UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                             ----------------------

                                    FORM 10-Q

(Mark One)

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

For the quarterly period ended September 29, 2005

                                       OR

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

For the transition period from ____________ to ____________

                         Commission file number: 0-19217

                     American Tax Credit Properties III L.P.
             ------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

Delaware                                                    13-3545006
--------------------------------------------           -------------------
(State or other jurisdiction of                         (I.R.S. Employer
incorporation or organization)                          Identification No.)

Richman Tax Credit Properties III L.P.
340 Pemberwick Road
Greenwich, Connecticut                                        06831
--------------------------------------------           -------------------
(Address of principal executive offices)                     (Zip Code)

Registrant's telephone number, including area code: (203) 869-0900

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 filing requirements
for the past 90 days.

Yes |X| No |_|

Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

Yes |_| No |X|

Indicate by check mark whether the Registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

Yes |_| No |X|
<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.

                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Table of Contents                                                           Page
-----------------                                                           ----

Balance Sheets................................................................3

Statements of Operations......................................................4

Statements of Cash Flows......................................................5

Notes to Financial Statements.................................................7


                                       2
<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                                 BALANCE SHEETS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                             September 29,      March 30,
                                                                                  Notes         2005               2005
                                                                                  -----      -----------        -----------
<S>                                                                                <C>       <C>                <C>
ASSETS

Cash and cash equivalents                                                                    $    13,925        $    58,001
Investments in bonds                                                                 2         1,958,986          1,936,474
Investment in local partnerships                                                     3           628,621            751,675
Interest receivable                                                                                1,599              1,599
                                                                                             -----------        -----------

                                                                                             $ 2,603,131        $ 2,747,749
                                                                                             ===========        ===========

LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities

   Accounts payable and accrued expenses                                                     $   599,536        $   622,126
   Payable to general partner and affiliates                                                   2,196,324          1,973,908
                                                                                             -----------        -----------

                                                                                               2,795,860          2,596,034
                                                                                             -----------        -----------

Commitments and contingencies                                                       3,4

Partners' equity (deficit)

   General partner                                                                              (317,576)          (314,335)
   Limited partners (35,883 units of limited partnership interest
     outstanding)                                                                                 89,732            410,557
   Accumulated other comprehensive income, net                                       2            35,115             55,493
                                                                                             -----------        -----------

                                                                                                (192,729)           151,715
                                                                                             -----------        -----------

                                                                                             $ 2,603,131        $ 2,747,749
                                                                                             ===========        ===========
</TABLE>

                       See Notes to Financial Statements.


                                       3
<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                Three Months      Six Months    Three Months     Six Months
                                                                    Ended           Ended           Ended           Ended
                                                                September 29,   September 29,   September 29,   September 29,
                                                       Notes         2005            2005            2004            2004
                                                       -----      ---------       ---------       ---------       ---------
<S>                                                     <C>       <C>             <C>             <C>             <C>
REVENUE

Interest                                                          $  25,832       $  51,635       $  33,152       $  66,158
Other income from local partnerships                    3            20,217          35,210          17,689          26,169
                                                                  ---------       ---------       ---------       ---------

TOTAL REVENUE                                                        46,049          86,845          50,841          92,327
                                                                  ---------       ---------       ---------       ---------

EXPENSES

Administration fees                                                  57,643         115,286          57,643         115,286
Management fees                                                      57,643         115,286          57,643         115,286
Professional fees                                                    23,468          39,109          18,592          37,250
State of New Jersey filing fee                                       12,580          17,877           6,595          12,497
Printing, postage and other                                           4,586          10,299           6,486           9,504
                                                                  ---------       ---------       ---------       ---------

TOTAL EXPENSES                                                      155,920         297,857         146,959         289,823
                                                                  ---------       ---------       ---------       ---------

                                                                   (109,871)       (211,012)        (96,118)       (197,496)

Equity in loss of investment in local
   partnerships                                         3           (64,488)       (113,054)       (150,147)       (205,155)
                                                                  ---------       ---------       ---------       ---------

NET LOSS                                                           (174,359)       (324,066)       (246,265)       (402,651)

Other comprehensive income (loss)                       2           (30,654)        (20,378)         24,417         (73,495)
                                                                  ---------       ---------       ---------       ---------

COMPREHENSIVE LOSS                                                $(205,013)      $(344,444)      $(221,848)      $(476,146)
                                                                  =========       =========       =========       =========

NET LOSS ATTRIBUTABLE TO

   General partner                                                $  (1,744)      $  (3,241)      $  (2,463)      $  (4,027)
   Limited partners                                                (172,615)       (320,825)       (243,802)       (398,624)
                                                                  ---------       ---------       ---------       ---------

                                                                  $(174,359)      $(324,066)      $(246,265)      $(402,651)
                                                                  =========       =========       =========       =========

NET LOSS per unit of limited partnership
   interest (35,883 units of limited
   partnership interest)                                          $   (4.81)      $   (8.94)      $   (6.79)      $  (11.11)
                                                                  =========       =========       =========       =========
</TABLE>

                       See Notes to Financial Statements.


                                       4
<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                            STATEMENTS OF CASH FLOWS
                  SIX MONTHS ENDED SEPTEMBER 29, 2005 AND 2004
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                2005            2004
                                                             ---------       ---------
<S>                                                          <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES

Interest received                                            $   8,745       $  36,079
Cash paid for
     administration fees                                        (8,156)       (128,289)
     management fees                                                          (141,000)
     professional fees                                         (64,977)        (64,287)
     State of New Jersey filing fee                            (19,087)        (24,995)
     printing, postage and other expenses                       (5,811)         (5,004)
                                                             ---------       ---------

Net cash used in operating activities                          (89,286)       (327,496)
                                                             ---------       ---------

CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from maturities/redemptions and sales of bonds                        401,193
Cash distributions from local partnerships                      45,210          36,169
                                                             ---------       ---------

Net cash provided by investing activities                       45,210         437,362
                                                             ---------       ---------

Net increase (decrease) in cash and cash equivalents           (44,076)        109,866

Cash and cash equivalents at beginning of period                58,001         103,242
                                                             ---------       ---------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                   $  13,925       $ 213,108
                                                             =========       =========

SIGNIFICANT NON-CASH INVESTING ACTIVITIES

Unrealized loss on investments in bonds, net                 $ (20,378)      $ (73,495)
                                                             =========       =========
</TABLE>

--------------------------------------------------------------------------------
See reconciliation of net loss to net cash used in operating activities on page
6.

                       See Notes to Financial Statements.


                                       5
<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                     STATEMENTS OF CASH FLOWS - (continued)
                  SIX MONTHS ENDED SEPTEMBER 29, 2005 AND 2004
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                   2005            2004
                                                                                ---------       ---------
<S>                                                                             <C>             <C>
RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES

Net loss                                                                        $(324,066)      $(402,651)

Adjustments to reconcile net loss to net cash used in operating activities

   Equity in loss of investment in local partnerships                             113,054         205,155
   Distributions from local partnerships classified as other income               (35,210)        (26,169)
   Amortization of net premium on investments in bonds                                711           2,297
   Gain on redemptions and sales of bonds                                                          (1,193)
   Accretion of zero coupon bonds                                                 (43,601)        (43,364)
   Decrease in interest receivable                                                                 12,181
   Decrease in accounts payable and accrued expenses                              (22,590)       (151,035)
   Increase in payable to general partner and affiliates                          222,416          77,283
                                                                                ---------       ---------

NET CASH USED IN OPERATING ACTIVITIES                                           $ (89,286)      $(327,496)
                                                                                =========       =========
</TABLE>

                       See Notes to Financial Statements.


                                       6
<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 29, 2005
                                   (UNAUDITED)

1.    Basis of Presentation

      The accompanying unaudited financial statements have been prepared in
      accordance with accounting principles generally accepted in the United
      States of America for interim financial information. They do not include
      all information and footnotes required by accounting principles generally
      accepted in the United States of America for complete financial
      statements. The results of operations are impacted significantly by the
      combined results of operations of the Local Partnerships, which are
      provided by the Local Partnerships on an unaudited basis during interim
      periods. Accordingly, the accompanying financial statements are dependent
      on such unaudited information. In the opinion of the General Partner, the
      financial statements include all adjustments necessary to present fairly
      the financial position as of September 29, 2005 and the results of
      operations and cash flows for the interim periods presented. All
      adjustments are of a normal recurring nature. The results of operations
      for the six months ended September 29, 2005 are not necessarily indicative
      of the results that may be expected for the entire year.

      Certain prior period Local Partnership amounts reflected in Note 3 have
      been reclassified to conform to the current period presentation.

2.    Investments in Bonds

      As of September 29, 2005, certain information concerning investments in
      bonds is as follows:

<TABLE>
<CAPTION>
                                                                   Gross             Gross
                                                 Amortized       unrealized        unrealized        Estimated
      Description and maturity                     cost            gains             losses          fair value
                                                -----------      -----------       -----------       -----------
      <S>                                       <C>              <C>               <C>               <C>
      Corporate debt securities
         After one year through five years      $   293,949      $    11,155       $      (950)      $   304,154
                                                -----------      -----------       -----------       -----------

      U.S. Treasury debt securities
         After one year through five years        1,629,922           24,910                --         1,654,832
                                                -----------      -----------       -----------       -----------

                                                $ 1,923,871      $    36,065       $      (950)      $ 1,958,986
                                                ===========      ===========       ===========       ===========
</TABLE>


                                       7
<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                               SEPTEMBER 29, 2005
                                   (UNAUDITED)

3.    Investment in Local Partnerships

      The Partnership owns limited partnership interests in forty-three Local
      Partnerships representing capital contributions in the aggregate amount of
      $29,264,476, all of which have been paid. As of June 30, 2005, the Local
      Partnerships have outstanding mortgage loans payable totaling
      approximately $81,648,000 and accrued interest payable on such loans
      totaling approximately $5,002,000, which are secured by security interests
      and liens common to mortgage loans on the Local Partnerships' real
      property and other assets.

      For the six months ended September 29, 2005, the investment in local
      partnerships activity consists of the following:

      Investment in local partnerships as of March 30, 2005          $ 751,675

      Equity in loss of investment in local partnerships              (113,054)*

      Cash distributions received from Local Partnerships              (45,210)
      Cash distributions from Local Partnerships classified as
         other income                                                   35,210
                                                                     ---------

      Investment in local partnerships as of September 29, 2005      $ 628,621
                                                                     =========

      *Equity in loss of investment in local partnerships is limited to the
      Partnership's investment balance in each Local Partnership; any excess is
      applied to other partners' capital in any such Local Partnership. The
      amount of such excess losses applied to other partners' capital was
      $1,363,614 for the six months ended June 30, 2005 as reflected in the
      combined statement of operations of the Local Partnerships reflected
      herein Note 3.

      As of June 30, 2005, Westminster Apartments Limited Partnership
      ("Westminster") was in default under the terms of its first mortgage;
      payments of principal, interest and replacement reserve deposits are over
      six years in arrears, resulting in a cumulative arrearage of approximately
      $652,000. The lender has indicated a willingness to restructure the debt,
      whereby payments will be required only to the extent that Westminster
      generates available annual cash flow; in addition, the lender would
      receive all residual proceeds upon the sale of Westminster. There can be
      no assurance that the issues will be resolved and the mortgage remains in
      default without a formal forbearance as of November 2005.

      The combined unaudited balance sheets of the Local Partnerships as of June
      30, 2005 and December 31, 2004 and the combined unaudited statements of
      operations of the Local Partnerships for the three and six month periods
      ended June 30, 2005 and 2004 are reflected on pages 9 and 10,
      respectively.


                                        8
<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                               SEPTEMBER 29, 2005
                                   (UNAUDITED)

3.    Investment in Local Partnerships (continued)

      The combined balance sheets of the Local Partnerships as of June 30, 2005
      and December 31, 2004 are as follows:

<TABLE>
<CAPTION>
                                                                                             June 30,           December 31,
                                                                                              2005                 2004
                                                                                          ------------         ------------
<S>                                                                                       <C>                  <C>
      ASSETS

      Cash and cash equivalents                                                           $  1,268,019         $  1,420,670
      Rents receivable                                                                         423,233              431,307
      Escrow deposits and reserves                                                           5,845,671            5,491,520
      Land                                                                                   3,910,215            3,910,215
      Buildings and improvements (net of accumulated depreciation
        of $57,018,156 and $55,018,504)                                                     58,416,208           60,312,727
      Intangible assets (net of accumulated amortization
        of $567,538 and $594,230)                                                              471,729              488,609
      Other assets                                                                           1,409,208            1,131,804
                                                                                          ------------         ------------

                                                                                          $ 71,744,283         $ 73,186,852
                                                                                          ============         ============

      LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

      Liabilities

        Accounts payable and accrued expenses                                             $  1,632,925         $  1,520,547
        Due to related parties                                                               5,352,603            5,281,845
        Mortgage loans                                                                      81,648,334           82,069,326
        Accrued interest                                                                     5,002,354            4,510,931
        Other liabilities                                                                      818,768              886,655
                                                                                          ------------         ------------

                                                                                            94,454,984           94,269,304
                                                                                          ------------         ------------
      Partners' equity (deficit)

        American Tax Credit Properties III L.P.
           Capital contributions, net of distributions                                      28,742,923           28,769,504
           Cumulative loss                                                                 (26,740,882)         (26,627,828)
                                                                                          ------------         ------------

                                                                                             2,002,041            2,141,676
                                                                                          ------------         ------------

        General partners and other limited partners
           Capital contributions, net of distributions                                        (338,019)            (332,555)
           Cumulative loss                                                                 (24,374,723)         (22,891,573)
                                                                                          ------------         ------------

                                                                                           (24,712,742)         (23,224,128)
                                                                                          ------------         ------------

                                                                                           (22,710,701)         (21,082,452)
                                                                                          ------------         ------------

                                                                                          $ 71,744,283         $ 73,186,852
                                                                                          ============         ============
</TABLE>


                                        9
<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                               SEPTEMBER 29, 2005
                                   (UNAUDITED)

3.    Investment in Local Partnerships (continued)

      The combined statements of operations of the Local Partnerships for the
      three and six month periods ended June 30, 2005 and 2004 are as follows:

<TABLE>
<CAPTION>
                                                         Three Months        Six Months         Three Months         Six Months
                                                             Ended              Ended               Ended              Ended
                                                           June 30,           June 30,            June 30,            June 30,
                                                             2005                2005                2004                2004
                                                         -----------         -----------         -----------         -----------
      <S>                                                <C>                 <C>                 <C>                 <C>
      REVENUE

      Rental                                             $ 2,983,141         $ 5,981,551         $ 2,949,996         $ 5,849,072
      Interest and other                                      65,498             164,412              95,270             180,813
                                                         -----------         -----------         -----------         -----------

      TOTAL REVENUE                                        3,048,639           6,145,963           3,045,266           6,029,885
                                                         -----------         -----------         -----------         -----------

      EXPENSES

      Administrative                                         660,010           1,369,922             836,825           1,529,524
      Utilities                                              341,395             751,351             335,082             742,826
      Operating and maintenance                              898,118           1,633,262             897,082           1,585,979
      Taxes and insurance                                    304,088             626,380             313,374             631,869
      Financial                                              654,975           1,331,938             671,146           1,374,892
      Depreciation and amortization                        1,041,663           2,029,314           1,004,368           2,019,043
                                                         -----------         -----------         -----------         -----------

      TOTAL EXPENSES                                       3,900,249           7,742,167           4,057,877           7,884,133
                                                         -----------         -----------         -----------         -----------

      NET LOSS                                           $  (851,610)        $(1,596,204)        $(1,012,611)        $(1,854,248)
                                                         -----------         -----------         -----------         -----------

      NET LOSS ATTRIBUTABLE TO

      American Tax Credit Properties III L.P.            $   (64,488)        $  (113,054)        $  (150,147)        $  (205,155)
      General partners and other limited
         partners, which includes $703,892,
         $1,363,614, $774,832 and $1,478,142 of
         Partnership loss in excess of investment           (787,122)         (1,483,150)           (862,464)         (1,649,093)
                                                         -----------         -----------         -----------         -----------

                                                         $  (851,610)        $(1,596,204)        $(1,012,611)        $(1,854,248)
                                                         ===========         ===========         ===========         ===========
</TABLE>

      The combined results of operations of the Local Partnerships for the six
      months ended June 30, 2005 are not necessarily indicative of the results
      that may be expected for an entire operating period.

4.    Additional Information

      Additional information, including the audited March 30, 2005 Financial
      Statements and the Organization, Purpose and Summary of Significant
      Accounting Policies, is included in the Partnership's Annual Report on
      Form 10-K for the fiscal year ended March 30, 2005 on file with the
      Securities and Exchange Commission.


                                       10
<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.

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

Material Changes in Financial Condition

As of September 29, 2005, American Tax Credit Properties III L.P. (the
"Registrant") has not experienced a significant change in financial condition as
compared to March 30, 2005. Principal changes in assets are comprised of
periodic transactions and adjustments and equity in loss from operations of the
local partnerships (the "Local Partnerships"), which own low-income multifamily
residential complexes (the "Properties") that qualify for the low-income tax
credit in accordance with Section 42 of the Internal Revenue Code (the
"Low-income Tax Credit"). During the six months ended September 29, 2005,
Registrant received cash from interest revenue and distributions from Local
Partnerships and utilized cash for operating expenses. Cash and cash equivalents
and investments in bonds decreased, in the aggregate, by approximately $22,000
during the six months ended September 29, 2005 (which includes a net unrealized
loss on investments in bonds of approximately $20,000, amortization of net
premium on investments in bonds of approximately $1,000 and accretion of zero
coupon bonds of approximately $44,000). Notwithstanding circumstances that may
arise in connection with the Properties, Registrant does not expect to realize
significant gains or losses on its investments in bonds, if any. During the six
months ended September 29, 2005, the investment in local partnerships decreased
as a result of Registrant's equity in the Local Partnerships' net loss for the
six months ended June 30, 2005 of $113,054 and cash distributions received from
Local Partnerships of $10,000 (exclusive of distributions from Local
Partnerships of $35,210 classified as other income). Accounts payable and
accrued expenses includes deferred administration fees of $556,673 and payable
to general partner and affiliates represents deferred management and
administration fees in the accompanying balance sheet as of September 29, 2005.

Results of Operations

Registrant's operating results are dependent upon the operating results of the
Local Partnerships and are significantly impacted by the Local Partnerships'
policies. In addition, the operating results herein are not necessarily the same
for tax reporting. Registrant accounts for its investment in local partnerships
in accordance with the equity method of accounting. Accordingly, the investment
is carried at cost, and is adjusted for Registrant's share of each Local
Partnership's results of operations and by cash distributions received. Equity
in loss of each investment in Local Partnership allocated to Registrant is
recognized to the extent of Registrant's investment balance in each Local
Partnership. Equity in loss in excess of Registrant's investment balance in a
Local Partnership is allocated to other partners' capital in any such Local
Partnership. As a result, the reported equity in loss of investment in local
partnerships is expected to decrease as Registrant's investment balances in the
respective Local Partnerships become zero. The combined statements of operations
of the Local Partnerships reflected in Note 3 to Registrant's financial
statements include the operating results of all Local Partnerships, irrespective
of Registrant's investment balances.

Cumulative losses and cash distributions in excess of investment in local
partnerships may result from a variety of circumstances, including a Local
Partnership's accounting policies, subsidy structure, debt structure and
operating deficits, among other things. In addition, the book value of
Registrant's investment in each Local Partnership (the "Local Partnership
Carrying Value") may be reduced if the Local Partnership Carrying Value is
considered to exceed the estimated value derived by management. Accordingly,
cumulative losses and cash distributions in excess of the investment or an
adjustment to a Local Partnership's Carrying Value are not necessarily
indicative of adverse operating results of a Local Partnership. See discussion
below under Local Partnership Matters regarding certain Local Partnerships
currently operating below economic break even levels.

Registrant's operations for the three months ended September 29, 2005 and 2004
resulted in net losses of $174,359 and $246,265, respectively. The decrease in
net loss is primarily attributable to a decrease in equity in loss of investment
in local partnerships of approximately $86,000, which decrease is primarily the
result of a decrease in the net operating losses of certain Local Partnerships
in which Registrant continues to have an investment balance. Other comprehensive
income (loss) for the three months ended September 29, 2005 and 2004 resulted
from a net unrealized gain (loss) on investments in bonds of $(30,654) and
$24,417, respectively.

The Local Partnerships' net loss of approximately $852,000 for the three months
ended June 30, 2005 was attributable to rental and other revenue of
approximately $3,049,000, exceeded by operating and interest expense (including
interest on non-mandatory debt) of approximately $2,859,000 and approximately
$1,042,000 of depreciation and amortization expense. The Local Partnerships' net
loss of approximately $1,013,000 for the three months ended June 30, 2004 was
attributable to rental and other revenue of approximately $3,045,000, exceeded
by operating and interest expense (including interest on non-mandatory debt) of
approximately $3,054,000 and approximately $1,004,000 of depreciation and
amortization expense. The results of operations of the Local Partnerships for
the three months ended June 30, 2005 are not necessarily indicative of the
results that may be expected in future periods.


                                       11
<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.

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

Registrant's operations for the six months ended September 29, 2005 and 2004
resulted in net losses of $324,066 and $402,651, respectively. The decrease in
net loss is primarily attributable to a decrease in equity in loss of investment
in local partnerships of approximately $92,000, which decrease is primarily
attributable to a decrease in the net operating losses of certain Local
Partnerships in which Registrant continues to have an investment balance. Other
comprehensive loss for the six months ended September 29, 2005 and 2004 resulted
from a net unrealized loss on investments in bonds of $20,378 and $73,495,
respectively.

The Local Partnerships' net loss of approximately $1,596,000 for the six months
ended June 30, 2005 was attributable to rental and other revenue of
approximately $6,146,000, exceeded by operating and interest expense (including
interest on non-mandatory debt) of approximately $5,713,000 and approximately
$2,029,000 of depreciation and amortization expense. The Local Partnerships' net
loss of approximately $1,854,000 for the six months ended June 30, 2004 was
attributable to rental and other revenue of approximately $6,030,000, exceeded
by operating and interest expense (including interest on non-mandatory debt) of
approximately $5,865,000 and approximately $2,019,000 of depreciation and
amortization expense. The results of operations of the Local Partnerships for
the six months ended June 30, 2005 are not necessarily indicative of the results
that may be expected in future periods.

Local Partnership Matters

Registrant's primary objective has been to provide Low-income Tax Credits to
limited partners generally over a ten year period. The relevant state tax credit
agency has allocated each of Registrant's Local Partnerships an amount of
Low-income Tax Credits, which are generally available for a ten year period from
the year the Property is placed in service (the "Ten Year Credit Period"). The
Ten Year Credit Period was substantially fully exhausted by the Local
Partnerships as of December 31, 2003. The required holding period of each
Property, in order to avoid Low-income Tax Credit recapture, is fifteen years
from the year in which the Low-income Tax Credits commence on the last building
of the Property (the "Compliance Period"). In addition, certain of the Local
Partnerships have entered into agreements with the relevant state tax credit
agencies whereby the Local Partnerships must maintain the low-income nature of
the Properties for a period which exceeds the Compliance Period, regardless of
any sale of the Properties by the Local Partnerships after the Compliance
Period. The Properties must satisfy various requirements including rent
restrictions and tenant income limitations (the "Low-income Tax Credit
Requirements") in order to maintain eligibility for the recognition of the
Low-income Tax Credit at all times during the Compliance Period. Once a Local
Partnership has become eligible for the Low-income Tax Credit, it may lose such
eligibility and suffer an event of recapture if its Property fails to remain in
compliance with the Low-income Tax Credit Requirements. Through December 31,
2004, none of the Local Partnerships have suffered an event of recapture of
Low-income Tax Credits. It is the General Partner's intention to sell or assign
Registrant's interests in Local Partnerships subsequent to the expiration of the
respective Compliance Periods. It is uncertain as to the amount, if any, that
Registrant will receive with respect to each specific Property from such sales
and assignments.

The Properties are principally comprised of subsidized and leveraged low-income
multifamily residential complexes located throughout the United States and
Puerto Rico. Many of the Local Partnerships receive rental subsidy payments,
including payments under Section 8 of Title II of the Housing and Community
Development Act of 1974 ("Section 8"). The subsidy agreements expire at various
times during and after the Compliance Periods of the Local Partnerships. Since
October 1997, the United States Department of Housing and Urban Development
("HUD") has issued a series of directives related to project based Section 8
contracts that define owners' notification responsibilities, advise owners of
project based Section 8 properties of what their options are regarding the
renewal of Section 8 contracts, provide guidance and procedures to owners,
management agents, contract administrators and HUD staff concerning renewal of
Section 8 contracts, provide policies and procedures on setting renewal rents
and handling renewal rent adjustments and provide the requirements and
procedures for opting-out of a Section 8 project based contract. Registrant
cannot reasonably predict legislative initiatives and governmental budget
negotiations, the outcome of which could result in a reduction in funds
available for the various federal and state administered housing programs
including the Section 8 program. Such changes could adversely affect the future
net operating income before debt service and debt structure of any or all Local
Partnerships currently receiving such subsidy or similar subsidies. One Local
Partnership's Section 8 contracts are currently subject to renewal under
applicable HUD guidelines.


                                       12
<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.

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

The Local Partnerships have various financing structures which include (i)
required debt service payments ("Mandatory Debt Service") and (ii) debt service
payments which are payable only from available cash flow subject to the terms
and conditions of the notes, which may be subject to specific laws, regulations
and agreements with appropriate federal and state agencies ("Non-Mandatory Debt
Service or Interest"). In the event rents are not sufficient to cover operating
expenses, Mandatory Debt Service requirements and other charges, certain general
partners of the Local Partnerships (the "Local General Partners") are obligated
to provide advances to cover deficits for a certain period of time up to certain
amounts (the "Deficit Guarantee"). A Local General Partner's funding of such
Deficit Guarantee is dependent on its liquidity or ability to borrow the
required funds. During the six months ended June 30, 2005, revenue from
operations of the Local Partnerships have generally been sufficient to cover
operating expenses and Mandatory Debt Service. Substantially all of the Local
Partnerships are effectively operating at or above break even levels, although
certain Local Partnerships' operating information reflects operating deficits
that do not represent cash deficits due to their mortgage and financing
structure and the required deferral of property management fees. However, as
discussed below, certain Local Partnerships' operating information indicates an
operating deficit after taking into account their mortgage and financing
structure and any required deferral of property management fees.

The terms of the partnership agreement of Westminster Apartments Limited
Partnership ("Westminster") require the Local General Partner to advance funds
to cover operating deficits through the Compliance Period. As of June 30, 2005,
Westminster was in default under the terms of its first mortgage; payments of
principal, interest and replacement reserve deposits are over six years in
arrears, resulting in a cumulative arrearage of approximately $652,000. The
lender has indicated a willingness to restructure the debt, whereby payments
will be required only to the extent that Westminster generates available annual
cash flow; in addition, the lender would receive all residual proceeds upon the
sale of Westminster. There can be no assurance that the issues will be resolved
and the mortgage remains in default without a formal forbearance as of November
2005. Westminster reported an operating deficit of approximately $74,000 for the
six months ended June 30, 2005, which amount includes a provision for
replacement reserve deposits of $1,184 per month and debt service payments of
$6,245 per month. Registrant's investment balance in Westminster, after
cumulative equity losses, became zero during the year ended March 30, 1999.
Westminster generated approximately $63.2 per Unit to the limited partners upon
the expiration of its Low-income Tax Credit allocation in 2003.

The terms of the partnership agreement of Sydney Engel Associates L.P. ("Sydney
Engel") require the Local General Partners to cause the management agent to
defer property management fees in order to avoid a default under the mortgage.
Sydney Engel reported an operating deficit of approximately $157,000 for the six
months ended June 30, 2005, which includes property management fees of
approximately $43,000. The Local General Partners represent that payments on the
mortgage are current and the Property does not incur real estate taxes.
Effective July 1, 2005, one of Sydney Engel's mortgages was amended whereby the
Mandatory Debt Service for the remainder of 2005 has been reduced by
approximately $129,000. Registrant's investment balance in Sydney Engel, after
cumulative equity losses, became zero during the year ended March 30, 1997. The
Compliance Period in connection with Sydney Engel expires on December 31, 2005.

Fulton Street Houses Limited Partnership ("Fulton Street") has an escrow of
approximately $320,000 as of June 30, 2005 to cover operating deficits and there
are no Mandatory Debt Service payments or real estate taxes required during the
Compliance Period. Fulton Street reported an operating deficit of approximately
$14,000 for the six months ended June 30, 2005. Registrant's investment balance
in Fulton Street, after cumulative equity losses, became zero during the year
ended March 30, 2002. Fulton Street generated approximately $116.8 per Unit to
the limited partners upon the expiration of its Low-income Tax Credit allocation
in 2001.

The terms of the partnership agreement of Orange City Plaza Limited Partnership
("Orange City") require the Local General Partner to advance funds to cover all
operating deficits through the Compliance Period and to cause the management
agent to defer property management fees in order to avoid a default under the
mortgage. Orange City reported an operating deficit of approximately $23,000 for
the six months ended June 30, 2005, which includes property management fees of
approximately $2,000. The Local General Partner represents that payments on the
mortgage and real estate taxes are current. Registrant's investment balance in
Orange City, after cumulative equity losses, became zero during the year ended
March 30, 2002. Orange City generated approximately $24.8 per Unit to the
limited partners upon the expiration of its Low-income Tax Credit allocation in
2002.


                                       13
<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.

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

The terms of the partnership agreement of Justin Associates ("Justin") require
the Local General Partners to cause the management agent to defer property
management fees in order to avoid a default under the mortgage. Justin incurred
an operating deficit of approximately $16,000 for the six months ended June 30,
2005 which includes property management fees of approximately $9,000. The Local
General Partners represent that payments on the mortgage and real estate taxes
are current. Registrant's investment balance in Justin, after cumulative equity
losses, became zero during the year ended March 30, 2002. Justin generated
approximately $99.0 per Unit to the limited partners upon the expiration of its
Low-income Tax Credit allocation in 2002.

Critical Accounting Policies and Estimates

The financial statements are prepared in accordance with accounting principles
generally accepted in the United States of America, which requires Registrant to
make certain estimates and assumptions. The following section is a summary of
certain aspects of those accounting policies that may require subjective or
complex judgments and are most important to the portrayal of Registrant's
financial condition and results of operations. Registrant believes that there is
a low probability that the use of different estimates or assumptions in making
these judgments would result in materially different amounts being reported in
the financial statements.

      o     Registrant accounts for its investment in local partnerships in
            accordance with the equity method of accounting since Registrant
            does not control the operations of a Local Partnership.

      o     If the book value of Registrant's investment in a Local Partnership
            exceeds the estimated value derived by management, Registrant
            reduces its investment in any such Local Partnership and includes
            such reduction in equity in loss of investment in local
            partnerships. A loss in value of an investment in a Local
            Partnership other than a temporary decline would be recorded as an
            impairment loss. Impairment is measured by comparing the investment
            carrying amount to the sum of the total amount of the remaining tax
            credits to be allocated to Registrant and the estimated residual
            value of the investment.

      o     Registrant does not consolidate the accounts and activities of the
            Local Partnerships, which are considered Variable Interest Entities
            under Financial Accounting Standards Board Interpretation No. 46 -
            Revised ("FIN 46R"), "Consolidation of Variable Interest Entities,"
            because Registrant is not considered the primary beneficiary.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

Registrant has invested a significant portion of its working capital reserves in
corporate bonds and U.S. Treasury instruments. The market value of such
investments is subject to fluctuation based upon changes in interest rates
relative to each investment's maturity date and the associated bond rating.
Since Registrant's investments in bonds have various maturity dates through
2008, the value of such investments may be adversely impacted in an environment
of rising interest rates in the event Registrant decides to liquidate any such
investment prior to its maturity. Although Registrant may utilize reserves to
pay for its operating expenses and/or assist an under performing Property, it
otherwise intends to hold such investments to their respective maturities.
Therefore, Registrant does not anticipate any material adverse impact in
connection with such investments.

Item 4. Controls and Procedures

As of September 29, 2005, under the direction of the Chief Executive Officer and
Chief Financial Officer, Registrant evaluated the effectiveness of its
disclosure controls and procedures and concluded that such disclosure controls
and procedures were effective as of September 29, 2005. No changes occurred
during the quarter ended September 29, 2005 that materially affected, or are
reasonably likely to materially affect, Registrant's internal control over
financial reporting.


                                       14
<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.

                           Part II - OTHER INFORMATION

Item 1. Legal Proceedings

      Registrant is not aware of any material legal proceedings.

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

      None

Item 3. Defaults Upon Senior Securities

      None; see Item 2 of Part I regarding the mortgage default of a certain
      Local Partnership.

Item 4. Submission of Matters to a Vote of Security Holders

      None

Item 5. Other Information

      None

Item 6. Exhibits

      Exhibit 31.1  Rule 13a-14(a)/15d-14(a) Certification of Chief Executive
                    Officer
      Exhibit 31.2  Rule 13a-14(a)/15d-14(a) Certification of Chief Financial
                    Officer
      Exhibit 32.1  Section 1350 Certification of Chief Executive Officer
      Exhibit 32.2  Section 1350 Certification of Chief Financial Officer


                                       15
<PAGE>

                                   SIGNATURES

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

                                 AMERICAN TAX CREDIT PROPERTIES III L.P.
                                 (a Delaware limited partnership)


                                 By:    Richman Tax Credit Properties III L.P.,
                                        General Partner


                                 by:    Richman Housing Credits Inc.,
                                        general partner


Dated: November 14, 2005         /s/  David Salzman
                                      -----------------------
                                 by:  David Salzman
                                      Chief Executive Officer


Dated: November 14, 2005         /s/  Neal Ludeke
                                      -----------------------
                                 by:  Neal Ludeke
                                      Chief Financial Officer


                                       16