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EX-13 - EXHIBIT 13 - BF Garden Tax Credit Fund V L.P.v347295_ex13.htm
EX-31.B - EXHIBIT 31.B - BF Garden Tax Credit Fund V L.P.v347295_ex31b.htm
EX-31.A - EXHIBIT 31.A - BF Garden Tax Credit Fund V L.P.v347295_ex31a.htm
EXCEL - IDEA: XBRL DOCUMENT - BF Garden Tax Credit Fund V L.P.Financial_Report.xls
EX-32.B - EXHIBIT 32.B - BF Garden Tax Credit Fund V L.P.v347295_ex32b.htm
EX-32.A - EXHIBIT 32.A - BF Garden Tax Credit Fund V L.P.v347295_ex32a.htm

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

x     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended March 31, 2013 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        333-109898

 

BOSTON CAPITAL TAX CREDIT FUND V L.P.

(Exact name of registrant as specified in its charter)

 

Delaware   14-1897569
(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)

 

Registrant’s telephone number, including area code (617)624-8900

 

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 (check one):

 

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 V L.P.

FORM 10-K ANNUAL REPORT FOR THE YEAR ENDED MARCH 31, 2013

 

TABLE OF CONTENTS

 

PART I
       
Item 1. Business   3
Item 1A. Risk Factors   5
Item 1B. Unresolved Staff Comments   7
Item 2. Properties   7
Item 3. Legal Proceedings   13
Item 4. Mine Safety Disclosures   13
       
PART II
       
Item 5. Market for the Fund's Limited Partnership Interests and Related Partner Matters and Issuer Purchases of Partnership Interests   14
Item 6. Selected Financial Data   14
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations   15
Item 7A. Quantitative and Qualitative Disclosures About Market Risk   25
Item 8. Financial Statements and Supplementary Data   25
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure   25
Item 9A. Controls and Procedures   25
Item 9B. Other Information   26
       
PART III
       
Item 10. Directors, Executive Officers and Corporate Governance of the Fund   27
Item 11. Executive Compensation   29
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Partner Matters   30
Item 13. Certain Relationships and Related Transactions, and Director Independence   30
Item 14. Principal Accountant Fees and Services   31
       
PART IV
       
Item 15. Exhibits and Financial Statement Schedules   32
       
  Signatures   37

 

2
 

 

PART I

 

Item 1.Business

 

Organization

 

Boston Capital Tax Credit Fund V L.P. (the "Fund") is a limited partnership formed under the Delaware Revised Uniform Limited Partnership Act as of October 15, 2003. The general partner of the Fund is Boston Capital Associates V LLC, a Delaware limited liability company. The members of the general partner are Boston Capital Companion Limited Partnership, a Massachusetts limited partnership, and John P. Manning, who is the managing member. Additional members of the general partner are Jeffrey H. Goldstein and Marc N. Teal. The general partner of Boston Capital Companion Limited Partnership is Boston Capital Partners II Corporation whose sole shareholder is John P. Manning. John P. Manning is the principal of Boston Capital Partners, Inc.

 

The assignor limited partner is BCTC V 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") were filed with the Securities and Exchange Commission and became effective January 2, 2004, 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 7,000,000 BACs at $10 per BAC. On August 10, 2004 a Form S-11, which registered an additional 8,500,000 BACs for sale to the public in one or more series became effective. As of March 31, 2013, subscriptions had been received and accepted by the Fund for 11,777,706 BACs in three series representing capital contributions of $117,777,060 in the aggregate.

 

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 such as tax credits. The payments for each tenant, which are made directly to the owner of their property, generally are in such amounts as 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 their 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.

 

3
 

 

As of March 31, 2013 the Fund had invested in 15 Operating Partnerships on behalf of Series 47; 11 Operating Partnerships on behalf of Series 48; and 24 Operating Partnerships on behalf of Series 49. 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 to limited partners through increases in value of the Fund's investments and, to the extent applicable, increase in equity 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.

 

Employees

 

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

 

4
 

 

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.

 

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:

 

5
 

 

- 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. For 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 such event.

 

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, expenses such as accrued Fund 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.

 

6
 

 

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.

 

Item 1B.Unresolved Staff Comments

 

Not applicable.

 

Item 2.Properties

 

The Fund has acquired a limited partnership interest in 50 Operating Partnerships in three series, identified in the table set forth below. The apartment complexes owned by the Operating Partnerships are eligible for the Federal Housing Tax Credit. Initial occupancy of a unit in each apartment complex which initially 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 Operating Partnerships and the respective apartment complexes are described more fully in the Prospectus. 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.

 

7
 

 

Boston Capital Tax Credit Fund V L.P. - Series 47

 

PROPERTY PROFILE AS OF MARCH 31, 2013

 

Property
Name
  Location    Units   Mortgage
Balance as
of 12/31/12
   Acq
Date
    Const
Comp
  Qualified
Occupancy
3/31/13
   Cap Con
paid thru
3/31/13
 
                                
Countrybook Apartments  Champagne, IL   150   $6,065,025   06/04    07/05   100%  $2,163,644 
                                
Dawn Springs Villa Apartments  London, KY   24    502,402   05/05    10/05   100%   591,815 
                                
La Maison Apartments  Lake Charles, LA   78    2,458,598   06/04    12/04   100%   2,339,767 
                                
Marion Apartments  Marion, MI   32    1,303,027   07/04    12/04   100%   419,185 
                                
Mayfair Park Apartments  Houston, TX   178    9,100,000   03/04    07/05   100%   2,383,449 
                                
McEver Vineyards Apartments  Gainesville, GA   220    10,511,847   11/03    12/04   100%   2,045,234 
                                
Mira Vista Apartments  Santa Anna, TX   24    446,084   03/04    03/05   100%   508,963 
                                
Park Plaza Apartments  Temple, OK   14    741,168   11/04    11/04   100%   254,983 
                                
Parkland Manor Apartments  Leitchfield, KY   74    1,766,107   07/04    05/05   100%   2,656,523 
                                
Pecan Creek Apartments  Hillsboro, TX   48    1,554,204   03/04    07/05   100%   1,042,211 
                                
Sandpiper Apartments  Carrollton, AL   52    1,174,738   04/04    11/04   100%   1,819,982 
                                
The Masters Apartments  Kerrville, TX   144    7,280,000   06/04    10/05   100%   1,948,109 

 

8
 

 

Boston Capital Tax Credit Fund V L.P. - Series 47

 

PROPERTY PROFILE AS OF MARCH 31, 2013

 

Continued

Property
Name
  Location    Units   Mortgage
Balance as
of 12/31/12
   Acq
Date
    Const
Comp
  Qualified
Occupancy
3/31/13
   Cap Con
paid thru
3/31/13
 
                                
The Vistas Apartments  Marble Falls, TX   124   $5,600,000   03/04    06/05   100%  $2,153,083 
                                
Time Square on the Hill  Fort Worth, TX   200    6,379,828   03/04    12/04   100%   3,078,424 
                                
Wellington Park Apts.  Houston, TX   244    12,250,000   01/04    07/05   100%   2,449,752 

 

9
 

 

Boston Capital Tax Credit Fund V L.P. - Series 48

 

PROPERTY PROFILE AS OF MARCH 31, 2013

 

Property
Name
  Location    Units   Mortgage
Balance as
of 12/31/12
   Acq
Date
    Const
Comp
  Qualified
Occupancy
3/31/13
   Cap Con
paid thru
3/31/13
 
                                
Colusa Avenue Apartments  Chowchilla, CA   38   $1,841,692   07/04    05/05   100%  $653,154 
                                
Contempo Apartments  Hammond, LA   48    1,487,331   08/04    08/05   100%   587,485 
                                
Greenway Place Apartments  Hopkinsville, KY   41    1,316,269   04/04    03/05   100%   1,850,391 
                                
Mayfair Park Apartments  Houston, TX   178    9,100,000   03/04    07/05   100%   2,383,449 
                                
Mira Vista Apartments  Santa Anna, TX   24    446,084   03/04    03/05   100%   16,718 
                                
McEver Vineyards Apartments  Gainesville, GA   220    10,511,847   11/03    12/04   100%   2,045,232 
                                
Starlite Village Apartments  Elizabethtown, KY   40    1,260,442   11/04    06/05   100%   1,672,329 
                                
The Links Apartments  Umatilla, OR   24    2,047,544   06/04    11/04   100%   707,499 
                                
The Masters Apartments  Kerrville, TX   144    7,280,000   06/04    10/05   100%   1,948,110 
                                
Wellington Park Apartments  Houston, TX   244    12,250,000   01/04    07/05   100%   2,449,752 
                                
Wyndam Place Senior Residences  Emporia, KS   42    878,352   08/04    05/05   100%   2,822,685 

 

10
 

 

Boston Capital Tax Credit Fund V L.P. - Series 49

 

PROPERTY PROFILE AS OF MARCH 31, 2013

 

Property
Name
  Location    Units   Mortgage
Balance as
of 12/31/12
   Acq
Date
    Const
Comp
  Qualified
Occupancy
3/31/13
   Cap Con
paid thru
3/31/13
 
                                
Bahia Palms Apartments  Laguna Vista, TX   64   $1,582,764   02/05    07/06   100%  $986,602 
                                
Briarwood Apartments  Kaufman, TX   48    1,624,966   02/05    12/06   100%   1,336,743 
                                
Bristol Apartments  Houston, TX   248    11,800,000   05/04    11/05   100%   6,805,870 
                                
Brookview I&II Apartments  Mauston, WI   22    682,115   03/05    06/05   100%   742,348 
                                
Chester Townhouses  Columbia, SC   62    1,751,170   03/06    11/06   100%   566,943 
                                
Columbia Senior Residences at MT. Pleasant  Atlanta, GA   78    1,689,948   12/05    06/07   100%   6,162,028 
                                
Countrybrook Apartments  Champaign, IL   150    6,065,025   06/04    07/05   100%   112,246 
                                
Garden Grace Apartments  Owensboro, KY   62    3,290,489   10/05    07/06   100%   2,863,240 
                                
La Mirage Villas Apartments  Perryton, TX   48    1,681,643   02/05    12/06   100%   1,367,398 
                                
Linda Villa Apartments  Shepherdsville, KY   32    1,006,419   5/05    10/05   100%   1,645,392 
                                
Linden’s Apartments  Shawnee, OK   54    1,110,259   12/04    02/06   100%   462,455 
                                
Meadow Glen Apartments  Kingfisher, OK   20    1,245,409   10/05    07/05   100%   406,280 

 

11
 

 

Boston Capital Tax Credit Fund V L.P. - Series 49

 

PROPERTY PROFILE AS OF MARCH 31, 2013

 

Continued

 

Property
Name
  Location    Units   Mortgage
Balance as
of 12/31/12
   Acq
Date
    Const
Comp
  Qualified
Occupancy
3/31/13
   Cap Con
paid thru
3/31/13
 
                                
Post Oak East Apartments  Fort Worth, TX   246   $13,317,234   07/04    05/06   100%  $1,141,118 
                                
RenaissanceVillage  Bowling Green, KY   34    646,508   05/05    05/06   100%   2,828,268 
                                
Richwood Apartments  Ash Flat, AR   25    1,280,365   12/05    08/06   100%   810,134 
                                
Ridgeview Terrace Apartments  Mount Vernon, WA   80    4,014,766   01/05    08/05   100%   1,768,991 
                                
Rosehill Senior Apartments Phase II  Topeka, KS   36    2,401,427   08/04    04/05   100%   2,550,156 
                                
Rosewood Apartments  Lenexa, KS   144    7,796,628   12/05    07/06   100%   4,383,214 
                                
Sunset Manor  Kewaunee, WI   38    1,113,224   10/05    07/05   100%   1,161,920 
                                
The Gardens of Athens  Athens, TX   32    1,524,161   01/05    12/05   100%   1,933,414 
                                
The Linden's Apartments  Bartesville, OK   54    1,020,010   05/05    06/06   100%   3,588,667 
                                
The Vistas Apartments  Marble Falls, TX   124    5,600,000   03/04    06/05   100%   629,603 
                                
Union Square Apartments  Junction City, LA   32    943,330   02/05    09/05   100%   733,891 
                                
Vista Hermosa Apartments  Eagle Pass TX   20    486,836   06/05    09/06   100%   479,965 

 

12
 

 

 

Item 3.Legal Proceedings

 

None.

 

Item 4.Mine Safety Disclosures

 

Not Applicable

 

13
 

 

PART II

 

Item 5.Market for the Fund's Limited Partnership Interest, Related Fund Matters and Issuer Purchases of Partnership 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, 2013, the Fund has 5,139 BAC holders for an aggregate of 11,777,706 BACs, at a subscription price of $10 per BAC, received and accepted.

 

The BACs were issued in series. Series 47 consists of 1,551 investors holding 3,478,334 BACs, Series 48 consists of 1,030 investors holding 2,299,372 BACs and Series 49 consists of 2,558 investors holding 6,000,000 BACs at March 31, 2013.

 

(c)Dividend history and restriction

The Fund has made no distributions of net cash flow to its BAC holders from its inception, October 15, 2003, through March 31, 2013.

 

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.

 

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.

 

To date the Fund has not made any cash distributions to the limited partners.

 

Item 6.Selected Financial Data

 

Not Applicable.

 

14
 

 

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, (ii) cash distributions from operations of the Operating Partnerships in which the Fund has and will invest and (iii) a line of credit. 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.

 

Capital Resources

 

The Fund offered BACs in the Offering originally declared effective by the Securities and Exchange Commission on January 2, 2004. As of March 31, 2013 the Fund had received and accepted subscriptions for $117,777,060 representing 11,777,706 BACs from investors admitted as BAC holders in Series 47 through Series 49 of the Fund. The Fund concluded its public offering of BACs in the Fund on April 29, 2005.

 

(Series 47). The Fund commenced offering BACs in Series 47 on January 2, 2004. The Fund received and accepted subscriptions for $34,783,340 representing 3,478,334 BACs from investors admitted as BAC holders in Series 47. Offers and sales of BACs in Series 47 were completed and the last of the BACs in Series 47 were issued by the Fund on April 30, 2004.

 

During the fiscal year ended March 31, 2013, $91,654 of Series 47 net offering proceeds were used to pay installments of its capital contributions to the Operating Partnerships. As of March 31, 2013, proceeds from the offer and sale of BACs in Series 47 had been used to invest in 15 Operating Partnerships in an aggregate amount of $26,407,255 and the Fund had completed payment of all installments of its capital contributions to the Operating Partnerships.

 

15
 

 

(Series 48). The Fund commenced offering BACs in Series 48 on May 11, 2004. The Fund received and accepted subscriptions for $22,993,720 representing 2,299,372 BACs from investors admitted as BAC holders in Series 48. Offers and sales of BACs in Series 48 were completed and the last of the BACs in Series 48 were issued by the Fund on August 12, 2004.

 

During the fiscal year ended March 31, 2013, $10,001 of Series 48 net offering proceeds were used to pay installments of its capital contributions to the Operating Partnerships. As of March 31, 2013, proceeds from the offer and sale of BACs in Series 48 had been used to invest in 11 Operating Partnerships in an aggregate amount of $17,450,063 and the Fund had completed payment of all installments of its capital contributions to the Operating Partnerships.

 

(Series 49). The Fund commenced offering BACs in Series 49 on August 24, 2004. The Fund received and accepted subscriptions for $60,000,000 representing 6,000,000 BACs from investors admitted as BAC holders in Series 49. Offers and sales of BACs in Series 49 were completed and the last of the BACs in Series 49 were issued by the Fund on April 29, 2005.

 

During the fiscal year ended March 31, 2013, none of Series 49 net offering proceeds were used to pay installments of its capital contributions to the Operating Partnerships. As of March 31, 2013, proceeds from the offer and sale of BACs in Series 49 had been used to invest in 24 Operating Partnerships in an aggregate amount of $45,667,147. The Fund had completed payment of all installments of its capital contributions to 23 of the Operating Partnerships. Series 49 has outstanding contributions payable to 1 Operating Partnership in the amount of $101 as of March 31, 2013. The remaining contributions of $101 will be released when the Operating Partnership have achieved the conditions set forth in their partnership agreement.

 

16
 

 

Results of Operations

 

The Fund incurs a 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 partnership management and reporting fees paid by the Operating Partnerships. The annual fund management fee incurred, net of fees received, for the fiscal years ended March 31, 2013 and 2012, was $1,034,407, and $1,009,786, respectively.

 

The Fund's investment objectives do not include receipt of significant cash flow 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 47). As of March 31, 2013 and 2012, the average Qualified Occupancy for the series was 100%. The series had a total of 15 properties as of March 31, 2013, all of which were at 100% Qualified Occupancy.

 

For the tax years ended December 31, 2012 and 2011, the series, in total, generated $1,062,035 and $1,328,706, respectively in passive income tax losses that were passed through to the investors and also provided $0.97 for both years in tax credits per BAC to the investors.

 

As of March 31, 2013 and 2012, Investments in Operating Partnerships for Series 47 was $6,296,006 and $8,629,599, respectively. The decrease is primarily the result of the way the Fund accounts for such 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, 2013 and 2012, net loss of the series was $3,138,036 and $3,047,627, respectively. The major components of the current year amount were share of losses from Operating Partnerships, impairment losses, and partnership management fees.

 

CP Continental L.P. (Time Square on the Hill) is a 200-unit family development located in Fort Worth, TX. Despite occupancy that fluctuates around 90%, the property consistently operates below breakeven due to low occupancy and high operating expenses. Management was able to reduce bad debt to around 3% in 2011, and it has been further reduced in 2012 to less than 2% of rental income. Although the cash flow loss was reduced in 2012, low rents and high expenses caused the property to continue to operate below breakeven. The property suffers from poor visibility and has almost no drive-by traffic, requiring a large amount of money to be spent on advertising. The property also has fewer amenities than the competition, which includes properties that have pools, washer/dryer connections and covered parking at the same rent levels as CP Continental. The site staff has increased its visits to nearby retailers and businesses to place fliers in an effort to increase traffic to the property. Occupancy was 94% as of March 31, 2013. Management continues to review the budget to determine areas to control expenses and improve cash flow. The property is expected to continue to operate below breakeven in 2013. The operating general partner is also reviewing refinancing options to lower the annual debt service. As of the first quarter of 2013, the operating general partner has not identified a program that would allow it to refinance the current Housing and Urban Development debt and improve annual cash flow. The property’s mortgage, real estate taxes, and insurance are current. After rental achievement, the operating general partner is obligated to promptly advance funds to eliminate any operating deficit. The operating general partner is not obligated to have subordinate loans outstanding at any time in excess of $542,490. The management company, an affiliate of the operating general partner, is deferring all fees until operations improve. The low income tax credit compliance period expires on December 31, 2019.

 

17
 

 

McEver Vineyards, L.P. (McEver Vineyards Apartments) is a 220-unit family property in Gainesville, GA. Beginning in 2009, weak and declining economic conditions caused several major employers to close, resulting in a number of move-outs and evictions for non-payment of rent. Consequently, the average annual occupancy declined to 87% in 2009 after averaging in the mid-90s% during 2006 - 2008. Increased vacancy loss, bad debt, and high operating expenses caused below breakeven operations. Occupancy rebounded in 2010 as tenants and prospective tenants responded to management’s decision to reduce rents to remain competitive in this price sensitive market. As a result, occupancy averaged 95%, 96% and 97% in 2010, 2011 and 2012, respectively. Occupancy for the quarter ended March 31, 2013 was at 93%. Despite this high occupancy level, operations remained below breakeven through the first quarter of 2013 due to low rent levels, continued high operating expenses, deferred maintenance costs and burdensome debt service. According to management, higher water and sewer rates caused utility costs to increase.

 

The operating general partner has attempted to restructure the debt in order to improve cash flow; to date this has been unsuccessful. While the investment general partner intends to continue to work with the operating general partner and lender to improve operations, as of March 31, 2013 the lender continues to not be interested in negotiating and documenting a loan modification. The mortgage, insurance and real estate taxes are all current through the first quarter of 2013. If the property is foreclosed in 2013, the estimated credit loss of $555,159 and tax credit recapture cost and interest penalty of $795,967 are equivalent to a credit loss of $160 per 1,000 BACs and a recapture and interest penalty cost of $229 per 1,000 BACs.

 

Pecan Acres, L.P. (La Maison Apartments) is a 78-unit family property located in Lake Charles, LA. The property operated well above breakeven in 2010 and 2011 and maintained high occupancy. Occupancy continues to be high and was 91% as of March 31, 2013. In May 2012, the investment general partner learned that one of the two operating general partners had been charging its own overhead and other unrelated expenses to the property. The investment general partner sent a demand notice to the operating general partner to return all misappropriated funds to the property accounts at that time. The investment general partner has engaged counsel and continues to work with the operating general partner’s attorney to resolve this matter. The legal action taken against the co-operating general partner in 2012 is still ongoing as of the first quarter of 2013. All real estate tax, insurance and mortgage payments are current. The low income housing tax credit compliance period expires on December 31, 2019.

 

Hillsboro Fountainhead, L.P. (Pecan Creek Apartments) is a 48-unit family property in Hillsboro, Texas. Despite an average annual occupancy of 85%, the property operated above breakeven in 2011 due to low operating expenses. In 2012, the average annual occupancy declined to 79% and the property ended December 2012 at 71% physical occupancy. In addition, the increased turnover from skips and evictions for non-payment of rent caused operations to decline to below breakeven. According to management, the tenant base is primarily composed of employees of a large outlet mall located two blocks from the property. Beginning in early 2012, the outlet mall closed approximately thirty stores, which negatively affected the property. The additional turnover resulted in increased administrative and maintenance costs associated with re-leasing and making vacant units rent-ready. To reduce vacancy, management has increased its community outreach efforts to include local churches, social agencies, and the housing authority. In addition, print advertisements are circulated in the local newspapers monthly. Despite these efforts, occupancy remained stagnant at 71% through the first quarter of 2013. The investment general partner will continue to work with the operating general partner to improve resident selection, reduce administrative and maintenance expenses, and increase occupancy. The operating general partner will fund deficits as necessary. All real estate taxes, insurance, and mortgage payments are current. The low income housing tax credit compliance period expires on December 31, 2019.

 

18
 

 

(Series 48). As of March 31, 2013 and 2012, the average Qualified Occupancy for the series was 100%. The series had a total of 11 properties as of March 31, 2013, all of which were at 100% Qualified Occupancy.

 

For the tax years ended December 31, 2012 and 2011, the series, in total, generated $672,435 and $980,624, respectively in passive income tax losses that were passed through to the investors and and also provided $0.96 and $0.97, respectively, in tax credits per BAC to the investors.

 

As of March 31, 2013 and 2012, Investments in Operating Partnerships for Series 48 was $4,833,619 and $6,625,699, respectively. The decrease is

primarily the result of the way the Fund accounts for such 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, 2013 and 2012, the net loss of the series was $2,163,384 and $2,110,274, respectively. The major components of the current year amount were share of losses from operating partnerships, impairment loss, and partnership management fees.

 

McEver Vineyards, L.P. (McEver Vineyards Apartments) is a 220-unit family property in Gainesville, GA. Beginning in 2009, weak and declining economic conditions caused several major employers to close, resulting in a number of move-outs and evictions for non-payment of rent. Consequently, the average annual occupancy declined to 87% in 2009 after averaging in the mid-90s% during 2006 - 2008. Increased vacancy loss, bad debt, and high operating expenses caused below breakeven operations. Occupancy rebounded in 2010 as tenants and prospective tenants responded to management’s decision to reduce rents to remain competitive in this price sensitive market. As a result, occupancy averaged 95%, 96% and 97% in 2010, 2011 and 2012, respectively. Occupancy for the quarter ended March 31, 2013 was at 93%. Despite this high occupancy level, operations remained below breakeven through the first quarter of 2013 due to low rent levels, continued high operating expenses, deferred maintenance costs and burdensome debt service. According to management, higher water and sewer rates caused utility costs to increase.

 

The operating general partner has attempted to restructure the debt in order to improve cash flow; to date this has been unsuccessful. While the investment general partner intends to continue to work with the operating general partner and lender to improve operations, as of March 31, 2013 the lender continues to not be interested in negotiating and documenting a loan modification. The mortgage, insurance and real estate taxes are all current through the first quarter of 2013. If the property is foreclosed in 2013, the estimated credit loss of $555,159 and tax credit recapture cost and interest penalty of $795,967 are equivalent to a credit loss of $241 per 1,000 BACs and a recapture and interest penalty cost of $346 per 1,000 BACs.

 

19
 

 

(Series 49). As of March 31, 2013 and 2012, the average Qualified Occupancy for the series was 100%. The series had a total of 24 properties as of March 31, 2013, all of which were at 100% Qualified Occupancy.

 

For the tax years ended December 31, 2012 and 2011, the series, in total, generated $3,147,820 and $1,544,181, respectively, in passive income tax losses that were passed through to the investors, and also provided $0.91 for both years in tax credits per BAC to the investors.

 

As of March 31, 2013 and 2012, Investments in Operating Partnerships for Series 49 was $16,478,101 and $21,176,147, respectively. The decrease is primarily the result of the way the Fund accounts for such 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, 2013 and 2012, the net loss of the series was $5,720,078 and $5,628,567, respectively. The major components of the current year amount were share of losses from operating partnerships, partnership management fees, and impairment losses.

 

Rosewood Senior Apartments (Rosewood Place, LLC) is a 144-unit senior's development in Lenexa, Kansas. The property reached initial full qualified occupancy in November 2007. The average occupancy in 2010, 2011 and 2012 was 95%, 99% and 98%, respectively. In the first quarter of 2013, the average occupancy was over 95%. Management attributed the small first quarter decline in occupancy to the opening of a new 48-unit senior's Low Income Housing Tax Credit apartment community in March 2013 approximately 7 miles from Rosewood Place. Although this new property reportedly is nearly fully leased, the operating general partner is concerned that it will put downward pressure on rents at Rosewood Place since its asking rents are approximately $100/month less than those at Rosewood Place when tenant utility costs are factored in. Note that income limits and therefore rent levels for the new property were set for households earning 40% and 50% of the area median income. The operating general partner and the investment general partner will closely monitor Rosewood’s occupancy over the next several quarters to determine whether any concessions on rental rates are needed to sustain Rosewood Place’s occupancy in the mid90s% level. Operations at Rosewood Place were nominally below breakeven in 2009, and at breakeven during 2010, 2011, 2012 and the first quarter of 2013. The Operating Partnership was able to stay current on its first mortgage debt during the time period 2007 – 2010 because no real estate tax payments were made for tax years 2006 through 2010. All outstanding taxes were paid including interest and penalties on January 7, 2011. At December 31, 2010, an estimated $605,700 in real estate taxes and interest penalties were owed by Rosewood Place, LLC, including the first and second half 2010 real estate taxes. As previously noted, the full tax amount owed was paid on January 7, 2011 from capital raised as part of the loan amendment described below that closed into escrow on December 21, 2010 and was released from escrow on January 6, 2011 when all conditions for closing the amendment were satisfied.

 

In July 2009, a contractor filed a motion for summary judgment, requesting foreclosure of its mechanic’s lien. This motion was approved on February 17, 2010, and an advertised foreclosure sale on April 14, 2010 was scheduled. On April 12, 2010, the contractor agreed to postpone the sale and to continue to negotiate a payment plan with the operating general partner. In June 2010, the operating general partner and the contractor reached an oral agreement on a five-year payment plan to settle the mechanic’s lien claim for $250,000. The mechanic’s lien judgment was released on December 29, 2010 as part of the settlement agreement executed in December 2010 by the contractor and the operating general partner.

 

20
 

 

In June 2010, the operating general partner refocused its efforts on negotiating a loan modification with the existing mortgage lender. By late July 2010, the operating general partner, the investment general partner and the lender had agreed in principle on a restructuring plan. In August 2010 the contractor also agreed, in concept, to the proposed loan modification. The modification documents were executed and the transaction closed into escrow on December 21, 2010. They were released from escrow on January 6, 2011 when all closing conditions were satisfied. The operating general partner contributed $148,000 towards the loan modification and a new investor contributed $600,000. The new investor was assigned a 45% interest in Rosewood Place, LLC in exchange for its $600,000 capital contribution. The new investor entity is related to the investment general partner. As a result of this transaction, approximately $249,000 per year of federal tax credits, equivalent to approximately $42 per 1,000 BACs, will be allocated to the new investor. It is anticipated that the new investor will put its 45% interest in Rosewood Place, LLC back to the investment limited partner in early 2015. On a cumulative basis, the investment general partner originally forecasted that the tax credits allocated to the original investors in Rosewood Place, LLC would be reduced by approximately $748,000 (equivalent to $125 per 1,000 BACs). However, it is now projected that the amount of tax credit reduction for the original investors will be approximately $997,000 (equivalent to $167 per 1,000 BACs). If the new investor had not contributed to the loan modification and the foreclosure had occurred in 2010, the investment general partner estimates that there would have been recapture and interest penalties relating to credits previously claimed of $613,304, as well as an estimated loss of credits for the tax years 2010-2017 of $3,854,295. This represents recapture of $102 and credit loss totaling $642, respectively, per 1,000 BACs.

 

This property is part of a portfolio that includes several properties that experienced operational difficulties in 2008 and 2009. During those years the operating general partner’s financial position also deteriorated, preventing his ability to recapitalize any of these properties. Although the operating general partner’s financial position did not improve during 2010, 2011, and 2012, operations throughout his portfolio did stabilize. During 2010, the investment general partner actively worked with the operating general partner and lender to restructure the mortgage debt as discussed above. Since the loan amendment for Rosewood Place, LLC closed in January 2011, real estate taxes, insurance escrows and bond payments have been paid currently and remained current as of March 31, 2013. In addition, payments to the contractor under the aforementioned five-year payment plan were also current as of March 31, 2013.

 

Rural Housing Partners of Kewaunee L.P. (Sunset Manor) is a 38-unit property located in Kewaunee, WI. Occupancy has historically been an issue at this property, mainly due to evictions for nonpayment of rent and residents vacating because of job losses. Current marketing includes advertising on Rent.com and Craigslist, advertising in the Local Free Shopper which covers three cities/towns, posting fliers in the local community, and frequent contacts with local housing agencies, as well as For Rent signs located on the property. Occupancy averaged 88% in 2012 and the property operated below breakeven. In 2013, occupancy remained a concern as the property was 84% occupied as of March 31, 2013, and the property operated below breakeven through the first quarter of 2013. All real estate taxes, mortgage and insurance payments are current. On December 31, 2019, the 15-year low income housing tax credit compliance period will expire with respect to Sunset Manor Apartments.

 

21
 

 

Rural Housing Partners of Mauston L.P. (Brookview I & II Apartments) is a 22-unit family property located in Mauston, WI. As of March 31, 2013, occupancy was 82% and the property was operating slightly below breakeven. The struggle with vacancy is a direct reflection of economic conditions in Mauston, where ongoing job losses have led to increased evictions and migration from the area. Management continues to focus marketing efforts on internet advertising. They also perform outreach to the local Housing and Urban Development office, the Wisconsin Housing Authority, and the Juneau County housing agencies. All real estate taxes, mortgage and insurance payments are current. On December 31, 2019, the 15-year low income housing tax credit compliance period will expire with respect to Brookview Apartments.

 

Union Square Housing Partnership, A LA L.P. (Union Square Apartments) is a 32-unit family property in Junction City, Louisiana. Despite averaging 97% occupancy in 2012, the property operated below breakeven due to high operating expenses. The property’s insurance expense increased substantially in 2012. The operating general partner stated that the insurance cost increase was portfolio-wide due to the number of claims filed in 2011. Management is now focused on educating the maintenance staff on preventative measures and decreasing rates by reducing the number of filed claims. Administrative costs grew over prior year amounts due to legal costs associated with an increased number of evictions for non-payment of rent, as well as a general increase in supply costs. The 2012 operating deficit was funded by utilizing operating cash and accruing payables. Although occupancy remained stable throughout the first quarter of 2013, averaging 97%, operations remained below breakeven due to continued high operating expenses. The investment general partner intends to continue to work with the operating general partner to reduce operating expenses. All real estate taxes, insurance, and mortgage payments are current. The low income tax credit compliance period expires on December 31, 2019.

 

22
 

 

Off Balance Sheet Arrangements

 

None.

 

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.

 

The main reason an impairment loss typically occurs is that the annual operating losses, recorded in accordance with the equity method of accounting, of the investment in limited partnership does not reduce the balance as quickly as the annual use of the tax credits. In years prior to the year ended March 31, 2009, management included remaining tax credits as well as residual value in the calculated value of the underlying investments. However, management decided to take a more conservative approach to the investment calculation and determined that the majority of the residual value component of the valuation was zero for the years ended, March 31, 2013 and 2012. However, it is important to note that this change in the accounting estimate to the calculation method of the impairment loss has no effect on the actual value or performance of the overall investment, nor does it have any effect on the remaining credits to be generated.

 

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. 

 

23
 

 

Principal Accounting Policies and Estimates - continued

 

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, advances made to Operating Partnerships, plus the risk of recapture of tax credits previously recognized on the investments, 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.

 

Recent Accounting Changes

 

In May 2011, the Financial Accounting Standards Board ("FASB") issued an update to existing guidance related to fair value measurements on how to measure fair value and what disclosures to provide about fair value measurements. For fair value measurements categorized as level 3, a reporting entity should disclose quantitative information of the unobservable inputs and assumptions, a description of the valuation processes and narrative description of the sensitivity of the fair value to changes in unobservable inputs. This update is effective for interim and annual periods beginning after December 15, 2011. The adoption of this update did not materially affect the Fund's condensed financial statements.

 

24
 

 

 

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

 

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 Boston Capital Associates V LLC, 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 Fund’s 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.

 

25
 

 

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 V LLC, 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, 2013. 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, 2013, 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, 2013 that materially affected, or are reasonably likely to materially affect, the Fund management's internal control over financial reporting.

  

Item 9B.Other Information

 

Not Applicable

 

26
 

 

PART III

 

Item 10.Directors, Executive Officers and Corporate Governance of the Fund

 

(a), (b), (c), (d) and (e)

 

The Fund has no directors or executives 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 64, 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, each of the entities is under the common control of Mr. Manning.

 

Jeffrey H. Goldstein, age 51, 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 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.

 

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Kevin P. Costello, age 66, 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 49, 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 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.

 

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(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.

 

Boston Capital Associates V LLC has adopted a Code of Ethics which applies to the Principal Executive Officer and Principal Financial Officer. 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, Suite 2100, 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 2013 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, less the amount of reporting fees received, has been accrued or paid to Boston Capital Asset Management Limited Partnership. The annual fund management fee charged to operations for the year ended March 31, 2013 was $1,034,407.

 

2.  The Fund has reimbursed an affiliate of the general partner a total of $60,912 for amounts charged to operations during the year ended March 31, 2013. The reimbursement is for items like postage, printing, travel, and overhead allocations.

 

29
 

 

Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Partner Matters

 

(a)Security ownership of certain beneficial owners.

 

As of March 31, 2013, 11,777,706 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 47   6.14%
Series 48   6.89%
Series 49   5.63%

 

(b)Security ownership of management.

 

The general partner has a .25% 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 Prospectus, 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 Fund 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 for the period October 15, 2003 through March 31, 2013.

 

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(b)Review, Approval or Ratification of transactions with related persons.

 

The Fund response to Item 13(a) is incorporated herein by reference.

  

(c)Promoters and certain control persons.

 

Not applicable.

 

(d)Independence.

 

The Fund has no directors.

 

Item 14.Principal Accountant Fees and Services

 

Fees paid to the Fund’s independent auditors for fiscal year 2013 were comprised of the following:

 

   Fee Type  Series 47   Series 48   Series 49 
(1)  Audit Fees  $20,739   $19,119   $24,387 
(2)  Audit Related Fees   3,445    2,650    5,830 
(3)  Tax Fees   5,570    4,770    7,370 
(4)  All Other Fees   -    -    - 
                   
   Total  $29,754   $26,539   $37,587 

 

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

 

   Fee Type  Series 47   Series 48   Series 49 
(1)  Audit Fees  $20,199   $18,624   $23,752 
(2)  Audit Related Fees   3,900    2,860    5,980 
(3)  Tax Fees   5,220    4,440    6,975 
(4)  All Other Fees   380    380    385 
                   
   Total  $29,699   $26,304   $37,092 

 

5)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 Boston Capital Associates V LLC.

 

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PART IV

 

Item 15.Exhibits and Financial Statement Schedules

 

(a)  1  &  2 Financial Statements; Filed herein as Exhibit 13

 

Boston Capital Tax Credit V L.P.; filed herein as Exhibit 13

 

Reports of Independent Registered Public Accounting Firms

Balance Sheets, March 31, 2013 and 2012

Statements of Operations for the years ended March 31, 2013 and 2012

Statements of Changes in Partners' Capital (deficit) for the years ended March 31, 2013 and 2012

Statements of Cash Flows for the years ended March 31, 2013 and 2012

Notes to Financial Statements, March 31, 2013 and 2012

 

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 thereto.

 

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

 

3.1.Certificate of Limited Partnership of Boston Capital Tax Credit Fund V L.P. (Incorporated by reference from Exhibit 3 to the Fund's Registration Statement No. 333-109898 on Form S-11 as filed with the Securities and Exchange Commission on October 22, 2003.)

 

4.1.Agreement of Limited Partnership of Boston Capital Tax Credit Fund V L.P. (Incorporated by reference from Exhibit 4 to the Fund's Registration Statement No. 333-109898 on Form S-11 as filed with the Securities and Exchange Commission on October 22, 2003.)

 

10.1.Beneficial Assignee Certificate. (Incorporated by reference from Exhibit 10A to the Fund's Registration Statement No. 333-109898 on Form S-11 as filed with the Securities and Exchange Commission on October 22, 2003.)

 

Exhibit No. 13 - Financial Statements.

 

a.Financial Statement of Boston Capital Tax Credit Fund V L.P.; Filed herein.

 

32
 

 

Exhibit No. 28 - Additional exhibits.

 

  a. Agreement of Limited Partnership of Hillsboro Fountainhead, LP (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on January 25, 2005).
     
  b. Agreement of Limited Partnership of Umatilla Links, LP (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on January 25, 2005).
     
  c. Agreement of Limited Partnership of Wyndam Emporia, LP (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on January 25, 2005).
     
  d. Agreement of Limited Partnership of Masters Apartment, LP (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on February 2, 2005).
     
  e. Agreement of Limited Partnership of McEver Vineyards, LP (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on February 2, 2005).
     
  f. Agreement of Limited Partnership of Park Plaza Village, LP (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on May 3, 2005).
     
  g. Agreement of Limited Partnership of Coleman Fountainhead, LP (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on April 28, 2005).
     
  h. Agreement of Limited Partnership of New Chester Townhouses, LP (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on March 31, 2006).
     
  i. Agreement of Limited Partnership of Bristol Apartments, LP (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on March 31, 2006).

 

33
 

 

  j. Agreement of Limited Partnership of Linden-Shawnee Partners (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on March 31, 2006).
     
  k. Agreement of Limited Partnership of Linda Villas, Limited (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on March 31, 2006).
     
  l. Agreement of Limited Partnership of Rural Housing Partners of Kewanee (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on March 31, 2006).
     
  m. Agreement of Limited Partnership of Richwood Apartments (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on March 31, 2006).
     
  n. Agreement of Limited Partnership of Perryton Fountainhead, LP (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on March 31, 2006).
     
  o. Agreement of Limited Partnership of Continental Terrace, LP (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on July 2, 2007).
     
  p. Agreement of Limited Partnership of Mayfair Park, LP (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on July 2, 2007).
     
  q. Agreement of Limited Partnership of P.D.C. Sixty, LP (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on July 2, 2007).
     
  r. Agreement of Limited Partnership of Wellington Park, LP(Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on July 2, 2007).
     
  s. Agreement of Limited Partnership of Carrollton Housing II LTD, (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on July 2, 2007).
     
  t. Agreement of Limited Partnership of Countybrook Champaign, LP (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on July 2, 2007).

 

34
 

 

  u. Agreement of Limited Partnership of Marion Apartments, LP (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on July 2, 2007).
     
  v. Agreement of Limited Partnership of Parkland Manor, LP (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on July 2, 2007).
     
  w. Agreement of Limited Partnership of Coleman Fountainhead, LP (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on July 3, 2007).
     
  x. Agreement of Limited Partnership of Cameron Fountainhead, LP (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on July 3, 2007).
     
  y. Agreement of Limited Partnership of Columbia Blackshear, LP(Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on July 3, 2007).
     
  z. Agreement of Limited Partnership of Garden Grace Apartments, LP (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on July 3, 2007).
     
  aa. Agreement of Limited Partnership of Kaufman Fountainhead, LP (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on July 3, 2007).
     
  ab. Agreement of Limited Partnership of Marble Falls Vistas, LP (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on July 3, 2007).
     
  ac. Agreement of Limited Partnership of Maverick Fountainhead, LP (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on July 3, 2007).
     
  ad. Agreement of Limited Partnership of Countybrook Champaign, LP (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on July 5, 2007).
     
  ae. Agreement of Limited Partnership of Dawn Springs Villas, LP(Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on July 5, 2007).

 

35
 

 

  af. Agreement of Limited Partnership of Rural Housing Mauston I & II, LP (Incorporated by reference from Registrant's current  eport on Form 8-K as filed with the Securities and Exchange Commission on July 5, 2007).
     
  ag. Agreement of Limited Partnership of Colusa Avenue, LP (Incorporated by reference from Registrant's current report on Form 8-K as filed with the Securities and Exchange Commission on July 9, 2007).

 

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 V L.P. Annual Report on Form 10-K for the period ended March 31, 2013 formatted in Extensible Business Reporting Language (XBRL): (i) the Balance Sheets, (ii) the Statements of Operations, (iii) the Statements of Changes in Partners' Capital (Deficit), (iv) the Statements of Cash Flows and (v) related notes, furnished herewith

 

36
 

 

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 V L.P.
 
  By: Boston Capital Associates V LLC,
Date:   General Partner
       
June 27, 2013   By: /s/ John P. Manning
      John P. Manning
      Managing Member

 

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 27, 2013 /s/ John P. Manning   Director, President
  John P. Manning   (Principal Executive
      Officer), Boston
      Capital Partners II
      Corp.; Director,
      President (Principal
      Executive Officer)
      BCTC V Assignor Corp.
       
June 27, 2013 /s/ Marc N. Teal   Sr. Vice President,
  Marc N. Teal   Chief Financial
      Officer (Principal
      Financial and
      Accounting Officer),
      Boston Capital
      Partners II Corp.;
      Sr. Vice President,
      Chief Financial
      Officer (Principal
      Financial and
      Accounting Officer)
      BCTC V Assignor Corp.

 

37