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EX-31.B - EXHIBIT 31.B - BOSTON CAPITAL TAX CREDIT FUND III L Pv413060_ex31b.htm
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EX-32.B - EXHIBIT 32.B - BOSTON CAPITAL TAX CREDIT FUND III L Pv413060_ex32b.htm
EX-13 - EXHIBIT 13 - BOSTON CAPITAL TAX CREDIT FUND III L Pv413060_ex13.htm
EX-32.A - EXHIBIT 32.A - BOSTON CAPITAL TAX CREDIT FUND III L Pv413060_ex32a.htm

 

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, 2015 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, 2015

 

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 16
Item 4. Mine Safety Disclosures 16
     
  PART II  
     
Item 5. Market for the Fund’s Limited Partnership Interests, Related Fund Matters and Issuer Purchases of Fund Interests  17
Item 6. Selected Financial Data 18
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 19
Item 7a. Quantitative and Qualitative Disclosure About Market Risk 42
Item 8. Financial Statements and Supplementary Data 42
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 42
Item 9a. Controls and Procedures 43
     
  PART III  
     
Item 10. Directors, Executive Officers and Corporate Governance of the Fund 44
Item 11. Executive Compensation 46
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 47
Item 13. Certain Relationships and Related Transactions, and Director Independence 47
Item 14. Principal Accountant Fees and Services 48
     
  PART IV  
     
Item 15. Exhibits and Financial Statement Schedules 49
     
  Signatures 53

 

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, 2015, 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, 2015 the Fund had invested in 18 Operating Partnerships on behalf of Series 15, 21 Operating Partnerships on behalf of Series 16, 13 Operating Partnerships on behalf of Series 17, 12 Operating Partnerships on behalf of Series 18 and 6 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 70 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, 2015

 

Property

Name

  Location   Units   Mortgage
Balance
As of
12/31/14
    Acq
Date
  Const
Comp
  Qualified
Occupancy
3/31/15
    Cap Con
Paid
Thru
3/31/15
 
                                         
Barton Village Apartments   Arlington,
GA
  18   $ 467,785     10/92   03/93     100 %   $ 101,154  
                                         
Bergen Meadows   Bergen,
NY
  24     899,006      07/92    07/92     100 %     199,420  
                                         
Calexico Senior Apts.   Calexico,
CA
  38     1,772,964      09/92    09/92     100 %     366,220  
                                         
Chestnut Hills Estates   Altoona,
AL
  24     668,175     09/92   09/92     100 %     146,500  
                                         
Columbia Heights Apts.   Camden,
AR
  32     1,166,853     10/92   09/93     100 %     247,599  
                                         
Deerfield Commons   Crewe,
VA
  39     1,130,219      04/92    06/92     100 %     242,430  
                                         
Graham Village Apts.   Graham,
NC
  50     828,734     10/94   06/95     100 %     919,461  
                                         
Greenwood Village   Fort Gaines,
GA
  24     613,012      08/92    05/93     100 %     131,268  
                                         
Hadley’s Lake Apts.   East Machias,
ME
  18     953,482     09/92   01/93     100 %     291,400  
                                         
Lakeside Apts.   Lake Village,
AR
  32     1,128,842      08/94    08/95     100 %     282,004  
                                         
Livingston Plaza   Livingston,
TX
  24     604,290      12/92    11/93     100 %     176,534  
                                         
Marshall Lane Apts.   Marshallville,
GA
  18     506,671     08/92   12/92     100 %     114,200  
                                         
North Trail Apts.   Arkansas
City, KS
  24     741,233      09/94    12/94     100 %     194,118  
                                         
Rio Mimbres II Apts   Deming,
NM
  24     711,484      04/92    04/92     100 %     149,811  

 

9
 

 

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

 

PROPERTY PROFILES AS OF MARCH 31, 2015

Continued

Property
Name
  Location  Units  Mortgage
Balance
As of
12/31/14
   Acq
Date
  Const
Comp
  Qualified
Occupancy
3/31/15
   Cap Con
Paid
Thru
3/31/15
 
                            
Sunset Sq. Apts.  Scottsboro,
AL
  24  $674,540    
09/92
   
08/92
   100%  $143,900 
                            
University Meadows  Detroit,
MI
  53   2,339,960   06/92  12/92   100%   1,676,750 
                            
Village Woods  Healdton,
OK
  24   630,546    
 
08/94
   
 
12/94
   100%   173,616 
                            
Whitewater Village Apts.  Ideal,
GA
  18   481,492   08/92  11/92   100%   108,000 

 

10
 

 

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

 

PROPERTY PROFILES AS OF MARCH 31, 2015

 

Property
Name
  Location  Units  Mortgage
Balance
As of
12/31/14
   Acq
Date
  Const
Comp
  Qualified
Occupancy
3/31/15
   Cap Con
Paid
Thru
3/31/15
 
                         
Bernice Villa Apts.  Bernice,
LA
  32  $729,325    
05/93
   
10/93
   100%  $200,476 
                            
Canterfield Manor  Denmark,
SC
  20   702,980    
11/92
   
01/93
   100%   175,959 
                            
Carriage Park Village  Westville, OK  24   597,413   02/93  07/93   100%   144,714 
                            
Cumberland Woods Apts.  Middlesboro, KY  40   1,330,333    
12/93
   
10/94
   100%   412,700 
                            
Fairmeadow Apts.  Latta,
SC
  24   803,414    
01/93
   
07/93
   100%   195,400 
                            
Falcon Ridge Apts.  Beattyville, KY  32   940,660    
04/94
   
01/95
   100%   247,200 
                            
Greenfield Properties  Greenfield, MO  20   477,119    
01/93
   
05/93
   100%   126,046 
                            
Holly Tree Manor  Holly Hill, SC  24   810,664    
11/92
   
02/93
   100%   201,490 
                            
Laurel Ridge Apts.  Idabel,
OK
  52   1,238,227    
04/93
   
12/93
   100%   282,606 
                            
Mendota Village Apts  Mendota,
CA
  44   1,793,263   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   852,477    
 
02/93
   
 
10/93
   100%   221,626 
                            
Parkwoods Apts.  Anson,
ME
  24   1,173,072    
12/92
   
09/93
   100%   320,206 
                            
Ransom St. Apartments  Blowing Rock,
NC
  13   474,500   12/93  11/94   100%   100,249 

 

11
 

 

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

 

PROPERTY PROFILES AS OF MARCH 31, 2015

 

Continued

Property
Name
  Location  Units  Mortgage
Balance
As of
12/31/14
   Acq
Date
  Const
Comp
  Qualified
Occupancy
3/31/15
   Cap Con
Paid
Thru
3/31/15
 
                         
St. Croix Commons Apts.  Woodville,
WI
  40  $1,225,784   10/94  12/94   100%  $534,847 
                            
St. Joseph Square Apts.  St. Joseph, LA  32   858,063    
05/93
   
09/93
   100%   206,086 
                            
Stony Ground Villas  St. Croix,
VI
  22   1,287,322    
12/92
   
06/93
   100%   358,414 
                            
The Woodlands  Tupper Lake, NY  18   866,263    
09/94
   
02/95
   100%   214,045 
                            
Tuolumne City Senior Apts.  Tuolumne,
CA
  30   1,457,204   12/92  08/93   100%   376,535 
                            
Vista
Linda Apartments
  Sabana Grande,
PR
  50   2,333,342   01/93  12/93   100%   445,530 
                            
West End Manor  Union,
SC
  28   898,954    
05/93
   
05/93
   100%   231,741 

 

12
 

 

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

 

PROPERTY PROFILES AS OF MARCH 31, 2015

 

Property
Name
  Location  Units  Mortgage
Balance
As of
12/31/14
   Acq
Date
  Const
Comp
  Qualified
Occupancy
3/31/15
   Cap Con
Paid
Thru
3/31/15
 
                         
Cairo
Senior
Housing
   
Cairo,
NY
  24  $982,523   05/93  04/93   100%  $201,711 
                            
Fuera Bush Senior
Housing
  Fuera Bush, NY  24   1,000,362   07/93  05/93   100%   189,364 
                            
Glenridge Apartments  Bullhead City,
AZ
  52   1,884,340   06/94  06/94   100%   520,500 
                            
Green Acres Estates  West Bath, ME  48   827,349   01/95  11/94   100%   135,849 
                            
Henson
Creek
Manor
  Fort Washington, MD  105   3,495,348   05/93  04/94   100%   2,980,421 
                            
Oakwood Manor of Bennetts-ville  Bennetts-ville,
SC
  24   798,901   09/93  12/93   100%   89,200 
                            
Pinehurst Senior Apts.  Farwell,
MI
  24   724,228   02/94  02/94   100%   183,176 
                            
Quail
Village
  Reedsville, GA  31   790,249   09/93  02/94   100%   171,855 
                            
Royale
Townhomes
  Glen Muskegon,
MI
  79   1,513,181   12/93  12/94   100%   909,231 
                            
Waynesburg House Apts.  Waynesburg, PA  34   1,370,229   07/94  12/95   100%   501,140 
                            
West Front Residence  Skowhegan, ME  30   1,284,995   09/94  08/94   100%   487,390 
                            
West Oaks Apartments  Raleigh,
NC
  50   1,378,296   06/93  07/93   100%   811,994 
                            
White Castle Manor  White Castle,
LA
  24   714,621   06/94  05/94   100%   198,684 

 

13
 

 

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

 

PROPERTY PROFILES AS OF MARCH 31, 2015

 

Property
Name
  Location  Units  Mortgage
Balance
As of
12/31/14
   Acq
Date
  Const
Comp
  Qualified
Occupancy
3/31/15
   Cap Con
Paid
Thru
3/31/15
 
                         
Briarwood Apartments  Humbolt,
IA
  20  $661,138   08/94  04/95   100%  $162,536 
                            
Chelsea Sq. Apartments  Chelsea,
MA
  6   301,393   08/94  12/94   100%   451,929 
                            
Kristine Apartments  Bakersfield,
CA
  60   720,694   10/94  10/94   100%   1,636,293 
                            
Leesville Elderly Apts.  Leesville,
LA
  54   2,063,095   06/94  06/94   100%   776,500 
                            
Lockport Seniors Apts.  Lockport,
LA
  40   1,111,086   07/94  09/94   100%   595,439 
                            
Marengo Park Apts.  Marengo,
IA
  24   680,671   10/93  03/94   100%   133,552 
                            
Meadowbrook Apartments  Oskaloosa,
IA
  16   443,382   11/93  09/94   100%   96,908 
                            
Natchitoches Senior Apartments  Natchitoches, LA  40   1,567,465   06/94  12/94   100%   644,175 
                            
Newton Plaza Apts.  Newton,
IA
  24   742,646   11/93  09/94   100%   166,441 
                            
Oakhaven Apartments  Ripley,
MS
  24   434,992   01/94  07/94   100%   116,860 
                            
Peach Tree Apartments  Felton,
DE
  32   1,350,345   01/94  07/93   100%   206,100 
                            
Vivian Seniors Apts.  Vivian,
LA
  40   1,629,593   07/94  09/94   100%   625,691 

 

14
 

 

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

 

PROPERTY PROFILES AS OF MARCH 31, 2015

 

Property
Name
  Location  Units  Mortgage
Balance
As of
12/31/14
   Acq
Date
  Const
Comp
  Qualified
Occupancy
3/31/15
   Cap Con
Paid
Thru
3/31/15
 
                         
Carrollton Villa  Carrollton,
MO
  48  $1,322,464   06/94  03/95  100%  $1,121,758 
                            
Munford Village  Munford,
AL
  24   730,074    
10/93
   
04/94
   100%   165,800 
                            
Poplar Ridge Apts.  Madison,
VA
  16   597,187    
12/93
   
10/94
   100%   124,704 
                            
Sherwood Knoll  Rainsville,
AL
  24   712,837    
10/93
   
04/94
   100%   162,500 
                            
Summerset Apartments  Swainsboro,
GA
  30   866,808    
01/94
   
11/95
   100%   223,029 
                            
Village North I  Independence, KS  24   771,222    
06/94
   
12/94
   100%   190,471 

 

15
 

 

Item 3.Legal Proceedings

 

None.

 

Item 4.Mine Safety Disclosures

 

Not Applicable.

 

16
 

 

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, 2015 the Fund has 12,694 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 2,357 investors holding 3,870,500 BACs, Series 16 consists of 3,275 investors holding 5,429,402 BACs, Series 17 consists of 2,780 investors holding 5,000,000 BACs, Series 18 consists of 2,039 investors holding 3,616,200 BACs, and Series 19 consists of 2,243 investors holding 4,080,000 BACs at March 31, 2015.

 

(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, 2015.

 

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.

 

17
 

 

During the year ended March 31, 2013, the Fund did not make a return of equity distribution to the BAC holders.

 

During the year ended March 31, 2014, the Fund made a return of equity distribution to the Series 17 and 19 BAC holders in the amount of $382,881 and $4,080,000, 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, 2015, the Fund did not make a return of equity distribution to the BAC holders.

 

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.

 

Item 6.Selected Financial Data

 

Not applicable.

 

18
 

 

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, 2015 were $701,686, and total fund management fees accrued as of March 31, 2015 were $16,146,101. During the year ended March 31, 2015 the Fund paid fees of $2,709,730 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.

 

19
 

 

During the fiscal year ended March 31, 2015, the Fund did not use any of Series 15 net offering proceeds to pay outstanding installments of its capital contributions. As of March 31, 2015, 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, 2015, 50 of the properties have been disposed of and 18 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, 2015, the Fund did not use any of Series 16 net offering proceeds to pay outstanding installments of its capital contributions. As of March 31, 2015, 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, 2015, 43 of the properties have been disposed of and 21 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 its partnership agreement.

 

(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, 2015, the Fund did not use any of Series 17 net offering proceeds to pay outstanding installments of its capital contributions. As of March 31, 2015, 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, 2015, 36 of the properties have been disposed of and 13 remain. The Fund had completed payments of all installments of its capital contributions to 48 of the 49 Operating Partnerships. Series 17 has outstanding contributions payable to 1 Operating Partnership in the amount of $7,893 as of March 31, 2015. The remaining contributions will be released when the Operating Partnership has achieved the conditions set forth in its partnership agreement.

 

(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, 2015, the Fund did not use any of Series 18 net offering proceeds to pay outstanding installments of its capital contributions. As of March 31, 2015, 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, 2015, 22 of the properties have been disposed of and 12 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.

 

20
 

 

(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, 2015, the Fund did not use any of Series 19 net offering proceeds to pay outstanding installments of its capital contributions. As of March 31, 2015, 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, 2015, 20 of the properties have been disposed of and 6 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, 2015 and 2014, was $360,887 and $566,582, 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, 2015 and 2014, the average Qualified Occupancy for the series was 100%. The series had a total of 18 properties at March 31, 2015, all of which were at 100% Qualified Occupancy.

 

For the tax years ended December 31, 2014 and 2013, the series, in total, generated $1,867,090 and $(258,693), 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, 2015 and 2014, 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, 2015 and 2014, the net income (loss) for series 15 was $590,961 and $(117,270), respectively. The major components of these amounts are the Fund’s share of income from Operating Partnerships and the partnership management fee.

 

21
 

 

In December 2013, the investment general partner transferred its interest in Ridgeview Apartments of Brainerd, LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $804,186 and cash proceeds to the investment partnership of $24,326. Of the total proceeds received, $1,080 represents reporting fees due to an affiliate of the investment partnership and the balance represents proceeds from the transfer. Of the remaining proceeds, $2,500 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $20,746 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 transfer of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $20,746 as of December 31, 2013.

 

In February 2014, the investment general partner of East Park Apartments I, LP approved an agreement to sell the property to a third party buyer and the transaction closed in June 2014. The sales price for the property is $850,000, which includes the outstanding mortgage balance of approximately $685,000 and cash proceeds to the investment partnership of $335,000. Of the proceeds received by the investment partnership, $21,300 represents reporting fees due to an affiliate of the investment partnership and $5,000 will be paid to BCAMLP for expenses related to the sale, which include third party legal costs. The remaining proceeds from the sale of approximately $308,700 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 $308,700 as of June 30, 2014. In November 2014, additional proceeds of $39,167 were received and returned to the cash reserves held by Series 15.

 

In June 2014, the investment general partner transferred its interest in April Gardens Apartments III to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,350,390 and cash proceeds to the investment partnership of $40,000. Of the total proceeds received, $3,000 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $37,000 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 transfer of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $37,000 as of June 30, 2014.

 

22
 

 

In June 2014, the investment general partner transferred its interest in Villa Del Mar LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,354,790 and cash proceeds to the investment partnership of $40,000. Of the total proceeds received, $3,000 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $37,000 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 transfer of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $37,000 as of June 30, 2014.

 

In December 2014, the investment general partner sold its interest in Laurelwood Apartments of Winnsboro, Phase II to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $995,901 and cash proceeds to the investment partnership of $128,000. Of the total proceeds received, $5,000 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $123,000 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 $123,000 as of December 31, 2014.

 

In December 2014, the investment general partner transferred its interest in Madison Partners Limited Partnership to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,109,853 and cash proceeds to the investment partnership of $27,000. Of the total proceeds received, $3,000 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $24,000 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 transfer of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $24,000 as of December 31, 2014.

 

23
 

 

In December 2014, the investment general partner sold its interest in Manning Lane Limited Partnership to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,361,485 and cash proceeds to the investment partnership of $136,475. Of the total proceeds received, $5,000 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $131,475 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 $131,475 as of December 31, 2014.

 

Livingston Plaza, Limited (Livingston Plaza) is a 24-unit, family property located in Livingston, Texas. Due to low occupancy and a lack of qualified applicants the property operates below breakeven. The operating general partner’s operating deficit guarantee has expired. The operating general partner has informed the investment general partner that it intends on offering to transfer title to this apartment property to the lender, U.S.D.A. Rural Development, via a deed in lieu of foreclosure conveyance sometime in January 2016. The investment general partner does not intend on objecting or contesting the deed in lieu of foreclosure transfer since operating results in each of the past several years indicate that the property value is less than the first mortgage loan balance. The 15-year low income housing tax credit compliance period with respect to Livingston Plaza expired on December 31, 2008.

 

In February 2015, the operating general partner of Graham Housing Limited Partnership entered into an agreement to sell the property to a non-affiliated entity and the transaction closed on April 28, 2015. The sales price of the property was $1,425,000, which included the outstanding mortgage balance of approximately $817,589 and cash proceeds to the investment partnership of $402,258. Of the total proceeds received by the investment partnership, $73,489 represents reporting fees due to an affiliate of the investment partnership and the balance represents proceeds from the sale. Of the remaining proceeds, $3,000 will be paid to BCAMLP for expenses related to the sale, which include third party legal costs. The remaining proceeds from the sale of $325,769 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.

 

24
 

 

The investment general partner will continue to monitor the following Operating Partnerships because of operational or other issues. However, these Operating Partnerships have all exited their LIHTC compliance period and there is therefore no risk to past credit delivery.

 

Beckwood Manor Eight Limited Partnership

Sunset Square Limited Partnership

University Meadows L.D.H.A. Limited Partnership

 

(Series 16). As of March 31, 2015 and 2014, the average Qualified Occupancy for the series was 100%. The series had a total of 21 properties at March 31, 2015, all of which were at 100% Qualified Occupancy.

 

For the tax years ended December 31, 2014 and 2013, the series, in total, generated $2,127,167 and $(1,011,704), 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, 2015 and 2014, 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, 2015, and 2014, the net income (loss) for series 16 was $3,285 and $508,571, respectively. The major components of these amounts are the Fund’s share of income from Operating Partnerships and the partnership management fee.

 

In December 2014, the investment general partner transferred its interest in Butler Rental Housing to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $682,369 and cash proceeds to the investment partnership of $62,500. Of the total proceeds received, $3,000 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $59,500 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 transfer of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $59,500 as of December 31, 2014.

 

25
 

 

In December 2014, the investment general partner transferred its interest in Blairsville Rental Housing to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $704,036 and cash proceeds to the investment partnership of $5,000. Of the total proceeds received, $3,000 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $2,000 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 (the” 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 10 years from the initial transfer date, there would be a residual payment distributable to the investment partnership in accordance with the terms of the RRN. 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 transfer of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $2,000 as of December 31, 2014.

 

In June 2013, the operating general partner of Meadows of Southgate L.D.H.A. LP entered into an agreement to sell the property to a non-affiliated third party buyer and the transaction closed on June 28, 2013. The sales price of the property was $2,739,000, which included the outstanding mortgage balance of approximately $1,744,202 and cash proceeds to the investment partnership of $727,000. Of the total proceeds received by the investment partnership, $7,500 was paid to BCAMLP for expenses related to the sale, which include third party legal costs. The remaining proceeds from the sale of $719,500 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 $719,500 as of June 30, 2013.

 

In July 2013, the investment general partner transferred its interest in Talbot Village II LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $635,180 and cash proceeds to the investment partnership of $57,337. Of the total proceeds received, $2,120 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 include third party legal costs. The remaining proceeds of approximately $50,217 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 transfer of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $50,217 as of September 30, 2013.

 

26
 

 

In September 2013, the investment general partner transferred its interest in Isola Square LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $903,802 and cash proceeds to the investment partnership of $27,114. Of the total proceeds received, $800 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 include third party legal costs. The remaining proceeds of approximately $21,314 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 transfer of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $21,314 as of September 30, 2013.

 

In August 2014, the investment general partner transferred its interest in Harmony House Associates to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,308,874 and cash proceeds to the investment partnership of $10,000. Of the total proceeds received, $3,000 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $7,000 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. 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 transfer of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $7,000 as of September 30, 2014.

 

In December 2014, the investment general partner transferred its interest in Blairsville Rental Housing II to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $694,199 and cash proceeds to the investment partnership of $62,500. Of the total proceeds received, $3,000 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $59,500 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 transfer of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $59,500 as of December 31, 2014.

 

27
 

 

In December 2014, the investment general partner sold its interest in Logan Lane Limited Partnership to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,202,009 and cash proceeds to the investment partnership of $87,001. Of the total proceeds received, $5,000 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $82,001 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 $82,001 as of December 31, 2014.

 

In December 2014, the investment general partner transferred its interest in Simmesport Square Partnership to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $786,863 and cash proceeds to the investment partnership of $25,170. Of the total proceeds received, $2,500 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $22,670 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 transfer of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $22,670 as of December 31, 2014.

 

In December 2014, the investment general partner transferred its interest in Lawtell Manor Partnership to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $779,880 and cash proceeds to the investment partnership of $24,828. Of the total proceeds received, $2,500 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $22,328 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 transfer of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $22,328 as of December 31, 2014.

 

28
 

 

The investment general partner will continue to monitor the following Operating Partnerships because of operational or other issues. However, these Operating Partnerships have all exited their LIHTC compliance period and there is therefore no risk to past credit delivery.

 

Anson Limited Partnership

Falcon Ridge, Limited Partnership

Greenfield Properties, Limited Partnership

 

(Series 17). As of March 31, 2015 and 2014, the average Qualified Occupancy for the Series was 100%. The series had a total of 13 properties at March 31, 2015, all of which were at 100% Qualified Occupancy.

 

For the tax years ended December 31, 2014 and 2013, the series, in total, generated $(3,293,863) and $5,071,394, 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, 2015 and 2014, 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, 2015 and 2014, the net income (loss) for series 17 was $930,695 and $5,558,239, respectively. The major components of these amounts are the Fund's share of income from Operating Partnerships and the partnership management fee.

 

In December 2014, the investment general partner transferred its interest in Mt. Vernon Associates LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,946,452 and cash proceeds to the investment partnership of $950,000. Of the total proceeds received, $12,160 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 include third party legal costs. The remaining proceeds of approximately $932,840 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 transfer of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $932,840 as of December 31, 2014.

 

29
 

 

In July 2013, the investment general partner transferred its interest in Briarwood Village LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,064,784 and cash proceeds to the investment partnership of $118,109. Of the total proceeds received, $5,000 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $113,109 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 transfer of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $113,109 as of September 30, 2013.

 

In July 2013, the investment general partner transferred its interest in Deerwood Village LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $598,232 and cash proceeds to the investment partnership of $60,267. Of the total proceeds received, $861 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 include third party legal costs. The remaining proceeds of approximately $54,406 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 transfer of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $54,406 as of September 30, 2013.

 

In July 2013, the investment general partner transferred its interest in Doyle Village LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,098,025 and cash proceeds to the investment partnership of $131,328. Of the total proceeds received, $5,000 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $126,328 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 transfer of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $126,328 as of September 30, 2013.

 

30
 

 

In July 2013, the investment general partner transferred its interest in Houston Village L.P. to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $630,245 and cash proceeds to the investment partnership of $72,780. Of the total proceeds received, $5,000 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $67,780 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 transfer of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $67,780 as of September 30, 2013.

 

In September 2013 the investment general partner transferred its interest in Greenwood Place LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,003,200 and cash proceeds to the investment partnership of $30,096. Of the total proceeds received, $900 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 $24,196 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 transfer of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $24,196 as of September 30, 2013.

 

31
 

 

In September 2013, the investment general partner transferred its interest in Jonestown Manor LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $810,589 and cash proceeds to the investment partnership of $24,318. Of the total proceeds received, $750 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 include third party legal costs. The remaining proceeds of approximately $18,568 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 transfer of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $18,568 as of September 30, 2013.

 

In June 2013, the operating general partner of Largo Center Apartments LP entered into an agreement to sell the property to a third party buyer and the transaction closed on September 30, 2013. The sales price of the property was $11,600,000, which included the outstanding mortgage balance of approximately $3,980,341 and cash proceeds to the investment partnership of $5,200,000. Of the total proceeds received by the investment partnership, $16,667 represents reporting fees due to an affiliate of the investment partnership and the balance represents proceeds from the sale. Of the remaining proceeds, $7,500 was paid to BCAMLP for expenses related to the sale, which include third party legal costs. The remaining proceeds from the sale of $5,175,833 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 $5,175,833 as of September 30, 2013. In addition, equity outstanding for the Operating Partnership in the amount of $6,086 was recorded as gain on the sale of the Operating Partnership as of September 30, 2013. In October 2013, additional proceeds of $50,000 were received and returned to the cash reserves held by Series 17. In February 2014, additional proceeds of $65,300 were received and returned to the cash reserves held by Series 17.

 

In December 2013, the investment general partner transferred 99% of its interest in Quail Village LP to a non-affiliated entity for its assumption of the outstanding mortgage balance of approximately $799,778 and cash proceeds to the investment partnership of $20,000. Of the total proceeds received, $8,221 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 will be paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $6,779 were returned to cash reserves held by Series 17. The remaining 1% investment limited partner interest in the Operating Partnership is scheduled to be transferred in September 2015. 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 99% transfer of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $6,779 as of December 31, 2013.

 

32
 

 

In January 2014, the investment general partner transferred its interest in Annadale Housing Partners to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $13,785,001 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 transfer, which include third party legal costs. There were no remaining proceeds returned to cash reserves held by Series 17. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership’s 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 transfer of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded as of March 31, 2014.

 

In October 2014, the investment general partner transferred its interest in Bladenboro Housing Associate, Phase II to a non-affiliated entity for its assumption of the outstanding mortgage balance of approximately $920,489 and cash proceeds to the investment partnership of $122,835. Of the total proceeds received, $5,000 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $117,835 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 transfer of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $117,835 as of December 31, 2014. In addition, equity outstanding for the Operating Partnership in the amount of $8,819 was recorded as gain on the sale of the Operating Partnership as of December 31, 2014.

 

In December 2014, the investment general partner transferred its interest in Opelousas Point Partnership to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,256,829 and cash proceeds to the investment partnership of $38,966. Of the total proceeds received, $2,500 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $36,466 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 transfer of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $36,466 as of December 31, 2014.

 

33
 

 

In December 2014, the investment general partner sold its interest in Briarwood Apartments LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $820,374 and cash proceeds to the investment partnership of $48,000. Of the total proceeds received $5,000 was paid to BCAMLP for expenses related to the transfer, which included third party legal costs. The remaining proceeds of approximately $43,000 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. 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 $43,000 as of December 31, 2014.

 

In April 2015, the operating general partner of Henson Creek Manor Associates Limited Partnership entered into an agreement to sell the property to a non-affiliated entity and the transaction closed on June 16, 2015. The sales price of the property was $12,941,737, which included the outstanding mortgage balance of approximately $4,293,415 and cash proceeds to the investment partnership of $4,000,000. Of the total proceeds received by the investment partnership, $17,000 will be paid to BCAMLP for expenses related to the sale, which include third party legal costs. The remaining proceeds from the sale of $3,983,000 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.

 

The investment general partner will continue to monitor the following Operating Partnerships because of operational or other issues. However, these Operating Partnerships have all exited their LIHTC compliance period and there is therefore no risk to past credit delivery.

 

Green Acres Limited Partnership

Skowhegan Housing Limited Partnership

 

(Series 18). As of March 31, 2015 and 2014, the average Qualified Occupancy for the series was 100%. The series had a total of 12 properties at March 31, 2015, all of which were at 100% Qualified Occupancy.

 

For the tax years ended December 31, 2014 and 2013, the series, in total, generated $1,942,569 and $493,920, 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.

 

34
 

 

As of March 31, 2015 and 2014, 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, 2015 and 2014, the net income (loss) for series 18 was $489,636 and $(21,394), respectively. The major components of these amounts are the Fund's share of reporting fees from Operating Partnerships and the partnership management fee.

 

Harris Housing Limited Partnership (Harris Music Lofts) is a 38-unit property located in West Palm Beach, Florida.  The property’s first mortgage maturity became due February 1, 2014, and a soft second and third mortgage that matured May 31, 2014.  The operating general partner had numerous meetings with the mortgage holder to request that they accept the short sale, but this proposal was rejected. The lender also had rejected any such extensions or modifications on their debt and as a result, the operating general partner has been unable to refinance.  The property last reported second quarter results which showed above breakeven operations with ending occupancy of 100% at June 30, 2014.  On August 26, 2014, the operating general partner executed a Deed in Lieu of Foreclosure.  The operating general partner stated that they will wait until November of 2014 until all invoices have been received and processed before submitting the Partnership’s final tax return.  The low income tax credit compliance period expired on December 31, 2010. 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 foreclosure of the Operating Partnership has been recorded as of September 30, 2014.

 

In November 2012, the operating general partner of Bear Creek of Naples entered into an agreement to sell the property to a non-affiliated third party buyer and the transaction closed on December 12, 2012. The sales price of the property was $6,960,000, which included the outstanding mortgage balance of approximately $4,608,790 and cash proceeds to the investment partnership of $833,501. Of the total proceeds received by the investment partnership, $15,000 was paid to BCAMLP for expenses related to the sale, which include third party legal costs. The remaining proceeds from the sale of $818,501 were returned to cash reserves held by Series 18. 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 $818,501 as of December 31, 2012. The gain on the sale includes a receivable in the amount of $70,000, which was recorded for Series 18 as of December 31, 2012. In February 2013, additional sale proceeds of $20,000 were received and returned to the cash reserves held by Series 18. In May 2013, additional sale proceeds of $13,000 were received and returned to the cash reserves held by Series 18.

 

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In August 2013, the investment general partner of Series 18 and Series 19 transferred their interests in Clarke School LP, to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $2,716,511 and cash proceeds to the investment partnerships of $14,150 and $5,850, for Series 18 and Series 19, respectively. Of the total proceeds received, $9,150 and $5,850, for Series 18 and 19, respectively, represents reporting fees due to an affiliate of the investment partnerships 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. No proceeds were returned to cash reserves held by Series 18 and Series 19, respectively. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership’s 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 transfer of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded as of September 30, 2013. In addition, the investment general partner on behalf of the investment partnership entered into a residual receipt promissory note (the RRN) with the Operating Partnership for receipt of a residual payment. Under the terms of the RRN, if there were a capital transaction involving the property owned by the Operating Partnership at any time within five years from the initial transfer date, there would be residual payment of 50% of any net distributable proceeds due to the investment partnership in effect at the date the investment limited partners transferred their respective interests.

 

In December 2013, the investment general partner transferred its interest in Rio Grande Apartments, LTD. to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,767,137 and cash proceeds to the investment partnership of $63,305. Of the total proceeds received, $45,787 represents reporting fees due to an affiliate of the investment partnership and the balance represents proceeds from the transfer. Of the remaining proceeds, $2,500 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $15,018 were returned to cash reserves held by Series 18. 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 transfer of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $15,018 as of December 31, 2013. In addition, the investment general partner on behalf of the investment partnership entered into a residual receipt promissory note (the 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 residual payment distributable to the investment partnership in accordance with the Operating Partnership Agreement in effect at the date the investment limited partner transferred its interest.

 

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In December 2014, the investment general partner transferred its interest in Vista Loma Apartments to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,478,846 and cash proceeds to the investment partnership of $72,201. Of the total proceeds received, $2,500 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $69,701 were returned to cash reserves held by Series 18. 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 transfer of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $69,701 as of December 31, 2014.

 

In December 2014, the investment general partner transferred its interest in Ponderosa Meadows LP to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $1,362,532 and cash proceeds to the investment partnership of $70,440. Of the total proceeds received, $2,500 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $67,940 were returned to cash reserves held by Series 18. 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 transfer of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $67,940 as of December 31, 2014.

 

In December 2014 the investment general partner transferred its interest in Jackson Housing, Limited Partnership to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $799,229 and cash proceeds to the investment partnership of $72,500. Of the total proceeds received, $3,000 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $69,500 were returned to cash reserves held by Series 18. 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 transfer of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $69,500 as of December 31, 2014.

 

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In December 2014, the investment general partner transferred its interest in Ellijay Rental Housing to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $784,599 and cash proceeds to the investment partnership of $62,500. Of the total proceeds received, $3,000 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $59,500 were returned to cash reserves held by Series 18. 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 transfer of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $59,500 as of December 31, 2014.

 

In March 2015, the investment general partner sold its interest in Lakeview Meadows II LDHA LP to a non-affiliated entity for its assumption of the outstanding mortgage balance of approximately $1,437,436 and cash proceeds to the investment partnership of $360,289. Of the total proceeds received by the investment partnership, $50,000 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 include third party legal costs. The remaining proceeds of approximately $305,289 were returned to cash reserves held by Series 18. 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 partnership’s investment in the Operating Partnership in accordance with the equity method of accounting, had previously reduced the investment in the Operating Partnership to zero. The sale proceeds were received in April 2015; so a receivable in the amount of $355,289 was recorded as of March 31, 2015. Accordingly, a gain on the sale of the Operating Partnership of the proceeds from the sale, net of the overhead and expenses, was recorded in the amount of $305,289 as of March 31, 2015

 

The investment general partner will continue to monitor the following Operating Partnerships because of operational or other issues. However, these Operating Partnerships have all exited their LIHTC compliance period and there is therefore no risk to past credit delivery.

 

Natchitoches Elderly Apartments, A Louisiana Partnership

Ripley Housing, L.P.

 

(Series 19). As of March 31, 2015 and 2014, the average Qualified Occupancy for the series was 100%. The series had a total of 6 properties at March 31, 2015, all of which were at 100% Qualified Occupancy.

 

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For the tax year ended December 31, 2014 and 2013, the series, in total, generated $452,501 and $(351,106), 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, 2015 and 2014, 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, 2015 and 2014, the net income (loss) for series 19 was $581,498 and $(112,942), respectively. The major components of these amounts are the Fund's share of income from Operating Partnerships and partnership management fee.

 

In July 2014, the investment general partner entered into an agreement to sell Northpointe, Limited Partnership to a non-affiliated entity and the transaction closed on October 1, 2014. The sales price of the property was $6,050,000, which included the outstanding mortgage balance of approximately $3,396,000 and cash proceeds to the investment partnership of $650,000. Of the total proceeds received by the investment partnership, $167,500 represents reporting fees due to an affiliate of the investment partnership and the balance represents proceeds from the sale. Of the remaining proceeds, $2,500 was paid to BCAMLP for expenses related to the sale, which include third party legal costs. The remaining proceeds from the sale of $480,000 will be 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 $480,000 as of December 31, 2014.

 

In August 2013, the investment general partner of Series 18 and Series 19 transferred their interests in Clarke School LP, to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $2,716,511 and cash proceeds to the investment partnerships of $14,150 and $5,850, for Series 18 and Series 19, respectively. Of the total proceeds received, $9,150 and $5,850, for Series 18 and 19, respectively, represents reporting fees due to an affiliate of the investment partnerships 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. No proceeds were returned to cash reserves held by Series 18 and Series 19, respectively. Annual losses generated by the Operating Partnership, which were applied against the investment limited partnership’s 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 transfer of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded as of September 30, 2013. In addition, the investment general partner on behalf of the investment partnership entered into a residual receipt promissory note (the RRN) with the Operating Partnership for receipt of a residual payment. Under the terms of the RRN, if there were a capital transaction involving the property owned by the Operating Partnership at any time within five years from the initial transfer date, there would be residual payment of 50% of any net distributable proceeds due to the investment partnership in effect at the date the investment limited partners transferred their respective interests.

 

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In December 2014 the investment general partner transferred its interest in Mansura Villa II Partnership to an entity affiliated with the operating general partner for its assumption of the outstanding mortgage balance of approximately $881,071 and cash proceeds to the investment partnership of $27,222. Of the total proceeds received, $2,500 was paid to BCAMLP for expenses related to the transfer, which include third party legal costs. The remaining proceeds of approximately $24,722 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 transfer of the Operating Partnership, net of the overhead and expense reimbursement, has been recorded in the amount of $24,722 as of December 31, 2014.

 

The investment general partner will continue to monitor the following Operating Partnerships because of operational or other issues. However, these Operating Partnerships have all exited their LIHTC compliance period and there is therefore no risk to past credit delivery.

 

Carrollton Villa, L.P.

Munford Village, Ltd.

 

Contractual Obligations

 

Not Applicable

 

Off Balance Sheet Arrangements

 

None

 

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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.

 

41
 

 

Recent Accounting Pronouncement

 

In February, 2015, the FASB issued ASU No. 2015-02, “Consolidation (Topic 810): Amendments to the Consolidation Analysis”. This will improve certain areas of consolidation guidance for reporting organizations that are required to evaluate whether to consolidate certain legal entities such as limited partnerships, limited liability corporations, and securitization structures. ASU 2015-02 simplifies and improves GAAP by: eliminating the presumption that a general partner should consolidate a limited partnership, eliminating the indefinite deferral of FASB Statement No. 167, thereby reducing the number of Variable Interest Entity (VIE) consolidation models from four to two (including the limited partnership consolidation model), and clarifying when fees paid to a decision maker should be a factor to include in the consolidation of VIEs. ASU 2015-02 will be effective for periods beginning after December 15, 2015. The Partnership is currently evaluating the potential impact of the adoption of this guidance on its 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 and 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, 2015. 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, 2015, 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, 2015 that materially affected, or are reasonably likely to materially affect, the Fund management's internal control over financial reporting.

 

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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 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 66, 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 53, 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.

 

44
 

 

Kevin P. Costello, age 68, 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 51, 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.

 

45
 

 

(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 2015 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, 2015 was $360,887.

 

2. The Fund has reimbursed an affiliate of the general partner a total of $65,867 for amounts charged to operations during the year ended March 31, 2015. The reimbursement includes postage, printing, travel, and overhead allocations.

 

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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, 2015, 21,996,102 BACs had been issued. The following Series are known to have one investor with holdings in excess of 5% of the total outstanding BACs in the series.

 

1.Everest Housing

199 South Los Robles Ave., Suite 200

Pasadena, CA 91101

 

Series  % of BACs held 
Series 15   8.27%
Series 16   10.26%
Series 18   9.33%
Series 19   6.98%

 

2.Warren Heller

515 W Buckeye Rd., Suite 104

Phoenix, AZ 85003

 

Series  % of BACs held 
Series 17   11.55%

 

(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, 2015.

 

47
 

 

(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.

 

Item 14.Principal Accountant Fees and Services

 

Fees paid to the Fund’s independent auditors for fiscal year 2015 were comprised of the following:

 

Fee Type  Ser. 15   Ser. 16   Ser. 17   Ser. 18   Ser. 19 
Audit Fees  $19,701   $23,251   $24,301   $18,276   $13,301 
                          
Audit Related Fees   -    -    -    -    - 
                          
Tax Fees   7,960    9,220    7,960    7,120    4,600 
                          
All Other Fees   1,620    2,217    1,922    1,387    1,568 
                          
Total  $29,281   $34,688   $34,183   $26,783   $19,469 

 

Fees paid to the Fund’s independent auditors for fiscal year 2014 were comprised of the following:

 

Fee Type  Ser. 15   Ser. 16   Ser. 17   Ser. 18   Ser. 19 
Audit Fees  $23,515   $27,815   $20,665   $19,615   $19,015 
                          
Audit Related Fees   -    -    -    -    - 
                          
Tax Fees   8,790    10,430    8,175    7,560    5,920 
                          
All Other Fees   -    -    -    -    - 
                          
Total  $32,305   $38,245   $28,840   $27,175   $24,935 

 

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.

 

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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, 2015 and 2014.

 

Statements of Operations for the years ended March 31, 2015 and 2014.

 

Statements of Changes in Partners' Capital (Deficit) for the years ended March 31, 2015 and 2014.

 

Statements of Cash Flows for the years ended March 31, 2015 and 2014.

 

Notes to Financial Statements March 31, 2015 and 2014.

 

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

 

49
 

 

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.)

 

51
 

 

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, 2015 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, filed herein

 

52
 

 

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 25, 2015 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 25, 2015   /s/ John P. Manning   Director, President
    John P. Manning   (Principal Executive Officer) C&M Management Inc.; Director, President (Principal Executive Officer) BCTC III Assignor Corp.
         
DATE:   SIGNATURE:   TITLE:
         
June 25, 2015   /s/ Marc N. Teal   Chief Financial Officer
    Marc N. Teal   (Principal Financial and Accounting Officer) C&M Management Inc.; Chief Financial Officer (Principal Financial and Accounting Officer) BCTC III Assignor Corp.

 

53