UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 
 ______________
 
 FORM
10-K
 
 ______________
 (Mark
One)
 
 x
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 For
the fiscal year ended March 31, 2008
 
 OR
 
 [  ]
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 Commission
File Number 0-17015
 
 INDEPENDENCE
TAX CREDIT PLUS L.P. IV
 (Exact
name of registrant as specified in its charter)
 
 Delaware
            
            13-3809869(State
      or other jurisdiction of incorporation or organization)
            
            (I.R.S.
      Employer Identification No.)625
      Madison Avenue, New York, New York
            
            10022(Address
      of principal executive offices)
            
            (Zip
      Code)
 
 Registrant’s
telephone number, including area code (212) 317-5700
 
 Securities
registered pursuant to Section 12(b) of the Act:
 
 None
 
 Securities
registered pursuant to Section 12(g) of the Act:
 
 Limited Partnership Interests and
Beneficial Assignment Certificates
 
 (Title of Class)
 
 Indicate by check mark if the
registrant is a well-known seasoned issuer, as defined in Rule 405 of the
Securities
Act.  Yes  [  ]  No  x
 
 Indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or Section
15(d) of the Act.  Yes [  ]  No  x
 
 Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90
days.  Yes   x    No   [  ]
 
 Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this
chapter) is not contained herein, and will not be contained, to the best of
registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.   x
 
 Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company.  See definition of “large
accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule
12b-2 of the Exchange Act.  (Check one):
 
 Large
      accelerated filer [  ]
            
            Accelerated
      filer [  ]Non-accelerated
      filer x (Do
      not check if a smaller reporting company)
            
            Smaller
      reporting company [  ]
 
 Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the
Act).  Yes  [  ]   No   x
 
 The approximate aggregate book value of
the voting and non-voting common equity held by non-affiliates of the Registrant
as of September 30, 2007 was $11,964,000, based on Limited Partner equity as of
such date.
 
 DOCUMENTS
INCORPORATED BY REFERENCE
 
 None
 
  
  PART
I
 
 
 Item
1.  Business
 
 General
 
 Independence
Tax Credit Plus L.P. IV (the “Partnership”) is a limited partnership which was
formed under the laws of the State of Delaware on February 22, 1995. The general
partner of the Partnership is Related Independence L.L.C., a Delaware limited
liability company (the “General Partner”).  Centerline Holding Company
(“Centerline”) (formerly known as CharterMac), is the parent of Centerline
Manager LLC (formerly known as RCC Manager LLC), the managing member of 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”).
 
 The
Partnership has received $45,844,000 of aggregate purchase price of BACs
excluding selling commissions, discounts or organization and offering expenses
(“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”, “subsidiaries” or “subsidiary partnerships”) owning leveraged
apartment complexes (“Apartment Complexes” or “Properties”) that are eligible
for the low-income housing tax credit (“Tax Credit”) enacted in the Tax Reform
Act of 1986, some of which may also be eligible for the historic rehabilitation
tax credit.  The Partnership had originally acquired interests in
fourteen Local Partnerships.  The Partnership’s investments in Local
Partnerships represent from 98.99% to 99.89% interests except for one investment
which is a 58.12% interest.  As of March 31, 2008, the Partnership has
invested approximately $37,555,000 (including approximately $902,000 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 the net proceeds of the Offering in fourteen Local Partnerships
of which approximately $973,000 remains to be paid to the Local Partnerships
(including approximately $434,000 being held in escrow) as certain benchmarks,
such as occupancy level, are attained prior to the release of the funds. The
Partnership does not intend to acquire interests in additional Local
Partnerships, but the Partnership may be required to fund potential purchase
price adjustments based on tax credit adjustor clauses.  See Item 2,
Properties, below.
 
 The
Partnership is currently in the process of disposing all of its
investments.  As of March 31, 2008, the property and the related
assets and liabilities of one Local Partnership were sold.  There can
be no assurance as to when the Partnership will dispose of its remaining
investments or the amount of proceeds which may be received.  However,
based on the historical operating results of the Local Partnerships and the
current economic conditions, including changes in tax laws, it is unlikely that
the proceeds from such sales received by the Partnership will be sufficient to
return to the limited partners their original investments.  All gains
and losses on sales are included in discontinued operations.
 
 The
investment objectives of the Partnership are described below:
 
 1.
            Entitle
      qualified BACs holders to Tax Credits over the period of the Partnership’s
      entitlement to claim Tax Credits (for each Property, generally ten years
      from the date of investment or, if later, the date the Property is leased
      to qualified tenants; referred to herein as the “Credit Period”) with
      respect to each Apartment Complex.
 
 2.
            Preserve
      and protect the Partnership’s
capital.
 
 3.
            Participate
      in any capital appreciation in the value of the Properties and provide
      distributions of Sale or Refinancing Proceeds upon the disposition of the
      Properties.
 
 4.
            Allocate
      passive losses to individual BACs holders to offset passive income that
      they may realize from rental real estate investments and other passive
      activities, and allocate passive losses to corporate BACs holders to
      offset business income.
 
 One of
the Partnership’s investment objectives is to entitle qualified BACs holders to
Tax Credits over the Credit Period. Each of the Local Partnerships in which the
Partnership has acquired an interest has been allocated by the relevant state
credit agencies the authority to recognize Tax Credits during the Credit Period
provided that the Local Partnership satisfies the rent restriction, minimum
set-aside and other requirements for recognition of the Tax Credits at all times
during such period. Once a Local Partnership has become eligible to recognize
Tax Credits, it may lose such eligibility and suffer an event of “recapture” if
its Property fails to remain in compliance with the Tax Credit requirements.
None of the Local Partnerships in which the Partnership has acquired an interest
has suffered an event of recapture.  Due to increased market demand
for investments in properties that were eligible to receive Tax Credits at the
time the Partnership was investing its capital and limitations on the types of
investments which were able to be obtained by the Partnership, the purchase
price for interests in Local Partnerships which are qualified for purchase by
the Partnership increased. As a result of these changes, management was not able
to invest the proceeds available for investment in a manner which enables the
Partnership to achieve Tax Credits in the originally anticipated range of
$140-150 for each $1,000 BAC each year in which the Partnership has been
receiving its full entitlement of Tax Credits.  The anticipated tax
credits for 2008, 2009 and 2010 are $3,372,042, $378,555 and $0,
respectively.
 
 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 and poor economic
conditions.
 
 The Tax
Credits are attached to a subsidiary partnership for the 10 year Credit Period
and are transferable with the Property during the entirety of such ten year
period. If trends in the real estate market warranted the sale of a Property,
the remaining Tax Credits would transfer to the new owner, thereby adding value
to the property on the market. However, such value declines each year and is not
included in the financial statement carrying amount. The Credit Periods are
scheduled to expire at various times through December 31, 2010 with respect to
the Local Partnerships depending upon when the Credit Period
commenced.
 
 - 2
-
  A loss on
impairment of assets is recorded when management estimates amounts recoverable
through future operations and sale of the Property on an undiscounted basis are
below depreciated cost.  At that time the Property investments
themselves are reduced to estimated fair value (generally using the discounted
cash flow valuation method).  Through March 31, 2008, the Partnership
has determined no loss on impairment of assets or reduction to estimated fair
value is necessary.
 
 While the
value of the remaining Tax Credits are a factor in calculating fair value, the
expiration of the Tax Credit Period, in and of itself, is not the only factor in
determining whether there is an impairment and generally does not have any
adverse impact on the fair value of the Local Partnerships.
 
 Sale of
Property
 
 On
September 5, 2007, the property and the related assets and liabilities of
Westminster Park Plaza, a California L.P. (“Westminster”) were sold to an
affiliate of the general partner of the Local Partnership (each, a “Local
General Partner”) for a sales price of $14,070,228.  The Partnership
received $2,513,602 as a distribution from this sale after the repayment of
mortgages, other liabilities and closing costs of approximately
$11,557,000.  The sale resulted in a gain of approximately $5,032,000
resulting from the write-off of the deficit basis in the property at the date of
sale.  Subsequently, the Partnership received a liquidating
distribution of $303,289 in May 2008.
 
 Segments
 
 The
Partnership operates in one segment, which is the investment in multi-family
residential property.  Financial information about this segment is set
forth in Item 8 hereto.
 
 Competition
 
 The real
estate business is highly competitive and substantially all of the properties
acquired by the Partnership are expected to have active competition from similar
properties in their respective vicinities. In addition, various other limited
partnerships may, in the future, be formed by the General Partner and/or its
affiliates to engage in businesses which may be competitive with the
Partnership.
 
 Employees
 
 The
Partnership does not have any direct employees. All services are performed for
the Partnership by the General Partner and its affiliates. The General Partner
receives compensation in 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 for expenses incurred in connection with the
performance by their employees of services for the Partnership in accordance
with the Partnership’s Amended and Restated Agreement of Limited Partnership
(the “Partnership Agreement”).
 
 Item
1A.  Risk Factors
 
 The
Partnership’s investment as a limited partner in the Local Partnerships is
subject to the risks of potential losses arising from management and ownership
of improved real estate. The Partnership’s investments also could be adversely
affected by poor economic conditions generally, which could increase vacancy
levels and rental payment defaults, and by increased operating expenses, any or
all of which could threaten the financial viability of one or more of the Local
Partnerships.
 
 There
also are substantial risks associated with the operation of Apartment Complexes
receiving government assistance. These include governmental regulations
concerning tenant eligibility, which may make it more difficult to rent
apartments in the Apartment Complexes; difficulties in obtaining government
approval for rent increases; limitations on the percentage of income which low
and moderate income tenants may pay as rent; the possibility that Congress may
not appropriate funds to enable the Department of Housing and Urban Development
(“HUD”) to make the rental assistance payments it has contracted to make; and
that when the rental assistance contracts expire there may not be market demand
for apartments at full market rents in a Local Partnership’s Apartment
Complex.
 
 Item
1B.  Unresolved Staff Comments
 
 Not
applicable
  - 3
-
  Item
2.  Properties
 
 Except
for its interest in New Zion Apartments, L.P. (“New Zion”), the Partnership’s
investment in each of the remaining thirteen Local Partnerships represents
98.99% or 99.89% of the partnership interests in the Local Partnership. The
Partnership’s investment in New Zion represents 58.12% of the partnership
interest in the subsidiary partnership (the other 41.86% limited partnership
interest is owned by an affiliate of the Partnership, with the same management).
Through the rights of the Partnership and/or an affiliate of the General
Partner, which affiliate has a contractual obligation to act on behalf of the
Partnership, to remove the Local General Partner and to approve certain major
operating and financial decisions, the Partnership has a controlling financial
interest in all of the Local Partnerships in which it has invested. Set forth
below is a schedule of the Local Partnerships including certain information
concerning their respective Apartment Complexes (the “Local Partnership
Schedule”). Further information concerning the Local Partnerships and their
properties, including any encumbrances affecting the properties may be found in
Item 15. Schedule III.
 
 Local Partnership
Schedule
 
 Name
      and Location
              (Number
      of Units)
            
            Date
      Acquired
            
            Percentage
      of Units Occupied at May 1,2008
            
            2007
            
            2006
            
            2005
            
            2004BX-8A
      Team Associates, L.P.
              Bronx,
      NY (41)
            
            October
      1995
            
            98
            %
            
            98
            %
            
            100
            %
            
            100
            %
            
            98
            %Westminster
      Park Plaza
              (a
      California Limited Partnership)
              Los
      Angeles, CA (130)
            
            June
      1996
            
            (a)
            
            
            94
            %
            
            91
            %
            
            94
            %
            
            98
            %Fawcett
      Street Limited Partnership
              Tacoma,
      WA (60)
            
            June
      1996
            
            98
            %
            
            93
            %
            
            97
            %
            
            100
            %
            
            97
            %Figueroa
      Senior Housing Limited Partnership
              Los
      Angeles, CA (66)
            
            November
      1996
            
            98
            %
            
            91
            %
            
            97
            %
            
            97
            %
            
            98
            %NNPHI
      Senior Housing Limited Partnership
              Los
      Angeles, CA (75)
            
            December
      1996
            
            100
            %
            
            100
            %
            
            100
            %
            
            100
            %
            
            97
            %Belmont/McBride
      Apartments Limited Partnership
              Paterson,
      NJ (42)
            
            January
      1997
            
            98
            %
            
            100
            %
            
            98
            %
            
            95
            %
            
            100
            %Sojourner
      Douglass, L.P.
              Paterson,
      NJ (20)
            
            February
      1997
            
            100
            %
            
            100
            %
            
            100
            %
            
            100
            %
            
            100
            %New
      Zion ApartmentsLimited Partnership
              Shreveport,
      LA (100)
            
            October
      1997
            
            99
            %
            
            100
            %
            
            100
            %
            
            94
            %
            
            96
            %Bakery
      Village Urban Renewal Associates, L.P.
              Montclair,
      NJ (125)
            
            December
      1997
            
            97
            %
            
            97
            %
            
            98
            %
            
            98
            %
            
            98
            %Marlton
      Housing Partnership, L.P.
              (a
      Pennsylvania limited partnership)
              Philadelphia,
      PA (25)
            
            May
      1998
            
            80
            %
            
            84
            %
            
            100
            %
            
            96
            %
            
            96
            %GP
      Kaneohe Limited Partnership
              Kaneohe,
      HI (44)
            
            July
      1999
            
            100
            %
            
            100
            %
            
            96
            %
            
            100
            %
            
            100
            %KSD
      Village Apartments, Phase II, Ltd.
              Danville,
      KY (16)
            
            July
      1999
            
            88
            %
            
            94
            %
            
            100
            %
            
            94
            %
            
            100
            %Kanisa
      Apartments, Ltd.
              Fayette
      County, KY (59)
            
            October
      1999
            
            73
            %
            
            78
            %
            
            86
            %
            
            92
            %
            
            86
            %Guymon
      Housing Partners, L.P.
              Guymon,
      OK (92)
            
            December
      1999
            
            99
            %
            
            91
            %
            
            95
            %
            
            96
            %
            
            96
            %
   The
property and the related assets and liabilities were sold during the fiscal year
ended March 31, 2008.
  Leases
are generally for periods not greater than one to two years and no tenant
occupies more than 10% of the total rentable square footage in any single
Apartment Complex.
 
 Management
continuously reviews the physical state of the properties and suggests to the
Local General Partners budget improvements which are generally funded from cash
flow from operations or release of replacement reserve escrows.
 
 - 4
-
  Management
periodically reviews the insurance coverage of the properties and believes such
coverage is adequate.
 
 See Item
1, Business, above for the general competitive conditions to which the
Properties described above are subject.
 
 Real
estate taxes are calculated using rates and assessed valuations determined by
the township or city in which the Property is located. Such taxes have
approximated less than 1% of the aggregate cost of the Properties as shown in
Schedule III included herein.
 
 Tax
Credits with respect to a given Apartment Complex are available for a ten-year
period that commences when the Property is rented to qualified tenants. However,
the annual Tax Credits available in the year in which the Apartment Complex is
placed in service must be prorated based upon the months remaining in the year.
The amount of the annual Tax Credit not available in the first year will be
available in the eleventh year. In certain cases, the Partnership acquired its
interest in a Local Partnership after the Local Partnership had placed its
Apartment Complex in service. In these cases, the Partnership may be allocated
Tax Credits only beginning in the month following the month in which it acquired
its interest and Tax Credits allocated in any prior period are not available to
the Partnership.
 
 Item
3.  Legal Proceedings
 
 None
 
 Item
4.  Submission of Matters to a Vote of Stockholders
 
 None.
 
  - 5
-
  PART
II
 
 
 Item
      5.  Market for Registrant’s Common Equity, Related Security
      Holder Matters and Issuer Purchases of Equity
  Securities
 
 As of
March 31, 2008, the Partnership had issued and outstanding 45,844 Limited
Partnership Interests, each representing a $1,000 capital contribution to the
Partnership, or an aggregate capital contribution of $45,844,000. All of the
issued and outstanding Limited Partnership Interests have been issued to
Independence Assignor Inc. (the “Assignor Limited Partner”), which has in turn
issued 45,844 BACs to the purchasers thereof for an aggregate purchase price of
$45,844,000. Each BAC represents all of the economic and virtually all of the
ownership rights attributable to a Limited Partnership Interest held by the
Assignor Limited Partner. BACs may be converted into Limited Partnership
Interests at no cost to the holder (other than the payment of transfer costs not
to exceed $100), but Limited Partnership Interests so acquired are not
thereafter convertible into BACs.
 
 Neither
the BACs nor the Limited Partnership Interests are traded on any established
trading market. The Partnership does not intend to include the BACs for
quotation on NASDAQ or for listing on any national or regional stock exchange or
any other established securities market. The Revenue Act of 1987 contained
provisions which have an adverse impact on investors in “publicly traded
partnerships.”  Accordingly, the General Partner has imposed limited
restrictions on the transferability of the BACs and the Limited Partnership
Interests in secondary market transactions. Implementation of the restrictions
should prevent a public trading market from developing and may adversely affect
the ability of an investor to liquidate his or her investment quickly. It is
expected that such procedures will remain in effect until such time, if ever, as
further revision of the Revenue Act of 1987 may permit the Partnership to lessen
the scope of the restrictions.
 
 As of May
28, 2008, the Partnership has approximately 2,531 registered holders of an
aggregate of 45,844 BACs.
 
 All of
the Partnership’s general partnership interests, representing an aggregate
capital contribution of $1,000, are held by the General Partner.
 
 The
Partnership has made no distributions to the BACs holders as of March 31,
2008.  There are no material legal restrictions in the Partnership
Agreement on the ability of the Partnership to make
distributions.  However, the Partnership does not anticipate providing
cash distributions to its BACs holders other than from net refinancing or sales
proceeds.
 
 Transfer
Procedures
 The
Partnership from time to time receives requests by unit holders and others to
transfer BACs and/or limited partnership interests.  Such requests may
occur in connection with tender offers for the Partnership’s
units.  Such requests implicate the Partnership’s policies and
procedures concerning transfers generally and tender offers in particular, which
were adopted by the Partnership pursuant to the terms of its Partnership
Agreement, to ensure compliance with applicable law, avoid adverse tax
consequences for the Partnership and its investors, and preserve the
Partnership’s advantageous tax status.
 
 In prior
years, the Partnership relied on the 5% safe harbor established by Internal
Revenue Service (“IRS”) regulations to avoid being characterized as a
“publicly-traded partnership” that is taxed as a corporation.  The 5%
safe harbor, however, expired and is no longer available as of December 31,
2005.  Accordingly, the Partnership now relies on a 2% safe harbor
established by another IRS regulation to avoid being characterized as a
“publicly-traded partnership” that is taxed as a corporation.
 
 A brief
summary of certain of the Partnership’s key policies, practices and requirements
with respect to transfers and tender offers is as follows:
 
 ·
            No
      transfer (whether for substitution, assignment or otherwise) is effective
      or binding on the Partnership unless and until it is approved by the
      General Partner.
 
 ·
            No
      transfer will be approved unless the transferor and transferee submit
      complete and properly executed forms of the Partnership’s own transfer
      documentation.  The Partnership does not accept forms of
      transfer documentation other than its own and does not accept signatures
      made by power of attorney in lieu of original signatures by each of the
      transferors and transferees.
 
 ·
            The
      Partnership will not approve transfers that in the cumulative aggregate
      for any tax year exceed the IRS 2% safe harbor, unless a financially
      responsible person provides the Partnership and its partners with (i) an
      indemnity (in form and substance in all ways acceptable to the General
      Partner) for all liability (including, without limitation, any adverse tax
      consequences) arising from or relating to exceeding the 2% safe harbor and
      (ii) a legal opinion (in form and substance in all ways acceptable to the
      General Partner) that there will be no adverse tax consequences to the
      Partnership and its partners from exceeding the 2% safe
      harbor.
 
 ·
            It
      order to avoid the undesirable situation of one or more tender offers
      consuming the entire safe harbor limitation early in the tax year and
      leaving the Partnership’s remaining investors with no liquidity
      opportunity for the rest of that tax year, the Partnership restricts the
      cumulative aggregate total of transfers made pursuant to all tender offers
      to 1.5% of its outstanding units in each tax year, unless a financially
      responsible person conducting such tender offer provides the Partnership
      with an acceptable indemnity and legal opinion of the type described
      above.  At the end of each tax year, the General Partner, in its
      discretion, may allow the cumulative total number of transfers (including
      those by tender offer) to reach the 2% safe harbor
  limit.
 
 ·
            The
      Partnership requires that all tender offers for its units be conducted in
      accordance with all applicable law including, without limitation, the
      federal securities laws.
 
 The
foregoing is solely a summary of the Partnership’s policies, requirements and
practices with respect to transfers and tender offers.  More complete
information, including a copy of the Partnership’s transfer documentation
package, may be obtained from the Partnership.
 
  - 6
-
  Item
6.  Selected Financial Data
 
 The
information set forth below presents selected financial data of the Partnership.
Additional financial information is set forth in the audited financial
statements in Item 8 hereof.
  Years
      Ended March 31,OPERATIONS
              2008
              
              2007*
              
              2006*
              
              2005*
              
              2004*Revenues
              
              $
              5,220,795
              
              $
              5,082,004
              
              $
              4,954,860
              
              $
              4,777,877
              
              $
              4,730,379Operating
      expenses
              
              
              (8,136,336
              )
              
              (7,894,365
              )
              
              (7,827,397
              )
              
              (7,791,320
              )
              
              (7,605,165
              )Loss
      from operations before minority interest
              
              
              (2,915,541
              )
              
              (2,812,361
              )
              
              (2,872,537
              )
              
              (3,013,443
              )
              
              (2,874,786
              )Minority
      interest in loss of subsidiary partnerships from
operations
              
              
              7,894
              
              
              16,845
              
              
              14,225
              
              
              29,336
              
              
              26,201Income
      (loss) from discontinued operations including gain on sale and minority
      interest (Note 13)
              
              $
              5,203,850
              
              $
              (207,673
              )
              $
              (187,864
              )
              $
              (252,603
              )
              $
              (212,689
              )Net
      income (loss)
              
              
              2,296,203
              
              
              (3,003,189
              )
              
              (3,046,176
              )
              
              (3,236,710
              )
              
              (3,061,274
              )Net
      income (loss) – limited partners
              
              
              2,273,241
              
              
              (2,973,157
              )
              
              (3,015,714
              )
              
              (3,204,343
              )
              
              (3,030,662
              )Loss
      from operations per BAC
              
              
              (62.79
              )
              
              (60.37
              )
              
              (61.72
              )
              
              (64.45
              )
              
              (61.52
              )Income
      (loss) from discontinued operations per BAC
              
              
              112.38
              
              
              (4.48
              )
              
              (4.06
              )
              
              (5.45
              )
              
              (4.59
              )Net
      income (loss) per BAC
              
              $
              49.59
              
              $
              (64.85
              )
              $
              (65.78
              )
              $
              (69.90
              )
              $
              (66.11
              )March
      31,FINANCIAL
      POSITION
              2008
              
              2007
              
              2006
              
              2005
              
              2004Total
      assets
              
              $
              55,852,903
              
              $
              66,020,451
              
              $
              68,494,315
              
              $
              71,011,719
              
              $
              73,413,762Total
      liabilities
              
              $
              38,831,764
              
              $
              50,914,576
              
              $
              50,352,846
              
              $
              49,809,849
              
              $
              48,933,879Minority
      interest
              
              $
              1,456,791
              
              $
              1,837,730
              
              $
              1,870,135
              
              $
              1,884,360
              
              $
              1,925,663Total
      partners’ capital
              
              $
              15,564,348
              
              $
              13,268,145
              
              $
              16,271,334
              
              $
              19,317,510
              
              $
              22,554,220*Reclassified
      for comparative purposes.
 
 At March
31, 2008, total assets decreased approximately $10,168,000 due to the sale of a
Local Partnership as well as depreciation and amortization offset by an increase
in cash and cash equivalents.  At March 31, 2007, total assets
decreased approximately $2,474,000 due to depreciation and amortization and a
reduction in cash and cash equivalents offset by an increase in cash held in
escrow.  At March 31, 2006, 2005 and 2004, total assets decreased
approximately $2,571,000, $2,477,000 and $2,369,000, respectively, due to
depreciation and amortization and a reduction in cash and cash
equivalents.
 
 At March
31, 2008, property and equipment decreased approximately $11,191,000 due to the
sale of a Local Partnership as well as depreciation expense.  At March
31, 2007, 2006, 2005 and 2004, property and equipment decreased approximately
$2,456,000, $2,296,000, $2,353,000 and $2,358,000, respectively, primarily due
to depreciation expense.
 
 At March
31, 2008, mortgage notes decreased approximately $7,793,000 due to the sale of a
Local Partnership.  At March 31, 2007, 2006, 2005 and 2004, mortgage
notes decreased approximately $498,000, $549,000, $214,000 and $89,000,
respectively.
 
  - 7
-
  Item
7.  Management’s Discussion and Analysis of Financial Condition and
Results of Operations
 
 Liquidity and Capital
Resources
 
 The
Partnership originally invested approximately $37,555,000 (including
approximately $902,000 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 the net proceeds of the
Offering in fourteen Local Partnerships, of which approximately $973,000 remains
to be paid to the Local Partnerships (including approximately $434,000 being
held in escrow) as certain benchmarks, such as occupancy level, are attained
prior to the release of the funds. During the year ended March 31, 2008,
approximately $66,000 was paid to Local Partnerships.  The Partnership
does not anticipate acquiring additional properties, but the Partnership may be
required to fund potential purchase price adjustments based on tax credit
adjustor clauses. There were no such adjustments made during the year ended
March 31, 2008.
 
 The
Partnership is currently in the process of disposing all of its
investments.  As of March 31, 2008, the property and the related
assets and liabilities of one Local Partnership were sold.  There can
be no assurance as to when the Partnership will dispose of its remaining
investments or the amount of proceeds which may be received.  However,
based on the historical operating results of the Local Partnerships and the
current economic conditions, including changes in tax laws, it is unlikely that
the proceeds from such sales received by the Partnership will be sufficient to
return to the limited partners their original investments.  All gains
and losses on sales are included in discontinued operations.
 
 Short-Term
 
 The
Partnership’s primary sources of funds include:  (i) working capital
reserves; (ii) interest earned on the working capital reserves; (iii) cash
distributions from operations of the Local Partnerships; and (iv) sales proceeds
and distributions.  Such funds, although minimal (other than possible
sales proceeds and sales distributions), are available to meet the obligations
of the Partnership.  The Partnership does not anticipate providing
cash distributions to BACs holders in circumstances other than refinancing or
sales.  During the year ended March 31, 2008 and 2007, distributions
from operations of the Local Partnerships amounted to approximately $2,514,000
and $16,000, respectively.  Additionally, during the year ended March
31, 2008 and 2007, the Partnership received approximately $2,514,000 and $0,
respectively, of distributions from the sale of investments.
 
 For the
year ended March 31, 2008, cash and cash equivalents of the Partnership and its
fourteen consolidated Local Partnerships increased approximately $1,292,000 due
to proceeds from sale of property of approximately $14,070,000, a decrease of
cash held in escrow of approximately $330,000, disposals of property and
equipment of approximately $71,000, an increase in due to local general partners
and affiliates of approximately $148,000 and an increase in due to selling
partners of approximately $67,000, which exceeded net cash used in operating
activities of approximately $5,668,000, repayments of mortgage notes of
approximately $7,576,000, costs related to sale of property of approximately
$120,000 and a decrease in capitalization of consolidated subsidiaries
attributable to minority interest of approximately $29,000.  Included
in the adjustments to reconcile the net income to net cash used in operating
activities is depreciation and amortization of approximately $2,360,000 and gain
on sale of property of approximately $5,032,000.
 
 Total
expenses for the years ended March 31, 2008, 2007 and 2006 excluding
depreciation and amortization, interest and general and administrative – related
parties, totaled $3,758,897, $3,427,286 and $3,282,994,
respectively.
 
 Accounts
payable totaled $434,095 and $451,390 as of March 31, 2008 and 2007,
respectively.  Accounts payable are short term liabilities which are
expected to be paid from operating cash flows, working capital balances at the
Local Partnership level, Local General Partner advances and, in certain
circumstances, advances from the Partnership.  In addition, accounts
payable from discontinued operations as of March 31, 2008 and 2007 totaled $18
and $0, respectively.  The Partnership believes it (and the applicable
Local Partnerships) has sufficient liquidity and ability to generate cash and to
meet existing and known or reasonably likely future cash requirements over both
the short and long term.
 
 Accrued
interest payable as of March 31, 2008 and 2007 was $6,010,799 and $9,493,633,
respectively.  Accrued interest payable represents the accrued
interest on all mortgage loans, which include primary and secondary loans.
Certain secondary loans have provisions such that interest is accrued but not
payable until a future date.  In addition, there was no accrued
interest payable from discontinued operations, as of March 31, 2008 and
2007.  The Partnership anticipates the payment of accrued interest on
the secondary loans (which make up the majority of the accrued interest payable
amount and which has been accumulating since the Partnership’s investment in the
respective Local Partnership) will be made from future refinancings or sales
proceeds of the respective Local Partnerships.  Furthermore, each
Local Partnership’s mortgage notes are collateralized by the land and buildings
of the respective Local Partnership, and are without further recourse to the
Partnership.
 
 Security
deposits payable are offset by cash held in security deposits, which are
included in “Cash held in escrow” on the financial statements.
 
 At March
31, 2008, there is approximately $1,123,000 in working capital
reserves.  The General Partner believes that these reserves, plus any
cash distributions received from the operations of the Local Partnerships, will
be sufficient to fund the Partnership’s ongoing operations for the foreseeable
future not including fees owed to the General Partner.
 
 The
Partnership had negotiated Operating Deficit Guaranty Agreements with the
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 both March 31, 2008 and 2007, the gross
amount of the Operating Deficit Guarantees aggregate approximately $123,000 and
$159,000, respectively.  As of both March 31, 2008 and 2007,
approximately $36,000 and $0, respectively, 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.
  - 8
-
  
 Long-Term
 
 Partnership
management fees owed to the General Partner amounting to approximately
$2,170,000 and $2,641,000 were accrued and unpaid as of March 31, 2008 and 2007,
respectively.  Unpaid partnership management fees for any year will be
accrued without interest and will be payable from working capital reserves or to
the extent of available funds after payments on all Partnership liabilities have
been made other than to those owed to the General Partner.
 
 The Local
Partnerships are impacted by inflation in several ways.  Inflation
allows for increases in rental rates generally to reflect the impact of higher
operating and replacement costs. Furthermore, inflation generally does not
impact the fixed long-term financing under which real property investments were
purchased. Inflation also affects the Local Partnerships adversely by increasing
operating costs, such as fuel, utilities, and labor.  Since revenues
from sales of assets are driven by market conditions, inflation has little
impact on sales.
 
 Management
is not aware of any trends or events, commitments or uncertainties, which have
not otherwise been disclosed that will or are likely to impact liquidity in a
material way. Management believes the only impact would be from laws that have
not yet been adopted. The portfolio is diversified by the location of the
Properties around the United States so that if one area of the country is
experiencing downturns in the economy, the remaining Properties in the portfolio
may be experiencing upswings. However, the geographic diversification of the
portfolio may not protect against a general downturn in the national
economy.  Tax Credits will be attached to a Property for a period of
ten years, and will be transferable with such Property during the remainder of
such ten-year period. If trends in the real estate market warranted the sale of
a Property, the remaining tax credits would transfer to the new owner, thereby
adding value to the Property on the market.  However, such value
declines each year and is not included in the financial statement carrying
amount.  The Credit Periods are scheduled to expire, and have expired,
at various times from December 31, 2005 through December 31, 2010 with respect
to the Local Partnerships depending upon when the Credit Period
commenced.  However, each Local Partnership must continue to comply
with the Tax Credit requirements until the end of the Compliance Period in order
to avoid recapture of the Tax Credits.  The Compliance Periods expired
with respect to the one Property that has been sold but will continue through
December 31, 2014 with respect to the remaining Properties depending upon when
the Compliance Period commenced.
 
 Sale of Underlying
Properties/Local Partnership Interests
 
 For a
discussion of the sale of the property in which the Partnership owns direct and
indirect interests, see Note 10 in Item 8.
 
 Discontinued
Operations
 
 The
Partnership is currently in the process of disposing all of its
investments.  The disposals meet the criteria established for
recognition as a discontinued operation under Statement of Financial Accounting
Standards No. 144, Accounting
for the Impairment or Disposal of Long-Lived Assets(“SFAS No.
144”).  SFAS No. 144 specifically requires that such amounts must
differentiate a component of a business comprised of operations and cash flows
that can be clearly distinguished operationally and for financial reporting
purposes, from the rest of the entity.  See Note 13 in Item 8 for a
discussion of the sale of property.  As of March 31, 2008, there were
no assets held for sale.
 
 Tabular Disclosure of
Contractual Obligations
 
 The
following table summarizes the Partnership’s commitments from operations as of
March 31, 2008, to make future payments under its debt agreements and other
contractual obligations.
 
 Total
            
            
            Less
      than
              1
      Year
            
            
            1 –
      3
              Years
            
            
            3
      -5
              Years
            
            
            More
      than
              5
      YearsMortgage
      notes payable (a)
            
            $
            27,258,408
            
            
            $
            453,694
            
            
            $
            851,800
            
            
            $
            845,240
            
            
            $
            25,107,674
 
 (a)
            The
      mortgage loans are payable in aggregate monthly installments of
      approximately $101,000 including principal and interest with rates varying
      from 0% to 9.11% per annum and have maturity dates ranging from 2008
      through 2051. The loans are collateralized by the land and buildings of
      the subsidiary partnerships, the assignment of certain subsidiary
      partnerships’ rents and leases, and are without further
      recourse.
 
 
 The
following table summarizes the Partnership’s commitments from discontinued
operations as of March 31, 2008 to make future payments under its debt
agreements and other contractual obligations.
 
 Total
            
            
            Less
      than
              1
      Year
            
            
            1 –
      3
              Years
            
            
            3
      -5
              Years
            
            
            More
      than
              5
      YearsMortgage
      notes payable (a)
            
            $
            216,891
            
            
            $
            216,891
            
            
            $
            0
            
            
            $
            0
            
            
            $
            0
 
 (a)
            Upon
      the sale of Westminster, the mortgage note to Community Redevelopment
      Agency of the City of Los Angeles (“CRA”) was paid off.  In
      accordance with the loan agreement, Westminster was required to pay CRA
      50% of the net proceeds from the sale transaction, which amounted to
      $216,891.  As of December 31, 2007, this disposition fee of
      $216,891 remains due to CRA.
 
 
 Off-Balance Sheet
Arrangements
 
 The
Partnership has no off-balance sheet arrangements.
  - 9
-
  
 Critical Accounting
Policies
 
 In
preparing the consolidated financial statements, management has made estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the consolidated financial statements and the reported amounts of
revenues and expenses during the reporting periods. Actual results could differ
from those estimates. Set forth below is a summary of the accounting policies
that management believes are critical to the preparation of the consolidated
financial statements.
 
 Property and
Equipment/Valuation of Long-Lived Assets
 
 Property
and equipment to be held and used are carried at cost which includes the
purchase price, acquisition fees and expenses, and any other costs incurred in
acquiring the Properties.  The cost of property and equipment is
depreciated over their estimated useful lives using accelerated and
straight-line methods. Expenditures for repairs and maintenance are charged to
expense as incurred; major renewals and betterments are
capitalized.  At the time property and equipment are retired or
otherwise disposed of, the cost and accumulated depreciation are eliminated from
the assets and accumulated depreciation accounts and the profit or loss on such
disposition is reflected in earnings.  The Partnership complies with
Statement of Financial Accounting Standards (“SFAS”) No. 144 “Accounting for the
Impairment or Disposal of Long-Lived Assets”.  A loss on impairment of
assets is recorded when management estimates amounts recoverable through future
operations and sale of the Property on an undiscounted basis 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, 2008, the Partnership has not recorded any loss on impairment of
assets or reductions to estimated fair value.
 
 Revenue
Recognition
 
 Rental
income is earned under standard residential operating leases and is typically
due the first day of each month, but can vary by property due to the terms of
the tenant leases.  Rental income is recognized when earned and
charged to tenants’ accounts receivable if not received by the due
date.  Rental payments received in advance of the due date are
deferred until earned.  Rental subsidies are recognized as rental
income during the month in which it is earned.
 
 Other
revenues are recorded when earned and consist of the following
items:  Interest income earned on cash and cash equivalent balances
and cash held in escrow balances, income from forfeited security deposits, late
charges, laundry and vending income and other rental related items.
 
 Other
revenues from operations include the following amounts at both the Partnership
and Local Partnership level:
 
 Years
      Ended March 31,2008
            
            
            2007*
            
            
            2006*Interest
            
            $
            155,884
            
            
            $
            90,805
            
            
            $
            65,089Other
            
            
            142,602
            
            
            
            173,146
            
            
            
            131,575Total
      other revenue
            
            $
            298,486
            
            
            $
            263,951
            
            
            $
            196,664* 
      Reclassified for comparative purposes.
 
 
 Other
revenues from discontinued operations include the following amounts at both the
Partnership and Local Partnership level:
 
 Years
      Ended March 31,2008
            
            
            2007*
            
            
            2006*Interest
            
            $
            4,827
            
            
            $
            7,510
            
            
            $
            3,650Other
            
            
            62,146
            
            
            
            64,451
            
            
            
            68,332Total
      other revenue
            
            $
            66,973
            
            
            $
            71,961
            
            
            $
            71,982* 
      Reclassified for comparative purposes.
 
 Related
Parties
 
 Under the
terms of the Partnership Agreement, the Partnership has entered into certain
arrangements with the General Partner and its affiliates, which provide for
compensation to be paid to the General Partner and its affiliates. Such
arrangements include (but are not limited to) agreements to pay nonrecurring
acquisition fees, a nonaccountable acquisition expense allowance, an accountable
expense reimbursement and subordinated disposition fees to the General Partner
and/or its affiliates. In addition, the General Partner is entitled to a
subordinated interest in cash from sales or refinancings and a 1% interest in
net income, net loss, distributions of adjusted cash from operations and cash
from sales or refinancings.  Certain members and officers of the
General Partner receive compensation from the General Partner and its affiliates
for services performed for various affiliated entities which may include
services performed for the Partnership. The maximum annual partnership
management fee paid to the General Partner is 0.5% of invested assets. See Note
8 in Item 8, which is incorporated herein by reference.
 
 
 - 10
-
  Recent Accounting
Pronouncements
 
 In
September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS
No. 157, Fair Value Measurements, which established a framework for measuring
the fair value of assets and liabilities as required by numerous other
accounting pronouncements, and expands disclosure requirements of the fair
values of certain assets and liabilities.  This statement is effective
for the Partnership’s year ending March 31, 2009.  The provisions of
this statement are not expected to have a material impact on the consolidated
financial statements.
   
 In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements. This statement was issued with the intent to
improve the relevance, comparability, and transparency of the financial
information that a reporting entity provides in its consolidated financial
statements for those entities that have outstanding noncontrolling interest in
one or more subsidiaries.  The effective date for this provision is
for fiscal years beginning after December 15, 2008.  The Partnership
is currently evaluating the impact of the provisions of this statement on the
consolidated financial statements.
 
 Results of
Operations
 
 The
majority of the Local Partnerships’ income continues to be in the form of rental
income, with the corresponding expenses being divided among operations,
depreciation and mortgage interest.  The following is a summary of the
results of operations of the Partnership for the years ended March 31, 2008,
2007 and 2006, respectively, excluding the results of its discontinued
operations which are not reflected in the following discussion (see Item 8, Note
13).
 
 The net
income (loss) for the years ended March 31, 2008, 2007 and 2006 totaled
$2,296,203, $(3,003,189) and $(3,046,176), respectively.
 
 The
Partnership and BACs holders began recognizing Tax Credits with respect to a
Property when the Credit Period for such Property commenced.  Because
of the time required for the acquisition, completion and rent-up of Properties,
the amount of Tax Credits per BAC has gradually increased over the first three
years of the Partnership.  Tax Credits not recognized in the first
three years will be recognized in the 11th through 13th years.  The
Partnership generated $4,297,059, $5,058,701 and $5,292,899 of Tax Credits
during each of the 2007, 2006 and 2005 tax years, respectively.
 
 2008 vs.
2007
 
 Rental
income increased approximately 2% for the year ended March 31, 2008 as compared
to the corresponding period ended March 31, 2007, primarily due to rental rate
increases at two Local Partnerships, HUD approved increases at a third and
fourth Local Partnership and an increase in occupancy at a fifth Local
Partnership.
 
 Other
income increased approximately $35,000 for the year ended March 31, 2008 as
compared to the corresponding period in 2007, primarily due to an increase in
interest income earned on sale proceeds being invested at the Partnership
level.
 
 Total
expenses, excluding general and administrative, repairs and maintenance, and
taxes, decreased less than 1% for the year ended March 31, 2008 as compared to
the corresponding period ended March 31, 2007.
 
 General
and administrative expenses increased approximately $173,000 for the year ended
March 31, 2008 as compared to the corresponding period in 2007, primarily due to
an increase in accounting fees at the Partnership level, an increase in
management fees at one Local Partnership, an increase in incentive developer
fees at a second Local Partnership, an increase in bad debts and salaries
related to maintenance and security at a third Local Partnership and an increase
in bookkeeping, legal and security expenses at a fourth Local
Partnership.
 
 Repairs
and maintenance increased approximately $96,000 for the year ended March 31,
2008 as compared to the corresponding period in 2007, primarily due to an
increase in painting, decorating, hardware supplies and security costs at one
Local Partnership, an increase in window and roof repairs, painting, caulking
and repair contracts at a second Local Partnership, and an increase in
replacement of fixtures, repairs payroll and supplies at a third Local
Partnership.
 
 Taxes
increased approximately $15,000 for the year ended March 31, 2008 as compared to
the corresponding period ended March 31, 2007 due to a refund received in the
prior year by two Local Partnerships.
 
 2007 vs.
2006
 
 Rental
income increased less than 1% for the year ended March 31, 2007 as compared to
the corresponding period ended March 31, 2006, primarily due to rental rate
increases at several Local Partnerships as well as a decrease in vacancies at
one Local Partnership offset by an increase in vacancies at three additional
Local Partnerships.
 
 Other
income increased approximately $67,000 for the year ended March 31, 2007 as
compared to the corresponding period ended March 31, 2006, primarily due to
increases in interest income due to higher interest rates at several Local
Partnerships as well as the Partnership level, the write-off of accrued
administrative fees that had been accrued for several years at one Local
Partnership and the receipt of insurance proceeds for damages caused by a storm
at a second Local Partnership.
 
 Total
expenses, excluding general and administrative-related parties, repairs and
maintenance, and taxes, remained fairly consistent with an increase of less than
1% for the year ended March 31, 2007 as compared to the corresponding period
ended March 31, 2006.
 
  - 11
-
 General
and administrative-related parties decreased approximately $105,000 for the year
ended March 31, 2007, as compared to the corresponding period ended March 31,
2006, primarily due to decreases in expense reimbursements at the Partnership
level.
 Repairs
and maintenance increased approximately $136,000 for the year ended March 31,
2007 as compared to the corresponding period ended March 31, 2006 due to
increases in painting and decorating, maintenance payroll and security at one
Local Partnership, an increase in repairs due to a HUD inspection at a second
Local Partnership and increases in roofing and stucco repairs at a third Local
Partnership.
 
 Taxes
decreased approximately $27,000 for the year ended March 31, 2007 as compared to
the corresponding period ended March 31, 2006 due to a refund received and a
reversal of accruals in 2006 at one Local Partnership and a refund received at a
second Local Partnership.
 
 Item
7A.  Quantitative and Qualitative Disclosures about Market
Risk
 
 Mortgage
notes are payable in aggregate monthly installments including principal and
interest at rates varying from 0% to 9.11% per annum.  The Partnership
does not believe there is a material risk associated with the various interest
rates associated with the mortgage notes as the majority of the Local
Partnership mortgage notes have fixed rates.  The Partnership
currently discloses in Item 8, Note 3 of the Notes to Consolidated Financial
Statements, the fair value of the mortgage notes payable.
 
 The
Partnership’s investment as a limited partner in the Local Partnerships is
subject to the risks of potential losses arising from management and ownership
of improved real estate. The Partnership’s investments also could be adversely
affected by poor economic conditions generally, which could increase vacancy
levels and rental payment defaults and by increased operating expenses, any or
all of which could threaten the financial viability of one or more of the Local
Partnerships.
 
 There
also are substantial risks associated with the operation of Apartment Complexes
receiving government assistance. These include governmental regulations
concerning tenant eligibility, which may make it more difficult to rent
apartments in the Apartment Complexes; difficulties in obtaining government
approval for rent increases; limitations on the percentage of income which low
and moderate income tenants may pay as rent; the possibility that Congress may
not appropriate funds to enable HUD to make the rental assistance payments it
has contracted to make; and that when the rental assistance contracts expire
there may not be market demand for apartments at full market rents in a Local
Partnership’s Apartment Complex.
 
 The Local
Partnerships are impacted by inflation in several ways. Inflation allows for
increases in rental rates generally to reflect the impact of higher operating
and replacement costs. Furthermore, inflation generally does not impact the
fixed long-term financing under which real property investments were purchased.
Inflation also affects the Local Partnerships adversely by increasing operating
costs as, for example, for such items as fuel, utilities and
labor.  However, continued inflation may result in appreciated values
of the Local Partnership’s apartment complexes over a period of time as rental
revenues and replacement costs continue to increase.
 
 The
Partnership does not have any other market risk sensitive
instruments.
   - 12
-
   Item
      8.
              Financial
      Statements and Supplementary DataSequential
                Page(a)
      1.
              Consolidated
      Financial StatementsReport
      of Independent Registered Public Accounting Firm
              
              14Consolidated
      Balance Sheets at March 31, 2008 and 2007
              
              39Consolidated
      Statements of Operations for the years ended March 31, 2008, 2007 and
      2006
              
              40Consolidated
      Statements of Changes in Partners’ Capital (Deficit) for the years ended
      March 31, 2008, 2007 and 2006
              
              41Consolidated
      Statements of Cash Flows for the years ended March 31, 2008, 2007 and
      2006
              
              42Notes
      to Consolidated Financial Statements
              
              43
  - 13
-
   
 REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
  To
the Partners
 Independence
Tax Credit Plus L.P. IV and Subsidiaries
 We have
audited the accompanying consolidated balance sheets of Independence Tax Credit
Plus L.P. IV and Subsidiaries (a Delaware limited partnership) as
of  March 31, 2008 and 2007, and the related consolidated statements
of operations, changes in partners' capital (deficit) and cash flows for each of
the years in the three-year period ended March 31, 2008.  These
consolidated financial statements are the responsibility of the Partnership's
management.  Our responsibility is to express an opinion on these
financial statements based on our audits.  We did not audit the
consolidated financial statements of twelve subsidiary partnerships, whose
income aggregated $3,056,395 for the year ended March 31, 2008 and whose assets
constituted 63% of consolidated assets at March 31, 2008.  Those
statements were audited by other auditors whose reports have been furnished to
us, and our opinion, insofar as it relates to the amounts included for these
subsidiary partnerships, is based solely on the reports of the other
auditors.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership is not required to have, nor were we engaged to perform an audit of
its internal control over financial reporting.  Our audit included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the
Partnership’s internal control over financial reporting.  Accordingly,
we express no such opinion.  An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statements presentation.  We believe
that our audits and the reports of the other auditors provide a reasonable basis
for our opinion.
 
 In our
opinion, based on our audits and the reports of the other auditors, the
consolidated financial statements referred to above present fairly, in all
material respects, the financial position of Independence Tax Credit Plus L.P.
IV and Subsidiaries as of March 31, 2008 and 2007, and the results of their
operations and their cash flows for each of the years ended in the three-year
period ended March 31, 2008, in conformity with accounting principles generally
accepted in the United States of America.
    /s/Friedman
LLP
  New
York, New York
 June
24, 2008
   - 14
-
  [Letterhead
of REZNICK GROUP, P.C.]
 
 INDEPENDENT
AUDITORS’ REPORT
 
 To the
Partners
 BX 8A
Team Associates, L.P.
 
 We have
audited the accompanying balance sheet of BX 8A Team Associates, LP, for the
year ended December 31, 2007, and the related statements of operations,
partners' equity (deficit) and cash flows for the year then
ended.  These financial statements are the responsibility of the
Partnership's management.  Our responsibility is to express an opinion
on these financial statements based on our audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership has determined that it is not required to have, nor we were engaged
to perform, an audit of its internal control over financial
reporting.  Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, we express no such
opinion.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
that our audit provides a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of BX 8A Team Associates, LP, as of
December 31, 2007, and the results of its operations and its cash flows for the
year then ended, in conformity with accounting principles generally accepted in
the United States of America.
 
 
 /s/
Reznick Group, P.C.
 Atlanta,
Georgia
 May 20,
2008
  - 15
-
  [Letterhead
of REZNICK GROUP, P.C.]
 
 INDEPENDENT
AUDITORS’ REPORT
 
 To the
Partners
 BX 8A
Team Associates, L.P.
 
 We have
audited the accompanying balance sheet of BX 8A Team Associates, L.P. for the
year ended December 31, 2006 and the related statement of operations, changes in
partners' equity (deficit) and cash flows for the year then
ended.  These financial statements are the responsibility of the
Partnership's management.  Our responsibility is to express an opinion
on these financial statements based on our audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership has determined that it is not required to have, nor we were engaged
to perform, an audit of its internal control over financial
reporting.  Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, we express no such
opinion.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
that our audit provides a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of BX 8A Team Associates, L.P. as of
December 31, 2006, and the results of its operations and cash flows for the year
then ended, in conformity with accounting principles generally accepted in the
United States of America.
 
 The
accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern.  As discussed in Note 14
to the financial statements, the Partnership has suffered recurring losses from
operations and has a net capital deficiency that raises substantial doubt about
its ability to continue as a going concern.  Management’s plan in
regard to these opinion matters are also described in Note 14.  The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
 
 /s/
Reznick Group, P.C.
 Atlanta,
Georgia
 May 7,
2007
  - 16
-
  [Letterhead
of REZNICK GROUP, P.C.]
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Partners
 Westminster
Park Plaza, L.P.
 
 We have
audited the accompanying balance sheet of Westminster Park Plaza, L.P. (the
Partnership) as of September 30, 2007, and the related statements of operations,
change in partners’ equity (deficit) and cash flows for the period from January
1, 2007 through September 30, 2007.  These financial statements are
the responsibility of the Partnership's management.  Our
responsibility is to express an opinion on these financial statements based on
our audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting.  Our audit included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the
Partnership’s internal control over financial reporting.  Accordingly,
we express no such opinion.  An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation.  We believe that our audit provides a reasonable basis
for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Westminster Park Plaza, L.P. as of
September 30, 2007, and the results of its operations, the changes in partners’
equity (deficit), and its cash flows for the period from January 1, 2007 through
September 30, 2007, in conformity with accounting principles generally accepted
in the United States of America.
 
 /s/
REZNICK GROUP
 Sacramento,
California
 May 5,
2008
 
 
  - 17
-
  [Letterhead
of REZNICK GROUP, P.C.]
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Partners
 Westminster
Park Plaza, L.P.
 
 We have
audited the accompanying balance sheet of Westminster Park Plaza, L.P. as of
December 31, 2006, and the related statement of operations, changes in partners’
deficit, and cash flows for the year then ended.  These financial
statements are the responsibility of the Partnership's
management.  Our responsibility is to express an opinion on these
financial statements based on our audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting.  Our audit included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the
Partnership’s internal control over financial reporting.  Accordingly,
we express no such opinion.  An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation.  We believe that our audit provides a reasonable basis
for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Westminster Park Plaza, L.P. as of
December 31, 2006 and the results of its operations, the changes in partners’
deficit, and its cash flows for the year then ended, in conformity with
accounting principles generally accepted in the United States of
America.
 
 /s/
REZNICK GROUP
 Sacramento,
California
 April 13,
2007
 
 
  - 18
-
  [LETTERHEAD
OF MCDANIEL & HALLSTROM, CPA’s]
 
 To the
Partners
 FAWCETT
STREET LIMITED PARTNERSHIP
 Tacoma,
Washington
 
 INDEPENDENT
AUDITOR'S REPORT
 
 We have
audited the accompanying balance sheets of FAWCETT STREET LIMITED PARTNERSHIP as
of December 31, 2007 and 2006, and the related statements of operations,
partners' equity and cash flows for the years then ended.  These
financial statements are the responsibility of the Partnership's
management.  Our responsibility is to express an opinion on these
financial statements based on our audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership has determined that it is not required to have, nor were we engaged
to perform, an audit of its internal control over financial
reporting.  Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, we express no such
opinion.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
that our audits provide a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of FAWCETT STREET LIMITED PARTNERSHIP
as of December 31, 2007 and 2006, and the results of its operations and its cash
flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
 
 
 /s/
McDaniel & Hallstrom, CPA's
 Belfair,
Washington
 February
27, 2008
  - 19
-
  [LETTERHEAD
OF MCDANIEL & HALLSTROM, CPA’s]
 
 To the
Partners
 FAWCETT
STREET LIMITED PARTNERSHIP
 Tacoma,
Washington
 
 INDEPENDENT
AUDITOR'S REPORT
 
 We have
audited the accompanying balance sheets of FAWCETT STREET LIMITED PARTNERSHIP as
of December 31, 2006 and 2005, and the related statements of operations,
partners' equity and cash flows for the years then ended.  These
financial statements are the responsibility of the Partnership's
management.  Our responsibility is to express an opinion on these
financial statements based on our audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership has determined that it is not required to have, nor were we engaged
to perform, an audit of its internal control over financial
reporting.  Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, we express no such
opinion.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
that our audits provide a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of FAWCETT STREET LIMITED PARTNERSHIP
as of December 31, 2006 and 2005, and the results of its operations and its cash
flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
 
 /s/
McDaniel & Hallstrom, CPA's
 Belfair,
Washington
 February
10, 2007
  - 20
-
  [LETTERHEAD
OF CLIFFORD R. BENN, CPA]
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 General
Partner
 Figueroa
Senior Housing Limited Partnership
 Los
Angeles, California
 
 I have
audited the balance sheet of Figueroa Senior Housing Limited Partnership at
December 31, 2007, and the related statements of loss, changes in partners'
capital, and cash flow for the year then ended.  These financial
statements are the responsibility of Figueroa Senior Housing Limited
Partnership's management.  My responsibility is to express an opinion
on these financial statements based on my audit.
 
 I
conducted my audit in accordance with the standards of the Public Company
Accounting Oversight Board, used in the United States of
America.  Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement.  The Partnership has determined that it is not
required to have, nor was I engaged to perform, an audit of its internal control
over financial reporting.  My audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, I express no such
opinion.  An audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  I believe
that my audit provides a reasonable basis for my opinion.
 
 In my
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Figueroa Senior Housing Limited
Partnership at December 31, 2007 and the results of its operations for the year
then ended in conformity with generally accepted accounting principles used in
the United States of America.
 
 I also
have audited, in accordance with the standards of the Public Company Accounting
Oversight Board, the effectiveness of Figueroa Senior Housing Limited
Partnership’s internal control over financial reporting as of December 31, 2007,
based on Public Company Accounting Oversight Board Standards and my report dated
February 8, 2008, expressed a disclaimer of a opinion.
 
 
 /s/
Clifford Benn, CPA
 February
8, 2008
 Carson,
California
 
  - 21
-
  [LETTERHEAD
OF CLIFFORD R. BENN, CPA]
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 General
Partner
 Figueroa
Senior Housing Limited Partnership
 Los
Angeles, California
 
 I have
audited the balance sheet of Figueroa Senior Housing Limited Partnership at
December 31, 2006, and the related statements of loss, changes in partners'
capital, and cash flow for the year then ended.  These financial
statements are the responsibility of Figueroa Senior Housing Limited
Partnership's management.  My responsibility is to express an opinion
on these financial statements based on my audit.
 
 I
conducted my audit in accordance with the standards of the Public Company
Accounting Oversight Board.  Those standards require that I plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  The Partnership has
determined that it is not required to have, nor was I engaged to perform, an
audit of its internal control over financial reporting.  My audit
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Partnership’s internal control over financial reporting.  Accordingly,
I express no such opinion.  An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  I believe
that my audit provides a reasonable basis for my opinion.
 
 In my
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Figueroa Senior Housing Limited
Partnership at December 31, 2006 and the results of its operations for the year
then ended in conformity with generally accepted accounting principles used in
the United States of America.
 
 /s/
Clifford Benn, CPA
 January
25, 2007
 Carson,
California
 
  - 22
-
  [LETTERHEAD
OF CLIFFORD R. BENN, CPA]
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 General
Partner
 NNPHI
Senior Housing, L.P.
 Los
Angeles, California
 
 I have
audited the balance sheet of NNPHI Senior Housing, L.P. at December 31, 2007,
and the related statements of loss, changes in partners' capital, and cash flow
for the year then ended.  These financial statements are the
responsibility of NNPHI Senior Housing, L.P.'s management.  My
responsibility is to express an opinion on these financial statements based on
my audit.
 
 I
conducted my audit in accordance with the standards of the Public Company
Accounting Oversight Board used in the United States of
America.  Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatements.  The Partnership has determined that it is not
required to have, nor was I engaged to perform, an audit of its internal control
over financial reporting.  My audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, I express no such
opinion.  An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  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, 2007, and the results of its operations for the year then ended in
conformity with generally accepted accounting principles used in the United
States of America.
 
 I also
have audited, in accordance with the standards of the Public Company Accounting
Oversight Board, the effectiveness of NNPHI Senior Housing, L.P.’s internal
control over financial reporting as of December 31, 2007, based on Public
Company Accounting Oversight Board Standards and my report dated February 22,
2008, expressed a disclaimer of a opinion.
 
 
 /s/
Clifford Benn, CPA
 February
22, 2008
 Carson,
California
 
  - 23
-
  [LETTERHEAD
OF CLIFFORD R. BENN, CPA]
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 General
Partner
 NNPHI
Senior Housing, L.P.
 Los
Angeles, California
 
 I have
audited the balance sheet of NNPHI Senior Housing, L.P. at December 31, 2006,
and the related statements of loss, changes in partners' capital, and cash flow
for the year then ended.  These financial statements are the
responsibility of NNPHI Senior Housing, L.P.'s management.  My
responsibility is to express an opinion on these financial statements based on
my audit.
 
 I
conducted my audit in accordance with the standards of the Public Company
Accounting Oversight Board.  Those standards require that I plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  The Partnership has
determined that it is not required to have, nor was I engaged to perform, an
audit of its internal control over financial reporting.  My audit
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Partnership’s internal control over financial reporting.  Accordingly,
I express no such opinion.  An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  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, 2006, and the results of its operations for the year then ended in
conformity with generally accepted accounting principles used in the United
States of America.
 
 /s/
Clifford Benn, CPA
 January
25, 2007
 Carson,
California
 
  - 24
-
  [Letterhead
of Favors Rettig, CPA’s, P.S.]
 
 INDEPENDENT
AUDITOR’S REPORT
 
 To the
Partners
 Belmont/McBride
Apartments Urban Renewal Associates, L.P.
 
 We have
audited the accompanying balance sheets of Belmont/McBride Apartments Urban
Renewal Associates, L.P. as of December 31, 2007 and 2006, and the related
statements of operations, partners’ equity (deficit), and cash flows for the
years then ended.  These financial statements are the responsibility
of the entity’s management.  Our responsibility is to express an
opinion on these financial statements based on our audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
partnership has determined that it is not required to have, nor were we engaged
to perform, an audit of its internal control over financial
reporting.  Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purposes of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, we express no such
opinion.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
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 Belmont/McBride Apartments Urban
Renewal Associates, L.P. as of December 31, 2007 and 2006, and the results of
its operations and cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of
America.
 
 
 /s/
Favors Rettig, CPA’s, P.S.
 Fircrest,
Washington
 February
25, 2008
 
 
  - 25
-
  [Letterhead
of Favors Rettig, CPA’s, P.S.]
 
 INDEPENDENT
AUDITOR’S REPORT
 
 To the
Partners
 Belmont/McBride
Apartments Urban Renewal Associates, L.P.
 
 We have
audited the accompanying balance sheet of Belmont/McBride Apartments Urban
Renewal Associates, L.P. as of December 31, 2006, and the related statements of
operations, partners’ equity (deficit), and cash flows for the year then
ended.  These financial statements are the responsibility of the
entity’s management.  Our responsibility is to express an opinion on
these financial statements based on our audit.  The financial
statements of Belmont/McBride Apartments Urban Renewal Associates, L.P. as of
December 31, 2005, were audited by other auditors whose report dated January 13,
2006 expressed an unqualified opinion on those statements.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
partnership has determined that it is not required to have, nor were we engaged
to perform, an audit of its internal control over financial
reporting.  Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, we express no such
opinion.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
that our audit provides a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Belmont/McBride Apartments Urban
Renewal Associates, L.P. as of December 31, 2006, and the results of its
operations and cash flows for the year then ended in conformity with accounting
principles generally accepted in the United States of America.
 
 /s/
Favors Rettig, CPA’s, P.S.
 Fircrest,
Washington
 February
16, 2007
 
 
  - 26
-
  [Letterhead
of KOCH GROUP & COMPANY, LLP]
 
 Independent Auditor's
Report
 
 To the
Partners
 Sojourner
Douglas Urban Renewal Partnership, L.P.
 
 We have
audited the accompanying balance sheets of Sojourner Douglas Urban Renewal
Partnership, L.P. (A Limited Partnership) as of December 31, 2007 and 2006 and
the related statements of operations, changes in partners' equity and cash flows
for the years then ended.  These financial statements are the
responsibility of the Partnership's management.  Our responsibility is
to express an opinion on these financial statements based on our
audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership has determined that it is not required to have, nor we were engaged
to perform, an audit of its internal control over financial
reporting.  Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, we express no such
opinion.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
that our audits provide a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Sojourner Douglas Urban Renewal
Partnership, L.P. (A Limited Partnership) as of December 31, 2007 and 2006 and
the results of its operations, changes in its partners’ equity and its cash
flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
 
 
 /s/ KOCH
GROUP & COMPANY, LLP
 New York,
New York
 April 14,
2008
  - 27
-
  [Letterhead
of KOCH GROUP & COMPANY, LLP]
 
 INDEPENDENT
AUDITOR'S REPORT
 
 To the
Partners
 Sojourner
Douglas Urban Renewal Partnership, L.P.
 
 We have
audited the accompanying balance sheets of Sojourner Douglas Urban Renewal
Partnership, L.P. (A Limited Partnership) as of December 31, 2006 and 2005 and
the related statements of operations, changes in partners' equity and cash flows
for the years then ended.  These financial statements are the
responsibility of the Partnership's management.  Our responsibility is
to express an opinion on these financial statements based on our
audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership has determined that it is not required to have, nor we were engaged
to perform, an audit of its internal control over financial
reporting.  Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, we express no such
opinion.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
that our audits provide a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly in all
material respects, the financial position of Sojourner Douglas Urban Renewal
Partnership, L.P. (A Limited Partnership) as of December 31, 2006 and 2005 and
the results of its operations, changes in its partners’ equity and its cash
flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
 
 /s/ KOCH
GROUP & COMPANY, LLP
 New York,
New York
 January
26, 2007
  - 28
-
  [Letterhead
of REZNICK GROUP, P.C.]
 
 INDEPENDENT
AUDITORS' REPORT
 
 To the
Partners
 New Zion
Apartments Limited Partnership
 
 We have
audited the accompanying balance sheet of New Zion Apartments Limited
Partnership, HUD Project No. LA48E000011, as of December 31, 2007, and the
related statements of income, partners' equity (deficit) and cash flow for the
year then ended.  These financial statements are the responsibility of
the Partnership's management.  Our responsibility is to express an
opinion on these financial statements based on our audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States) and the standards applicable to
financial audits contained in Government Auditing Standards issued by
the Comptroller General of the United States.  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting.  Our audit included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the
Partnership’s internal control over financial reporting.  Accordingly,
we express no such opinion.  An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation.  We believe that our audit provides a reasonable basis
for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of New Zion Apartments Limited
Partnership at December 31, 2007, and the results of its operations, changes in
partners’ equity (deficit), and its cash flows for the year then ended, in
conformity with accounting principles generally accepted in the United States of
America.
 
 In
accordance with Government Auditing Standards, we have
also issued a report, dated April 10, 2008 on our consideration of New Zion
Apartments Limited Partnership's internal control over financial
reporting.  The purpose of that report is to describe the scope of our
testing of internal control over financial reporting and the results of that
testing and not to provide an opinion on the internal control over financial
reporting.  In accordance with Government Auditing Standards, we have
also issued an opinion dated April 10, 2008 on New Zion Apartments Limited
Partnership’s compliance with certain provisions of laws, regulations,
contracts, and grant agreements, and other matters that could have a direct and
material effect on a major HUD-assisted program.  Those reports are an
integral part of an audit performed in accordance with Government Auditing Standards and should
be considered in assessing the results of our audit.
 
 Our audit
was conducted for the purpose of forming an opinion on the basic financial
statements taken as a whole.  The accompanying supplemental
information on pages 22 through 35 is presented for purposes of additional
analysis and is not a required part of the basic financial statements of the
partnership.  Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
 
 /s/
Reznick Group, P.C.
 Taxpayer
Identification Number:
 52-1088612
 Baltimore,
Maryland
 April 10,
2008
 
 Lead
Auditor:  Mary E. Norwood, CPA
 
  - 29
-
  [Letterhead
of REZNICK GROUP, P.C.]
 
 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, HUD Project No. LA48E000011, at December 31, 2006, and the related
statement of income partners', capital and cash flow 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 standards as
established by the Auditing Standards Board (United States), the standards
applicable to financial audits contained in Government Auditing Standards issued by
the Comptroller General of the United States, and the standards of the Public
Company Accounting Oversight Board (United States).  Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement.  The Partnership is not required to have, nor were we
engaged to perform, an audit of its internal control over financial
reporting.  Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, we express no such
opinion.  An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.  We
believe that our audit provides a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to in the first paragraph above
present fairly, in all material respects, the financial position of New Zion
Apartments Limited Partnership at December 31, 2006, and the results of its
operations, changes in capital, and its cash flows for the year then ended in
conformity with U.S. generally accepted accounting principles.
 
 In
accordance with Government Auditing Standards, we have
also issued a report, dated February 9, 2007 on our consideration of New Zion
Apartments Limited Partnership's internal control over financial
reporting.  The purpose of that report is to describe the scope of our
testing of internal control over financial reporting and the results of that
testing and not to provide an opinion on the internal control over financial
reporting.  In accordance with Government Auditing Standards, we have
also issued an opinion dated February 19, 2007, on New Zion Apartments Limited
Partnership’s compliance with certain provisions of laws, regulations,
contracts, and grant agreements, and other matters that could have a direct and
material effect on a major HUD-assisted program.  Those reports are an
integral part of an audit performed in accordance with Government Auditing Standards and should
be considered in assessing the results of our audit.
 
 Our audit
was conducted for the purpose of forming an opinion on the basic financial
statements taken as a whole.  The accompanying supplemental
information on pages 22 through 33 is presented for purposes of additional
analysis and is not a required part of the basic financial statements of the
partnership.  Such information has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
 
 /s/
Reznick Group, P.C.
 Taxpayer
Identification Number:
 72-0506596
 Atlanta,
Georgia
 February
23, 2007
 Lead
Auditor:  Joshua D. Northcutt, CPA
 
  - 30
-
  [Letterhead
of REZNICK GROUP, P.C.]
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Partners
 Bakery
Village Urban Renewal Associates, L.P.
 
 We have
audited the accompanying balance sheet of Bakery Village Urban Renewal
Associates, L.P. as of December 31, 2007, and the related statements of
operations, changes in partners’ equity (deficit) and cash flows for the year
then ended.  These financial statements are the responsibility of the
Partnership's management.  Our responsibility is to express an opinion
on these financial statements based on our audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership has determined that it is not required to have, nor were we engaged
to perform, an audit of its internal control over financial
reporting.  Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, we express no such
opinion.  An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.  We
believe that our audit provides a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Bakery Village Urban Renewal
Associates, L.P. as of December 31, 2007, and the results of its operations,
changes in its partners’ equity (deficit) and its cash flows for the year then
ended, in conformity with accounting principles generally accepted in the United
States of America.
 
 /s/
REZNICK GROUP, P.C.
 Baltimore,
Maryland
 April 1,
2008
 
 
  - 31
-
  [Letterhead
of REZNICK GROUP, P.C.]
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Partners
 Bakery
Village Urban Renewal Associates, L.P.
 
 We have
audited the accompanying balance sheet of Bakery Village Urban Renewal
Associates, L.P. as of December 31, 2006, and the related statements of
operations, changes in partners’ equity (deficit) and cash flows for the year
then ended.  These financial statements are the responsibility of the
Partnership's management.  Our responsibility is to express an opinion
on these financial statements based on our audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership has determined that it is not required to have, nor were we engaged
to perform, an audit of its internal control over financial
reporting.  Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, we express no such
opinion.  An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.  We
believe that our audit provides a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Bakery Village Urban Renewal
Associates, L.P. as of December 31, 2006, and the results of its operations,
changes in partners’ equity (deficit) and its cash flows for the year then
ended, in conformity with accounting principles generally accepted in the United
States of America.
 
 /s/
REZNICK GROUP, P.C.
 Baltimore,
Maryland
 April 11,
2007
 
 
  - 32
-
  [Letterhead
of REZNICK GROUP, P.C.]
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Partners
 Marlton
Housing Partnership, L.P.
 
 We have
audited the accompanying balance sheet of Marlton Housing Partnership, L.P. as
of December 31, 2007, and the related statements of operations, changes in
partners’ equity (deficit) and cash flows for the year then
ended.  These financial statements are the responsibility of the
partnership's management.  Our responsibility is to express an opinion
on these financial statements based on our audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership has determined that it is not required to have, nor were we engaged
to perform, an audit of its internal control over financial
reporting.  Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, we express no such
opinion.  An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.  We
believe that our audit provides a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Marlton Housing Partnership, L.P.
as of December 31, 2007, and the results of its operations, changes in partners’
equity (deficit) and its cash flows for the year then ended, in conformity with
accounting principles generally accepted in the United States of
America.
 
 Our audit
was made for the purpose of forming an opinion on the basic financial statements
taken as a whole.  The supplemental information on pages 18 and 19 is
presented for the purposes of additional analysis and is not a required part of
the basic financial statements.  Such information has been subjected
to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
 
 
 /s/
REZNICK GROUP
 Baltimore,
Maryland
 March 25,
2008
 
 
  - 33
-
  [Letterhead
of REZNICK GROUP, P.C.]
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Partners
 Marlton
Housing Partnership, L.P.
 
 We have
audited the accompanying balance sheet of Marlton Housing Partnership, L.P. as
of December 31, 2006, and the related statements of operations, changes in
partners’ equity (deficit) and cash flows for the year then
ended.  These financial statements are the responsibility of the
partnership's management.  Our responsibility is to express an opinion
on these financial statements based on our audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership has determined that it is not required to have, nor were we engaged
to perform, an audit of its internal control over financial
reporting.  Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, we express no such
opinion.  An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.  We
believe that our audit provides a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Marlton Housing Partnership, L.P.
as of December 31, 2006, and the results of its operations, changes in partners’
equity (deficit) and its cash flows for the year then ended, in conformity with
accounting principles generally accepted in the United States of
America.
 
 /s/
REZNICK GROUP
 Baltimore,
Maryland
 March 28,
2007
 
 
  - 34
-
  [LETTERHEAD
OF FAVORS & ASSOCIATES, CPA's, P.S.]
 
 INDEPENDENT
AUDITORS' REPORT
 
 To the
Partners
 GP
Kaneohe Limited Partnership
 
 We have
audited the accompanying balance sheets of GP Kaneohe Limited Partnership as of
December 31, 2007 and 2006, and the related statements of operations, changes in
partners' capital (deficit), and cash flows for the years then
ended.  These financial statements are the responsibility of the
entity's management.  Our responsibility is to express an opinion on
these financial statements based on our audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership has determined that it is not required to have, nor we were engaged
to perform, an audit of its internal control over financial
reporting.  Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, we express no such
opinion.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
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 GP Kaneohe Limited Partnership as
of December 31, 2007 and 2006, and the results of its operations and cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.
 
 /s/
Favors & Associates, CPA's, P.S.
 Fircrest,
Washington
 February
11, 2008
 
  - 35
-
  [LETTERHEAD
OF FAVORS & ASSOCIATES, CPA's, P.S.]
 
 INDEPENDENT
AUDITORS' REPORT
 
 To the
Partners
 GP
Kaneohe Limited Partnership
 
 We have
audited the accompanying balance sheets of GP Kaneohe Limited Partnership as of
December 31, 2006 and 2005, and the related statements of operations, changes in
partners' capital (deficit), and cash flows for the years then ended. These
financial statements are the responsibility of the entity's
management.  Our responsibility is to express an opinion on these
financial statements based on our audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership has determined that it is not required to have, nor we were engaged
to perform, an audit of its internal control over financial
reporting.  Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, we express no such
opinion.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
that our 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 GP Kaneohe Limited Partnership as
of December 31, 2006 and 2005, and the results of its operations and cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.
 
 /s/
Favors & Associates, CPA's, P.S.
 Fircrest,
Washington
 February
16, 2007
 
  - 36
-
  [LETTERHEAD
OF HANKINS & COMPANY]
 
 Independent Auditors’
Report
 
 Partners
 Guymon
Housing Partners
 Limited
Partnership
 Fort
Smith, Arkansas
 
 We have
audited the accompanying balance sheets of Guymon Housing Partners Limited
Partnershipas of
December 31, 2007 and 2006, and the related statements of operations, changes in
partners' equity (deficit) and cash flows for the years then
ended.  These financial statements are the responsibility of the
Partnership's management.  Our responsibility is to express an opinion
on these financial statements based on our audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Partnership has determined that it is not required to have, nor were we engaged
to perform, an audit of its internal control over financial
reporting.  Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Partnership’s internal control over
financial reporting.  Accordingly, we express no such
opinion.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
that our audits provide a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Guymon Housing Partners Limited
Partnership as of December 31, 2007 and 2006, and the results of its operations
and cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
 
 
 /s/
Hankins & Company
 Fort
Smith, Arkansas
 February
27, 2008
 
 
 
  - 37
-
  [LETTERHEAD
OF HANKINS & COMPANY]
 
 INDEPENDENT
AUDITOR'S REPORT
 
 Partners
 Guymon
Housing Partners Limited Partnership
 Fort
Smith, Arkansas
 
 We have
audited the accompanying balance sheets of Guymon Housing Partners Limited
Partnershipas of
December 31, 2006 and 2005, and the related statements of operations, changes in
partners' equity (deficit) and cash flows for the years then
ended.  These financial statements are the responsibility of the
Partnership's management.  Our responsibility is to express an opinion
on these financial statements based on our audits.
 
 We
conducted our audits in accordance with generally accepted auditing standards as
established by the Auditing Standards Board (United States) and in accordance
with the standards of the Public Company Accounting Oversight Board (United
States).  Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement.  The Partnership has determined that it is
not required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting.  Our audit included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Partnership’s internal control
over financial reporting.  Accordingly, we express no such
opinion.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
that our audits provide a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Guymon Housing Partners Limited
Partnership as of December 31, 2006 and 2005, and the results of its operations
and its cash flows for the years then ended, in conformity with accounting
principles generally accepted in the United States of America.
 
 /s/
Hankins & Company
 February
26, 2007
 Fort
Smith, Arkansas
  - 38
-
  
 
 INDEPENDENCE
TAX CREDIT PLUS L.P. IV
 AND
SUBSIDIARIES
 CONSOLIDATED
BALANCE SHEETS
 
 
 
 
 March
      31,2008
            
            
            2007ASSETSOperating
      assets:Property
      and equipment, at cost, less accumulated depreciation (Notes 2, 4 and
      7)
            
            $
            49,023,752
            
            
            $
            59,929,615Cash
      and cash equivalents (Notes 2, 3 and 12)
            
            
            2,231,576
            
            
            
            1,375,669Cash
      held in escrow (Notes 2, 3 and 5)
            
            
            2,816,310
            
            
            
            3,400,368Deferred
      costs - less accumulated amortization (Notes 2 and 6)
            
            
            409,498
            
            
            
            486,343Due
      from local general partners and affiliates (Note 8)
            
            
            299,985
            
            
            
            231,589Other
      assets
            
            
            517,343
            
            
            
            596,867Total
      operating assets
            
            
            55,298,464
            
            
            
            66,020,451Assets
      of discontinued operations (Note 13):Net
      assets held for sale
            
            
            554,439
            
            
            
            0Total
      discontinued assets
            
            
            554,439
            
            
            
            0Total
      assets
            
            $
            55,852,903
            
            
            $
            66,020,451LIABILITIES
      AND PARTNERS’ CAPITAL (DEFICIT)Operating
      liabilities:Mortgage
      notes payable (Notes 3 and 7)
            
            $
            27,258,408
            
            
            $
            35,051,752Accounts
      payable and other liabilities
            
            
            434,095
            
            
            
            451,390Accrued
      interest payable
            
            
            6,010,799
            
            
            
            9,493,633Security
      deposit payable
            
            
            330,190
            
            
            
            415,159Due
      to local general partners and affiliates (Note 8)
            
            
            1,823,782
            
            
            
            1,775,063Due
      to general partners and affiliates (Note 8)
            
            
            2,757,581
            
            
            
            3,727,579Total
      operating liabilities
            
            
            38,614,855
            
            
            
            50,914,576Liabilities
      of discontinued operations (Note 13):Mortgage
      notes payable of assets held for sale (Note 7)
            
            
            216,891
            
            
            
            0Net
      liabilities held for sale (including minority interest)
            
            
            18
            
            
            
            0Total
      discontinued liabilities
            
            
            216,909
            
            
            
            0Total
      liabilities
            
            
            38,831,764
            
            
            
            50,914,576Minority
      interests (Note 2)
            
            
            1,456,791
            
            
            
            1,837,730Commitments
      and contingencies (Notes 8 and 12)Partners’
      capital (deficit):Limited
      partners (100,000 BACs authorized; 45,844 issued and outstanding) (Note
      1)
            
            
            15,816,240
            
            
            
            13,542,999General
      partners
            
            
            (251,892
            )
            
            
            (274,854
            )Total
      partners’ capital (deficit)
            
            
            15,564,348
            
            
            
            13,268,145Total
      liabilities and partners’ capital (deficit)
            
            $
            55,852,903
            
            
            $
            66,020,451The
      accompanying notes are an integral part of these consolidated financial
      statements.
 
 
  - 39
-
  INDEPENDENCE
TAX CREDIT PLUS L.P. IV
 AND
SUBSIDIARIES
 CONSOLIDATED
STATEMENTS OF OPERATIONS
 
 
 
 
 Years
      Ended March 31,2008
            
            
            2007*
            
            
            2006*Operations:RevenuesRental
      income
            
            $
            4,922,309
            
            
            $
            4,818,053
            
            
            $
            4,758,196Other
      (Note 2)
            
            
            298,486
            
            
            
            263,951
            
            
            
            196,664Total
      revenues
            
            
            5,220,795
            
            
            
            5,082,004
            
            
            
            4,954,860ExpensesGeneral
      and administrative
            
            
            1,406,055
            
            
            
            1,232,751
            
            
            
            1,235,503General
      and administrative-related parties (Note 8)
            
            
            718,813
            
            
            
            721,541
            
            
            
            826,965Repairs
      and maintenance
            
            
            1,013,600
            
            
            
            917,221
            
            
            
            781,158Operating
      and other
            
            
            878,675
            
            
            
            849,133
            
            
            
            796,939Real
      estate taxes
            
            
            128,407
            
            
            
            113,620
            
            
            
            140,171Insurance
            
            
            332,160
            
            
            
            314,561
            
            
            
            329,223Financial,
      primarily interest
            
            
            1,439,423
            
            
            
            1,456,212
            
            
            
            1,506,448Depreciation
      and amortization
            
            
            2,219,203
            
            
            
            2,289,326
            
            
            
            2,210,990Total
      expenses
            
            
            8,136,336
            
            
            
            7,894,365
            
            
            
            7,827,397Loss
      from continuing operations before minority interest
            
            
            (2,915,541
            )
            
            
            (2,812,361
            )
            
            
            (2,872,537
            )Minority
      interest in loss of subsidiaries from operations
            
            
            7,894
            
            
            
            16,845
            
            
            
            14,225Loss
      from continuing operations
            
            
            (2,907,647
            )
            
            
            (2,795,516
            )
            
            
            (2,858,312
            )Discontinued
      operations:Income
      (loss) from discontinued operations (including minority interest and gain
      on sale of property) (Note 13)
            
            
            5,203,850
            
            
            
            (207,673
            )
            
            
            (187,864
            )Net
      income (loss)
            
            $
            2,296,203
            
            
            $
            (3,003,189
            )
            
            $
            (3,046,176
            )Loss
      from operations – limited partners
            
            $
            (2,878,571
            )
            
            $
            (2,767,561
            )
            
            $
            (2,829,729
            )Income
      (loss) from discontinued operations (including minority interest and gain
      on sale of property) – limited partners
            
            
            5,151,812
            
            
            
            (205,596
            )
            
            
            (185,985
            )Net
      income (loss) – limited partners
            
            $
            2,273,241
            
            
            $
            (2,973,157
            )
            
            $
            (3,015,714
            )Number
      of BACs outstanding
            
            
            45,844
            
            
            
            45,844
            
            
            
            45,844Loss
      from operations per BAC
            
            $
            (62.79
            )
            
            $
            (60.37
            )
            
            $
            (61.72
            )Income
      (loss) from discontinued operations (including minority interest and gain
      on sale of properties) per BAC
            
            
            112.38
            
            
            
            (4.48
            )
            
            
            (4.06
            )Income
      (loss) per BAC
            
            $
            49.59
            
            
            $
            (64.85
            )
            
            $
            (65.78
            )*   Reclassified
      for comparative purposes.
              
              The
      accompanying notes are an integral part of these consolidated financial
      statements.
 
  - 40
-
  INDEPENDENCE
TAX CREDIT PLUS L.P. IV
 AND
SUBSIDIARIES
 CONSOLIDATED
STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL (DEFICIT)
 YEARS
ENDED MARCH 31, 2008, 2007 and 2006
 
 
 
 
 Total
            
            
            Limited
              Partners
            
            
            General
              PartnersPartners’
      capital (deficit) –April 1, 2005
            
            $
            19,317,510
            
            
            $
            19,531,870
            
            
            $
            (214,360
            )Net
      loss
            
            
            (3,046,176
            )
            
            
            (3,015,714
            )
            
            
            (30,462
            )Partners’
      capital (deficit) – March 31, 2006
            
            
            16,271,334
            
            
            
            16,516,156
            
            
            
            (244,822)Net
      loss
            
            
            (3,003,189
            )
            
            
            (2,973,157
            )
            
            
            (30,032
            )Partners’
      capital (deficit) – March 31, 2007
            
            
            13,268,145
            
            
            
            13,542,999
            
            
            
            (274,854
            )Net
      income
            
            
            2,296,203
            
            
            
            2,273,241
            
            
            
            22,962Partner’s
      capital (deficit) – March 31, 2008
            
            $
            15,564,348
            
            
            $
            15,816,240
            
            
            $
            (251,892
            )The
      accompanying notes are an integral part of these consolidated financial
      statements.
 
 
 
 
  - 41
-
  INDEPENDENCE
TAX CREDIT PLUS L.P. IV
 AND
SUBSIDIARIES
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 
 
 
 Years
      Ended March 31,2008
            
            2007
            
            2006Cash
      flows from operating activities:Net
      income (loss)
            
            $
            2,296,203
            
            $
            (3,003,189
            )
            $
            (3,046,176
            )Adjustments
      to reconcile net income (loss) to net cash (used in)provided
      by operating activities:Depreciation
      and amortization
            
            
            2,359,711
            
            
            2,511,355
            
            
            2,433,019Gain
      on sale of property
            
            
            (5,032,150
            )
            
            0
            
            
            0Minority
      interest in loss of subsidiary partnerships
            
            
            (351,547
            )
            
            (16,845
            )
            
            (14,225
            )Decrease
      (increase) in cash held in escrow
            
            
            186,381
            
            
            (59,537
            )
            
            71,578Decrease
      (increase) in other assets
            
            
            40,951
            
            
            (56,171
            )
            
            (28,780
            )(Decrease)
      increase in accounts payable and other liabilities
            
            
            (398,375
            )
            
            684,423
            
            
            600,203Decrease
      in accrued interest payable
            
            
            (3,482,834
            )
            
            0
            
            
            0Decrease
      in security deposit payable
            
            
            (84,924
            )
            
            0
            
            
            0Increase
      in due to local general partners and affiliates
            
            
            63,483
            
            
            25,291
            
            
            269Decrease
      in due to local general partners and affiliates
            
            
            (162,531
            )
            
            (16,984
            )
            
            (58,753
            )Increase
      in due from local general partners
            
            
            (132,310
            )
            
            0
            
            
            0(Decrease)
      increase in due to general partner and affiliates
            
            
            (969,998
            )
            
            466,147
            
            
            581,844Total
      adjustments
            
            
            (7,964,143
            )
            
            3,537,679
            
            
            3,585,155Net
      cash (used in) provided by operating activities
            
            
            (5,667,940
            )
            
            534,490
            
            
            538,979Cash
      flows from investing activities:Disposal
      (acquisition) of property and equipment
            
            
            70,867
            
            
            70,029
            
            
            (82,448
            )Decrease
      (increase) in cash held in escrow
            
            
            329,548
            
            
            (109,401
            )
            
            227Proceeds
      from sale of property
            
            
            14,070,228
            
            
            0
            
            
            0Costs
      relating to sale of property
            
            
            (119,597
            )
            
            6
            
            
            0Increase
      (decrease) in due to local general partners and affiliates
            
            
            147,767
            
            
            (98,966
            )
            
            31,938Decrease
      (increase) in due from local general partners and
    affiliates
            
            
            0
            
            
            19,357
            
            
            (54,000
            )Increase
      in due to selling partners
            
            
            67,404
            
            
            0
            
            
            0Net
      cash provided by (used in) investing activities
            
            
            14,566,217
            
            
            (118,981
            )
            
            (168,159
            )Cash
      flows from financing activities:Repayments
      of mortgage notes
            
            
            (7,576,453
            )
            
            (498,181
            )
            
            (548,628
            )Increase
      in deferred costs
            
            
            0
            
            
            (12,222
            )
            
            0Decrease
      in capitalization of consolidated subsidiaries attributable tominority
      interest
            
            
            (29,392
            )
            
            (15,560
            )
            
            0Net
      cash used in financing activities
            
            
            (7,605,845
            )
            
            (525,963
            )
            
            (548,628
            )Net
      increase (decrease) in cash and cash equivalents
            
            
            1,292,432
            
            
            (110,454
            )
            
            (177,808
            )Cash
      and cash equivalents at beginning of year
            
            
            1,375,669
            
            
            1,486,123
            
            
            1,663,931Cash
      and cash equivalents at end of year*
            
            $
            2,668,101
            
            
            1,375,669
            
            $
            1,486,123Supplemental
      disclosure of cash flow information:Cash
      paid during the year for interest
            
            $
            5,284,742
            
            $
            1,187,823
            
            $
            1,391,100Summarized
      below are the components of the gain on sale of property:Proceeds
      from sale of investment – net
            
            $
            (13,950,631
            )
            $
            0
            
            $
            0Decrease
      in property and equipment, net of accumulated depreciation
            
            
            8,552,130
            
            
            0
            
            
            0Decrease
      in cash held in escrow
            
            
            68,129
            
            
            0
            
            
            0Increase
      in other assets
            
            
            (15,427
            )
            
            0
            
            
            0Increase
      in accounts payable and other liabilities
            
            
            381,098
            
            
            0
            
            
            0Decrease
      in security deposit payable
            
            
            (45
            )
            
            0
            
            
            0Decrease
      in due to selling partners
            
            
            (67,404
            )
            
            0
            
            
            0*  
      Cash and cash equivalents at end of period includes cash and cash
      equivalents from discontinued operations of $436,525, $0 and $0,
      respectively.
              
              The
      accompanying notes are an integral part of these consolidated financial
      statements.
  - 42
-
  INDEPENDENCE
TAX CREDIT PLUS L.P. IV
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2008, 2007 and 2006
 
 
 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”).  Centerline Holding Company (“Centerline”) is the parent of
Centerline Manager LLC (formerly known as RCC Manager LLC).
 
 The
Partnership’s business is primarily to invest in other partnerships (“Local
Partnerships,” “subsidiaries” or “subsidiary partnerships”) owning leveraged
apartment complexes (“Apartment Complexes” or “Properties”) that are eligible
for the low-income housing tax credit (“Tax Credit”) enacted in the Tax Reform
Act of 1986, some of which may also be eligible for the historic rehabilitation
tax credit.  Qualified Beneficial Assignment Certificates (“BACs”)
holders are entitled to Tax Credits over the period of the Partnership’s
entitlement to claim Tax Credits (for each Property, generally ten years from
the date of investment or, if later, the date the Property is placed in service;
referred to herein as the “Credit Period”) with respect to each Apartment
Complex.
 
 The
Partnership had originally acquired limited partnership interests in fourteen
subsidiary partnerships, all of which have been consolidated. The Partnership
does not anticipate acquiring limited partnership interests in additional
subsidiary partnerships. The Partnership’s investments in Local Partnerships
represent from 98.99% to 99.89% interests, except for one investment which is a
58.12% interest.
 
 The
Partnership was authorized to issue a total of 100,000 ($100,000,000) Beneficial
Assignment Certificates (“BACs”) which have been registered with the Securities
and Exchange Commission for sale to the public. Each BAC represents all of the
economic and virtually all of the ownership rights attributable to a limited
partnership interest. The solicitation for the subscription of BACs was
terminated as of May 22, 1996 and the final closing occurred on August 15, 1996.
The Partnership had raised a total of $45,844,000 representing 45,844
BACs.
 
 
 NOTE 2 -
Summary of Significant Accounting Policies
 
 a)  Basis
of Accounting
 
 For
financial reporting purposes, the Partnership’s fiscal year ends on March 31.
All subsidiaries have fiscal years ending December 31. Accounts of the
subsidiaries have been adjusted for intercompany transactions from January 1
through March 31. The Partnership’s fiscal year ends March 31 in order to allow
adequate time for the subsidiaries’ financial statements to be prepared and
consolidated. The books and records of the Partnership are maintained on the
accrual basis of accounting, in accordance with U.S. generally accepted
accounting principles (“GAAP”).
 
 b)  Basis
of Consolidation
 
 The
consolidated financial statements include the accounts of the Partnership and
its subsidiary partnerships for the years ended March 31, 2008, 2007 and 2006,
respectively, in which the Partnership is a limited partner. Through the rights
of the Partnership and/or an affiliate of the General Partner, which affiliate
has a contractual obligation to act on behalf of the Partnership, to remove the
general partner of the subsidiary local partnerships (the “Local General
Partner”) and to approve certain major operating and financial decisions, the
Partnership has a controlling financial interest in the subsidiary partnerships.
All intercompany accounts and transactions with the subsidiary partnerships have
been eliminated in consolidation.
 
 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 $0, $11,000 and $10,000 for the years ended March 31,
2008, 2007 and 2006, 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)  Property
and Equipment
 
 Property
and equipment to be held and used are carried at cost which includes the
purchase price, acquisition fees and expenses, construction period interest and
any other costs incurred in acquiring the properties.  The cost of
property and equipment is depreciated over their estimated useful lives using
accelerated and straight-line methods. Expenditures for repairs and maintenance
are charged to expense as incurred; major renewals and betterments are
capitalized. At the time property and equipment are retired or otherwise
disposed of, the cost and accumulated depreciation are eliminated from the
assets and accumulated depreciation accounts and the profit or loss on such
disposition is reflected in earnings.  The Partnership complies with
Statement of Financial Accounting Standards (“SFAS”) No. 144 “Accounting for the
Impairment or Disposal of Long-Lived Assets”.  A loss on impairment of
assets is recorded when management estimates amounts recoverable through future
operations and sale of the property on an undiscounted basis are below
depreciated cost. At that time property investments themselves are reduced to
estimated fair value (generally using estimated future discounted net cash
flows) when the property is considered to be impaired and the depreciated cost
exceeds estimated fair value.
 
 - 43
-
 INDEPENDENCE
TAX CREDIT PLUS L.P. IV
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2008, 2007 and 2006
 
 At the
time management commits to a plan to dispose of assets, said assets are adjusted
to the lower of carrying amount or fair value less costs to sell. These assets
are classified as property and equipment-held for sale and are not depreciated.
There are no assets classified as property and equipment-held for sale through
March 31, 2008.
 
 Through
March 31, 2008, the Partnership has determined no loss on impairment of assets
or reductions to estimated fair value is necessary.
 
 e)  Revenue
Recognition
 
 Rental
income is earned under standard residential operating leases and is typically
due the first day of each month, but can vary by property due to the terms of
the tenant leases.  Rental income is recognized when earned and
charged to tenants’ accounts receivable if not received by the due
date.  Rental payments received in advance of the due date are
deferred until earned.  Rental subsidies are recognized as rental
income during the month in which it is earned.
 
 Other
revenues are recorded when earned and consist of the following
items:  Interest income earned on cash and cash equivalent balances
and cash held in escrow balances, income from forfeited security deposits, late
charges, laundry and vending income and other rental related items.
 
 Other
revenues from operations include the following amounts at both the Partnership
and Local Partnership level:
 
 Years
      Ended March 31,2008
            
            
            2007*
            
            
            2006*Interest
            
            $
            155,884
            
            
            $
            90,805
            
            
            $
            65,089Other
            
            
            142,602
            
            
            
            173,146
            
            
            
            131,575Total
      other revenue
            
            $
            298,486
            
            
            $
            263,951
            
            
            $
            196,664*  
      Reclassified for comparative purposes.
 
 
 Other
revenues from discontinued operations include the following amounts at both the
Partnership and Local Partnership level:
 
 Years
      Ended March 31,2008
            
            
            2007*
            
            
            2006*Interest
            
            $
            4,827
            
            
            $
            7,510
            
            
            $
            3,650Other
            
            
            62,146
            
            
            
            64,451
            
            
            
            68,332Total
      other revenue
            
            $
            66,973
            
            
            $
            71,961
            
            
            $
            71,982*  
      Reclassified for comparative purposes.
 
 
 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).
 
 In prior
years, the Partnership relied on the 5% safe harbor established by Internal
Revenue Service (“IRS”) regulations to avoid being characterized as a
“publicly-traded partnership” that is taxed as a corporation.  The 5%
safe harbor, however, expired and is no longer available as of December 31,
2005.  Accordingly, the Partnership now relies on a 2% safe harbor
established by another IRS regulation to avoid being characterized as a
“publicly-traded partnership” that is taxed as a corporation.
  - 44
-
  INDEPENDENCE
TAX CREDIT PLUS L.P. IV
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2008, 2007 and 2006
 
 
 g)  Mortgage
Financing and Offering Costs
 
 Costs
incurred in connection with obtaining permanent mortgage financing are
capitalized and amortized over the lives of the related mortgage notes. Costs
incurred to sell BACs, including brokerage fees and the nonaccountable expense
allowance, are considered selling and offering expenses. These costs are charged
directly to limited partners’ capital.
 
 h)  Deferred
Costs
 
 Deferred
costs and fees incurred in connection with the purchase of interests in certain
subsidiary partnerships have been capitalized as property costs and are being
amortized over the lives of the related properties.
 
 i)  Loss
Contingencies
 
 The
Partnership records loss contingencies as a charge to income when information
becomes available which indicates that it is probable that an asset has been
impaired or a liability has been incurred as of the date of the consolidated
financial statements and the amount of loss can be reasonably
estimated.
 
 j)  Use
of Estimates
 
 The
preparation of consolidated financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect certain
reported amounts and disclosures. Accordingly, actual results could differ from
those estimates.
 
 
 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,
Cash Held in Escrow and Accounts Payable and Other
Liabilities
 The
carrying amount approximates fair value due to the short-term maturity of the
instruments.
 
 Mortgage Notes
Payable
 The fair
value of mortgage notes payable is estimated, where practicable, based on the
borrowing rate currently available for similar loans.
 
 The
estimated fair values of the Partnership’s mortgage notes payable from operating
liabilities are as follows:
 
 March
      31, 2008
            
            
            March
      31, 2007Carrying
              Amount
            
            
            Fair
      Value
            
            
            Carrying
              Amount
            
            
            Fair
      ValueMortgage
      notes payable for which it is:Practicable
      to estimate fair value
            
            $
            14,584,750
            
            
            $
            17,456,584
            
            
            $
            26,267,763
            
            
            $
            27,213,707Not
      practicable
            
            $
            12,673,658
            
            
            
            (a)
            
            
            $
            8,783,989
            
            
            
            (a)
 
 
 The
estimated fair values of the Partnership’s mortgage notes payable from
discontinued liabilities are as follows:
 
 March
      31, 2008
            
            
            March
      31, 2007Carrying
              Amount
            
            
            Fair
      Value
            
            
            Carrying
              Amount
            
            
            Fair
      ValueMortgage
      notes payable for which it is:Practicable
      to estimate fair value
            
            $
            0
            
            
            $
            0
            
            
            $
            0
            
            
            $
            0Not
      practicable
            
            $
            216,891
            
            
            
            (a)
            
            
            $
            0
            
            
            
            (a)
 
 
 Upon the
sale of Westminster, the mortgage note to Community Redevelopment Agency of the
City of Los Angeles (“CRA”) was paid off.  In accordance with the loan
agreement, Westminster was required to pay CRA 50% of the net proceeds from the
sale transaction, which amounted to $216,891.  As of December 31,
2007, this disposition fee of $216,891 remains due to CRA.
  - 45
-
  INDEPENDENCE
TAX CREDIT PLUS L.P. IV
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2008, 2007 and 2006
   (a)
                Management
      believes it is not practicable to estimate the fair value of certain
      mortgage notes payable because mortgage programs with similar
      characteristics are not currently available to each of the subsidiary
      partnerships.
 
 The
carrying amount of other assets and liabilities reported on the consolidated
balance sheets that require such disclosure approximates fair
value.
 Due to General Partner and
Affiliates and Due to Local General Partners and Affiliates
 Management
believes it is not practical to estimate the fair value of due to general
partner and affiliates and due to Local General Partners and affiliates because
market information on such unique obligations are not currently
available.
 
 
 NOTE 4 -
Property and Equipment
 
 The
components of property and equipment and their estimated useful lives from
operating assets are as follows:
 
 March
      31,
            
            Estimated
              Useful
      Lives
              (Years)2008
            
            
            2007Land
            
            $
            2,015,069
            
            
            $
            3,307,496Building
      and improvements
            
            
            67,252,682
            
            
            
            76,880,650
            
            27.5Furniture
      and fixtures
            
            
            942,976
            
            
            
            1,213,232
            
            5 –
      770,210,727
            
            
            
            81,401,378Less:  Accumulated
      depreciation
            
            
            (21,186,975
            )
            
            
            (21,471,763
            )$
            49,023,752
            
            
            $
            59,929,615
 
 
 Included
in property and equipment at March 31, 2008 and 2007, was $2,750,640 of
acquisition fees paid to the General Partner and $708,031 of third party
acquisition expenses. In addition, as of March 31, 2008 and 2007, building and
improvements includes $343,161 of capitalized interest. No interest was
capitalized during the years ended March 31, 2008, 2007 and 2006.
 
 In
connection with the rehabilitation of the properties, the subsidiary
partnerships have incurred developer’s fees of $4,235,495 to the Local General
Partners and affiliates as of both March 31, 2008 and 2007.  Such fees
have been included in the cost of property and equipment.
 
 Depreciation
expense for the years ended March 31, 2008, 2007 and 2006 amounted to
$2,174,323, $2,165,817 and $2,158,217, respectively.
 
 During
the year ended March 31, 2008, there was a write-off of accumulated depreciation
in the amount of $2,567,654, which was related to the discontinued
assets.
 
 Depreciation
expense from discontinued operations for the years ended March 31, 2008, 2007
and 2006 amounted to $108,543, $219,746 and $219,746, respectively.
 
 
 NOTE 5 -
Cash Held in Escrow
 
 Cash held
in escrow from operating assets consists of the following:
 
 March
      31,2008
            
            
            2007Purchase
      price payments*
            
            $
            433,646
            
            
            $
            499,573Real
      estate taxes, insurance and other
            
            
            877,823
            
            
            
            975,067Reserve
      for replacement
            
            
            1,199,098
            
            
            
            1,529,714Tenant
      security deposits
            
            
            305,743
            
            
            
            396,014$
            2,816,310
            
            
            $
            3,400,368*  
      Represents amounts to be paid to seller upon meeting specified rental
      achievement criteria.
 
  - 46
-
  INDEPENDENCE
TAX CREDIT PLUS L.P. IV
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2008, 2007 and 2006
  NOTE 6 -
Deferred Costs
 
 The
components of deferred costs and their periods of amortization from operating
assets are as follows:
 
 March
      31,2008
            
            
            2007
            
            PeriodFinancing
      costs
            
            $
            1,006,807
            
            
            $
            1,006,807
            
            2
      through 45 yearsOther
      deferred costs
            
            
            133,786
            
            
            
            189,9141,140,593
            
            
            
            1,196,721Less:  Accumulated
      amortization
            
            
            (731,095
            )
            
            
            (710,378
            )$
            409,498
            
            
            $
            486,343
 
 Amortization
expense for the years ended March 31, 2008, 2007 and 2006 amounted to $44,880,
$123,509 and $52,773, respectively.  During the years ended March 31,
2008 and 2007, deferred costs of $56,128 and $65,922 were written off due to the
discontinued asset and a loan restructuring (see Note 7),
respectively.  In addition, during the year ended March 31, 2008,
$24,163 of accumulated amortization was written off due to the discontinued
asset.
 
 Amortization
expense from discontinued operations for the years ended March 31, 2008, 2007
and 2006 amounted to $31,965, $2,283 and $2,283, respectively.
 
 
 NOTE 7 -
Mortgage Loans Payable
 
 The
mortgage loans from operations are payable in aggregate monthly installments of
approximately $101,000 including principal and interest with rates varying from
0% to 9.11% per annum and have maturity dates ranging from 2008 through 2051.
The loans are collateralized by the land and buildings of the subsidiary
partnerships, the assignment of certain subsidiary partnerships’ rents and
leases, and are without further recourse.
 
 Annual
principal payments on the permanent debt requirements for mortgage notes payable
for each of the next five calendar years and thereafter are as
follows:
 
 Year
      Ending December 31,
            
            Amount2008
            
            $
            453,6942009
            
            
            415,6502010
            
            
            436,1502011
            
            
            459,4762012
            
            
            385,764Thereafter
            
            
            25,107,674$
            27,258,408
 
 
 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).
 
 Accrued
interest payable amounted to approximately $6,011,000 and $9,494,000 as of March
31, 2008 and 2007, respectively.  Interest accrues on all mortgage
loans, which include primary and secondary loans.  Certain secondary
loans have provisions such that interest is accrued but not payable until a
future date.  The Partnership anticipates the payment of accrued
interest on the secondary loans (which make up the majority of the accrued
interest payable amount indicated in the above table and which have been
accumulating since the Partnership’s investment in the respective Local
Partnership) will be made from future refinancings or sales proceeds of the
respective Local Partnerships.  In addition, each Local Partnership’s
mortgage notes are collateralized by the land and buildings of the respective
Local Partnership, and are without further recourse to the
Partnership.  Accrued interest payable is included in accounts payable
and other liabilities on the Consolidated Balance Sheets.
 
 The
mortgage loan from discontinued operations of $216,891 as of March 31, 2008
represents a disposition fee payable upon the sale of
Westminster.  See Note 3 for detailed discussion regarding this
amount.
 
 - 47
-
 INDEPENDENCE
TAX CREDIT PLUS L.P. IV
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2008, 2007 and 2006
 NOTE 8 -
Related Party Transactions
 
 An
affiliate of the General Partner has a .01% interest as a special limited
partner in each of the Local Partnerships.
 
 Pursuant
to the Partnership Agreement and the Local Partnership Agreements, the General
Partner, the Local General Partners and their respective affiliates receive
their pro-rata share of profits, losses and tax credits.
 
 A)  Guarantees
 
 The
Partnership had negotiated Operating Deficit Guaranty Agreements with the Local
Partnerships whereby the Local General Partners of such Local Partnerships
and/or their affiliates 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, 2008 and 2007, Operating Deficit Guarantees aggregate
approximately $123,000 and $159,000, respectively.  As of March 31,
2008 and 2007, approximately $36,000 and $0, respectively, 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.
 
 B)  Related
Party Expenses
 
 Expenses
incurred to related parties from operations for the years ended March 31, 2008,
2007 and 2006 were as follows:
 
 Years
      Ended March 31,2008
            
            
            2007
            
            
            2006Partnership
      management fees (a)
            
            $
            290,617
            
            
            $
            337,120
            
            
            $
            337,120Expense
      reimbursements (b)
            
            
            153,476
            
            
            
            121,372
            
            
            
            228,697Local
      administrative fees (d)
            
            
            76,000
            
            
            
            63,000
            
            
            
            76,000Total
      general and administrative - General Partner
            
            
            520,093
            
            
            
            521,492
            
            
            
            641,817Property
      management fees incurred to affiliates of thesubsidiary
      partnerships’ general partners (c)
            
            
            198,720
            
            
            
            200,049
            
            
            
            185,148Total
      general and administrative-related parties
            
            $
            718,813
            
            
            $
            721,541
            
            
            $
            826,965
 
 
 (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 payments on all Partnership
liabilities have been made other than to those owed to the General Partner.
Partnership management fees owed to the General Partner amounting to
approximately $2,170,000 and $2,641,000 were accrued and unpaid as of March 31,
2008 and 2007, 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 $375,586,
$394,964 and $388,853 for the years ended March 31, 2008, 2007 and 2006,
respectively.  Of these fees, $198,720, $200,049 and $185,148 were
incurred to affiliates of the Local General Partners.
 
 (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.
  - 48
-
  INDEPENDENCE
TAX CREDIT PLUS L.P. IV
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2008, 2007 and 2006
  C)  Due
to/from Local General Partners and Affiliates
 
 Due to
Local General Partners and affiliates from operating liabilities consists of the
following:
 
 March
      31,2008
            
            
            2007Development
      fee payable
            
            $
            1,583,734
            
            
            $
            1,617,304Construction
      costs payable
            
            
            50,000
            
            
            
            50,000Operating
      advances
            
            
            126,565
            
            
            
            85,993Management
      and other fees
            
            
            63,483
            
            
            
            21,766$
            1,823,782
            
            
            $
            1,775,063
 
 
 Due from
Local General Partners and affiliates from operating liabilities consists of the
following:
 
 March
      31,2008
            
            
            2007Local
      general partner loan receivable
            
            $
            299,985
            
            
            $
            231,589
 
 
 Due from
Local General Partners and affiliates from discontinued liabilities consists of
the following:
 
 March
      31,2008
            
            
            2007Operating
      advances
            
            $
            (76,851
            )
            
            $
            0Management
      and other fees receivable
            
            
            140,765
            
            
            
            0$
            63,914
            
            
            $
            0
 
 
 NOTE 9 –
Taxable Net Loss
 
 A
reconciliation of the consolidated financial statement net income (loss) to the
income tax loss for the Partnership and its consolidated subsidiaries
follows:
 
 Years
      Ended December 31,2007
            
            
            2006
            
            
            2005Financial
      statement net income (loss)
            
            $
            2,296,203
            
            
            $
            (3,003,189
            )
            
            $
            (3,046,176
            )Differences
      between depreciation and amortization expense
              for
      financial reporting purposes and income tax purposes
            
            
            (398,803
            )
            
            
            (198,983
            )
            
            
            (333,774
            )Differences
      resulting from Partnership having a different
              fiscal
      year for income tax and financial reporting purposes
            
            
            (46,302)
            
            
            
            (6,712
            )
            
            
            15,040Tax
      exempt interest income
            
            
            (69,367
            )
            
            
            (42,169
            )
            
            
            (24,764
            )Difference
      between gain on sale of property for financial reporting purpose and
      income tax purposes
            
            
            (351,115
            )
            
            
            0
            
            
            
            0Difference
      between gains and losses allocated to minority interest for financial
      reporting purposes and tax purposes
            
            
            (9,767,944
            )
            
            
            0
            
            
            
            0Other,
      including accruals for financial reporting purposes not
              deductible
      for income tax purposes until paid
            
            
            2,682,380
            
            
            
            338,099
            
            
            
            20,349Net
      loss per income tax returns
            
            $
            (5,654,948
            )
            
            $
            (2,912,954
            )
            
            $
            (3,369,325
            )
 
  - 49
-
  INDEPENDENCE
TAX CREDIT PLUS L.P. IV
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2008, 2007 and 2006
 NOTE 10 –
Sale of Property
 
 The
Partnership is currently in the process of disposing all of its
investments.  During the fiscal year ended March 31, 2008, the
property and the related assets and liabilities of one Local Partnership were
sold.  There can be no assurance as to when the Partnership will
dispose of its remaining investments or the amount of proceeds which may be
received.  However, based on the historical operating results of the
Local Partnerships and the current economic conditions, including changes in tax
laws, it is unlikely that the proceeds from such sales received by the
Partnership will be sufficient to return to the limited partners their original
investments.  All gains and losses on sales are included in
discontinued operations.
 
 On
September 5, 2007, the property and the related assets and liabilities of
Westminster Park Plaza, a California L.P. (“Westminster”) were sold to an
affiliate of the Local General Partner for a sales price of
$14,070,228.  The Partnership received $2,513,602 as a distribution
from this sale after the repayment of mortgages, other liabilities and closing
costs of approximately $11,557,000. The sale resulted in a gain of approximately
$5,032,000 resulting from the write-off of the deficit basis in the property at
the date of sale.  Subsequently the Partnership received a liquidating
distribution of $303,289 in May 2008.
 
  - 50
-
  
 NOTE 11 –
Selected Quarterly Financial Data (Unaudited)
 
 The
following table summarizes the Partnership’s quarterly results of operations for
the years ended March 31, 2008 and 2007.
 
 Quarter
      EndedOPERATIONS
            
            June
      30,
              2007*
            
            
            September
      30,
              2007
            
            
            December
      31,
              2007
            
            
            March
      31,
              2008Revenues
            
            $
            1,319,731
            
            
            $
            1,301,183
            
            
            $
            1,363,418
            
            
            $
            1,236,463Total
      expenses
            
            
            (1,951,547
            )
            
            
            (2,103,947
            )
            
            
            (2,060,614
            )
            
            
            (2,020,228
            )Loss
      from continuing operations before minority interest
            
            
            (631,816
            )
            
            
            (802,764
            )
            
            
            (697,196
            )
            
            
            (783,765
            )Minority
      interest in loss (income) of subsidiaries from operations
            
            
            597
            
            
            
            (6,228
            )
            
            
            (357,136
            )
            
            
            370,661Loss
      from continuing operations
            
            
            (631,219
            )
            
            
            (808,992
            )
            
            
            (1,054,332
            )
            
            
            (413,104
            )(Loss)
      income from discontinued operations (includingminority
      interest and gain on sale of property)
            
            
            (108,036
            )
            
            
            (46,474
            )
            
            
            5,020,829
            
            
            
            337,531Net
      (loss) income
            
            $
            (739,255
            )
            
            $
            (855,466
            )
            
            $
            3,966,497
            
            
            $
            (75,573
            )Net
      (loss) income – limited partnership
            
            $
            (731,862
            )
            
            $
            (846,912
            )
            
            $
            3,926,832
            
            
            $
            (74,817
            )Loss
      per weighted average BAC from operations
            
            $
            (13.63
            )
            
            $
            (17.47
            )
            
            $
            (22.76
            )
            
            $
            (8.93
            )(Loss)
      income per weighted average BAC from
              discontinued
      operations
            
            
            (2.33
            )
            
            
            (1.01
            )
            
            
            108.42
            
            
            
            7.30Net
      (loss) income per weighted average BAC
            
            $
            (15.96
            )
            
            $
            (18.48
            )
            
            $
            85.66
            
            
            $
            (1.63
            )Quarter
      EndedOPERATIONS
            
            June
      30,
              2006*
            
            
            September
      30,
              2006*
            
            
            December
      31,
              2006*
            
            
            March
      31,
              2007*Revenues
            
            $
            1,281,875
            
            
            $
            1,282,967
            
            
            $
            1,268,765
            
            
            $
            1,248,397Total
      expenses
            
            
            (1,998,702
            )
            
            
            (1,968,101
            )
            
            
            (1,936,977
            )
            
            
            (1,990,585
            )Loss
      from continuing operations before minority interest
            
            
            (716,827
            )
            
            
            (685,134
            )
            
            
            (668,212
            )
            
            
            (742,188
            )Minority
      interest in loss of subsidiaries from operations
            
            
            9,551
            
            
            
            198
            
            
            
            207
            
            
            
            6,889Loss
      from continuing operations
            
            
            (707,276
            )
            
            
            (684,936
            )
            
            
            (668,005
            )
            
            
            (735,299
            )Loss
      from discontinued operations (including minority interest)
            
            
            (41,012
            )
            
            
            (41,289
            )
            
            
            (12,337
            )
            
            
            (113,035
            )Net
      loss
            
            $
            (748,288
            )
            
            $
            (726,225
            )
            
            $
            (680,342
            )
            
            $
            (848,334
            )Net
      loss – limited partnership
            
            $
            (740,805
            )
            
            $
            (718,962
            )
            
            $
            (673,540
            )
            
            $
            (839,850
            )Loss
      per weighted average BAC from operations
            
            $
            (15.27
            )
            
            $
            (14.79
            )
            
            $
            (14.43
            )
            
            $
            (15.88
            )Loss
      per weighted average BAC from discontinued operations
            
            
            (0.89
            )
            
            
            (0.89
            )
            
            
            (0.26
            )
            
            
            (2.44
            )Net
      loss per weighted average BAC
            
            $
            (16.16
            )
            
            $
            (15.68
            )
            
            $
            (14.69
            )
            
            $
            (18.32
            )*    Reclassified
      for comparative purposes.
 
  - 51
-
  INDEPENDENCE
TAX CREDIT PLUS L.P. IV
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2008, 2007 and 2006
 NOTE 12 –
Commitments and Contingencies
 
 a)  Uninsured
Cash and Cash Equivalents
 
 The
Partnership and its subsidiary partnerships maintain their cash and cash
equivalents in various banks. The accounts at each bank are insured by the
Federal Deposit Insurance Corporation for up to $100,000.  At March
31, 2008, uninsured cash and cash equivalents at various banking institutions
approximated $1,960,000.
 
 b)  Leases
 
 One
subsidiary partnership is leasing the land on which its Property is located, in
Hawaii, for a term of 65 years starting on July 14, 1982. At December 31, 2007,
the subsidiary partnership is obligated to pay rent of $1 per
annum.
 
 c)  Other
 
 The
Partnership is subject to the risks incident to potential losses arising from
the management and ownership of improved real estate and poor economic
conditions.
 
 The
Partnership and BACs holders began to recognize Tax Credits with respect to a
Property when the Credit Period for such Property commenced.  The
Credit Period generally runs for ten years from the date it commenced with
respect to each eligible Property.  Because of the time required for
the acquisition, completion and rent-up of Properties, as expected, that the
amount of Tax Credits per BAC gradually increased over the first three years of
the Partnership. Tax Credits not recognized in the first three years will be
recognized in the 11th through 13th years. The Partnership generated $4,297,059,
$5,058,701 and $5,292,899 of Tax Credits during each of the 2007, 2006 and 2005
tax years, respectively.  The Tax Credits have expired, and will
continue to expire at various times through 2010.
 
 
 NOTE 13 –
Discontinued Operations
 
 The
following table summarizes the financial position of the Local Partnerships that
are classified as discontinued operations because the respective Local
Partnerships were classified as assets held for sale.  As of March 31,
2008, Westminster was classified as a discontinued operation in the consolidated
balance sheets.  The amounts shown below, as of March 31, 2008,
represent residual cash and accounts payable balances as of the balance sheet
date from the sale of Westminster.  As of March 31, 2007, there were
no assets classified as discontinued operations in the consolidated financial
statements.
 
 Consolidated
Balance Sheets:
 
 March
      31,
              2008
            
            
            March
      31,
              2007AssetsCash
      and cash equivalents
            
            $
            436,525
            
            
            $
            0Due
      from Local General Partners and affiliates (Note 8)
            
            
            63,914
            
            
            
            0Other
      assets
            
            
            54,000
            
            
            
            0Total
      assets
            
            $
            554,439
            
            
            $
            0LiabilitiesMortgage
      notes payable
            
            $
            216,891
            
            
            $
            0Accounts
      payable and other liabilities
            
            
            18
            
            
            
            0Total
      liabilities
            
            $
            216,909
            
            
            $
            0
 
 
 The
following table summarizes the results of operations of the Local Partnerships
that are classified as discontinued operations.  For the year ended
March 31, 2008, Westminster, which was sold during the year, was classified as
discontinued operations in the consolidated statements of
operations.  For the years ended March 31, 2007 and 2006, Westminster,
in order to present comparable results to the year ended March 31, 2008, was
classified as discontinued operations in the consolidated statements of
operations.
  - 52
-
  INDEPENDENCE
TAX CREDIT PLUS L.P. IV
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2008, 2007 and 2006
 Consolidated Statements of
Discontinued Operations:
 
 Years
      Ended March 31,2008
            
            
            2007*
            
            
            2006*RevenuesRental
      income
            
            $
            784,253
            
            
            $
            1,121,074
            
            
            $
            1,118,383Other
      (Note 2)
            
            
            66,973
            
            
            
            71,961
            
            
            
            71,982Gain
      on sale of properties (Note 10)
            
            
            5,032,150
            
            
            
            0
            
            
            
            0Total
      revenues
            
            
            5,883,376
            
            
            
            1,193,035
            
            
            
            1,190,365ExpensesGeneral
      and administrative
            
            
            243,253
            
            
            
            276,408
            
            
            
            306,915Repairs
      and maintenance
            
            
            140,274
            
            
            
            236,993
            
            
            
            239,548Operating
      and other
            
            
            75,823
            
            
            
            93,466
            
            
            
            88,669Real
      estate taxes
            
            
            37,846
            
            
            
            90,232
            
            
            
            27,311Insurance
            
            
            22,990
            
            
            
            48,081
            
            
            
            53,541Financial,
      primarily interest
            
            
            362,485
            
            
            
            433,499
            
            
            
            440,216Depreciation
      and amortization
            
            
            140,508
            
            
            
            222,029
            
            
            
            222,029Total
      expenses
            
            
            1,023,179
            
            
            
            1,400,708
            
            
            
            1,378,229Income
      (loss) before minority interest
            
            
            4,860,197
            
            
            
            (207,673
            )
            
            
            (187,864
            )Minority
      interest in loss of subsidiaries from discontinued
    operations
            
            
            343,653
            
            
            
            0
            
            
            
            0Total
      income (loss) from discontinued operations (includinggain
      on sale of properties and minority interest)
            
            $
            5,203,850
            
            
            $
            (207,673
            )
            
            $
            (187,864
            )Income
      (loss) – limited partners from discontinued operations(including
      gain on sale of properties and minority interest)
            
            $
            5,151,812
            
            
            $
            (205,596
            )
            
            $
            (185,985
            )Number
      of BACs outstanding
            
            
            45,844
            
            
            
            45,844
            
            
            
            45,844Income
      (loss) from discontinued operations (including gain on saleof
      properties and minority interest) per BAC
            
            $
            112.38
            
            
            $
            (4.48
            )
            
            $
            (4.06
            )
 
 *
            Reclassified
      for comparative purposes.
 
 Years
      Ended March 31,2008
            
            
            2007*
            
            
            2006*Cash
      flows from discontinued operationsNet
      cash (used in) provided by operating activities
            
            $
            (3,965,622
            )
            
            $
            90,940
            
            
            $
            50,512Net
      cash provided by (used in) investing activities
            
            $
            14,287,408
            
            
            $
            (32,403
            )
            
            $
            (28,308
            )Net
      cash used in financing activities
            
            $
            (7,220,875
            )
            
            $
            (96,099
            )
            
            $
            (89,382
            )
 
 *
            Reclassified
      for comparative purposes.
 
 
 NOTE 14 –
Recent Accounting Pronouncements
 
 Recent Accounting
Pronouncements
 
 In
September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, which
established a framework for measuring the fair value of assets and liabilities
as required by numerous other accounting pronouncements, and expands disclosure
requirements of the fair values of certain assets and
liabilities.  This statement is effective for the Partnership’s year
ending March 31, 2009.  The provisions of this statement are not
expected to have a material impact on the consolidated financial
statements.
 
 In
February 2007 the FASB issued SFAS No. 159, The Fair Value Option for Financial
Assets and Financial Liabilities.  This statement was issued with the
intent to provide an alternative measurement treatment for certain financial
assets and liabilities.  The alternative measurement would permit fair
value to be used for both initial and subsequent measurement, with changes in
fair value recognized in earnings as those changes occur. This "Fair Value
Option" would be available on a contract by contract basis.  This
statement is effective for the Partnership’s year ending March 31,
2009.  The provisions of this statement are not expected to have a
material impact on the consolidated financial statements.
 
 - 53
-
 INDEPENDENCE
TAX CREDIT PLUS L.P. IV
 AND
SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 MARCH 31,
2008, 2007 and 2006
 
 
 - 54
-
  Item
9.  Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
 
 None
 
 Item
9A(T).  Controls and Procedures
 
 (a)Evaluation of Disclosure
Controls and Procedures.The Chief Executive Officer and Chief
Financial Officer of Related Independence L.L.C, the general partner of the
Partnership, have evaluated the effectiveness of the Partnership’s disclosure
controls and procedures (as such term is defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”)
as of the end of the period covered by this report.  Based on such
evaluation, such officers have concluded that, as of the end of such period, the
Partnership’s disclosure controls and procedures are effective.
 
 (b)  Management’s Report on
Internal Control over Financial Reporting.Our management is
responsible for establishing and maintaining adequate internal control over
financial reporting, as such term is defined in Exchange Act
Rules 13a-15(f) and 15d-15(f).  In evaluating the Partnership’s
internal control over financial reporting, management has adopted the framework
in Internal Control-Integrated Framework issued by the Committee of Sponsoring
organizations of the Treadway Commission (the “COSO
Framework”).  Under the supervision and with the participation of our
management, including the Chief Executive Officer and Chief Financial Officer of
the General Partner, the Partnership conducted an evaluation of the
effectiveness of its internal control over financial reporting as of the end of
the period covered by this report.  The Partnership’s internal control
over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external reporting purposes in accordance with
generally accepted accounting principles.  Internal control over
financial reporting includes those policies and procedures that (1) pertain
to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the Company;
(2) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles, and that receipts and expenditures of
the Company are being made only in accordance with authorizations of management
and directors of the Company; and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the
financial statements.  However, because of inherent limitations,
internal control over financial reporting may not prevent or detect
misstatements.  Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
 
 Based on
management’s evaluation under the COSO Framework, it has concluded that the
Partnership’s internal control over financial reporting, was, as of the end of
the period covered by this report, (1) effective at the Partnership level, in
that they provide reasonable assurance that information required to be disclosed
by the Partnership in the reports it files or submits under the Securities
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the SEC's rules and forms and (2) ineffective at the
subsidiary level due to certain control deficiencies noted in the audit reports
for such subsidiaries.  Management will attempt to cause the Local
General Partner’s to remedy such deficiencies; however, the General Partner does
not have control over the internal controls at the subsidiary
level.  Management believes they have sufficient controls at the
Partnership level to mitigate these deficiencies, and such deficiencies do not
have a material impact on the consolidated financial statements.
 
 This
annual report does not include an attestation report of the Partnership’s
registered public accounting firm regarding internal control over financial
reporting. The Partnership’s internal control over financial reporting was not
subject to attestation by the Partnership’s registered public accounting firm
pursuant to temporary rules of the Securities and Exchange Commission that
permit the Partnership to provide only this report.
 
 (c)  Changes in Internal Controls over Financial
Reporting.Except as noted in (b) above, during the year ended
March 31, 2008, there were no changes in the Partnership’s internal control over
financial reporting that have materially affected, or are reasonably likely to
materially affect, the Partnership’s internal control over financial
reporting.
 
 Item
9B.  Other Information
 
 Not
applicable.
   - 55
-
  PART
      III
 
 
 Item
10.  Directors and Executive Officers and Corporate
Governance
 
 The
Partnership has no directors or executive officers. The Partnership’s affairs
are managed and controlled by Related Independence LLC (“RILLC”), the General
Partner.  The Partnership has not adopted a separate code of ethics
because the Partnership has no directors or executive officers. However,
Centerline Holding Company (“Centerline”) (formerly known as CharterMac), the
parent company of CharterMac Capital LLC (“CharterMac Capital”) (formerly known
as Related Capital Company LLC), which controls the General Partner, has adopted
a code of ethics (see http://www.centerline.com).
 
 Certain
information concerning the executive officers of the General Partner is set
forth below.
 
 Name
            
            PositionRobert
      L. Levy
            
            Chief
      Financial OfficerAndrew
      J. Weil
            
            President
      and Chief Executive OfficerMark
      D. Schnitzer
            
            Senior
      Vice President
 
 
 ROBERT L.
LEVY, 42, is the Chief Financial Officer of Centerline.  Mr. Levy is
also the Chief Financial Officer of American Mortgage Acceptance Company
(“AMAC”), a publicly traded real estate investment trust managed by an affiliate
of Centerline.  Mr. Levy is responsible for overseeing the Corporate
Finance, Capital Markets, Accounting, Budgeting, Tax and Treasury
departments.  Mr. Levy joined Centerline’s predecessor in November of
2001 as the Director of Capital Markets.  From 1998 through 2001, Mr.
Levy was a Vice President in the Real Estate Equity Research and Investment
Banking Departments at Robertson Stephens, an investment banking firm in San
Francisco.  Prior to 1998, Mr. Levy was employed by Prudential
Securities in the Real Estate Equity Research Group and at Prudential Realty
Group, the real estate investment arm of the Prudential Insurance
Company.  He received his Masters in Business Administration from the
Leonard N. Stern School of Business at New York University and his Bachelor of
Arts from Northwestern University.
 
 ANDREW J.
WEIL, 37, is an Executive Managing Director of Centerline, and is the Head of
the Affordable Housing Group.  Mr. Weil is responsible for overseeing
the day to day operations of the Affordable Housing Group, including the
acquisition of properties with Low-Income Housing Tax Credits and the
origination and structuring of institutional funds.  Prior to joining
Centerline’s predecessor in January 1994, Mr. Weil was a Financial Analyst for
the Heights Management Company, where he specialized in the analysis of
potential investments and property management.  Mr. Weil received a
Bachelor of Science degree in Economics with a concentration in Finance from the
Wharton School of the University of Pennsylvania.
 
 MARC D.
SCHNITZER, 47, is the Chief Executive Officer of Centerline.  He is
responsible both for financial restructurings of real estate properties and
directing Centerline Affordable Housing Advisors LLC’s acquisitions of
properties generating Housing Tax Credits. Mr. Schnitzer received a Masters
of Business Administration from The Wharton School of the University of
Pennsylvania in December 1987 before joining Centerline Affordable Housing
Advisors LLC 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.  Mr. Schnitzer also serves on the Board of Trustees of
Centerline.
 
 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 refinancings and a 1% interest in net income, net loss,
distributions of adjusted cash from operations and cash from sales or
refinancings.  Certain members and officers of the General Partner
receive compensation from the General Partner and its affiliates for services
performed for various affiliated entities which may include services performed
for the Partnership. The maximum annual partnership management fee paid to the
General Partner is 0.5% of invested assets. See Note 8 in Item 8 above, which is
incorporated herein by reference.
 
 Tabular
information concerning salaries, bonuses and other types of compensation payable
to executive officers has not been included in this annual report. As noted
above, the Partnership has no executive officers. The levels of compensation
payable to the General Partner and/or its affiliates is limited by the terms of
the Partnership Agreement and may not be increased therefrom on a discretionary
basis.
  - 56
-
  
 Item
      12.  Security Ownership of Certain Beneficial Owners and
      Management and Related Stockholder
Matters
 
 Title
      of Class
            
            Name
      and address of
              Beneficial
      Ownership
            
            Amount
      and Nature of
              Beneficial
      Ownership
            
            Percentage
              of
      ClassGeneral
      Partnership Interest in the
              Partnership
            
            Related
      Independence L.L.C.
              625
      Madison Avenue
              New
      York, NY  10022
            
            $1,000
      capital contribution - directly owned
            
            100%
 
 
 Independence
SLP IV L.P., a limited partnership whose general partner is the General Partner
of the Partnership and which acts as the special limited partner of each Local
Partnership, holds a .01% limited partnership interest in the Local
Partnerships. See Note 8 in Item 8 above, which information is incorporated
herein by reference thereto.
 
 Except as
set forth below no person is known by the Partnership to be the beneficial owner
of more than five percent of the Limited Partnership Interests and/or BACs; and
neither the General Partner nor any officer of the General Partner beneficially
owns any Limited Partnership Interests or BACs. The following table sets forth
the number of BACs beneficially owned as of May 28, 2008 by (i) each BACs holder
known to the Partnership to be a beneficial owner of more than 5% of the BACs,
(ii) each executive officer of the General Partner of RILLC and (iii) the
directors and executive officers of the general partners of RILLC as a group.
Unless otherwise noted, all BACs are owned directly with sole voting and
dispositive powers.
 
 Name
      of Beneficial Owner (1)
            
            Amount
      and Nature of
              Beneficial
      Ownership
            
            Percentage
              of
      ClassLehigh
      Tax Credit Partners, Inc.
            
            2,868.06
            (2)
            
            6.3
            %J.
      Michael Fried
            
            2,868.06
            (2)(3)
            
            6.3
            %Alan
      P. Hirmes
            
            2,868.06
            (2)(3)
            
            6.3
            %Stuart
      J. Boesky
            
            2,868.06
            (2)(3)
            
            6.3
            %Stephen
      M. Ross
            
            2,868.06
            (2)(3)
            
            6.3
            %Marc
      D. Schnitzer
            
            2,868.06
            (2)(3)
            
            6.3
            %Andrew
      J. Weil
            
            -
            
            
            -Robert
      L. Levy
            
            -
            
            
            -All
      executive officers of the general partner of the Related General Partner
      as a group (eight persons)2,868.06
            (2)(3)
            
            6.3
            %
 
 
 (1)    The
address for each of the persons in the table is 625 Madison Avenue, New York,
New York 10022.
 
 (2)     As
set forth in Schedule 13D filed by Lehigh Tax Credit Partners III L.L.C.
(“Lehigh III”) and Lehigh Tax Credit Partners, Inc. (the “Managing Member”) on
January 25, 1999 with the Securities and Exchange Commission (the “Commission”)
and pursuant to a letter agreement dated October 6, 1998 among the Partnership,
Lehigh III and Related Independence Associates IV L.P. (“RIA”) (the “Standstill
Agreement”), Lehigh III agreed that, prior to October 6, 2008 (the “Standstill
Expiration Date”), it will not and it will cause certain affiliates not to (i)
seek to propose to enter into, directly or indirectly, any merger,
consolidation, business combination, sale or acquisition of assets, liquidation,
dissolution or other similar transaction involving the Partnership, (ii) form,
join or otherwise participate in a “group” (within the meaning of Section
13(d)(3) of the Act) with respect to any voting securities of the Partnership,
except that those affiliates bound by the Standstill Agreement will not be
deemed to have violated it and formed a “group” solely by acting in accordance
with the Standstill Agreement, (iii) disclose in writing to any third party any
intention, plan or arrangement inconsistent with the terms of the Standstill
Agreement, or (iv) loan money to, advise, assist or encourage any person in
connection with any action inconsistent with the terms of the Standstill
Agreement, Lehigh III also agreed to vote its BACs in the same manner as a
majority of all voting BACs holders; provided, however, Lehigh is entitled to
vote its BACs as it determines with regard to any proposal (i) to remove RIA as
a general partner of the Partnership or (ii) concerning the reduction of any
fees, profits, distributions or allocations for the benefit of RIA or its
affiliates. The discussion herein of the Standstill Agreement is subject to and
qualified in its entirety by reference to such agreement, a copy of which is
attached hereto as an exhibit and incorporated herein by
reference.  The addresses of each of the Partnership, Lehigh III and
RIA is 625 Madison Avenue, New York, New York 10022.
 
 (3)      Each
such party serves as an executive officer of the Managing Member and owns an
equity interest therein except J. Michael Fried, Stuart J. Boesky and Alan
Hirmes who own only economic interests.
 
 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 in Item 8
above, which are incorporated herein by reference thereto. However, there have
been no direct financial transactions between the Partnership and the members
and officers of the General Partner.
 
  - 57
-
  
 Item
14.  Principal Accountant Fees and Services
 
 Audit
Fees
 The
aggregate fees by Friedman LLP and its affiliates for professional services
rendered for the audit of the Partnership’s annual consolidated financial
statements for the years ended March 31, 2008 and 2007 and for the reviews of
the financial information included in the Partnership’s quarterly reports on
Form 10-Q for those years were $95,250 and $91,000, respectively.
 
 Audit Related
Fees
 None.
 
 Tax Fees
 The
aggregate fees by Weiser LLP and its affiliates for professional services
rendered for the preparation of the Partnership’s annual tax returns were $8,900
for both years ended December 31, 2007 and 2006.
 
 All Other
Fees
 None.
 
 The
Partnership is not required to have and does not have a standalone audit
committee.
 
  - 58
-
  PART
      IV
 
 Item
      15.
              Exhibits,
      Financial Statement SchedulesSequential
                Page(a)
      1.
              Financial
      StatementsReport
      of Independent Registered Public Accounting Firm
              
              14Consolidated
      Balance Sheets at March 31, 2008 and 2007
              
              39Consolidated
      Statements of Operations for the years ended March 31, 2008, 2007 and
      2006
              
              40Consolidated
      Statements of Changes in Partners’ Capital (Deficit) for the years ended
      March 31, 2008, 2007 and 2006
              
              41Consolidated
      Statements of Cash Flows for the years ended March 31, 2008, 2007 and
      2006
              
              42Notes
      to Consolidated Financial Statements
              
              43(a)
      2.
              Consolidated
      Financial Statement SchedulesReport
      of Independent Registered Public Accounting Firm
              
              66Schedule
      I - Condensed Financial Information of Registrant
              
              67Schedule
      III - Real Estate and Accumulated Depreciation
              
              70All
      other schedules have been omitted because they are not required or because
      the required information is contained in the financial statements or notes
      thereto.(a)
      3.
              Exhibits(3A)
              Agreement
      of Limited Partnership of Independence Tax Credit Plus L.P. IV as adopted
      on February 22, 1995*(3B)
              Form
      of Amended and Restated Agreement of Limited Partnership of Independence
      Tax Credit Plus L.P. IV, attached to the Prospectus as Exhibit
      A**(3C)
              Certificate
      of Limited Partnership of Independence Tax Credit Plus L.P. IV as filed on
      February 22, 1995*(10A)
              Form
      of Subscription Agreement attached to the Prospectus as Exhibit
      B**(10B)
              Escrow
      Agreement between Independence Tax Credit Plus L.P. IV and Bankers Trust
      Company*(10C)
              Form
      of Purchase and Sales Agreement pertaining to the Partnership’s
      acquisition of Local Partnership Interests*(10D)
              Form
      of Amended and Restated Agreement of Limited Partnership of Local
      Partnerships*(21)
              Subsidiaries
      of the Registrant
              
              60*     
      Incorporated herein as an exhibit by reference to exhibits filed with
      Post-Effective Amendment No. 4 to the Registration Statement on Form S-11
      {Registration No. 33-89968}**  
      Incorporated herein as an exhibit by reference to exhibits filed with
      Post-Effective Amendment No. 8 to the Registration Statement on Form S-11
      {Registration No. 33-89968}(31.1)
              Certification Pursuant to Rule 13a-14(a) or Rule
      15d-14(a)
              
              63(31.2)
              Certification Pursuant to Rule 13a-14(a) or Rule
      15d-14(a)
              
              64(32.1)
              Certification Pursuant to Rule 13a-14(b) or Rule
      15d-14(b) and Section 1350 of Title 18 of the United States Code (18
      U.S.C. 1350)
              
              65
  - 59
-
  PART
      IV
 
 
 Item
      15.
            Exhibits,
      Financial Statement Schedules (continued)(c)
            Subsidiaries of the
      Registrant(Exhibit 21)
            
            Jurisdiction
      of OrganizationBX-8A
      Team Associates, L.P.
            
            NYFawcett
      Street Limited Partnership
            
            WAFigueroa
      Senior Housing Limited Partnership
            
            CANNPHI
      Senior Housing Limited Partnership
            
            CABelmont/McBride
      Apartments Limited Partnership
            
            NJNew
      Zion Apartments Limited Partnership
            
            LABakery
      Village Urban Renewal Associates, L.P.
            
            NJSojourner
      Douglass, L.P.
            
            NJMarlton
      Housing Partnership, L.P.
            
            PAGP
      Kaneohe Limited Partnership
            
            HIKSD
      Village Apartments, Phase II, Ltd.
            
            KYKanisa
      Apartments, Ltd.
            
            KYGuymon
      Housing Partners, L.P.
            
            OK(d)
            Not
      applicable
 
  - 60
-
 SIGNATURES
 
 
 
 Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
 
 
 
 INDEPENDENCE TAX CREDIT PLUS
L.P. IV
 (Registrant)
 
 
 
 By:
            RELATED
      INDEPENDENCE L.L.C.,a
      General PartnerDate:
            June 24,
      2008
            
            
            
            By:
            /s/ Robert L.
      LevyRobert
      L. LevyChief
      Financial Officer and Principal Accounting OfficerDate:
            June 24,
      2008
            
            
            
            By:
            /s/ Andrew J.
      WeilAndrew
      J. WeilPresident
      and Chief Executive Officer
 
  - 61
-
  Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated:
 
 
 
 Signature
            
            Title
            
            Date/s/ Robert L.
      Levy
              Robert
      L. Levy
            
            Chief
      Financial Officer (principal accounting officer) of Related Independence
      L.L.C.
            
            June 24,
      2008/s/ Andrew J.
      Weil
              Andrew
      J. Weil
            
            President,
      Chief Executive Officer of Related Independence L.L.C.
            
            June 24,
      2008
 
 
  - 62
-
 
 REPORT
OF INDEPENDENT REGISTERED PUBLIC
 ACCOUNTING
FIRM ON FINANCIAL STATEMENT SCHEDULES
 
 
 
 
 To the
Partners
 Independence
Tax Credit Plus L.P. IV and Subsidiaries
 
 
 Under
date of June 24, 2008, we reported on the consolidated balance sheets of
Independence Tax Credit Plus L.P. IV and Subsidiaries as of March 31, 2008 and
2007, and the related consolidated statements of operations, changes in
partners' capital (deficit) and cash flows for each of the years in the
three-year period ended March 31, 2008.
 
 In
connection with our audits of the aforementioned consolidated financial
statements, we have also audited supporting Schedule I as of March 31, 2008 and
2007 and for the years ended March 31, 2008, 2007 and 2006, and Schedule III as
of March 31, 2008 and for the years ended March 31, 2008, 2007 and
2006.  These supporting schedules are the responsibility of the
Partnerships' management.  Our responsibility is to express an opinion
on these schedules based on our audits.  In our opinion, these
schedules present fairly, when read in conjunction with the related consolidated
financial statements, the financial data required to be set forth
therein.
 
 
 
 
 
 
 
 
 
 /s/Friedman
LLP
 
 
 New York,
New York
 June 24,
2008
  - 66
-
  INDEPENDENCE
TAX CREDIT PLUS L.P. IV
 SCHEDULE
I
 CONDENSED
SCHEDULE OF FINANCIAL INFORMATION OF REGISTRANT
 
 
 
 Summarized
condensed financial information of registrant (not including consolidated
subsidiary partnerships)
 
 
 
 CONDENSED
BALANCE SHEETS
 
 
 
 
 ASSETS
 
 
 2008
            
            
            2007Cash
      and cash equivalents
            
            $
            1,662,363
            
            
            $
            651,290Investment
      in subsidiary partnerships
            
            
            13,548,292
            
            
            
            13,537,609Cash
      held in escrow
            
            
            433,646
            
            
            
            499,573Other
      assets
            
            
            2,304,271
            
            
            
            1,920,076Total
      assets
            
            $
            17,948,572
            
            
            $
            16,608,548LIABILITIES
      AND PARTNERS’ CAPITALDue
      to general partner and affiliates
            
            $
            2,314,782
            
            
            $
            3,286,122Other
      liabilities
            
            
            69,442
            
            
            
            54,281Total
      liabilities
            
            
            2,384,224
            
            
            
            3,340,403Partners’
      capital
            
            
            15,564,348
            
            
            
            13,268,145Total
      liabilities and partners’ capital
            
            $
            17,948,572
            
            
            $
            16,608,548
 
 
 Investments
in subsidiary partnerships are recorded in accordance with the equity method of
accounting, wherein the investments are not reduced below
zero.  Accordingly, partners’ equity on the consolidated balance sheet
will differ from partners’ equity shown above.
 
  - 67
-
  INDEPENDENCE
TAX CREDIT PLUS L.P. IV
 SCHEDULE
I
 CONDENSED
SCHEDULE OF FINANCIAL INFORMATION OF REGISTRANT
 (Not
Including Consolidated Subsidiary Partnerships)
 
 
 CONDENSED
STATEMENTS OF OPERATIONS
 
 
 
 
 Years
      Ended March 31,2008
            
            
            2007
            
            
            2006RevenuesOther
      income
            
            $
            73,636
            
            
            $
            34,046
            
            
            $
            25,492Loss
      on sale of property
            
            
            (121,324
            )
            
            
            0
            
            
            
            0Total
      (loss) income
            
            
            (47,688
            )
            
            
            34,046
            
            
            
            25,492ExpensesAdministrative
      and management
            
            
            174,568
            
            
            
            141,723
            
            
            
            116,597Administrative
      and management-related parties
            
            
            444,093
            
            
            
            458,492
            
            
            
            565,817Total
      expenses
            
            
            618,661
            
            
            
            600,215
            
            
            
            682,414Loss
      from operations
            
            
            (666,349
            )
            
            
            (566,169
            )
            
            
            (656,922
            )Equity
      in income (loss) of subsidiary partnerships
            
            
            2,962,552
            
            
            
            (2,437,020
            )
            
            
            (2,389,254
            )Net
      income (loss)
            
            $
            2,296,203
            
            
            $
            (3,003,189
            )
            
            $
            (3,046,176
            )
 
 
  - 68
-
  INDEPENDENCE
TAX CREDIT PLUS L.P. IV
 SCHEDULE
I
 CONDENSED
SCHEDULE OF FINANCIAL INFORMATION OF REGISTRANT
 (Not
Including Consolidated Subsidiary Partnerships)
 
 CONDENSED
STATEMENTS OF CASH FLOWS
 
 Increases
(Decreases) in Cash and Cash Equivalents
 
 
 
 
 Years
      Ended March 31,2008
            
            
            2007
            
            
            2006Cash
      flows from operating activities:Net
      income (loss)
            
            $
            2,296,203
            
            
            $
            (3,003,189
            )
            
            $
            (3,046,176
            )Adjustments
      to reconcile net income (loss) to net cash used in operating
      activities:Equity
      in income (loss) of subsidiary partnerships
            
            
            (2,962,552
            )
            
            
            2,437,020
            
            
            
            2,389,254Increase
      in other assets
            
            
            (384,195
            )
            
            
            (40,466
            )
            
            
            (55,108
            )Increase
      (decrease) in liabilities:Due
      to general partner and affiliates
            
            
            (971,340
            )
            
            
            458,492
            
            
            
            565,817Other
      liabilities
            
            
            15,161
            
            
            
            1,383
            
            
            
            3,679Total
      adjustments
            
            
            (4,302,926
            )
            
            
            2,856,429
            
            
            
            2,903,642Net
      cash used in operating activities
            
            
            (2,006,723
            )
            
            
            (146,760
            )
            
            
            (142,534
            )Cash
      flows from investing activities:Decrease
      in cash held in escrow
            
            
            65,927
            
            
            
            39,475
            
            
            
            53,975Decrease
      in investments in subsidiary partnerships
            
            
            2,951,869
            
            
            
            15,561
            
            
            
            0Net
      cash provided by investing activities
            
            
            3,017,796
            
            
            
            55,036
            
            
            
            53,975Net
      increase (decrease) in cash and cash equivalents
            
            
            1,011,073
            
            
            
            (91,724
            )
            
            
            (88,559
            )Cash
      and cash equivalents, beginning of year
            
            
            651,290
            
            
            
            743,014
            
            
            
            831,573Cash
      and cash equivalents, end of year
            
            $
            1,662,363
            
            
            $
            651,290
            
            
            $
            743,014
 
 
  - 69
-
  INDEPENDENCE
TAX CREDIT PLUS L.P. IV
 AND
SUBSIDIARIES
 SCHEDULE
III
 CONSOLIDATED
SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION
 Partnership
Property Pledged as Collateral
 MARCH 31,
2008
  Description
              
              Encumbrances
              
              Initial
      Cost to Partnership
              
              Cost
                Capitalized
                Subsequent
      to
                Acquisition:
                Improvements
              
              Gross
      Amount at which Carried at Close of Period
              
              Accumulated
                Depreciation
              
              Year
      of
                Construction/
                Renovation
              
              Date
                Acquired
              
              Life
      on which
                Depreciation
      in
                Latest
      Income
                Statements
      are
                Computed
      (a)Land
              
              Buildings
      and
                Improvements
              Land
              
              Buildings
      and
                Improvements
              
              TotalApartment
      ComplexesBX-8A
      Team Associates, L.P.Bronx,
      NY
              
              $
              1,761,664
              
              $
              5,467
              
              $
              2,667,819
              
              $
              334,088
              
              $
              11,579
              
              $
              2,995,795
              
              $
              3,007,374
              
              $
              1,254,695
              
              
              1995-96
              
              Oct.
      1995
              
              27.5
              yearsWestminster
      Park Plaza (b)Los
      Angeles, CA
              
              
              216,891
              
              
              1,197,697
              
              
              8,093,774
              
              
              (9,291,471
              )
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              1996-97
              
              June
      1996
              
              27.5
              yearsFawcett
      Street Limited PartnershipTacoma,
      WA
              
              
              1,937,471
              
              
              390,654
              
              
              4,247,465
              
              
              188,181
              
              
              396,383
              
              
              4,429,917
              
              
              4,826,300
              
              
              1,804,048
              
              
              1996-97
              
              June
      1996
              
              27.5
              yearsFigueroa
      Senior Housing Limited PartnershipLos
      Angeles, CA
              
              
              2,975,137
              
              
              279,000
              
              
              4,978,250
              
              
              608,149
              
              
              291,377
              
              
              5,574,022
              
              
              5,865,399
              
              
              2,045,007
              
              
              1996-97
              
              Nov.
      1996
              
              27.5
              yearsNNPHI
      Senior Housing Limited PartnershipLos
      Angeles, CA
              
              
              3,892,340
              
              
              709,657
              
              
              6,135,419
              
              
              451,969
              
              
              715,387
              
              
              6,581,658
              
              
              7,297,045
              
              
              2,279,841
              
              
              1996-97
              
              Dec.
      1996
              
              27.5
              yearsBelmont/McBride
      Apartments Limited PartnershipPaterson,
      NJ
              
              
              2,715,973
              
              
              154,934
              
              
              5,627,693
              
              
              2,512,963
              
              
              182,633
              
              
              8,112,957
              
              
              8,295,590
              
              
              2,789,787
              
              
              1997-98
              
              Jan.
      1997
              
              27.5
              yearsSojourner
      Douglass, L.P.Paterson,
      NJ
              
              
              1,977,352
              
              
              141,297
              
              
              2,573,950
              
              
              161,189
              
              
              143,996
              
              
              2,732,440
              
              
              2,876,436
              
              
              1,061,732
              
              
              1997-98
              
              Feb.
      1997
              
              27.5
              yearsNew
      Zion Apartments Limited PartnershipShreveport,
      LA
              
              
              809,291
              
              
              20,000
              
              
              2,688,770
              
              
              76,839
              
              
              22,699
              
              
              2,762,910
              
              
              2,785,609
              
              
              1,119,345
              
              
              1997-98
              
              Oct.
      1997
              
              27.5
              yearsBakery
      Village Urban Renewal Associates, L.P.Montclair,
      NJ
              
              
              4,194,352
              
              
              50,000
              
              
              14,912,416
              
              
              2,735,024
              
              
              52,699
              
              
              17,644,741
              
              
              17,697,440
              
              
              4,206,250
              
              
              1997-98
              
              Dec.
      1997
              
              27.5
              yearsMarlton
      Housing Partnership, L.P.Philadelphia,
      PA
              
              
              1,849,000
              
              
              2,648
              
              
              1,547,121
              
              
              1,564,837
              
              
              4,355
              
              
              3,110,251
              
              
              3,114,606
              
              
              735,654
              
              
              1998-99
              
              May
      1998
              
              27.5
              yearsGP
      Kaneohe Limited PartnershipKaneohe,
      HI
              
              
              1,633,413
              
              
              0
              
              
              3,306,828
              
              
              71,694
              
              
              613
              
              
              3,377,909
              
              
              3,378,522
              
              
              842,617
              
              
              1999-00
              
              July
      1999
              
              7-40
              yearsKSD
      Village Apartments, Phase II Ltd.Danville,
      KY
              
              
              376,880
              
              
              0
              
              
              887,539
              
              
              37,552
              
              
              612
              
              
              924,478
              
              
              925,090
              
              
              233,348
              
              
              1999-00
              
              July
      1999
              
              10-40
              yearsKanisa
      Apartments Ltd.Fayette
      County, KY
              
              
              1,377,399
              
              
              106,592
              
              
              4,846,543
              
              
              124,390
              
              
              107,205
              
              
              4,970,320
              
              
              5,077,525
              
              
              1,073,710
              
              
              1998-99
              
              Oct.
      1999
              
              5-40
              yearsGuymon
      Housing Partners, L.P.Guymon,
      OK
              
              
              1,758,136
              
              
              84,918
              
              
              4,238,907
              
              
              739,965
              
              
              85,531
              
              
              4,978,260
              
              
              5,063,791
              
              
              1,740,941
              
              
              1998-99
              
              Dec.
      1999
              
              27.5
              yearsLess
      discontinued operations
              
              
              (216,891
              )
              
              (1,197,697
              )
              
              (8,093,774
              )
              
              9,291,471
              
              
              0
              
              
              0
              
              
              0
              
              
              0$
              27,258,408
              
              $
              1,945,167
              
              $
              58,658,720
              
              $
              9,606,840
              
              $
              2,015,069
              
              $
              68,195,658
              
              $
              70,210,727
              
              $
              21,186,975(a)     Depreciation
      is computed using primarily the straight-line method over the estimated
      useful lives determined by the Partnership date of
      acquisition.(b)     The
      property and related assets and liabilities were sold during the fiscal
      year ended March 31, 2008.
 
  - 70
-
  INDEPENDENCE
TAX CREDIT PLUS L.P. IV
 AND
SUBSIDIARIES
 SCHEDULE
III
 CONSOLIDATED
SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION
 Partnership
Property Pledged as Collateral
 MARCH 31,
2008
  Cost
      of Property and Equipment
              
              
              Accumulated
      DepreciationYears
      Ended March 31,2008
              
              
              2007
              
              
              2006
              
              
              2008
              
              
              2007
              
              
              2006Balance
      at beginning of year
              
              $
              81,401,378
              
              
              $
              81,471,407
              
              
              $
              81,388,959
              
              
              $
              21,471,763
              
              
              $
              19,086,200
              
              
              $
              16,708,237(Adjustment
      to) additions during year:Land,
      building and improvements
              
              
              70,868
              
              
              
              (70,029
              )
              
              
              82,448Discontinued
      operations and dispositions
              
              
              (11,261,519
              )
              
              
              0
              
              
              
              0Accumulated
      depreciation on dispositions
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (2,567,654)
              
              
              
              0
              
              
              
              0Depreciation
      expense
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              2,282,866
              
              
              
              2,385,563
              
              
              
              2,377,963Balance
      at close of year
              
              $
              70,210,727
              
              
              $
              81,401,378
              
              
              $
              81,471,407
              
              
              $
              21,186,975
              
              
              $
              21,471,763
              
              
              $
              19,086,200
 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.
 
  - 71
-