of Vistas Associates LP approved an agreement to sell the property to a non-affiliated entity and the transaction closed on January 31, 2011. The sales price for the property was $8,450,000, which included the outstanding mortgage balances of approximately $4,575,943 and cash proceeds to the investment partnership of $2,750,000. Of the proceeds received by the investment partnership, $25,000 represents reporting fees due to an affiliate of the investment partnership and the balance represents proceeds from the sale. Of the remaining proceeds, $15,000 was paid to BCAMLP for expenses related to the sale, which includes third party legal costs. The remaining proceeds from the sale of $2,710,000 were returned to cash reserves held by Series 19. The monies held in cash reserves will be utilized to pay current operating expenses, accrued but unpaid asset management fees, and accrued but unpaid expenses of the investment partnership. After all outstanding obligations of the investment partnership are satisfied, any remaining monies will be distributed based on the number of BACs held by each investor at the time of distribution. In March 2011, the investment partnership received additional proceeds for its share of the Operating Partnership’s cash in the amount of $722,500 which was returned to the cash reserves held by Series 19. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment limited partnership investment in the Operating Partnership to zero. Accordingly, a gain on the sale of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $3,432,500 as of March 31, 2011. In August 2011, the investment partnership received its final cash distribution from the Operating Partnership’s remaining cash totaling $99,450, which was returned to the cash reserves held by Series 19. Accordingly, a gain on the sale of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $99,450 as of September 30, 2011.

 

47
 

 

Contractual Obligations

 

Not Applicable

 

Off Balance Sheet Arrangements

 

None

 

48
 

 

Principal Accounting Policies and Estimates

 

The financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (GAAP), which require the Fund to make various estimates and assumptions. The following section is a summary of some aspects of those accounting policies that may require subjective or complex judgments and are most important to the portrayal of the Fund’s financial condition and results of operations. The Fund 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 financial statements.

 

The Fund is required to assess potential impairments to its long-lived assets, which are primarily investments in limited partnerships. The Fund accounts for its investment in limited partnerships in accordance with the equity method of accounting since the Fund does not control the operations of the Operating Partnerships. The purpose of an impairment analysis is to verify that the real estate investment balance reflected on the balance sheet does not exceed the value of the underlying investments.

 

If the book value of the Fund’s investment in an Operating Partnership exceeds the estimated value derived by management, which generally consists of the remaining future Low-Income Housing Credits allocable to the Fund and the estimated residual value to the Fund, the Fund reduces its investment in the Operating Partnership.

 

In accordance with the accounting guidance for the consolidation of variable interest entities, the Fund determines when it should include the assets, liabilities, and activities of a variable interest entity (VIE) in its financial statements, and when it should disclose information about its relationship with a VIE. The analysis that must be performed to determine which entity should consolidate a VIE focuses on control and economic factors.  A VIE is a legal structure used to conduct activities or hold assets, which must be consolidated by a company if it is the primary beneficiary because it has (1) the power to direct the activities of the VIE that most significantly impact the VIE's economic performance and (2) the obligation to absorb losses or receive benefits that could potentially be significant to the VIE. If multiple unrelated parties share such power, as defined, no party will be required to consolidate the VIE. Further, the guidance requires continual reconsideration of the primary beneficiary of a VIE. 

 

Based on this guidance, the Operating Partnerships in which the Fund invests meet the definition of a VIE because the owners of the equity at risk in these entities do not have the power to direct their operations.  However, management does not consolidate the Fund’s interests in these VIEs, as it is not considered to be the primary beneficiary since it does not have the power to direct the activities that are considered most significant to the economic performance of these entities.  The Fund currently records the amount of its investment in these partnerships as an asset on its balance sheets, recognizes its share of partnership income or losses in the statements of operations, and discloses how it accounts for material types of these investments in its financial statements. The Fund’s balance in investment in Operating Partnerships plus advances made to Operating Partnerships represents its maximum exposure to loss.  The Fund’s exposure to loss on these partnerships is mitigated by the condition and financial performance of the underlying Housing Complexes as well as the strength of the general partners and their guarantee against credit recapture to the investors of the Fund.

 

49
 

 

Recent Accounting Changes

 

In June 2009, the FASB issued an amendment to the accounting and disclosure requirements for the consolidation of variable interest entities (VIEs). The amended guidance modifies the consolidation model to one based on control and economics, and replaced quantitative primary beneficiary analysis with a qualitative analysis. The primary beneficiary of a VIE will be the entity that has (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (2) the obligation to absorb losses or receive benefits that could potentially be significant to the VIE. If multiple unrelated parties share such power, as defined, no party will be required to consolidate the VIE. Further, the amended guidance requires continual reconsideration of the primary beneficiary of a VIE and adds an additional reconsideration event for determination of whether an entity is a VIE. Additionally, the amendment requires enhanced and expanded disclosures around VIEs. This amendment was effective for fiscal years beginning after November 15, 2009. The adoption of this guidance on April 1, 2010 did not have a material effect on the Fund’s financial statements.

 

 

Item 7a. Quantitative and Qualitative Disclosure About Market Risk
   
  Not Applicable
   
Item 8. Financial Statements and Supplementary Data
   
  The information required by this item is contained in Part IV, Item 15 of this Annual Report on Form 10-K. 
   
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 
   
  None

 

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Item 9a.   Controls & Procedures
     
  (a)

Evaluation of Disclosure Controls and Procedures

     
    As of the end of the period covered by this report, the Fund’s general partner, under the supervision and with the participation of the Principal Executive Officer and Principal Financial Officer of C&M Management, Inc., carried out an evaluation of the effectiveness of the Fund’s “disclosure controls and procedures” as defined in the Securities Exchange Act of 1934 Rules 13a-15 and 15d-15 with respect to each series individually, as well as the Fund as a whole. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer have concluded that as of the end of the period covered by this report, the disclosure controls and procedures with respect to each series individually, as well as the Fund as a whole, were adequate and effective in timely alerting them to material information relating to any series or the Fund as a whole required to be included in the Fund’s periodic SEC filings.
     
  (b)

Management’s Annual Report on Internal Control over Financial Reporting

     
   

Management of the Fund is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) of each series individually, as well as the Fund as a whole. The Fund’s internal control system over financial reporting is designed to provide reasonable assurance to the Fund’s management regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.

 

Due to inherent limitations, an internal control system over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

 

The Fund's general partner, under the supervision and with the participation of the Principal Executive Officer and Principal Financial Officer of Boston Capital Associates III LP, assessed the effectiveness of the internal controls and procedures over financial reporting with respect to each series individually, as well as the Fund as a whole, as of March 31, 2012. In making this assessment, the Fund's management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework. Based on this assessment, management believes that, as of March 31, 2012, its internal control over financial reporting with respect to each series individually, as well as the Fund as a whole was effective.

     
  (c)

Changes in Internal Controls

     
    There were no changes in the Fund management's internal control over financial reporting that occurred during the quarter ended March 31, 2012 that materially affected, or are reasonably likely to materially affect, the Fund management's internal control over financial reporting.

 

51
 

 

PART III

 

Item 10. Directors, Executive Officers and Corporate Governance
  (a), (b), (c), (d) and (e) 

 

The Fund has no directors or executive officers of its own. The following biographical information is presented for the partners of the general partners and affiliates of those partners (including Boston Capital Partners, Inc. ("Boston Capital")) with principal responsibility for the Fund's affairs.

 

John P. Manning, age 63, is co-founder, and since 1974 has been the President and Chief Executive Officer, of Boston Capital Corporation. As co-founder and CEO of Boston Capital, Mr. Manning’s primary responsibilities include strategic planning, business development and the continued oversight of new opportunities. In addition to his responsibilities at Boston Capital Corporation, Mr. Manning is a proactive leader in the multifamily real estate industry. He served in 1990 as a member of the Mitchell-Danforth Task Force, which reviewed and suggested reforms to the Low Income Housing Tax Credit program. He was the founding President of the Affordable Housing Tax Credit Coalition and is a former member of the board of the National Leased Housing Association. During the 1980s, he served as a member of the Massachusetts Housing Policy Committee as an appointee of the Governor of Massachusetts. In addition, Mr. Manning has testified before the U.S. House Ways and Means Committee and the U.S. Senate Finance Committee on the critical role of the private sector in the success of the Low Income Housing Tax Credit. In 1996, President Clinton appointed him to the President’s Advisory Committee on the Arts at the John F. Kennedy Center for the Performing Arts. In 1998, President Clinton appointed Mr. Manning to the President’s Export Council, the premiere committee comprised of major corporate CEOs that advise the President on matters of foreign trade and commerce. In 2003, he was appointed by Boston Mayor Tom Menino to the Mayors Advisory Panel on Housing. Mr. Manning sits on the Board of Directors of the John F. Kennedy Presidential Library in Boston where he serves as Chairman of the Distinguished Visitors Program. He is also on the Board of Directors of the Beth Israel Deaconess Medical Center in Boston. Mr. Manning is a graduate of Boston College.

 

Mr. Manning is the managing member of Boston Associates. Mr. Manning is also the principal of Boston Capital Corporation. While Boston Capital is not a direct subsidiary of Boston Capital Corporation, it is under the common control of Mr. Manning.

 

Jeffrey H. Goldstein, age 50, is Chief Operating Officer and has been the Director of Real Estate of Boston Capital Corporation since 1996. He directs Boston Capital Corporation’s comprehensive real estate services, which include all aspects of origination, underwriting, due diligence and acquisition. As COO, Mr. Goldstein is responsible for the financial and operational areas of Boston Capital Corporation and assists in the design and implementation of business development and strategic planning objectives. Mr. Goldstein previously served as the Director of the Asset Management division as well as the head of the dispositions and troubled assets group. Utilizing his 16 years experience in the real estate syndication and development industry, Mr. Goldstein has been instrumental in the diversification and expansion of Boston Capital Corporation’s businesses. Prior to joining Boston Capital Corporation in 1990, Mr. Goldstein was Manager of Finance for A.J. Lane & Co., where he was responsible for placing debt on all new construction projects and debt structure for existing apartment properties. Prior to that, he served as

 

52
 

 

Manager for Homeowner Financial Services, a financial consulting firm for residential and commercial properties, and worked as an analyst responsible for budgeting and forecasting for the New York City Council Finance Division. He graduated from the University of Colorado and received his MBA from Northeastern University.

 

Kevin P. Costello, age 65, is Executive Vice President and has been the Director of Institutional Investing of Boston Capital Corporation since 1992 and serves on the firm’s Executive Committee. He is responsible for all corporate investment activity and has spent over 20 years in the real estate syndication and investment business. Mr. Costello’s prior responsibilities at Boston Capital Corporation have involved the management of the Acquisitions Department and the structuring and distribution of conventional and tax credit private placements. Prior to joining Boston Capital Corporation in 1987, he held positions with First Winthrop, Reynolds Securities and Bache & Company. Mr. Costello graduated from Stonehill College and received his MBA with honors from Rutgers’ Graduate School of Business Administration.

 

Marc N. Teal, age 48, has been Chief Financial Officer of Boston Capital Corporation since May 2003. Mr. Teal previously served as Senior Vice President and Director of Accounting and prior to that served as Vice President of Partnership Accounting. He has been with Boston Capital Corporation since 1990. In his current role as CFO he oversees all of the accounting, financial reporting, SEC reporting, budgeting, audit, tax and compliance for Boston Capital Corporation, its affiliated entities and all Boston Capital Corporation sponsored programs. Additionally, Mr. Teal is responsible for maintaining all banking and borrowing relationships of Boston Capital Corporation and treasury management of all working capital reserves. He also oversees Boston Capital Corporation's information and technology areas, including the strategic planning for Boston Capital Corporation and its affiliaties. Prior to joining Boston Capital Corporation in 1990, Mr. Teal was a Senior Accountant for Cabot, Cabot & Forbes, a multifaceted real estate company, and prior to that was a Senior Accountant for Liberty Real Estate Corp. He received a Bachelor of Science Accountancy from Bentley College and a Masters in Finance from Suffolk University.

 

53
 

 

(f) Involvement in certain legal proceedings.
   
  None.
   
(g) Promoters and control persons.
   
  None.
   
(h) and (i) The Fund has no directors or executive officers and accordingly has no audit committee and no audit committee financial expert.  The Fund is not a listed issuer as defined in Regulation 10A-3 promulgated under the Securities Exchange Act of 1934.
   
  The general partner of the Fund, Boston Capital Associates III LP, has adopted a Code of Ethics which applies to the Principal Executive Officer and Principal Financial Officer of C&M Management, Inc.  The Code of Ethics will be provided without charge to any person who requests it.  Such request should be directed to Marc N. Teal Boston Capital Corp. One Boston Place Boston, MA 02108.
   
Item 11. Executive Compensation
   
  (a), (b), (c), (d) and (e)

 

The Fund has no officers or directors and no compensation committee. However, under the terms of the Amended and Restated Agreement and Certificate of Limited Partnership of the Fund, the Fund has paid or accrued obligations to the general partner and its affiliates for the following fees during the 2012 fiscal year:

 

1.   An annual fund management fee based on .5 percent of the aggregate cost of all apartment complexes acquired by the Operating Partnerships has been accrued or paid to Boston Capital Asset Management Limited Partnership. The annual fund management fee charged to operations, net of reporting fees received, during the year ended March 31, 2012 was $541,340.

 

2.   The Fund has reimbursed an affiliate of the general partner a total of $67,309 for amounts charged to operations during the year ended March 31, 2012. The reimbursement includes postage, printing, travel, and overhead allocations.

 

54
 

 

Item 12.   Security Ownership of Certain Beneficial Owners and Management, and Related Stockholder Matters
     
  (a) Security ownership of certain beneficial owners.
     
    As of March 31, 2012, 21,996,102 BACs had been issued. The following Series are known to have one investor, Everest Housing, 199 South Los Robles Ave. Suite 200, Pasadena, CA 91101, with holdings in excess of 5% of the total outstanding BACs in the series.

 

Series  % of BACs held 
Series 15   8.24%
Series 16   10.23%
Series 17   9.71%
Series 18   9.32%
Series 19   6.97%

 

  (b) Security ownership of management.
     
    The general partner has a 1% interest in all profits, losses, credits and distributions of the Fund.
     
  (c) Changes in control.

 

There exists no arrangement known to the Fund the operation of which may at a subsequent date result in a change in control of the Fund. There is a provision in the Fund's Partnership Agreement which allows, under certain circumstances, the ability to change control.

 

The Fund has no compensation plans under which interests in the Fund are authorized for issuance.

 

Item 13. Certain Relationships and Related Transactions, and Director Independence.

 

  (a) Transactions with related persons.

 

The Fund has no officers or directors. However, under the terms of the Offering, various kinds of compensation and fees are payable to the general partner and its affiliates during the organization and operation of the Fund. Additionally, the general partner will receive distributions from the Fund if there is cash available for distribution or residual proceeds as defined in the Partnership Agreement. See Note B of Notes to Financial Statements in Item 15 of this Annual Report on Form 10-K for amounts accrued or paid to the general partner and its affiliates during the period from April 1, 1995 through March 31, 2012.

 

  (b) Review, Approval or Ratification of transactions with related persons.
     
    The Fund response to Item 13(a) is incorporated herein by reference.
     
  (c) Transactions with Promoters and certain control persons.
    Not applicable.
     
  (d) Independence.
    The Fund has no directors.

 

55
 

 

Item 14.Principal Accounting Fees and Services

 

Fees paid to the Fund’s independent auditors for fiscal year 2012 were comprised of the following:

 

Fee Type  Ser. 15   Ser. 16   Ser. 17   Ser. 18   Ser. 19 
Audit Fees  $22,580   $24,805   $22,205   $17,405   $14,805 
                          
Audit Related Fees   -    -    -    -    - 
                          
Tax Fees   10,095    11,265    10,095    7,755    6,000 
                          
All Other Fees   1,820    380    380    380    1,780 
                          
Total  $34,495   $36,450   $32,680   $25,540   $22,585 

 

Fees paid to the Fund’s independent auditors for fiscal year 2011 were comprised of the following:

 

Fee Type  Ser. 15   Ser. 16   Ser. 17   Ser. 18   Ser. 19 
Audit Fees  $23,025   $24,825   $23,400   $18,000   $15,475 
                          
Audit Related Fees   -    -    -    -    - 
                          
Tax Fees   11,215    13,555    11,020    9,070    7,120 
                          
All Other Fees   2,800    -    -    -    2,800 
                          
Total  $37,040   $38,380   $34,420   $27,070   $25,395 

 

Audit Committee

 

The Fund has no Audit Committee. All audit services and any permitted non-audit services performed by the Fund’s independent auditors are pre-approved by C&M Management, Inc.

 

56
 

 

PART IV

 

Item 15. Exhibits and Financial Statement Schedules

 

(a) 1 and 2.    Financial Statements and Financial Statement Schedules, filed herein as Exhibit 13 -

 

Report of Independent Registered Public Accounting Firm

 

Balance Sheets, March 31, 2012 and 2011

 

Statements of Operations for the years ended March 31, 2012 and 2011.

 

Statements of Changes in Partners' Capital (Deficit) for the years ended March 31, 2012 and 2011.

 

Statements of Cash Flows for the years ended March 31, 2012 and 2011.

 

Notes to Financial Statements March 31, 2012 and 2011

 

Schedules not listed are omitted 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 hereto.

 

(b) 1.Exhibits (listed according to the number assigned in the table in Item 601 of Regulation S-K)

 

Exhibit No. 3 - Organization Documents.

 

a.Certificate of Limited Partnership of Boston Capital Tax Credit Fund III L.P. (Incorporated by reference from Exhibit 3 to the Fund's Registration Statement No. 33-42999 on Form S-11 as filed with the Securities and Exchange Commission on September 26, 1991.)

 

Exhibit No. 4 - Instruments defining the rights of security holders, including indentures.

 

a.Agreement of Limited Partnership of Boston Capital Tax Credit Fund III L.P. (Incorporated by reference from Exhibit 4 to the Fund's Registration Statement No. 33-42999 on Form S-11 as filed with the Securities and Exchange Commission on September 26, 1991.)

 

Exhibit No. 10 - Material contracts.

 

a.Beneficial Assignee Certificate. (Incorporated by reference from Exhibit 10A to the Fund's Registration Statement No. 33-42999 on Form S-11 as filed with the Securities and Exchange Commission on September 26, 1991.)

 

Exhibit No. 13 - Financial Statements.

 

a.Financial Statement of Boston Capital Tax Credit Fund III L.P., filed herein

 

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Exhibit No. 28 - Additional exhibits.

 

a.Agreement of Limited Partnership of Branson Christian County (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on April 4, 1994).

 

b.Agreement of Limited Partnership of Peachtree L.P. (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on April 4, 1994).

 

c.Agreement of Limited Partnership of Cass Partners, L.P. (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on April 7, 1994).

 

d.Agreement of Limited Partnership of Sable Chase of McDonough L.P. (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on April 8, 1994).

 

e.Agreement of Limited Partnership of Ponderosa Meadows Limited Partnership (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on April 12, 1994).

 

f.Agreement of Limited Partnership of Hackley-Barclay LDHA (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on April 14, 1994).

 

g.Agreement of Limited Partnership of Sugarwood Park (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on May 12, 1994).

 

h.Agreement of Limited Partnership of West End Manor of Union Limited Partnership (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on May 29, 1994).

 

i.Agreement of Limited Partnership of Vista Loma (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on May 31, 1994).

 

j.Agreement of Limited Partnership of Palmetto Properties (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on June 16, 1994).

 

k.Agreement of Limited Partnership of Jefferson Square (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on June 27, 1994).

 

l.Agreement of Limited Partnership of Holts Summit Square (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on June 27, 1994).

 

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m.Agreement of Limited Partnership of Harris Housing (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on July 8, 1994).

 

n.Agreement of Limited Partnership of Branson Christian County II (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on September 1, 1994).

 

o.Agreement of Limited Partnership of Chelsea Square (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on September 12, 1994).

 

p.Agreement of Limited Partnership of Palatine Limited Partnership (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on September 21, 1994).

 

q.Agreement of Limited Partnership of Mansura Villa II Limited Partnership (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on October 19, 1994).

 

r.Agreement of Limited Partnership of Haynes House Associates II Limited Partnership (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on October 25, 1994).

 

s.Agreement of Limited Partnership of Skowhegan Limited Partnership (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on October 28, 1994).

 

t.Agreement of Limited Partnership of Mt. Vernon Associates, L.P. (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on November 19, 1994).

 

u.Agreement of Limited Partnership of Clinton Estates, L.P. (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on February 1, 1995.)

 

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Exhibit No. 31 Certification 302

a.Certification pursuant to 18 U.S.C. Section 1350, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herein
b.Certification pursuant to 18 U.S.C. Section 1350, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herein

 

Exhibit No. 32 Certification 906

a.Certification pursuant to 18 U.S.C. Section 1350, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herein

 

b.Certification pursuant to 18 U.S.C. Section 1350, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herein

 

Exhibit No. 101

The following materials from the Boston Capital Tax Credit Fund III, L.P. Annual Report on Form 10-K for the period ended March 31, 2012 formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Balance Sheets, (ii) the Condensed Statements of Operations, (iii) the Condensed Statements of Changes in Partners' Capital (Deficit), (iv) the Condensed Statements of Cash Flows and (v) related notes, furnished herewith

 

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SIGNATURES

 

Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the Fund has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  Boston Capital Tax Credit Fund III L.P.
   
  By: Boston Capital Associates III L.P.
    General Partner
     
  By: BCA Associates Limited Partnership,
    General Partner
     
  By: C&M Management Inc.,
Date:   General Partner
     
June 29, 2012 By: /s/ John P. Manning
     
    John P. Manning

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Fund and in the capacities and on the dates indicated:

 

DATE:   SIGNATURE:   TITLE:
         
June 29, 2012   /s/ John P. Manning   Director, President
        (Principal Executive
    John P. Manning   Officer) C&M Management
        Inc.; Director,
        President (Principal
        Executive Officer)
        BCTC III Assignor Corp.

 

DATE:   SIGNATURE:   TITLE:
         
June 29, 2012   /s/ Marc N. Teal   Chief Financial Officer
        (Principal Financial
    Marc N. Teal   and Accounting Officer)
        C&M Management Inc.;
        Chief Financial Officer
        (Principal Financial
        and Accounting Officer)
        BCTC III Assignor Corp.

 

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