UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 
 ______________
 
 FORM
10-K
 
 ______________
 (Mark
One)
 
 þ
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 For
the fiscal year ended March 31, 2009
 
 OR
 
 o
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 Commission
File Number 0-20476
 
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 (Formerly
known as Independence Tax Credit Plus Program)
 (Exact
name of registrant as specified in its charter)
 
 Delaware
                  
                  13-3589920(State
      or other jurisdiction of incorporation or organization)
                  
                  (I.R.S.
      Employer Identification No.)625
      Madison Avenue, New York, New York
                  
                  10022(Address
      of principal executive offices)
                  
                  (Zip
      Code)
 
 Registrant’s
telephone number, including area code (212) 317-5700
 
 Securities
registered pursuant to Section 12(b) of the Act:
 
 None
 
 Securities
registered pursuant to Section 12(g) of the Act:
 
 Beneficial Assignment Certificates
(including underlying Limited Partnership Interests)
 
 (Title of Class)
 
 Indicate by check mark if the
registrant is a well-known seasoned issuer, as defined in Rule 405 of the
Securities Act.  Yes  o    No  þ
 
 Indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or Section
15(d) of the Act.  Yes  o    No  þ
 
 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 such filing requirements for the past 90
days.  Yes  þ    No  o
 
 Indicate by checkmark whether the
registrant has submitted electronically and posted on its corporate Website, if
any, every Interactive Data File required to be submitted and posted pursuant to
Rule 405 of Regulation S-T (§229.405 of this chapter) during the preceeding 12
months (or for such shorter period that the registrant was required to submit
and post such files).  Yes  o   No  o
 
 Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this
chapter) is not contained herein, and will not be contained, to the best of
registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  þ
 
 Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company.  See the definitions of “large
accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule
12b-2 of the Exchange Act.  (Check one):
 
 Large
      accelerated filer o
            
            Accelerated
      filer oNon-accelerated
      filer o  (Do not check if a smaller
      reporting company)
            
            Smaller
      reporting company þ
 
 Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the
Act).  Yes  o   No   þ
 
 The approximate aggregate book value of
the voting and non-voting common equity held by non-affiliates of the Registrant
as of September 30, 2008 was $(18,097,000), based on Limited Partner equity
(deficit) as of such date.
 
 DOCUMENTS
INCORPORATED BY REFERENCE
 
 None
 
 
  
  
 PART
I
  Item
1.  Business.
  General
  Independence
Tax Credit Plus L.P. (the “Partnership”) is a limited partnership which was
formed under the laws of the State of Delaware on November 7, 1990. The general
partner of the Partnership is Related Independence Associates L.P., a Delaware
limited partnership (the “General Partner”). The general partner of the General
Partner is Related Independence Associates Inc., a Delaware corporation
(“RIAI”).  The ultimate parent of the General Partner is Centerline
Holding Company (“Centerline”).
  On July
1, 1991, the Partnership commenced a public offering (the “Offering”) of
Beneficial Assignment Certificates (“BACs”) representing assignments of limited
partnership interests in the Partnership (“Limited Partnership Interests”),
managed by Related Equities Corporation (the “Dealer Manager”), pursuant to a
prospectus dated July 1, 1991, as supplemented by Master Supplement No. 1a
thereto dated April 28, 1992 and Master Supplement No. 2a thereto dated November
3, 1992 (as so supplemented, the “Prospectus”).
  The
Partnership received $76,786,000 of gross proceeds from the Offering from 5,351
investors and no further issuance of BACs is anticipated.
  The
Partnership was formed to invest as a limited partner in other partnerships
(“Local Partnerships”, “subsidiaries” or “subsidiary partnerships”) that own
apartment complexes (“Apartment Complexes” or “Properties”) that are eligible
for the low-income housing tax credit (“Tax Credit”) enacted in the Tax Reform
Act of 1986, some of which may also be eligible for the historic rehabilitation
tax credit (“Historic Tax Credit”).  The Partnership’s investment in
each Local Partnership represents from 98% to 98.99% of the Partnership’s
interests in the Local Partnership.  The Partnership originally held
ownership interests in twenty-eight Local Partnerships.  The
Partnership does not intend to acquire additional properties.  As of
March 31, 2009, approximately $59,700,000 (not including acquisition fees of
approximately $4,500,000) of the net proceeds of the Offering has been invested
in Local Partnerships, of which all has been paid to the Local Partnerships, as
certain benchmarks such as occupancy levels were attained prior to the release
of the funds.  As of March 31, 2009, the Partnership has disposed of
sixteen of the twenty-eight original Properties.  During the year
ended March 31, 2009, one Local Partnership sold its property and the related
assets and liabilities and the Partnership sold its limited partnership
interests in nine Local Partnerships.  Through March 31, 2009, three
Local Partnerships have sold their property and the related assets and
liabilities, the Partnership has sold its limited partnership interests in
twelve Local Partnerships and one Local Partnership has transferred the deed to
the property and related assets and liabilities of such Local
Partnership.  In addition, as of March 31, 2009, three Local
Partnerships entered into agreements to sell their property and related assets
and liabilities.  See discussion on Sales of Underlying Local
Partnerships and Assets Held for Sale below.
  The
investment objectives of the Partnership are to:
  1.
            Entitle
      qualified BACs holders to Tax Credits over the period of the Partnership’s
      entitlement to claim Tax Credits (for each Property, generally ten years
      from the date of investment or, if later, the date the Property is placed
      in service; referred to herein as the “Credit Period”) with respect to
      each Apartment Complex.
  2.
            Preserve
      and protect the Partnership’s
capital.
  3.
            Participate
      in any capital appreciation in the value of the Properties and provide
      distributions of Sale or Refinancing Proceeds upon the disposition of the
      Properties.
  4.
            Provide
      cash distributions, when available, from operations of
      Properties.
  5.
            Allocate
      passive losses to individual BACs holders to offset passive income that
      they may realize from rental real estate investments and other passive
      activities, and allocate passive losses to corporate BACs holders to
      offset business income.
  One of
the Partnership’s objectives is to entitle qualified BACs holders to Tax Credits
over the Credit Period. Each of the Local Partnerships in which the Partnership
has acquired an interest has been allocated by the relevant state credit
agencies the authority to recognize Tax Credits during the Credit Period
provided that the Local Partnership satisfies the rent restriction, minimum
set-aside and other requirements for recognition of the Tax Credits at all times
during such period. Once a Local Partnership has become eligible to recognize
Tax Credits, it may lose such eligibility and suffer an event of “recapture” if
its Property fails to remain in compliance with the Tax Credit requirements.
None of the Local Partnerships in which the Partnership has acquired an interest
has suffered an event of recapture.
  Tax
Credits with respect to a given Apartment Complex are available for a ten-year
period that commences when the Property is leased to qualified tenants. However,
the annual Tax Credits available in the year in which the Apartment Complex is
leased to qualified tenants must be prorated based upon the months remaining in
the year. The amount of the annual Tax Credits not available in the first year
will be available in the eleventh year. Internal Revenue Code Section 42
regulates the use of the Apartment Complexes as to occupancy, eligibility, and
unit gross rent, among other requirements. Each Apartment Complex must meet the
provisions of these regulations during each of fifteen consecutive years (the
“Compliance Period”) in order to remain qualified to receive the credits.
Certain Apartment Complexes have extended compliance periods of up to fifty
years. The Partnership generated $0 and $11,579 in Tax Credits during the years
ending December 31, 2008 and 2007, respectively.
  As of
December 31, 2007, all Credit Periods have expired, and the Partnership has met
its primary objective of generating Tax Credits for qualified BACs holders.
However, each Local Partnership must continue to comply with the Tax Credit
requirements until the end of the Compliance Period in order to avoid recapture
of the Tax Credits.  The Compliance Periods will continue through
December 31, 2013 with respect to the Properties depending upon when the Tax
Credit Periods commenced.
    - 2
-
 As of
March 31, 2009, the Partnership has not met its investment objective of
providing cash distributions from the operations of the Properties. The
Partnership does not anticipate providing cash distributions to BACs holders
other than distributions of sale or refinancing proceeds upon the disposition of
Properties. Furthermore, at this time there can be no assurance that the
Partnership will achieve this investment objective.
  The
Partnership also continues to meet its objective of allocating passive losses to
individual BACs holders to offset passive income that they may realize from
rental real estate investment and other passive activities, and allocating
passive losses to the corporate BACs holders to offset business income. At this
time, there can be no assurance that the Partnership will continue to meet this
investment objective.
  There can
be no assurance that the Partnership will achieve its other investment
objectives as described above.
  A loss on
impairment of assets is recorded when management estimates amounts recoverable
through future operations and sale of the Property on an undiscounted basis are
below depreciated cost.  At that time the Property investments
themselves are reduced to estimated fair value (generally using the discounted
cash flow valuation method).  During the year ended March 31, 2009 and
2008, the Partnership recorded approximately $9,706,000 and $6,360,000,
respectively, as an aggregate loss on impairment of assets.  Through
March 31, 2009, the Partnership has recorded approximately $17,731,000 as an
aggregate loss on impairment of assets or reduction to estimated fair
value.
  The
Partnership is subject to the risks incident to potential losses arising from
the management and ownership of improved real estate. The Partnership can also
be affected by poor economic conditions generally; however, no more than 25% of
the Properties are located in any single state. There are also substantial risks
associated with owning interests in properties, as does the Partnership, which
receive government assistance, for example the possibility that Congress may not
appropriate funds to enable the Department of Housing and Urban Development
(“HUD”) to make rental assistance payments. HUD also restricts annual cash
distributions to partners based on operating results and a percentage of the
owner’s equity contribution. The Partnership cannot sell or substantially
liquidate its investments in subsidiary partnerships during the period that the
subsidy agreements are in existence without HUD’s approval. Furthermore, there
may not be market demand for apartments at full market rents when the rental
assistance contracts expire.
  Segments
 The
Partnership operates in one segment, which is the investment in multi-family
residential property.  Financial information about this segment is set
forth in Item 8 hereto.
  Sales of Underlying Local
Partnerships
  The
Partnership is currently in the process of disposing of its
investments.  It is anticipated that the process will continue to take
a number of years.  During the year ended March 31, 2009, one Local
Partnership sold its property and the related assets and liabilities and the
Partnership sold its limited partnership interests in nine Local
Partnerships.  Through March 31, 2009, three Local Partnerships have
sold their property and the related assets and liabilities, the Partnership has
sold its limited partnership interests in twelve Local Partnerships and one
Local Partnership has transferred the deed to the property and related assets
and liabilities of such Local Partnership.  In addition, three Local
Partnerships have entered into agreements to sell their property and the related
assets and liabilities.  There can be no assurance as to when the
Partnership will dispose of its remaining investments or the amount of proceeds
which may be received.  However, based on the historical operating
results of the Local Partnerships and the current economic conditions, including
changes in tax laws, it is unlikely that the proceeds from such sales received
by the Partnership will be sufficient to return to the limited partners their
original investment.
  On
January 23, 2009, the Partnership sold its limited partnership interest in
Plainsboro Housing Partners, L.P. (“Plainsboro”) to an affiliate of the Local
General Partner for a sales price of $1,401,000.  During the quarter
ended December 31, 2008, in accordance with SFAS No. 144, the Partnership deemed
the building impaired and wrote it down to its fair value, resulting in a loss
on impairment of $800,000.  The sale resulted in a gain of
approximately $153,000 resulting from the write-off of the basis in the Local
Partnership of approximately $1,248,000 at the date of the sale and the receipt
of $1,401,000 in cash from the sale.  The sale also resulted in a
non-cash contribution to the Local Partnership from the General Partner of
approximately $3,000 as a result of write-off of the fees owed by the Local
Partnership to an affiliate of the General Partner.
  On
December 31, 2008, the Partnership sold its limited partnership interest in
Christine Apartments L.P. (“Christine Apartments”) to the Local General Partner
for a sales price of $50,000.  The sale resulted in a gain of
approximately $737,000 resulting from the write-off of the deficit basis in the
Local Partnership of approximately $687,000 at the date of the sale and the
receipt of $50,000 in cash from the sale, which was recorded during the quarter
ended December 31, 2008.  An adjustment to the gain of approximately
$(5,000) was recorded during the quarter ended March 31, 2009, resulting in an
overall gain of approximately $732,000.
  On
December 17, 2008, the property and the related assets and liabilities of West
Diamond Street Associates (“West Diamond”) were sold to an unaffiliated third
party purchaser for a sales price of $1 plus the assumption of the outstanding
mortgage notes.  The sale resulted in a gain of approximately
$1,066,000 resulting from the write-off of the deficit basis in the property at
the date of sale.
  On
November 30, 2008, the Partnership sold its limited partnership interest in
Conifer Bateman Associates (“Bateman Hotel”) to the Local General Partner for a
sales price of $50.  The sale resulted in a loss of approximately
$87,000 resulting from the write-off of the basis in the Local Partnership of
approximately $87,000 at the date of the sale, which was recorded during the
quarter ended December 31, 2008. An adjustment to the loss of approximately
$(5,000) was recorded during the quarter ended March 31, 2009, resulting in an
overall loss of approximately $82,000. The sale also resulted in a non-cash
contribution to the Local Partnership from the General Partner of approximately
$14,000 as a result of write-off of the fees owed by the Local Partnership to an
affiliate of the General Partner.
  On
October 21, 2008, the Partnership sold its limited partnership interest in
Lancaster Terrace L.P. (“Lancaster”) to the Local General Partner for a sales
price of $1,564,990.  The sale resulted in a gain of approximately
$904,000 resulting from the write-off of the basis in the Local Partnership of
approximately $660,000 at the date of the sale and the receipt of $1,564,190 in
cash from the sale, which was recorded during the quarter ended December 31,
2008. An adjustment to the gain of approximately $111,000 was recorded during
the quarter ended March 31, 2009, resulting in an overall gain of approximately
$1,015,000. The sale also resulted in a non-cash contribution to the Local
Partnership from the General Partner of approximately $2,000 as a result of
write-off of the fees owed by the Local Partnership to an affiliate of the
General Partner.
    - 3
-
 On
October 17, 2008, the Partnership sold its limited partnership interest in
Bethel Villa Associates, L.P. (“Bethel Villa”) to the Local General Partner for
a sales price of $750,000.  During the quarters ended March 31, 2008
and December 31, 2008, in accordance with Statement of Financial Accounting
Standards No. 144 (“SFAS No. 144”) Accounting for the Impairment or
Disposal of Long-Lived Assets, the Partnership deemed the building
impaired and wrote it down to its fair value, which resulted in a loss on
impairment of $5,000,000 and $720,000, respectively. The sale resulted in a loss
of approximately $28,000 resulting from the write-off of the basis in the Local
Partnership of approximately $778,000 at the date of the sale and the receipt of
$750,000 in cash from the sale, which was recorded during the quarter ended
December 31, 2008. An adjustment to the loss of approximately $373,000 was
recorded during the quarter ended March 31, 2009, resulting in an overall gain
of approximately $345,000.
  On August
22, 2008, the Partnership sold its limited partnership interest in Lares
Apartments Limited Partnership (“Lares”) to the Local General Partner for a
sales price of $125,000.  The sale resulted in a gain of approximately
$691,000 resulting from the write-off of the deficit basis in the Local
Partnership at the date of the sale of approximately $566,000 and the receipt of
$125,000 in cash from the sale, which was recorded during the quarter ended
December 31, 2008. An adjustment to the gain of approximately $(31,000) was
recorded during the quarter ended March 31, 2009, resulting in an overall gain
of approximately $660,000.
  On August
22, 2008, the Partnership sold its limited partnership interest in Lajas
Apartments Limited Partnership (“Lajas”) to the Local General Partner for a
sales price of $121,250.  The sale resulted in a gain of approximately
$690,000, resulting from the write-off of the deficit basis in the Local
Partnership at the date of the sale of approximately $568,000 and the receipt of
$121,730 in cash from the sale, which was recorded during the quarter ended
December 31, 2008. An adjustment to the gain of approximately $(40,000) was
recorded during the quarter ended March 31, 2009, resulting in an overall gain
of approximately $650,000.
  On May 6,
2008, the Partnership sold its limited partnership interest in Susquehanna
Partners (“Susquehanna”) to an affiliate of the Local General Partner for a
sales price of $1.  During the quarter ended March 31, 2008, in
accordance with SFAS No. 144, the Partnership deemed the building impaired and
wrote it down to its fair value, which resulted in a loss on impairment of
$630,000.  The sale resulted in a loss of approximately $49,000,
resulting from the write-off of the basis in the Local Partnership of
approximately $49,000 at the date of the sale, which was recorded during the
quarter ended June 30, 2008.  Adjustments to the loss of approximately
$(1,000) and $(37,000) were recorded during the quarters ended September 30,
2008 and March 31, 2009, resulting in an overall loss of approximately
$11,000.  The sale also resulted in a non-cash contribution to the
Local Partnership from the General Partner of approximately $41,000 as a result
of write-off of the fees owed by the Local Partnership to an affiliate of the
General Partner.
  On April
1, 2008, the Partnership sold its limited partnership interest in Landreth
Venture (“Landreth”) to the Local General Partner for a sales price of
$17,500.  During the year ended March 31, 2009 and 2008, in accordance
with SFAS No. 144, the building was deemed impaired and written down to its fair
value, resulting in a loss on impairment of approximately $3,000,000 and
$730,000, respectively.  The sale resulted in a gain of approximately
$10,000, resulting from the write-off of the basis in the Local Partnership at
the date of the sale of approximately $7,000 and the $17,500 cash received from
the sale, which was recorded during the quarter ended June 30,
2008.  Adjustments to the gain of approximately $1,000 and $3,009,000
were recorded during the quarter ended September 30, 2008 and March 31, 2009,
resulting in an overall gain of approximately $3,020,000.
  On March
20, 2008, the property and the related assets and liabilities of Homestead
Apartments Associates Ltd. (“Homestead”) were sold to an unaffiliated third
party purchaser for a sales price of $4,000,000.  The Partnership
received $32,500 as a distribution from this sale after the repayment of the
mortgages, other liabilities and closing costs of approximately
$3,967,500.  The sale resulted in a gain of approximately $75,000
resulting from the write-off of the deficit basis in the property at the date of
sale, which was recorded during the quarter ended June 30,
2008.  Adjustments to the gain of approximately $201,000, $(7,000) and
$(324,000) were recorded during the quarters ended September 30, 2008, December
31, 2008 and March 31, 2009, resulting in an overall loss of approximately
$55,000.
  On
February 1, 2008, the Partnership sold its limited partnership interest in
Hampden Hall Associates, L.P. (“Hampden Hall”) to an affiliate of the Local
General Partner for a sales price of approximately $955,000.  The sale
resulted in a loss of approximately $1,173,000, resulting from the write-off of
the basis in the Local Partnership of approximately $2,128,000 at the date of
the sale and the $955,000 cash received from the sale.
  On
January 17, 2008, the Partnership sold its limited partnership interest in BX-7F
Associates (“Beaumont”) to the Local General Partner for a sales price of
$2,090,000.  The sale resulted in a gain of approximately $311,000,
resulting from the write-off of the basis in the Local Partnership at the date
of the sale of approximately $1,711,000 and the $2,022,299 cash received from
the sale.
  On
November 30, 2007, the property and the related assets and liabilities of Harbor
Court Limited Partnership (“Harbor Court”) were sold to an unaffiliated third
party purchaser for a sales price of $2,100,000.  The Partnership
received $1,991,996 as a distribution from this sale after the repayment of
other liabilities, closing costs and distributions to minority interests of
approximately $108,000.  The sale resulted in a gain of approximately
$1,260,000, which was recorded during the quarter ended March 31,
2008.
  On
October 31, 2007, Old Public Limited Partnership (“Old Public”) transferred the
deed to the property and the related assets and liabilities to an unaffiliated
third party in lieu of foreclosure.  The transfer of assets of
approximately $851,000 and liabilities of $1,138,000 resulted in a gain of
approximately $287,000 at the date of the transfer.  An adjustment to
the gain of approximately $(193,000) was recorded during the quarter ended March
31, 2008, resulting in an overall gain of approximately $94,000.
  On March
29, 2007, the Partnership sold its limited partnership interest in P.S. 157
Associates, L.P. (“P.S. 157”) to the Local General Partner for a sales price of
$1,996,490.  The sale resulted in a gain of approximately $2,010,000
resulting from the write-off of the deficit basis in the Local Partnership of
approximately $13,000 at the date of the sale and the $2,023,209 cash received
from the sale.  An adjustment to the gain of approximately $6,000 was
recorded during the quarter ended March 31, 2008, resulting in an overall gain
of approximately $2,016,000.
    - 4
-
 Assets Held for
Sale
  On May 9,
2008, Creative Choice Homes II, Ltd. (“Opa-Locka”) entered into a purchase and
sale agreement to sell the property and the related assets and liabilities to an
unaffiliated third party purchaser for a sales price of
$17,000,000.  This agreement expired in April of 2009.  The
property is currently being actively marketed for sale and management is seeking
a potential buyer.  As of December 31, 2008, Opa-Locka had property
and equipment, at cost, of approximately $22,812,000, accumulated depreciation
of approximately $7,946,000 and mortgage debt of approximately
$5,417,000.
  On April
18, 2008, Rolling Green Associates, L.P. (“Rolling Green”) entered into a
purchase and sale agreement to sell the property and the related assets and
liabilities to an unaffiliated third party purchaser for a sales price of
$14,000,000.  This agreement expired in April of 2009.  The
property is currently being actively marketed for sale and management is seeking
a potential buyer.  As of December 31, 2008, Rolling Green had
property and equipment, at cost, of approximately $22,318,000, accumulated
depreciation of approximately $11,734,000 and mortgage debt of approximately
$10,663,000.
  On April
1, 2008, Homestead Apartments Associates II Ltd. (“Homestead II”) entered into a
purchase and sale agreement to sell the property and the related assets and
liabilities to an unaffiliated third party purchaser for a sales price of
$4,000,000.  This agreement expired in April of 2009.  The
property is currently being actively marketed for sale and management is seeking
a potential buyer.  As of December 31, 2008, Homestead II had property
and equipment, at cost, of approximately $5,594,000, accumulated depreciation of
approximately $2,076,000 and mortgage debt of approximately
$3,169,000.
  Competition
 The real
estate business is highly competitive and substantially all of the Properties
acquired by the Partnership are subject to active competition from similar
properties in their respective vicinities. In addition, various other limited
partnerships have, in the past, and may, in the future, be formed by the General
Partner and/or its affiliates to engage in businesses which may be competitive
with the Partnership. The General Partner is also the general partner of
Independence Tax Credit Plus L.P. II.
  Employees
 The
Partnership does not have any direct employees. All services are performed for
the Partnership by its General Partner and its affiliates. The General Partner
receives compensation in connection with such activities as set forth in Items
11 and 13. In addition, the Partnership reimburses the General Partner and
certain of its affiliates for expenses incurred in connection with the
performance by their employees of services for the Partnership in accordance
with the Partnership’s Amended and Restated Agreement of Limited Partnership
(the “Partnership Agreement”).
  Item
1A.  Risk Factors
  The
Partnership’s investment as a limited partner in the Local Partnerships is
subject to the risks incident to the potential losses arising from management
and ownership of improved real estate. The Partnership’s investments also could
be adversely affected by poor economic conditions, generally, which could
increase vacancy levels and rental payment defaults, and by increased operating
expenses, any or all of which could threaten the financial viability of one or
more of the Local Partnerships.
  There
also are substantial risks associated with the operations of Apartment Complexes
receiving government assistance. These include governmental regulations
concerning tenant eligibility, which may make it more difficult to rent
apartments in the Apartment Complexes; difficulties in obtaining government
approval for rent increases; limitations on the percentage of income which low
and moderate-income tenants may pay as rent; the possibility that Congress may
not appropriate funds to enable HUD to make the rental assistance payments it
has contracted to make; and that when the rental assistance contracts expire
there may not be market demand for apartments at full market rents in a Local
Partnership’s Apartment Complex.
  The Local
Partnerships are impacted by inflation in several ways. Inflation allows for
increases in rental rates generally to reflect the impact of higher operating
and replacement costs. Furthermore, inflation generally does not impact the
fixed long-term financing under which real property investments were purchased.
Inflation also affects the Local Partnerships adversely by increasing operating
costs, such as fuel, utilities, and labor.
  Item
1B.  Unresolved Staff Comments
  None
  Item
2.  Properties
  As of
March 31, 2009, the Partnership held a 98.99% limited partnership interest in
ten Local Partnerships, a 98% limited partnership interest in one Local
Partnership and a 88.99% interest in another Local Partnership.  Set
forth below is a schedule of the Local Partnerships including certain
information concerning their respective Apartment Complexes (the “Local
Partnership Schedule”).  Further information concerning these Local
Partnerships and their Properties, including any encumbrances affecting the
Properties, may be found in Item 15, Schedule III.
  
  - 5
-
  
 Local Partnership
Schedule
 
 
 Name
      and Location
              (Number
      of Units)
            
            Date
      Acquired
            
            %
      of Units Occupied at May 1,2009
            
            2008
            
            2007
            
            2006
            
            2005Harbor
      Court Limited Partnership
            
            December
      1991
            
            (b)
            
            
            (b)
            
            
            100
            %
            
            100
            %
            
            98
            %Staten
      Island, NY (40)Old
      Public Limited Partnership
            
            December
      1991
            
            (d)
            
            
            (d)
            
            
            77
            %
            
            57
            %
            
            67
            %Lawrenceburg,
      TN (30)Lancaster
      Terrace Limited Partnership
            
            February
      1992
            
            (f)
            
            
            98
            %
            
            89
            %
            
            96
            %
            
            93
            %Salem,
      OR (104)655
      North Street Limited Partnership
            
            March
      1992
            
            90
            %
            
            93
            %
            
            96
            %
            
            96
            %
            
            92
            %Baton
      Rouge, LA (195)Landreth
      Venture
            
            March
      1992
            
            (f)
            
            
            100
            %
            
            96
            %
            
            92
            %
            
            96
            %Philadelphia,
      PA (47)Homestead
      Apartments Associates Ltd.
            
            March
      1992
            
            (b)
            
            
            (b)
            
            
            95
            %
            
            99
            %
            
            99
            %Homestead,
      FL (123)Bethel
      Villa Associates, L.P.
            
            April
      1992
            
            (f)
            
            
            97
            %
            
            99
            %
            
            99
            %
            
            100
            %Wilmington,
      DE (150)West
      Diamond Street Associates
            
            May
      1992
            
            (e)
            
            
            89
            %
            
            93
            %
            
            100
            %
            
            100
            %Philadelphia,
      PA (28)Susquehanna
      Partners
            
            May
      1992
            
            (f)
            
            
            87
            %
            
            96
            %
            
            91
            %
            
            87
            %Philadelphia,
      PA (47)Boston
      Bay Limited Partnership
            
            August
      1992
            
            98
            %
            
            93
            %
            
            95
            %
            
            100
            %
            
            99
            %Boston,
      MA (88)Morrant
      Bay Limited Partnership
            
            August
      1992
            
            97
            %
            
            91
            %
            
            92
            %
            
            95
            %
            
            92
            %Boston,
      MA (130)Hope
      Bay Limited Partnership
            
            August
      1992
            
            100
            %
            
            98
            %
            
            98
            %
            
            100
            %
            
            98
            %Boston,
      MA (45)Lares
      Apartments Limited Partnership
            
            August
      1992
            
            (f)
            
            
            100
            %
            
            100
            %
            
            100
            %
            
            100
            %Lares,
      PR (102)Lajas
      Apartments Limited Partnership
            
            August
      1992
            
            (f)
            
            
            100
            %
            
            100
            %
            
            100
            %
            
            100
            %Lajas,
      PR (99)Arlington-Rodeo
      Properties
            
            August
      1992
            
            93
            %
            
            100
            %
            
            100
            %
            
            100
            %
            
            100
            %Los
      Angeles, CA (29)Conifer
      Bateman Associates
            
            August
      1992
            
            (f)
            
            
            83
            %
            
            83
            %
            
            83
            %
            
            92
            %Lowville,
      NY (24)Hampden
      Hall Associates, L.P.
            
            September
      1992
            
            (c)
            
            
            (c)
            
            
            96
            %
            
            84
            %
            
            95
            %St.
      Louis, MO (75)Chester
      Renaissance Associates
            
            September
      1992
            
            95
            %
            
            95
            %
            
            100
            %
            
            100
            %
            
            100
            %Chester,
      PA (20)Homestead
      Apts. II LTD.
            
            October
      1992
            
            89
            %
            
            96
            %
            
            95
            %
            
            99
            %
            
            99
            %Homestead,
      FL (112)P.S.
      157 Associates, L.P.
            
            November
      1992
            
            (a)
            
            
            (a)
            
            
            (a)
            
            
            100
            %
            
            100
            %New
      York, NY (73) (a)Cloisters
      Limited Partnership II
            
            November
      1992
            
            34
            %
            
            62
            %
            
            88
            %
            
            94
            %
            
            98
            %Philadelphia,
      PA (65) (g)
  
 - 6
-
  Local Partnership
Schedule
 (continued)
 
 Name
      and Location
                (Number
      of Units)
              
              Date
      Acquired
              
              %
      of Units Occupied at May 1,2009
              
              2008
              
              2007
              
              2006
              
              2005
 Creative
      Choice Homes II, LTD.
              
              December
      1992
              
              98
              %
              
              95
              %
              
              100
              %
              
              91
              %
              
              95
              %Opa-Locka,
      FL (328)Milford
      Crossing Associates L.P.
              
              December
      1992
              
              97
              %
              
              99
              %
              
              100
              %
              
              96
              %
              
              93
              %Milford,
      DE (73)BX-7F
      Associates, L.P.
              
              January
      1993
              
              (c)
              
              
              (c)
              
              
              98
              %
              
              98
              %
              
              97
              %Bronx,
      NY (85)Los
      Angeles Limited Partnership
              
              May
      1993
              
              99
              %
              
              100
              %
              
              99
              %
              
              100
              %
              
              100
              %Rio
      Piedras, PR (124)Christine
      Apartments, L.P.
              
              June
      1993
              
              (f)
              
              
              100
              %
              
              88
              %
              
              100
              %
              
              100
              %Buffalo,
      NY (32)Plainsboro
      Housing Partners, L.P.
              
              July
      1993
              
              (f)
              
              
              94
              %
              
              98
              %
              
              98
              %
              
              97
              %Plainsboro,
      NJ (126)Rolling
      Green Associates, L.P.
              
              October
      1993
              
              97
              %
              
              98
              %
              
              95
              %
              
              93
              %
              
              97
              %Syracuse,
      NY (395)
  (a)
            The
      Partnership’s limited partnership interest was sold during the fiscal year
      ended March 31, 2007 (see Note 10 in Item
8).
  (b)
            The
      property and the related assets and liabilities were sold during the
      fiscal year ended March 31, 2008 (see Note 10 in Item
  8).
  (c)
            The
      Partnership’s limited partnership interest was sold during the fiscal year
      ended March 31, 2008 (see Note 10 in Item
8).
  (d)
            The
      deed to the property and related assets and liabilities was transferred
      during the fiscal year ended March 31, 2008 (see Note 10 in Item
      8).
  (e)
            The
      property and the related assets and liabilities were sold during the
      fiscal year ended March 31, 2009 (see Note 10 in Item
  8).
  (f)
            The
      Partnership’s limited partnership interest was sold during the fiscal year
      ended March 31, 2009 (see Note 10 in Item
8).
  (g)
            See
      discussion under the heading, “Results of Operations of Certain Local
      Partnerships” in Item 7.
  All
leases are generally for periods not exceeding one to two years and no tenant
occupies more than 10% of the total rentable square footage in any single
Apartment Complex.
  Rents
from commercial tenants (to which average rental per square foot applies)
comprise less than 5% of the rental revenues of the Partnership. Maximum rents
for the residential units are determined annually by HUD and reflect
increases/decreases in consumer price indices in various geographic areas.
Market conditions, however, determine the amount of rent actually
charged.
  Management
annually reviews the physical state of the Properties and suggests to the
respective general partners of the Local Partnerships (“Local General Partners”)
budget improvements, which are generally funded from cash flow from operations
or release of replacement reserve escrows to the extent available.
  Management
annually reviews the insurance coverage of the Properties and believes such
coverage is adequate.
  See Item
1, Business, above, for the general competitive conditions to which the
Properties described above are subject.
  Real
estate taxes are calculated using rates and assessed valuations determined by
the township or city in which the Property is located. Such taxes have
approximated 1% of the aggregate cost of the Properties as shown in Schedule III
to the financial statements included herein.
  Item
3.  Legal Proceedings
  None
  Item
4.  Submission of Matters to a Vote of Security Holders
  None
   - 7
-
  
 PART
II
   Item
5.  Market for Registrant’s Common Equity, Related Stockholder Matters
and Issuer Purchaser of Equity Securities
  As of
March 31, 2009, the Partnership had issued and outstanding 76,786 Limited
Partnership Interests, each representing a $1,000 capital contribution to the
Partnership, or an aggregate capital contribution of $76,786,000. All of the
issued and outstanding Limited Partnership Interests have been issued to
Independence Assignor Inc. (the “Assignor Limited Partner”), which has in turn
issued 76,786 BACs to the purchasers thereof for an aggregate purchase price of
$76,786,000. Each BAC represents all of the economic and virtually all of the
ownership rights attributable to a Limited Partnership Interest held by the
Assignor Limited Partner. BACs may be converted into Limited Partnership
Interests at no cost to the holder (other than the payment of transfer costs not
to exceed $100), but Limited Partnership Interests so acquired are not
thereafter convertible into BACs.
  Neither
the BACs nor the Limited Partnership Interests are traded on any established
trading market. The Partnership does not intend to include the BACs for
quotation on NASDAQ or for listing on any national or regional stock exchange or
any other established securities market. The Revenue Act of 1987 contained
provisions which have an adverse impact on investors in “publicly traded
partnerships.”  Accordingly, the General Partner has imposed limited
restrictions on the transferability of the BACs and the Limited Partnership
Interests in secondary market transactions. These restrictions should prevent a
public trading market from developing but may adversely affect the ability of an
investor to liquidate his or her investment quickly. It is expected that such
procedures will remain in effect until such time, if ever, as further revision
of the Revenue Act of 1987 may permit the Partnership to lessen the scope of the
restrictions.
  As of May
28, 2009, the Partnership had approximately 4,556 registered holders of an
aggregate of 76,786 BACs.
  All of
the Partnership’s general partnership interests, representing an aggregate
capital contribution of $1,000, are held by the General Partner.
  There are
no material legal restrictions in the Partnership Agreement on the ability of
the Partnership to make distributions. The Partnership has made no distributions
to the BACs holders as of March 31, 2009.  The Partnership does not
anticipate providing cash distributions to its BACs holders other than from net
refinancing or sales proceeds.
  Transfer
Procedures
 The
Partnership from time to time receives requests by unit holders and others to
transfer BACs and/or Limited Partnership Interests.  Such requests may
occur in connection with tender offers for the Partnership’s
units.  Such requests implicate the Partnership’s policies and
procedures concerning transfers generally and tender offers in particular, which
were adopted by the Partnership pursuant to the terms of its Partnership
Agreement, to ensure compliance with applicable law, avoid adverse tax
consequences for the Partnership and its investors, and preserve the
Partnership’s advantageous tax status.
  In prior
years, the Partnership relied on the 5% safe harbor established by Internal
Revenue Service (“IRS”) regulations to avoid being characterized as a
“publicly-traded partnership” that is taxed as a corporation.  The 5%
safe harbor, however, expired and is no longer available as of December 31,
2005.  Accordingly, the Partnership now relies on a 2% safe harbor
established by another IRS regulation to avoid being characterized as a
“publicly-traded partnership” that is taxed as a corporation.
  A brief
summary of certain of the Partnership’s key policies, practices and requirements
with respect to transfers and tender offers is as follows:
  ·
            No
      transfer (whether for substitution, assignment or otherwise) is effective
      or binding on the Partnership unless and until it is approved by the
      General Partner.
 
 ·
            No
      transfer will be approved unless the transferor and transferee submit
      complete and properly executed forms of the Partnership’s own transfer
      documentation.  The Partnership does not accept forms of
      transfer documentation other than its own and does not accept signatures
      made by power of attorney in lieu of original signatures by each of the
      transferors and transferees.
 
 ·
            The
      Partnership will not approve transfers that in the cumulative aggregate
      for any tax year exceed the IRS 2% safe harbor, unless a financially
      responsible person provides the Partnership and its partners with (i) an
      indemnity (in form and substance in all ways acceptable to the General
      Partner) for all liability (including, without limitation, any adverse tax
      consequences) arising from or relating to exceeding the 2% safe harbor and
      (ii) a legal opinion (in form and substance in all ways acceptable to the
      General Partner) that there will be no adverse tax consequences to the
      Partnership and its partners from exceeding the 2% safe
      harbor.
 
 ·
            In
      order to avoid the undesirable situation of one or more tender offers
      consuming the entire safe harbor limitation early in the tax year and
      leaving the Partnership’s remaining investors with no liquidity
      opportunity for the rest of that tax year, the Partnership restricts the
      cumulative aggregate total of transfers made pursuant to all tender offers
      to 1.5% of its outstanding units in each tax year, unless a financially
      responsible person conducting such tender offer provides the Partnership
      with an acceptable indemnity and legal opinion of the type described
      above.  At the end of each tax year, the General Partner, in its
      discretion, may allow the cumulative total number of transfers (including
      those by tender offer) to reach the 2% safe harbor
  limit.
 
 ·
            The
      Partnership requires that all tender offers for its units be conducted in
      accordance with all applicable law including, without limitation, the
      federal securities laws.
 
 The
foregoing is solely a summary of the Partnership’s policies, requirements and
practices with respect to transfers and tender offers.  More complete
information, including a copy of the Partnership’s transfer documentation
package, may be obtained from the Partnership.
  
  - 8
-
  Item
7.  Management’s Discussion and Analysis of Financial Condition and
Results of Operations
  Liquidity and Capital
Resources
 As of
March 31, 2009, approximately $59,700,000 (not including acquisition fees of
approximately $4,500,000) of the net proceeds of the Offering has been invested
in Local Partnerships.  During the year ended March 31, 2009, one
Local Partnership sold its property and the related assets and liabilities and
the Partnership sold its limited partnership interests in nine Local
Partnerships.  Through March 31, 2009, three Local Partnerships have
sold their property and the related assets and liabilities, the Partnership has
sold its limited partnership interests in twelve Local Partnerships and one
Local Partnership transferred the deed to the property and related assets and
liabilities of such Local Partnership.  In addition, three Local
Partnerships entered into agreements to sell their property and the related
assets and liabilities (see Notes 10 and 11 in Item 8).
  Short-Term
  During
the year ended March 31, 2009, cash and cash equivalents of the Partnership and
its consolidated subsidiary partnership increased approximately
$878,000.  This increase is due to net cash provided by operating
activities ($1,529,000), net proceeds from sales ($9,605,000), an increase in
due to local general partners and affiliates relating to financing activities
($411,000) and an increase in due to local general partners and affiliates
relating to investing activities ($1,505,000) which exceeded costs related to
sales ($53,000), acquisitions of property and equipment ($1,414,000), repayments
of mortgage notes ($7,498,000), an increase in cash held in escrow relating to
investing activities ($2,943,000) and a decrease in capitalization of
consolidated subsidiaries attributable to minority interest
($264,000).  Included in the adjustments to reconcile the net loss to
net cash provided by operating activities are depreciation and amortization
($3,181,000), gain on sale of properties ($7,495,000) and loss on impairment of
properties ($9,706,000).
  Total
expenses from operations for the years ended March 31, 2009 and 2008, excluding
depreciation and amortization, interest, general and administrative-related
parties and loss on impairment of property, totaled $5,959,302 and $6,006,951,
respectively.
  Accounts
payable from operations as of March 31, 2009 and 2008 were $1,181,205 and
$3,914,793, respectively.  Accounts payable are short term liabilities
which are expected to be paid from operating cash flows, working capital
balances at the Local Partnership level, Local General Partner advances and in
certain circumstances advances from the Partnership.  Accounts payable
from discontinued operations totaled $2,685,081 and $291,398 as of March 31,
2009 and 2008, respectively.  Because the provisions of the secondary
loans defer the payment of accrued interest of the respective Local
Partnerships, the Partnership believes it (and the applicable Local
Partnerships) has sufficient liquidity and ability to generate cash and to meet
existing and known or reasonably likely future cash requirements over both the
short and long term.
  Accrued
interest payable from operations as of March 31, 2009 and 2008 was $10,496,943
and $11,332,424, respectively.  Accrued interest payable represents
the accrued interest on all mortgage loans, which include primary and secondary
loans. Certain secondary loans have provisions such that interest is accrued but
not payable until a future date.  Accrued interest payable from
discontinued operations totaled $680,348 and $516,823 as of March 31, 2009 and
2008, respectively.  The Partnership anticipates the payment of
accrued interest on the secondary loans (which make up the majority of the
accrued interest payable amount owed and which have been accumulating since the
Partnership’s investment in the respective Local Partnership) will be made from
future refinancings or sales proceeds of the respective Local Partnerships. In
addition, each Local Partnership’s mortgage notes are collateralized by the land
and buildings of the respective Local Partnership, and are without further
recourse to the Partnership.
  During
the year ended March 31, 2009, the Partnership’s primary sources of funds
included: (i) working capital reserves; (ii) interest earned on the working
capital reserves; (iii) cash distributions from operations of the Local
Partnerships; and (iv) sales proceeds and distributions.  Such funds
are available to meet the obligations of the Partnership.  The
Partnership does not anticipate providing cash distributions to BACs holders in
circumstances other than refinancing or sales.  Cash distributions
received from the Local Partnerships, as well as the working capital reserves
referred to above, will be used towards the future operating expenses of the
Partnership.  During the years ended March 31, 2009 and 2008, the
amounts received from operations of the Local Partnerships were approximately
$75,000 and $86,000, respectively.  Additionally, during the years
ended March 31, 2009 and 2008, the Partnership received approximately $33,000
and $1,992,000 of distributions from the sale of properties and approximately
$3,979,000 in proceeds from the sale of Local Partnerships’ limited partnership
interest, respectively.  The Partnership does not anticipate being
able to make distributions sufficient to return to BACs holders their original
capital contributions.
  The
Partnership’s unconsolidated working capital reserve at March 31, 2009 was
approximately $5,044,000.
  Partnership
management fees owed to the General Partner amounting to approximately
$6,219,000 and $9,228,000 were accrued and unpaid as of March 31, 2009 and 2008,
respectively.  During the year ended March 31, 2009, management deemed
the unpaid partnership management fees related to sold properties uncollectible
and wrote off approximately $3,752,000, resulting in a non-cash General Partner
contribution of the same amount.  Without the General Partner’s
advances and continued accrual without payment of certain fees and expense
reimbursements, the Partnership will not be in a position to meet its
obligations.
  Long-Term
 For a
discussion of contingencies affecting certain Local Partnerships, see Results of
Operations of Certain Local Partnerships, below. Since the maximum loss the
Partnership would be liable for is its net investment in the respective
subsidiary partnerships, the resolution of the existing contingencies is not
anticipated to impact future results of operations, liquidity or financial
condition in a material way. However, the Partnership’s loss of its investment
in a Local Partnership may also result in recapture of Tax Credits if the
investment is lost before expiration of the Compliance Period.
  Management
is not aware of any trends or events, commitments or uncertainties, which have
not otherwise been disclosed, that will or are likely to impact liquidity in a
material way. Management believes the only impact would be from laws that have
not yet been adopted. The portfolio is diversified by the location of the
Properties around the United States so that if one area of the country is
experiencing downturns in the economy, the remaining Properties in the portfolio
may be experiencing upswings. However, the geographic diversification of the
portfolio may not protect against a general downturn in the national economy.
The Partnership had fully invested the proceeds of its Offering in 28 Local
Partnerships, all of which had their Tax Credits fully in place.  As
of December 31, 2007, all Credit Periods had expired.  The Compliance
Periods will continue through December 31, 2013 with respect to the Properties
depending upon when the Tax Compliance Periods commenced.
   - 9
-
  Discontinued
Operations
 For a
discussion of discontinued operations, see Note 14 in Item 8.
  Sale of Underlying
Properties/Local Partnership Interests
 For a
discussion of the sale of Properties in which the Partnership owns direct
interests, see Note 10 in Item 8.
  Tabular Disclosure of
Contractual Obligations
 The
following table summarizes the Partnership’s commitments as of March 31, 2009 to
make future payments under its debt agreements and other contractual
obligations.
  Total
              
              
              Less
      than
                1
      Year
              
              
              1 –
      3
                Years
              
              
              3
      -5
                Years
              
              
              More
      than
                5
      YearsMortgage
      notes payable (a)
              
              $
              20,705,851
              
              
              $
              758,369
              
              
              $
              1,659,837
              
              
              $
              1,358,990
              
              
              $
              16,928,655Long
      term notes payable (b)
              
              
              129,274
              
              
              
              25,854
              
              
              
              51,710
              
              
              
              51,710
              
              
              
              0$
              20,835,125
              
              
              $
              784,223
              
              
              $
              1,711,547
              
              
              $
              1,410,700
              
              
              $
              16,928,655(a)
      The mortgage notes are payable in aggregate monthly installments of
      approximately $109,000, including principal and interest at rates varying
      from 1% to 8% per annum, through the year 2048. Each subsidiary
      partnership’s mortgage note payable is collateralized by the land and
      buildings of the respective subsidiary partnership, the assignment of
      certain subsidiary partnerships’ rents and leases, and is without further
      recourse.
                (b)
      See Note 8 (B) ii in Item 8.  Financial Statements and
      Supplementary Data.
 
  The
following table summarizes the Partnership’s commitments from discontinued
operations as of March 31, 2009 to make future payments under its debt
agreements and other contractual obligations.
  Total
              
              
              Less
      than
                1
      Year
              
              
              1 –
      3
                Years
              
              
              3
      -5
                Years
              
              
              More
      than
                5
      YearsMortgage
      notes payable (a)
              
              $
              19,248,504
              
              
              $
              6,901,650
              
              
              $
              3,829,354
              
              
              $
              1,630,000
              
              
              $
              6,887,500Long
      term notes payable (b)
              
              
              979,770
              
              
              
              979,770
              
              
              
              0
              
              
              
              0
              
              
              
              0$
              20,228,274
              
              
              $
              7,881,420
              
              
              $
              3,829,354
              
              
              $
              1,630,000
              
              
              $
              6,887,500(a)
      The mortgage notes are payable in aggregate monthly installments of
      approximately $219,000, including principal and interest at rates varying
      from 5% to 9% per annum, through the year 2020. Each subsidiary
      partnership’s mortgage note payable is collateralized by the land and
      buildings of the respective subsidiary partnership, the assignment of
      certain subsidiary partnerships’ rents and leases, and is without further
      recourse.
                (b) See
      Note 8 (B) iii in Item 8.  Financial Statements and
      Supplementary Data.
 
  Off-Balance Sheet
Arrangements
 The
Partnership has no off-balance sheet arrangements.
  Critical Accounting
Policies
 In
preparing the consolidated financial statements, management has made estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting periods. Actual results could differ from those
estimates. Set forth below is a summary of the accounting policies that
management believes are critical to the preparation of the consolidated
financial statements. The summary should be read in conjunction with the more
complete discussion of the Partnership’s accounting policies included in Note 2
to the consolidated financial statements in this annual report on Form
10-K.
  Property and
Equipment
 Property
and equipment to be held and used are carried at cost which includes the
purchase price, acquisition fees and expenses, construction period interest and
any other costs incurred in acquiring the Properties. The cost of property and
equipment is depreciated over their estimated useful lives using accelerated and
straight-line methods. Expenditures for repairs and maintenance are charged to
expense as incurred; major renewals and betterments are capitalized. At the time
property and equipment are retired or otherwise disposed of, the cost and
accumulated depreciation are eliminated from the assets and accumulated
depreciation accounts and the profit or loss on such disposition is reflected in
earnings. The Partnership complies with Statement of Financial Accounting
Standards (“SFAS”) No. 144 Accounting for the Impairment or
Disposal of Long-Lived Assets.  A loss on impairment of assets
is recorded when management estimates amounts recoverable through future
operations and sale of the Property on an undiscounted basis is below
depreciated cost. At that time, Property investments themselves are reduced to
estimated fair value (generally using discounted cash flows) when the Property
is considered to be impaired and the depreciated cost exceeds estimated fair
value.
  At the
time management commits to a plan to dispose of assets, said assets are adjusted
to the lower of their carrying amount or fair value less costs to sell. These
assets are classified as property and equipment-held for sale and are not
depreciated.  Property and equipment that are held for sale are
included in discontinued operations.  There are three assets
classified as property and equipment-held for sale as of March 31, 2009 (see
Note 11 in Item 8).
  During
the year ended March 31, 2009 and 2008, the Partnership recorded approximately
$9,706,000 and $6,360,000, respectively, as an aggregate loss on impairment of
assets.  Through March 31, 2009, the Partnership has recorded
approximately $17,731,000 as an aggregate loss on impairment of
assets.
  - 10
-
  Revenue
Recognition
  Rental
income is earned primarily under standard residential operating leases and is
typically due the first day of each month, but can vary by Property due to the
terms of the tenant leases.  Rental income is recognized when earned
and charged to tenants’ accounts receivable if not received by the due
date.  Rental payments received in advance of the due date are
deferred until earned.  Rental subsidies are recognized as rental
income during the month in which it is earned.
  Other
revenues are recorded when earned and consist of the following
items:  Interest income earned on cash and cash equivalent balances
and cash held in escrow balances, income from forfeited security deposits, late
charges, laundry and vending income and other rental related items.
  Other
revenues from operations include the following amounts at both the Partnership
and Local Partnership level:
  Years
      Ended March 31,2009
              
              2008*Interest
              
              $
              82,988
              
              $
              85,110Other
              
              
              64,564
              
              
              69,646Total
      other revenue
              
              $
              147,552
              
              $
              154,756
 
  Other
revenues from discontinued operations from operations include the following
amounts at both the Partnership and Local Partnership level:
  Years
      Ended March 31,2009
              
              2008*Interest
              
              $
              86,830
              
              $
              191,960Other
              
              
              850,807
              
              
              629,244Total
      other revenue
              
              $
              937,637
              
              $
              821,204*
      Reclassified for comparative purposes.
 
 
 Income
Taxes
 The
Partnership is not required to provide for, or pay, any federal income taxes.
Net income or loss generated by the Partnership is passed through to the
partners and is required to be reported by them. The Partnership may be subject
to state and local taxes in jurisdictions in which it operates. For income tax
purposes, the Partnership has a fiscal year ending December 31.
  Recent Accounting
Pronouncements
  In April
2009, the Financial Accounting Standards Board (“FASB”) issued FSP No. FAS 107-1
and APB 28-1, “Interim Disclosures about Fair Value of Financial
Instruments”.  This FSP amends FASB Statement No. 107 to require
disclosures about fair values of financial instruments for interim reporting
periods as well as in annual financial statements.  The FSP also
amends APB Opinion No. 28 to require those disclosures in summarized financial
information at interim reporting periods.  This FSP becomes effective
for interim reporting periods ending after June 15, 2009, with early adoption
permitted for periods ending after March 15, 2009.  The adoption of
this FSP is not expected to have a material impact on the Partnership’s
consolidated financial statements.
  In April
2009, the FASB issued FSP NO. FAS 157-4, “Determining Fair Value When the Volume
and Level of Activity for the Asset or Liability Have Significantly Decreased
and Identifying Transactions That Are Not Orderly”.  This FSP provides
additional guidance on determining fair value when the volume and level of
activity for the asset or liability have significantly decreased when compared
with normal market activity for the asset or liability.  A significant
decrease in the volume or level of activity for the asset of liability is an
indication that transactions or quoted prices may not be determinative of fair
value because transactions may not be orderly.  In that circumstance,
further analysis of transactions or quoted prices is needed, and an adjustment
to the transactions or quoted prices may be necessary to estimate fair
value.  This FSP becomes effective for interim reporting periods
ending after June 15, 2009, with early adoption permitted for periods ending
after March 15, 2009.  The adoption of this FSP is not expected to
have a material impact on the Partnership’s consolidated financial
statements.
  In
December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in
Consolidated Financial Statements”.  This statement was issued with
the intent to improve the relevance, comparability, and transparency of the
financial information that a reporting entity provides in its consolidated
financial statements for those entities that have outstanding non-controlling
interest in one or more subsidiaries.  The effective date for this
provision is for fiscal years beginning after December 15, 2008.  The
Partnership is currently evaluating the impact of the provisions of this
statement on the consolidated financial statements.
  Results of
Operations
 The
following is a summary of the results of operations of the Partnership for the
years ended March 31, 2009 and 2008 (the 2008 and 2007 Fiscal Years,
respectively), excluding the results of its discontinued operations which are
not reflected in the following discussion.
  The
Partnership’s results of operations for the 2008 and 2007 Fiscal Years consisted
primarily of the results of the Partnership’s investment in Local Partnerships.
The majority of Local Partnership income continues to be in the form of rental
income with the corresponding expenses being divided among operations,
depreciation and mortgage interest.
   - 11
-
  The net
loss for the 2008 and 2007 Fiscal Years totaled $4,894,349 and $10,467,870,
respectively.
  2008 vs.
2007
  Rental
income increased approximately 3% for the 2008 Fiscal Year as compared to the
2007 Fiscal Year, primarily due to annual rent increases and decreases in
vacancies at several Local Partnerships, partially offset by a decrease in
occupancy at one Local Partnership.
  Total
expenses, excluding loss on impairment of property, remained fairly consistent
with a decrease of approximately 1% for the 2008 Fiscal Year as compared to the
2007 Fiscal Year.
  Results of Operations of
Certain Local Partnerships
  a)
            Subsidiary
      Partnerships – Going Concern
  Creative Choice Homes II
L.P. (“Opa-Locka”)
 The
financial statements for Opa-Locka were prepared assuming that Opa-Locka will
continue as a going concern.  Opa-Locka is in default on its third and
fourth mortgage notes, which were incurred to affiliates of the Local General
Partner.  The Local General Partner has not sent a notice of default
with respect to the notes as of the year ended March 31, 2009 and will be unable
to call the notes until the first and second mortgage notes, which are current,
are paid in full.
  Opa-Locka
has also continued to incur significant operating losses resulting, in part,
from the effects of a major hurricane, which created additional
losses.  These conditions raise substantial doubt about Opa-Locka’s
ability to continue as a going concern.  The ability for Opa-Locka to
continue as a going concern is based on the Local General Partner’s continuing
ability to fund operating losses and insurance proceeds to cover the damages to
the Property.  This condition is alleviated in part by the fact that
the property has had positive operating cash flow for the past several
years.  The financial statements do not include any adjustments that
might be necessary if Opa-Locka is unable to continue as a going
concern.
  The
Partnership’s investment in Opa-Locka at March 31, 2009 and 2008 was reduced to
zero as a result of prior years’ losses, and the minority interest balance was
zero at each date.  Opa-Locka’s net (income) loss after minority
interest amounted to approximately $(366,000) and $2,400,000 for the 2008 and
2007 Fiscal Years.
  In
October 2005, Opa-Locka suffered property damage and business interruption due
to a severe hurricane.  Opa-Locka contracted to complete repairs and
renovations of the buildings damaged for a cost of
$7,489,000.  Opa-Locka expects to be reimbursed by insurance proceeds
in the amount of approximately $4,420,000.  As of December 31, 2008,
$4,000,000 of insurance proceeds has been received by the mortgage company which
is acting as administrator and trustee of the funds.  A balance of
$3,970,717 remains payable to the construction company as of December 31, 2008
related to the rehabilitation.
  The above
circumstances have called into question the recoverability of the carrying
amounts of the building.  On May 9, 2008, Opa-Locka entered into a
purchase and sale agreement to sell its property and related assets and
liabilities to an unaffiliated third party purchaser, which expired in April
2009.  The property is currently being actively marketed for sale and
management is seeking a potential buyer (see Note 11 in Item 8).
 Morrant Bay Limited
Partnership (“Morrant Bay”)
 The
financial statements for Morrant Bay have been prepared assuming that Morrant
Bay will continue as a going concern.  Morrant Bay has been
experiencing higher operating costs, attributable in part to escalating energy
and repair costs.  These conditions, in addition to regulatory rent
restrictions imposed under HUD guidelines, has resulted in operating cash flow
not meeting all current obligations as they become due.  At December
31, 2008, current liabilities exceed current assets by approximately
$327,000.  This raises doubt as to whether Morrant Bay will be able to
continue as a going concern.  Management continually monitors
operating costs and will request additional rent increases when allowed by
HUD.  Additionally, management is in the process of evaluating
refinancing plans.  During 2008, Morrant Bay entered into negotiations
with a local non-profit to re-syndicate the property.  In connection
with this, Morrant Bay is negotiating with the General Partner to redeem their
interest in Morrant Bay for a nominal amount.  There can be no
assurance if or when such negotiations will result in an actual redemption of
the Local Partnership’s interests.
  The
Partnership’s investment in Morrant Bay at March 31, 2009 and 2008 was reduced
to zero as a result of prior years’ losses and the minority interest balance was
approximately $228,000 at each date.  Morrant Bay’s net loss after
minority interest amounted to approximately $474,000 and $712,000 for the 2008
and 2007 Fiscal Years.  The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
  Boston Bay Limited
Partnership (“Boston Bay”)
 The
financial statements for Boston Bay have been prepared assuming that Boston Bay
will continue as a going concern.  Boston Bay has been experiencing
higher operating costs, attributable in part to escalating energy and repair
costs.  These conditions, in addition to regulatory rent restrictions
imposed under HUD guidelines, has resulted in operating cash flow not meeting
all current obligations as they become due.  At December 31, 2008,
current liabilities exceed current assets by approximately
$330,000.  This raises doubt as to whether Boston Bay will be able to
continue as a going concern.  Management continually monitors
operating costs and will request additional rent increases when allowed by
HUD.  Additionally, management is in the process of evaluating
refinancing plans.  During 2008, Boston Bay entered into negotiations
with a local non-profit to re-syndicate the property.  In connection
with this, Boston Bay is negotiating with the General Partner to redeem their
interest in Boston Bay for a nominal amount.  There can be no
assurance if or when such negotiations will result in an actual redemption of
the Local Partnership’s interests.
  The
Partnership’s investment in Boston Bay at March 31, 2009 and 2008 was reduced to
zero as a result of prior years’ losses and the minority interest balance was
approximately $87,000 at each date.  Boston Bay’s net loss after
minority interest amounted to approximately $342,000 and $540,000 for the 2008
and 2007 Fiscal Years.  The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
  - 12
-
   b)
            Subsidiary
      Partnerships – Commitments and
Contingencies
  Cloisters Limited
Partnership II (“Cloister”)
 Cloisters
is in the process of converting the project from rental to for sale
condominiums.  Cloisters is currently in negotiations to finalize a
construction agreement in the estimated amount of $2,146,000 and construction
financing in the estimated amount of $800,000 related to the renovation of the
units for sale.  There can be no assurance for when the conversion
will actually take place.
  Other
  The
Partnership’s investment as a limited partner in the Local Partnerships is
subject to the risks incident to the potential losses arising from management
and ownership of improved real estate. The Partnership’s investments also could
be adversely affected by poor economic conditions, generally, which could
increase vacancy levels and rental payment defaults and by increased operating
expenses, any or all of which could threaten the financial viability of one or
more of the Local Partnerships.
  There
also are substantial risks associated with the operations of Apartment Complexes
receiving government assistance. These include governmental regulations
concerning tenant eligibility, which may make it more difficult to rent
apartments in the Apartment Complexes; difficulties in obtaining government
approval for rent increases; limitations on the percentage of income which low
and moderate-income tenants may pay as rent; the possibility that Congress may
not appropriate funds to enable HUD to make the rental assistance payments it
has contracted to make; and that when the rental assistance contracts expire
there may not be market demand for apartments at full market rents in a Local
Partnership’s Apartment Complex.
  The Local
Partnerships are impacted by inflation in several ways. Inflation allows for
increases in rental rates generally to reflect the impact of higher operating
and replacement costs. Furthermore, inflation generally does not impact the
fixed long-term financing under which real property investments were purchased.
Inflation also affects the Local Partnerships adversely by increasing operating
costs, such as fuel, utilities, and labor.
  Item
7A.  Quantitative and Qualitative Disclosure about Market
Risk
  Mortgage
notes are payable in aggregate monthly installments including principal and
interest at rates varying from1% to 9% per annum.  The Partnership
does not believe there is a material risk associated with the various interest
rates associated with the mortgage notes as the majority of the Local
Partnership mortgage notes have fixed rates.  The Partnership
currently discloses in Note 3 Item 8 of the Notes to Consolidated Financial
Statements, the fair value of the mortgage notes payable.
  The
Partnership does not have any other market risk sensitive
instruments.
   - 13
-
  
 Item
      8.
            Financial
      Statements and Supplementary DataSequential
              Page(a)
      1.
            Consolidated
      Financial StatementsReport
      of Independent Registered Public Accounting Firm
            
            15Consolidated
      Balance Sheets at March 31, 2009 and 2008
            
            47Consolidated
      Statements of Operations for the Years Ended March 31, 2009 and
      2008
            
            48Consolidated
      Statements of Changes in Partners’ Capital (Deficit) for the Years Ended
      March 31, 2009 and 2008
            
            49Consolidated
      Statements of Cash Flows for the Years Ended March 31, 2009 and
      2008
            
            50Notes
      to Consolidated Financial Statements
            
            52
 
 
  - 14
-
 
 REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
   To the
Partners of
 Independence
Tax Credit Plus L.P. and Subsidiaries
 (A
Delaware Limited Partnership)
  We have
audited the consolidated balance sheets of Independence Tax Credit Plus L.P. and
Subsidiaries (A Delaware Limited Partnership) as of March 31, 2009 and 2008, and
the related consolidated statements of operations, changes in partners’ capital
(deficit), and cash flows for the years ended March 31, 2009 and 2008 (the 2008
and 2007 Fiscal Years).  These financial statements are the
responsibility of the Partnership’s management.  Our responsibility is
to express an opinion on these financial statements based on our
audits.  We did not audit the financial statements for nineteen (2008
Fiscal Year) and twenty two (2007 Fiscal Year) subsidiary partnerships whose
losses aggregated $11,647,146 and $8,011,225 for the 2008 and 2007 Fiscal Years,
respectively, and whose assets constituted 91% and 71% of the Partnership’s
assets at both March 31, 2009 and 2008, respectively, presented in the
accompanying consolidated financial statements.  The financial
statements for seventeen (2008 Fiscal Year) and twenty one (2007 Fiscal Year) of
these subsidiary partnerships were audited by other auditors whose reports
thereon have been furnished to us and our opinion expressed herein, insofar as
it relates to the amounts included for these subsidiary partnerships is based
solely upon the reports of the other auditors.  The financial
statements for two (2008 Fiscal Year) and one (2007 Fiscal Year) of these
subsidiary partnerships were unaudited.
  We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audits provide a reasonable basis
for our opinion.
  In our
opinion, based upon our audits, and the reports of the other auditors referred
to above, the consolidated financial statements referred to in the first
paragraph present fairly, in all material respects, the financial position of
Independence Tax Credit Plus L.P. and Subsidiaries at March 31, 2009 and 2008,
and the results of their operations and their cash flows for the years ended
March 31, 2009 and 2008, in conformity with U.S. generally accepted accounting
principles.
  As
discussed in Note 13(a), the consolidated financial statements include the
financial statements of three subsidiary partnerships with significant
uncertainties.  The financial statements of these subsidiary
partnerships were prepared assuming that they will continue as going
concerns.  These three subsidiary partnerships’ net losses aggregated
$551,341 (2008 Fiscal Year) and $3,651,851 (2007 Fiscal Year) and their assets
aggregated $23,400,218 and $23,381,182 at March 31, 2009 and 2008,
respectively.  Management’s plan in regard to this matter is also
described in Note 13(a).  The accompanying consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
  
 
 
 
 TRIEN
ROSENBERG ROSENBERG
 WEINBERG
CIULLO & FAZZARI LLP
 
 
 New York,
New York
 June 24,
2009
  
  - 15
-
  
 [Letterhead
of Reznick Group, P.C.]
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Partners
 Harbor
Court L.P.
 
 We have
audited the accompanying balance sheet of Harbor Court L.P. as of December 31,
2007, and the related statements of operations, partners' equity (deficit) and
cash flows for year then ended.  These financial statements are the
responsibility of the Partnership's management.  Our responsibility is
to express an opinion on these financial statements based on our
audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership has determined that it is not required to have, nor we were engaged
to perform, an audit of its internal control over financial
reporting.  Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, we express no such
opinion.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
that our audit provides a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Harbor Court L.P., as of December
31, 2007, and the results of its operations, the changes in partners' equity
(deficit) and its cash flows for the year then ended, in conformity with
accounting principles generally accepted in the United States of
America.
 
 /s/
Reznick Group, P.C.
 Bethesda,
Maryland
 April 10,
2008
 
  - 16
-
  
 [Letterhead
of Mack Roberts & Company, L.L.C.]
 
 INDEPENDENT AUDITOR'S
REPORT
 
 The
Partners
 Lancaster
Terrace Limited Partnership
 Salem,
Oregon
 
 We have
audited the balance sheets of Lancaster Terrace Limited Partnership as of
October 21, 2008 and December 31, 2007, and the related statements of
operations, changes in partners' capital and cash flows for the period from
January 1, 2008 to October 21, 2008 and the year ended December 31,
2007.  These financial statements are the responsibility of the
Partnership's management.  Our responsibility is to express an opinion
on these financial statements based on our audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audits provide a reasonable basis
for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Lancaster Terrace Limited
Partnership as of October 21, 2008 and December 31, 2007 and the results of its
operations, changes in partners’ capital and its cash flows for the period from
January 1, 2008 to October 21, 2008 and the year ended December 31, 2007, in
conformity with accounting principles generally accepted in the United States of
America.
 
 /s/ Mack,
Roberts & Co., L.L.C.
 Portland,
Oregon
 
 February
2, 2009
  - 17
-
  
 [Letterhead
of Pailet, Meunier and LeBlanc, L.L.P.]
 
 INDEPENDENT AUDITOR'S
REPORT
 
 To the
Partners
 655 NORTH
STREET LIMITED PARTNERSHIP
 New
Orleans, Louisiana
 
 We have
audited the accompanying balance sheets of 655 NORTH STREET LIMITED PARTNERSHIP
HUD Project No. 064-44801, as of December 31, 2008 and 2007, and the related
statements of income, changes in partners' equity, and cash flows for the years
then ended.  These financial statements are the responsibility of the
Partnership's management.  Our responsibility is to express an opinion
on these financial statements based on our audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States) and the standards applicable to
financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United
States.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
that our audits provide a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of 655 NORTH STREET LIMITED
PARTNERSHIP, HUD Project No. 064-44801, as of December 31, 2008 and 2007 and the
results of its operations, changes in partners' equity, and cash flows for the
years then ended in conformity with accounting principles generally accepted in
the United States of America.
 
 In
accordance with Government
Auditing Standards and the Consolidated Audit Guide for Audits
of HUD Programs issued by the U.S. Department of Housing and Urban
Development, we have also issued a report dated March 30, 2009, on our
consideration of 655 NORTH STREET LIMITED PARTNERSHIP's internal control, and
reports dated March 30, 2009, on its compliance with specific requirements
applicable to major HUD programs and specific requirements applicable to Fair
Housing and Non-Discrimination.  Those reports are an integral part of
an audit performed in accordance with Government Auditing Standards
and should be read in conjunction with this report in considering the results of
our audit.
 
 
 /s/
Pailet, Meunier & LeBlanc, L.L.P.
 Metairie,
Louisiana
 March 30,
2009
 
  - 18
-
  
 [Letterhead
of Reznick Group, P.C.]
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Partners
 Landreth
Venture
 
 We have
audited the accompanying balance sheet of Landreth Venture as of April 1, 2008
and the related statements of operations, changes in partners' equity (deficit)
and cash flows for the period January 1, 2008 through April 1, 2008 (date of
investor transfer).  These financial statements are the responsibility
of the Partnership's management.  Our responsibility is to express an
opinion on these financial statements based on our audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership has determined that it is not required to have, nor were we engaged
to perform, an audit of its internal control over financial
reporting.  Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, we express no such
opinion.  An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.  We
believe that our audit provides a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Landreth Venture, as of April 1,
2008, and the results of its operations, the changes in partners' equity
(deficit) and cash flows for the period January 1, 2008 through April 1, 2008
(date of investor transfer), in conformity with accounting principles generally
accepted in the United States of America.
 
 
 /s/
Reznick Group, P.C.
 Baltimore,
Maryland
 April 2,
2009
 
  - 19
-
  [Letterhead
of Reznick Group, P.C.]
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Partners
 Landreth
Venture
 
 We have
audited the accompanying balance sheets of Landreth Venture as of December 31,
2007 and 2006 and the related statements of profit and loss, changes in
partners' equity (deficit) and cash flows for the year then
ended.  These financial statements are the responsibility of the
Partnership's management.  Our responsibility is to express an opinion
on these financial statements based on our audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States) and the standards applicable to
financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United
States.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement.  The Partnership has determined that it is not
required to have, nor we were engaged to perform, an audit of its internal
control over financial reporting.  Our audit included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Partnership’s internal control
over financial reporting.  Accordingly, we express no such
opinion.  An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.  We
believe that our audits provide a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Landreth Venture, as of December
31, 2007 and 2006, and the results of its operations, the changes in partners'
equity (deficit) and cash flows for the years then ended, in conformity with
accounting principles generally accepted in the United States of
America.
 
 In
accordance with Government Auditing
Standards, we have also issued our report dated March 25, 2008, on our
consideration of Landreth Venture’s internal control over financial reporting
and on our tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements and other matters.  The purpose of
that report is to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing, and not to
provide an opinion on the internal control over financial reporting or on
compliance.  That report is an integral part of an audit performed in
accordance with Government Auditing
Standards and should be considered in assessing the result of our
audit.
 
 Our
audits were made for the purpose of forming an opinion on the basic financial
statements taken as a whole.  The 2007 supplemental information on
pages 27 through 30 is presented for purposes of additional analysis and is not
a required part of the basic financial statements.  Such information
has been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a
whole.
 
 /s/
Reznick Group, P.C.
 Baltimore,
Maryland
 March 25,
2008
 
 Lead
Auditor: Michael A. Cumming, CPA
 
 Email
id:  mike.cumming@reznickgroup.com
 
  - 20
-
  
 [Letterhead
of Reznick Group, P.C.]
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Partners
 Bethel
Villa Associates, L.P.
 
 We have
audited the accompanying balance sheets of Bethel Villa Associates, L.P. as of
December 31, 2007 and 2006, and the related statements of profit and loss,
partners' equity (deficit) and cash flows for the years then
ended.  These financial statements are the responsibility of the
partnership's management.  Our responsibility is to express an opinion
on these financial statements based on our audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States) and the standards applicable to
financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United
States.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement.  The Partnership has determined that it is not
required to have, nor we were engaged to perform, an audit of its internal
control over financial reporting.  Our audit included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the partnership’s internal control
over financial reporting.  Accordingly, we express no such
opinion.  An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
that our audits provide a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Bethel Villa Associates, L.P. as of
December 31, 2007 and 2006, and the results of its operations, the changes in
partners' equity (deficit) and cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America.
 
 In
accordance with Government Auditing
Standards, we have also issued our report dated February 29, 2008, on our
consideration of Bethel Villa Associates, L.P.’s internal control over financial
reporting.  The purpose of that report is to describe the scope of our
testing of internal control over financial reporting and compliance and the
results of that testing, and not to provide an opinion on the internal control
over financial reporting.  In accordance with Government Auditing
Standards, we have also issued an opinion February 29, 2008 on Bethel
Villa Associates, L.P.’s compliance with certain provisions of laws,
regulations, contracts, and grant agreements, and other matters that could have
a direct and material effect on a major HUD-assisted program.  Those
reports are an integral part of an audit performed in accordance with Government Auditing
Standards and should be considered in assessing the results of our
audits.
 
 Our
audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole.  The 2007 supplemental
information on pages 29 through 48 is presented for purposes of additional
analysis and is not a required part of the basic financial statements of the
partnership.  Such information, except 2007 budget included in
comparison of budget to actual marked “Unaudited”, on which we express no
opinion, has been subjected to the auditing procedures applied in the audit of
the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
 
 /s/
Reznick Group, P.C.
 Bethesda,
Maryland                                                                                    Taxpayer
Identification Number:  52-1088612
 February
29, 2008
 
 
 Audit
Principal: Nelson D. Gomez
   
 - 21
-
  
 [Letterhead
of J.H. Williams & Co., LLP]
 
 INDEPENDENT
AUDITORS' REPORT
 
 To the
Partners of
 Susquehanna
Partners
 (a
Limited Partnership)
 Philadelphia,
Pennsylvania
 
 We have
audited the accompanying balance sheet of Susquehanna Partners (a Limited
Partnership) as of May 6, 2008 and the related statement of income, change in
partners' equity and cash flows for the period then ended.  These
financial statements are the responsibility of the Partnership's management and
contracted management agent.  Our responsibility is to express an
opinion on these financial statements based on our audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States of America).  Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement.  The Partnership has determined that it is not required
to have, nor were we engaged to perform, an audit of its internal control over
financial reporting.  Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, we express no such
opinion.  An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by the
Partnership’s management and contracted management agent, as well as evaluating
the overall financial statement presentation.  We believe that our
audits provide a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Susquehanna Partners (a Limited
Partnership) at May 6, 2008, and the results of its operations and cash flows
for the period then ended in conformity with accounting principles generally
accepted in the United States of America.
 
 /s/ J.H.
Williams & Co., LLP
 Kingston,
Pennsylvania
 May 9,
2009
  
 - 22
-
 
  
 [Letterhead
of J.H. Williams & Co., LLP]
 
 INDEPENDENT
AUDITORS' REPORT
 
 To the
Partners
 Susquehanna
Partners (a Limited Partnership)
 Philadelphia,
Pennsylvania
 
 We have
audited the accompanying balance sheets of Susquehanna Partners (a Limited
Partnership) as of December 31, 2007 and 2006 and the related statements of
income, changes in partners' equity and cash flows for the years then
ended.  These financial statements are the responsibility of the
Partnership's management and contracted management agent.  Our
responsibility is to express an opinion on these financial statements based on
our audits.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States of America).  Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement.  The Partnership has determined that it is not required
to have, nor were we engaged to perform, an audit of its internal control over
financial reporting.  Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, we express no such
opinion.  An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by the
Partnership’s management and contracted management agent, as well as evaluating
the overall financial statement presentation.  We believe that our
audits provide a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Susquehanna Partners (a Limited
Partnership) at December 31, 2007 and 2006, and the results of its operations
and cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
 
 /s/ J.H.
Williams & Co., LLP
 Kingston,
Pennsylvania
 May 9,
2008
  - 23
-
  
 [Letterhead
of Ercolini & Company LLP]
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Partners of
 Boston
Bay Limited Partnership
 Boston,
Massachusetts
 
 We have
audited the accompanying balance sheet of Boston Bay Limited Partnership as of
December 31, 2008 and the related statement of operations, partners' deficiency,
and cash flows for the year ended December 31, 2008.  These financial
statements are the responsibility of the Partnership's
management.  Our responsibility is to express an opinion on these
financial statements based on our audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting.  Our audit included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the company’s
internal control over financial reporting.  Accordingly, we express no
such opinion.  An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audits provide a reasonable basis
for our opinion.
 
 The
accompanying financial statements have been prepared assuming that the
Partnership will continue as going concern.  As discussed in Note 14,
the Partnership is incurring liquidity problems which raise substantial doubt
about its ability to continue as a going concern.  The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Boston Bay Limited Partnership as
of December 31, 2008 and the results of its operations and its cash flows for
the year ended December 31, 2008 in conformity with accounting principles
generally accepted in the United States of America.
 
 /s/
Ercolini & Company LLP
 Boston,
Massachusetts
 January
22, 2009
  - 24
-
  [Letterhead
of Ercolini & Company LLP]
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Partners of
 Boston
Bay Limited Partnership
 Boston,
Massachusetts
 
 We have
audited the accompanying balance sheet of Boston Bay Limited Partnership as of
December 31, 2007 and the related statement of operations, partners' deficiency,
and cash flows for the year ended December 31, 2007.  These financial
statements are the responsibility of the Partnership's
management.  Our responsibility is to express an opinion on these
financial statements based on our audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting.  Our audit included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the company’s
internal control over financial reporting.  Accordingly, we express no
such opinion.  An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audits provide a reasonable basis
for our opinion.
 
 The
accompanying financial statements have been prepared assuming that the
Partnership will continue as going concern.  As discussed in Note 14,
the Partnership is incurring liquidity problems which raise substantial doubt
about its ability to continue as a going concern.  The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Boston Bay Limited Partnership as
of December 31, 2007 and the result of its operations and its cash flows for the
year ended December 31, 2007 in conformity with accounting principles generally
accepted in the United States of America.
 
 /s/
Ercolini & Company LLP
 Boston,
Massachusetts
 February
18, 2008
  - 25
-
  
 [Letterhead
of Ercolini & Company LLP]
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Partners of
 Morrant
Bay Limited Partnership
 Boston,
Massachusetts
 
 We have
audited the accompanying balance sheet of Morrant Bay Limited Partnership as of
December 31, 2008 and the related statement of operations, partners' deficiency,
and cash flow for the year ended December 31, 2008.  These financial
statements are the responsibility of the Partnership's
management.  Our responsibility is to express an opinion on these
financial statements based on our audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting.  Our audit included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the company’s
internal control over financial reporting.  Accordingly, we express no
such opinion.  An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audit provides a reasonable basis
for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Morrant Bay Limited Partnership as
of December 31, 2008, and the results of its operations and its cash flows for
the year ended December 31, 2008, in conformity with accounting principles
generally accepted in the United States of America.
 
 /s/
Ercolini & Company LLP
 Boston,
Massachusetts
 January
23, 2009
  - 26
-
  [Letterhead
of Ercolini & Company LLP]
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Partners of
 Morrant
Bay Limited Partnership
 Boston,
Massachusetts
 
 We have
audited the accompanying balance sheet of Morrant Bay Limited Partnership as of
December 31, 2007 and the related statement of operations, partners' deficiency,
and cash flow for the year ended December 31, 2007.  These financial
statements are the responsibility of the Partnership's
management.  Our responsibility is to express an opinion on these
financial statements based on our audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting.  Our audit included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the company’s
internal control over financial reporting.  Accordingly, we express no
such opinion.  An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audit provides a reasonable basis
for our opinion.
 
 The
accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern.  As discussed in Note
14, the Partnership is incurring liquidity problems which raise substantial
doubt about its ability to continue as a going concern.  The financial
statements do not include any adjustment that might result from the outcome of
this uncertainty.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Morrant Bay Limited Partnership as
of December 31, 2007, and the results of its operations and its cash flows for
the year ended December 31, 2007, in conformity with accounting principles
generally accepted in the United States of America.
 
 /s/
Ercolini & Company LLP
 Boston,
Massachusetts
 February
18, 2008
  - 27
-
  
 [Letterhead
of Ercolini & Company LLP]
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Partners of
 Hope Bay
Limited Partnership
 Boston,
Massachusetts
 
 We have
audited the accompanying balance sheet of Hope Bay Limited Partnership as of
December 31, 2008 and the related statement of operations, partners' deficiency,
and cash flow for the year ended December 31, 2008.  These financial
statements are the responsibility of the Partnership's
management.  Our responsibility is to express an opinion on these
financial statements based on our audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting.  Our audit included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the company’s
internal control over financial reporting.  Accordingly, we express no
such opinion.  An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audit provides a reasonable basis
for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Hope Bay Limited Partnership as of
December 31, 2008, and the results of its operations and its cash flows for the
year ended December 31, 2008, in conformity with accounting principles generally
accepted in the United States of America.
 
 /s/
Ercolini & Company LLP
 Boston,
Massachusetts
 January
26, 2009
  - 28
-
  [Letterhead
of Ercolini & Company LLP]
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Partners of
 Hope Bay
Limited Partnership
 Boston,
Massachusetts
 
 We have
audited the accompanying balance sheet of Hope Bay Limited Partnership as of
December 31, 2007 and the related statement of operations, partners' deficiency,
and cash flow for the year ended December 31, 2007.  These financial
statements are the responsibility of the Partnership's
management.  Our responsibility is to express an opinion on these
financial statements based on our audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting.  Our audit included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the company’s
internal control over financial reporting.  Accordingly, we express no
such opinion.  An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audit provides a reasonable basis
for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Hope Bay Limited Partnership as of
December 31, 2007, and the results of its operations and its cash flows for the
year ended December 31, 2007, in conformity with accounting principles generally
accepted in the United States of America.
 
 /s/
Ercolini & Company LLP
 Boston,
Massachusetts
 February
18, 2008
  - 29
-
  
 [Letterhead
of JOSE E. ROSARIO & CO., CPA, P.S.C.]
 
 INDEPENDENT
AUDITORS’ REPORT
 
 To the
Partners of
 Lares
Apartments Limited Partnership
 San Juan,
Puerto Rico
 
 We have
audited the accompanying balance sheet of Lares Apartments Limited Partnership,
Rural Development Project No. 63-034-660467896, as of August 15, 2008 and the
related statement of operations, changes in partners’ deficit, and cash flows
for the year then ended.  These financial statements are the
responsibility of the Partnership's management.  Our responsibility is
to express an opinion on these financial statements based on our
audit.
 
 We
conducted our audit in accordance with standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership has determined that it is not required to have, nor were we engaged
to perform, an audit of its internal control over financial
reporting.  Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, we express no such
opinion.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
that our audit provide a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Lares Apartments Limited
Partnership as of August 15, 2008 and the results of its operations, changes in
partners' deficit, and cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of
America.
 
 
 /s/ Jose
E. Rosario & Co, CPA, P.S.C.
 Jose E.
Rosario & Co., CPA, P.S.C.
 License
No. 176
 Expires
December 1, 2009
 
 December
4, 2008
 San Juan,
Puerto Rico
 
 Stamp No.
2400423 of the Puerto Rico College of CPA was affixed to the
original.
 
 
  - 30
-
  [Letterhead
of JOSE E. ROSARIO & CO., CPA, P.S.C.]
 
 INDEPENDENT
AUDITORS’ REPORT
 
 To the
Partners of
 Lares
Apartments Limited Partnership
 San Juan,
Puerto Rico
 
 We have
audited the accompanying balance sheets of Lares Apartments Limited Partnership,
Rural Development Project No. 63-034-660467896, as of December 31, 2007 and
2006, and the related statements of operations, changes in partners’ deficit,
and cash flows for the years then ended.  These financial statements
are the responsibility of the Partnership's management.  Our
responsibility is to express an opinion on these financial statements based on
our audits.
 
 We
conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership has determined that it is not required to have, nor were we engaged
to perform, an audit of its internal control over financial
reporting.  Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, we express no such
opinion.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
that our audits provide a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Lares Apartments Limited
Partnership as of December 31, 2007 and 2006 and the results of its operations,
changes in partners' deficit, and cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
 
 
 /s/ Jose
E. Rosario & Co, CPA, P.S.C.
 Jose E.
Rosario & Co., CPA, P.S.C.
 License
No. 176
 Expires
December 1, 2009
 
 February
26, 2008
 San Juan,
Puerto Rico
 
 Stamp No.
2298021 of the Puerto Rico College of CPA was affixed to the
original.
 
 
  - 31
-
  
 [Letterhead
of JOSE E. ROSARIO & CO., CPA, P.S.C.]
 
 INDEPENDENT
AUDITOR’S REPORT
 
 To the
Partners
 Lajas
Apartments Limited Partnership
 San Juan,
Puerto Rico
 
 We have
audited the accompanying balance sheet of Lajas Apartments Limited Partnership,
Rural Development Project No. 63-034-660467896, as of August 15, 2008 and the
related statement of operations, changes in partners’ deficit, and cash flows
for the year then ended.  These financial statements are the
responsibility of the Partnership's management.  Our responsibility is
to express an opinion on these financial statements based on our
audit.
 
 We
conducted our audit in accordance with standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership has determined that it is not required to have, nor we were engaged
to perform, an audit of its internal control over financial
reporting.  Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, we express no such
opinion.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
that our audit provide a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Lajas Apartments Limited
Partnership as of August 15, 2008 and the results of its operations, changes in
partners' deficit, and cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of
America.
 
 
 /s/ Jose
E. Rosario & Co, CPA, P.S.C.
 Jose E.
Rosario & Co., CPA, P.S.C.
 License
No. 176
 Expires
December 1, 2009
 
 December
4, 2008
 San Juan,
Puerto Rico
 
 Stamp No.
2400424 of the Puerto Rico College of CPA was affixed to the
original.
 
 
  - 32
-
  [Letterhead
of JOSE E. ROSARIO & CO., CPA, P.S.C.]
 
 INDEPENDENT
AUDITO'’S REPORT
 
 To the
Partners
 Lajas
Apartments Limited Partnership
 San Juan,
Puerto Rico
 
 We have
audited the accompanying balance sheets of Lajas Apartments Limited Partnership,
Rural Development Project No. 63-017-0660467895, as of December 31, 2007 and
2006, and the related statements of operations, changes in partners’ deficit and
cash flows for the years then ended.  These financial statements are
the responsibility of the Partnership's management.  Our
responsibility is to express an opinion on these financial statements based on
our audits.
 
 We
conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership has determined that it is not required to have, nor were we engaged
to perform, an audit of its internal control over financial
reporting.  Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, we express no such
opinion.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
that our audits provide a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Lajas Apartments Limited
Partnership as of December 31, 2007 and 2006 and the results of its operations,
changes in partners' deficit and cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
 
 
 /s/ Jose
E. Rosario & Co, CPA, P.S.C.
 Jose E.
Rosario & Co., CPA, P.S.C.
 License
No. 176
 Expires
December 1, 2009
 
 February
26, 2008
 San Juan,
Puerto Rico
 
 Stamp No.
2306143 of the Puerto Rico College of CPA was affixed to the
original.
 
 
  - 33
-
  
 [Letterhead
of Kim & Lee]
 
 To the
Partners
 Arlington
- Rodeo Properties
 (California
Limited Partnership)
 
 We have
audited the accompanying balance sheet of Arlington - Rodeo Properties (A
California Limited Partnership) as of December 31, 2008 and 2007, and the
related statements of operations, changes in partners' equity, and cash flows
for the years then ended.  These financial statements are the
responsibility of the Partnership’s management.  Our responsibility is
to express an opinion on these financial statements based on our
audit.
 
 We have
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
partnership has determined that it is not required to have, nor we were engaged
to perform, an audit of its internal control over financial
reporting.  Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, we express no such
opinion.   An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
that our audit provide a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Arlington - Rodeo Properties as of
December 31, 2008 and 2007 and the results of its operations and its cash flows
for the years then ended, in conformity with U.S. generally accepted accounting
principles.
 
 /s/ Kim
& Lee
 Los
Angeles, California
 February
28, 2009
  - 34
-
  
 [Letterhead
of Reznick Group, P.C.]
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Partners
 Chester
Renaissance Associates
 
 We have
audited the accompanying balance sheets of Chester Renaissance Associates as of
December 31, 2008 and 2007, and the related statements of profit and loss,
changes in partners' equity (deficit) and cash flows for the years then
ended.  These financial statements are the responsibility of the
Partnership's management.  Our responsibility is to express an opinion
on these financial statements based on our audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States) and the standards applicable to
financial audits contained in Government Auditing Standards, issued by
the Comptroller General of the United States.  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership has determined that it is not required to have, nor were we engaged
to perform, an audit of its internal control over financial
reporting.  Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, we express no such
opinion.  An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.  We
believe that our audits provide a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Chester Renaissance Associates as
of December 31, 2008, and 2007, and the results of its operations, the changes
in partners' equity (deficit) and cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America.
 
 In
accordance with Government Auditing Standards, we have
also issued our report dated March 20, 2009, on our consideration of Chester
Renaissance Associates’ internal control over financial reporting and on our
tests of its compliance with certain provisions of laws, regulations, contracts,
and grant agreements and other matters.  The purpose of that report is
to describe the scope of our testing of internal control over financial
reporting and compliance and the results of that testing, and not to provide an
opinion on the internal control over financial reporting or
compliance.  That report is an integral part of an audit performed in
accordance with Government Auditing Standards and should
be considered in assessing the results of our audit.
 
 Our
audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole.  The 2008 supplemental
information on pages 26 through 29 is presented for purposes of additional
analysis and is not a required part of the basic financial
statements.  Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
 
 
 /s/
Reznick Group, P.C.
 Baltimore,
Maryland
 March 20,
2009
 
 
 Lead
Auditor:  Michael A. Cumming, CPA
 Email
Address:  mike.cumming@reznickgroup.com
  - 35
-
  
 [Letterhead
of Rosen, Seymour, Shapss, Martin & Company, LLP]
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Partners
 P.S. 157
Associates, L.P.:
 
 We have
audited the accompanying balance sheet of P.S. 157 Associates, L.P. (a limited
partnership), as of March 31, 2007, and the related statements of operations,
partners' capital, and cash flows for the three months ended.  These
financial statements are the responsibility of the Partnership's
management.  Our responsibility is to express an opinion on these
financial statements based on our audits.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership has determined that it is not required to have, nor were we engaged
to perform, an audit of its internal control over financial
reporting.  Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, we express no such
opinion.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
that our audit provides a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of P.S. 157 Associates, L.P. (a
limited partnership) as of March 31, 2007, and the results of its operations and
its cash flows for the three months then ended in conformity with accounting
principles generally accepted in the United States of America.
 
 /s/
Rosen, Seymour, Shapss, Martin & Company, LLP
 CERTIFIED
PUBLIC ACCOUNTANTS
 New York,
New York
 May 8,
2007
  - 36
-
  
 [Letterhead
of Reznick Group, P.C.]
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Partners of
 Cloisters
Limited Partnership II
 
 We have
audited the accompanying balance sheet of Cloisters Limited Partnership II as of
December 31, 2008, and the related statements of operations, changes in
partners' equity (deficit) and cash flows for the year then
ended.  These financial statements are the responsibility of the
Partnership's management.  Our responsibility is to express an opinion
on these financial statements based on our audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership has determined that it is not required to have, nor were we engaged
to perform, an audit of its internal control over financial
reporting.  Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, we express no such
opinion.  An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.  We
believe that our audit provides a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Cloisters Limited Partnership II as
of December 31, 2008, and the results of its operations, the changes in
partners' equity (deficit) and its cash flows for the year then ended, in
conformity with accounting principles generally accepted in the United States of
America.
 
 /s/
Reznick Group
 Baltimore,
Maryland
 April 2,
2009
 
 
  - 37
-
  [Letterhead
of Reznick Group, P.C.]
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Partners of
 Cloisters
Limited Partnership II
 
 We have
audited the accompanying balance sheet of Cloisters Limited Partnership II as of
December 31, 2007, and the related statements of operations, changes in
partners' equity (deficit) and cash flows for the year then
ended.  These financial statements are the responsibility of the
Partnership's management.  Our responsibility is to express an opinion
on these financial statements based on our audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership has determined that it is not required to have, nor were we engaged
to perform, an audit of its internal control over financial
reporting.  Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the partnership’s internal control over
financial reporting.  Accordingly, we express no such
opinion.  An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.  We
believe that our audit provides a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Cloisters Limited Partnership II as
of December 31, 2007, and the results of its operations, the changes in
partners' equity (deficit) and its cash flows for the year then ended, in
conformity with accounting principles generally accepted in the United States of
America.
 
 Our audit
was made for the purpose of forming an opinion on the basic financial statements
taken as a whole.  The supplemental information on pages 16 and 17 is
presented for the purposes of additional analysis and is not a required part of
the basic financial statements.  Such information has been subjected
to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
 
 /s/
Reznick Group
 Baltimore,
Maryland
 March 25,
2008
 
 
  - 38
-
  
 [Letterhead
of Bagell, Josephs, Levine & Company, L.L.C.]
 
 INDEPENDENT
AUDITORS’ REPORT
 
 To the
Partners of Milford Crossing Associates, L.P.
 Wilmington,
DE
 
 We have
audited the accompanying balance sheets of Milford Crossing Associates, L.P. as
of December 31, 2008 and 2007 and the related statements of operations,
partners' deficiency, and cash flows for the years then ended.  These
financial statements are the responsibility of the Partnership’s
management.  Our responsibility is to express an opinion on these
financial statements based on our audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audit provides
a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Milford Crossing Place Associates,
L.P. as of December 31, 2008 and 2007, and the results of its operations and its
cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
 
 Our
audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole.  The accompanying supplemental
information on pages 14 through 22 is presented for purposes of additional
analysis and is not a required part of the basic financial statements of Milford
Crossing Associates, L.P.  Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated, in all material respects, in relation to the
basic financial statements taken as a whole.
 
 /s/
Bagell, Josephs, Levine & Company, L.L.C.
 BAGELL,
JOSEPHS, LEVINE & COMPANY, L.L.C.
 Certified
Public Accountants
 Marlton,
New Jersey
 
 January
21, 2009
 
  - 39
-
  
 [Letterhead
of Citrin Cooperman & Company, LLP]
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Partners
 BX-7F
ASSOCIATES, L.P.
 
 We have
audited the accompanying balance sheets of BX-7F Associates, L.P. (a limited
partnership) as of December 31, 2007 and 2006, and the related statements of
operations, partners' capital, and cash flows for the years then
ended.  These financial statements are the responsibility of the
Partnership's management.  Our responsibility is to express an opinion
on these financial statements based on our audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  We were
not engaged to perform an audit of the Partnership’s internal control over
financial reporting.  An audit includes consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, we express no such
opinion.  An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.  We
believe that our audits provide a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of BX-7F Associates, L.P. as of
December 31, 2007 and 2006, and the results of its operations and its cash flows
for the years then ended, in conformity with accounting principles generally
accepted in the United States of America.
 
 /s/
Citrin Cooperman & Company, L.L.P.
 CERTIFIED
PUBLIC ACCOUNTANTS
 White
Plains, New York
 February
29, 2008
  - 40
-
  
 [Letterhead
of Amílcar Torres Rivera, CPA]
 
 INDEPENDENT
AUDITORS' REPORT
 
 To the
Partners of
 Los
Angeles Limited Partnership
 
 I have
audited the accompanying balance sheets of LOS ANGELES LIMITED
PARTNERSHIP as of December 31, 2008 and 2007, and the related statements
of operations, partners' equity and cash flows for the years then
ended.  These financial statements are the responsibility of the
Partnership's management.  My responsibility is to express an opinion
on these financial statements based on my audits.
 
 I
conducted my audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that I plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership has determined that it is not required to have, nor I was engaged to
perform, an audit of its internal control over financial
reporting.  My audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, I express no such
opinion.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  I believe
that my audits provide a reasonable basis for my opinion.
 
 In my
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of LOS ANGELES LIMITED
PARTNERSHIP as of December 31, 2008 and 2007, and the results of its
operations, changes in partners’ equity and its cash flows for the years then
ended, in conformity with accounting principles generally accepted in the United
States of America.
 
 
 /s/
Amílcar Torres Rivera, CPA
 License
1876
 Expires
December 1, 2010
 
 San Juan,
Puerto Rico
 February
10, 2009
 
 Stamp
#2335342 of the
 Puerto
Rico Society of
 Certified
Public Accountants
 was
affixed to the original.
  - 41
-
  
 [Letterhead
of Toski, Schaefer & Co., P.C.]
 
 INDEPENDENT
AUDITOR'S REPORT
 
 The
Partners
 Christine
Apartments, L.P.:
 
 We have
audited the accompanying balance sheet of Christine Apartments, L.P. as of
August 31, 2008 and the related statements of operations, partners' equity and
cash flows for the eight months ended August 31, 2008.  These
financial statements are the responsibility of the Partnership's
management.  Our responsibility is to express an opinion on these
financial statements based on our audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership has determined that it is not required to have, nor were we engaged
to perform, an audit of its internal control over financial
reporting.  Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, we express no such
opinion.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
that our audits provide a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Christine Apartments, L.P. as of
August 31, 2008 and the results of its operations, changes in partners' equity
and cash flows for the eight months ended August 31, 2008, in conformity with
accounting principles generally accepted in the United States of
America.
 
 As
discussed in note 12, the Partnership ceased operations on August 31, 2008 with
the purchase by the general partner of the partnership interest of the limited
partners.
 
 Our audit
was made for the purpose of forming an opinion on the basic financial statements
taken as a whole.  The accompanying supplemental information is
presented for purposes of additional analysis and is not a required part of the
basic financial statements.  Such information has been subjected to
the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.
 
 
 /s/
Toski, Schaefer & Co., P.C.
 Williamsville,
New York
 February
13, 2009
  - 42
-
  [Letterhead
of Toski, Schaefer & Co., P.C.]
 
 INDEPENDENT
AUDITOR'S REPORT
 
 The
Partners
 Christine
Apartments, L.P.:
 
 We have
audited the accompanying balance sheets of Christine Apartments, L.P. as of
December 31, 2007 and 2006 and the related statements of operations, partners'
equity and cash flows for the years then ended.  These financial
statements are the responsibility of the Partnership's
management.  Our responsibility is to express an opinion on these
financial statements based on our audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership has determined that it is not required to have, nor were we engaged
to perform, an audit of its internal control over financial
reporting.  Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, we express no such
opinion.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
that our audits provide a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Christine Apartments, L.P. as of
December 31, 2007 and 2006 and the results of its operations, changes in
partners' equity and cash flows for the years then ended, in conformity with
accounting principles generally accepted in the United States of
America.
 
 Our
audits were made for the purpose of forming an opinion on the basic financial
statements taken as a whole.  The accompanying supplemental
information is presented for purposes of additional analysis and is not a
required part of the basic financial statements.  Such information has
been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a
whole.
 
 
 /s/
Toski, Schaefer & Co., P.C.
 Williamsville,
New York
 February
8, 2008
  - 43
-
  
 [Letterhead
of Reznick Group, P.C.]
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Partners
 Plainsboro
Housing Partners, L.P.
 
 We have
audited the accompanying balance sheet of Plainsboro Housing Partners, L.P. as
of December 31, 2008, and the related statements of revenue and expenses,
changes in partners' equity and cash flows for the year then
ended.  These financial statements are the responsibility of the
partnership's management.  Our responsibility is to express an opinion
on these financial statements based on our audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting.  Our audit included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the
partnership’s internal control over financial reporting.  Accordingly,
we express no such opinion.  An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation.  We believe that our audit provides a reasonable basis
for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Plainsboro Housing Partners, L.P.
as of December 31, 2008, and the results of its operations, the changes in
partners' equity and its cash flows for the year then ended, in conformity with
accounting principles generally accepted in the United States of
America.
 
 /s/
Reznick Group, P.C.
 Baltimore,
Maryland
 March 19,
2009
 
 
  - 44
-
  [Letterhead
of Reznick Group, P.C.]
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Partners
 Plainsboro
Housing Partners Limited Partnership
 
 We have
audited the accompanying balance sheet of Plainsboro Housing Partners Limited
Partnership as of December 31, 2007, and the related statements of revenue and
expenses, changes in partners' equity and cash flows for the year then
ended.  These financial statements are the responsibility of the
partnership's management.  Our responsibility is to express an opinion
on these financial statements based on our audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting.  Our audits included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the
partnership’s internal control over financial reporting.  Accordingly,
we express no such opinion.  An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation.  We believe that our audit provides a reasonable basis
for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Plainsboro Housing Partners Limited
Partnership as of December 31, 2007, and the results of its operations, the
changes in partners' equity and its cash flows for the year then ended, in
conformity with accounting principles generally accepted in the United States of
America.
 
 /s/
Reznick Group, P.C.
 Baltimore,
Maryland
 March 6,
2008
 
 
  - 45
-
  
 [Letterhead
of Koch Group & Company, LLP]
 
 INDEPENDENT
AUDITORS' REPORT
 
 To the
Partners
 Rolling
Green Associates, L.P. (A Limited Partnership)
 
 We have
audited the accompanying balance sheets of Rolling Green Associates, L.P. (A
Limited Partnership) as of December 31, 2008 and 2007, and the related
statements of operations, changes in partners' equity (deficiency), and cash
flows for the years then ended.  These financial statements are the
responsibility of the Partnership's management.  Our responsibility is
to express an opinion on these financial statements based on our
audits.
 
 We
conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership has determined that it is not required to have, nor we were engaged
to perform, an audit of its internal control over financial
reporting.  Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the partnership’s internal control over
financial reporting.  Accordingly, we express no such
opinion.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
that our audits provide a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Rolling Green Associates, L.P. (a
Limited Partnership) as of December 31, 2008 and 2007, and the results of its
operations, changes in partners' equity (deficiency) and its cash flows for the
years then ended in conformity with accounting principles generally accepted in
the United States of America.
 
 Our
audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole.  The accompanying supplementary
information on pages 12 to 18 is presented for purposes of additional analysis
and is not a required part of the basic financial statements.  Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a
whole.
 
 /s/ Koch
Group & Company, LLP
 New York,
New York
 February
12, 2009
  - 46
-
 
 
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 CONSOLIDATED
BALANCE SHEETS
 
 
 ASSETS
 
 
 March
      31,2009
            
            
            2008Operating
      AssetsProperty
      and equipment, at cost, less accumulated depreciation(Notes
      2, 4, 7 and 10)
            
            $
            22,693,155
            
            
            $
            78,650,906Cash
      and cash equivalents (Notes 2, 3 and 13)
            
            
            5,253,902
            
            
            
            4,056,150Cash
      held in escrow (Notes 3 and 5)
            
            
            2,005,856
            
            
            
            7,140,700Deferred
      costs, less accumulated amortization (Notes 2 and 6)
            
            
            199,544
            
            
            
            656,411Other
      assets
            
            
            792,384
            
            
            
            1,355,639Total
      operating assets
            
            
            30,944,841
            
            
            
            91,859,806Assets
      from discontinued operations (Note 14)Property
      and equipment held for sale, net of accumulateddepreciation
      (Note 4)
            
            
            29,015,203
            
            
            
            6,378,404Net
      assets held for sale
            
            
            4,246,142
            
            
            
            3,791,881Total
      assets from discontinued operations
            
            
            33,261,345
            
            
            
            10,170,285Total
      assets
            
            $
            64,206,186
            
            
            $
            102,030,091LIABILITIES
      AND PARTNERS’ CAPITAL (DEFICIT)Operating
      LiabilitiesMortgage
      notes payable (Notes 3 and 7)
            
            $
            20,705,851
            
            
            $
            63,332,026Accounts
      payable
            
            
            1,181,205
            
            
            
            3,914,793Accrued
      interest payable
            
            
            10,496,943
            
            
            
            11,332,424Security
      deposits payable
            
            
            169,564
            
            
            
            555,107Due
      to local general partners and affiliates (Note 8)
            
            
            745,843
            
            
            
            12,498,138Due
      to general partners and affiliates (Note 8)
            
            
            9,756,202
            
            
            
            13,688,107Total
      operating liabilities
            
            
            43,055,608
            
            
            
            105,320,595Liabilities
      from discontinued operations (Note 14)Mortgage
      notes payable of assets held for sale (Note 7)
            
            
            19,248,504
            
            
            
            7,478,590Net
      liabilities held for sale (including minority interest)
            
            
            14,934,389
            
            
            
            730,900Total
      liabilities from discontinued operations
            
            
            34,182,893
            
            
            
            8,209,490Total
      liabilities
            
            
            77,238,501
            
            
            
            113,530,085Minority
      interests (Note 2)
            
            
            4,312,640
            
            
            
            4,761,586Commitments
      and contingencies (Notes 7, 8 and 13)Partners’
      capital (deficit)Limited
      partners (76,786 BACs issued and outstanding)
            
            
            (20,269,539
            )
            
            
            (15,424,134
            )General
      partners
            
            
            2,924,584
            
            
            
            (837,446
            )Total
      partners’ capital (deficit)
            
            
            (17,344,955
            )
            
            
            (16,261,580
            )Total
      liabilities and partners’ capital (deficit)
            
            $
            64,206,186
            
            
            $
            102,030,091See
      accompanying notes to consolidated financial
  statements.
  - 47
-
  INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 CONSOLIDATED
STATEMENTS OF OPERATIONS
 
 
 
 
 Years
      Ended March 31,2009
                
                2008*Operations:RevenuesRental
      income
                
                $
                6,902,109
                
                $
                6,719,066Other
      (Notes 1 and 13)
                
                
                147,552
                
                
                154,756Total
      revenues
                
                
                7,049,661
                
                
                6,873,822ExpensesGeneral
      and administrative
                
                
                1,482,992
                
                
                1,363,226General
      and administrative-related parties (Note 8)
                
                
                1,412,076
                
                
                1,471,240Repairs
      and maintenance
                
                
                2,168,562
                
                
                2,381,535Operating
                
                
                1,358,530
                
                
                1,292,087Taxes
                
                
                498,893
                
                
                516,768Insurance
                
                
                450,325
                
                
                453,335Interest
                
                
                1,459,593
                
                
                1,450,343Depreciation
      and amortization
                
                
                1,628,015
                
                
                1,613,563Loss
      on impairment of property
                
                
                5,186,710
                
                
                0Total
      expenses from operations
                
                
                15,645,696
                
                
                10,542,097Loss
      from operations before minority interest
                
                
                (8,596,035
                )
                
                (3,668,275
                )Minority
      interest in loss of subsidiaries from operations
                
                
                608,772
                
                
                32,756Loss
      from operations
                
                
                (7,987,263
                )
                
                (3,635,519
                )Discontinued
      Operations:Income
      (loss) from discontinued operations (including gain on sale of properties
      and minorityinterest)
      (Note 14)
                
                
                3,092,914
                
                
                (6,832,351
                )Net
      loss
                
                $
                (4,894,349
                )
                
                (10,467,870
                )Loss
      from operations – limited partners
                
                $
                (7,907,390
                )
                $
                (3,599,164
                )Income
      (loss) from discontinued operations (including gain on sale of properties
      and minorityinterest)
      – limited partners
                
                
                3,061,985
                
                
                (6,764,027
                )Net
      loss – limited partners
                
                $
                (4,845,405
                )
                $
                (10,363,191
                )Number
      of BACs outstanding
                
                
                76,786
                
                
                76,786Loss
      from operations per BAC
                
                $
                (102.98
                )
                $
                (46.87
                )Income
      (loss) from discontinued operations (including gain on sale of properties
      and minority interest) – per BAC
                
                
                39.88
                
                
                (88.09
                )Net
      loss per BAC
                
                $
                (63.10
                )
                $
                (134.96
                )*Reclassified
      for comparative purposes.
                  
                  See
      accompanying notes to consolidated financial
  statements.
 
 
  - 48
-
  INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 CONSOLIDATED
STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL (DEFICIT)
 
 
 
 
 Total
            
            
            Limited
              Partners
            
            
            General
              PartnerPartners’
      capital (deficit) – April 1, 2006
            
            $
            467,915
            
            
            $
            1,146,110
            
            
            $
            (678,195
            )Net
      loss
            
            
            (6,269,750
            )
            
            
            (6,207,053
            )
            
            
            (62,697
            )Partner’s
      capital (deficit) – March 31, 2007
            
            
            (5,801,835
            )
            
            
            (5,060,943
            )
            
            
            (740,892
            )Net
      loss
            
            
            (10,467,870
            )
            
            
            (10,363,191
            )
            
            
            (104,679
            )Contribution
      – write off of related party debt
            
            
            8,125
            
            
            
            0
            
            
            
            8,125Partner’s
      capital (deficit) – March 31, 2008
            
            
            (16,261,580
            )
            
            
            (15,424,134
            )
            
            
            (837,446
            )Net
      loss
            
            
            (4,894,349
            )
            
            
            (4,845,405
            )
            
            
            (48,944
            )Contribution
      – write off of related party debt
            
            
            59,450
            
            
            
            0
            
            
            
            59,450Contribution
      – write off of partnership management fees related to sold
      properties
            
            
            3,751,524
            
            
            
            0
            
            
            
            3,751,524Partner’s
      capital (deficit) – March 31, 2009
            
            $
            (17,344,955
            )
            
            $
            (20,269,539
            )
            
            $
            2,924,584See
      accompanying notes to consolidated financial
  statements.
 
 
  - 49
-
  INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 INCREASE
(DECREASE) IN CASH AND CASH EQUIVALENTS
 
 
 
 
 Years
      Ended March 31,2009
                
                2008Cash
      flows from operating activities:Net
      loss
                
                $
                (4,894,349
                )
                $
                (10,467,870
                )Adjustments
      to reconcile net loss to net cash provided by (used in) operating
      activities:Gain
      on sale
                
                
                (7,494,728
                )
                
                (2,508,563
                )Depreciation
      and amortization
                
                
                3,180,992
                
                
                5,420,827Loss
      on impairment of fixed assets
                
                
                9,706,033
                
                
                6,360,000Minority
      interest in loss of subsidiaries
                
                
                (920,944
                )
                
                (814,334
                )(Increase)
      decrease in assets:Cash
      held in escrow
                
                
                2,688,444
                
                
                1,722,698Other
      assets
                
                
                (65,510
                )
                
                1,978,039Increase
      (decrease) in liabilities:Accounts
      payable
                
                
                98,672
                
                
                (1,856,642
                )Accrued
      interest payable
                
                
                407,777
                
                
                999,244Security
      deposit payable
                
                
                (22,241
                )
                
                72,456Due
      to local general partners and affiliates
                
                
                (819,536
                )
                
                1,172,756Due
      to general partner and affiliates
                
                
                (336,084
                )
                
                (2,482,135
                )Total
      adjustments
                
                
                6,422,875
                
                
                10,064,346Net
      cash provided by (used in) operating activities
                
                
                1,528,526
                
                
                (403,524
                )Cash
      flows from investing activities:Proceeds
      from sales
                
                
                9,605,431
                
                
                7,164,093Cost
      related to sales
                
                
                (53,194
                )
                
                (155,803
                )Acquisition
      of property and equipment
                
                
                (1,414,288
                )
                
                (1,211,078
                )(Increase)
      decrease in cash held in escrow
                
                
                (2,942,866
                )
                
                482,008Increase
      in due to local general partners and affiliates
                
                
                1,504,855
                
                
                862,115Net
      cash provided by investing activities
                
                
                6,699,938
                
                
                7,141,335Cash
      flows from financing activities:Increase
      in deferred costs
                
                
                0
                
                
                (25,736
                )Repayments
      of mortgage notes
                
                
                (7,497,888
                )
                
                (4,292,442
                )Increase
      (decrease) in due to local general partners and affiliates
                
                
                411,137
                
                
                (52,377
                )Decrease
      in capitalization of consolidated subsidiaries attributable to minority
      interest
                
                
                (263,533
                )
                
                (325,571
                )Net
      cash used in financing activities
                
                
                (7,350,284
                )
                
                (4,696,126
                )Net
      increase in cash and cash equivalents
                
                
                878,180
                
                
                2,041,685Cash
      and cash equivalents at beginning of year
                
                
                4,413,853
                
                
                2,372,168Cash
      and cash equivalents at end of year*
                
                $
                5,292,033
                
                $
                4,413,853Supplemental
      disclosure of cash flows information:Cash
      paid during the year for interest
                
                $
                2,753,554
                
                $
                3,608,868
 
 
 *Cash and
      cash equivalents, end of year, for the years ended March 31, 2009 and
      2008, includes cash and cash equivalents from discontinued operations of
      $38,131 and $357,703, respectively.
              
              See
      accompanying notes to consolidated financial
  statements.
 
  - 50
-
  INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 INCREASE
(DECREASE) IN CASH AND CASH EQUIVALENTS
 
 
 
 
 Years
      Ended March 31,2009
            
            2008Summarized
      below are the components of the gain on sale of investments and
      properties:Proceeds
      from sale of investments and properties – net
            
            $
            (9,552,237
            )
            $
            (7,008,290
            )Decrease
      in property and equipment, net of accumulated depreciation
            
            
            21,922,479
            
            
            15,174,776Decrease
      in cash held in escrow
            
            
            4,846,860
            
            
            578,513Decrease
      in prepaid expenses and other assets
            
            
            443,570
            
            
            242,599Decrease
      in deferred costs
            
            
            336,369
            
            
            233,874Decrease
      in mortgage notes payable
            
            
            (23,358,373
            )
            
            (9,848,904
            )Decrease
      in accounts payable and other liabilities
            
            
            (438,576
            )
            
            (733,250
            )Decrease
      in accrued interest payable
            
            
            (1,079,733
            )
            
            (10,999
            )Decrease
      in security deposits payable
            
            
            (350,230
            )
            
            (188,068
            )Increase
      (decrease) in due to general partners and affiliates
            
            
            599,991
            
            
            (16,875
            )Decrease
      in due to local general partners and affiliate
            
            
            (1,375,975
            )
            
            (1,126,467
            )Increase
      in capitalization of consolidated subsidiaries attributable to minority
      interest
            
            
            451,677
            
            
            186,403Contribution
      from write-off of related party debt
            
            
            59,450
            
            
            8,125Supplemental
      disclosures of non-cash investing and financing
activities:Contribution
      from write-off of partnership management fees related to sold
      properties
            
            $
            3,751,524
            
            $
            0
 
 
  - 51
-
  INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2009
   NOTE 1 –
General
  Independence
Tax Credit Plus L.P. (the “Partnership”), a Delaware limited partnership, was
organized on November 7, 1990, but had no activity until May 31, 1991 (which
date is considered to be inception for financial accounting purposes) and
commenced its public offering on July 1, 1991.  The general partner of
the Partnership is Related Independence Associates L.P., a Delaware limited
partnership (the “General Partner”).  The general partner of the
General Partner is Related Independence Associates Inc., a Delaware corporation
(“RIAI”).  The ultimate parent of the General Partner is Centerline
Holding Company (“Centerline”).
  The
Partnership’s business is to invest as a limited partner in other partnerships
(“Local Partnerships,” “subsidiaries” or “subsidiary partnerships”) that own
leveraged apartment complexes (“Apartment Complexes”) that are eligible for the
low-income housing tax credit (“Tax Credit”) enacted in the Tax Reform Act of
1986, some of which may also be eligible for the historic rehabilitation tax
credit.  Qualified Beneficial Assignment Certificates (“BACs”) holders
are entitled to Tax Credits over the period of the Partnership’s entitlement to
claim Tax Credits (for each Property, generally ten years from the date of
investment or, if later, the date the Property is placed in service; referred to
herein as the “Credit Period”) with respect to each Apartment
Complex.
  The
Partnership is currently in the process of disposing of its
investments.  As of March 31, 2009, the Partnership has disposed of
sixteen of the twenty-eight original Properties.  During the year
ended March 31, 2009, one Local Partnership sold its property and the related
assets and liabilities and the Partnership sold its limited partnership
interests in nine Local Partnerships.  Through March 31, 2009, three
Local Partnerships have sold their property and the related assets and
liabilities, the Partnership has sold its limited partnership interests in
twelve Local Partnerships and one Local Partnership has transferred the deed to
the property and related assets and liabilities of such Local Partnership (see
Note 10).  In addition, as of March 31, 2009, three Local Partnerships
entered into agreements to sell their property and the related assets and
liabilities (see Note 11).
  The
Partnership was authorized to issue a total of 200,000 BACs which were
registered with the Securities and Exchange Commission for sale to the public.
Each BAC represents all of the economic and virtually all of the ownership
rights attributable to a limited partnership interest. As of March 31, 2009, the
Partnership had raised a total of $76,786,000 representing 76,786 BACs and no
further issuance of BACs is anticipated.
  The terms
of the Partnership’s Amended and Restated Agreement of Limited Partnership (the
“Partnership Agreement”) provide, among other things, that net profits or losses
and distributions of cash flow are, in general, allocated 99% to the limited
partners and BACs holders and 1% to the General Partner.
   NOTE 2 -
Summary of Significant Accounting Policies
  a)  Basis
of Accounting
  For
financial reporting purposes the Partnership’s fiscal year ends on March 31. All
subsidiaries have fiscal years ending December 31. Accounts of the subsidiaries
have been adjusted for intercompany transactions from January 1 through March
31. The Partnership’s fiscal year ends March 31 in order to allow adequate time
for the subsidiaries’ financial statements to be prepared and
consolidated.  The books and records of the Partnership are maintained
on the accrual basis of accounting, in accordance with accounting principles
generally accepted in the United States of America (“GAAP”).
  b)  Basis
of Consolidation
  The
consolidated financial statements include the accounts of the Partnership and
twenty-three subsidiary partnerships in which the Partnership is a limited
partner (including the subsidiary partnership in which the Partnership sold its
limited partnership interest).  Through the rights of the Partnership
and/or an affiliate of the General Partner, which affiliate has a contractual
obligation to act on behalf of the Partnership, to remove the general partner of
the subsidiary local partnerships and to approve certain major operating and
financial decisions, the Partnership has a controlling financial interest in the
subsidiary local partnerships. All intercompany accounts and transactions with
the subsidiary partnerships have been eliminated in consolidation.
  Increases
(decreases) in the capitalization of consolidated subsidiaries attributable to
minority interest arise from cash contributions and cash distributions,
respectively, to the minority interest partners.
  Losses
attributable to minority interest which exceed the minority interests’
investment in a subsidiary have been charged to the Partnership. Such losses
aggregated approximately $27,000 and $80,000 for the years ended March 31, 2009
and 2008, respectively (the 2008 and 2007 Fiscal Years, respectively). The
Partnership’s investment in each subsidiary is equal to the respective
subsidiary’s partners’ equity less minority interest capital, if any. In
consolidation, all subsidiary partnership losses are included in the
Partnership’s capital account except for losses allocated to minority interest
capital.
  c)  Cash
and Cash Equivalents
  Cash and
cash equivalents include cash on hand, cash in banks, and investments in
short-term highly liquid instruments purchased with original maturities of three
months or less.
    - 52
-
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2009
  Property
and equipment to be held and used are carried at cost which includes the
purchase price, acquisition fees and expenses, construction period interest and
any other costs incurred in acquiring the properties. The cost of property and
equipment is depreciated over their estimated useful lives using accelerated and
straight-line methods. Expenditures for repairs and maintenance are charged to
expense as incurred; major renewals and betterments are capitalized. At the time
property and equipment are retired or otherwise disposed of, the cost and
accumulated depreciation are eliminated from the assets and accumulated
depreciation accounts and the profit or loss on such disposition is reflected in
earnings. The Partnership complies with Statement of Financial Accounting
Standards No. 144 (“SFAS No. 144”) “Accounting for the Impairment or Disposal of
Long-Lived Assets”. A loss on impairment of assets is recorded when management
estimates amounts recoverable through future operations and sale of the property
on an undiscounted basis is below depreciated cost. At that time, property
investments themselves are reduced to estimated fair value (generally using
discounted cash flows) when the property is considered to be impaired and the
depreciated cost exceeds estimated fair value.
  At the
time management commits to a plan to dispose of assets, said assets are adjusted
to the lower of carrying amount or fair value less costs to sell. These assets
are classified as property and equipment-held for sale and are not
depreciated.  Property and equipment that are held for sale are
included in discontinued operations.  There are three assets
classified as property and equipment-held for sale as of March 31, 2009 (see
Note 11).
  During
the year ended March 31, 2009 and 2008, the Partnership recorded approximately
$9,706,000 and $6,360,000, respectively, as an aggregate loss on impairment of
assets.  Through March 31, 2009, the Partnership has recorded
approximately $17,731,000 as an aggregate loss on impairment of assets or
reduction to estimated fair value.
 e)  Income
Taxes
  The
Partnership is not required to provide for, or pay, any federal income taxes.
Net income or loss generated by the Partnership is passed through to the
partners and is required to be reported by them. The Partnership may be subject
to state and local taxes in jurisdictions in which it operates. For income tax
purposes, the Partnership has a fiscal year ending December 31.
  f)  Revenue
Recognition
  Rental
income is earned primarily under standard residential operating leases and is
typically due the first day of each month, but can vary by property due to the
terms of the tenant leases.  Rental income is recognized when earned
and charged to tenants’ accounts receivable if not received by the due
date.  Rental payments received in advance of the due date are
deferred until earned.  Rental subsidies are recognized as rental
income during the month in which it is earned.
  Other
revenues are recorded when earned and consist of the following
items:  Interest income earned on cash and cash equivalent balances
and cash held in escrow balances, income from forfeited security deposits, late
charges, laundry and vending income and other rental related items.
  Other
revenues from operations include the following amounts at both the Partnership
and Local Partnership level:
  Years
      Ended March 31,2009
              
              2008*Interest
              
              $
              82,988
              
              $
              85,110Other
              
              
              64,564
              
              
              69,646Total
      other revenue
              
              $
              147,552
              
              $
              154,756
 
  Other
revenues from discontinued operations from operations include the following
amounts at both the Partnership and Local Partnership level:
  Years
      Ended March 31,2009
              
              2008*Interest
              
              $
              86,830
              
              $
              191,960Other
              
              
              850,807
              
              
              629,244Total
      other revenue
              
              $
              937,637
              
              $
              821,204*
      Reclassified for comparative purposes.
 
 
 - 53
-
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2009
  The
Partnership records loss contingencies as a charge to income when information
becomes available which indicates that it is probable that an asset has been
impaired or a liability has been incurred as of the date of the financial
statements and the amount of loss can be reasonably estimated.
  h)  Use
of Estimates
  The
preparation of financial statements in conformity with GAAP requires management
to make estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those
estimates.
  j)  Recent
Accounting Pronouncements
  In April
2009, the Financial Accounting Standards Board (“FASB”) issued FSP No. FAS 107-1
and APB 28-1, “Interim Disclosures about Fair Value of Financial
Instruments”.  This FSP amends FASB Statement No. 107 to require
disclosures about fair values of financial instruments for interim reporting
periods as well as in annual financial statements.  The FSP also
amends APB Opinion No. 28 to require those disclosures in summarized financial
information at interim reporting periods.  This FSP becomes effective
for interim reporting periods ending after June 15, 2009, with early adoption
permitted for periods ending after March 15, 2009.  The adoption of
this FSP is not expected to have a material impact on the Partnership’s
consolidated financial statements.
  In April
2009, the FASB issued FSP NO. FAS 157-4, “Determining Fair Value When the Volume
and Level of Activity for the Asset or Liability Have Significantly Decreased
and Identifying Transactions That Are Not Orderly”.  This FSP provides
additional guidance on determining fair value when the volume and level of
activity for the asset or liability have significantly decreased when compared
with normal market activity for the asset or liability.  A significant
decrease in the volume or level of activity for the asset of liability is an
indication that transactions or quoted prices may not be determinative of fair
value because transactions may not be orderly.  In that circumstance,
further analysis of transactions or quoted prices is needed, and an adjustment
to the transactions or quoted prices may be necessary to estimate fair
value.  This FSP becomes effective for interim reporting periods
ending after June 15, 2009, with early adoption permitted for periods ending
after March 15, 2009.  The adoption of this FSP is not expected to
have a material impact on the Partnership’s consolidated financial
statements.
  In
December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in
Consolidated Financial Statements”.  This statement was issued with
the intent to improve the relevance, comparability, and transparency of the
financial information that a reporting entity provides in its consolidated
financial statements for those entities that have outstanding non-controlling
interest in one or more subsidiaries.  The effective date for this
provision is for fiscal years beginning after December 15, 2008.  The
Partnership is currently evaluating the impact of the provisions of this
statement on the consolidated financial statements.
   NOTE 3 –
Fair Value of Financial Instruments
  The
following methods and assumptions were used to estimate the fair value of each
class of financial instruments (all of which are held for nontrading purposes)
for which it is practicable to estimate that value:
  Cash and Cash Equivalents,
Investments Available-for-Sale and Cash Held in Escrow
 The
carrying amount approximates fair value.
  Mortgage Notes
Payable
 During
the first quarter of 2008, we adopted the provisions required by SFAS No. 157
relating to financial assets and liabilities.  SFAS No. 157 defines
fair value, establishes a framework for measuring fair value, and expands
disclosures about fair value measurements.  SFAS No. 157 applies to
reported balances that are required or permitted to be measured at fair value
under existing accounting pronouncements; accordingly, the standard does not
require any new fair value measurements of reported balances.
  As
permitted, we chose not to elect the fair value option as prescribed by FASB
SFAS No. 159, “The Fair Value
Option for Financial Assets and Financial Liabilities” – Including an
Amendment of FASB Statement No. 115, for our financial assets and liabilities
that had not been previously carried at fair value.  Therefore, we did
not elect to fair value any additional items under SFAS No. 159.
  The
estimated fair value of financial instruments has been determined using
available market information or other appropriate valuation
methodologies.  However, considerable judgment is required in
interpreting market data to develop estimates of fair
value.  Consequently, the estimates are not necessarily indicative of
the amounts that could be realized or would be paid in a current market
exchange.  The following are financial instruments for which the
Partnership’s estimate of fair value differs from the carrying
amounts:
  At
      March 31, 2009
                
                At
      March 31, 2008Carrying
      Amount
                
                Fair
      Estimated Value
                
                Carrying
      Amount
                
                Fair
      Estimated ValueLIABILITIES:Mortgage
      notes
                
                $
                39,954,355
                
                $
                39,954,355
                
                $
                70,810,616
                
                $
                69,979,454
   - 54
-
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2009
  The
components of property and equipment from operations are as
follows:
  March
      31,
                  
                  Estimated
                    Useful
      Lives
                    (Years)2009
                  
                  2008Land
                  
                  $
                  2,470,944
                  
                  $
                  4,717,143
                  
                  -Building
      and improvements
                  
                  
                  40,984,897
                  
                  
                  132,103,886
                  
                  15-40Furniture
      and fixtures
                  
                  
                  1,552,462
                  
                  
                  3,356,074
                  
                  3-1045,008,303
                  
                  
                  140,177,103Less:
      Accumulated depreciation
                  
                  
                  (22,315,148
                  )
                  
                  (61,526,197
                  )$
                  22,693,155
                  
                  $
                  78,650,906
 
  The
initial cost to the Partnership, as shown in Schedule III in Item 15 includes
approximately $4,500,000 of acquisition fees paid to the General Partner and
$1,057,104 of acquisition expenses.
  In
connection with the rehabilitation of the properties, the subsidiary
partnerships have incurred developer’s fees of approximately $14,500,000 to the
Local General Partners and affiliates, net of approximately $979,000 earned by
the Partnership.  Such fees were included in the cost of property and
equipment.
  Depreciation
expense for the years ended March 31, 2009 and 2008 amounted to $1,615,050 and
$1,600,597, respectively.
  During
the years ended March 31, 2009 and 2008, there were write-offs of accumulated
depreciation in the amounts of $24,461,998 and $10,966,585, which were related
to the discontinued assets.
  The
components of property and equipment from discontinued operations are as
follows:
  March
      31,
                  
                  Estimated
                    Useful
      Lives
                    (Years)2009
                  
                  2008Land
                  
                  $
                  1,097,362
                  
                  $
                  777,006
                  
                  -Building
      and improvements
                  
                  
                  48,908,038
                  
                  
                  14,344,435
                  
                  15-40Furniture
      and fixtures
                  
                  
                  825,306
                  
                  
                  499,959
                  
                  3-1050,830,706
                  
                  
                  15,621,400Less:
      Accumulated depreciation
                  
                  
                  (21,815,503
                  )
                  
                  (9,242,996
                  )$
                  29,015,203
                  
                  $
                  6,378,404
 
  Depreciation
expense for the discontinued property and equipment for the years ended March
31, 2009 and 2008 amounted to $1,491,675 and $3,682,969,
respectively.
  Impairment of
property
  During
the year ended March 31, 2009, in accordance with SFAS No. 144, Landreth Venture
(“Landreth”) deemed the building impaired and wrote it down to its fair value of
approximately $592,000, which resulted in a loss on impairment of approximately
$2,999,000 (consisting of approximately $5,184,000 of fixed assets and
approximately $2,185,000 of accumulated depreciation). Fair value was obtained
from an assessment made by the management after indications that the remaining
cost of its rental property will not be recovered through normal operations
evidenced by a history of net operating losses over the past few
years.
  During
the years ended March 31, 2009 and 2008, in accordance with SFAS No. 144, the
Partnership deemed the building of Bethel Villa Associates (“Bethel Villa”)
impaired and wrote it down to its fair value, which resulted in a loss on
impairment of $720,000 and $5,000,000, respectively. Fair value was obtained
from the contracted sales price (see Note 10). Bethel Villa entered into a
contract for sale during the year ended March 31, 2008 and was sold during the
year ended March 31, 2009.
   - 55
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 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2009
  During
the year ended March 31, 2009, in accordance with SFAS No. 144, Cloisters L. P.
II (“Cloisters”) deemed the building impaired and wrote it down to its fair
value of approximately $674,000, which resulted in a loss on impairment of
approximately $5,187,000 (consisting of approximately $8,846,000 of fixed assets
and approximately $3,659,000 of accumulated depreciation). Fair value was
obtained from an assessment made by the management after indications that the
remaining cost of its rental property will not be recovered through normal
operations evidenced by a history of net operating losses over the past few
years.
  During
the year ended March 31, 2008, in accordance with SFAS No. 144, the Partnership
deemed the building of Landreth Venture (“Landreth”) impaired and wrote it down
to its fair value, which resulted in a loss on impairment of $730,000. Fair
value was obtained from the contracted sales price (see Note 10).
  During
the year ended March 31, 2008, in accordance with SFAS No. 144, the Partnership
deemed the building of Susquehanna Partners (“Susquehanna”) impaired and wrote
it down to its fair value, which resulted in a loss on impairment of $630,000.
Fair value was obtained from the contracted sales price (see Note
10).
   NOTE 5 –
Cash Held in Escrow
  Cash held
in escrow consists of the following:
  March
      31,2009
                  
                  2008Real
      estate taxes, insurance and other
                  
                  $
                  434,600
                  
                  $
                  2,930,927Reserve
      for replacements
                  
                  
                  1,398,684
                  
                  
                  3,640,467Tenant
      security deposits
                  
                  
                  172,572
                  
                  
                  569,306$
                  2,005,856
                  
                  $
                  7,140,700
 
  Cash held
in escrow included in the discontinued assets consists of the
following:
  March
      31,2009
                
                2008Real
      estate taxes, insurance and other
                
                $
                2,214,019
                
                $
                2,386,962Reserve
      for replacements
                
                
                1,126,310
                
                
                433,795Tenant
      security deposits
                
                
                230,893
                
                
                208,059$
                3,571,222
                
                $
                3,028,816
 
  NOTE 6 –
Deferred Costs
  The
components of deferred costs and their periods of amortization from operations
are as follows:
  March
      31,
                
                Period2009
                
                2008Financing
      expenses
                
                $
                469,039
                
                $
                1,940,437
                
                *Less:
      Accumulated amortization
                
                
                (269,495
                )
                
                (1,284,026
                )$
                199,544
                
                $
                656,411
 
  Amortization
expense from operations for the years ended March 31, 2009 and 2008 amounted to
$12,965 and $12,966, respectively.  During the years ended March 31,
2009 and 2008, deferred costs of $1,289,092 and $318,332 were written off due to
discontinued assets.  In addition, during the year ended March 31,
2009 and 2008, $952,723 and $110,194 of accumulated amortization was written off
due to discontinued assets.
  - 56
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 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2009
 The
discontinued assets components of deferred costs and their periods of
amortization are as follows:
  March
      31,
                  
                  Period2009
                  
                  2008Financing
      expenses
                  
                  $
                  1,106,847
                  
                  $
                  924,541
                  
                  *Less:  Accumulated
      amortization
                  
                  
                  (868,985
                  )
                  
                  (732,911
                  )$
                  237,862
                  
                  $
                  191,630*  Over
      the life of the respective mortgages.
 
  Amortization
expense from discontinued operations for the years ended March 31, 2009 and 2008
amounted to $61,301 and $124,295, respectively.
   NOTE 7 –
Mortgage Notes Payable
  The
mortgage notes from operations are payable in aggregate monthly installments of
approximately $109,000, including principal and interest at rates varying from
1% to 8% per annum, through the year 2048. Each subsidiary partnership’s
mortgage note payable is collateralized by the land and buildings of the
respective subsidiary partnership, the assignment of certain subsidiary
partnership’s rents and leases, and is without further recourse.
  Certain
mortgage notes with balances aggregating $4,560,000 and $13,092,000 at December
31, 2008 and 2007, respectively, which bear interest at rates ranging from 7.5%
to 9% per annum, were eligible for interest rate subsidies. Accordingly, the
subsidiary partnerships paid only that portion of the monthly payments that
would be required if the interest rate was 1% and the balance was subsidized
under Sections 236 and 551(b) of the National Housing Act.
  Annual
principal payment requirements on the mortgage notes from operations, as of
March 31, 2009, for each of the next five fiscal years and thereafter, are as
follows:
  Fiscal
      Year
                
                Amount2009
                
                $
                758,3692010
                
                
                805,1722011
                
                
                854,6652012
                
                
                984,3372013
                
                
                374,653Thereafter
                
                
                16,928,655$
                20,705,851
 
  Accrued
interest payable as of March 31, 2009 and 2008 was approximately $10,497,000 and
$11,332,000, respectively.  Interest accrues on all mortgage loans,
which include primary and secondary loans.  Certain secondary loans
have provisions such that interest is accrued but not payable until a future
date.  The Partnership anticipates the payment of accrued interest on
the secondary loans (which make up the majority of the accrued interest payable
amount and which have been accumulating since the Partnership’s investment in
the respective Local Partnership) will be made from future refinancings or sales
proceeds of the respective Local Partnerships.
  The
mortgage agreements from operations require monthly deposits to replacement
reserves of approximately $37,000 and monthly deposits to escrow accounts for
real estate taxes, hazard and mortgage insurance and other (Note
5).
  The
mortgage notes from discontinued operations are payable in aggregate monthly
installments of approximately $219,000, including principal and interest at
rates varying from 5% to 9% per annum, through the year 2020.  Each
subsidiary partnership’s mortgage note payable is collateralized by the land and
buildings of the respective subsidiary partnership, the assignment of certain
subsidiary partnership’s rents and leases, and is without further
recourse.
    - 57
-
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2009
 Annual
principal payment requirements on the mortgage notes from discontinued
operations, as of March 31, 2009, for each of the next five fiscal years and
thereafter, are as follows:
  Fiscal
      Year
              
              Amount2009
              
              $
              6,901,6502010
              
              
              3,074,3542011
              
              
              755,0002012
              
              
              795,0002013
              
              
              835,000Thereafter
              
              
              6,887,500$
              19,248,504
 
  Accrued
interest payable as of March 31, 2009 and 2008 was approximately $680,000 and
$517,000, respectively.  Interest accrues on all mortgage loans, which
include primary and secondary loans.  Certain secondary loans have
provisions such that interest is accrued but not payable until a future
date.  The Partnership anticipates the payment of accrued interest on
the secondary loans (which make up the majority of the accrued interest payable
amount and which have been accumulating since the Partnership’s investment in
the respective Local Partnership) will be made from future refinancings or sales
proceeds of the respective Local Partnerships.
  The
mortgage agreements from discontinued operations require monthly deposits to
replacement reserves of approximately $25,000 and monthly deposits to escrow
accounts for real estate taxes, hazard and mortgage insurance and other (Note
5).
  Creative Choice Homes II,
Ltd. (“Opa-Locka”)
 The first
mortgage note dated November 3, 1993 in the original amount of $9,500,000 was
payable to the Federal Home Loan Mortgage Corporation in monthly principal and
interest installments with interest accrued at the rate of 8.81% per annum. At
December 31, 2008, the outstanding balance of this note was $557,300 which was
due in full on February 1, 2009.  Opa-Locka has applied for an
extension, but no refinancing arrangement has been completed as of the date of
this report.
  The
second mortgage note dated February 1, 1994 in the original amount of $3,000,000
was payable to Florida Housing Finance Agency with interest rate of 7.03% per
annum, of which 4.03% of interest was deferred and added back to principal.
Payments of interest only at 3% were payable from cash flow on every June 30
through the maturity date of the note. At December 31, 2008, the outstanding
balance of this note was $4,859,930 including deferred interest of
$1,859,930.  A balloon payment of principal and all accrued interest
was due on March 24, 2009.  Opa-Locka has applied for an extension,
but no refinancing arrangement has been completed as of the date of this
report.
  The
property is currently being actively marketed for sale and management is seeking
a potential buyer (see Note11).
   NOTE 8 –
Related Party Transactions
  An
affiliate of the General Partner, Independence SLP L.P., has a 0.1% interest as
a special limited partner in each of the Local Partnerships. An affiliate of the
General Partner also has a minority interest in certain Local
Partnerships.
  As of
March 31, 2009 and 2008, the Partnership owes an affiliate of the General
Partner approximately $2,441,000 and $2,953,000, respectively, for operating
advances. These advances are non-interest bearing and have no set repayment
terms. The Partnership has advanced these monies to one Local Partnership to
fund its operations.
  A) Other
Related Party Expenses
  The
General Partner and its affiliates perform services for the Partnership. The
costs incurred from operations for the years ended March 31, 2009 and 2008 were
as follows:
  Years
      Ended March 31,2009
                  
                  2008*Partnership
      management fees (i)
                  
                  $
                  742,000
                  
                  $
                  869,000Expense
      reimbursement (ii)
                  
                  
                  244,875
                  
                  
                  181,166Local
      administrative fee (iv)
                  
                  
                  8,867
                  
                  
                  22,500Total
      general and administrative - General Partner
                  
                  
                  995,742
                  
                  
                  1,072,666Property
      management fees incurred to affiliates of the Local General Partners
      (iii)
                  
                  
                  416,334
                  
                  
                  398,574Total
      general and administrative - related parties
                  
                  $
                  1,412,076
                  
                  $
                  1,471,240
 
   - 58
-
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2009
  Years
      Ended March 31,2009
              
              2008*Local
      administrative fee (iv)
              
              $
              28,250
              
              $
              32,000Property
      management fees incurred to affiliates of the General
    Partners
              
              
              0
              
              
              181,607Total
      general and administrative-General Partners
              
              
              28,250
              
              
              213,607Property
      management fees incurred to affiliates of the Local General Partners
      (iii)
              
              
              297,928
              
              
              661,803Total
      general and administrative-related parties
              
              $
              326,178
              
              $
              875,410*
      Reclassified for comparative purposes.
 
  (i)
            The
      General Partner is entitled to receive a partnership management fee, after
      payment of all partnership expenses, which together with the local annual
      administrative fees will not exceed a maximum of 0.5% per annum of
      invested assets (as defined in the Partnership Agreement), for
      administering the affairs of the Partnership. Subject to the foregoing
      limitation, the partnership management fee will be determined by the
      General Partner in its sole discretion based upon its review of the
      Partnership’s investments.  Unpaid partnership management fees
      for any year have been, and will continue to be, accrued without interest
      and will be payable only to the extent of available funds after the
      Partnership has made distributions to the limited partners of sale or
      refinancing proceeds equal to their original capital contributions plus a
      10% priority return thereon (to the extent not theretofore paid out of
      cash flow).  During the year ended March 31, 2009, management
      deemed the unpaid partnership management fees related to sold properties
      uncollectible and wrote off approximately $3,752,000, resulting in a
      non-cash General Partner contribution of the same
      amount.  Partnership management fees owed to the General Partner
      amounting to approximately $6,219,000 and $9,228,000 were accrued and
      unpaid as of March 31, 2009 and 2008,
  respectively.
  (ii)
            The
      Partnership reimburses the General Partner and its affiliates for actual
      Partnership operating expenses incurred by the General Partner and its
      affiliates on the Partnership’s behalf. The amount of reimbursement from
      the Partnership is limited by the provisions of the Partnership Agreement.
      Another affiliate of the General Partner performs asset monitoring for the
      Partnership. These services include site visits and evaluations of the
      subsidiary partnerships’ performance. Expense reimbursements owed to the
      General Partners and its affiliates amounting to approximately $963,000
      and $1,825,000 were accrued and unpaid as of March 31, 2009 and 2008,
      respectively.
  (iii)
            Property
      management fees incurred by the subsidiary partnerships amounted to
      $1,035,476 and $1,378,224 for the years ended March 31, 2009 and 2008,
      respectively.  Of these fees, $714,262 and $1,060,377 were
      incurred to affiliates of the general partners of the Local Partnerships
      (the “Local General Partners”) which includes $297,928 and $661,803 of
      fees relating to discontinued operations and $0 and $181,607 were incurred
      to affiliates of the General
Partner.
  (iv)
            Independence
      SLP L.P. is entitled to receive a local administrative fee of up to $2,500
      per year from each subsidiary
partnership.
     - 59
-
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2009
  Due to
local general partners and affiliates included in operating liabilities consists
of the following:
  March
      31,2009
                      
                      2008Operating
      advances (i)
                      
                      $
                      165,038
                      
                      $
                      1,497,761Development
      fee payable
                      
                      
                      163,223
                      
                      
                      1,385,161Long-term
      notes payable (ii)
                      
                      
                      129,274
                      
                      
                      1,474,672Accrued
      interest on long-term notes payable
                      
                      
                      9,094
                      
                      
                      1,314,233Management
      and other fees
                      
                      
                      279,214
                      
                      
                      738,441Construction
      costs
                      
                      
                      0
                      
                      
                      6,087,870$
                      745,843
                      
                      $
                      12,498,138(i)
      Operating advances include the following loan:Christine Apartments, L.P.
                      
                      $
                      0
                      
                      $
                      116,100This
      loan was non-interest bearing and had no set repayment
      terms.  The Partnership’s limited partnership interest in
      Christine Apartments was sold on December 31, 2008 (see Note
      10).(ii)
      Long-term notes payable consist of the following:655 North Street L.P.
                        In
      December 2003, 655 North Street was refinanced as part of the
      mark-to-market program and the owner was required to make an additional
      investment.  This capital recovery payment is payable over ten
      years with interest accruing at 7.5% per annum.
                      
                      $
                      129,274
                      
                      $
                      160,988Creative Choice Homes II,
    LTD.
                      
                      $
                      0
                      
                      $
                      979,770The
      first note bears interest at 7% payable monthly.  Principal on
      the loan is due and payable in full on December 31, 2009.  No
      payments were made during the current year on this
      note.  Delinquent principal payments as of December 31, 2008
      amounted to $479,770, and thus, this note is technically in
      default.  The second note bears interest at 12% payable
      monthly.  Principal on the loan is due and payable in full on
      December 31, 2009.  No payments were made during the current
      year on this note.  Delinquent principal payments as of December
      31, 2008 amounted to $500,000, and thus, this note is technically in
      default.Plainsboro Housing Partners,
      L.P.
                      
                      $
                      0
                      
                      $
                      333,914This
      loan accrued interest at a rate of 7.34% per annum on the outstanding
      principal balance. Repayment of the principal and interest were to be made
      from net cash flow to the extent available pursuant to the promissory
      note. All accrued interest and principal were due in a balloon payment in
      December 2013.  The Partnership sold its limited partnership
      interest in Plainsboro on January 23, 2009 (see Note 10).Interest
      expense incurred on such long-term notes payable amounted to approximately
      $136,000 and $286,000 for the 2008 and 2007 Fiscal Years,
      respectively.
 
  Due to
local general partners and affiliates included in the discontinued liabilities
consists of the following:
  March
      31,2009
              
              2008Operating
      deficit advances
              
              $
              1,204,533
              
              $
              0Operating
      advances
              
              
              245,311
              
              
              215,093Development
      fee payable
              
              
              1,120,234
              
              
              9,135Long-term
      notes payable (iii)
              
              
              979,770
              
              
              0Accrued
      interest on long-term notes payable
              
              
              1,449,870
              
              
              0Management
      and other fees
              
              
              301,619
              
              
              (2,059
              )Construction
      costs
              
              
              6,393,608
              
              
              0$
              11,694,945
              
              $
              222,169
   
 - 60
-
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2009
 (iii)
      Long-term notes payable included in the discontinued liabilities consist
      of the following:Creative Choice Homes II,
    LTD.
                
                $
                979,770
                
                $
                0The
      first note bears interest at 7% payable monthly.  Principal on
      the loan is due and payable in full on December 31, 2009.  No
      payments were made during the current year on this
      note.  Delinquent principal payments as of December 31, 2008
      amounted to $479,770, and thus, this note is technically in
      default.  The second note bears interest at 12% payable
      monthly.  Principal on the loan is due and payable in full on
      December 31, 2009.  No payments were made during the current
      year on this note.  Delinquent principal payments as of December
      31, 2008 amounted to $500,000, and thus, this note is technically in
      default.
 
  C)  Other
  Pursuant
to the Partnership Agreement and the partnership agreements of the Local
Partnerships, the General Partner and Independence SLP L.P. received their pro
rata share of profits, losses and tax credits.
   NOTE 9 –
Taxable Net Loss
  Our
adoption of FASB Interpretation (“FIN”) No. 48 did not have a material impact on
the consolidated financial statements and does not impact our financial position
at March 31, 2009.
  A
reconciliation of the financial statements net loss to the taxable net loss for
the Partnership and its consolidated subsidiaries follows:
  2008
            
            2007Financial
      statement net loss
            
            $
            (4,894,349
            )
            $
            (10,467,870
            )Differences
      between depreciation and amortization expense recorded for financial
      reporting purposes and the accelerated cost recovery system utilized for
      income tax purposes
            
            
            (900,088
            )
            
            (756,303
            )Differences
      resulting from parent company having a different fiscal year for income
      tax and financial reporting purposes
            
            
            (75,487
            )
            
            27,737Tax
      exempt interest income
            
            
            (75,941
            )
            
            (142,516
            )Non-deductible
      loss on impairment of property
            
            
            9,706,034
            
            
            6,360,000Difference
      resulting from forgiveness of related-party debt considered a General
      Partner contribution for financial purposes and income for tax
      purposes.
            
            
            3,177,916
            
            
            0Cost
      from hurricane events not deducted for income tax purposes
            
            
            0
            
            
            2,309,923Difference
      between gain on sale of properties for financial reporting purposes and
      gain on sale for income tax purposes
            
            
            (5,888,036
            )
            
            1,841,300Other,
      including related party accruals not deductible until paid
            
            
            (1,333,576
            )
            
            1,319,955Taxable
      net (loss) income as shown on the income tax return for the calendar year
      ended
            
            $
            (283,527
            )
            $
            492,226
 
  NOTE 10 –
Sale of Properties
  The
Partnership is currently in the process of disposing of its
investments.  It is anticipated that the process will continue to take
a number of years.  During the year ended March 31, 2009, one Local
Partnership sold its property and the related assets and liabilities and the
Partnership sold its limited partnership interests in nine Local
Partnerships.  Through March 31, 2009, three Local Partnerships have
sold their property and the related assets and liabilities, the Partnership has
sold its limited partnership interests in twelve Local Partnerships and one
Local Partnership has transferred the deed to the property and related assets
and liabilities of such Local Partnership.  In addition, three Local
Partnerships have entered into agreements to sell their property and the related
assets and liabilities.  There can be no assurance as to when the
Partnership will dispose of its remaining investments or the amount of proceeds
which may be received.  However, based on the historical operating
results of the Local Partnerships and the current economic conditions, including
changes in tax laws, it is unlikely that the proceeds from such sales received
by the Partnership will be sufficient to return to the limited partners their
original investment.
   - 61
-
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2009
  On
December 31, 2008, the Partnership sold its limited partnership interest in
Christine Apartments L.P. (“Christine Apartments”) to the Local General Partner
for a sales price of $50,000.  The sale resulted in a gain of
approximately $737,000 resulting from the write-off of the deficit basis in the
Local Partnership of approximately $687,000 at the date of the sale and the
receipt of $50,000 in cash from the sale, which was recorded during the quarter
ended December 31, 2008.  An adjustment to the gain of approximately
$(5,000) was recorded during the quarter ended March 31, 2009, resulting in an
overall gain of approximately $732,000.
  On
December 17, 2008, the property and the related assets and liabilities of West
Diamond Street Associates (“West Diamond”) were sold to an unaffiliated third
party purchaser for a sales price of $1 plus the assumption of the outstanding
mortgage notes.  The sale resulted in a gain of approximately
$1,066,000 resulting from the write-off of the deficit basis in the property at
the date of sale.
  On
November 30, 2008, the Partnership sold its limited partnership interest in
Conifer Bateman Associates (“Bateman Hotel”) to the Local General Partner for a
sales price of $50.  The sale resulted in a loss of approximately
$87,000 resulting from the write-off of the basis in the Local Partnership of
approximately $87,000 at the date of the sale, which was recorded during the
quarter ended December 31, 2008. An adjustment to the loss of approximately
$(5,000) was recorded during the quarter ended March 31, 2009, resulting in an
overall loss of approximately $82,000. The sale also resulted in a non-cash
contribution to the Local Partnership from the General Partner of approximately
$14,000 as a result of write-off of the fees owed by the Local Partnership to an
affiliate of the General Partner.
  On
October 21, 2008, the Partnership sold its limited partnership interest in
Lancaster Terrace L.P. (“Lancaster”) to the Local General Partner for a sales
price of $1,564,990.  The sale resulted in a gain of approximately
$904,000 resulting from the write-off of the basis in the Local Partnership of
approximately $660,000 at the date of the sale and the receipt of $1,564,190 in
cash from the sale, which was recorded during the quarter ended December 31,
2008. An adjustment to the gain of approximately $111,000 was recorded during
the quarter ended March 31, 2009, resulting in an overall gain of approximately
$1,015,000. The sale also resulted in a non-cash contribution to the Local
Partnership from the General Partner of approximately $2,000 as a result of
write-off of the fees owed by the Local Partnership to an affiliate of the
General Partner.
  On
October 17, 2008, the Partnership sold its limited partnership interest in
Bethel Villa Associates, L.P. (“Bethel Villa”) to the Local General Partner for
a sales price of $750,000.  During the quarters ended March 31, 2008
and December 31, 2008, in accordance with Statement of Financial Accounting
Standards No. 144 (“SFAS No. 144”) Accounting for the Impairment or
Disposal of Long-Lived Assets, the Partnership deemed the building
impaired and wrote it down to its fair value, which resulted in a loss on
impairment of $5,000,000 and $720,000, respectively. The sale resulted in a loss
of approximately $28,000 resulting from the write-off of the basis in the Local
Partnership of approximately $778,000 at the date of the sale and the receipt of
$750,000 in cash from the sale, which was recorded during the quarter ended
December 31, 2008. An adjustment to the loss of approximately $373,000 was
recorded during the quarter ended March 31, 2009, resulting in an overall gain
of approximately $345,000.
  On August
22, 2008, the Partnership sold its limited partnership interest in Lares
Apartments Limited Partnership (“Lares”) to the Local General Partner for a
sales price of $125,000.  The sale resulted in a gain of approximately
$691,000 resulting from the write-off of the deficit basis in the Local
Partnership at the date of the sale of approximately $566,000 and the receipt of
$125,000 in cash from the sale, which was recorded during the quarter ended
December 31, 2008. An adjustment to the gain of approximately $(31,000) was
recorded during the quarter ended March 31, 2009, resulting in an overall gain
of approximately $660,000.
  On August
22, 2008, the Partnership sold its limited partnership interest in Lajas
Apartments Limited Partnership (“Lajas”) to the Local General Partner for a
sales price of $121,250.  The sale resulted in a gain of approximately
$690,000, resulting from the write-off of the deficit basis in the Local
Partnership at the date of the sale of approximately $568,000 and the receipt of
$121,730 in cash from the sale, which was recorded during the quarter ended
December 31, 2008. An adjustment to the gain of approximately $(40,000) was
recorded during the quarter ended March 31, 2009, resulting in an overall gain
of approximately $650,000.
  On May 6,
2008, the Partnership sold its limited partnership interest in Susquehanna
Partners (“Susquehanna”) to an affiliate of the Local General Partner for a
sales price of $1.  During the quarter ended March 31, 2008, in
accordance with SFAS No. 144, the Partnership deemed the building impaired and
wrote it down to its fair value, which resulted in a loss on impairment of
$630,000.  The sale resulted in a loss of approximately $49,000,
resulting from the write-off of the basis in the Local Partnership of
approximately $49,000 at the date of the sale, which was recorded during the
quarter ended June 30, 2008.  Adjustments to the loss of approximately
$(1,000) and $(37,000) were recorded during the quarters ended September 30,
2008 and March 31, 2009, resulting in an overall loss of approximately
$11,000.  The sale also resulted in a non-cash contribution to the
Local Partnership from the General Partner of approximately $41,000 as a result
of write-off of the fees owed by the Local Partnership to an affiliate of the
General Partner.
  On April
1, 2008, the Partnership sold its limited partnership interest in Landreth
Venture (“Landreth”) to the Local General Partner for a sales price of
$17,500.  During the years ended March 31, 2009 and 2008, in
accordance with SFAS No. 144, the building was deemed impaired and written down
to its fair value, resulting in a loss on impairment of approximately $3,000,000
and $730,000, respectively.  The sale resulted in a gain of
approximately $10,000, resulting from the write-off of the basis in the Local
Partnership at the date of the sale of approximately $7,000 and the $17,500 cash
received from the sale, which was recorded during the quarter ended June 30,
2008.  Adjustments to the gain of approximately $1,000 and $3,009,000
were recorded during the quarter ended September 30, 2008 and March 31, 2009,
resulting in an overall gain of approximately $3,020,000.
   - 62
-
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2009
  On
February 1, 2008, the Partnership sold its limited partnership interest in
Hampden Hall Associates, L.P. (“Hampden Hall”) to an affiliate of the Local
General Partner for a sales price of approximately $955,000.  The sale
resulted in a loss of approximately $1,173,000, resulting from the write-off of
the basis in the Local Partnership of approximately $2,128,000 at the date of
the sale and the $955,000 cash received from the sale.
  On
January 17, 2008, the Partnership sold its limited partnership interest in BX-7F
Associates (“Beaumont”) to the Local General Partner for a sales price of
$2,090,000.  The sale resulted in a gain of approximately $311,000,
resulting from the write-off of the basis in the Local Partnership at the date
of the sale of approximately $1,711,000 and the $2,022,299 cash received from
the sale.
  On
November 30, 2007, the property and the related assets and liabilities of Harbor
Court Limited Partnership (“Harbor Court”) were sold to an unaffiliated third
party purchaser for a sales price of $2,100,000.  The Partnership
received $1,991,996 as a distribution from this sale after the repayment of
other liabilities, closing costs and distributions to minority interests of
approximately $108,000.  The sale resulted in a gain of approximately
$1,260,000, which was recorded during the quarter ended March 31,
2008.
  On
October 31, 2007, Old Public Limited Partnership (“Old Public”) transferred the
deed to the property and the related assets and liabilities to an unaffiliated
third party in lieu of foreclosure.  The transfer of assets of
approximately $851,000 and liabilities of $1,138,000 resulted in a gain of
approximately $287,000 at the date of the transfer.  An adjustment to
the gain of approximately $(193,000) was recorded during the quarter ended March
31, 2008, resulting in an overall gain of approximately $94,000.
  On March
29, 2007, the Partnership sold its limited partnership interest in P.S. 157
Associates, L.P. (“P.S. 157”) to the Local General Partner for a sales price of
$1,996,490.  The sale resulted in a gain of approximately $2,010,000
resulting from the write-off of the deficit basis in the Local Partnership of
approximately $13,000 at the date of the sale and the $2,023,209 cash received
from the sale.  An adjustment to the gain of approximately $6,000 was
recorded during the quarter ended March 31, 2008, resulting in an overall gain
of approximately $2,016,000.
   NOTE 11 –
Assets Held for Sale
  On May 9,
2008, Creative Choice Homes II, Ltd. (“Opa-Locka”) entered into a purchase and
sale agreement to sell the property and the related assets and liabilities to an
unaffiliated third party purchaser for a sales price of
$17,000,000.  This agreement expired in April of 2009.  The
property is currently being actively marketed for sale and management is seeking
a potential buyer.  As of December 31, 2008, Opa-Locka had property
and equipment, at cost, of approximately $22,812,000, accumulated depreciation
of approximately $7,946,000 and mortgage debt of approximately
$5,417,000.
  On April
18, 2008, Rolling Green Associates, L.P. (“Rolling Green”) entered into a
purchase and sale agreement to sell the property and the related assets and
liabilities to an unaffiliated third party purchaser for a sales price of
$14,000,000.  This agreement expired in April of 2009.  The
property is currently being actively marketed for sale and management is seeking
a potential buyer.  As of December 31, 2008, Rolling Green had
property and equipment, at cost, of approximately $22,318,000, accumulated
depreciation of approximately $11,734,000 and mortgage debt of approximately
$10,663,000.
  On April
1, 2008, Homestead Apartments Associates II Ltd. (“Homestead II”) entered into a
purchase and sale agreement to sell the property and the related assets and
liabilities to an unaffiliated third party purchaser for a sales price of
$4,000,000.  This agreement expired in April of 2009.  The
property is currently being actively marketed for sale and management is seeking
a potential buyer.  As of December 31, 2008, Homestead II had property
and equipment, at cost, of approximately $5,594,000, accumulated depreciation of
approximately $2,076,000 and mortgage debt of approximately
$3,169,000.
   - 63
-
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2009
  The
following table summarizes the Partnership’s quarterly results of operations for
the years ended March 31, 2009 and 2008.
  OPERATIONS
                  
                  Quarter
      EndedJune
      30,
                    2008*
                  
                  September
      30, 2008*
                  
                  December
      31, 2008*
                  
                  March
      31,
                    2009Revenues
                  
                  $
                  1,755,934
                  
                  $
                  1,756,752
                  
                  $
                  1,819,754
                  
                  $
                  1,717,221Operating
      expenses
                  
                  
                  (2,699,117
                  )
                  
                  (2,584,868
                  )
                  
                  (2,410,160
                  )
                  
                  (7,951,551
                  )Loss
      before minority interest
                  
                  
                  (943,183
                  )
                  
                  (828,116
                  )
                  
                  (590,406
                  )
                  
                  (6,234,330
                  )Minority
      interest in loss of subsidiaries from operations
                  
                  
                  7,036
                  
                  
                  10,174
                  
                  
                  10,755
                  
                  
                  580,807Loss
      from operations
                  
                  
                  (936,147
                  )
                  
                  (817,942
                  )
                  
                  (579,651
                  )
                  
                  (5,653,523
                  )(Loss)
      income from discontinued operations
                  
                  
                  (1,251,719
                  )
                  
                  305,782
                  
                  
                  740,712
                  
                  
                  3,298,139Net
      (loss) income
                  
                  $
                  (2,187,866
                  )
                  $
                  (512,160
                  )
                  $
                  161,061
                  
                  $
                  (2,355,384
                  )Net
      loss per weighted average BAC from operations
                  
                  $
                  (12.07
                  )
                  $
                  (10.55
                  )
                  $
                  (7.47
                  )
                  $
                  (72.89
                  )Net
      (loss) income per weighted average BAC from discontinued
      operations
                  
                  
                  (16.14
                  )
                  
                  3.94
                  
                  
                  9.55
                  
                  
                  42.53Net
      (loss) income per weighted average BAC
                  
                  $
                  (28.21
                  )
                  $
                  (6.61
                  )
                  $
                  2.08
                  
                  $
                  (30.36
                  )OPERATIONS
                  
                  Quarter
      EndedJune
      30,
                    2007*
                  
                  September
      30, 2007*
                  
                  December
      31, 2007*
                  
                  March
      31,
                    2008*Revenues
                  
                  $
                  1,769,065
                  
                  $
                  1,688,238
                  
                  $
                  1,773,638
                  
                  $
                  1,642,881Operating
      expenses
                  
                  
                  (2,794,801
                  )
                  
                  (2,541,859
                  )
                  
                  (2,611,360
                  )
                  
                  (2,594,077
                  )Loss
      before minority interest
                  
                  
                  (1,025,736
                  )
                  
                  (853,621
                  )
                  
                  (837,722
                  )
                  
                  (951,196
                  )Minority
      interest in loss of subsidiaries from operations
                  
                  
                  5,529
                  
                  
                  6,451
                  
                  
                  6,856
                  
                  
                  13,920Loss
      from operations
                  
                  
                  (1,020,207
                  )
                  
                  (847,170
                  )
                  
                  (830,866
                  )
                  
                  (937,276
                  )Income
      (loss) from discontinued operations
                  
                  
                  1,085,173
                  
                  
                  (99,640
                  )
                  
                  (306,419
                  )
                  
                  (7,511,465
                  )Net
      income (loss)
                  
                  $
                  64,966
                  
                  $
                  (946,810
                  )
                  $
                  (1,137,285
                  )
                  $
                  (8,448,741
                  )Net
      loss per weighted average BAC from operations
                  
                  $
                  (13.15
                  )
                  $
                  (10.93
                  )
                  $
                  (10.71
                  )
                  $
                  (12.08
                  )Net
      income (loss) per weighted average BAC from discontinuedoperations
                  
                  
                  13.99
                  
                  
                  (1.28
                  )
                  
                  (3.95
                  )
                  
                  (96.85
                  )Net
      income (loss) per weighted average BAC
                  
                  $
                  0.84
                  
                  $
                  (12.21
                  )
                  $
                  (14.66
                  )
                  $
                  (108.93
                  )
  * 
Reclassified for comparative purposes.
  - 64
-
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2009
  a)  Subsidiary
Partnerships – Going Concern
  Creative Choice Homes II
L.P. (“Opa-Locka”)
 The
financial statements for Opa-Locka were prepared assuming that Opa-Locka will
continue as a going concern.  Opa-Locka is in default on its third and
fourth mortgage notes, which were incurred to affiliates of the Local General
Partner.  The Local General Partner has not sent a notice of default
with respect to the notes as of the year ended March 31, 2009 and will be unable
to call the notes until the first and second mortgage notes, which are current,
are paid in full.
  Opa-Locka
has also continued to incur significant operating losses resulting, in part,
from the effects of a major hurricane, which created additional
losses.  These conditions raise substantial doubt about Opa-Locka’s
ability to continue as a going concern.  The ability for Opa-Locka to
continue as a going concern is based on the Local General Partner’s continuing
ability to fund operating losses and insurance proceeds to cover the damages to
the Property.  This condition is alleviated in part by the fact that
the property has had positive operating cash flow for the past several
years.  The financial statements do not include any adjustments that
might be necessary if Opa-Locka is unable to continue as a going
concern.
  The
Partnership’s investment in Opa-Locka at March 31, 2009 and 2008 was reduced to
zero as a result of prior years’ losses, and the minority interest balance was
zero at each date.  Opa-Locka’s net (income) loss after minority
interest amounted to approximately $(366,000) and $2,400,000 for the 2008 and
2007 Fiscal Years.
  In
October 2005, Opa-Locka suffered property damage and business interruption due
to a severe hurricane.  Opa-Locka contracted to complete repairs and
renovations of the buildings damaged for a cost of
$7,489,000.  Opa-Locka expects to be reimbursed by insurance proceeds
in the amount of approximately $4,420,000.  As of December 31, 2008,
$4,000,000 of insurance proceeds has been received by the mortgage company which
is acting as administrator and trustee of the funds.  A balance of
$3,970,717 remains payable to the construction company as of December 31, 2008
related to the rehabilitation.
  The above
circumstances have called into question the recoverability of the carrying
amounts of the building.  On May 9, 2008, Opa-Locka entered into a
purchase and sale agreement to sell its property and related assets and
liabilities to an unaffiliated third party purchaser, which expired in April
2009.  The property is currently being marketed for sale and
management is seeking a potential buyer (see Note 11).
 Morrant Bay Limited
Partnership (“Morrant Bay”)
 The
financial statements for Morrant Bay have been prepared assuming that Morrant
Bay will continue as a going concern.  Morrant Bay has been
experiencing higher operating costs, attributable in part to escalating energy
and repair costs.  These conditions, in addition to regulatory rent
restrictions imposed under HUD guidelines, has resulted in operating cash flow
not meeting all current obligations as they become due.  At December
31, 2008, current liabilities exceed current assets by approximately
$327,000.  This raises doubt as to whether Morrant Bay will be able to
continue as a going concern.  Management continually monitors
operating costs and will request additional rent increases when allowed by
HUD.  Additionally, management is in the process of evaluating
refinancing plans.  During 2008, Morrant Bay entered into negotiations
with a local non-profit to re-syndicate the property.  In connection
with this, Morrant Bay is negotiating with the General Partner to redeem their
interest in Morrant Bay for a nominal amount.  There can be no
assurance if or when such negotiations will result in an actual redemption of
the Local Partnership’s interests.
  The
Partnership’s investment in Morrant Bay at March 31, 2009 and 2008 was reduced
to zero as a result of prior years’ losses and the minority interest balance was
approximately $228,000 at each date.  Morrant Bay’s net loss after
minority interest amounted to approximately $474,000 and $712,000 for the 2008
and 2007 Fiscal Years.  The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
  Boston Bay Limited
Partnership (“Boston Bay”)
 The
financial statements for Boston Bay have been prepared assuming that Boston Bay
will continue as a going concern.  Boston Bay has been experiencing
higher operating costs, attributable in part to escalating energy and repair
costs.  These conditions, in addition to regulatory rent restrictions
imposed under HUD guidelines, has resulted in operating cash flow not meeting
all current obligations as they become due.  At December 31, 2008,
current liabilities exceed current assets by approximately
$330,000.  This raises doubt as to whether Boston Bay will be able to
continue as a going concern.  Management continually monitors
operating costs and will request additional rent increases when allowed by
HUD.  Additionally, management is in the process of evaluating
refinancing plans.  During 2008, Boston Bay entered into negotiations
with a local non-profit to re-syndicate the property.  In connection
with this, Boston Bay is negotiating with the General Partner to redeem their
interest in Boston Bay for a nominal amount.  There can be no
assurance if or when such negotiations will result in an actual redemption of
the Local Partnership’s interests.
  The
Partnership’s investment in Boston Bay at March 31, 2009 and 2008 was reduced to
zero as a result of prior years’ losses and the minority interest balance was
approximately $87,000 at each date.  Boston Bay’s net loss after
minority interest amounted to approximately $342,000 and $540,000 for the 2008
and 2007 Fiscal Years.  The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
   - 65
-
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2009
 b)
            Subsidiary
      Partnerships – Commitments and
Contingencies
  Cloisters Limited
Partnership II (“Cloister”)
 Cloisters
is in the process of converting the project from rental to for sale
condominiums.  Cloisters is currently in negotiations to finalize a
construction agreement in the estimated amount of $2,146,000 and construction
financing in the estimated amount of $800,000 related to the renovation of the
units for sale.  There can be no assurance for when the conversion
will actually take place.
  c)  Uninsured
Cash and Cash Equivalents
  The
Partnership maintains its cash and cash equivalents in various banks. Accounts
at each bank are guaranteed by the Federal Deposit Insurance Corporation up to
$250,000. As of March 31, 2009, uninsured cash and cash equivalents approximated
$5,864,000.
  d)  Cash
Distributions
  Cash
distributions from the Local Partnerships to the Partnership are restricted by
the provisions of the respective partnership agreements of the Local
Partnerships and the U.S. Department of Housing and Urban Development (“HUD”)
based on operating results and a percentage of the owner’s equity
contribution.  Such cash distributions are typically made for surplus
cash flow.
  e)  Tax
Credits
  The
Partnership is subject to the risks incident to potential losses arising from
the management and ownership of improved real estate.  The Partnership
can also be affected by poor economic conditions generally; however, no more
than 25% of the properties are located in any single state. There are also
substantial risks associated with owning properties receiving government
assistance; for example, the possibility that Congress may not appropriate funds
to enable HUD to make rental assistance payments. HUD also restricts annual cash
distributions to partners based on operating results and a percentage of the
owner’s equity contribution. The Partnership cannot sell or substantially
liquidate its investments in subsidiary partnerships during the period that the
subsidy agreements are in existence without HUD’s approval. Furthermore, there
may not be market demand for apartments at full market rents when the rental
assistance contracts expire.
  The
Partnership and BACs holders began to recognize Tax Credits with respect to an
Apartment Complex when the Credit Period for such Apartment Complex
commenced.  As of December 31, 2007, all Credit Periods have
expired.
   NOTE 14 –
Discontinued Operations
  The
following table summarizes the financial position of the Local Partnerships that
are classified as discontinued operations because the respective Local
Partnerships were classified as assets held for sale.  As of March 31,
2009, Homestead II, Rolling Green and Opa-Locka were classified as discontinued
operations on the consolidated balance sheets.  As of March 31, 2008,
Homestead, Harbor Court, Bethel Villa and Lancaster were classified as
discontinued operations on the consolidated balance sheets.
  Consolidated Balance
Sheets:
  March
      31,2009
              
              2008AssetsProperty
      and equipment – less accumulated depreciation of $21,815,503 and
      $9,242,996, respectively
              
              $
              29,015,203
              
              $
              6,378,404Cash
      and cash equivalents
              
              
              38,131
              
              
              357,703Cash
      held in escrow
              
              
              3,571,222
              
              
              3,028,816Deferred
      costs, net of accumulated amortization of $868,985 and $732,911,
      respectively
              
              
              237,862
              
              
              191,630Other
      assets
              
              
              398,927
              
              
              213,732Total
      assets
              
              $
              33,261,345
              
              $
              10,170,285LiabilitiesMortgage
      notes payable
              
              $
              19,248,504
              
              $
              7,478,590Accounts
      payable
              
              
              2,685,081
              
              
              291,398Accrued
      interest payable
              
              
              680,348
              
              
              516,823Security
      deposit payable
              
              
              140,490
              
              
              127,418Due
      to local general partners and affiliates
              
              
              11,694,945
              
              
              222,169Due
      to general partners and affiliates
              
              
              489,288
              
              
              45,000Minority
      interest
              
              
              (755,763
              )
              
              (471,908
              )Total
      liabilities
              
              $
              34,182,893
              
              $
              8,209,490
 
   - 66
-
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2009
   The following table
summarizes the results of operations of the Local Partnerships that are
classified as discontinued operations.  For the year ended March 31,
2009, Plainsboro, Lancaster, Bateman Hotel, West Diamond, Bethel Villa,
Christine Apartments, Lares, Lajas, Landreth and Susquehanna, which were sold
during the current year, Homestead, which was sold during the year ended March
31, 2008, and Homestead II, Rolling Green and Opa-Locka, which are classified as
assets held for sale, were all classified as discontinued operations in the
consolidated financial statements.  For the year ended March 31, 2008,
P.S. 157, Old Public, Harbor Court, Beaumont, Hampden Hall and Homestead, which
were sold during the year, Bethel Villa and Lancaster, which were classified as
assets held for sale, and Plainsboro, Bateman Hotel, West Diamond, Christine
Apartments, Lares, Lajas, Landreth, Susquehanna, Homestead II, Rolling Green and
Opa-Locka, in order to present comparable results to the year ended March 31,
2009, were all classified as discontinued operations in the consolidated
financial statements.
  Consolidated Statements of
Discontinued Operations:
  Years
      Ended March 31,2009
                          
                          2008*RevenuesRental
      income
                          
                          $
                          11,449,962
                          
                          $
                          16,279,132Other
      (Note 2)
                          
                          
                          937,637
                          
                          
                          821,204Gain
      on sale of properties
                          
                          
                          7,494,728
                          
                          
                          2,508,563Total
      revenue
                          
                          
                          19,882,327
                          
                          
                          19,608,899ExpensesGeneral
      and administrative
                          
                          
                          2,556,895
                          
                          
                          3,294,610General
      and administrative-related parties (Note 8)
                          
                          
                          326,178
                          
                          
                          875,410Repairs
      and maintenance
                          
                          
                          3,108,393
                          
                          
                          3,628,713Operating
      and other
                          
                          
                          1,201,073
                          
                          
                          1,724,236Real
      estate taxes
                          
                          
                          1,061,131
                          
                          
                          1,218,086Insurance
                          
                          
                          816,549
                          
                          
                          1,257,092Interest
                          
                          
                          1,959,067
                          
                          
                          2,747,494Depreciation
      and amortization
                          
                          
                          1,552,976
                          
                          
                          3,807,264Costs
      from hurricane events
                          
                          
                          0
                          
                          
                          2,309,923Loss
      on impairment of property
                          
                          
                          4,519,323
                          
                          
                          6,360,000Total
      expenses
                          
                          
                          17,101,585
                          
                          
                          27,222,828Income
      (loss) before minority interest
                          
                          
                          2,780,742
                          
                          
                          (7,613,929
                          )Minority
      interest in loss of subsidiaries from discontinued
    operations
                          
                          
                          312,172
                          
                          
                          781,578Total
      income (loss) from discontinued operations (including gain on sale of
      properties)
                          
                          $
                          3,092,914
                          
                          $
                          (6,832,351
                          )Income
      (loss) – limited partners from discontinued operations (including gain on
      sale of properties)
                          
                          $
                          3,061,985
                          
                          $
                          (6,764,027
                          )Number
      of BACs outstanding
                          
                          
                          76,786
                          
                          
                          76,786Income
      (loss) discontinued operations (including gain on sale of properties) per
      BAC
                          
                          $
                          39.88
                          
                          $
                          (88.09
                          )
 
  Cash
Flows from Discontinued Operations:
  Years
      Ended March 31,2009
                
                2008*Net
      cash used in operating activities
                
                $
                (4,216,483
                )
                $
                (4,510,593
                )Net
      cash provided by investing activities
                
                $
                12,679,515
                
                $
                14,043,962Net
      cash used in financing activities
                
                $
                (6,629,178
                )
                $
                (3,793,273
                )
 
 *  Reclassified
for comparative purposes.
    - 67
-
  Item
9.  Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
  None
  Item
9A(T).  Controls and Procedures
  (a)Evaluation of Disclosure
Controls and Procedures.The Chief Executive Officer and Chief Financial
Officer of Related Independence Associates, Inc., the general partner of the
General Partner of the Partnership, have evaluated the effectiveness of the
Partnership’s disclosure controls and procedures (as such term is defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
amended (“Exchange Act”) as of the end of the period covered by this
report.  Based on such evaluation, such officers have concluded that,
as of the end of such period, the Partnership’s disclosure controls and
procedures are effective.
  (b)  Management’s Report on
Internal Control over Financial Reporting.Management is responsible
for establishing and maintaining adequate internal control over financial
reporting, as such term is defined in Exchange Act Rules 13a-15(f) and
15d-15(f).  In evaluating the Partnership’s internal control over
financial reporting, management has adopted the framework in Internal
Control-Integrated Framework issued by the Committee of Sponsoring organizations
of the Treadway Commission (the “COSO Framework”).  Under the
supervision and with the participation of management, including the Chief
Executive Officer and Chief Financial Officer of the General Partner, the
Partnership conducted an evaluation of the effectiveness of its internal control
over financial reporting as of March 31, 2009.  The Partnership’s
internal control system was designed to provide reasonable assurance to the
Partnership’s management regarding the reliability of financial reporting and
the preparation of financial statements for the external purposes in accordance
with generally accepted accounting principles.  Internal control over
financial reporting includes those policies and procedures that (1) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the Partnership; (2)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the Partnership are
being made only in accordance with authorizations of management and executive
officers of the Partnership; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition
of the Partnership’s assets that could have a material effect on the financial
statements.  However, because of inherent limitations, internal
control over financial reporting may not prevent or detect
misstatements.  Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
  Based on
management’s evaluation under the COSO Framework, it has concluded that the
Partnership’s internal control over financial reporting, was, as of the end of
the period covered by this report, (1) effective at the Partnership level, in
that they provide reasonable assurance that information required to be disclosed
by the Partnership in the reports it files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in the SEC's rules and forms and (2) ineffective at the subsidiary level due to
certain control deficiencies noted in the audit reports for such
subsidiaries.  Management will attempt to cause the Local General
Partner’s to remedy such deficiencies; however, the General Partner does not
have control over the internal controls at the subsidiary
level.  Management believes they have sufficient controls at the
Partnership level to mitigate these deficiencies, and such deficiencies do not
have a material impact on the consolidated financial statements.
  This
annual report does not include an attestation report of the Partnership’s
registered public accounting firm regarding internal control over financial
reporting. The Partnership’s internal control over financial reporting was not
subject to attestation by the Partnership’s registered public accounting firm
pursuant to temporary rules of the Securities and Exchange Commission that
permit the Partnership to provide only this report.
  (c)  Changes in Internal Controls over Financial
Reporting.Except as noted in (b) above, during the year ended
March 31, 2009, there were no changes in the Partnership’s internal control over
financial reporting that have materially affected, or are reasonably likely to
materially affect, the Partnership’s internal control over financial
reporting.
  Item
9B.  Other Information
  None
   - 68
-
  PART
III
  Item
10.  Directors, Executive Officers and Corporate
Governance
  The
Partnership is a limited partnership which was formed under the laws of the
State of Delaware on November 7, 1990. The general partner of the Partnership is
Related Independence Associates L.P., a Delaware limited partnership (the
“General Partner”). The general partner of the General Partner is Related
Independence Associates Inc., a Delaware corporation (“RIAI).  The
Partnership has no directors or executive officers. The Partnership’s affairs
are managed and controlled by the General Partner. The Partnership has not
adopted a separate code of ethics because the Partnership has no directors or
executive officers.  The ultimate parent of the General Partner is
Centerline Holding Company (“Centerline”).  Centerline has adopted a
code of ethics (see http://www.centerline.com).
  Certain
information concerning the directors and executive officers of RIAI is set forth
below.
  Name
              
              PositionRobert
      L. Levy
              
              Director
      and Chief Financial OfficerAndrew
      J. Weil
              
              President
      and Chief Executive OfficerMarc
      D. Schnitzer
              
              Senior
      Vice President
 
  ROBERT L.
LEVY, 43, is the Chief Financial Officer of Centerline.  Mr. Levy is
also the Chief Financial Officer of American Mortgage Acceptance Company
(“AMAC”), a publicly traded real estate investment trust managed by an affiliate
of Centerline.  Mr. Levy is responsible for overseeing the Corporate
Finance, Capital Markets, Accounting, Budgeting, Tax and Treasury
departments.  Mr. Levy joined Centerline’s predecessor in November of
2001 as the Director of Capital Markets.  From 1998 through 2001, Mr.
Levy was a Vice President in the Real Estate Equity Research and Investment
Banking Departments at Robertson Stephens, an investment banking firm in San
Francisco.  Prior to 1998, Mr. Levy was employed by Prudential
Securities in the Real Estate Equity Research Group and at Prudential Realty
Group, the real estate investment arm of the Prudential Insurance
Company.  He received his Masters in Business Administration from the
Leonard N. Stern School of Business at New York University and his Bachelor of
Arts from Northwestern University.
  ANDREW J.
WEIL, 38, is an Executive Managing Director of Centerline, and is the Head of
Centerline’s Affordable Housing Group.  Mr. Weil is responsible for
overseeing the day to day operations of the Affordable Housing Group, including
the acquisition of properties with Low-Income Housing Tax Credits and the
origination and structuring of institutional funds.  Prior to joining
Centerline’s predecessor in January 1994, Mr. Weil was a Financial Analyst for
the Heights Management Company, where he specialized in the analysis of
potential investments and property management.  Mr. Weil received a
Bachelor of Science degree in Economics with a concentration in Finance from the
Wharton School of the University of Pennsylvania.
  MARC D.
SCHNITZER, 48, is the Chief Executive Officer of Centerline and is responsible
both for financial restructuring of real estate properties and directing
Centerline’s acquisitions of properties generating Housing Tax Credits. Mr.
Schnitzer received a Masters of Business Administration from The Wharton School
of the University of Pennsylvania in December 1987 before joining Centerline in
January 1988.  He held numerous positions with Centerline and its
predecessors prior to being appointed CEO in March 2006.  From 1983 to
January 1986, he was a financial analyst for the First Boston Corporation in New
York. Mr. Schnitzer graduated summa cum laude with a Bachelor of Science in
Business Administration from the School of Management at Boston University in
May 1983.  Mr. Schnitzer also serves on the Board of Trustees of
Centerline and AMAC.
  Item
11.  Executive Compensation
  The
Partnership has no officers or directors. The Partnership does not pay or accrue
any fees, salaries or other forms of compensation to directors or officers of
the general partner of the General Partner for their services. Under the terms
of the Partnership Agreement, the General Partner and its affiliates are
entitled to receive compensation from the Partnership in consideration of
certain services rendered to the Partnership by such parties. In addition, the
General Partner is entitled to 1% of all cash distributions and Tax Credit
allocations and a subordinated 15% interest in Net Sales or Refinancings
Proceeds. See Note 8 in Item 8 above for a presentation of the types and amounts
of compensation paid to the General Partner and its affiliates, which is
incorporated herein by reference thereto.
  Tabular
information concerning salaries, bonuses and other types of compensation payable
to executive officers has not been included in this annual report. As noted
above, the Partnership has no executive officers. The levels of compensation
payable to the General Partner and/or its affiliates is limited by the terms of
the Partnership Agreement and may not be increased therefrom on a discretionary
basis.
  Item
12.  Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters
  Title
      of Class
              
              Name
      and Address of
                Beneficial
      Ownership
              
              Amount
      and Nature of
                Beneficial
      Ownership
              
              Percentage
                of
      ClassGeneral
      Partnership
                interest
      in the Partnership
              
              Related
      Independence Associates L.P.
                625
      Madison Avenue
                New
      York, NY 10022
              
              $1,000
      capital contribution – directly owned
              
              100%
 
  - 69
-
  Independence
SLP L.P., a limited partnership whose general partner is the General Partner of
the Partnership and which acts as the special limited partner of each Local
Partnership, holds either a 0.1% or 1% limited partnership interest in each
Local Partnership. See Note 8 in Item 8 above, which information is incorporated
herein by reference thereto.
  Except as
set forth in the table below, no person is known by the Partnership to be the
beneficial owner of more than 5% of the Limited Partnership Interests and
neither the General Partner nor any director or executive officer of the general
partner of the General Partner owns any Limited Partnership Interests. The
following table sets forth the number of BACs beneficially owned, as of May 28,
2009, by (i) each BACs holder known to the Partnership to be a beneficial owner
of more than 5% of the BACs, (ii) each director and executive officer of the
general partner of the General Partner and (iii) the director and executive
officers of the general partner of the General Partner as a
group.  Unless otherwise noted, all BACs are owned directly with sole
voting and dispositive powers.
  Name
      of Beneficial Owner (1)
              
              Amount
      and Nature of
                Beneficial
      Ownership
              
              Percent
      of ClassLehigh
      Tax Credit Partners, Inc.
              
              6,846.30
              (2)
      (3)
              
              8.9
              %J.
      Michael Fried
              
              6,846.30
              (2)
      (3) (4)
              
              8.9
              %Alan
      P. Hirmes
              
              6,846.30
              (2)
      (3) (4)
              
              8.9
              %Stuart
      J. Boesky
              
              6,846.30
              (2)
      (3) (4)
              
              8.9
              %Marc
      D. Schnitzer
              
              6,846.30
              (2)
      (3) (4)
              
              8.9
              %Denise
      L. Kiley
              
              6,846.30
              (2)
      (3) (4)
              
              8.9
              %Robert
      L. Levy
              
              -
              
              
              -Andrew
      J. Weil
              
              -
              
              
              -All
      directors and executive officers of the general partner of the General
      Partner as a group (three persons)
              
              6,846.30
              (2)
      (3) (4)
              
              8.9
              %
 
  (1)
            The
      address for each of the persons in the table is 625 Madison Avenue, New
      York, New York 10022.
  (2)
            As
      set forth in Schedule 13D filed by Lehigh Tax Credit Partners L.L.C.
      (“Lehigh I”) and Lehigh Tax Credit Partners, Inc., (the “Managing Member”)
      on June 10, 1997 with the Securities and Exchange Commission (the
      “Commission”).
  (3)
            All
      of such BACs represent BACs owned directly by Lehigh I and its affiliate,
      Lehigh Tax Credit Partners II, L.L.C. (“Lehigh II”), for which the
      Managing Member serves as managing member.  As of May 28, 2009,
      Lehigh I held 3,410.65 BACs and Lehigh II held 2,239.60
    BACs.
  (4)
            Mr.
      Schnitzer serves as an executive officer of the Managing Member and owns
      an equity interest therein.  All other parties only own an
      economic interest.
  Item
13.  Certain Relationships and Related Transactions, and Director
Independence
  The
Partnership has and will continue to have certain relationships with the General
Partner and its affiliates, as discussed in Item 11 and also Note 8 in Item 8
above, which are incorporated herein by reference. However, there have been no
direct financial transactions between the Partnership and the directors and
officers of the general partner of the General Partner.
  Item
14.  Principal Accountant Fees and Services
  Audit
Fees
  The
aggregate fees billed by Trien Rosenberg Rosenberg Weinberg Ciullo and Fazzari
LLP and its affiliates for professional services rendered for the audit of the
Partnership’s annual financial statements for the years ended March 31, 2009 and
2008 and for the reviews of the financial statements included in the
Partnership’s quarterly reports on Form 10-Q for those years were $72,000 and
$68,500, respectively.
  Audit – Related
Fees
  None
  Tax Fees
  The
aggregate fees billed by Weiser LLP and its affiliates for professional services
rendered for the preparation of the Partnership’s  annual tax returns
were $11,500 for both years ended December 31, 2008 and 2007,
respectively.
   - 70
-
  All Other
Fees
  None.
  The
Partnership is not required to have, and does not have, a stand-alone audit
committee.
   - 71
-
  PART
IV
  
 
 
 Item
      15.
                  Exhibits
      and Financial Statement SchedulesSequential
                    Page(a)
      1.
                  Financial StatementsReport
      of Independent Registered Public Accounting Firm
                  
                  15Consolidated
      Balance Sheets at March 31, 2009 and 2008
                  
                  47Consolidated
      Statements of Operations for the Years Ended March 31, 2009 and
      2008
                  
                  48Consolidated
      Statements of Changes in Partners’ Capital (Deficit) for the Years Ended
      March 31, 2009 and 2008
                  
                  49Consolidated
      Statements of Cash Flows for the Years Ended March 31, 2009 and
      2008
                  
                  50Notes
      to Consolidated Financial Statements
                  
                  52(a)
      2.
                  Consolidated Financial Statement
      SchedulesReport
      of Independent Registered Public Accounting Firm
                  
                  76Schedule
      I- Condensed Financial Information of Registrant
                  
                  77Schedule
      III - Real Estate and Accumulated Depreciation
                  
                  80(a)
      3.
                  Exhibits(3A)
                  Form
      of Amended and Restated Agreement of Limited Partnership of Independence
      Tax Credit Plus L.P., attached to the Prospectus as Exhibit
    A*(3B)
                  Amended
      and Restated Certificate of Limited Partnership of Independence Tax Credit
      Plus L.P.*(10A)
                  Form
      of Subscription Agreement attached to the Prospectus as Exhibit
      B*(10B)
                  Form
      of Purchase and Sales Agreement pertaining to the Partnership’s
      acquisition of Local Partnership Interests*(10C)
                  Form
      of Amended and Restated Agreement of Limited Partnership of Local
      Partnerships*(21)
                  Subsidiaries
      of the Registrant
                  
                  73*   
      Incorporated herein as an exhibit by reference to exhibits filed with
      Pre-Effective Amendment No. 1 to the Independence Tax Credit Plus L.P.
      Registration Statement on Form S-11 (Registration No.
      33-37704)(31.1)
                  Certification Pursuant to Rule 13a-14(a) or Rule
      15d-14(a)(31.2)
                  Certification Pursuant to Rule 13a-14(a) or Rule
      15d-14(a)(32.1)
                  Certification Pursuant to Rule 13a-14(b) or Rule
      15d-14(b) and Section 1350 of Title 18 of the United States Code (18
      U.S.C. 1350)
  - 72
-
   Item
      15.
            Exhibits
      and Financial Statement Schedules (continued)
 
 Subsidiaries of the
      Registrant (Exhibit 21)
              
              Jurisdiction
                of
      Organization655
      North Street Limited Partnership
              
              LABoston
      Bay Limited Partnership
              
              MAMorrant
      Bay Limited Partnership
              
              MAHope
      Bay Limited Partnership
              
              MAArlington-Rodeo
      Properties
              
              CAChester
      Renaissance Associates
              
              PAHomestead
      Apartments II, LTD.
              
              FLCloisters
      Limited Partnership II
              
              PACreative
      Choice Homes II, LTD.
              
              FLMilford
      Crossing Associates L.P.
              
              DELos
      Angeles Limited Partnership
              
              PRRolling
      Green Associates, L.P.
              
              NY
 
  - 73
-
   SIGNATURES
 
 
 
 Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
 
 
 
 INDEPENDENCE TAX CREDIT PLUS
L.P.
 (Registrant)
 
 
 
 By:
            RELATED
      INDEPENDENCE ASSOCIATES L.P.,its
      General PartnerBy:
            INDEPENDENCE
      ASSOCIATES GP LLC,a
      General PartnerDate:
            June 29, 2009
            
            
            
            By:
            /s/ Robert L. LevyRobert
      L. LevyChief
      Financial Officer, Principal Accounting Officer and
              DirectorDate:
            June 29, 2009
            
            
            
            By:
            /s/ Andrew J. WeilAndrew
      J. WeilPresident
      and Chief Executive Officer
 
 
  - 74
-
  Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated:
 
 
 
 Signature
                    
                    Title
                    
                    Date/s/ Robert L. Levy
                      Robert
      L. Levy
                    
                    Chief
      Financial Officer, Principal Accounting Officer and Director
      of
                      Independence
      Associates GP LLC.
                    
                    June 29, 2009/s/ Andrew J. Weil
                      Andrew
      J. Weil
                    
                    President
      (Chief Executive Officer) of Independence Associates GP
    LLC.
                    
                    June 29,
2009
 
 
 
  - 75
-
   REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 To the
Partners of
 Independence
Tax Credit Plus L.P. and Subsidiaries
 (A
Delaware Limited Partnership)
 
 In
connection with our audits of the consolidated financial statements of
Independence Tax Credit Plus L.P. and Subsidiaries (A Delaware Limited
Partnership) included in this Form 10-K as presented in our opinion dated June
24, 2009 on page 15, and based on the reports of other auditors, we have also
audited supporting Schedule I for the 2008 and 2007 Fiscal Years and Schedule
III at March 31, 2009.  In our opinion, and based upon the reports of
the other auditors, these consolidated schedules present fairly, when read in
conjunction with the related consolidated financial statements, the financial
data required to be set forth therein.
 
 As
discussed in Note 13(a), the consolidated financial statements include the
financial statements of three subsidiary partnerships with significant
uncertainties.  The financial statements of these subsidiary
partnerships were prepared assuming that they will continue as going
concerns.  These three subsidiary partnerships’ net losses aggregated
$551,341 (2008 Fiscal Year) and $3,651,851 (2007 Fiscal Year) and their assets
aggregated $23,400,218 and $23,381,182 at March 31, 2009 and 2008,
respectively.  Management’s plan in regard to this matter is also
described in Note 13(a).  The accompanying consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
  
 TRIEN
ROSENBERG ROSENBERG
 WEINBERG
CIULLO & FAZZARI LLP
 
 
 New York,
New York
 June 24,
2009
  - 76
-
  INDEPENDENCE
TAX CREDIT PLUS L.P.
 SCHEDULE
I
 CONDENSED
FINANCIAL INFORMATION OF REGISTRANT
 (NOT
INCLUDING CONSOLIDATED SUBSIDIARY PARTNERSHIPS)
 
 
 CONDENSED
BALANCE SHEETS
 
 
 
 
 ASSETS
 
 
 2009
            
            
            2008Cash
      and cash equivalents
            
            $
            5,043,817
            
            
            $
            2,818,676Advances
      and investment in subsidiary partnerships
            
            
            1,229,204
            
            
            
            6,929,305Other
      assets
            
            
            166,299
            
            
            
            137,511Total
      assets
            
            $
            6,439,320
            
            
            $
            9,885,492LIABILITIES
      AND PARTNERS’ CAPITALOther
      liabilities
            
            $
            52,290
            
            
            $
            7,292Due
      to general partners and affiliates
            
            
            9,622,432
            
            
            
            14,006,563Total
      liabilities
            
            
            9,674,722
            
            
            
            14,013,855Partners’
      (deficit) capital*
            
            
            (3,235,402
            )
            
            
            (4,128,363
            )Total
      liabilities and partners’ capital
            
            $
            6,439,320
            
            
            $
            9,885,492
 
 Investments
in subsidiary partnerships are recorded in accordance with the equity method of
accounting, wherein the investments are not reduced below
zero.  Accordingly, partners’ capital on the consolidated balance
sheet will differ from partners’ capital shown above.
 
 *  Condensed
partners’ (deficit) capital includes $0 and $427,758 of related party income at
March 31, 2009 and 2008, respectively.
 
  - 77
-
  INDEPENDENCE
TAX CREDIT PLUS L.P.
 SCHEDULE
I
 CONDENSED
FINANCIAL INFORMATION OF REGISTRANT
 (NOT
INCLUDING CONSOLIDATED SUBSIDIARY PARTNERSHIPS)
 
 
 CONDENSED
STATEMENTS OF OPERATIONS
 
 
 
 
 Years
      Ended March 31,2009
            
            
            2008Revenues
            
            $
            52,711
            
            
            $
            24,695ExpensesAdministrative
      and management
            
            
            258,655
            
            
            
            241,765Administrative
      and management-related parties
            
            
            986,875
            
            
            
            1,050,166Total
      expenses
            
            
            1,245,530
            
            
            
            1,291,931Loss
      from operations
            
            
            (1,192,819
            )
            
            
            (1,267,236
            )Gain
      on sale of investments in subsidiary partnerships
            
            
            6,169,515
            
            
            
            1,053,008Distribution
      income of subsidiary partnerships in excess of investments
            
            
            35,699
            
            
            
            32,972Equity
      in loss of subsidiary partnerships*
            
            
            (7,870,958
            )
            
            
            (7,576,450
            )Net
      loss
            
            $
            (2,858,563
            )
            
            $
            (7,757,706
            )* 
      Includes suspended prior year losses of investments in accordance with
      equity method of accounting amounting to $(3,079,933) and $(2,458,754) as
      of March 31, 2009 and 2008,
respectively.
  
 - 78
-
  INDEPENDENCE
TAX CREDIT PLUS L.P.
 SCHEDULE
I
 CONDENSED
FINANCIAL INFORMATION OF REGISTRANT
 (NOT
INCLUDING CONSOLIDATED SUBSIDIARY PARTNERSHIPS)
 
 
 CONDENSED
STATEMENTS OF CASH FLOWS
 
 
 
 
 
 Years
      Ended March 31,2009
            
            2008Cash
      flows from operating activities:Net
      loss
            
            $
            (2,858,563
            )
            $
            (7,757,706
            )Adjustments
      to reconcile net loss to net cash provided by operating
      activities:Gain
      on sale of investments
            
            
            (6,169,515
            )
            
            (1,053,008
            )Distribution
      income of subsidiary partnerships in excess of investments
            
            
            (35,699
            )
            
            (32,972
            )Equity
      in loss of subsidiary partnerships
            
            
            7,870,958
            
            
            7,576,450Increase
      in other assets
            
            
            (61,195
            )
            
            (12,625
            )(Decrease)
      increase in other liabilities
            
            
            44,998
            
            
            2,597Increase
      in due to general partner and affiliates
            
            
            (4,384,131
            )
            
            (2,183,590
            )Total
      adjustments
            
            
            (2,734,584
            )
            
            4,296,852Net
      cash used in operating activities
            
            
            (5,593,147
            )
            
            (3,460,854
            )Cash
      flows from investing activities:Proceeds
      from sale of investments in subsidiary partnerships
            
            
            4,029,430
            
            
            5,000,508Decrease
      in cash held in escrow-purchase price payments
            
            
            0
            
            
            8,607Investment
      in subsidiary partnerships
            
            
            0
            
            
            (8,607
            )Distributions
      from subsidiary partnerships
            
            
            107,334
            
            
            2,078,010Contribution-General
      Partner – Partnership management fees
            
            
            3,751,524
            
            
            0Advances
      to subsidiary partnerships
            
            
            (70,000
            )
            
            (830,254
            )Net
      cash provided by investing activities
            
            
            7,818,288
            
            
            6,248,264Net
      increase in cash and cash equivalents
            
            
            2,225,141
            
            
            2,787,410Cash
      and cash equivalents, beginning of year
            
            
            2,818,676
            
            
            31,266Cash
      and cash equivalents, end of year
            
            $
            5,043,817
            
            $
            2,818,676
 
  - 79
-
  INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 SCHEDULE
III
 REAL
ESTATE AND ACCUMULATED DEPRECIATION
 Partnership
Property Pledged as Collateral
 MARCH 31,
2009
   
 
 Description
                                
                                Encumbrances
                                
                                Initial
      Cost to Partnership
                                
                                Cost
      Capitalized
                                  Subsequent
      to
                                  Acquisition:
                                  Improvements
                                
                                Land
                                
                                Buildings
      and
                                  Improvements
                                
                                Total
                                
                                Accumulated
                                  Depreciation
                                
                                Year
      of
                                  Construction/
                                  Renovation
                                
                                Date
                                  Acquired
                                
                                Life
      on which
                                  Depreciation
      in
                                  Latest
      Income
                                  Statement
      is
                                  Computed*Land
                                
                                Buildings
      and
                                  ImprovementsApartment
      ComplexesHarbor
      Court Limited Partnership (d)Staten
      Island, NY
                                
                                $
                                0
                                
                                $
                                137,450
                                
                                $
                                1,007,966
                                
                                $
                                (1,145,416
                                )
                                $
                                0
                                
                                $
                                0
                                
                                $
                                0
                                
                                $
                                0
                                
                                1991
                                
                                Dec.
      1991
                                
                                27.5
                                yearsOld
      Public Limited Partnership (e)Lawrenceburg,
      TN
                                
                                
                                0
                                
                                
                                10,000
                                
                                
                                1,713,310
                                
                                
                                (1,723,310
                                )
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                1991
                                
                                Dec.
      1991
                                
                                27.5
                                yearsLancaster
      Terrace Limited Partnership (f)Salem,
      OR
                                
                                
                                0
                                
                                
                                161,269
                                
                                
                                3,679,601
                                
                                
                                (3,840,870
                                )
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                1992
                                
                                Feb.
      1992
                                
                                15-27.5
                                years655
      North Street Limited PartnershipBaton
      Rouge, LA
                                
                                
                                4,560,344
                                
                                
                                125,500
                                
                                
                                3,040,980
                                
                                
                                6,236,976
                                
                                
                                127,751
                                
                                
                                9,275,705
                                
                                
                                9,403,456
                                
                                
                                5,351,650
                                
                                1992
                                
                                Mar.
      1992
                                
                                27.5
                                yearsLandreth
      Venture (f)Philadelphia,
      PA
                                
                                
                                0
                                
                                
                                1,761
                                
                                
                                5,903,337
                                
                                
                                (5,905,098
                                )
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                1992
                                
                                Mar.
      1992
                                
                                40
                                yearsHomestead
      Apartments Associates Ltd. (b)(d)Homestead,
      FL
                                
                                
                                0
                                
                                
                                329,402
                                
                                
                                0
                                
                                
                                (329,402
                                )
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                1992
                                
                                Mar.
      1992
                                
                                40
                                yearsBethel
      Villa Associates, L.P. (f)Wilmington,
      DE
                                
                                
                                0
                                
                                
                                270,000
                                
                                
                                5,969,354
                                
                                
                                (6,239,354
                                )
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                1992
                                
                                Apr.
      1992
                                
                                27.5
                                yearsWest
      Diamond Street Associates (g)Philadelphia,
      PA
                                
                                
                                0
                                
                                
                                30,829
                                
                                
                                3,444,649
                                
                                
                                (3,475,478
                                )
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                1992
                                
                                May
      1992
                                
                                40
                                yearsSusquehanna
      Partners (f)Philadelphia,
      PA
                                
                                
                                0
                                
                                
                                16,000
                                
                                
                                0
                                
                                
                                (16,000
                                )
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                1992
                                
                                May
      1992
                                
                                20-40
                                yearsBoston
      Bay Limited PartnershipBoston,
      MA
                                
                                
                                1,843,993
                                
                                
                                440,000
                                
                                
                                4,143,758
                                
                                
                                900,245
                                
                                
                                441,585
                                
                                
                                5,042,418
                                
                                
                                5,484,003
                                
                                
                                3,101,276
                                
                                1991
                                
                                Aug.
      1992
                                
                                27.5
                                yearsMorrant
      Bay Limited PartnershipBoston,
      MA
                                
                                
                                2,718,056
                                
                                
                                650,000
                                
                                
                                5,522,250
                                
                                
                                1,485,897
                                
                                
                                651,585
                                
                                
                                7,006,562
                                
                                
                                7,658,147
                                
                                
                                4,164,587
                                
                                1991
                                
                                Aug.
      1992
                                
                                27.5
                                yearsHope
      Bay Limited PartnershipBoston,
      MA
                                
                                
                                1,059,636
                                
                                
                                225,000
                                
                                
                                1,435,185
                                
                                
                                697,388
                                
                                
                                226,585
                                
                                
                                2,130,988
                                
                                
                                2,357,573
                                
                                
                                1,282,293
                                
                                1991
                                
                                Aug.
      1992
                                
                                27.5
                                yearsLares
      Apartments Limited Partnership (f)Lares,
      PR
                                
                                
                                0
                                
                                
                                137,000
                                
                                
                                0
                                
                                
                                (137,000
                                )
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                1992
                                
                                Aug.
      1992
                                
                                40
                                yearsLajas
      Apartments Limited Partnership (f)Lajas,
      PR
                                
                                
                                0
                                
                                
                                110,090
                                
                                
                                4,952,929
                                
                                
                                (5,063,019
                                )
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                1992
                                
                                Aug.
      1992
                                
                                40
                                yearsArlington-Rodeo
      PropertiesLos
      Angeles, CA
                                
                                
                                3,543,123
                                
                                
                                624,052
                                
                                
                                0
                                
                                
                                5,094,391
                                
                                
                                625,637
                                
                                
                                5,092,806
                                
                                
                                5,718,443
                                
                                
                                2,285,871
                                
                                1992
                                
                                Aug.
      1992
                                
                                27.5
                                yearsConifer
      Bateman Associates (f)Lowville,
      NY
                                
                                
                                0
                                
                                
                                15,000
                                
                                
                                2,525,729
                                
                                
                                (2,540,729
                                )
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                1990
                                
                                Aug.
      1992
                                
                                15-27.5
                                yearsHampden
      Hall Associates, L.P. (c)St.  Louis,
      MO
                                
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                1992
                                
                                Sep.
      1992
                                
                                27.5
                                yearsChester
      Renaissance AssociatesChester,
      PA
                                
                                
                                839,350
                                
                                
                                33,667
                                
                                
                                168,333
                                
                                
                                1,826,960
                                
                                
                                42,153
                                
                                
                                1,986,807
                                
                                
                                2,028,960
                                
                                
                                792,813
                                
                                1992
                                
                                Sep.
      1992
                                
                                40
                                yearsHomestead
      Apartments II, LTD. (h)Homestead,
      FL
                                
                                
                                3,168,774
                                
                                
                                338,966
                                
                                
                                0
                                
                                
                                5,287,011
                                
                                
                                340,551
                                
                                
                                5,285,426
                                
                                
                                5,625,977
                                
                                
                                2,095,859
                                
                                1992
                                
                                Oct.
      1992
                                
                                40
                                yearsP.S.
      157 Associates, L.P. (a)(b)New
      York, NY
                                
                                
                                0
                                
                                
                                36,500
                                
                                
                                9,350,642
                                
                                
                                (9,388,727
                                )
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                1992
                                
                                Nov.
      1992
                                
                                40
                                yearsCloisters
      Limited Partnership IIPhiladelphia,
      PA
                                
                                
                                0
                                
                                
                                35,160
                                
                                
                                0
                                
                                
                                791,153
                                
                                
                                36,745
                                
                                
                                789,568
                                
                                
                                826,313
                                
                                
                                141,633
                                
                                1992
                                
                                Nov.
      1992
                                
                                40
                                yearsCreative
      Choice Homes II, LTD. (h)Opa-Locka,
      FL
                                
                                
                                5,417,230
                                
                                
                                0
                                
                                
                                0
                                
                                
                                22,843,733
                                
                                
                                574,637
                                
                                
                                22,269,096
                                
                                
                                22,843,733
                                
                                
                                7,965,919
                                
                                1988
                                
                                Dec.
      1992
                                
                                40
                                yearsMilford
      Crossing Associates L.P.  (**)Milford,
      DE
                                
                                
                                2,300,044
                                
                                
                                203,006
                                
                                
                                0
                                
                                
                                4,392,233
                                
                                
                                115,519
                                
                                
                                4,479,720
                                
                                
                                4,595,239
                                
                                
                                2,639,890
                                
                                1992
                                
                                Dec.
      1992
                                
                                27.5
                                years
   
 - 80
-
 
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 SCHEDULE
III
 REAL
ESTATE AND ACCUMULATED DEPRECIATION
 Partnership
Property Pledged as Collateral
 MARCH 31,
2009
 (continued)
  
 
 Description
                                  
                                  Encumbrances
                                  
                                  Initial
      Cost to Partnership
                                  
                                  Cost
      Capitalized
                                    Subsequent
      to
                                    Acquisition:
                                    Improvements
                                  
                                  Land
                                  
                                  Buildings
      and
                                    Improvements
                                  
                                  Total
                                  
                                  Accumulated
                                    Depreciation
                                  
                                  Year
      of
                                    Construction/
                                    Renovation
                                  
                                  Date
                                    Acquired
                                  
                                  Life
      on which
                                    Depreciation
      in
                                    Latest
      Income
                                    Statement
      is
                                    Computed*Land
                                  
                                  Buildings
      and
                                    Improvements
 BX-7F Associates, L.P.
      (c)Bronx,
      NY
                                
                                
                                0
                                
                                
                                4
                                
                                
                                5,705,064
                                
                                
                                (5,705,068
                                )
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                1993
                                
                                Jan.
      1993
                                
                                40
                                yearsLos
      Angeles Limited PartnershipRio
      Piedras, PR
                                
                                
                                3,841,305
                                
                                
                                201,210
                                
                                
                                0
                                
                                
                                6,734,959
                                
                                
                                203,384
                                
                                
                                6,732,785
                                
                                
                                6,936,169
                                
                                
                                2,555,132
                                
                                1994
                                
                                Apr.1993
                                
                                40
                                yearsChristine
      Apartments, L.P. (f)Buffalo,
      NY
                                
                                
                                0
                                
                                
                                10,000
                                
                                
                                2,351,072
                                
                                
                                (2,361,073
                                )
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                1993
                                
                                June
      1993
                                
                                27.5
                                yearsPlainsboro
      Housing Partners, L.P. (f)Plainsboro,
      NJ
                                
                                
                                0
                                
                                
                                800,000
                                
                                
                                0
                                
                                
                                (800,000
                                )
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                
                                0
                                
                                1994
                                
                                July
      1993
                                
                                27.5
                                yearsRolling
      Green Associates, L.P. (h)Syracuse,
      NY
                                
                                
                                10,662,500
                                
                                
                                180,000
                                
                                
                                19,583,101
                                
                                
                                2,597,893
                                
                                
                                182,174
                                
                                
                                22,178,820
                                
                                
                                22,360,994
                                
                                
                                11,753,637
                                
                                1992
                                
                                Oct.
      1993
                                
                                27.5
                                yearsLess:  Discontinued
      operations
                                
                                
                                (19,248,504
                                )
                                
                                (2,584,271
                                )
                                
                                (66,186,754
                                )
                                
                                17,941,907
                                
                                
                                (1,097,362
                                )
                                
                                (49,733,342
                                )
                                
                                (50,830,704
                                )
                                
                                (21,815,412
                                )$
                                20,705,851
                                
                                $
                                2,537,595
                                
                                $
                                14,310,506
                                
                                $
                                28,160,202
                                
                                $
                                2,470,944
                                
                                $
                                42,537,359
                                
                                $
                                45,008,303
                                
                                $
                                22,315,148*    
      Personal property is depreciated over the estimated useful life ranging
      from 3 to 10 years.
                                  **  
      During the year ended December 31, 1997, the Partnership sold a parcel of
      land for $210,000 to an entity with a member who is also the general
      partner of the Partnership.
                                  (a)  
      The Partnership’s Local Partnership interest in this Local Partnership was
      sold during the fiscal year ended March 31, 2007.  See Note 10
      in Item 8, Financial Statements and Supplementary Data.
                                  (b)  
      This Property is included in discontinued operations for the year ended
      March 31, 2007.  See Note 14 in Item 8, Financial Statements and
      Supplementary Data.
                                  (c)  
      The Partnership’s Local Partnership interest in this Local Partnership was
      sold during the fiscal year ended March 31, 2008.  See Note 10
      in Item 8, Financial Statements and Supplementary Data.
                                  (d)  
      The Property and the related assets and liabilities were sold during the
      fiscal year ended March 31, 2008.  See Note 10 in Item 8,
      Financial Statements and Supplementary Data.
                                  (e)  
      The deed to the Property and related assets and liabilities were
      transferred during the fiscal year ended March 31, 2008.  See
      Note 10 in Item 8, Financial Statements and Supplementary
      Data.
                                  (f)   
      The Partnership’s Local Partnership interest in this Local Partnership was
      sold during the fiscal year ended March 31, 2009.  See Note 10
      in Item 8, Financial Statements and Supplementary Data.
                                  (g)  
      The Property and the related assets and liabilities were sold during the
      fiscal year ended March 31, 2009.  See Note 10 in Item 8,
      Financial Statements and Supplementary Data.
                                  (h)  
      This Property is included in discontinued operations for the year ended
      March 31, 2009.  See Note 11 in Item 8, Financial Statements and
      Supplementary
Data.
 
  
  - 81
-
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 SCHEDULE
III
 REAL
ESTATE AND ACCUMULATED DEPRECIATION
 Partnership
Property Pledged as Collateral
 MARCH 31,
2009
 (continued)
  Cost
      of Property and Equipment
            
            Accumulated
      DepreciationYears
      Ended March 31,2009
            
            2008
            
            2009
            
            2008Balance
      at beginning of period
            
            $
            140,177,103
            
            $
            171,240,385
            
            $
            61,526,197
            
            $
            70,978,449Additions
      during period:Improvements
            
            
            1,414,288
            
            
            1,211,078Depreciation
      expense
            
            
            
            
            
            
            
            
            1,615,050
            
            
            5,283,566Deductions
      during period:Discontinued
      operations, dispositions, and impairments
            
            
            (96,583,088
            )
            
            (32,274,360
            )
            
            (40,826,099
            )
            
            (14,735,818
            )Balance
      at close of period
            
            $
            45,008,303
            
            $
            140,177,103
            
            $
            22,315,148
            
            $
            61,526,197
 
 At the
time the Local Partnerships were acquired by Independence Tax Credit Plus L.P.,
the entire purchase price paid by Independence Tax Credit Plus L.P. was pushed
down to the local partnerships as property and equipment with an offsetting
credit to capital.  Since the projects were in the construction phase
at the time of acquisition, the capital accounts were insignificant at the time
of purchase.  Therefore, there are no material differences between the
original cost material differences between the original cost basis for tax and
GAAP.
 
 
 
  - 82
-