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 December 30, 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 ___.




<PAGE>

<TABLE>
<CAPTION>






                                        AMERICAN TAX CREDIT PROPERTIES III L.P.

                                             PART I - FINANCIAL INFORMATION


Item 1. Financial Statements



                                            Table of Contents            Page
<S>                                                                        <C>

Balance Sheets as of December 30, 1997 (Unaudited) and March 30, 1997 
(Unaudited)                                                                   3

Statements of Operations for the three and nine month periods ended
 December 30, 1997 (Unaudited)
and December 30, 1996 (Unaudited)                                             4

Statements of Cash Flows for the nine months ended December 30, 1997
(Unaudited)                                                                    5
and December 30, 1996 (Unaudited)

Notes to Financial Statements as of December 30, 1997 (Unaudited)             7



</TABLE>

<PAGE>


<TABLE>
<CAPTION>

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



                                                                                      December 30,          March 30,
                                                                          Notes           1997                1997
                                                                            -----   --------------------------------
<S>                                                                        <C>      <C>                 <C>

ASSETS

Cash and cash equivalents                                                           $       398,753     $       409,413
Restricted cash                                                               3             84,433            1,309,208
Investments in bonds available-for-sale                                       2          3,040,162            2,854,771
Investment in local partnerships                                              3          9,388,862           10,905,064
Interest receivable                                                                           31,630              25,173
                                                                                    ----------------    ----------------

                                                                                      $ 12,943,840         $ 15,503,629
                                                                                      ============         ============

LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities

   Accounts payable and accrued expenses                                            $      942,734       $      862,114
   Payable to general partner                                                              897,974              800,043
   Capital contributions payable                                              3             84,433            1,309,208
   Other                                                                                      16,450              21,200
                                                                                    ----------------    ----------------

                                                                                         1,941,591            2,992,565
                                                                                    --------------       --------------

Commitments and contingencies                                                 4

Partners' equity (deficit)

   General partner                                                                        (205,507)            (188,365)
   Limited partners (35,883 units of limited partnership interest
     outstanding)                                                                       11,184,491           12,881,544
   Unrealized gain (loss) on investments in bonds available-for-sale, net     2               23,265           (182,115)
                                                                                    ----------------     -------------- 

                                                                                        11,002,249           12,511,064
                                                                                     -------------        -------------

                                                                                      $ 12,943,840         $ 15,503,629
                                                                                      ============         ============

</TABLE>


                                           See Notes to Financial Statements.



<PAGE>


<TABLE>
<CAPTION>

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



                                                        Three Months        Nine Months        Three Months        Nine Months
                                                       Ended December     Ended December    Ended December 30,   Ended December
                                                             30,                30,                                    30,
                                              Notes           1997               1997               1996                1996
                                              -----   --------------------------------------------------------- ------------
<S>                                          <C>      <C>                <C>                <C>                 <C>
REVENUE

Interest                                              $         41,007   $        192,400   $         79,701    $       237,123
Other income from local partnerships                                                  4,172
                                                      -------------------------------------         --------    -----------------

TOTAL REVENUE                                                   41,007            196,572             79,701             237,123
                                                      ----------------   ----------------   ----------------    ----------------

EXPENSES

Administration fees                                           57,646            172,931              57,646            172,931
Management fees                                               57,646            172,931              57,646            172,931
Professional fees                                             26,526             44,625              13,911             27,760
Printing, postage and other                                     10,729             20,965                2,975             14,141
                                                      -----------------  ----------------   ------------------  -----------------

TOTAL EXPENSES                                                 152,547           411,452            132,178              387,763
                                                      ----------------   ---------------    ---------------     ----------------

Loss from operations                                        (111,540)          (214,880)            (52,477)          (150,640)

Equity in loss of investment in local
   partnerships                                 3            (430,848)        (1,499,315)          (601,022)         (2,010,258)
                                                      ---------------    ---------------    ---------------     --------------- 

NET LOSS                                              $     (542,388)    $   (1,714,195)     $     (653,499)    $   (2,160,898)
                                                      ==============     ==============      ==============     ============== 

NET LOSS ATTRIBUTABLE TO

   General partner                                    $         (5,424)  $        (17,142)  $         (6,535)   $        (21,609)
   Limited partners                                         (536,964)         (1,697,053)          (646,964)         (2,139,289)
                                                      --------------     ---------------    ---------------     --------------- 

                                                      $     (542,388)    $   (1,714,195)     $     (653,499)    $   (2,160,898)
                                                      ==============     ==============      ==============     ============== 

NET LOSS per unit of limited partnership
   interest (35,883 units of limited
   partnership interest)                              $         (14.96)  $          (47.29) $         (18.03)   $          (59.62)
                                                      ================   =================  ================    ================= 

</TABLE>


                                           See Notes to Financial Statements.



<PAGE>


<TABLE>
<CAPTION>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                            STATEMENTS OF CASH FLOWS
                  NINE MONTHS ENDED DECEMBER 30, 1997 AND 1996
                                   (UNAUDITED)



                                                                                    1997                1996
                                                                             ------------------  -----------
<S>                                                                          <C>                 

CASH FLOWS FROM OPERATING ACTIVITIES

Interest received                                                              $    130,932         $    177,063
Other income from local partnerships                                                  4,172
Cash used for local partnerships for deferred expenses                               (4,750)              (4,750)
Cash paid for
   administration fees                                                              (75,000)             (75,000)
   management fees                                                                  (75,000)             (75,000)
   professional fees                                                                (55,375)             (40,999)
   printing, postage and other expenses                                             (27,526)             (10,393)
                                                                              -------------        ------------- 

Net cash used in operating activities                                              (102,547)             (29,079)
                                                                               ------------        ------------- 

CASH FLOWS FROM INVESTING ACTIVITIES

Cash distributions from local partnerships                                           16,887               23,509
Maturity/redemption of bonds                                                         75,000              200,000
Transfer from (to) restricted cash                                                1,224,775             (198,900)
Investment in a local partnership                                                (1,224,775)
                                                                                ----------- 

Net cash provided by investing activities                                            91,887               24,609
                                                                             --------------       --------------

Net decrease in cash and cash equivalents                                           (10,660)             (4,470)

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

CASH AND CASH EQUIVALENTS AT END OF PERIOD                                     $    398,753         $    385,461
                                                                               ============         ============

SIGNIFICANT NON-CASH INVESTING ACTIVITIES

Unrealized gain on investments in bonds available-for-sale, net                $    205,380       $         8,871
                                                                               ============       ===============

Increase in capital contributions payable                                                           $     198,900
                                                                                                    =============


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



</TABLE>


                                           See Notes to Financial Statements.



<PAGE>


<TABLE>
<CAPTION>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                     STATEMENTS OF CASH FLOWS - (Continued)
                  NINE MONTHS ENDED DECEMBER 30, 1997 AND 1996
                                   (UNAUDITED)



                                                                                     1997                1996
                                                                             --------------------------------
<S>                                                                          <C>                 <C>

RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES

Net loss                                                                       $ (1,714,195)        $ (2,160,898)

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

   Equity in loss of investment in local partnerships                             1,499,315            2,010,258
   Amortization of net premium on investments in bonds                               11,180               12,639
   Accretion of zero coupon bonds                                                   (66,191)             (66,191)
   Increase in interest receivable                                                   (6,457)              (6,508)
   Increase in payable to general partner                                            97,931               97,931
   Increase in accounts payable and accrued expenses                                 80,620               88,440
   Decrease in other liabilities                                                       (4,750)             (4,750)
                                                                             ----------------    ---------------- 

NET CASH USED IN OPERATING ACTIVITIES                                         $    (102,547)      $      (29,079)
                                                                              =============       ============== 

</TABLE>



                                           See Notes to Financial Statements.



<PAGE>


<TABLE>
<CAPTION>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 30, 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  December  30,  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  and  nine  month  periods  ended  December  30,  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 December 30, 1997,  certain  information  concerning  investments  in
bonds available-for-sale is as follows:

                                                                   Gross unrealized         Gross
                                                    Amortized           gains            unrealized         Estimated
       Description and maturity                         cost                               losses           fair value
       <S>                                       <C>               <C>                <C>               <C>
       Corporate debt securities
          After one year through five years      $     481,068     $       5,335      $         (469)    $     485,934
          After five years through ten years          455,406              7,127            (3,637)            458,896
          After ten years                              955,943            22,878           (13,293)            965,528
                                                 -------------      ------------      ------------       -------------

                                                    1,892,417             35,340           (17,399)          1,910,358
                                                 ------------       ------------      ------------        ------------

       U.S. Treasury debt securities
          After five years through ten years           89,631             --                (1,361)             88,270
          After ten years                              909,093            10,886                 --            919,979
                                                 -------------      ------------      -----------------  -------------

                                                       998,724            10,886             (1,361)         1,008,249
                                                 -------------      ------------      -------------       ------------

       U.S. government and agency securities
          After ten years                              125,756               --              (4,201)           121,555
                                                 -------------     ----------------   -------------      -------------

                                                  $ 3,016,897        $    46,226       $   (22,961)        $ 3,040,162
                                                  ===========        ===========       ===========         ===========
      </TABLE>

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 is
     outstanding as of December 30, 1997.  Restricted  cash in the  accompanying
     balance sheet as of December 30, 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  September  30,  1997,  the  Local  Partnerships  have
     outstanding mortgage loans payable totaling  approximately  $87,056,000 and
     accrued interest payable on such loans totaling  approximately  $2,000,000,
     which are secured by security  interests and liens common to mortgage loans
     on the Local Partnerships' real property and other assets.


<PAGE>


<TABLE>
<CAPTION>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                                DECEMBER 30, 1997
                                   (UNAUDITED)


3.   Investment in Local Partnerships (continued)

     For the nine months  ended  December  30,  1997,  the  investment  in Local
     Partnerships activity consists of the following:

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

           Equity in loss of investment in Local Partnerships                                  (1,499,315)  (A)

           Cash distributions received from Local Partnerships                                    (16,887)
                                                                                           -------------- 

           Investment in Local Partnerships as of December 30, 1997                          $  9,388,862
                                                                                             ============

          </TABLE>



     (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 $661,055 for the nine months ended September 30, 1997 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
     September  30,  1997  and  December  31,  1996 and the  combined  unaudited
     statements of operations of the Local  Partnerships  for the three and nine
     month  periods  ended  September 30, 1997 and 1996 are reflected on pages 9
     and 10, respectively.



<PAGE>



<TABLE>
------------------------------------------------------------------------------------------------------------------------
<CAPTION>
                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                                DECEMBER 30, 1997
                                   (UNAUDITED)


3.   Investment in Local Partnerships (continued)

     The  combined  balance  sheets of the Local  Partnerships  as of  September  30, 1997 and  December 31, 1996 are as
     follows:
                                                                                    September 30,        December 31,
                                                                                          1997                1996
                                                                                  --------------------------------
      ASSETS
      <S>                                                                         <C>                 <C>
      Cash and other investments                                                  $     1,446,550     $     1,340,942
      Rental receivable                                                                   378,060             354,108
      Capital contributions receivable                                                     84,433           1,309,208
      Escrow deposits and reserves                                                      4,637,282           3,763,306
      Land                                                                              3,964,692           3,964,692
      Buildings and improvements (net of accumulated depreciation of
        $26,294,423 and $23,212,364)                                                   89,416,763          92,443,378
      Intangible assets (net of accumulated amortization of $649,850 and
        $1,039,889)                                                                       772,792             748,879
      Other                                                                                                     772,465
                                                                                        ----------    -----------------
                                                                                          752,304

                                                                                    $ 101,452,876       $ 104,696,978
                                                                                    =============       =============

      LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

      Liabilities

        Accounts payable and accrued expenses                                     $       638,322     $       512,801
        Due to related parties                                                          5,025,701           5,127,931
        Mortgage and construction loans                                                87,055,836          87,351,443
        Notes payable                                                                      61,002              70,804
        Accrued interest                                                                2,000,246           1,782,695
        Other                                                                               581,193             557,856
                                                                                  -----------------   -----------------

                                                                                       95,362,300          95,403,530
                                                                                  ---------------     ---------------
      Partners' equity (deficit)

        American Tax Credit Properties III L.P.
           Capital contributions, net of distributions (includes receivable of
             $84,433 and $1,309,208)                                                   29,055,122          29,079,605
           Cumulative loss                                                            (19,663,760)        (18,164,445)
                                                                                   --------------      -------------- 

                                                                                         9,391,362         10,915,160

        General partners and other limited partners, including ATCP II
           Capital contributions, net of distributions                                    (64,402)            764,757
           Cumulative loss                                                             (3,236,384)         (2,386,469)
                                                                                  ---------------     --------------- 

                                                                                       (3,300,786)         (1,621,712)

                                                                                        6,090,576           9,293,448
                                                                                  ---------------     ---------------

                                                                                    $ 101,452,876       $ 104,696,978
                                                                                    =============       =============
</TABLE>


<PAGE>



<TABLE>
------------------------------------------------------------------------------------------------------------------------
<CAPTION>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                                DECEMBER 30, 1997
                                   (UNAUDITED)



3.   Investment in Local Partnerships (continued)

     The combined  statements of operations  of the Local  Partnerships  for the
     three and nine  month  periods  ended  September  30,  1997 and 1996 are as
     follows:

                                                  Three Months       Nine Months       Three Months        Nine Months
                                                      Ended             Ended              Ended              Ended
                                                  September 30,     September 30,      September 30,      September 30,
                                                       1997                1997             1996                1996
                                                ------------------ -----------------------------------  ------------
      <S>                                       <C>                <C>               <C>                <C>
      REVENUE

      Rental                                      $  2,657,724      $  7,862,784        $ 2,579,221      $   7,709,936
      Interest and other                               107,208            275,998            55,980            235,821
                                                --------------     --------------     -------------     --------------

      TOTAL REVENUE                                  2,764,932         8,138,782          2,635,201          7,945,757
                                                 -------------     -------------       ------------      -------------

      EXPENSES

      Administrative                                   479,734         1,516,242            491,257          1,520,155
      Utilities                                        194,336           724,777            176,214            762,780
      Operating, maintenance and other                 571,374         1,609,499            473,663          1,489,338
      Taxes and insurance                              322,825           975,289            337,661            967,868
      Interest (including amortization of
        $12,001, $37,939, $18,936 and $89,229)
                                                       846,140         2,580,146            871,083          2,660,463
      Depreciation                                   1,026,873          3,082,059         1,041,892          3,105,829
                                                  ------------     --------------      ------------     --------------

      TOTAL EXPENSES                                 3,441,282        10,488,012          3,391,770         10,506,433
                                                  ------------     -------------       ------------      -------------

      NET LOSS                                    $   (676,350)     $ (2,349,230)      $   (756,569)      $ (2,560,676)
                                                  ============      ============       ============       ============ 

      NET LOSS ATTRIBUTABLE TO

      American Tax Credit Properties III L.P.     $   (430,848)     $ (1,499,315)      $   (601,022)      $ (2,010,258)
      General partners and other limited
         partners, including ATCP II, which 
     includes $196,380, $661,055, $91,556 and
     $350,502 of American Tax Credit Properties 
     III L.P. loss in excess of                       (245,502)          (849,915)         (155,547)          (550,418)
                                                  ------------     --------------      ------------     -------------- 
         investment

                                                   $  (676,350)     $ (2,349,230)       $  (756,569)      $ (2,560,676)
                                                   ===========      ============        ===========       ============ 

</TABLE>


     The combined results of operations of the Local  Partnerships for the three
     and nine  month  periods  ended  September  30,  1997  are not  necessarily
     indicative  of the  results  that may be expected  for an entire  operating
     period.


<PAGE>




                 AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                                DECEMBER 30, 1997
                                   (UNAUDITED)

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 of 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.  To  date,  the
     information has not been provided.  On July 28, 1997, a complaint was filed
     in the Court of  Chancery  of the State of  Delaware  in and for New Castle
     County 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.  A one day trial was held on September 29, 1997. On
     December 5, 1997,  the Court of Chancery  issued a  memorandum  opinion and
     order,  holding  that  plaintiff is entitled to the  requested  information
     regarding Unit holders. On December 15, 1997,  defendants filed a Notice of
     Appeal to the Supreme  Court of  Delaware,  and  briefing on that appeal is
     currently in progress.  The Court of Chancery has stayed enforcement of its
     December  5, 1997  memorandum  opinion  and  order  pending  resolution  of
     defendants' appeal.

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.


<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 December 30, 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 nine months ended December 30,
1997,  Registrant  received cash from interest earnings,  maturity of a bond 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  $175,000  during the nine months ended  December 30, 1997,  which
increase  includes a net  unrealized  gain recorded on  investments  in bonds of
approximately  $205,000, the amortization of net premium on investments in bonds
of approximately $11,000 and the accretion of zero coupon bonds of approximately
$66,000. During the nine months ended December 30, 1997, the investment in Local
Partnerships  decreased  as  a  result  of  Registrant's  equity  in  the  Local
Partnerships'  net  loss  for  the  nine  months  ended  September  30,  1997 of
$1,499,315 and cash  distributions  received from Local Partnerships of $16,887.
Accounts  payable  and  accrued  expenses  and  payable to general  partner  are
comprised  primarily  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  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 1998 after being  renewed in 1997 for a one year period.
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 nine months ended September 30, 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'  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 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 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 default under the  mortgage.  The
Christian   Street  Local   Partnership   incurred  an   operating   deficit  of
approximately  $19,000 for the nine  months  ended  September  30,  1997,  which
includes property management fees of approximately $3,000. Accordingly,  the net
operating deficit was approximately  $16,000.  Required payments on the mortgage
and real estate taxes are current.  As of September 30, 1997,  the Local General
Partners of the Christian Street Local  Partnership have advanced  approximately
$65,000 under their Deficit Guarantee  obligation.  Of Registrant's total annual
Low-income Tax Credits,  approximately 2% is allocated from the Christian Street
Local Partnership.

Although  Westminster  Apartments  Limited  Partnership (the "Westminster  Local
Partnership")  reported only a minor operating deficit for the nine months ended
September 30, 1997, the  Westminster  Local  Partnership  subsequently  incurred
higher operating deficits and, as a result,  fell three months in arrears on its
mortgage.  As of February  11,  1998,  the Local  General  Partners  report that
required  mortgage  payments  are  current as a result of the lender  drawing on
available collateral provided by the Local General Partners. No default has been
declared by the lender as a result of the arrearage



<PAGE>




                                        AMERICAN TAX CREDIT PROPERTIES III L.P.


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

or the  drawdown  on the  collateral.  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  Partners have appealed the real estate tax assessment,  there
is no assurance  that the Local  General  Partners  will be  successful in their
appeal to reduce the taxes. 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  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. 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 December 30, 1997

For the three months  ended  December  30,  1997,  Registrant  had a net loss of
approximately $542,000,  which included an equity in loss of investment in Local
Partnerships of approximately  $431,000 for the three months ended September 30,
1997.  Registrant's loss from operations for the three months ended December 30,
1997  of  approximately   $112,000  was  attributable  to  interest  revenue  of
approximately $41,000, exceeded by operating expenses of approximately $153,000.
Nonrecognition  of losses in excess of Registrant's  investment in certain Local
Partnerships during the period was approximately $196,000.

The Local Partnerships' net loss of approximately  $676,000 for the three months
ended  September  30,  1997 was  attributable  to rental  and other  revenue  of
approximately $2,765,000, exceeded by operating and interest expenses (including
Non-Mandatory Interest) of approximately $2,402,000 and approximately $1,039,000
of depreciation and amortization expenses.

Three Months Ended December 30, 1996

For the three months  ended  December  30,  1996,  Registrant  had a net loss of
approximately $653,000,  which included an equity in loss of investment in Local
Partnerships of approximately  $601,000 for the three months ended September 30,
1996.  Registrant's loss from operations for the three months ended December 30,
1996  of   approximately   $52,000  was  attributable  to  interest  revenue  of
approximately $80,000, 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 $92,000.



<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  $757,000 for the three months
ended  September  30,  1996 was  attributable  to rental  and other  revenue  of
approximately $2,635,000, exceeded by operating and interest expenses (including
Non-Mandatory Interest) of approximately $2,331,000 and approximately $1,061,000
of depreciation and amortization expenses.

Nine Months Ended December 30, 1997

For the nine  months  ended  December  30,  1997,  Registrant  had a net loss of
approximately  $1,714,000,  which  included an equity in loss of  investment  in
Local  Partnerships  of  approximately  $1,499,000  for the  nine  months  ended
September 30, 1997.  Registrant's loss from operations for the nine months ended
December 30, 1997 of approximately $215,000 was attributable to interest revenue
of  approximately   $192,000  and  other  income  from  Local   Partnerships  of
approximately $4,000,  exceeded by operating expenses of approximately $411,000.
Nonrecognition  of losses in excess of Registrant's  investment in certain Local
Partnerships during the period was approximately $661,000.

The Local Partnerships' net loss of approximately $2,349,000 for the nine months
ended  September  30,  1997 was  attributable  to rental  and other  revenue  of
approximately $8,139,000, exceeded by operating and interest expenses (including
Non-Mandatory Interest) of approximately $7,368,000 and approximately $3,120,000
of depreciation and amortization expenses.

Nine Months Ended December 30, 1996

For the nine  months  ended  December  30,  1996,  Registrant  had a net loss of
approximately  $2,161,000,  which  included an equity in loss of  investment  in
Local  Partnerships  of  approximately  $2,010,000  for the  nine  months  ended
September 30, 1996.  Registrant's loss from operations for the nine months ended
December 30, 1996 of approximately $151,000 was attributable to interest revenue
of  approximately  $237,000,  exceeded by  operating  expenses of  approximately
$388,000.  Nonrecognition  of losses in excess  of  Registrant's  investment  in
certain Local Partnerships during the period was approximately $350,000.

The Local Partnerships' net loss of approximately $2,561,000 for the nine months
ended  September  30,  1996 was  attributable  to rental  and other  revenue  of
approximately 7,946,000,  exceeded by operating and interest expenses (including
Non-Mandatory Interest) of approximately $7,312,000 and approximately $3,195,000
of depreciation and amortization expenses.

Three and Nine Month Periods Ended December 30, 1997 v.
Three and Nine Month Periods Ended December 30, 1996

Registrant's operations for the three months ended December 30, 1997 resulted in
a net loss of approximately  $542,000 as compared to a net loss of approximately
$653,000 for the three months ended  December 30, 1996. The decrease in net loss
is primarily  attributed  to a decrease in the equity in loss of  investment  in
Local Partnerships of approximately $170,000,  which includes an increase in the
nonrecognition  of  losses  in  excess  of  Registrant's   investment  in  Local
Partnerships of  approximately  $105,000 in accordance with the equity method of
accounting,  partially  offset  by  (i)  a  reduction  of  interest  revenue  of
approximately $39,000 as a result of Registrant's  utilization of investments to
pay  capital  contributions  to a Local  Partnership  and  (ii) an  increase  in
Registrant's  professional  fees of  approximately  $13,000.  Professional  fees
increased as a result of legal expenses  incurred in connection  with the matter
described in Note 4 to the financial statements.

Registrant's  operations for the nine months ended December 30, 1997 resulted in
a  net  loss  of  approximately   $1,714,000  as  compared  to  a  net  loss  of
approximately  $2,161,000  for the nine months  ended  December  30,  1996.  The
decrease in net loss is primarily attributed to a decrease in the equity in loss
of investment in Local Partnerships of approximately $511,000, which includes an
increase in the nonrecognition of losses in excess of Registrant's investment in
Local  Partnerships  of  approximately  $311,000 in  accordance  with the equity
method of accounting, partially offset by (i) a reduction of interest revenue of
approximately $45,000 as a result of Registrant's  utilization of investments to
pay  capital  contributions  to a Local  Partnership  and  (ii) an  increase  in
Registrant's  professional  fees of  approximately  $17,000.  Professional  fees
increased as a result of legal expenses  incurred in connection  with the matter
described in Note 4 to the financial statements.


<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 in the
          Court of  Chancery  of the  State of  Delaware  in and for New  Castle
          County against Registrant, 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. A one day trial was held on September
          29,  1997.  On  December  5,  1997,  the  Court of  Chancery  issued a
          memorandum  opinion and order,  holding that  plaintiff is entitled to
          the requested  information  regarding  Unit  holders.  On December 15,
          1997,  defendants  filed a Notice of Appeal  to the  Supreme  Court of
          Delaware,  and briefing on that appeal is  currently in progress.  The
          Court of  Chancery  has stayed  enforcement  of its  December  5, 1997
          memorandum opinion and order pending resolution of defendants' appeal.

          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>




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


Dated: February 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)