SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-KSB
(Mark One)
[X]   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
         1934

                   For the fiscal year ended December 31, 2002

[ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
         OF 1934

                   For the transition period from _________to _________

                         Commission file number 0-13192

                       ANGELES INCOME PROPERTIES, LTD. III
                 (Name of small business issuer in its charter)

         California                                            95-3903984
(State or other jurisdiction of                             (I.R.S. Employer
 incorporation or organization)                            Identification No.)

                          55 Beattie Place, PO Box 1089
                        Greenville, South Carolina 29602
                    (Address of principal executive offices)

                    Issuer's telephone number (864) 239-1000

              Securities registered under Section 12(b) of the Exchange Act:

                                      None

              Securities registered under Section 12(g) of the Exchange Act:

                            Limited Partnership Units
                                (Title of class)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. Yes X No___

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the best of the  registrant's  knowledge  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year.  $828,000

State the aggregate  market value of the voting  partnership  interests  held by
non-affiliates  computed  by  reference  to the price at which  the  partnership
interests  were sold,  or the average bid and asked  prices of such  partnership
interests as of December 31, 2002. No market exists for the limited  partnership
interests of the Registrant,  and,  therefore,  no aggregate market value can be
determined.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      None

The matters discussed in this report contain certain forward-looking statements,
including, without limitation, statements regarding future financial performance
and the effect of government  regulations.  The discussions of the  Registrant's
business  and  results  of  operations,   including  forward-looking  statements
pertaining to such matters,  do not take into account the effects of any changes
to the  Registrant's  business  and results of  operations.  Actual  results may
differ  materially  from those described in the  forward-looking  statements and
will  be  affected  by  a  variety  of  risks  and  factors  including,  without
limitation:  national and local economic  conditions;  the terms of governmental
regulations that affect the Registrant and interpretations of those regulations;
the competitive  environment in which the Registrant operates;  financing risks,
including the risk that cash flows from  operations may be  insufficient to meet
required  payments of  principal  and  interest;  real estate  risks,  including
variations  of real  estate  values and the  general  economic  climate in local
markets and competition for tenants in such markets; and possible  environmental
liabilities.   Readers  should  carefully  review  the  Registrant's   financial
statements and the notes thereto,  as well as the risk factors  described in the
documents  the  Registrant  files  from  time to time  with the  Securities  and
Exchange Commission.

                                     PART I

Item 1.     Description of Business

Angeles Income  Properties,  Ltd. III (the  "Partnership"  or "Registrant") is a
publicly held limited partnership organized under the California Uniform Limited
Partnership  Act pursuant to a  partnership  agreement  dated May 26,  1983,  as
amended (hereinafter referred to as "the Agreement"). The Partnership's managing
general  partner is Angeles  Realty  Corporation  II, ("ARC II" or the "Managing
General  Partner") an affiliate of Apartment  Investment and Management  Company
("AIMCO") and previously a wholly-owned  subsidiary of MAE GP Corporation  ("MAE
GP").  Effective  February 25, 1998, MAE GP was merged into Insignia  Properties
Trust  ("IPT"),  which  was an  affiliate  of  Insignia  Financial  Group,  Inc.
("Insignia").  Effective February 26, 1999, IPT was merged into AIMCO. Thus, the
Managing General Partner is now a wholly-owned  subsidiary of AIMCO. The Elliott
Accommodation Trust and the Elliott Family Partnership, Ltd., California limited
partnerships,  were non-managing  general partners.  Effective December 31, 1997
the Elliott Family Partnership,  Ltd. acquired the Elliott Accommodation Trust's
general partner interest in the Registrant. On June 30, 2000, the Elliott Family
Partnership  sold  its  remaining   interest  to  AIMCO   Properties,   LP  (the
"Non-Managing  General  Partner"),  a wholly  owned  subsidiary  of  AIMCO.  The
Managing  General  Partner  and the  Non-Managing  General  Partner  are  herein
collectively  referred to as the "General Partners".  The Partnership  Agreement
provides  that the  Partnership  is to  terminate  on  December  31, 2038 unless
terminated prior to such date.

The  Registrant  is engaged in the business of operating and holding real estate
properties for investment.  In 1984 and 1985, during its acquisition  phase, the
Registrant  acquired  one  existing  apartment  complex,  a mobile home park,  a
shopping center and invested in three joint ventures  which, in turn,  owned two
shopping  centers  and  one  industrial/distribution   complex.  The  Registrant
continues to own and operate the apartment  complex (see "Item 2. Description of
Property").

Commencing March 7, 1984, the Registrant  offered up to 160,000 units of Limited
Partnership Interest (the "Units"),  at a purchase price of $500 per Unit with a
minimum  purchase of 10 Units  ($5,000),  or 4 Units  ($2,000) for an Individual
Retirement  Account  pursuant  to  a  Registration   Statement  filed  with  the
Securities and Exchange Commission.

The offering  terminated  March 6, 1985. Upon  termination of the offering,  the
Registrant  sold 86,920  units  aggregating  $43,460,000.  The General  Partners
contributed  capital  in  the  amount  of  $1,000  for  a  1%  interest  in  the
Partnership.  Since its initial offering,  the Registrant has not received,  nor
are limited partners required to make, additional capital contributions.

The  Partnership  has  no  employees.  Property  management  and  administrative
services are provided by the Managing  General Partner and by agents retained by
the Managing General Partner.

Risk Factors

The  real  estate  business  in which  the  Partnership  is  engaged  is  highly
competitive.  There are other  residential  properties within the market area of
the Partnership's  property.  The number and quality of competitive  properties,
including  those which may be managed by an affiliate  of the  Managing  General
Partner,  in such market area could have a material  effect on the rental market
for apartments  owned by the  Partnership  and the rents that may be charged for
such  apartments.  While the Managing  General  Partner and its  affiliates  own
and/or  control a significant  number of apartment  units in the United  States,
such units represent an insignificant percentage of total apartment units in the
United States and competition for the apartments is local.

Laws benefiting  disabled persons may result in the Partnership's  incurrence of
unanticipated  expenses.  Under the Americans with  Disabilities Act of 1990, or
ADA,  all places  intended to be used by the public are required to meet certain
Federal  requirements  related to access and use by disabled persons.  Likewise,
the Fair Housing Amendments Act of 1988, or FHAA, requires apartment  properties
first occupied after March 13, 1990 to be accessible to the  handicapped.  These
and other  Federal,  state  and  local  laws may  require  modifications  to the
Partnership's  property, or restrict renovations of the property.  Noncompliance
with these laws could result in the  imposition  of fines or an award of damages
to  private  litigants  and  also  could  result  in an  order  to  correct  any
non-complying  feature,  which could result in substantial capital expenditures.
Although the Managing General Partner believes that the  Partnership's  property
is  substantially in compliance with present  requirements,  the Partnership may
incur unanticipated expenses to comply with the ADA and the FHAA.

Both the income and expenses of operating the property owned by the  Partnership
are subject to factors outside of the Partnership's  control, such as changes in
the supply and demand for  similar  properties  resulting  from  various  market
conditions, increases/decreases in unemployment or population shifts, changes in
the  availability of permanent  mortgage  financing,  changes in zoning laws, or
changes in patterns or needs of users. In addition,  there are risks inherent in
owning  and  operating  residential   properties  because  such  properties  are
susceptible  to the  impact of  economic  and other  conditions  outside  of the
control of the Partnership.

There have been, and it is possible there may be other, Federal, state and local
legislation  and  regulations   enacted   relating  to  the  protection  of  the
environment.  The Partnership is unable to predict the extent,  if any, to which
such new  legislation  or  regulations  might occur and the degree to which such
existing or new legislation or regulations  might adversely  affect the property
owned by the Partnership.

The  Partnership  monitors its property for evidence of  pollutants,  toxins and
other dangerous substances, including the presence of asbestos. In certain cases
environmental  testing has been performed which resulted in no material  adverse
conditions or liabilities.  In no case has the Partnership  received notice that
it is a potentially  responsible party with respect to an environmental clean up
site.

Insurance  coverage is becoming  more  expensive  and  difficult to obtain.  The
current  insurance market is  characterized by rising premium rates,  increasing
deductibles,  and more restrictive  coverage language.  Recent developments have
resulted in  significant  increases in insurance  premiums and have made it more
difficult to obtain  certain types of insurance.  As an example,  many insurance
carriers are excluding  mold-related  risks from their policy coverages,  or are
adding  significant  restrictions to such coverage.  Continued  deterioration in
insurance   market  place   conditions  may  have  a  negative   effect  on  the
Partnership's operating results.

A further description of the Partnership's business is included in "Management's
Discussion and Analysis or Plan of Operations" included in "Item 6" of this Form
10-KSB.

Item 2.     Description of Property

The following table sets forth the Partnership's investment in its property:

<TABLE>
<CAPTION>

                              Date of
Property                      Purchase      Type of Ownership             Use

<S>                           <C>   <C>
Lake Forest Apartments        06/27/84        Fee ownership      Residential Rental
  Brandon, Mississippi                                           136 units
</TABLE>

Schedule of Property

Set forth  below for the  Registrant's  property  is the gross  carrying  value,
accumulated  depreciation,  depreciable life, method of depreciation and Federal
tax basis.

<TABLE>
<CAPTION>

                    Gross
                   Carrying    Accumulated   Depreciable                 Federal
Property            Value      Depreciation      Life       Method      Tax Basis
                       (in thousands)                                (in thousands)

Lake Forest
<S>                <C>           <C>           <C>                      <C>
   Apartments      $ 5,095       $ 3,846       3-40 yrs      S/L        $ 1,541
</TABLE>

See  "Note  A" of the  financial  statements  included  in  "Item 7 -  Financial
Statements"  for  a  description  of  the   Partnership's   capitalization   and
depreciation policies.

Schedule of Rental Rate and Occupancy

Average annual rental rate and occupancy for 2002 and 2001 for the property:

                                  Average Annual                Average Annual
                              Rental Rate Occupancy
                                   (per unit)
 Property                       2002            2001          2002         2001

 Lake Forest Apartments        $6,662          $6,887         85%           91%

The  Managing  General  Partner  attributes  the  decrease in  occupancy  to the
unfavorable economic conditions in the local market area.

As noted under "Item 1.  Description of Business",  the real estate  industry is
highly  competitive.  The Partnership's  property is subject to competition from
other residential  apartment complexes in the area. The Managing General Partner
believes that the property is adequately  insured.  The apartment complex leases
its units for lease terms of one year or less. No residential  tenant leases 10%
or more  of the  available  rental  space.  The  property  is in  good  physical
condition,  subject to normal  depreciation and  deterioration as is typical for
assets of this type and age.

Schedule of Real Estate Tax and Rate

Real estate taxes and rate in 2002 for the property were:

                                    2002             2002
                                  Billing            Rate
                               (in thousands)

Lake Forest Apartments              $65             11.14%

Capital Improvements

The Partnership completed  approximately $71,000 in capital expenditures at Lake
Forest Apartments during the year ended December 31, 2002,  consisting primarily
of floor covering  replacements,  air conditioning  upgrades, and other building
improvements.  These  improvements  were  funded  from  operating  cash flow and
insurance  proceeds.   The  Partnership  is  currently  evaluating  the  capital
improvement  needs of the property  for the upcoming  year and expects to budget
approximately $88,000. Additional improvements may be considered and will depend
on the physical  condition of the property as well as cash flow generated by the
property.

Item 3.     Legal Proceedings

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the  Partnership,  its Managing  General Partner and
several of their  affiliated  partnerships  and corporate  entities.  The action
purports  to  assert  claims  on  behalf  of a class  of  limited  partners  and
derivatively  on behalf  of a number  of  limited  partnerships  (including  the
Partnership)  which are named as nominal  defendants,  challenging,  among other
things,  the  acquisition  of  interests  in certain  Managing  General  Partner
entities by Insignia Financial Group, Inc. ("Insignia") and entities which were,
at one  time,  affiliates  of  Insignia;  past  tender  offers  by the  Insignia
affiliates to acquire limited partnership units;  management of the partnerships
by the  Insignia  affiliates;  and the series of  transactions  which  closed on
October 1, 1998 and February 26, 1999 whereby  Insignia and Insignia  Properties
Trust,  respectively,  were merged  into AIMCO.  The  plaintiffs  seek  monetary
damages and equitable relief, including judicial dissolution of the Partnership.
On June 25, 1998, the Managing General Partner filed a motion seeking  dismissal
of the action.  In lieu of responding  to the motion,  the  plaintiffs  filed an
amended  complaint.  The Managing General Partner filed demurrers to the amended
complaint which were heard February 1999.

Pending the ruling on such  demurrers,  settlement  negotiations  commenced.  On
November 2, 1999,  the parties  executed and filed a Stipulation  of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the  settlement  was obtained on November 3, 1999 from the Court,  at which time
the Court set a final  approval  hearing for  December  10,  1999.  Prior to the
December  10,  1999  hearing,  the  Court  received  various  objections  to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement.  On
December 14, 1999, the Managing  General  Partner and its affiliates  terminated
the  proposed  settlement.  In  February  2000,  counsel  for some of the  named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated  the  settlement.  On June  27,  2000,  the  Court  entered  an order
disqualifying  them  from the case and an  appeal  was  taken  from the order on
October 5, 2000. On December 4, 2000, the Court  appointed the law firm of Lieff
Cabraser  Heimann & Bernstein  LLP as new lead  counsel for  plaintiffs  and the
putative class.  Plaintiffs filed a third amended complaint on January 19, 2001.
On March 2, 2001,  the  Managing  General  Partner  and its  affiliates  filed a
demurrer to the third amended  complaint.  On May 14, 2001,  the Court heard the
demurrer to the third amended  complaint.  On July 10, 2001, the Court issued an
order  sustaining  defendants'  demurrer on certain  grounds.  On July 20, 2001,
Plaintiffs filed a motion for reconsideration of the Court's July 10, 2001 order
granting in part and denying in part defendants' demurrer. On September 7, 2001,
Plaintiffs  filed a fourth amended class and  derivative  action  complaint.  On
September 12, 2001, the Court denied Plaintiffs' motion for reconsideration.  On
October 5, 2001, the Managing General Partner and affiliated  defendants filed a
demurrer to the fourth amended complaint,  which was heard on December 11, 2001.
On February 2, 2002,  the Court served its order  granting in part the demurrer.
The  Court has  dismissed  without  leave to amend  certain  of the  plaintiffs'
claims.  On February 11, 2002,  plaintiffs  filed a motion  seeking to certify a
putative  class  comprised of all  non-affiliated  persons who own or have owned
units  in  the  partnerships.   The  Managing  General  Partner  and  affiliated
defendants  oppose the motion.  On April 29,  2002,  the Court held a hearing on
plaintiffs' motion for class  certification and took the matter under submission
after further  briefing,  as ordered by the court, was submitted by the parties.
On July 10, 2002,  the Court entered an order vacating the current trial date of
January 13, 2003 (as well as the  pre-trial  and  discovery  cut-off  dates) and
stayed the case in its  entirety  through  November  7, 2002 so that the parties
could have an opportunity to discuss settlement.  On October 30, 2002, the court
entered an order extending the stay in effect through January 10, 2003.

On January 8, 2003,  the parties filed a  Stipulation  of Settlement in proposed
settlement of the Nuanes action and the Heller action described below. The Court
has  scheduled  the hearing on  preliminary  approval  for April 4, 2003 and the
hearing on final approval for June 2, 2003.

In general  terms,  the  proposed  settlement  provides  for  certification  for
settlement  purposes of a settlement class consisting of all limited partners in
this  Partnership and others (the  "Partnerships")  as of December 20, 2002, the
dismissal  with  prejudice  and  release  of claims  in the  Nuanes  and  Heller
litigation,  payment by AIMCO of $9.9  million  (which shall be  distributed  to
settlement  class  members  after  deduction of attorney fees and costs of class
counsel and certain costs of  settlement)  and up to $ 1 million toward the cost
of independent  appraisals of the Partnerships'  properties by a Court appointed
appraiser.  An affiliate of the Managing General Partner has also agreed to make
a tender offer to purchase all of the partnership  interests in the Partnerships
within one year of final  approval,  if it is granted,  and to provide  partners
with the  independent  appraisals  at the time of these  tenders.  The  proposed
settlement  also provides for the  limitation  of the allowable  costs which the
Managing  General  Partner or its  affiliates  will charge the  Partnerships  in
connection with this litigation and imposes limits on the class counsel fees and
costs in this  litigation.  If the  Court  grants  preliminary  approval  of the
proposed settlement in March, a notice will be distributed to partners providing
detail on the terms of the proposed settlement.

During the third  quarter of 2001, a complaint  (the "Heller  action") was filed
against  the same  defendants  that are named in the  Nuanes  action,  captioned
Heller v. Insignia Financial Group. On or about August 6, 2001, plaintiffs filed
a first amended  complaint.  The first amended complaint in the Heller action is
brought as a purported  derivative  action,  and asserts  claims for among other
things  breach  of  fiduciary  duty;  unfair  competition;   conversion,  unjust
enrichment;  and judicial  dissolution.  Plaintiffs in the Nuanes action filed a
motion to  consolidate  the Heller action with the Nuanes action and stated that
the Heller action was filed in order to preserve the derivative claims that were
dismissed  without  leave to amend in the Nuanes action by the Court order dated
July 10, 2001. On October 5, 2001, the Managing  General  Partner and affiliated
defendants  moved to strike the first  amended  complaint  in its  entirety  for
violating  the Court's July 10, 2001 order  granting in part and denying in part
defendants'  demurrer in the Nuanes action, or alternatively,  to strike certain
portions of the complaint based on the statute of limitations.  Other defendants
in the action  demurred to the fourth  amended  complaint,  and,  alternatively,
moved to strike the complaint. On December 11, 2001, the court heard argument on
the motions  and took the matters  under  submission.  On February 4, 2002,  the
Court  served  notice of its order  granting  defendants'  motion to strike  the
Heller complaint as a violation of its July 10, 2001 order in the Nuanes action.
On March 27, 2002,  the plaintiffs  filed a notice  appealing the order striking
the  complaint.  Before  completing  briefing on the appeal,  the parties stayed
further proceedings in the appeal pending the Court's review of the terms of the
proposed settlement described above.

The  Managing  General  Partner  does  not  anticipate  that  any  costs  to the
Partnership, whether legal or settlement costs, associated with these cases will
be material to the Partnership's overall operations.

The  Partnership is unaware of any other pending or outstanding  litigation that
is not of a routine nature arising in the ordinary course of business.

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

During the quarter ended December 31, 2002, no matter was submitted to a vote of
security  holders  of the  Registrant  through  the  solicitation  of proxies or
otherwise.

                                     PART II

Item 5. Market for the  Partnership's  Common Equity and Related Security Holder
Matters

The Partnership,  a publicly-held  limited partnership,  offered and sold 86,920
Limited Partnership Units (the "Units") during its offering period through March
6, 1985, and currently has 86,738 Units  outstanding and 1,836 Limited  Partners
of record.  Affiliates  of the Managing  General  Partner  owned 45,112 Units or
52.01% of the  outstanding  Units at December 31, 2002. No public trading market
has developed for the Units,  and it is not anticipated  that such a market will
develop in the future.

The following  table sets forth the  distributions  from  operations made by the
Partnership for the years ended December 31, 2002 and 2001.

                                                    Distribution
                                                                   Per Limited
                                       Aggregate                Partnership Unit
                                   (in thousands)
     01/01/01 - 12/31/01                 $ 339                       $ 3.87
     01/01/02 - 12/31/02                 $ 310                       $ 3.54

Future cash  distributions  will depend on the levels of net cash generated from
operations,  the  availability of cash reserves,  the timing of financing and/or
sale of the property.  The  Partnership's  cash  available for  distribution  is
reviewed on a monthly basis. There can be no assurance that the Partnership will
generate sufficient funds from operations,  after required capital expenditures,
to permit  any  distributions  to its  partners  in the year 2003 or  subsequent
periods.  See "Item 2.  Description  of  Property  - Capital  Improvements"  for
information  relating to anticipated  capital  expenditures at the Partnership's
property.

In addition to its indirect  ownership of the general  partner  interests in the
Partnership,  AIMCO and its affiliates owned 45,112 limited partnership units in
the Partnership  representing  52.01% of the  outstanding  Units at December 31,
2002. A number of these Units were  acquired  pursuant to tender  offers made by
AIMCO or its  affiliates.  It is  possible  that  AIMCO or its  affiliates  will
acquire additional units of limited  partnership  interest in the Partnership in
exchange  for  cash  or a  combination  of  cash  and  units  in  the  operating
partnership of AIMCO either through  private  purchases or tender offers.  Under
the  Partnership  Agreement,  unitholders  holding a  majority  of the Units are
entitled to take action with respect to a variety of matters which would include
voting on certain  amendments to the Partnership  Agreement and voting to remove
the  Managing  General  Partner.  As a result of its  ownership of 52.01% of the
outstanding  Units,  AIMCO is in a position to control all voting decisions with
respect to the Registrant.  Although the Managing General Partner owes fiduciary
duties to the limited partners of the Partnership,  the Managing General Partner
also owes fiduciary duties to AIMCO as its sole  stockholder.  As a result,  the
duties of the Managing  General Partner,  as managing  general  partner,  to the
Partnership  and its limited  partners may come into conflict with the duties of
the Managing General Partner to AIMCO, as its sole stockholder.

Item 6.     Management's Discussion and Analysis or Plan of Operation

This item should be read in conjunction with the financial  statements and other
items contained elsewhere in this report.

Results of Operations

The  Partnership's  net income for both the years  ended  December  31, 2002 and
2001, totaled approximately  $73,000. Net income was constant as the decrease in
total revenues was offset by a corresponding  decrease in total expenses.  Total
revenues  decreased for the year ended  December 31, 2002 due to reduced  rental
revenue partially offset by a casualty gain in 2002.  Rental revenues  decreased
due to a decrease in occupancy  and average  rental  rates at the  Partnership's
property.

During the year ended  December 31, 2002, a net casualty  gain of  approximately
$30,000 was recorded at Lake Forest Apartments.  The casualty gain is related to
wind damage  incurred in January 2002. The gain was the result of the receipt of
insurance  proceeds  of  approximately  $30,000,  net of the  write off of fixed
assets which were fully depreciated.

The decrease in total  expenses for the year ended  December 31, 2002 was due to
decreases  in  operating  expenses,  general  and  administrative  expenses  and
depreciation  expenses  partially offset by an increase in property tax expense.
Operating expenses decreased due to decreases in management fees and maintenance
expenses at Lake Forest  Apartments.  Management  fees, which are based on 5% of
gross receipts,  decreased due to a decrease in rental revenues, and maintenance
expenses decreased due to a decrease in payroll and related benefit expenses and
an increase in the  capitalization of certain direct and indirect project costs,
primarily  payroll  related  costs,  at the  property  (see  "Item 7.  Financial
Statements,  Note  A  -  Organization  and  Significant  Accounting  Policies").
Depreciation  expense  decreased  due to certain  fixed  assets  becoming  fully
depreciated at the property in 2002 and 2001. Property tax expense increased due
to an increase in the assessed property value.

General and administrative expenses decreased during the year ended December 31,
2002 due to a  decrease  in the costs of  services  included  in the  management
reimbursements  to the Managing General Partner as allowed under the Partnership
Agreement,  reduced  professional  fees and lower  fees  earned by the  Managing
General  Partner on cash flows from  operations.  Also  included  in general and
administrative  expenses  are costs  associated  with the  quarterly  and annual
communications  with  investors  and  regulatory  agencies  and the annual audit
required by the Partnership Agreement.

As part of the ongoing  business plan of the  Partnership,  the Managing General
Partner  monitors the rental market  environment of its  investment  property to
assess the feasibility of increasing rents,  maintaining or increasing occupancy
levels and protecting  the  Partnership  from increases in expenses.  As part of
this plan, the Managing General Partner attempts to protect the Partnership from
the burden of  inflation-related  increases in expenses by increasing  rents and
maintaining a high overall  occupancy  level.  However,  due to changing  market
conditions,  which  can  result  in the use of  rental  concessions  and  rental
reductions to offset softening market conditions, there is no guarantee that the
Managing General Partner will be able to sustain such a plan.

Capital Resources and Liquidity

At  December  31,  2002,  the  Registrant  held  cash  and cash  equivalents  of
approximately $58,000,  compared to approximately $135,000 at December 31, 2001,
a decrease  of  approximately  $77,000.  The  decrease  is due to  approximately
$310,000  and  $41,000  of cash  used in  financing  and  investing  activities,
respectively,  partially  offset by  approximately  $274,000 of cash provided by
operating   activities.   Cash  used  in  financing   activities   consisted  of
distributions to the partners.  Cash used in investing  activities  consisted of
property  improvements  and  replacements  offset  by  insurance  proceeds.  The
Registrant invests its working capital reserves in interest bearing accounts.

The sufficiency of existing  liquid assets to meet future  liquidity and capital
expenditure   requirements   is  directly   related  to  the  level  of  capital
expenditures  required at the Partnership's  property to adequately maintain the
physical  assets and other operating needs of the Partnership and to comply with
Federal,  state,  and local  legal and  regulatory  requirements.  The  Managing
General  Partner  monitors  developments  in the  area of legal  and  regulatory
compliance and is studying new federal laws, including the Sarbanes-Oxley Act of
2002. The Sarbanes-Oxley Act of 2002 mandates or suggests additional  compliance
measures with regard to governance,  disclosure, audit and other areas. In light
of these changes,  the  Partnership  expects that it will incur higher  expenses
related to compliance, including increased legal and audit fees. The Partnership
is currently  evaluating the capital  improvement  needs of the property for the
upcoming year and currently expects to budget approximately $88,000.  Additional
improvements may be considered and will depend on the physical  condition of the
property  as well as  anticipated  cash  flow  generated  by the  property.  The
additional capital  expenditures will be incurred only if cash is available from
operations and Partnership  reserves.  To the extent that such budgeted  capital
improvements are completed the Registrant's distributable cash flow, if any, may
be adversely affected at least in the short term.

The  Registrant's  assets are thought to be sufficient  for any near-term  needs
(exclusive of capital improvements) of the Registrant.

The  Partnership  distributed  the  following  amounts  during  the years  ended
December 30, 2002 and 2001 (in thousands, except per unit data):

<TABLE>
<CAPTION>

                                          Per                               Per
                      Year Ended        Limited         Year Ended        Limited
                     December 31,     Partnership      December 31,     Partnership
                         2002             Unit             2001             Unit

<S>                     <C>              <C>              <C>              <C>
Operations              $ 310            $ 3.54           $ 339            $ 3.87
</TABLE>

Future cash  distributions  will depend on the levels of net cash generated from
operations,  the availability of cash reserves,  mortgage financing,  and/or the
sale of the property.  The  Partnership's  distribution  policy is reviewed on a
monthly  basis.  There can be no assurance  that the  Partnership  will generate
sufficient funds from operations, after required capital expenditures, to permit
any distributions to its partners in the year 2003 or subsequent periods.

Other

In addition to its indirect  ownership of the general  partner  interests in the
Partnership,  AIMCO and its affiliates  owned 45,112 limited  partnership  units
(the "Units") in the Partnership representing 52.01% of the outstanding Units at
December  31,  2002.  A number of these Units were  acquired  pursuant to tender
offers  made by  AIMCO  or its  affiliates.  It is  possible  that  AIMCO or its
affiliates will acquire additional units of limited partnership  interest in the
Partnership  in  exchange  for cash or a  combination  of cash and  units in the
operating  partnership  of AIMCO  either  through  private  purchases  or tender
offers. Under the Partnership  Agreement,  unitholders holding a majority of the
Units are  entitled to take action  with  respect to a variety of matters  which
would  include  voting on certain  amendments to the  Partnership  Agreement and
voting to remove the Managing General  Partner.  As a result of its ownership of
52.01% of the  outstanding  Units,  AIMCO is in a position to control all voting
decisions with respect to the Registrant.  Although the Managing General Partner
owes fiduciary duties to the limited  partners of the Partnership,  the Managing
General Partner also owes fiduciary duties to AIMCO as its sole stockholder.  As
a result,  the duties of the  Managing  General  Partner,  as  managing  general
partner, to the Partnership and its limited partners may come into conflict with
the duties of the Managing General Partner to AIMCO, as its sole stockholder.

Critical Accounting Policies and Estimates

A summary of the Partnership's  significant  accounting  policies is included in
"Note A - Organization and Significant Accounting Policies" which is included in
the financial statements in "Item 7. Financial Statements". The Managing General
Partner  believes that the consistent  application of these policies enables the
Partnership  to provide  readers of the  financial  statements  with  useful and
reliable  information  about the  Partnership's  operating results and financial
condition. The preparation of financial statements in conformity with accounting
principles  generally  accepted in the United States requires the Partnership to
make  estimates and  assumptions.  These  estimates and  assumptions  affect the
reported  amounts  of  assets  and  liabilities  at the  date  of the  financial
statements  as well as reported  amounts of  revenues  and  expenses  during the
reporting  period.  Actual results could differ from these estimates.  Judgments
and  assessments  of  uncertainties  are required in applying the  Partnership's
accounting  policies in many areas. The following may involve a higher degree of
judgment and complexity.

Impairment of Long-Lived Assets

The  investment  property is recorded at cost,  less  accumulated  depreciation,
unless  considered  impaired.  If  events  or  circumstances  indicate  that the
carrying amount of the property may be impaired,  the  Partnership  will make an
assessment of its  recoverability  by estimating  the  undiscounted  future cash
flows,  excluding  interest  charges,  of the property.  If the carrying  amount
exceeds the aggregate  future cash flows,  the  Partnership  would  recognize an
impairment  loss to the extent the carrying amount exceeds the fair value of the
property.

Real  property  investments  are  subject  to varying  degrees of risk.  Several
factors  may  adversely  affect  the  economic  performance  and  value  of  the
Partnership's   investment  property.  These  factors  include  changes  in  the
national,  regional and local economic  climate;  local  conditions,  such as an
oversupply  of  multifamily   properties;   competition   from  other  available
multifamily  property  owners and changes in market  rental  rates.  Any adverse
changes in these factors could cause an impairment in the Partnership's assets.

Revenue Recognition

The Partnership generally leases apartment units for twelve-month terms or less.
Rental income  attributable to leases is recognized  monthly as it is earned and
the Partnership  fully reserves all balances  outstanding  over thirty days. The
Partnership will offer rental concessions during  particularly slow months or in
response  to  heavy  competition  from  other  similar  complexes  in the  area.
Concessions are charged to income as incurred.

Item 7.     Financial Statements

ANGELES INCOME PROPERTIES, LTD. III

LIST OF FINANCIAL STATEMENTS


      Report of Ernst & Young LLP, Independent Auditors

      Balance Sheet - December 31, 2002

      Statements of Operations - Years ended December 31, 2002 and 2001

      Statements  of  Changes  in  Partners'  (Deficit)  Capital  - Years  ended
      December 31, 2002 and 2001

      Statements of Cash Flows - Years ended December 31, 2002 and 2001

      Notes to Financial Statements

                    Report of Ernst & Young LLP, Independent Auditors



The Partners
Angeles Income Properties, Ltd. III


We have audited the  accompanying  balance sheet of Angeles  Income  Properties,
Ltd. III as of December  31, 2002,  and the related  statements  of  operations,
changes in partners' (deficit) capital, and cash flows for each of the two years
in the period ended  December  31,  2002.  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 auditing standards generally accepted
in 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 the  Partnership's  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 Angeles Income Properties, Ltd.
III at December 31, 2002,  and the results of its  operations and its cash flows
for each of the two years in the period ended  December 31, 2002,  in conformity
with accounting principles generally accepted in the United States.


                                                            /s/ERNST & YOUNG LLP


Greenville, South Carolina
February 14, 2003

                           ANGELES INCOME PROPERTIES, LTD. III

                                  BALANCE SHEET
                        (in thousands, except unit data)

                                December 31, 2002
<TABLE>
<CAPTION>


Assets
<S>                                                                           <C>
   Cash and cash equivalents                                                  $ 58
   Receivables and deposits                                                       8
   Other assets                                                                   7
   Investment property (Note D):
      Land                                                     $ 657
      Buildings and related personal property                   4,438
                                                                5,095
      Less accumulated depreciation                            (3,846)        1,249
                                                                            $ 1,322

Liabilities and Partners' (Deficit) Capital
Liabilities
   Accounts payable                                                           $ 4
   Tenant security deposit liabilities                                           15
   Accrued property taxes                                                        68
   Due to affiliate (Note C)                                                     11
   Other liabilities                                                             47

Partners' (Deficit) Capital
   General partners                                            $ (19)
   Limited partners (86,738 units issued and
      outstanding)                                              1,196         1,177
                                                                            $ 1,322


                      See Accompanying Notes to Financial Statements
</TABLE>

                           ANGELES INCOME PROPERTIES, LTD. III

                            STATEMENTS OF OPERATIONS
                      (in thousands, except per unit data)


<TABLE>
<CAPTION>

                                                           Years Ended December 31,
                                                              2002         2001
Revenues:
<S>                                                           <C>          <C>
  Rental income                                               $ 753        $ 825
  Other income                                                    45           49
  Casualty gain (Note E)                                          30           --
      Total revenues                                             828          874

Expenses:
  Operating                                                      337          353
  General and administrative                                     115          162
  Depreciation                                                   228          251
  Property taxes                                                  75           35
      Total expenses                                             755          801

Net income (Note B)                                           $ 73         $ 73

Net income allocated to general partners 1%                    $ 1          $ 1

Net income allocated to limited partners 99%                      72           72

                                                              $ 73         $ 73

Net income per limited partnership unit                      $ 0.83       $ 0.83

Distributions per limited partnership unit                   $ 3.54       $ 3.87


                      See Accompanying Notes to Financial Statements
</TABLE>


                           ANGELES INCOME PROPERTIES, LTD. III

                   STATEMENTS OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL
                        (in thousands, except unit data)


<TABLE>
<CAPTION>

                                         Limited
                                       Partnership    General     Limited
                                          Units       Partners   Partners     Total

<S>                                       <C>           <C>       <C>        <C>
Original capital contributions            86,920        $ 1       $43,460    $43,461

Partners' (deficit) capital
   at December 31, 2000                   86,738       $ (15)     $ 1,695    $ 1,680

Net income for the year ended
   December 31, 2001                          --            1          72         73

Distributions to partners                     --           (3)       (336)      (339)

Partners' (deficit) capital at
   December 31, 2001                      86,738          (17)      1,431      1,414

Net income for the year ended
   December 31, 2002                          --            1          72         73

Distributions to partners                     --           (3)       (307)      (310)

Partners' (deficit) capital at
   December 31, 2002                      86,738       $ (19)     $ 1,196    $ 1,177

                      See Accompanying Notes to Financial Statements
</TABLE>

                           ANGELES INCOME PROPERTIES, LTD. III

                            STATEMENTS OF CASH FLOWS
                                 (in thousands)

<TABLE>
<CAPTION>

                                                              Year Ended December 31,
                                                                  2002        2001
Cash flows from operating activities:
<S>                                                               <C>         <C>
  Net income                                                      $ 73        $ 73
  Adjustments to reconcile net income to net cash provided
   by operating activities:
     Depreciation                                                   228          251
     Casualty gain                                                  (30)          --
     Bad debt                                                        --           15
     Change in accounts:
      Receivables and deposits                                       (4)          10
      Other assets                                                    1           --
      Accounts payable                                               (1)         (18)
      Tenant security deposit liabilities                            (3)          (5)
      Accrued property taxes                                         34           (4)
      Due to affiliates                                             (18)          (4)
      Other liabilities                                              (6)           3

          Net cash provided by operating activities                 274          321

Cash flows from investing activities:
  Property improvements and replacements                            (71)         (53)
  Insurance proceeds                                                 30           --

          Net cash used in investing activities                     (41)         (53)

Cash flows used in financing activities:
  Distributions to partners                                        (310)        (339)

Net decrease in cash and cash equivalents                           (77)         (71)

Cash and cash equivalents at beginning of the year                  135          206

Cash and cash equivalents at end of year                          $ 58        $ 135

                      See Accompanying Notes to Financial Statements
</TABLE>


                       ANGELES INCOME PROPERTIES, LTD. III

                          NOTES TO FINANCIAL STATEMENTS

                                December 31, 2002


Note A - Organization and Significant Accounting Policies

Organization:   Angeles  Income  Properties,  Ltd.  III  (the  "Partnership"  or
"Registrant")  is a  California  limited  partnership  organized  in May 1983 to
acquire and operate  residential  and  commercial  real estate  properties.  The
Partnership's  managing  general partner is Angeles Realty  Corporation II ("ARC
II" or the "Managing General Partner"), an affiliate of Apartment Investment and
Management Company ("AIMCO") and previously a wholly-owned  subsidiary of MAE GP
Corporation  ("MAE GP").  Effective  February 25,  1998,  MAE GP was merged into
Insignia Properties Trust ("IPT"),  which was an affiliate of Insignia Financial
Group,  Inc.  ("Insignia").  Effective  February 26,  1999,  IPT was merged into
AIMCO.  Thus the Managing  General  Partner is now a wholly-owned  subsidiary of
AIMCO. The Elliott Accommodation Trust and the Elliott Family Partnership, Ltd.,
California limited partnerships,  were non-managing general partners.  Effective
December 31, 1997, the Elliott  Family  Partnership,  Ltd.  acquired the Elliott
Accommodation  Trust's general partner interest in the Partnership.  On June 30,
2000,  the  Elliott  Family  Partnership  sold its  remaining  interest to AIMCO
Properties,  LP (the "Non-Managing General Partner"),  a wholly owned subsidiary
of AIMCO. The Managing General Partner and the Non-Managing  General Partner are
herein  collectively  referred to as the  "General  Partners".  The  Partnership
Agreement  provides that the  Partnership  is to terminate on December 31, 2038,
unless  terminated  prior to such date. As of December 31, 2002, the Partnership
operates one residential property in Mississippi.

Use of Estimates:  The  preparation of financial  statements in conformity  with
accounting   principles   generally  accepted  in  the  United  States  requires
management to make estimates and assumptions that affect the amounts reported in
the financial  statements and  accompanying  notes.  Actual results could differ
from those estimates.

Allocations of Profits, Gains, Losses, and Distributions: In accordance with the
Partnership  Agreement,   any  gain  from  the  sale  or  other  disposition  of
Partnership  assets will be allocated  first to the Managing  General Partner to
the extent of the amount of any Incentive  Interest (as defined  below) to which
the  Managing  General  Partner  is  entitled.  Any gain  remaining  after  said
allocation  will be  allocated to the general  partners and limited  partners in
proportion to their interests in the  Partnership;  provided that the gain shall
first be allocated to Partners with negative account balances,  in proportion to
such balances,  in an amount equal to the sum of such negative  capital  account
balances.  The  Partnership  will allocate  other profits and losses 0.5% to the
Managing General Partner,  0.5% to the Non-Managing  General Partner, and 99% to
the Limited Partners.

Except as discussed below, the Partnership will allocate distributions 1% to the
General Partners and 99% to the limited partners.

Upon  the  sale  or  other  disposition,  or  refinancing  of any  asset  of the
Partnership, the Distributable Net Proceeds shall be distributed as follows: (i)
First,  to the  Partners  in  proportion  to their  interest  until the  Limited
Partners have  received  proceeds  equal to their  Original  Capital  Investment
applicable  to the  property;  and (ii) Second,  to the Partners  until  Limited
Partners  have  received  distributions  from  all  sources  equal  to  their 6%
Cumulative  Distribution,  (iii) Third, to the Managing General Partner until it
has  received  its  Brokerage  Compensation;  (iv)  Fourth,  to the  Partners in
proportion  to  their  interests  until  the  Limited   Partners  have  received
distributions   from  all  sources  equal  to  their  additional  2%  Cumulative
Distribution;  and (v)  Thereafter,  85% to the Partners in  proportion to their
interests and 15% ("Incentive Interest") to the Managing General Partner.

Depreciation:  Depreciation  is  provided by the  straight-line  method over the
estimated lives of the apartment  property and related  personal  property.  For
Federal income tax purposes,  the  accelerated  cost recovery method is used for
real property over 18 years for additions after March 15, 1984 and before May 9,
1985, and 19 years for additions  after May 8, 1985, and before January 1, 1987.
As a result of the Tax Reform Act of 1986,  for  additions  after  December  31,
1986, the modified  accelerated cost recovery method is used for depreciation of
(1) real property over 27 1/2 years and (2) personal  property  additions over 5
years.

Cash and Cash Equivalents: Cash and cash equivalents include cash on hand and in
banks.  At certain times,  the amount of cash deposited at a bank may exceed the
limit on insured  deposits.  Cash  balances  included  approximately  $53,000 at
December 31, 2002 that are  maintained  by an affiliated  management  company on
behalf of affiliated entities in cash concentration accounts.

Investment  Property:  Investment property consists of one apartment complex and
is stated at cost.  Acquisition  fees are  capitalized as a cost of real estate.
Expenditures  in excess of $250 that  maintain  an  existing  asset  which has a
useful  life of more  than one  year  are  capitalized  as  capital  replacement
expenditures  and  depreciated  over the  estimated  useful  life of the  asset.
Expenditures for ordinary repairs,  maintenance and apartment turnover costs are
expensed as incurred.  In  accordance  with  Statement  of Financial  Accounting
Standards  ("SFAS")  No. 144,  "Accounting  for the  Impairment  and disposal of
Long-Lived  Assets",  the Partnership  records  impairment  losses on long-lived
assets used in operations when events and circumstances indicate that the assets
might be impaired and the  undiscounted  cash flows estimated to be generated by
those assets are less than the carrying amounts of those assets.  No adjustments
for  impairment of value were necessary for the years ended December 31, 2002 or
2001.

During 2001, AIMCO, an affiliate of the Managing General Partner, commissioned a
project to study process improvement ideas to reduce operating costs. The result
of  the  study  led to a  re-engineering  of  business  processes  and  eventual
redeployment of personnel and related capital  spending.  The  implementation of
these plans  during  2002,  accounted  for as a change in  accounting  estimate,
resulted in a refinement of the Partnership's  process for capitalizing  certain
direct and  indirect  project  costs  (principally  payroll  related  costs) and
increased capitalization of such costs by approximately $11,000 in 2002 compared
to 2001.

Tenant Security  Deposits:  The Partnership  requires security deposits from all
apartment  lessees for the  duration of the lease.  The  security  deposits  are
refunded  when the tenant  vacates  the  apartment  provided  the tenant has not
damaged the space and is current on rental payments.

Leases: The Partnership  generally leases apartment units for twelve month terms
or less.  The  Partnership  recognizes  income as earned on its leases and fully
reserves all balances  outstanding  over thirty days. In addition,  the Managing
General Partner's policy is to offer rental concessions during particularly slow
months or in response to heavy  competition from similar  complexes in the area.
Concessions are charged against rental income as incurred.

Fair Value of Financial Instruments: SFAS No. 107, "Disclosures about Fair Value
of  Financial  Instruments",  as amended  by SFAS No.  119,  "Disclosures  about
Derivative  Financial  Instruments  and Fair  Value of  Financial  Instruments",
requires  disclosure  of fair value  information  about  financial  instruments,
whether or not recognized in the balance  sheet,  for which it is practicable to
estimate  fair  value.  Fair value is defined in the SFAS as the amount at which
the  instruments  could be exchanged in a current  transaction  between  willing
parties,  other than in a forced or liquidation  sale. The Partnership  believes
that the carrying amounts of its financial  instruments  approximate  their fair
values due to the short term maturity of these instruments.

Segment Reporting: SFAS No. 131, "Disclosure about Segments of an Enterprise and
Related  Information"  established  standards  for the way that public  business
enterprises  report  information  about operating  segments in annual  financial
statements and requires that those enterprises report selected information about
operating segments in interim financial reports.  It also established  standards
for related disclosures about products and services, geographic areas, and major
customers.  As defined in SFAS No. 131, the  Partnership has only one reportable
segment.

Advertising:  The  Partnership  expenses  the cost of  advertising  as incurred.
Advertising  costs of  approximately  $18,000  and  $23,000  for the year  ended
December 31, 2002 and 2001, respectively, were charged to operating expense.

Recent  Accounting  Pronouncements:  In August 2001,  the  Financial  Accounting
Standards Board issued SFAS No. 144,  "Accounting for the Impairment or Disposal
of Long-Lived  Assets".  SFAS No. 144 provides accounting guidance for financial
accounting  and reporting for the  impairment or disposal of long-lived  assets.
SFAS No.  144  supersedes  SFAS  No.  121,  "Accounting  for the  Impairment  of
Long-Lived  Assets and for Long-Lived Assets to be Disposed Of". SFAS No. 144 is
effective for fiscal years  beginning  after December 15, 2001. The  Partnership
adopted SFAS No. 144  effective  January 1, 2002,  the adoption of which did not
have an effect  on the  financial  position  or  results  of  operations  of the
Partnership.

In April 2002,  the Financial  Accounting  Standards  Board issued SFAS No. 145,
"Recission of FASB Statements No. 4, 44 and 64". SFAS No. 4 "Reporting Gains and
Losses from  Extinguishment  of Debt,"  required  that all gains and losses from
extinguishment  of  debt  be  aggregated  and,  if  material,  classified  as an
extraordinary item. SFAS No. 145 rescinds SFAS No. 4, and accordingly, gains and
losses from extinguishment of debt should only be classified as extraordinary if
they are unusual in nature and occur  infrequently.  SFAS 145 is  effective  for
fiscal years  beginning after May 15, 2002 with early adoption  acceptable.  The
Partnership  adopted SFAS No. 145 effective April 1, 2002, the adoption of which
did not have an effect on the financial position or results of operations of the
Partnership.

Note B - Income Taxes

The Partnership has received a ruling from the Internal  Revenue Service that it
will  be  classified  as  a  partnership   for  Federal   income  tax  purposes.
Accordingly, taxable income or loss of the Partnership is reported in the income
tax returns of its partners.  Accordingly, no provision for income taxes is made
in the financial statements of the Partnership.

The  following is a  reconciliation  of reported net income and Federal  taxable
income (in thousands, except per unit data):

                                          2002          2001
Net income as reported                  $    73       $    73
Add (deduct):
  Depreciation differences                  102            97
  Other                                     (21)          (11)
Federal taxable income                  $   154       $   159
Federal taxable income per
  limited partnership unit              $  1.76       $  1.81

The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net assets (in thousands):

Net assets as reported                              $ 1,177
Land and buildings                                      (70)
Accumulated depreciation                                362
Syndication and distribution costs                    5,807
Other                                                    90
Net assets - Federal tax basis                      $ 7,366

Note C - Transactions with Affiliated Parties

The  Partnership  has no employees  and is  dependent  on the  Managing  General
Partner  and  its  affiliates  for  the  management  and  administration  of all
Partnership  activities.  The  Partnership  Agreement  provides  (i) for certain
payments to affiliates for services and (ii)  reimbursement  of certain expenses
incurred by affiliates on behalf of the Partnership.

Affiliates of the Managing  General  Partner are entitled to receive 5% of gross
receipts from the Partnership's  property as compensation for providing property
management  services.  The  Partnership  paid to such  affiliates  approximately
$40,000  and  $48,000  for  the  years  ended   December   31,  2002  and  2001,
respectively, which is included in operating expenses.

An  affiliate  of  the  Managing  General  Partner  received   reimbursement  of
accountable  administrative  expenses  amounting  to  approximately  $44,000 and
$81,000 for the years ended December 31, 2002 and 2001,  respectively,  which is
included in general and administrative  expense and investment property.  During
the fourth quarter of 2002, the Partnership recorded an adjustment to management
reimbursements to the Managing General Partner of approximately $10,000 due to a
change in  estimated  costs.  The first three  quarters  were based on estimated
amounts and in the fourth  quarter the  reimbursements  were  adjusted  based on
actual costs. As a result of the adjustment,  the Managing  General Partner owes
the Partnership  approximately $10,000 which is included in the due to affiliate
balance on the  accompanying  balance sheet.  Included in the amount at December
31, 2001 are fees related to  construction  management  services  provided by an
affiliate of the Managing General Partner of approximately  $15,000.  There were
no such  fees  during  the  year  ended  December  31,  2002.  The  construction
management service fees are calculated based on a percentage of additions to the
investment property.

The Partnership Agreement provides for a fee equal to 10% of "net cash flow from
operations",  as defined in the Partnership Agreement to be paid to the Managing
General Partner for executive and administrative  management services.  This fee
is calculated and accrued quarterly.  A fee of approximately  $27,000 was earned
for the twelve months ended  December 31, 2001 and was paid during 2002.  During
the twelve months ended December 31, 2002, the Managing General Partner earned a
fee of  approximately  $21,000  which is  included in due to  affiliates  on the
accompanying balance sheet.

Beginning in 2001,  the  Partnership  began  insuring its property up to certain
limits through coverage provided by AIMCO which is generally  self-insured for a
portion of losses and  liabilities  related  to workers  compensation,  property
casualty and vehicle liability.  The Partnership  insures its property above the
AIMCO  limits  through  insurance  policies  obtained  by  AIMCO  from  insurers
unaffiliated with the Managing General Partner.  During the years ended December
31, 2002 and 2001,  respectively,  the Partnership paid AIMCO and its affiliates
approximately $14,000 and $13,000, respectively, for insurance coverage and fees
associated with policy claims administration.

In addition to its indirect  ownership of the general  partner  interests in the
Partnership,  AIMCO and its affiliates  owned 45,112 limited  partnership  units
(the "Units") in the Partnership representing 52.01% of the outstanding Units at
December  31,  2002.  A number of these Units were  acquired  pursuant to tender
offers  made by  AIMCO  or its  affiliates.  It is  possible  that  AIMCO or its
affiliates will acquire additional units of limited partnership  interest in the
Partnership  in  exchange  for cash or a  combination  of cash and  units in the
operating  partnership  of AIMCO  either  through  private  purchases  or tender
offers. Under the Partnership  Agreement,  unitholders holding a majority of the
Units are  entitled to take action  with  respect to a variety of matters  which
would  include  voting on certain  amendments to the  Partnership  Agreement and
voting to remove the Managing General  Partner.  As a result of its ownership of
52.01% of the  outstanding  Units,  AIMCO is in a position to control all voting
decisions with respect to the Registrant.  Although the Managing General Partner
owes fiduciary duties to the limited  partners of the Partnership,  the Managing
General Partner also owes fiduciary duties to AIMCO as its sole stockholder.  As
a result,  the duties of the  Managing  General  Partner,  as  managing  general
partner, to the Partnership and its limited partners may come into conflict with
the duties of the Managing General Partner to AIMCO, as its sole stockholder.

Note D - Investment Property and Accumulated Depreciation


                                  Initial Cost
                                 To Partnership
                                 (in thousands)

                                                      Buildings         Cost
                                                     and Related    Capitalized
                                                      Personal     Subsequent to
     Description         Encumbrances       Land      Property      Acquisition
                        (in thousands)                            (in thousands)

Lake Forest Apts.            $ --          $ 657       $3,160          $1,278

                      Gross Amount At Which Carried
                           At December 31, 2002
                              (in thousands)

<TABLE>
<CAPTION>

                               Buildings
                              And Related
                                Personal               Accumulated      Date     Depreciable
    Description        Land     Property     Total     Depreciation   Acquired   Life-Years

<S>                   <C>        <C>         <C>          <C>         <C>  <C>       <C>
Lake Forest Apts.     $ 657      $4,438      $5,095       $3,846      6/27/84        40
</TABLE>

The  depreciable  life included above is for the buildings and  components.  The
depreciable lives for related personal property are for 3 to 10 years.

Reconciliation of "investment property and accumulated depreciation":

                                                 Years Ended December 31,
                                                   2002           2001
                                                      (in thousands)
Investment Property
Balance at beginning of year                      $ 5,045        $ 4,992
  Property improvements and replacements               71             53
  Property dispositions                               (21)            --
Balance at end of year                            $ 5,095        $ 5,045

Accumulated Depreciation
Balance at beginning of year                      $ 3,639        $ 3,388
  Additions charged to expense                        228            251
  Property dispositions                               (21)            --
Balance at end of year                            $ 3,846        $ 3,639

The  aggregate  cost of the real  estate  for  Federal  income tax  purposes  at
December  31,  2002  and  2001,  is  approximately  $5,025,000  and  $4,984,000,
respectively. The accumulated depreciation taken for Federal income tax purposes
at December  31, 2002 and 2001,  is  approximately  $3,484,000  and  $3,358,000,
respectively.

Note E - Casualty Gain

During the year ended  December 31, 2002, a net casualty  gain of  approximately
$30,000 was recorded at Lake Forest Apartments.  The casualty gain is related to
wind damage  incurred in January 2002. The gain was the result of the receipt of
insurance  proceeds  of  approximately  $30,000,  net of the  write off of fixed
assets which were fully depreciated.

Note F - Legal Proceedings

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the  Partnership,  its Managing  General Partner and
several of their  affiliated  partnerships  and corporate  entities.  The action
purports  to  assert  claims  on  behalf  of a class  of  limited  partners  and
derivatively  on behalf  of a number  of  limited  partnerships  (including  the
Partnership)  which are named as nominal  defendants,  challenging,  among other
things,  the  acquisition  of  interests  in certain  Managing  General  Partner
entities by Insignia Financial Group, Inc. ("Insignia") and entities which were,
at one  time,  affiliates  of  Insignia;  past  tender  offers  by the  Insignia
affiliates to acquire limited partnership units;  management of the partnerships
by the  Insignia  affiliates;  and the series of  transactions  which  closed on
October 1, 1998 and February 26, 1999 whereby  Insignia and Insignia  Properties
Trust,  respectively,  were merged  into AIMCO.  The  plaintiffs  seek  monetary
damages and equitable relief, including judicial dissolution of the Partnership.
On June 25, 1998, the Managing General Partner filed a motion seeking  dismissal
of the action.  In lieu of responding  to the motion,  the  plaintiffs  filed an
amended  complaint.  The Managing General Partner filed demurrers to the amended
complaint which were heard February 1999.

Pending the ruling on such  demurrers,  settlement  negotiations  commenced.  On
November 2, 1999,  the parties  executed and filed a Stipulation  of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the  settlement  was obtained on November 3, 1999 from the Court,  at which time
the Court set a final  approval  hearing for  December  10,  1999.  Prior to the
December  10,  1999  hearing,  the  Court  received  various  objections  to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement.  On
December 14, 1999, the Managing  General  Partner and its affiliates  terminated
the  proposed  settlement.  In  February  2000,  counsel  for some of the  named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated  the  settlement.  On June  27,  2000,  the  Court  entered  an order
disqualifying  them  from the case and an  appeal  was  taken  from the order on
October 5, 2000. On December 4, 2000, the Court  appointed the law firm of Lieff
Cabraser  Heimann & Bernstein  LLP as new lead  counsel for  plaintiffs  and the
putative class.  Plaintiffs filed a third amended complaint on January 19, 2001.
On March 2, 2001,  the  Managing  General  Partner  and its  affiliates  filed a
demurrer to the third amended  complaint.  On May 14, 2001,  the Court heard the
demurrer to the third amended  complaint.  On July 10, 2001, the Court issued an
order  sustaining  defendants'  demurrer on certain  grounds.  On July 20, 2001,
Plaintiffs filed a motion for reconsideration of the Court's July 10, 2001 order
granting in part and denying in part defendants' demurrer. On September 7, 2001,
Plaintiffs  filed a fourth amended class and  derivative  action  complaint.  On
September 12, 2001, the Court denied Plaintiffs' motion for reconsideration.  On
October 5, 2001, the Managing General Partner and affiliated  defendants filed a
demurrer to the fourth amended complaint,  which was heard on December 11, 2001.
On February 2, 2002,  the Court served its order  granting in part the demurrer.
The  Court has  dismissed  without  leave to amend  certain  of the  plaintiffs'
claims.  On February 11, 2002,  plaintiffs  filed a motion  seeking to certify a
putative  class  comprised of all  non-affiliated  persons who own or have owned
units  in  the  partnerships.   The  Managing  General  Partner  and  affiliated
defendants  oppose the motion.  On April 29,  2002,  the Court held a hearing on
plaintiffs' motion for class  certification and took the matter under submission
after further  briefing,  as ordered by the court, was submitted by the parties.
On July 10, 2002,  the Court entered an order vacating the current trial date of
January 13, 2003 (as well as the  pre-trial  and  discovery  cut-off  dates) and
stayed the case in its  entirety  through  November  7, 2002 so that the parties
could have an opportunity to discuss settlement.  On October 30, 2002, the court
entered an order extending the stay in effect through January 10, 2003.

On January 8, 2003,  the parties filed a  Stipulation  of Settlement in proposed
settlement of the Nuanes action and the Heller action described below. The Court
has  scheduled  the hearing on  preliminary  approval  for April 4, 2003 and the
hearing on final approval for June 2, 2003.

In general  terms,  the  proposed  settlement  provides  for  certification  for
settlement  purposes of a settlement class consisting of all limited partners in
this  Partnership and others (the  "Partnerships")  as of December 20, 2002, the
dismissal  with  prejudice  and  release  of claims  in the  Nuanes  and  Heller
litigation,  payment by AIMCO of $9.9  million  (which shall be  distributed  to
settlement  class  members  after  deduction of attorney fees and costs of class
counsel and certain costs of  settlement)  and up to $ 1 million toward the cost
of independent  appraisals of the Partnerships'  properties by a Court appointed
appraiser.  An affiliate of the Managing General Partner has also agreed to make
a tender offer to purchase all of the partnership  interests in the Partnerships
within one year of final  approval,  if it is granted,  and to provide  partners
with the  independent  appraisals  at the time of these  tenders.  The  proposed
settlement  also provides for the  limitation  of the allowable  costs which the
Managing  General  Partner or its  affiliates  will charge the  Partnerships  in
connection with this litigation and imposes limits on the class counsel fees and
costs in this  litigation.  If the  Court  grants  preliminary  approval  of the
proposed settlement in March, a notice will be distributed to partners providing
detail on the terms of the proposed settlement.

During the third  quarter of 2001, a complaint  (the "Heller  action") was filed
against  the same  defendants  that are named in the  Nuanes  action,  captioned
Heller v. Insignia Financial Group. On or about August 6, 2001, plaintiffs filed
a first amended  complaint.  The first amended complaint in the Heller action is
brought as a purported  derivative  action,  and asserts  claims for among other
things  breach  of  fiduciary  duty;  unfair  competition;   conversion,  unjust
enrichment;  and judicial  dissolution.  Plaintiffs in the Nuanes action filed a
motion to  consolidate  the Heller action with the Nuanes action and stated that
the Heller action was filed in order to preserve the derivative claims that were
dismissed  without  leave to amend in the Nuanes action by the Court order dated
July 10, 2001. On October 5, 2001, the Managing  General  Partner and affiliated
defendants  moved to strike the first  amended  complaint  in its  entirety  for
violating  the Court's July 10, 2001 order  granting in part and denying in part
defendants'  demurrer in the Nuanes action, or alternatively,  to strike certain
portions of the complaint based on the statute of limitations.  Other defendants
in the action  demurred to the fourth  amended  complaint,  and,  alternatively,
moved to strike the complaint. On December 11, 2001, the court heard argument on
the motions  and took the matters  under  submission.  On February 4, 2002,  the
Court  served  notice of its order  granting  defendants'  motion to strike  the
Heller complaint as a violation of its July 10, 2001 order in the Nuanes action.
On March 27, 2002,  the plaintiffs  filed a notice  appealing the order striking
the  complaint.  Before  completing  briefing on the appeal,  the parties stayed
further proceedings in the appeal pending the Court's review of the terms of the
proposed settlement described above.

The  Managing  General  Partner  does  not  anticipate  that  any  costs  to the
Partnership, whether legal or settlement costs, associated with these cases will
be material to the Partnership's overall operations.

The  Partnership is unaware of any other pending or outstanding  litigation that
is not of a routine nature arising in the ordinary course of business.

Item 8. Changes in and Disagreements with Accountant on Accounting and Financial
     Disclosures

            None.

                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
with Section 16(a) of the Exchange Act

Angeles Income  Properties,  Ltd. III (the "Partnership" or "Registrant") has no
officers  or  directors.   The  Managing   General  Partner  is  Angeles  Realty
Corporation  II  ("ARC  II"  or  "Managing  General   Partner"),   which  was  a
wholly-owned subsidiary of MAE GP Corporation ("MAE GP"). Effective February 25,
1998,  MAE GP was merged  into  Insignia  Properties  Trust  ("IPT").  Effective
February 26,  2000,  IPT was merged into  Apartment  Investment  and  Management
Company  ("AIMCO").  Thus,  the Managing  General  Partner is now a wholly-owned
subsidiary of AIMCO.

The names of the director and  executive  officers of ARC II, their ages and the
nature of all positions with ARC II presently held are as follows:

Name                        Age    Position

Patrick J. Foye              45    Executive Vice President and Director
Paul J. McAuliffe            46    Executive Vice President and Chief
                                     Financial Officer
Thomas C. Novosel            44    Senior Vice President and Chief Accounting
                                     Officer

Patrick J. Foye has been  Executive  Vice President and Director of the Managing
General  Partner  since October 1, 1998.  Mr. Foye has served as Executive  Vice
President  of AIMCO  since  May 1998,  where he is  responsible  for  continuous
improvement,  acquisitions of partnership securities,  consolidation of minority
interests,  and corporate and other  acquisitions.  Prior to joining AIMCO,  Mr.
Foye was a Merger and  Acquisitions  Partner in the law firm of  Skadden,  Arps,
Slate, Meagher & Flom LLP from 1989 to 1998.

Paul J. McAuliffe has been Executive Vice President and Chief Financial  Officer
of the Managing General Partner since April 1, 2002. Mr. McAuliffe has served as
Executive  Vice  President  of AIMCO  since  February  1999 and Chief  Financial
Officer of AIMCO since  October 1999.  From May 1996 until he joined AIMCO,  Mr.
McAuliffe was Senior Managing Director of Secured Capital Corp.

Thomas C. Novosel has been Senior Vice President and Chief Accounting Officer of
the Managing  General  Partner  since April 1, 2002.  Mr.  Novosel has served as
Senior Vice  President and Chief  Accounting  Officer of AIMCO since April 2000.
From October 1993 until he joined  AIMCO,  Mr.  Novosel was a partner at Ernst &
Young LLP, where he served as the director of real estate advisory  services for
the  southern  Ohio  Valley  area  offices  but did not work on any  assignments
related to AIMCO or the Partnership.

One or more of the above persons are also directors and/or officers of a general
partner (or general partner of a general partner) of limited  partnerships which
either have a class of  securities  registered  pursuant to Section 12(g) of the
Securities Exchange Act of 1934, or are subject to the reporting requirements of
Section  15(d) of such Act.  Further,  one or more of the above persons are also
directors and/or officers of Apartment Investment and Management Company and the
general  partner  of  AIMCO  Properties,  L.P.,  entities  that  have a class of
securities  registered  pursuant to Section 12(g) of the Securities Exchange Act
of 1934, or are subject to the reporting  requirements of Section 15 (d) of such
Act.

The executive  officers and director of the Managing General Partner fulfill the
obligations  of the Audit  Committee  and  oversee the  Partnership's  financial
reporting process on behalf of the Managing General Partner.  Management has the
primary  responsibility  for the financial  statements and the reporting process
including  the  systems  of  internal  controls.  In  fulfilling  its  oversight
responsibilities,  the executive  officers and director of the Managing  General
Partner reviewed the audited  financial  statements with management  including a
discussion  of the  quality,  not  just  the  acceptability,  of the  accounting
principles,  the  reasonableness  of significant  judgments,  and the clarity of
disclosures in the financial statements.

The executive  officers and director of the Managing  General  Partner  reviewed
with the independent auditors,  who are responsible for expressing an opinion on
the conformity of those audited financial statements with accounting  principles
generally accepted in the United States,  their judgments as to the quality, not
just the  acceptability,  of the  Partnership's  accounting  principles and such
other  matters as are required to be discussed  with the Audit  Committee or its
equivalent under auditing standards  generally accepted in the United States. In
addition,  the  Partnership  has  discussed  with the  independent  auditors the
auditors' independence from management and the Partnership including the matters
in the written  disclosures  required by the  Independence  Standards  Board and
considered  the   compatibility   of  non-audit   services  with  the  auditors'
independence.

The executive  officers and director of the Managing  General Partner  discussed
with the  Partnership's  independent  auditors  the overall  scope and plans for
their audit. In reliance on the reviews and discussions  referred to above,  the
executive  officers and director of the Managing  General  Partner have approved
the  inclusion of the audited  financial  statements  in the Form 10-KSB for the
year  ended  December  31,  2002 for filing  with the  Securities  and  Exchange
Commission.

The Managing  General Partner has  reappointed  Ernst & Young LLP as independent
auditors to audit the financial statements of the Partnership for 2003. Fees for
2002 were  audit  services  of  approximately  $27,000  and  non-audit  services
(principally tax-related) of approximately $12,000.

Item 10.    Executive Compensation

No direct form of compensation  or  remuneration  was paid by the Partnership to
any officer or director of the Managing General Partner.

Item 11.    Security Ownership of Certain Beneficial Owners and Management

Except as noted below, no person or entity was known by the Registrant to be the
beneficial  owner  of  more  than 5% of the  Limited  Partnership  Units  of the
Registrant as of December 31, 2002.

Entity                                  Number of Units      Percentage
AIMCO Properties LP
  (an affiliate of AIMCO)                    33,637            38.78%
Cooper River Properties, LLC
  (an affiliate of AIMCO)                    11,470            13.23%
Insignia Properties LP
  (an affiliate of AIMCO)                         5               *

*  Less than 0.01%

Cooper River Properties LLC and Insignia Properties LP are indirectly ultimately
owned by AIMCO. Their business addresses are 55 Beattie Place, Greenville, South
Carolina 29602.

AIMCO Properties LP is indirectly  ultimately  controlled by AIMCO. Its business
address is 4582 S. Ulster St. Parkway, Suite 1100, Denver, Colorado 80237.

No director  or officer of the  Managing  General  Partner  owns any Units.  The
Managing  General  Partner  owns  100  Units  as  required  by the  terms of the
Partnership Agreement governing the Partnership.

Item 12.    Certain Relationships and Related Transactions

The  Partnership  has no employees  and is  dependent  on the  Managing  General
Partner  and  its  affiliates  for  the  management  and  administration  of all
Partnership  activities.  The  Partnership  Agreement  provides  (i) for certain
payments to affiliates for services and (ii)  reimbursement  of certain expenses
incurred by affiliates on behalf of the Partnership.

Affiliates of the Managing  General  Partner are entitled to receive 5% of gross
receipts from the Partnership's  property as compensation for providing property
management  services.  The  Partnership  paid to such  affiliates  approximately
$40,000  and  $48,000  for  the  years  ended   December   31,  2002  and  2001,
respectively, which is included in operating expenses.

An  affiliate  of  the  Managing  General  Partner  received   reimbursement  of
accountable  administrative  expenses  amounting  to  approximately  $44,000 and
$81,000 for the years ended December 31, 2002 and 2001,  respectively,  which is
included in general and administrative  expense and investment property.  During
the fourth quarter of 2002, the Partnership recorded an adjustment to management
reimbursements to the Managing General Partner of approximately $10,000 due to a
change in  estimated  costs.  The first three  quarters  were based on estimated
amounts and in the fourth  quarter the  reimbursements  were  adjusted  based on
actual costs. As a result of the adjustment,  the Managing  General Partner owes
the Partnership  approximately $10,000 which is included in the due to affiliate
balance on the  accompanying  balance sheet.  Included in the amount at December
31, 2001 are fees related to  construction  management  services  provided by an
affiliate of the Managing General Partner of approximately  $15,000.  There were
no such  fees  during  the  year  ended  December  31,  2002.  The  construction
management service fees are calculated based on a percentage of additions to the
investment property.

The Partnership Agreement provides for a fee equal to 10% of "net cash flow from
operations",  as defined in the Partnership Agreement to be paid to the Managing
General Partner for executive and administrative  management services.  This fee
is calculated and accrued quarterly.  A fee of approximately  $27,000 was earned
for the twelve months ended  December 31, 2001 and was paid during 2002.  During
the twelve months ended December 31, 2002, the Managing General Partner earned a
fee of  approximately  $21,000  which is  included in due to  affiliates  on the
accompanying balance sheet.

Beginning in 2001,  the  Partnership  began  insuring its property up to certain
limits through coverage provided by AIMCO which is generally  self-insured for a
portion of losses and  liabilities  related  to workers  compensation,  property
casualty and vehicle liability.  The Partnership  insures its property above the
AIMCO  limits  through  insurance  policies  obtained  by  AIMCO  from  insurers
unaffiliated with the Managing General Partner.  During the years ended December
31, 2002 and 2001,  respectively,  the Partnership paid AIMCO and its affiliates
approximately $14,000 and $13,000, respectively, for insurance coverage and fees
associated with policy claims administration.

In addition to its indirect  ownership of the general  partner  interests in the
Partnership,  AIMCO and its affiliates  owned 45,112 limited  partnership  units
(the "Units") in the Partnership representing 52.01% of the outstanding Units at
December  31,  2002.  A number of these Units were  acquired  pursuant to tender
offers  made by  AIMCO  or its  affiliates.  It is  possible  that  AIMCO or its
affiliates will acquire additional units of limited partnership  interest in the
Partnership  in  exchange  for cash or a  combination  of cash and  units in the
operating  partnership  of AIMCO  either  through  private  purchases  or tender
offers. Under the Partnership  Agreement,  unitholders holding a majority of the
Units are  entitled to take action  with  respect to a variety of matters  which
would  include  voting on certain  amendments to the  Partnership  Agreement and
voting to remove the Managing General  Partner.  As a result of its ownership of
52.01% of the  outstanding  Units,  AIMCO is in a position to control all voting
decisions with respect to the Registrant.  Although the Managing General Partner
owes fiduciary duties to the limited  partners of the Partnership,  the Managing
General Partner also owes fiduciary duties to AIMCO as its sole stockholder.  As
a result,  the duties of the  Managing  General  Partner,  as  managing  general
partner, to the Partnership and its limited partners may come into conflict with
the duties of the Managing General Partner to AIMCO, as its sole stockholder.

                                     PART IV


Item 13.    Exhibits and Reports on Form 8-K

      (a)   Exhibits:

            See Exhibit Index attached.

      (b) Reports on Form 8-K filed in the fourth quarter of year 2002:

            None.

Item 14.    Controls and Procedures

The principal  executive officer and principal financial officer of the Managing
General Partner, who are the equivalent of the Partnership's principal executive
officer and principal financial officer,  respectively,  have, within 90 days of
the filing  date of this  annual  report,  evaluated  the  effectiveness  of the
Partnership's  disclosure  controls and  procedures  (as defined in Exchange Act
Rules 13a-14(c) and 15d-14(c)) and have determined that such disclosure controls
and  procedures  are  adequate.  There have been no  significant  changes in the
Partnership's  internal  controls or in other  factors that could  significantly
affect the  Partnership's  internal  controls since the date of evaluation.  The
Partnership does not believe any significant deficiencies or material weaknesses
exist in the Partnership's internal controls. Accordingly, no corrective actions
have been taken.

                                   SIGNATURES



In accordance  with Section 13 or 15(d) of the Exchange Act, the  Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                    ANGELES INCOME PROPERTIES, LTD. III
                                    (A California Limited Partnership)
                                    (Registrant)


                                    By:   Angeles Realty Corporation II
                                          Managing General Partner


                                    By:   /s/Patrick J. Foye
                                          Patrick J. Foye
                                          Executive Vice President

                                    By:   /s/Thomas C. Novosel
                                          Thomas C. Novosel
                                          Senior Vice President and
                                          Chief Accounting Officer

                                   Date:  March 28, 2003


In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the Registrant and in the capacities on the date
indicated.

/s/Patrick J. Foye            Executive Vice President      Date: March 28, 2003
Patrick J. Foye               and Director

/s/Thomas C. Novosel          Senior Vice President         Date: March 28, 2003
Thomas C. Novosel             and Chief Accounting Officer

                                  CERTIFICATION


I, Patrick J. Foye, certify that:


1. I have  reviewed  this  annual  report  on  Form  10-KSB  of  Angeles  Income
Properties, Ltd. III;


2.  Based on my  knowledge,  this  annual  report  does not  contain  any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;


3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;


4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:


      a)  Designed  such  disclosure  controls  and  procedures  to ensure  that
      material   information   relating  to  the   registrant,   including   its
      consolidated  subsidiaries,  is made  known to us by others  within  those
      entities,  particularly  during the period in which this annual  report is
      being prepared;


      b) Evaluated the effectiveness of the registrant's disclosure controls and
      procedures  as of a date  within 90 days prior to the filing  date of this
      annual report (the "Evaluation Date"); and


      c) Presented in this annual report our conclusions about the effectiveness
      of the disclosure  controls and  procedures  based on our evaluation as of
      the Evaluation Date;


5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's   board  of  directors  (or  persons   performing   the  equivalent
functions):


      a) All  significant  deficiencies  in the design or  operation of internal
      controls which could adversely affect the registrant's  ability to record,
      process,  summarize and report  financial data and have identified for the
      registrant's auditors any material weaknesses in internal controls; and


      b) Any fraud,  whether or not material,  that involves management or other
      employees  who  have  a  significant  role  in the  registrant's  internal
      controls; and


6. The  registrant's  other  certifying  officers  and I have  indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


Date: March 28, 2003

                                    /s/Patrick J. Foye
                                    Patrick J. Foye
                                    Executive  Vice  President of Angeles Realty
                                    Corporation  II,  equivalent  of  the  chief
                                    executive officer of the Partnership

                                  CERTIFICATION


I, Paul J. McAuliffe, certify that:


1. I have  reviewed  this  annual  report  on  Form  10-KSB  of  Angeles  Income
Properties, Ltd. III;


2.  Based on my  knowledge,  this  annual  report  does not  contain  any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;


3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;


4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:


      a)  Designed  such  disclosure  controls  and  procedures  to ensure  that
      material   information   relating  to  the   registrant,   including   its
      consolidated  subsidiaries,  is made  known to us by others  within  those
      entities,  particularly  during the period in which this annual  report is
      being prepared;


      b) Evaluated the effectiveness of the registrant's disclosure controls and
      procedures  as of a date  within 90 days prior to the filing  date of this
      annual report (the "Evaluation Date"); and


      c) Presented in this annual report our conclusions about the effectiveness
      of the disclosure  controls and  procedures  based on our evaluation as of
      the Evaluation Date;


5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's   board  of  directors  (or  persons   performing   the  equivalent
functions):


      a) All  significant  deficiencies  in the design or  operation of internal
      controls which could adversely affect the registrant's  ability to record,
      process,  summarize and report  financial data and have identified for the
      registrant's auditors any material weaknesses in internal controls; and


      b) Any fraud,  whether or not material,  that involves management or other
      employees  who  have  a  significant  role  in the  registrant's  internal
      controls; and


6. The  registrant's  other  certifying  officers  and I have  indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


Date: March 28, 2003

                                    /s/Paul J. McAuliffe
                                    Paul J. McAuliffe
                                    Executive Vice President and Chief Financial
                                    Officer of Angeles  Realty  Corporation  II,
                                    equivalent of the chief financial officer of
                                    the Partnership

                       ANGELES INCOME PROPERTIES, LTD. III

                                  EXHIBIT INDEX


Exhibit Number    Description of Exhibit

       3.1        Amended  Certificate and Agreement of the Limited  Partnership
                  file in Form S-11 dated June 2,  1983,  which is  incorporated
                  herein by reference.

      10.1        Agreement of Purchase  and of Real  Property  with  Exhibits -
                  Lake Forest  Apartments  filed in Form 8K dated June 28, 1984,
                  which is incorporated herein by reference

      10.12       Stock Purchase  Agreement  dated November 24, 1992 showing the
                  purchase of 100% of the  outstanding  stock of Angeles  Realty
                  Corporation II, a subsidiary of MAE GP  Corporation,  filed in
                  Form 8-K dated December 31, 1993, which is incorporated herein
                  by reference.

99   Certification of Chief Executive Officer and Chief Financial Officer.

Exhibit 99


                          Certification of CEO and CFO
                       Pursuant to 18 U.S.C. Section 1350,
                             As Adopted Pursuant to
                      Section 906 of the Sarbanes-Oxley Act of 2002



In  connection  with  the  Annual  Report  on  Form  10-KSB  of  Angeles  Income
Properties,  Ltd. III (the "Partnership"),  for the year ended December 31, 2002
as filed with the  Securities  and Exchange  Commission  on the date hereof (the
"Report"),  Patrick J. Foye, as the equivalent of the chief executive officer of
the Partnership, and Paul J. McAuliffe, as the equivalent of the chief financial
officer of the Partnership, each hereby certifies, pursuant to 18 U.S.C. Section
1350,  as adopted  pursuant  to Section 906 of the  Sarbanes-Oxley  Act of 2002,
that, to the best of his knowledge:

(1)  The Report fully complies with the  requirements  of Section 13(a) or 15(d)
     of the Securities Exchange Act of 1934; and

      (2)   The  information  contained in the Report  fairly  presents,  in all
            material respects, the financial condition and results of operations
            of the Partnership.


                                    /s/Patrick J. Foye
                              Name: Patrick J. Foye
                              Date: March 28, 2003


                                     /s/Paul J. McAuliffe
                              Name:  Paul J. McAuliffe
                              Date: March 28, 2003

This  certification  accompanies  the  Report  pursuant  to  Section  906 of the
Sarbanes-Oxley  Act of 2002 and shall not,  except to the extent required by the
Sarbanes-Oxley  Act of 2002, be deemed filed by the  Partnership for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended.