UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K
(Mark One)

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

For the fiscal year ended March 31, 1998

                                       OR

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

                         Commission File Number 33-89968

                      INDEPENDENCE TAX CREDIT PLUS L.P. IV
                      ------------------------------------
             (Exact name of registrant as specified in its charter)

        Delaware                                                 13-3809869
        --------                                                 ----------
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              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) 421-5333

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

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

                       DOCUMENTS INCORPORATED BY REFERENCE
       None

Index to exhibits may be found on page 47
Page 1 of 58

<PAGE>


                                      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").

On July 6, 1995, the Partnership commenced a public offering (the "Offering") of
Beneficial Assignment Certificates ("BACs") representing assignments of limited
partnership interests in the Partnership ("Limited Partnership Interests"),
managed by Related Equities Corporation (the "Dealer Manager"), pursuant to a
prospectus dated July 6, 1995 (the "Prospectus").

As of March 31, 1998, the Partnership has received $45,844,000 of Gross Proceeds
of the Offering from 2,759 investors ("BACs holders"). The solicitation for the
subscription of BACs was terminated as of May 22, 1996 and the final closing
occurred on August 15, 1996.

The Partnership's business is primarily to invest in other partnerships ("Local
Partnerships") owning apartment complexes ("Apartment Complexes" or
"Properties") that are eligible for the low-income housing tax credit ("Housing
Tax Credit") enacted in the Tax Reform Act of 1986, some of which may also be
eligible for the historic rehabilitation tax credit ("Historic Tax Credit";
together with Housing Tax Credits, "Tax Credits"). As of March 31, 1998, the
Partnership has acquired an interest in nine Local Partnerships, all of which
have been consolidated. The Partnership's investment in each Local Partnership
represents from 95% to 99.89% with one Local Partnership at 58.12% of the
partnership interests in the Local Partnership. As of March 31, 1998, the
Partnership has invested approximately $27,390,000 (including approximately
$1,161,000 classified as a loan repayable from sale/refinancing proceeds in
accordance with the Contribution Agreement and not including acquisition fees of
approximately $1,771,000) of net proceeds in nine Local Partnerships of which
approximately $13,252,000 remains to be paid to the Local Partnerships
(including approximately $2,313,000 being held in escrow) as certain benchmarks,
such as occupancy level, are attained prior to the release of the funds. The
Partnership has approximately $9,056,000 available for future investments. The
Partnership will be acquiring additional properties, and the Partnership may be
required to fund potential purchase price adjustments based on tax credit
adjustor clauses. See Item 2, Properties, below.

The Partnership has been formed to invest in Apartment Complexes that are
eligible for the Housing Tax Credit enacted in the Tax Reform Act of 1986. Some
Apartment Complexes may also be eligible for Historic Rehabilitation Tax Credits
("Historic Complexes"). The investment objectives of the Partnership are
described below.

1. Entitle qualified BACs holders to Housing 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.

                                      -2-

<PAGE>

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

There can be no assurance that the Partnership will achieve its investment
objectives as described above.

The Partnership is subject to the risks incident to potential losses arising
from the management and ownership of improved real estate. The Partnership can
also be affected by poor economic conditions generally, however the Partnership
intends to purchase additional properties which will diversify its portfolio.

Competition
-----------

The real estate business is highly competitive and substantially all of the
properties acquired and to be acquired by the Partnership are expected to have
active competition from similar properties in their respective vicinities. The
Partnership will compete in the acquisition of properties with many other
entities engaged in real estate investment activities, some of which have
greater assets than the Partnership. In addition, the number of entities and the
amount available for investment in properties of a type suitable for investment
by the Partnership may increase, resulting in increased competition for such
investments and possible increases in the prices to be paid. 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 their affiliates. The General
Partner receives compensation in the 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 from 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 2.  Properties.

As of March 31, 1998, the Partnership has acquired an interest in nine Local
Partnerships, all of which have been consolidated. Except for the interest in
Westminster Park Plaza ("Westminster") and New Zion Apartments, L.P. ("New
Zion"), the Partnership's investment in each Local Partnership represents 98.99%
or 99.89% of the partnership interests in the Local Partnership. As of June 30,
1997, the Partnership had acquired a 47.29% interest in Westminster and has two
options to acquire an additional 48.7% interest and a 3% interest, respectively.
The interest acquired by the Partnership in Westminster gave it full and
exclusive voting rights. On July 1, 

                                      -3-

<PAGE>

1997, the Partnership exercised its option to purchase an additional 48.7%
interest in Westminster after which the Partnership's investment in Westminster
totaled 95.99%. 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 general partner and to approve certain major
operating and financial decisions, the Partnership has a controlling financial
interest in all of the Local Partnerships 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 14. Schedule 
III.

                           Local Partnership Schedule

<TABLE>
<CAPTION>
Name and Location                                     Percentage of Units
(Number of Units)                    Date Acquired    Occupied at May 1,
--------------------------------------------------------------------------
                                                      1998   1997   1996
                                                      ----   ----   ----
<S>                                  <C>              <C>    <C>     <C>
BX-8A Team Associates, L.P.          October 1995      98%   100%    98%
  New York, NY (41)                  
                                     
Westminster Park Plaza               
  (a California Limited Partnership) June 1996         94%    96%
  Los Angeles, CA (130)              
                                     
Fawcett Street Limited Partnership   June 1996         93%    93%
  Tacoma, WA (60)                    
                                     
Figueroa Senior Housing              November 1996     99%     0%*
  Limited Partnership                
  Los Angeles, CA (66)               
                                     
NNPHI Senior Housing                 December 1996     99%     0%*
  Limited Partnership                
  Los Angeles, CA (75)               
                                     
Belmont/McBride Apartments           January 1997     100%     0%*
  Limited Partnership                
  Paterson, NJ (42)                  
                                     
Sojourner Douglass, L.P.             February 1997    100%
  Paterson, NJ (20)                  
                                     
New Zion Apartments                  October 1997       0%*
  Limited Partnership                
  Shreveport, LA (100)               
                                     
Bakery Village Urban Renewal         December 1997      0%*
  Associates, L.P.                  
  Montclair, NJ (125)
</TABLE>

* Properties still in construction phase.

                                      -4-

<PAGE>

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

Management continuously reviews the physical state of the properties and budgets
improvements when required which are generally funded from cash flow from
operations or release of replacement reserve escrows.

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

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

Real estate taxes are calculated using rates and assessed valuations determined
by the township or city in which the property is located. Such taxes have
approximated 1% of the aggregate cost of the properties as shown in Schedule III
to the financial statements included herein.

In connection with investments in development-stage Apartment Complexes, the
General Partner generally requires that the general partners of the Local
Partnerships ("Local General Partners") provide completion guarantees and/or
undertake to repurchase the Partnership's interest in the Local Partnership if
construction or rehabilitation is not completed substantially on time or on
budget ("Development Deficit Guarantees"). The Development Deficit Guarantees
generally also require the Local General Partner to provide any funds necessary
to cover net operating deficits of the Local Partnership until such time as the
Apartment Complex has achieved break-even operations. The General Partner
generally requires that the Local General Partners undertake an obligation to
fund operating deficits of the Local Partnership (up to a stated maximum amount)
during a limited period of time (typically three to five years) following the
achievement of break-even operations ("Operating Deficit Guarantees"). Under the
terms of the Development and Operating Deficit Guarantees, amount funded will be
treated as Operating Loans which will not bear interest and which will be repaid
only out of 50% of available cash flow or out of available net sale or
refinancing proceeds. In some instances, the Local General Partners are required
to undertake an obligation to comply with a Rent-Up Guaranty Agreement, whereby
the Local General Partner agrees to pay liquidated damages if predetermined
occupancy rates are not achieved. These payments are made without right of
repayment. In cases where the General Partner deems it appropriate, the
obligations of a Local General Partner under the Development Deficit, Operating
Deficit and/or Rent-Up Guarantees are secured by letters of credit and/or cash
escrow deposits.

Housing Tax Credits with respect to a given Apartment Complex are available for
a ten-year period that commences when the property is placed into service.
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.  Submission of Matters to a Vote of Security Holders.
None.

                                      -5-

<PAGE>


                                     PART II

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

As of March 31, 1998, 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 plans to impose 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 8, 1998, the Partnership has approximately 2,767 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.

There are no material legal restrictions in the Partnership Agreement on the
ability of the Partnership to make distributions.

The Partnership has made no distributions to the BACs holders as of March 31,
1998. The Partnership does not anticipate providing cash distributions to its
BACs holders other than from net refinancing or sales proceeds.

There has recently been an increasing number of requests for the list of BACs
holders of limited partnerships such as the Partnership. Often these requests
are made by a person who, only a short time before making the request, acquired
merely a small number of BACs in the partnership and seeks the list for an
improper purpose, a purpose that is not in the best interest of the partnership
or is harmful to the partnership. In order to best serve and protect the
interests of the Partnership and all of its investors, the General Partner of
the Partnership has adopted a policy with respect to requests for the
Partnership's list of BACs holders. This policy is intended to protect investors
from unsolicited and coercive offers to acquire BACs holders' interests and does
not limit any other rights the General Partner may have under the Partnership
Agreement or applicable law.

                                      -6-

<PAGE>


Item 6.  Selected Financial Data.

The information set forth below presents selected financial data of the
Partnership. There were no operations prior to commencement of the Offering of
BACs on July 6, 1995. Additional financial information is set forth in the
audited financial statements in Item 8 hereof.

<TABLE>
<CAPTION>
OPERATIONS                                       Year Ended March 31,
----------                              -------------------------------------
                                           1998         1997            1996
                                           ----         ----            ----
<S>                                     <C>          <C>             <C>     
Revenues                                $2,655,915   $1,820,050      $270,029

Operating expenses                       3,223,943    1,761,475       108,857
                                         ---------    ---------       -------

(Loss) income before minority interest    (568,028)      58,575       161,172

Minority interest in loss of
  subsidiary partnership                    16,171        1,544           225
                                         ---------    ---------       -------

Net (loss) income                       $ (551,857)  $   60,119      $161,397
                                        ==========   ==========      ========

Net (loss) income per weighted
  average BAC                           $   (11.92)  $     1.46      $  19.39
                                        ==========   ==========      ========
</TABLE>

<TABLE>
<CAPTION>
FINANCIAL POSITION                                             March 31,
------------------                      ----------------------------------------------------
                                           1998          1997           1996          1995
                                        ----------------------------------------------------
<S>                                    <C>            <C>            <C>           <C>      
Total assets                           $73,996,062    $57,381,058    $27,605,692   $  51,010
                                       ===========    ===========    ==========    =========
                                    
Total liabilities                      $32,736,900    $17,025,235    $ 2,745,844   $ 169,491
                                       ===========    ===========    ==========    =========
                                    
Minority interest                      $   736,218    $  (718,978)   $   321,081   $       0
                                       ===========    ===========    ==========    =========
                                    
Total partners' capital (deficiency)   $40,522,944    $41,074,801    $24,538,767   $(118,481)
                                       ===========    ===========    ==========    =========
</TABLE>

During the year end March 31, 1998 total assets increased primarily due to the
proceeds from mortgage and construction loans which were utilized in the
investment of Local Partnerships amounting to approximately $11,900,000. During
the years ended March 31, 1997 and 1996 total assets increased primarily due to
an increase in cash and cash equivalents and investments available for sale
primarily due to capital contributions which were not fully expended amounting
to approximately $13,300,000 and $20,000,000, respectively. For the years ended
March 31, 1998, 1997 and 1996, total assets and liabilities increased primarily
due to the continued acquisition of Local Partnerships. For the years ended
March 31, 1998, 1997 and 1996 property and equipment increased approximately
$14,000,000, $17,500,000 and $2,700,000, respectively, and construction loans
increased approximately $4,300,000, $1,800,000 and $2,000,000, respectively.
During the years ended March 31, 1998 and 1997 mortgage notes increased
approximately $8,100,000 and $9,200,000, respectively.

Cash Distributions
------------------

The Partnership has made no distributions to the BACs holders as of March 31,
1998.

                                      -7-

<PAGE>


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

Liquidity and Capital Resources

The Partnership's primary source of funds is the proceeds of its offering. Other
sources of funds include interest earned on such proceeds which have been
invested in tax-exempt money market instruments pending acquisition of Local
Partnerships and a working capital reserve in the original amount of 2.5% of
gross equity raised. The solicitation for the subscription of BACs was
terminated as of May 22, 1996 and the final closing occurred on August 15, 1996.
The Partnership has received $45,844,000 in gross proceeds for BACs pursuant to
a public offering, resulting in net proceeds available for investment of
approximately $36,446,000 after volume discounts, payment of sales commissions,
acquisition fees and expenses, organization and offering expenses and
establishment of a working capital reserve.

As of March 31, 1998, the Partnership has invested approximately $27,390,000
(including approximately $1,161,000 classified as a loan repayable from
sale/refinancing proceeds in accordance with the Contribution Agreement and not
including acquisition fees of approximately $1,771,000) of net proceeds in nine
Local Partnerships of which approximately $13,252,000 remains to be paid to the
Local Partnerships (including approximately $2,313,000 being held in escrow) as
certain benchmarks, such as occupancy level, are attained prior to the release
of the funds. Three of the Local Partnerships were acquired during the year
ended March 31, 1998 for a combined purchase price of approximately $12,133,000
(including approximately $259,000 classified as a loan repayable from
sale/refinancing proceeds in accordance with the Contribution Agreement and not
including acquisition fees of approximately $896,000) of which approximately
$6,616,000 remains to be paid (approximately $1,426,000 of the remaining
payments is being held in escrow). The Partnership has approximately $9,056,000
available for future investments. During the year ended March 31, 1998,
approximately $6,742,000 was paid to Local Partnerships, including purchase
price adjustments (none of which was released from escrow). An additional
$1,549,000 was placed into escrow for purchase price payments during the year
ended March 31, 1998. The Partnership will be acquiring additional properties,
and the Partnership may be required to fund potential purchase price adjustments
based on tax credit adjustor clauses. Such adjustment resulted in a net increase
in purchase price adjustments of approximately $53,000 during the year ended
March 31, 1998.

For the year ended March 31, 1998, cash and cash equivalents of the Partnership
and its nine consolidated Local Partnerships decreased approximately $7,249,000
primarily due to an increase in property and equipment ($8,700,000), an increase
in construction in progress ($10,565,000), an increase in investments available
for sale ($800,000), and an increase in cash held in escrow relating to
investing activities ($1,549,000) which exceeded cash provided by operating
activities ($1,504,000), an increase in accounts payable and other liabilities
relating to investing activities ($665,000), a net increase in due to local
general partners and affiliates relating to investing activities ($509,000), a
net increase in deferred costs relating to financing activities ($304,000), net
proceeds from mortgage and construction loans ($11,824,000) and an increase in
capitalization of consolidated subsidiaries attributable to minority interest
($182,000). Included in the adjustments to reconcile the net loss to cash
provided by operations is depreciation and amortization of approximately
$815,000.

A working capital reserve of approximately $1,146,000 (2.5% of gross equity) has
been established from the Partnership's funds available for investment, which
includes amounts which may be required for potential purchase price adjustments
based on tax credit adjustor clauses. At March 31, 1998 and 1997, none of this
reserve was used. 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. 

                                      -8-

<PAGE>

As of March 31, 1998, there have been no cash distributions from the Local
Partnerships. Management anticipates receiving distributions in the future,
although not to a level sufficient to permit providing cash distributions to the
BACs holders.

The property owned by one of the Local Partnerships in which the Partnership has
invested has been in operation and has maintained stable occupancy since 1990.

The Partnership has negotiated Development Deficit Guaranty Agreements with the
development stage Local Partnerships in which it has invested, none of which
have expired as of March 31, 1998. The Local General Partners and/or their
affiliates have agreed to fund development deficits through the breakeven dates
of each of the Local Partnerships. Such guarantees are defined in their
respective agreements and generally there is no right of repayment to such Local
General Partners. Amounts received under Development Deficit Guaranty from the
developers of the properties purchased by the Partnership are treated as a
reduction of the carrying value of the respective assets.

The Partnership has negotiated Operating Deficit Guaranty Agreements with the
development stage Local Partnerships by which the general partners of such Local
Partnerships and/or their affiliates have 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, 1998, 1997 and 1996, the
gross amounts of the Operating Deficit Guarantees aggregate approximately
$1,848,000, $1,008,000 and $300,000, respectively, none of which have expired as
of March 31, 1998, 1997 and 1996. All current Operating Deficit Guarantees
expire within the next three years. As of March 31, 1998, $0 has 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.

In addition, one Local Partnership has a Rent-Up Guaranty Agreement, in which
the Local General Partner agrees to pay liquidated damages if predetermined
occupancy rates are not achieved. The Local General Partner has agreed to fund
the Rent-Up Guaranty through the break-even date. As of March 31, 1998, the
gross amount of this Rent-Up Guaranty for the Local Partnership aggregated
approximately $764,000 and it has not expired. There has not been any funding
under this guaranty agreement. Amounts received under the guaranty will be
treated as a reduction of the carrying value of the respective assets.

The Operating Deficit Guaranty Agreements, Rent-Up Guaranty Agreements, and
Development Deficit Guaranty Agreements are negotiated to protect the
Partnership's interest in the Local Partnerships and to provide incentive to the
Local General Partners to generate positive cash flow.

Partnership management fees owed to the General Partner amounting to
approximately $269,000 and $128,000 were accrued and unpaid as of March 31, 1998
and 1997, respectively.

The Partnership has invested or committed for investment approximately 75% of
the net proceeds available for investment in nine Local Partnerships, of which
two commenced to generate tax credits in 1996, three have commenced to generate
tax credits in 1997 and four are currently anticipated to commence to generate
tax credits in 1998. The Partnership does not anticipate that it will acquire
prior to the end of 1998 interests in any additional Local Partnerships which
will generate tax credits in 1998. Additionally, due to recent increases in
market demand for investments in properties that are eligible to receive tax
credits and limitations on the types of investments which may be obtained by the
Partnership the purchase price for interests in Local Partnerships which are
qualified for purchase by the Partnership have in-

                                      -9-

<PAGE>

creased. As a result of these changes in market, management does not believe
that the Partnership will be able to invest the proceeds available for
investment in a manner which will enable the Partnership to achieve tax credits
in the range of $140-150 for each $1,000 BAC each year in which the Partnership
is receiving its full entitlement of tax credits.

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 will be diversified by the
location of the properties around the United States so that if one area of the
country is experiencing downturns in the economy, the remaining properties in
the portfolio may be experiencing upswings. However the geographic
diversification of the portfolio may not protect against a general downturn in
the national economy. The tax credits will be attached to the project for a
period of ten years, and will be transferable with the property during the
remainder of such ten-year period. If the General Partner determined that a sale
of a property is warranted, the remaining tax credits would transfer to the new
owner; thereby adding significant value to the property on the market, which
potential increase in value is not included in the financial statement carrying
amount.

Results of Operations
---------------------

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. A loss on impairment of assets is recorded when management estimates
amounts recoverable through future operations and sale of the property on an
undiscounted basis are below depreciated cost. At that time property investments
themselves are reduced to estimated fair value (generally using discounted cash
flows) when the property is considered to be impaired and the depreciated cost
exceeds estimated fair value.

Through March 31, 1998, the Partnership has not recorded any loss on impairment
of assets or reductions to estimated fair value.

The following is a summary of the results of operations of the Partnership for
the years ended March 31, 1998, 1997 and 1996 (the 1997, 1996 and 1995 Fiscal
Years).

The net (loss) income for the 1997, 1996 and 1995 Fiscal Years totaled
$(551,857), $60,119 and $161,397, respectively.

The Partnership and BACs holders will begin to recognize Housing Tax Credits
with respect to a property when the credit period for such property commences.
Because of the time required for the acquisition, completion and rent-up of
properties, it is expected that the amount of Tax Credits per BAC will gradually
increase over the first three years of the Partnership. Housing Tax Credits not
recognized in the first three years will be recognized in the 11th through 13th
years. The Partnership generated $1,267,926, $299,899 and $42,668 of Housing Tax
Credits and no Historic Tax Credits during the 1997, 1996 and 1995 tax years,
respectively.

As of March 31, 1998, 1997 and 1996, the Partnership had acquired an interest in
nine, six and one Local Partnerships, respectively, zero, one and zero of which
were not consolidated, and 

                                      -10-

<PAGE>

are shown on the balance sheet, at cost, as property and equipment. The
Partnership intends to utilize the net proceeds of the offering to acquire
additional interests in Local Partnerships.

The Partnership's results of operations for the years ended March 31, 1998, 1997
and 1996 consisted primarily of (1) approximately $1,021,000, $1,021,000 and
$222,000 of tax-exempt interest income earned on funds not currently invested in
Local Partnerships and (2) the results of the Partnership's investment in nine,
five and one consolidated Local Partnerships, respectively.

During the year ended March 31, 1998, all categories of income and expenses
increased and the results of operations are not comparable due to the continued
acquisition, construction and rent up of properties and are not reflective of
future operations of the Partnership due to uncompleted property construction
and rent-up of properties. In addition, interest income will decrease in future
periods since a substantial portion of the proceeds from the Offering will be
invested in Local Partnerships. For the years ended March 31, 1998, 1997 and
1996, two, two and one of the Partnership's nine, five and one consolidated
properties, respectively, completed construction and were in various stages of
rent up. In addition, three, one and zero of the properties, respectively, had
completed construction in a previous fiscal year, but were in various stages of
rent up for the years ended March 31, 1998, 1997 and 1996. As of the years ended
March 31, 1998, 1997 and 1996, four, two and zero of the Partnership's nine,
five and one consolidated properties, respectively, were still under
construction and four, two and zero of the properties, respectively, had
construction loans with a commitment for permanent financing.

Year 2000 Compliance
--------------------

As the year 2000 approaches, an issue has emerged regarding how existing
application software programs and operating systems can accommodate this date
value. Failure to adequately address this issue could have potentially serious
repercussions. The General Partner is in the process of working with the
Partnership's service providers to prepare for the year 2000. Based on
information currently available, the Partnership does not expect that it will
incur significant operating expenses or be required to incur material costs to
be year 2000 compliant.

Other
-----

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 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. Inflation also affects the Local Partnerships
adversely by increasing operating costs as, for example, for such items as fuel,
utilities and labor.

                                      -11-

<PAGE>

There has recently been an increasing number of requests for the list of BACs
holders of limited partnerships such as the Partnership. Often these requests
are made by a person who, only a short time before making the request, acquired
merely a small number of BACs in the Partnership and seeks the list for an
improper purpose, a purpose that is not in the best interest of the Partnership
or is harmful to the Partnership. In order to best serve and protect the
interests of the Partnership and all of its investors, the General Partner of
the Partnership has adopted a policy with respect to requests for the
Partnership's list of BACs holders. This policy is intended to protect investors
from unsolicited and coercive offers to acquire BACs holders' interests and does
not limit any other rights the General Partner may have under the Partnership
Agreement or applicable law.

                                      -12-

<PAGE>


Item 8.  Financial Statements and Supplementary Data.

<TABLE>
<CAPTION>
                                                                               Sequential
                                                                                  Page
                                                                                  ----
<S>                                                                             <C>
(a) 1. Consolidated Financial Statements

       Independent Auditors' Report                                             14

       Consolidated Balance Sheets at March 31, 1998 and 1997                   28

       Consolidated Statements of Operations for the Years Ended March 31,
       1998, 1997 and 1996                                                      29

       Consolidated Statements of Changes in Partners' Capital for the Years
       Ended March 31, 1998, 1997 and 1996                                      30

       Consolidated Statements of Cash Flows for the Years Ended March 31,
       1998, 1997 and 1996                                                      31

       Notes to Consolidated Financial Statements                               33
</TABLE>

                                      -13-

<PAGE>


                           INDEPENDENT AUDITORS' REPORT
                           ----------------------------


To the Partners of
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 (a Delaware limited partnership) and Subsidiaries as of
March 31, 1998 and 1997, and the related consolidated statements of operations,
changes in partners' capital and cash flows for the years ended March 31, 1998,
1997 and 1996 (the 1997, 1996 and 1995 fiscal years). These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits. We did not
audit the financial statements for eight subsidiary partnerships (1997 fiscal
year), five subsidiary partnerships (1996 fiscal year) and one subsidiary
partnership (1995 fiscal year) whose losses aggregated $902,970, $537,931 and
$22,536 for the years ended March 31, 1998, 1997 and 1996, respectively, and
whose assets constituted 61% and 29% of the Partnership's assets at March 31,
1998 and 1997, respectively, presented in the accompanying consolidated
financial statements. 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits 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, 1998 and 1997, and the results of their
operations and their cash flows for the years ended March 31, 1998, 1997 and
1996 in conformity with generally accepted accounting principles.





/s/ Friedman, Alpren & Green LLP
--------------------------------
Friedman, Alpren & Green LLP

New York, New York
June 8, 1998

                                      -14-

<PAGE>               
                   [Letterhead of Leshkowitz & Company, LLP]


                          Independent Auditor's Report

To the Partners of 
BX 8A Team Associates L.P.:

            We have audited the accompanying balance sheets of BX 8A Team
Associates L.P. as of December 31, 1997 and 1996, and the related statements of
operations, changes in partners' capital, and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

            In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of BX 8A Team
Associates L.P. as of December 31, 1997 and 1996, and the results of its
operations, changes in partners' capital and its cash flows for the years then
ended in conformity with generally accepted accounting principles.

                                                        /s/ Leshkowitz & Company

February 13, 1998
New York, New York

<PAGE>

                   [Letterhead of Leshkowitz & Company, LLP]




                         Independent Auditor's Report
                         ----------------------------



To the Partners of
BX 8A Team Associates L.P.:


     We have audited the accompanying balance sheets of BX 8A Team Associates
L.P. as of December 31, 1996 and 1995, and the related statements of operations,
changes in partners' capital, and cash flows for the year ended December 31, 
1996 and for the period from October 1, 1995 (date of investor entry) through
December 31, 1995. 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 audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of BX 8A Team Associates L.P.
as of December 31, 1996 and 1995, and the results of its operations, changes in
partners' capital and its cash flows for the year ended December 31, 1996 and
for the period from October 1, 1995 (date of investor entry) through
December 31, 1995 in conformity with generally accepted accounting principles.



                                             /s/   Leshkowitz & Company, LLP
                                                 ------------------------------
                                                   Leshkowitz & Company, LLP


New York, New York
January 16, 1997

<PAGE>
                   [Letterhead of Reznick Fedder & Silverman]


                           INDEPENDENT AUDITORS' REPORT

To the Partners
Westminster Park Plaza

             We have audited the accompanying balance sheet of Westminster Park
Plaza (a California limited partnership) as of December 31, 1997 and the related
statements of operations, changes in partners' deficit and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

             We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statements
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 Westminster Park
Plaza as of December 31, 1997, and the results of its operations, the changes in
partners' deficit and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.

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

/s/ Reznick Fedder & Silverman

Boston, Massachusetts 
January 27, 1998

<PAGE>

                  [Letterhead of Reznick Fedder & Silverman]


                         INDEPENDENT AUDITORS' REPORT

To the Partners
Westminster Park Plaza

We have audited the accompanying balance sheet of Westminster Park Plaza (a
California limited partnership) as of December 31, 1996 and the related
statements of operations, changes in partners' deficit and cash flows for the
period June 1, 1996 through December 31, 1996. 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statements 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 Westminister Park Plaza as of
December 31, 1996, and the results of its operations, the changes in partners'
deficit and its cash flows for the period June 1, 1996 through December 31,
1996 in conformity with generally accepted accounting principles.

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

/s/ Reznick Fedder & Silverman

Boston, Massachusetts
April 15, 1997

<PAGE>
                      [Letterhead of McDaniel & Hallstrom]


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, 1997 and 1996, and the related statements of
operations, partners' equity and cash flows for the year ended December 31, 1997
and the period June 3, 1996 through December 31, 1996. 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 generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of FAWCETT STREET LIMITED
PARTNERSHIP as of December 31, 1997 and 1996, and the results of its operations
and its cash flows for the year ended December 31, 1997 and the period June 3,
1996 through December 31, 1996, in conformity with generally accepted accounting
principles.

/s/ McDaniel & Hallstrom

McDaniel & Hallstrom, CPA's 
Tacoma, Washington

February 12, 1998

<PAGE>
                   [Letterhead of Reznick Fedder & Silverman]


                          INDEPENDENT AUDITORS' REPORT

To the Partners
Figueroa Senior Housing Limited Partnership

             We have audited the accompanying balance sheet of Figueroa Senior
Housing Limited Partnership as of December 31, 1997, and the related statements
of expenses, partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

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

             In our opinion, the financial statements referred to above presents
fairly, in all material respects, the financial position of Figueroa Senior
Housing Limited Partnership as of December 31, 1997, and the results of its
operations, the changes in partners' equity and its cash flows for the year then
ended in conformity with generally accepted accounting principles.

                                                  /s/ Reznick Fedder & Silverman

Baltimore, Maryland
January 21, 1998

<PAGE>

                 [Letterhead of Reznick Fedder & Silverman]




                         INDEPENDENT AUDITORS' REPORT
                         ----------------------------



To the Partners of
Figueroa Senior Housing Limited Partnership

     We have audited the accompanying balance sheet of Figueroa Senior
Housing Limited Partnership as of December 31, 1996. This financial statement
is the responsibility of the Partnership's management. Our responsibility is
to express an opinion on this financial statement based on our audit.

     We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the balance sheet is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the balance sheet. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall balance sheet
presentation. We believe that our audit of the balance sheet provides a
reasonable basis for our opinion.

     In our opinion, the balance statement referred to above presents fairly,
in all material respects, the financial position of Figueroa Senior Housing
Limited Partnership as of December 31, 1996, in conformity with generally
accepted accounting principles.


                                                /s/ Reznick Fedder & Silverman

Baltimore, Maryland
June 7, 1997

<PAGE>

          [Letterhead of Clifford R. Benn Certified Public Accountants]

                          INDEPENDENT AUDITOR'S REPORT

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,
1997, 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 generally accepted auditing standards.
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 include
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, 1997 and the results of its operations for the year then ended in
conformity with generally accepted accounting principles.

                                                        /s/ Clifford R. Benn CPA

February 4, 1998
Carson, California

<PAGE>

         [Letterhead of Clifford R. Benn Certified Public Accountants]


                          INDEPENDENT AUDITOR'S REPORT
 
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,
1996, 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 generally accepted auditing standards.
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, 1996 and the results of its operations for the year then ended in 
conformity with generally accepted accounting principles.

                                   /s/ Clifford Benn, CPA
                                   -----------------------
                                       Clifford Benn, CPA

March 18, 1997
Carson, California

<PAGE>

                   [Letterhead of Reznick Fedder & Silverman]

                           INDEPENDENT AUDITORS' REPORT

To the Partners
Belmont/McBride Apartments Limited Partnership

             We have audited the accompanying balance sheet of Belmont/McBride
Apartments Limited Partnership as of December 31, 1997, and the related
statements of operations, partners' equity and cash flows for the year then
ended. These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

             In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Belmont/McBride
Apartments Limited Partnership as of December 31, 1997, and the results of its
operations, the changes in partners' equity and cash flows for the year then
ended, in conformity with generally accepted accounting principles.

                                              /s/ Reznick Fedder & Silverman
Bethesda, Maryland
February 19, 1998

<PAGE>

                     [Letterhead of Cole, Evans & Peterson]

                          INDEPENDENT AUDITORS' REPORT

To the Partners
New Zion Apartments Limited Partnership
Shreveport, Louisiana

We have audited the accompanying balance sheet of New Zion Apartments Limited
Partnership at December 31, 1997, and the related statements of income,
partners' capital, and cash flows for the period 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 generally accepted auditing standards.
These standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of New Zion Apartments Limited
Partnership at December 31, 1997, and the results of its operations and its cash
flows for the period then ended in conformity with generally accepted accounting
principles.


<PAGE>
                                                                          Page 2
To the Partners
New Zion Apartments Limited Partnership

Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying schedules 1 and 2 are
presented for purposes of additional analysis and are 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/ Cole, Evans & Peterson

Cole, Evans & Peterson
February 22, 1998
Shreveport, Louisiana

<PAGE>

                   [Letterhead of Reznick Fedder & Silverman]


                          INDEPENDENT AUDITORS' REPORT


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, 1997, and the related
statements of operations, partners' equity and cash flows for the period March 
3, 1996 (inception) through December 31, 1997. 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 generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

             In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Bakery Village Urban
Renewal Associates, L.P. as of December 31, 1997, and the results of its
operations, the changes in partners' equity and cash flows for the period March
3, 1996 (inception) through December 31, 1997, in conformity with generally
accepted accounting principles.

                                                  /s/ Reznick Fedder & Silverman

Bethesda, Maryland
February 10, 1998


<PAGE>

                       INDEPENDENCE TAX CREDIT PLUS L.P. IV
                                 AND SUBSIDIARIES
                            CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                   March 31,
                                                          -------------------------
                                                              1998         1997
                                                          -----------   -----------

                                      ASSETS

<S>                                                       <C>           <C>  
Property and equipment - at cost, less accumulated
  depreciation (Notes 2 and 4)                            $33,487,474   $19,801,865
Construction in progress                                    9,294,984     1,010,368
Cash and cash equivalents (cost approximates market)
  (Notes 2 and 10)                                          9,811,741    17,061,164
Investments available for sale (Note 2)                    17,000,000    16,200,000
Cash held in escrow (Note 5)                                2,454,311       865,896
Deferred costs, less accumulated amortization 
  (Notes 2 and 6)                                           1,555,982     2,179,235
Other assets                                                  391,570       262,530
                                                          -----------   -----------

  Total assets                                            $73,996,062   $57,381,058
                                                           ==========    ==========


                         LIABILITIES AND PARTNERS' CAPITAL

Liabilities:
  Mortgage notes payable (Note 7)                         $17,371,283   $ 9,226,190
  Construction loans payable (Note 7)                       7,468,689     3,790,102
  Accounts payable and other liabilities                    4,069,053     2,531,437
  Due to local general partners and affiliates (Note 8)     3,320,488     1,264,805
  Due to general partner and affiliates (Note 8)              507,387       212,701
                                                          -----------   -----------

  Total liabilities                                        32,736,900    17,025,235
                                                           ----------    ----------

Minority interest                                             736,218      (718,978)
                                                          -----------   -----------

Commitments and contingencies (Note 10)

Partners' capital:
  Limited partners (100,000 BACs authorized;
    45,844 issued and outstanding) (Note 1)                40,525,248    41,071,586
  General partner                                              (2,304)        3,215
                                                          -----------   -----------

   Total partners' capital                                 40,522,944    41,074,801
                                                          -----------   -----------

   Total liabilities and partners' capital                $73,996,062   $57,381,058
                                                          ===========   ===========
</TABLE>

See accompanying notes to consolidated financial statements.

                                      -15-

<PAGE>


                      INDEPENDENCE TAX CREDIT PLUS L.P. IV
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS



<TABLE>
<CAPTION>
                                                    Years Ended March 31,
                                                1998          1997           1996
                                             ----------    ----------      --------

<S>                                          <C>           <C>             <C>     
Revenues
  Rental income                              $1,493,628    $  716,694      $ 47,060
  Other income (principally interest on 
   capital contributions)                     1,162,287     1,103,356       222,969
                                             ----------    ----------      --------

                                              2,655,915     1,820,050       270,029
                                              ---------     ---------    ----------

Expenses
  General and administrative                    599,319       440,577        16,112
  General and administrative-related parties
   (Note 8)                                     399,042       279,158        25,916
  Repairs and maintenance                       234,038       120,531           294
  Operating and other                           228,449       117,841        17,635
  Taxes                                          69,841        47,362             0
  Insurance                                      97,821        35,664         4,071
  Interest                                      780,824       376,338        15,957
  Depreciation and amortization                 814,609       344,004        28,872
                                             ----------    ----------      --------

                                              3,223,943     1,761,475       108,857
                                             ----------    ----------      --------

Net (loss) income before minority interest     (568,028)       58,575       161,172

Minority interest in loss of subsidiary
  partnership                                    16,171         1,544           225
                                             ----------    ----------      --------

Net (loss) income                            $ (551,857)   $   60,119      $161,397
                                             ==========    ==========      ========

Net (loss) income - limited partners         $ (546,338)   $   59,518      $159,783
                                             ==========    ==========      ========

Weighted average number of BACs outstanding      45,844        40,706         8,241
                                             ==========    ==========      ========

Net (loss) income per weighted average BAC   $   (11.92)   $     1.46      $  19.39
                                             ==========    ==========      ========
</TABLE>

See accompanying notes to consolidated financial statements.

                                     -16-

<PAGE>


                      INDEPENDENCE TAX CREDIT PLUS L.P. IV
                                AND SUBSIDIARIES
             CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
                FOR THE YEARS ENDED MARCH 31, 1998, 1997 AND 1996


<TABLE>
<CAPTION>
                                                           Limited         General
                                              Total        Partners        Partner
                                            -----------   -----------     ---------

<S>                                         <C>           <C>             <C>      
Partners' capital - April 1, 1995           $  (118,481)  $  (119,481)    $   1,000

Capital contributions                        27,333,000    27,333,000             0

Distributions                                       (10)          (10)            0

Offering costs                               (2,837,139)   (2,837,139)            0

Net income                                      161,397       159,783         1,614
                                            -----------   -----------     ---------

Partners' capital - March 31, 1996           24,538,767    24,536,153         2,614

Capital contributions                        18,511,000    18,511,000             0

Offering costs                               (2,035,085)   (2,035,085)            0

Net income                                       60,119        59,518           601
                                            -----------   -----------     ---------

Partners' capital - March 31, 1997           41,074,801    41,071,586         3,215

Net loss                                       (551,857)     (546,338)       (5,519)
                                            -----------   -----------     ---------

Partners' capital - March 31, 1998          $40,522,944   $40,525,248     $  (2,304)
                                            ===========   ===========     =========
</TABLE>

See accompanying notes to consolidated financial statements.

                                      -17-

<PAGE>


                      INDEPENDENCE TAX CREDIT PLUS L.P. IV
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                Years Ended March 31,
                                                      -----------------------------------------
                                                         1998            1997           1996
                                                     ------------   ------------   ------------
<S>                                                  <C>            <C>            <C>         
Cash flows from operating activities:                                             
  Net (loss) income                                  $   (551,857)  $     60,119   $    161,397
                                                     ------------   ------------   ------------
  Adjustments to reconcile net (loss) income to                         
   net cash provided by operating activities:                           
  Depreciation and amortization                           814,609        344,004         28,872
  Minority interest in loss of subsidiary                               
   partnerships                                            16,171          1,544            225
  Increase in cash held in escrow                         (39,520)      (102,008)             0
  Increase in other assets                               (114,040)        (2,416)      (210,031)
  Increase in accounts payable and other                                          
   liabilities                                            872,166      1,983,479            756
  Decrease in due from local general partners                           
   and affiliates                                         226,797              0              0
  Increase in due from local general partners                           
   and affiliates                                         (15,000)       (91,800)             0
  Increase in due to general partner and                                
   affiliates                                             294,686        197,432         28,214
                                                     ------------   ------------   ------------
    Total adjustments                                   2,055,869      2,330,235       (151,964)
                                                     ------------   ------------   ------------
                                                                        
  Net cash provided by operating activities             1,504,012      2,390,354          9,433
                                                     ------------     ----------  -------------
                                                                        
Cash flows from investing activities:                                   
  Acquisition of property and equipment                (8,699,373)   (11,942,399)    (2,368,940)
  Increase in construction in progress                (10,565,714)    (5,157,862)             0
  (Increase) decrease in cash held in escrow           (1,548,895)     2,236,112     (3,000,000)
  Increase in other assets                                (15,000)             0              0
  Increase in accounts payable and other                                
   liabilities                                            665,450        441,874              0
  Increase in due to local general partners                             
   and affiliates                                       1,450,115      1,362,711              0
  Decrease in due to local general partners                             
   and affiliates                                        (941,390)      (895,987)             0
  Increase in investments available for sale             (800,000)    (4,697,588)   (11,502,412)
  Increase in deferred costs                                    0     (1,177,599)    (1,656,279)
                                                     ------------   ------------   ------------
                                                                        
  Net cash used in investing activities               (20,454,807)   (19,830,738)   (18,527,631)
                                                     ------------   ------------   ------------
</TABLE>

See accompanying notes to consolidated financial statements.

                                      -18-
<PAGE>


                      INDEPENDENCE TAX CREDIT PLUS L.P. IV
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (continued)


<TABLE>
<CAPTION>
                                                            Years Ended March 31,
                                                -----------------------------------------
                                                    1998          1997           1996
                                                ----------     -----------    -----------
<S>                                             <C>            <C>            <C>        
Cash flows from financing activities:
  Proceeds from mortgage notes                  $8,187,439     $ 9,247,947    $         0
  Repayments of mortgage loans                     (42,346)        (21,757)             0
  Proceeds from construction loans               5,957,776       1,750,928      2,039,174
  Repayments of construction loans              (2,279,189)              0              0
  Increase in offering costs                             0      (2,035,085)    (2,837,139)
  (Decrease) increase in due to general                       
    partner and affiliates                               0        (273,330)       146,139
  Capital contributions received                         0      18,511,000     27,333,000
  Cash distributions paid                                0               0            (10)
  Increase in deferred costs                      (304,279)       (121,384)             0
  Increase (decrease) in capitalization of                    
   consolidated subsidiaries attributable to                  
   minority interest                               181,971      (1,041,603)       320,856
                                                ----------     -----------    -----------
                                                              
  Net cash provided by financing activities     11,701,372       26,016,716    27,002,020
                                                ----------     -----------    -----------
                                                              
Net (decrease) increase in                                    
  cash and cash equivalents                     (7,249,423)      8,576,332      8,483,822
                                                              
Cash and cash equivalents at                                  
  beginning of year                             17,061,164       8,484,832          1,010
                                                ----------     -----------    -----------
                                                              
Cash and cash equivalents at end of year        $9,811,741     $17,061,164    $ 8,484,832
                                                ==========     ===========    ===========
                                                              
Supplemental disclosure of cash flow information:             
Cash paid during the year for interest          $  481,162     $   252,490    $    15,957
                                                              
Supplemental disclosures of noncash investing                 
  and financing activities:                                   
Retainage included in other assets and                        
  accounts payable and other liabilities$                0     $         0    $    50,083
                                                              
Development fees due to local general                         
  partners and affiliates capitalized to                      
  property and equipment                        $1,335,161     $   577,894    $   311,987
                                                              
Property and equipment reclassified from                      
  construction in progress                      $2,281,098     $ 4,147,494    $         0
                                                              
Capitalization of deferred acquisition costs    $  896,176     $   804,197    $    70,304
                                                              
Increase in property and equipment
  due to the purchase of minority interest      $1,257,054     $         0    $         0
</TABLE>

See accompanying notes to consolidated financial statements.

                                      -19-

<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. IV
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1998


NOTE 1 - General

Independence Tax Credit Plus L.P. IV (a Delaware limited partnership) (the
"Partnership") was organized on February 22, 1995 and commenced a public
offering on July 6, 1995. The general partner of the Partnership is Related
Independence L.L.C., a Delaware limited liability company (the "General
Partner").

The Partnership's business is to invest in other partnerships ("Local
Partnerships," "subsidiaries" or "subsidiary partnerships") owning apartment
complexes that are eligible for the low-income housing tax credit ("Housing Tax
Credit") enacted in the Tax Reform Act of 1986, some of which complexes may also
be eligible for the historic rehabilitation tax credit ("Historic Tax Credit";
together with Housing Tax Credits, "Tax Credits").

As of March 31, 1998, the Partnership has acquired limited partnership interests
in nine subsidiary partnerships, all of which have been consolidated. The
Partnership anticipates acquiring limited partnership interests in additional
subsidiary partnerships in the future. The Partnership's investment in each
Local Partnership represents from 95% to 99.89% with one Local Partnership at
58.12% of the partnership interests in the Local Partnership.

As of March 31, 1998, 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 solicitation for the
subscription of BAC's was terminated as of May 22, 1996 and the final closing
occurred on August 15, 1996. As of March 31, 1998, the Partnership 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 generally accepted accounting
principles.

b)  Basis of Consolidation

The consolidated financial statements include the accounts of the Partnership
and nine, five and one subsidiary partnerships for the years ended March 31,
1998, 1997 and 1996, 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 and to approve certain major operating and financial decisions, the
Partnership has a control-

                                      -20-

<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. IV
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1998


ling financial interest in the subsidiary partnerships. All intercompany
accounts and transactions with the subsidiary partnerships have been eliminated
in consolidation.

Increases (decreases) in the capitalization of the consolidated subsidiaries
attributable to minority interests arise from cash contributions from and cash
distributions to the minority interest partners.

Losses attributable to minority interests which exceed the minority interests'
investment in a subsidiary have been charged to the Partnership. Such losses
aggregated approximately $89,000, $203,000 and $0 for the years ended March 31,
1998, 1997 and 1996, respectively. The Partnership's investment in each
subsidiary is equal to the respective subsidiary's partners' equity less
minority interest capital, if any. In consolidation, all subsidiary partnership
losses are included in the Partnership's capital account except for losses
allocated to minority interest capital.

c)  Cash and Cash Equivalents

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

d)  Investments Available For Sale

At inception, the Partnership adopted the provisions of the Financial Accounting
Standards Board's Statement of Financial Accounting Standards ("SFAS") No. 115
"Accounting for Certain Investments in Debt and Equity Securities." At March 31,
1998 and 1997, the Partnership has classified its securities as available for
sale.

Available for sale securities are carried at fair value with net unrealized gain
(loss) reported as a separate component of partners' capital until realized. A
decline in the market value of any available for sale security below cost that
is deemed other than temporary is charged to earnings, resulting in the
establishment of a new cost basis for the security.

At March 31, 1998 and 1997, the Partnership's investments classified as
investments available for sale are carried at cost which approximates fair
market value, have maturities of less than one year and consists of municipal
bonds and municipal bond instruments. As further clarification, the maturities
of the investments are approximately one month and therefore there are no
material unrealized gains or losses.

e)  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. A loss on impairment 

                                      -21-

<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. IV
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1998


of assets is recorded when management estimates amounts recoverable through
future operations and sale of the property on an undiscounted basis are below
depreciated cost. At that time property investments themselves are reduced to
estimated fair value (generally using discounted cash flows) when the property
is considered to be impaired and the depreciated cost exceeds estimated fair
value.

At the time management commits to a plan to dispose of assets, said assets are
adjusted to the lower of carrying amount or fair value less costs to sell. These
assets are classified as property and equipment-held for sale and are not
depreciated.

Through March 31, 1998, the Partnership has not recorded any loss on impairment
of assets or reductions to estimated fair value.

f)  Income Taxes

The Partnership is not required to provide for, or pay, any federal income
taxes. Net income or loss generated by the Partnership is passed through to the
partners and is required to be reported by them. The Partnership may be subject
to state and local taxes in jurisdictions in which it operates. For income tax
purposes, the Partnership has a fiscal year ending December 31 (Note 9).

g)  Organization and Offering Costs

Costs incurred to organize the Partnership, including but not limited to legal,
accounting and registration fees, are considered deferred organization expenses.
These costs are capitalized and are being amortized over a 60-month period.
Costs incurred in connection with obtaining permanent mortgage financing are
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 Acquisition Costs

Acquisition costs and fees incurred in connection with the proposed purchase of
interests in certain subsidiary partnerships have been deferred. In the event
these partnerships are acquired, these amounts will be capitalized as property
costs. If the subsidiary partnerships are not acquired, these amounts will be
charged to operations.

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
financial statements and the amount of loss can be reasonably estimated.

                                      -22-

<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. IV
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1998


j)  Use of Estimates

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

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 for which it is practicable to estimate that
value:

Cash and Cash Equivalents and Cash Held in Escrow 
------------------------------------------------- 
The carrying amount approximates fair value.

Mortgage Notes Payable
----------------------
The fair value of mortgage notes payable and construction loans payable is
estimated, where practicable, based on the borrowing rate currently available
for similar loans.

The estimated fair values of the Partnership's mortgage notes payable and
construction loans payable are as follows:

<TABLE>
<CAPTION>
                                             March 31, 1998                March 31, 1997
                                         -------------------------    -----------------------
                                          Carrying                    Carrying
                                           Amount      Fair Value      Amount     Fair Value
                                         -----------   -----------    ----------  -----------
<S>                                      <C>           <C>            <C>          <C>       
Mortgage notes payable for which it is:
Practicable to estimate fair value       $11,106,260   $11,106,260    $8,103,690   $8,103,690
Not practicable                            6,265,023           (a)     1,122,500          (a)

Construction loans payable for which it is:

Practicable to estimate fair value         6,478,272     6,478,272     2,039,174    2,039,174
Not practicable                              990,417           (a)     1,750,928          (a)
</TABLE>

(a) Management believes it is not practicable to estimate the fair value of the
mortgage notes and construction loans payable because mortgage programs with
similar characteristics are not currently available to the partnerships.

The carrying amount of other assets and liabilities reported on the consolidated
balance sheets that require such disclosure approximates fair value.


                                      -23-

<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. IV
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1998



NOTE 4 - Property and Equipment

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

<TABLE>
<CAPTION>
                                               March 31,              Estimated
                                      ----------------------------   Useful Lives
                                          1998             1997         (Years)
                                      -----------      -----------   ------------
<S>                                   <C>              <C>                <C>
Land                                  $ 3,061,463      $ 1,882,002
Building and improvements              31,024,804       14,672,141        27.5
Investment in limited partnership (a)           0        3,201,522
Furniture and fixtures                    535,506          397,246         5-7
                                      -----------      -----------

                                       34,621,773       20,152,911
Less:  Accumulated depreciation        (1,134,299)        (351,046)
                                      -----------      -----------

                                      $33,487,474      $19,801,865
                                      ===========      ===========
</TABLE>

a) Represents the Partnership's investment, at cost, as of March 31, 1997 in
Belmont/McBride Apartments Limited Partnership which was acquired in January
1997 and was not consolidated in the accompanying financial statement.

Included in property and equipment at March 31, 1998 and 1997, was $1,770,677
and $874,501, respectively, of acquisition fees paid to the General Partner and
$490,000 and $310,674, respectively, of third party acquisition expenses. In
addition, as of March 31, 1998 and 1997, building and improvements and
construction in progress includes $183,190 and $33,645, respectively, of
capitalized interest.

In connection with the rehabilitation of the properties, the subsidiary
partnerships have incurred developer's fees of $2,434,242 and $895,987 to the
local general partners and affiliates as of March 31, 1998 and 1997,
respectively. Such fees have been included in the cost of property and
equipment.

Depreciation expense for the years ended March 31, 1998, 1997 and 1996 amounted
to $783,253, $328,095 and $22,951, respectively.


                                      -24-

<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. IV
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1998



NOTE 5 - Cash Held in Escrow

Cash held in escrow consists of the following:

<TABLE>
<CAPTION>
                                                 March 31,
                                       ---------------------------
                                          1998               1997
                                       ----------         --------
<S>                                    <C>                <C>     
Purchase price payments*               $2,312,783         $763,888
Real estate taxes, insurance and other    141,528          102,008
                                       ----------         --------

                                       $2,454,311         $865,896
                                       ==========         ========
</TABLE>

*Represents amounts to be paid to seller upon completion of properties under
construction and upon meeting specified rental achievement criteria.

NOTE 6 - Deferred Costs

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

<TABLE>
<CAPTION>
                                                 March 31,
                                       ---------------------------
                                           1998             1997           Period
                                       ----------       ----------       ---------
<S>                                    <C>              <C>              <C>     
Financing costs                        $  398,376       $  196,420           *
Deferred acquisition costs              1,017,672        1,916,137          **
Organization costs                        193,120           88,508       60 months
                                        ---------       ----------
                                        1,609,168        2,201,065
Less:  Accumulated amortization           (53,186)         (21,830)
                                       ----------       ----------

                                       $1,555,982       $2,179,235
                                       ==========       ==========
</TABLE>

*Over the life of the related mortgage note.

**Will be capitalized as part of the cost of future acquisitions or charged to
operations.

Amortization expense for the years ended March 31, 1998, 1997 and 1996 amounted
to $31,356, $15,909 and $5,921, respectively.

NOTE 7 - Mortgage and Construction Loans Payable

The mortgage and construction loans are payable in aggregate monthly
installments of approximately $59,000 including principal and interest with
rates varying from 1% to 9.36% per annum and have maturity dates ranging from
2004 through 2052. 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.

                                      -25-

<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. IV
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1998


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

<TABLE>
<CAPTION>
Fiscal Year Ending                      Amount
------------------                  -----------

<S>                                 <C>        
1998                                $    89,422
1999                                    103,933
2000                                    111,816
2001                                    120,349
2002                                    130,033
Thereafter                           16,815,730
                                    -----------

                                    $17,371,283
                                    ===========
</TABLE>

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).

As of December 31, 1997 and 1996, three and two subsidiary partnerships have
construction loan commitments totaling approximately $9,833,000 and $4,239,000
with outstanding balances of approximately $7,469,000 and $3,790,000.

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 and affiliate receive their pro-rata share of profits, losses
and tax credits.

The General Partner and its affiliates perform services for the Partnership. The
costs incurred for the years ended March 31, 1998, 1997 and 1996 are as follows:

A)  Acquisition Fees

The General Partner is entitled to an acquisition fee equal to 6.0% of the gross
proceeds of the offering paid upon investor closings, for its services in
connection with assisting in the selection and evaluation of Local Partnerships,
in acquiring apartment complexes and supervising the construction of the
complexes. Such fees will be capitalized as a cost of the investments upon
closing of subsidiary partnerships acquisitions. As of both March 31, 1998 and
1997, $2,750,640 of such costs have been incurred, of which $1,770,677 and
$874,501, respectively, have been capitalized. The balance is included in
deferred costs.

B)  Public Offering Costs

Costs incurred to organize the Partnership and certain costs of offering the
BACs including but not limited to legal, accounting, and registration fees are
considered organization and offering costs. Related Equities Corporation, the
Dealer Manager, is entitled to a nonaccountable or-


                                      -26-

<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. IV
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1998


ganization and offering expense allowance equal to 2.5% of Gross Proceeds, in
consideration of which it is obligated to pay all such expenses up to the amount
of such allowance. The Partnership is obligated to pay all such expenses that
are in excess of 2.5% of Gross Proceeds and up to 3.5% of Gross Proceeds. The
Dealer Manager is responsible for all such expenses in excess of 3.5% of Gross
Proceeds. The selling commissions and a nonaccountable marketing expense
allowance are considered offering costs. These costs are charged directly to
limited partners' capital. As of both March 31, 1998 and 1997, offering costs
totaled $1,554,540, and along with selling commissions (see Note 8(C)) are
charged directly to limited partner's capital.

C)  Selling Commissions and Fees

The Partnership has paid up to 7.5% of the aggregate purchase price of BACs
sold, without regard to quantity discounts, to Related Equities Corporation, an
affiliate of the General Partner. To the extent other broker/dealers sold the
interests, such amounts were fully reallowed to the other broker/dealers. As of
March 31, 1998 and 1997, $3,437,175, was paid or incurred to Related Equities
Corporation and then fully reallocated to other unaffiliated broker/dealers.

D)  Guaranty

The Partnership has negotiated Development Deficit Guaranty Agreements with the
develop-ment stage Local Partnerships in which it has invested, none of which
have expired as of March 31, 1998. The Local General Partners and/or their
affiliates have agreed to fund devel-opment deficits through the breakeven dates
of each of the Local Partnerships. Such guaran-tees are defined in their
respective agreements and generally there is no right of repayment to such Local
General Partners. Amounts received under Development Deficit Guaranty from the
developers of the properties purchased by the Partnership are treated as a
reduction of the carrying value of the respective assets.

The Partnership has negotiated Operating Deficit Guaranty Agreements with the
development stage Local Partnerships by which the general partners of such Local
Partnerships and/or their affiliates have 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, 1998, 1997 and 1996, the
gross amounts of the Operating Deficit Guarantees aggregate approximately
$1,848,000, $1,008,000 and $300,000, respectively, none of which have expired as
of March 31, 1998, 1997 and 1996. All current Operating Deficit Guarantees
expire within the next three years. As of March 31, 1998, $0 has 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.

In addition, one Local Partnership has a Rent-Up Guaranty Agreement, in which
the Local General Partner agrees to pay liquidated damages if predetermined
occupancy rates are not achieved. The Local General Partner has agreed to fund
the Rent-Up Guaranty through the break-even date. As of March 31, 1998, the
gross amount of this Rent-Up Guaranty for the Local Partnership aggregated
approximately $764,000 and it has not expired. There has not been any funding
under this guaranty agreement. Amounts received under the guaranty will be
treated as a reduction of the carrying value of the respective asset.


                                      -27-

<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. IV
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1998


The Operating Deficit Guaranty Agreements, Rent-Up Guaranty Agreements, and
Development Deficit Guaranty Agreements are negotiated to protect the
Partnership's interest in the Local Partnerships and to provide incentive to the
Local General Partners to generate positive cash flow.

E)  Other Related Party Expenses

The costs incurred to related parties for the years ended March 31, 1998, 1997
and 1996 were as follows:

<TABLE>
<CAPTION>
                                                Year Ended December 31,
                                       -------------------------------------
                                          1998          1997          1996
                                       ---------     ---------       -------
<S>                                     <C>           <C>            <C>    
Partnership management fees (a)         $268,233      $164,433       $ 6,667
Expense reimbursement (b)                 98,985        98,302        11,659
Property management fees (c)              26,824        11,423         2,590
Local administrative fee (d)               5,000         5,000         5,000
                                       ---------     ---------       -------

                                        $399,042      $279,158       $25,916
                                         =======       =======        ======
</TABLE>

(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 will be accrued without interest and will be
payable only to the extent of available funds after the Partnership has made
distributions to the limited partners of sale or refinancing proceeds equal to
their original capital contributions plus a 10% priority return thereon (to the
extent not theretofore paid out of cash flow). Partnership management fees owed
to the General Partner amounting to approximately $269,000 and $128,000 were
accrued and unpaid as of March 31, 1998 and 1997, respectively.

(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.

(c) Property management fees incurred by the Local Partnerships amounted to
$80,213, $38,231 and $2,590 for the years ended March 31, 1998, 1997 and 1996,
respectively. Of these fees, $26,824, $11,423 and $2,590 was incurred to
affiliates of the subsidiary partnerships' general partners.

                                      -28-

<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. IV
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1998


(d) 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.

F)  Due to Local General Partners and Affiliates

Due to local general partners and affiliates consists of the following:

<TABLE>
<CAPTION>
                                                             March 31,
                                                      ------------------------
                                                         1998           1997
                                                      ---------       --------
<S>                                                   <C>             <C>     
Development fee payable                               $1,335,161      $577,894
General partner loan payable                               4,000             0
General partner loan receivable                          (15,000)      (91,800)
Construction advances                                    366,638       778,711
Construction costs payable                             1,498,692             0
Management and other fees                                130,997             0
                                                      ---------       --------

                                                      $3,320,488    $1,264,805
                                                      ==========    ==========
</TABLE>

NOTE 9 - Income Taxes

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

<TABLE>
<CAPTION>
                                                    Year Ended December 31,
                                            ---------------------------------------
                                                1997           1996         1995
                                            -----------     ---------      --------
<S>                                         <C>             <C>            <C>     
Financial statement net (loss) income       $  (551,857)    $  60,119      $161,397

Differences between depreciation and
amortization expense records for
financial reporting purposes and the
accelerated cost recovery system
utilized for income tax purposes                  1,070         6,517             0

Differences resulting from parent 
company having a different fiscal year 
for income tax and financial reporting
purposes                                       (137,249)       41,357      (141,908)

Tax exempt interest income                   (1,052,987)     (912,629)      (68,937)

Other, including accruals for financial
reporting purposes not deductible for
income tax purposes until paid                  462,725       169,367         7,322
                                            -----------   -----------  ------------

Net loss as shown on the income tax return  $(1,278,298)    $(635,269)    $ (42,126)
                                             ==========   ===========   ===========
</TABLE>

                                      -29-


<PAGE>

                      INDEPENDENCE TAX CREDIT PLUS L.P. IV
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1998


NOTE 10 - Commitments and Contingencies

a)  Uninsured Cash and Cash Equivalents

The Partnership maintains its cash and cash equivalents in various banks. The
accounts at each bank are guaranteed by the Federal Deposit Insurance
Corporation up to $100,000. At March 31, 1998, uninsured cash and cash
equivalents approximated $9,151,000.

b)  Other

The Partnership is subject to the risks incident to potential losses arising
from the management and ownership of improved real estate. The Partnership can
also be affected by poor economic conditions generally, however the Partnership
intends to purchase additional properties which will diversify its portfolio.

The Partnership and BACs holders will begin to recognize Housing Tax Credits
with respect to a property when the credit period for such property commences.
Because of the time required for the acquisition, completion and rent-up of
properties, it is expected that the amount of Tax Credits per BAC will gradually
increase over the first three years of the Partnership. Housing Tax Credits not
recognized in the first three years will be recognized in the 11th through 13th
years. The Partnership generated $1,267,926, $299,899 and $42,668 of Housing Tax
Credits and no Historic Tax Credits during the 1997, 1996 and 1995 tax years,
respectively.

                                      -30-

<PAGE>



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

None

                                    PART III

Item 10.  Directors and Executive Officers of the Registrant.

The Partnership has no directors or executive officers. The Partnership's
affairs are managed and controlled by Related Independence L.L.C. ("RILLC"), the
General Partner. The members of RILLC are Related General II, L.P., a Delaware
limited partnership ("RGII), J. Michael Fried, Alan P. Hirmes and Stuart J.
Boesky. RCMP, Inc., a Delaware corporation ("RCMP") is the sole general partner
of RGII. The executive officers and directors of the General Partner of RCMP are
as follows:

<TABLE>
<CAPTION>
Name                                Position
----                                --------
<S>                                 <C> 
Stephen M. Ross                     Director and President of RCMP

J. Michael Fried                    President and Member of RILLC

Andrew D. Augenblick                Director and Executive Vice President of RCMP

Michael J. Wechsler                 Director and Executive Vice President of RCMP

Alan P. Hirmes                      Senior Vice President and Member of RILLC

Stuart J. Boesky                    Vice President and Member of RILLC

Marc D. Schnitzer                   Vice President of RILLC

Glenn F. Hopps                      Treasurer of RILLC

Lynn A. McMahon                     Secretary of RILLC
</TABLE>

STEPHEN M. ROSS, 58, is a Director of RILLC. Mr. Ross is also President,
Director and shareholder of The Related Realty Group, Inc., the General Partner
of The Related Companies, L.P. He graduated from the University of Michigan
School of Business Administration with a Bachelor of Science degree and from
Wayne State University School of Law with a Juris Doctor degree. Mr. Ross then
received a Master of Laws degree in taxation from New York University School of
Law. He joined the accounting firm of Coopers & Lybrand in Detroit as a tax
specialist and later moved to New York, where he worked for two large Wall
Street investment banking firms in their real estate and corporate finance
departments. Mr. Ross formed the predecessor of The Related Companies, L.P. in
1972 to develop, manage, finance and acquire subsidized and conventional
apartment developments.

J. MICHAEL FRIED, 54, is President of RILLC. Mr. Fried is the sole shareholder
of one of the general partners of Related Capital Company ("Capital"), a real
estate finance and acquisition affiliate of the RILLC. In that capacity, he is
responsible for all of Capital's syndication, finance, acquisition and investor
reporting activities. Mr. Fried practiced corporate law in New York City with
the law firm of Proskauer Rose Goetz & Mendelsohn from 1974 until he joined
Capital in 1979. Mr. Fried graduated from Brooklyn Law School with a Juris
Doctor degree, magna 

                                      -31-

<PAGE>

cum laude; from Long Island University Graduate School with a Master of Science
degree in Psychology; and from Michigan State University with a Bachelor of Arts
degree in History.

ANDREW D. AUGENBLICK, 37, is a Director and Executive Vice President of RCMP.
Mr. Augenblick is also an Executive Vice President of The Related Companies,
L.P. Prior to joining Related in 1985, he was with McKinsey & Company. Mr.
Augenblick graduated from Dartmouth College when he received a Bachelor of Arts
Degree and from the Harvard Graduate School of Business Administration when he
received a Masters degree in Business Administration.

MICHAEL J. WECHSLER, 59, is a Director and Executive Vice President of RCMP. Mr.
Wechsler joined the predecessor of The Related Companies, L.P. in 1987 as Chief
Operating Officer and Executive Vice President and is the Chief Operating
Officer and Executive Vice President of the Related Realty Group, Inc. Prior to
that, he was Senior Vice President and a Managing Director of the Real Estate
Division of Chemical Bank with overall responsibility for administration and
lending activities of the Division in 25 states and New York City. He supervised
a diversified portfolio of construction and real estate loans of over $3.5
billion. Mr. Wechsler attended the Massachusetts Institute of Technology when he
received a Bachelor of Science degree in Civil Engineering and received his
Masters in Business Administration from the Harvard Graduate School of Business
Administration.

ALAN P. HIRMES, 43, is a Senior Vice President of RILLC. Mr. Hirmes has been a
Certified Public Accountant in New York since 1978. Prior to joining Related in
October 1983, Mr. Hirmes was employed by Weiner & Co., Certified Public
Accountants. Mr. Hirmes is also a Vice President of Capital. Mr. Hirmes
graduated from Hofstra University with a Bachelor of Arts degree.

STUART J. BOESKY, 42, is a Vice President of RILLC. Mr. Boesky practiced real
estate and tax law in New York City with the law firm of Shipley & Rothstein
from 1984 until February 1986 when he joined Capital. From 1983 to 1984 Mr.
Boesky practiced law with the Boston law firm of Kaye Fialkow Richard &
Rothstein (which subsequently merged with Strook & Strook & Lavan) and from 1978
to 1980 was a consultant specializing in real estate at the accounting firm of
Laventhol & Horwath. Mr. Boesky graduated from Michigan State University with a
Bachelor of Arts degree and from Wayne State School of Law with a Juris Doctor
degree. He then received a Master of Laws degree in Taxation from Boston
University School of Law.

MARC D. SCHNITZER, 37, is a Vice President of RILLC. He is responsible both for
financial restructurings of real estate properties and directing Related's
acquisitions of properties generating Housing Tax Credits. Mr. Schnitzer
received a Masters of Business Administration from The Wharton School of the
University of Pennsylvania in December 1987 before joining Related in January
1988. From 1983 to January 1986, he was a financial analyst for the First Boston
Corporation in New York. Mr. Schnitzer graduated summa cum laude with a Bachelor
of Science in Business Administration from the School of Management at Boston
University in May 1983.

GLENN F. HOPPS, 35, is Treasurer of RILLC. Prior to joining Related in December,
1990, Mr. Hopps was employed by Marks Shron & Company and Weissbarth, Altman and
Michaelson, certified public accountants. Mr. Hopps graduated from New York
State University at Albany with a Bachelor of Science Degree in Accounting.

LYNN A. McMAHON, 42, is Secretary of RILLC. Since 1983, she has served as
Assistant to the President of Capital. From 1978 to 1983 she was employed at
Sony Corporation of America in the Government Relations Department.

                                      -32-

<PAGE>


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 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 Financings and a 1% interest in Net Income, Net
Loss, Distributions of Adjusted Cash from Operations and Cash from Sales or
Financings. 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 to the Financial Statements 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.

<TABLE>
<CAPTION>
                    Name and address of     Amount and Nature of          Percentage
Title of Class      Beneficial Ownership    Beneficial Ownership          of Class
--------------      --------------------    --------------------          --------

<S>                 <C>                     <C>                             <C> 
General Partnership Related Independence    $1,000 capital                  100%
Interest in the     L.L.C.                  contribution
Partnership         625 Madison Avenue      -directly owned
New York, NY  10022
</TABLE>

Independence SLP IV L.P., a limited partnership whose general partner is the
general partner of 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 to the Financial
Statements in Item 8 above, which information is incorporated herein by
reference thereto.

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 director or officer of the General Partner beneficially
owns any Limited Partnership Interests or BACs.

Item 13.  Certain Relationships and Related Transactions.

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 to
the Financial Statements in Item 8 above, which is 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.

                                      -33-

<PAGE>

                                      PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

<TABLE>
<CAPTION>
                                                                                 Sequential
                                                                                    Page
                                                                                 ----------
<S>      <C>                                                                        <C>
(a) 1.   Financial Statements                                                    
         --------------------                                                    
                                                                                 
         Independent Auditors' Report                                               14
                                                                                 
         Consolidated Balance Sheets at March 31, 1998 and 1997                     28
                                                                                 
         Consolidated  Statements  of  Operations  for the Years  Ended          
         March 31, 1998, 1997 and 1996                                              29
                                                                                 
         Consolidated Statements of Changes in Partners' Capital for the Years
         Ended March 31, 1998, 1997 and 1996                                        30

         Consolidated  Statements  of Cash  Flows for the  Years  Ended
         March 31, 1998, 1997 and 1996                                              31

         Notes to Consolidated Financial Statements                                 33

(a) 2.   Consolidated Financial Statement Schedules
         ------------------------------------------

         Independent Auditors' Report                                               53

         Schedule I - Condensed Financial Information of Registrant                 54

         Schedule III - Real Estate and Accumulated Depreciation                    57

         All 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*
</TABLE>

                                  -34-

<PAGE>

                                      PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

<TABLE>
<CAPTION>
                                                                                 Sequential
                                                                                    Page
                                                                                 ----------
<S>      <C>                                                                        <C>
(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                                             49
                                                                                 
(27)     Financial Data Schedule (filed herewith)                                   58
                                                                                 
         *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}

(b)      Reports on Form 8-K
</TABLE>
         -------------------  

         No reports on Form 8-K were filed during the quarter.

                                  -35-

<PAGE>



Item 14. Exhibits, Financial Statement Schedules, and Reports on Form
         8-K. (continued)


                                                                   Jurisdiction
(c)      Subsidiaries of the Registrant (Exhibit 21)            of Organization
         ------------------------------                         ---------------

         BX-8A Team Associates, L.P.                                       NY
         Westminster Park Plaza                                            CA
         Fawcett Street Limited Partnership                                WA
         Figueroa Senior Housing Limited Partnership                       CA
         NNPHI Senior Housing Limited Partnership                          CA
         Belmont/McBride Apartments Limited Partnership                    NJ
         New Zion Apartments Limited Partnership                           LA
         Bakery Village Urban Renewal Associates, L.P.                     NJ
         Sojourner Douglass, L.P.                                          NJ


(d)      Not applicable

                                  -36-

<PAGE>

Supplemental Information to be furnished with Reports Filed Pursuant to Section
15(d) of the Act by Registrants which have Not Registered Securities Pursuant to
Section 12 of the Act.

No annual report to security holders covering the Registrant's last fiscal year
nor any proxy statement, form of proxy or other proxy soliciting material with
respect to any annual or other meeting of security holders has been sent to
security holders.

                                  -37-

<PAGE>

                                    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 Partner



Date: June 23, 1998                 By: /s/ J. Michael Fried
                                        --------------------
                                        J. Michael Fried
                                        President and Member
                                        (principal executive officer)

<PAGE>


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:


<TABLE>
<CAPTION>
    Signature                           Title                              Date
---------------------        --------------------------------------     ------------


<S>                          <C>                                        <C>

                             President and Chief Executive Officer
                             Director and President of RCMP, Inc.,
/s/Stephen M. Ross           the general partner of Related
---------------------        General II L.P., a Member of Related
Stephen M. Ross              Independence L.L.C.                        June 23, 1998



                             Director and Executive Vice President
/s/Andrew D. Augenblick      of RCMP, Inc., the general partner of
---------------------        Related General II L.P., a Member of
Andrew D. Augenblick         Related Independence L.L.C.                June 23, 1998



                             Director and Executive Vice President
/s/Michael J. Wechsler       of RCMP, Inc., the general partner of
---------------------        Related General II L.P., a Member of
Michael J. Wechsler          Related Independence L.L.C.                June 23, 1998



/s/J. Michael Fried          President and Member of
---------------------        Related Independence
J. Michael Fried             L.L.C. (principal executive officer)       June 23, 1998



/s/Alan P. Hirmes            Senior Vice President and
---------------------        Member of Related Independence
Alan P. Hirmes               L.L.C. (principal financial officer)       June 23, 1998



/s/Stuart J. Boesky          Vice President and Member of
---------------------        Related Independence L.L.C.                June 23, 1998
Stuart J. Boesky


/s/Glenn F. Hopps            Treasurer of Related Independence
---------------------        L.L.C. (principal accounting officer)      June 23, 1998
Glenn F. Hopps
</TABLE>


<PAGE>


           INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENT SCHEDULES
           -------------------------------------------------------------


To the Partners of
Independence Tax Credit Plus L.P. IV and Subsidiaries



In connection with our audits of the consolidated financial statements of
Independence Tax Credit Plus L.P. IV and Subsidiaries included in the Form 10-K
as presented in our opinion dated June 8, 1998, which is based in part on the
reports of other auditors, we have also audited supporting Schedule I as of
March 31, 1998 and 1997 and for the years ended March 31, 1998, 1997 and 1996
and Schedule III as of March 31, 1998 and for the years ended March 31, 1998,
1997 and 1996. In our opinion, based on our audits and the reports of the other
auditors, these schedules present fairly, when read in conjunction with the
related financial statements, the financial data required to be set forth
therein.



/s/ Friedman, Alpren & Green LLP
Friedman, Alpren & Green LLP

New York, New York
June 8, 1998



<PAGE>


                       INDEPENDENCE TAX CREDIT PLUS L.P. IV
                                    SCHEDULE I
                   CONDENSED FINANCIAL INFORMATION OF REGISTRANT
               (Not Including Consolidated Subsidiary Partnerships)


                             CONDENSED BALANCE SHEETS


                                      ASSETS

<TABLE>
<CAPTION>
                                                                 March 31,
                                                          -------------------------
                                                              1998        1997
                                                          -----------   ----------- 

<S>                                                       <C>           <C>        
Cash and cash equivalents                                 $ 5,538,587   $14,962,703
Investments available for sale                             17,000,000    16,200,000
Investment in subsidiary partnerships                      14,814,511     7,300,638
Cash held in escrow                                         2,312,783       763,888
Other assets                                                1,156,223     2,054,077
                                                          -----------   -----------

  Total assets                                            $40,822,104   $41,281,306
                                                          ===========   ===========


                         LIABILITIES AND PARTNERS' CAPITAL


Due to general partner and affiliates                     $   296,317   $   202,701
Other liabilities                                               2,843         3,804
                                                          -----------   -----------

  Total liabilities                                           299,160       206,505

  Partners' capital                                        40,522,944    41,074,801
                                                          -----------   -----------

  Total liabilities and partners' capital                 $40,822,104   $41,281,306
                                                          ===========   ===========
</TABLE>


<PAGE>

                       INDEPENDENCE TAX CREDIT PLUS L.P. IV
                                    SCHEDULE I
                   CONDENSED FINANCIAL INFORMATION OF REGISTRANT
               (Not Including Consolidated Subsidiary Partnerships)


                        CONDENSED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                         Years Ended March 31,
                                                 --------------------------------------
                                                     1998         1997           1996
                                                 ----------   -----------    ----------
<S>                                              <C>           <C>             <C>     
Revenues

  Interest income                                $1,020,860    $1,052,299      $222,419
                                                 ----------    ----------      --------




Expenses

  Administrative and management                     175,712       177,612        15,305
  Administrative and management-related parties     367,218       262,735        18,326
  Amortization                                       10,000        10,000         5,000
                                                -----------    ----------      --------

Total Expenses                                      552,930       450,347        38,631
                                                 ----------     ---------      --------

  Income from operations                            467,930       601,952       183,788

  Equity in loss of subsidiary partnerships      (1,019,787)     (541,833)      (22,391)
                                                 ----------    ----------       -------

Net (loss)  income                              $  (551,857)   $   60,119      $161,397
                                                ===========    ==========      ========
</TABLE>



<PAGE>


                       INDEPENDENCE TAX CREDIT PLUS L.P. IV
                                    SCHEDULE I
                   CONDENSED FINANCIAL INFORMATION OF REGISTRANT
               (Not Including Consolidated Subsidiary Partnerships)

                        CONDENSED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                      Years Ended March 31,
                                            --------------------------------------
                                                1998         1997           1996
                                            -----------   -----------    ----------
<S>                                         <C>           <C>            <C>     

Cash flows from operating activities:

Net (loss) income                           $  (551,857)  $    60,119    $  161,397
                                            -----------   -----------    ----------

Adjustments to reconcile net (loss) income
  to net cash provided by operating
  activities:

  Amortization                                   10,000        10,000         5,000
  Equity in loss of subsidiary partnerships   1,019,787       541,833        22,391
  Decrease (increase) in other assets           897,854      (281,195)     (156,639)
Increase (decrease) in liabilities:
  Due to general partner and affiliates          93,616       (80,898)       23,214
  Other liabilities                                (961)          490       (51,931)
                                            -----------   -----------    ----------

  Total adjustments                           2,020,296       190,230      (157,965)
                                            -----------   -----------    ----------

  Net cash provided by operating activities   1,468,439       250,349         3,432
                                            -----------   -----------    ----------

Cash flows from investing activities:

  Increase in investments available for sale   (800,000)   (4,697,588)  (11,502,412)
  (Increase) decrease in cash held in escrow (1,548,895)    2,236,112    (3,000,000)
  Increase in other assets                                               (1,581,243)
  Investments in subsidiary partnerships     (8,543,660)   (7,757,038)      (77,945)
                                            -----------   -----------    ----------

  Net cash used in investing activities     (10,892,555)  (10,218,514)  (16,161,600)
                                            -----------   -----------    ----------

Cash flows from financing activities:

  Capital contributions received                      0    18,511,000    27,333,000
  Distributions paid                                  0             0           (10)
  Offering costs                                      0    (2,035,085)   (2,837,139)
  Decrease in due to local general partners
   and affiliates                                     0       (29,879)      146,139
                                            -----------   -----------    ----------

  Net cash provided by financing activities           0    16,446,036    24,641,990
                                            -----------   -----------    ----------

Net (decrease) increase in cash and cash
   equivalents                               (9,424,116)    6,477,871     8,483,822

Cash and cash equivalents, beginning of year 14,962,703     8,484,832         1,010
                                            -----------   -----------    ----------

Cash and cash equivalents, end of year      $ 5,538,587   $14,962,703    $8,484,832
                                            ===========   ===========    ==========
</TABLE>



<PAGE>


                      INDEPENDENCE TAX CREDIT PLUS L.P. IV
                                AND SUBSIDIARIES
                                  SCHEDULE III
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                   Partnership Property Pledged as Collateral
                                 MARCH 31, 1998


<TABLE>
<CAPTION>
                                                                                              
                                                                  Initial Cost to Partnership         Cost Capitalized  
                                                                  ---------------------------          Subsequent to    
                                                                                   Buildings and         Acquisition:   
        Description                              Encumbrances          Land        Improvements          Improvements   
----------------------------                     ------------       ----------     -------------      ---------------   

<S>                                               <C>               <C>            <C>                   <C>            
Apartment Complexes

BX-8A Team Associates, L.P.                       $ 2,039,174       $    5,467     $ 2,667,819           $  (25,900)    
  New York, NY
Westminster Park Plaza                              8,063,730        1,191,347       7,973,033             1,871,038    
  Los Angeles, CA
Fawcett Street Limited Partnership                  2,060,899          390,654       4,247,465                82,891    
  Tacoma, WA
Figueroa Senior Housing Limited Partnership         3,217,189          279,000       4,850,960               143,110
  Los Angeles, CA
NNPHI Senior Housing Limited Partnership            4,439,098          702,685               0                80,530    
  Los Angeles, CA
Belmont/McBride Apartments                          1,916,780          154,934       4,503,031                19,923    
  Limited Partnership
  Paterson, NJ
Sojourner Douglass, L.P.                            1,977,352          141,297       2,573,950                19,923    
  Paterson, NJ
New Zion Apartments Limited Partnership             1,125,750           20,000       2,688,770                19,923    
  Shreveport, LA
Bakery Village Urban Renewal                          655,492                0               0                19,923    
  Associates, L.P.
  Montclair, NJ                                   -----------       ----------     -----------            ----------   

                                                  $25,495,464       $2,885,384     $29,505,028            $2,231,361    
                                                  ===========       ==========     ===========            ==========    

(a) Depreciation is computed using primarily the straight-line method over the estimated useful lives determined by the 
    Partnership date of acquisition.
</TABLE>


<TABLE>
<CAPTION>

                                                                                                                     Life on which
                                           Gross Amount at which Carried At Close of Period                          Depreciation in
                                          --------------------------------------------------    Year of               Latest Income
                                                      Buildings and            Accumulated   Construction/  Date     Statements are
     Description                             Land     Improvements    Total    Depreciation  Renovation     Acquired    Computed(a)
-------------------------------           ----------  -------------  -------  -------------  -------------  -------- --------------

Apartment Complexes

<S>                                       <C>         <C>          <C>          <C>           <C>           <C>          <C>     
BX-8A Team Associates, L.P.               $    9,875  $ 2,637,511  $ 2,647,386  $  200,319    1995-96       Oct. 1995    27.5 years
  New York, NY
Westminster Park Plaza                     1,284,373    9,751,045   11,035,418     552,146    1996-97       June 1996    27.5 years
  Los Angeles, CA
Fawcett Street Limited Partnership           394,680    4,326,330    4,721,010     203,822    1996-97       June 1996    27.5 years
  Tacoma, WA
Figueroa Senior Housing Limited Partnership  345,607    4,927,463    5,273,070       3,146    1996-97       Nov. 1996    27.5 years
  Los Angeles, CA
NNPHI Senior Housing Limited Partnership     706,712       76,503      783,215       2,428    1996-97       Dec. 1996    27.5 years
  Los Angeles, CA
Belmont/McBride Apartments                   155,930    4,521,958    4,677,888      74,827    1997-98       Jan. 1997    27.5 years
  Limited Partnership
  Paterson, NJ
Sojourner Douglass, L.P.                     142,293    2,592,877    2,735,170      78,855    1997-98       Feb. 1997    27.5 years
  Paterson, NJ
New Zion Apartments Limited Partnership       20,996    2,707,697    2,728,693      17,417    1997-98       Oct. 1997    27.5 years
  Shreveport, LA
Bakery Village Urban Renewal                     996       18,927       19,923       1,339    1997-98       Dec. 1997    27.5 years
  Associates, L.P.
  Montclair, NJ                           ----------  -----------  -----------  ----------        

                                          $3,061,462  $31,560,311  $34,621,773  $1,134,299
                                          ==========  ===========  ===========  ==========
</TABLE>

<TABLE>
<CAPTION>
                                           Cost of Property and Equipment                     Accumulated Depreciation
                                    ----------------------------------------------      -------------------------------------
                                                                    Year Ended March 31,
                                    -----------------------------------------------------------------------------------------
                                        1998              1997            1996            1998           1997          1996
                                     -----------       -----------     ----------       ----------     ---------     --------

<S>                                  <C>               <C>             <C>              <C>            <C>          <C>      
Balance at beginning of year         $20,152,911       $ 2,680,927     $        0       $  351,046     $  22,951    $       0
Additions during year:
  Land, building and improvements     14,468,862        17,471,984      2,650,927
  Depreciation expense                                                                     783,253       328,095       22,951
                                     -----------       -----------     ----------       ----------     ---------     --------
Balance at close of year             $34,621,773       $20,152,911     $2,680,927       $1,134,299     $ 351,046     $ 22,951
                                     ===========       ===========     ==========       ==========     =========     ========
</TABLE>

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. Since the projects were in the construction phase
at the time of acquisition, the capital accounts were insignificant. Therefore,
there are no material differences between the original cost basis for tax and
generally accepted accounting principles.