UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





______________





FORM 10-K





______________


(Mark One)





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





For the fiscal year ended March 31, 2010





OR





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





Commission File Number 0-17015





INDEPENDENCE TAX CREDIT PLUS L.P. IV


(Exact name of registrant as specified in its charter)





Delaware

13-3809869(State or other jurisdiction of incorporation or organization)

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

10022(Address of principal executive offices)

(Zip Code)





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





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





None





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





Limited Partnership Interests and Beneficial Assignment Certificates





(Title of Class)





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





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





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





Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).Yes  o   No  o





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





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





Large accelerated filer  o

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

Smaller reporting company  þ





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





The approximate aggregate book value of the voting and non-voting common equity held by non-affiliates of the Registrant as of September 30, 2009 was $(44,000), based on Limited Partner equity as of such date.





DOCUMENTS INCORPORATED BY REFERENCE





None





PART I




Item 1.  Business.




General




Independence Tax Credit Plus L.P. IV (the “Partnership”) is a limited partnership which was formed under the laws of the State of Delaware on February 22, 1995. The general partner of the Partnership is Related Independence L.L.C., a Delaware limited liability company (the “General Partner”).  Centerline Holding Company (“Centerline”) is the ultimate parent of Centerline Affordable Housing Advisors LLC (“CAHA”), the managing member of the General Partner.




The Partnership’s initial business was to invest in other partnerships (“Local Partnerships”, “subsidiaries” or “subsidiary partnerships”) owning leveraged apartment complexes (“Apartment Complexes” or “Properties”) that are eligible for the low-income housing tax credit (“Tax Credit”) enacted in the Tax Reform Act of 1986, some of which may also be eligible for the historic rehabilitation tax credit.  As of March 31, 2010, the Partnership had originally invested approximately $37,555,000 (not including acquisition fees of approximately $1,771,000) of the net proceeds of the Offering in fourteen Local Partnerships of which approximately $796,000 remains to be paid to the Local Partnerships (including approximately $341,000 being held in escrow) as certain benchmarks, such as occupancy level, are attained prior to the release of the funds. The Partnership does not intend to acquire interests in additional Local Partnerships, but the Partnership may be required to fund potential purchase price adjustments based on tax credit adjustor clauses.  The Partnership is currently invested in twelve Local Partnerships.  The Partnership’s investments in Local Partnerships represent from 98.99% to 99.89% interests except for one investment which is a 58.12% interest.  See Item 2, Properties, below.




The Partnership is currently in the process of developing a plan to dispose of all of its investments.  As of March 31, 2010, the Partnership has sold its limited partnership interest in one Local Partnership and the property and the related assets and liabilities of another Local Partnership.  There can be no assurance as to when the Partnership will dispose of its remaining investments or the amount of proceeds which may be received.  However, based on the historical operating results of the Local Partnerships and the current economic conditions, including changes in tax laws, it is unlikely that the proceeds from such sales received by the Partnership will be sufficient to return to the limited partners their original investments.  All gains and losses on sales are included in discontinued operations.




The investment objectives of the Partnership are described below:




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




2.
Preserve and protect the Partnership’s capital.




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




4.
Allocate passive losses to individual BACs holders to offset passive income that they may realize from rental real estate investments and other passive activities, and allocate passive losses to corporate BACs holders to offset business income.




One of the Partnership’s objectives is to entitle qualified BACs holders to Tax Credits over the Credit Period. Each of the Local Partnerships in which the Partnership has acquired an interest has been allocated by the relevant state credit agencies the authority to recognize Tax Credits during the Credit Period provided that the Local Partnership satisfies the rent restriction, minimum set-aside and other requirements for recognition of the Tax Credits at all times during such period. Once a Local Partnership has become eligible to recognize Tax Credits, it may lose such eligibility and suffer an event of “recapture” if its Property fails to remain in compliance with the Tax Credit requirements during the 15-year period commencing at the beginning of the Credit Period (“Compliance Period”).  As of December 31, 2009, all the Local Partnerships have completed their Credit Periods.  However, each Local Partnership must continue to comply with the Tax Credit requirements until the end of the Compliance Period in order to avoid recapture of the Tax Credits.  The Compliance Periods will continue through December 31, 2014 with respect to the Properties depending upon when the Compliance Period commenced.




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




The Partnership is subject to the risks incident to potential losses arising from the management and ownership of improved real estate and poor economic conditions.




The Partnership complies with ASC Topic 360, Property, Plant, and Equipment(“ASC 360”).  Impairment of assets is a two-step process.  First, management estimates amounts recoverable through future operations and sale of the Property on an undiscounted basis.  If such estimates are below depreciated cost, Property investments themselves are reduced to estimated fair value (generally using the discounted cash flow valuation method).  During the year ended March 31, 2010, the Partnership recorded approximately $12,993,000 as a loss on impairment of assets.  Through March 31, 2010, the Partnership has recorded approximately $25,026,000 as an aggregate loss on impairment of assets.




Sale of Properties




On December 31, 2008, the Partnership sold its limited partnership interest in BX-8A Team Associates, L.P. (“BX-8A”) to an unaffiliated third party purchaser for a sales price of $100,000.  The Partnership received $40,000 from this sale after the repayment of other liabilities of approximately $60,000.  The sale resulted in a gain of approximately $102,000 resulting from the write-off of the deficit basis in the Local Partnership of approximately $62,000 at the date of the sale and the $40,000 cash received from the sale.  The sale also resulted in a write-off of operating advances of approximately $902,000 owed to the Partnership.  In addition, the sale resulted in a non-cash contribution to the Local Partnership from the General Partner of approximately $5,000 as a result of the write-off of fees owed by the Local Partnership to an affiliate of the General Partner.











- 2 -







Segments




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




Competition




The real estate business is highly competitive and substantially all of the properties acquired by the Partnership are expected to have active competition from similar properties in their respective vicinities. In addition, various other limited partnerships may, in the future, be formed by the General Partner and/or its affiliates to engage in businesses which may be competitive with the Partnership.




Employees




The Partnership does not have any direct employees. All services are performed for the Partnership by the General Partner and its affiliates. The General Partner receives compensation in connection with such activities as set forth in Items 11 and 13. In addition, the Partnership reimburses the General Partner and certain of its affiliates for expenses incurred in connection with the performance by their employees of services for the Partnership in accordance with the Partnership’s Amended and Restated Agreement of Limited Partnership (the “Partnership Agreement”).




Item 1A.  Risk Factors.




The Partnership’s investment as a limited partner in the Local Partnerships is subject to the risks of potential losses arising from management and ownership of improved real estate. The Partnership’s investments also could be adversely affected by poor economic conditions generally, which could increase vacancy levels and rental payment defaults, and by increased operating expenses, any or all of which could threaten the financial viability of one or more of the Local Partnerships.




There also are substantial risks associated with the operation of Apartment Complexes receiving government assistance. These include governmental regulations concerning tenant eligibility, which may make it more difficult to rent apartments in the Apartment Complexes; difficulties in obtaining government approval for rent increases; limitations on the percentage of income which low and moderate income tenants may pay as rent; the possibility that Congress may not appropriate funds to enable the Department of Housing and Urban Development (“HUD”) to make the rental assistance payments it has contracted to make; and that when the rental assistance contracts expire there may not be market demand for apartments at full market rents in a Local Partnership’s Apartment Complex.




Item 1B.  Unresolved Staff Comments.




Not applicable.














- 3 -




Item 2.  Properties.




Except for its interest in New Zion Apartments, L.P. (“New Zion”), the Partnership’s investment in each of the remaining twelve Local Partnerships represents 98.99% or 99.89% of the partnership interests in the Local Partnership. The Partnership’s investment in New Zion represents 58.12% of the partnership interest in the subsidiary partnership (the other 41.86% limited partnership interest is owned by an affiliate of the Partnership, with the same management). Through the rights of the Partnership and/or an affiliate of the General Partner, which affiliate has a contractual obligation to act on behalf of the Partnership, to remove the Local General Partner and to approve certain major operating and financial decisions, the Partnership has a controlling financial interest in all of the Local Partnerships in which it has invested. Set forth below is a schedule of the Local Partnerships including certain information concerning their respective Apartment Complexes (the “Local Partnership Schedule”). Further information concerning the Local Partnerships and their properties, including any encumbrances affecting the properties may be found in Item 15. Schedule III.




Local Partnership Schedule




Name and Location

(Number of Units)

Date Acquired

Percentage of Units Occupied at May 1,2010

2009

2008

2007

2006BX-8A Team Associates, L.P.Bronx, NY (41)

October 1995

(b)


(b)


98
%

98
%

100
%Westminster Park Plaza(a California Limited Partnership)Los Angeles, CA (130)

June 1996

(a)


(a)


(a)


94
%

91
%Fawcett Street Limited PartnershipTacoma, WA (60)

June 1996

95
%

95
%

98
%

93
%

97
%Figueroa Senior Housing Limited PartnershipLos Angeles, CA (66)

November 1996

98
%

98
%

98
%

91
%

97
%NNPHI Senior Housing Limited PartnershipLos Angeles, CA (75)

December 1996

100
%

100
%

100
%

100
%

100
%Belmont/McBride Apartments Limited PartnershipPaterson, NJ (42)

January 1997

81
%

95
%

98
%

100
%

98
%Sojourner Douglass, L.P.Paterson, NJ (20)

February 1997

95
%

100
%

100
%

100
%

100
%New Zion ApartmentsLimited PartnershipShreveport, LA (100)

October 1997

94
%

98
%

99
%

100
%

100
%Bakery Village Urban Renewal Associates, L.P.Montclair, NJ (125)

December 1997

96
%

96
%

97
%

97
%

98
%Marlton Housing Partnership, L.P.(a Pennsylvania limited partnership)Philadelphia, PA (25)

May 1998

100
%

88
%

80
%

84
%

100
%GP Kaneohe Limited PartnershipKaneohe, HI (44)

July 1999

100
%

100
%

100
%

100
%

96
%KSD Village Apartments, Phase II, Ltd.Danville, KY (16)

July 1999

93
%

88
%

88
%

94
%

100
%Kanisa Apartments, Ltd.Fayette County, KY (59)

October 1999

63
%

81
%

73
%

78
%

86
%Guymon Housing Partners, L.P.Guymon, OK (92)

December 1999

96
%

96
%

99
%

91
%

95
%


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


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




Leases are generally for periods not greater than one to two years and no tenant occupies more than 10% of the total rentable square footage in any single Apartment Complex.




Management continuously reviews the physical state of the properties and suggests to the Local General Partners budget improvements which are generally funded from cash flow from operations or release of replacement reserve escrows.








- 4 -






Management periodically reviews the insurance coverage of the properties and believes such coverage is adequate.




See Item 1, Business, above for the general competitive conditions to which the Properties described above are subject.




Real estate taxes are calculated using rates and assessed valuations determined by the township or city in which the Property is located. Such taxes have approximated less than 1% of the aggregate cost of the Properties as shown in Schedule III included herein.




Tax Credits with respect to a given Apartment Complex are available for a ten-year period that commences when the Property is rented to qualified tenants. However, the annual Tax Credits available in the year in which the Apartment Complex is placed in service must be prorated based upon the months remaining in the year. The amount of the annual Tax Credit not available in the first year will be available in the eleventh year. In certain cases, the Partnership acquired its interest in a Local Partnership after the Local Partnership had placed its Apartment Complex in service. In these cases, the Partnership may be allocated Tax Credits only beginning in the month following the month in which it acquired its interest and Tax Credits allocated in any prior period are not available to the Partnership.




Item 3.  Legal Proceedings.




None.




Item 4.  (Removed and Reserved).











- 5 -







PART II






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




As of March 31, 2010, the Partnership had issued and outstanding 45,844 Limited Partnership Interests, each representing a $1,000 capital contribution to the Partnership, or an aggregate capital contribution of $45,844,000. All of the issued and outstanding Limited Partnership Interests have been issued to Independence Assignor Inc. (the “Assignor Limited Partner”), which has in turn issued 45,844 BACs to the purchasers thereof for an aggregate purchase price of $45,844,000. Each BAC represents all of the economic and virtually all of the ownership rights attributable to a Limited Partnership Interest held by the Assignor Limited Partner. BACs may be converted into Limited Partnership Interests at no cost to the holder (other than the payment of transfer costs not to exceed $100), but Limited Partnership Interests so acquired are not thereafter convertible into BACs.




Neither the BACs nor the Limited Partnership Interests are traded on any established trading market. The Partnership does not intend to include the BACs for quotation on NASDAQ or for listing on any national or regional stock exchange or any other established securities market. The Revenue Act of 1987 contained provisions which have an adverse impact on investors in “publicly traded partnerships.”  Accordingly, the General Partner has imposed limited restrictions on the transferability of the BACs and the Limited Partnership Interests in secondary market transactions. Implementation of the restrictions should prevent a public trading market from developing and may adversely affect the ability of an investor to liquidate his or her investment quickly. It is expected that such procedures will remain in effect until such time, if ever, as further revision of the Revenue Act of 1987 may permit the Partnership to lessen the scope of the restrictions.




As of June 18, 2010, the Partnership has approximately 2,520 registered holders of an aggregate of 45,844 BACs.




All of the Partnership’s general partnership interests, representing an aggregate capital contribution of $1,000, are held by the General Partner.




The Partnership has made no distributions to the BACs holders as of March 31, 2010.  There are no material legal restrictions in the Partnership Agreement on the ability of the Partnership to make distributions.  However, the Partnership does not anticipate providing cash distributions to its BACs holders other than from net refinancing or sales proceeds.




Transfer Procedures




The Partnership from time to time receives requests by unit holders and others to transfer BACs and/or limited partnership interests.  Such requests may occur in connection with tender offers for the Partnership’s units.  Such requests implicate the Partnership’s policies and procedures concerning transfers generally and tender offers in particular, which were adopted by the Partnership pursuant to the terms of its Partnership Agreement, to ensure compliance with applicable law, avoid adverse tax consequences for the Partnership and its investors, and preserve the Partnership’s advantageous tax status.




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




A brief summary of certain of the Partnership’s key policies, practices and requirements with respect to transfers and tender offers is as follows:




·
No transfer (whether for substitution, assignment or otherwise) is effective or binding on the Partnership unless and until it is approved by the General Partner.




·
No transfer will be approved unless the transferor and transferee submit complete and properly executed forms of the Partnership’s own transfer documentation.  The Partnership does not accept forms of transfer documentation other than its own and does not accept signatures made by power of attorney in lieu of original signatures by each of the transferors and transferees.




·
The Partnership will not approve transfers that in the cumulative aggregate for any tax year exceed the IRS 2% safe harbor, unless a financially responsible person provides the Partnership and its partners with (i) an indemnity (in form and substance in all ways acceptable to the General Partner) for all liability (including, without limitation, any adverse tax consequences) arising from or relating to exceeding the 2% safe harbor and (ii) a legal opinion (in form and substance in all ways acceptable to the General Partner) that there will be no adverse tax consequences to the Partnership and its partners from exceeding the 2% safe harbor.




·
It order to avoid the undesirable situation of one or more tender offers consuming the entire safe harbor limitation early in the tax year and leaving the Partnership’s remaining investors with no liquidity opportunity for the rest of that tax year, the Partnership restricts the cumulative aggregate total of transfers made pursuant to all tender offers to 1.5% of its outstanding units in each tax year, unless a financially responsible person conducting such tender offer provides the Partnership with an acceptable indemnity and legal opinion of the type described above.  At the end of each tax year, the General Partner, in its discretion, may allow the cumulative total number of transfers (including those by tender offer) to reach the 2% safe harbor limit.




·
The Partnership requires that all tender offers for its units be conducted in accordance with all applicable law including, without limitation, the federal securities laws.




The foregoing is solely a summary of the Partnership’s policies, requirements and practices with respect to transfers and tender offers.  More complete information, including a copy of the Partnership’s transfer documentation package, may be obtained from the Partnership.




Item 6.  Selected Financial Data.




Not applicable.










- 6 -






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




Liquidity and Capital Resources




The Partnership originally invested approximately $37,555,000 (not including acquisition fees of approximately $1,771,000) of the net proceeds of the Offering in fourteen Local Partnerships, of which approximately $796,000 remains to be paid to the Local Partnerships (including approximately $341,000 being held in escrow) as certain benchmarks, such as occupancy level, are attained prior to the release of the funds. During the year ended March 31, 2010, approximately $25,000 was paid to Local Partnerships.  The Partnership does not anticipate acquiring additional properties, but the Partnership may be required to fund potential purchase price adjustments based on tax credit adjustor clauses. There were no such adjustments made during the year ended March 31, 2010.




The Partnership is currently in the process of developing a plan to dispose of all of its investments.  As of March 31, 2010, the Partnership has sold its limited partnership interest in one Local Partnership and the property and the related assets and liabilities of another Local Partnership.  There can be no assurance as to when the Partnership will dispose of its remaining investments or the amount of proceeds which may be received.  However, based on the historical operating results of the Local Partnerships and the current economic conditions, including changes in tax laws, it is unlikely that the proceeds from such sales received by the Partnership will be sufficient to return to the limited partners their original investments.  All gains and losses on sales are included in discontinued operations.




Short-Term




The Partnership’s primary sources of funds include:  (i) working capital reserves; (ii) interest earned on the working capital reserves; (iii) cash distributions from operations of the Local Partnerships; and (iv) sales proceeds and distributions.  Such funds, although minimal (other than possible sales proceeds and sales distributions), are available to meet the obligations of the Partnership.  The Partnership does not anticipate providing cash distributions to BACs holders in circumstances other than refinancing or sales.  During the year ended March 31, 2010 and 2009, distributions from operations of the Local Partnerships amounted to approximately $5,000 and $27,000, respectively.  Additionally, during the year ended March 31, 2010 and 2009, the Partnership received approximately $0 and $343,000, respectively, of distributions from the sale of investments.




For the year ended March 31, 2010, cash and cash equivalents of the Partnership and its consolidated Local Partnerships decreased approximately $45,000 due to acquisitions of property and equipment of approximately $91,000, repayments of mortgage notes of approximately $485,000, a decrease in capitalization of consolidated subsidiaries attributable to noncontrolling interests of approximately $5,000 and an increase in deferred costs of approximately $20,000, which exceeded net cash provided by operating activities of approximately $476,000, amounts released from cash held in escrow of approximately $55,000 and amounts received from local general partners and affiliates of approximately $25,000.  Included in the adjustments to reconcile the net loss to net cash provided by operating activities is depreciation and amortization of approximately $1,718,000, loss on impairment of asset of approximately $12,993,000 and prior period adjustment of approximately $299,000.




Total expenses for the years ended March 31, 2010 and 2009, excluding depreciation and amortization, interest, general and administrative – related parties, and loss on impairment of asset, totaled $3,622,571 and $3,714,280, respectively.




Accounts payable totaled $554,586 and $450,137 as of March 31, 2010 and 2009, respectively.  Accounts payable are short term liabilities which are expected to be paid from operating cash flows, working capital balances at the Local Partnership level, Local General Partner advances and, in certain circumstances, advances from the Partnership.  Accrued interest payable as of March 31, 2010 and 2009 was $6,474,837 and $6,002,200, respectively.  Accrued interest payable represents the accrued interest on all mortgage loans, which include primary and secondary loans. Certain secondary loans have provisions such that interest is accrued but not payable until a future date.  The Partnership anticipates the payment of accrued interest on the secondary loans (which make up the majority of the accrued interest payable amount and which has been accumulating since the Partnership’s investment in the respective Local Partnership) will be made from future refinancings or sales proceeds of the respective Local Partnerships.  Furthermore, each Local Partnership’s mortgage notes are collateralized by the land and buildings of the respective Local Partnership, and are without further recourse to the Partnership.


The Partnership believes it (and the applicable Local Partnerships) has sufficient liquidity and ability to generate cash and to meet existing and known or reasonably likely future cash requirements over both the short and long term not including fees owed to the General Partner.  However, assuming the General Partner continues to defer the payment of fees as discussed below and in Note 8 to the Financial Statements in Item 8, the Partnership believes it has sufficient liquidity and ability to generate cash and to meet existing and known or reasonably likely future cash requirements over both the short and long term.




Security deposits payable are offset by cash held in security deposits, which are included in “Cash held in escrow” on the financial statements.




At March 31, 2010, there is approximately $118,000 in working capital reserves.  The General Partner believes that these reserves, plus any cash distributions received from the operations of the Local Partnerships, will be sufficient to fund the Partnership’s ongoing operations for the foreseeable future not including fees owed to the General Partner.




The Partnership had negotiated Operating Deficit Guaranty Agreements with the Local Partnerships by which the general partners of such Local Partnerships and/or their affiliates agreed to fund operating deficits for a specified period of time. The terms of the Operating Deficit Guaranty Agreements vary for each of these Local Partnerships, with maximum dollar amounts to be funded for a specified period of time, generally three years, commencing on the break-even date.  As of both March 31, 2010 and 2009, the gross amount of the Operating Deficit Guarantees aggregate approximately $123,000 and $123,000, respectively.  As of both March 31, 2010 and 2009, no amounts have been funded under the Operating Deficit Guaranty Agreements.  Amounts funded under such agreements will be treated as non-interest bearing loans, which will be paid only out of 50% of available cash flow or out of available net sale or refinancing proceeds.











- 7 -






Long-Term




Partnership management fees owed to the General Partner amounting to approximately $1,847,000 and $1,638,000 were accrued and unpaid as of March 31, 2010 and 2009, respectively, and are included in the line item Due to general partners and affiliates in the consolidated balance sheets.  Unpaid partnership management fees for any year are to be deferred without interest and will be payable out of sales or refinancing proceeds only to the extent of available funds after payments on all Partnership liabilities have been made other than to those owed to the General Partner and its affiliates.




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




The Local Partnerships are impacted by inflation in several ways.  Inflation allows for increases in rental rates generally to reflect the impact of higher operating and replacement costs. Furthermore, inflation generally does not impact the fixed long-term financing under which real property investments were purchased. Inflation also affects the Local Partnerships adversely by increasing operating costs, such as fuel, utilities, and labor.  Since revenues from sales of assets are driven by market conditions, inflation has little impact on sales.




Management is not aware of any trends or events, commitments or uncertainties, which have not otherwise been disclosed that will or are likely to impact liquidity in a material way. Management believes the only impact would be from laws that have not yet been adopted. The portfolio is diversified by the location of the Properties around the United States so that if one area of the country is experiencing downturns in the economy, the remaining Properties in the portfolio may be experiencing upswings. However, the geographic diversification of the portfolio may not protect against a general downturn in the national economy.  As of December 31, 2009, the Credit Periods have expired.  However, each Local Partnership must continue to comply with the Tax Credit requirements until the end of the Compliance Period in order to avoid recapture of the Tax Credits.  The Compliance Periods expired with respect to the two Properties that have been sold but will continue through December 31, 2014 with respect to the remaining Properties depending upon when the Compliance Period commenced.




Sale of Underlying Properties/Local Partnership Interests




For a discussion of the sale of properties in which the Partnership owns direct and indirect interests, see Note 10 in Item 8.




Discontinued Operations




The Partnership is currently in the process of developing a plan to dispose of all of its investments.  The dispositions meet the criteria established for recognition as a discontinued operation under ASC 360, Property, Plant and Equipment(“ASC 360”), which specifically requires that such amounts must differentiate a component of a business comprised of operations and cash flows that can be clearly distinguished operationally and for financial reporting purposes, from the rest of the entity.  See Note 13 in Item 8 for a discussion of the sale of property.  As of March 31, 2010, there were no assets held for sale.




Tabular Disclosure of Contractual Obligations




The following table summarizes the Partnership’s commitments from operations as of March 31, 2010, to make future payments under its debt agreements and other contractual obligations.




Total


Less than

1 Year


1 – 3

Years


3 – 5

Years


More than

5 YearsMortgage notes payable (a)

$
24,703,113


$
409,244


$
888,599


$
1,008,273


$
22,396,997





(a)
The mortgage loans are payable in aggregate monthly installments of approximately $143,000 including principal and interest with rates varying from 0% to 8.46% per annum and have maturity dates ranging from 2014 through 2051. The loans are collateralized by the land and buildings of the subsidiary partnerships, the assignment of certain subsidiary partnerships’ rents and leases, and are without further recourse.  Certain obligations are guaranteed by affiliates of the general partner.




Off-Balance Sheet Arrangements




The Partnership has no off-balance sheet arrangements.




Critical Accounting Policies




In preparing the consolidated financial statements, management has made estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Set forth below is a summary of the accounting policies that management believes are critical to the preparation of the consolidated financial statements.




Property and Equipment/Valuation of Long-Lived Assets




Property and equipment to be held and used are carried at cost which includes the purchase price, acquisition fees and expenses, construction period interest and any other costs incurred in acquiring the properties.  The cost of property and equipment is depreciated over their estimated useful lives using accelerated and straight-line methods. Expenditures for repairs and maintenance are charged to expense as incurred; major renewals and betterments are capitalized. At the time property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are eliminated from the assets and accumulated depreciation accounts and the profit or loss on such disposition is reflected in earnings.  The Partnership complies with ASC Topic 360, Property, Plant, and Equipment (“ASC 360”).  The determination of asset impairment is a two-step process.  First, management estimates amounts recoverable through future operations and sale of the property on an undiscounted basis.  If such estimates are below depreciated cost, property investments are reduced to estimated fair value (using estimated future discounted net cash flows) when the property is considered to be impaired and the depreciated cost exceeds estimated fair value.








- 8 -






At the time management commits to a plan to dispose of assets, said assets are adjusted to the lower of carrying amount or fair value less costs to sell. These assets are classified as property and equipment-held for sale and are not depreciated. There are no assets classified as property and equipment-held for sale at March 31, 2010.




Fair Value Measurements




The Partnership adopted FASB ASC 820 – “Fair Value Measurements”for financial assets and liabilities.  ASC 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.  ASC 820 applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard does not require any new fair value measurements of reported balances.  As permitted, we chose not to elect the fair value option as prescribed by FASB ASC 825 – “Financial Instruments” – Including an Amendment of ASC 320 – “Investments – Debt and Equity Securities”, for our financial assets and liabilities that had not been previously carried at fair value.  Therefore, we did not elect to fair value any additional items under ASC 825.




Revenue Recognition




Rental income is earned under standard residential operating leases and is typically due the first day of each month, but can vary by property due to the terms of the tenant leases.  Rental income is recognized when earned and charged to tenants’ accounts receivable if not received by the due date.  Rental payments received in advance of the due date are deferred until earned.  Rental subsidies are recognized as rental income during the month in which it is earned.




Other revenues are recorded when earned and consist of the following items:  Interest income earned on cash and cash equivalent balances and cash held in escrow balances, income from forfeited security deposits, late charges, laundry and vending income and other rental related items (see Item 8, Note 2e).




Related Parties




Under the terms of the Partnership Agreement, the Partnership has entered into certain arrangements with the General Partner and its affiliates, which provide for compensation to be paid to the General Partner and its affiliates. Such arrangements include (but are not limited to) agreements to pay nonrecurring acquisition fees, a nonaccountable acquisition expense allowance, an accountable expense reimbursement and subordinated disposition fees to the General Partner and/or its affiliates. In addition, the General Partner is entitled to a subordinated interest in cash from sales or refinancings and a 1% interest in net income, net loss, distributions of adjusted cash from operations and cash from sales or refinancings.  Certain members and officers of the General Partner receive compensation from the General Partner and its affiliates for services performed for various affiliated entities which may include services performed for the Partnership. The maximum annual partnership management fee paid to the General Partner is 0.5% of invested assets. See Note 8 in Item 8, which is incorporated herein by reference.




Recent Accounting Pronouncements




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




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




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











- 9 -







Results of Operations




The majority of the Local Partnerships’ income continues to be in the form of rental income, with the corresponding expenses being divided among operations, depreciation and mortgage interest.  The following is a summary of the results of operations of the Partnership for the years ended March 31, 2010 and 2009, respectively, excluding the results of its discontinued operations which are not reflected in the following discussion (see Item 8, Note 13).




The net loss for the years ended March 31, 2010 and 2009 totaled $15,237,441 and $14,904,418, respectively.




The Partnership and BACs holders began recognizing Tax Credits with respect to a Property when the Credit Period for such Property commenced.  Because of the time required for the acquisition, completion and rent-up of Properties, the amount of Tax Credits per BAC has gradually increased over the first three years of the Partnership.  Tax Credits not recognized in the first three years will be recognized in the 11th through 13th years.  The Partnership generated $945,893 and $3,002,588 of Tax Credits during each of the 2009 and 2008 tax years, respectively.




2010 vs. 2009




Rental income increased approximately 2% for the year ended March 31, 2010 as compared to the corresponding period ended March 31, 2009, primarily due to rental rate increases at the Local Partnerships.




Other income increased approximately $23,000 for the year ended March 31, 2010 as compared to the corresponding period in 2009, primarily due to a loss recognized on sale of securities in the previous year at one Local Partnership, offset by a decrease in laundry and vending revenue at a second Local Partnership, a decrease in interest income due to lower reserve balances at a third Local Partnership and a decrease in interest income earned on lower sale proceeds being invested at the Partnership level.




Total expenses, excluding depreciation and amortization and loss on impairment of asset, decreased approximately 2% for the year ended March 31, 2010 as compared to the corresponding period ended March 31, 2009.




Depreciation and amortization decreased approximately $357,000 for the year ended March 31, 2010 as compared to the corresponding period in 2009, primarily due to the reduction in carrying amounts relating to impairment of assets recorded during the year ended March 31, 2009 at five Local Partnerships.




Loss on impairment of fixed assets amounted to approximately $12,993,000 and $12,033,000 for the years ended March 31, 2010 and 2009, respectively.  See Note 4 in Item 8 for detailed discussion on impairments.




Subsidiary Partnerships – Prior Period Adjustment




A subsidiary partnership had accrued interest on the development fee payable from February 1, 1999 through December 31, 2002.  Its partnership agreement does not allow for interest to be paid on the development fee; and accordingly, in 2009 the accrued interest was reversed and reflected as a prior period adjustment of $299,018.




Item 7A.  Quantitative and Qualitative Disclosures about Market Risk.




Mortgage notes are payable in aggregate monthly installments including principal and interest at rates varying from 0% to 8.46% per annum.  The Partnership does not believe there is a material risk associated with the various interest rates associated with the mortgage notes as the majority of the Local Partnership mortgage notes have fixed rates.  The Partnership currently discloses in Item 8, Note 3 of the Notes to Consolidated Financial Statements, the fair value of the mortgage notes payable.




The Partnership’s investment as a limited partner in the Local Partnerships is subject to the risks of potential losses arising from management and ownership of improved real estate. The Partnership’s investments also could be adversely affected by poor economic conditions generally, which could increase vacancy levels and rental payment defaults and by increased operating expenses, any or all of which could threaten the financial viability of one or more of the Local Partnerships.




There also are substantial risks associated with the operation of Apartment Complexes receiving government assistance. These include governmental regulations concerning tenant eligibility, which may make it more difficult to rent apartments in the Apartment Complexes; difficulties in obtaining government approval for rent increases; limitations on the percentage of income which low and moderate income tenants may pay as rent; the possibility that Congress may not appropriate funds to enable HUD to make the rental assistance payments it has contracted to make; and that when the rental assistance contracts expire there may not be market demand for apartments at full market rents in a Local Partnership’s Apartment Complex.




The Local Partnerships are impacted by inflation in several ways. Inflation allows for increases in rental rates generally to reflect the impact of higher operating and replacement costs. Furthermore, inflation generally does not impact the fixed long-term financing under which real property investments were purchased.  Inflation also affects the Local Partnerships adversely by increasing operating costs, for example, for such items as fuel, utilities and labor.  However, continued inflation may result in appreciated values of the Local Partnership’s apartment complexes over a period of time as rental revenues and replacement costs continue to increase.




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











- 10 -









Item 8.
Financial Statements and Supplementary Data.Sequential

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

12Consolidated Balance Sheets at March 31, 2010 and 2009

27Consolidated Statements of Operations for the years ended March 31, 2010 and 2009

28Consolidated Statements of Changes in Partners’ Capital (Deficit) for the years ended March 31, 2010 and 2009

29Consolidated Statements of Cash Flows for the years ended March 31, 2010 and 2009

30Notes to Consolidated Financial Statements

31











- 11 -







REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




To the Partners


Independence Tax Credit Plus L.P. IV and Subsidiaries




We have audited the accompanying consolidated balance sheets of Independence Tax Credit Plus L.P. IV and Subsidiaries (a Delaware limited partnership) as of  March 31, 2010 and 2009, and the related consolidated statements of operations, changes in partners' capital (deficit) and cash flows for each of the years in the two-year period ended March 31, 2010.  These consolidated financial statements are the responsibility of the Partnership's management.  Our responsibility is to express an opinion on these financial statements based on our audits.  We did not audit the consolidated financial statements of seven and nine subsidiary partnerships, whose losses aggregated $11,858,536 and $10,524,758 for the years ended March 31, 2010 and 2009, respectively, and whose assets constituted 59% and 71% of consolidated assets at March 31, 2010 and 2009, respectively.  Those statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for these subsidiary partnerships, is based solely on the reports of the other auditors.




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




In our opinion, based on our audits and the reports of the other auditors, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Independence Tax Credit Plus L.P. IV and Subsidiaries as of March 31, 2010 and 2009, and the results of their operations and their cash flows for each of the years ended in the two-year period ended March 31, 2010, in conformity with accounting principles generally accepted in the United States of America.




As discussed in Note 14 to the consolidated financial statements, the Partnership corrected an error relating to accrued interest and has adjusted its partners’ capital (deficit) as of March 31, 2009.




/s/Friedman LLP




New York, New York


June 24, 2010










- 12 -







[Letterhead of REZNICK GROUP, P.C.]





INDEPENDENT AUDITORS’ REPORT





To the Partners


BX 8A Team Associates, L.P.





We have audited the accompanying balance sheet of BX 8A Team Associates, LP, as of December 31, 2008, and the related statements of operations, partners' equity (deficit) and cash flows for the year then ended.  These financial statements are the responsibility of the Partnership's management.  Our responsibility is to express an opinion on these financial statements based on our audit.





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





In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of BX 8A Team Associates, LP, as of December 31, 2008, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.








/s/ Reznick Group, P.C.


Birmingham, Alabama


April 17, 2009











- 13 -





[LETTERHEAD OF MCDANIEL & HALLSTROM, CPA’s]





To the Partners


FAWCETT STREET LIMITED PARTNERSHIP


Tacoma, Washington





INDEPENDENT AUDITOR'S REPORT





We have audited the accompanying balance sheets of FAWCETT STREET LIMITED PARTNERSHIP as of December 31, 2008 and 2007, and the related statements of operations, partners' equity and cash flows for the years then ended.  These financial statements are the responsibility of the Partnership's management.  Our responsibility is to express an opinion on these financial statements based on our audits.





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





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








/s/ McDaniel & Hallstrom, CPA's


Tacoma, Washington


February 13, 2009











- 14 -







[LETTERHEAD OF CLIFFORD R. BENN, CPA]




REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




General Partner


Figueroa Senior Housing Limited Partnership


Los Angeles, California





I have audited the balance sheet of Figueroa Senior Housing Limited Partnership, at December 31, 2009, and the related statements of loss, changes in partners' capital, and cash-flow for the year then ended. These financial statements are the responsibility of Figueroa Senior Housing Limited Partnership's management. My responsibility is to express an opinion on these financial statements based on my audits.




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




In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Figueroa Senior Housing Limited Partnership on December 31, 2009, and the results of its operations and its cash-flow for the year then ended in conformity with generally accepted accounting principles used in the United States of America.










/s/ Clifford Benn, CPA


February 26, 2010


Carson, California










- 15 -







[LETTERHEAD OF CLIFFORD R. BENN, CPA]





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





General Partner


Figueroa Senior Housing Limited Partnership


Los Angeles, California





I have audited the balance sheet of Figueroa Senior Housing Limited Partnership at December 31, 2008, and the related statements of loss, changes in partners' capital, and cash flow for the year then ended.  These financial statements are the responsibility of Figueroa Senior Housing Limited Partnership's management.  My responsibility is to express an opinion on these financial statements based on my audit.





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





In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Figueroa Senior Housing Limited Partnership at December 31, 2008 and the results of its operations for the year then ended in conformity with generally accepted accounting principles used in the United States of America.





I also have audited, in accordance with the standards of the Public Company Accounting Oversight Board, the effectiveness of Figueroa Senior Housing Limited Partnership’s internal control over financial reporting as of December 31, 2008, based on Public Company Accounting Oversight Board Standards and my report dated February 19, 2009, expressed a disclaimer of a opinion.








/s/ Clifford Benn, CPA


February 19, 2009


Carson, California











- 16 -







[LETTERHEAD OF CLIFFORD R. BENN, CPA]





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





General Partner


NNPHI Senior Housing, L.P.


Los Angeles, California





I have audited the balance sheet of NNPHI Senior Housing Limited Partnership, at December 31, 2009, and the related statements of loss, changes in partners' capital, and cash-flow for the year then ended. These financial statements are the responsibility of NNPHI Senior Housing Limited Partnership's management. My responsibility is to express an opinion on these financial statements based on my audit.





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





In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of NNPHI Senior Housing Limited Partnership on December 31, 2009, and the results of its operations and its cash-flow for the year then ended in conformity with generally accepted accounting principles used in the United States of America.








/s/ Clifford Benn, CPA


February 26, 2010


Carson, California








- 17 -










[LETTERHEAD OF CLIFFORD R. BENN, CPA]





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





General Partner


NNPHI Senior Housing, L.P.


Los Angeles, California





I have audited the balance sheet of NNPHI Senior Housing, L.P. at December 31, 2008, and the related statements of loss, changes in partners' capital, and cash flow for the year then ended.  These financial statements are the responsibility of NNPHI Senior Housing, L.P.'s management.  My responsibility is to express an opinion on these financial statements based on my audit.





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





In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of NNPHI Senior Housing, L.P. at December 31, 2008, and the results of its operations for the year then ended in conformity with generally accepted accounting principles used in the United States of America.





I also have audited, in accordance with the standards of the Public Company Accounting Oversight Board, the effectiveness of NNPHI Senior Housing, L.P.’s internal control over financial reporting as of December 31, 2008, based on Public Company Accounting Oversight Board Standards and my report dated February 19, 2009, expressed a disclaimer of a opinion.








/s/ Clifford Benn, CPA


February 19, 2009


Carson, California











- 18 -








[Letterhead of KOCH GROUP 7 COMPANY, LLP]





Independent Auditor's Report





To the Partners


Sojourner Douglass Urban Renewal Partnership, L.P.





We have audited the accompanying balance sheets of Sojourner Douglass Urban Renewal Partnership, L.P. (A Limited Partnership) as of December 31, 2009 and 2008 and the related statements of operations, changes in partners' equity and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.





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





In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Sojourner Douglass Urban Renewal Partnership, L.P. (A Limited Partnership) as of December 31, 2009 and 2008 and the results of its operations, changes in its partners' equity and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.








/s/ KOCH GROUP & COMPANY, LLP


New York, New York


March 9, 2010









- 19 -







[Letterhead of REZNICK GROUP, P.C.]





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the Partners


New Zion Apartments Limited Partnership





We have audited the accompanying balance sheet of New Zion Apartments Limited Partnership, HUD Project No. LA48E000011, as of December 31, 2009, and the related statements of income, partners' equity (deficit) and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.





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





In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of New Zion Apartments Limited Partnership as of December 31, 2009, and the results of its operations, changes in partners' equity (deficit), and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.





In accordance with Government Auditing Standards, we have also issued a report, dated March 4, 2010 on our consideration of New Zion Apartments Limited Partnership's internal control over financial reporting. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and the results of that testing and not to provide an opinion on the internal control over financial reporting. In accordance with Government Auditing Standards, we have also issued an opinion dated March 4, 2010, on New Zion Apartments Limited Partnership's compliance with certain provisions of laws, regulations, contracts, and grant agreements, and other matters that could have a direct and material effect on a major HUD-assisted program. Those reports are an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.





Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental information on pages 23 through 35 is presented for purposes of additional analysis and is not a required part of the basic financial statements of the Partnership. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.








/s/ Reznick Group, P.C.


Taxpayer Identification Number:


52-1088612


Baltimore, Maryland


March 4, 2010





Lead Auditor:  Scott H. Szeliga, CPA











- 20 -








[Letterhead of REZNICK GROUP, P.C.]





INDEPENDENT AUDITORS' REPORT





To the Partners


New Zion Apartments Limited Partnership





We have audited the accompanying balance sheet of New Zion Apartments Limited Partnership, HUD Project No. LA48E000011, as of December 31, 2008, and the related statements of income, partners' equity (deficit) and cash flows for the year then ended.  These financial statements are the responsibility of the Partnership's management.  Our responsibility is to express an opinion on these financial statements based on our audit.





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





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





In accordance with Government Auditing Standards, we have also issued a report, dated March 23, 2009 on our consideration of New Zion Apartments Limited Partnership's internal control over financial reporting.  The purpose of that report is to describe the scope of our testing of internal control over financial reporting and the results of that testing and not to provide an opinion on the internal control over financial reporting.  In accordance with Government Auditing Standards, we have also issued an opinion dated March 23, 2009 on New Zion Apartments Limited Partnership’s compliance with certain provisions of laws, regulations, contracts, and grant agreements, and other matters that could have a direct and material effect on a major HUD-assisted program.  Those reports are an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.





Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole.  The accompanying supplemental information on pages 21 through 34 is presented for purposes of additional analysis and is not a required part of the basic financial statements of the partnership.  Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.





/s/ Reznick Group, P.C.


Taxpayer Identification Number:


52-1088612


Baltimore, Maryland


March 23, 2009





Lead Auditor:  Scott H. Szeliga, CPA











- 21 -







[Letterhead of REZNICK GROUP, P.C.]





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the Partners


Bakery Village Urban Renewal Associates, L.P.





We have audited the accompanying balance sheet of Bakery Village Urban Renewal Associates, L.P. as of December 31, 2009, and the related statements of operations, changes in partners' equity (deficit) and cash flows for the year then ended. These financial statements are the responsibility of the partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.





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





In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Bakery Village Urban Renewal Associates, L.P. as of December 31, 2009, and the results of its operations, the changes in its partners' equity (deficit) and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.





As discussed in note 9, adjustments have been made to the partners' equity (deficit) as of December 31, 2008, to reverse accrued interest on the development fee note payable that had been expensed in 1999 - 2002.








/s/ REZNICK GROUP, P.C.


Baltimore, Maryland


March 8, 2010











- 22 -








[Letterhead of REZNICK GROUP, P.C.]





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the Partners


Bakery Village Urban Renewal Associates, L.P.





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





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





In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Bakery Village Urban Renewal Associates, L.P. as of December 31, 2008, and the results of its operations, the changes in its partners’ equity (deficit) and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.





/s/ REZNICK GROUP, P.C.


Baltimore, Maryland


March 19, 2009











- 23 -








[Letterhead of REZNICK GROUP, P.C.]





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the Partners


Marlton Housing Partnership, L.P.





We have audited the accompanying balance sheet of Marlton Housing Partnership, L.P. as of December 31, 2009, and the related statements of operations, changes in partners' equity (deficit) and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit.





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





In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Marlton Housing Partnership, L.P. as of December 31, 2009, and the results of its operations, the change in partners' equity (deficit) and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.





Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information on pages 20 and 21 is presented for the purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.








/s/ REZNICK GROUP


Baltimore, Maryland


March 24, 2010










- 24 -








[Letterhead of REZNICK GROUP, P.C.]





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the Partners


Marlton Housing Partnership, L.P.





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





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





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





Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole.  The supplemental information on pages 18 and 19 is presented for the purposes of additional analysis and is not a required part of the basic financial statements.  Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.








/s/ REZNICK GROUP


Baltimore, Maryland


April 4, 2009










- 25 -





[Letterhead of HANKINS & COMPANY]





INDEPENDENT AUDITORS’ REPORT





Partners


Guymon Housing Partners


Limited Partnership


Fort Smith, Arkansas





We have audited the accompanying balance sheets of Guymon Housing Partners Limited Partnership as of December 31, 2009 and 2008, and the related statements of operations, partners' equity (deficit) and cash flows for the years then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.





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





In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Guymon Housing Partners Limited Partnership as of December 31, 2009 and 2008, and the results of its operations and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.








/s/ HANKINS & COMPANY


Fort Smith, Arkansas


February 26, 2010










- 26 -





INDEPENDENCE TAX CREDIT PLUS L.P. IV


AND SUBSIDIARIES


CONSOLIDATED BALANCE SHEETS














March 31,2010


2009*ASSETSOperating assets:Property and equipment, at cost, less accumulated depreciation (Notes 2, 4 and 7)

$
18,938,097


$
33,534,651Cash and cash equivalents (Notes 2, 3 and 12)


1,176,371



1,221,135Cash held in escrow (Notes 2, 3 and 5)


2,053,883



2,384,087Deferred costs - less accumulated amortization (Notes 2 and 6)


314,520



318,382Due from local general partners and affiliates (Note 8)


415,917



381,072Other assets


368,261



381,288Total operating assets


23,267,049



38,220,615LIABILITIES AND PARTNERS’ CAPITAL (DEFICIT)Operating liabilities:Mortgage notes payable (Notes 3 and 7)

$
24,703,113


$
25,188,479Accounts payable and other liabilities


554,586



450,137Accrued interest payable


6,474,837



6,002,200Security deposit payable


308,937



313,722Due to local general partners and affiliates (Note 8)


1,760,553



1,814,971Due to general partner and affiliates (Note 8)


2,470,084



2,183,287Total operating liabilities


36,272,110



35,952,796Commitments and contingencies (Notes 8 and 12)Partners’ capital (deficit):Limited partners (100,000 BACs authorized; 45,844 issued and outstanding) (Note 1)


(13,728,173
)


1,356,894General partners


(545,320
)


(392,946
)Independence Tax Credit Plus L.P. IV total


(14,273,493
)


963,948Noncontrolling interests (Note 2)


1,268,432



1,303,871Total partners’ capital


(13,005,061
)


2,267,819Total liabilities and partners’ capital (deficit)

$
23,267,049


$
38,220,615*   Restated.The accompanying notes are an integral part of these consolidated financial statements.













- 27 -








INDEPENDENCE TAX CREDIT PLUS L.P. IV


AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF OPERATIONS














Years Ended March 31,2010


2009Operations:RevenuesRental income

$
4,891,163


$
4,808,071Other (Note 2)


125,800



102,835Total revenues


5,016,963



4,910,906ExpensesGeneral and administrative


1,367,573



1,448,251General and administrative-related parties (Note 8)


593,921



601,460Repairs and maintenance


1,071,571



1,026,888Operating and other


832,778



856,515Real estate taxes


119,982



132,527Insurance


230,667



250,099Financial, primarily interest


1,357,379



1,390,392Depreciation and amortization


1,717,972



2,075,109Loss on impairment of assets


12,993,000



12,033,060Total expenses


20,284,843



19,814,301Loss from operations


(15,267,880
)


(14,903,395
)Loss from discontinued operations


-



(80,558
)Net loss


(15,267,880
)


(14,983,953
)Net loss attributable to noncontrolling interests from operations


30,439



22,698Net loss attributable to noncontrolling interests from discontinued operations


-



56,837Net loss attributable to noncontrolling interests

$
30,439


$
79,535Net loss attributable to Independence Tax Credit Plus LP IV

$
(15,237,441
)

$
(14,904,418
)Loss from operations – limited partners

$
(15,085,067
)

$
(14,731,890
)Loss from discontinued operations – limited partners


-



(23,484
)Net loss – limited partners

$
(15,085,067
)

$
(14,755,374
)Number of BACs outstanding


45,844



45,844Loss from operations per BAC

$
(329.05
)

$
(321.35
)Loss from discontinued operations per BAC


-



(0.51
)Loss per BAC

$
(329.05
)

$
(321.86
)The accompanying notes are an integral part of these consolidated financial statements.










- 28 -







INDEPENDENCE TAX CREDIT PLUS L.P. IV


AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL (DEFICIT)


YEARS ENDED MARCH 31, 2010 and 2009














Total


Limited

Partners


General

Partners


Noncontrolling

InterestsPartners’ capital (deficit) – April 1, 2008

$
16,947,754


$
15,816,240


$
(251,892
)

$
1,383,406Prior period adjustment (Note 14)


299,018



296,028



2,990



0Partners’ capital (deficit) as restated – April 1, 2008


17,246,772



16,112,268



(248,902
)


1,383,406Net loss


(14,983,953
)


(14,755,374
)


(149,044
)


(79,535
)Forgiveness of related party debt


5,000



0



5,000



0Partner’s capital (deficit) – March 31, 2009


2,267,819



1,356,894



(392,946
)


1,303,871Net loss


(15,267,880
)


(15,085,067
)


(152,374
)


(30,439
)Distributions


(5,000
)


0



0



(5,000
)Partner’s capital (deficit) – March 31, 2010

$
(13,005,061
)

$
(13,728,173
)

$
(545,320
)

$
1,268,432The accompanying notes are an integral part of these consolidated financial statements.












- 29 -







INDEPENDENCE TAX CREDIT PLUS L.P. IV


AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS











Years Ended March 31,2010


2009*Cash flows from operating activities:Net loss

$
(15,267,880
)

$
(14,983,953
)Adjustments to reconcile net loss to net cash provided by (used in) operating activities:Prior period adjustment


299,018



0Depreciation and amortization


1,717,972



2,190,395Gain on sale of property


0



(68,089
)Loss on impairment of assets


12,993,000



12,033,060Decrease in cash held in escrow


275,017



108,750Decrease in other assets


13,027



70,681Increase (decrease) in accounts payable and other liabilities


104,448



(427,953
)Increase in accrued interest payable


173,619



290,419(Decrease) increase in security deposit payable


(4,785
)


5,655(Decrease) increase in due to local general partners and affiliates


(79,865
)


187,852Increase in due from local general partners


(34,845
)


(381,072
)Increase (decrease) in due to general partner and affiliates


286,797



(509,294
)Total adjustments


(15,743,403
)


13,500,404Net cash provided by (used in) operating activities


475,523



(1,483,549
)Cash flows from investing activities:Acquisition of property and equipment


(90,820
)


(343,142
)Decrease in cash held in escrow


55,187



224,965Proceeds from sale of property


0



343,289Costs relating to sale of property


0



(66,362
)Increase in due to local general partners and affiliates


25,447



277,034Net cash (used in) provided by investing activities


(10,186
)


435,784Cash flows from financing activities:Repayments of mortgage notes


(485,366
)


(325,816
)Decrease in capitalization of consolidated subsidiaries attributable to noncontrolling interests


(5,000
)


(73,385
)Increase in deferred costs


(19,735
)


0Net cash used in financing activities


(510,101
)


(399,201
)Net decrease in cash and cash equivalents


(44,764
)


(1,446,966
)Cash and cash equivalents at beginning of year


1,221,135



2,668,101Cash and cash equivalents at end of year*

$
1,176,371



1,221,135Supplemental disclosure of cash flow information:Cash paid during the year for interest

$
970,290


$
1,127,614Summarized below are the components of the gain on sale of property:Proceeds from sale of investment – net

$
0


$
(276,927
)Decrease in property and equipment, net of accumulated depreciation


0



1,643,157Decrease in cash held in escrow


0



98,508Decrease in other assets


0



119,374Increase in accounts payable and other liabilities


0



443,981Decrease in security deposit payable


0



(22,123
)Decrease in due to local general partners and affiliates


0



(109,798
)Decrease in due to general partners and affiliates


0



(65,000
)Decrease in mortgage notes


0



(1,961,004
)Decrease in deferred costs


0



56,743Increase in capital contribution – General Partner


0



5,000*  Reclassified for comparative purposes.



The accompanying notes are an integral part of these consolidated financial statements.










- 30 -





INDEPENDENCE TAX CREDIT PLUS L.P. IV


AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


MARCH 31, 2010 and 2009




NOTE 1 – General




Independence Tax Credit Plus L.P. IV (a Delaware limited partnership) (the “Partnership”) was organized on February 22, 1995.  The general partner of the Partnership is Related Independence L.L.C., a Delaware limited liability company (the “General Partner”).  Centerline Holding Company (“Centerline”) is the ultimate parent of Centerline Affordable Housing Advisors LLC (“CAHA”), the managing member of the General Partner.




The Partnership’s business is primarily to invest in other partnerships (“Local Partnerships,” “subsidiaries” or “subsidiary partnerships”) owning leveraged apartment complexes (“Apartment Complexes” or “Properties”) that are eligible for the low-income housing tax credit (“Tax Credit”) enacted in the Tax Reform Act of 1986, some of which may also be eligible for the historic rehabilitation tax credit.  Qualified Beneficial Assignment Certificates (“BACs”) holders are entitled to Tax Credits over the period of the Partnership’s entitlement to claim Tax Credits (for each Property, generally ten years from the date of investment or, if later, the date the Property is placed in service; referred to herein as the “Credit Period”) with respect to each Apartment Complex.




The Partnership had originally acquired limited partnership interests in fourteen subsidiary partnerships, all of which have been, or were, consolidated. The Partnership does not anticipate acquiring limited partnership interests in additional subsidiary partnerships. The Partnership’s investments in Local Partnerships represent from 98.99% to 99.89% interests, except for one investment which is a 58.12% interest.




The Partnership was authorized to issue a total of 100,000 ($100,000,000) Beneficial Assignment Certificates (“BACs”) which have been registered with the Securities and Exchange Commission for sale to the public. Each BAC represents all of the economic and virtually all of the ownership rights attributable to a limited partnership interest.  The Partnership had raised a total of $45,844,000 representing 45,844 BACs.






NOTE 2 – Summary of Significant Accounting Policies




a)  Basis of Accounting




For financial reporting purposes, the Partnership’s fiscal year ends on March 31. All subsidiaries have fiscal years ending December 31. Accounts of the subsidiaries have been adjusted for intercompany transactions from January 1 through March 31. The Partnership’s fiscal year ends March 31 in order to allow adequate time for the subsidiaries’ financial statements to be prepared and consolidated. The books and records of the Partnership are maintained on the accrual basis of accounting, in accordance with U.S. generally accepted accounting principles (“GAAP”).




b)  Basis of Consolidation




The consolidated financial statements include the accounts of the Partnership and its subsidiary partnerships for the years ended March 31, 2010 and 2009, respectively, in which the Partnership is a limited partner. Through the rights of the Partnership and/or an affiliate of the General Partner, which affiliate has a contractual obligation to act on behalf of the Partnership, to remove the general partner of the subsidiary local partnerships (the “Local General Partner”) and to approve certain major operating and financial decisions, the Partnership has a controlling financial interest in the subsidiary partnerships. All intercompany accounts and transactions with the subsidiary partnerships have been eliminated in consolidation.




The Partnership has adopted FASB Accounting Standards Codification (“ASC”) Topic 810, Consolidation (“ASC 810”), which is effective for fiscal year ends beginning after December 15, 2008, to determine the accounting of its noncontrolling interests in its consolidated financial statements.  In accordance with ASC 810, losses attributable to noncontrolling interests amounted to approximately $30,000 for the year ended March 31, 2010.  Prior to the adoption of ASC 810, losses attributable to minority interests which exceeded the minority interests’ investment in a subsidiary partnership were charged to the Partnership.  Such losses amounted to approximately $26,000 for the year ended March 31, 2009.  Increases (decreases) in the capitalization of the consolidated subsidiaries attributable to noncontrolling interests arise from cash contributions from and cash distributions to the noncontrolling interest partners.  The Partnership’s investment in each subsidiary is equal to the respective subsidiary’s partners’ equity less minority interest capital, if any.  The weighted average loss per BAC is calculated on the limited partnership interests.




c)  Cash and Cash Equivalents




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




d)  Property and Equipment




Property and equipment to be held and used are carried at cost which includes the purchase price, acquisition fees and expenses, construction period interest and any other costs incurred in acquiring the properties.  The cost of property and equipment is depreciated over their estimated useful lives using accelerated and straight-line methods. Expenditures for repairs and maintenance are charged to expense as incurred; major renewals and betterments are capitalized. At the time property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are eliminated from the assets and accumulated depreciation accounts and the profit or loss on such disposition is reflected in earnings.  The determination of asset impairment is a two-step process.  First, management estimates amounts recoverable through future operations and sale of the property on an undiscounted basis.  If such estimates are below depreciated cost, property investments are reduced to estimated fair value (using estimated future discounted net cash flows) when the property is considered to be impaired and the depreciated cost exceeds estimated fair value.








- 31 -


INDEPENDENCE TAX CREDIT PLUS L.P. IV
 AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31, 2010 and 2009
 
 
 At the time management commits to a plan to dispose of assets, said assets are adjusted to the lower of carrying amount or fair value less costs to sell. These assets are classified as property and equipment-held for sale and are not depreciated. There are no assets classified as property and equipment-held for sale at March 31, 2010.




e)  Revenue Recognition




Rental income is earned under standard residential operating leases and is typically due the first day of each month, but can vary by property due to the terms of the tenant leases.  Rental income is recognized when earned and charged to tenants’ accounts receivable if not received by the due date.  Rental payments received in advance of the due date are deferred until earned.  Rental subsidies are recognized as rental income during the month in which it is earned.




Other revenues are recorded when earned and consist of the following items:  Interest income earned on cash and cash equivalent balances and cash held in escrow balances, income from forfeited security deposits, late charges, laundry and vending income and other rental related items.




f)  Income Taxes




The Partnership is not a tax paying entity for income tax purposes and, accordingly, no provision has been made for income taxes.  The Partnership may be subject to state and local taxes in jurisdictions in which it operates.




The Partnership has no material liability for unrecognized tax benefits and no material change to the beginning partner’s capital of the Partnership. As of and during the year ended March 31, 2010, the Partnership did not have a liability for any unrecognized tax benefits or related interest and penalties.




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




Income tax returns for the year prior to 2006 are no longer subject to examination by tax authorities.




g)  Mortgage Financing and Offering Costs




Costs incurred in connection with obtaining permanent mortgage financing are capitalized and amortized over the lives of the related mortgage notes. Costs incurred to sell BACs, including brokerage fees and the nonaccountable expense allowance, are considered selling and offering expenses. These costs are charged directly to limited partners’ capital.




h)  Deferred Costs




Deferred costs and fees incurred in connection with the purchase of interests in certain subsidiary partnerships have been capitalized as property costs and are being amortized over the lives of the related properties.




i)  Loss Contingencies




The Partnership records loss contingencies as a charge to income when information becomes available which indicates that it is probable that an asset has been impaired or a liability has been incurred as of the date of the consolidated financial statements and the amount of loss can be reasonably estimated.




j)  Use of Estimates




The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.




k)  Recent Accounting Pronouncements




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










- 32 -


INDEPENDENCE TAX CREDIT PLUS L.P. IV
 AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31, 2010 and 2009


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




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






NOTE 3 – Fair Value of Financial Instruments




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




Cash and Cash Equivalents and Cash Held in Escrow


The carrying amount approximates fair value.




Accounts Payable and Other Liabilities


The carrying amount approximates fair value.




Mortgage Notes Payable


The Partnership has categorized its financial assets and liabilities based upon the fair value hierarchy specified by ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”). This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures.  This standard does not require any new fair value measurements, but discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost).  This standard provides for a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels.  The following is a brief description of those three levels:




Level 1:
Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.




Level 2:
Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly.  These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.




Level 3:
Unobservable inputs that reflect the Partnership’s own assumptions.




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




At March 31, 2010

At March 31, 2009Carrying 
Amount

Fair Value

Carrying 
Amount

Fair ValueLIABILITIES:Mortgage notes and accrued interest

$
31,177,950


$
12,763,485


$
31,190,679


$
15,101,746







Fair value has been estimated using Level 3 inputs.











- 33 -





INDEPENDENCE TAX CREDIT PLUS L.P. IV
 AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31, 2010 and 2009




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




Due to General Partner and Affiliates and Due to/from Local General Partners and Affiliates


Management believes it is not practical to estimate the fair value of due to General Partner and affiliates and due to/from Local General Partners and affiliates because market information on such unique obligations are not currently available.




NOTE 4 – Property and Equipment




The components of property and equipment and their estimated useful lives from operating assets are as follows:




March 31,

Estimated

Useful Lives

(Years)2010


2009Land

$
2,003,490


$
2,003,490Building and improvements


38,507,210



51,500,210

27.5 – 40Furniture and fixtures


1,376,938



1,286,118

5 – 7(41,887,638
)


54,789,818Less:  Accumulated depreciation


(22,949,541
)


(21,255,167
)$
18,938,097


$
33,534,651







Depreciation expense for the years ended March 31, 2010 and 2009 amounted to $1,694,374 and $2,046,500, respectively.




Depreciation expense from discontinued operations for the years ended March 31, 2010 and 2009 amounted to $0 and $109,522, respectively.




Impairments




The Partnership deemed the buildings of the following Local Partnerships impaired and wrote them down to their estimated fair values which resulted in losses on impairment.  Fair value was obtained from assessments made by management after indications that the carrying value of the assets were not recoverable or from appraisals done at the Local Partnerships.




Impairments recorded for the year ended March 31, 2010 were as follows:




Bakery Village Urban Renewal Associates, LP

$
8,083,000Belmont/McBride Apartments Limited Partnership


2,299,000Figueroa Senior Housing Limited Partnership


1,295,000Guymon Housing Partners, L.P.


1,316,000$
12,993,000







Impairments recorded for the year ended March 31, 2009 were as follows:




Marlton Housing Partnership, LP

$
2,233,060Fawcett Street Limited Partnership


2,400,000NNPHI Senior Housing Limited Partnership


2,600,000Sojourner Douglass L.P.


1,600,000Kanisa Apartments, Ltd.


3,200,000$
12,033,060











- 34 -


INDEPENDENCE TAX CREDIT PLUS L.P. IV
 AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31, 2010 and 2009


NOTE 5 – Cash Held in Escrow




Cash held in escrow from operating assets consists of the following:




March 31,2010


2009Purchase price payments*

$
340,846


$
365,846Real estate taxes, insurance and other


442,805



723,948Reserve for replacement


974,573



1,004,760Tenant security deposits


295,659



289,533$
2,053,883


$
2,384,087*   Represents amounts to be paid to seller upon meeting specified rental achievement criteria.







NOTE 6 – Deferred Costs




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




March 31,2010


2009

PeriodFinancing costs

$
884,890


$
884,890

2 through 45 yearsOther deferred costs


153,522



133,7861,038,412



1,018,676Less:  Accumulated amortization


(723,892
)


(700,294
)$
314,520


$
318,382







Amortization expense for the years ended March 31, 2010 and 2009 amounted to $23,598 and $28,609, respectively.




Amortization expense from discontinued operations for the years ended March 31, 2010 and 2009 amounted to $0 and $5,764, respectively.




NOTE 7 - Mortgage Loans Payable




The mortgage loans from operations are payable in aggregate monthly installments of approximately $143,000 including principal and interest with rates varying from 0% to 8.46% per annum and have maturity dates ranging from 2014 through 2051.  The loans are collateralized by the land and buildings of the subsidiary partnerships, the assignment of certain subsidiary partnerships’ rents and leases, and are without further recourse.  Certain obligations are guaranteed by affiliates of the general partner.




Annual principal payments on the permanent debt requirements for mortgage notes payable for each of the next five calendar years and thereafter are as follows:




Year Ending December 31,

Amount2010

$
409,2442010


432,1312011


456,4682012


483,1902013


525,083Thereafter


22,396,997$
24,703,113







The mortgage agreements generally require monthly deposits to replacement reserves and monthly deposits to escrow accounts for real estate taxes, hazard and mortgage insurance and other expenses (Note 5).










- 35 -


INDEPENDENCE TAX CREDIT PLUS L.P. IV
 AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31, 2010 and 2009


Accrued interest payable amounted to approximately $6,475,000 and $6,301,000 as of March 31, 2010 and 2009, respectively.  Interest accrues on all mortgage loans, which include primary and secondary loans.  Certain secondary loans have provisions such that interest is accrued but not payable until a future date.  The Partnership anticipates the payment of accrued interest on the secondary loans (which make up the majority of the accrued interest payable amount indicated in the above table and which have been accumulating since the Partnership’s investment in the respective Local Partnership) will be made from future refinancings or sales proceeds of the respective Local Partnerships.  In addition, each Local Partnership’s mortgage notes are collateralized by the land and buildings of the respective Local Partnership, and are without further recourse to the Partnership.  Accrued interest payable is included in accounts payable and other liabilities on the Consolidated Balance Sheets.






NOTE 8 – Related Party Transactions




An affiliate of the General Partner has a .01% interest as a special limited partner in each of the Local Partnerships.




Pursuant to the Partnership Agreement and the Local Partnership Agreements, the General Partner, the Local General Partners and their respective affiliates receive their pro-rata share of profits, losses and tax credits.




A)  Guarantees




The Partnership had negotiated Operating Deficit Guaranty Agreements with the Local Partnerships whereby the Local General Partners of such Local Partnerships and/or their affiliates agreed to fund operating deficits for a specified period of time. The terms of the Operating Deficit Guaranty Agreements vary for each of these Local Partnerships, with maximum dollar amounts to be funded for a specified period of time, generally three years, commencing on the break-even date. As of March 31, 2010 and 2009, Operating Deficit Guarantees aggregate approximately $123,000 and $123,000, respectively.  Amounts funded under such agreements will be treated as non-interest bearing loans, which will be paid only out of 50% of available cash flow or out of available net sale or refinancing proceeds.  As of March 31, 2010 and 2009, there has been no funding under the Operating Deficit Guaranty Agreements.




B)  Related Party Expenses




Expenses incurred to related parties from operations for the years ended March 31, 2010 and 2009 were as follows:




Years Ended March 31,2010


2009Partnership management fees (a)

$
208,973


$
229,179Expense reimbursements (b)


158,165



114,017Local administrative fees (c)


39,000



38,000Total general and administrative – General Partner


406,138



381,196Property management fees incurred to affiliates of the subsidiary partnerships’ general partners


187,783



220,264Total general and administrative-related parties

$
593,921


$
601,460







Expenses incurred to related parties from discontinued operations for the years ended March 31, 2010 and 2009 were as follows:




Years Ended March 31,2010


2009Local administrative fees (c)

$
0


$
5,000Total general and administrative – General Partner

$
0


$
5,000







(a)     The General Partner is entitled to receive a partnership management fee, after payment of all Partnership expenses, which together with the annual local administrative fees will not exceed a maximum of 0.5% per annum of invested assets (as defined in the Partnership Agreement), for administering the affairs of the Partnership. Subject to the foregoing limitation, the partnership management fee will be determined by the General Partner in its sole discretion based upon its review of the Partnership’s investments. Unpaid partnership management fees for any year are accrued without interest and will be payable out of sales or refinancing proceeds only to the extent of available funds after payments on all Partnership liabilities have been made other than to those owed to the General Partner and its affiliates.  Partnership management fees owed to the General Partner amounting to approximately $1,847,000 and $1,638,000 were accrued and unpaid as of March 31, 2010 and 2009, respectively.  Current year partnership management fees may be paid out of operating reserves or refinancing and sales proceeds.  As such the General Partner cannot demand payment of the deferred fees beyond the Partnership’s ability to pay them.








- 36 -


INDEPENDENCE TAX CREDIT PLUS L.P. IV
 AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31, 2010 and 2009




(b)     The Partnership reimburses the General Partner and its affiliates for actual Partnership operating expenses incurred by the General Partner and its affiliates on the Partnership’s behalf. The amount of reimbursement from the Partnership is limited by the provisions of the Partnership Agreement. Another affiliate of the General Partner performs asset monitoring for the Partnership. These services include site visits and evaluations of the subsidiary partnerships’ performance.  Expense reimbursements and asset monitoring fees owed to the General Partner and its affiliates amounting to approximately $86,000 and $35,000 were accrued and unpaid as of March 31, 2010 and 2009, respectively.  The General Partner does not intend to demand payment of the deferred payables beyond the Partnership’s ability to pay them.  The Partnership anticipates that these will be paid from working capital reserves or future sales proceeds.




(c)     Independence SLP IV L.P., a special limited partner of the subsidiary partnerships, is entitled to receive a local administrative fee of up to $5,000 per year from each subsidiary partnership.  Local administrative fees owed to Independence SLP IV L.P. amounting to $279,000 and $255,000 were accrued and unpaid as of March 31, 2010 and 2009, respectively.  These fees have been deferred in certain cases and the Partnership anticipates that they will be paid from working capital reserves or future sales proceeds.




C)  Due to/from Local General Partners and Affiliates




Due to Local General Partners and affiliates from operating liabilities consists of the following:




March 31,2010


2009Development fee payable

$
1,586,284


$
1,586,284Construction costs payable


50,000



50,000Operating advances


71,447



46,000Management and other fees


52,822



132,687$
1,760,553


$
1,814,971







Due from Local General Partners and affiliates from operating liabilities consists of the following:




March 31,2010


2009Local general partner loan receivable

$
415,917


$
381,072









- 37 -


INDEPENDENCE TAX CREDIT PLUS L.P. IV
 AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31, 2010 and 2009




NOTE 9 – Taxable Net Loss




A reconciliation of the consolidated financial statement net loss to the income tax loss for the Partnership and its consolidated subsidiaries follows:




Years Ended March 31,2010


2009Financial statement net loss

$
(15,237,441
)

$
(14,904,418
)Differences between depreciation and amortization expense for financial reporting purposes and income tax purposes


(479,158
)


(406,606
)Differences resulting from Partnership having a different fiscal year for income tax and financial reporting purposes


(143,342
)


96,575Tax exempt interest income


(124
)


(2,903
)Provision for loss on impairment


12,993,000



12,033,060Difference between gains and losses allocated to noncontrolling interests for financial reporting purposes and tax purposes


0



(860,969
)Other, including accruals for financial reporting purposes not deductible for income tax purposes until paid


(337,224
)


459,220Net loss per income tax returns

$
(3,204,289
)

$
(3,586,041
)







NOTE 10 – Sale of Property




The Partnership is currently in the process of developing a plan to dispose of all of its investments.  As of March 31, 2010, the Partnership’s limited partnership interest in one Local Partnership and the property and the related assets and liabilities of one Local Partnership have been sold.  There can be no assurance as to when the Partnership will dispose of its remaining investments or the amount of proceeds which may be received.  However, based on the historical operating results of the Local Partnerships and the current economic conditions, including changes in tax laws, it is unlikely that the proceeds from such sales received by the Partnership will be sufficient to return to the limited partners their original investments.  All gains and losses on sales are included in discontinued operations.




On December 31, 2008, the Partnership sold its limited partnership interest in BX-8A Team Associates, L.P. (“BX-8A”) to an unaffiliated third party purchaser for a sales price of $100,000.  The Partnership received $40,000 from this sale after the repayment of other liabilities of approximately $60,000.  The sale resulted in a gain of approximately $102,000 resulting from the write-off of the deficit basis in the Local Partnership of approximately $62,000 at the date of the sale and the $40,000 cash received from the sale.  The sale also resulted in a write-off of operating advances of approximately $902,000 owed to the Partnership.  In addition, the sale resulted in a non-cash contribution to the Local Partnership from the General Partner of approximately $5,000 as a result of the write-off of fees owed by the Local Partnership to an affiliate of the General Partner.











- 38 -





INDEPENDENCE TAX CREDIT PLUS L.P. IV


AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


MARCH 31, 2010 and 2009









NOTE 11 – Selected Quarterly Financial Data (Unaudited)




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




Quarter EndedOPERATIONS

June 30,

2009

September 30,

2009

December 31,

2009

March 31,

2010Revenues

$
1,316,947

$
1,289,401

$
1,260,234

$
1,150,381Total expenses


(1,865,813
)

(1,849,363
)

(1,812,797
)

(14,756,870
)Loss from operations


(548,866
)

(559,962
)

(552,563
)

(13,606,489
)Noncontrolling interests in (income) loss of subsidiaries from operations


(5,644
)

(1,610
)

(2,323
)

(40,016
)Net loss – Independence Tax Credit Plus L.P. IV

$
(554,510
)
$
(561,572
)
$
(554,886
)
$
(13,566,473
)Net loss – limited partnership

$
(548,965
)
$
(555,956
)
$
(549,337
)
$
(13,430,809
)Net loss per weighted average BAC

$
(11.97
)
$
(12.13
)
$
(11.98
)
$
(292.97
)Quarter EndedOPERATIONS

June 30,

2008

September 30,

2008

December 31,

2008

March 31,

2009Revenues

$
1,262,255

$
1,262,469

$
1,293,273

$
1,092,909Total expenses


(1,910,086
)

(1,899,492
)

(1,940,413
)

(14,064,310
)Loss from continuing operations before minority interest


(647,831
)

(637,023
)

(647,140
)

(12,971,401
)(Loss) income from discontinued operations


(60,404
)

(5,300
)

(48,748
)

33,893Net loss

$
(708,234
)
$
(642,323
)
$
(695,888
)
$
(12,937,508
)Noncontrolling interests in (income) loss of subsidiaries from operations


(9,433
)

(3,359
)

(5,778
)

41,268Noncontrolling interests in loss of subsidiaries from discontinued operations


256


48


482


56,051Net loss – Independence Tax Credit Plus L.P. IV

$
(717,411
)
$
(645,634
)
$
(701,184
)
$
(12,840,189
)Net loss – limited partnership

$
(710,237
)
$
(639,178
)
$
(694,172
)
$
(12,711,787
)Loss per weighted average BAC from operations

$
(14.19
)
$
(13.83
)
$
(14.10
)
$
(279.23
)(Loss) income per weighted average BAC from discontinued operations


(1.30
)

(0.11
)

(1.04
)

1.94Net loss per weighted average BAC

$
(15.49
)
$
(13.94
)
$
(15.14
)
$
(277.29
)








NOTE 12 – Commitments and Contingencies




a)  Uninsured Cash and Cash Equivalents




The Partnership and its subsidiary partnerships maintain their cash and cash equivalents in various banks. The accounts at each bank are insured by the Federal Deposit Insurance Corporation for up to $250,000 with certain limitations.  At March 31, 2010, uninsured cash and cash equivalents at various banking institutions approximated $67,000.








- 39 -


INDEPENDENCE TAX CREDIT PLUS L.P. IV
 AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31, 2010 and 2009




b)  Leases




Certain subsidiary partnerships have land lease arrangements whereby they are  obligated to pay $1 per annum through June 2054.




c)  Property Management Fees




Property management fees incurred by the Local Partnerships amounted to $293,275 and $346,945 for the years ended March 31, 2010 and 2009, respectively.  Of these fees, $187,783 and $220,264 were incurred to affiliates of the Local General Partners.




d)  Other




The Partnership is subject to the risks incident to potential losses arising from the management and ownership of improved real estate and poor economic conditions.




The Partnership and BACs holders began to recognize Tax Credits with respect to a Property when the Credit Period for such Property commenced.  The Credit Period generally runs for ten years from the date it commenced with respect to each eligible Property.  Because of the time required for the acquisition, completion and rent-up of Properties, as expected, that the amount of Tax Credits per BAC gradually increased over the first three years of the Partnership. Tax Credits not recognized in the first three years will be recognized in the 11th through 13th years. The Partnership generated $945,893 and $3,115,662 of Tax Credits during each of the 2009 and 2008 tax years, respectively.  As of December 31, 2009, all the Local Partnerships have completed their Credit Periods.








- 40 -


INDEPENDENCE TAX CREDIT PLUS L.P. IV
 AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31, 2010 and 2009


NOTE 13 – Discontinued Operations




The following table summarizes the results of operations of the Local Partnerships that are classified as discontinued operations.  For the year ended March 31, 2010, there were no properties classified as discontinued operations in the consolidated financial statements.  For the year ended March 31, 2009, BX-8A, which was sold during the year ended March 31, 2009, was classified as discontinued operations in the consolidated statements of operations.




Consolidated Statements of Discontinued Operations:




Year Ended

March 31, 2009RevenuesRental income

$
320,167Other (Note 2)


8,632Gain on sale of properties (Note 10)


68,089Total revenues


396,888ExpensesGeneral and administrative


112,515General and administrative-related parties (Note 8)


5,000Repairs and maintenance


84,501Operating and other


103,374Insurance


29,129Financial, primarily interest


27,641Depreciation and amortization


115,286Total expenses


477,446Loss before noncontrolling interests


(80,558
)Noncontrolling interests in loss of subsidiaries from discontinued operations


56,837Total loss from discontinued operations (including gain on sale of properties and noncontrolling interests)

$
(23,721
)Loss – limited partners from discontinued operations (including gain on sale of properties and noncontrolling interests)

$
(23,484
)Number of BACs outstanding


45,844Loss from discontinued operations (including gain on sale of properties and noncontrolling interests) per BAC

$
(0.51
)







Year Ended

March 31, 2009Cash flows from Discontinued Operations:

Net cash used in operating activities

$
(827,474
)Net cash provided by investing activities

$
465,243Net cash used in financing activities

$
(74,294
)







In accordance with ASC 360, the results of discontinued operations are reported as a separate component of income before extraordinary items on the consolidated statements of operations.  Discontinued operations include the results of operations and any gain or loss recognized for Local Partnerships that have been disposed of or are held for sale.  A gain or loss recognized on a disposition is disclosed in the notes to the consolidated financial statements.  Adjustments to amounts previously reported in operations that are directly related to a disposition of a Local Partnership are reclassified in the current period as discontinued operations for comparability purposes.  Assets and liabilities of a Local Partnership that are classified as held for sale are presented separately in the asset and liability sections, respectively, of the consolidated balance sheets.











- 41 -


INDEPENDENCE TAX CREDIT PLUS L.P. IV
 AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31, 2010 and 2009


NOTE 14 – Prior Period Adjustment




A subsidiary partnership had accrued interest on the development fee payable from February 1, 1999 through December 31, 2002.  Its partnership agreement does not allow for interest to be paid on the development fee; and accordingly, in 2009 the accrued interest was reversed and reflected as a prior period adjustment of $299,018.











- 42 -






Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.




None




Item 9A(T).  Controls and Procedures.




(a)Evaluation of Disclosure Controls and Procedures.The Chief Executive Officer and Chief Financial Officer of Related Independence L.L.C, the general partner of the Partnership, have evaluated the effectiveness of the Partnership’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”) as of the end of the period covered by this report.  Based on such evaluation, such officers have concluded that, as of the end of such period, the Partnership’s disclosure controls and procedures are effective.




(b)  Management’s Report on Internal Control over Financial Reporting.Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f).  In evaluating the Partnership’s internal control over financial reporting, management has adopted the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring organizations of the Treadway Commission (the “COSO Framework”).  Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer of the General Partner, the Partnership conducted an evaluation of the effectiveness of its internal control over financial reporting as of March 31, 2010.  The Partnership’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with generally accepted accounting principles.  Internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.  However, because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.




Based on management’s evaluation under the COSO Framework, it has concluded that the Partnership’s internal control over financial reporting, was, as of March 31, 2010, (1) effective at the Partnership level, in that they provide reasonable assurance that information required to be disclosed by the Partnership in the reports it files or submits under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and (2) ineffective at the subsidiary level due to certain control deficiencies noted in the audit reports for such subsidiaries.  Management will attempt to cause the Local General Partner’s to remedy such deficiencies; however, the General Partner does not have control over the internal controls at the subsidiary level.  Management believes they have sufficient controls at the Partnership level to mitigate these deficiencies, and such deficiencies do not have a material impact on the consolidated financial statements.




This annual report does not include an attestation report of the Partnership’s registered public accounting firm regarding internal control over financial reporting. The Partnership’s internal control over financial reporting was not subject to attestation by the Partnership’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Partnership to provide only this report.




(c)  Changes in Internal Controls over Financial Reporting.Except as noted in (b) above, during the year ended March 31, 2010, there were no changes in the Partnership’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting.




Item 9B.  Other Information.




Not applicable.










- 43 -








PART III




Item 10.  Directors, Executive Officers and Corporate Governance.




The Partnership has no directors or executive officers. The Partnership’s affairs are managed and controlled by Related Independence LLC (“RILLC”), the General Partner.  The Partnership has not adopted a separate code of ethics because the Partnership has no directors or executive officers. However, Centerline Holding Company (“Centerline”), the ultimate parent company of Centerline Affordable Housing Advisors (“CAHA”) which controls the General Partner, has adopted a code of ethics (see http://www.centerline.com).




Certain information concerning the executive officers of the General Partner is set forth below.




Name

PositionRobert A. Pace

Chief Financial OfficerAndrew J. Weil

President and Chief Executive Officer







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




ANDREW J. WEIL, 39, is an Executive Managing Director of Centerline, and is the Head of the Affordable Housing Group and the Chief Executive Officer of Centerline Financial, Centerline’s Credit Risk Products Group.  Mr. Weil is responsible for overseeing the day to day operations of the Affordable Housing Group, including the acquisition of properties with Low-Income Housing Tax Credits and the origination and structuring of institutional funds.  Prior to joining Centerline’s predecessor in January 1994, Mr. Weil was a Financial Analyst for the Heights Management Company, where he specialized in the analysis of potential investments and property management.  Mr. Weil received a Bachelor of Science degree in Economics with a concentration in Finance from the Wharton School of the University of Pennsylvania.




Item 11.  Executive Compensation.




The Partnership has no officers or directors. The Partnership does not pay or accrue any fees, salaries or other forms of compensation to members or officers of the General Partner for their services. However, under the terms of the Partnership Agreement, the Partnership has entered into certain arrangements with the General Partner and its affiliates, which provide for compensation to be paid to the General Partner and its affiliates. Such arrangements include (but are not limited to) agreements to pay annual partnership management fees, nonrecurring acquisition fees, a nonaccountable acquisition expense allowance, an accountable expense reimbursement and subordinated disposition fees to the General Partner and/or its affiliates. In addition, the General Partner is entitled to a subordinated interest in cash from sales or refinancings and a 1% interest in net income, net loss, distributions of adjusted cash from operations and cash from sales or refinancings.  Certain members and officers of the General Partner receive compensation from the General Partner and its affiliates for services performed for various affiliated entities which may include services performed for the Partnership. The maximum annual partnership management fee paid to the General Partner is 0.5% of invested assets. See Note 8 in Item 8 above, which is incorporated herein by reference.




Tabular information concerning salaries, bonuses and other types of compensation payable to executive officers has not been included in this annual report. As noted above, the Partnership has no executive officers. The levels of compensation payable to the General Partner and/or its affiliates is limited by the terms of the Partnership Agreement and may not be increased therefrom on a discretionary basis.




Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.




Title of Class

Name and address of

Beneficial Ownership

Amount and Nature of

Beneficial Ownership

Percentage

of ClassGeneral Partnership Interest in the

Partnership

Related Independence L.L.C.

625 Madison Avenue

New York, NY  10022

$1,000 capital contribution - directly owned

100%







Independence SLP IV L.P., a limited partnership whose general partner is the General Partner of the Partnership and which acts as the special limited partner of each Local Partnership, holds a .01% limited partnership interest in the Local Partnerships. See Note 8 in Item 8 above, which information is incorporated herein by reference thereto.




Except as set forth below no person is known by the Partnership to be the beneficial owner of more than five percent of the Limited Partnership Interests and/or BACs; and neither the General Partner nor any officer of the General Partner beneficially owns any Limited Partnership Interests or BACs. The following table sets forth the number of BACs beneficially owned as of May 28, 2010 by (i) each BACs holder known to the Partnership to be a beneficial owner of more than 5% of the BACs, (ii) each executive officer of the General Partner of RILLC and (iii) the directors and executive officers of the general partners of RILLC as a group. Unless otherwise noted, all BACs are owned directly with sole voting and dispositive powers.











- 44 -






Name of Beneficial Owner (1)

Amount and Nature of

Beneficial Ownership

Percentage

of ClassLehigh Tax Credit Partners, Inc.

2,868.06
(2)

6.3
%J. Michael Fried

2,868.06
(2)(3)

6.3
%Alan P. Hirmes

2,868.06
(2)(3)

6.3
%Stuart J. Boesky

2,868.06
(2)(3)

6.3
%Stephen M. Ross

2,868.06
(2)(3)

6.3
%Marc D. Schnitzer

2,868.06
(2)(3)

6.3
%Andrew J. Weil

-


-Robert A. Pace

-


-All executive officers of the general partner of the Related General Partner as a group (three persons)2,868.06
(2)

6.3
%







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




(2)           As set forth in Schedule 13D filed by Lehigh Tax Credit Partners III L.L.C. and Lehigh Tax Credit Partners, Inc. (the “Managing Member”) on January 25, 1999 with the Securities and Exchange Commission.




(3)           Only owns an economic interest in the Managing Member.




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




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




Item 14.  Principal Accountant Fees and Services.




Audit Fees




The aggregate fees by Friedman LLP for professional services rendered for the audit of the Partnership’s annual consolidated financial statements for the years ended March 31, 2010 and 2009 and for the reviews of the financial information included in the Partnership’s quarterly reports on Form 10-Q for those years were $83,200 and $82,500, respectively.




Audit Related Fees




None.




All Other Fees




None.




The Partnership is not required to have and does not have a standalone audit committee.











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PART IV




Item 15.
Exhibits, Financial Statement Schedules.Sequential

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

12Consolidated Balance Sheets at March 31, 2010 and 2009

27Consolidated Statements of Operations for the years ended March 31, 2010 and 2009

28Consolidated Statements of Changes in Partners’ Capital (Deficit) for the years ended March 31, 2010 and  2009

29Consolidated Statements of Cash Flows for the years ended March 31, 2010 and 2009

30Notes to Consolidated Financial Statements

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

50Schedule I - Condensed Financial Information of Registrant

51Schedule III - Real Estate and Accumulated Depreciation

54All other schedules have been omitted because they are not required or because the required information is contained in the financial statements or notes thereto.(a) 3.
Exhibits(3A)
Agreement of Limited Partnership of Independence Tax Credit Plus L.P. IV as adopted on February 22, 1995*(3B)
Form of Amended and Restated Agreement of Limited Partnership of Independence Tax Credit Plus L.P. IV, attached to the Prospectus as Exhibit A**(3C)
Certificate of Limited Partnership of Independence Tax Credit Plus L.P. IV as filed on February 22, 1995*(10A)
Form of Subscription Agreement attached to the Prospectus as Exhibit B**(10B)
Escrow Agreement between Independence Tax Credit Plus L.P. IV and Bankers Trust Company*(10C)
Form of Purchase and Sales Agreement pertaining to the Partnership’s acquisition of Local Partnership Interests*(10D)
Form of Amended and Restated Agreement of Limited Partnership of Local Partnerships*(21)
Subsidiaries of the Registrant

47*Incorporated herein as an exhibit by reference to exhibits filed with Post-Effective Amendment No. 4 to the Registration Statement on Form S-11 {Registration No. 33-89968}**Incorporated herein as an exhibit by reference to exhibits filed with Post-Effective Amendment No. 8 to the Registration Statement on Form S-11 {Registration No. 33-89968}(31.1)
Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a)(31.2)
Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a)(32.1)
Certification Pursuant to Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Title 18 of the United States Code (18 U.S.C. 1350)








- 46 -








PART IV




Item 15.
Exhibits, Financial Statement Schedules (continued).(c)
Subsidiaries of the Registrant (Exhibit 21)

Jurisdiction of OrganizationFawcett Street Limited Partnership

WAFigueroa Senior Housing Limited Partnership

CANNPHI Senior Housing Limited Partnership

CABelmont/McBride Apartments Limited Partnership

NJNew Zion Apartments Limited Partnership

LABakery Village Urban Renewal Associates, L.P.

NJSojourner Douglass, L.P.

NJMarlton Housing Partnership, L.P.

PAGP Kaneohe Limited Partnership

HIKSD Village Apartments, Phase II, Ltd.

KYKanisa Apartments, Ltd.

KYGuymon Housing Partners, L.P.

OK(d)
Not applicable










- 47 -







SIGNATURES











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











INDEPENDENCE TAX CREDIT PLUS L.P. IV


(Registrant)











By:
RELATED INDEPENDENCE L.L.C.,a General PartnerDate:
June 24, 2010



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



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








- 48 -







Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:











Signature

Title

Date/s/ Robert A. Pace

Robert A. Pace

Chief Financial Officer and Principal Accounting Officer of Related Independence L.L.C.

June 24, 2010/s/ Andrew J. Weil

Andrew J. Weil

President (Chief Executive Officer) of Related Independence L.L.C.

June 24, 2010











- 49 -









REPORT OF INDEPENDENT REGISTERED PUBLIC


ACCOUNTING FIRM ON FINANCIAL STATEMENT SCHEDULES














To the Partners


Independence Tax Credit Plus L.P. IV and Subsidiaries








Under date of June 24, 2010, we reported on the basic consolidated balance sheets of Independence Tax Credit Plus L.P. IV and Subsidiaries as of March 31, 2010 and 2009, and the related consolidated statements of operations, changes in partners' capital (deficit) and cash flows for each of the years in the two-year period ended March 31, 2010.





In connection with our audits of the basic aforementioned consolidated financial statements, we have also audited supporting Schedule I as of March 31, 2010 and 2009 and for the years ended March 31, 2010 and 2009, and Schedule III as of March 31, 2010 and for the years ended March 31, 2010 and 2009.  These supporting schedules are the responsibility of the Partnerships' management.  Our responsibility is to express an opinion on these schedules based on our audits.  In our opinion, these schedules present fairly, when read in conjunction with the related consolidated financial statements, the financial data required to be set forth therein.














/s/Friedman LLP








New York, New York


June 24, 2010








- 50 -







INDEPENDENCE TAX CREDIT PLUS L.P. IV


SCHEDULE I


CONDENSED SCHEDULE OF FINANCIAL INFORMATION OF REGISTRANT











Summarized condensed financial information of registrant (not including consolidated subsidiary partnerships)











CONDENSED BALANCE SHEETS














ASSETS








2010


2009Cash and cash equivalents

$
573,780


$
807,515Investment in subsidiary partnerships


0



0Cash held in escrow


340,846



365,846Other assets


1,097,063



1,226,454Total assets

$
2,011,689


$
2,399,815LIABILITIES AND PARTNERS’ CAPITALDue to general partner and affiliates

$
1,934,439


$
1,672,192Other liabilities


77,250



67,693Total liabilities


2,011,689



1,739,885Partners’ capital (deficit)


0



659,930Total liabilities and partners’ capital (deficit)

$
2,011,689


$
2,399,815








Investments in subsidiary partnerships are recorded in accordance with the equity method of accounting, wherein the investments are not reduced below zero.  Accordingly, partners’ equity on the consolidated balance sheet will differ from partners’ equity shown above.











See Independent Registered Public Accounting Firm’s Report on Supplementary Information.








- 51 -







INDEPENDENCE TAX CREDIT PLUS L.P. IV


SCHEDULE I


CONDENSED SCHEDULE OF FINANCIAL INFORMATION OF REGISTRANT


(Not Including Consolidated Subsidiary Partnerships)








CONDENSED STATEMENTS OF OPERATIONS














Years Ended March 31,2010

2009RevenuesOther income

$
1,958

$
32,431Loss on sale of property


0


(125,678
)Total income (loss)


1,958


(93,247
)ExpensesAdministrative and management


145,819


141,420Administrative and management-related parties


367,138


343,192Total expenses


512,957


484,612Loss from operations


(510,999
)

(577,859
)Equity in loss of subsidiary partnerships


(148,931
)

(14,326,559
)Net loss

$
(659,930
)
$
(14,904,418
)











See Independent Registered Public Accounting Firm’s Report on Supplementary Information.









- 52 -







INDEPENDENCE TAX CREDIT PLUS L.P. IV


SCHEDULE I


CONDENSED SCHEDULE OF FINANCIAL INFORMATION OF REGISTRANT


(Not Including Consolidated Subsidiary Partnerships)





CONDENSED STATEMENTS OF CASH FLOWS





Increases (Decreases) in Cash and Cash Equivalents














Years Ended March 31,2010

2009Cash flows from operating activities:Net loss

$
(659,930
)
$
(14,904,418
)Adjustments to reconcile net loss to net cash used in operating activities:Equity in loss of subsidiary partnerships


0


14,326,559Decrease in other assets


129,391


1,026,806Increase (decrease) in liabilities:Due to general partner and affiliates


262,247


(642,590
)Other liabilities


9,557


(1,749
)Total adjustments


401,195


14,709,026Net cash used in operating activities


(258,735
)

(195,392
)Cash flows from investing activities:Decrease in cash held in escrow


25,000


67,800Decrease (increase) in investments in subsidiary partnerships


0


(727,256
)Net cash provided by (used in) investing activities


25,000


(659,456
)Net decrease in cash and cash equivalents


(233,735
)

(854,848
)Cash and cash equivalents, beginning of year


807,515


1,662,363Cash and cash equivalents, end of year

$
573,780

$
807,515











See Independent Registered Public Accounting Firm’s Report on Supplementary Information.








- 53 -








INDEPENDENCE TAX CREDIT PLUS L.P. IV


AND SUBSIDIARIES


SCHEDULE III


CONSOLIDATED SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION


Partnership Property Pledged as Collateral


MARCH 31, 2010








Description

Encumbrances

Initial Cost to Partnership

Cost

Capitalized

Subsequent to

Acquisition:

Improvements

Gross Amount at which Carried at Close of Period

Accumulated

Depreciation and Impairments

Year of

Construction/

Renovation

Date

Acquired

Life on which

Depreciation in

Latest Income

Statements are

Computed (a)Land

Buildings and

Improvements
Land

Buildings and

Improvements

TotalApartment ComplexesFawcett Street Limited PartnershipTacoma, WA

$
1,791,241

$
390,654

$
4,247,465

$
(2,211,819
)
$
396,383

$
2,029,917

$
2,426,300

$
2,031,578


1996-97

June 1996

27.5
yearsFigueroa Senior Housing Limited PartnershipLos Angeles, CA


2,957,279


279,000


4,978,250


(660,664
)

291,377


4,305,209


4,596,586


2,463,362


1996-97

Nov. 1996

27.5
yearsNNPHI Senior Housing Limited PartnershipLos Angeles, CA


3,872,440


709,657


6,135,419


(2,119,270
)

715,387


4,010,419


4,725,806


2,679,444


1996-97

Dec. 1996

27.5
yearsBelmont/McBride Apartments Limited PartnershipPaterson, NJ


2,645,117


154,934


5,627,693


213,963


182,633


5,813,957


5,996,590


3,368,477


1997-98

Jan. 1997

27.5
yearsSojourner Douglass, L.P.Paterson, NJ


1,977,352


141,297


2,573,950


(1,403,766
)

143,996


1,167,485


1,311,481


1,211,274


1997-98

Feb. 1997

27.5
yearsNew Zion Apartments Limited PartnershipShreveport, LA


694,364


20,000


2,688,770


137,075


22,699


2,823,146


2,845,845


1,325,076


1997-98

Oct. 1997

27.5
yearsBakery Village Urban Renewal Associates, L.P.Montclair, NJ


3,997,638


50,000


14,912,416


(5,109,389
)

52,699


9,800,328


9,853,027


5,092,602


1997-98

Dec. 1997

27.5
yearsMarlton Housing Partnership, L.P.Philadelphia, PA


1,849,000


2,648


1,547,121


(1,391,840
)

4,355


153,574


157,929


97,120


1998-99

May 1998

27.5
yearsGP Kaneohe Limited PartnershipKaneohe, HI


1,583,509


0


3,306,828


111,467


613


3,417,682


3,418,295


1,009,536


1999-00

July 1999

7-40
yearsKSD Village Apartments, Phase II Ltd.Danville, KY


346,336


0


887,539


40,224


612


927,150


927,762


290,606


1999-00

July 1999

10-40
yearsKanisa Apartments Ltd.Fayette County, KY


1,363,209


106,592


4,846,543


(3,072,909
)

107,205


1,773,021


1,880,226


1,246,509


1998-99

Oct. 1999

5-40
yearsGuymon Housing Partners, L.P.Guymon, OK


1,625,628


84,918


4,238,907


(576,035
)

85,531


3,662,260


3,747,791


2,133,960


1998-99

Dec. 1999

27.5
years$
24,703,113

$
1,939,700

$
55,990,901

$
(16,042,963
)
$
2,003,490

$
39,884,148

$
41,887,638

$
22,949,541(a)   Depreciation is computed using primarily the straight-line method over the estimated useful lives determined by the Partnership date of acquisition.








See Independent Registered Public Accounting Firm’s Report on Supplementary Information.








- 54 -








INDEPENDENCE TAX CREDIT PLUS L.P. IV


AND SUBSIDIARIES


SCHEDULE III


CONSOLIDATED SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION


Partnership Property Pledged as Collateral


MARCH 31, 2010








Cost of Property and Equipment


Accumulated DepreciationYears Ended March 31,2010


2009


2010


2009Balance at beginning of year

$
54,789,818


$
70,210,727


$
21,255,167


$
21,186,975(Adjustment to) additions during year:Land, building and improvements


90,820



343,142Discontinued operations, dispositions and impairments


(12,993,000
)


(15,764,051
)Accumulated depreciation on dispositions and impairments










0



(2,087,830
)Depreciation expense










1,694,374



2,156,022Balance at close of year

$
41,887,638


$
54,789,818


$
22,949,541


$
21,255,167








At the time the Local Partnerships were acquired by Independence Tax Credit Plus L.P. IV, the entire purchase price paid by Independence Tax Credit Plus L.P. IV was pushed down to the Local Partnerships as property and equipment with an offsetting credit to capital.











See Independent Registered Public Accounting Firm’s Report on Supplementary Information.








- 55 -