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, 1998

                                       OR

            [   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                  
      For the transition period from ________________ to _________________
                                          

                         Commission file number: 0-19217


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

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



Richman Tax Credit Properties III L.P.
599 West Putnam Avenue, 3rd Floor
Greenwich, Connecticut                                             06830
---------------------------------------                          ----------
(address of principal executive offices)                         (Zip Code)


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

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required to file such reports),  and (2) has been subject to filing requirements
for the past 90 days.

Yes X No ___.

<PAGE>


                     AMERICAN TAX CREDIT PROPERTIES III L.P.

                         PART I - FINANCIAL INFORMATION


Item 1. Financial Statements


                               Table of Contents
                                                                            Page

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

Statements of Operations for the three and nine month 
periods ended December 30, 1998 (Unaudited)and
December 30, 1997 (Unaudited)..................................................4

Statements of Cash Flows for the nine months ended 
December 30, 1998 (Unaudited)and December 30, 1997 (Unaudited).................5
     
Notes to Financial Statements as of December 30, 1998 (Unaudited)..............7



<PAGE>





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

<TABLE>
<CAPTION>
<S>                                                                         <C>      <C>                <C>    


                                                                                     December 30,         March 30,
                                                                            Notes        1998               1998
                                                                            -----    ------------       ------------                

ASSETS

Cash and cash equivalents                                                            $    487,221       $    419,372
Restricted cash                                                               4            84,433             84,433
Investments in bonds available-for-sale                                       3         3,078,764          3,065,441
Investment in local partnerships                                              4         7,172,364          8,515,114
Interest receivable                                                                        31,347             21,909
                                                                                     ------------       ------------
                                                                                     $ 10,854,129       $ 12,106,269
                                                                                     ============       ============
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities

   Accounts payable and accrued expenses                                             $  1,084,936       $    997,634
   Payable to general partner                                                           1,028,545            930,614
   Capital contributions payable                                              4            84,433             84,433
   Other                                                                                   11,700             16,450
                                                                                     ------------       ------------
                                                                                        2,209,614          2,029,131
                                                                                     ------------       ------------
Commitments and contingencies                                                 4

Partners' equity (deficit)

   General partner                                                                       (230,201)          (214,858)
   Limited partners (35,883 units of limited partnership interest
     outstanding)                                                                       8,739,762         10,258,714
   Accumulated other comprehensive income, net                               2,3          134,954             33,282
                                                                                     ------------       ------------

                                                                                        8,644,515         10,077,138
                                                                                     ------------       ------------
                                                                                     $ 10,854,129       $ 12,106,269
                                                                                     ============       ============

                      

                       See Notes to Financial Statements.

</TABLE>

<PAGE>




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

<TABLE>
<CAPTION>
<S>                                           <C>      <C>                <C>               <C>                  <C>    


                                                        Three Months        Nine Months        Three Months        Nine Months
                                                           Ended               Ended              Ended               Ended
                                                        December 30,        December 30,       December 30,        December 30,
                                              Notes         1998               1998               1997                1997
                                              -----     -----------        ------------        -----------         -----------      

REVENUE

Interest                                                $   61,700         $    185,232        $    41,007         $   192,400
Other income from local partnerships            4                                 5,752                                  4,172
                                                        ----------         ------------        -----------         -----------
TOTAL REVENUE                                               61,700              190,984             41,007             196,572
                                                        ----------         ------------        -----------         -----------
EXPENSES

Administration fees                                         57,646              172,931             57,646             172,931
Management fees                                             57,646              172,931             57,646             172,931
Professional fees                                           13,251               34,600             26,526              44,625
Printing, postage and other                                  8,807               22,704             10,729              20,965
                                                        ----------         ------------        -----------         -----------
TOTAL EXPENSES                                             137,350              403,166            152,547             411,452
                                                        ----------         ------------        -----------         -----------
Loss from operations                                       (75,650)            (212,182)          (111,540)           (214,880)

Equity in loss of investment in local
   partnerships                                 4         (432,042)          (1,322,113)          (430,848)         (1,499,315)
                                                        ----------         ------------        -----------         ----------- 


NET LOSS                                                  (507,692)          (1,534,295)          (542,388)         (1,714,195)

Other comprehensive income (loss)              2,3         (50,421)             101,672             74,391             205,380
                                                        ----------         ------------        -----------         -----------
COMPRENHENSIVE LOSS                                     $ (558,113)        $ (1,432,623)       $  (467,997)        $(1,508,815)
                                                        ==========         ============        ===========         ===========

NET LOSS ATTRIBUTABLE TO

   General partner                                      $   (5,077)        $    (15,343)       $    (5,424)        $   (17,142)
   Limited partners                                       (502,615)          (1,518,952)          (536,964)         (1,697,053)
                                                        ----------         ------------        -----------         -----------
                                                        $ (507,692)        $ (1,534,295)       $  (542,388)        $(1,714,195)
                                                        ==========         ============        ===========         ===========
NET LOSS per unit of limited partnership
   interest (35,883 units of limited                  
   partnership interest)                                $   (14.01)        $     (42.33)       $    (14.96)        $    (47.29)
                                                        ==========         ============        ===========         ===========

                       See Notes to Financial Statements.
                                                        
</TABLE>
<PAGE>


                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                            STATEMENTS OF CASH FLOWS
                  NINE MONTHS ENDED DECEMBER 30, 1998 AND 1997
                                   (UNAUDITED)

<TABLE>
<CAPTION>
<S>                                                                             <C>               <C> 


                                                                                     1998                1997
                                                                                ---------         -----------

CASH FLOWS FROM OPERATING ACTIVITIES



Interest received                                                               $ 121,225         $   130,932
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                                                              (44,225)            (55,375)
   printing, postage and other expenses                                           (23,708)            (27,526)
                                                                                ---------         -----------     

Net cash used in operating activities                                            (101,458)           (106,719)
                                                                                ---------         -----------

CASH FLOWS FROM INVESTING ACTIVITIES


Cash distributions and other income from local partnerships                        26,389              21,059
Maturity/redemption of bonds                                                      142,918              75,000
Transfer from restricted cash                                                                       1,224,775
Investment in local partnerships                                                                   (1,224,775)
                                                                                ---------         -----------


Net cash provided by investing activities                                         169,307              96,059
                                                                                ---------         -----------

Net increase (decrease) in cash and cash equivalents                               67,849             (10,660)


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

CASH AND CASH EQUIVALENTS AT END OF PERIOD                                      $ 487,221         $   398,753
                                                                                =========         ===========


SIGNIFICANT NON-CASH INVESTING ACTIVITIES

Unrealized gain on investments in bonds available-for-sale, net                 $ 101,672         $   205,380
                                                                                =========         ===========

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


                       See Notes to Financial Statements.

</TABLE>
<PAGE>
                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                     STATEMENTS OF CASH FLOWS - (Continued)
                  NINE MONTHS ENDED DECEMBER 30, 1998 AND 1997
                                   (UNAUDITED)

<TABLE>
<CAPTION>
<S>                                                                             <C>                 <C> 


                                                                                       1998                1997
                                                                                -----------         -----------     

RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES


Net loss                                                                        $ (1,534,295)       $ (1,714,195)


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


   Equity in loss of investment in local partnerships                              1,322,113           1,499,315
   Distributions from local partnerships classified as other income                   (5,752)             (4,172)
   Loss on maturity/redemption of investments in bonds                                   677
   Amortization of net premium on investments in bonds                                 9,919              11,180
   Accretion of zero coupon bonds                                                    (65,165)            (66,191)
   Increase in interest receivable                                                    (9,438)             (6,457)
   Increase in payable to general partner                                             97,931              97,931
   Increase in accounts payable and accrued expenses                                  87,302              80,620
   Decrease in other liabilities                                                      (4,750)             (4,750)
                                                                                ------------        ------------

NET CASH USED IN OPERATING ACTIVITIES                                           $   (101,458)       $   (106,719)
                                                                                ============        ============
</TABLE>



                       See Notes to Financial Statements.

<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 30, 1998
                                   (UNAUDITED)

1.   Basis of Presentation

     The  accompanying  unaudited  financial  statements  have been  prepared in
accordance with generally accepted  accounting  principles for interim financial
information.  They do not  include all  information  and  footnotes  required by
generally accepted accounting principles for complete financial statements.  The
results of  operations  are impacted  significantly  by the combined  results of
operations  of  the  Local  Partnerships,   which  are  provided  by  the  Local
Partnerships  on an unaudited  basis during interim  periods.  Accordingly,  the
accompanying  financial statements are dependent on such unaudited  information.
In the opinion of the General  Partner,  the  financial  statements  include all
adjustments  necessary to present  fairly the financial  position as of December
30, 1998 and the results of  operations  and cash flows for the interim  periods
presented.  All adjustments  are of a normal  recurring  nature.  The results of
operations  for the three and nine month periods ended December 30, 1998 are not
necessarily indicative of the results that may be expected for the entire year.

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

2.    Comprehensive Income

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


3.   Investments in Bonds Available-For-Sale

     As of December 30, 1998,  certain  information  concerning  investments  in
bonds available-for-sale is as follows:

<TABLE>
<CAPTION>
       <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                          $   138,253         $     -            $   (1,457)       $   136,796
         After one year through five years            536,566             13,409                -              549,975
         After five years through ten years           703,602             44,076                -              747,678
         After ten years                              487,291               -                (8,426)           478,865
                                                  -----------         ----------         ----------        -----------
                                                    1,865,712             57,485             (9,883)         1,913,314
       
       U.S. Treasury debt securities
         After ten years                            1,078,098             87,352                -            1,165,450
                                                  -----------         ----------         ----------        -----------

       
                                                  $ 2,943,810         $  144,837         $   (9,883)       $ 3,078,764
                                                  ===========         ==========         ==========        ===========

</TABLE>


<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                                DECEMBER 30, 1998
                                   (UNAUDITED)


4.   Investment in Local Partnerships

     The Partnership  owns limited  partnership  interests in forty-three  Local
Partnerships  representing  capital  contributions  in the  aggregate  amount of
$29,264,476,  of which the  Partnership  has paid  $29,180,043  and  $84,433  is
outstanding as of December 30, 1998. Restricted cash in the accompanying balance
sheet as of December 30, 1998 represents such outstanding capital  contribution,
which  is  payable  upon  one  Local  Partnership's  satisfaction  of  specified
conditions  related  to  operations.   As  of  September  30,  1998,  the  Local
Partnerships  have  outstanding  mortgage loans payable  totaling  approximately
$86,514,000 and accrued  interest  payable on such loans totaling  approximately
$2,359,000, which are secured by security interests and liens common to mortgage
loans on the Local Partnerships' real property and other assets.

     For the nine months  ended  December  30,  1998,  the  investment  in Local
Partnerships activity consists of the following:
<TABLE>
<CAPTION>
           <S>                                                                              <C>  

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

           Equity in loss of investment in Local Partnerships                                 (1,322,113) *

           Cash distributions received from Local Partnerships                                   (26,389)

           Cash distributions classified as other income                                           5,752
                                                                                            ------------ 
           Investment in Local Partnerships as of December 30, 1998                         $  7,172,364
                                                                                            ============ 

</TABLE>

     * 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 $972,612 for the nine
months  ended  September  30, 1998 as  reflected  in the  combined  statement of
operations of the Local Partnerships reflected herein Note 4.

     The  combined  unaudited  balance  sheets of the Local  Partnerships  as of
September 30, 1998 and December 31, 1997 and the combined  unaudited  statements
of  operations  of the Local  Partnerships  for the three and nine month periods
ended September 30, 1998 and 1997 are reflected on pages 9 and 10, respectively.


<PAGE>
                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                                DECEMBER 30, 1998
                                   (UNAUDITED)


4.   Investment in Local Partnerships (continued)

     The combined  balance sheets of the Local  Partnerships as of September 30,
1998 and December 31, 1997 are as follows:
<TABLE>
<CAPTION>
      <S>                                                                          <C>                  <C>    
 

                                                                                   September 30,        December 31,
                                                                                       1998                 1997
                                                                                   ------------        ------------
      ASSETS

      Cash and cash equivalents                                                    $  1,378,752        $    863,259
      Rents receivable                                                                  435,709             456,077
      Capital contributions receivable                                                   84,433              84,433
      Escrow deposits and reserves                                                    4,806,329           4,403,622
      Land                                                                            3,910,215           3,910,215
      Buildings and improvements (net of accumulated depreciation of
        $30,058,773 and $27,045,787)                                                 84,637,784        
                                                                                                         87,586,072
      Intangible assets (net of accumulated amortization of $616,699 and
        $584,504)                                                                       726,304             762,749
      Other                                                                             849,147           1,401,766
                                                                                   ------------        ------------
                                                                                   $ 96,828,673        $ 99,468,193
                                                                                   ============        ============
      LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

      Liabilities

        Accounts payable and accrued expenses                                      $    645,177        $    442,564
        Due to related parties                                                        5,095,122           5,247,688
        Mortgage loans                                                               86,514,119          86,919,773
        Notes payable                                                                    29,736              62,111
        Accrued interest                                                              2,358,935           2,109,721
        Other                                                                           629,874             580,863
                                                                                   ------------        ------------
                                                                                     95,272,963          95,362,720
                                                                                   ============        ============
      Partners' equity (deficit)                                                   

        American Tax Credit Properties III L.P.
           Capital contributions, net of distributions (includes
              receivable of $84,433)                                                 29,006,523          29,048,449
           Cumulative loss                                                          (21,844,989)        (20,522,876)
                                                                                   ------------        ------------
                                                                                      7,161,534           8,525,573
                                                                                   ------------        ------------
        General partners and other limited partners, including ATCP II
           Capital contributions, net of distributions                                 (154,835)           (123,346)
           Cumulative loss                                                           (5,450,989)         (4,296,754)
                                                                                   ------------        ------------
                                                                                     (5,605,824)         (4,420,100)
                                                                                   ------------        ------------
                                                                                      1,555,710           4,105,473
                                                                                   ------------        ------------
                                                                                   $ 96,828,673        $ 99,468,193
                                                                                   ============        ============

</TABLE>
<PAGE>


                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                                DECEMBER 30, 1998
                                   (UNAUDITED)

4. Investment in Local Partnerships (continued)

  The combined  statements of operations of the Local Partnerships for the three
  and nine month periods ended September 30, 1998 and 1997 are as follows:
<TABLE>
<CAPTION>
<S>                                                 <C>              <C>               <C>              <C>  

                                                    Three Months      Nine Months      Three Months      Nine Months
                                                        Ended            Ended             Ended            Ended
                                                    September 30,    September 30,     September 30,    September 30,
                                                        1998              1998             1997              1997
                                                    ------------     ------------      ------------     ------------

REVENUE

Rental                                               $ 2,667,212     $  7,932,978      $  2,657,724     $  7,862,784
Interest and other                                        89,304          253,270           107,208          275,998
                                                     -----------     ------------      ------------     ------------           
TOTAL REVENUE                                          2,756,516        8,186,248         2,764,932        8,138,782
                                                     -----------     ------------      ------------     ------------
EXPENSES

Administrative                                           534,207        1,527,912           479,734        1,516,242
Utilities                                                172,918          686,562           194,336          724,777
Operating, maintenance and other                         770,033        1,913,861           571,374        1,609,499
Taxes and insurance                                      317,192          965,138           322,825          975,289
Financial (including amortization of $11,868,
  $36,445, $12,001 and $37,939)                          842,157        2,556,137           846,140        2,580,146
Depreciation                                           1,005,677        3,012,986         1,026,873        3,082,059
                                                     -----------     ------------      ------------     ------------
TOTAL EXPENSES                                         3,642,184       10,662,596         3,441,282       10,488,012
                                                     -----------     ------------      ------------     ------------
NET LOSS                                             $  (885,668)    $ (2,476,348)     $   (676,350)    $ (2,349,230)
                                                     ===========     ============      ============     ============
NET LOSS ATTRIBUTABLE TO

American Tax Credit Properties III L.P.              $  (432,042)    $ (1,322,113)     $   (430,848)    $ (1,499,315)
General partners and other limited partners,
   including ATCP II, which includes               
   $380,527, $972,612, $196,380 and $661,055
   of Partnership loss in excess of investment          (453,626)      (1,154,235)         (245,502)        (849,915)
                                                     -----------     ------------      ------------     ------------
                                                    
                                                     $  (885,668)    $ (2,476,348)     $   (676,350)    $ (2,349,230)
                                                     ===========     ============      ============     ============
</TABLE>


     The combined results of operations of the Local  Partnerships for the three
and nine month periods ended September 30, 1998 are not  necessarily  indicative
of the results that may be expected for an entire operating period.

5. Additional Information

     Additional  information,  including  the audited  March 30, 1998  Financial
Statements and the Organization,  Purpose and Summary of Significant  Accounting
Policies,  is included in the  Partnership's  Annual Report on Form 10-K for the
fiscal  year  ended  March 30,  1998 on file with the  Securities  and  Exchange
Commission.


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

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

Material Changes in Financial Condition

     As of December  30,  1998,  American Tax Credit  Properties  III L.P.  (the
"Registrant") has not experienced a significant change in financial condition as
compared  to March 30,  1998.  Principal  changes  in assets  are  comprised  of
periodic  transactions  and  adjustments  and  anticipated  equity  in loss from
operations  of the  local  partnerships  (the  "Local  Partnerships")  which own
low-income  multifamily  residential  complexes (the "Properties") which qualify
for the  low-income  tax credit in  accordance  with  Section 42 of the Internal
Revenue  Code (the  "Low-income  Tax  Credit").  During  the nine  months  ended
December  30,   1998,   Registrant   received   cash  from   interest   revenue,
maturity/redemption  of bonds and  distributions  from  Local  Partnerships  and
utilized cash for operating expenses.  Cash and cash equivalents and investments
in  bonds  available-for-sale  increased,  in the  aggregate,  by  approximately
$81,000  during the nine months ended  December  30, 1998 (which  included a net
unrealized gain on investments in bonds of approximately $102,000,  amortization
of net premium on investments in bonds of approximately $10,000 and accretion of
zero coupon bonds of approximately $65,000).  Notwithstanding circumstances that
may arise in  connection  with the  Properties,  Registrant  does not  expect to
realize  significant gains or losses on its investments in bonds, if any. During
the nine months ended December 30, 1998,  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,  1998  of  $1,322,113   and  cash
distributions   received  from  Local  Partnerships  of  $20,637  (exclusive  of
distributions  from Local  Partnerships  of $5,752  classified as other income).
Accounts  payable and  accrued  expenses  and payable to general  partner in the
accompanying   balance   sheet  as  of  December  30,  1998   include   deferred
administration fees and management fees, respectively.

Results of Operations

     Registrant's  operating results are dependent upon the operating results of
the Local Partnerships and are significantly impacted by the Local Partnerships'
policies. In addition, the operating results herein are not necessarily the same
for tax reporting.  Registrant accounts for its investment in Local Partnerships
in accordance with the equity method of accounting.  Accordingly, the investment
is  carried  at cost,  which  includes  capital  contributions  payable,  and is
adjusted  for  Registrant's  share  of  each  Local  Partnership's   results  of
operations and by cash distributions received. Equity in loss of each investment
in Local  Partnership  allocated to  Registrant  is  recognized to the extent of
Registrant's  investment  balance in each Local  Partnership.  Equity in loss in
excess of Registrant's investment balance in a Local Partnership is allocated to
other partners' capital in any such Local Partnership. As a result, the reported
equity in loss of  investment in Local  Partnerships  is expected to decrease as
Registrant's  investment  balances in the respective Local  Partnerships  become
zero. The combined statements of operations of the Local Partnerships  reflected
in Note 4 to Registrant's  financial statements include the operating results of
all Local Partnerships, irrespective of Registrant's investment balances.

     Cumulative  losses and cash  distributions in excess of investment in Local
Partnerships  may result  from a variety  of  circumstances,  including  a Local
Partnership's  accounting  policies,   subsidy  structure,  debt  structure  and
operating deficits, among other things. Accordingly,  cumulative losses and cash
distributions  in excess of the  investment  are not  necessarily  indicative of
adverse  operating  results of a Local  Partnership.  See discussion below under
Local  Partnership  Matters  regarding  certain  Local  Partnerships   currently
operating below economic break even levels.

     Registrant's  operations  for the three months ended  December 30, 1998 and
1997 resulted in net losses of $507,692 and $542,388, respectively. The decrease
in net loss is  primarily  attributable  to an increase  in interest  revenue of
approximately  $21,000  and a decrease  in  professional  fees of  approximately
$13,000.  Other comprehensive  income (loss) for the three months ended December
30, 1998 and 1997 resulted from a net  unrealized  gain (loss) on investments in
bonds available for-sale of $(50,421) and $74,391, respectively.

     The Local  Partnerships'  net loss of approximately  $886,000 for the three
months ended September 30, 1998 was  attributable to rental and other revenue of
approximately $2,757,000, exceeded by operating and interest expenses (including
interest on non-mandatory  debt) of approximately  $2,625,000 and  approximately
$1,018,000 of depreciation and amortization  expenses.  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 interest on non-mandatory
debt) of approximately  $2,402,000 and approximately  $1,039,000 of depreciation
and  amortization  expenses.  The  increase  in net  loss  from  1997 to 1998 is
primarily  attributable to an increase in the operating and maintenance expenses
of  certain  Local  Partnerships.   The  results  of  operations  of  the  Local
Partnerships  for the three months ended  September 30, 1998 are not necessarily
indicative of the results that may be expected in future periods.
<PAGE>
                     AMERICAN TAX CREDIT PROPERTIES III L.P.


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

     Registrant's  operations  for the nine months  ended  December 30, 1998 and
1997  resulted in net losses of $1,534,295  and  $1,714,195,  respectively.  The
difference in net loss is primarily attributable to a decrease in equity in loss
of investment in Local Partnerships of approximately $177,000, which includes an
increase in the nonrecognition of losses in excess of Registrant's investment in
Local  Partnerships  of  approximately  $312,000 in  accordance  with the equity
method of  accounting.  Other  comprehensive  income for the nine  months  ended
December 30, 1998 and 1997 resulted from a net unrealized gain on investments in
bonds available-for-sale of $101,672 and $205,380, respectively.

     The Local  Partnerships' net loss of approximately  $2,476,000 for the nine
months ended September 30, 1998 was  attributable to rental and other revenue of
approximately $8,186,000, exceeded by operating and interest expenses (including
interest on non-mandatory  debt) of approximately  $7,613,000 and  approximately
$3,049,000 of depreciation and amortization  expenses.  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 interest on non-mandatory
debt) of approximately  $7,368,000 and approximately  $3,120,000 of depreciation
and amortization  expenses.  The results of operations of the Local Partnerships
for the nine months ended September 30, 1998 are not  necessarily  indicative of
the results that may be expected in future periods.

Local Partnership Matters

     The  Properties  are  principally  comprised of  subsidized  and  leveraged
low-income  multifamily  residential  complexes  located  throughout  the United
States and  Puerto  Rico.  The rents of the  Properties,  many of which  receive
rental subsidy payments pursuant to subsidy  agreements ("HAP  Contracts"),  are
subject to specific  laws,  regulations  and  agreements  with federal and state
agencies.  One Local Partnership's HAP Contracts are scheduled to expire in 1999
after being  extended  during 1998.  In addition,  the Local  Partnerships  have
various  financing  structures  which include (i) required debt service payments
("Mandatory Debt Service") and (ii) debt service payments which are payable only
from available cash flow subject to the terms and conditions of the notes, which
may be subject to specific laws,  regulations  and agreements  with  appropriate
federal and state agencies  ("Non-Mandatory  Debt Service or Interest").  In the
event rents are not  sufficient  to cover  operating  expenses,  Mandatory  Debt
Service  requirements  and other charges,  certain general partners of the Local
Partnerships (the "Local General Partners") are obligated to provide advances to
cover deficits for a certain period of time up to certain  amounts (the "Deficit
Guarantee").  A Local  General  Partner's  funding of such Deficit  Guarantee is
dependent on its liquidity or ability to borrow the required  funds.  During the
nine months ended  September  30, 1998,  revenue  from  operations  of the Local
Partnerships,   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 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  $11,000 for the nine
months ended  September 30, 1998,  which includes  property  management  fees of
approximately  $3,000. As of September 30, 1998, the Local General Partners have
advanced  approximately  $85,000 under their Deficit  Guarantee  obligation  and
payments  on the  mortgage  and real  estate  taxes  are  current.  Registrant's
investment balance in the Christian Street Local  Partnership,  after cumulative
equity losses, became zero during the year ended March 30, 1998. Of Registrant's
total annual  Low-income  Tax Credits,  approximately  2% is allocated  from the
Christian Street Local Partnership.

     Fulton  Street  Houses  Limited   Partnership  (the  "Fulton  Street  Local
Partnership")  has an escrow of approximately  $286,000 as of September 30, 1998
to cover operating  deficits and there are no Mandatory Debt Service payments or
real estate taxes required during the Compliance Period. The Fulton Street Local
Partnership incurred an operating deficit of approximately  $23,000 for the nine
months September 30, 1998. Of Registrant's  total annual Low-income Tax Credits,
approximately 8% is allocated from the Fulton Street Local Partnership.
<PAGE>
                    AMERICAN TAX CREDIT PROPERTIES III L.P.

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

     The terms of the  partnership  agreement of  Batesville  Family,  L.P. (the
"Batesville Local  Partnership")  require the management agent to defer property
management  fees in order to avoid a default under the mortgage.  The Batesville
Local Partnership incurred an operating deficit of approximately $21,000 for the
nine months ended September 30, 1998, which includes property management fees of
approximately  $1,000.  Payments  on the  mortgage  and real  estate  taxes  are
current.  Registrant's  investment  balance in the Batesville Local Partnership,
after  cumulative  equity  losses,  became  zero during the year ended March 30,
1997. Of Registrant's  total annual Low-income Tax Credits,  approximately 1% is
allocated from the Batesville Local Partnership.

     While the operations of Westminster  Apartments  Limited  Partnership  (the
"Westminster Local Partnership") reflect near break even operations for the nine
months ended  September  30, 1998,  the Local General  Partner  reports that the
Westminster  Local  Partnership  is currently  one month in arrears on its first
mortgage obligation.  No default has been declared and the Local General Partner
is working  with the lender to resolve  the  arrearage  via the  application  of
excess escrow funds held by the lender.

Adoption of Accounting Standard

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

Year 2000 Compliance

     The  inability  of  computers,   software  and  other  equipment  utilizing
microprocessors  to recognize and properly process data fields  containing a two
digit year is commonly referred to as the year 2000 compliance ("Y2K") issue. As
the year 2000  approaches,  such  systems  may be unable to  accurately  process
certain  data-based  information.  Many businesses may need to upgrade  existing
systems or purchase new ones to correct the Y2K issue. The total cost associated
with Y2K  implementation  is not  expected  to  materially  impact  Registrant's
financial  position or results of operations in any given year.  However,  there
can be no  assurance  that the  systems of other  entities  on which  Registrant
relies,  including  the  Local  Partnerships  which  report to  Registrant  on a
periodic basis for the purpose of Registrant's reporting to its investors,  will
be timely  converted.  There can be no  assurance  that a failure  to convert by
another entity would not have a material adverse impact on Registrant.
<PAGE>


                     AMERICAN TAX CREDIT PROPERTIES III L.P.

                           Part II - OTHER INFORMATION


Item 1.   Legal Proceedings

          None

Item 2.   Changes in Securities

          None

Item 3.   Defaults Upon Senior Securities

          None

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

          None

Item 5.   Other Information

          As discussed in Part I, Item 2 - Management's  Discussion and Analysis
          of Financial  Condition and Results of  Operations,  the local general
          partner   of   Westminster   Apartments   Limited   Partnership   (the
          "Westminster  Local  Partnership")  reports that the Westminster Local
          Partnership  is currently  one month in arrears on its first  mortgage
          obligation. No default has been declared and the local general partner
          is  working  with  the  lender  to  resolve  the   arrearage  via  the
          application of excess escrow funds held by the lender.

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 11, 1999           /s/  Richard Paul Richman
                                   ----------------------------------------
                                        Richard Paul Richman
                                        President, Chief Executive
                                        Officer and Director of the
                                        general partner of the
                                        General Partner


Dated: February 11, 1999          /s/  Neal Ludeke
                                  ----------------------------------------     
                                       Neal Ludeke
                                       Vice President and
                                       Treasurer of the general partner
                                       of the General Partner
                                       (Principal Financial and Accounting
                                       Officer of Registrant)