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 June 29, 1998

                                       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.
599 West Putnam Avenue, 3rd Floor
Greenwich, Connecticut
            06830
(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 ___.




<PAGE>





                     AMERICAN TAX CREDIT PROPERTIES III L.P.

                         PART I - FINANCIAL INFORMATION
<TABLE>

Item 1. Financial Statements
           <S>                                                                      <C>

                                       Table of Contents                               Page


Balance Sheets as of June 29, 1998 (Unaudited) and March 30, 1998 (Unaudited)............3

Statements of Operations for the three months ended June 29, 1998 (Unaudited)
    and June 29, 1997 (Unaudited)........................................................4

Statements of Cash Flows for the three months ended June 29, 1998 (Unaudited)
    and June 29, 1997 (Unaudited)........................................................5

Notes to Financial Statements as of June 29, 1998 (Unaudited)............................7


</TABLE>
<PAGE>





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



<TABLE>
<S>                                                         <C>       <C>           <C>                
                                                                     June 29,         March 30,
                                                           Notes        1998              1998
                                                           -----  ---------------- -----------
ASSETS

Cash and cash equivalents                                         $       488,494  $       419,372
Restricted cash                                              4           84,433           84,433
Investments in bonds available-for-sale                      3        3,025,565        3,065,441
Investment in local partnerships                             4        8,052,922        8,515,114
Interest receivable                                                      30,967           21,909
                                                                  ----------------------------------

                                                                  $  11,682,381    $  12,106,269
                                                                  =============    =============

LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities

  Accounts payable and accrued expenses                           $     1,041,402  $       997,634
  Payable to general partner                                            963,257          930,614
  Capital contributions payable                              4           84,433           84,433
  Other                                                                  16,450           16,450
                                                                  ----------------------------------

                                                                        2,105,542        2,029,131

Commitment and contingencies                                 4

Partners' equity (deficit)

  General partner                                                      (220,130)        (214,858)
  Limited partners (35,883 units of limited partnership
    interest outstanding)                                             9,736,813       10,258,714
  Accumulated other comprehensive income                    2,3          60,156           33,282
                                                                  --------------------------------

                                                                        9,576,839      10,077,138

                                                                  $  11,682,381    $  12,106,269
                                                                  =============    =============


</TABLE>









                       See Notes to Financial Statements.


<PAGE>





                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                                          STATEMENTS OF OPERATIONS
                    THREE MONTHS ENDED JUNE 29, 1998 AND 1997
                                   (UNAUDITED)



<TABLE>
<S>                                                         <C>       <C>               <C>
                                                           Notes       1998             1997
                                                           -----  --------------   ---------
REVENUE

Interest                                                          $     61,859     $     65,729
Other income from local partnerships                                     4,172           4,172
                                                                  -------------    --------------

TOTAL REVENUE                                                            66,031           69,901
                                                                  -------------    -------------

EXPENSES

Administration fees                                                    57,643           57,643
Management fees                                                        57,643           57,643
Professional fees                                                      12,412           10,750
Printing, postage and other                                             9,855            5,900
                                                                  --------------   --------------

TOTAL EXPENSES                                                         137,553          131,936
                                                                  ------------     ------------

Loss from operations                                                  (71,522)         (62,035)

Equity in loss of investment in local partnerships           4        (455,651)        (515,689)
                                                                  ------------     ------------ 

NET LOSS                                                             (527,173)        (577,724)

Other comprehensive income                                  2,3         26,874          65,815
                                                                  ---------------- --------------

COMPREHENSIVE LOSS                                                $   (500,299)    $  (511,909)
                                                                  =============    ============

NET LOSS ATTRIBUTABLE TO

  General partner                                                 $    (5,272)   $      (5,777)
  Limited partners                                                   (521,901)        (571,947)
                                                                  -----------      ----------- 

                                                                  $  (527,173)     $  (577,724)
                                                                  ===========      =========== 

NET LOSS per unit of limited partnership interest
  (35,883 units of limited partnership interest)                  $      (14.54)   $      (15.94)
                                                                  =============    ============= 



</TABLE>







                       See Notes to Financial Statements.


<PAGE>





                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                                          STATEMENTS OF CASH FLOWS
                    THREE MONTHS ENDED JUNE 29, 1998 AND 1997
                                   (UNAUDITED)



<TABLE>
<S>                                                                       <C>        <C>                 
                                                                                      1997
                                                                        1998
CASH FLOWS FROM OPERATING ACTIVITIES

Interest received                                               $    34,551   $      38,490
Cash paid for
    administration fees                                             (25,000)         (25,000)
    management fees                                                 (25,000)         (25,000)
    professional fees                                                (1,287)         (10,000)
    printing, postage and other expenses                             (9,855)         (7,451)
                                                                --------------  -------------- 

Net cash used in operating activities                                 (26,591)        (28,961)
                                                                -------------   ------------- 

CASH FLOWS FROM INVESTING ACTIVITIES

Cash distributions and other income from local partnerships          10,713           18,559
Redemption of bonds                                                  85,000
Transfer from restricted cash                                                      1,224,775
Investment in a local partnership                                                 (1,224,775)
                                                                 ----------------------------

Net cash provided by investing activities                               95,713          18,559
                                                                --------------  --------------

Net increase (decrease) in cash and cash equivalents                 69,122          (10,402)

Cash and cash equivalents at beginning of period                      419,372         409,413
                                                                -------------   -------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                      $    488,494    $    399,011
                                                                ============    ============

SIGNIFICANT NON-CASH INVESTING ACTIVITIES

Unrealized gain on investments in bonds available-for-sale, net $      26,874   $      65,815
                                                                ==============  =============
</TABLE>

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














                       See Notes to Financial Statements.


<PAGE>




                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                     STATEMENTS OF CASH FLOWS - (Continued)
                    THREE MONTHS ENDED JUNE 29, 1998 AND 1997
                                   (UNAUDITED)



<TABLE>
<S>                                                                   <C>            <C>            
                                                                     1998            1997
                                                                --------------  ---------

RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING
  ACTIVITIES

Net loss                                                        $  (527,173)    $  (577,724)

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

  Equity in loss of investment in local partnerships               455,651          515,689
  Distributions from local partnerships classified as other         (4,172)          (4,172)
    income
  Amortization of net premium on investments in bonds                3,314            3,727
  Accretion of zero coupon bonds                                   (21,564)         (22,063)
  Increase in interest receivable                                   (9,058)          (8,903)
  Increase in payable to general partner                            32,643           32,643
  Increase in accounts payable and accrued expenses                 43,768           31,842
                                                                -------------   --------------

NET CASH USED IN OPERATING ACTIVITIES                           $    (26,591)   $   (28,961)
                                                                ============    =========== 


</TABLE>

























                       See Notes to Financial Statements.


<PAGE>





                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 29, 1998
                                   (UNAUDITED)


1.  Basis of Presentation

    The  accompanying  unaudited  financial  statements  have been  prepared  in
    accordance  with  generally  accepted  accounting   principles  for  interim
    financial  information.  They do not include all  information  and footnotes
    required by generally accepted accounting  principles 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 June 29, 1998 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 three months ended June 29, 1998
    are not  necessarily  indicative of the results that may be expected for the
    entire year.

    Certain  reclassifications  of  amounts  have  been made to  conform  to the
current period presentation.

2.  Comprehensive Income

    On March 31, 1998, the Partnership adopted Statement of Financial Accounting
    Standard ("SFAS") No. 130,  "Reporting  Comprehensive  Income." As a result,
    the  statements  of  operations  includes an amount for other  comprehensive
    income, as well as comprehensive loss. Other  comprehensive  income consists
    of revenues,  expenses, gains and losses that have affected partners' equity
    (deficit) but which are excluded from net loss. Other  comprehensive  income
    in the accompanying  statement of operations for the three months ended June
    29,  1998  resulted  from a net  unrealized  gain on  investments  in  bonds
    available-for-sale of $26,874. Accumulated other comprehensive income in the
    accompanying  balance sheet as of June 29, 1998 reflects the  cumulative net
    unrealized  gain on  investments  in bonds  available-for-sale.  The balance
    sheet as of March 30, 1998 and the  statement  of  operations  for the three
    months ended June 29, 1997 include certain  reclassifications to reflect the
    adoption of SFAS No. 130

3.  Investments in Bonds Available-For-Sale

    As of June 29, 1998,  certain  information  concerning  investments in bonds
    available-for-sale is as follows:
<TABLE>
<S>                                          <C>            <C>            <C>            <C>                 
                                                           Gross          Gross
                                          Amortized      unrealized     unrealized      Estimated
      Description and maturity                 cost         gains           losses         fair
                                                                                        value

      Corporate debt securities
        Within one year                 $   139,555   $       --     $       (647)  $    138,908
        After one year through five         539,143        11,864             --         551,007
          years
        After five years through ten        602,018        29,323           (587)        630,754
        years
        After ten years                     607,083           1,664         (8,032)        600,715
                                        -----------     -----------    -----------    ------------

                                          1,887,799          42,851         (9,266)     1,921,384
                                        -----------     -----------    -----------    -----------

      U.S. Treasury debt securities
        After ten years                   1,036,906           27,888             --      1,064,794
                                        -----------     ------------   ---------------------------

      U.S. government and agency
      securities
        After ten years                         40,704            --          (1,317)         39,387
                                        --------------  ----------------------------  --------------

                                        $ 2,965,409     $    70,739    $  (10,583)    $ 3,025,565
                                        ===========     ===========    ==========     ===========
</TABLE>


<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                                  JUNE 29, 1998
                                   (UNAUDITED)


4.  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,  of which the Partnership has paid  $29,180,043 and $84,433 are
    outstanding as of June 29, 1998. Restricted cash in the accompanying balance
    sheet as of June 29, 1998 represents such outstanding capital  contribution,
    which is payable  upon one Local  Partnership's  satisfaction  of  specified
    conditions  related  to  operations.   As  of  March  31,  1998,  the  Local
    Partnerships have outstanding mortgage loans payable totaling  approximately
    $86,785,000   and   accrued   interest   payable  on  such  loans   totaling
    approximately $2,195,000,  which are secured by security interests and liens
    common to mortgage loans on the Local  Partnerships' real property and other
    assets.


    For  the  three  months  ended  June  29,  1998,  the  investment  in  Local
    Partnerships activity consists of the following:

          Investment in Local Partnerships as of March    $  8,515,114
          30, 1998

          Equity in loss of investment in Local                 (455,651)   *
          Partnerships

          Cash distributions received from Local                 (10,713)
            Partnerships

          Cash distributions classified as other income             4,172
                                                         ----------------

          Investment in Local Partnerships as of June      $   8,052,922
          29,1998                                          =============
          


    *    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
         $356,022  for the three months ended March 31, 1998 as reflected in the
         combined  statement of operations of the Local  Partnerships  reflected
         herein Note 4.

    The combined  unaudited balance sheets of the Local Partnerships as of March
    31, 1998 and  December  31, 1997 and the combined  unaudited  statements  of
    operations  of the Local  Partnerships  for the three months ended March 31,
    1998 and 1997 are reflected on pages 9 and 10, respectively.



<PAGE>





                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                                  JUNE 29, 1998
                                   (UNAUDITED)


4.  Investment in Local Partnerships (continued)

    The combined  balance sheets of the Local  Partnerships as of March 31, 1998
    and December 31, 1997 are as follows:
<TABLE>
<S>                                                                        <C>             <C>                
                                                                          March 31,      December 31,
                                                                           1998            1997
                                                                    ---------------------------
     ASSETS

     Cash and other investments                                     $     1,377,343 $       863,259
     Rents receivable                                                    428,550          456,077
     Capital contributions receivable                                     84,433           84,433
     Escrow deposits and reserves                                      3,989,265        4,403,622
     Land                                                              3,910,215        3,910,215
     Buildings and improvements (net of accumulated depreciation
       of $28,049,370 and $27,045,787)                                86,599,431       87,586,072
     Intangible assets (net of accumulated amortization of
       $592,546 and $584,504)                                            750,457          762,749
     Other                                                              1,259,49       1,401,766
                                                                    --------------------------------

                                                                    $   98,399,188  $  99,468,193
                                                                    ==============  =============

     LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

     Liabilities

       Accounts payable and accrued expenses                     $       428,203 $       442,564
       Due to related parties                                          5,137,790        5,247,688
       Mortgage loans                                                 86,785,499       86,919,773
       Notes payable                                                      33,725           62,111
       Accrued interest                                                2,195,490        2,109,721
       Other                                                             607,967          580,863
                                                                    ---------------------------------

                                                                         95,188,674      95,362,720
     Partners' equity (deficit)

       American Tax Credit Properties III L.P.
         Capital contributions, net of distributions (includes
           receivable of $84,433)                                     29,031,317       29,048,449
         Cumulative loss                                               (20,978,527)    (20,522,876)
                                                                    --------------  -------------- 

                                                                           8,052,790      8,525,573

       General partners and other limited partners, including
         ATCP II
         Capital contributions, net of distributions                    (140,962)        (123,346)
         Cumulative loss                                                 (4,701,314)     (4,296,754)
                                                                    --------------- --------------- 

                                                                         (4,842,276)     (4,420,100)

                                                                          3,210,514       4,105,473
                                                                    ---------------      ----------
                                                                    $  98,399,188   $  99,468,193
                                                                    =============   =============

</TABLE>
<PAGE>





                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                                  JUNE 29, 1998
                                   (UNAUDITED)

4.  Investment in Local Partnerships (continued)

    The combined  statements  of operations  of the Local  Partnerships  for the
    three months ended March 31, 1998 and 1997 are as follows:
<TABLE>
<S>                                                                    <C>                <C>            
                                                                          1998            1997
                                                                    --------------------------
     REVENUE

     Rental                                                         $ 2,615,715      $ 2,620,956
     Interest and other                                                    79,279          81,609
                                                                    -------------   -------------

     TOTAL REVENUE                                                    2,694,994        2,702,565
                                                                    -----------      -----------

     EXPENSES

     Administrative                                                     495,485          509,595
     Utilities                                                          279,931          288,693
     Operating, maintenance and other                                   587,786          475,229
     Taxes and insurance                                                329,825          326,318
     Financial (including amortization of $12,292 and $11,654)          858,595          883,918
     Depreciation                                                      1,003,583       1,016,932
                                                                    ------------    ------------

     TOTAL EXPENSES                                                    3,555,205       3,500,685
                                                                    ------------    ------------

     NET LOSS                                                       $    (860,211)  $   (798,120)
                                                                    =============== ============ 

     NET LOSS ATTRIBUTABLE TO

     American Tax Credit Properties III L.P.                        $   (455,651)   $   (515,689)
     General partners and other limited partners, including
       ATCP II, which includes $356,022 and $214,390 of
       American Tax Credit Properties III L.P. loss in excess           (404,560)       (282,431)
                                                                    ------------    ------------ 
       of investment

                                                                    $   (860,211)   $   (798,120)
                                                                    ============    ============ 
</TABLE>
    The combined  results of operations of the Local  Partnerships for the three
    months ended March 31, 1998 are not  necessarily  indicative  of the results
    that may be expected for an entire operating period.

5.  Additional Information

    Additional  information,  including  the audited  March 30,  1998  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,  1998 on file with the  Securities
    and Exchange Commission.


<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 June 29, 1998,  American Tax Credit Properties III L.P. (the "Registrant")
has not experienced a significant  change in financial  condition as compared to
March  30,  1998.   Principal  changes  in  assets  are  comprised  of  periodic
transactions  and adjustments and anticipated  equity in loss from operations of
the  local  partnerships  (the  "Local   Partnerships")   which  own  low-income
multifamily  residential  complexes  (the  "Properties")  which  qualify for the
low-income  tax  credit  under  Section  42 of the  Internal  Revenue  Code (the
"Low-income  Tax  Credit").  During  the  three  months  ended  June  29,  1998,
Registrant  received  cash  from  interest  revenue,  redemption  of  bonds  and
distributions from Local Partnerships and utilized cash for operating  expenses.
Cash and cash equivalents and investments in bonds available-for-sale increased,
in the aggregate,  by  approximately  $29,000 during the three months ended June
29,  1998  (which  included a net  unrealized  gain on  investments  in bonds of
approximately  $27,000,  the amortization of net premium on investments in bonds
of approximately  $3,000 and the accretion of zero coupon bonds of approximately
$22,000).  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 three months ended June 29, 1998,
the  investment  in Local  Partnerships  decreased  as a result of  Registrant's
equity in the Local  Partnerships' net loss for the three months ended March 30,
1998 of $455,651 and cash  distributions  received  from Local  Partnerships  of
$10,713 (exclusive of distributions from Local Partnerships of $4,172 classified
as other income).  Accounts  payable and accrued expenses and payable to general
partner  in the  accompanying  balance  sheet  as of June  29,  1998  represents
deferred administration fees and management fees, respectively.

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,  under which the investment
is carried at cost which includes capital contributions payable, 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 4 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. Accordingly,  cumulative losses and cash
distributions  in excess of the  investment  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  June 29,  1998 and 1997
resulted in net losses of $527,173 and $577,724,  respectively.  The decrease in
net loss is primarily attributable to a decrease in equity in loss of investment
in Local  Partnerships.  The decrease in equity in loss of  investment  in Local
Partnerships  is primarily  the result of an increase in the  nonrecognition  of
losses  in  excess  of   Registrant's   investment  in  Local   Partnerships  of
approximately  $142,000  in  accordance  with the equity  method of  accounting,
partially offset by Registrant's  share of the increase in net loss of the Local
Partnerships of approximately  $62,000. Other comprehensive income for the three
months  ended  June 29,  1998  and 1997  resulted  from net  unrealized  gain on
investments in bonds available-for-sale of $26,874 and $65,815, respectively.





<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' net loss of approximately  $860,000 for the three months
ended  March  31,  1998  was   attributable  to  rental  and  other  revenue  of
approximately $2,695,000, exceeded by operating and interest expenses (including
interest on non-mandatory  debt) of approximately  $2,539,000 and  approximately
$1,016,000 of depreciation and amortization expenses. The Local Partnership' net
loss of  approximately  $798,000  for the three  months ended March 31, 1997 was
attributable to rental and other revenue of approximately  $2,703,000,  exceeded
by operating and interest expenses (including interest on non-mandatory debt) of
approximately  $2,472,000  and  approximately  $1,029,000  of  depreciation  and
amortization  expenses.  The results of operations of the Local Partnerships for
the three  months  ended March 31, 1998 are not  necessarily  indicative  of the
results that may be expected in future periods.

Local Partnership Matters

The Properties are principally  comprised of subsidized and leveraged low-income
multifamily  residential  complexes  located  throughout  the United  States and
Puerto Rico. The rents of the  Properties,  many of which receive rental subsidy
payments  pursuant  to  subsidy  agreements  ("HAP  Contracts")  are  subject to
specific laws,  regulations and agreements with federal and state agencies.  One
Local  Partnership's  HAP  Contract,  which  covers  certain  rental  units,  is
scheduled to expire in October 1998. In addition,  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 a local
partnership  (the "Local General  Partner") 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
three months  ended March 31,  1998,  revenue  from  operations,  Local  General
Partner  advances and reserves of the Local  Partnerships  have  generally  been
sufficient  to  cover  the  operating   expenses  and  Mandatory  Debt  Service.
Substantially all of the Local Partnerships are effectively operating at or near
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  any  required  deferral  of  property
management  fees.  However,  as discussed  below,  certain  Local  Partnerships'
operating  information  indicates below break even operations  after taking into
account  their  mortgage and financing  structure  and any required  deferral of
property management fees.

The  terms  of  the  partnership  agreement  of  the  Christian  Street  Commons
Associates (the "Christian Street Local Partnership")  require the Local General
Partners to advance  funds to cover  operating  deficits up to $150,000  through
2008 and to cause the  management  agent to defer  property  management  fees in
order  to avoid a  default  under  the  mortgage.  The  Christian  Street  Local
Partnership  incurred an operating deficit of approximately $6,000 for the three
months  ended  March  31,  1998,  which  includes  property  management  fees of
approximately $1,000.  Accordingly,  the net operating deficit was approximately
$5,000.  As of  March  31,  1998,  the  Local  General  Partners  have  advanced
approximately $78,000 under their Deficit Guarantee  obligation.  
Registrant's investment balance in the Christian Street Local Partnership, after
the cumulative equity losses,  became zero during the year ended March 30, 1998.
Of  Registrant's  total  annual  Low-income  Tax  Credits,  approximately  2% is
allocated from the Christian Street Local Partnership.

The Local  General  Partner of Fulton  Street Houses  Limited  Partnership  (the
"Fulton  Street Local  Partnership")  has  escrowed  deposits in the name of the
Fulton Street Local Partnership to cover operating deficits. The balance of this
escrow is  approximately  $250,000 as of March 31, 1998.  The mortgage  does not
require any Mandatory Debt Service  payments during the Compliance  Period.  The
Fulton Street Local  Partnership  incurred an operating deficit of approximately
$15,000 for the three  months  March 31,  1998.  Of  Registrant's  total  annual
Low-income  Tax Credits,  approximately  8% is allocated  from the Fulton Street
Local Partnership.



<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 Sydney Engel  Associates  L.P.  (the
"Sydney Engel Local Partnership") require the management agent to defer property
management fees in order to avoid a default under the mortgage. The Sydney Engel
Local Partnership incurred an operating deficit of approximately $49,000 for the
three months ended March 31, 1998,  which includes  property  management fees of
approximately $26,000.  Accordingly, the net operating deficit was approximately
$23,000.  As of March 31, 1998, the Sydney Engel Local Partnership has escrowed 
deposits of approximately  $426,000 to cover operating deficits.  Of 
Registrant's total annual  Low-income  Tax Credits,  approximately  9% is 
allocated from the Sydney Engel Local Partnership.

The  terms  of  the  partnership  agreement  of  Batesville  Family,  L.P.  (the
"Batesville Local  Partnership")  require the management agent to defer property
management  fees in order to avoid a default under the mortgage.  The Batesville
Local Partnership  incurred an operating deficit of approximately $7,000 for the
three months ended March 31, 1998,  which includes  property  management fees of
approximately  $500.  Of Registrant's total annual income Low-income Tax   
Credits, approximately 1% is allocated from the Batesville Local Partnership.


Adoption of Accounting Standard

On March 31, 1998, Registrant adopted Statement of Financial Accounting Standard
("SFAS") No. 130,  "Reporting  Comprehensive  Income." SFAS No. 130  establishes
standards for reporting and display of  comprehensive  income and its components
(revenues,  expenses,  gains  and  losses)  in a  full  set  of  general-purpose
financial  statements.  The adoption of SFAS No. 130 has not materially impacted
Registrant's financial position and results of operations.




<PAGE>



                     AMERICAN TAX CREDIT PROPERTIES III L.P.

                           Part II - OTHER INFORMATION


Item 1.  Legal Proceedings

         None

Item 2.  Changes in Securities

         None

Item 3.  Defaults Upon Senior Securities

         None

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

         None

Item 5.  Other Information

         None

Item 6.  Exhibits and Reports on Form 8-K

         None




<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: August 13, 1998                              /s/ Richard Paul Richman
       ---------------                              ------------------------
                                                       Richard Paul Richman
                                                   President, Chief Executive
                                                   Officer and Director of the
                                                     general partner of the
                                                       General Partner


Dated: August 13, 1998                              /s/ Neal Ludeke
       ---------------                              ---------------
                                                       Neal Ludeke
                                                     Vice President and
                                              Treasurer of the general partner
                                                    of the General Partner
                                            (Principal Financial and Accounting
                                                        Officer of Registrant)