WNC Housing Tax Credit Fund VI, L.P., Series 13 - FORM 10-Q

Attached files

file	filename
EX-31.1 - CERTIFICATION EXHIBIT 31.1 - WNC Housing Tax Credit Fund VI, L.P., Series 13	ex_311.htm
EX-31.2 - CERTIFICATION EXHIBIT 31.2 - WNC Housing Tax Credit Fund VI, L.P., Series 13	ex_312.htm
EX-32.2 - CERTIFICATION EXHIBIT 32.2 - WNC Housing Tax Credit Fund VI, L.P., Series 13	ex_322.htm
EX-32.1 - CERTIFICATION EXHIBIT 32.1 - WNC Housing Tax Credit Fund VI, L.P., Series 13	ex_321.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended December 31, 2014

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

For the transition period from ________ to ___________

Commission file number: 000-52841

WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13

California		20-2355224
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

17782 Sky Park Circle
Irvine, CA		92614-6404
(Address of principal executive offices)		(Zip Code)

(714) 662-5565

(Telephone number)

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 o No þ

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

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

Large accelerated filer o

Accelerated filer o

Non-accelerated filer þ

Smaller reporting company o

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

WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13

(A California Limited Partnership)

INDEX TO FORM 10-Q

For the Quarterly Period Ended December 31, 2014

PART I. FINANCIAL INFORMATION

	Item 1.	Financial Statements

		Condensed Balance Sheets
			As of December 31, 2014 and March 31, 2014	3

		Condensed Statements of Operations
			For the Three and Nine Months Ended December 31, 2014 and 2013	4

		Condensed Statement of Partners' Equity (Deficit)
			For the Nine Months Ended December 31, 2014	5

		Condensed Statements of Cash Flows
			For the Nine Months Ended December 31, 2014 and 2013	6

		Notes to Condensed Financial Statements		7

	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		20

	Item 3.	Quantitative and Qualitative Disclosures about Market Risks		24

	Item 4.	Controls and Procedures		24

PART II. OTHER INFORMATION

	Item 1.	Legal Proceedings		25

	Item 1A.	Risk Factors		25

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		25

	Item 3.	Defaults Upon Senior Securities		25

	Item 4.	Mine Safety Disclosures		25

	Item 5.	Other Information		25

	Item 6.	Exhibits		26

	Signatures			27

WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13

(A California Limited Partnership)

CONDENSED BALANCE SHEETS

(Unaudited)

	December 31, 2014			March 31, 2014

ASSETS
Cash and cash equivalents	$	14,798		$	18,047
Investments in Local Limited Partnerships, net (Notes 2 and 3)		4,441,184			5,396,913
Due from affiliates, net (Note 5)		-			2,265,967
Other assets		31,757			6,500

Total Assets	$	4,487,739		$	7,687,427


LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities:
Payables to Local Limited Partnerships (Note 4)	$	474,328		$	474,328
Accrued fees and expenses due to
General Partner and affiliates (Note 3)		2,981,855			3,548,586

Total Liabilities		3,456,183			4,022,914

Partners’ Equity (Deficit):
General Partner		(17,078	)		(14,445	)
Limited Partners (25,000 Partnership Units authorized;
20,951 and 20,971, respectively, Partnership Units issued and outstanding)		1,048,634			3,678,958

Total Partners’ Equity (Deficit)		1,031,556			3,664,513

Total Liabilities and Partners’ Equity (Deficit)	$	4,487,739		$	7,687,427

See accompanying notes to condensed financial statements

WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13

(A California Limited Partnership)

CONDENSED STATEMENTS OF OPERATIONS

For the Three and Nine Months Ended December 31, 2014 and 2013

(Unaudited)

	2014						2013
	Three Months			Nine Months			Three Months			Nine Months

Reporting fees	$	3,558		$	3,558		$	3,558		$	3,558

Operating expenses and loss:
Amortization (Note 2)		1,225			4,096			-			18,805
Asset management fees (Note 3)		40,901			122,703			40,901			122,703
Legal and accounting fees		67,817			266,936			43,821			125,289
Impairment loss (Note 1)		-			728,957			-			1,876,679
Write off of advances to Local
Limited Partnerships (Note 5)		170,880			1,229,390			1,063,677			1,204,050
Asset management expenses		5,785			20,437			14,702			16,092
Other		4,954			42,538			16,679			26,826

Total operating expenses and loss		291,562			2,415,057			1,179,780			3,390,444

Loss from operations		(288,004	)		(2,411,499	)		(1,176,222	)		(3,386,886	)

Equity in losses of Local
Limited Partnerships (Note 2)		(73,838	)		(221,516	)		(55,815	)		(192,537	)

Interest income		3			58			4			49

Net loss	$	(361,839	)	$	(2,632,957	)	$	(1,232,033	)	$	(3,579,374	)

Net loss allocated to:
General Partner	$	(362	)	$	(2,633	)	$	(1,232	)	$	(3,579	)

Limited Partners	$	(361,477	)	$	(2,630,324	)	$	(1,230,801	)	$	(3,575,795	)

Net loss per Partnership Unit	$	(17	)	$	(126	)	$	(59	)	$	(171	)

Outstanding weighted Partnership Units		20,951			20,951			20,971			20,971

See accompanying notes to condensed financial statements

WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13

(A California Limited Partnership)

CONDENSED STATEMENT OF PARTNERS’ EQUITY (DEFICIT)

For the Nine Months Ended December 31, 2014

(Unaudited)

	General			Limited
	Partner			Partners			Total

Partners’ equity (deficit) at March 31, 2014	$	(14,445	)	$	3,678,958		$	3,664,513

Net loss		(2,633	)		(2,630,324	)		(2,632,957	)

Partners’ equity (deficit) at December 31, 2014	$	(17,078	)	$	1,048,634		$	1,031,556

See accompanying notes to condensed financial statements

WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13

(A California Limited Partnership)

CONDENSED STATEMENTS OF CASH FLOWS

For the Nine Months Ended December 31, 2014 and 2013

(Unaudited)

	2014			2013

Cash flows from operating activities:
Net loss	$	(2,632,957	)	$	(3,579,374	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization		4,096			18,805
Equity in losses of Local Limited Partnerships		221,516			192,537
Increase in other assets		(25,257	)		-
Impairment loss		728,957			1,876,679
Increase (decrease) in accrued fees and expenses due to
General Partner and affiliates		(63,432	)		280,911
Write off of advances to Local Limited Partnerships		1,229,390			1,204,050

Net cash used in operating activities		(537,687	)		(6,392	)

Cash flows from investing activities:
Advances to Local Limited Partnerships		(963,423	)		(1,204,050	)
Reimbursement of advances made to Local Limited Partnerships		2,000,000			-
Distributions received from Local Limited Partnerships		1,160			2,250

Net cash provided by (used in) investing activities		1,037,737			(1,201,800	)

Cash flows from financing activities:
Advances received from General Partner and affiliates		811,140			1,063,676
Reimbursement of advances received from General Partner and affiliates		(1,314,439	)		-

Net cash provided by (used in) financing activities		(503,299	)		1,063,676

Net decrease in cash and cash equivalents		(3,249	)		(144,516	)

Cash and cash equivalents , beginning of period		18,047			161,924

Cash and cash equivalents , end of period	$	14,798		$	17,408

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Taxes paid	$	-		$	-

See accompanying notes to condensed financial statements

WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13

(A California Limited Partnership)

NOTES TO CONDENSED FINANCIAL STATEMENTS

For the Quarterly Period Ended December 31, 2014

(Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General

The accompanying condensed unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q for quarterly reports under Section 13 or 15(d) of the Securities Exchange Act of 1934. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended December 31, 2014 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2015. For further information, refer to the financial statements and footnotes thereto included in the Partnership's annual report on Form 10-K for the fiscal year ended March 31, 2014.

Organization

WNC Housing Tax Credit Fund VI, L.P., Series 13, a California Limited Partnership (the “Partnership”), was formed on February 7, 2005 under the laws of the State of California, and commenced operations on December 14, 2005. The Partnership was formed to invest primarily in other limited partnerships and limited liability companies (the “Local Limited Partnerships”) which own and operate multi-family housing complexes (the “Housing Complexes”) that are eligible for Low Income Housing Tax Credits. The local general partners (the “Local General Partners”) of each Local Limited Partnership retain responsibility for maintaining, operating and managing the Housing Complex. Each Local Limited Partnership is governed by its agreement of limited partnership (the “Local Limited Partnership Agreement”).

The general partner of the Partnership is WNC National Partners, LLC (the “General Partner”). The general partner of the General Partner is WNC & Associates, Inc. (“Associates”). The chairman and the president of Associates owns all of the outstanding stock of Associates. The business of the Partnership is conducted primarily through Associates, as the Partnership and General Partner have no employees of their own.

The Partnership shall continue in full force and effect until December 31, 2070, unless terminated prior to that date, pursuant to the partnership agreement or law.

The financial statements include only activity relating to the business of the Partnership and do not give effect to any assets that the partners may have outside of their interests in the Partnership, or to any obligations, including income taxes of the partners.

Pursuant to a registration statement filed with the U.S. Securities and Exchange Commission (the “SEC”) on April 18, 2005, the Partnership commenced a public offering of 25,000 units of limited partnership interest (“Partnership Units”) at a price of $1,000 per Partnership Unit. The required minimum offering amount of $1,400,000 was achieved by December 14, 2005. Total subscriptions for 20,981 Partnership Units had been accepted, representing $20,965,400, which is net of volume discounts of $4,540 and dealer discounts of $11,060. Holders of Partnership Units are referred to herein as “Limited Partners.” The General Partner has a 0.1% interest in operating profits and losses, taxable income and losses, in cash available for distribution from the Partnership and tax credits. The Limited Partners will be allocated the remaining 99.9% interest in proportion to their respective investments. As of December 31, 2014 and March 31, 2014, a total of 20,951 and 20,971 Partnership Units, respectively, remain outstanding.

The proceeds from the disposition of any of the Housing Complexes will be used first to pay debts and other obligations per the respective Local Limited Partnership Agreement. Any remaining proceeds will then be paid to the partners of the Local Limited Partnership, including the Partnership, in accordance with the terms of the particular Local Limited Partnership Agreement. The sale of a Housing Complex may be subject to other restrictions and obligations.

WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13

(A California Limited Partnership)

NOTES TO CONDENSED FINANCIAL STATEMENTS

For the Quarterly Period Ended December 31, 2014

(Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

Accordingly, there can be no assurance that a Local Limited Partnership will be able to sell its Housing Complex. Even if

it does so, there can be no assurance that any significant amounts of cash will be distributed to the Partnership. Should such distributions occur, the Limited Partners will be entitled to receive distributions from the proceeds remaining after payment of Partnership obligations and funding reserves, equal to their capital contributions and their return on investment (as defined in the Partnership Agreement). The General Partner would then be entitled to receive proceeds equal to its capital contributions from the remainder. Any additional sale or refinancing proceeds will be distributed 90% to the Limited Partners (in proportion to their respective investments) and 10% to the General Partner.

Risks and Uncertainties

An investment in the Partnership and the Partnership’s investments in Local Limited Partnerships and their Housing Complexes are subject to risks. These risks may impact the tax benefits of an investment in the Partnership, and the amount of proceeds available for distribution to the Limited Partners, if any, on liquidation of the Partnership’s investments. Some of those risks include the following:

The Low Income Housing Tax Credits rules are extremely complicated. Noncompliance with these rules results in the loss of future Low Income Housing Tax Credits and the fractional recapture of Low Income Housing Tax Credits already taken. In most cases the annual amount of Low Income Housing Tax Credits that an individual can use is limited to the tax liability due on the person’s last $25,000 of taxable income. The Local Limited Partnerships may be unable to sell the Housing Complexes at a price which would result in the Partnership realizing cash distributions or proceeds from the transaction. Accordingly, the Partnership may be unable to distribute any cash to its Limited Partners. Low Income Housing Tax Credits may be the only benefit from an investment in the Partnership.

The Partnership has invested in a limited number of Local Limited Partnerships. Such limited diversity means that the results of operation of each single Housing Complex will have a greater impact on the Partnership. With limited diversity, poor performance of one Housing Complex could impair the Partnership’s ability to satisfy its investment objectives. Each Housing Complex is subject to mortgage indebtedness. If a Local Limited Partnership failed to pay its mortgage, it could lose its Housing Complex in foreclosure. If foreclosure were to occur during the first 15 years (the “Compliance Period”), the loss of any remaining future Low Income Housing Tax Credits, a fractional recapture of prior Low Income Housing Tax Credits, and a loss of the Partnership’s investment in the Housing Complex would occur. The Partnership is a limited partner or a non-managing member of each Local Limited Partnership. Accordingly, the Partnership will have very limited rights with respect to management of the Local Limited Partnerships. The Partnership will rely totally on the Local General Partners. Neither the Partnership’s investments in Local Limited Partnerships, nor the Local Limited Partnerships’ investments in Housing Complexes, are readily marketable. To the extent the Housing Complexes receive government financing or operating subsidies, they may be subject to one or more of the following risks: difficulties in obtaining tenants for the Housing Complexes; difficulties in obtaining rent increases; limitations on cash distributions; limitations on sales or refinancing of Housing Complexes; limitations on transfers of interests in Local Limited Partnerships; limitations on removal of Local General Partners; limitations on subsidy programs; and possible changes in applicable regulations. Uninsured casualties could result in loss of property and Low Income Housing Tax Credits and recapture of Low Income Housing Tax Credits previously taken. The value of real estate is subject to risks from fluctuating economic conditions, including employment rates, inflation, tax, environmental, land use and zoning policies, supply and demand of similar Housing Complexes, and neighborhood conditions, among others.

WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13

(A California Limited Partnership)

NOTES TO CONDENSED FINANCIAL STATEMENTS

For the Quarterly Period Ended December 31, 2014

(Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

The ability of Limited Partners to claim tax losses from the Partnership is limited. The IRS may audit the Partnership or a Local Limited Partnership and challenge the tax treatment of tax items. The amount of Low Income Housing Tax

Credits and tax losses allocable to Limited Partners could be reduced if the IRS were successful in such a challenge. The alternative minimum tax could reduce tax benefits from an investment in the Partnership. Changes in tax laws could also impact the tax benefits from an investment in the Partnership and/or the value of the Housing Complexes.

The Partnership currently has insufficient working capital to fund its operations. Associates has agreed to continue providing advances sufficient enough to fund the operations and working capital requirements of the Partnership through July 31, 2016.

Anticipated future and existing cash resources of the Partnership are not sufficient to pay existing liabilities of the Partnership. A significant portion of the existing liabilities are the payables to Local Limited Partnerships and those payables are the first priority to be paid. If the Partnership does not have enough cash to pay those liabilities the General Partner or an affiliate will fund the necessary cash to pay the liabilities. The remaining portion of the payables is due to the General Partner or an affiliate. Though the amounts payable to the General Partner and/or its affiliates are contractually currently payable, the Partnership anticipates that the General Partner and/or its affiliates will not require the payment of these contractual obligations until capital reserves are in excess of the aggregate of then existing contractual obligations and then anticipated future foreseeable obligations of the Partnership. The Partnership would be adversely affected should the General Partner and/or its affiliates demand current payment of the existing contractual obligations and or suspend services for this or any other reason.

No trading market for the Partnership Units exists or is expected to develop. Limited Partners may be unable to sell their Partnership Units except at a discount and should consider their Partnership Units to be a long-term investment. Individual Limited Partners will have no recourse if they disagree with actions authorized by a vote of the majority of Limited Partners.

Exit Strategy

The Compliance Period for a Housing Complex is generally 15 years following construction or rehabilitation completion. Associates was one of the first in the industry to offer syndicated investments in Low Income Housing Tax Credits. The initial programs have completed their Compliance Periods.

Upon the sale of a Local Limited Partnership interest or Housing Complex after the end of the Compliance Period, there would be no recapture of Low Income Housing Tax Credits. A sale prior to the end of the Compliance Period could result in recapture if certain conditions are not met. None of the Housing Complexes have completed their 15-year Compliance Period.

Upon identifying those Housing Complexes with the highest potential for a successful sale, refinancing or re-syndication, the Partnership expects to proceed with efforts to liquidate them. The objective is to maximize the Limited Partners’ return wherever possible and, ultimately, to wind down the Partnership. Local Limited Partnership interests may be disposed of any time by the General Partner in its discretion.

With that in mind, as of December 31, 2014, except as indicated in the following two paragraphs, the General Partner has not begun reviewing the Housing Complexes for potential disposition, since none of the Housing Complexes have completed the Compliance Period. Once the Housing Complexes have done so, the review will take into consideration many factors, including extended use requirements (such as those due to mortgage restrictions or state compliance agreements), the condition of the Housing Complexes, and the tax consequences to the Limited Partners from the sale of the Housing Complexes.

WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13

(A California Limited Partnership)

NOTES TO CONDENSED FINANCIAL STATEMENTS

For the Quarterly Period Ended December 31, 2014

(Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

During the year ended March 31, 2011, the Partnership sold two Local Limited Partnerships, Fernwood Meadows, L.P. (“Fernwood”) and Sierra’s Run, L.P. (“Sierra’s Run”), in order to generate sufficient equity to complete the purchase of additional low income housing tax credits for Davenport Housing VII, L.P. (“Davenport).

Fernwood and Sierra’s Run will complete their Compliance Periods in 2022; therefore there is a risk of tax credit recapture. The maximum exposure of recapture (excluding the interest and penalties related to the recapture) is $177,508 and $170,246, respectively, for Fernwood and Sierra’s Run, which equates to $16.58 per Partnership Unit in the aggregate. Under the circumstances, the General Partner believes there is a reasonable expectation that each Local Limited Partnership will continue to be operated as qualified low income housing for the balance of its Compliance Period, and, accordingly, does not anticipate that there will be any recapture.

Subsequent to December 31, 2014, the underlying Housing Complex of Grove Village Limited Partnership (“Grove Village”) was sold resulting in the termination of the Partnership’s Local Limited Partnership interest. Grove Village was appraised for $1,700,000 and had a mortgage note balance of $5,756,079 as of December 31, 2013. The sale price was $1,690,000, of which approximately $99,000 was used for third party brokerage fees, $239,000 was used for liens held by the City of Dallas for past due water and sewer fees, $36,000 was used for corporate liens, $77,000 was used for liens in litigation, $8,000 was paid to TDHCA, $129,000 was used to pay past due property taxes, $60,000 was used to pay past due payables, and $10,000 was used for prorated prepaid rents. Lastly there was $100,000 to remain in escrow for 60 days for any unforeseen payables or liens are brought forward. After a deduction of $7,944 in escrow expenses, $92,056 was reimbursed to the Partnership in April 2015. Of the balance, $625,000 was used for repayment of the mortgage note. Although the note was being carried on the books at $5,756,079, the note had been acquired by Associates for $625,000. The new loan holder accepted $625,000 as payment in full, although it was entitled to the full outstanding amount. The difference between $5,756,079 and $625,000 is cancelation of debt income and will flow through to the investors as such. It will appear on the 2015 Forms K-1, as will all results of the sale. The real estate sale resulted in proceeds of $306,244 available to the Partnership. Theses proceeds are being held in the Partnership’s reserves and no distributions to partners are expected. The Partnership has incurred $43,509 approximately in sales related expenses which will be netted against the proceeds from the sale in calculating the gain on the sale. The Partnership’s investment balance in Grove Village immediately prior to the sale was zero; and $99,130 of capital contributions payable were written off resulting in a gain of $361,865. Additional gains could be recognized due to the cancellation of debt income. Due the fact that 8609’s were never obtained for Grove Village there is no applicable Compliance Period.

Method of Accounting for Investments in Local Limited Partnerships

The Partnership accounts for its investments in Local Limited Partnerships using the equity method of accounting, whereby the Partnership adjusts its investment balance for its share of the Local Limited Partnerships’ results of operations and for any contributions made and distributions received. The Partnership reviews the carrying amount of an individual investment in a Local Limited Partnership for possible impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of such investment may not be recoverable. Recoverability of such investment is measured by the estimated value derived by management, generally consisting of the sum of the remaining future Low Income Housing Tax Credits estimated to be allocable to the Partnership and the estimated residual value to the Partnership. If an investment is considered to be impaired, the Partnership reduces the carrying value of its investment in any such Local Limited Partnership. The accounting policies of the Local Limited Partnerships, generally, are expected to be consistent with those of the Partnership. Costs incurred by the Partnership in acquiring the investments are capitalized as part of the investment account and are being amortized over 27.5 years (see Note 2).

“Equity in losses of Local Limited Partnerships” for the periods ended December 31, 2014 and 2013 has been recorded by the Partnership. Management’s estimate for the three and nine-month periods is based on either actual unaudited results reported by the Local Limited Partnerships or historical trends in the operations of the Local Limited Partnerships. Equity in losses of Local Limited Partnerships allocated to the Partnership are not recognized to the extent that the investment balance would be adjusted below zero. If the Local Limited Partnerships report net income in future years, the Partnership will resume applying the equity method only after its share of such net income equals the share of net losses not recognized during the period(s) the equity method was suspended (see Note 2).

WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13

(A California Limited Partnership)

NOTES TO CONDENSED FINANCIAL STATEMENTS

For the Quarterly Period Ended December 31, 2014

(Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

In accordance with the accounting guidance for the consolidation of variable interest entities, the Partnership determines when it should include the assets, liabilities, and activities of a variable interest entity (VIE) in its financial statements, and when it should disclose information about its relationship with a VIE. 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 Local Limited Partnerships in which the Partnership 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 Partnership'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 Partnership currently records the amount of its investment in these Local Limited 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 Partnership's balance in investment in Local Limited Partnerships, plus the risk of recapture of tax credits previously recognized on these investments, represents its maximum exposure to loss. The Partnership's exposure to loss on these Local Limited Partnerships is mitigated by the condition and financial performance of the underlying Housing Complexes as well as the strength of the Local General Partners and their guarantee against credit recapture to the investors in the Partnership.

Distributions received by the Partnership are accounted for as a reduction of the investment balance. Distributions received after the investment has reached zero are recognized as income. As of December 31, 2014, four of the investment balances had reached zero.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.

Cash and Cash Equivalents

The Partnership considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. As of December 31, 2014 and March 31, 2014, the Partnership had $14,135 and $17,217 in cash equivalents, respectively.

Reporting Comprehensive Income

The Partnership had no items of other comprehensive income for all periods presented.

WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13

(A California Limited Partnership)

NOTES TO CONDENSED FINANCIAL STATEMENTS

For the Quarterly Period Ended December 31, 2014

(Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

Income Taxes

The Partnership has elected to be treated as a pass-through entity for income tax purposes and, as such, is not subject to income taxes. Rather, all items of taxable income, deductions and tax credits are passed through to and are reported by its owners on their respective income tax returns. The Partnership’s federal tax status as a pass-through entity is based on its legal status as a partnership. Accordingly, the Partnership is not required to take any tax positions in order to qualify as a pass-through entity. The Partnership is required to file and does file tax returns with the Internal Revenue Service and other taxing authorities. Accordingly, these financial statements do not reflect a provision for income taxes and the Partnership has no other tax positions which must be considered for disclosure. Income tax returns filed by the Partnership are subject to examination by the Internal Revenue Service for a period of three years. While no income tax returns are currently being examined by the Internal Revenue Service, tax years since 2011 remain open.

Net Loss Per Partnership Unit

Net loss per Partnership Unit includes no dilution and is computed by dividing loss available to Limited Partners by the weighted average number of Partnership Units outstanding during the period. Calculation of diluted net loss per Partnership Unit is not required.

Revenue Recognition

The Partnership is entitled to receive reporting fees from the Local Limited Partnerships. The intent of the reporting fees is to offset (in part) administrative costs incurred by the Partnership in corresponding with the Local Limited Partnerships. Due to the uncertainty of the collection of these fees, the Partnership recognizes reporting fees as collections are made.

Amortization

Acquisition fees and costs were being amortized over 27.5 years using the straight-line method. Amortization expense for the nine months ended December 31, 2014 and 2013 was $4,096 and $18,805, respectively.

Impairment

The Partnership reviews its investments in Local Limited Partnership for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value of such investments may not be recoverable. Recoverability is measured by a comparison of the carrying amount of the investment to the sum of the total amount of the remaining Low Income Housing Tax Credits allocated to the Partnership and any estimated residual value of the investment. For the nine months ended December 31, 2014 and 2013, impairment loss related to investments in Local Limited Partnerships was $696,069 and $568,391, respectively.

The Partnership also evaluates its intangibles for impairment in connection with its investments in Local Limited Partnerships. Impairment on the intangibles is measured by comparing the Partnership’s total investment balance after impairment of investments in Local Limited Partnerships to the sum of the total of the remaining Low Income Housing Tax Credits allocated to the Partnership and any estimated residual value of the investments. During the nine months ended December 31, 2014 and 2013, an impairment loss of $32,888 and $1,308,288, respectively, was recorded against related intangibles.

WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13

(A California Limited Partnership)

NOTES TO CONDENSED FINANCIAL STATEMENTS

For the Quarterly Period Ended December 31, 2014

(Unaudited)

NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS

As of December 31, 2014 and March 31, 2014, the Partnership owns Local Limited Partnership interests in 8 Local Limited Partnerships, each of which owns one Housing Complex consisting of an aggregate of 598 apartment units. The respective Local General Partners of the Local Limited Partnerships manage the day to day operations of the entities. Significant Local Limited Partnership business decisions require approval from the Partnership. The Partnership, as a limited partner, is generally entitled to 99.98%, as specified in the Local Limited Partnership Agreements, of the operating profits and losses, taxable income and losses, and Low Income Housing Tax Credits of the Local Limited Partnerships.

The following is a summary of the equity method activity of the investments in Local Limited Partnerships for the periods presented below:

	For the Nine Months Ended December 31, 2014			For the Year Ended March 31, 2014
Investments per balance sheet, beginning of period	$	5,396,913		$	7,636,679
Distributions received from Local Limited Partnerships		(1,160	)		-
Equity in losses of Local Limited Partnerships		(221,516	)		(341,021	)
Impairment loss		(728,957	)		(1,876,679	)
Amortization of acquisition fees and costs		(4,096	)		(22,057	)
Amortization of warehouse interest and costs		-			(9	)
Investments per balance sheet, end of period	$	4,441,184		$	5,396,913

	For the Nine Months Ended December 31, 2014		For the Year Ended March 31, 2014
Investments in Local Limited Partnerships, net	$	4,341,928	$	5,260,673
Acquisition fees and costs, net of accumulated amortization of $2,466 and $4,891		99,256		136,240
Investments per balance sheet, end of period	$	4,441,184	$	5,396,913

WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13

(A California Limited Partnership)

NOTES TO CONDENSED FINANCIAL STATEMENTS

For the Quarterly Period Ended December 31, 2014

(Unaudited)

NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS, continued

Selected financial information for the nine months ended December 31, 2014 and 2013 from the unaudited combined condensed financial statements of the Local Limited Partnerships in which the Partnership has invested is as follows:

COMBINED CONDENSED STATEMENTS OF OPERATIONS

	2014			2013

Revenues	$	3,408,000		$	3,332,000

Expenses:
Interest expense		910,000			1,121,000
Depreciation and amortization		1,241,000			1,477,000
Operating expenses		1,854,000			2,808,000
Total expenses		4,005,000			5,406,000

Net loss	$	(597,000	)	$	(2,074,000	)
Net loss allocable to the Partnership	$	(597,000	)	$	(2,073,000	)
Net loss recorded by the Partnership	$	(222,000	)	$	(193,000	)

Certain Local Limited Partnerships have incurred significant operating losses and/or have working capital deficiencies. In the event these Local Limited Partnerships continue to incur significant operating losses, additional capital contributions by the Partnership may be required to sustain operations of such Local Limited Partnerships. If additional capital contributions are not made when they are required, the Partnership's investments in certain of such Local Limited Partnerships could be impaired, and the loss and recapture of the related Low Income Housing Tax Credits could occur.

Troubled Housing Complexes

Davenport started construction in October 2006 and was scheduled to be completed in June 2008. Construction was delayed due to the original Local General Partner defaulting on his construction guarantee and resulting disputed mechanic liens on the property. In November 2008, Shelter Resource Corporation was admitted as a co-general partner, due to restrictions implemented by the Iowa Finance Authority (“IFA”) on the removal of the original general partner. Subsequently, with IFA’s approval, the defaulting original Local General Partner was removed from the Partnership leaving Shelter Resource Corporation as the sole Local General Partner.

As of March 31, 2010, the property was 100% completed and a certificate of occupancy was granted for both buildings in December 2009. The Partnership engaged all sub-contractors to sign new construction contracts, along with lien releases for any and all work done after their engagement. During the year ended March 31, 2010, the Partnership voluntarily advanced $846,175 to Davenport for construction related costs. There were no additional advances made to Davenport due to the additional investment made, as discussed below.

The project was fully completed as of March 31, 2010 and it achieved stabilized operations by June 2010. In June 2010 the property achieved 85% occupancy and has maintained occupancy of 80% to 90% to the date of this filing. Davenport has been awarded state historical tax credits from the State of Iowa, federal historical credits and federal Low Income Housing Tax Credits. The State historical credits are given in the form of a refund check from the State in conjunction with the State tax return filing. The net amount of the check after applicable federal taxes will be contributed back to the property to help fund construction shortfalls. Davenport was also allocated additional federal Low Income Housing Tax Credits as well as federal historical tax credits. Upon the Limited Partners’ approval of the dispositions of Sierra’s Run and Fernwood, the Partnership made the additional investment in Davenport. See the exit strategy in Note 1 regarding the dispositions of Sierra’s Run and Fernwood. On July 1, 2010, the Partnership committed additional capital to Davenport in the amount of $2,490,651. This additional commitment generated $408,710 of federal historic credits and $3,582,550 of additional federal Low Income Housing Tax Credits which was allocated to the partners of the Partnership.

WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13

(A California Limited Partnership)

NOTES TO CONDENSED FINANCIAL STATEMENTS

For the Quarterly Period Ended December 31, 2014

(Unaudited)

NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS, continued

Grove Village Limited Partnership (“Grove Village”) and Pleasant Village Limited Partnership (“Pleasant Village”), both Texas limited partnerships in which the Partnership is a limited partner, were audited by the Internal Revenue Service (“IRS”) for tax years 2007, 2008 and 2009. In its findings of those audits, the IRS asserted that the low income housing tax credits (“LIHTCs”) for Grove Village and Pleasant Village should not have been claimed for those three years. As of the year-end for each of tax years 2007, 2008, 2009, and 2010 the IRS Forms 8609 had not been issued by the Texas Department of Housing & Community Affairs (“TDHCA”), which is contrary to the representation made by the general partner (the “Local General Partner”) of Grove Village and Pleasant Village on their respective tax returns.

An Appellate Hearing with the IRS was held on June 27, 2013. Thereafter, the Partnership received notification that the IRS Appeals Division ruled in favor of the IRS findings. The Partnership filed a Petition for Readjustment with the United States Tax Court for Pleasant Village. The Partnership did not file with the Tax Court for Grove Village. The Tax Court noticed a trial date of June 22, 2015, which has been extended to a date to be determined this autumn. In the event the Partnership is not successful with the Tax Court for those three years, management believes the maximum potential recapture for Pleasant Village would be $1,334,678, or $64 per Partnership Unit, which includes the estimated interest that would be charged.

In May 2013, the Local General Partner stopped making the mortgage payments for Grove Village and Pleasant Village without providing notice to the Partnership of its intent to do so. The lender issued a notice of default. To prevent the lender from commencing a foreclosure action against the properties and thereby eliminating any possibility of obtaining the Forms 8609 and the LIHTCs, WNC & Associates, Inc. negotiated the purchase of the notes from the lender. The risk of foreclosure by the original lender was eliminated by Associates’ purchase of the notes.

Since October 2013 (and ending on the sale date in the case of Grove Village), the Partnership and the Local General Partner have advanced approximately $1,482,000 and $3,035,000 to Grove Village and Pleasant Village, respectively. These funds were used to pay operating deficits, and to meet renovation expense requirements.

In June 2013, the Partnership filed a lawsuit against the Local General Partner and the guarantors of the LIHTCs. Discussions were commenced with the Local General Partner’s insurance carrier and counsel to determine whether a settlement of the claims could be reached. The Partnership settled with the Local General Partner regarding the contract claims for $2,000,000; on the Partnership’s books this amount was applied against receivables due from Local Limited Partnerships. The Partnership settled with the insurance carrier regarding the negligence claims for $1,300,000. It is estimated that the proceeds will be received by the Partnership by July 31, 2015. The use of the proceeds is yet to be determined.

WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13

(A California Limited Partnership)

NOTES TO CONDENSED FINANCIAL STATEMENTS

For the Quarterly Period Ended December 31, 2014

(Unaudited)

NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS, continued

Inasmuch as the Forms 8609 were never issued to Grove Village, there will be a recapture of the LIHTCs taken. The LIHTCs for Grove Village for 2007-2010 totaled approximately $1,590,000 and the estimated interest that will be imposed under the Internal Revenue Code and Treasury Regulations is approximately $426,000. The total of approximately $2,016,000 equates to $96 per Partnership Unit. The Partnership is currently working with its outside accounting firm to determine the manner in which this will appear on the Investors’ 2015 Forms K-1. Following the determination the Partnership will communicate the manner to the Investors

In June 2015, the Partnership began receiving phone calls from some of its Investors regarding an IRS notice they received requesting a copy of the Investors’ 2007 tax returns (the “IRS Notice”). For most Investors, the statute of limitations for an IRS examination for 2007 likely has expired. The IRS Notice further stated that the Partnership had been the subject of an examination.

Long established IRS law requires the IRS to notify a limited partnership, through its tax matters partner, if it is conducting an examination of the limited partnership’s books and records. Please be advised that WNC National Partners, LLC (“WNC TMP”), as the tax matters partner of the Partnership, has not been notified by the IRS in this regard, nor has the Partnership opened its books and records to the IRS in an examination of its 2007 tax year. The examinations discussed in the forepart of this letter were of Grove Village and Pleasant Village, and not of the Partnership.

WNC TMP has left voice mail messages on the various phone numbers specified on the IRS Notices provided to the Partnership by the Investors who have done so. Later in June 2005, one of the specified IRS phone numbers on the IRS Notice was disconnected. The facts that the statute of limitations for tax year 2007 likely has expired for most Investors, the Partnership has not been notified or examined by the IRS, the IRS has not returned any phone calls to the Partnership, and one phone number for the Investors to make inquiries to the IRS has been disconnected, are all troubling.

The Partnership has retained outside tax counsel to pursue the IRS Notice matter in Washington, D.C. Counsel has made inquiries and awaits an explanation.

WNC TMP is providing this notice to all Investors now to make them aware of the above referenced information provided to the Partnership by some of the Investors. Even though WNC TMP and the Partnership do not have any specific information at this time, they believe this early notification is warranted due to the unusual circumstances of the IRS Notice.

The Partnership suggests that each Investor contact his or her own tax return preparer to make their own determination whether and how to respond to the IRS. If the Partnership or WNC TMP learns anything through tax counsel or otherwise that is definitive regarding the IRS Notice, WNC TMP will deliver the information to the Investors.

WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13

(A California Limited Partnership)

NOTES TO CONDENSED FINANCIAL STATEMENTS

For the Quarterly Period Ended December 31, 2014

(Unaudited)

NOTE 3 - RELATED PARTY TRANSACTIONS

Under the terms of the Partnership Agreement, the Partnership has paid or is obligated to the General Partner or its affiliates for the following fees:

(a)

Acquisition fees of up to 7% of the gross proceeds from the sale of Partnership Units as compensation for services rendered in connection with the acquisition of Local Limited Partnerships. At the end of all periods presented, the Partnership incurred acquisition fees of $1,468,670. Impairment on the intangibles is measured by comparing the Partnership’s total investment balance after impairment of investments in Local Limited Partnerships to the sum of the total of the remaining Low Income Housing Tax Credits allocated to the Partnership. If an impairment loss related to the acquisition fees is recorded, the accumulated amortization is reduced to zero at that time. As of December 31, 2014, the acquisition fees were fully amortized or impaired.

(b)

A non-accountable acquisition costs of 2% of the gross proceeds from the sale of Partnership Units as an expense reimbursement in connection with the acquisition of Local Limited Partnerships. As of the end of all periods presented, the Partnership incurred acquisition costs of $419,620, which have been included in investments in Local Limited Partnerships. Accumulated amortization of these capitalized costs was $2,466 and $4,891 as of December 31, 2014 and March 31, 2014, respectively. Impairment on the intangibles is measured by comparing the Partnership’s total investment balance after impairment of investments in Local Limited Partnerships to the sum of the total of the remaining Low Income Housing Tax Credits allocated to the Partnership. If an impairment loss related to the acquisition costs is recorded, the accumulated amortization is reduced to zero at that time.

(c)

An annual asset management fee accrues in an amount equal to 0.5% of the Invested Assets of the Partnership. “Invested Assets” is defined as the sum of the Partnership’s Investment in Local Limited Partnerships, plus the reserves of the Partnership of up to 5% of gross Partnership Unit sales proceeds, and the Partnership’s allocable share of the amount of the mortgage loans and other debts related to the Housing Complexes owned by such Local Limited Partnerships. Asset management fees of $122,703 were incurred during each of the nine months ended December 31, 2014 and 2013. No payments were made during the nine months ended December 31, 2014 and 2013.

(d)

The Partnership reimburses the General Partner or its affiliates for operating expenses incurred by the Partnership and paid for by the General Partner or its affiliates on behalf of the Partnership. Operating expense reimbursements paid were $540,942 and $10,000 during the nine months ended December 31, 2014 and 2013, respectively.

(e)

A subordinated disposition fee will be paid in an amount equal to 1% of the sales price of real estate sold. Payment of this fee is subordinated to the Limited Partners receiving a return on investment (as defined in the Partnership Agreement) and is payable only if the General Partner or its affiliates render services in the sales effort. No disposition fees have been incurred for all periods presented.

(f)

WNC Holding, LLC (“Holding”), a wholly owned subsidiary of Associates, acquires investments in Local Limited Partnerships using funds from a secured warehouse line of credit. Such investments are warehoused by Holding until transferred to syndicated partnerships as investors are identified. The transfer of the warehoused investments is typically achieved through the admittance of the syndicated partnership as the Limited Partner of the Local Limited Partnership and the removal of Holding as the Limited Partner. Consideration paid to Holding for the transfer of its interest in the Local Limited Partnership generally consists of cash reimbursement of capital contribution installment(s) paid to the Local Limited Partnerships by Holding, assumption of the remaining capital contributions payable due to the Local Limited Partnership and financing costs and interest charged by Holding. As of all periods presented, the Partnership incurred financing costs of $772 and interest of $267 which are included in investments in Local Limited Partnerships. If an impairment loss related to the financing costs and interest is recorded, the accumulated amortization is reduced to zero at that time. As of December 31, 2014, the financing costs and interest were fully amortized and impaired.

WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13

(A California Limited Partnership)

NOTES TO CONDENSED FINANCIAL STATEMENTS

For the Quarterly Period Ended December 31, 2014

(Unaudited)

NOTE 3 - RELATED PARTY TRANSACTIONS, continued

(g)

Payables to the General Partner or affiliates amounting to $1,622,933 at December 31, 2014 represent advances that had been made to the Partnership by the General Partner or an affiliate to aid the Partnership in providing funding to two Local Limited Partnerships which were experiencing operational issues.

The accrued fees and expenses due to the General Partner and affiliates consist of the following at:

	December 31, 2014		March 31, 2014

Asset management fee payable	$	1,214,126	$	1,091,423
Reimbursement for expenses paid by the General Partner or affiliates		144,797		330,932
Payable to General Partner or affiliates		1,622,932		2,126,231

Total	$	2,981,855	$	3,548,586

The General Partner and/or its affiliates does not anticipate that these accrued fees will be paid until such time as capital reserves are in excess of future foreseeable working capital requirements of the Partnership.

NOTE 4 - PAYABLES TO LOCAL LIMITED PARTNERSHIPS

Payables to Local Limited Partnerships amounting to $474,328 at December 31, 2014 and March 31, 2014, represent amounts which are due at various times based on conditions specified in the Local Limited Partnership Agreements. These contributions are payable in installments and are generally due upon the Local Limited Partnerships achieving certain operating and development benchmarks (generally within two years of the Partnership’s initial investment). The payables to Local Limited Partnerships are subject to adjustment in certain circumstances.

NOTE 5 – ADVANCES TO LOCAL LIMITED PARTNERSHIPS

The Partnership is not obligated to fund advances to the Local Limited Partnerships. Occasionally, when Local Limited Partnerships encounter operational issues the Partnership may decide to advance funds to assist the Local Limited Partnerships with its operational issues.

As of both December 31, 2014 and March 31, 2014, the Partnership advanced $759,336 to Davenport Housing VII, L.P., in which the Partnership is a limited partner. All advances were reserved in full in the year they were advanced.

As of December 31, 2014, the Partnership advanced $809,968 and $2,419,422 to Grove Village, L.P., and Pleasant Village, L.P., respectively, in which the Partnership is a limited partner. During the nine months ended December 31, 2014, $155,378 and $808,045 was advanced to Grove Village, L.P. and Pleasant Village L.P., respectively. Settlement proceeds of $2,000,000 from the Local General Partner were applied against the advances during the nine months ended December 31, 2014. During the nine months ended December 31, 2014 and 2013, total advances of $1,229,390 and $1,204,050, respectively, were written off due to collectability.

WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13

(A California Limited Partnership)

NOTES TO CONDENSED FINANCIAL STATEMENTS

For the Quarterly Period Ended December 31, 2014

(Unaudited)

NOTE 6 – SUBSEQUENT EVENTS

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements

With the exception of the discussion regarding historical information, this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other discussions elsewhere in this Form 10-Q contain forward looking statements. Such statements are based on current expectations subject to uncertainties and other factors which may involve known and unknown risks that could cause actual results of operations to differ materially from those projected or implied. Further, certain forward-looking statements are based upon assumptions about future events which may not prove to be accurate.

Risks and uncertainties inherent in forward looking statements include, but are not limited to, the Partnership’s future cash flows and ability to obtain sufficient financing, level of operating expenses, conditions in the Low Income Housing Tax Credit property market and the economy in general, as well as legal proceedings. Historical results are not necessarily indicative of the operating results for any future period.

Subsequent written and oral forward looking statements attributable to the Partnership or persons acting on its behalf are expressly qualified in their entirety by cautionary statements in this Form 10-Q and in other reports filed with the SEC.

The following discussion and analysis compares the results of operations for the three and nine months ended December 31, 2014 and 2013, and should be read in conjunction with the condensed financial statements and accompanying notes included within this report.

Financial Condition

The Partnership’s assets at December 31, 2014 consisted of $15,000 in cash, $32,000 in other assets and aggregate investments in Local Limited Partnerships of $4,441,000. Liabilities at December 31, 2014 consisted of $474,000 of payables to Local Limited Partnerships and $2,982,000 in accrued fees and expenses due to the General Partner and/or its affiliates.

Results of Operations

Three Months Ended December 31, 2014 Compared to Three Months Ended December 31, 2013 The Partnership’s net loss for the three months ended December 31, 2014 was $362,000, reflecting a decrease of $870,000 from the $1,232,000 net loss experienced for the three months ended December 31, 2013. Write offs of advances to Local Limited Partnerships decreased by $893,000 for the three months ended December 31, 2014 compared to the three months ended December 31, 2013. The advances made to Local Limited Partnerships, and the probability of collection, can vary each period depending on the operations of the individual Local Limited Partnerships. Legal and accounting fees increased by $24,000 during the three months ended in December 31, 2014. The increase was due to legal expenses related to the Appellate Hearing with the IRS regarding LIHTC’s for Pleasant Village and Grove Village. Asset management expenses decreased by $9,000 during the three months ended December 31, 2014. The asset management expenses decreased due to fewer site visits performed from asset managers during the three months ended December 31, 2014. The equity in losses of Local Limited Partnerships increased by $18,000 for the three months ended December 31, 2014. Equity in losses can vary based on the operations of the underlying Housing Complexes of the Local Limited Partnerships. In addition, other expenses decreased by $12,000 during the three months ended December 31, 2014 compared to the three months ended December 31, 2013. The decrease in other expenses was mainly due to a fewer consulting expenses incurred for Grove Village and Pleasant Village during the three months ended December 31, 2014.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. continued

Nine Months Ended December 31, 2014 Compared to the Nine Months Ended December 31, 2013 The Partnership’s net loss for the nine months ended December 31, 2014 was $2,633,000, reflecting a decrease of approximately $946,000 from the $3,579,000 net loss experienced for the nine months ended December 31, 2013. Legal and accounting fees increased by $142,000 due to expenses related to the Appellate Hearing with the IRS regarding the LIHTC’s for Pleasant Village and Grove Village. Write offs of advances to Local Limited Partnerships increased by $25,000 for the nine months ended December 31, 2014 compared to the nine months ended December 31, 2013 as discussed above. Impairment loss decreased by $1,148,000 for the nine months ended December 31, 2014 compared to the nine months ended December 31, 2013. Impairment loss can vary from year to year depending on the operations of the Local Limited Partnerships and the amount of Low Income Housing Tax Credits that are allocated each year to the Partnership. Asset management expenses increased by $4,000 during the nine months ended December 31, 2014 due to site visits performed at Pleasant Village by asset managers during the nine months ended December 31, 2014. The equity in losses of Local Limited Partnerships increased by $29,000 for the nine months ended December 31, 2014. Equity in losses can vary based on the operations of the underlying Housing Complexes of the Local Limited Partnerships. Also, amortization decreased by $15,000 during the nine months ended December 31, 2014 due to impairment of intangibles decreasing future amortization expense. Other expenses increased by $16,000 during the nine months ended December 31, 2014, mainly due to consulting expenses incurred for Grove Village and Pleasant Village.

Liquidity and Capital Resources

Nine Months Ended December 31, 2014 Compared to Nine Months Ended December 31, 2013 The net decrease in cash and cash equivalents during the nine months ended December 31, 2014 was $3,000 compared to a net decrease in cash and cash equivalents during the nine months ended December 31, 2013 of $145,000. During the nine months ended December 31, 2014, the Partnership advanced $963,000 to Local Limited Partnerships compared to $1,204,000 advanced during the nine months ended December 31, 2013. The advances to troubled Local Limited Partnerships can vary each year depending on the operations of the individual Local Limited Partnerships. During the nine months ended December 31, 2014, the Partnership reimbursed the General Partner or an affiliate $541,000 for operating expenses paid on its behalf compared to $10,000 reimbursed during the nine months ended December 31, 2013. During the nine months ended December 31, 2014 the Partnership received $811,000 of advances from the General Partner or affiliates. The funds were used to make advances to Local Limited Partnerships that were experiencing operational issues. Litigation settlement proceeds of $2,000,000 were received during the nine months ended December 31, 2014, which was in turn used to reimburse the General Partner or an affiliate for advances owed. Additionally, during the nine months ended December 31, 2014, the Partnership received $1,000 in distributions compared to $2,000 received during the nine months ended December 31, 2013. Distributions fluctuate from year to year due to the fact that Local Limited Partnership may pay those fees to the Partnership when the Local Limited Partnerships' cash flows will allow for the payment.

During the nine months ended December 31, 2014, accrued payables, which consist primarily of related party asset management fees and advances due to the General Partner and affiliates, decreased by $567,000. The General Partner does not anticipate that these accrued fees and advances will be paid until such time as capital reserves are in excess of foreseeable working capital requirements of the Partnership.

The Partnership expects its future cash flows, together with its net available assets as of December 31, 2014, to be insufficient to meet all currently foreseeable future cash requirements. Associates has agreed to continue providing advances sufficient enough to fund the operations and working capital requirements of the Partnership through July 31, 2015.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. continued

Recent Accounting Changes

In January 2014, the FASB issued an amendment to the accounting and disclosure requirements for investments in qualified affordable housing projects. The amendments provide guidance on accounting for investments by a reporting entity in flow-through limited liability entities that manage or invest in affordable housing projects that qualify for the low-income housing tax credit. The amendments permit reporting entities to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received, and recognizes the net investment performance in the income statement as a component of income tax expense (benefit). The amendments are effective for interim and annual periods beginning after December 15, 2014 and should be applied retrospectively to all periods presented. Early adoption is permitted. The adoption of this update is not expected to materially affect the Partnership's financial statements.

Other Matters

Davenport started construction in October 2006 and was scheduled to be completed in June 2008. Construction was delayed due to the original Local General Partner defaulting on his construction guarantee and resulting disputed mechanic liens on the property. In November 2008, the original Local General Partner was replaced with a new Local General Partner, Shelter Resource Corporation, due to restrictions implemented by the Iowa Finance Authority (“IFA”). Subsequently, with IFA’s approval, the defaulting original Local General Partner was removed from the Partnership leaving Shelter Resource Corporation as the sole Local General Partner.

conjunction with the State tax return filing. The net amount of the check after applicable federal taxes will be contributed back to the property to help fund construction shortfalls. Davenport was also allocated additional federal Low Income Housing Tax Credits as well as federal historical tax credits. Upon the Limited Partners’ approval of the dispositions of Sierra Run’s and Fernwood, the Partnership made the additional investment in Davenport. See the exit strategy in Note 1 regarding the dispositions of Sierra’s Run and Fernwood. On July 1, 2010, the Partnership committed additional capital to Davenport in the amount of $2,490,651. This additional commitment generated $408,710 of federal historic credits and $3,582,550 of additional federal Low Income Housing Tax Credits which were allocated to the partners of the Partnership.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, continue

The Partnership has retained outside tax counsel to pursue the IRS Notice matter in Washington, D.C. Counsel has made inquiries and awaits an explanation.

Item 3. Quantitative and Qualitative Disclosures About Market Risks

NOT APPLICABLE

Item 4. Controls and Procedures

(a) Disclosure controls and procedures

As of the end of the period covered by this report, the Partnership’s General Partner, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer of Associates, carried out an evaluation of the effectiveness of the Partnership’s “disclosure controls and procedures” as defined in Securities Exchange Act of 1934 Rule 13a-15 and 15d-15. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, the Partnership’s disclosure controls and procedures were not effective to ensure that material information required to be disclosed in the Partnership’s periodic report filings with SEC is recorded, processed, summarized and reported within the time period specified by the SEC’s rules and forms, consistent with the definition of “disclosure controls and procedures” under the Securities Exchange Act of 1934.

The Partnership must rely on the Local Limited Partnerships to provide the Partnership with certain information necessary to the timely filing of the Partnership’s periodic reports. Factors in the accounting at the Local Limited Partnerships have caused delays in the provision of such information during past reporting periods, and resulted in the Partnership’s inability to file its periodic reports in a timely manner.

Once the Partnership has received the necessary information from the Local Limited Partnerships, the Chief Executive Officer and the Chief Financial Officer of Associates believe that the material information required to be disclosed in the Partnership’s periodic report filings with SEC is effectively recorded, processed, summarized and reported, albeit not in a timely manner. Going forward, the Partnership will use the means reasonably within its power to impose procedures designed to obtain from the Local Limited Partnerships the information necessary to the timely filing of the Partnership’s periodic reports.

(b) Changes in internal controls

There were no changes in the Partnership’s internal control over financial reporting that occurred during the quarter ended December 31, 2014 that materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

Part II. Other Information

Item 1. Legal Proceedings

Grove Village Limited Partnership (“Grove Village”) and Pleasant Village Limited Partnership (“Pleasant Village”) (collectively, "the properties"), both Texas limited partnerships in which the Partnership is a Limited Partner, were audited by the Internal Revenue Service (“IRS”) for tax years 2007, 2008 and 2009. In its findings of those audits, the IRS asserted that the Low Income Housing Tax Credits (“LIHTCs”) for the properties should not have been claimed for those three years even though the Local General Partner for each of the properties represented on the tax returns that the taking of the LIHTCs was permissible. The Partnership received notification that the IRS Appeals Division ruled in favor of the IRS findings. The Partnership filed a Petition for Readjustment with the United States Tax Court for Pleasant Village. The Partnership did not file with the Tax Court for Grove Village. The Partnership expects that there will be a recapture of the LIHTCs taken for those years for Grove Village. In the event the Partnership is not successful with the Tax Court, management believes the maximum potential recapture for those years for both Grove Village and Pleasant Village would be $3,548,480, or $169 per Partnership Unit, including interest and penalties. The Partnership has obtained the Form 8609’s for Pleasant Village.

As additional background, the Local General Partner stopped making the mortgage payment for Grove Village and Pleasant Village in May 2013. To prevent the lender from commencing a foreclosure action against the properties and thereby eliminating any possibility of obtaining LIHTCs, WNC & Associates, Inc. (“WNC”) negotiated the purchase of the notes from the lender. Due to the purchase of the notes by WNC the properties were not at risk of foreclosure due to non-payment of the monthly mortgage payments. Since October 2013, WNC advanced $1,534,968 and $3,144,422 to Grove Village and Pleasant Village, respectively, to meet operating deficits, as well as renovation expense requirements.

In June 2013, the Partnership filed a lawsuit against the Local General Partner and the Guarantors. The Partnership has now settled with the Local General Partner and its insurance carrier for $3,100,000. To date only $2,000,000 has been paid with the balance due by July 30, 2015. The money has been used in part to reimburse WNC and fund reserves at the Partnership level.

In January 2015, Grove Village was sold to an unrelated third party and the sale proceeds were used to pay the mortgage note and fund reserves at the Partnership level.

Item 1A. Risk Factors

No material changes in risk factors as previously disclosed in the Partnership’s Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

NONE

Item 3. Defaults Upon Senior Securities

NONE

Item 4. Mine Safety Disclosures

NOT APPLICABLE

Item 5. Other Information

NONE

Item 6. Exhibits

Exhibit No.		Description

31.1		Certification of the Principal Executive Officer pursuant to Rule 13a-14 and 15d-14, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002. (filed herewith)

31.2		Certification of the Principal Financial Officer pursuant to Rule 13a-14 and 15d-14, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002. (filed herewith)

32.1		Section 1350 Certification of the Chief Executive Officer. (filed herewith)

32.2		Section 1350 Certification of the Chief Financial Officer. (filed herewith)

101		Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Condensed Balance Sheets at December 31, 2014 and March 31, 2014, (ii) the Condensed Statements of Operations for the three and nine months ended December 31, 2014 and 2013, (iii) the Condensed Statements of Partners’ Equity (Deficit) for the nine months ended December 31, 2014 (iv) the Condensed Statements of Cash Flows for the nine months ended December 31, 2014 and 2013 and (v) the Notes to Condensed Financial Statements.

Exhibits 32.1, 32.2 and 101 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section. Such exhibits shall not be deemed incorporated by reference into any filing under the Securities Act of 1933 or Securities Exchange Act of 1934.

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

WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 13

By:	WNC National Partners, LLC	General Partner


By:	/s/ Wilfred N. Cooper, Jr.
	Wilfred N. Cooper, Jr.
	President and Chief Executive Officer of WNC & Associates, Inc.

	Date: July 21, 2015


By:	/s/ Melanie R. Wenk
	Melanie R. Wenk
	Senior Vice President - Chief Financial Officer of WNC & Associates, Inc.
	Date: July 21, 2015

Attached files

WNC Housing Tax Credit Fund VI, L.P., Series 13 Reports

Also read