UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 
 ______________
 
 FORM
10-K
 
 ______________
 (Mark
One)
 
 x
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 For
the fiscal year ended March 31, 2008
 
 OR
 
 [  ]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) 517-3700
 
 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  [  ]    No  x
 
 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  [  ]    No  x
 
 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  x    No  [  ]
 
 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.  x
 
 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 definition of “large
accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule
12b-2 of the Exchange Act.  (Check one):
 
 Large
      accelerated filer [  ]
            
            Accelerated
      filer [  ]Non-accelerated
      filer x (Do
      not check if a smaller reporting company)
            
            Smaller
      reporting company [  ]
 
 Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the
Act).  Yes  [  ]   No   x
 
 The approximate aggregate book value of
the voting and non-voting common equity held by non-affiliates of the Registrant
as of September 30, 2007 was $(5,934,000), 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, 2008, 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, 2008, the Partnership has disposed of
six of the twenty-eight original Properties.  During the year ended
March 31, 2008, two Local Partnerships sold their property and the related
assets and liabilities, the Partnership sold its limited partnership interests
in two Local Partnerships and one Local Partnership transferred the deed to the
property and related assets and liabilities of such Local Partnership. 
Through March 31, 2008, two Local Partnerships sold their property and the
related assets and liabilities, the Partnership sold its limited partnership
interests in three Local Partnerships and one Local Partnership transferred the
deed to the property and related assets and liabilities of such Local
Partnership.  In addition, one Local Partnership entered into an agreement
to sell its property and related assets and liabilities and the Partnership has
entered into an agreement to sell its limited partnership interest in another
Local Partnership.  Subsequent to March 31, 2008, the Partnership sold its
limited partnership interest in one Local Partnership and three Local
Partnerships have entered into agreements to sell their property and the related
assets and liabilities (see Note 15 in Item 8).  See Item 2,
Properties, 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.
            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 $11,579, $17,573 and $17,573 in Tax Credits
during the years ending December 31, 2007, 2006 and 2005,
respectively.
 
 The Tax
Credits are attached to a Local Partnership for the Credit Period and are
transferable with the Property during the entirety of such ten year
period.  If trends in the real estate market warranted the sale of a
Property, the remaining Tax Credits would transfer to the new owner, thereby
adding value to the Property on the market.  However, such value
declines each year and is not included in the financial statement carrying
amount.  As of December 31, 2006, all Credit Periods have expired
except for one Local Partnership which has an extended Credit
Period.  This Local Partnership will receive $11,579 in Tax Credits
through December 31, 2008 and then smaller amounts through 2011.  The
Compliance Periods will continue through December 31, 2016 with respect to the
Properties depending upon when the Tax Credit Periods commenced.
 
 - 2
-
  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, 2008,
the Partnership recorded approximately $5,630,000 as an aggregate loss on
impairment of assets.  Through March 31, 2008, the Partnership has
recorded approximately $7,295,000 as an aggregate loss on impairment of assets
or reduction to estimated fair value.
 
 While the
value of the remaining Tax Credits are a factor in calculating fair value, the
expiration of the Credit Period, in and of itself, is not the only factor in
determining whether there is an impairment and generally does not have any
adverse impact on the fair value of the Local Partnerships.
 
 There can
be no assurance that the Partnership will achieve its investment objectives as
described above.
 
 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 23% 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
Partnership Interest
 
 The
Partnership is currently in the process of disposing of its
investments.  During the year ended March 31, 2008, two Local
Partnerships sold their property and the related assets and liabilities, the
Partnership sold its limited partnership interests in two Local Partnerships and
one Local Partnership transferred the deed to the property and related assets
and liabilities of such Local Partnership.  Through March 31, 2008, two
Local Partnerships have sold their property and the related assets and
liabilities, the Partnership has sold its limited partnership interests in three
Local Partnerships and one Local Partnership transferred the deed to the
property and related assets and liabilities of such Local Partnership.  In
addition, one Local Partnership entered into an agreement to sell its property
and related assets and liabilities and the Partnership has entered into an
agreement to sell its limited partnership interest in another Local
Partnership.  Subsequent to March 31, 2008, the Partnership sold its
limited partnership interest in one Local Partnership and three Local
Partnerships have entered into agreements to sell their property and the related
assets and liabilities (see Note 15 in Item 8).
 
 On March
20, 2008, the property and 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 $191,000
resulting from the write of the deficit basis in the property at the date of
sale, which will be recognized during the quarter ending June 30,
2008.
 
 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.
 
 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.
 
 Assets Held for
Sale
 
 On March
31, 2008, Bethel Villa Associates, L.P. (“Bethel Villa”) entered into a purchase
and sale agreement to sell its limited partnership interest to the Local General
Partner for a sales price of $750,000.  The sales documents have been
executed.  The sale requires HUD approval.  At this time,
the Partnership cannot determine when or if HUD will grant its
approval.  During the quarter ended March 31, 2008, in accordance with
Statement of Financial Accounting Standards No. 144 (“SFAS No. 144”) Accounting for the Impairment of
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.  Bethel Villa is being held as an asset held
for sale as of March 31, 2008.  As of December 31, 2007, Bethel Villa
had property and equipment, at cost, of approximately $5,360,000, accumulated
depreciation of approximately $4,603,000 and mortgage debt of approximately
$2,874,000
 
 - 3
-
  On
September 5, 2007, Lancaster Terrace Limited Partnership (“Lancaster Terrace”)
entered into a purchase and sale agreement to sell the property and the related
assets and liabilities to the Local General Partner for a sales price of
$2,800,000.  The sales documents have been executed and the initial
deposit funds are being held in escrow.  No assurance can be given
that the sale will actually occur.  The closing is expected to occur
during 2008.  Lancaster Terrace was being held as an asset held for
sale since the quarter ended September 30, 2007.  As of December 31,
2007, Lancaster Terrace had property and equipment, at cost, of approximately
$3,961,000, accumulated depreciation of approximately $2,334,000 and mortgage
debt of approximately $1,332,000.
 
 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, 2008, the Partnership held a 98.99% limited partnership interest in
twenty-one Local Partnerships and a 98% limited partnership interest in one
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.
 
 - 4
-
 
 Local Partnership
Schedule
 
 
 Name
      and Location
                (Number
      of Units)
              
              Date
      Acquired
              
              %
      of Units Occupied at May 1,2008
              
              2007
              
              2006
              
              2005
              
              2004Harbor
      Court Limited Partnership
              
              December
      1991
              
              (b)
              
              
              100
              %
              
              100
              %
              
              98
              %
              
              100
              %Staten
      Island, NY (40)Old
      Public Limited Partnership
              
              December
      1991
              
              (d)
              
              
              77
              %
              
              57
              %
              
              67
              %
              
              63
              %Lawrenceburg,
      TN (30)Lancaster
      Terrace Limited Partnership
              
              February
      1992
              
              98
              %
              
              89
              %
              
              96
              %
              
              93
              %
              
              89
              %Salem,
      OR (104)655
      North Street Limited Partnership
              
              March
      1992
              
              93
              %
              
              96
              %
              
              96
              %
              
              92
              %
              
              94
              %Baton
      Rouge, LA (195)Landreth
      Venture
              
              March
      1992
              
              100
              %
              
              96
              %
              
              92
              %
              
              96
              %
              
              92
              %Philadelphia,
      PA (47)Homestead
      Apartments Associates Ltd.
              
              March
      1992
              
              (b)
              
              
              95
              %
              
              99
              %
              
              99
              %
              
              96
              %Homestead,
      FL (123)Bethel
      Villa Associates, L.P.
              
              April
      1992
              
              97
              %
              
              99
              %
              
              99
              %
              
              100
              %
              
              100
              %Wilmington,
      DE (150)West
      Diamond Street Associates
              
              May
      1992
              
              89
              %
              
              93
              %
              
              100
              %
              
              100
              %
              
              96
              %Philadelphia,
      PA (28)Susquehanna
      Partners
              
              May
      1992
              
              87
              %
              
              96
              %
              
              91
              %
              
              87
              %
              
              98
              %Philadelphia,
      PA (47)Boston
      Bay Limited Partnership
              
              August
      1992
              
              93
              %
              
              95
              %
              
              100
              %
              
              99
              %
              
              99
              %Boston,
      MA (88)Morrant
      Bay Limited Partnership
              
              August
      1992
              
              91
              %
              
              92
              %
              
              95
              %
              
              92
              %
              
              99
              %Boston,
      MA (130)Hope
      Bay Limited Partnership
              
              August
      1992
              
              98
              %
              
              98
              %
              
              100
              %
              
              98
              %
              
              100
              %Boston,
      MA (45)Lares
      Apartments Limited Partnership
              
              August
      1992
              
              100
              %
              
              100
              %
              
              100
              %
              
              100
              %
              
              100
              %Lares,
      PR (102)Lajas
      Apartments Limited Partnership
              
              August
      1992
              
              100
              %
              
              100
              %
              
              100
              %
              
              100
              %
              
              100
              %Lajas,
      PR (99)Arlington-Rodeo
      Properties
              
              August
      1992
              
              100
              %
              
              100
              %
              
              100
              %
              
              100
              %
              
              97
              %Los
      Angeles, CA (29)Conifer
      Bateman Associates
              
              August
      1992
              
              83
              %
              
              83
              %
              
              83
              %
              
              92
              %
              
              96
              %Lowville,
      NY (24)Hampden
      Hall Associates, L.P.
              
              September
      1992
              
              (c)
              
              
              96
              %
              
              84
              %
              
              95
              %
              
              93
              %St.
      Louis, MO (75)Chester
      Renaissance Associates
              
              September
      1992
              
              95
              %
              
              100
              %
              
              100
              %
              
              100
              %
              
              100
              %Chester,
      PA (20)Homestead
      Apts. II LTD.
              
              October
      1992
              
              96
              %
              
              95
              %
              
              99
              %
              
              99
              %
              
              96
              %Homestead,
      FL (112)P.S.
      157 Associates, L.P.
              
              November
      1992
              
              (a)
              
              
              (a)
              
              
              100
              %
              
              100
              %
              
              100
              %New
      York, NY (73) (a)Cloisters
      Limited Partnership II
              
              November
      1992
              
              62
              %
              
              88
              %
              
              94
              %
              
              98
              %
              
              98
              %Philadelphia,
      PA (65)
   - 5
-
 Local Partnership
Schedule
 (continued)
 %
      of Units Occupied at May 1,Name
      and Location

                (Number
      of Units)
              
              Date
      Acquired
              
              2008
              
              2007
              
              2006
              
              2005
              
              2004Creative
      Choice Homes II, LTD.
              
              December
      1992
              
              95
              %
              
              100
              %
              
              91
              %
              
              95
              %
              
              98
              %Opa-Locka,
      FL (328)Milford
      Crossing Associates L.P.
              
              December
      1992
              
              99
              %
              
              100
              %
              
              96
              %
              
              93
              %
              
              96
              %Milford,
      DE (73)BX-7F
      Associates, L.P.
              
              January
      1993
              
              (c)
              
              
              98
              %
              
              98
              %
              
              97
              %
              
              96
              %Bronx,
      NY (85)Los
      Angeles Limited Partnership
              
              May
      1993
              
              100
              %
              
              99
              %
              
              100
              %
              
              100
              %
              
              100
              %Rio
      Piedras, PR (124)Christine
      Apartments, L.P.
              
              June
      1993
              
              100
              %
              
              88
              %
              
              100
              %
              
              100
              %
              
              91
              %Buffalo,
      NY (32)Plainsboro
      Housing Partners, L.P.
              
              July
      1993
              
              94
              %
              
              98
              %
              
              98
              %
              
              97
              %
              
              99
              %Plainsboro,
      NJ (126)Rolling
      Green Associates, L.P.
              
              October
      1993
              
              98
              %
              
              95
              %
              
              93
              %
              
              97
              %
              
              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
      properties 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).
 
 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
 
 - 6
-
  PART
II
 
 
 Item
      5.    Market for Registrant’s Common Equity, Related
      Stockholder Matters and Issuer Purchaser of Equity
    Securities
 
 As of
March 31, 2008, 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, 2008, the Partnership had approximately 4,577 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, 2008.  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.
 
 - 7
-
  Item
6.  Selected Financial Data
 
 The
information set forth below presents selected financial data of the Partnership.
Additional financial information is set forth in the audited consolidated
financial statements in Item 8 hereof.
 Years
      Ended March 31,OPERATIONS
              
              2008
              
              
              2007*
              
              
              2006*
              
              
              2005*
              
              
              2004*Revenues
              
              $
              18,298,722
              
              
              $
              17,810,379
              
              
              $
              17,755,787
              
              
              $
              17,112,300
              
              
              $
              16,465,249Operating
      expenses
              
              
              (27,174,146
              )
              
              
              (24,366,942
              )
              
              
              (22,458,522
              )
              
              
              (22,778,278
              )
              
              
              (23,661,739
              )Loss
      from operations before minorityinterest
              
              
              (8,875,424
              )
              
              
              (6,556,563
              )
              
              
              (4,702,735
              )
              
              
              (5,665,978
              )
              
              
              (7,196,490
              )Minority
      interest in loss of subsidiariesfrom
      operations
              
              
              33,712
              
              
              
              28,974
              
              
              
              29,338
              
              
              
              32,328
              
              
              
              18,270Loss
      from operations
              
              
              (8,841,712
              )
              
              
              (6,527,589
              )
              
              
              (4,673,397
              )
              
              
              (5,633,650
              )
              
              
              (7,178,220
              )Income
      (loss) from discontinued operations(Note
      13)
              
              
              (1,626,158
              )
              
              
              257,839
              
              
              
              (397,047
              )
              
              
              (331,424
              )
              
              
              (378,349
              )Net
      loss
              
              $
              (10,467,870
              )
              
              $
              (6,269,750
              )
              
              $
              (5,070,444
              )
              
              $
              (5,965,074
              )
              
              $
              (7,556,569
              )Loss
      from operations per BAC
              
              $
              (113.99
              )
              
              $
              (84.16
              )
              
              $
              (60.25
              )
              
              $
              (72.64
              )
              
              $
              (92.55
              )(Income)
      loss from discontinued operations per BAC
              
              
              (20.97
              )
              
              
              3.33
              
              
              
              (5.12
              )
              
              
              (4.27
              )
              
              
              (4.88
              )Net
      loss per BAC
              
              $
              (134.96
              )
              
              $
              (80.83
              )
              
              $
              (65.37
              )
              
              $
              (76.91
              )
              
              $
              (97.43
              )
 
 
 FINANCIAL
      POSITION
              
              March
      31,2008
              
              
              2007
              
              
              2006
              
              
              2005
              
              
              2004Total
      assets
              
              $
              102,760,091
              
              
              $
              130,944,933
              
              
              $
              130,577,695
              
              
              $
              135,523,965
              
              
              $
              139,042,443Total
      liabilities
              
              $
              113,530,085
              
              
              $
              131,056,452
              
              
              $
              124,655,274
              
              
              $
              124,452,229
              
              
              $
              122,586,996Minority
      interest
              
              $
              4,761,586
              
              
              $
              5,690,316
              
              
              $
              5,454,506
              
              
              $
              5,533,377
              
              
              $
              4,952,014Total
      partners’ (deficit) capital
              
              $
              (16,261,580
              )
              
              $
              (5,801,835
              )
              
              $
              467,915
              
              
              $
              5,538,359
              
              
              $
              11,503,433*  Reclassified
      for comparative purposes.
 During
the year ended March 31, 2008, total assets decreased due to the sale of the
Partnership’s interests in certain of the Local Partnerships and/or the
underlying Properties and loss on impairment of properties.  During
the year ended March 31, 2007, total assets decreased due to depreciation and
loss on impairment of property but were offset by increases in cash held in
escrow resulting from funds being deposited from insurance proceeds at one Local
Partnership and an increase in other receivables at the Partnership level
resulting from the accrual of sales proceeds (which were received subsequent to
March 31, 2007).  During the years ended March 31, 2006, 2005 and
2004, total assets decreased primarily due to depreciation.  During
the year ended March 31, 2008, total liabilities decreased due to the sale of
the Partnership’s interests in certain of the Local Partnerships and/or the
underlying Properties and the repayment of mortgage notes.  During
March 31, 2007, total liabilities increased due to increased construction costs
payable to affiliates of the Local General Partner affected by hurricane damage
at one Local Partnership, increased advances from an affiliate of the General
Partner at two other Local Partnerships and deferred sales proceeds resulting
from the sale of another Local Partnership.  During the years ended
March 31, 2006 and 2005, total liabilities increased due to increased advances
from an affiliate of the General Partner at two Local Partnerships,
respectively.  During the year ended March 31, 2004, total liabilities
increased due to increased advances from an affiliate of the General Partner to
one Local Partnership and an increase in accounts payable from operations at a
second Local Partnership.
 
 Cash
Distributions
 There are
no legal restrictions on the Partnership making distributions to BACs holders;
however, the Partnership has made no distributions to the BACs holders as of
March 31, 2008 and does not expect to be able to make distributions except out
of net refinancing or sale proceeds.
 
 - 8
-
 Item
7.  Management’s Discussion and Analysis of Financial Condition and
Results of Operations
 
 Liquidity and Capital
Resources
 As of
March 31, 2008, 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, 2008, two
Local Partnerships sold their property and the related assets and liabilities,
the Partnership sold its limited partnership interests in two Local Partnerships
and one Local Partnership transferred the deed to the property and related
assets and liabilities of such Local Partnership.  Through March 31, 2008,
two Local Partnerships have sold their property and the related assets and
liabilities, the Partnership has sold its limited partnership interests in three
Local Partnerships and one Local Partnership transferred the deed to the
property and related assets and liabilities of such Local Partnership.  In
addition, one Local Partnership entered into an agreement to sell its property
and related assets and liabilities and the Partnership has entered into an
agreement to sell its limited partnership interest in another Local
Partnership.  Subsequent to March 31, 2008, the Partnership sold its
limited partnership interest in one Local Partnership and three Local
Partnerships have entered into agreements to sell their property and the related
assets and liabilities (see Note 15 in Item 8).
 
 Short-Term
 During
the year ended March 31, 2008, cash and cash equivalents of the Partnership and
its consolidated subsidiary partnership increased approximately
$2,042,000.  This increase is due to net proceeds from sale of
properties ($7,164,000), a decrease in cash held in escrow relating to investing
activities ($482,000) and an increase in due to local general partners and
affiliates relating to investing activities ($862,000) which exceeded net cash
used in operating activities ($404,000), cost related to sales ($156,000),
acquisitions of property and equipment ($1,211,000), repayments of mortgage
notes ($4,292,000), a decrease in due to local general partners and affiliates
relating to financing activities ($52,000), an increase in deferred costs
($26,000) and a decrease in capitalization of consolidated subsidiaries
attributable to minority interest ($326,000).  Included in the
adjustments to reconcile the net loss to net cash used in operating activities
are depreciation and amortization ($5,421,000), gain on sale of properties
($2,509,000) and loss on impairment of properties ($6,360,000).
 
 Total
expenses for the years ended March 31, 2008, 2007 and 2006, excluding
depreciation and amortization, interest, general and administrative-related
parties, loss on impairment of property and cost from hurricane events, totaled
$13,464,913, $13,291,839 and $12,446,692, respectively.
 
 Accounts
payable as of March 31, 2008 and 2007 were $3,914,793 and $6,591,153,
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.  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 as of March 31, 2008 and 2007 was $11,332,424 and $10,368,890,
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. 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, 2008, 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 in 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, 2008, 2007 and 2006,
the amounts received from operations of the Local Partnerships were
approximately $86,000, $82,000 and $102,000,
respectively.  Additionally, during the year ended March 31, 2008, the
Partnership received approximately $1,992,000 of distributions from the sale of
properties and approximately $5,001,000 in proceeds from the sale of Local
Partnerships’ limited partnership interest.  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, 2008 was
approximately $2,819,000.
 
 Partnership
management fees owed to the General Partner amounting to approximately
$9,228,000 and $8,359,000 were accrued and unpaid as of March 31, 2008 and 2007,
respectively. 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 will eliminate the ability to generate future Tax Credits
from such Local Partnership and may also result in recapture of Tax Credits if
the investment is lost before expiration of the Credit 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 has fully invested the proceeds of its Offering in 28 Local
Partnerships, all of which have their Tax Credits fully in place.  Tax
Credits are attached to a Property for a period of ten years, and are
transferable with the Property during the remainder of the ten-year period. If
trends in the real estate market warranted the sale of a Property, the remaining
Tax Credits would transfer to the new owner; thereby adding value to the
Property on the market. However, such value declines each year and is not
included in the financial statement carrying amount.  As of December
31, 2006, all Credit Periods have expired except for one Local Partnership which
has an extended Credit Period.  This Local Partnership will receive
$11,579 in Tax Credits through December 31, 2008 and then smaller amounts
through 2011.  The Compliance Periods will continue through December
31, 2016 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, 2008 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)
            
            $
            63,332,026
            
            
            $
            8,993,010
            
            
            $
            6,236,601
            
            
            $
            3,764,337
            
            
            $
            44,338,078Long
      term notes payable (b)
            
            
            1,313,684
            
            
            
            979,770
            
            
            
            -
            
            
            
            -
            
            
            
            333,914$
            64,645,710
            
            
            $
            9,972,780
            
            
            $
            6,236,601
            
            
            $
            3,764,337
            
            
            $
            44,671,992(a)  
      The mortgage notes are payable in aggregate monthly installments of
      approximately $479,000, including principal and interest at rates varying
      from 0% to 9% 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, 2008 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)
            
            $
            7,478,590
            
            
            $
            1,324,749
            
            
            $
            986,870
            
            
            $
            3,252,941
            
            
            $
            1,914,030(a)  
      The mortgage notes are payable in aggregate monthly installments of
      approximately $16,000, including principal and interest at rates varying
      from 1% to 9% per annum, through the year 2040. 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.
 
 
 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 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 two assets classified
as property and equipment-held for sale as of March 31, 2008 (see Note 11 in
Item 8).
 
 - 10
-
  During
the year ended March 31, 2008, the Partnership recorded approximately $6,360,000
as an aggregate loss on impairment of assets.  Through March 31, 2008,
the Partnership has recorded approximately $8,025,000 as an aggregate loss on
impairment of assets.
 
 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 31,2008
            
            2007*
            
            2006*Interest
            
            $
            242,965
            
            $
            203,364
            
            $
            144,504Other
            
            
            440,399
            
            
            402,353
            
            
            512,450Total
      other revenue
            
            $
            683,364
            
            $
            605,717
            
            $
            656,954
 
 
 Other
revenues from discontinued operations from operations include the following
amounts at both the Partnership and Local Partnership level:
 
 Years
      Ended March 31,2008
            
            2007*
            
            2006*Interest
            
            $
            34,105
            
            $
            32,040
            
            $
            19,312Other
            
            
            271,577
            
            
            243,691
            
            
            231,007Total
      other revenue
            
            $
            305,682
            
            $
            275,731
            
            $
            250,319*  
      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
September 2006, the FASB issued SFAS No. 157, Fair Value Measurements,
which established a framework for measuring the fair value of assets and
liabilities as required by numerous other accounting pronouncements, and expands
disclosure requirements of the fair values of certain assets and
liabilities.  This statement is effective for the Partnership’s year
ending March 31, 2009.  The provisions of this statement will not have
a material impact on the consolidated financial statements.
 
 In
February 2007 the FASB issued SFAS No. 159, the Fair Value Option for Financial
Assets and Financial Liabilities.  This statement was issued
with the intent to provide an alternative measurement treatment for certain
financial assets and liabilities.  The alternative measurement would
permit fair value to be used for both initial and subsequent measurement, with
changes in fair value recognized in earnings as those changes
occur.  This “Fair Value Option” would be available on a contract by
contract basis.  This statement is effective for the Partnership’s
year ending March 31, 2009.  The provisions of this statement will not
have a material impact on the consolidated financial statements.
 
 In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements.  This statement was issue
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 noncontrolling
interest in one or more subsidiaries.  The effective date for this
provision is for fiscal year ends 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, 2008, 2007 and 2006 (the 2007, 2006 and 2005 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 2007, 2006 and 2005 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.
 
 The net
loss for the 2007, 2006 and 2005 Fiscal Years totaled $10,467,870, $6,269,750
and $5,070,444, respectively.
 
 - 11
-
  The
Partnership and BACs holders began to recognize Tax Credits with respect to a
Property when the Credit Period for such Property commenced. Because of the time
required for the acquisition, completion and rent-up of Properties, the amount
of Tax Credits per BAC gradually increased over the first three years of the
Partnership. Tax Credits not recognized in the first three years will be
recognized in the 11th through 13th years. The Partnership generated $11,579,
$17,573 and $17,573 of Tax Credits during the 2007, 2006 and 2005 tax years,
respectively.
 
 2007 vs.
2006
 
 Rental
income increased approximately 2% for the 2007 Fiscal Year as compared to the
2006 Fiscal Year, primarily due to an increase in tenant assistance payments at
one Local Partnership.
 
 Other
income increased approximately $77,000 for the 2007 Fiscal Year as compared to
the 2006 Fiscal Year, primarily due to an increase in subsidy payments received
at one Local Partnership, offset by a decrease in the amount of anti-drug grants
received at a second Local Partnership.
 
 Total
expenses, excluding loss on impairment of property and cost from hurricane
events, remained fairly consistent with an increase of approximately 1% for the
2007 Fiscal Year as compared to the 2006 Fiscal Year.
 
 2006 vs.
2005
 
 Rental
income increased approximately 1% for the 2006 Fiscal Year as compared to the
2005 Fiscal Year, primarily due to an increase in tenant assistant payments and
a decrease in vacancy at one Local Partnership and rental rate increases at the
other Local Partnerships.
 
 Total
expenses excluding general and administrative and loss on impairment of
property, remained fairly consistent with an increase of approximately 1% for
the 2006 Fiscal Year as compared to the 2005 Fiscal Year.
 
 General
and administrative increased approximately $549,000 for the 2006 Fiscal Year as
compared to the 2005 Fiscal Year, primarily due to an increase in legal costs,
legal settlement made, and a legal contingency expensed at one Local
Partnership, an increase in bad debt expense at a second Local Partnership, an
increase in payroll costs, employee benefits and bad debt expense at a third
Local Partnership and an increase in accounting costs at the Partnership
level.
 
 Results of Operations of
Certain Local Partnerships
 
 Creative Choice Homes II
L.P. (“Opa-Locka”) - Going Concerns and Uncertainties
 
 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, 2008 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, 2008 and 2007 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 loss (income) after minority
interest amounted to approximately $2,400,000, $1,600,000 and $(3,000) for the
2007, 2006 and 2005 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
$7,789,000.  Opa-Locka expects to be reimbursed by insurance proceeds
in the amount of approximately $4,420,000.  As of December 31, 2007,
$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
$4,061,787 remains payable to the construction company as of December 31, 2007
related to the rehabilitation. In addition, during the year ended December 31,
2007, $2,309,923 was incurred by Opa-Locka as costs from hurricane events
 in excess of insurance proceeds received.
 
 The above
circumstances have called into question the recoverability of the carrying
amounts of the building.  As a result, during the year ended March 31,
2007, pursuant to SFAS 144, Accounting for the Impairment or Disposal of
Long-Lived Assets, impairment loss of $1,164,864 was recognized on the building
and improvements.  Subsequently, on May 9, 2008, Opa-Locka entered
into a purchase and sale agreement to sell its property and related liabilities
to an unaffiliated third party purchaser (see Note 15 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, 2007, current liabilities exceed current assets by approximately
$360,000.  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.
 
 The
Partnership’s investment in Morrant Bay at March 31, 2008 and 2007 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 $712,000, $431,000 and $436,000 for
the 2007, 2006 and 2005 Fiscal Years.  The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
 
 - 12
-
  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, 2007,
current liabilities exceed current assets by approximately
$100,000.  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.
 
 The
Partnership’s investment in Boston Bay at March 31, 2008 and 2007 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 $540,000, $212,000 and $163,000 for
the 2007, 2006 and 2005 Fiscal Years.  The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
 
 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 from 0% 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, 2008 and 2007
            
            61Consolidated
      Statements of Operations for the Years Ended March 31, 2008, 2007 and
      2006
            
            62Consolidated
      Statements of Changes in Partners’ Capital (Deficit) for the Years Ended
      March 31, 2008, 2007 and 2006
            
            63Consolidated
      Statements of Cash Flows for the Years Ended March 31, 2008, 2007 and
      2006
            
            64Notes
      to Consolidated Financial Statements
            
            66
 
 
 - 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, 2008 and 2007, and
the related consolidated statements of operations, changes in partners’ capital
(deficit), and cash flows for the years ended March 31, 2008, 2007 and 2006 (the
2007, 2006 and 2005 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 twenty two
(2007 Fiscal Year) twenty three (2006 Fiscal Year) and twelve (2005 Fiscal Year)
subsidiary partnerships whose losses aggregated $8,011,225, $2,856,501 and
$2,090,127 for the 2007, 2006 and 2005 Fiscal Years, respectively, and whose
assets constituted 71% and 74% of the Partnership’s assets at both March 31,
2008 and 2007, respectively, presented in the accompanying consolidated
financial statements.  The financial statements for twenty one (2007
Fiscal Year), twenty two (2006 Fiscal Year) and eleven (2005 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 one 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, 2008 and 2007,
and the results of their operations and their cash flows for the years ended
March 31, 2008, 2007 and 2006, 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
$3,651,851 (2007 Fiscal Year), $2,257,184 (2006 Fiscal Year) and $596,598 (2005
Fiscal Year), and their assets aggregated $23,381,182 and $26,226,406 at March
31, 2008 and 2007, 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 27,
2008
 
 - 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 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,
2006, and the related statements of operations, 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 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, 2006, 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
 March 27,
2007
 
 - 17
-
 [Letterhead
of Reznick Fedder & Silverman]
 
 INDEPENDENT
AUDITORS' REPORT
 
 To the
Partners
 Harbor
Court L.P.
 
 We have
audited the accompanying balance sheets of Harbor Court L.P. as of December 31,
2005 and 2004, and the related statements of income, 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 audit in accordance with auditing standards generally accepted in
the 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.  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 Harbor Court L.P., as of December
31, 2005 and 2004, and the results of its income, the 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/
Reznick Fedder & Silverman
 Bethesda,
Maryland
 January
28, 2006
 
 - 18
-
 [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
December 31, 2007 and 2006, and the related statements of operations, changes in
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.  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 December 31, 2007 and 2006, and the results of its operations,
changes in partners’ capital and its cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America.
 
 /s/ Mack,
Roberts & Co., L.L.C.
 Portland,
Oregon
 February
28, 2008
  - 19
-
 [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
December 31, 2006 and 2005, and the related statements of operations, changes in
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 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 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 December 31, 2006 and 2005, and the results of its operations,
changes in partners’ capital and its cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America.
 
 /s/ Mack,
Roberts & Co., L.L.C.
 Portland,
Oregon
 February
22, 2007
 [Letterhead
of Pailet, Meunier and LeBlanc, L.L.P.]
 
 - 20
-
 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, 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.  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, 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.
 
 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 17, 2008, on our
consideration of 655 NORTH STREET LIMITED PARTNERSHIP's internal control, and
reports dated March 17, 2008, 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 17,
2008
 
 - 21
-
 [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, 2006 and 2005, 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, 2006 and 2005, 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 February 27, 2007, on our
consideration of 655 North Street Limited Partnership's internal control, and
reports dated February 27, 2007, 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
 February
27, 2007
  - 22
-
 [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
 
 - 23
-
 [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 December 31,
2006, and the related statements of operations, 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 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 Landreth Venture, as of December
31, 2006 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
 March 28,
2007
 
 - 24
-
 [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
  
 - 25
-
 [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 sheet of Bethel Villa Associates, L.P. as of
December 31, 2006, and the related statements of operations, 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 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 Bethel Villa Associates, L.P., as
of December 31, 2006, and the results of its operations, the changes in
partners' equity (deficit) and 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
 February
27, 2007
 
  - 26
-
 [Letterhead
of J.H. Williams & Co., LLP]
 
 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
  
 - 27
-
 [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, 2006 and 2005 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 general partner 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).  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, 2006 and 2005, 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
 February
16, 2007
  - 28
-
 [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
  - 29
-
 [Letterhead
of Robert 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, 2006 and the related statement of operations, partners' deficiency,
and cash flows for the year ended December 31, 2006.  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 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 Boston Bay Limited Partnership as
of December 31, 2006, and the result of its operations and its cash flows for
the year ended December 31, 2006, in conformity with accounting principles
generally accepted in the United States of America.
 
 /s/
Robert Ercolini & Company LLP
 Boston,
Massachusetts
 February
13, 2007
  - 30
-
 [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
  - 31
-
 [Letterhead
of Robert 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, 2006 and the related statement of operations, partners' deficiency,
and cash flows for the year ended December 31, 2006.  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 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 Morrant Bay Limited Partnership as
of December 31, 2006, and the results of its operations and its cash flows for
the year ended December 31, 2006, in conformity with accounting principles
generally accepted in the United States of America.
 
 /s/
Robert Ercolini & Company LLP
 Boston,
Massachusetts
 February
13, 2007
  - 32
-
 [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
  - 33
-
 [Letterhead
of Robert 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, 2006 and the related statement of operations, partners' deficiency,
and cash flows for the year ended December 31, 2006.  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 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 Hope Bay Limited Partnership as of
December 31, 2006, and the results of its operations and its cash flows for the
year ended December 31, 2006, in conformity with accounting principles generally
accepted in the United States of America.
 
 /s/
Robert Ercolini & Company LLP
 Boston,
Massachusetts
 February
13, 2007
  - 34
-
 [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.
 
 - 35
-
 
 [Letterhead
of JOSE E. ROSARIO & CO.]
 
 INDEPENDENT
AUDITOR'S REPORT
 
 To the
Partners
 Lares
Apartments Limited Partnership
 
 We have
audited the accompanying balance sheets of Lares Apartments Limited Partnership,
Rural Development Project No. 63-034-660467896, as of December 31, 2006 and
2005, 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 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, 2006 and 2005 and the results of its operation,
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.
 License
No. 176
 Expires
December 1, 2009
 
 February
20, 2007
 San Juan,
Puerto Rico
 
 Stamp No.
2203434 of the Puerto Rico College of CPA was affixed to the
original.
 
 
 - 36
-
 [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.
  - 37
-
 [Letterhead
of JOSE E. ROSARIO & CO.]
 
 INDEPENDENT
AUDITOR'S REPORT
 
 To the
Partners
 Lajas
Apartments Limited Partnership
 
 We have
audited the accompanying balance sheets of Lajas Apartments Limited Partnership,
Rural Development Project No. 63-017-06660422313, as of December 31, 2006 and
2005, 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 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, 2006 and 2005 and the results of its operation,
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.
 License
No. 176
 Expires
December 1, 2009
 
 February
20, 2007
 San Juan,
Puerto Rico
 
 Stamp No.
2203435 of the Puerto Rico College of CPA was affixed to the
original.
 
 
 - 38
-
 [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, 2007 and 2006, 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, 2007 and 2006, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.
 
 /s/ Kim
& Lee
 Los
Angeles, California
 February
29, 2008
  - 39
-
 [Letterhead
of Kim & Lee]
 
 To the
Partners
 Arlington
- Rodeo Properties
 (A
California Limited Partnership)
 
 We have
audited the accompanying balance sheet of Arlington - Rodeo Properties (A
California Limited Partnership) as of December 31, 2006 and 2005, 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 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 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 Arlington - Rodeo Properties as of
December 31, 2006 and 2005, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.
 
 /s/ Kim
& Lee
 Los
Angeles, California
 February
28, 2007
 
 - 40
-
 [Letterhead
of Salmin, Celona, Wehrle & Flaherty, LLP]
 
 INDEPENDENT
AUDITORS' REPORT
 
 To the
Partners
 Conifer
Bateman Associates
 
 We have
audited the accompanying balance sheet of Conifer Bateman Associates (a limited
partnership) as of December 31, 2006 and 2005, and the related statements of
operations and partners' capital (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).  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 Conifer Bateman Associates as of
December 31, 2006 and 2005, 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/
Salmin, Celona, Wehrle & Flaherty, LLP
 Rochester,
New York
 
 February
15, 2007
 
 - 41
-
 [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, 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 Chester Renaissance Associates 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 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.  The 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 made for the purpose of forming an opinion on the basic financial
statements taken as a whole.  The 2007 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 25,
2008
 
 
 Lead
Auditor:  Michael A. Cumming, CPA
 Email
Address:  mike.cumming@reznickgroup.com
  - 42
-
 [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 sheet of Chester Renaissance Associates as of
December 31, 2006, 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 Chester Renaissance Associates as
of December 31, 2006 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
 March 29,
2007
 
 - 43
-
 [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
  - 44
-
 [Letterhead
of Rosen, Seymour, Shapss, Martin & Co., L.L.P.]
 
 INDEPENDENT
AUDITORS' REPORT
 
 To the
Partners
 P.S. 157
Associates, L.P.
 
 We have
audited the accompanying balance sheets of P.S. 157 Associates, L.P. (a limited
partnership), as of December 31, 2006 and 2005, 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 auditing 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 P.S. 157 Associates, L.P. (a
limited partnership) as of December 31, 2006 and 2005, 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/
Rosen, Seymour, Shapss, Martin & Co., L.L.P.
 CERTIFIED
PUBLIC ACCOUNTANTS
 New York,
New York
 February
3, 2007
 
 - 45
-
 [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
 
 
 - 46
-
 [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, 2006, 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, 2006, 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
 March 28,
2007
 
 
 - 47
-
 [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, 2007 and 2006 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 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 Milford Crossing Place Associates,
L.P. as of December 31, 2007 and 2006, and the results of its operations and its
cash flows for the year 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 13 through 15 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
 
 February
11, 2008
 
 - 48
-
 [Letterhead
of Bagell, Josephs, Levine & Company, L.L.C.]
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Partners
 Milford
Crossing Associates, L.P.
 Wilmington,
DE
 
 We have
audited the accompanying balance sheet of Milford Crossing Associates, L.P. (the
“Company”) as of December 31, 2006, and the related statements of profit and
loss, partners' equity and cash flows for the year ended December 31,
2006.  These financial statements are the responsibility of the
Company’s management.  Our responsibility is to express an opinion on
these financial statements based on our audit.  The financial
statements of Milford Crossing Associates, L.P., as of December 31, 2005, were
audited by other auditors whose report dated February 10, 2006 expressed an
unqualified opinion on those statements.
 
 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
Company 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 Company’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 Milford Crossing Associates, L.P.
as of December 31, 2006, the results of its operations and its cash flows for
the year ended December 31, 2006, in conformity with U.S. generally accepted
accounting principles.
 
 Our audit
was conducted for the purpose of forming an opinion on the basic financial
statements taken as a whole.  The accompanying supplementary
information on pages 14 through 16 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.
 Certified
Public Accountants
 Gibbsboro,
New Jersey
 February
13, 2007
 
 - 49
-
 [Letterhead
of FISHBEIN & COMPANY, P.C.]
 
 INDEPENDENT
AUDITORS' REPORT
 
 To the
Partners
 Milford
Crossing Associates, L.P.
 Wilmington,
Delaware
 
 We have
audited the accompanying balance sheets of MILFORD CROSSING ASSOCIATES,
L.P. as of
December 31, 2005 and 2004, and the related statements of profit and loss,
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 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, 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 Milford Crossing Associates,
L.P.as of December
31, 2005 and 2004, 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.
 
 Our
audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole.  The supporting data included
in this report (shown on pages 13 through 15) is presented for the purpose 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 financial statements taken as a whole.
 
 
 /s/
Fishbein & Company, P.C.
 Horsham,
Pennsylvania
 February
10, 2006
  - 50
-
 [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
  - 51
-
 [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, 2006 and 2005, 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, 2006 and 2005, 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
5, 2007
 
 - 52
-
 [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, 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.  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, 2007 and 2006, 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
11, 2008
 
 Stamp
#2296317 of the
 Puerto
Rico Society of
 Certified
Public Accountants
 was
affixed to the original.
  - 53
-
 [Letterhead
of Amílcar Torres Rivera, CPA]
 
 INDEPENDENT
AUDITORS' REPORT
 
 To the
Partners
 Los
Angeles Limited Partnership
 
 I have
audited the accompanying balance sheets of Los Angeles Limited Partnership as of
December 31, 2006 and 2005, 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 audit procedures that
are appropriate in the circumstances as a basis for designing audit procedure
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, 2006 and 2005, and the results of its operations, changes in
partner's 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, 2007
 
 San Juan,
Puerto Rico
 February
5, 2007
 
 Stamp
#2202326 of the
 Puerto
Rico Society of
 Certified
Public Accountants
 was
affixed to the original.
 
 - 54
-
 [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
  - 55
-
 [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, 2006 and 2005 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, 2006 and 2005 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
9, 2007
 
 - 56
-
 [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
 
 
 - 57
-
 [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, 2006, 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, 2006, 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 28,
2007
 
 
 
 - 58
-
 [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, 2007 and 2006, 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 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 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, 2007 and 2006, 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
 March 24,
2008
 
 - 59
-
 [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, 2006 and 2005, 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 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 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, 2006 and 2005, 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
 January
25, 2007
 
 - 60
-
 
 
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 CONSOLIDATED
BALANCE SHEETS
 
 
 ASSETS
 
 
 March
      31,2008
            
            
            2007Operating
      AssetsProperty
      and equipment, at cost, less accumulated depreciation(Notes
      2, 4, 7 and 10)
            
            $
            78,650,906
            
            
            $
            100,261,936Cash
      and cash equivalents (Notes 2, 3 and 13)
            
            
            4,056,150
            
            
            
            2,240,570Cash
      held in escrow (Notes 3 and 5)
            
            
            7,140,700
            
            
            
            12,717,862Deferred
      costs, less accumulated amortization (Notes 2 and 6)
            
            
            656,411
            
            
            
            1,159,231Other
      assets
            
            
            1,355,639
            
            
            
            3,643,901Total
      operating assets
            
            
            91,859,806
            
            
            
            120,023,500Assets
      from discontinued operations (Note 14)Property
      and equipment held for sale, net of accumulateddepreciation
      (Note 4)
            
            
            6,378,404
            
            
            
            10,374,639Net
      assets held for sale
            
            
            3,791,881
            
            
            
            546,794Total
      assets from discontinued operations
            
            
            10,170,285
            
            
            
            10,921,433Total
      assets
            
            $
            102,030,091
            
            
            $
            130,944,933LIABILITIES
      AND PARTNERS’ CAPITAL (DEFICIT)Operating
      LiabilitiesMortgage
      notes payable (Notes 3 and 7)
            
            $
            63,332,026
            
            
            $
            75,276,001Accounts
      payable
            
            
            3,914,793
            
            
            
            6,591,153Accrued
      interest payable
            
            
            11,332,424
            
            
            
            10,368,890Security
      deposits payable
            
            
            555,107
            
            
            
            690,426Due
      to local general partners and affiliates (Note 8)
            
            
            12,498,138
            
            
            
            11,475,587Due
      to general partners and affiliates (Note 8)
            
            
            13,688,107
            
            
            
            16,194,617Total
      operating liabilities
            
            
            105,320,595
            
            
            
            120,596,674Liabilities
      from discontinued operations (Note 14)Mortgage
      notes payable of assets held for sale (Note 7)
            
            
            7,478,590
            
            
            
            9,675,961Net
      liabilities held for sale (including minority interest)
            
            
            730,900
            
            
            
            783,817Total
      liabilities from discontinued operations
            
            
            8,209,490
            
            
            
            10,459,778Total
      liabilities
            
            
            113,530,085
            
            
            
            131,056,452Minority
      interests (Note 2)
            
            
            4,761,586
            
            
            
            5,690,316Commitments
      and contingencies (Notes 7, 8 and 13)Partners’
      capital (deficit)Limited
      partners (76,786 BACs issued and outstanding)
            
            
            (15,424,134
            )
            
            
            (5,060,943
            )General
      partners
            
            
            (837,446
            )
            
            
            (740,892
            )Total
      partners’ capital (deficit)
            
            
            (16,261,580
            )
            
            
            (5,801,835
            )Total
      liabilities and partners’ capital (deficit)
            
            $
            102,030,091
            
            
            $
            130,944,933See
      accompanying notes to consolidated financial
  statements.
   - 61
-
  INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 CONSOLIDATED
STATEMENTS OF OPERATIONS
 
 
 
 
 Years
      Ended March 31,2008
            
            
            2007*
            
            
            2006*Operations:RevenuesRental
      income
            
            $
            17,615,358
            
            
            $
            17,204,662
            
            
            $
            17,098,833Other
      (Notes 1 and 13)
            
            
            683,364
            
            
            
            605,717
            
            
            
            656,954Total
      revenues
            
            
            18,298,722
            
            
            
            17,810,379
            
            
            
            17,755,787ExpensesGeneral
      and administrative
            
            
            3,382,033
            
            
            
            3,746,124
            
            
            
            3,197,538General
      and administrative-related parties (Note 8)
            
            
            2,033,210
            
            
            
            1,955,574
            
            
            
            1,947,308Repairs
      and maintenance
            
            
            4,832,571
            
            
            
            4,430,503
            
            
            
            4,484,630Operating
            
            
            2,422,652
            
            
            
            2,345,394
            
            
            
            2,147,411Taxes
            
            
            1,511,907
            
            
            
            1,439,642
            
            
            
            1,358,798Insurance
            
            
            1,315,750
            
            
            
            1,330,176
            
            
            
            1,258,315Interest
            
            
            3,705,509
            
            
            
            3,648,042
            
            
            
            3,778,918Depreciation
      and amortization
            
            
            4,300,591
            
            
            
            4,306,623
            
            
            
            4,285,604Loss
      on impairment of property
            
            
            1,360,000
            
            
            
            1,164,864
            
            
            
            0Cost
      from hurricane events (Note 13)
            
            
            2,309,923
            
            
            
            0
            
            
            
            0Total
      expenses from operations
            
            
            27,174,146
            
            
            
            24,366,942
            
            
            
            22,458,522Loss
      from operations before minority interest
            
            
            (8,875,424
            )
            
            
            (6,556,563
            )
            
            
            (4,702,735
            )Minority
      interest in loss of subsidiaries from operations
            
            
            33,712
            
            
            
            28,974
            
            
            
            29,338Loss
      from operations
            
            
            (8,841,712
            )
            
            
            (6,527,589
            )
            
            
            (4,673,397
            )Discontinued
      Operations:(Loss)
      income from discontinued operations (including gain on sale of properties
      and minority interest) (Note 14)
            
            
            (1,626,158
            )
            
            
            257,839
            
            
            
            (397,047
            )Net
      loss
            
            $
            (10,467,870
            )
            
            
            (6,269,750
            )
            
            
            (5,070,444
            )Number
      of BACs outstanding
            
            
            76,786
            
            
            
            76,786
            
            
            
            76,786Loss
      from operations – limited partners
            
            $
            (8,753,295
            )
            
            $
            (6,462,313
            )
            
            $
            (4,626,663
            )(Loss)
      income from discontinued operations (including gain on sale of properties
      and minority interest) – limited partners
            
            
            (1,609,896
            )
            
            
            255,260
            
            
            
            (393,077
            )Net
      loss - limited partners
            
            $
            (10,363,191
            )
            
            $
            (6,207,053
            )
            
            $
            (5,019,740
            )Loss
      from operations per BAC
            
            $
            (113.99
            )
            
            $
            (84.16
            )
            
            $
            (60.25
            )(Loss)
      income from discontinued operations (including gain on sale of properties
      and minority interest) – per BAC
            
            
            (20.97
            )
            
            
            3.33
            
            
            
            (5.12
            )Net
      loss per BAC
            
            $
            (134.96
            )
            
            $
            (80.83
            )
            
            $
            (65.37
            )*    Reclassified
      for comparative purposes.See
      accompanying notes to consolidated financial
  statements.
 
 
 - 62
-
 
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 CONSOLIDATED
STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL (DEFICIT)
 
 
 
 
 Total
            
            
            Limited
              Partners
            
            
            General
              PartnerPartners’
      capital (deficit) – March 31, 2005
            
            $
            5,538,359
            
            
            $
            6,165,850
            
            
            $
            (627,491
            )Net
      loss
            
            
            (5,070,444
            )
            
            
            (5,019,740
            )
            
            
            (50,704
            )Partners’
      capital (deficit) – March 31, 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
            
            
            
            
            
            
            
            8,125Partner’s
      capital (deficit) – March 31, 2008
            
            $
            (16,261,580
            )
            
            $
            (15,424,134
            )
            
            $
            (837,446
            )See
      accompanying notes to consolidated financial
  statements.
 
 
 - 63
-
  INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 INCREASE
(DECREASE) IN CASH AND CASH EQUIVALENTS
 
 
 
 
 Years
      Ended March 31,2008
            
            
            2007
            
            
            2006Cash
      flows from operating activities:Net
      loss
            
            $
            (10,467,870
            )
            
            $
            (6,269,750
            )
            
            $
            (5,070,444
            )Adjustments
      to reconcile net loss to net cash (used in) provided byoperating
      activities:Gain
      on sale
            
            
            (2,508,563
            )
            
            
            0
            
            
            
            0Depreciation
      and amortization
            
            
            5,420,827
            
            
            
            5,636,136
            
            
            
            5,608,137Loss
      on impairment of fixed assets
            
            
            6,360,000
            
            
            
            1,164,864
            
            
            
            0Minority
      interest in loss of subsidiaries
            
            
            (814,334
            )
            
            
            (23,807
            )
            
            
            (28,990
            )(Increase)
      decrease in assets:Cash
      held in escrow
            
            
            1,722,698
            
            
            
            (2,312,608
            )
            
            
            (227,205
            )Other
      assets
            
            
            1,978,039
            
            
            
            (2,179,218
            )
            
            
            456,003Increase
      (decrease) in liabilities:Accounts
      payable
            
            
            (1,856,642
            )
            
            
            2,466,842
            
            
            
            (2,562,672
            )Accrued
      interest payable
            
            
            999,244
            
            
            
            1,104,444
            
            
            
            1,469,204Security
      deposit payable
            
            
            72,456
            
            
            
            20,092
            
            
            
            19,963Due
      to local general partners and affiliates
            
            
            1,172,756
            
            
            
            (1,289,983
            )
            
            
            2,134,957Due
      to general partner and affiliates
            
            
            (2,482,135
            )
            
            
            2,085,364
            
            
            
            1,874,926Total
      adjustments
            
            
            10,064,346
            
            
            
            6,672,126
            
            
            
            8,744,323Net
      cash (used in) provided by operating activities
            
            
            (403,524
            )
            
            
            402,376
            
            
            
            3,673,879Cash
      flows from investing activities:Proceeds
      from sales
            
            
            7,164,093
            
            
            
            0
            
            
            
            0Cost
      related to sales
            
            
            (155,803
            )
            
            
            0
            
            
            
            0Acquisition
      of property and equipment
            
            
            (1,211,078
            )
            
            
            (1,704,302
            )
            
            
            (974,534
            )Decrease
      (increase) in cash held in escrow
            
            
            482,008
            
            
            
            (252,296
            )
            
            
            (53,468
            )Increase
      in due to local general partners and affiliates
            
            
            862,115
            
            
            
            1,099,986
            
            
            
            0Insurance
      proceeds
            
            
            0
            
            
            
            4,078,772
            
            
            
            0Net
      cash provided by (used in) investing activities
            
            
            7,141,335
            
            
            
            3,222,160
            
            
            
            (1,028,002
            )Cash
      flows from financing activities:Increase
      in deferred costs
            
            
            (25,736
            )
            
            
            0
            
            
            
            0Repayments
      of mortgage notes
            
            
            (4,292,442
            )
            
            
            (2,664,482
            )
            
            
            (2,691,874
            )Decrease
      in due to local general partners and affiliates
            
            
            (52,377
            )
            
            
            (52,720
            )
            
            
            (41,459
            )Decrease
      in capitalization of consolidated subsidiariesattributable
      to minority interest
            
            
            (325,571
            )
            
            
            (187,519
            )
            
            
            (49,882
            )Net
      cash used in financing activities
            
            
            (4,696,126
            )
            
            
            (2,904,721
            )
            
            
            (2,783,215
            )Net
      increase (decrease) in cash and cash equivalents
            
            
            2,041,685
            
            
            
            719,815
            
            
            
            (137,338
            )Cash
      and cash equivalents at beginning of year
            
            
            2,372,168
            
            
            
            1,652,353
            
            
            
            1,789,691Cash
      and cash equivalents at end of year*
            
            $
            4,413,853
            
            
            $
            2,372,168
            
            
            $
            1,652,353Supplemental
      disclosure of cash flows information:Cash
      paid during the year for interest
            
            $
            3,608,868
            
            
            $
            3,930,967
            
            
            $
            3,711,610*Cash
      and cash equivalents, end of year, for the years ended March 31, 2008,
      2007 and 2006, includes cash and cash equivalents from discontinued
      operations of $357,703, $131,598 and $0, respectively.
              
              See
      accompanying notes to consolidated financial
  statements.
 
 - 64
-
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 INCREASE
(DECREASE) IN CASH AND CASH EQUIVALENTS
 
 
 
 Years
      Ended March 31,2008
            
            
            2007
            
            
            2006Summarized
      below are the components of the gain on sale of investments and
      properties:Proceeds
      from sale of investments and properties – net
            
            $
            (7,008,290
            )
            
            $
            0
            
            
            $
            0Decrease
      in property and equipment, net of accumulated depreciation
            
            
            15,174,776
            
            
            
            0
            
            
            
            0Decrease
      in cash held in escrow
            
            
            578,513
            
            
            
            0
            
            
            
            0(Increase)
      decrease in prepaid expenses and other assets
            
            
            242,599
            
            
            
            0
            
            
            
            0Decrease
      in deferred costs
            
            
            233,874
            
            
            
            0
            
            
            
            0Decrease
      in mortgage notes payable
            
            
            (9,848,904
            )
            
            
            0
            
            
            
            0Decrease
      in accounts payable and other liabilities
            
            
            (733,250
            )
            
            
            0
            
            
            
            0Decrease
      in accrued interest payable
            
            
            (10,999
            )
            
            
            0
            
            
            
            0Decrease
      in security deposits payable
            
            
            (188,068
            )
            
            
            0
            
            
            
            0Increase
      (decrease) in due to general partners and affiliates
            
            
            (16,875
            )
            
            
            0
            
            
            
            0Decrease
      in due to local general partners and affiliate
            
            
            (1,126,467
            )
            
            
            0
            
            
            
            0Increase
      in capitalization of consolidated subsidiaries attributable to minority
      interest
            
            
            186,403
            
            
            
            0
            
            
            
            0Contribution
      from write-off of related party debt
            
            
            8,125
            
            
            
            0
            
            
            
            0
  
 - 65
-
  INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2008
 
 
 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, 2008, the Partnership has disposed of
six of the twenty-eight original Properties.  During the year ended
March 31, 2008, two Local Partnerships sold their property and the related
assets and liabilities, the Partnership sold its limited partnership interests
in two Local Partnerships and one Local Partnership transferred the deed to the
property and related assets and liabilities of such Local Partnership. 
Through March 31, 2008, two Local Partnerships have sold their property and the
related assets and liabilities, the Partnership has sold its limited partnership
interests in three Local Partnerships and one Local Partnership transferred the
deed to the property and related assets and liabilities of such Local
Partnership (see Note 10).  In addition, one Local Partnership entered into
an agreement to sell its property and related assets and liabilities and the
Partnership has entered into an agreement to sell its limited partnership
interest in another Local Partnership (see Note 11).  Subsequent to March
31, 2008, the Partnership sold its limited partnership interest in one Local
Partnership and three Local Partnerships have entered into agreements to sell
their property and the related assets and liabilities (see Note
15).
 
 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, 2008, 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-eight 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 $80,000, $48,000 and $32,000 for the years ended March
31, 2008, 2007 and 2006, respectively (the 2007, 2006 and 2005 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.
 
 - 66
-
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2008
 
 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.
 
 d)  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 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 two assets classified
as property and equipment-held for sale as of March 31, 2008 (see Note
11).
 
 During
the year ended March 31, 2008, the Partnership recorded approximately $6,360,000
as an aggregate loss on impairment of assets.  Through March 31, 2008,
the Partnership has recorded approximately $8,025,000 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 31,2008
            
            2007*
            
            2006*Interest
            
            $
            242,965
            
            $
            203,364
            
            $
            144,504Other
            
            
            440,399
            
            
            402,353
            
            
            512,450Total
      other revenue
            
            $
            683,364
            
            $
            605,717
            
            $
            656,954
 
 
 Other
revenues from discontinued operations include the following amounts at both the
Partnership and Local Partnership level:
 
 Years
      Ended March 31,2008
            
            2007*
            
            2006*Interest
            
            $
            34,105
            
            $
            32,040
            
            $
            19,312Other
            
            
            271,577
            
            
            243,691
            
            
            231,007Total
      other revenue
            
            $
            305,682
            
            $
            275,731
            
            $
            250,319*     Reclassified
      for comparative purposes.
  
 - 67
-
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2008
 
 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.
 
 i)  Recent
Accounting Pronouncements
 
 In
September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, which
established a framework for measuring the fair value of assets and liabilities
as required by numerous other accounting pronouncements, and expands disclosure
requirements of the fair values of certain assets and
liabilities.  This statement is effective for the Partnership’s year
ending March 31, 2009.  The provisions of this statement will not have
a material impact on the consolidated financial statements.
 
 In
February 2007 the FASB issued SFAS No. 159, the Fair Value Option for Financial
Assets and Financial Liabilities.  This statement was issued with the
intent to provide an alternative measurement treatment for certain financial
assets and liabilities.  The alternative measurement would permit fair
value to be used for both initial and subsequent measurement, with changes in
fair value recognized in earnings as those changes occur.  This “Fair
Value Option” would be available on a contract by contract
basis.  This statement is effective for the Partnership’s year ending
March 31, 2009.  The provisions of this statement will not have a
material impact on the consolidated financial statements.
 
 In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements.  This statement was issue 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 noncontrolling
interest in one or more subsidiaries.  The effective date for this
provision is for fiscal year ends 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
and Cash Held in Escrow
 The
carrying amount approximates fair value.
 
 Mortgage Notes
Payable
 The fair
value of mortgage notes payable is estimated, where practicable, based on the
borrowing rate currently available for similar loans.
 
 The
estimated fair values of the Partnership’s mortgage notes payable from
operations are as follows:
 
 March
      31, 2008
            
            
            March
      31, 2007Carrying
              Amount
            
            
            Fair
      Value
            
            
            Carrying
              Amount
            
            
            Fair
      ValueMortgage
      notes payable for which it is:Practicable
      to estimate fair value
            
            $
            38,606,197
            
            
            $
            37,775,035
            
            
            $
            41,580,846
            
            
            $
            40,729,357Not
      practicable
            
            $
            24,725,829
            
            
            
            *
            
            
            $
            33,695,155
            
            
            
            *
 
 
 The
estimated fair values of the Partnership’s mortgage notes payable from
discontinued operations are as follows:
 
 March
      31, 2008
            
            
            March
      31, 2007Carrying
              Amount
            
            
            Fair
              Value
            
            
            Carrying
              Amount
            
            
            Fair
              ValueMortgage
      notes payable for which it is:Practicable
      to estimate fair value
            
            $
            3,272,090
            
            
            $
            3,272,090
            
            
            $
            9,675,961
            
            
            $
            6,660,885Not
      practicable
            
            $
            4,206,500
            
            
            
            *
            
            
            $
            0
            
            
            
            *
  - 68
-
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2008
 *
            Management
      believes it is not practical to estimate the fair value of these mortgage
      notes payable because mortgage programs with similar characteristics are
      not currently available to the Local
  Partnerships.
 
 
 The
carrying amount of other financial instruments that require such disclosure
approximates fair value.
 
 
 NOTE 4 -
Property and Equipment
 
 The
components of property and equipment from operations are as
follows:
 
 March
      31,
            
            Estimated
              Useful
      Lives
              (Years)2008
            
            2007Land
            
            $
            4,717,143
            
            $
            5,313,563
            
            -Building
      and improvements
            
            
            132,103,886
            
            
            162,672,612
            
            15-40Furniture
      and fixtures
            
            
            3,356,074
            
            
            3,254,210
            
            3-10140,177,103
            
            
            171,240,385Less:
      Accumulated depreciation
            
            
            (61,526,197
            )
            
            (70,978,449
            )$
            78,650,906
            
            $
            100,261,936
 
 
 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, 2008, 2007 and 2006 amounted to,
$4,214,859, $4,220,891 and $4,199,873, respectively.
 
 The
components of property and equipment from discontinued operations are as
follows:
 
 March
      31,
            
            Estimated
              Useful
      Lives
              (Years)2008
            
            2007Land
            
            $
            777,006
            
            $
            377,368
            
            -Building
      and improvements
            
            
            14,344,435
            
            
            15,189,402
            
            15-40Furniture
      and fixtures
            
            
            499,959
            
            
            298,933
            
            3-1015,621,400
            
            
            15,865,703Less:
      Accumulated depreciation
            
            
            (9,242,996
            )
            
            (5,491,064
            )$
            6,378,404
            
            $
            10,374,639
 
 
 Depreciation
expense for the discontinued property and equipment for the years ended March
31, 2008, 2007 and 2006 amounted to $1,068,707,
$1,274,579 and $1,267,599, respectively.
 
 - 69
-
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2008
 NOTE 5 -
Cash Held in Escrow
 
 Cash held
in escrow consists of the following:
 
 March
      31,2008
            
            
            2007Purchase
      price payments*
            
            $
            0
            
            
            $
            8,607Real
      estate taxes, insurance and other
            
            
            2,930,927
            
            
            
            7,005,330Reserve
      for replacements
            
            
            3,640,467
            
            
            
            4,997,496Tenant
      security deposits
            
            
            569,306
            
            
            
            706,429$
            7,140,700
            
            
            $
            12,717,862*Represents
      amounts to be paid to seller upon meeting specified rental achievement
      criteria.
  
 Cash held
in escrow included in the discontinued assets consists of the following:
 March
      31,2008
            
            
            2007Real
      estate taxes, insurance and other
            
            $
            2,386,962
            
            
            $
            132,392Reserve
      for replacements
            
            
            433,795
            
            
            
            0Tenant
      security deposits
            
            
            208,059
            
            
            
            102,481$
            3,028,816
            
            
            $
            234,873
 
 
 NOTE 6 -
Deferred Costs
 
 The
components of deferred costs and their periods of amortization from operations
are as follows:
 
 March
      31,
            
            Period2008
            
            
            2007Financing
      expenses
            
            $
            1,940,437
            
            
            $
            3,049,894
            
            *Less:
      Accumulated amortization
            
            
            (1,284,026
            )
            
            
            (1,890,663
            )$
            656,411
            
            
            $
            1,159,231
 
 
 Amortization
expense from operations for the years ended March 31, 2008, 2007 and 2006
amounted to $85,732, $85,732 and $85,731, respectively.
 
 The
discontinued assets components of deferred costs and their periods of
amortization are as follows:
 
 March
      31,
            
            
            Period2008
            
            
            2007Financing
      expenses
            
            $
            924,541
            
            
            $
            133,416
            
            
            *Less:  Accumulated
      amortization
            
            
            (732,911
            )
            
            
            (99,201
            )$
            191,630
            
            
            $
            34,215*     Over
      the life of the respective mortgages.
 
 
 Amortization
expense from discontinued operations for the years ended March 31, 2008, 2007
and 2006 amounted to $51,529, $54,934 and $54,934, respectively.
 
 - 70
-
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2008
 NOTE 7 -
Mortgage Notes Payable
 
 The
mortgage notes from operations are payable in aggregate monthly installments of
approximately $484,000, including principal and interest at rates varying from
0% to 9% 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 $8,361,000 and 8,401,000 at December
31, 2007 and 2006, 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, 2008, for each of the next five fiscal years and thereafter, are as
follows:
 
 Fiscal
      Year
            
            Amount2008
            
            $
            8,993,0102009
            
            
            2,187,9192010
            
            
            4,048,6822011
            
            
            1,791,2132012
            
            
            1,973,124Thereafter
            
            
            44,338,078$
            63,332,026
 
 
 Accrued
interest payable as of March 31, 2008 and 2007 was approximately $11,332,000 and
$10,369,000, 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 $68,000 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 $62,000, including principal and interest at rates
varying from 1% to 9% per annum, through the year 2015.  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.
 
 Annual
principal payment requirements on the mortgage notes from discontinued
operations, as of March 31, 2008, for each of the next five fiscal years and
thereafter, are as follows:
 
 Fiscal
      Year
            
            Amount2008
            
            $
            1,324,7492009
            
            
            489,4352010
            
            
            497,4352011
            
            
            2,777,7642012
            
            
            475,177Thereafter
            
            
            1,914,030$
            7,478,590
 
 Accrued
interest payable as of March 31, 2008 and 2007 was approximately $517,000 and
$492,000, 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 $6,000 and monthly deposits to escrow
accounts for real estate taxes, hazard and mortgage insurance and other (Note
5).
 
 - 71
-
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2008
 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, 2008 and 2007, the Partnership owes an affiliate of the General
Partner approximately $2,953,000 and $6,187,000, respectively, for operating
advances. These advances are non-interest bearing and have no set repayment
terms. The Partnership has advanced these monies to two Local Partnerships to
fund their 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, 2008, 2007 and 2006
were as follows:
  Years
      Ended March 31,2008
            
            2007*
            
            2006*Partnership
      management fees (i)
            
            $
            869,000
            
            $
            880,000
            
            $
            880,000Expense
      reimbursement (ii)
            
            
            181,166
            
            
            190,309
            
            
            273,640Local
      administrative fee (iv)
            
            
            39,500
            
            
            39,500
            
            
            39,500Property
      management fees incurred to affiliates of the General
    Partners
            
            
            181,607
            
            
            145,155
            
            
            144,489Total
      general and administrative - General Partner
            
            
            1,271,273
            
            
            1,254,964
            
            
            1,337,629Property
      management fees incurred to affiliates of the Local General Partners
      (iii)
            
            
            761,937
            
            
            700,610
            
            
            609,679Total
      general and administrative - related parties
            
            $
            2,033,210
            
            $
            1,955,574
            
            $
            1,947,308
 
 
 The
General Partner and its affiliates perform services for the
Partnership.  The cost incurred from discontinued operations for the
years ended March 31, 2008, 2007 and 2006 were as follows:
 
 Years
      Ended March 31,2008
            
            2007*
            
            2006*Local
      administrative fee (iv)
            
            $
            15,000
            
            $
            15,000
            
            $
            15,000Total
      general and administrative-General Partners
            
            
            15,000
            
            
            15,000
            
            
            15,000Property
      management fees incurred to affiliates of the Local General Partners
      (iii)
            
            
            298,440
            
            
            315,801
            
            
            265,382Total
      general and administrative-related parties
            
            $
            313,440
            
            $
            330,801
            
            $
            280,382* 
      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). Partnership management fees owed to the General Partner amounting to
approximately $9,228,000 and $8,359,000 were accrued and unpaid as of March 31,
2008 and 2007, 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 $1,825,000 and $1,644,000 were
accrued and unpaid as of March 31, 2008 and 2007, respectively.
 
 (iii)           Property
management fees incurred by the subsidiary partnerships amounted to $1,378,224,
$1,422,528 and $1,317,131 for the years ended March 31, 2008, 2007 and 2006,
respectively.  Of these fees, $1,060,377, $1,006,411 and $875,061 were
incurred to affiliates of the general partners of the Local Partnerships (the
“Local General Partners”) which includes $298,440, $315,801 and $265,382 of
these fees relating to discontinued operations and $181,607, $145,155 and
$144,489 were incurred to affiliates of the General Partner.
 
 - 72
-
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2008
 
 B)  Due
to Local General Partners and Affiliates
 
 Due to
local general partners and affiliates included in operating liabilities consists
of the following:
 
 March
      31,2008
            
            
            2007Operating
      advances (i)
            
            $
            1,658,749
            
            
            $
            1,727,780Development
      fee payable
            
            
            1,385,161
            
            
            
            1,396,993Long-term
      notes payable (ii)
            
            
            1,313,684
            
            
            
            1,366,061Accrued
      interest on long-term notes payable
            
            
            1,314,233
            
            
            
            1,052,466Management
      and other fees
            
            
            738,441
            
            
            
            759,229Construction
      costs
            
            
            6,087,870
            
            
            
            5,173,058$
            12,498,138
            
            
            $
            11,475,587(i)
      Operating advances include the following loan:Christine Apartments,
      L.P.
            
            $
            116,100
            
            
            $
            116,100This
      loan is non-interest bearing and has no set repayment
    terms.(ii)
      Long-term notes payable consist of the following:Creative Choice Homes
      II, LTD.
            
            $
            979,770
            
            
            $
            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, 2006
      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, 2006 amounted to $500,000, and thus, this note is technically in
      default.Plainsboro Housing
      Partners, L.P.
            
            $
            333,914
            
            
            $
            386,291This
      loan accrues interest at a rate of 7.34% per annum on the outstanding
      principal balance. Repayment of the principal and interest shall be made
      from net cash flow to the extent available pursuant to the promissory
      note. All accrued interest and principal are due in a balloon payment in
      December 2013.Interest
      expense incurred on such long-term notes payable amounted to approximately
      $286,000, $122,000 and $126,000 for the 2007, 2006 and 2005 Fiscal Years,
      respectively.
 
 
 Due to
local general partners and affiliates included in the discontinued liabilities
consists of the following:
 
 March
      31,2008
            
            
            2007Development
      deficit advances
            
            $
            0
            
            
            $
            50,000Operating
      advances
            
            
            215,093
            
            
            
            414,493Development
      fee payable
            
            
            9,135
            
            
            
            0Management
      and other fees
            
            
            (2,059
            )
            
            
            (75,800
            )$
            222,169
            
            
            $
            388,693
 
 
 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.
 
 - 73
-
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2008
 
 A
reconciliation of the financial statements net loss to the taxable net loss for
the Partnership and its consolidated subsidiaries follows:
 
 Years
      Ended December 31,2007
            
            
            2006
            
            
            2005Financial
      statement net loss
            
            $
            (10,467,870
            )
            
            $
            (6,269,750
            )
            
            $
            (5,070,444
            )Differences
      between depreciation and amortizationexpense
      recorded for financial reporting purposes and theaccelerated
      cost recovery system utilized for income taxpurposes
            
            
            (756,303
            )
            
            
            (983,042
            )
            
            
            (961,689
            )Differences
      resulting from parent company having adifferent
      fiscal year for income tax and financial reportingpurposes
            
            
            27,737
            
            
            
            (16,893
            )
            
            
            32,009Tax
      exempt interest income
            
            
            (142,516
            )
            
            
            0
            
            
            
            0Non-deductible
      loss on impairment of property
            
            
            6,360,000
            
            
            
            1,164,864
            
            
            
            0Cost
      from hurricane events not deducted for income tax purposes
            
            
            2,309,923
            
            
            
            0
            
            
            
            0Difference
      between gain on sale of properties for financial reporting purposes and
      gain on sale for income tax purposes
            
            
            1,841,300
            
            
            
            0
            
            
            
            0Other,
      including related party accruals not deductible until paid
            
            
            1,319,955
            
            
            
            1,825,310
            
            
            
            (191,835
            )Taxable
      net income (loss) as shown on the income tax return for the calendar year
      ended
            
            $
            492,226
            
            
            $
            (4,279,511
            )
            
            $
            (6,191,959
            )
 
 
 NOTE 10 –
Sale of Property
 
 The
Partnership is currently in the process of disposing of its
investments.  During the year ended March 31, 2008, two Local
Partnerships sold their property and the related assets and liabilities, the
Partnership sold its limited partnership interests in two Local Partnerships and
one Local Partnership transferred the deed to the property and related assets
and liabilities of such Local Partnership.  Through March 31, 2008, two
Local Partnerships have sold their property and the related assets and
liabilities, the Partnership has sold its limited partnership interests in three
Local Partnerships and one Local Partnership transferred the deed to the
property and related assets and liabilities of such Local Partnership.  In
addition, one Local Partnership entered into an agreement to sell its property
and related assets and liabilities and the Partnership has entered into an
agreement to sell its limited partnership interest in another Local Partnership
(see Note 11).  Subsequent to March 31, 2008, the Partnership sold its
limited partnership interest in one Local Partnership and three Local
Partnerships have entered into agreements to sell their property and the related
assets and liabilities (see Note 15).
 
 On March
20, 2008, the property and 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 $191,000
resulting from the write of the deficit basis in the property at the date of
sale, which will be recognized during the quarter ending June 30,
2008.
 
 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.
 
 - 74
-
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2008
 
 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 March
31, 2008, Bethel Villa Associates, L.P. (“Bethel Villa”) entered into a purchase
and sale agreement to sell its limited partnership interest to the Local General
Partner for a sales price of $750,000.  The sales documents have been
executed.  The sale requires HUD approval.  At this time,
the Partnership cannot determine when or if HUD will grant its
approval.  During the quarter ended March 31, 2008, in accordance with
Statement of Financial Accounting Standards No. 144 (“SFAS No. 144”) Accounting for the Impairment of
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.  Bethel Villa is being held as an asset held
for sale as of March 31, 2008.  As of December 31, 2007, Bethel Villa
had property and equipment, at cost, of approximately $5,360,000, accumulated
depreciation of approximately $4,603,000 and mortgage debt of approximately
$2,874,000.
 
 On
September 5, 2007, Lancaster Terrace Limited Partnership (“Lancaster Terrace”)
entered into a purchase and sale agreement to sell the property and the related
assets and liabilities to the Local General Partner for a sales price of
$2,800,000.  The sales documents have been executed and the initial
deposit funds are being held in escrow.  No assurance can be given
that the sale will actually occur.  The closing is expected to occur
during 2008.  Lancaster Terrace was being held as an asset held for
sale since the quarter ended September 30, 2007.  As of December 31,
2007, Lancaster Terrace had property and equipment, at cost, of approximately
$3,961,000, accumulated depreciation of approximately $2,334,000 and mortgage
debt of approximately $1,332,000.
 
 - 75
-
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2008
 NOTE 12 –
Selected Quarterly Financial Data (Unaudited)
 
 The
following table summarizes the Partnership’s quarterly results of operations for
the years ended March 31, 2008 and 2007.
 
 OPERATIONS
            
            Quarter
      EndedJune
      30,
              2007*
            
            September
      30,
              2007*
            
            December
      31,2007*
            
            March
      31,
              2008Revenues
            
            $
            4,456,653
            
            $
            4,528,241
            
            $
            4,232,422
            
            $
            5,081,406Operating
      expenses
            
            
            (6,060,116
            )
            
            (5,618,655
            )
            
            (5,835,435
            )
            
            (9,659,940
            )Loss
      before minority interest
            
            
            (1,603,463
            )
            
            (1,090,414
            )
            
            (1,603,013
            )
            
            (4,578,534
            )Minority
      interest in loss of subsidiaries from operations
            
            
            6,155
            
            
            6,554
            
            
            7,046
            
            
            13,957Loss
      from operations
            
            
            (1,597,308
            )
            
            (1,083,860
            )
            
            (1,595,967
            )
            
            (4,564,577
            )Income
      (loss) from discontinued operations
            
            
            1,662,274
            
            
            137,050
            
            
            458,682
            
            
            (3,884,164
            )Net
      income (loss)
            
            $
            64,966
            
            $
            (946,810
            )
            $
            (1,137,285
            )
            $
            (8,448,741
            )Net
      loss per weighted average BAC from operations
            
            $
            (20.59
            )
            $
            (13.97
            )
            $
            (20.58
            )
            $
            (58.85
            )Net
      income (loss) per weighted average BAC from discontinued
      operations
            
            
            21.43
            
            
            1.76
            
            
            5.92
            
            
            (50.08
            )Net
      income (loss) per weighted average BAC
            
            $
            0.84
            
            $
            (12.21
            )
            $
            (14.66
            )
            $
            (108.93
            )OPERATIONS
            
            Quarter
      EndedJune
      30,
              2006*
            
            September
      30,
              2006*
            
            December
      31, 2006*
            
            March
      31,
              2007*Revenues
            
            $
            4,393,366
            
            $
            4,149,933
            
            $
            4,288,646
            
            $
            4,978,434Operating
      expenses
            
            
            (5,774,238
            )
            
            (5,665,703
            )
            
            (5,313,849
            )
            
            (7,613,152
            )Loss
      before minority interest
            
            
            (1,380,872
            )
            
            (1,515,770
            )
            
            (1,025,203
            )
            
            (2,634,718
            )Minority
      interest in loss of subsidiaries
            
            
            7,945
            
            
            6,704
            
            
            5,751
            
            
            8,574Loss
      from operations
            
            
            (1,372,927
            )
            
            (1,509,066
            )
            
            (1,019,452
            )
            
            (2,626,144
            )(Loss)
      income from discontinued operations
            
            
            (87,080
            )
            
            (17,727
            )
            
            123,313
            
            
            239,333Net
      loss
            
            $
            (1,460,007
            )
            $
            (1,526,793
            )
            $
            (896,139
            )
            $
            (2,386,811
            )Net
      loss per weighted average BAC from operations
            
            $
            (17.70
            )
            $
            (19.46
            )
            $
            (13.14
            )
            $
            (33.86
            )Net
      (loss) income per weighted average BAC from discontinuedoperations
            
            
            (1.12
            )
            
            (0.23
            )
            
            1.59
            
            
            3.09Net
      loss per weighted average BAC
            
            $
            (18.82
            )
            $
            (19.69
            )
            $
            (11.55
            )
            $
            (30.77
            )*Reclassified
      for comparative purposes.
  
 - 76
-
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2008
 
 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, 2008 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, 2008 and 2007 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 loss (income) after minority
interest amounted to approximately $2,400,000, $1,600,000 and $(3,000) for the
2007, 2006 and 2005 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
$7,789,000.  Opa-Locka expects to be reimbursed by insurance proceeds
in the amount of approximately $4,420,000.  As of December 31, 2007,
$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
$4,061,787 remains payable to the construction company as of December 31, 2007
related to the rehabilitation. In addition, during the year ended December 31,
2007, $2,309,923 was incurred by Opa-Locka as costs f rom
hurricane events in excess of insurance proceeds received.
 
 The above
circumstances have called into question the recoverability of the carrying
amounts of the building.  As a result, during the year ended March 31,
2007, pursuant to SFAS 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, impairment loss of $1,164,864, was
recognized on the building and improvements.  Subsequently, on May 9,
2008, Opa-Locka entered into a purchase and sale agreement to sell its property
and related liabilities to an unaffiliated third party purchaser (see Note
15).
 
 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, 2007, current liabilities exceed current assets by approximately
$360,000.  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.
 
 The
Partnership’s investment in Morrant Bay at March 31, 2008 and 2007 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 $712,000, $431,000 and $436,000 for
the 2007, 2006 and 2005 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, 2007,
current liabilities exceed current assets by approximately
$100,000.  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.
 
 The
Partnership’s investment in Boston Bay at March 31, 2008 and 2007 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 $540,000, $212,000 and $163,000 for
the 2007, 2006 and 2005 Fiscal Years.  The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
 
 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
$100,000. As of March 31, 2008, uninsured cash and cash equivalents approximated
$4,058,000.
 
 - 77
-
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2008
 
 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 23% 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.
Because of the time required for the acquisition, completion and rent-up of
Apartment Complexes, the amount of Tax Credits per BAC gradually increased over
the first three years of the Partnership. Tax Credits not recognized in the
first three years will be recognized in the 11th through 13th
years.  The Partnership generated $11,579, $17,573 and $17,573 Tax
Credits during the 2007, 2006 and 2005 tax years, respectively.
 
 
 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,
2008, Homestead, Harbor Court, Bethel Villa and Lancaster were classified as
discontinued operations on the consolidated balance sheets.  As of
March 31, 2007, P.S. 157 and Homestead were classified as discontinued
operations on the consolidated balance sheets.
 
 Consolidated Balance
Sheets:
 
 March
      31,2008
            
            2007AssetsProperty
      and equipment – less accumulated depreciation of $9,242,996 and
      $5,491,064, respectively
            
            $
            6,378,404
            
            $
            10,374,639Cash
      and cash equivalents
            
            
            357,703
            
            
            131,598Cash
      held in escrow
            
            
            3,028,816
            
            
            234,873Deferred
      costs, net of accumulated amortization of $732,911 and $99,201,
      respectively
            
            
            191,630
            
            
            34,215Other
      assets
            
            
            213,732
            
            
            146,108Total
      assets
            
            $
            10,170,285
            
            $
            10,921,433LiabilitiesMortgage
      notes payable
            
            $
            7,478,590
            
            $
            9,675,961Accounts
      payable
            
            
            291,398
            
            
            204,937Accrued
      interest payable
            
            
            516,823
            
            
            492,112Security
      deposit payable
            
            
            127,418
            
            
            107,711Due
      to local general partners and affiliates
            
            
            222,169
            
            
            388,693Due
      to general partners and affiliates
            
            
            45,000
            
            
            37,500Minority
      interest
            
            
            (471,908
            )
            
            (447,136
            )Total
      liabilities
            
            $
            8,209,490
            
            $
            10,459,778
 
 
 The
following table summarizes the results of operations of the Local Partnerships
that are classified as discontinued operations.  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, and Bethel Villa and Lancaster,
which were classified as assets held for sale, were all classified as
discontinued operations in the consolidated financial statements.  For
the year ended March 31, 2007, P.S. 157, which was sold during the year,
Homestead, which was classified as an asset held for sale, and Old Public,
Harbor Court, Beaumont, Hampden Hall, Bethel Villa and Lancaster, in order to
present comparable results to the year ended March 31, 2008, were classified as
discontinued operations in the consolidated financial statements.  For
the year ended March 31, 2006, P.S. 157, Old Public, Harbor Court, Beaumont,
Hampden Hall, Homestead, Bethel Villa and Lancaster, in order to present
comparable results to the year ended March 31, 2008, were classified as
discontinued operations in the consolidated financial statements.
 - 78
-
  INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2008
 
 
 Years
      Ended March 31,2008
            
            2007
            
            2006RevenuesRental
      income
            
            $
            5,369,754
            
            $
            5,913,606
            
            $
            5,366,817Other
      (Note 2)
            
            
            305,682
            
            
            275,731
            
            
            250,319Gain
      on sale of properties
            
            
            2,508,563
            
            
            0
            
            
            0Total
      revenue
            
            
            8,183,999
            
            
            6,189,337
            
            
            5,617,136ExpensesGeneral
      and administrative
            
            
            1,275,803
            
            
            1,187,743
            
            
            1,178,214General
      and administrative-related parties (Note 8)
            
            
            313,440
            
            
            320,801
            
            
            280,382Repairs
      and maintenance
            
            
            1,177,677
            
            
            1,189,054
            
            
            1,321,486Operating
      and other
            
            
            593,671
            
            
            597,250
            
            
            617,427Real
      estate taxes
            
            
            222,947
            
            
            231,765
            
            
            251,899Insurance
            
            
            394,677
            
            
            392,069
            
            
            363,296Interest
            
            
            492,328
            
            
            678,136
            
            
            678,598Depreciation
      and amortization
            
            
            1,120,236
            
            
            1,329,513
            
            
            1,322,533Loss
      on impairment of property
            
            
            5,000,000
            
            
            0
            
            
            0Total
      expenses
            
            
            10,590,779
            
            
            5,926,331
            
            
            6,013,835(Loss)
      income before minority interest
            
            
            (2,406,780
            )
            
            263,006
            
            
            (396,699
            )Minority
      interest in income (loss) of subsidiaries from discontinuedoperations
            
            
            780,622
            
            
            (5,167
            )
            
            (348
            )Total
      (loss) income from discontinued operations (including gain onsale
      of properties)
            
            $
            (1,626,158
            )
            $
            257,839
            
            $
            (397,047
            )(Loss)
      income – limited partners from discontinued operations (includinggain
      on sale of properties)
            
            $
            (1,609,896
            )
            $
            255,260
            
            $
            (393,077
            )Number
      of BACs outstanding
            
            
            76,786
            
            
            76,786
            
            
            76,786(Loss)
      income discontinued operations (including gain on sale ofproperties)
      per BAC
            
            $
            (20.97
            )
            $
            3.33
            
            $
            (5.12
            )
 
 
 Cash
flows from Discontinued Operations:
 
 Years
      Ended March 31,2008
            
            2007*
            
            2006*Net
      cash (used in) provided by operating activities
            
            $
            (110,203
            )
            $
            1,140,679
            
            $
            1,852,518Net
      cash provided by (used in) investing activities
            
            $
            11,795,830
            
            $
            (278,660
            )
            $
            (311,378
            )Net
      cash used in financing activities
            
            $
            (2,149,637
            )
            $
            (475,181
            )
            $
            (731,384
            )
 
 *  Reclassified
for comparative purposes.
 
 
 NOTE 15 –
Subsequent Events
 
 On May 9,
2008, Creative Choice Homes II, Ltd. (“Opa-Locka”) entered into a purchase and
sale agreement to sell its property and the related assets and liabilities to an
unaffiliated third party purchaser for a sale price of
$17,000,000.  The sales documents have been executed and the initial
deposit funds are being held in escrow.  The closing is expected to
occur during the quarter ended December 31, 2008.  No assurance can be
given that the sale will actually occur.  As of December 2007,
Opa-Locka had property and equipment, at cost, of approximately $22,070,000,
accumulated depreciation of approximately $7,685,000 and mortgage debt of
approximately $6,340,000.
 
 - 79
-
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2008
 
 Accounting for the Impairment of
Disposal of Long-Lived Assets
 
 On April
14, 2008, Rolling Green Associates, L.P. (“Rolling Green”) entered into a
purchase and sale agreement to sell its property and the related assets and
liabilities to an unaffiliated third party purchaser for a sales price of
$14,000,000.  The sales documents have been executed and the initial
deposit funds are being held in escrow.  The closing is expected to
occur by the end of 2008.  No assurance can be given that the sale
will actually occur.  As of December 31, 2007, Rolling Green had
property and equipment, at cost, of approximately $22,311,000, accumulated
depreciation of approximately $11,528,000 and mortgage debt of approximately
$11,304,000.
 
 On April
1, 2008, Homestead Apartments Associates II Ltd. (“Homestead II”) entered into a
purchase and sale agreement to sell its property and the related assets and
liabilities to an unaffiliated third party purchaser for a sales price of
$4,000,000.  The sales documents have been executed and the initial
deposit funds are being held in escrow.  The closing is expected to
occur by the end of 2008.  No assurance can be given that the sale
will actually occur.  As of December 31, 2007, Homestead II had
property and equipment, at cost, of approximately $5,594,000, accumulated
depreciation of approximately $1,945,000 and mortgage debt of approximately
$3,208,000.
 
 On April
1, 2008, the Partnership’s limited partnership interest in Landreth Venture L.P.
(“Landreth”) was sold to the Local General Partner for a sales price of
$20,000.  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, resulting in a loss in impairment of $730,000.  The
sale resulted in a loss of approximately $3,000, resulting from the write-off of
the basis in the Local Partnership of approximately $23,000 and $20,000 cash
received from the sale, which will be recognized on the Partnership’s Quarterly
Report on Form 10-Q for the quarter ending June 30, 2008.
 
 - 80
-
 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 the end of the period covered by this
report.  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, 2008, 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
 
 
 - 81
-
  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, 42, 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, 37, 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, 47, 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%
 
 
 - 82
-
  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 18,
2006, 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”) and pursuant
to a letter agreement dated May 28, 1997 among the Partnership, Lehigh I and the
General Partner (the “Standstill Agreement”), Lehigh I agreed that, prior to May
28, 2007 (the “Standstill Expiration Date”), it would not and it would cause
certain affiliates, including Lehigh Tax Credit Partners II, L.L.C. (“Lehigh
II”), not to (i) acquire, attempt to acquire or make a proposal to acquire,
directly or indirectly, more than 45% (including BACs acquired through all other
means) of the outstanding BACs, (ii) seek to propose to enter into, directly or
indirectly, any merger, consolidation, business combination, sale or acquisition
of assets, liquidation, dissolution or other similar transaction involving the
Partnership, (iii) make, or in any way participate, directly or indirectly, in
any “solicitation” of “proxies” or “consents” (as such terms are used in the
proxy rules of the Commission) to vote any voting securities of the Partnership,
(iv) form, join or otherwise participate in a “group” (within the meaning of
Section 13 (d)(3) of the Securities and Exchange Act of 1934) with respect to
any voting securities of the Partnership, except those affiliates bound by the
Standstill Agreement will not be deemed to have violated it and formed a “group”
solely by acting in accordance with the Standstill Agreement, (v) disclose in
writing to any third party any intention, plan or arrangement inconsistent with
the terms of the Standstill Agreement, or (vi) loan money to, advise, assist or
encourage any person in connection with any action inconsistent with the terms
of the Standstill Agreement. In addition, Lehigh I agreed that until the
Standstill Expiration Date it would not sell any BACs acquired by it unless the
buyer of such BACs agreed to be bound by the Standstill Agreement; provided,
however, Lehigh I was entitled to make transfers in the secondary market to any
purchaser which represented that following such sale it would not own three
percent (3%) or more of the BACs outstanding. By the terms of the Standstill
Agreement, Lehigh I also agreed to vote its BACs in the same manner as a
majority of all voting BACs holders; provided, however, Lehigh I was entitled to
vote its BACs as it determined with regard to any proposal (i) to remove the
General Partner as a general partner of the Partnership or (ii) concerning the
reduction of any fees, profits, distributions or allocations for the benefit of
the General Partner or its affiliates.  The address of each of the
Partnership, Lehigh I and the General Partner is 625 Madison Avenue, New York,
New York 10022.
 
 (3)  All
of such BACs represent BACs owned directly by Lehigh I and Lehigh II for which
the Managing Member serves as managing member. As of May 28, 2008, 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; 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.
 
 - 83
-
  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, 2008 and
2007 and for the reviews of the financial statements included in the
Partnership’s quarterly reports on Form 10-Q for those years were $62,300 and
$86,900, 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 $1,000 and $11,000 for the years ended December 31, 2007 and 2006,
respectively.
 
 All Other
Fees
 None.
 
 The
Partnership is not required to have, and does not have, a stand-alone audit
committee.
  - 84
-
  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, 2008 and 2007
            
            61Consolidated
      Statements of Operations for the Years Ended March 31, 2008, 2007 and
      2006
            
            62Consolidated
      Statements of Changes in Partners’ Capital (Deficit) for the Years Ended
      March 31, 2008, 2007 and 2006
            
            63Consolidated
      Statements of Cash Flows for the Years Ended March 31, 2008, 2007 and
      2006
            
            64Notes
      to Consolidated Financial Statements
            
            66(a)
      2.
            Consolidated Financial
      Statement SchedulesReport
      of Independent Registered Public Accounting Firm
            
            92Schedule
      I- Condensed Financial Information of Registrant
            
            93Schedule
      III - Real Estate and Accumulated Depreciation
            
            96(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*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)
            
            89(31.2)
            Certification Pursuant to Rule 13a-14(a) or Rule
      15d-14(a)
            
            90(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)
            
            91
   - 85
-
    Item
      15.
              Exhibits
      and Financial Statement Schedules (continued)
  Subsidiaries of the
      Registrant(Exhibit 21)
              
              Jurisdiction
                of
      OrganizationLancaster
      Terrace Limited Partnership
              
              OR655
      North Street Limited Partnership
              
              LALandreth
      Venture
              
              PAHomestead
      Apartments Associates Ltd.
              
              FLWest
      Diamond Street Associates
              
              PASusquehanna
      Partners
              
              PABoston
      Bay Limited Partnership
              
              MAMorrant
      Bay Limited Partnership
              
              MAHope
      Bay Limited Partnership
              
              MALares
      Apartments Limited Partnership
              
              PRLajas
      Apartments Limited Partnership
              
              PRArlington-Rodeo
      Properties
              
              CAConifer
      Bateman Associates
              
              NYChester
      Renaissance Associates
              
              PAHomestead
      Apartments II, LTD.
              
              FLCloisters
      Limited Partnership II
              
              PACreative
      Choice Homes II, LTD.
              
              FLMilford
      Crossing Associates L.P.
              
              DELos
      Angeles Limited Partnership
              
              PRChristine
      Apartments, L.P.
              
              NYPlainsboro
      Housing Partners, L.P.
              
              NJRolling
      Green Associates, L.P.
              
              NY
 
 - 86
-
  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:
            RELATED
      INDEPENDENCE ASSOCIATES INC.,a
      General PartnerDate:
            June 27,
      2008
            
            
            
            By:
            /s/ Robert L.
      LevyRobert
      L. LevyChief
      Financial Officer, Principal Accounting Officerand
      DirectorDate:
            June 27,
      2008
            
            
            
            By:
            /s/ Andrew J.
      WeilAndrew
      J. WeilPresident
      and Chief Executive Officer
 
 
 - 87
-
  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 Related
      Independence Associates Inc.
            
            June 27,
      2008/s/
      Andrew J. Weil
              Andrew
      J. Weil
            
            President
      (Chief Executive Officer) of Related Independence Associates
      Inc.
            
            June 27,
      2008
  
 - 88
-
 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 27, 2008 on page 15, and based on the reports of other auditors, we
have also audited supporting Schedule I for the 2007, 2006 and 2005 Fiscal Years
and Schedule III at March 31, 2008.  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
$3,651,851 (2007 Fiscal Year), $2,257,184 (2006 Fiscal Year) and $596,598 (2005
Fiscal Year), and their assets aggregated $23,381,182 and $26,226,406 at March
31, 2008 and 2007, 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  27,
2008
 
 - 92
-
  INDEPENDENCE
TAX CREDIT PLUS L.P.
 SCHEDULE
I
 CONDENSED
FINANCIAL INFORMATION OF REGISTRANT
 (NOT
INCLUDING CONSOLIDATED SUBSIDIARY PARTNERSHIPS)
 
 
 CONDENSED
BALANCE SHEETS
 
 
 
 
 ASSETS
 
 
 2008
            
            2007Cash
      and cash equivalents
            
            $
            2,818,676
            
            $
            31,266Advances
      and investment in subsidiary partnerships
            
            
            6,929,305
            
            
            19,668,019Cash
      held in escrow
            
            
            0
            
            
            8,607Other
      assets
            
            
            137,511
            
            
            2,112,848Total
      assets
            
            $
            9,885,492
            
            $
            21,820,740LIABILITIES
      AND PARTNERS’ CAPITALOther
      liabilities
            
            $
            7,292
            
            $
            2,001,244Due
      to general partners and affiliates
            
            
            14,006,563
            
            
            16,190,153Total
      liabilities
            
            
            14,013,855
            
            
            18,191,397Partners’
      (deficit) capital*
            
            
            (4,128,363
            )
            
            3,629,343Total
      liabilities and partners’ capital
            
            $
            9,885,492
            
            $
            21,820,740
 
 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 $427,758 and $472,251 of related party
income at March 31, 2008 and 2007, respectively.
 
 - 93
-
  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 31,2008
            
            
            2007
            
            
            2006Revenues
            
            $
            24,695
            
            
            $
            10,426
            
            
            $
            6,928ExpensesAdministrative
      and management
            
            
            241,765
            
            
            
            178,403
            
            
            
            129,867Administrative
      and management-related parties
            
            
            1,050,166
            
            
            
            1,070,309
            
            
            
            1,153,640Total
      expenses
            
            
            1,291,931
            
            
            
            1,248,712
            
            
            
            1,283,507Loss
      from operations
            
            
            (1,267,236
            )
            
            
            (1,238,286
            )
            
            
            (1,276,579
            )Gain
      on sale of investments in subsidiary partnerships
            
            
            1,053,008
            
            
            
            0
            
            
            
            0Distribution
      income of subsidiary partnerships in excess of investments
            
            
            32,972
            
            
            
            16,486
            
            
            
            0Equity
      in loss of subsidiary partnerships
            
            
            (7,576,450
            )
            
            
            (3,161,490
            )
            
            
            (2,092,313
            )Net
      loss
            
            $
            (7,757,706
            )
            
            $
            (4,383,290
            )
            
            $
            (3,368,892
            )
   - 94
-
  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 31,2008
            
            
            2007
            
            
            2006Cash
      flows from operating activities:Net
      loss
            
            $
            (7,757,706
            )
            
            $
            (4,383,290
            )
            
            $
            (3,368,892
            )Adjustments
      to reconcile net loss to net cash provided by
              operating
      activities:Gain
      on sale of investments
            
            
            (1,053,008
            )
            
            
            0
            
            
            
            0Distribution
      income of subsidiary partnerships in excess of investments
            
            
            (32,972
            )
            
            
            (16,486
            )
            
            
            0Equity
      in loss of subsidiary partnerships
            
            
            7,576,450
            
            
            
            3,161,490
            
            
            
            2,092,313Increase
      in other assets
            
            
            (12,625
            )
            
            
            (1,982,727
            )
            
            
            0(Decrease)
      increase in other liabilities
            
            
            2,597
            
            
            
            1,986,377
            
            
            
            1,972Increase
      in due to general partner and affiliates
            
            
            (2,183,590
            )
            
            
            2,145,674
            
            
            
            1,888,697Total
      adjustments
            
            
            4,296,852
            
            
            
            5,294,328
            
            
            
            3,982,982Net
      cash (used in) provided by operating activities
            
            
            (3,460,854
            )
            
            
            911,038
            
            
            
            614,090Cash
      flows from investing activities:Proceeds
      from sale of investments in subsidiary partnerships
            
            
            5,000,508
            
            
            
            0
            
            
            
            0Decrease
      in cash held in escrow-purchase pricepayments
            
            
            8,607
            
            
            
            9,334
            
            
            
            0Investment
      in subsidiary partnerships
            
            
            (8,607
            )
            
            
            (9,334
            )
            
            
            0Distributions
      from subsidiary partnerships
            
            
            2,078,010
            
            
            
            81,847
            
            
            
            102,265Advances
      to subsidiary partnerships
            
            
            (830,254
            )
            
            
            (1,050,427
            )
            
            
            (688,640
            )Net
      cash provided by (used in) investing activities
            
            
            6,248,264
            
            
            
            (968,580
            )
            
            
            (586,375
            )Net
      increase (decrease) in cash and cash equivalents
            
            
            2,787,410
            
            
            
            (57,542
            )
            
            
            27,715Cash
      and cash equivalents, beginning of year
            
            
            31,266
            
            
            
            88,808
            
            
            
            61,093Cash
      and cash equivalents, end of year
            
            $
            2,818,676
            
            
            $
            31,266
            
            
            $
            88,808
 
  - 95
-
  INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 SCHEDULE
III
 REAL
ESTATE AND ACCUMULATED DEPRECIATION
 Partnership
Property Pledged as Collateral
 MARCH 31,
2008
  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 PartnershipSalem,
      OR
              
              
              1,332,341
              
              
              161,269
              
              
              3,679,601
              
              
              157,170
              
              
              163,105
              
              
              3,834,935
              
              
              3,998,040
              
              
              2,353,912
              
              1992
              
              Feb.
      1992
              
              15-27.5
              years655
      North Street Limited PartnershipBaton
      Rouge, LA
              
              
              4,731,551
              
              
              125,500
              
              
              3,040,980
              
              
              6,236,976
              
              
              127,751
              
              
              9,275,705
              
              
              9,403,456
              
              
              4,975,298
              
              1992
              
              Mar.
      1992
              
              27.5
              yearsLandreth
      VenturePhiladelphia,
      PA
              
              
              3,148,181
              
              
              1,761
              
              
              5,903,337
              
              
              (598,332
              )
              
              3,645
              
              
              5,303,121
              
              
              5,306,766
              
              
              2,395,871
              
              1992
              
              Mar.
      1992
              
              40
              yearsHomestead
      Apartments Associates Ltd. (b)(d)Homestead,
      FL
              
              
              3,272,090
              
              
              329,402
              
              
              0
              
              
              5,901,849
              
              
              338,802
              
              
              5,892,449
              
              
              6,231,251
              
              
              2,266,131
              
              1992
              
              Mar.
      1992
              
              40
              yearsBethel
      Villa Associates, L.P.Wilmington,
      DE
              
              
              2,874,159
              
              
              270,000
              
              
              5,969,354
              
              
              (1,826,095
              )
              
              275,099
              
              
              4,138,160
              
              
              4,413,259
              
              
              4,080,219
              
              1992
              
              Apr.
      1992
              
              27.5
              yearsWest
      Diamond Street AssociatesPhiladelphia,
      PA
              
              
              1,576,000
              
              
              30,829
              
              
              3,444,649
              
              
              (934,261
              )
              
              32,414
              
              
              2,508,803
              
              
              2,541,217
              
              
              1,809,500
              
              1992
              
              May
      1992
              
              40
              yearsSusquehanna
      PartnersPhiladelphia,
      PA
              
              
              1,638,149
              
              
              16,000
              
              
              0
              
              
              3,377,315
              
              
              17,585
              
              
              3,375,730
              
              
              3,393,315
              
              
              1,541,919
              
              1992
              
              May
      1992
              
              20-40
              yearsBoston
      Bay Limited PartnershipBoston,
      MA
              
              
              2,009,252
              
              
              440,000
              
              
              4,143,758
              
              
              891,334
              
              
              441,585
              
              
              5,033,507
              
              
              5,475,092
              
              
              2,924,286
              
              1991
              
              Aug.
      1992
              
              27.5
              yearsMorrant
      Bay Limited PartnershipBoston,
      MA
              
              
              2,971,215
              
              
              650,000
              
              
              5,522,250
              
              
              1,485,897
              
              
              651,585
              
              
              7,006,562
              
              
              7,658,147
              
              
              3,914,926
              
              1991
              
              Aug.
      1992
              
              27.5
              yearsHope
      Bay Limited PartnershipBoston,
      MA
              
              
              1,111,455
              
              
              225,000
              
              
              1,435,185
              
              
              697,388
              
              
              226,585
              
              
              2,130,988
              
              
              2,357,573
              
              
              1,207,372
              
              1991
              
              Aug.
      1992
              
              27.5
              yearsLares
      Apartments Limited PartnershipLares,
      PR
              
              
              4,347,198
              
              
              137,000
              
              
              0
              
              
              5,440,655
              
              
              151,585
              
              
              5,426,070
              
              
              5,577,655
              
              
              1,959,565
              
              1992
              
              Aug.
      1992
              
              40
              yearsLajas
      Apartments Limited PartnershipLajas,
      PR
              
              
              4,013,456
              
              
              110,090
              
              
              4,952,929
              
              
              309,432
              
              
              111,675
              
              
              5,260,776
              
              
              5,372,451
              
              
              2,119,945
              
              1992
              
              Aug.
      1992
              
              40
              yearsArlington-Rodeo
      PropertiesLos
      Angeles, CA
              
              
              3,543,123
              
              
              624,052
              
              
              0
              
              
              5,090,262
              
              
              625,637
              
              
              5,088,677
              
              
              5,714,314
              
              
              2,153,945
              
              1992
              
              Aug.
      1992
              
              27.5
              yearsConifer
      Bateman AssociatesLowville,
      NY
              
              
              901,602
              
              
              15,000
              
              
              2,525,729
              
              
              92,118
              
              
              16,585
              
              
              2,616,262
              
              
              2,632,847
              
              
              1,515,155
              
              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
              
              
              1,794,585
              
              
              42,153
              
              
              1,954,432
              
              
              1,996,585
              
              
              741,495
              
              1992
              
              Sep.
      1992
              
              40
              yearsHomestead
      Apartments II, LTD.Homestead,
      FL
              
              
              3,208,194
              
              
              338,966
              
              
              0
              
              
              5,287,011
              
              
              340,551
              
              
              5,285,426
              
              
              5,625,977
              
              
              1,964,449
              
              1992
              
              Oct.
      1992
              
              40
              yearsP.S.
      157 Associates, L.P. (a)(b)New
      York, NY
              
              
              0
              
              
              36,500
              
              
              9,350,642
              
              
              (9,387,142
              )
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              1992
              
              Nov.
      1992
              
              40
              yearsCloisters
      Limited Partnership IIPhiladelphia,
      PA
              
              
              0
              
              
              35,160
              
              
              0
              
              
              9,635,371
              
              
              36,745
              
              
              9,633,786
              
              
              9,670,531
              
              
              3,558,002
              
              1992
              
              Nov.
      1992
              
              40
              yearsCreative
      Choice Homes II, LTD.Opa-Locka,
      FL
              
              
              6,340,166
              
              
              0
              
              
              0
              
              
              22,101,731
              
              
              574,637
              
              
              21,527,094
              
              
              22,101,731
              
              
              7,704,919
              
              1988
              
              Dec.
      1992
              
              40
              yearsMilford
      Crossing Associates L.P.  (**)Milford,
      DE
              
              
              2,334,394
              
              
              203,006
              
              
              0
              
              
              4,392,233
              
              
              115,519
              
              
              4,479,720
              
              
              4,595,239
              
              
              2,481,391
              
              1992
              
              Dec.
      1992
              
              27.5
              years
   - 96
-
 INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 SCHEDULE
III
 REAL
ESTATE AND ACCUMULATED DEPRECIATION
 Partnership
Property Pledged as Collateral
 MARCH 31,
2008
 (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
                ImprovementsBX-7F
      Associates, L.P. (c)Bronx,
      NY
              
              
              0
              
              
              4
              
              
              5,705,064
              
              
              (5,705,064
              )
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              1993
              
              Jan.
      1993
              
              40
              yearsLos
      Angeles Limited PartnershipRio
      Piedras, PR
              
              
              3,879,215
              
              
              201,210
              
              
              0
              
              
              6,719,125
              
              
              203,384
              
              
              6,716,951
              
              
              6,920,335
              
              
              2,384,590
              
              1994
              
              Apr.1993
              
              40
              yearsChristine
      Apartments, L.P.Buffalo,
      NY
              
              
              1,245,000
              
              
              10,000
              
              
              2,351,072
              
              
              310,876
              
              
              13,174
              
              
              2,658,775
              
              
              2,671,949
              
              
              1,404,644
              
              1993
              
              June
      1993
              
              27.5
              yearsPlainsboro
      Housing Partners, L.P.Plainsboro,
      NJ
              
              
              4,190,459
              
              
              800,000
              
              
              0
              
              
              8,986,063
              
              
              802,174
              
              
              8,983,889
              
              
              9,786,063
              
              
              3,764,716
              
              1994
              
              July
      1993
              
              27.5
              yearsRolling
      Green Associates, L.P.Syracuse,
      NY
              
              
              11,304,066
              
              
              180,000
              
              
              19,583,101
              
              
              2,591,609
              
              
              182,174
              
              
              22,172,536
              
              
              22,354,710
              
              
              11,546,941
              
              1992
              
              Oct.
      1993
              
              27.5
              yearsLess:  Discontinued
      operations
              
              
              (7,478,590
              )
              
              (944,625
              )
              
              (27,425,937
              )
              
              12,749,159
              
              
              (777,006
              )
              
              (14,844,394
              )
              
              (15,621,400
              )
              
              (9,242,994
              )$
              63,332,026
              
              $
              4,177,241
              
              $
              53,071,323
              
              $
              82,928,539
              
              $
              4,717,143
              
              $
              135,459,960
              
              $
              140,177,103
              
              $
              61,526,197*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.
 
 - 97
-
  INDEPENDENCE
TAX CREDIT PLUS L.P.
 AND
SUBSIDIARIES
 SCHEDULE
III
 REAL
ESTATE AND ACCUMULATED DEPRECIATION
 Partnership
Property Pledged as Collateral
 MARCH 31,
2008
 (continued)
  Cost
      of Property and Equipment
            
            
            Accumulated
      DepreciationYears
      Ended March 31,2008
            
            
            2007
            
            
            2006
            
            
            2008
            
            
            2007
            
            
            2006Balance
      at beginning of period
            
            $
            171,240,385
            
            
            $
            186,636,537
            
            
            $
            185,665,410
            
            
            $
            70,978,449
            
            
            $
            71,043,930
            
            
            $
            65,579,865Additions
      during period:Improvements
            
            
            1,211,078
            
            
            
            1,717,395
            
            
            
            974,534Depreciation
      expense
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            5,283,566
            
            
            
            5,495,470
            
            
            
            5,467,472Deductions
      during period:Discontinued
      operations, dispositions, and impairments
            
            
            (32,274,360
            )
            
            
            (17,113,547
            )
            
            
            (3,407
            )
            
            
            (14,735,818
            )
            
            
            (5,560,951
            )
            
            
            (3,407
            )Balance
      at close of period
            
            $
            140,177,103
            
            
            $
            171,240,385
            
            
            $
            186,636,537
            
            
            $
            61,526,197
            
            
            $
            70,978,449
            
            
            $
            71,043,930
  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.
  
 - 98
-