UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





______________





FORM 10-K


______________


(Mark One)





þ
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the fiscal year ended March 31, 2010





OR





o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





Commission File Number 0-20476





INDEPENDENCE TAX CREDIT PLUS L.P.


(Formerly known as Independence Tax Credit Plus Program)


(Exact name of registrant as specified in its charter)





Delaware

13-3589920(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)625 Madison Avenue, New York, New York

10022(Address of principal executive offices)

(Zip Code)





Registrant’s telephone number, including area code (212) 317-5700





Securities registered pursuant to Section 12(b) of the Act:





None





Securities registered pursuant to Section 12(g) of the Act:





Beneficial Assignment Certificates (including underlying Limited Partnership Interests)





(Title of Class)





Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes  o    No  þ





Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes  o   No  þ





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  þ    No  o




Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  o   No  o




Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  þ





Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):





Large accelerated filer  o

Accelerated fileroNon-accelerated filer  o(Do not check if a smaller reporting company)

Smaller reporting company  þ





Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes  o   No   þ





The approximate aggregate book value of the voting and non-voting common equity held by non-affiliates of the Registrant as of September 30, 2009 was $(21,908,000), 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 Independence Associates GP LLC, a Delaware corporation.  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 88.99% 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, 2010, 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, 2010, the Partnership has disposed of eighteen of the twenty-eight original Properties.  During the year ended March 31, 2010, one Local Partnership sold its property and the related assets and liabilities and the Partnership sold its limited partnership interests in one Local Partnership.  Through March 31, 2010, four Local Partnerships have sold their property and the related assets and liabilities, the Partnership has sold its limited partnership interests in thirteen Local Partnerships and one Local Partnership has transferred the deed to the property and related assets and liabilities of such Local Partnership.  In addition, as of March 31, 2010, two Local Partnerships have entered into agreements to sell their property and related assets and liabilities.  See discussion on Sales of Underlying Local Partnerships and Assets Held for Sale below.




The investment objectives of the Partnership are to:




1.
Entitle qualified BACs holders to Tax Credits over the period of the Partnership’s entitlement to claim Tax Credits (for each Property, generally ten years from the date of investment or, if later, the date the Property is placed in service; referred to herein as the “Credit Period”) with respect to each Apartment Complex.




2.
Preserve and protect the Partnership’s capital.




3.
Participate in any capital appreciation in the value of the Properties and provide distributions of Sale or Refinancing Proceeds upon the disposition of the Properties.




4.
Provide cash distributions, when available, from operations of Properties.




5.
Allocate passive losses to individual BACs holders to offset passive income that they may realize from rental real estate investments and other passive activities, and allocate passive losses to corporate BACs holders to offset business income.




One of the Partnership’s objectives is to entitle qualified BACs holders to Tax Credits over the Credit Period. Each of the Local Partnerships in which the Partnership has acquired an interest has been allocated by the relevant state credit agencies the authority to recognize Tax Credits during the Credit Period provided that the Local Partnership satisfies the rent restriction, minimum set-aside and other requirements for recognition of the Tax Credits at all times during such period. Once a Local Partnership has become eligible to recognize Tax Credits, it may lose such eligibility and suffer an event of “recapture” if its Property fails to remain in compliance with the Tax Credit requirements. None of the Local Partnerships in which the Partnership has acquired an interest has suffered an event of recapture.




Tax Credits with respect to a given Apartment Complex are available for a ten-year period that commences when the Property is leased to qualified tenants. However, the annual Tax Credits available in the year in which the Apartment Complex is leased to qualified tenants must be prorated based upon the months remaining in the year. The amount of the annual Tax Credits not available in the first year will be available in the eleventh year. Internal Revenue Code Section 42 regulates the use of the Apartment Complexes as to occupancy, eligibility, and unit gross rent, among other requirements. Each Apartment Complex must meet the provisions of these regulations during each of fifteen consecutive years (the “Compliance Period”) in order to remain qualified to receive the credits. Certain Apartment Complexes have extended compliance periods of up to fifty years.




As of December 31, 2007, all Credit Periods have expired, and the Partnership has met its primary objective of generating Tax Credits for qualified BACs holders. However, each Local Partnership must continue to comply with the Tax Credit requirements until the end of the Compliance Period in order to avoid recapture of the Tax Credits.  The Compliance Periods will continue through December 31, 2013 with respect to the Properties depending upon when the Tax Credit Periods commenced.










- 2 -






As of March 31, 2010, the Partnership has not met its investment objective of providing cash distributions from the operations of the Properties. The Partnership does not anticipate providing cash distributions to BACs holders other than distributions of sale or refinancing proceeds upon the disposition of Properties. Furthermore, at this time there can be no assurance that the Partnership will achieve this investment objective.




The Partnership also continues to meet its objective of allocating passive losses to individual BACs holders to offset passive income that they may realize from rental real estate investment and other passive activities, and allocating passive losses to the corporate BACs holders to offset business income. At this time, there can be no assurance that the Partnership will continue to meet this investment objective.




There can be no assurance that the Partnership will achieve its other investment objectives as described above, and it is unlikely that the Partnership will meet its objectives 2 and 3, also as noted above.




A loss on impairment of assets is recorded when management estimates amounts recoverable through future operations and sale of the Property on an undiscounted basis are below depreciated cost.  At that time the Property investments themselves are reduced to estimated fair value (generally using the discounted cash flow valuation method).  During the year ended March 31, 2010 and 2009, the Partnership recorded approximately $6,687,000 and $9,706,000, respectively, as an aggregate loss on impairment of assets.  Through March 31, 2010, the Partnership has recorded approximately $24,418,000 as an aggregate loss on impairment of assets or reduction to estimated fair value.




The Partnership is subject to the risks incident to potential losses arising from the management and ownership of improved real estate. The Partnership can also be affected by poor economic conditions generally; however, no more than 30% of the Properties are located in any single state. There are also substantial risks associated with owning interests in properties, as does the Partnership, which receive government assistance, for example the possibility that Congress may not appropriate funds to enable the Department of Housing and Urban Development (“HUD”) to make rental assistance payments. HUD also restricts annual cash distributions to partners based on operating results and a percentage of the owner’s equity contribution. The Partnership cannot sell or substantially liquidate its investments in subsidiary partnerships during the period that the subsidy agreements are in existence without HUD’s approval. Furthermore, there may not be market demand for apartments at full market rents when the rental assistance contracts expire.




Segments


The Partnership operates in one segment, which is the investment in multi-family residential property.  Financial information about this segment is set forth in Item 8 hereto.




Sales of Underlying Local Partnerships




The Partnership is currently in the process of developing a plan to dispose all of its investments.  It is anticipated that the process will continue to take a number of years.  During the year ended March 31, 2010, one Local Partnership sold its property and the related assets and liabilities and the Partnership sold its limited partnership interest in one Local Partnership.  Through March 31, 2010, four Local Partnerships have sold their property and the related assets and liabilities, the Partnership has sold its limited partnership interest in thirteen Local Partnerships and one Local Partnership has transferred the deed to the property and related assets and liabilities of such Local Partnership.  In addition, two Local Partnerships have entered into agreements to sell their property and the related assets and liabilities.  There can be no assurance as to when the Partnership will dispose of its remaining investments or the amount of proceeds which may be received.  However, based on the historical operating results of the Local Partnerships and the current economic conditions, including changes in tax laws, it is unlikely that the proceeds from such sales received by the Partnership will be sufficient to return to the limited partners their original investment.




On January 1, 2010, the Partnership sold its limited partnership interest in Creative Choice Homes II, Ltd. (“Opa-Locka”) to an affiliate of the Local General Partner for a sales price of $227,500.  The sale resulted in a loss of approximately $11,524,000 resulting from the write-off of the basis in the Local Partnership of approximately $11,752,000 at the date of the sale and the receipt of $227,500 in cash from the sale.  The sale also resulted in a non-cash contribution to the Local Partnership from the Local General Partner of approximately $10,574,000 as a result of the write-off of fees owed by the Local Partnership to the Local General Partner.




On September 30, 2009, the property and related assets and liabilities of Rolling Green were sold to an affiliate of the General Partner for a sales price of $12,000,000.  The Partnership received $170,000 from this sale after the repayment of the mortgages, other liabilities and closing costs of approximately $11,830,000.  The distribution received was used to repay to the Partnership a portion of the funds advanced by it to Rolling Green.  The sale resulted in a gain of approximately $1,098,000 resulting from the write-off of the deficit basis in the property at the date of sale, which was recorded during the quarter ended December 31, 2009.  An adjustment to the gain of approximately $(15,000) was recorded during the quarter ended March 31, 2010, resulting in an overall gain of approximately $1,083,000.  The sale also resulted in a non-cash contribution to the Local Partnership from the Local General Partner of approximately $221,000 as a result of the write-off of advances owed by Rolling Green to the Local General Partner.




On January 23, 2009, the Partnership sold its limited partnership interest in Plainsboro Housing Partners, L.P. (“Plainsboro”) to an affiliate of the Local General Partner for a sales price of $1,401,000.  During the quarter ended December 31, 2008, in accordance with ASC 360, Property, Plant and Equipment(“ASC 360”), the Partnership deemed the building impaired and wrote it down to its fair value, resulting in a loss on impairment of $800,000.  The sale resulted in a gain of approximately $153,000 resulting from the write-off of the basis in the Local Partnership of approximately $1,248,000 at the date of the sale and the receipt of $1,401,000 in cash from the sale.  The sale also resulted in a non-cash contribution to the Local Partnership from the General Partner of approximately $3,000 as a result of write-off of the fees owed by the Local Partnership to an affiliate of the General Partner.




On December 31, 2008, the Partnership sold its limited partnership interest in Christine Apartments L.P. (“Christine Apartments”) to the Local General Partner for a sales price of $50,000.  The sale resulted in a gain of approximately $737,000 resulting from the write-off of the deficit basis in the Local Partnership of approximately $687,000 at the date of the sale and the receipt of $50,000 in cash from the sale, which was recorded during the quarter ended December 31, 2008.  An adjustment to the gain of approximately $(5,000) was recorded during the quarter ended March 31, 2009, resulting in an overall gain of approximately $732,000.










- 3 -






On December 17, 2008, the property and the related assets and liabilities of West Diamond Street Associates (“West Diamond”) were sold to an unaffiliated third party purchaser for a sales price of $1 plus the assumption of the outstanding mortgage notes.  The sale resulted in a gain of approximately $1,066,000 resulting from the write-off of the deficit basis in the property at the date of sale.




On November 30, 2008, the Partnership sold its limited partnership interest in Conifer Bateman Associates (“Bateman Hotel”) to the Local General Partner for a sales price of $50.  The sale resulted in a loss of approximately $87,000 resulting from the write-off of the basis in the Local Partnership of approximately $87,000 at the date of the sale, which was recorded during the quarter ended December 31, 2008. An adjustment to the loss of approximately $(5,000) was recorded during the quarter ended March 31, 2009, resulting in an overall loss of approximately $82,000. The sale also resulted in a non-cash contribution to the Local Partnership from the General Partner of approximately $14,000 as a result of write-off of the fees owed by the Local Partnership to an affiliate of the General Partner.




On October 21, 2008, the Partnership sold its limited partnership interest in Lancaster Terrace L.P. (“Lancaster”) to the Local General Partner for a sales price of $1,564,990.  The sale resulted in a gain of approximately $904,000 resulting from the write-off of the basis in the Local Partnership of approximately $660,000 at the date of the sale and the receipt of $1,564,190 in cash from the sale, which was recorded during the quarter ended December 31, 2008. An adjustment to the gain of approximately $111,000 was recorded during the quarter ended March 31, 2009, resulting in an overall gain of approximately $1,015,000. The sale also resulted in a non-cash contribution to the Local Partnership from the General Partner of approximately $2,000 as a result of write-off of the fees owed by the Local Partnership to an affiliate of the General Partner.




On October 17, 2008, the Partnership sold its limited partnership interest in Bethel Villa Associates, L.P. (“Bethel Villa”) to the Local General Partner for a sales price of $750,000.  During the quarters ended March 31, 2008 and December 31, 2008, in accordance with ASC 360, the Partnership deemed the building impaired and wrote it down to its fair value, which resulted in a loss on impairment of $5,000,000 and $720,000, respectively. The sale resulted in a loss of approximately $28,000 resulting from the write-off of the basis in the Local Partnership of approximately $778,000 at the date of the sale and the receipt of $750,000 in cash from the sale, which was recorded during the quarter ended December 31, 2008. An adjustment to the loss of approximately $373,000 was recorded during the quarter ended March 31, 2009, resulting in an overall gain of approximately $345,000.




On August 22, 2008, the Partnership sold its limited partnership interest in Lares Apartments Limited Partnership (“Lares”) to the Local General Partner for a sales price of $125,000.  The sale resulted in a gain of approximately $691,000 resulting from the write-off of the deficit basis in the Local Partnership at the date of the sale of approximately $566,000 and the receipt of $125,000 in cash from the sale, which was recorded during the quarter ended December 31, 2008. An adjustment to the gain of approximately $(31,000) was recorded during the quarter ended March 31, 2009, resulting in an overall gain of approximately $660,000.




On August 22, 2008, the Partnership sold its limited partnership interest in Lajas Apartments Limited Partnership (“Lajas”) to the Local General Partner for a sales price of $121,250.  The sale resulted in a gain of approximately $690,000, resulting from the write-off of the deficit basis in the Local Partnership at the date of the sale of approximately $568,000 and the receipt of $121,730 in cash from the sale, which was recorded during the quarter ended December 31, 2008. An adjustment to the gain of approximately $(40,000) was recorded during the quarter ended March 31, 2009, resulting in an overall gain of approximately $650,000.




On May 6, 2008, the Partnership sold its limited partnership interest in Susquehanna Partners (“Susquehanna”) to an affiliate of the Local General Partner for a sales price of $1.  During the quarter ended March 31, 2008, in accordance with ASC 360, the Partnership deemed the building impaired and wrote it down to its fair value, which resulted in a loss on impairment of $630,000.  The sale resulted in a loss of approximately $49,000, resulting from the write-off of the basis in the Local Partnership of approximately $49,000 at the date of the sale, which was recorded during the quarter ended June 30, 2008.  Adjustments to the loss of approximately $(1,000) and $(37,000) were recorded during the quarters ended September 30, 2008 and March 31, 2009, resulting in an overall loss of approximately $11,000.  The sale also resulted in a non-cash contribution to the Local Partnership from the General Partner of approximately $41,000 as a result of write-off of the fees owed by the Local Partnership to an affiliate of the General Partner.




On April 1, 2008, the Partnership sold its limited partnership interest in Landreth Venture (“Landreth”) to the Local General Partner for a sales price of $17,500.  During the year ended March 31, 2009 and 2008, in accordance with ASC 360, the building was deemed impaired and written down to its fair value, resulting in a loss on impairment of approximately $3,000,000 and $730,000, respectively.  The sale resulted in a gain of approximately $10,000, resulting from the write-off of the basis in the Local Partnership at the date of the sale of approximately $7,000 and the $17,500 cash received from the sale, which was recorded during the quarter ended June 30, 2008.  Adjustments to the gain of approximately $1,000 and $3,009,000 were recorded during the quarter ended September 30, 2008 and March 31, 2009, resulting in an overall gain of approximately $3,020,000.




On March 20, 2008, the property and the related assets and liabilities of Homestead Apartments Associates Ltd. (“Homestead”) were sold to an unaffiliated third party purchaser for a sales price of $4,000,000.  The Partnership received $32,500 as a distribution from this sale after the repayment of the mortgages, other liabilities and closing costs of approximately $3,967,500.  The sale resulted in a gain of approximately $75,000 resulting from the write-off of the deficit basis in the property at the date of sale, which was recorded during the quarter ended June 30, 2008.  Adjustments to the gain of approximately $201,000, $(7,000) and $(324,000) were recorded during the quarters ended September 30, 2008, December 31, 2008 and March 31, 2009, resulting in an overall loss of approximately $55,000.




On November 30, 2007, the property and the related assets and liabilities of Harbor Court Limited Partnership (“Harbor Court”) were sold to an unaffiliated third party purchaser for a sales price of $2,100,000.  The Partnership received $1,991,996 as a distribution from this sale after the repayment of other liabilities, closing costs and distributions to minority interests of approximately $108,000.  The sale resulted in a gain of approximately $1,260,000, which was recorded during the quarter ended March 31, 2008.  An adjustment to the gain of approximately $(49,000) was recorded during the quarter ended June 30, 2009, resulting in an overall gain of approximately $1,211,000.  The sale also resulted in a non-cash distribution to the Local General Partner of approximately $199,000 as a result of the write-off of receivables from the Local General Partner to Harbor Court.














- 4 -






Assets Held for Sale




On January 1, 2010, Cloisters Limited Partnership II (“Cloisters”) entered into a purchase and sale agreement to sell the property and the related assets and liabilities to an unaffiliated third party purchaser for a sales price of $1,800,000.  As of December 31, 2009, Cloisters had property and equipment, at cost, of approximately $795,000 and accumulated depreciation of approximately $120,000.




On April 1, 2008, Homestead Apartments Associates II Ltd. (“Homestead II”) entered into a purchase and sale agreement to sell the property and the related assets and liabilities to an unaffiliated third party purchaser for a sales price of $4,000,000.  During the quarter ended March 31, 2010, in accordance with ASC 360, the Partnership deemed the building impaired and wrote it down to its fair value, which resulted in a loss on impairment of $1,607,000.  The sale is contingent upon receiving an allocation of HOME funds, which Homestead II has applied for and expects to receive in July 2010.  As of December 31, 2009, Homestead II had property and equipment, at cost, of approximately $3,987,000, accumulated depreciation of approximately $2,076,000 and mortgage debt of approximately $3,129,000.




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.




Not applicable.




Item 2.  Properties.




As of March 31, 2010, the Partnership held a 98.99% limited partnership interest in nine Local Partnerships and a 88.99% 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.









- 5 -




Local Partnership Schedule
 
 
 % of Units Occupied at May 1,Name and Location

(Number of Units)


Date Acquired

2010


2009


2008


2007


2006Harbor Court Limited Partnership


December 1991

(b)


(b)


(b)



100
%


100
%Staten Island, NY (40)Old Public Limited Partnership


December 1991

(d)


(d)


(d)



77
%


57
%Lawrenceburg, TN (30)Lancaster Terrace Limited Partnership


February 1992

(f)


(f)



98
%


89
%


96
%Salem, OR (104)655 North Street Limited Partnership


March 1992


96
%


90
%


93
%


96
%


96
%Baton Rouge, LA (195)Landreth Venture


March 1992

(f)


(f)



100
%


96
%


92
%Philadelphia, PA (47)Homestead Apartments Associates Ltd.


March 1992

(b)


(b)


(b)



95
%


99
%Homestead, FL (123)Bethel Villa Associates, L.P.


April 1992

(f)


(f)



97
%


99
%


99
%Wilmington, DE (150)West Diamond Street Associates


May 1992

(e)


(e)



89
%


93
%


100
%Philadelphia, PA (28)Susquehanna Partners


May 1992

(f)


(f)



87
%


96
%


91
%Philadelphia, PA (47)Boston Bay Limited Partnership


August 1992


100
%


98
%


93
%


95
%


100
%Boston, MA (88)Morrant Bay Limited Partnership


August 1992


96
%


97
%


91
%


92
%


95
%Boston, MA (130)Hope Bay Limited Partnership


August 1992


100
%


100
%


98
%


98
%


100
%Boston, MA (45)Lares Apartments Limited Partnership


August 1992

(f)


(f)



100
%


100
%


100
%Lares, PR (102)Lajas Apartments Limited Partnership


August 1992

(f)


(f)



100
%


100
%


100
%Lajas, PR (99)Arlington-Rodeo Properties


August 1992


96
%


93
%


100
%


100
%


100
%Los Angeles, CA (29)Conifer Bateman Associates


August 1992

(f)


(f)



83
%


83
%


83
%Lowville, NY (24)Hampden Hall Associates, L.P.


September 1992

(c)


(c)


(c)



96
%


84
%St. Louis, MO (75)Chester Renaissance Associates


September 1992


100
%


95
%


95
%


100
%


100
%Chester, PA (20)Homestead Apts. II LTD.


October 1992


84
%


89
%


96
%


95
%


99
%Homestead, FL (112)P.S. 157 Associates, L.P.


November 1992

(a)


(a)


(a)


(a)



100
%New York, NY (73) (a)Cloisters Limited Partnership II


November 1992


16
%


34
%


62
%


88
%


94
%Philadelphia, PA (65) (g)Creative Choice Homes II, LTD.


December 1992

(i)



98
%


95
%


100
%


91
%Opa-Locka, FL (328)
     - 6 -
   Local Partnership Schedule
 (continued) 
 % of Units Occupied at May 1,Name and Location

(Number of Units)


Date Acquired

2010


2009


2008


2007


2006
 Milford Crossing Associates L.P.


December 1992

98
%

97
%

99
%

100
%

96
%Milford, DE (73)BX-7F Associates, L.P.


January 1993

(c)


(c)


(c)


98
%

98
%Bronx, NY (85)Los Angeles Limited Partnership


May 1993

98
%

99
%

100
%

99
%

100
%Rio Piedras, PR (124)Christine Apartments, L.P.


June 1993

(f)


(f)


100
%

88
%

100
%Buffalo, NY (32)Plainsboro Housing Partners, L.P.


July 1993

(f)


(f)


94
%

98
%

98
%Plainsboro, NJ (126)Rolling Green Associates, L.P.


October 1993

(h)


97
%

98
%

95
%

93
%Syracuse, NY (395)




(a)
The Partnership’s limited partnership interest was sold during the fiscal year ended March 31, 2007 (see Note 10 in Item 8).




(b)
The property and the related assets and liabilities were sold during the fiscal year ended March 31, 2008 (see Note 10 in Item 8).




(c)
The Partnership’s limited partnership interest was sold during the fiscal year ended March 31, 2008 (see Note 10 in Item 8).




(d)
The deed to the property and related assets and liabilities was transferred during the fiscal year ended March 31, 2008 (see Note 10 in Item 8).




(e)
The property and the related assets and liabilities were sold during the fiscal year ended March 31, 2009 (see Note 10 in Item 8).




(f)
The Partnership’s limited partnership interest was sold during the fiscal year ended March 31, 2009 (see Note 10 in Item 8).




(g)
See discussion under the heading, “Results of Operations of Certain Local Partnerships” in Item 7.




(h)
The property and the related assets and liabilities were sold during the fiscal year ended March 31, 2010 (see Note 10 in Item 8).




(i)
The Partnership’s limited partnership interest was sold during the fiscal year ended March 31, 2010 (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.  (Removed and Reserved).











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PART II




Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchaser of Equity Securities.




As of March 31, 2010, 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, 2010, the Partnership had approximately 4,547 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, 2010.  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.




The Partnership relies on a 2% safe harbor established by an Internal Revenue Service (“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.




Item 6.  Selected Financial Data.




Not applicable.











- 8 -






Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.




Liquidity and Capital Resources




As of March 31, 2010, 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.  The Partnership is currently in the process of developing a plan to dispose all of its investments.  It is anticipated that the process will continue to take a number of years.  During the year ended March 31, 2010, one Local Partnership sold its property and the related assets and liabilities and the Partnership sold its limited partnership interest in one Local Partnership.  Through March 31, 2010, four Local Partnerships have sold their property and the related assets and liabilities, the Partnership has sold its limited partnership interest in thirteen Local Partnerships and one Local Partnership transferred the deed to the property and related assets and liabilities of such Local Partnership.  In addition, two Local Partnerships entered into agreements to sell their property and the related assets and liabilities (see Notes 10 and 11 in Item 8).  There can be no assurance as to when the Partnership will dispose of its remaining investments or the amount of proceeds which may be received.  However, based on the historical operating results of the Local Partnerships and the current economic conditions, including changes in tax laws, it is unlikely that the proceeds from such sales received by the Partnership will be sufficient to return to the limited partners their original investment. All gains and losses on sales are included in discontinued operations.




Short-Term




During the year ended March 31, 2010, the Partnership’s primary sources of funds included: (i) working capital reserves; (ii) interest earned on the working capital reserves; (iii) cash distributions from operations of the Local Partnerships; and (iv) sales proceeds and distributions.  Such funds are available to meet the obligations of the Partnership.  The Partnership does not anticipate providing cash distributions to BACs holders in circumstances other than refinancing or sales.  Cash distributions received from the Local Partnerships, as well as the working capital reserves referred to above have been minimal but will be used towards the future operating expenses of the Partnership.  During the years ended March 31, 2010 and 2009, the amounts received from operations of the Local Partnerships were approximately $0 and $75,000, respectively.  Additionally, during the years ended March 31, 2010 and 2009, the Partnership received approximately $170,000 and $33,000 of distributions from the sale of properties and approximately $228,000 and $3,979,000 in proceeds from the sale of Local Partnerships’ limited partnership interest, respectively.  The Partnership does not anticipate being able to make distributions sufficient to return to BACs holders their original capital contributions.




During the year ended March 31, 2010, cash and cash equivalents of the Partnership and its consolidated subsidiary partnership decreased approximately $3,672,000.  This decrease is due to net cash used in operating activities ($1,640,000), costs related to sales ($308,000), acquisitions of property and equipment ($824,000), repayments of mortgage notes ($11,454,000), a net decrease in due to local general partners and affiliates relating to investing and financing activities ($785,000), an increase in deferred costs ($7,000) and a decrease in capitalization of consolidated subsidiaries attributable to noncontrolling interest ($5,000), which exceeded net proceeds from sales ($10,922,000) and a decrease in cash held in escrow ($428,000).  Included in the adjustments to reconcile the net loss to net cash used in operating activities are depreciation and amortization ($1,645,000), loss on sale of properties ($10,490,000) and loss on impairment of properties ($6,687,000).




Total expenses from operations for the years ended March 31, 2010 and 2009, excluding depreciation and amortization, interest, general and administrative-related parties and loss on impairment of property, totaled $5,221,402 and $5,650,721, respectively.




Accounts payable from operations as of March 31, 2010 and 2009 were $1,139,138 and $1,181,205, respectively.  Accounts payable are short term liabilities which are expected to be paid from operating cash flows, working capital balances at the Local Partnership level, Local General Partner advances and in certain circumstances advances from the Partnership.  Accounts payable from discontinued operations totaled $184,224 and $2,685,081 as of March 31, 2010 and 2009, respectively.  Accrued interest payable from operations as of March 31, 2010 and 2009 was $11,600,608 and $10,496,943, respectively.  Accrued interest payable represents the accrued interest on all mortgage loans, which include primary and secondary loans. Certain secondary loans have provisions such that interest is accrued but not payable until a future date.  Accrued interest payable from discontinued operations totaled $496,971 and $680,348 as of March 31, 2010 and 2009, respectively.  The Partnership anticipates the payment of accrued interest on the secondary loans (which make up the majority of the accrued interest payable amount owed and which have been accumulating since the Partnership’s investment in the respective Local Partnership) will be made from future refinancings or sales proceeds of the respective Local Partnerships. In addition, each Local Partnership’s mortgage notes are collateralized by the land and buildings of the respective Local Partnership, and are without further recourse to the Partnership.




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.  In addition, assuming the General Partner continues to defer the payment of fees as discussed below and in Note 8 to the Financial Statements in Item 8, the Partnership believes it 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.




The Partnership’s unconsolidated working capital reserve at March 31, 2010 was approximately $1,366,000.




Long-Term




Partnership management fees owed to the General Partner amounting to approximately $4,555,000 and $6,219,000 were accrued and unpaid as of March 31, 2010 and 2009, respectively, and are included in the line item titled Due to general partners and affiliates on the Consolidated Balance Sheets.  During the year ended March 31, 2010, management deemed the unpaid partnership management fees related to sold properties uncollectible and wrote off approximately $1,508,000, resulting in a non-cash General Partner contribution of the same amount.  Unpaid partnership management fees for any year are to be deferred without interest and will be payable out of sales or refinancing proceeds only to the extent of available funds after payments on all Partnership liabilities have been made other than to those owed to the General Partner and its affiliates, and after the Limited Partners have received a 10% return on their capital contributions.




All other amounts included in Due to General Partner and affiliates are expected to be paid, if at all, from working capital reserves.  The General Partner does not anticipate advancing going forward any operating funds to any of the Local Partnerships in which the Partnership has invested.  Even if a situation arose where the General Partner and its affiliates needed to but were not able to make operating advances in the future due to lack of funds, the only impact on the Partnership would be that it would lose its investment in that particular Local Partnership.  The Partnership’s ability to continue its operations would not be affected.










- 9 -






For a discussion of contingencies affecting certain Local Partnerships, see Results of Operations of Certain Local Partnerships, below. Since the maximum loss the Partnership would be liable for is its net investment in the respective subsidiary partnerships, the resolution of the existing contingencies is not anticipated to impact future results of operations, liquidity or financial condition in a material way. However, the Partnership’s loss of its investment in a Local Partnership may also result in recapture of Tax Credits if the investment is lost before expiration of the Compliance Period.




Management is not aware of any trends or events, commitments or uncertainties, which have not otherwise been disclosed, that will or are likely to impact liquidity in a material way. Management believes the only impact would be from laws that have not yet been adopted. The portfolio is diversified by the location of the Properties around the United States so that if one area of the country is experiencing downturns in the economy, the remaining Properties in the portfolio may be experiencing upswings. However, the geographic diversification of the portfolio may not protect against a general downturn in the national economy. The Partnership had fully invested the proceeds of its Offering in twenty eight Local Partnerships, all of which had their Tax Credits fully in place.  As of December 31, 2007, all Credit Periods had expired.  The Compliance Periods will continue through December 31, 2013 with respect to the Properties depending upon when the Tax Compliance Periods commenced.




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, 2010 to make future payments under its debt agreements and other contractual obligations.


Total

Less than

1 Year

1 – 3

Years

3 -5

Years

More than

5 YearsMortgage notes payable (a)

$
19,936,251

$
805,172

$
3,623,842

$
1,883,051

$
13,624,186Long term notes payable (b)


111,548


17,726


46,911


46,911


0$
20,047,799

$
822,898

$
3,670,753

$
1,929,962

$
13,624,186(a) The mortgage notes are payable in aggregate monthly installments of approximately $109,000, including principal and interest at rates varying from 1% to 8.58% 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) i in Item 8.  Financial Statements and Supplementary Data.
 
  The following table summarizes the Partnership’s commitments from discontinued operations as of March 31, 2010 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)

$
3,129,354

$
3,129,354

$
0

$
0

$
0$
3,129,354

$
3,129,354

$
0

$
0

$
0(a)  The mortgage notes are payable in aggregate monthly installments of approximately $15,000, including principal and interest at rates varying from 5.17% to 9% per annum, through the year 2010.  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 ASC 360, Property, Plant and Equipment(“ASC 360”).  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.








- 10 -






At the time management commits to a plan to dispose of assets, said assets are adjusted to the lower of their carrying amount or fair value less costs to sell. These assets are classified as property and equipment-held for sale and are not depreciated.  Property and equipment that are held for sale are included in discontinued operations.  There are two assets classified as property and equipment-held for sale as of March 31, 2010 (see Note 11 in Item 8).




During the years ended March 31, 2010 and 2009, the Partnership recorded approximately $6,687,000 and $9,706,000, respectively, as an aggregate loss on impairment of assets.  Through March 31, 2010, the Partnership has recorded approximately $24,418,000 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 (see Note 2f in Item 8).




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 January, 2010, the FASB issued under Topic 820, Fair Value Measurements and Disclosures, ASU 2010-06, “Improving Disclosures about Fair Value Measurements”. This ASU reports on new disclosure requirements — and clarifications of existing requirements — under ASC Subtopic 820-10 (originally issued as FAS 157). The new disclosure requirements apply to interim and annual reporting periods beginning after December 15, 2009, with one exception: The new rules regarding purchases, sales, issuances and settlements associated with Level 3 measurements will be effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years.  The adoption of this accounting standard is not expected to have a material effect on the Partnership’s consolidated financial statements.




In January 2010, the FASB issued under ASC Topic 810, Consolidation, ASU 2010-02, Accounting and Reporting for Decreases in Ownership of a Subsidiary – a Scope Clarification.  The objective of ASU 2010-02 is to address implementation issues related to changes in ownership provisions. This ASU clarifies that decreases in ownership provisions within ASC Topic 810-10 applies to a) a subsidiary or group of assets that is a business or nonprofit activity, b) a subsidiary that is a business or nonprofit activity that is transferred to an equity method investee or joint venture or c) an exchange of a group of assets that constitutes a business or nonprofit activity for a non-controlling interest in an entity (including equity method investee or joint venture).  This ASU clarifies that the decrease in ownership guidance within ASC Topic 810-10 does not apply to the following transactions even if they involve businesses:  a) sales in substance of real estate and b) conveyances of oil and gas mineral rights.  This ASU also expands disclosure requirements for the deconsolidation of a subsidiary or derecognition of a group of assets within the scope of ASC Topic 810-10.  This ASU is effective in the period in which an entity adopts Statement of Financial Accounting Standards (SFAS) No. 160, Non-controlling Interests in Consolidated Financial Statements. If an entity has previously adopted SFAS160, the amendments in this update are effective beginning in the first interim or annual reporting period ending on or after December 15, 2009.  Retrospective application to the first period that an entity adopted SFAS 160 is required.  The adoption of this accounting standard did not have a material effect on the Partnership’s consolidated financial statements.




On August 26, 2009, the FASB issued Accounting Standard Update (ASU) 2009-05, Measuring Liabilities at Fair Value, to clarify how entities should estimate the fair value of liabilities under the ASC Topic 820, Fair Value Measurements and Disclosures.  The amendments in ASU 2009-05 reduce potential ambiguity in financial reporting when measuring the fair value of liabilities.  Therefore, preparers, investors, and other users of financial statements will have a better understanding of how the fair value of liabilities was measured, helping to improve consistency in the application of Topic 820.  The FASB issued ASU 2009-05 as a result of expressed concern that there may be a lack of observable market information to measure the fair value of a liability.  For example, in the hypothetical transfer of an asset subject to a restriction there will be no observable data available to measure the liability because it is restricted from being transferred.  This guidance is effective for the first reporting period (including interim periods) beginning after issuance.  The adoption of this accounting standard did not  have a material effect on the Partnership’s consolidated financial statements.




In June 2009, the FASB issued ASC 105-10 (formerly SFAS No. 168), The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles.  The objective of this statement is to replace SFAS No. 162 and to establish the FASB Accounting Standards Codification as the source of the authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP.  The rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants.  This statement shall be effective for financial statements issued for interim and annual periods ending after September 15, 2009 and was adopted by the Partnership for its second quarter reporting.  The adoption did not have a significant impact on the reporting of our financial position, results of operations or cash flows.










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In June 2009, the FASB issued under ASC Topic 810-Consolidation, SFAS No. 167, an amendment to FASB Interpretation 46(R), “Consolidation of Variable Interest Entities.”  The statement requires an entity to perform an analysis to determine whether the entity’s variable interest give it a controlling financial interest in a variable interest entity by rationalizing characteristics that would give it power to direct the activities of a variable interest entity and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the variable interest entity.  The statement is effective for years beginning after November 15, 2009 and is not expected to have a material effect on the Partnership’s consolidated financial statements.




In June 2009, the FASB issued under ASC Topic 860 – Transfers and Servicing, SFAS No. 166, “Accounting for Transfers of Financial Assets”, an amendment to SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities.”  The statement defines the term “participating interest” to establish specific conditions for reporting a transfer of financial assets as a sale and improves financial reporting by eliminating (a) the exception for qualifying special-purpose entities from consolidation guidance and (b) the exception that permitted sale accounting for certain mortgage securitizations when a transferor has not surrendered control over the transferred financial assets.  The statement is effective for annual reports for years beginning after November 15, 2009 and is not expected to have a material effect on the Partnership’s 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, 2010 and 2009 (the 2009 and 2008 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 2009 and 2008 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 2009 and 2008 Fiscal Years totaled $17,996,417 and $5,815,293, respectively.




2009 vs. 2008




Rental income increased approximately 4% for the 2009 Fiscal Year as compared to the 2008 Fiscal Year, primarily due to annual rent increases and decreases in vacancies at several Local Partnerships.




Other income decreased approximately $35,000 for the 2009 Fiscal Year as compared to the 2008 Fiscal Year, primarily due to a decrease in the amount of cash being invested at several Local Partnerships as well as the Partnership level partially offset by increases in tenant charges at one Local Partnership.




Total expenses, excluding general and administrative-related parties, repair and maintenance, and loss on impairment of properties, remained fairly consistent with a decrease of approximately 1% for the 2009 Fiscal Year as compared to the 2008 Fiscal Year.




General and administrative – related party expenses decreased approximately $479,000 for the 2009 Fiscal Year as compared to the 2008 Fiscal Year, primarily due to a decrease in partnership management fees and other expense reimbursement allocations at the Partnership level due to sale of properties.




Repair and maintenance expenses decreased approximately $283,000 for the 2009 Fiscal Year as compared to the 2008 Fiscal Year, primarily due to a decrease in building and apartment repairs, and other maintenance repairs at three Local Partnerships, partially offset by an increase in maintenance supplies and repairs, decorating and ground supplies and maintenance repairs at two Local Partnerships.




Loss on impairment of properties amounted to approximately $6,687,000 and $9,706,000 for the 2009 and 2008 Fiscal Years, respectively.  See Note 4 in Item 8 for detailed discussion on impairments.




Results of Operations of Certain Local Partnerships




a)
Subsidiary Partnerships – Going Concern




Creative Choice Homes II L.P. (“Opa-Locka”)


The Partnership sold its limited partnership interest in Opa-Locka on January 1, 2010 (see Note 10 in Item 8).  Prior thereto, the financial statements for Opa-Locka were prepared assuming that Opa-Locka would continue as a going concern.  Opa-Locka was in default on its third and fourth mortgage notes, which were incurred to affiliates of the Local General Partner.  The Local General Partner had not sent a notice of default with respect to the notes as of the year ended March 31, 2010 and would have been unable to call the notes until the first and second mortgage notes were paid in full.  In addition, the current liabilities exceeded the current assets by approximately $8,700,000.  These conditions raised substantial doubt about Opa-Locka’s ability to continue as a going concern.  The financial statements do not include any adjustments that might be necessary if Opa-Locka had been unable to continue as a going concern.




The Partnership’s investment in Opa-Locka at March 31, 2010 and 2009 was reduced to zero as a result of prior years’ losses, and the noncontrolling interest balance was $0 and $5,000 at each date.  Opa-Locka’s net income after noncontrolling interest amounted to approximately $554,000 and $487,000 for the 2009 and 2008 Fiscal Years.










- 12 -






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, 2009, current liabilities exceed current assets by approximately $773,000.  This raises doubt as to whether Morrant Bay will be able to continue as a going concern.  Management continually monitors operating costs and will request additional rent increases when allowed by HUD.  Additionally, management is in the process of evaluating refinancing plans.  During 2008, Morrant Bay entered into negotiations with a local non-profit to re-syndicate the property.  In connection with this, Morrant Bay is negotiating with the General Partner to redeem the Partnership’s interest in Morrant Bay for a nominal amount.  There can be no assurance if or when such negotiations will result in a sale of the limited partnership’s interests.




The Partnership’s investment in Morrant Bay at March 31, 2010 and 2009 was reduced to zero as a result of prior years’ losses and the noncontrolling interest balance was approximately $(231,000) and $(228,000) for the 2009 and 2008 Fiscal Years, respectively.  Morrant Bay’s net loss after noncontrolling interest amounted to approximately $288,000 and $474,000 for the 2009 and 2008 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, 2009, current liabilities exceed current assets by approximately $299,000.  This raises doubt as to whether Boston Bay will be able to continue as a going concern.  Management continually monitors operating costs and will request additional rent increases when allowed by HUD.  Additionally, management is in the process of evaluating refinancing plans.  During 2008, Boston Bay entered into negotiations with a local non-profit to re-syndicate the property.  In connection with this, Boston Bay is negotiating with the General Partner to redeem the Partnership’s interest in Boston Bay for a nominal amount.  There can be no assurance if or when such negotiations will result in a sale of the limited partnership’s interests.




The Partnership’s investment in Boston Bay at March 31, 2010 and 2009 was reduced to zero as a result of prior years’ losses and the noncontrolling interest balance was approximately $(89,000) and $(87,000) for the 2009 and 2008 Fiscal Years, respectively.  Boston Bay’s net loss after noncontrolling interest amounted to approximately $187,000 and $342,000 for the 2009 and 2008 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 from1% to 9% per annum.  The Partnership does not believe there is a material risk associated with the various interest rates associated with the mortgage notes as the majority of the Local Partnership mortgage notes have fixed rates.  The Partnership currently discloses in Note 3 Item 8 of the Notes to Consolidated Financial Statements, the fair value of the mortgage notes payable.




The Partnership does not have any other market risk sensitive instruments.











- 13 -









Item 8.
Financial Statements and Supplementary Data.Sequential

Page(a) 1.
Consolidated Financial StatementsReport of Independent Registered Public Accounting Firm

15Consolidated Balance Sheets at March 31, 2010 and 2009

39Consolidated Statements of Operations for the Years Ended March 31, 2010 and 2009

40Consolidated Statements of Changes in Partners’ Capital (Deficit) for the Years Ended March 31, 2010 and 2009

41Consolidated Statements of Cash Flows for the Years Ended March 31, 2010 and 2009

42Notes to Consolidated Financial Statements

44













- 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, 2010 and 2009, and the related consolidated statements of operations, changes in partners’ capital (deficit), and cash flows for the years ended March 31, 2010 and 2009 (the 2009 and 2008 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 eleven (2009 Fiscal Year) and nineteen (2008 Fiscal Year) subsidiary partnerships whose losses aggregated $3,429,180 and $11,647,146 for the 2009 and 2008 Fiscal Years, respectively, and whose assets constituted 83% and 91% of the Partnership’s assets at both March 31, 2010 and 2009, respectively, presented in the accompanying consolidated financial statements.  The financial statements for ten (2009 Fiscal Year) and seventeen (2008 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 (2009 Fiscal Year) and two (2008 Fiscal Year) of these subsidiary partnerships were unaudited.


We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.




In our opinion, based upon our audits, and the reports of the other auditors referred to above, the consolidated financial statements referred to in the first paragraph present fairly, in all material respects, the financial position of Independence Tax Credit Plus L.P. and Subsidiaries at March 31, 2010 and 2009, and the results of their operations and their cash flows for the years ended March 31, 2010 and 2009, in conformity with U.S. generally accepted accounting principles.




As discussed in Note 13(b), 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 $10,504,227 (2009 Fiscal Year) and $551,341 (2008 Fiscal Year) and their assets aggregated $6,189,416 and $23,400,218 at March 31, 2010 and 2009, respectively.  Management’s plan in regard to this matter is also described in Note 13(b).  The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
















TRIEN ROSENBERG


WEINBERG CIULLO & FAZZARI LLP








New York, New York


June 24, 2010











- 15 -





[Letterhead of Mack Roberts & Company, L.L.C.]





INDEPENDENT AUDITOR'S REPORT





The Partners


Lancaster Terrace Limited Partnership


Salem, Oregon





We have audited the balance sheets of Lancaster Terrace Limited Partnership as of October 21, 2008 and December 31, 2007, and the related statements of operations, changes in partners' capital and cash flows for the period from January 1, 2008 to October 21, 2008 and the year ended December 31, 2007.  These financial statements are the responsibility of the Partnership's management.  Our responsibility is to express an opinion on these financial statements based on our audits.





We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.





In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Lancaster Terrace Limited Partnership as of October 21, 2008 and December 31, 2007 and the results of its operations, changes in partners’ capital and its cash flows for the period from January 1, 2008 to October 21, 2008 and the year ended December 31, 2007, in conformity with accounting principles generally accepted in the United States of America.





/s/ Mack, Roberts & Co., L.L.C.


Portland, Oregon





February 2, 2009














- 16 -





[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, 2009 and 2008, 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, 2009 and 2008 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 4, 2010, on our consideration of 655 North Street Limited Partnership's internal control, and reports dated February 4, 2010, 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 4, 2010














- 17 -








[Letterhead of Reznick Group, P.C.]





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the Partners


Landreth Venture





We have audited the accompanying balance sheet of Landreth Venture as of April 1, 2008 and the related statements of operations, changes in partners' equity (deficit) and cash flows for the period January 1, 2008 through April 1, 2008 (date of investor transfer).  These financial statements are the responsibility of the Partnership's management.  Our responsibility is to express an opinion on these financial statements based on our audit.





We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audit provides a reasonable basis for our opinion.





In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Landreth Venture, as of April 1, 2008, and the results of its operations, the changes in partners' equity (deficit) and cash flows for the period January 1, 2008 through April 1, 2008 (date of investor transfer), in conformity with accounting principles generally accepted in the United States of America.








/s/ Reznick Group, P.C.


Baltimore, Maryland


April 2, 2009














- 18 -





[Letterhead of J.H. Williams & Co., LLP]





INDEPENDENT AUDITORS' REPORT





To the Partners of


Susquehanna Partners


(a Limited Partnership)


Philadelphia, Pennsylvania





We have audited the accompanying balance sheet of Susquehanna Partners (a Limited Partnership) as of May 6, 2008 and the related statement of income, change in partners' equity and cash flows for the period then ended.  These financial statements are the responsibility of the Partnership's management and contracted management agent.  Our responsibility is to express an opinion on these financial statements based on our audits.





We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States of America).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by the Partnership’s management and contracted management agent, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.





In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Susquehanna Partners (a Limited Partnership) at May 6, 2008, and the results of its operations and cash flows for the period then ended in conformity with accounting principles generally accepted in the United States of America.





/s/ J.H. Williams & Co., LLP


Kingston, Pennsylvania


June 24, 2009














- 19 -








[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, 2009 and the related statement of operations, partners' deficiency, and cash flow for the year ended December 31, 2009. 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 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, 2009 and the results of its operations and its cash flows for the year ended December 31, 2009 in conformity with accounting principles generally accepted in the United States of America.








/s/ Ercolini & Company LLP


Boston, Massachusetts


February 24, 2010














- 20 -





[Letterhead of Ercolini & Company LLP]





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the Partners of


Boston Bay Limited Partnership


Boston, Massachusetts





We have audited the accompanying balance sheet of Boston Bay Limited Partnership as of December 31, 2008 and the related statement of operations, partners' deficiency, and cash flows for the year ended December 31, 2008.  These financial statements are the responsibility of the Partnership's management.  Our responsibility is to express an opinion on these financial statements based on our audit.





We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.





The accompanying financial statements have been prepared assuming that the Partnership will continue as going concern.  As discussed in Note 14, the Partnership is incurring liquidity problems which raise substantial doubt about its ability to continue as a going concern.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.





In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Boston Bay Limited Partnership as of December 31, 2008 and the results of its operations and its cash flows for the year ended December 31, 2008 in conformity with accounting principles generally accepted in the United States of America.





/s/ Ercolini & Company LLP


Boston, Massachusetts


January 22, 2009

















- 21 -








[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, 2009 and the related statement of operations, partners' deficiency, and cash flow for the year ended December 31, 2009. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.





We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.





In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Morrant Bay Limited Partnership as of December 31, 2009, and the results of its operations and its cash flows for the year ended December 31, 2009, in conformity with accounting principles generally accepted in the United States of America.








/s/ Ercolini & Company LLP


Boston, Massachusetts


February 24, 2010














- 22 -











[Letterhead of Ercolini & Company LLP]





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the Partners of


Morrant Bay Limited Partnership


Boston, Massachusetts





We have audited the accompanying balance sheet of Morrant Bay Limited Partnership as of December 31, 2008 and the related statement of operations, partners' deficiency, and cash flow for the year ended December 31, 2008.  These financial statements are the responsibility of the Partnership's management.  Our responsibility is to express an opinion on these financial statements based on our audit.





We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audit provides a reasonable basis for our opinion.





In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Morrant Bay Limited Partnership as of December 31, 2008, and the results of its operations and its cash flows for the year ended December 31, 2008, in conformity with accounting principles generally accepted in the United States of America.





/s/ Ercolini & Company LLP


Boston, Massachusetts


January 23, 2009

















- 23 -








[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, 2009 and the related statement of operations, partners' deficiency, and cash flow for the year ended December 31, 2009. 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, 2009, and the results of its operations and its cash flows for the year ended December 31, 2009, in conformity with accounting principles generally accepted in the United States of America.








/s/ Ercolini & Company LLP


Boston, Massachusetts


February 24, 2010














- 24 -








[Letterhead of Ercolini & Company LLP]





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the Partners of


Hope Bay Limited Partnership


Boston, Massachusetts





We have audited the accompanying balance sheet of Hope Bay Limited Partnership as of December 31, 2008 and the related statement of operations, partners' deficiency, and cash flow for the year ended December 31, 2008.  These financial statements are the responsibility of the Partnership's management.  Our responsibility is to express an opinion on these financial statements based on our audit.





We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audit provides a reasonable basis for our opinion.





In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Hope Bay Limited Partnership as of December 31, 2008, and the results of its operations and its cash flows for the year ended December 31, 2008, in conformity with accounting principles generally accepted in the United States of America.





/s/ Ercolini & Company LLP


Boston, Massachusetts


January 26, 2009














- 25 -








[Letterhead of JOSE E. ROSARIO & CO., CPA, P.S.C.]





INDEPENDENT AUDITORS’ REPORT





To the Partners of


Lares Apartments Limited Partnership


San Juan, Puerto Rico





We have audited the accompanying balance sheet of Lares Apartments Limited Partnership, Rural Development Project No. 63-034-660467896, as of August 15, 2008 and the related statement of operations, changes in partners’ deficit, and cash flows for the year then ended.  These financial statements are the responsibility of the Partnership's management.  Our responsibility is to express an opinion on these financial statements based on our audit.





We conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audit provide a reasonable basis for our opinion.





In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Lares Apartments Limited Partnership as of August 15, 2008 and the results of its operations, changes in partners' deficit, and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.








/s/ Jose E. Rosario & Co, CPA, P.S.C.


Jose E. Rosario & Co., CPA, P.S.C.


License No. 176


Expires December 1, 2009





December 4, 2008


San Juan, Puerto Rico





Stamp No. 2400423 of the Puerto Rico College of CPA was affixed to the original.














- 26 -







[Letterhead of JOSE E. ROSARIO & CO., CPA, P.S.C.]





INDEPENDENT AUDITOR’S REPORT





To the Partners


Lajas Apartments Limited Partnership


San Juan, Puerto Rico





We have audited the accompanying balance sheet of Lajas Apartments Limited Partnership, Rural Development Project No. 63-034-660467896, as of August 15, 2008 and the related statement of operations, changes in partners’ deficit, and cash flows for the year then ended.  These financial statements are the responsibility of the Partnership's management.  Our responsibility is to express an opinion on these financial statements based on our audit.





We conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Partnership has determined that it is not required to have, nor we were engaged to perform, an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audit provide a reasonable basis for our opinion.





In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Lajas Apartments Limited Partnership as of August 15, 2008 and the results of its operations, changes in partners' deficit, and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.








/s/ Jose E. Rosario & Co, CPA, P.S.C.


Jose E. Rosario & Co., CPA, P.S.C.


License No. 176


Expires December 1, 2009





December 4, 2008


San Juan, Puerto Rico





Stamp No. 2400424 of the Puerto Rico College of CPA was affixed to the original.











- 27 -





[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, 2009 and 2008, 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 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, 2009 and 2008 and the results of its operations and its cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.








/s/ Kim & Lee


Los Angeles, California


March 1, 2010











- 28 -








[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, 2009 and 2008, and the related statements of profit and loss, changes in partners' equity (deficit) and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.





We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.





In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Chester Renaissance Associates as of December 31, 2009, and 2008, 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 23, 2010, 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 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 results of our audit.





Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The 2009 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 23, 2010








Lead Auditor:  Michael A. Cumming, CPA


Email Address:  mike.cumming@reznickgroup.com











- 29 -








[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, 2009, and the related statements of operations, changes in partners' equity (deficit) and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.





We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.





In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Cloisters Limited Partnership II as of December 31, 2009, 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 24, 2010











- 30 -








[Letterhead of Reznick Group, P.C.]





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the Partners of


Cloisters Limited Partnership II





We have audited the accompanying balance sheet of Cloisters Limited Partnership II as of December 31, 2008, and the related statements of operations, changes in partners' equity (deficit) and cash flows for the year then ended.  These financial statements are the responsibility of the Partnership's management.  Our responsibility is to express an opinion on these financial statements based on our audit.





We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audit provides a reasonable basis for our opinion.





In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Cloisters Limited Partnership II as of December 31, 2008, and the results of its operations, the changes in partners' equity (deficit) and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.





/s/ Reznick Group


Baltimore, Maryland


April 2, 2009











- 31 -








[Letterhead of Friedman LLP]





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the Partners


Milford Crossing Associates, L.P.





We have audited the accompanying balance sheets of Milford Crossing Associates, L.P. as of December 31, 2009 and 2008, and the related statements of operations, partners’ deficiency and cash flows for each of the years in the two-year period ended December 31, 2009. Milford Crossing Associates, L.P.'s management is responsible for these financial statements. 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 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, 2009 and 2008, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2009 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 shown on pages 15 to 23 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/ Friedman LLP


Marlton, New Jersey





January 31, 2010











- 32 -








[Letterhead of Bagell, Josephs, Levine & Company, L.L.C.]





INDEPENDENT AUDITORS’ REPORT





To the Partners of Milford Crossing Associates, L.P.


Wilmington, DE





We have audited the accompanying balance sheets of Milford Crossing Associates, L.P. as of December 31, 2008 and 2007 and the related statements of operations, partners' deficiency, and cash flows for the years then ended.  These financial statements are the responsibility of the Partnership’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.





We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audit provides a reasonable basis for our opinion.





In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Milford Crossing Place Associates, L.P. as of December 31, 2008 and 2007, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.





Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole.  The accompanying supplemental information on pages 14 through 22 is presented for purposes of additional analysis and is not a required part of the basic financial statements of Milford Crossing Associates, L.P.  Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.





/s/ Bagell, Josephs, Levine & Company, L.L.C.


BAGELL, JOSEPHS, LEVINE & COMPANY, L.L.C.


Certified Public Accountants


Marlton, New Jersey





January 21, 2009











- 33 -








[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, 2009 and 2008, 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, 2009 and 2008, 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 8, 2010





Stamp #2438386 of the


Puerto Rico Society of


Certified Public Accountants


was affixed to the original.











- 34 -








[Letterhead of Toski, Schaefer & Co., P.C.]





INDEPENDENT AUDITOR'S REPORT





The Partners


Christine Apartments, L.P.:





We have audited the accompanying balance sheet of Christine Apartments, L.P. as of August 31, 2008 and the related statements of operations, partners' equity and cash flows for the eight months ended August 31, 2008.  These financial statements are the responsibility of the Partnership's management.  Our responsibility is to express an opinion on these financial statements based on our audits.





We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Partnership has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.





In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Christine Apartments, L.P. as of August 31, 2008 and the results of its operations, changes in partners' equity and cash flows for the eight months ended August 31, 2008, in conformity with accounting principles generally accepted in the United States of America.





As discussed in note 12, the Partnership ceased operations on August 31, 2008 with the purchase by the general partner of the partnership interest of the limited partners.





Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole.  The accompanying supplemental information is presented for purposes of additional analysis and is not a required part of the basic financial statements.  Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.








/s/ Toski, Schaefer & Co., P.C.


Williamsville, New York


February 13, 2009











- 35 -








[Letterhead of Reznick Group, P.C.]





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the Partners


Plainsboro Housing Partners, L.P.





We have audited the accompanying balance sheet of Plainsboro Housing Partners, L.P. as of December 31, 2008, and the related statements of revenue and expenses, changes in partners' equity and cash flows for the year then ended.  These financial statements are the responsibility of the partnership's management.  Our responsibility is to express an opinion on these financial statements based on our audit.





We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the partnership’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audit provides a reasonable basis for our opinion.





In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Plainsboro Housing Partners, L.P. as of December 31, 2008, and the results of its operations, the changes in partners' equity and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.





/s/ Reznick Group, P.C.


Baltimore, Maryland


March 19, 2009











- 36 -





[Letterhead of Koch Group & Company, LLP]





INDEPENDENT AUDITOR’S REPORT





To the Partners


Rolling Green Associates, L.P. (A Limited Partnership)





We have audited the accompanying balance sheet of Rolling Green Associates, L.P. (a limited partnership) as of September 30, 2009, and the related statements of operations, changes in partners' equity (deficiency), and cash flows for the period January 1, 2009 through September 30, 2009 (date of sale). These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.





We conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership has determined that it is not required to have, nor we were engaged to perform, an audit of its internal control over financial reporting. Our 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 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 Rolling Green Associates, L.P. (a limited partnership) as September 30, 2009, and the results of its operations, changes in its partners' equity (deficiency) and its cash flows for the period January 1, 2009 through September 30, 2009 in conformity with accounting principles generally accepted in the United States of America.





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 9 to 10 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


June 21, 2010











- 37 -








[Letterhead of Koch Group & Company, LLP]





INDEPENDENT AUDITORS' REPORT





To the Partners


Rolling Green Associates, L.P. (A Limited Partnership)





We have audited the accompanying balance sheets of Rolling Green Associates, L.P. (A Limited Partnership) as of December 31, 2008 and 2007, and the related statements of operations, changes in partners' equity (deficiency), and cash flows for the years then ended.  These financial statements are the responsibility of the Partnership's management.  Our responsibility is to express an opinion on these financial statements based on our audits.





We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Partnership has determined that it is not required to have, nor we were engaged to perform, an audit of its internal control over financial reporting.  Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the partnership’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.





In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Rolling Green Associates, L.P. (a Limited Partnership) as of December 31, 2008 and 2007, and the results of its operations, changes in partners' equity (deficiency) and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.





Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole.  The accompanying supplementary information on pages 12 to 18 is presented for purposes of additional analysis and is not a required part of the basic financial statements.  Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.





/s/ Koch Group & Company, LLP


New York, New York


February 12, 2009











- 38 -







INDEPENDENCE TAX CREDIT PLUS L.P.


AND SUBSIDIARIES


CONSOLIDATED BALANCE SHEETS








ASSETS








March 31,2010

2009Operating AssetsProperty and equipment, at cost, less accumulated depreciation(Notes 2, 4, 7 and 10)

$
15,647,943

$
22,693,155Cash and cash equivalents (Notes 2, 3 and 13)


1,601,240


5,253,902Cash held in escrow (Notes 3 and 5)


2,178,742


2,005,856Deferred costs, less accumulated amortization (Notes 2 and 6)


187,494


199,544Other assets


721,872


792,384Total operating assets


20,337,291


30,944,841Assets from discontinued operations (Note 14)Property and equipment held for sale, net of accumulateddepreciation (Note 4)


2,606,404


29,015,203Net assets held for sale


167,215


4,246,142Total assets from discontinued operations


2,773,619


33,261,345Total assets

$
23,110,910

$
64,206,186LIABILITIES AND PARTNERS’ CAPITAL (DEFICIT)Operating LiabilitiesMortgage notes payable (Notes 3 and 7)

$
19,936,251

$
20,705,851Accounts payable


1,139,138


1,181,205Accrued interest payable


11,600,608


10,496,943Security deposits payable


154,305


169,564Due to local general partners and affiliates (Note 8)


705,651


745,843Due to general partners and affiliates (Note 8)


4,797,738


9,756,202Total operating liabilities


38,333,691


43,055,608Liabilities from discontinued operations (Note 14)Mortgage notes payable of assets held for sale (Note 7)


3,129,354


19,248,504Net liabilities held for sale


1,333,122


15,690,152Total liabilities from discontinued operations


4,462,476


34,938,656Total liabilities


42,796,167


77,994,264Commitments and contingencies (Notes 7, 8 and 13)Partners’ (deficit) capitalLimited partners (76,786 BACs issued and outstanding)


(28,251,234
)

(20,269,539
)General partners


4,352,232


2,924,584Independence Tax Credit Plus L.P. total


(23,899,002
)

(17,344,955
)Noncontrolling interests


4,213,745


3,556,877Total partners’ (deficit) capital


(19,685,257
)

(13,788,078
)Total liabilities and partners’ (deficit) capital

$
23,110,910

$
64,206,186See accompanying notes to consolidated financial statements.














- 39 -





INDEPENDENCE TAX CREDIT PLUS L.P.


AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF OPERATIONS














Years Ended March 31,2010

2009*RevenuesRental income

$
6,900,266

$
6,638,557Other income (Notes 1 and 13)


106,699


142,068Total revenues


7,006,965


6,780,625ExpensesGeneral and administrative


1,337,019


1,414,399General and administrative-related parties (Note 8)


907,460


1,386,315Repairs and maintenance


1,800,306


2,083,031Operating


1,191,330


1,291,824Taxes


513,241


473,516Insurance


379,506


387,951Financial, principally interest


1,489,942


1,459,593Depreciation and amortization


1,405,765


1,385,377Loss on impairment of properties


5,080,000


0Total expenses from operations


14,104,569


9,882,006Loss from operations


(7,097,604
)

(3,101,381
)Loss from discontinued operations (Note 14)


(10,898,813
)

(2,713,912
)Net loss


(17,996,417
)

(5,815,293)Net loss attributable to noncontrolling interests from operations


64,964


4,503Net loss attributable to noncontrolling interests from discontinued operations


9,869,135


916,441Net loss attributable to noncontrolling interests


9,934,099


920,944Net loss attributable to Independence Tax Credit Plus L.P.

$
(8,062,318
)
$
(4,894,349
)Loss from operations – limited partners

$
(6,962,314
)
$
(3,065,909
)Loss from discontinued operations (including (loss) gain on sale of properties) – limited partners


(1,019,381
)

(1,779,496
)Net loss – limited partners

$
(7,981,695
)
$
(4,845,405
)Number of BACs outstanding


76,786


76,786Loss from operations per weighted average BAC

$
(90.67
)
$
(39.93
)Loss from discontinued operations per weighted average BAC


(13.28
)

(23.17
)Net loss per weighted average BAC

$
(103.95
)
$
(63.10
)





*  Reclassified for comparative purpose.



See accompanying notes to consolidated financial statements.











- 40 -





INDEPENDENCE TAX CREDIT PLUS L.P.


AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL (DEFICIT)














Total


Limited

Partners


General

Partner


Noncontrolling

InterestsPartner’s capital (deficit) – April 1, 2008

$
(11,971,902
)

$
(15,424,134
)

$
(837,446
)

$
4,289,678Net loss


(5,815,293
)


(4,845,405
)


(48,944
)


(920,944
)Contribution – write off of related party debt


511,127



0



59,450



451,677Contribution – write off of partnership management fees related to sold properties


3,751,524



0



3,751,524



0Distributions


(263,534
)


0



0



(263,534
)Partner’s capital (deficit) – March 31, 2009


(13,788,078
)


(20,269,539
)


2,924,584



3,556,877Net loss


(17,996,417
)


(7,981,695
)


(80,623
)


(9,934,099
)Contribution – write-off of related party debt


10,795,392



0



0



10,795,392Contribution – write-off of partnership management fees related to sold properties


1,508,271



0



1,508,271



0Distributions


(204,425
)


0



0



(204,425
)Partner’s capital (deficit) – March 31, 2010

$
(19,685,257
)

$
(28,251,234
)

$
4,352,232


$
4,213,745





See accompanying notes to consolidated financial statements.











- 41 -







INDEPENDENCE TAX CREDIT PLUS L.P.


AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS


INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS














Years Ended March 31,2010

2009*Cash flows from operating activities:Net loss

$
(17,996,417
)
$
(5,815,293
)Adjustments to reconcile net loss to net cash provided by (used in) operating activities:Loss (gain) on sale


10,489,922


(7,494,728
)Depreciation and amortization


1,645,430


3,180,992Loss on impairment of properties


6,687,000


9,706,033(Increase) decrease in assets:Cash held in escrow


1,194,691


2,688,444Other assets


(774,051
)

(65,510
)Increase (decrease) in liabilities:Accounts payable


(209,569
)

98,672Accrued interest payable


1,024,549


407,777Security deposit payable


(43,985
)

(22,241
)Due to local general partners and affiliates


193,980


(819,536
)Due to general partner and affiliates


(3,851,981
)

(336,084
)Total adjustments


16,355,986


7,343,819Net cash (used in) provided by operating activities


(1,640,431
)

1,528,526Cash flows from investing activities:Proceeds from sales


10,922,000


9,605,431Cost related to sales


(307,918
)

(53,194
)Acquisition of property and equipment


(823,743
)

(1,414,288
)Decrease (increase) in cash held in escrow


427,898


(2,942,866
)(Decrease) increase in due to local general partners and affiliates


(765,532
)

1,504,855Net cash provided by investing activities


9,452,705


6,699,938Cash flows from financing activities:Increase in deferred costs


(6,582
)

0Repayments of mortgage notes


(11,453,552
)

(7,497,888
)(Decrease) increase in due to local general partners and affiliates


(19,102
)

411,137Decrease in capitalization of consolidated subsidiaries attributable to noncontrolling interest


(5,025
)

(263,533
)Net cash used in financing activities


(11,484,261
)

(7,350,284
)Net (decrease) increase in cash and cash equivalents


(3,671,987
)

878,180Cash and cash equivalents at beginning of year


5,292,033


4,413,853Cash and cash equivalents at end of year**

$
1,620,046

$
5,292,033Supplemental disclosure of cash flows information:Cash paid during the year for interest

$
1,557,713

$
2,753,554








*    Reclassified for comparative purposes.

**  Cash and cash equivalents, end of year, for the years ended March 31, 2010 and 2009, includes cash and cash equivalents from discontinued operations of $18,806 and $38,131, respectively.








- 42 -







INDEPENDENCE TAX CREDIT PLUS L.P.


AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS


INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS














Years Ended March 31,2010

2009Summarized below are the components of the gain on sale of investments and properties:Proceeds from sale of investments and properties – net

$
(10,614,082
)
$
(9,552,237
)Decrease in property and equipment, net of accumulated depreciation


26,195,736


21,922,479Decrease in cash held in escrow


1,679,214


4,846,860Decrease in prepaid expenses and other assets


1,196,142


443,570Decrease in deferred costs


1,555


336,369Decrease in mortgage notes payable


(5,435,198
)

(23,358,373
)Decrease in accounts payable and other liabilities


(2,333,356
)

(438,576
)Decrease in accrued interest payable


(104,261
)

(1,079,733
)Decrease in security deposits payable


(40,107
)

(350,230
)(Decrease) increase in due to general partners and affiliates


(32,500
)

599,991Decrease in due to local general partners and affiliate


(10,619,213
)

(1,375,975
)Increase in capitalization of consolidated subsidiaries attributable to noncontrolling interest


10,595,992


451,677Contribution from write-off of related party debt


0


59,450Supplemental disclosures of non-cash investing and financing activities:Contribution from write-off of partnership management fees related to sold properties

$
1,508,271

$
3,751,524





*
Reclassified for comparative purposes.


**
Cash and cash equivalents, end of year, for the years ended March 31, 2010 and 2009, includes cash and cash equivalents from discontinued operations of $18,806 and $38,131, respectively.





See accompanying notes to consolidated financial statements.










- 43 -





INDEPENDENCE TAX CREDIT PLUS L.P.


AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


MARCH 31, 2010







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 Independence Associates GP LLC., a Delaware corporation.  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 developing a plan to dispose all of its investments.  As of March 31, 2010, the Partnership has disposed of eighteen of the twenty-eight original Properties.  During the year ended March 31, 2010, one Local Partnership sold its property and the related assets and liabilities and the Partnership sold its limited partnership interest in one Local Partnership.  Through March 31, 2010, four Local Partnerships have sold their property and the related assets and liabilities, the Partnership has sold its limited partnership interest in thirteen Local Partnerships and one Local Partnership has transferred the deed to the property and related assets and liabilities of such Local Partnership (see Note 10).  In addition, as of March 31, 2010, two Local Partnerships entered into agreements to sell their property and the related assets and liabilities (see Note 11).




The Partnership was authorized to issue a total of 200,000 BACs which were registered with the Securities and Exchange Commission for sale to the public. Each BAC represents all of the economic and virtually all of the ownership rights attributable to a limited partnership interest. As of March 31, 2010, 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 thirteen (2009 Fiscal Year) and twenty four (2008 Fiscal Year) subsidiary partnerships in which the Partnership is a limited partner.  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.


The Partnership has adopted FASB Accounting Standards Codification (“ASC”) Topic 810, Noncontrolling Interests in Consolidated Financial Statements(“ASC 810”), which is effective for fiscal year ends beginning after December 15, 2008.  In accordance with ASC 810, losses attributable to noncontrolling interests amounted to approximately $9,934,000 for the year ended March 31, 2010.  Prior to the adoption of this ASC, losses attributable to noncontrolling interests which exceeded the noncontrolling interests’ investment in a subsidiary partnership were charged to the Partnership.  Such losses aggregated approximately $27,000 for the year ended March 31, 2009.  Increases (decreases) in the capitalization of consolidated subsidiaries attributable to noncontrolling interest arise from cash contributions from and cash distributions to the noncontrolling interest partners.  The Partnership’s investment in each subsidiary is equal to the respective subsidiary’s partners’ equity less noncontrolling interest capital, if any.




c)  Cash and Cash Equivalents




Cash and cash equivalents include cash on hand, cash in banks, and investments in short-term highly liquid instruments purchased with original maturities of three months or less.











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INDEPENDENCE TAX CREDIT PLUS L.P.
 AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31, 2010


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 ASC 360, Property, Plant and Equipment(“ASC 360”). 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, 2010 (see Note 11).




During the year ended March 31, 2010 and 2009, the Partnership recorded approximately $6,687,000 and $9,706,000, respectively, as an aggregate loss on impairment of assets.  Through March 31, 2010, the Partnership has recorded approximately $24,418,000 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.




The Partnership’s management have analyzed the Partnership’s tax positions and concluded that no liability for unrecognized tax benefits should be recorded for position taken on returns filed for open tax years.  As of and during the year ended March 31, 2010, the Partnership did not have a liability for any unrecognized tax benefits or related interest and penalties.  Such related interest and penalties, if any, would be included in general and administrative expense.




The Partnership relies on a 2% safe harbor established by an Internal Revenue Service (“IRS”) regulation to avoid being characterized as a “publicly-traded partnership” that is taxed as a corporation.




In the normal course of business the Partnership or one of its subsidiaries is subject to examination by federal, state and local jurisdictions in which it operates where applicable.  At March 31, 2010, the tax year that remain subject to examination by the major tax jurisdictions under the statute of limitations is from the year 2006 forward.




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 31,2010


2009*Interest

$
24,870


$
82,893Other


81,829



59,175Total other revenue

$
106,699


$
142,068









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INDEPENDENCE TAX CREDIT PLUS L.P.


AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


MARCH 31, 2010









Other revenues from discontinued operations from operations include the following amounts at both the Partnership and Local Partnership level:




Years Ended March 31,2010

2009*Interest

$
10,330

$
86,925Grant revenue (i)


1,200,936


690,125Other


97,598


166,071Total other revenue

$
1,308,864

$
943,121*   Reclassified for comparative purposes.(i)  Opa-Locka received a Housing Development Grant (“HDG”) through Miami-Dade County for a total of $1,891,061.  $1,391,000 of the funds were to be provided by FEMA, and $500,000 by Miami-Dade County as the project was completed.  The funds were to be used to modify the site to help mitigate future damage from possible floods mostly due to hurricanes.  Completion of the project occurred during 2009.  During the years ended December 31, 2009 and 2008, the property recognized as income $1,200,936 and $690,125, respectively, of the funds in connection with the grant.  In total, Opa-Locka has received $841,625 of the funds from FEMA leaving a balance due of $1,049,436.  As of December 31, 2009, Opa-Locka had capitalized and placed in service $1,891,061 related to these improvements.




g)  Loss Contingencies




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 January, 2010, the FASB issued under Topic 820, Fair Value Measurements and Disclosures, ASU 2010-06, “Improving Disclosures about Fair Value Measurements”. This ASU reports on new disclosure requirements — and clarifications of existing requirements — under ASC Subtopic 820-10 (originally issued as FAS 157). The new disclosure requirements apply to interim and annual reporting periods beginning after December 15, 2009, with one exception: The new rules regarding purchases, sales, issuances and settlements associated with Level 3 measurements will be effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years.  The adoption of this accounting standard is not expected to have a material effect on the Partnership’s consolidated financial statements.




In January 2010, the FASB issued under ASC Topic 810, Consolidation, ASU 2010-02, Accounting and Reporting for Decreases in Ownership of a Subsidiary – a Scope Clarification.  The objective of ASU 2010-02 is to address implementation issues related to changes in ownership provisions. This ASU clarifies that decreases in ownership provisions within ASC Topic 810-10 applies to a) a subsidiary or group of assets that is a business or nonprofit activity, b) a subsidiary that is a business or nonprofit activity that is transferred to an equity method investee or joint venture or c) an exchange of a group of assets that constitutes a business or nonprofit activity for a non-controlling interest in an entity (including equity method investee or joint venture).  This ASU clarifies that the decrease in ownership guidance within ASC Topic 810-10 does not apply to the following transactions even if they involve businesses:  a) sales in substance of real estate and b) conveyances of oil and gas mineral rights.  This ASU also expands disclosure requirements for the deconsolidation of a subsidiary or derecognition of a group of assets within the scope of ASC Topic 810-10.  This ASU is effective in the period in which an entity adopts Statement of Financial Accounting Standards (SFAS) No. 160, Non-controlling Interests in Consolidated Financial Statements. If an entity has previously adopted SFAS160, the amendments in this update are effective beginning in the first interim or annual reporting period ending on or after December 15, 2009.  Retrospective application to the first period that an entity adopted SFAS 160 is required.  The adoption of this accounting standard did not have a material effect on the Partnership’s consolidated financial statements.




On August 26, 2009, the FASB issued Accounting Standard Update (ASU) 2009-05, Measuring Liabilities at Fair Value, to clarify how entities should estimate the fair value of liabilities under the ASC Topic 820, Fair Value Measurements and Disclosures.  The amendments in ASU 2009-05 reduce potential ambiguity in financial reporting when measuring the fair value of liabilities.  Therefore, preparers, investors, and other users of financial statements will have a better understanding of how the fair value of liabilities was measured, helping to improve consistency in the application of Topic 820.  The FASB issued ASU 2009-05 as a result of expressed concern that there may be a lack of observable market information to measure the fair value of a liability.  For example, in the hypothetical transfer of an asset subject to a restriction there will be no observable data available to measure the liability because it is restricted from being transferred.  This guidance is effective for the first reporting period (including interim periods) beginning after issuance.  The adoption of this accounting standard did not  have a material effect on the Partnership’s consolidated financial statements.










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INDEPENDENCE TAX CREDIT PLUS L.P.
 AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31, 2010
 
   In June 2009, the FASB issued ASC 105-10 (formerly SFAS No. 168), The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles.  The objective of this statement is to replace SFAS No. 162 and to establish the FASB Accounting Standards Codification as the source of the authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP.  The rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants.  This statement shall be effective for financial statements issued for interim and annual periods ending after September 15, 2009 and was adopted by the Partnership for its second quarter reporting.  The adoption did not have a significant impact on the reporting of our financial position, results of operations or cash flows.




In June 2009, the FASB issued under ASC Topic 810-Consolidation, SFAS No. 167, an amendment to FASB Interpretation 46(R), “Consolidation of Variable Interest Entities.”  The statement requires an entity to perform an analysis to determine whether the entity’s variable interest give it a controlling financial interest in a variable interest entity by rationalizing characteristics that would give it power to direct the activities of a variable interest entity and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the variable interest entity.  The statement is effective for years beginning after November 15, 2009 and is not expected to have a material effect on the Partnership’s consolidated financial statements.




In June 2009, the FASB issued under ASC Topic 860 – Transfers and Servicing, SFAS No. 166, “Accounting for Transfers of Financial Assets”, an amendment to SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities.”  The statement defines the term “participating interest” to establish specific conditions for reporting a transfer of financial assets as a sale and improves financial reporting by eliminating (a) the exception for qualifying special-purpose entities from consolidation guidance and (b) the exception that permitted sale accounting for certain mortgage securitizations when a transferor has not surrendered control over the transferred financial assets.  The statement is effective for annual reports for years beginning after November 15, 2009 and is not expected to have a material effect on the Partnership’s consolidated financial statements.






NOTE 3 – Fair Value of Financial Instruments




The following methods and assumptions were used to estimate the fair value of each class of financial instruments (all of which are held for nontrading purposes) for which it is practicable to estimate that value:




Cash and Cash Equivalents, Investments Available-for-Sale and Cash Held in Escrow


The carrying amount approximates fair value.




Mortgage Notes Payable


The Partnership adopted FASB ASC 820 – “Fair Value Measurements”for financial assets and liabilities.  ASC 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.  ASC 820 applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard does not require any new fair value measurements of reported balances.




As permitted, we chose not to elect the fair value option as prescribed by FASB ASC 825 – “Financial Instruments” – Including an Amendment of ASC 320 – “Investments – Debt and Equity Securities”, for our financial assets and liabilities that had not been previously carried at fair value.  Therefore, we did not elect to fair value any additional items under ASC 825.




The estimated fair value of financial instruments has been determined using available market information or other appropriate valuation methodologies.  However, considerable judgment is required in interpreting market data to develop estimates of fair value.  Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange.  The following are financial instruments for which the Partnership’s estimate of fair value differs from the carrying amounts:




At March 31, 2010

At March 31, 2009Carrying

Amount

Fair Estimated

Value

Carrying

Amount

Fair Estimated

ValueLIABILITIES:Mortgage notes

$
23,065,605

$
19,275,709

$
39,954,355

$
37,186,773







For the mortgage notes, fair value is calculated using present value cash flow models based on a discount rate.  It was determined that the Tender Option Bond market, through which these bonds have been securitized in the past, continued to see a dramatic slowdown with limited liquidity and significantly reduced transaction levels.  To assist in valuing these notes, the Partnership held separate discussions with various third party investment banks who are leaders in the municipal bond business.  The discussions produced assumptions that were based on market conditions as well as the credit quality of the underlying property partnerships, which held the mortgage notes, to determine what discount rates to utilize.











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INDEPENDENCE TAX CREDIT PLUS L.P.


AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


MARCH 31, 2010









NOTE 4 – Property and Equipment




The components of property and equipment from operations are as follows:




March 31,

Estimated

Useful Lives

(Years)2010

2009Land

$
2,434,199

$
2,470,944

-Building and improvements


35,182,541


40,984,897

15-40Furniture and fixtures


1,598,432


1,552,462

3-1039,215,172


45,008,303Less: Accumulated depreciation


(23,567,229
)

(22,315,148
)$
15,647,943

$
22,693,155







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, 2010 and 2009 amounted to $1,393,715 and $1,372,412, respectively.




The components of property and equipment from discontinued operations are as follows:




March 31,

Estimated

Useful Lives

(Years)2010

2009Land

$
377,296

$
1,097,362

-Building and improvements


4,278,327


48,908,038

15-40Furniture and fixtures


189,667


825,306

3-104,845,290


50,830,706Less: Accumulated depreciation


(2,238,886
)

(21,815,503
)$
2,606,404

$
29,015,203











Depreciation expense for the discontinued property and equipment for the years ended March 31, 2010 and 2009 amounted to $1,304 and $1,734,313, respectively.




During the years ended March 31, 2010 and 2009, there were write-offs of accumulated depreciation in the amounts of $19,719,554 and $24,461,998, which were related to the discontinued assets.




Impairment of Properties




During the year ended March 31, 2010, the Partnership performed a fair value analysis on all of its remaining investments due to the current deteriorating market conditions in the real estate industry.  Impairment of assets is a two-step process.  First, management estimated amounts recoverable through future operations and sale of the Property on an undiscounted basis.  If such estimates were below depreciated cost, Property investments themselves were reduced to estimated fair value (generally using the discounted cash flow valuation method).  Each Local Partnership must continue to comply with its Tax Credit requirements until the end of the Compliance Period in order to avoid recapture of the Tax Credits.  Therefore, a 5-year cash flow projection was used, as this period is indicative of the average holding period left of the remaining investments.  A net operating income projection was prepared to calculate a residual value at the end of the 5-year period. Based on this analysis, the Partnership deemed the properties of the below Local Partnerships impaired and wrote them down to their estimated fair values which resulted in $6,687,000 of losses on impairment in the current year.











- 48 -


INDEPENDENCE TAX CREDIT PLUS L.P.
 AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31, 2010
 
 
 
 Impairments recorded for the year ended March 31, 2010 were as follows:




Arlington-Rodeo Properties

$
2,666,000Chester Renaissance Associates


1,104,000Milford Crossings Associates


1,310,000$
5,080,000







Impairments recorded relating to discontinued operations for the year ended March 31, 2010 were as follows:




Homestead Apartments II Ltd.

$
1,607,000







Impairments recorded relating to discontinued operations for the year ended March 31, 2009 were as follows:




Landreth Venture

$
2,999,000Bethel Villa Associates


720,000Plainsboro Housing Partners L.P.


800,000Cloisters L.P. II


5,187,000$
9,706,000









NOTE 5 – Cash Held in Escrow




Cash held in escrow consists of the following:




March 31,2010


2009Real estate taxes, insurance and other

$
424,071


$
434,600Reserve for replacements


1,595,138



1,398,684Tenant security deposits


159,533



172,572$
2,178,742


$
2,005,856







Cash held in escrow included in the discontinued assets consists of the following:




March 31,2010


2009Real estate taxes, insurance and other

$
24,873


$
2,214,019Reserve for replacements


0



1,126,310Tenant security deposits


71,660



230,893$
96,533


$
3,571,222







NOTE 6 – Deferred Costs




The components of deferred costs and their periods of amortization from operations are as follows:




March 31,2010


2009


PeriodFinancing expenses

$
469,039


$
469,039



*Less: Accumulated amortization


(281,545
)


(269,495
)$
187,494


$
199,544











- 49 -


INDEPENDENCE TAX CREDIT PLUS L.P.
 AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31, 2010


Amortization expense from operations for the years ended March 31, 2010 and 2009 amounted to $12,050 and $12,965, respectively.




The discontinued assets components of deferred costs and their periods of amortization are as follows:




March 31,2010


2009


PeriodFinancing expenses

$
94,797


$
1,106,847



*Less:  Accumulated amortization


(90,269
)


(868,985
)$
4,528


$
237,862*  Over the life of the respective mortgages.







Amortization expense from discontinued operations for the years ended March 31, 2010 and 2009 amounted to $238,361 and $61,301, respectively.




During the years ended March 31, 2010 and 2009, there were write-offs of deferred costs of $1,018,632 and $1,289,092 and accumulated amortization of $1,017,077 and $952,723, respectively, which were related to discontinued assets.




NOTE 7 – Mortgage Notes Payable




The mortgage notes from operations are payable in aggregate monthly installments of approximately $109,000, including principal and interest at rates varying from 1% to 7.9% 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 $4,380,000 and $4,560,000 at December 31, 2009 and 2008, respectively, which bear interest at rates ranging from 2.0% to 5.4% 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, 2010, for each of the next five fiscal years and thereafter, are as follows:




Fiscal Year

Amount2010

$
805,1722011


854,8652012


2,768,9772013


1,510,0652014


372,986Thereafter


13,624,186$
19,936,251







Accrued interest payable as of March 31, 2010 and 2009 was approximately $11,601,000 and $10,497,000, respectively.  Interest accrues on all mortgage loans, which include primary and secondary loans.  Certain secondary loans have provisions such that interest is accrued but not payable until a future date.  The Partnership anticipates the payment of accrued interest on the secondary loans (which make up the majority of the accrued interest payable amount and which have been accumulating since the Partnership’s investment in the respective Local Partnership) will be made from future refinancings or sales proceeds of the respective Local Partnerships.




The mortgage agreements from operations require monthly deposits to replacement reserves of approximately $37,000 and monthly deposits to escrow accounts for real estate taxes, hazard and mortgage insurance and other (Note 5).




The mortgage notes from discontinued operations are payable in aggregate monthly installments of approximately $15,000, including principal and interest at rates varying from 5.17% to 9% per annum, through the year 2010.  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.










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INDEPENDENCE TAX CREDIT PLUS L.P.
 AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31, 2010


Annual principal payment requirements on the mortgage notes from discontinued operations, as of March 31, 2010, for each of the next five fiscal years and thereafter, are as follows:




Fiscal Year

Amount2010

$
3,129,3542011


02012


02013


02014


0Thereafter


0$
3,129,354







Accrued interest payable from discontinued operations as of March 31, 2010 and 2009 was approximately $497,000 and $680,000, 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.






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.




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, 2010 and 2009 were as follows:




Years Ended March 31,2010



2009
*Partnership management fees (i)

$
336,000


$
742,000Expense reimbursement (ii)


166,059



244,875Local administrative fee (iii)


10,000



10,000Total general and administrative – General Partner


512,059



996,875Property management fees incurred to affiliates of theLocal General Partners


395,401



389,440Total general and administrative – related parties

$
907,460


$
1,386,315







The General Partner and its affiliates perform services for the Partnership.  The cost incurred from discontinued operations for the years ended March 31, 2010 and 2009 were as follows:




Years Ended March 31,2010



2009
*Local administrative fee (iii)

$
12,500


$
27,117Total general and administrative-General Partners


12,500



27,117Property management fees incurred to affiliates of theLocal General Partners


55,439



324,822Total general and administrative-related parties

$
67,939


$
351,939*  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 are to be deferred without interest and will be payable out of sales or refinancing proceeds only to the extent of available funds after payments on all Partnership liabilities have been made other than to those owed to the General Partner and its affiliates, and after the Limited Partners have received a 10% return on their capital contributions.  During the year ended March 31, 2010, management deemed the unpaid partnership management fees related to sold properties uncollectible and wrote off approximately $1,508,000, resulting in a non-cash General Partner contribution of the same amount.  Partnership management fees owed to the General Partner amounting to approximately $4,555,000 and $6,219,000 were accrued and unpaid as of March 31, 2010 and 2009, respectively, and are included in the line item Due to general partners and affiliates on the consolidated balance sheets.  Current year partnership management fees may be paid out of operating reserves or refinancing and sales proceeds.  As such the General Partner cannot demand payment of the deferred fees except as noted above.










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INDEPENDENCE TAX CREDIT PLUS L.P.


AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


MARCH 31, 2010











(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.  The General Partner does not intend to demand payment of the deferred payables beyond the Partnership’s ability to pay them.  The Partnership anticipates that these will be paid from working capital reserves or future sales proceeds.  Expense reimbursements owed to the General Partners and its affiliates amounting to approximately $41,000 and $963,000 were accrued and unpaid as of March 31, 2010 and 2009, respectively.




(iii)
Independence SLP L.P. is entitled to receive a local administrative fee of up to $2,500 per year from each subsidiary partnership.  As of March 31, 2010 and 2009, the subsidiary partnerships owed approximately $154,000 and $256,000, respectively, of these fees to Independence SLP L.P.  These fees also have been deferred in certain cases and the Partnership anticipates that they will be paid from working capital reserves or future sales proceeds.




As of March 31, 2010, the Partnership owed $80,000 to the Special Limited Partner for the fees it received from one Local Partnership on its behalf.  As of March 31, 2009, the Partnership owed an affiliate of the General Partner approximately $2,441,000 for operating advances.  These advances were non-interest bearing and had no set repayment terms. The Partnership advanced these monies to one Local Partnership to fund its operations.  These advances were repaid to the affiliate during the year ended March 31, 2010.




As of March 31, 2010 and  2009, 655 North Street L.P. owed an affiliate of the General Partner approximately $23,000 and $26,000, respectively, for advances under the Mark-to-Market program. In addition, as of March 31, 2009, Rolling Green owed an affiliate of the General Partner approximately $341,000 for operating advances.




B)  Due to Local General Partners and Affiliates




Due to local general partners and affiliates included in operating liabilities consists of the following:




March 31,2010

2009Operating advances

$
237,183

$
165,038Development fee payable


163,223


163,223Long-term notes payable (i)


111,548


129,274Accrued interest on long-term notes payable


7,718


9,094Management and other fees


185,979


279,214$
705,651

$
745,843(i) Long-term notes payable consist of the following:655 North Street L.P.

In December 2003, 655 North Street was refinanced as part of the mark-to-market program and the owner was required to make an additional investment.  This capital recovery payment is payable over ten years with interest accruing at 7.5% per annum.

$
111,548

$
129,274











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INDEPENDENCE TAX CREDIT PLUS L.P.
 AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31, 2010


Due to local general partners and affiliates included in the discontinued liabilities consists of the following:




March 31,2010

2009Operating deficit advances

$
0

$
1,204,533Operating advances


496,961


245,311Development fee payable


0


1,120,234Long-term notes payable (ii)


0


979,770Accrued interest on long-term notes payable


0


1,449,870Management and other fees


28,309


301,619Construction costs


0


6,393,608$
525,270

$
11,694,945







(ii) Long-term notes payable included in the discontinued liabilities consist of the following:Creative Choice Homes II, LTD.

$
0

$
979,770The first note bears interest at 7% payable monthly.  Principal on the loan was 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, 2009 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 was 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, 2009 amounted to $500,000, and thus, this note is technically in default.  On January 1, 2010, the Partnership sold its limited partnership interest in Opa-Locka (see Note 10).







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.








- 53 -


INDEPENDENCE TAX CREDIT PLUS L.P.
 AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31, 2010


NOTE 9 – Taxable Net Loss




Our adoption of FASB Interpretation (“FIN”) No. 48 did not have a material impact on the consolidated financial statements and does not impact our financial position at March 31, 2010.




A reconciliation of the financial statements net loss to the taxable net loss for the Partnership and its consolidated subsidiaries follows:




2009

2008Financial statement net loss

$
(8,062,318
)
$
(4,894,349
)Differences between depreciation and amortization expense recorded for financial reporting purposes and the accelerated cost recovery system utilized for income tax purposes


(1,106,204
)

(900,088
)Differences resulting from parent company having a different fiscal year for income tax and financial reporting purposes


330,258


(75,487
)Tax exempt interest income


(28,237
)

(75,941
)Non-deductible loss on impairment of property


6,687,000


9,706,034Difference resulting from forgiveness of related-party debt considered a General Partner contribution for financial purposes and income for tax purposes.


1,508,271


3,177,916Difference between gain on sale of properties for financial reporting purposes and gain on sale for income tax purposes


16,083,681


(5,888,036
)Other, including related party accruals not deductible until paid


(10,384,124
)

(1,333,576
)Taxable net income (loss) as shown on the income tax return for the calendar year ended

$
5,028,327

$
(283,527
)







No provision for income taxes related to the operations of the Partnership has been included in the accompanying financial statements because, as a partnership, it is not subject to federal or material state income taxes and the tax effect of its activities accrues to the BACsholders.  Net income for financial statement purposes may differ significantly from taxable income reportable to BACsholders as a result of differences between the tax bases and financial reporting bases of assets and liabilities and the taxable income allocation requirements under its partnership agreement.  In the event of an examination of the Partnership’s tax return, the tax liability of the partners could be changed if an adjustment in the Partnership’s income is ultimately sustained by the taxing authorities.  At March 31, 2010, the tax basis net assets exceeded the financial statement net assets by approximately $2,900,000 due to depreciation differences, impairments and related party advances.






NOTE 10 – Sale of Properties




The Partnership is currently in the process of developing a plan to dispose all of its investments.  It is anticipated that the process will continue to take a number of years.  During the year ended March 31, 2010, one Local Partnership sold its property and the related assets and liabilities and the Partnership sold its limited partnership interest in one Local Partnership.  Through March 31, 2010, four Local Partnerships have sold their property and the related assets and liabilities, the Partnership has sold its limited partnership interest in thirteen Local Partnerships and one Local Partnership has transferred the deed to the property and related assets and liabilities of such Local Partnership.  In addition, two Local Partnerships have entered into agreements to sell their property and the related assets and liabilities.  There can be no assurance as to when the Partnership will dispose of its remaining investments or the amount of proceeds which may be received.  However, based on the historical operating results of the Local Partnerships and the current economic conditions, including changes in tax laws, it is unlikely that the proceeds from such sales received by the Partnership will be sufficient to return to the limited partners their original investment.




On January 1, 2010, the Partnership sold its limited partnership interest in Creative Choice Homes II, Ltd. (“Opa-Locka”) to an affiliate of the Local General Partner for a sales price of $227,500.  The sale resulted in a loss of approximately $11,524,000 resulting from the write-off of the basis in the Local Partnership of approximately $11,752,000 at the date of the sale and the receipt of $227,500 in cash from the sale.  The sale also resulted in a non-cash contribution to the Local Partnership from the Local General Partner of approximately $10,574,000 as a result of the write-off of fees owed by the Local Partnership to the Local General Partner.




On September 30, 2009, the property and related assets and liabilities of Rolling Green were sold to an affiliate of the General Partner for a sales price of $12,000,000.  The Partnership received $170,000 from this sale after the repayment of the mortgages, other liabilities and closing costs of approximately $11,830,000.  The distribution received was used to repay to the Partnership a portion of the funds advanced by it to Rolling Green.  The sale resulted in a gain of approximately $1,098,000 resulting from the write-off of the deficit basis in the property at the date of sale, which was recorded during the quarter ended December 31, 2009.  An adjustment to the gain of approximately $(15,000) was recorded during the quarter ended March 31, 2010, resulting in an overall gain of approximately $1,083,000.  The sale also resulted in a non-cash contribution to the Local Partnership from the Local General Partner of approximately $221,000 as a result of the write-off of advances owed by Rolling Green to the Local General Partner.








- 54 -


INDEPENDENCE TAX CREDIT PLUS L.P.
 AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31, 2010
 
   On January 23, 2009, the Partnership sold its limited partnership interest in Plainsboro Housing Partners, L.P. (“Plainsboro”) to an affiliate of the Local General Partner for a sales price of $1,401,000.  During the quarter ended December 31, 2008, in accordance with ASC 360, Property, Plant and Equipment(“ASC 360”), the Partnership deemed the building impaired and wrote it down to its fair value, resulting in a loss on impairment of $800,000.  The sale resulted in a gain of approximately $153,000 resulting from the write-off of the basis in the Local Partnership of approximately $1,248,000 at the date of the sale and the receipt of $1,401,000 in cash from the sale.  The sale also resulted in a non-cash contribution to the Local Partnership from the General Partner of approximately $3,000 as a result of write-off of the fees owed by the Local Partnership to an affiliate of the General Partner.




On December 31, 2008, the Partnership sold its limited partnership interest in Christine Apartments L.P. (“Christine Apartments”) to the Local General Partner for a sales price of $50,000.  The sale resulted in a gain of approximately $737,000 resulting from the write-off of the deficit basis in the Local Partnership of approximately $687,000 at the date of the sale and the receipt of $50,000 in cash from the sale, which was recorded during the quarter ended December 31, 2008.  An adjustment to the gain of approximately $(5,000) was recorded during the quarter ended March 31, 2009, resulting in an overall gain of approximately $732,000.




On December 17, 2008, the property and the related assets and liabilities of West Diamond Street Associates (“West Diamond”) were sold to an unaffiliated third party purchaser for a sales price of $1 plus the assumption of the outstanding mortgage notes.  The sale resulted in a gain of approximately $1,066,000 resulting from the write-off of the deficit basis in the property at the date of sale.




On November 30, 2008, the Partnership sold its limited partnership interest in Conifer Bateman Associates (“Bateman Hotel”) to the Local General Partner for a sales price of $50.  The sale resulted in a loss of approximately $87,000 resulting from the write-off of the basis in the Local Partnership of approximately $87,000 at the date of the sale, which was recorded during the quarter ended December 31, 2008. An adjustment to the loss of approximately $(5,000) was recorded during the quarter ended March 31, 2009, resulting in an overall loss of approximately $82,000. The sale also resulted in a non-cash contribution to the Local Partnership from the General Partner of approximately $14,000 as a result of write-off of the fees owed by the Local Partnership to an affiliate of the General Partner.




On October 21, 2008, the Partnership sold its limited partnership interest in Lancaster Terrace L.P. (“Lancaster”) to the Local General Partner for a sales price of $1,564,990.  The sale resulted in a gain of approximately $904,000 resulting from the write-off of the basis in the Local Partnership of approximately $660,000 at the date of the sale and the receipt of $1,564,190 in cash from the sale, which was recorded during the quarter ended December 31, 2008. An adjustment to the gain of approximately $111,000 was recorded during the quarter ended March 31, 2009, resulting in an overall gain of approximately $1,015,000. The sale also resulted in a non-cash contribution to the Local Partnership from the General Partner of approximately $2,000 as a result of write-off of the fees owed by the Local Partnership to an affiliate of the General Partner.




On October 17, 2008, the Partnership sold its limited partnership interest in Bethel Villa Associates, L.P. (“Bethel Villa”) to the Local General Partner for a sales price of $750,000.  During the quarters ended March 31, 2008 and December 31, 2008, in accordance with ASC 360, the Partnership deemed the building impaired and wrote it down to its fair value, which resulted in a loss on impairment of $5,000,000 and $720,000, respectively. The sale resulted in a loss of approximately $28,000 resulting from the write-off of the basis in the Local Partnership of approximately $778,000 at the date of the sale and the receipt of $750,000 in cash from the sale, which was recorded during the quarter ended December 31, 2008. An adjustment to the loss of approximately $373,000 was recorded during the quarter ended March 31, 2009, resulting in an overall gain of approximately $345,000.




On August 22, 2008, the Partnership sold its limited partnership interest in Lares Apartments Limited Partnership (“Lares”) to the Local General Partner for a sales price of $125,000.  The sale resulted in a gain of approximately $691,000 resulting from the write-off of the deficit basis in the Local Partnership at the date of the sale of approximately $566,000 and the receipt of $125,000 in cash from the sale, which was recorded during the quarter ended December 31, 2008. An adjustment to the gain of approximately $(31,000) was recorded during the quarter ended March 31, 2009, resulting in an overall gain of approximately $660,000.




On August 22, 2008, the Partnership sold its limited partnership interest in Lajas Apartments Limited Partnership (“Lajas”) to the Local General Partner for a sales price of $121,250.  The sale resulted in a gain of approximately $690,000, resulting from the write-off of the deficit basis in the Local Partnership at the date of the sale of approximately $568,000 and the receipt of $121,730 in cash from the sale, which was recorded during the quarter ended December 31, 2008. An adjustment to the gain of approximately $(40,000) was recorded during the quarter ended March 31, 2009, resulting in an overall gain of approximately $650,000.




On May 6, 2008, the Partnership sold its limited partnership interest in Susquehanna Partners (“Susquehanna”) to an affiliate of the Local General Partner for a sales price of $1.  During the quarter ended March 31, 2008, in accordance with ASC 360, the Partnership deemed the building impaired and wrote it down to its fair value, which resulted in a loss on impairment of $630,000.  The sale resulted in a loss of approximately $49,000, resulting from the write-off of the basis in the Local Partnership of approximately $49,000 at the date of the sale, which was recorded during the quarter ended June 30, 2008.  Adjustments to the loss of approximately $(1,000) and $(37,000) were recorded during the quarters ended September 30, 2008 and March 31, 2009, resulting in an overall loss of approximately $11,000.  The sale also resulted in a non-cash contribution to the Local Partnership from the General Partner of approximately $41,000 as a result of write-off of the fees owed by the Local Partnership to an affiliate of the General Partner.




On April 1, 2008, the Partnership sold its limited partnership interest in Landreth Venture (“Landreth”) to the Local General Partner for a sales price of $17,500.  During the year ended March 31, 2009 and 2008, in accordance with ASC 360, the building was deemed impaired and written down to its fair value, resulting in a loss on impairment of approximately $3,000,000 and $730,000, respectively.  The sale resulted in a gain of approximately $10,000, resulting from the write-off of the basis in the Local Partnership at the date of the sale of approximately $7,000 and the $17,500 cash received from the sale, which was recorded during the quarter ended June 30, 2008.  Adjustments to the gain of approximately $1,000 and $3,009,000 were recorded during the quarter ended September 30, 2008 and March 31, 2009, resulting in an overall gain of approximately $3,020,000.








- 55 -





INDEPENDENCE TAX CREDIT PLUS L.P.


AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


MARCH 31, 2010











On March 20, 2008, the property and the related assets and liabilities of Homestead Apartments Associates Ltd. (“Homestead”) were sold to an unaffiliated third party purchaser for a sales price of $4,000,000.  The Partnership received $32,500 as a distribution from this sale after the repayment of the mortgages, other liabilities and closing costs of approximately $3,967,500.  The sale resulted in a gain of approximately $75,000 resulting from the write-off of the deficit basis in the property at the date of sale, which was recorded during the quarter ended June 30, 2008.  Adjustments to the gain of approximately $201,000, $(7,000) and $(324,000) were recorded during the quarters ended September 30, 2008, December 31, 2008 and March 31, 2009, resulting in an overall loss of approximately $55,000.




On November 30, 2007, the property and the related assets and liabilities of Harbor Court Limited Partnership (“Harbor Court”) were sold to an unaffiliated third party purchaser for a sales price of $2,100,000.  The Partnership received $1,991,996 as a distribution from this sale after the repayment of other liabilities, closing costs and distributions to minority interests of approximately $108,000.  The sale resulted in a gain of approximately $1,260,000, which was recorded during the quarter ended March 31, 2008.  An adjustment to the gain of approximately $(49,000) was recorded during the quarter ended June 30, 2009, resulting in an overall gain of approximately $1,211,000.  The sale also resulted in a non-cash distribution to the Local General Partner of approximately $199,000 as a result of the write-off of receivables from the Local General Partner to Harbor Court.







NOTE 11 – Assets Held for Sale




On January 1, 2010, Cloisters Limited Partnership II (“Cloisters”) entered into a purchase and sale agreement to sell the property and the related assets and liabilities to an unaffiliated third party purchaser for a sales price of $1,800,000.  As of December 31, 2009, Cloisters had property and equipment, at cost, of approximately $795,000 and accumulated depreciation of approximately $120,000.




On April 1, 2008, Homestead Apartments Associates II Ltd. (“Homestead II”) entered into a purchase and sale agreement to sell the property and the related assets and liabilities to an unaffiliated third party purchaser for a sales price of $4,000,000.  During the quarter ended March 31, 2010, in accordance with ASC 360, the Partnership deemed the building impaired and wrote it down to its fair value, which resulted in a loss on impairment of $1,607,000.  The sale is contingent upon receiving an allocation of HOME funds, which Homestead II has applied for and expects to receive in July 2010.  As of December 31, 2009, Homestead II had property and equipment, at cost, of approximately $3,987,000, accumulated depreciation of approximately $2,076,000 and mortgage debt of approximately $3,129,000.








- 56 -





INDEPENDENCE TAX CREDIT PLUS L.P.


AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


MARCH 31, 2010











NOTE 12 – Selected Quarterly Financial Data (Unaudited)




The following table summarizes the Partnership’s quarterly results of operations for the years ended March 31, 2010 and 2009.




Quarter EndedOPERATIONS

June 30,

2009*

September 30,

2009*

December 31,

2009*

March 31,

2010Revenues

$
1,766,188

$
1,773,653

$
1,768,518

$
1,698,606Operating expenses


(2,426,302
)

(2,263,427
)

(2,129,135
)

(7,285,705
)Loss from operations


(660,114
)

(489,774
)

(360,617
)

(5,587,099
)Income (loss) from discontinued operations


62,315


382,569


407,613


(11,751,310
)Net (loss) income


(597,799
)

(107,205
)

46,996


(17,338,409
)Net loss attributable to noncontrolling interests from operations


4,852


2,639


1,413


56,060Net (income) loss attributable to noncontrolling interests from discontinued operations

$
(197,555
)
$
(760,374
)
$
9,156

$
10,817,908Net (loss) income attributable to Independence Tax Credit Plus L.P.

$
(790,502
)
$
(864,940
)
$
57,565

$
(6,464,441
)Net (loss) income – limited partnership

$
(782,597
)
$
(856,291
)
$
56,989

$
(6,399,796
)Loss per weighted average BAC from operations

$
(8.45
)
$
(6.28
)
$
(4.63
)
$
(71.31
)(Loss) income per weighted average BAC from discontinued operation


(1.74
)

(4.87
)

5.37


(12.04
)Net (loss) income per weighted average BAC

$
(10.19
)
$
(11.15
)
$
0.74

$
(83.35
)Quarter EndedOPERATIONS

June 30,

2008*

September 30,

2008*

December 31,

2008*

March 31,

2009*Revenues

$
1,674,173

$
1,689,920

$
1,757,358

$
1,659,174Operating expenses


(2,558,247
)

(2,433,729
)

(2,253,585
)

(2,636,445
)Loss from operations


(884,074
)

(743,809
)

(496,227
)

(977,271
)(Loss) income from discontinued operations


(440,343
)

223,905


1,117,336


(3,614,810
)Net (loss) income


(1,324,417
)

(519,904
)

621,109


(4,592,081
)Net loss attributable to noncontrolling interests from operations


570


936


431


2,566Net (income) loss attributable to noncontrolling interest from discontinued operations

$
(864,019
)
$
6,809

$
(460,479
)
$
2,234,130Net (loss) income attributable to Independence Tax Credit Plus L.P.

$
(2,187,866
)
$
(512,159
)
$
161,061

$
(2,355,385
)Net (loss) income – limited partnership

$
(2,165,987
)
$
(507,038
)
$
159,450

$
(2,331,830
)Loss per weighted average BAC from operations

$
(11.39
)
$
(9.58
)
$
(6.39
)
$
(12.57
)(Loss) income per weighted average BAC from discontinued operation


(16.82
)

2.98


8.47


(17.80
)Net (loss) income per weighted average BAC

$
(28.21
)
$
(6.60
)
$
2.08

$
(30.37
)*    Reclassified for comparative purposes.









- 57 -


INDEPENDENCE TAX CREDIT PLUS L.P.
 AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31, 2010


NOTE 13 – Commitments and Contingencies




a)
Going Concern Consideration




At March 31, 2010, the Partnership’s liabilities exceeded assets by $19,685,257 and for the 2009 year incurred a net loss of $17,996,417, including loss on sale of properties of $10,489,922 and loss on impairment of properties of $6,687,000.  These factors raise substantial doubt about the Partnership’s ability to continue as a going concern. As discussed in Note 8, partnership management fees of approximately $4,555,000 will be payable out of sales or refinancing proceeds only to the extent of available funds after payments on all other Partnership liabilities have been made and after the Limited Partners have received a 10% return on their capital contributions.  As such, the General Partner cannot demand payment of these deferred fees beyond the Partnership’s ability to pay them.  In addition, where the Partnership has unpaid partnership management fees related to sold properties, such management fees are written off and recorded as capital contributions.  During the year ended March 31, 2010, the Partnership wrote off approximately $1,508,000 of such management fees.




All of the mortgage payable balance of $23,065,605 and the accrued interest payable balance of $12,097,579 is of a nonrecourse nature and secured by the respective properties.  The Partnership is currently in the process of developing a plan to dispose all of its investments.  Historically, the mortgage notes and accrued interest thereon have been assumed by the buyer in instances of sales of the Partnership’s interest or have been paid off from sales proceeds in instances of sales of the property.  In most instances when the Partnership’s interest was sold and liabilities were assumed, the Partnership recognized a gain from the sale.  The Partnership owns the limited partner interest in all its investments, and as such has no financial responsibility to fund operating losses incurred by the Local Partnerships.  The maximum loss the Partnership would incur is its net investment in the respective Local Partnerships.  Dispositions of any investment in a Local Partnership should not impact the future results of operations, liquidity, or financial condition of The Partnership.




The Partnership has working capital reserves of approximately $1,366,000 at March 31, 2010.  Such amount is considered sufficient to cover the Partnership’s day to day operating expenses, excluding fees to the General Partner, for at least the next year.  The Partnership’s operating expenses, excluding the Local Partnerships’ expenses and related party expenses amounted to approximately $170,000 for the year ended March 31, 2010.




Management believes the above mitigating factors enable the Partnership to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.




b)
Subsidiary Partnerships – Going Concern




Creative Choice Homes II L.P. (“Opa-Locka”)


The Partnership sold its limited partnership interest in Opa-Locka on January 1, 2010 (see Note 10 in Item 8).  Prior thereto, the financial statements for Opa-Locka were prepared assuming that Opa-Locka would continue as a going concern.  Opa-Locka was in default on its third and fourth mortgage notes, which were incurred to affiliates of the Local General Partner.  The Local General Partner had not sent a notice of default with respect to the notes as of the year ended March 31, 2010 and would have been unable to call the notes until the first and second mortgage notes were paid in full.  In addition, the current liabilities exceeded the current assets by approximately $8,700,000.  These conditions raised substantial doubt about Opa-Locka’s ability to continue as a going concern.  The financial statements do not include any adjustments that might be necessary if Opa-Locka had been unable to continue as a going concern.




The Partnership’s investment in Opa-Locka at March 31, 2010 and 2009 was reduced to zero as a result of prior years’ losses, and the noncontrolling interest balance was $0 and $5,000 at each date.  Opa-Locka’s net income after noncontrolling interest amounted to approximately $554,000 and $487,000 for the 2009 and 2008 Fiscal Years.




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, 2009, current liabilities exceed current assets by approximately $773,000.  This raises doubt as to whether Morrant Bay will be able to continue as a going concern.  Management continually monitors operating costs and will request additional rent increases when allowed by HUD.  Additionally, management is in the process of evaluating refinancing plans.  During 2008, Morrant Bay entered into negotiations with a local non-profit to re-syndicate the property.  In connection with this, Morrant Bay is negotiating with the General Partner to redeem the Partnership’s interest in Morrant Bay for a nominal amount.  There can be no assurance if or when such negotiations will result in a sale of the limited partnership’s interests.




The Partnership’s investment in Morrant Bay at March 31, 2010 and 2009 was reduced to zero as a result of prior years’ losses and the noncontrolling interest balance was approximately $(231,000) and $(228,000) for the 2009 and 2008 Fiscal Years, respectively.  Morrant Bay’s net loss after noncontrolling interest amounted to approximately $288,000 and $474,000 for the 2009 and 2008 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, 2009, current liabilities exceed current assets by approximately $299,000.  This raises doubt as to whether Boston Bay will be able to continue as a going concern.  Management continually monitors operating costs and will request additional rent increases when allowed by HUD.  Additionally, management is in the process of evaluating refinancing plans.  During 2008, Boston Bay entered into negotiations with a local non-profit to re-syndicate the property.  In connection with this, Boston Bay is negotiating with the General Partner to redeem the Partnership’s interest in Boston Bay for a nominal amount.  There can be no assurance if or when such negotiations will result in a sale of the limited partnership’s interests.










- 58 -


INDEPENDENCE TAX CREDIT PLUS L.P.
 AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31, 2010


The Partnership’s investment in Boston Bay at March 31, 2010 and 2009 was reduced to zero as a result of prior years’ losses and the noncontrolling interest balance was approximately $(89,000) and $(87,000) for the 2009 and 2008 Fiscal Years, respectively.  Boston Bay’s net loss after noncontrolling interest amounted to approximately $187,000 and $342,000 for the 2009 and 2008 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.




c)  Uninsured Cash and Cash Equivalents




The Partnership maintains its cash and cash equivalents in various banks.  Accounts at each bank are guaranteed by the Federal Deposit Insurance Corporation up to $250,000. As of March 31, 2010, uninsured cash and cash equivalents approximated $1,116,000.




d)  Cash Distributions




Cash distributions from the Local Partnerships to the Partnership are restricted by the provisions of the respective partnership agreements of the Local Partnerships and the U.S. Department of Housing and Urban Development (“HUD”) based on operating results and a percentage of the owner’s equity contribution.  Such cash distributions are typically made for surplus cash flow.




e)  Tax Credits




The Partnership is subject to the risks incident to potential losses arising from the management and ownership of improved real estate.  The Partnership can also be affected by poor economic conditions generally; however, no more than 30% of the properties are located in any single state. There are also substantial risks associated with owning properties receiving government assistance; for example, the possibility that Congress may not appropriate funds to enable HUD to make rental assistance payments. HUD also restricts annual cash distributions to partners based on operating results and a percentage of the owner’s equity contribution. The Partnership cannot sell or substantially liquidate its investments in subsidiary partnerships during the period that the subsidy agreements are in existence without HUD’s approval. Furthermore, there may not be market demand for apartments at full market rents when the rental assistance contracts expire.




The Partnership and BACs holders began to recognize Tax Credits with respect to an Apartment Complex when the Credit Period for such Apartment Complex commenced.  As of December 31, 2007, all Credit Periods expired.  However, each Local Partnership must continue to comply with the Tax Credit requirements until the end of the Compliance Period in order to avoid recapture of the Tax Credits.  The Compliance Periods will continue through December 31, 2013 with respect to the Properties depending upon when the Tax Credit Periods commenced.




f)  Property Management Fees




Property management fees incurred by the subsidiary partnerships amounted to $686,957 and $1,035,476 for the years ended March 31, 2010 and 2009, respectively.  Of these fees, $450,840 and $714,262 were incurred to affiliates of the general partners of the Local Partnerships (the “Local General Partners”) which includes $55,439 and $324,882 of fees relating to discontinued operations.




g)  Subsequent Events
  We evaluated all subsequent events from the date of the balance sheet through June 24, 2010, which represent the issuance date of these financial statements.  There were no events or transactions occurring during this subsequent event reporting period, which require recognition or disclosure in the financial statements.








- 59 -


INDEPENDENCE TAX CREDIT PLUS L.P.
 AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31, 2010


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, 2010, Homestead II, Rolling Green, Opa-Locka and Cloisters were classified as discontinued operations on the consolidated balance sheets.  As of March 31, 2009, Homestead II, Rolling Green and Opa-Locka were classified as discontinued operations on the consolidated balance sheets.




Consolidated Balance Sheets:




March 31,2009


2008AssetsProperty and equipment – less accumulated depreciation of $2,238,886 and$21,815,503, respectively

$
2,606,404


$
29,015,203Cash and cash equivalents


18,806



38,131Cash held in escrow


96,533



3,571,222Deferred costs, net of accumulated amortization of $90,269 and $868,985, respectively


4,528



237,862Other assets


47,348



398,927Total assets

$
2,773,619


$
33,261,345LiabilitiesMortgage notes payable

$
3,129,354


$
19,248,504Accounts payable


184,224



2,685,081Accrued interest payable


496,971



680,348Security deposit payable


71,657



140,490Due to local general partners and affiliates


525,270



11,694,945Due to general partners and affiliates


55,000



489,288Total liabilities

$
4,462,476


$
34,938,656







The following table summarizes the results of operations of the Local Partnerships that are classified as discontinued operations.  For the year ended March 31, 2010, Rolling Green and Opa-Locka, which were sold during the current year, and Homestead II and Cloisters, 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, 2009, Plainsboro, Lancaster, Bateman Hotel, West Diamond, Bethel Villa, Christine Apartments, Lares, Lajas, Landreth and Susquehanna, which were sold during the current year, Homestead, which was sold during the year ended March 31, 2008, and Homestead II, Rolling Green and Opa-Locka, which were classified as assets held for sale, and Cloisters, in order to present comparable results to the year ended March 31, 2010, were all classified as discontinued operations in the consolidated financial statements.











- 60 -


INDEPENDENCE TAX CREDIT PLUS L.P.
 AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31, 2010


Consolidated Statements of Discontinued Operations:




Years Ended March 31,2010


2009RevenuesRental income

$
7,014,291


$
11,713,514Other (Note 2)


1,308,864



943,121(Loss) gain on sale of property (Note 10)


(10,489,922
)


7,494,728Total revenue


(2,166,767
)


20,151,363ExpensesGeneral and administrative


1,490,895



2,666,116General and administrative-related parties (Note 8)


67,939



351,939Repairs and maintenance


2,199,899



3,193,924Operating and other


739,431



1,267,779Insurance


424,820



838,295Taxes


732,483



1,086,508Interest


1,229,914



1,959,067Depreciation and amortization


239,665



1,795,614Loss on impairment of assets


1,607,000



9,706,033Total expenses


8,732,046



22,865,275Loss from discontinued operations


(10,898,813
)


(2,713,912
)Noncontrolling interest in loss of subsidiaries from discontinued operations


9,869,135



916,441Loss from discontinued operations – Independence Tax Credit Plus LP II

$
(1,029,678
)

$
(1,797,471
)Loss – limited partners from discontinued operations

$
(1,019,381
)

$
(1,779,496
)Number of BACs outstanding


76,786



76,786Loss from discontinued operations per BAC

$
(13.28
)

$
(23.17
)







Cash Flows from Discontinued Operations:




Years Ended March 31,2010


2009*Net cash used in operating activities

$
(10,823,066
)

$
(15,664,434
)Net cash provided by investing activities

$
21,830,230


$
13,430,473Net cash used in financing activities

$
(20,306,756
)

$
(6,629,178
)





*  Reclassified for comparative purposes.










- 61 -






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 Independence Associates, GP LLC, the general partner of the General Partner of the Partnership, have evaluated the effectiveness of the Partnership’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”) as of the end of the period covered by this report.  Based on such evaluation, such officers have concluded that, as of the end of such period, the Partnership’s disclosure controls and procedures are effective.




(b)  Management’s Report on Internal Control over Financial Reporting.Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f).  In evaluating the Partnership’s internal control over financial reporting, management has adopted the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring organizations of the Treadway Commission (the “COSO Framework”).  Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer of the General Partner, the Partnership conducted an evaluation of the effectiveness of its internal control over financial reporting as of March 31, 2010.  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, 2010, 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.










- 62 -





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 Independence Associates GP LLC, a Delaware corporation.  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 Independence Associates GP LLC is set forth below.




Name

PositionRobert A. Pace

Chief Financial OfficerAndrew J. Weil

President and Chief Executive Officer







ROBERT A. PACE, 37, is the Chief Financial Officer of RIAI and a Director of Centerline.  Mr. Pace oversees the accounting operations of the General partner, and is also responsible for overseeing the accounting operations of Centerline’s Affordable Housing Group.  Mr. Pace joined Centerline’s predecessor in January of 2003 as an Assistant Controller.  Prior to joining Centerline’s predecessor, Mr. Pace worked for KPMG in the financial services real estate group as an audit manager.  He received a Bachelor of Science Degree from Wagner College in 1994 and is a Certified Public Accountant.




ANDREW J. WEIL, 39, is an Executive Managing Director of Centerline, and is the Head of the Affordable Housing Group and the Chief Executive Officer of Centerline Financial, Centerline’s Credit Risk Products 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.




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%







Independence SLP L.P., a limited partnership whose general partner is the General Partner of the Partnership and which acts as the special limited partner of each Local Partnership, holds either a 0.1% or 1% limited partnership interest in each Local Partnership. See Note 8 in Item 8 above, which information is incorporated herein by reference thereto.




Except as set forth in the table below, no person is known by the Partnership to be the beneficial owner of more than 5% of the Limited Partnership Interests and neither the General Partner nor any director or executive officer of the general partner of the General Partner owns any Limited Partnership Interests. The following table sets forth the number of BACs beneficially owned, as of May 28, 2010, 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.











- 63 -







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 A. Pace

--


--Andrew J. Weil

--


--All directors and executive officers of the general partner of the General Partner as a group (three persons)

6,846.30
(2) (3) (4)

8.9
%







(1)
The address for each of the persons in the table is 625 Madison Avenue, New York, New York 10022.




(2)
As set forth in Schedule 13D filed by Lehigh Tax Credit Partners L.L.C. (“Lehigh I”) and Lehigh Tax Credit Partners, Inc., (the “Managing Member”) on June 10, 1997 with the Securities and Exchange Commission (the “Commission”).




(3)
All of such BACs represent BACs owned directly by Lehigh I and its affiliate, Lehigh Tax Credit Partners II, L.L.C. (“Lehigh II”), for which the Managing Member serves as managing member.  As of May 28, 2010, Lehigh I held 3,410.65 BACs and Lehigh II held 3,430.65 BACs.




(4)
All parties only own an economic interest in the Managing Member.




Item 13.  Certain Relationships and Related Transactions, and Director Independence.




The Partnership has and will continue to have certain relationships with the General Partner and its affiliates, as discussed in Item 11 and also Note 8 in Item 8 above, which are incorporated herein by reference. However, there have been no direct financial transactions between the Partnership and the directors and officers of the general partner of the General Partner.




Item 14.  Principal Accountant Fees and Services.




Audit Fees




The aggregate fees billed by Trien Rosenberg Rosenberg Weinberg Ciullo and Fazzari LLP and its affiliates for professional services rendered for the audit of the Partnership’s annual financial statements for the years ended March 31, 2010 and 2009 and for the reviews of the financial statements included in the Partnership’s quarterly reports on Form 10-Q for those years were $57,000 and $72,000, 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 return were $11,500 for the year ended December 31, 2008.  For the year ended December 31, 2009, the Partnership’s annual tax returns were prepared by the Partnership’s tax department.




All Other Fees




None.




The Partnership is not required to have, and does not have, a stand-alone audit committee.








- 64 -






PART IV













Item 15.
Exhibits and Financial Statement Schedules.Sequential

Page(a) 1.
Financial StatementsReport of Independent Registered Public Accounting Firm

15Consolidated Balance Sheets at March 31, 2010 and 2009

39Consolidated Statements of Operations for the Years Ended March 31, 2010 and 2009

40Consolidated Statements of Changes in Partners’ Capital (Deficit) for the Years Ended March 31, 2010 and 2009

41Consolidated Statements of Cash Flows for the Years Ended March 31, 2010 and 2009

42Notes to Consolidated Financial Statements

44(a) 2.
Consolidated Financial Statement SchedulesReport of Independent Registered Public Accounting Firm

69Schedule I- Condensed Financial Information of Registrant

70Schedule III - Real Estate and Accumulated Depreciation

73(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*

66(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)(31.2)
Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a)(32.1)
Certification Pursuant to Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Title 18 of the United States Code (18 U.S.C. 1350)










- 65 -







Item 15.
Exhibits and Financial Statement Schedules (continued).




Subsidiaries of the Registrant (Exhibit 21)

Jurisdiction

of Organization655 North Street Limited Partnership

LABoston Bay Limited Partnership

MAMorrant Bay Limited Partnership

MAHope Bay Limited Partnership

MAArlington-Rodeo Properties

CAChester Renaissance Associates

PAHomestead Apartments II, LTD.

FLCloisters Limited Partnership II

PAMilford Crossing Associates L.P.

DELos Angeles Limited Partnership

PR














- 66 -







SIGNATURES











Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.











INDEPENDENCE TAX CREDIT PLUS L.P.


(Registrant)











By:
RELATED INDEPENDENCE ASSOCIATES L.P.,its General PartnerBy:
INDEPENDENCE ASSOCIATES GP LLC,a General PartnerDate:
June 24, 2010



By:
/s/ Robert A. PaceRobert A. PaceChief Financial Officer and Principal Accounting OfficerDate:
June 24, 2010



By:
/s/ Andrew J. WeilAndrew J. WeilPresident and Chief Executive Officer











- 67 -





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 A. Pace

Robert A. Pace

Chief Financial Officer and Principal Accounting Officer of

Independence Associates GP LLC.

June 24, 2010/s/ Andrew J. Weil

Andrew J. Weil

President (Chief Executive Officer) of Independence Associates GP LLC.

June 24, 2010












- 68 -







REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM








To the Partners of


Independence Tax Credit Plus L.P. and Subsidiaries


(A Delaware Limited Partnership)





In connection with our audits of the consolidated financial statements of Independence Tax Credit Plus L.P. and Subsidiaries (A Delaware Limited Partnership) included in this Form 10-K as presented in our opinion dated June 24, 2010 on page 15, and based on the reports of other auditors, we have also audited supporting Schedule I for the 2009 and 2008 Fiscal Years and Schedule III at March 31, 2010.  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(b), 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 $10,504,227 (2009 Fiscal Year) and $551,341 (2008 Fiscal Year) and their assets aggregated $6,189,416 and $23,400,218 at March 31, 2010 and 2009, respectively.  Management’s plan in regard to this matter is also described in Note 13(b).  The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.





TRIEN ROSENBERG


WEINBERG CIULLO & FAZZARI LLP








New York, New York


June 24, 2010













- 69 -








INDEPENDENCE TAX CREDIT PLUS L.P.


SCHEDULE I


CONDENSED FINANCIAL INFORMATION OF REGISTRANT


(NOT INCLUDING CONSOLIDATED SUBSIDIARY PARTNERSHIPS)








CONDENSED BALANCE SHEETS














ASSETS








2010

2009Cash and cash equivalents

$
1,366,294

$
5,043,817Advances and investment in subsidiary partnerships


0


1,229,204Other assets


166,299


166,299Total assets

$
1,532,593

$
6,439,320LIABILITIES AND PARTNERS’ CAPITALOther liabilities

$
70,146

$
52,290Due to general partners and affiliates


4,676,398


9,622,432Total liabilities


4,746,544


9,674,722Partners’ (deficit) capital


(3,213,951
)

(3,235,402
)Total liabilities and partners’ capital

$
1,532,593

$
6,439,320







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.








- 70 -






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 31,2010


2009Revenues

$
16,657


$
52,711ExpensesAdministrative and management


169,713



258,655Administrative and management-related parties


502,059



986,875Total expenses


671,772



1,245,530Loss from operations


(655,115
)


(1,192,819
)(Loss) gain on sale of investments in subsidiary partnerships


(10,489,922
)


6,169,515Distribution income of subsidiary partnerships in excess of investments


0



35,699Equity in income (loss) of subsidiary partnerships*


9,658,217



(7,870,958
)Net loss

$
(1,486,820
)

$
(2,858,563
)*  Includes suspended prior year losses of investments in accordance with equity method of accounting amounting to $(1,455,094) and $(3,079,933) as of March 31, 2010 and 2009, respectively.














- 71 -





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 31,2010


2009Cash flows from operating activities:Net loss

$
(1,486,820
)

$
(2,858,563
)Adjustments to reconcile net loss to net cash used in operating activities:Loss (gain) on sale of investments


10,489,922



(6,169,515
)Distribution income of subsidiary partnerships in excess of investments


0



(35,699
)Equity in income (loss) of subsidiary partnerships


(9,658,237
)


7,870,958Decrease (increase) in other assets


170,019



(61,195
)Increase in other liabilities


17,856



44,998Decrease in due to general partner and affiliates


(4,946,034
)


(4,384,131
)Total adjustments


(3,926,474
)


(2,734,584
)Net cash used in operating activities


(5,413,294
)


(5,593,147
)Cash flows from investing activities:Proceeds from sale of investments in subsidiary partnerships


227,500



4,029,430Distributions from subsidiary partnerships


0



107,334Contribution-General Partner – Partnership management fees


1,508,271



3,751,524Advances to subsidiary partnerships


0



(70,000
)Net cash provided by investing activities


1,735,771



7,818,288Net (decrease) increase in cash and cash equivalents


(3,677,523
)


2,225,141Cash and cash equivalents, beginning of year


5,043,817



2,818,676Cash and cash equivalents, end of year

$
1,366,294


$
5,043,817










- 72 -







INDEPENDENCE TAX CREDIT PLUS L.P.


AND SUBSIDIARIES


SCHEDULE III


REAL ESTATE AND ACCUMULATED DEPRECIATION


Partnership Property Pledged as Collateral


MARCH 31, 2010










Description

Encumbrances

Initial Cost to Partnership

Cost

Capitalized

Subsequent to

Acquisition:

Improvements

Land

Buildings and

Improvements

Total

Accumulated

Depreciation

Year of

Construction/

Renovation

Date

Acquired

Life on which

Depreciation in

Latest Income

Statement is

Computed*Land

Buildings and

ImprovementsApartment ComplexesHarbor Court Limited Partnership (d)Staten Island, NY

$
0

$
137,450

$
1,007,966

$
(1,145,416
)
$
0

$
0

$
0

$
0

1991

Dec. 1991

27.5
yearsOld Public Limited Partnership (e)Lawrenceburg, TN


0


10,000


1,713,310


(1,723,310
)

0


0


0


0

1991

Dec. 1991

27.5
yearsLancaster Terrace Limited Partnership (f)Salem, OR


0


161,269


3,679,601


(3,840,870
)

0


0


0


0

1992

Feb. 1992

15-27.5
years655 North Street Limited PartnershipBaton Rouge, LA


4,379,659


125,500


3,040,980


6,236,976


127,751


9,275,705


9,403,456


5,728,002

1992

Mar. 1992

27.5
yearsLandreth Venture (f)Philadelphia, PA


0


1,761


5,903,337


(5,905,098
)

0


0


0


0

1992

Mar. 1992

40
yearsHomestead Apartments Associates Ltd. (b)(d)Homestead, FL


0


329,402


0


(329,402
)

0


0


0


0

1992

Mar. 1992

40
yearsBethel Villa Associates, L.P. (f)Wilmington, DE


0


270,000


5,969,354


(6,239,354
)

0


0


0


0

1992

Apr. 1992

27.5
yearsWest Diamond Street Associates (g)Philadelphia, PA


0


30,829


3,444,649


(3,475,478
)

0


0


0


0

1992

May 1992

40
yearsSusquehanna Partners (f)Philadelphia, PA


0


16,000


0


(16,000
)

0


0


0


0

1992

May 1992

20-40
yearsBoston Bay Limited PartnershipBoston, MA


1,668,140


440,000


4,143,758


909,733


441,585


5,051,906


5,493,491


3,277,738

1991

Aug. 1992

27.5
yearsMorrant Bay Limited PartnershipBoston, MA


2,449,389


650,000


5,522,250


1,528,193


651,585


7,048,858


7,700,443


4,412,878

1991

Aug. 1992

27.5
yearsHope Bay Limited PartnershipBoston, MA


1,003,853


225,000


1,435,185


718,416


226,585


2,152,016


2,378,601


1,356,919

1991

Aug. 1992

27.5
yearsLares Apartments Limited Partnership (f)Lares, PR


0


137,000


0


(137,000
)

0


0


0


0

1992

Aug. 1992

40
yearsLajas Apartments Limited Partnership (f)Lajas, PR


0


110,090


4,952,929


(5,063,019
)

0


0


0


0

1992

Aug. 1992

40
yearsArlington-Rodeo PropertiesLos Angeles, CA


3,543,123


624,052


0


2,437,510


625,637


2,435,925


3,061,562


2,418,369

1992

Aug. 1992

27.5
yearsConifer Bateman Associates (f)Lowville, NY


0


15,000


2,525,729


(2,540,729
)

0


0


0


0

1990

Aug. 1992

15-27.5
yearsHampden Hall Associates, L.P. (c)St.  Louis, MO


0


0


0


0


0


0


0


0

1992

Sep. 1992

27.5
yearsChester Renaissance AssociatesChester, PA


827,600


33,667


168,333


722,960


42,153


882,807


924,960


852,495

1992

Sep. 1992

40
yearsHomestead Apartments II, LTD. (h)(k)Homestead, FL


3,129,354


338,966


0


3,680,011


340,551


3,678,426


4,018,977


2,095,859

1992

Oct. 1992

40
yearsP.S. 157 Associates, L.P. (a)(b)New York, NY


0


36,500


9,350,642


(9,388,727
)

0

0


0


0

1992

Nov. 1992

40
yearsCloisters Limited Partnership II (k)Philadelphia, PA


0


35,160


0


791,153


36,745


789,568


826,313


142,937

1992

Nov. 1992

40
yearsCreative Choice Homes II, LTD. (i)Opa-Locka, FL


0


0


0


0


0


0


0


0

1988

Dec. 1992

40
yearsMilford Crossing Associates L.P.  (**)Milford, DE


2,263,631


203,006


0


3,082,233


115,519


3,169,720


3,285,239


2,792,730

1992

Dec. 1992

27.5
yearsBX-7F Associates, L.P. (c)Bronx, NY


0


4


5,705,064


(5,705,068
)

0


0


0


0

1993

Jan. 1993

40
years
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 INDEPENDENCE TAX CREDIT PLUS L.P.
 AND SUBSIDIARIES
 SCHEDULE III
 REAL ESTATE AND ACCUMULATED DEPRECIATION
 Partnership Property Pledged as Collateral
 MARCH 31, 2010
 (continued)
    Description

Encumbrances

Initial Cost to Partnership

Cost

Capitalized

Subsequent to

Acquisition:

Improvements

Land

Buildings and

Improvements

Total

Accumulated

Depreciation

Year of

Construction/

Renovation

Date

Acquired

Life on which

Depreciation in

Latest Income

Statement is

Computed*Land

Buildings and

Improvements
 Los Angeles Limited PartnershipRio Piedras, PR


3,800,856


201,210


0


6,766,210


203,384


6,764,036


6,967,420


2,728,094

1994

Apr.1993

40
yearsChristine Apartments, L.P. (f)Buffalo, NY


0


10,000


2,351,072


(2,361,073
)

0


0


0


0

1993

June 1993

27.5
yearsPlainsboro Housing Partners, L.P. (f)Plainsboro, NJ


0


800,000


0


(800,000
)

0


0


0


0

1994

July 1993

27.5
yearsRolling Green Associates, L.P. (j)Syracuse, NY


0


180,000


19,583,101


(19,763,101
)

0


0


0


0

1992

Oct. 1993

27.5
yearsLess:  Discontinued operations


(3,129,354
)

(2,619,431
)

(66,186,754
)

63,962,481


(377,296
)

(4,467,994
)

(4,845,290
)

(2,238,792
)$
19,936,251

$
2,502,435

$
14,310,506

$
22,402,231

$
2,434,199

$
36,780,973

$
39,215,172

$
23,567,229*Personal property is depreciated over the estimated useful life ranging from 3 to 10 years.

**During the year ended December 31, 1997, the Partnership sold a parcel of land for $210,000 to an entity with a member who is also the general partner of the Partnership.

(a)The Partnership’s Local Partnership interest in this Local Partnership was sold during the fiscal year ended March 31, 2007.  See Note 10 in Item 8, Financial Statements and Supplementary Data.

(b)This Property is included in discontinued operations for the year ended March 31, 2007.  See Note 14 in Item 8, Financial Statements and Supplementary Data.

(c)The Partnership’s Local Partnership interest in this Local Partnership was sold during the fiscal year ended March 31, 2008.  See Note 10 in Item 8, Financial Statements and Supplementary Data.

(d)The Property and the related assets and liabilities were sold during the fiscal year ended March 31, 2008.  See Note 10 in Item 8, Financial Statements and Supplementary Data.

(e)The deed to the Property and related assets and liabilities were transferred during the fiscal year ended March 31, 2008.  See Note 10 in Item 8, Financial Statements and Supplementary Data.

(f)The Partnership’s Local Partnership interest in this Local Partnership was sold during the fiscal year ended March 31, 2009.  See Note 10 in Item 8, Financial Statements and Supplementary Data.

(g)The Property and the related assets and liabilities were sold during the fiscal year ended March 31, 2009.  See Note 10 in Item 8, Financial Statements and Supplementary Data.

(h)This Property is included in discontinued operations for the year ended March 31, 2009.  See Note 11 in Item 8, Financial Statements and Supplementary Data.

(i)The Partnership’s Local Partnership interest in this Local Partnership was sold during the fiscal year ended March 31, 2010.  See Note 10 in Item 8, Financial Statements and Supplementary Data.

(j)The Property and the related assets and liabilities were sold during the fiscal year ended March 31, 2010.  See Note 10 in Item 8, Financial Statements and Supplementary Data.

(k)This Property is included in discontinued operations for the fiscal year ended March 31, 2010.  See Note 11 in Item 8, Financial Statements and Supplementary Data.
 
  - 74 -


INDEPENDENCE TAX CREDIT PLUS L.P.
 AND SUBSIDIARIES
 SCHEDULE III
 REAL ESTATE AND ACCUMULATED DEPRECIATION
 Partnership Property Pledged as Collateral
 MARCH 31, 2010
 (continued)


Cost of Property and Equipment

Accumulated DepreciationYears Ended March 31,2010

2009

2010

2009Balance at beginning of period

$
45,008,303

$
140,177,103

$
22,315,148

$
61,526,197Additions during period:Improvements


823,743


1,414,288Depreciation expense








1,393,715


1,615,050Deductions during period:Discontinued operations, dispositions, and impairments


(6,616,874
)

(96,583,088
)

(141,634
)

(40,826,099
)Balance at close of period

$
39,215,172

$
45,008,303

$
23,567,229

$
22,315,148





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.









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