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, 1997

                                       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 ___.




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                     AMERICAN TAX CREDIT PROPERTIES III L.P.

                         PART I - FINANCIAL INFORMATION


Item 1. Financial Statements


                                       Table of Contents


Balance Sheets as of June 29, 1997 (Unaudited) and March 30, 1997 (Unaudited)..

Statements of Operations for the three months ended June 29, 1997 (Unaudited)
    and June 29, 1996 (Unaudited)..............................................

Statements of Cash Flows for the three months ended June 29, 1997 (Unaudited)
    and June 29, 1996 (Unaudited)..............................................

Notes to Financial Statements as of June 29, 1997 (Unaudited)..................



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<TABLE>
<CAPTION>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                                 BALANCE SHEETS
                        JUNE 29, 1997 AND MARCH 30, 1997
                                   (UNAUDITED)




                                                                     June 29,         March 30,
                                                           Notes        1997              1997
                                                           -----  ---------------- -----------
<S>                                                        <C>    <C>              <C>
ASSETS

Cash and cash equivalents                                         $     399,011  $       409,413
Restricted cash                                              3           84,433        1,309,208
Investments in bonds available-for-sale                      2        2,938,922        2,854,771
Investment in local partnerships                             3       10,374,988       10,905,064
Interest receivable                                                      34,076           25,173
                                                                  ----------------------------------

                                                                  $  13,831,430    $  15,503,629
                                                                  =============    =============

LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities
  Accounts payable and accrued expenses                           $     893,956  $       862,114
  Payable to general partner                                            832,686          800,043
  Capital contributions payable                              3           84,433        1,309,208
  Other                                                                  21,200           21,200
                                                                  ----------------------------------

                                                                      1,832,275        2,992,565

Commitments and contingencies                                4

Partners' equity (deficit)
  General partner                                                      (194,142)        (188,365)
  Limited partners (35,883 units of limited partnership
    interest outstanding)                                            12,309,597       12,881,544
  Unrealized loss on investments in bonds                    2         (116,300)        (182,115)
                                                                  ---------------  --------------- 
    available-for-sale, net

                                                                     11,999,155       12,511,064

                                                                  $  13,831,430    $  15,503,629
                                                                  =============    =============


                       See Notes to Financial Statements.
</TABLE>



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<TABLE>
<CAPTION>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                                          STATEMENTS OF OPERATIONS
                    THREE MONTHS ENDED JUNE 29, 1997 AND 1996
                                   (UNAUDITED)




                                                           Notes       1997             1996
                                                           -----  --------------   ---------
<S>                                                         <C>         <C>              <C>
REVENUE

Interest                                                          $     65,729     $     78,436
Other income from local partnerships                                     4,172
                                                                  --------------   -------------

TOTAL REVENUE                                                           69,901           78,436
                                                                  -------------    -------------

EXPENSES

Administration fees                                                     57,643           57,643
Management fees                                                         57,643           57,643
Professional fees                                                       10,750            8,202
Printing, postage and other                                              5,900            7,929
                                                                  --------------   --------------

TOTAL EXPENSES                                                         131,936          131,417
                                                                  ------------     ------------

Loss from operations                                                   (62,035)         (52,981)

Equity in loss of investment in local partnerships           3        (515,689)        (639,005)
                                                                  ------------      ------------ 

NET LOSS                                                          $   (577,724)     $  (691,986)
                                                                   ===========       =========== 

NET LOSS ATTRIBUTABLE TO
  General partner                                                 $    (5,777)      $    (6,920)
  Limited partners                                                   (571,947)         (685,066)
                                                                  -----------        ----------- 

                                                                  $  (577,724)      $  (691,986)
                                                                  ===========        =========== 

NET LOSS per unit of limited partnership interest
  (35,883 units of limited partnership interest)                  $    (15.94)      $    (19.09)
                                                                  =============    ============= 


                       See Notes to Financial Statements.
</TABLE>



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<TABLE>
<CAPTION>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                                          STATEMENTS OF CASH FLOWS
                    THREE MONTHS ENDED JUNE 29, 1997 AND 1996
                                   (UNAUDITED)




                                                                      1997
                                                                                        1996
<S>                                                             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES

Interest received                                               $    38,490     $     47,842
Other income from local partnerships                                  4,172
Cash used for local partnerships for deferred expenses                                (4,750)
Cash paid for
    administration fees                                             (25,000)         (25,000)
    management fees                                                 (25,000)         (25,000)
    professional fees                                               (10,000)         (23,721)
    printing, postage and other expenses                             (7,451)          (4,175)
                                                                --------------  ------------- 

Net cash used in operating activities                               (24,789)         (34,804)
                                                                -------------   ------------ 

CASH FLOWS FROM INVESTING ACTIVITIES

Cash distributions from local partnerships                           14,387           20,222
Transfer from restricted cash                                     1,224,775
Investment in a local partnership                                (1,224,775)
                                                                -------------   -------------

Net cash provided by investing activities                            14,387           20,222
                                                                --------------  --------------

Net decrease in cash and cash equivalents                           (10,402)         (14,582)

Cash and cash equivalents at beginning of period                    409,413          389,931
                                                                -------------   -------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                      $   399,011     $    375,349
                                                                ============    ============

SIGNIFICANT NON-CASH INVESTING ACTIVITIES

Unrealized gain (loss) on investments in bonds                
  available-for-sale, net                                       $    65,815     $   (54,566)
                                                                =============   ============ 
  


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


                       See Notes to Financial Statements.
</TABLE>



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<TABLE>
<CAPTION>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                     STATEMENTS OF CASH FLOWS - (Continued)
                    THREE MONTHS ENDED JUNE 29, 1997 AND 1996
                                   (UNAUDITED)




                                                                     1997            1996
                                                                --------------  ---------
<S>                                                             <C>             <C>
RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING
  ACTIVITIES

Net loss                                                        $  (577,724)    $  (691,986)

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

  Equity in loss of investment in local partnerships               515,689          639,005
  Amortization of net premium on investments in bonds                3,727            3,727
  Accretion of zero coupon bonds                                   (22,063)         (22,064)
  Increase in interest receivable                                   (8,903)         (12,257)
  Increase in payable to general partner                            32,643           32,643
  Increase in accounts payable and accrued expenses                 31,842           20,878
  Decrease in other liabilities                                                      (4,750)
                                                                ----------------------------- 

NET CASH USED IN OPERATING ACTIVITIES                           $  (24,789)     $    (34,804)
                                                                ===========     ============ 


                       See Notes to Financial Statements.
</TABLE>



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<TABLE>
<CAPTION>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 29, 1997
                                   (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, 1997 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, 1997
    are not  necessarily  indicative of the results that may be expected for the
    entire year.

2.  Investments in Bonds Available-For-Sale

    As of June 29, 1997,  certain  information  concerning  investments in bonds
    available-for-sale is as follows:

      <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                 $    76,236   $       --     $     (1,076)  $      75,160
        After one year through five         484,352          2,260         (1,913)        484,699
          years
        After five years through ten        401,819            604        (10,643)        391,780
        years
        After ten years                   1,009,821          5,395        (39,273)        975,943
                                        -----------     -----------    -----------    ------------

                                          1,972,228           8,259        (52,905)     1,927,582
                                        -----------     -----------    -----------    -----------

      U.S. Treasury debt securities
        After ten years                      957,186            --         (57,637)       899,549
                                        ------------    --------------------------    ------------

      U.S. government and agency
      securities
        After ten years                      125,808            --         (14,017)        111,791
                                        ------------    --------------------------    ------------

                                        $ 3,055,222     $     8,259    $ (124,559)    $ 2,938,922
                                        ===========     ===========    ==========     ===========

</TABLE>



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<TABLE>
<CAPTION>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                                  JUNE 29, 1997
                                   (UNAUDITED)


3.  Investment in Local Partnerships

    The Partnership  owns a limited  partnership  interest 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, 1997. Restricted cash in the accompanying balance
    sheet as of June 29, 1997 represents such outstanding capital  contribution,
    which is payable upon one Local  Partnership  providing  information that it
    has satisfied  specific  conditions  related to operations.  As of March 31,
    1997, the Local  Partnerships  have  outstanding  mortgage and  construction
    loans  payable  totaling  approximately  $87,267,000  and  accrued  interest
    payable on such loans totaling approximately  $1,857,000,  which are secured
    by security interests and liens common to mortgage and construction loans on
    the Local Partnerships' real property and other assets.

    For  the  three  months  ended  June  29,  1997,  the  investment  in  Local
    Partnerships activity consists of the following:

          <S>                                            <C>
          Investment in Local Partnerships as of March    $ 10,905,064
          30, 1997

          Equity in loss of investment in Local
            Partnerships for the three months ended              (515,689) (A)
            March 31, 1997

          Cash distributions received from Local
            Partnerships during the three months ended           (14,387)
            June 29, 1997

          Investment in Local Partnerships as of June      $ 10,374,988
                                                           ============
          29, 1997


    (A)  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
         $214,390  and  $253,122  for the three  months ended March 31, 1997 and
         1996,  respectively,   as  reflected  in  the  combined  statements  of
         operations of the Local Partnerships reflected herein Note 3.

    The combined  unaudited balance sheets of the Local Partnerships as of March
    31, 1997 and  December  31, 1996 and the combined  unaudited  statements  of
    operations  of the Local  Partnerships  for the three months ended March 31,
    1997 and 1996 are reflected on pages 9 and 10, respectively.

</TABLE>



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<TABLE>
<CAPTION>
                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                                  JUNE 29, 1997
                                   (UNAUDITED)

3.  Investment in Local Partnerships (continued)

    The combined  balance sheets of the Local  Partnerships as of March 31, 1997
    and December 31, 1996 are as follows:

                                                                      March 31,      December 31,
                                                                           1997            1996
                                                                    ---------------------------
     <S>                                                            <C>             <C>
     ASSETS

     Cash and other investments                                     $     1,212,940 $     1,340,942
     Rental receivable                                                   369,528          354,108
     Capital contributions receivable                                  1,309,208        1,309,208
     Escrow deposits and reserves                                      3,859,744        3,763,306
     Land                                                              3,964,692        3,964,692
     Buildings and improvements (net of accumulated depreciation
       of $24,229,296 and $23,212,364)                                91,437,753       92,443,378
     Intangible assets (net of accumulated amortization of
       $624,710 and $1,039,889)                                          737,411          748,879
     Other                                                                    830,04          772,465
                                                                    ---------------------------------

                                                                    $ 103,721,320   $ 104,696,978
                                                                    =============   =============
     LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

     Liabilities

       Accounts payable and accrued expenses                        $       508,822 $       512,801
       Due to related parties                                          4,951,830        5,127,931
       Mortgage and construction loans                                87,266,838       87,351,443
       Notes payable                                                      67,022           70,804
       Accrued interest                                                1,856,634        1,782,695
       Other                                                                  586,53          557,856
                                                                    ---------------------------------

                                                                         95,237,677      95,403,530
     Partners' equity (deficit)

       American Tax Credit Properties III L.P.
         Capital contributions, net of distributions (includes
           receivable of $1,309,208)                                  29,069,509       29,079,605
         Cumulative loss                                               (18,680,134)    (18,164,445)
                                                                    --------------  -------------- 

                                                                         10,389,375      10,915,160
       General partners and other limited partners, including
         ATCP II
         Capital contributions, net of distributions                     763,168          764,757
         Cumulative loss                                                 (2,668,900)     (2,386,469)
                                                                    --------------- --------------- 

                                                                         (1,905,732)     (1,621,712)

                                                                          8,483,643       9,293,448

                                                                    $ 103,721,320   $ 104,696,978
                                                                    =============   =============
</TABLE>


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<TABLE>
<CAPTION>
                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                                  JUNE 29, 1997
                                   (UNAUDITED)

3.  Investment in Local Partnerships (continued)

    The combined  statements  of operations  of the Local  Partnerships  for the
    three months ended March 31, 1997 and 1996 are as follows:

                                                                          1997            1996
                                                                    --------------------------
     <S>                                                            <C>             <C>
     REVENUE
     Rental                                                         $ 2,620,956      $ 2,499,829
     Interest and other                                                  81,609          78,465
                                                                    -------------   -------------

     TOTAL REVENUE                                                    2,702,565        2,578,294
                                                                    -----------      -----------

     EXPENSES
     Administrative                                                     509,595          537,514
     Utilities                                                          288,693          330,687
     Operating, maintenance and other                                   475,229          462,561
     Taxes and insurance                                                326,318          317,122
     Interest (including amortization of $11,654 and $38,585)           883,918          853,848
     Depreciation                                                      1,016,932       1,033,184
                                                                    ------------    ------------

     TOTAL EXPENSES                                                    3,500,685       3,534,916
                                                                    ------------    ------------

     NET LOSS                                                       $   (798,120)   $   (956,622)
                                                                    ============    ============ 

     NET LOSS ATTRIBUTABLE TO
     American Tax Credit Properties III L.P.                        $   (515,689)   $   (639,005)
     General partners and other limited partners, including
       ATCP II, which includes $214,390 and $253,122 of
       American Tax Credit Properties III L.P. loss in excess           (282,431)       (317,617)
                                                                    ------------    ------------ 
       of investment

                                                                    $   (798,120)   $   (956,622)
                                                                    ============    ============ 
</TABLE>

    The combined  results of operations of the Local  Partnerships for the three
    months ended March 31, 1997 are not  necessarily  indicative  of the results
    that may be expected for an entire operating period.

4.  Commitments and Contingencies

    On July 16, 1997, the Partnership  received a demand for certain information
    with respect to the holders of Units, the stated purpose which was to assist
    such party in making an offer to Unit  holders to  purchase  their Units and
    otherwise to communicate  with them concerning such an offer.  Subsequently,
    the Partnership  requested  certain  information from such party in order to
    assess the  appropriateness of the demand. On July 28, 1997, a complaint was
    filed against the  Partnership,  the General Partner and its general partner
    seeking,among other things, an order directing the defendants to immediately
    furnish the requested  information  and awarding the plaintiff any resulting
    damages. As of August 13, 1997, such information has not been provided.

5.  Additional Information

    Additional  information,  including  the audited  March 30,  1997  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,  1997 on file with the  Securities
    and Exchange Commission.


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                     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, 1997,  Registrant  has not  experienced a  significant  change in
financial  condition as compared to March 30, 1997.  Principal changes in assets
are comprised of periodic transactions and adjustments and anticipated equity in
loss  from  operations  of the  Local  Partnerships  and  payment  of a  capital
contribution  to a Local  Partnership.  During the three  months  ended June 29,
1997,  Registrant  received cash from interest earnings and  distributions  from
Local  Partnerships  and utilized cash for operating  expenses and for a capital
contribution to a Local  Partnership.  Cash and cash equivalents and investments
in  bonds  available-for-sale  increased,  in the  aggregate,  by  approximately
$74,000 during the three months ended June 29, 1997,  which increase  includes a
net unrealized gain recorded on investments in bonds of  approximately  $66,000,
the amortization of net premium on investments in bonds of approximately  $4,000
and the  accretion of zero coupon  bonds of  approximately  $22,000.  During the
three months ended June 29, 1997, 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 31, 1997 of $515,689  and cash  distributions  received
from Local  Partnerships of $14,387.  Accounts  payable and accrued expenses and
payable to general partner are principally  comprised of accrued  administration
fees and management fees, respectively.

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,  including  payments  under  Section 8 of Title II of the  Housing and
Community  Development  Act of 1974 ("Section 8"), are subject to specific laws,
regulations  and  agreements  with  federal  and  state  agencies.  The  subsidy
agreements  expire at various times during and after the  Compliance  Periods of
the Local  Partnerships.  The United  States  Department  of  Housing  and Urban
Development  ("HUD") has issued  notices  which  implement  provisions  to renew
certain  project  based  Section 8 contracts  expiring  during HUD's fiscal year
1997,  where requested by an owner, for an additional one year term generally at
or  below  current  rent  levels,  subject  to  certain  guidelines.  HUD has an
additional  program which, in general,  provides for restructuring  rents and/or
mortgages where rents may be adjusted to market levels and mortgage terms may be
adjusted  based on the  reduction in rents,  although  there may be instances in
which  only  rents,  but not  mortgages,  are  restructured.  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 and
debt structure of any or all Local Partnerships currently receiving such subsidy
or similar subsidies.  One Local Partnership's Section 8 contract,  which covers
certain  rental units,  is scheduled to expire in 1997.  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 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 three months ended March 31,
1997,  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'  accounting  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 below break even
operations after taking into account their mortgage and financing  structure and
the required deferral of property management fees.

The terms of the partnership  agreement of Christian  Street Commons  Associates
(the "Christian Street Local Partnership") require the Local General Partners of
the  Christian  Street Local  Partnership  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



<PAGE>


<PAGE>
                     AMERICAN TAX CREDIT PROPERTIES III L.P.


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

default under the mortgage.  The Christian Street Local Partnership  incurred an
operating deficit of approximately  $11,000 for the three months ended March 31,
1997,  which  includes  property   management  fees  of  approximately   $1,000.
Accordingly,  the net operating deficit was approximately  $10,000.  As of March
31, 1997, the Local General Partners of the Christian  Street Local  Partnership
have advanced approximately $52,000 under their Deficit Guarantee obligation. Of
Registrant's total annual Low-income Tax Credits,  approximately 2% is allocated
from the Christian Street Local Partnership.

The terms of the partnership agreement of Orange City Plaza, Limited Partnership
(the "Orange City Plaza Local Partnership") require the Local General Partner of
the Orange  City Plaza Local  Partnership  to advance  funds to cover  operating
deficits  through  2005  and to cause  the  management  agent to defer  property
management fees in order to avoid a default under the mortgage. During the three
months ended March 31,  1997,  Orange City Plaza Local  Partnership  incurred an
operating deficit of approximately  $7,000,  which includes property  management
fees of  approximately  $1,000.  Accordingly,  the  net  operating  deficit  was
approximately  $6,000.  All  required  payments on the  mortgage and real estate
taxes  are  current.  Of  Registrant's  total  annual  Low-income  Tax  Credits,
approximately 2% is allocated from the Orange City Plaza Local Partnership.

The  terms  of the  partnership  agreement  of  Westminster  Apartments  Limited
Partnership  (the  "Westminster  Local  Partnership")  require the Local General
Partner of the Westminster  Local  Partnership to cause the management  agent to
defer property  management  fees in order to avoid a default under the mortgage.
During the three  months  ended March 31, 1997,  Westminster  Local  Partnership
incurred an operating deficit of approximately  $11,000, which includes property
management fees of approximately $3,000. Accordingly,  the net operating deficit
was approximately  $8,000. All required payments on the mortgage and real estate
taxes are current.  The  Westminster  Local  Partnership  was entitled to a real
estate  tax  abatement  which  expired  in 1996,  resulting  in an  increase  of
approximately  $17,000 per annum in real estate tax expense.  Although the Local
General  Partner  is  appealing  the real  estate  tax,  the  Westminster  Local
Partnership  is  depositing  escrows to cover the real estate  taxes at the full
amount.  There is no assurance that the Local General Partner will be successful
in  its  appeal.   Of   Registrant's   total  annual   Low-income  Tax  Credits,
approximately 4% is allocated from the Westminster Local Partnership.

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 the Local  Partnership's  results of operations and by
any 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.  Any equity in loss in excess of
Registrant's  investment  balance in a Local  Partnership  is allocated to other
partners'  capital in each such Local  Partnership.  As a result,  the 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, regardless 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 above under
Material Changes in Financial  Condition  regarding  certain Local  Partnerships
currently operating below economic break even levels.

Three Months Ended June 29, 1997

For  the  three  months  ended  June  29,  1997,  Registrant  had a net  loss of
approximately $578,000,  which included an equity in loss of investment in Local
Partnerships  of  approximately  $516,000  for the three  months ended March 31,
1997.



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<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  loss from  operations  for the three months ended June 29, 1997 of
approximately  $62,000 was  attributable  to interest  revenue of  approximately
$66,000  and other  income  from Local  Partnerships  of  approximately  $4,000,
exceeded by operating  expenses of  approximately  $132,000.  Nonrecognition  of
losses in excess of Registrant's investment in certain Local Partnerships during
the period was approximately $214,000.

The Local Partnerships' 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
Non-Mandatory Interest) of approximately $2,472,000 and approximately $1,029,000
of depreciation and amortization expenses.

Three Months Ended June 29, 1996

For  the  three  months  ended  June  29,  1996,  Registrant  had a net  loss of
approximately $692,000,  which included an equity in loss of investment in Local
Partnerships  of  approximately  $639,000  for the three  months ended March 31,
1996. Registrant's loss from operations for the three months ended June 29, 1996
of  approximately  $53,000 was attributable to interest revenue of approximately
$78,000,   exceeded   by   operating   expenses   of   approximately   $131,000.
Nonrecognition  of losses in excess of Registrant's  investment in certain Local
Partnerships during the period was approximately $253,000.

The Local Partnerships' net loss of approximately  $957,000 for the three months
ended  March  31,  1996  was   attributable  to  rental  and  other  revenue  of
approximately $2,578,000, exceeded by operating and interest expenses (including
Non-Mandatory Interest) of approximately $2,463,000 and approximately $1,072,000
of depreciation and amortization expenses.

Three Months Ended June 29, 1997 v.
Three Months Ended June 29, 1996

Registrant's  operations  for the three months ended June 29, 1997 resulted in a
net loss of  approximately  $578,000 as compared to a net loss of  approximately
$692,000 for the three  months ended June 29, 1996.  The decrease in net loss is
primarily  attributable  to a decrease  in the equity in loss of  investment  in
Local Partnerships of approximately  $123,000,  which is primarily the result of
(i) an increase in the net rental  income of the Local  Partnerships  and (ii) a
decrease in the nonrecognition of losses in excess of Registrant's investment in
Local Partnerships of approximately $39,000 in accordance with the equity method
of accounting.



<PAGE>


<PAGE>


                     AMERICAN TAX CREDIT PROPERTIES III L.P.

                           Part II - OTHER INFORMATION


Item 1.  Legal Proceedings

         On July 16, 1997, Everest Properties, Inc. ("Everest") demanded certain
         information  with respect to the holders of Units.  Everest stated that
         the  purpose of the demand was to assist  Everest in making an offer to
         Unit holders to purchase their Units and otherwise to communicate  with
         them concerning such an offer. On July 25, 1997,  Registrant  requested
         certain information from Everest in order to assess the appropriateness
         of the demand. To date, the information has not been provided.  On July
         28, 1997,  Everest filed a complaint  against  Registrant,  the General
         Partner and its  general  partner in the Court of Chancery of the State
         of Delaware in and for New Castle County  seeking,  among other things,
         an order directing the defendants to immediately  furnish the requested
         information and awarding the plaintiff any resulting damages.

         Registrant is not aware of any other material legal proceedings.

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>


<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, 1997                /s/ Richard Paul Richman
       ---------------                ------------------------
                                          Richard Paul Richman
                                          President, Chief Executive
                                          Officer and Director of the
                                          general partner of the
                                          General Partner


Dated: August 13, 1997                /s/ Neal Ludeke
       ---------------                ---------------
                                          Neal Ludeke
                                          Vice President and
                                          Treasurer of the general partner
                                          of the General Partner
                                          (Principal Financial and Accounting
                                          Officer of Registrant)