Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2017
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: 000-50837
WNC HOUSING TAX CREDIT FUND VI, L.P., Series 10
(Exact name of registrant as specified in its charter)
California
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33-0974362
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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17782 Sky Park Circle,
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92614-6404
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Irvine, CA
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(Zip code)
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(Address of principal executive offices)
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(714) 662-5565
(Telephone Number)
Securities registered pursuant to Section 12(b) of the
Act:
NONE
Securities registered pursuant to section 12(g) of the
Act:
UNITS OF LIMITED PARTNERSHIP INTEREST
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act
Yes ☐
No ☒
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 ☒
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 ☒ No ☐
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Website, if any, every
Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T (232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files).
Yes ☒
No ☐
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K (229.405 of this chapter) is not
contained herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.☒
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 definition 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___X__ Smaller
reporting company_____
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).
Yes____ No__X__
State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the
price at which the common equity was last sold, or the average bid
and asked price of such common equity, as of the last business day
of the registrant’s most recently completed second fiscal
quarter.
INAPPLICABLE
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference
and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into
which the document is incorporated: (1) Any annual report to
security holders; (2) Any proxy or information statement; and (3)
Any prospectus filed pursuant to Rule 424(b) or (c) under the
Securities Act of 1933. The listed documents should be clearly
described for identification purposes (e.g., annual report to
security holders for fiscal year ended December 24,
1980).
NONE
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Page
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Part I
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Item 1.
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Business
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4
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Item 1A.
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Risk Factors
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6
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Item 1B.
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Unresolved Staff Comments
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14
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Item 2.
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Properties
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14
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Item 3.
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Legal Proceedings
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18
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Item 4.
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Mine Safety Disclosures
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18
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Part II
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities
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18
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Item 5b.
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Use of Proceeds
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18
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Item 5c.
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Purchases of Equity Securities by the Issuer and Affiliated
Purchasers
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18
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Item 6.
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Selected Financial Data
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19
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Item 7.
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Management’s Discussion and Analysis of Financial Condition
and Results of Operations
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21
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Item 7A.
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Quantitative and Qualitative Disclosures about Market
Risk
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26
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Item 8.
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Financial Statements and Supplementary Data
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26
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Item 9.
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Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
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27
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Item 9A.
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Controls and Procedures
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27
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Item 9B.
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Other Information
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28
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Part III
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Item 10.
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Directors, Executive Officers and Corporate Governance
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29
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Item 11.
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Executive Compensation
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32
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
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33
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Item 13.
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Certain Relationships and Related Transactions, and Director
Independence
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34
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Item 14.
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Principal Accountant Fees and Services
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34
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Part IV
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Item 15.
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Exhibits and Financial Statement Schedules
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35
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Signatures
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42
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3
PART I.
Item 1. Business
Organization
WNC Housing Tax Credit Fund VI, L.P., Series 10 (the
“Partnership”) is a California Limited Partnership
formed under the laws of the State of California on July 17, 2001
and commenced operations on February 28, 2003. The
Partnership was formed to acquire limited partnership interests in
other limited partnerships ("Local Limited Partnerships") which own
multi-family housing complexes (“Housing Complexes”)
that are eligible for Federal low income housing tax credits
(“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 Complexes. 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 & Associates,
Inc. (“Associates” or the “General
Partner”). The chairman and the president of Associates owns
all of the outstanding stock of Associates. The business of the
Partnership is conducted primarily through the General Partner, as
the Partnership has no employees of its own.
Pursuant to a supplement dated February 28, 2003 to the prospectus
of the Partnership dated November 14, 2001, on March 6,
2003, 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. As of the close of the public
offering, a total of 13,153 Partnership Units representing
$13,119,270, net of dealer discounts of $31,220 and volume
discounts of $2,510, had been sold. As of March 31, 2017 and
2016, a total of 13,042 and 13,148 Partnership Units remain
outstanding, respectively. Holders of Partnership Units are
referred to herein as “Limited Partners”.
The Partnership shall continue in full force and effect until
December 31, 2062 unless terminated prior to that date pursuant to
the Partnership Agreement (as defined below) or law.
Description of Business
The Partnership's principal business objective is to provide its
Limited Partners with Low Income Housing Tax
Credits. The Partnership's principal business therefore
consists of investing as a limited partner or non-managing member
in Local Limited Partnerships each of which will own and operate a
Housing Complex which will qualify for the Low Income Housing Tax
Credits. In general, under Section 42 of the Internal
Revenue Code, an owner of low income housing can receive the Low
Income Housing Tax Credits to be used to reduce Federal taxes
otherwise due in each year of a ten-year credit period. Each
Housing Complex is subject to a 15-year compliance period (the
“Compliance Period”), and under state law may have to
be maintained as low income housing for 30 or more
years.
As a consequence of the provisions of tax law in effect for
dispositions of buildings prior to August 2008, in order to avoid
recapture of Low Income Housing Credits, the Partnership expected
that it would not dispose of its interests in Local Limited
Partnerships (“Local Limited Partnership Interests”) or
approve the sale by any Local Limited Partnership of its Housing
Complex prior to the end of the applicable Compliance Period. That
provision of law was amended in 2008 (i) to provide that there
would be no recapture on sale of a Low Income Housing Tax Credit
building during the Compliance Period if it were reasonable to
expect at the time of sale that the building would continue to be
operated as qualified low income housing (see “Exit
Strategy” below) and (ii) to eliminate the possibility
of posting a bond against potential recapture. The
Partnership is not seeking to sell its Local Limited Partnership
Interests. And, because of (i) the nature of the Housing
Complexes and the Local Limited Partnership Interests, (ii) the
difficulty of predicting the resale market for low-income housing,
(iii) the current economy, and (iv) the ability of lenders to
disapprove of transfer, it is not possible at this time to predict
when the liquidation of the Partnership's assets and the
disposition of the proceeds, if any, in accordance with the
Partnership's Agreement of Limited Partnership dated July 17, 2001
(the "Partnership Agreement"), would occur. Furthermore,
the codification of the economic substance doctrine as part of 2010
legislation has created some uncertainty about the deductibility of
losses from low income housing that is not generating Low Income
Housing Tax Credits, and this could have an adverse effect on the
resale market for Housing Complexes and Local Limited Partnership
Interests. Until a Local Limited Partnership Interest or
the related Housing Complex is sold, it is anticipated that the
Local General Partner would continue to operate such Housing
Complex. Notwithstanding the preceding, circumstances
beyond the control of the General Partner or the Local General
Partners may occur during the ten-year credit delivery period
and/or the Compliance Period, which would require the Partnership
to approve the disposition of a Housing Complex prior to the end
thereof, possibly resulting in recapture of Low Income Housing Tax
Credits.
4
The Partnership originally invested in six Local Limited
Partnerships, two of which have been sold or otherwise disposed of
as of March 31, 2017. Each of these Local Limited
Partnerships owns or owned a single Housing Complex that is
eligible for the Low Income Housing Tax Credits. Certain
Local Limited Partnerships may also benefit from additional
government programs promoting low- or moderate-income
housing.
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 must satisfy the
“reasonable belief” test outlined above to avoid
recapture.
The following table reflects the end of the ten-year credit
delivery period and the Compliance Period of each Housing
Complex:
Local Limited Partnership Name
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Expected last
year of credit
delivery
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15-year Compliance Period
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Catoosa Senior Village, L.P.
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2013
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2017
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Humboldt Village, L.P.
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2014
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2018
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Melodie Meadows Associates, Ltd.
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2013
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2017
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Starlight Place, L.P.
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2015
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2020
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With that in mind, the General Partner is continuing its review of
the Housing Complexes. The review considers many
factors, including extended use requirements (such as those due to
mortgage restrictions or state compliance agreements), the
condition of the Housing Complexes, Partnership cash flow, and the
tax consequences to the Limited Partners from the sale of the
Housing Complexes.
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 or the applicable
Local Limited Partnership Interests. The objective is to wind down
the Partnership after Low Income Housing Tax Credits are no longer
available. Local Limited Partnership Interests may be disposed of
at any time by the General Partner in its discretion. While
liquidation of the Housing Complexes or the applicable Local
Limited Partnership Interests continues to be evaluated, the
dissolution of the Partnership was not imminent as of March 31,
2017.
As of
March 31, 2016, the Partnership sold its Local Limited Partnership
interest in FDI-Green Manor 2003 (“Green Manor”) and
FDI-Pine Meadows 2003 (“Pine Meadows”). The Compliance
Periods for Green Manor and Pine Meadows expire in 2018. Recapture
Guarantee Surety Bonds were issued to the Purchasers to guarantee
the repayment of the recaptured tax credits and interests arising
from any non-compliance as provided in Section 42 of the Internal
Revenue Code arising after the date of the sale.
As of December 31, 2017, the Partnership has identified the
following Local Limited Partnerships for possible
disposition.
Local Limited Partnership
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Debt at 12/31/16
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Appraisal value
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Estimated sales price
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Estimated sale dates
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Estimated sales expenses
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Catoosa Senior Village
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$2,198,475
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$920,000
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$19,500
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6/30/2017
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*
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Melodie Meadows Associates
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$1,258,276
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$690,000
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31,200
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7/31/2017
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*
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*
Estimated price and close date has yet to be determined. The Local
Limited Partnership is not under contract to be purchased as of the
report date.
5
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. 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, as the
proceeds first would be used to pay Local Limited Partnership
obligations and funding of reserves.
Item 1A. Risk Factors
Set forth below are the risks the Partnership believes are the most
significant to the Limited Partners. The Partnership and
the Local Limited Partnerships operate in a continually changing
business environment and, therefore, new risks emerge from time to
time. This section contains some forward-looking
statements. For an explanation of the qualifications and
limitations on forward-looking statements, see Item 7.
(a) Risks
arising from the Internal Revenue Code rules governing Low Income
Housing Tax Credits
Low Income Housing Tax Credits
might not be available. If a Housing Complex does not satisfy
the requirements of Internal Revenue Code Section 42, then the
Housing Complex will not be eligible for Low Income Housing Tax
Credits.
Low Income Housing Tax Credits
might be less than anticipated. The Local General Partners calculate
the amount of the Low Income Housing Tax Credits. No
opinion of counsel will cover the calculation of the amount of Low
Income Housing Tax Credits. The IRS could challenge the
amount of the Low Income Housing Tax Credits claimed for any
Housing Complex under any of a number of provisions set forth in
Internal Revenue Code Section 42. A successful challenge
by the IRS would decrease the amount of the Low Income Housing Tax
Credits from the amount paid for by the
Partnership. Although
each Housing Complex has completed its Compliance Period, the IRS
generally can audit an information income tax return for a period
of three years following the filing date of the return. A
determination by the IRS that the amount of Low Income Housing Tax
Credits taken for an open year could result in a recapture of
credits with interest. If it does, recapture will be a
portion of all Low Income Housing Tax Credits taken in prior years
for that Housing Complex, plus interest. During the first 11
years of the Compliance Period, non-compliance results in one-third
of the Low Income Housing Tax Credits up to that point for the
particular Housing Complex being recaptured, plus interest.
Between years 12 and 15, the recapture is phased out
ratably.
Low Income Housing Tax Credits
may be recaptured if Housing Complexes are not owned and operated
for 15 years. Housing Complexes must comply with
Internal Revenue Code Section 42 for the 15-year Compliance
Period. Low Income Housing Tax Credits will be
recaptured with interest to the extent that a Housing Complex is
not rented as low income housing or in some other way does not
satisfy the requirements of Internal Revenue Code Section 42 during
the Compliance Period.
There can be no assurance that recapture will not
occur. If it does, recapture will be a portion of all
Low Income Housing Tax Credits taken in prior years for that
Housing Complex, plus interest. During the first 11
years of the Compliance Period, non-compliance results in one-third
of the Low Income Housing Tax Credits up to that point for the
particular Housing Complex being recaptured, plus
interest. Between years 12 and 15, the recapture is
phased out ratably.
Sales of Housing Complexes
after 15 years are subject to limitations which may impact a Local
Limited Partnership’s ability to sell its Housing
Complex. Each Local
Limited Partnership executes an extended low income housing
commitment with the state in which the Housing Complex is
located. The extended low income housing commitment
states the number of years that the Local Limited Partnership and
any subsequent owners must rent the Housing Complex as low income
housing. Under Federal law, the commitment must be for
at least 30 years. The commitment, actually agreed to,
may be significantly longer than 30 years. In
prioritizing applicants for Low Income Housing Tax Credits, most
states give additional points for commitment periods in excess of
30 years. On any sale of the Housing Complex during the
commitment period, the purchaser would have to agree to continue to
rent the Housing Complex as low income housing for the duration of
the commitment period. This requirement reduces the
potential market, and possibly the sales price, for the Housing
Complexes. The sale of a Housing Complex may be subject
to other restrictions. For example, Federal lenders or
subsidizers may have the right to approve or disapprove a purchase
of a Housing Complex. 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 amount of cash will be distributed to the
Limited Partners. The Partnership would first use sale
proceeds to pay obligations of the Partnership. As a
result, a material portion of the Low Income Housing Tax Credits
may represent a return of the money originally invested in the
Partnership.
6
As
part of the recently enacted health care legislation, Congress has
codified the economic substance doctrine. Because of its recent
enactment, the full reach of this provision is
unclear. Inasmuch as Housing Complexes might offer no
benefit to a purchaser other than tax benefits, it is possible that
the economic substance doctrine could be interpreted to limit
deduction of tax losses from Housing Complexes, which would be
expected to have a significant adverse effect on the sale value of
the Housing Complexes and the Local Limited Partnership
Interests.
Limited Partners can only use
Low Income Housing Tax Credits in limited
amounts. The ability
of an individual or other non-corporate Limited Partner to claim
Low Income Housing Tax Credits on his individual tax return is
limited. For example, an individual Limited Partner can use Low
Income Housing Tax Credits to reduce his tax liability
on:
●
an
unlimited amount of passive income, which is income from entities
such as the Partnership, and
●
$25,000
in income from other sources.
However, the use of Low Income Housing Tax Credits by an individual
against these types of income is subject to ordering rules, which
may further limit the use of Low Income Housing Tax
Credits. Some corporate Limited Partners are subject to
similar and other limitations. They include corporations which
provide personal services, and corporations which are owned by five
or fewer shareholders.
Any portion of a Low Income Housing Tax Credit which is allowed to
a Limited Partner under such rules is then aggregated with all of
the Limited Partner’s other business credits. The
aggregate is then subject to the general limitation on all business
credits. That limitation provides that a Limited Partner
can use business credits to offset the Limited Partner’s
annual tax liability equal to $25,000 plus 75% of the Limited
Partner’s tax liability in excess of $25,000. However, there
may be limits on the use of business credits to offset any
alternative minimum tax. All of these concepts are
extremely complicated.
(b) Risks
related to investment in Local Limited Partnerships and Housing
Complexes
Because the Partnership has
few investments, each investment will have a great impact on the
Partnership’s results of operations. Any single Housing Complex
experiencing poor operating performance, impairment of value or
recapture of Low Income Housing Tax Credits will have a significant
impact upon the Partnership as a whole.
The failure to pay mortgage
debt could result in a forced sale of a Housing
Complex. Each Local Limited
Partnership leverages the Partnership’s investment therein by
incurring mortgage debt. A Local Limited
Partnership’s revenues could be less than its debt payments
and taxes and other operating costs. If so, the Local
Limited Partnership would have to use working capital reserves,
seek additional funds, or suffer a forced sale of its Housing
Complex, which could include a foreclosure. The same
results could occur if government subsidies
ceased. Foreclosure would result in a loss of the
Partnership’s capital invested in the Housing
Complex. Foreclosure could also result in a recapture of
Low Income Housing Tax Credits, and a loss of Low Income Housing
Tax Credits for the year in which the foreclosure occurs. If the
Housing Complex is highly-leveraged, a relatively slight decrease
in the rental revenues could adversely affect the Local Limited
Partnership’s ability to pay its debt service requirements.
Mortgage debt may be repayable in a self-amortizing series of equal
installments or with a large balloon final
payment. Balloon payments maturing prior to the end of
the anticipated holding period for the Housing Complex create the
risk of a forced sale if the debt cannot be refinanced. There can
be no assurance that additional funds will be available to any
Local Limited Partnership if needed on acceptable terms or at
all.
The Partnership does not
control the Local Limited Partnerships and must rely on the Local
General Partners. The Local
General Partners will make all management decisions for the Local
Limited Partnerships and the Housing Complexes. The
Partnership has very limited rights with respect to management of
the Local Limited Partnerships. The Partnership will not be able to
exercise any control with respect to Local Limited Partnership
business decisions and operations. Consequently, the success of the
Partnership will depend on the abilities of the Local General
Partners.
7
Housing Complexes subsidized
by other government programs are subject to additional rules which
may make it difficult to operate and sell Housing
Complexes. Some or
all of the Housing Complexes receive or may receive government
financing or operating subsidies in addition to Low Income Housing
Tax Credits. The following are risks associated with
some such subsidy programs:
●
Obtaining tenants
for the Housing Complexes. Government regulations limit the types
of people who can rent subsidized housing. These regulations may
make it more difficult to rent the residential units in the Housing
Complexes.
●
Obtaining rent
increases. In many cases rents can only be increased with the prior
approval of the subsidizing agency.
●
Limitations on cash
distributions. The amount of cash that may be distributed to owners
of subsidized Housing Complexes is less than the amount that could
be earned by the owners of non-subsidized Housing
Complexes.
●
Limitations on sale
or refinancing of the Housing Complexes. A Local Limited
Partnership may be unable to sell its Housing Complex or to
refinance its mortgage loan without the prior approval of the
lender or state allocating agency. The lender or state allocating
agency may withhold such approval in the discretion of the lender
or state allocating agency. Approval may be subject to conditions,
including the condition that the purchaser continues to operate the
property as affordable housing for terms which could be as long as
30 years or more. In addition, any prepayment of a mortgage may
result in the assessment of a prepayment penalty.
●
Limitations on
transfers of interests in Local Limited Partnerships. The
Partnership may be unable to sell its interest in a Local Limited
Partnership without the prior approval of the lender or state
allocating agency. The lender or state allocating agency may
withhold such approval in the discretion of the lender or state
allocating agency. Approval may be subject to
conditions.
●
Limitations on
removal and admission of Local General Partners. The Partnership
may be unable to remove a Local General Partner from a Local
Limited Partnership except for cause, such as the violation of the
rules of the lender or state allocating authority. Regulations may
prohibit the removal of a Local General Partner or permit removal
only with the prior approval of the lender. Regulations may also
require approval of the admission of a successor Local General
Partner even upon the death or other disability of a Local General
Partner.
●
Limitations on
subsidy payments. Subsidy payments may be fixed in amount and
subject to annual legislative appropriations. The rental revenues
of a Housing Complex, when combined with the maximum committed
subsidy, may be insufficient to meet obligations. Congress or the
state legislature, as the case may be, may fail to appropriate or
increase the necessary subsidy. In those events, the mortgage
lender could foreclose on the Housing Complex unless a workout
arrangement could be negotiated.
●
Possible changes in
applicable regulations. Legislation may be enacted which adversely
revises provisions of outstanding mortgage loans. Such legislation
has been enacted in the past.
●
Limited Partners
may not receive distributions if Housing Complexes are sold. There
is no assurance that Limited Partners will receive any cash
distributions from the sale or refinancing of a Housing Complex.
The price at which a Housing Complex is sold may not be high enough
to pay the mortgage and other expenses at the Local Limited
Partnership and Partnerships levels which must be paid at such
time. If that happens, a Limited Partner’s return would be
derived only from the Low Income Housing Tax Credits and tax
losses. Similar risks apply to sales of Local Limited Partnership
Interests.
Uninsured casualties could result in losses
and recapture. There are casualties which are either
uninsurable or not economically insurable. These include
earthquakes, floods, wars and losses relating to hazardous
materials or environmental matters. If a Housing Complex
experienced an uninsured casualty, the Partnership could lose both
its invested capital and anticipated profits in such property. Even
if the casualty were an insured loss, the Local Limited Partnership
might be unable to rebuild the destroyed property. A portion of
prior Low Income Housing Tax Credits could be recaptured and future
Low Income Housing Tax Credits could be lost if the Housing Complex
were not restored within a reasonable period of time. Any liability
judgments against the Local Limited Partnership could exceed
available insurance proceeds or otherwise materially and adversely
affect the Local Limited Partnership. The cost of liability and
casualty insurance has increased in recent years. Casualty
insurance has become more difficult to obtain and may require large
deductible amounts.
8
Housing Complexes without
financing or operating subsidies may be unable to pay operating
expenses. If a Local Limited
Partnership were unable to pay operating expenses, one result could
be a forced sale of its Housing Complex. If a forced
sale occurs during the Compliance Period of a Housing Complex, a
partial recapture of Low Income Housing Tax Credits could occur. In
this regard, some of the Local Limited Partnerships may own Housing
Complexes which have no subsidies other than Low Income Housing Tax
Credits. Those Housing Complexes do not have the benefit
of below-market-interest-rate financing or operating subsidies
which often are important to the feasibility of low income
housing. Those Housing Complexes rely solely on rents to
pay expenses. However, in order for any Housing Complex to be
eligible for Low Income Housing Tax Credits, it must restrict the
rent which may be charged to tenants. Over time, the
expenses of a Housing Complex will increase. If a Local
Limited Partnership cannot increase its rents, it may be unable to
pay increased operating expenses.
The Partnership’s investment protection
policies will be worthless if the net worth of the Local General
Partners is not sufficient to satisfy their obligations.
There is a risk that the Local General Partners will be unable to
perform their financial obligations to the Partnership. The General
Partner has not established a minimum net worth requirement for the
Local General Partners. Rather, at the time of the
Partnership’s investment, each Local General Partner
demonstrated a net worth which the General Partner believed was
appropriate under the circumstances. The assets of the Local
General Partners are likely to consist primarily of real estate
holdings and similar assets. The fair market value of these types
of assets is difficult to estimate. These types of assets cannot be
readily liquidated to satisfy the financial guarantees and
commitments which the Local General Partners make to the
Partnership. Moreover, other creditors may have claims on these
assets. No escrow accounts or other security arrangements will be
established to ensure performance of a Local General
Partner’s obligations. The cost to enforce a Local General
Partner’s obligations may be high. If a Local General Partner
does not satisfy its obligations the Partnership may have no
remedy, or the remedy may be limited to removing the Local General
Partner as general partner of the Local Limited
Partnership.
Fluctuating economic
conditions can reduce the value of real estate. The Partnership’s principal business
objective is providing its Limited Partners with Low Income Housing
Tax Credits, not the generation of gains from the appreciation of
real estate held by the Local Limited
Partnerships. In its financial statements,
the Partnership has carried its investments in Local Limited
Partnerships at values equal to or less than the sum of the total
amount of the remaining future Low Income Housing Tax Credits
estimated to be allocated to the Partnership and the estimated
residual value to the Partnership of its interests in the Local
Limited Partnerships.
Any
investment in real estate is subject to risks from fluctuating
economic conditions. These conditions can adversely affect the
ability to realize a profit or even to recover invested capital.
Among these conditions are:
●
the
general and local job market,
●
the
availability and cost of mortgage financing,
●
monetary
inflation,
●
tax,
environmental, land use and zoning policies,
●
the
supply of and demand for similar properties,
●
neighborhood
conditions,
●
the
availability and cost of utilities and water.
For each of the years ended March 31, 2017, 2016 and 2015, a loss
in value of an investment in a Local Limited Partnership, other
than a temporary decline, is recorded by the Partnership in its
financial statements as an impairment loss. Impairment is measured
by comparing the Partnership’s carrying amount in the
investment to the sum of the total amount of the remaining future
Low Income Housing Tax Credits estimated to be allocated to the
Partnership and any estimated residual value to the Partnership.
For the years ended March 31, 2017, 2016 and 2015, impairment loss
related to investments in Local Limited Partnerships was $0,
$125,322 and $413,639,
respectively.
9
(c) Tax
risks other than those relating to tax credits
In addition to the risks pertaining specifically to Low Income
Housing Tax Credits, there are other Federal income tax
risks. Additional Federal income tax risks associated
with the ownership of Partnership Units and the operations of the
Partnership and the Local Limited Partnerships include, but are not
limited to, the following:
No opinion of counsel as to
certain matters. No
legal opinion is obtained regarding matters:
●
the
determination of which depends on future factual
circumstances,
●
which
are peculiar to individual Limited Partners, or
●
which
are not customarily the subject of an opinion.
The more significant of these matters include:
●
allocating
purchase price among components of a property, particularly as
between buildings and fixtures, the cost of which is depreciable,
and the underlying land, the cost of which is not
depreciable,
●
characterizing
expenses and payments made to or by the Partnership or a Local
Limited Partnership,
●
identifying
the portion of the costs of any Housing Complex which qualify for
historic and other tax credits,
●
applying
to any specific Limited Partner the limitation on the use of tax
credits and tax losses. Limited Partners must determine
for themselves the extent to which they can use tax credits and tax
losses, and
●
the
application of the alternative minimum tax to any specific Limited
Partner, or the calculation of the alternative minimum tax by any
Limited Partner. The alternative minimum tax could
reduce the tax benefits from an investment in the
Partnership.
There can be no assurance, therefore, that the IRS will not
challenge some of the tax positions adopted by the
Partnership. The courts could sustain an IRS
challenge. An IRS challenge, if successful, could have a
detrimental effect on the Partnership’s ability to realize
its investment objectives.
Passive activity rules will
limit deduction of the Partnership’s losses and impose tax on
interest income. The Internal Revenue Code imposes
limits on the ability of most investors to claim losses from
investments in real estate. An individual may claim
these so-called passive losses only as an offset to income from
investments in real estate or rental activities. An
individual may not claim passive losses as an offset against other
types of income, such as salaries, wages, dividends and
interest. These passive activity rules will restrict the
ability of most Limited Partners to use losses from the Partnership
as an offset of non-passive income.
The Partnership may earn
interest income on its reserves and loans. The passive activity rules generally
will categorize interest as portfolio income, and not passive
income. Passive losses cannot be used as an offset to portfolio
income. Consequently, a Limited Partner could pay tax
liability on portfolio income from the
Partnership.
At risk rules might limit
deduction of the Partnership’s losses. If a significant portion of the
financing used to purchase Housing Complexes does not consist of
qualified nonrecourse financing, the “at risk” rules
will limit a Limited Partner’s ability to claim Partnership
losses to the amount the Limited Partner invests in the
Partnership. The “at risk” rules of the
Internal Revenue Code generally limit a Limited Partner’s
ability to deduct Partnership losses to the sum
of:
●
the
amount of cash the Limited Partner invests in the Partnership,
and
●
the
Limited Partner’s share of Partnership qualified nonrecourse
financing.
Qualified nonrecourse financing is non-convertible, nonrecourse
debt which is borrowed from a government, or with exceptions, any
person actively and regularly engaged in the business of lending
money.
10
Tax liability on sale of a
Housing Complex or Local Limited Partnership Interest may exceed
the cash available from the sale. When a Local Limited Partnership
sells a Housing Complex it will recognize gain. Such gain is equal
to the difference between:
●
the
sales proceeds plus the amount of indebtedness secured by the
Housing Complex, and
●
the
adjusted basis for the Housing Complex. The adjusted basis for a
Housing Complex is its original cost, plus capital expenditures,
minus depreciation.
Similarly, when the Partnership sells an interest in a Local
Limited Partnership the Partnership will recognize gain. Such gain
is equal to the difference between:
●
the
sales proceeds plus the Partnership’s share of the amount of
indebtedness secured by the Housing Complex, and
●
the
adjusted basis for the interest. The adjusted basis for
an interest in a Local Limited Partnership is the amount paid for
the interest, plus income allocations and cash distributions, less
loss allocations.
Accordingly, gain will be increased by the depreciation deductions
taken during the holding period for the Housing
Complex. In some cases, a Limited Partner could have a
tax liability from a sale greater than the cash distributed to the
Limited Partner from the sale.
Alternative minimum tax
liability could reduce a Limited Partner’s tax
benefits. If a
Limited Partner pays alternative minimum tax, the Limited Partner
could suffer a reduction in benefits from an investment in the
Partnership. The application of the alternative minimum
tax is personal to each Limited Partner. Tax credits may
not be utilized to reduce alternative minimum tax
liability.
IRS could audit the returns of
the Partnership, the Local Limited Partnerships or the Limited
Partners. The IRS can audit the
Partnership or a Local Limited Partnership at the entity level with
regard to issues affecting the entity. The IRS does not
have to audit each Limited Partner in order to challenge a position
taken by the Partnership or a Local Limited
Partnership. Similarly, only one judicial proceeding can
be filed to contest an IRS determination. A contest by
the Partnership of any IRS determination might result in high legal
fees.
An audit of the Partnership or
a Local Limited Partnership also could result in an audit of a
Limited Partner. An
audit of a Limited Partner’s tax returns could result in
adjustments both to items that are related to the Partnership and
to unrelated items. The Limited Partner could then be
required to file amended tax returns and pay additional tax plus
interest and penalties.
A successful IRS challenge to
tax allocations of the Partnership or a Local Limited Partnership
would reduce the tax benefits of an investment in the
Partnership. Under
the Internal Revenue Code, a partnership’s allocation of
income, gains, deductions, losses and tax credits must have
substantial economic effect. Substantial economic effect
is a highly-technical concept. The fundamental principle
is two-fold. If a partner will benefit economically from
an item of partnership income or gain, that item must be allocated
to him so that he bears the correlative tax
burden. Conversely, if a partner will suffer
economically from an item of partnership deduction or loss, that
item must be allocated to him so that he bears the correlative tax
benefit. If a partnership’s allocations do not
have substantial economic effect, then the partnership’s tax
items are allocated in accordance with each partner’s
interest in the partnership. The IRS might challenge the
allocations made by the Partnership:
●
between
the Limited Partners and the General Partner,
●
among
the Limited Partners, or
●
between
the Partnership and a Local General Partner.
If any allocations were successfully challenged, a greater share of
the income or gain or a lesser share of the losses or tax credits
might be allocated to the Limited Partners. This would
increase the tax liability or reduce the tax benefits to the
Limited Partners.
11
Tax liabilities could arise in
later years of the Partnership. After a period of years following
commencement of operations by a Local Limited Partnership, the
Local Limited Partnership may generate profits rather than
losses. A Limited Partner would have tax liability on
his share of such profits unless he could offset the income
with:
●
unused
passive losses from the Partnership or other investments,
or
●
current
passive losses from other investments.
In such circumstances, the Limited Partner would not receive a cash
distribution from the Partnership with which to pay any tax
liability.
IRS challenge to tax treatment
of expenditures could reduce losses. The IRS may contend that fees and payments of
the Partnership or a Local Limited Partnership:
●
should
be deductible over a longer period of time or in a later
year,
●
are
excessive and may not be capitalized or deducted in
full,
●
should
be capitalized and not deducted, or
●
may
not be included as part of the basis for computing tax
credits.
Any such contention by the IRS could adversely impact, among other
things:
●
the
eligible basis of a Housing Complex used to compute Low Income
Housing Tax Credits,
●
the
adjusted basis of a Housing Complex used to compute
depreciation,
●
the
correct deduction of fees,
●
the
amortization of organization and offering expenses and start-up
expenditures.
If the IRS were successful in any such contention, the anticipated
Low Income Housing Tax Credits and losses of the Partnership would
be reduced, perhaps substantially.
Changes in tax law might
reduce the value of Low Income Housing Tax
Credits. Although all Low
Income Housing Tax Credits are allocated to a Housing Complex at
commencement of the 10-year credit period, there can be no
assurance that future legislation may not adversely affect an
investment in the Partnership. For example, legislation could
reduce or eliminate the value of Low Income Housing Tax
Credits. In this regard, before 1986, the principal tax
benefit of an investment in low income housing was tax
losses. These tax losses generally were used to reduce
an investor’s income from all sources on a dollar-for-dollar
basis. Investments in low income housing were made in
reliance on the availability of such tax
benefits. However, tax legislation enacted in 1986
severely curtailed deduction of such losses.
New administrative or judicial
interpretations of the law might reduce the value of Low Income
Housing Tax Credits. Many of the provisions of the Internal
Revenue Code related to low income housing and real estate
investments have not been interpreted by the IRS in regulations,
rulings or public announcements, or by the courts. In
the future, these provisions may be interpreted or clarified by the
IRS or the courts in a manner adverse to the Partnership or the
Local Limited Partnerships. The IRS constantly reviews
the Federal tax rules, and can revise its interpretations of
established concepts. Any such revisions could reduce or
eliminate tax benefits associated with an investment in the
Partnership.
State income tax laws may
adversely affect the Limited Partners. A Limited Partner may be required to
file income tax returns and be subject to tax and withholding in
each state or local taxing jurisdiction in which: a Housing Complex
is located, the Partnership or a Local Limited Partnership engages
in business activities, or the Limited Partner is a
resident. Corporate Limited Partners may be required to
pay state franchise taxes.
12
The tax treatment of
particular items under state or local income tax laws may vary
materially from the Federal income tax treatment of such
items. Nonetheless,
many of the Federal income tax risks associated with an investment
in the Partnership may also apply under state or local income tax
law. The Partnership may be required to withhold state
taxes from distributions or income allocations to Limited Partners
in some instances.
(d) Risks
related to the Partnership and the Partnership
Agreement
The Partnership may be unable
to timely provide financial reports to the Limited Partners which
would adversely affect their ability to monitor Partnership
operations. Historically, the Partnership has been unable to
timely file and provide investors with all of its required periodic
reports. In some instances, the delay has been
substantial. Each Local General Partner is required to retain
independent public accountants and to report financial information
to the Partnership in a timely manner. There cannot be
any assurance that the Local General Partners will satisfy these
obligations. If not, the Partnership would be unable to
provide to the Limited Partners in a timely manner its financial
statements and other reports. That would impact the
Limited Partners’ ability to monitor Partnership
operations. The Partnership’s failure to meet its
filing requirements under the Securities Exchange Act of 1934 could
reduce the liquidity for the Partnership Units due to the
unavailability of public information concerning the
Partnership. The failure to file could also result in
sanctions imposed by the SEC. Any defense mounted by the
Partnership in the face of such sanctions could entail legal and
other fees, which would diminish cash reserves.
Lack of liquidity of
investment. There is
no public market for the purchase and sale of Partnership Units,
and it is unlikely that one will develop. Accordingly,
Limited Partners may not be able to sell their Partnership Units
promptly or at a reasonable price. Partnership Units
should be considered as a long-term investment because the
Partnership is unlikely to sell any Local Limited Partnership
Interests for at least 15 years. Partnership Units
cannot be transferred to tax-exempt or foreign entities, or through
a secondary market. The General Partner can deny
effectiveness of a transfer if necessary to avoid adverse tax
consequences from the transfer. The General Partner does
not anticipate that any Partnership Units will be redeemed by the
Partnership.
The Limited Partners will not
control the Partnership and must rely totally on the General
Partner. The General
Partner will make all management decisions for the
Partnership. Management decisions include exercising
powers granted to the Partnership by a Local Limited
Partnership. Limited Partners have no right or power to
take part in Partnership management.
Individual Limited Partners will have no recourse if they disagree
with actions authorized by a vote of the majority. The
Partnership Agreement grants to Limited Partners owning more than
50% of the Partnership Units the right to:
o
remove
the General Partner and elect a replacement general
partner,
o
amend
the Partnership Agreement,
o
terminate
the Partnership.
Accordingly, a majority-in-interest of the Limited Partners could
cause any such events to occur, even if Limited Partners owning 49%
of the Partnership Units opposed such action.
Limitations on liability of
the General Partner to the Partnership. The ability of Limited Partners to
sue the General Partner and its affiliates is subject to
limitations. The Partnership Agreement limits the
liability of the General Partner and its affiliates to the Limited
Partners. The General Partner and its affiliates will
not be liable to the Limited Partners for acts and omissions:
performed or omitted in good faith, and performed or omitted in a
manner which the General Partner reasonably believed to be within
the scope of its authority and in the best interest of the Limited
Partners, provided such conduct did not constitute negligence or
misconduct.
Therefore, Limited Partners may be less able to sue the General
Partner and its affiliates than would be the case if such
provisions were not included in the Partnership
Agreement.
Associates and its affiliates
are serving as the general partners of many other
partnerships. Depending on their corporate area of
responsibility, the officers of Associates initially devote
approximately 5% to 50% of their time to the
Partnership. These individuals spend significantly less
time devoted to the Partnership after the investment of the
Partnership’s capital in Local Limited
Partnerships.
13
The interests of Limited
Partners may conflict with the interests of the General Partner and
its affiliates. The
General Partner and its affiliates are committed to the management
of more than 100 other limited partnerships that have investments
similar to those of the Partnership. The General Partner
and its affiliates receive substantial compensation from the
Partnership. The General Partner decides how the
Partnership’s investments in Housing Complexes are managed,
and when the investments will be sold. The General Partner may face
a conflict in these circumstances because the General
Partner’s share of fees and cash distributions from the
transaction may be more or less than their expected share of fees
if a Housing Complex was not sold. The Partnership has not
developed any formal process for resolving conflicts of interest.
However, the General Partner is subject to a fiduciary duty to
exercise good faith and integrity in handling the affairs of the
Partnership, and that duty will govern its actions in all such
matters. Furthermore, the manner in which the Partnership can
operate and sell investments is subject to substantial restrictions
as outlined in the Partnership Agreement.
Anticipated
future and existing cash resources of the Partnership are not
sufficient to pay existing liabilities of the
Partnership. However, substantially all of the
existing liabilities of the Partnership are payable to the General
Partner and/or its affiliates.
The Partnership’s accrued payables consist
primarily of the asset management fees payable to the
General Partner. These asset management fees payable
increased by approximately $74,000,
$80,000 and $92,000 for the years ended March 31, 2017, 2016 and
2015, respectively. The Partnership’s future
contractual cash obligations consist of its obligations to pay
future annual asset management fees and the payables due to the
Local Limited Partnerships. The future annual asset
management fees will equal approximately $74,000 per year through
the termination of the Partnership, which must occur no later than
December 31, 2062. 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 the
existing contractual obligations and
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.
Associates
has agreed to continue providing advances sufficient enough to fund
the operations and working capital requirements of the Partnership
through June 30, 2018.
Item 1B. Unresolved Staff Comments
Not Applicable
Item 2. Properties
Through its investments in Local Limited Partnerships, the
Partnership holds indirect ownership interests in the Housing
Complexes. The following table reflects the status of
the four Housing Complexes as of the dates or for the periods
indicated:
14
WNC Housing Tax Credit Fund VI, L.P., Series 10
|
||
March 31, 2017
|
|
|
|
|
|
As of March 31, 2017
|
As of December 31, 2016
|
|||
Local Limited
Partnership Name
|
Location
|
General Partner Name
|
Partnership’s Total Investment in Local Limited
Partnership
|
Amount of Investment Paid to Date
|
Number of Units
|
Estimated Aggregate
Low Income Housing Tax Credits (1)
|
Mortgage Balances of Local Limited Partnership
|
|
|
|
|
|
|
|
|
Catoosa
Senior Village, L.P.
|
Calhoun,
Georgia
|
BC
Holdings, LLC
|
$1,997,000
|
$1,997,000
|
60
|
$2,663,000
|
$2,199,000
|
|
|
|
|
|
|
||
|
|
|
|
|
|
||
Humboldt
Village, L.P.
|
Winnemucca,
Nevada
|
Humboldt
Village, LLC
|
1,713,000
|
1,713,000
|
66
|
2,351,000
|
2,149,000
|
|
|
|
|
|
|
||
Melodie
Meadows Associates, Ltd.
|
Glencoe,
Alabama
|
Eagle
Creek Partners
|
1,569,000
|
1,569,000
|
40
|
2,135,000
|
1,258,000
|
|
|
|
|
|
|
||
Starlight
Place, L.P.
|
Americus,
Georgia
|
BC
Holdings, LLC
|
3,258,000
|
3,258,000
|
52
|
4,402,000
|
351,000
|
|
|
|
|
|
|
||
|
$8,537,000
|
$8,537,000
|
218
|
$11,551,000
|
$5,957,000
|
(1)
Represents aggregate anticipated Low Income
Housing Tax Credits to be received over the 10 year credit period
if Housing Complexes are retained and rented in compliance with
credit rules for the 15-year Compliance Period. All of the anticipated Low Income Housing Tax
Credits have been received from the Local Limited Partnerships and
allocated to the Limited Partners and General Partner and are no
longer available to the Partnership’s Limited
Partners.
15
WNC Housing Tax Credit Fund VI, L.P., Series 10
|
||
March 31, 2017
|
|
|
|
For the Year Ended December 31, 2016
|
||
Local Limited Partnership Name
|
Rental Income
|
Net Income (Loss)
|
Low Income Housing Tax Credits Allocated to
Partnership
|
|
|
|
|
Catoosa
Senior Village, L.P.
|
$300,000
|
$(70,000)
|
99.97%
|
|
|
|
|
Humboldt
Village, L.P.
|
433,000
|
(21,000)
|
92.06%
|
|
|
|
|
Melodie
Meadows Associates, Ltd.
|
169,000
|
(77,000)
|
99.98%
|
|
|
|
|
Starlight
Place, L.P.
|
289,000
|
(156,000)
|
99.97%
|
|
|
|
|
|
$1,191,000
|
$(324,000)
|
|
16
WNC Housing Tax Credit Fund VI, L.P., Series 10
|
|
|||||||
March 31, 2017
|
|
|
|
|
|
Occupancy Rates
As of December 31,
|
||||
Local
Limited Partnership
Name
|
Location
|
General
Partner Name
|
2016
|
2015
|
2014
|
2013
|
2012
|
|
|
|
|
|
|
|
|
Catoosa
Senior Village, L.P.
|
Calhoun,
Georgia
|
BC
Holdings, LLC
|
97%
|
95%
|
100%
|
93%
|
100%
|
|
|
|
|
|
|
||
FDI
– Green Manor 2003, Ltd.
|
Hempstead,
Texas
|
Fieser
Holding, Inc.
|
N/A
|
N/A
|
58%
|
55%
|
68%
|
|
|
|
|
|
|
||
FDI
– Pine Meadows 2003, Ltd.
|
Prairie
View, Texas
|
Fieser
Holding, Inc.
|
N/A
|
N/A
|
66%
|
51%
|
85%
|
|
|
|
|
|
|
||
Humboldt
Village, L.P.
|
Winnemucca,
Nevada
|
Humboldt
Village, LLC
|
95%
|
97%
|
92%
|
92%
|
94%
|
|
|
|
|
|
|
||
Melodie
Meadows Associates, Ltd.
|
Glencoe,
Alabama
|
Eagle
Creek Partners
|
95%
|
100%
|
100%
|
98%
|
100%
|
|
|
|
|
|
|
||
Starlight
Place, L.P.
|
Americus,
Georgia
|
BC
Holdings, LLC
|
100%
|
100%
|
100%
|
100%
|
100%
|
|
|
|
|
|
|
||
Weighted
Average
|
97%
|
98%
|
86%
|
82%
|
92%
|
N/A - The Partnership sold its interest in the Local Limited
Partnership prior to the respective year end.
17
Item 3. Legal Proceedings
NONE
Item 4. Mine Safety Disclosures
NOT
APPLICABLE
PART II.
Item 5. Market for Registrant’s Common Equity,
Related Stockholder Matters and Issuer Purchases of Equity
Securities
Item 5a.
a)
The
Partnership Units are not traded on a public exchange but were sold
through a public offering. It is not anticipated that
any public market will develop for the purchase and sale of any
Partnership Units and none exists. Partnership Units can be
assigned or otherwise transferred only if certain requirements in
the Partnership Agreement are satisfied.
b)
At
March 31, 2017, there were 644 Limited Partners and no assignees of
Partnership Units who were not admitted as Limited
Partners.
c)
The
Partnership was not designed to provide operating cash
distributions to Limited Partners. It is possible that
the Partnership could make distributions from sale proceeds, if the
Partnership is able to sell its Local Limited Partnership Interests
or Housing Complexes for more than the related closing costs and
any then accrued obligations of the Partnership. There
can be no assurance in this regard. Any distributions
would be made in accordance with the terms of the Partnership
Agreement. For all periods presented there were no cash
distributions to the Limited Partners.
d)
No
securities are authorized for issuance by the Partnership under
equity compensation plans.
e)
The
Partnership does not issue common stock.
f)
No
unregistered securities were sold by the Partnership during the
year ended March 31, 2017.
Item 5b. Use of Proceeds
NOT APPLICABLE
Item 5c. Purchases of Equity Securities by the Issuer and
Affiliated Purchasers
NONE
18
Item 6. Selected Financial Data
Selected balance sheet information for the Partnership is as
follows:
|
March 31,
|
||||
|
|
|
|
|
|
|
2017
|
2016
|
2015
|
2014
|
2013
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
Cash
and cash equivalents
|
$38,303
|
$41,923
|
$14,591
|
$7,498
|
$44,994
|
Investments
in Local Limited Partnerships, net
|
-
|
-
|
148,733
|
664,639
|
1,698,269
|
Other
assets
|
-
|
2,700
|
-
|
-
|
-
|
Total Assets
|
$38,303
|
$44,623
|
$163,324
|
$672,137
|
$1,743,263
|
LIABILITIES
|
|
|
|
|
|
Payables
to Local Limited Partnerships
|
$-
|
$-
|
$-
|
$-
|
$-
|
Accrued
fees and expenses due to General Partner and
affiliates
|
1,098,095
|
999,908
|
923,518
|
799,168
|
701,922
|
|
|
|
|
|
|
Total Liabilities
|
1,098,095
|
999,908
|
923,518
|
799,168
|
701,922
|
|
|
|
|
|
|
PARTNERS' EQUITY (DEFICIT)
|
(1,059,792)
|
(955,285)
|
(760,194)
|
(127,031)
|
1,041,341
|
|
|
|
|
|
|
Total Liabilities and
Partners’ Equity (Deficit)
|
$38,303
|
$44,623
|
$163,324
|
$672,137
|
$1,743,263
|
19
Selected results of operations, cash flows and other information
for the Partnership are as follows:
|
For the Years Ended March 31,
|
||||
|
2017
|
2016
|
2015
|
2014
|
2013
|
|
|
|
|
|
|
Loss from operations (Note
1)
|
$(104,515)
|
$(229,785)
|
$(539,998)
|
$(906,853)
|
$(1,139,340)
|
Equity
in losses of Local Limited Partnerships
|
-
|
(23,411)
|
(93,166)
|
(261,526)
|
(291,873)
|
Gain
on sale of Local Limited Partnerships
|
-
|
58,099
|
-
|
-
|
-
|
Interest
income
|
8
|
6
|
1
|
7
|
15
|
|
|
|
|
|
|
Net loss
|
$(104,507)
|
$(195,091)
|
$(633,163)
|
$(1,168,372)
|
$(1,431,198)
|
|
|
|
|
|
|
Net loss allocated to:
|
|
|
|
|
|
General
Partner
|
$(105)
|
$(195)
|
$(633)
|
$(1,168)
|
$(1,431)
|
|
|
|
|
|
|
Limited
Partners
|
$(104,402)
|
$(194,896)
|
$(632,530)
|
$(1,167,204)
|
$(1,429,767)
|
|
|
|
|
|
|
Net loss per Partnership Unit
|
$(8)
|
$(14.82)
|
$(48.11)
|
$(88.77)
|
$(108.70)
|
|
|
|
|
|
|
Outstanding weighted Partnership Units
|
13,042
|
13,148
|
13,148
|
13,148
|
13,153
|
Note 1 - Loss from operations for the years ended March 31, 2017,
2016, 2015, 2014, and 2013, includes a charge for impairment loss
on investments in Local Limited Partnerships of $0,
$125,322, $413,639, $770,604, and
$1,016,943, respectively, (see Note 2 to the financial
statements).
20
|
For the Years Ended March 31,
|
||||
|
|
|
|
|
|
|
2017
|
2016
|
2015
|
2014
|
2013
|
|
|
|
|
|
|
Net cash provided by (used in):
|
|
|
|
|
|
Operating
activities
|
$(3,620)
|
$(30,767)
|
$(2,008)
|
$(38,996)
|
$(41,700)
|
Investing
activities
|
-
|
58,099
|
9,101
|
1,500
|
8,404
|
Net change in cash and cash equivalents
|
(3,620)
|
27,332
|
7,093
|
(37,496)
|
(33,296)
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of year
|
41,923
|
14,591
|
7,498
|
44,994
|
78,290
|
|
|
|
|
|
|
Cash and cash equivalents, end of year
|
$38,303
|
$41,923
|
$14,591
|
$7,498
|
$44,994
|
Low Income Housing Tax Credits per Partnership Unit were as follows
for the years ended December 31:
|
2016
|
2015
|
2014
|
2013
|
2012
|
Federal
|
$-
|
$16
|
$49
|
$81
|
$101
|
State
|
-
|
-
|
-
|
-
|
-
|
Total
|
$-
|
$16
|
$49
|
$81
|
$101
|
Item 7. 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-K 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
Credits property market and the economy in general, changes in law
rules and regulations, and 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-K and in other reports filed with the Securities and Exchange
Commission. The following discussion should be read in
conjunction with the financial statements and the notes thereto
included elsewhere in this filing.
Critical Accounting Policies and Certain Risks and
Uncertainties
The Partnership believes that the following discussion addresses
the Partnership’s most significant accounting policies, which
are the most critical to aid in fully understanding and evaluating
the Partnership’s reported financial results, and certain of
the Partnership’s risks and uncertainties.
21
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.
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 product 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 were capitalized as part of the investment account
and were being amortized over 30 years (See Notes 2 and 3 to the
financial statements).
“Equity in losses of Local Limited Partnerships”
for each year ended March 31 has been recorded by the Partnership
based on the twelve months of reported results provided by the
Local Limited Partnerships for each year ended December 31. Equity
in losses from the Local Limited Partnerships allocated to the
Partnership is 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.
Distributions received from the Local Limited Partnerships are
accounted for as a reduction of the investment
balance. Distributions received after the investment has
reached zero are recognized as distribution income.
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.
22
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 2013 remain open.
Impact of Recent Accounting Pronouncements
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 was permitted. The adoption of this
update did not materially affect the Partnership's financial
statements.
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 is effective for
periods beginning after December 15, 2015. The adoption of this
update did not materially affect the Partnership's financial
statements.
Certain Risks and Uncertainties
See Item 1A for a discussion of risks regarding the
Partnership.
To date, certain Local Limited Partnerships have incurred
significant operating losses and have working capital
deficiencies. In the event these Local Limited
Partnerships continue to incur significant operating losses,
additional capital contributions by the Partnership and/or the
Local General Partners may be required to sustain the operations of
such Local Limited Partnerships. If additional capital
contributions are not made when they are required, the
Partnership’s investment in certain of such Local Limited
Partnerships could be lost, and the loss and recapture of the
related Low Income Housing Tax Credits could occur.
Anticipated future and existing cash resources of the Partnership
are not sufficient to pay existing liabilities of the
Partnership. However, substantially all of the existing
liabilities of the Partnership are payable to the General Partner
and/or its affiliates. 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.
23
Financial Condition
For the year ended March 31, 2017
The Partnership’s assets at March 31, 2017 consisted
of $38,000 in cash and cash
equivalents. Liabilities at March 31, 2017 consisted of
$1,098,000 of accrued fees and
expenses due to General Partner and affiliates, (See “Future
Contractual Cash Obligations” below).
Results of Operations
Year Ended March 31, 2017 Compared to Year Ended March 31,
2016 The
Partnership’s net loss for the year ended March 31,
2017 was $105,000, reflecting a
decrease of $90,000 from the
net loss experienced for the year ended March 31, 2016 of $195,000.
The decrease in net loss was due in part to a decrease of $125,000
in impairment loss for the year ended March 31, 2017 compared to
the year ended March 31, 2016. There was also a decrease of $23,000
in equity in losses of Local Limited
Partnerships. All investment balances reached zero
in the prior year, therefore no additional losses or impairment
could be recorded. There was $58,000 gain on sale during the
year ended March 31, 2016 compared to no gain on sale during the
year ended March 31, 2017. The gain on sale of Local Limited
Partnerships will vary from period to period depending on the value
and sales price of the Housing Complexes that have been identified
for disposition and the closing date of such
transaction.
Accounting and legal fees decreased by
$4,000 for the year ended March 31, 2017 compared to the year ended
March 31, 2016 due to the timing of the accounting work
performed. The Partnership’s asset management fees
decreased $6,000 for the year ended March 31, 2017. These fees are
calculated based on the value of the invested assets, which
decreased due to the sale of Local Limited
Partnerships.
Reporting fees and distribution income
decreased by $10,000 for the year ended March 31, 2017 due to the
fact that Local Limited Partnerships pay the reporting fees and
distributions to the Partnership when the Local Limited
Partnerships’ cash flows will allow for the payment. Write
off of other assets increased $3,000 for the year ended March 31,
2017. Capitalized costs from potential disposition of Local Limited
Partnerships were expensed due to the length of time it has taken
to dispose of the properties.
Year Ended March 31, 2016 Compared to Year Ended March 31,
2015 The
Partnership’s net loss for the year ended March 31, 2016 was
$195,000, reflecting a decrease of $438,000 from the net loss
experienced for the year ended March 31, 2015 of $633,000. The
decrease in net loss was due in part to a decrease of $288,000 in
impairment loss for the year ended March 31, 2016 compared to the
year ended March 31, 2015. The impairment loss can
vary each year depending on the annual decrease in Low Income
Housing Tax Credits allocated to the Partnership compared to the
current net investment balance that is being carried for the
particular Local Limited Partnerships. There was a $58,000
increase in gain on sale during the year ended March 31, 2016. The
gain on sale of Local Limited Partnerships will vary from period to
period depending on the value and sales price of the Housing
Complexes that have been identified for disposition and the closing
date of such transaction. There
was also a decrease of $70,000 in equity in losses of Local Limited
Partnerships. The equity in losses can vary from year to
year depending on the operations of the underlying Housing
Complexes of the Local Limited Partnerships. As all remaining
investments in Local Limited Partnerships have been reduced to
zero, no further equity in losses of Local Limited Partnerships is
expected to be recognized by the Partnership. Accounting and legal fees increased by $5,000 for
the year ended March 31, 2016 compared to the year ended March 31,
2015 due to the timing of the accounting work performed. The
Partnership’s asset management fees decreased $12,000 for the
year ended March 31, 2016. These fees are calculated based on the
value of the invested assets, which decreased due to the sale of
Local Limited Partnerships.
Reporting fees and distribution income
increased by $13,000 for the year ended March 31, 2016 due to the
fact that Local Limited Partnerships pay the reporting fees and
distributions to the Partnership when the Local Limited
Partnerships’ cash flows will allow for the
payment.
24
Liquidity and Capital Resources
Year Ended March 31, 2017 Compared to Year Ended March 31,
2016 The net
decrease in cash and cash equivalents during the year ended March
31, 2017 was $4,000 compared to a net increase in cash and cash
equivalents for the year ended March 31, 2016 of $27,000. The
Partnership received $58,000 in
net proceeds from the sale of two Local Limited Partnerships during
the year ended March 31, 2016 compared to no proceeds received
during the year ended March 31, 2017. Proceeds received from
disposition vary depending on the sale prices and the value of the
Housing Complexes that are sold. The Partnership reimbursed the
General Partner or an affiliate $10,000 for expenses paid on its behalf during the
year ended March 31, 2017 compared to $54,000 reimbursed during the
year ended March 31, 2016. Reimbursements of operating expense are
paid after management reviews the cash position of the Partnership.
Reporting fees and distribution income decreased by $10,000 for the
year ended March 31, 2017. The Local Limited Partnerships pay
reporting fees and distributions to the Partnership when the Local
Limited Partnerships’ cash flows will allow for the
payment.
Year Ended March 31, 2016 Compared to Year Ended March 31,
2015 The net
increase in cash and cash equivalents during the year ended March
31, 2016 was $27,000 compared to a net increase in cash and cash
equivalents for the year ended March 31, 2015 of $7,000. The
Partnership received $58,000 in net proceeds from the sale of two
Local Limited Partnerships during the year ended March 31, 2016
compared to no proceeds received during the year ended March 31,
2015. Proceeds received from disposition vary depending on the sale
prices and the value of the Housing Complexes that are sold. The
Partnership reimbursed the General Partner or an affiliate $54,000
for expenses paid on its behalf during the year ended March 31,
2016 compared to $5,000 reimbursed during the year ended March 31,
2015. Reimbursements of operating expense are paid after management
reviews the cash position of the Partnership. Reporting fees
increased by $9,000 and distributions decreased by $5,000 for the
year ended March 31, 2016. The Local Limited Partnerships pay
reporting fees and distributions to the Partnership when the Local
Limited Partnerships’ cash flows will allow for the
payment.
Accrued payables, which consist primarily of related party asset
management fees due to the General Partner, increased by
approximately $98,000, $76,000
and $124,000, for the years ended March 31, 2017, 2016 and 2015,
respectively. The General Partner 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.
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 June 30,
2018.
Future Contractual Cash Obligations
The following table summarizes the Partnership’s future
contractual cash obligations as of March 31, 2017:
|
2018
|
2019
|
2020
|
2021
|
2022
|
Thereafter
|
Total
|
|
|
|
|
|
|
|
|
Asset management fees(1)
|
$1,171,843
|
$73,748
|
$73,748
|
$73,748
|
$73,748
|
$2,949,920
|
$4,416,755
|
Total contractual cash
obligations
|
$1,171,843
|
$73,748
|
$73,748
|
$73,748
|
$73,748
|
$2,949,920
|
$4,416,755
|
(1)
Asset
management fees are payable annually until termination of the
Partnership, which is to occur no later than December 31, 2062. The
estimate of the fees payable included herein assumes the retention
of the Partnership’s interest in all Housing Complexes owned
at March 31, 2017 until December 31, 2062. Amounts due to the
General Partner as of March 31, 2017 have been included in the 2018
column. The General Partner does not anticipate that
these fees will be paid until such time as capital reserves are in
excess of the aggregate of the existing contractual obligations and
the anticipated future foreseeable obligations of the
Partnership.
For additional information regarding our asset management fees, see
Note 3 to the financial statements included elsewhere
herein.
25
Off-Balance Sheet Arrangements
The Partnership has no off-balance sheet arrangements.
Exit Strategy
See Item 1 for information in this regard.
Impact of Recent Accounting Pronouncements
See footnote 1 to the audited financial statements.
Item 7A. Quantitative and Qualitative Disclosures above
Market Risk
NOT APPLICABLE
Item 8. Financial Statements and Supplementary Data
26
Report of Independent Registered Public Accounting
Firm
To the Partners
WNC Housing Tax Credit Fund VI, L.P., Series 10
We have audited the accompanying balance sheets of WNC Housing Tax
Credit Fund VI, L.P., Series 10 (the "Partnership") as of March 31,
2017 and 2016,
and the related statements
of operations, partners' equity (deficit), and cash flows for each
of the years in the three-year period ended March 31, 2017. The
Partnership's management is responsible for these financial
statements. Our responsibility is to express an opinion on these
financial statements based on our audits. We did not audit the
financial statements of certain Local Limited Partnerships which
investments represent $0, $0 and $93,644 of the total Partnership
loss for the years ended March 31, 2017, 2016 and 2015,
respectively. Those statements were audited by other auditors,
whose reports have been furnished to us, and our opinion, insofar
as it relates to those Local Limited Partnerships, is based solely
on the reports of the other auditors.
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. The Partnership is not required to
have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included consideration
of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the Partnership's internal control over
financial reporting. Accordingly, we express no such opinion. An
audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, based on our audits and the reports of other
auditors, the financial statements referred to above present
fairly, in all material respects, the financial position of WNC
Housing Tax Credit Fund VI, L.P., Series 10 as of March 31, 2017
and 2016 and the results of its operations and its cash flows for
each of the years in the three-year period ended March 31, 2017 in
conformity with accounting principles generally accepted in the
United States of America.
Our
audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The schedule listed
under Item 15(a)(2) in the index related to each of the years in
the three-year period ended March 31, 2017 is presented for the
purpose of complying with the Securities and Exchange Commission's
rules and is not part of the basic financial statements. This
schedule is the responsibility of the Partnership's management.
Our audit procedures included determining whether this schedule
reconciles to the basic financial statements or the underlying
accounting and other records, as applicable, and performing
procedures to test the completeness and accuracy of the information
presented in this schedule. This schedule has been subjected to the
auditing procedures applied to the audits of the basic financial
statements and, in our opinion, fairly states in all material
respects the financial statement data required to be set forth
therein in relation to the basic financial statements taken as a
whole.
/s/ CohnReznick, LLP.
Bethesda,
Maryland
June
23, 2017
PAILET,
MEUNIER and LeBLANC, L.L.P.
Certified Public
Accountants
Management
Consultants
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Partners
Starlight Place, LP Americus, Georgia
We have audited the
accompanying financial statements of Starlight Place, LP, USDA
Rural Development Case No. 02-0546282, as of December 31, 2014 and
the related statements of operations, changes in partners' equity
and cash flows for the year ended December 31, 2014. Starlight
Place, LP's management is responsible for these financial
statements. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our
audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the
financial statements referred to above present fairly, in all
material respects, the financial position of Starlight Place, LP as
of December 31, 2014 and the result of its operations and its cash
flows for the year ended December 31, 2014 in conformity with
accounting principles generally accepted in the United States of
America.
In accordance with
Government Auditing
Standards, we have also issued a report dated February 20,
2015 on our consideration of Starlight Place, LP's internal control
over financial reporting and our tests of its compliance with
certain provisions of laws, regulations, contracts, and grant
agreements and other matters. The purpose of that report is to
describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing,
and not to provide an opinion on the internal control over
financial reporting or on compliance. That report is an integral
part of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with this report in considering the
results of our audit.
Metairie,
Louisiana
February 20,
2015
Member
of:
|
|
|
●
PCAOB - Public Company Accounting Oversight Board
|
AICPA:
Center for Public Company Audit Firms (SEC) ● Governmental
Audit Quality Center ●Private Companies Practice Section
(PCPS)
3421
N. Causeway Blvd., Suite 701 ● Metairie, LA 70002 ●
Telephone (504) 837-0770 ● Fax (504) 837-7102
201
St. Charles Ave., Suite 2500 ● New Orleans, LA 70170 ●
Telephone (504) 599-5905 ● Fax (504) 837-7102
www.pmlcpa.com
F-1
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A California Limited Partnership)
BALANCE SHEETS
|
March
31,
|
|
|
2017
|
2016
|
ASSETS
|
|
|
Cash and cash
equivalents
|
$38,303
|
$41,923
|
Investments in
Local Limited Partnerships, net (Notes 2 and 3)
|
-
|
-
|
Other
assets
|
-
|
2,700
|
|
|
|
Total
Assets
|
$38,303
|
$44,623
|
|
|
|
LIABILITIES
AND PARTNERS’ EQUITY (DEFICIT)
|
|
|
|
|
|
Liabilities:
|
|
|
Accrued
fees and expenses due to General Partner and affiliates (Note
3)
|
$1,098,095
|
$999,908
|
|
|
|
Total
Liabilities
|
1,098,095
|
999,908
|
|
|
|
Partners’
Equity (Deficit)
|
|
|
General
Partner
|
(12,403)
|
(12,298)
|
Limited Partners
(25,000 Partnership Units authorized; 13,042 and 13,148 Partnership
Units issued and outstanding, respectively)
|
(1,047,389)
|
(942,987)
|
|
|
|
Total
Partners’ Equity (Deficit)
|
(1,059,792)
|
(955,285)
|
|
|
|
Total
Liabilities and Partners’ Equity (Deficit)
|
$38,303
|
$44,623
|
See accompanying notes to financial statements
F-2
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
For the Years Ended March 31, 2017, 2016 and 2015
|
For the Years
Ended March 31
|
||
|
2017
|
2016
|
2015
|
|
|
|
|
Operating
income:
|
|
|
|
Reporting
fees
|
$3,722
|
$12,417
|
$2,990
|
Distribution
income
|
2,650
|
3,534
|
-
|
Total
operating income
|
6,372
|
15,951
|
2,990
|
|
|
|
|
Operating expenses
and loss:
|
|
|
|
Asset
management fees (Note 3)
|
73,748
|
79,717
|
91,656
|
Impairment
loss (Note 2)
|
-
|
125,322
|
413,639
|
Accounting
and legal fees
|
25,607
|
29,500
|
24,500
|
Write
off of other assets
|
2,700
|
-
|
-
|
Other
|
8,832
|
11,197
|
13,193
|
Total operating
expenses and loss
|
110,887
|
245,736
|
542,988
|
|
|
|
|
Loss from
operations
|
(104,515)
|
(229,785)
|
(539,998)
|
|
|
|
|
Equity in losses of
Local Limited Partnerships (Note 2)
|
-
|
(23,411)
|
(93,166)
|
|
|
|
|
Gain on sale of
Local Limited Partnerships
|
-
|
58,099
|
-
|
|
|
|
|
Interest
income
|
8
|
6
|
1
|
|
|
|
|
Net
loss
|
$(104,507)
|
$(195,091)
|
$(633,163)
|
|
|
|
|
Net loss allocated
to:
|
|
|
|
General
Partner
|
$(105)
|
$(195)
|
$(633)
|
Limited
Partners
|
$(104,402)
|
$(194,896)
|
$(632,530)
|
|
|
|
|
Net loss per
Partnership Unit
|
$(8)
|
$(14.82)
|
$(48.11)
|
|
|
|
|
Outstanding
weighted Partnership Units
|
13,042
|
13,148
|
13,148
|
See accompanying notes to financial statements
F-3
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A California Limited Partnership)
STATEMENTS OF PARTNERS’ EQUITY (DEFICIT)
For the Years Ended March 31, 2017, 2016 and 2015
|
General
Partner
|
Limited
Partners
|
Total
|
|
|
|
|
Partners’
deficit at March 31, 2014
|
$(11,470)
|
$(115,561)
|
$(127,031)
|
|
|
|
|
Net
loss
|
(633)
|
(632,530)
|
(633,163)
|
|
|
|
|
Partners’
deficit at March 31, 2015
|
(12,103)
|
(748,091)
|
(760,194)
|
|
|
|
|
Net
loss
|
(195)
|
(194,896)
|
(195,091)
|
|
|
|
|
Partners’
deficit at March 31, 2016
|
(12,298)
|
(942,987)
|
(955,285)
|
|
|
|
|
Net
loss
|
(105)
|
(104,402)
|
(104,507)
|
|
|
|
|
Partners’
deficit at March 31, 2017
|
$(12,403)
|
$(1,047,389)
|
$(1,059,792)
|
See accompanying notes to financial statements
F-4
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
For the Years Ended March 31, 2017, 2016 and 2015
|
For The Years Ended March 31,
|
||
|
2017
|
2016
|
2015
|
|
|
|
|
Cash
flows from operating activities:
|
|
|
|
Net
loss
|
$(104,507)
|
$(195,091)
|
$(633,163)
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
|
|
|
Impairment
loss
|
-
|
125,322
|
413,639
|
Equity
in losses of Local Limited Partnerships
|
-
|
23,411
|
93,166
|
(Increase)
decrease in other assets
|
2,700
|
(2,700)
|
-
|
Increase
in accrued fees and expenses due to General Partner
and affiliates
|
98,187
|
76,390
|
124,350
|
Gain
on sale of Local Limited Partnerships
|
-
|
(58,099)
|
-
|
|
|
|
|
Net
cash used in operating activities
|
(3,620)
|
(30,767)
|
(2,008)
|
|
|
|
|
Cash
flows from investing activities:
|
|
|
|
Distributions
received from Local Limited Partnerships
|
-
|
-
|
9,101
|
Net
proceeds from sale of Local Limited Partnerships
|
-
|
58,099
|
-
|
|
|
|
|
Net
cash provided by investing activities
|
-
|
58,099
|
9,101
|
|
|
|
|
Net
increase (decrease) in cash and cash equivalents
|
(3,620)
|
27,332
|
7,093
|
|
|
|
|
Cash
and cash equivalents, beginning of year
|
41,923
|
14,591
|
7,498
|
|
|
|
|
Cash
and cash equivalents, end of year
|
$38,303
|
$41,923
|
$14,591
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION
|
|
|
|
|
|
|
|
Taxes
paid
|
$800
|
$800
|
$800
|
See accompanying notes to financial statements
F-5
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Years Ended March 31, 2017, 2016 and 2015
NOTE
1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Organization
WNC Housing Tax Credit Fund VI, L.P., Series 10 (the
“Partnership”) is a California Limited Partnership
formed under the laws of the State of California on July 17, 2001,
and commenced operations on February 28, 2003. The
Partnership was formed to acquire limited partnership interests in
other limited partnerships ("Local Limited Partnerships") which own
multi-family housing complexes (“Housing Complexes”)
that are eligible for Federal low income housing tax credits
(“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 Complexes. 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 & Associates,
Inc. (“Associates” or the “General
Partner”). The chairman and the president of Associates owns
all of the outstanding stock of Associates. The business of the
Partnership is conducted primarily through the General Partner, as
the Partnership has no employees of its own.
The Partnership shall continue in full force and effect until
December 31, 2062 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.
The partnership agreement authorized the sale of up to 25,000 units
of limited partnership interest (“Partnership Units”)
at $1,000 per Partnership Unit. The offering of
Partnership Units has concluded, and 13,153 Partnership Units
representing subscriptions in the amount of $13,119,270, net of
dealer discounts of $31,220 and volume discounts of $2,510, had
been accepted. As of March 31, 2017 and 2016, a total of
13,042 and 13,148 Partnership Units remain outstanding,
respectively. The General Partner has a 0.1% interest in
operating profits and losses, taxable income and losses, cash
available for distribution from the Partnership and Low Income
Housing Tax Credits of the Partnership. The investors
(the “Limited Partners”) in the Partnership will be
allocated the remaining 99.9% of these items in proportion to their
respective investments.
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. 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:
F-6
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Years Ended March 31, 2017, 2016 and 2015
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES, continued
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 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 properties, and neighborhood conditions,
among others.
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 the 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.
Anticipated future and existing cash resources of the Partnership
are not sufficient to pay existing liabilities of the
Partnership. However, substantially all of the existing
liabilities of the Partnership are payable to the General Partner
and/or its affiliates. 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.
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 June 30, 2018.
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.
F-7
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Years Ended March 31, 2017, 2016 and 2015
NOTE
1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES, continued
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.
With that in mind, the General Partner is continuing its review of
the Housing Complexes. The review considers 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.
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 wind down the Partnership as Low Income Housing Tax
Credits are no longer available. Local Limited
Partnership Interests may be disposed of any time by the General
Partner in its discretion. While liquidation of the Housing
Complexes continues to be evaluated, the dissolution of the
Partnership was not imminent as of March 31, 2017.
During the year ended March 31, 2016, the Partnership sold its
Local Limited Partnership interest in FDI-Green Manor 2003
(“Green Manor”) and FDI-Pine Meadows 2003 (“Pine
Meadows”). The Partnership received proceeds of $65,000 and
recognized a gain of $58,099 during the year ended March 31, 2016.
The Compliance Periods for Green Manor and Pine Meadows expire in
2018. Recapture Guarantee Surety Bonds were issued to the
Purchasers to guarantee the repayment of the recaptured tax credits
and interests arising from any non-compliance as provided in
Section 42 of the Internal Revenue Code arising after the date of
the sale.
As of December 31, 2016, the Partnership has identified the
following Local Limited Partnerships for possible
disposition.
Local Limited Partnership
|
Debt at 12/31/16
|
Appraisal value
|
Estimated sales price
|
Estimated sale dates
|
Estimated sales expenses
|
Catoosa Senior Village
|
$2,198,475
|
$920,000
|
$19,500
|
6/30/2017
|
*
|
Melodie Meadows Associates
|
$1,258,276
|
$690,000
|
31,200
|
7/31/2017
|
*
|
*
Estimated price and close date has yet to be determined. The Local
Limited Partnership is not under contract to be purchased as of the
report filing.
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. 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, as the proceeds first would be used to pay Partnership
obligations and funding of reserves.
F-8
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Years Ended March 31, 2017, 2016 and 2015
NOTE
1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES, continued
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 any
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 were capitalized as part of the investment account
and were being amortized over 30 years (see Notes 2 and
3).
“Equity in losses of Local Limited Partnerships” for
each year ended March 31 has been recorded by the Partnership based
on the twelve months of reported results provided by the Local
Limited Partnerships for each year ended December
31. Equity in losses from the Local Limited Partnerships
allocated to the Partnership is 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.
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 from the Local Limited Partnerships are
accounted for as a reduction of the investment balance.
Distributions received after the investment has reached zero are
recognized as distribution income. As of March 31, 2017
and 2016, all and four of the investment accounts in Local Limited
Partnerships had reached zero.
F-9
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Years Ended March 31, 2017, 2016 and 2015
NOTE
1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES, continued
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. The Partnership had cash equivalents of
$38,303 and $41,923, respectively, as of March 31, 2017 and
2016.
Reporting Comprehensive Income
The Partnership had no items of other comprehensive income for all
periods presented.
Net Loss Per Partnership Unit
Net loss per Partnership Unit includes no dilution and is computed
by dividing loss allocated to Limited Partners by the weighted
average Partnership Units outstanding during the
period. Calculation of diluted net loss per Partnership
Unit is not required.
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 2013 remain open.
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.
Impairment
The Partnership reviews its investments in Local Limited
Partnerships 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 years ended March 31, 2017, 2016 and 2015,
impairment loss related to investments in Local Limited
Partnerships was $0, $125,322
and $413,639, respectively.
F-10
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Years Ended March 31, 2017, 2016 and 2015
NOTE
1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES, continued
Impact of Recent Accounting Pronouncements
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 was permitted. The adoption of this
update did not materially affect the Partnership's financial
statements.
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 is effective for
periods beginning after December 15, 2015. The adoption of this
update did not materially affect the Partnership's financial
statements.
NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS
As of March 31, 2017 and 2016, the Partnership owns Local Limited
Partnership Interests in 4 Local Limited Partnerships,
respectively, each of which owns one Housing Complex, consisting of
an aggregate of 218 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 Partnership’s investments in Local Limited Partnerships
as shown in the balance sheets at March 31, 2017 and 2016
are approximately $4,609,000
and $4,934,000, respectively, less than the Partnership's equity at
the preceding December 31 as shown in the Local Limited
Partnerships’ combined condensed financial statements
presented below. This difference is primarily due to
acquisition, selection and other costs related to the acquisition
of the investments which have been capitalized in the Partnership's
investment account, impairment losses recorded in the
Partnership’s investment account and capital contributions
payable to the Local Limited Partnerships which were netted against
partner capital in the Local Limited Partnership’s financial
statements.
The Partnership reviews its investments in Local Limited
Partnerships 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 years ended March 31, 2017, 2016 and 2015,
impairment loss related to investments in Local Limited
Partnerships was $0, $125,322
and $413,639, respectively.
At March 31, 2017 and 2016 the investment accounts in certain Local
Limited Partnerships have reached a zero balance. Consequently, a
portion of the Partnership’s estimate of its share of losses
for the years ended March 31, 2017, 2016 and 2015 amounting to
approximately $322,000,
$262,000 and $255,000, respectively, have not been recognized. As
of March 31, 2017, the aggregate share of net losses not recognized
by the Partnership amounted to approximately
$800,000.
F-11
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Years Ended March 31, 2017, 2016 and 2015
NOTE 2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS,
continued
The following is a summary of the equity method activity of the
investments in the Local Limited Partnerships for the periods
presented:
|
For The Years Ended
March 31,
|
||
|
2017
|
2016
|
2015
|
|
|
|
|
Investments
per balance sheet, beginning of period
|
$-
|
$148,733
|
$664,639
|
Impairment
loss
|
-
|
(125,322)
|
(413,639)
|
Equity
in losses of Local Limited Partnerships
|
-
|
(23,411)
|
(93,166)
|
Distributions
received from Local Limited Partnerships
|
-
|
-
|
(9,101)
|
Investment
per balance sheet, end of period
|
$-
|
$-
|
$148,733
|
The financial information from the individual financial statements
of the Local Limited Partnerships include rental and interest
subsidies. Rental subsidies are included in total
revenues and interest subsidies are generally netted in interest
expense. Approximate combined condensed financial
information from the individual financial statements of the Local
Limited Partnerships as of December 31 and for the years then ended
is as follows:
COMBINED CONDENSED BALANCE SHEETS
|
2016
|
2015
|
ASSETS
|
|
|
Buildings and improvements (net of
accumulated depreciation as of December 31, 2016 and 2015,
of $6,156,000 and $5,720,000,
respectively)
|
$9,710,000
|
$10,123,000
|
Land
|
993,000
|
993,000
|
Other assets
|
1,448,000
|
1,447,000
|
Total assets
|
$12,151,000
|
$12,563,000
|
|
|
|
LIABILITIES
|
|
|
Mortgage payable
|
$5,957,000
|
$5,993,000
|
Due to affiliates
|
116,000
|
115,000
|
Other liabilities
|
64,000
|
66,000
|
|
|
|
Total liabilities
|
6,137,000
|
6,174,000
|
|
|
|
PARTNERS' EQUITY
|
|
|
WNC Housing Tax Credit Fund VI, L.P., Series
10
|
4,609,000
|
4,934,000
|
Other partners
|
1,405,000
|
1,455,000
|
Total partners’
equity
|
6,014,000
|
6,389,000
|
Total liabilities and
partners’ equity
|
$12,151,000
|
$12,563,000
|
F-12
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Years Ended March 31, 2017, 2016 and 2015
NOTE
2 - INVESTMENTS IN LOCAL LIMITED PARTNERSHIPS,
continued
COMBINED CONDENSED STATEMENTS OF OPERATIONS
|
2016
|
2015
|
2014
|
|
|
|
|
Revenues
|
$1,289,000
|
$1,267,000
|
$1,651,000
|
|
|
|
|
Expenses:
|
|
|
|
Operating expenses
|
1,000,000
|
940,000
|
1,104,000
|
Interest expense
|
159,000
|
159,000
|
349,000
|
Depreciation and amortization
|
454,000
|
451,000
|
547,000
|
|
|
|
|
Total expenses
|
1,613,000
|
1,550,000
|
2,000,000
|
|
|
|
|
Net loss
|
$(324,000)
|
$(283,000)
|
$(349,000)
|
|
|
|
|
Net loss allocable to the Partnership
|
$(322,000)
|
$(285,000)
|
$(348,000)
|
|
|
|
|
Net loss recorded by the Partnership
|
$-
|
$(23,000)
|
$(93,000)
|
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 and/or the
Local General Partner may be required to sustain the operations of
such Local Limited Partnerships. If additional capital
contributions are not made when they are required, the
Partnership's investment 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.
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:
Acquisition
fees of 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 total acquisition
fees of $920,710, which have been included in investments in Local
Limited Partnerships. As of all periods presented, the fees have
been fully amortized or impaired. 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 the estimated
residual value of the investments. If an impairment loss related to
the acquisition expenses is recorded, the accumulated amortization
is reduced to zero at that time.
Reimbursement
of costs incurred by the General Partner or by an affiliate of
Associates in connection with the acquisition of Local Limited
Partnerships. These reimbursements have not exceeded 2%
of the gross proceeds. At the end of all periods
presented, the Partnership incurred acquisition costs of $263,060,
which have been included in investments in Local Limited
Partnerships. As of all periods presented, the costs have been
fully amortized or impaired. 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 the estimated
residual value of the investments. If an impairment loss related to
the acquisition expenses is recorded, the accumulated amortization
is reduced to zero at that time.
F-13
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Years Ended March 31, 2017, 2016 and 2015
NOTE 3 - RELATED PARTY TRANSACTIONS (continued)
An
annual asset management fee not to exceed 0.5% of the invested
assets of the Partnership, as defined. “Invested
Assets” means the sum of the Partnership’s investment
in Local Limited Partnership interests and the Partnership’s
allocable share of mortgage loans on and other debts related to the
Housing Complexes owned by such Local Limited Partnerships. Asset
management fees of $73,748, $79,717and $91,656 were incurred during
the years ended March 31, 2017, 2016 and 2015, respectively, none
of which was paid during the years ended March 31, 2017, 2016 and
2015.
A
subordinated disposition fee in an amount equal to 1% of the sale
price of real estate sold by the Local Limited
Partnerships. Payment of this fee is subordinated to the
Limited Partners receiving distributions equal to their capital
contributions and their return on investment (as defined in the
Partnership Agreement) and is payable only if services are rendered
in the sales effort. No such fee was incurred for all
periods presented.
The
Partnership reimbursed 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
$10,000, $53,624 and $5,000, during the years ended March 31, 2017,
2016 and 2015, respectively.
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. For all periods presented the Partnership
incurred financing costs of $7,252 and interest of $65,823 which
are included in investments in Local Limited
Partnerships. As of all periods presented, the financing
costs and interest were fully amortized or
impaired. 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
capitalized warehouse interest and costs are recorded, the
accumulated amortization is reduced to zero at that
time.
The accrued fees and expenses due to the General Partner and
affiliates consist of the following at:
|
March 31,
|
|
|
2017
|
2016
|
|
|
|
Asset
management fee payable
|
$1,038,699
|
$964,951
|
Expenses
paid by the General Partner or an affiliate on behalf of the
Partnership
|
59,396
|
34,957
|
|
|
|
Total
|
$1,098,095
|
$999,908
|
The General Partner and/or its affiliates do not anticipate that
these accrued fees will be paid until such time as capital reserves
are in excess of the future foreseeable working capital
requirements of the Partnership.
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 June 30,
2018.
F-14
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Years Ended March 31, 2017, 2016 and 2015
NOTE 4 – QUARTERLY RESULTS OF OPERATIONS
(UNAUDITED)
The following is a summary of the quarterly operations for the
years ended March 31 (rounded):
|
June 30
|
September 30
|
December 31
|
March 31
|
2017
|
|
|
|
|
|
|
|
|
|
Income
|
$-
|
$5,000
|
$1,000
|
$-
|
|
|
|
|
|
Operating
expenses and loss
|
26,000
|
38,000
|
24,000
|
23,000
|
|
|
|
|
|
Loss
from operations
|
(26,000)
|
(33,000)
|
(23,000)
|
(23,000)
|
|
|
|
|
|
Net
loss
|
(26,000)
|
(33,000)
|
(23,000)
|
(23,000)
|
|
|
|
|
|
Net
loss available to Limited Partners
|
(26,000)
|
(33,000)
|
(23,000)
|
(22,000)
|
|
|
|
|
|
Net
loss per Partnership Unit
|
(2)
|
(2)
|
(2)
|
(2)
|
|
June 30
|
September 30
|
December 31
|
March 31
|
2016
|
|
|
|
|
|
|
|
|
|
Income
|
$-
|
$11,000
|
$-
|
$5,000
|
|
|
|
|
|
Operating
expenses and loss
|
156,000
|
43,000
|
23,000
|
24,000
|
|
|
|
|
|
Loss
from operations
|
(156,000)
|
(32,000)
|
(23,000)
|
(19,000)
|
|
|
|
|
|
Equity
in losses of Local Limited Partnerships
|
(23,000)
|
-
|
-
|
-
|
|
|
|
|
|
Gain
on sale of Local Limited Partnerships
|
-
|
58,000
|
-
|
-
|
|
|
|
|
|
Net
income (loss)
|
(179,000)
|
26,000
|
(23,000)
|
(19,000)
|
|
|
|
|
|
Net
income (loss) available to Limited Partners
|
(179,000)
|
26,000
|
(23,000)
|
(19,000)
|
|
|
|
|
|
Net
income (loss) per Partnership Unit
|
(14)
|
2
|
(1)
|
(1)
|
F-15
WNC HOUSING TAX CREDIT FUND VI, L.P., SERIES 10
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Years Ended March 31, 2017, 2016 and 2015
NOTE 4 – QUARTERLY RESULTS OF OPERATIONS (UNAUDITED),
continued
|
June 30
|
September 30
|
December 31
|
March 31
|
2015
|
|
|
|
|
|
|
|
|
|
Income
|
$-
|
$1,000
|
$-
|
$2,000
|
|
|
|
|
|
Operating
expenses and loss
|
438,000
|
50,000
|
27,000
|
28,000
|
|
|
|
|
|
Loss
from operations
|
(438,000)
|
(49,000)
|
(27,000)
|
(26,000)
|
|
|
|
|
|
Equity
in losses of Local Limited Partnerships
|
(33,000)
|
(33,000)
|
(33,000)
|
6,000
|
|
|
|
|
|
Net
loss
|
(471,000)
|
(82,000)
|
(60,000)
|
(20,000)
|
|
|
|
|
|
Net
loss available to Limited Partners
|
(471,000)
|
(82,000)
|
(60,000)
|
(20,000)
|
|
|
|
|
|
Net
loss per Partnership Unit
|
(36)
|
(6)
|
(5)
|
(1)
|
F-16
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
NONE
Item 9A. Controls and Procedures
(a) Evaluation
of disclosure controls and procedures
As
of the end of the periods 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
Rules 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) Management’s
annual report on internal control over financial
reporting
The
management of Associates is responsible for establishing and
maintaining for the Partnership adequate internal control over
financial reporting as that term is defined in Securities Exchange
Act of 1934 Rules 13a-15(f) and 15d-15(f), and for performing an
assessment of the effectiveness of internal control over financial
reporting as of March 31, 2017. The internal control process of
Associates, as it is applicable to the Partnership, was designed to
provide reasonable assurance to Associates regarding the
preparation and fair presentation of published financial
statements, and includes those policies and procedures
that:
(1)
Pertain
to the maintenance of records that in reasonable detail accurately
and fairly reflect the transactions and dispositions of the assets
of the Partnership;
(2)
Provide
reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with
generally accepted accounting principles in the United States, and
that the Partnership’s receipts and expenditures are being
made only in accordance with authorization of the management of
Associates; and
(3)
Provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the
Partnership’s assets that could have a material effect on the
financial statements.
27
All
internal control processes, no matter how well designed, have
inherent limitations. Therefore, even those processes determined to
be effective can provide only reasonable assurance with respect to
the reliability of financial statement preparation and
presentation. Further, projections of any evaluation of
effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions or
that the degree of compliance with the policies or procedures may
deteriorate.
Management
of Associates assessed the effectiveness of its internal control
over financial reporting, as it is applicable to the Partnership,
as of the end of the Partnership’s most recent fiscal year.
In making this assessment, it used the criteria set forth in
Internal Control – Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission
(COSO). Based on its assessment, management of Associates concluded
that, for the reasons set forth above under “Disclosure
controls and procedures,” the internal control over financial
reporting, as it is applicable to the Partnership, was not
effective as of March 31, 2017.
For
purposes of the Securities Exchange Act of 1934, the term
“material weakness” is a deficiency, or a combination
of deficiencies, in a reporting company’s internal control
over financial reporting such that there is a reasonable
possibility that a material misstatement of the company's annual or
interim financial statements will not be prevented or detected on a
timely basis. For the reasons discussed above in this Item 9A,
sub-section (a) under the caption “Evaluation of disclosure
controls and procedures,” the Partnership’s internal
control over financial reporting has not been effective in
permitting timely reporting of the Partnership’s financial
information. Accordingly, the management of Associates believes
that this inability to generate timely reports constitutes a
material weakness in its internal control over financial
reporting.
(c) Changes
in internal controls
There
were no changes in the Partnership’s internal control over
financial reporting that occurred during the quarter ended March
31, 2017 that materially affected, or are reasonably likely to
materially affect, the Partnership’s internal control over
financial reporting.
Item 9B. Other Information
NONE
28
PART III.
Item 10. Directors, Executive Officers and Corporate
Governance
(a)
Identification of Directors, (b) Identification of Executive
Officers, (c) Identification of Certain Significant Employees, (d)
Family Relationships, and (e) Business Experience
The
Partnership has no directors, executive officers or employees of
its own. The business of the Partnership is conducted primarily
through Associates. Associates is a California corporation which
was organized in 1971. The following biographical information is
presented for the officers and employees of Associates with
principal responsibility for the Partnership’s
affairs.
Wilfred
N. Cooper, Sr.
|
Chairman
|
Wilfred
N. Cooper, Jr.
|
President
and Chief Executive Officer
|
Michael
J. Gaber
|
Executive
Vice President and Chief Operating Officer
|
David
N. Shafer, Esq.
|
Executive
Vice President
|
Melanie
R. Wenk, CPA
|
Senior
Vice President – Chief Financial Officer
|
Darrick
Metz
|
Senior
Vice President – Originations
|
Christine
A. Cormier
|
Senior
Vice President – Investor Relations
|
Anand
Kannan
|
President
– Community Preservation Partners
|
Gregory
S. Hand
|
Senior
Vice President – Underwriting
|
Anil
Advani
|
Senior
Vice President – Syndications
|
In
addition to Wilfred N. Cooper, Sr., the directors of WNC &
Associates, Inc. are Wilfred N. Cooper, Jr., Kay L. Cooper and
Jennifer E. Cooper.
Wilfred
N. Cooper, Sr. is the founder and Chairman of the Board of
Directors of WNC & Associates, Inc., a Director of WNC Capital
Corporation, and a general partner in some of the partnerships
previously sponsored by WNC & Associates, Inc. Mr. Cooper has
been actively involved in the affordable housing industry since
1968. Previously, during 1970 and 1971, he was founder and a
principal of Creative Equity Development Corporation, a predecessor
of WNC& Associates, Inc., and of Creative Equity Corporation, a
real estate investment firm. For 12 years before that, Mr. Cooper
was employed by Rockwell International Corporation, last serving as
its manager of housing and urban developments where he had
responsibility for factory-built housing evaluation and project
management in urban planning and development. He has testified
before committees of the U.S. Senate and the U.S. House of
Representatives on matters pertaining to the affordable housing
industry. Mr. Cooper is a Life Director of the National Association
of Home Builders (“NAHB”), a National Trustee for
NAHB’s Political Action Committee, and a past Chairman of
NAHB’s Multifamily Council. He is a Life Trustee of the
National Housing Conference, and a co-founder and Director Emeritus
of the California Housing Consortium. He is the husband of Kay
Cooper and the father of Wilfred N. Cooper, Jr. Mr. Cooper
graduated from Pomona College in 1956 with a Bachelor of Arts
degree.
Wilfred
N. Cooper, Jr. is President, Chief Executive Officer, a Director,
and a member of the Investment Committee, of WNC & Associates,
Inc. He is President and a Director of, and a registered principal
with, WNC Capital Corporation. He has been involved in real estate
investment and acquisition activities since 1988 when he joined WNC
& Associates, Inc. Previously, he served as a Government
Affairs Assistant with Honda North America in Washington, D.C. Mr.
Cooper serves on the Orange County Advisory Board of U.S. Bank, the
Board of Trustees of NHC, the Editorial Advisory Board of
Tax Credit Advisor, and the
Tax Policy Council of the National Trust for Historic Preservation.
He is a member of the Urban Land Institute and of Vistage
International, a global network of business leaders and chief
executives. He is the son of Wilfred Cooper, Sr. and Kay Cooper.
Mr. Cooper graduated from The American University in 1985 with a
Bachelor of Arts degree.
29
Michael
J. Gaber is an Executive Vice President, Chief Operating Officer,
chair of the Investment Committee, and oversees the Property
Acquisition and Investment Management groups, of WNC &
Associates, Inc. Mr. Gaber has been involved in real estate
acquisition, valuation and investment activities since 1989 and has
been associated with WNC & Associates, Inc. since 1997. Prior
to joining WNC & Associates, Inc., he was involved in the
valuation and classification of major assets, restructuring of debt
and analysis of real estate taxes with a large financial
institution. Mr. Gaber is a member of the Housing Credit Group of
NAHB and of National Housing and Rehabilitation Association
(“NH&RA”). Mr. Gaber graduated from the California
State University, Fullerton in 1991 with a Bachelor of Science
degree in business administration – finance.
David
N. Shafer is an Executive Vice President, a member of the
Investment Committee, and oversees the New Markets Tax Credit
group, of WNC & Associates, Inc. He is a registered
representative with WNC Capital Corporation. Mr. Shafer has been
active in the real estate industry since 1984. Before joining WNC
& Associates, Inc. in 1990, he was engaged as an attorney in
the private practice of law with a specialty in real estate and
taxation. Mr. Shafer is a Director and past President of the
California Council of Affordable Housing, a Director of the Council
for Affordable and Rural Housing and a member of the State Bar of
California. Mr. Shafer graduated from the University of California
at Santa Barbara in 1978 with a Bachelor of Arts degree, from the
New England School of Law in 1983 with a Juris Doctor degree (cum
laude) and from the University of San Diego in 1986 with a Master
of Laws degree in taxation.
Melanie
R. Wenk is Senior Vice President – Chief Financial Officer of
WNC & Associates, Inc. She oversees WNC’s corporate and
partnership accounting group, which is responsible for SEC
reporting and New Markets Tax Credit compliance. Prior to joining
WNC in 2003, Ms. Wenk was associated as a public accountant with
BDO Seidman, LLP. She graduated from the California Polytechnic
State University, Pomona in 1999 with a Bachelor of Science degree
in accounting.
Darrick
Metz is Senior Vice President – Originations of WNC &
Associates, Inc. He has been involved in multifamily property
underwriting, acquisition and investment activities since 1991.
Prior to joining WNC in 1999, he was employed by a Minnesota
development company specializing in tax credit and market rate
multifamily projects. Mr. Metz also worked with the Minnesota
Housing Finance Agency (“MHFA”), where he held the
position of Senior Housing Development Officer. While at MHFA, he
was responsible for the allocation of tax credits, HOME funds and
state loan products. Mr. Metz is active in the Qualified Allocation
Plan Tax Credit Advisory Committee for the Wisconsin Housing and
Economic Development Authority, a member of MHFA’s
Multifamily Technical Assistance and a board member of NH&RA.
He graduated from St. Cloud State University in 1993 with a
Bachelor of Science degree in finance/economics.
Christine
A. Cormier is Senior Vice President – Investor Relations of
WNC & Associates, Inc. and oversees multi-investor fund equity
raising and closings as well as the marketing group. She is a
registered representative with WNC Capital Corporation. Ms. Cormier
has been active in the real estate industry since 1985. Prior to
joining WNC in 2008, Ms. Cormier was with another major tax credit
syndicator for over 12 years where she was the Managing Director of
investor relations. Ms. Cormier graduated from Bentley University
in 1982 with a Bachelor of Science degree (summa cum laude) in
accounting and computer science.
Anand
Kannan is President – Community Preservation Partners of WNC
& Associates, Inc. and leads the preservation and development
teams for Community Preservation Partners, LLC. Prior to joining
WNC in 2011, Mr. Kannan served as Associate Director at Vitus Group
(previously Pacific Housing Advisors, Inc.), where he developed or
consulted on affordable housing projects across the country. His
expertise is in the acquisition and rehabilitation of existing
low-income housing projects that are or will be financed by
tax-exempt bonds, tax credits, and other government subsidies.
Prior to his tenure at Vitus Group, Mr. Kannan was associated with
Novogradac & Company LLP. Mr. Kannan graduated from the
University of California at Berkeley in 2002 with a Bachelor of
Arts degree in economics with an emphasis in
accounting.
Gregory
S. Hand is Senior Vice President – Underwriting of WNC &
Associates, Inc. and oversees the property underwriting activities.
Mr. Hand has been involved in real estate analysis, development and
management since 1987. Prior to joining WNC in 1998, he was a
portfolio asset manager with a national tax credit sponsor with
responsibility for the management of $200 million in assets. Prior
to that, he was a finance manager with The Koll Company and a
financial analyst with The Irvine Company. Mr. Hand graduated from
Iowa State University in 1987 with a Bachelor of Business
Administration degree in finance.
Anil
Advani is Senior Vice President – Syndications of WNC &
Associates, Inc. He oversees all activities pertaining to private
label funds, including structuring, originations, underwriting and
acquisitions. Mr. Advani has 16 years of experience in affordable
housing. Prior to joining WNC in 2011 and rejoining WNC in 2013, he
worked for major tax credit syndicators where he was involved in
the originations, structuring, and placement to institutional
investors of local limited partnership investments. Prior to that,
he was associated with a major accounting firm performing due
diligence reviews of tax credit investments on behalf of
institutional investors. Mr. Advani graduated from the University
of Texas at Austin in 1993 with a Bachelor of Arts degree in
economics and from The American University – Washington
College of Law in 1996 with a Juris Doctor degree.
30
(f)
Involvement in Certain Legal Proceedings
None.
(g)
Promoters and Control Persons
Inapplicable.
(h) Audit Committee
Financial Expert, and (i) Identification of the Audit
Committee
Neither
the Partnership nor the General Partner, has an audit
committee.
(j) Changes to Nominating
Procedures
Inapplicable.
(k) Compliance With
Section 16(a) of the Exchange Act
None.
(l) Code of
Ethics
Associates
has adopted a Code of Ethics which applies to the Chief Executive
Officer and Chief Financial Officer of Associates. The
Code of Ethics will be provided without charge to any person who
requests it. Such requests should be directed
to: Investor Relations at (714) 662-5565 extension
187.
31
Item 11. Executive Compensation
The General Partner and its affiliates are not permitted under
Section 5.6 of the Partnership’s Agreement of Limited
Partnership (the “Agreement,” incorporated as Exhibit
3.1 to this report) to receive any salary, fees, profits,
distributions or allocations from the Partnership or any Local
Limited Partnership in which the Partnership invests except as
expressly allowed by the Agreement. The compensation and
other economic benefits to the General Partner and its Affiliates
provided for in the Agreement are summarized below.
(a) Compensation for Services
For services rendered by the General Partner or an
affiliate of the General Partner in connection with the
administration of the affairs of the Partnership, the General
Partner or any such affiliate may receive an annual asset
management fee not to exceed 0.5% of the invested assets of the
Local Limited Partnerships, including the Partnership’s
allocable share of the mortgages. The asset management
fee is payable with respect to the previous calendar quarter on the
first day of each calendar quarter during the year. Accrued but
unpaid asset management fees for any year are deferred without
interest and are payable in subsequent years from any funds
available to the Partnership after payment of all other costs and
expenses of the Partnership, including any capital reserves then
determined by the General Partner to no longer be necessary to be
retained by the Partnership, or from the proceeds of a sale or
refinancing of Partnership assets. Asset management
fees of $73,748, $79,717, and
$91,656 were incurred during the years ended March 31, 2017, 2016
and 2015, none of which was paid during the years ended March 31,
2017, 2016 and 2015.
Subject
to a number of terms and conditions set forth in the Agreement, the
General Partner and its affiliates may be entitled to compensation
for services actually rendered or to be rendered in connection with
(i) selecting, evaluating, structuring, negotiating and closing the
Partnership's investments in Local Limited Partnership Interests,
(ii) the acquisition or development of Properties for the Local
Limited Partnerships, or (iii) property management services
actually rendered by the General Partner or its affiliates
respecting the Properties owned by Local Limited
Partnerships. The Partnership has completed its
investment stage, so no compensation for the services in (i) or
(ii) has been paid during the period covered by this report and
none will be paid in the future. None of the services
described in (iii) were rendered and no such compensation was
payable for such services during the periods covered by this
report.
(b) Operating Expenses
Reimbursement
to the General Partner or any of its affiliates of Operating Cash
Expenses is subject to specific restrictions in Section 5.3.3 of
the Partnership’s Agreement of Limited Partnership (the
“Agreement,” incorporated as Exhibit 3.1 to this
report). The Agreement defines “Operating Cash
Expenses” as
“
. . . the amount of cash disbursed by the Partnership . . . in the
ordinary course of business for the payment of its operating
expenses, such as expenses for management, utilities, repair and
maintenance, insurance, investor communications, legal, accounting,
statistical and bookkeeping services, use of computing or
accounting equipment, travel and telephone expenses, salaries and
direct expenses of Partnership employees while engaged in
Partnership business, and any other operational and administrative
expenses necessary for the prudent operation of the Partnership.
Without limiting the generality of the foregoing, Operating Cash
Expenses shall include fees paid by the Partnership to any General
Partner or any Affiliate of a General Partner permitted by this
Agreement and the actual cost of goods, materials and
administrative services used for or by the Partnership, whether
incurred by a General Partner, an Affiliate of a General Partner or
a non-Affiliated Person in performing the foregoing functions. As
used in the preceding sentence, actual cost of goods and materials
means the actual cost of goods and materials used for or by the
Partnership and obtained from entities not Affiliated with a
General Partner, and actual cost of administrative services means
the pro rata cost of personnel (as if such persons were employees
of the Partnership) associated therewith, but in no event to exceed
the Competitive amount.”
32
The
Agreement provides that no such reimbursement shall be permitted
for services for which a General Partner or any of its Affiliates
is entitled to compensation by way of a separate
fee. Furthermore, no such reimbursement is to be made
for (a) rent or depreciation, utilities, capital equipment or other
such administrative items, and (b) salaries, fringe benefits,
travel expenses and other administrative items incurred or
allocated to any "controlling person" of a General Partner or any
Affiliate of a General Partner. For the purposes of Section 5.3.4,
"controlling person" includes, but is not limited to, any person,
however titled, who performs functions for a General Partner or any
Affiliate of a General Partner similar to those of: (1) chairman or
member of the board of directors; (2) executive management, such as
president, vice president or senior vice president, corporate
secretary or treasurer; (3) senior management, such as the vice
president of an operating division who reports directly to
executive management; or (4) those holding 5% or more equity
interest in such General Partner or any such Affiliate of a General
Partner or a person having the power to direct or cause the
direction of such General Partner or any such Affiliate of a
General Partner, whether through the ownership of voting
securities, by contract or otherwise.
The
unpaid operating expenses reimbursable to the General Partner or
its affiliates were $59,396, $34,957and $38,284 for the years ended
March 31, 2017, 2016, and 2015, respectively. The Partnership
reimbursed the General Partner or its affiliates for operating
expenses of $10,000, $53,624 and $5,000, during the years ended
March 31, 2017, 2016, and 2015, respectively.
(c) Interest in Partnership
The General Partner receives 0.1% of the
Partnership’s allocated Low Income Housing Tax Credits, which
approximated $0, $212 and $648,
for the years ended December 31, 2016, 2015 and
2014. The General Partner is also entitled to receive
0.1% of the Partnership’s operating income or losses, gain or
loss from the sale of property and operating cash distributions.
There were no distributions of operating cash to the General
Partner during the years ended March 31, 2017, 2016, and
2015. The General Partner has an interest in sale or
refinancing proceeds as follows: after the Limited Partners have
received a return of their capital, General Partner may receive an
amount equal to its capital contribution, less any prior
distribution of such proceeds, then the General Partner may receive
10% and the Limited Partners 90% of any remaining
proceeds. There were no such distributions of cash to
the General Partner during the years ended March 31, 2017, 2016,
and 2015.
(d) Subordinated Disposition Fee
A
subordinated disposition fee in an amount equal to 1% of the sale
price of real estate sold by the Local Limited
Partnerships. Payment of this fee is subordinated to the
Limited Partners receiving distributions equal to their capital
contributions and their return on investment (as defined in the
Partnership Agreement) and is payable only if services are rendered
in the sales effort. No such fee was incurred for all
periods presented.
Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
(a)
Securities Authorized for Issuance under Equity Compensation
Plans
The
Partnership has no compensation plans under which interests in the
Partnership are authorized for issuance.
(b)
Security Ownership of Certain Beneficial Owners
No
person is known to own beneficially in excess of 5% of the
outstanding Partnership Units.
(c)
Security Ownership of Management
Neither
the General Partner, Associates, its affiliates, nor any of the
officers or directors of the General Partner, Associates or its
affiliates own directly or beneficially any Partnership
Units.
(d)
Changes in Control
The
management and control of Associates and its affiliates may be
changed at any time in accordance with its respective
organizational documents, without the consent or approval of the
Limited Partners. In addition, the Partnership Agreement
provides for the admission of one or more additional and successor
General Partners in certain circumstances.
33
First,
with the consent of the General Partner and a majority-in-interest
of the Limited Partners, the General Partner may designate one or
more persons to be successor or additional General Partners. In
addition, the General Partner may, without the consent of the
Limited Partners, (i) substitute in its stead as General Partner
any entity which has, by merger, consolidation or otherwise,
acquired substantially all of its assets, stock or other evidence
of equity interest and continued its business, or (ii) cause to be
admitted to the Partnership an additional General Partner or
Partners if it deems such admission to be necessary or desirable so
that the Partnership will be classified a partnership for Federal
income tax purposes. Finally, a majority-in-interest of
the Limited Partners may at any time remove the General Partner of
the Partnership and elect a successor General Partner.
Item 13. Certain Relationships and Related Transactions,
and Director Independence
(a)
The
General Partner manages all of the Partnership’s
affairs. The transactions with the General Partner are
primarily in the form of fees paid by the Partnership for services
rendered to the Partnership, reimbursement of expenses, and the
General Partner’s interests in the Partnership, as discussed
in Item 11 and in the notes to the Partnership’s financial
statements.
(b)
The
Partnership has no directors.
Item 14. Principal Accountant Fees and
Services
The following is a summary of fees paid to the Partnership’s
principal independent registered public accounting firm for the
years ended March 31:
|
2017
|
2016
|
Audit
Fees
|
$21,400
|
$23,000
|
Audit-related
Fees
|
-
|
-
|
Tax
Fees
|
4,000
|
4,000
|
All
Other Fees
|
-
|
-
|
TOTAL
|
$25,400
|
$27,000
|
The Partnership has no Audit Committee. All audit services and any
permitted non-audit services performed by the Partnership’s
independent auditors are preapproved by the General
Partner.
34
PART IV.
Item 15. Exhibits and Financial Statement
Schedules
(a)(1) List of financial
statements included in Part II hereof
Reports
of Independent Registered Public Accounting Firms
Balance
Sheets, March 31, 2017 and 2016
Statements
of Operations for the Years Ended March 31, 2017, 2016 and
2015
Statements
of Partners’ Equity (Deficit) for the years ended March 31,
2017, 2016 and 2015
Statements
of Cash Flows for the years ended March 31, 2017, 2016, and
2015
Notes
to Financial Statements
(a)(2) List of Financial
statement schedules included in Part IV hereof:
Schedule
III, Real Estate Owned by Local Limited Partnerships
(a)(3)
Exhibits.
3.1
Articles
of incorporation and by-laws: The registrant is not
incorporated. The Partnership Agreement filed as Exhibit
28.1 to Form 10-K for fiscal year ended December 31, 1995 is hereby
incorporated herein by reference as Exhibit 3.1.
31.1
Certification
of the Chief Executive Officer pursuant to Rule 13a-14 and 15d-14
(filed herewith)
31.2
Certification
of the Chief Financial Officer pursuant to Rule 13a-14 and 15d-14
(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)
99.2
Financial
Statements of Starlight, L.P., as of and for the year ended
December 31, 2014, together with Independent Auditors’ Report
thereon; a significant subsidiary of the Partnership. (filed
herewith)
101.
Interactive
data files pursuant to Rule 405 of Regulation S-T: (i) the Balance
Sheets at March 31, 2017 and 2016, (ii) the Statements of
Operations for the years ended March 31, 2017, 2016 and 2015, (iii)
the Statements of Partners’ Equity (Deficit) for the years
ended March 31, 2017, 2016 and 2015, (iv) the Statements of Cash
Flows for the years ended March 31, 2017, 2016 and 2015 and (v) the
Notes to 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.
35
WNC Housing Tax Credit Fund VI, L.P., Series 10
Real Estate Owned by Local Limited Partnerships
March 31, 2017
|
|
|
As of March 31, 2017
|
Initial Cost to Partnership
|
|
As of December 31, 2016
|
||||||
Local Limited Partnership Name
|
|
Location
|
Total Investment in Local Limited Partnership
|
Amount of Investment Paid to Date
|
Land
|
Building & Improvements
|
Cost Capitalized Subsequent to Acquisition
|
Mortgage Balances of Local Limited Partnerships
|
Land
|
Building & Equipment
|
Accumulated Depreciation
|
Net Book Value
|
Catoosa
Senior Village, L.P.
|
|
Calhoun,
Georgia
|
$1,997,000
|
$1,997,000
|
$456,000
|
$4,352,000
|
$10,000
|
$2,199,000
|
$456,000
|
$4,362,000
|
$1,942,000
|
$2,876,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Humboldt
Village, L.P.
|
|
Winnemucca,
Nevada
|
1,713,000
|
1,713,000
|
79,000
|
4,223,000
|
61,000
|
2,149,000
|
79,000
|
4,284,000
|
1,480,000
|
2,883,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Melodie
Meadows Associates, Ltd.
|
|
Glencoe,
Alabama
|
1,569,000
|
1,569,000
|
209,000
|
2,693,000
|
87,000
|
1,258,000
|
209,000
|
2,780,000
|
1,082,000
|
1,907,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Starlight
Place, L.P.
|
|
Americus,
Georgia
|
3,258,000
|
3,258,000
|
249,000
|
4,396,000
|
44,000
|
351,000
|
249,000
|
4,440,000
|
1,652,000
|
3,037,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$8,537,000
|
$8,537,000
|
$993,000
|
$15,664,000
|
$202,000
|
$5,957,000
|
$993,000
|
$15,866,000
|
$6,156,000
|
$10,703,000
|
36
WNC Housing Tax Credit Fund VI, L.P., Series 10
|
Schedule III
|
Real Estate Owned by Local Limited Partnerships
|
March 31, 2017
|
|
For the Year Ended December 31, 2016
|
|||
Local Limited
Partnership Name
|
Rental Income
|
Net Loss
|
Year Investment Acquired
|
Estimated Useful Life (Years)
|
|
|
|
|
|
Catoosa
Senior Village, L.P.
|
$300,000
|
$(70,000)
|
2003
|
40
|
|
|
|
|
|
Humboldt
Village, L.P.
|
433,000
|
(21,000)
|
2004
|
40
|
|
|
|
|
|
Melodie
Meadows Associates, Ltd.
|
169,000
|
(77,000)
|
2003
|
40
|
|
|
|
|
|
Starlight
Place, L.P.
|
289,000
|
(156,000)
|
2004
|
40
|
|
|
|
|
|
|
$1,191,000
|
$(324,000)
|
|
|
37
WNC Housing Tax Credit Fund VI, L.P., Series 10
Real Estate Owned by Local Limited Partnerships
March 31, 2016
|
|
|
As of March 31, 2016
|
Initial Cost to Partnership
|
|
As of December 31, 2015
|
||||||
Local Limited Partnership Name
|
|
Location
|
Total Investment in Local Limited Partnership
|
Amount of Investment Paid to Date
|
Land
|
Building & Improvements
|
Cost Capitalized Subsequent to Acquisition
|
Mortgage Balances of Local Limited Partnerships
|
Land
|
Building & Equipment
|
Accumulated Depreciation
|
Net Book Value
|
Catoosa
Senior Village, L.P.
|
|
Calhoun,
Georgia
|
$1,997,000
|
$1,997,000
|
$456,000
|
$4,352,000
|
$10,000
|
$2,207,000
|
$456,000
|
$4,362,000
|
$1,813,000
|
$3,005,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Humboldt
Village, L.P.
|
|
Winnemucca,
Nevada
|
1,713,000
|
1,713,000
|
79,000
|
4,223,000
|
69,000
|
2,174,000
|
79,000
|
4,292,000
|
1,385,000
|
2,986,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Melodie
Meadows Associates, Ltd.
|
|
Glencoe,
Alabama
|
1,569,000
|
1,569,000
|
209,000
|
2,693,000
|
56,000
|
1,258,000
|
209,000
|
2,749,000
|
1,008,000
|
1,950,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Starlight
Place, L.P.
|
|
Americus,
Georgia
|
3,258,000
|
3,258,000
|
249,000
|
4,396,000
|
44,000
|
354,000
|
249,000
|
4,440,000
|
1,514,000
|
3,175,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$8,537,000
|
$8,537,000
|
$993,000
|
$15,664,000
|
$179,000
|
$5,993,000
|
$993,000
|
$15,843,000
|
$5,720,000
|
$11,116,000
|
38
WNC Housing Tax Credit Fund VI, L.P., Series 10
|
Schedule III
|
Real Estate Owned by Local Limited Partnerships
|
March 31, 2016
|
|
For the Year Ended December 31, 2015
|
|||
Local Limited
Partnership Name
|
Rental Income
|
Net Income (Loss)
|
Year Investment Acquired
|
Estimated Useful Life (Years)
|
|
|
|
|
|
Catoosa
Senior Village, L.P.
|
$288,000
|
$(124,000)
|
2003
|
40
|
|
|
|
|
|
Humboldt
Village, L.P.
|
431,000
|
18,000
|
2004
|
40
|
|
|
|
|
|
Melodie
Meadows Associates, Ltd.
|
182,000
|
(47,000)
|
2003
|
40
|
|
|
|
|
|
Starlight
Place, L.P.
|
284,000
|
(130,000)
|
2004
|
40
|
|
|
|
|
|
|
$1,185,000
|
$(283,000)
|
|
|
39
WNC Housing Tax Credit Fund VI, L.P., Series 10
Real Estate Owned by Local Limited Partnerships
March 31, 2015
|
|
|
As of March 31, 2015
|
Initial Cost to Partnership
|
|
As of December 31, 2014
|
||||||
Local Limited Partnership Name
|
|
Location
|
Total Investment in Local Limited Partnership
|
Amount of Investment Paid to Date
|
Land
|
Building & Improvements
|
Cost Capitalized Subsequent to Acquisition
|
Mortgage Balances of Local Limited Partnerships
|
Land
|
Building & Equipment
|
Accumulated Depreciation
|
Net Book Value
|
Catoosa
Senior Village, L.P.
|
|
Calhoun,
Georgia
|
$1,997,000
|
$1,997,000
|
$456,000
|
$4,352,000
|
$10,000
|
$2,215,000
|
$456,000
|
$4,362,000
|
$1,684,000
|
$3,134,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FDI-Green
Manor 2003, Ltd.
|
|
Hempstead,
Texas
|
613,000
|
613,000
|
27,000
|
1,734,000
|
56,000
|
1,029,000
|
27,000
|
1,790,000
|
483,000
|
1,334,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FDI-Pine
Meadows 2003, Ltd.
|
|
Prairie
View, Texas
|
668,000
|
668,000
|
47,000
|
1,693,000
|
183,000
|
949,000
|
47,000
|
1,876,000
|
504,000
|
1,419,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Humboldt
Village, L.P.
|
|
Winnemucca,
Nevada
|
1,713,000
|
1,713,000
|
79,000
|
4,223,000
|
59,000
|
2,199,000
|
79,000
|
4,282,000
|
1,276,000
|
3,085,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Melodie
Meadows Associates, Ltd.
|
|
Glencoe,
Alabama
|
1,569,000
|
1,569,000
|
209,000
|
2,693,000
|
49,000
|
1,194,000
|
209,000
|
2,742,000
|
935,000
|
2,016,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Starlight
Place, L.P.
|
|
Americus,
Georgia
|
3,258,000
|
3,258,000
|
249,000
|
4,396,000
|
44,000
|
357,000
|
249,000
|
4,440,000
|
1,378,000
|
3,311,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$9,818,000
|
$9,818,000
|
$1,067,000
|
$19,091,000
|
$401,000
|
$7,943,000
|
$1,067,000
|
$19,492,000
|
$6,260,000
|
$14,299,000
|
40
WNC Housing Tax Credit Fund VI, L.P., Series 10
Schedule III
Real Estate Owned by Local Limited Partnerships
March 31, 2015
|
For the Year
Ended December 31, 2014
|
|||
Local Limited
Partnership Name
|
Rental Income
|
Net Loss
|
Year Investment Acquired
|
Estimated Useful Life (Years)
|
|
|
|
|
|
Catoosa
Senior Village, L.P.
|
$286,000
|
$(76,000)
|
2003
|
40
|
|
|
|
|
|
FDI-Green
Manor 2003, Ltd.
|
96,000
|
(48,000)
|
2004
|
40
|
|
|
|
|
|
FDI-Pine
Meadows 2003, Ltd.
|
172,000
|
(91,000)
|
2004
|
40
|
|
|
|
|
|
Humboldt
Village, L.P.
|
473,000
|
(10,000)
|
2004
|
40
|
|
|
|
|
|
Melodie
Meadows Associates, Ltd.
|
169,000
|
(30,000)
|
2003
|
40
|
|
|
|
|
|
Starlight
Place, L.P.
|
284,000
|
(94,000)
|
2004
|
40
|
|
|
|
|
|
|
$1,480,000
|
$(349,000)
|
|
|
41
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 10
By: WNC & ASSOCIATES,
INC.
General Partner
By: /s/
Wilfred N. Cooper, Jr.
Wilfred
N. Cooper, Jr.,
President
of WNC & Associates, Inc.
Date: June 23,
2017
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 registrant and in the capacities and on the dates
indicated.
By: /s/
Wilfred N. Cooper, Jr.
Wilfred
N. Cooper, Jr.,
Chief
Executive Officer, President and Director of WNC & Associates,
Inc. (principal executive officer)
Date: June
23, 2017
By: /s/
Melanie R. Wenk
Melanie
R. Wenk,
Senior
Vice-President - Chief Financial Officer of WNC & Associates,
Inc. (principal financial officer and principal accounting
officer)
Date: June
23, 2017
By: /s/
Wilfred N. Cooper, Sr.
Wilfred
N. Cooper, Sr.,
Chairman
of the Board of WNC & Associates, Inc.
Date: June
23, 2017
By: /s/
Kay L. Cooper
Kay
L. Cooper
Director
of WNC & Associates, Inc.
Date: June
23, 2017
42