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 30, 1997

                                                OR

                  [   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                      SECURITIES  EXCHANGE ACT OF 1934 For the transition period
                      from ______ to ____________

                                              0-19217
                                     (Commission File Number)

                             American Tax Credit Properties III L.P.
           (Exact name of registrant as specified in its governing instruments)

                        Delaware                              13-3545006
(State orother jurisdiction of organization)(I.R.S. Employer Identification No.)
Richman Tax Credit Properties III L.P.
599 West Putnam Avenue, 3rd floor
Greenwich, Connecticut                                           06830
------------------------------------------------------ -----------------------
(Address of principal executive offices)                        (Zip Code)
Registrant's telephone number, including area code:          (203) 869-0900
Securities registered pursuant to Section 12(b) of the Act:
          None                                                         None
(Title of each Class)               (Name of each exchange on which registered)

Securities registered pursuant to Section 12(g) of the Act:
                                   Units of Limited Partnership Interest
-------------------------------------------------------------------------------
                                              (Title of Class)

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

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of Registrant's  knowledge, in a 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

Registrant has no voting stock.

Documents incorporated by reference:

Part I - pages 20 through  31 and 44  through 66 of the  prospectus  dated
February  7, 1990,  as supplemented  by  Supplement  No.  1,  Supplement  No. 2,
Supplement  No.  3,  Supplement  No. 4, Supplement No. 5 and Supplement  No. 6
dated June 6, 1990,  November 21, 1990,  December 20, 1990, October 30, 1991, 
December 26, 1991 and January 15, 1992,  respectively,  filed  pursuant to Rule
424(b)(3) under the Securities Act of 1933.

<PAGE>


                                              PART I

Item 1. Business

Formation

American  Tax Credit  Properties  III L.P.  ("Registrant"),  a Delaware  limited
partnership,  was formed on September 21, 1989 to invest  primarily in leveraged
low-income  multifamily  residential  complexes (the "Property" or "Properties")
which qualify for the low-income tax credit established by Section 42 of the Tax
Reform Act of 1986 (the  "Low-income  Tax Credit"),  through the  acquisition of
limited partnership equity interests in partnerships (the "Local Partnership" or
"Local  Partnerships")  that  are  the  owners  of  the  Properties.  Registrant
considers its activity to constitute a single industry segment.

Richman Tax Credit  Properties  III L.P.  (the  "General  Partner"),  a Delaware
limited partnership, was formed on September 21, 1989 to act as the sole general
partner of  Registrant.  The general  partner of the General  Partner is Richman
Housing  Credits  Inc.  ("Richman  Housing"),  a Delaware  corporation  which is
wholly-owned  by Richard Paul Richman.  Richman  Housing is an affiliate of both
The Richman Group, Inc.  ("Richman Group"),  a Delaware  corporation  founded by
Richard Paul Richman in 1988 and Wilder Richman Corporation  ("WRC"), a New York
corporation co-founded by Richard Paul Richman in 1979.

The  Amendment No. 2 to the  Registration  Statement on Form S-11 was filed with
the  Securities  and Exchange  Commission  (the  "Commission")  on February 1,
1990 pursuant to the Securities Act of 1933 under  Registration  Statement 
File No. 33-31390,  which was declared  effective on February 2, 1990.Reference
is made to the  prospectus  dated  February 7, 1990, as  supplemented  by 
Supplement No. 1, Supplement  No. 2,  Supplement No. 3,  Supplement No. 4,  
Supplement No. 5 and Supplement No. 6 dated June 6, 1990,  November 21, 1990, 
December 20, 1990, October 30, 1991, December 26, 1991 and January 15, 1992,  
respectively,  filed with the Commission  pursuant to Rule 424(b)(3)  under the
Securities Act of 1933 (the  "Prospectus").  Pursuant  to Rule  12b-23  of the 
Commission's  General  Rules and Regulations  promulgated under the Securities 
Exchange Act of 1934, as amended (the "Exchange Act"),the  description  of 
Registrant's  business set forth under the heading  "Investment  Objectives and
Policies" at pages 44 through 66 of the Prospectus is incorporated herein by 
reference.

On March 12, 1990, Registrant commenced, through Merrill Lynch, Pierce, Fenner &
Smith  Incorporated  ("Merrill  Lynch"),  the offering of up to 150,000 units of
limited  partnership  interest  ("Unit") at $1,000 per Unit.  On June 13,  1990,
December  27,  1990,  December  31, 1991 and January 23, 1992 the  closings  for
19,730,  9,622, 5,227 and 1,304 Units,  respectively,  took place,  amounting to
aggregate limited partners' capital contributions of $35,883,000.

Competition

Pursuant  to Rule  12b-23 of the  Commission's  General  Rules  and  Regulations
promulgated under the Exchange Act, the description of Registrant's competition,
general risks, tax risks and partnership risks set forth under the heading "Risk
Factors"  at pages 20 through 31 of the  Prospectus  is  incorporated  herein by
reference.

Employees

Registrant  employs no personnel  and incurs no payroll  costs.  All  management
activities of Registrant are conducted by the General  Partner.  An affiliate of
the General Partner employs individuals who perform the management activities of
Registrant.  This entity also performs  similar services for other affiliates of
the General Partner.






<PAGE>

Item 1. Business (continued)

Tax Reform Act of 1986, Revenue Act of 1987, Technical and Miscellaneous Revenue
Act  of  1988,  Omnibus  Budget  Reconciliation  Act  of  1989,  Omnibus  Budget
Reconciliation   Act  of  1990,  Tax  Extension  Act  of  1991,  Omnibus  Budget
Reconciliation  Act of 1993 and Uruguay Round Agreements Act  (collectively  the
"Tax Acts")

Registrant  is organized as a limited  partnership  and is a "pass  through" tax
entity which does not, itself, pay Federal income tax. However,  the partners of
Registrant  who are  subject to Federal  income tax may be  affected  by the Tax
Acts.  Registrant will consider the effect of certain aspects of the Tax Acts on
the partners when making decisions  regarding its  investments.  Registrant does
not anticipate  that the Tax Acts will currently have a material  adverse impact
on Registrant's business operations, capital resources and plans or liquidity.

Item 2. Properties

The executive  offices of Registrant and the General  Partner are located at 599
West Putnam Avenue, 3rd floor, Greenwich, Connecticut 06830. Registrant does not
own or lease any  properties.  Registrant  pays no rent;  all charges for leased
space are borne by an affiliate of the General Partner.

Registrant's  primary objective is to provide  Low-income Tax Credits to limited
partners  generally  over  a  ten  year  period.   Each  of  Registrant's  Local
Partnerships  has been  allocated  by the  relevant  state tax credit  agency an
amount of  Low-income  Tax Credits  for ten years from the date the  Property is
placed in service.  The required  holding period of each  Property,  in order to
avoid Low-income Tax Credit  recapture,  is fifteen years from the year in which
the  Low-income  Tax Credits  commence on the last building of the Property (the
"Compliance  Period").  In  addition,  certain  of the Local  Partnerships  have
entered into agreements with the relevant state tax credit agencies  whereby the
Local  Partnerships  must maintain the low-income nature of the Properties for a
period  which  exceeds  the  Compliance  Period,  regardless  of any sale of the
Properties by the Local Partnerships after the Compliance Period. The Properties
must satisfy various requirements  including rent restrictions and tenant income
limitations  (the  "Low-income  Tax Credit  Requirements")  in order to maintain
eligibility for the recognition of the Low-income Tax Credit at all times during
the Compliance  Period.  Once a Local  Partnership  has become  eligible for the
Low-income  Tax  Credit,  it may lose such  eligibility  and  suffer an event of
recapture if its Property fails to remain in compliance  with the Low-income Tax
Credit  Requirements.  Through December 31, 1996, none of the Local Partnerships
have suffered an event of recapture of Low-income Tax Credits.

Although  Registrant  generally owns a 98.9%-99%  limited  partnership  interest
("Local  Partnership  Interest")  in  the  Local  Partnerships,  Registrant  and
American  Tax  Credit  Properties  II  L.P.  ("ATCP  II"),  a  Delaware  limited
partnership and an affiliate of Registrant, together, in the aggregate, acquired
a 99% Local Partnership Interest in certain Local Partnerships as follows:
                                          Registrant                    ATCP II
                                                                              
              Batesville Family, L.P.                  61.75%           37.25%
              Bruce Housing Associates, L.P.           61.75            37.25
              Carrington Limited Dividend Housing     
                Association Limited Partnership        65.95            33.05
              Ivy Family, L.P.                         61.75            37.25
              Lawrence Road Properties, Ltd.           61.75            37.25
              Mirador del Toa Limited Partnership      59.06            39.94
              Purvis Heights Properties, L.P.          61.75            37.25
              Queen Lane Investors                     48.50            50.50

Many of the  Local  Partnerships  receive  rental  subsidy  payments,  including
payments  under Section 8 of Title II of the Housing and  Community  Development
Act of 1974 ("Section 8") (see descriptions of subsidies on page 7). The subsidy
agreements  expire at various times during and after the  Compliance  Periods of
the Local  Partnerships.  The United  States  Department  of  Housing  and Urban
Development  ("HUD") has issued  notices  which  implement  provisions  to renew
certain  project  based  Section 8 contracts  expiring  during HUD's fiscal year
1997,  where requested by an owner, for an additional one year term generally at
or  below  current  rent  levels,  subject  to  certain  guidelines.  HUD has an
additional  program which, in general,  provides for restructuring  rents and/or
mortgages where rents may be adjusted to market levels and mortgage terms may be
adjusted  based on the  reduction in rents,  although  there may be instances in
which  only  rents,  but not  mortgages,  are  restructured.  Registrant  cannot
reasonably predict legislative initiatives and governmental budget






<PAGE>
<TABLE>
<CAPTION>

Item 2. Properties (continued)

negotiations,  the  outcome  of  which  could  result  in a  reduction  in funds
available  for the  various  federal  and state  administered  housing  programs
including the Section 8 program.  Such changes could adversely affect the future
net  operating  income  and  debt  structure  of any or all  Local  Partnerships
currently  receiving such subsidy or similar subsidies.  One Local Partnership's
Section 8 contract, which covers certain rental units, is scheduled to expire in
1997.

                                                Capital contribution           Mortgage &
                                                            obligation        construction
Name of Local Partnership         Number     Total as of     Paid through   loans payable as   Subsidy
                                                                                   of
Name of apartment complex        of           March 30,       March 30,       December 31,       (see
                                  rental
Apartment complex location        units        1997              1997             1996        footnotes)
--------------------------       ---------  ------------    ---------------------------------- ----------

<S>                              <C>       <C>              <C>             <C>                <C>
April Gardens Apartments II
  Limited Partnership
April Gardens Apartments
Las Piedras, Puerto Rico            48     $   485,581      $   485,581        $ 2,008,084     (1b&d)
Ashland Park Apartments, L.P.
Ashland Park Apartments
Ashland, Nebraska                   24         235,732         235,732           1,044,903     (1b&d)
Auburn Family, L.P.
Louisville Apartments
Louisville, Mississippi             16          95,412          95,412             474,003     (1b&d)
Batesville Family, L.P.
Westridge Apartments
Batesville, Mississippi             48         239,7162        239,7162          1,446,124       (1b)
Bay Springs Elderly, L.P.
Bay Springs Manor
Bay Springs, Mississippi            24         208,820         208,820             680,053     (1b&d)
Brisas del Mar Apartments
  Limited Partnership
Brisas del Mar Apartments
Hatillo, Puerto Rico                66         668,172         668,172           2,670,432     (1b&d)
Bruce Housing Associates, L.P.
Bruce Family Apartments
Bruce, Mississippi                  40         183,1552        183,1552          1,115,155     (1b&d)
Carrington Limited Dividend
  Housing Association Limited
  Partnership
Carrington Place
Farmington Hills, Michigan         100       2,174,7202      2,174,7202          3,487,158       (1c)
Chestnut Park Associates, L.P.
Chestnut Park Apartments
East Orange, New Jersey             59       4,204,576       4,204,576           5,284,761       (1a)
Chowan Senior Manor Associates
  Limited Partnership
Azalea Garden Senior Manor
  Apartments
Murfreesboro, North Carolina        33         278,405         278,405           1,271,652     (1b&d)
</TABLE>





<PAGE>
<TABLE>
<CAPTION>

Item 2. Properties (continued)

                                                Capital contribution           Mortgage &
                                                            obligation        construction
Name of Local Partnership         Number     Total as of     Paid through   loans payable as   Subsidy
                                                                                   of
Name of apartment complex        of           March 30,       March 30,       December 31,       (see
                                  rental
Apartment complex location        units        1997              1997             1996        footnotes)
--------------------------      ---------  ------------    ---------------------------------- ----------

<S>                              <C>       <C>              <C>             <C>                <C>
Christian Street Commons
  Associates
Christian Street Commons
  Apartments
Philadelphia, Pennsylvania          18     $   581,645      $   581,645        $   633,184     (1a&b)
Country View Apartments
Country View Apartments
Pembroke, Maine                     16         279,183         279,183             943,663     (1b&d)
Desarrollos de Belen Limited
  Partnership
Vista de Jagueyes II Apartments
Aguas Buenas, Puerto Rico            41        422,929         422,929           1,892,733      (1b&d)
Desarrollos de Emaus Limited
  Partnership
Hucares II Apartments
Naguabo, Puerto Rico                 72        631,404         631,404           3,217,134      (1b&d)
Ellinwood Heights Apartments,
L.P.
Ellinwood Heights Apartments         
Ellinwood, Kansas                    24        156,261         156,261             692,502      (1b&d)
Fulton Street Houses Limited
  Partnership
Fulton Street Townhouse
  Apartments
New York, New York                   35      1,948,081       1,948,081           3,869,930      (1a&b)
Hayes Run Limited Partnership
Mashburn Gap Apartments
Marshall, North Carolina             34        322,074         322,074           1,434,682      (1b&d)
Howard L. Miller Sallisaw
  Apartments II, L.P.
Sallisaw II Apartments
Sallisaw, Oklahoma                   24        130,158         130,158             619,235      (1b&d)
Hurlock Meadow Limited
  Partnership
Hurlock Meadow Apartments
Hurlock, Maryland                    30        284,218         199,785           1,279,669      (1b&d)
Ivy Family, L.P.
Ivy Apartments
Louisville, Mississippi              32        135,5282        135,5282            805,507      (1b&d)
Justin Associates
Locust Tower Apartments
Philadelphia, Pennsylvania           40      1,809,723       1,809,723           2,511,407      (1b&e)
LaBelle Commons, Ltd.
LaBelle Commons
LaBelle, Florida                     32        253,580         253,580           1,020,357      (1b&d)
</TABLE>





<PAGE>
<TABLE>
<CAPTION>

Item 2. Properties (continued)

                                                Capital contribution           Mortgage &
                                                            obligation        construction
Name of Local Partnership         Number     Total as of     Paid through   loans payable as   Subsidy
                                                                                   of
Name of apartment complex        of           March 30,       March 30,       December 31,       (see
                                  rental
Apartment complex location         units        1997              1997             1996        footnotes)
--------------------------       ---------  ------------    ---------------------------------- ----------

<S>                              <C>       <C>              <C>             <C>                <C>
Lawrence Road Properties, Ltd.
Hillcrest Apartments
Newton, Mississippi                  24    $   123,7992     $   123,7992       $   763,628      (1b&d)
Loma Del Norte Limited
  Partnership
Loma Del Norte Apartments
Anthony, New Mexico                  40        314,865         314,865           1,446,530      (1b&d)
Long Reach Associates Limited
  Partnership
Oak Ridge Apartments
Bath, Maine                         30         448,922         448,922           1,487,788      (1b&d)
Mirador del Toa Limited
  Partnership
Mirador del Toa Apartments
Toa Alta, Puerto Rico               48         284,8472        284,8472          1,896,098      (1b&d)
Moore Haven Commons, Ltd.
Moore Haven Commons
Moore Haven, Florida                28         213,402         213,402             934,175      (1b&d)
NP-89 Limited Dividend Housing
  Association Limited Partnership
Newport Apartments
Clinton Township, Michigan         168       2,372,292       2,372,292           4,375,085      (1a&b)
Nash Hill Associates, Limited
  Partnership
Nash Hill Place
Williamsburg, Massachusetts         28         302,575         302,575           1,478,728     (1b,d&f)
North Calhoun City, L.P.
Calhoun City Apartments
Calhoun City, Mississippi           18         146,565         146,565             498,050      (1b&d)
Orange City Plaza, Limited
  Partnership
Orange City Plaza Apartments
Orange City, Iowa                   32         456,090         456,090             549,795        (1a)
Puerta del Mar Limited
Partnership
Puerta del Mar Apartments           66         630,570         630,570           2,542,593      (1b&d)
Hatillo, Puerto Rico
Purvis Heights Properties, L.P.
Pineview Apartments
Purvis, Mississippi                 40         191,5122        191,5122          1,156,152        (1b)
Queen Lane Investors
Queen's Row
Philadelphia, Pennsylvania          29         597,0502        597,0502          1,587,345      (1b&e)
Somerset Manor, Ltd.
Somerset Manor
Central City, Pennsylvania          24         208,465         208,465             903,396      (1b&d)
</TABLE>





<PAGE>
<TABLE>
<CAPTION>

Item 2. Properties (continued)

                                                Capital contribution           Mortgage &
                                                            obligation        construction
Name of Local Partnership         Number     Total as of     Paid through   loans payable as   Subsidy
                                                                                   of
Name of apartment complex        of           March 30,       March 30,       December 31,       (see
                                  rental
Apartment complex location         units         1997              1997            1996        footnotes)
--------------------------       ---------  -------------   ---------------------------------------------

<S>                              <C>       <C>              <C>             <C>                <C>
Sugar Cane Villas, Ltd.
Sugar Cane Villas
Pahokee, Florida                    87     $     751,560    $     751,560   $      3,329,461    (1b&d)
Summerfield Apartments Limited
  Partnership
Summerfield Apartments
Charlotte, North Carolina            52      1,088,667       1,088,667           1,827,382        (1b)
Sydney Engel Associates L.P.
(formerly known as Sydney Engel
  Associates)
The Castle
New York, New York                  224      3,201,874       1,977,099          17,939,501        (1b)
Union Valley Associates Limited
  Partnership
Union Valley Apartments
Union Township, Pennsylvania         36        371,589         371,589           1,456,431        (1b)
Walnut Grove Family, L.P.
Walnut Grove Apartments
Walnut Grove, Mississippi            24        191,695         191,695             851,857      (1b&d)
Waynesboro Apartments Limited
  Partnership
Waynesboro Apartments
Waynesboro, Pennsylvania             36        360,859         360,859           1,493,131        (1b)
West Calhoun City, L.P.
West Calhoun City Apartments
Calhoun City, Mississippi            28        230,212         230,212             789,306      (1b&d)
Westminster Apartments Limited
  Partnership
Westminster Apartments
Philadelphia, Pennsylvania           42        1,047,993        1,047,993       1,642,683       (1a&b)
                                           -------------    -------------   -------------             
                                           $ 29,264,476     $ 27,955,268     $ 87,351,443
                                           ============     ============     ============
</TABLE>

    (1) Description of Subsidies:

        (a)Section 8 of Title II of the Housing and Community Development Act of
           1974 allows  qualified  low-income  tenants to pay thirty  percent of
           their  monthly  income as rent with the  balance  paid by the federal
           government.

        (b) The Local  Partnership's  debt structure includes a 
            principal or interest payment subsidy.
           
        (c)The  Michigan  State  Housing   Development   Authority  allows
           tenants,  who would  otherwise  pay more than 40% of their income for
           rent and utilities, to receive rental subsidies.

        (d)The Rural Housing Service (formerly the Farmers Home  Administration)
           of the United States  Department  of  Agriculture  Rental  Assistance
           Program  allows  qualified   low-income  tenants  to  receive  rental
           subsidies.

        (e)The  City  of  Philadelphia   Housing   Authority   allows  qualified
           low-income tenants to receive rental certificates.

        (f)The Commonwealth of Massachusetts participates in a rental assistance
           program.




<PAGE>

Item 2. Properties (continued)

    (2) The capital  contribution  obligation total as of March 30, 1997 and the
        capital  contribution  obligation  paid  through  March 30, 1997 reflect
        Registrant's obligation only.

Item 3. Legal Proceedings

Registrant is not aware of any material legal proceedings.

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

There were no matters  submitted to a vote of the limited partners of Registrant
during the fourth quarter of the fiscal year covered by this report.





<PAGE>

                                             PART II

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

Market Information and Holders

There is no established public trading market for Registrant's  Units. There are
provisions  in the Amended and  Restated  Agreement  of Limited  Partnership  of
Registrant  which are intended to prevent the development of a public  secondary
market.  Accordingly,  accurate  information as to the market value of a Unit at
any given date is not available. Since November 1992, Merrill Lynch has provided
its clients who wish to buy or sell partnership units with a limited partnership
secondary  service   available  through  Merrill  Lynch's  Limited   Partnership
Secondary  Transaction  Department.  The number of owners of Units as of May 20,
1997 was 1,857, holding 35,883 Units.

Beginning  with the December  1994  Merrill  Lynch  client  account  statements,
Merrill Lynch  implemented  new  guidelines  for providing  estimated  values of
limited  partnerships  and other direct  investments  reported on client account
statements.  As a  result,  Merrill  Lynch no  longer  reports  general  partner
estimates  of  limited  partnership  net  asset  value  on  its  client  account
statements,  although Registrant may continue to provide its estimate of limited
partnership value to Unit holders. Pursuant to the guidelines,  estimated values
for limited  partnership  interests  originally  sold by Merrill  Lynch (such as
Registrant's  Units)  will be  provided  two times per year to Merrill  Lynch by
independent  valuation  services.  These  estimated  values  will  be  based  on
financial and other information available to the independent services (1) on the
prior August 15th for  reporting  on December  year-end  and  subsequent  client
account   statements  through  the  following  May's  month-end  client  account
statements  and (2) on the  prior  March  31st  for  reporting  on June  through
November  month-end  client account  statements of the same year.  Merrill Lynch
clients may contact their Merrill Lynch  Financial  Consultants or telephone the
number  provided  to them on  their  account  statements  to  obtain  a  general
description of the  methodology  used by the independent  valuation  services to
determine  their  estimates  of value.  In addition,  Registrant  may provide an
estimate  of  limited  partnership  value to Unit  holders  from time to time in
Registrant's  reports to limited partners.  The estimated values provided by the
independent services and Registrant, which may differ, are not market values and
Unit holders may not be able to sell their Units or realize either amount upon a
sale of their Units.  In addition,  Unit holders may not realize such  estimated
values upon the liquidation of Registrant's assets over its remaining life.

Distributions

Registrant owns a limited  partnership  interest in Local  Partnerships that are
the owners of Properties which are leveraged and receive  government  assistance
in various forms of rental and debt service  subsidies.  The distribution of any
cash flow generated by the Local  Partnerships may be restricted,  as determined
by each Local  Partnership's  financing  and  subsidy  agreements.  Accordingly,
Registrant  does not  anticipate  that it will provide  significant  annual cash
distributions to its partners.  There were no cash distributions to the partners
during the years ended March 30, 1997 and 1996.

Low-income Tax Credits, which are subject to various limitations, may be used by
investors to offset federal income tax  liabilities.  The Low-income Tax Credits
per Unit generated by Registrant  and allocated to the limited  partners for the
tax years ended  December 31, 1996 and 1995 and the  cumulative  Low-income  Tax
Credits allocated from inception through December 31, 1996 are as follows:

<TABLE>
<CAPTION>
                                                                Low-income
                                                               Tax Credits
                    <S>                                 <C>
                    Tax year ended December 31, 1996             $ 152.73
                    Tax year ended December 31, 1995               153.64

                    Cumulative totals                            $ 837.28
</TABLE>

Notwithstanding future circumstances which may give rise to recapture or loss of
future benefits (see Part I, Item 2 - Properties, herein), Registrant expects to
generate total Low-income Tax Credits from investments in Local  Partnerships of
approximately $1,500 per Unit through December 31, 2003.






<PAGE>

Item 6. Selected Financial Data

The information set forth below presents selected  financial data of Registrant.
Additional detailed financial  information is set forth in the audited financial
statements included under Part II, Item 8 herein.

<TABLE>
<CAPTION>
                                                          Years Ended March 30,
                                  1997             1996          1995            1994          1993
                             ------------  ------------------------------ --------------- -----------
                         
<S>                         <C>             <C>            <C>             <C>             <C>
Interest revenue            $      317,065  $      335,724 $      326,184  $      331,981  $    364,553
                            ==============  ============== ==============  ==============  ==============

Equity in loss of
  investment in local       $ (2,509,806)   $ (3,249,195)  $ (3,396,272)   $ (3,295,333)   $ (3,177,723)
                            ============    ============   ============    ============    ============ 
  partnerships

Net loss                    $ (2,718,536)   $ (3,443,977)  $ (3,611,978)   $ (3,522,497)   $ (3,348,281)
                            ============    ============   ============    ============    ============ 

Net loss per unit of
  limited partnership 
  interest                  $       (75.00) $       (95.02)$       (99.65) $       (97.18) $     (92.38)
                            ==============  ============== ==============  ==============  ============== 
  


                                                       As of March 30,
                                   1997         1996           1995           1994           1993
                             -------------- -----------   ------------   -------------- -----------
                              

Total assets                 $15,503,629    $17,832,235     $21,199,982     $23,379,674    $26,618,607
                             ===========    ===========     ===========     ===========    ===========

</TABLE>

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

Capital Resources and Liquidity

Registrant registered 150,000 units of limited partnership interest ("Units") at
$1,000 per Unit with the Securities and Exchange  Commission (the  "Commission")
and on February 2, 1990, the Commission  declared  effective  Amendment No. 2 to
the Registration  Statement on Form S-11.  Registrant  admitted limited partners
between  June 13,  1990 and January 23,  1992 in four  closings  with  aggregate
limited partners' capital contributions amounting to $35,883,000.

Registrant  acquired  forty-three  limited  partnership  interests  (the  "Local
Partnership  Interests")  in  partnerships  (the "Local  Partnership"  or "Local
Partnerships")  representing capital contributions in the amount of $29,264,476.
The Local  Partnerships own low-income  multifamily  residential  complexes (the
"Property"  or  "Properties")  which  qualify  for  the  low-income  tax  credit
established  by Section 42 of the Tax  Reform Act of 1986 (the  "Low-income  Tax
Credit").  The  required  holding  period  of each  Property,  in order to avoid
Low-income  Tax Credit  recapture,  is fifteen  years from the year in which the
Low-income  Tax Credits  commence  on the last  building  of the  Property  (the
"Compliance Period"). The investments in Local Partnerships are highly illiquid.
As of March 30, 1997,  Registrant has paid capital  contributions of $27,955,268
to the Local Partnerships and $1,309,208 are outstanding. Restricted cash in the
balance  sheet  as  of  March  30,  1997  represents  such  outstanding  capital
contributions  (and is  referred  to herein  as  "Temporary  Investments").  The
outstanding  capital  contributions  are  payable  upon two Local  Partnerships'
satisfaction  of specified  conditions  related to  operations  (see  discussion
pertaining to Sydney Engel Associates below).

From the closing of Units,  Registrant  established a working  capital  reserve.
Registrant  is  not  expected  to  have  access  to  any  source  of  financing.
Accordingly, if unforeseen contingencies arise that cause a Local Partnership to
require additional capital,  in addition to that contributed by Registrant,  the
source of such capital  needs may be obtained from (i) limited  working  capital
reserves of  Registrant  (which may include  distributions  received  from Local
Partnerships), (ii) debt financing at the Local Partnership level (which may not
be available) or (iii) additional equity contributions of the general partner of
a Local  Partnership  (the "Local  General  Partner").  In  addition,  the Local
Partnerships  are generally  expected to maintain  escrow  reserves over time in
addition to the reserves  maintained  by  Registrant.  There can be no assurance
that any of these  sources  would be readily  available  to provide for possible
additional  capital  requirements or be sufficient to remedy any such unforeseen
contingencies.





<PAGE>

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

As of March 30, 1997, Registrant's working capital is comprised of cash and cash
equivalents  of  $409,413,   investments  in  corporate   bonds  of  $1,897,688,
investments  in  U.S.  Treasury  bonds  of  $847,896  and  investments  in  U.S.
government  agency bonds of $109,187.  Registrant  acquired such  investments in
bonds with the intention of utilizing  proceeds generated by such investments in
bonds to meet its annual  obligations.  Future sources of Registrant's funds are
expected  primarily  from  interest  earned on  investments  of working  capital
reserves, retired investments in bonds and limited cash distributions from Local
Partnerships.

During the year ended March 30, 1997,  Registrant  received  cash from  interest
earnings  and  distributions  from  Local  Partnerships  and  utilized  cash for
operating expenses.  In addition,  Registrant received $200,000 from maturity of
investments  in  bonds.  Cash  and cash  equivalents  and  investments  in bonds
available-for-sale decreased, in the aggregate, by approximately $196,000 during
the year ended March 30, 1997,  which decrease  includes a net  unrealized  loss
recorded on investments in bonds of approximately  $87,000,  the amortization of
net premium on investments in bonds of  approximately  $17,000 and the accretion
of  zero  coupon  bonds  of  approximately  $88,000.  In  addition,   Registrant
transferred  approximately $207,000 to restricted cash due to an increase in the
capital  contribution payable to Sydney Engel Associates (see discussion further
below).  During  the  year  ended  March  30,  1997,  the  investment  in  Local
Partnerships  decreased  as  a  result  of  Registrant's  equity  in  the  Local
Partnerships'  net loss for the year ended  December 31, 1996 of $2,509,806  and
cash distributions received from Local Partnerships of $33,605, partially offset
by the increase in investment in Sydney Engel Associates.

The Properties are principally  comprised of subsidized and leveraged low-income
multifamily  residential  complexes  located  throughout  the United  States and
Puerto Rico. The rents of the  Properties,  many of which receive rental subsidy
payments,  including  payments  under  Section 8 of Title II of the  Housing and
Community  Development  Act of 1974 ("Section 8"), are subject to specific laws,
regulations  and  agreements  with  federal  and  state  agencies.  The  subsidy
agreements  expire at various times during and after the  Compliance  Periods of
the Local  Partnerships.  The United  States  Department  of  Housing  and Urban
Development  ("HUD") has issued  notices  which  implement  provisions  to renew
certain  project  based  Section 8 contracts  expiring  during HUD's fiscal year
1997,  where requested by an owner, for an additional one year term generally at
or  below  current  rent  levels,  subject  to  certain  guidelines.  HUD has an
additional  program which, in general,  provides for restructuring  rents and/or
mortgages where rents may be adjusted to market levels and mortgage terms may be
adjusted  based on the  reduction in rents,  although  there may be instances in
which  only  rents,  but not  mortgages,  are  restructured.  Registrant  cannot
reasonably predict legislative initiatives and governmental budget negotiations,
the outcome of which  could  result in a reduction  in funds  available  for the
various federal and state administered  housing programs including the Section 8
program. Such changes could adversely affect the future net operating income and
debt structure of any or all Local Partnerships currently receiving such subsidy
or similar subsidies.  One Local Partnership's Section 8 contract,  which covers
certain  rental units,  is scheduled to expire in 1997.  In addition,  the Local
Partnerships have various  financing  structures which include (i) required debt
service payments ("Mandatory Debt Service") and (ii) debt service payments which
are payable only from available cash flow subject to the terms and conditions of
the notes,  which may be subject to specific  laws,  regulations  and agreements
with  appropriate  federal and state  agencies  ("Non-Mandatory  Debt Service or
Interest").  In the event rents are not sufficient to cover operating  expenses,
Mandatory Debt Service  requirements  and other  charges,  certain Local General
Partners  are  obligated  to provide  advances to cover  deficits  for a certain
period of time up to certain amounts (the "Deficit Guarantee").  A Local General
Partner's  funding of such Deficit  Guarantee  is dependent on its  liquidity or
ability to borrow the required  funds.  During the year ended December 31, 1996,
revenue from  operations,  Local  General  Partner  advances and reserves of the
Local  Partnerships  have  generally  been  sufficient  to cover  the  operating
expenses and Mandatory Debt Service. Substantially all of the Local Partnerships
are effectively  operating at or near break even levels,  although certain Local
Partnerships'  accounting  information  reflects  operating deficits that do not
represent  cash deficits due to their  mortgage and financing  structure and the
required  deferral of property  management  fees.  However,  as discussed below,
certain Local  Partnerships'  operating  information  indicates below break even
operations after taking into account their mortgage and financing  structure and
the required deferral of property management fees.

The terms of the partnership  agreement of Justin  Associates (the "Justin Local
Partnership") require the Local General Partners of the Justin Local Partnership
to advance funds to cover operating  deficits up to $266,000  through March 1997
and to cause the management agent to defer property  management fees in order to
avoid a default under the  mortgage.  The Justin Local  Partnership  incurred an
operating deficit of approximately $30,000 for the year ended December 31, 1996,
which includes property management fees of approximately  $17,000.  Accordingly,
the net operating  deficit was approximately  $13,000.  As of December 31, 1996,
the Local General Partners of the Justin Local Partnership have





<PAGE>

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

advanced  approximately  $42,000 under their Deficit  Guarantee  obligation.  Of
Registrant's total annual Low-income Tax Credits,  approximately 6% is allocated
from the Justin Local Partnership.

The terms of the partnership  agreement of Christian  Street Commons  Associates
(the "Christian Street Local Partnership") require the Local General Partners of
the  Christian  Street Local  Partnership  to advance  funds to cover  operating
deficits up to $150,000  through 2008 and to cause the management agent to defer
property  management  fees in order to avoid a default under the  mortgage.  The
Christian   Street  Local   Partnership   incurred  an   operating   deficit  of
approximately  $22,000 for the year ended  December  31,  1996,  which  includes
property management fees of approximately $3,000. Accordingly, the net operating
deficit was  approximately  $19,000.  As of December 31, 1996, the Local General
Partners of the Christian Street Local  Partnership have advanced  approximately
$47,000 under their Deficit Guarantee  obligation.  Of Registrant's total annual
Low-income Tax Credits,  approximately 2% is allocated from the Christian Street
Local Partnership.

On April 18, 1997 Sydney Engel  Associates L.P.  (formerly known as Sydney Engel
Associates)  (the  "Sydney  Engel Local  Partnership")  closed on its  permanent
mortgages with the City of New York.  Upon closing,  Registrant  paid the Sydney
Engel Local  Partnership  its  outstanding  capital  contribution of $1,224,775,
which includes an additional  capital  contribution of $206,881,  which was paid
from reserves, resulting from the delay in closing the mortgages. Registrant has
continued to receive the full Low-income Tax Credits from the Sydney Engel Local
Partnership as generally anticipated.  The Local General Partner and the special
limited partner (an affiliate of the General  Partner) of the Sydney Engel Local
Partnership  utilized the additional  time to negotiate more favorable  terms on
the permanent mortgages than those included in the original commitment.

Results of Operations

Registrant's  operating  results are dependent upon the operating results of the
Local  Partnerships and are  significantly  impacted by the Local  Partnerships'
policies. In addition, the operating results herein are not necessarily the same
for tax reporting.  Registrant accounts for its investment in Local Partnerships
in accordance  with the equity method of accounting,  under which the investment
is carried at cost which includes capital contributions payable, and is adjusted
for Registrant's share of the Local  Partnership's  results of operations and by
any cash  distributions  received.  Equity in loss of each  investment  in Local
Partnership  allocated to Registrant is recognized to the extent of Registrant's
investment  balance in each Local  Partnership.  Any equity in loss in excess of
Registrant's  investment  balance in a Local  Partnership  is allocated to other
partners'  capital in each such Local  Partnership.  As a result,  the equity in
loss of investment in Local Partnerships is expected to decrease as Registrant's
investment  balances in the respective Local Partnerships  become zero. However,
the combined  statements of operations  of the Local  Partnerships  reflected in
Note 5 to Registrant's financial statements include the operating results of all
Local Partnerships, regardless of Registrant's investment balances.

Cumulative  losses  and cash  distributions  in  excess of  investment  in Local
Partnerships  may result  from a variety  of  circumstances,  including  a Local
Partnership's  accounting  policies,   subsidy  structure,  debt  structure  and
operating deficits, among other things. Accordingly,  cumulative losses and cash
distributions  in excess of the  investment  are not  necessarily  indicative of
adverse  operating  results of a Local  Partnership.  See discussion above under
Capital Resources and Liquidity  regarding certain Local Partnerships  currently
operating below economic break even levels.

Year Ended March 30, 1997

For the year ended March 30, 1997,  Registrant  had a net loss of  approximately
$2,719,000, which included an equity in loss of investment in Local Partnerships
of approximately $2,510,000 for the year ended December 31, 1996. Nonrecognition
of losses in excess of  Registrant's  investment in certain  Local  Partnerships
during the year was  approximately  $534,000.  Registrant's loss from operations
for the year ended March 30, 1997 of approximately  $209,000 was attributable to
interest revenue of approximately  $317,000,  exceeded by operating  expenses of
approximately  $526,000.  Interest  revenue  for future  periods is  expected to
decline  as  investments  in bonds  mature  and are  utilized  for  Registrant's
operating  expenses and Temporary  Investments  are utilized to make payments of
capital contributions to Local Partnerships.

The Local Partnerships' net loss of approximately  $3,260,000 for the year ended
December 31, 1996 was  attributable to rental and other revenue of approximately
$10,764,000, exceeded by operating and interest expenses of approximately





<PAGE>

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

$9,806,000  and  approximately   $4,218,000  of  depreciation  and  amortization
expenses.  The Local Partnerships' net loss for the year ended December 31, 1996
includes accrued  Non-Mandatory  Interest charges of approximately  $299,000 and
does  not  include   principal   amortization   on  mortgage  loans  payable  of
approximately $309,000.

Year Ended March 30, 1996

For the year ended March 30, 1996,  Registrant  had a net loss of  approximately
$3,444,000, which included an equity in loss of investment in Local Partnerships
of approximately $3,249,000 for the year ended December 31, 1995. Nonrecognition
of losses in excess of  Registrant's  investment in certain  Local  Partnerships
during the year was  approximately  $175,000.  Registrant's loss from operations
for the year ended March 30, 1996 of approximately  $195,000 was attributable to
interest revenue of approximately  $336,000,  exceeded by operating  expenses of
approximately  $528,000 and amortization of organization  costs of approximately
$3,000.

The Local Partnerships' net loss of approximately  $3,678,000 for the year ended
December 31, 1995 was  attributable to rental and other revenue of approximately
$10,623,000,  exceeded by  operating  and  interest  expenses  of  approximately
$9,909,000  and  approximately   $4,392,000  of  depreciation  and  amortization
expenses.  The Local Partnerships' net loss for the year ended December 31, 1995
includes accrued  Non-Mandatory  Interest charges of approximately  $278,000 and
does  not  include   principal   amortization   on  mortgage  loans  payable  of
approximately $261,000.

Year Ended March 30, 1995

For the year ended March 30, 1995,  Registrant  had a net loss of  approximately
$3,612,000, which included an equity in loss of investment in Local Partnerships
of approximately $3,396,000 for the year ended December 31, 1994. Nonrecognition
of losses in excess of  Registrant's  investment in certain  Local  Partnerships
during the year was approximately $6,000.  Registrant's loss from operations for
the year ended March 30, 1995 of  approximately  $216,000  was  attributable  to
interest revenue of approximately  $326,000,  exceeded by operating  expenses of
approximately $527,000 and amortization of organization costs of $15,000.

The Local Partnerships' net loss of approximately  $3,666,000 for the year ended
December 31, 1994 was  attributable to rental and other revenue of approximately
$10,254,000,  exceeded by  operating  and  interest  expenses  of  approximately
$9,560,000  and  approximately   $4,360,000  of  depreciation  and  amortization
expenses.  The Local Partnerships' net loss for the year ended December 31, 1994
includes accrued  Non-Mandatory  Interest charges of approximately  $276,000 and
does  not  include   principal   amortization   on  mortgage  loans  payable  of
approximately $241,000.

Year Ended March 30, 1997 v. 1996

Registrant's operations for the year ended March 30, 1997 resulted in a net loss
of  approximately  $2,719,000  as  compared  to  a  net  loss  of  approximately
$3,444,000  for the year  ended  March 30,  1996.  The  decrease  in net loss is
primarily  attributable  to a decrease  in the equity in loss of  investment  in
Local Partnerships of approximately  $739,000,  which is primarily the result of
(i) an  increase  in the  nonrecognition  of losses  in  excess of  Registrant's
investment in Local  Partnerships of  approximately  $359,000 in accordance with
the  equity  method of  accounting  and (ii) a  general  decrease  in  operating
expenses of the Local Partnerships.

Year Ended March 30, 1996 v. 1995

Registrant's operations for the year ended March 30, 1996 resulted in a net loss
of  approximately  $3,444,000  as  compared  to  a  net  loss  of  approximately
$3,612,000  for the year  ended  March 30,  1995.  The  decrease  in net loss is
primarily  attributable  to a decrease  in the equity in loss of  investment  in
Local Partnerships of approximately  $147,000,  which is primarily the result of
an increase in the nonrecognition of losses in excess of Registrant's investment
in Local  Partnerships of  approximately  $169,000 in accordance with the equity
method of accounting.

Inflation

Inflation  is not  expected to have a material  adverse  impact on  Registrant's
operations during its period of ownership of the Local Partnership Interests.





<PAGE>

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

Recent Accounting Statements Not Yet Adopted

In February  1997,  the  Financial  Accounting  Standards  Board  issued  
Statement  of  Financial Accounting  Standards  ("SFAS") No. 128,  "Earnings 
per Share" and SFAS No. 129,  "Disclosure  of Information  about Capital 
Structure." SFAS No. 128 provides  accounting and reporting  standards for the
amount of  earnings  per share.  SFAS No. 129  requires  the  disclosure  in 
summary  form within the financial  statements of the pertinent rights and
privileges of the various  securities outstanding. SFAS No. 128 and SFAS No. 129
are effective  for fiscal years ending after  December 15, 1997 and earlier
application is not permitted.

The  implementation  of SFAS  No.  128  and  SFAS  No.  129 is not  expected  to
materially  impact  Registrant's   financial   statements  because  Registrant's
earnings  per share  would not be  significantly  affected  and the  disclosures
regarding  the  capital  structure  in the  financial  statements  would  not be
significantly changed.





<PAGE>

                             AMERICAN TAX CREDIT PROPERTIES III L.P.


Item 8. Financial Statements and Supplementary Data


                                          Table of Contents Page

Independent Auditors' Report.

Balance Sheets as of March 30, 1997 and 1996.

Statements of Operations for the years ended March 30, 1997, 1996 and 1995.

Statements of Changes in Partners' Equity (Deficit) for the years ended
     March 30, 1997, 1996 and 1995.

Statements of Cash Flows for the years ended March 30, 1997, 1996 and 1995.

Notes to Financial Statements as of March 30, 1997, 1996 and 1995.



No financial  statement  schedules  are  included  because of the absence of the
conditions  under which they are required or because the information is included
in the financial statements or the notes thereto.






<PAGE>

                                   INDEPENDENT AUDITORS' REPORT


To the Partners
American Tax Credit Properties III L.P.

We  have  audited  the  accompanying  balance  sheets  of  American  Tax  Credit
Properties III L.P. as of March 30, 1997 and 1996, and the related statements of
operations, changes in partners' equity (deficit) and cash flows for each of the
three years in the period ended March 30, 1997.  These financial  statements are
the  responsibility of the partnership's  management.  Our  responsibility is to
express an opinion on these financial statements based on our audits.

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

        In our  opinion,  the  financial  statements  referred to above  present
fairly, in all material respects,  the financial position of American Tax Credit
Properties  III L.P.  as of March 30,  1997 and  1996,  and the  results  of its
operations  and its cash flows for each of the three  years in the period  ended
March 30, 1997, in conformity with generally accepted accounting principles.


/s/ Reznick Fedder & Silverman

Bethesda, Maryland
May 8, 1997






<PAGE>
<TABLE>
<CAPTION>
                             AMERICAN TAX CREDIT PROPERTIES III L.P.
                                          BALANCE SHEETS
                                     MARCH 30, 1997 AND 1996




                                                            Notes             1997            1996
                                                            -----       --------------------------
ASSETS
<S>                                                     <C>             <C>             <C>
Cash and cash equivalents                                    3,9        $   409,413  $     389,931
Restricted cash                                             3,5,9         1,309,208      1,102,327
Investments in bonds available-for-sale                      4,9          2,854,771      3,070,375
Investment in local partnerships                             5,8         10,905,064     13,241,594
Interest receivable                                           9              25,173         28,008
                                                                        --------------- ---------------

                                                                       $ 15,503,629    $ 17,832,235
                                                                        ============    ============
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities
  Accounts payable and accrued expenses                      8,9        $   862,114  $     717,878
  Payable to general partner                                6,8,9           800,043        669,472
  Capital contributions payable                              5,9          1,309,208      1,102,327
  Other                                                                      21,200         25,950
                                                                        --------------- ---------------

                                                                          2,992,565      2,515,627

Commitments and contingencies                                5,8

Partners' equity (deficit)                                   2,4
  General partner                                                          (188,365)      (161,180)
  Limited partners, $1,000 stated value per unit
    (35,883 units of limited partnership interest                        12,881,544     15,572,895
    outstanding)
  Unrealized loss on investments in bonds                                 (182,115)        (95,107)
                                                                        --------------  --------------- 
    available-for-sale, net

                                                                          12,511,064     15,316,608

                                                                        $ 15,503,629   $ 17,832,235
                                                                        ============    ============
</TABLE>







                                See Notes to Financial Statements.






<PAGE>
<TABLE>
<CAPTION>

                             AMERICAN TAX CREDIT PROPERTIES III L.P.
                                     STATEMENTS OF OPERATIONS
                            YEARS ENDED MARCH 30, 1997, 1996 AND 1995




                                              Notes        1997              1996             1995
                                              -----   ----------------  ---------------- ---------
<S>                                           <C>     <C>               <C>              <C>
REVENUE

Interest                                              $      317,065    $      335,724   $      326,184
                                                      --------------    --------------   --------------

TOTAL REVENUE                                                 317,065           335,724          326,184
                                                      ---------------   ---------------  ---------------

EXPENSES

Administration fees                             8           230,571          230,571          230,571
Management fees                                6,8          230,571          230,571          230,571
Professional fees                                            45,849           50,757           52,841
Printing, postage and other                                  18,804           15,482           12,907
Amortization                                                                   3,125           15,000
                                                      ---------------------------------- ---------------

TOTAL EXPENSES                                              525,795          530,506          541,890
                                                      --------------    --------------   --------------

Loss from operations                                       (208,730)        (194,782)        (215,706)

Equity in loss of investment in local    
partnerships                                    5        (2,509,806)       (3,249,195)      (3,396,272)
                                                      -------------     -------------    ------------- 


NET LOSS                                               $ (2,718,536)    $ (3,443,977)    $ (3,611,978)
                                                       ============     ============     ============ 

NET LOSS ATTRIBUTABLE TO                        2
  General partner                                     $     (27,185)   $      (34,440)  $      (36,120)
  Limited partners                                       (2,691,351)       (3,409,537)      (3,575,858)
                                                      -------------     -------------    ------------- 

                                                       $ (2,718,536)    $ (3,443,977)    $ (3,611,978)
                                                       ============     ============     ============ 

NET LOSS per unit of limited partnership
  interest (35,883 units of limited
  partnership interest)                               $     (75.00)  $        (95.02)    $     (99.65)
                                                      ===============   ===============  =============== 
</TABLE>





                                See Notes to Financial Statements.






<PAGE>
<TABLE>
<CAPTION>

                             AMERICAN TAX CREDIT PROPERTIES III L.P.
                       STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIT)
                            YEARS ENDED MARCH 30, 1997, 1996 AND 1995



                                                                         Unrealized
                                                                       Gain (Loss) on
                                                                       Investments in
                                         General        Limited       Bonds Available-
                                         Partner        Partners        For-Sale, Net         Total
                                                                          
<S>                                    <C>           <C>             <C>                 <C>
Partners' equity (deficit),       
  March 30, 1994                      $  (90,620)   $ 22,558,290    $                   $ 22,467,670
  
Net loss                                 (36,120)     (3,575,858)                          (3,611,978)

Unrealized loss on investments in
  bonds available-for-sale, net                                           (202,799)          (202,799)
                                       ---------------------------------------------     -------------- 

Partners' equity (deficit),        
  March 30, 1995                        (126,740)     18,982,432           (202,799)       18,652,893
  

Net loss                                 (34,440)     (3,409,537)                          (3,443,977)

Change in unrealized loss on
  investments in bonds
  available-for-sale, net                                                   107,692            107,692
                                       ---------------------------------------------     --------------
  

Partners' equity (deficit),        
  March 30, 1996                        (161,180)     15,572,895            (95,107)       15,316,608
  

Net loss                                 (27,185)     (2,691,351)                          (2,718,536)

Change in unrealized loss on
  investments in bonds                                                      (87,008)          (87,008)
                                       ----------------------------------------------    --------------- 
  available-for-sale, net

Partners' equity (deficit), 
  March 30, 1997                      $ (188,365)   $ 12,881,544    $     (182,115)     $ 12,511,064
                                       ==========    ============    ==============      ============
  
</TABLE>










                                See Notes to Financial Statements.





<PAGE>
<TABLE>
<CAPTION>

                             AMERICAN TAX CREDIT PROPERTIES III L.P.
                                     STATEMENTS OF CASH FLOWS
                            YEARS ENDED MARCH 30, 1997, 1996 AND 1995



                                                                 1997            1996            1995
                                                             -------------   -------------   --------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                         <C>             <C>             <C>
Interest received                                            $   248,496     $   256,741     $   268,584
Cash used for local partnerships for deferred expenses            (4,750)         (4,750)         (4,750)
Cash paid for
    administration fees                                         (100,000)       (100,000)       (100,000)
    management fees                                             (100,000)       (100,000)       (125,000)
    professional fees                                            (40,999)        (41,357)        (49,091)
    printing, postage and other expenses                           (9,989)       (12,736)        (15,291)
                                                            -------------   ------------    ------------- 

Net cash used in operating activities                              (7,242)         (2,102)        (25,548)
                                                            -------------   -------------   ------------- 

CASH FLOWS FROM INVESTING ACTIVITIES

Maturity/redemption of bonds                                     200,000                         125,000
Cash distributions from local partnerships                        33,605          29,682          55,570
Transfer from (to) restricted cash                              (206,881)        300,000         515,250
Investment in local partnerships                                                (300,000)       (488,197)
Investments in bonds                                                            (301,554)
                                                            ----------------------------      ------------ 

Net cash provided by (used in) investing activities               26,724        (271,872)        207,623
                                                            ------------     -----------    ------------

Net increase (decrease) in cash and cash equivalents              19,482        (273,974)        182,075

Cash and cash equivalents at beginning of year                   389,931         663,905         481,830
                                                             -----------     -----------    ------------

CASH AND CASH EQUIVALENTS AT END OF YEAR                     $   409,413     $   389,931    $    663,905
                                                             ===========     ===========    ============

SIGNIFICANT NON-CASH INVESTING ACTIVITIES

Unrealized gain (loss) on investments in bonds              
    available-for-sale, net                                  $   (87,008)     $  107,692     $  (202,799)
                                                             ===========      ==========     =========== 
    

Increase in capital contributions payable                     $  206,881                     $ 1,402,327
                                                              ==========                     ===========


See reconciliation of net loss to net cash used in operating  activities on page
21.

</TABLE>


                                See Notes to Financial Statements.






<PAGE>
<TABLE>
<CAPTION>

                             AMERICAN TAX CREDIT PROPERTIES III L.P.
                              STATEMENTS OF CASH FLOWS - (Continued)
                            YEARS ENDED MARCH 30, 1997, 1996 AND 1995



                                                                 1997            1996            1995
                                                           ------------------------------------------
RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING
    ACTIVITIES
<S>                                                        <C>             <C>             <C>
Net loss                                                   $ (2,718,536)   $ (3,443,977)   $ (3,611,978)

Adjustments to reconcile net loss to net cash used in
    operating activities

    Equity in loss of investment in local partnerships       2,509,806       3,249,195       3,396,272
    Amortization of organization costs                                           3,125          15,000
    Amortization of net premium on investments in bonds         16,852          18,640          22,646
    Accretion of zero coupon bonds                             (88,256)        (86,046)        (88,254)
    Decrease (increase) in interest receivable                   2,835         (11,577)          8,008
    Increase in accounts payable and accrued expenses          144,236         142,717         131,937
    Increase in payable to general partner                     130,571         130,571         105,571
    Decrease in other liabilities                               (4,750)         (4,750)         (4,750)
                                                           --------------- --------------- --------------- 

NET CASH USED IN OPERATING ACTIVITIES                      $        (7,242)$        (2,102)$      (25,548)
                                                           =============== =============== ============== 

</TABLE>















                                See Notes to Financial Statements.






<PAGE>

                             AMERICAN TAX CREDIT PROPERTIES III L.P.
                                  NOTES TO FINANCIAL STATEMENTS
                                  MARCH 30, 1997, 1996 AND 1995


1.    Organization, Purpose and Summary of Significant Accounting Policies

      American Tax Credit Properties III L.P. (the  "Partnership") was formed on
      September  21,  1989 and the  Certificate  of Limited  Partnership  of the
      Partnership   was  filed  under  the  Delaware   Revised  Uniform  Limited
      Partnership  Act. There was no operating  activity until  admission of the
      limited  partners on June 13, 1990. The  Partnership  was formed to invest
      primarily in leveraged low-income  multifamily  residential complexes (the
      "Property" or  "Properties")  which qualify for the  low-income tax credit
      established  by Section 42 of the Tax Reform Act of 1986 (the  "Low-income
      Tax  Credit"),  through  the  acquisition  of limited  partnership  equity
      interests (the "Local Partnership  Interests") in partnerships (the "Local
      Partnership"  or  "Local   Partnerships")  that  are  the  owners  of  the
      Properties. Richman Tax Credit Properties III L.P. (the "General Partner")
      was formed on September 21, 1989 to act as the sole general partner of the
      Partnership.

      Basis of Accounting and Fiscal Year

      The  Partnership's   records  are  maintained  on  the  accrual  basis  of
      accounting  for both financial  reporting and tax purposes.  For financial
      reporting  purposes,  the Partnership's  fiscal year ends March 30 and its
      quarterly  periods end June 29,  September  29 and  December 30. The Local
      Partnerships have a calendar year for financial  reporting  purposes.  The
      Partnership  and the  Local  Partnerships  each have a  calendar  year for
      income tax purposes.

      The  Partnership  accounts for its  investment  in Local  Partnerships  in
      accordance  with the equity method of accounting (see Note 5), under which
      the  investment is carried at cost which  includes  capital  contributions
      payable,  and is  adjusted  for  the  Partnership's  share  of  the  Local
      Partnership's   results  of  operations  and  by  any  cash  distributions
      received. Equity in loss of each investment in Local Partnership allocated
      to the  Partnership  is  recognized  to the  extent  of the  Partnership's
      investment balance in each Local Partnership. Any equity in loss in excess
      of  the  Partnership's  investment  balance  in  a  Local  Partnership  is
      allocated  to other  partners'  capital  in each such  Local  Partnership.
      Previously  unrecognized  equity  in  loss  of any  Local  Partnership  is
      recognized  in the fiscal year in which equity in income is earned by such
      Local Partnership. Distributions received subsequent to the elimination of
      an investment balance for any such Local Partnership are recorded as other
      income from Local Partnerships.

      Use of Estimates

      The  preparation  of financial  statements  in conformity  with  generally
      accepted  accounting  principles requires management to make estimates and
      assumptions that affect the reported amounts of assets and liabilities and
      disclosure  of  contingent  assets  and  liabilities  at the  date  of the
      financial  statements  and the  reported  amounts of revenue and  expenses
      during the  reporting  period.  Actual  results  could  differ  from those
      estimates.

      Adoption of Accounting Standard

      On  March  31,  1996,  the  Partnership  adopted  Statement  of  Financial
      Accounting  Standards  ("SFAS") No. 121,  "Accounting  for  Impairment  of
      Long-Lived  Assets and for Long-Lived  Assets to be Disposed of." SFAS No.
      121 requires that long-lived assets and certain  identifiable  intangibles
      held and used by an entity be reviewed for impairment  whenever  events or
      changes in circumstances indicate that the carrying amount of an asset may
      not be  recoverable.  The  adoption  of SFAS  No.  121 has not  materially
      affected the Partnership's reported earnings,  financial condition or cash
      flows.

      Cash and Cash Equivalents

      For purposes of the statements of cash flows,  the  Partnership  considers
      all highly liquid investments purchased with an original maturity of three
      months or less at the date of acquisition to be cash equivalents. Cash and
      cash equivalents are stated at cost which approximates market value.





<PAGE>
                             AMERICAN TAX CREDIT PROPERTIES III L.P.
                           NOTES TO FINANCIAL STATEMENTS - (Continued)
                                  MARCH 30, 1997, 1996 AND 1995


1.   Organization, Purpose and Summary of Significant 
     Accounting Policies (continued)

    Restricted Cash

    Restricted  cash is set  aside to make the  Partnership's  required  capital
    contributions to Local Partnerships (see Notes 3 and 5).

    Investments in Bonds Available-For-Sale

    Investments in bonds classified as available-for-sale  represent investments
    in bonds that the  Partnership  intends to hold for an indefinite  period of
    time but not  necessarily  to maturity.  Any decision to sell an  investment
    classified  as  available-for-sale   would  be  based  on  various  factors,
    including  significant  movements  in interest  rates and  liquidity  needs.
    Investments in bonds  available-for-sale are carried at estimated fair value
    and  unrealized  gains or losses are  reported  as a separate  component  of
    partners' equity (deficit).

    Premium/Discount on Investments

    Premiums  and  discounts  on  investments  in bonds  available-for-sale  are
    amortized  (accreted)  using the  straight-line  method over the life of the
    investment.  Amortized premiums offset interest revenue, while the accretion
    of  discounts  and zero  coupon  bonds are  included  in  interest  revenue.
    Unamortized  premiums and unaccreted discounts of investments redeemed prior
    to maturity are offset against, or included in, interest revenue.

    Gain (Loss) on Redemption or Sale of Investments

    Realized  gain  (loss)  on  redemption  or  sale  of  investments  in  bonds
    available-for-sale  are included in, or offset against,  interest revenue on
    the basis of the adjusted cost of each specific investment redeemed or sold.

    Organization Costs

    Organization  costs were  amortized on a  straight-line  basis over five (5)
    years;  such costs  became fully  amortized  during the year ended March 30,
    1996.

    Income Taxes

    No provision  for income taxes has been made because all income,  losses and
    tax credits are allocated to the partners for inclusion in their  respective
    tax returns. In accordance with SFAS No. 109, "Accounting for Income Taxes,"
    the  Partnership  has  included  in Note 7 certain  disclosures  related  to
    differences in the book and tax bases of accounting.

    Reclassifications

    Certain  reclassifications  of  amounts  have  been made to  conform  to the
    current year presentation.





<PAGE>
                             AMERICAN TAX CREDIT PROPERTIES III L.P.
                           NOTES TO FINANCIAL STATEMENTS - (Continued)
                                  MARCH 30, 1997, 1996 AND 1995


2.    Capital Contributions

      On March 12, 1990,  the  Partnership  commenced the offering of units (the
      "Units") through Merrill Lynch,  Pierce,  Fenner & Smith Incorporated (the
      "Selling Agent").  On June 13, 1990,  December 27, 1990, December 31, 1991
      and  January  23,  1992,  under  the  terms of the  Amended  and  Restated
      Agreement of Limited  Partnership  of the  Partnership  (the  "Partnership
      Agreement"),   the  General  Partner  admitted  limited  partners  to  the
      Partnership in four closings. At these closings, subscriptions for a total
      of 35,883 Units  representing  $35,883,000  in limited  partners'  capital
      contributions were accepted. In connection with the offering of Units, the
      Partnership  incurred  registration costs of $4,418,530,  of which $75,000
      was  capitalized as  organization  costs and $4,343,530 was charged to the
      limited partners' equity. The Partnership  received a capital contribution
      of $100 from the General Partner.

      Net loss is  allocated  99% to the limited  partners and 1% to the General
      Partner in accordance with the Partnership Agreement.

3.    Cash and Cash Equivalents and Restricted Cash

      As of March 30, 1997,  the  Partnership  has  $1,718,621  in cash and cash
      equivalents  and restricted  cash which are deposited in  interest-bearing
      accounts with an institution  which is not insured by the Federal  Deposit
      Insurance Corporation.

4.    Investments in Bonds Available-For-Sale

      The  Partnership  carries its  investments in bonds as  available-for-sale
      because such  investments  are used to facilitate and provide  flexibility
      for  the  Partnership's   obligations,   including  resolving   unforeseen
      contingencies  which may arise in connection with the Local  Partnerships.
      Investments in bonds  available-for-sale are reflected in the accompanying
      balance sheets at estimated fair value.

      As of March 30, 1997, certain information  concerning investments in bonds
      available-for-sale is as follows:

      <TABLE>
      <CAPTION>
                                                            Gross          Gross       Estimated
                                           Amortized     unrealized     unrealized        fair
       Description and maturity                cost         gains          losses         value
       ------------------------          ----------------------------- -------------- ---------
        <S>                              <C>            <C>            <C>            <C>
       Corporate debt securities
         Within one year                 $     76,647  $         --   $      (873)   $    75,774
         After one year through five 
           years                              486,202             77        (4,059)      82,220
         After five years through ten       
           years                              401,902           --         (18,362)      383,540
         After ten years                    1,009,978           --         (53,824)      956,154
                                         ------------   ----------------------------  ------------

                                            1,974,729                77      (77,118)    1,897,688
                                         ------------   ----------------------------  ------------
       U.S. Treasury debt securities
         After ten years                       936,323            --       (88,427)       847,896
                                         -------------  ----------------------------  -------------

       U.S. government and agency
       securities
         After ten years                       125,834            --       (16,647)       109,187
                                         -------------  ----------------------------  -------------

                                         $ 3,036,886    $           77 $   (182,192)  $ 2,854,771
                                         ===========    ============== ============   ===========
      </TABLE>





<PAGE>
<TABLE>
<CAPTION>
                             AMERICAN TAX CREDIT PROPERTIES III L.P.
                           NOTES TO FINANCIAL STATEMENTS - (Continued)
                                  MARCH 30, 1997, 1996 AND 1995



4.    Investments in Bonds Available-For-Sale (continued)

      As of  March  30,  1996,  certain  information  on  investments  in  bonds
      available-for-sale is as follows:

                                                            Gross          Gross       Estimated
                                           Amortized     unrealized     unrealized       fair
       Description and maturity               cost          gains          losses          value
       <S>                               <C>            <C>            <C>            <C>
       Corporate debt securities
         Within one year                 $    201,946   $       --     $      (478)   $   201,468
         After one year through fiveyears     466,485         2,542           (336)       468,691
         After five years through ten years   507,639         --           (16,252)       491,387
         After ten years                    1,010,603         5,126        (45,239)       970,490
                                         ------------     ----------   ------------   -----------
                                                              

                                            2,186,673            7,668         (62,305)   2,132,036
                                         ------------     -------------    ------------   ----------
                                                          
                                                         

       U.S. Treasury debt securities
         After ten years                      852,871            --         (25,990)      826,881
                                         ------------   ---------------------------   -----------

       U.S. government and agency
       securities
         After ten years                      125,938            --         (14,480)       111,458
                                         ------------   ---------------------------   ------------

                                         $ 3,165,482      $    7,668   $  (102,775)   $ 3,070,375
                                         ===========      ============  ===========    ===========
                                                         
                                                         
      </TABLE>

5.    Investment in Local Partnerships

      As of March 30, 1997, the Partnership owns a limited partnership  interest
      in the following Local Partnerships:

      <TABLE>
      <CAPTION>

       <S>    <C>
          1.  April Gardens Apartments II Limited Partnership;
          2.  Ashland Park Apartments, L.P.;
          3.  Auburn Family, L.P.;
          4.  Batesville Family, L.P.;
          5.  Bay Springs Elderly, L.P.;
          6.  Brisas del Mar Apartments Limited Partnership;
          7.  Bruce Housing Associates, L.P.;
          8.  Carrington Limited Dividend Housing Association Limited 
              Partnership;
          9.  Chestnut Park Associates, L.P.;
         10.  Chowan Senior Manor Associates Limited Partnership;
         11.  Christian Street Commons Associates;
         12.  Country View Apartments;
         13.  Desarrollos de Belen Limited Partnership;
         14.  Desarrollos de Emaus Limited Partnership;
         15.  Ellinwood Heights Apartments, L.P.;
         16.  Fulton Street Houses Limited Partnership;
         17.  Hayes Run Limited Partnership;
         18.  Howard L. Miller Sallisaw Apartments II, L.P.;
         19.  Hurlock Meadow Limited Partnership;
         20.  Ivy Family, L.P.;
         21.  Justin Associates;
         22.  LaBelle Commons, Ltd.;
         23.  Lawrence Road Properties, Ltd.;
      </TABLE>





<PAGE>
                             AMERICAN TAX CREDIT PROPERTIES III L.P.
                           NOTES TO FINANCIAL STATEMENTS - (Continued)
                                  MARCH 30, 1997, 1996 AND 1995


5.   Investment in Local Partnerships (continued)
6.
      <TABLE>
      <CAPTION>

       <S>    <C>
         24.  Loma Del Norte Limited Partnership;
         25.  Long Reach Associates Limited Partnership;
         26.  Mirador del Toa Limited Partnership;
         27.  Moore Haven Commons, Ltd.;
         28.  NP-89 Limited Dividend Housing Association Limited Partnership;
         29.  Nash Hill Associates, Limited Partnership;
         30.  North Calhoun City, L.P.;
         31.  Orange City Plaza, Limited Partnership;
         32.  Puerta del Mar Limited Partnership;
         33.  Purvis Heights Properties, L.P.;
         34.  Queen Lane Investors;
         35.  Somerset Manor, Ltd.;
         36.  Sugar Cane Villas, Ltd.;
         37.  Summerfield Apartments Limited Partnership;
         38.  Sydney Engel Associates L.P.(formerly  known  as  Sydney  Engel
              Associates);
         39.  Union Valley Associates Limited Partnership;
         40.  Walnut Grove Family, L.P.;
         41.  Waynesboro Apartments Limited Partnership;
         42.  West Calhoun City, L.P.; and
         43.  Westminster Apartments Limited Partnership.

      </TABLE>

      Although the Partnership  generally owns a 98.9%-99%  limited  partnership
      interest in the Local  Partnerships,  the  Partnership  and  American  Tax
      Credit Properties II L.P. ("ATCP II"), a Delaware limited  partnership and
      an affiliate of the Partnership,  together,  in the aggregate,  acquired a
      99% Local Partnership Interest in certain Local Partnerships, as follows:

      <TABLE>
      <CAPTION>

               <S>                                 <C>             <C>
                                                       The
                                                    Partnership        ATCP II
               Batesville Family, L.P.              61.75%            37.25%
               Bruce Housing Associates, L.P.       61.75             37.25
               Carrington Limited Dividend
                   Housing Association Limited 
                   Partnership                      65.95             33.05
               Ivy Family, L.P.                     61.75             37.25
               Lawrence Road Properties, Ltd.       61.75             37.25
               Mirador del Toa Limited              
                   Partnership                      59.06             39.94
               Purvis Heights Properties, L.P.      61.75             37.25
               Queen Lane Investors                 48.50             50.50
      </TABLE>

The Properties are principally  comprised of subsidized and leveraged low-income
multifamily  residential  complexes  located  throughout  the United  States and
Puerto Rico. The required  holding  period of each  Property,  in order to avoid
Low-income  Tax Credit  recapture,  is fifteen  years from the year in which the
Low-income  Tax Credits  commence  on the last  building  of the  Property  (the
"Compliance Period").  The rents of the Properties are controlled by federal and
state agencies  pursuant to applicable laws and regulations  (see Note 8). Under
the terms of each of the forty-three Local Partnership's partnership agreements,
the  Partnership  has  committed  to make capital  contribution  payments in the
aggregate  amount of $29,264,476,  of which the Partnership has paid $27,955,268
and $1,309,208 are  outstanding.  Restricted  cash in the  accompanying  balance
sheet as of March 30, 1997 represents such  outstanding  capital  contributions.
The outstanding  capital  contributions are payable upon two Local Partnerships'
satisfaction of specified conditions related






<PAGE>
                             AMERICAN TAX CREDIT PROPERTIES III L.P.
                           NOTES TO FINANCIAL STATEMENTS - (Continued)
                                  MARCH 30, 1997, 1996 AND 1995



5.   Investment in Local Partnerships (continued)

    to  operations.  As of  December  31,  1996,  the  Local  Partnerships  have
    outstanding  mortgage and construction loans payable totaling  approximately
    $87,351,000   and   accrued   interest   payable  on  such  loans   totaling
    approximately $1,783,000,  which are secured by security interests and liens
    common to mortgage and construction  loans on the Local  Partnerships'  real
    property and other assets.

    Equity  in loss of  investment  in  Local  Partnerships  is  limited  to the
    Partnership's investment balance in each Local Partnership;  any such excess
    is applied to other  partners'  capital in any such Local  Partnership  (see
    Note 1). The amount of such excess losses applied to other partners' capital
    was  $534,104,  $175,282  and $6,396 for the years ended  December 31, 1996,
    1995 and 1994,  respectively,  as reflected in the  combined  statements  of
    operations of the Local Partnerships reflected herein Note 5.

    The combined  balance  sheets of the Local  Partnerships  as of December 31,
    1996  and  1995 and the  combined  statements  of  operations  of the  Local
    Partnerships  for the  years  ended  December  31,  1996,  1995 and 1994 are
    reflected on pages 28 and 29, respectively.






<PAGE>
<TABLE>
<CAPTION>
                             AMERICAN TAX CREDIT PROPERTIES III L.P.
                           NOTES TO FINANCIAL STATEMENTS - (Continued)
                                  MARCH 30, 1997, 1996 AND 1995



5.    Investment in Local Partnerships (continued)

      The combined  balance sheets of the Local  Partnerships as of December 31,
      1996 and 1995 are as follows:

                                                                     1996              1995
                                                              -----------------------------
       ASSETS
       <S>                                                    <C>               <C>
       Cash and other investments                             $   1,340,942   $     1,392,146
       Rental receivable                                            354,108           310,169
       Capital contributions receivable                           1,309,208         1,102,327
       Escrow deposits and reserves                               3,763,306         3,403,860
       Land                                                       3,964,692         3,964,692
       Buildings and improvements (net of accumulated
         depreciation of $23,212,364 and $19,100,770)            92,443,378        96,409,439
       Intangible assets (net of accumulated amortization
         of $1,039,889 and $948,812)                                748,879           854,837
       Other                                                        772,465           747,972
                                                              ----------------- -----------------

                                                              $ 104,696,978      $ 108,185,442
                                                              =============      =============

       LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

       Liabilities

         Accounts payable and accrued expenses                $     512,801   $        608,574
         Due to related parties                                   5,127,931          5,363,967
         Mortgage and construction loans                         87,351,443         87,656,301
         Notes payable                                               70,804             38,848
         Accrued interest                                         1,782,695          1,524,375
         Other                                                      557,856            584,408
                                                              ----------------- -----------------

                                                                 95,403,530        95,776,473
       Partners' equity (deficit)

         American Tax Credit Properties III L.P.
           Capital contributions, net of distributions
             (includes receivable of $1,309,208 and              
             $1,102,327)                                          29,079,605        28,908,501 
           Cumulative loss                                       (18,164,445)      (15,654,639)
                                                              --------------    -------------- 

                                                                   10,915,160        13,253,862

         General partners and other limited partners,
           including ATCP II
           Capital contributions, net of distributions              764,757            791,395
           Cumulative loss                                       (2,386,469)        (1,636,288)
                                                              ---------------   --------------- 

                                                                 (1,621,712)          (844,893)
                                                              ---------------   ---------------- 

                                                                  9,293,448         12,408,969

                                                              $ 104,696,978      $ 108,185,442
                                                              =============      =============
</TABLE>





<PAGE>
<TABLE>
<CAPTION>
                             AMERICAN TAX CREDIT PROPERTIES III L.P.
                           NOTES TO FINANCIAL STATEMENTS - (Continued)
                                  MARCH 30, 1997, 1996 AND 1995



5.    Investment in Local Partnerships (continued)

      The combined  statements of operations of the Local  Partnerships  for the
      years ended December 31, 1996, 1995 and 1994 are as follows:


                                                   1996                 1995                1994
                                              ---------------      ---------------     ---------
       REVENUE
       <S>                                   <C>                  <C>                 <C>
       Rental                                  $ 10,325,782        $ 10,245,866         $  9,928,011
       Interest and other                           437,813              377,903             326,102
                                             --------------       --------------      --------------

       TOTAL REVENUE                             10,763,595          10,623,769           10,254,113
                                               ------------        ------------         ------------

       EXPENSES

       Administrative                             2,121,842           2,158,197            2,069,886
       Utilities                                  1,018,174             966,013            1,020,047
       Operating, maintenance and other           1,987,209           2,150,242            1,824,693
       Taxes and insurance                        1,249,956           1,149,897            1,136,319
       Interest (including amortization of
         $105,969, $192,541 and  $201,351)        3,534,807           3,677,468            3,711,332
       Depreciation                               4,111,594           4,199,670            4,158,262
                                             --------------       --------------      --------------

       TOTAL EXPENSES                            14,023,582          14,301,487           13,920,539
                                              -------------       -------------        -------------

       NET LOSS                               $  (3,259,987)      $  (3,677,718)        $ (3,666,426)
                                              =============       =============         ============ 

       NET LOSS ATTRIBUTABLE TO
          American Tax Credit Properties      $  (2,509,806)      $  (3,249,195)        $ (3,396,272)
          III L.P.
          General partners and other
           limited  partners,   including  
           ATCP  II, which includes specially
           allocated items of net income to
           certain general partners of $2,128,
           $17,411 and $23,771, and $534,104,
           $175,282 and $6,396 of American Tax     (750,181)           (428,523)            (270,154)
                                              -------------       -------------        ------------- 
           Credit Properties III L.P. loss
           in excess of investment

                                               $ (3,259,987)       $ (3,677,718)        $ (3,666,426)
                                               ============        ============         ============ 
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                                  AMERICAN TAX CREDIT PROPERTIES III L.P.
                                NOTES TO FINANCIAL STATEMENTS - (Continued)
                                       MARCH 30, 1997, 1996 AND 1995

5.    Investment in Local Partnerships (continued)

      Investment  and capital  contribution  activity with respect to each Local
      Partnership for the year ended March 30, 1997 is as follows:
                                                                           Cash
                                   Investment                           distribution Investment
                                   in Local    Investment Partnership's   received     in Local     Capital
                                   Partnership during      equity in     during the  Partnership contributions
                                   balance     the year   loss for the      year       balance     payable as
                                     as of       ended     year ended      ended        as of         of
 Name of Local Partnership         March 30,   March       December 31,   March 30,   March 30,    March 30,
                                      1996     30, 1997      1996            1997        1997        1997
 --------------------------------- ----------- ---------- -------------- ----------- ----------- ------------
 <S>                               <C>         <C>        <C>            <C>         <C>         <C>
 April Gardens Apartments II
   Limited Partnership                12,149  $--    $    (12,149)      $  --       $     --    $   --
 Ashland Park Apartments, L.P.        78,159   --         (22,138)         --           56,021      --
 Auburn Family, L.P.                  64,880   --         (14,339)         --           50,541      --
 Batesville Family, L.P.              30,768   --         (30,768) (1)     --           --          --
 Bay Springs Elderly, L.P.           116,684   --         (23,229)         --           93,455      --
 Brisas del Mar Apartments  
   Limited Partnership                88,088   --         (88,088) (1)     --           --          --
 Bruce Housing Associates, L.P.       69,671   --         (23,153)         --           46,518      --
 Carrington Limited Dividend
   Housing Association Limited   
   Partnership                     1,292,293   --         (166,243)        --        1,126,050      --
 Chestnut Park Associates, L.P.    1,820,198   --         (473,949)        --        1,346,249      --
 Chowan Senior Manor Associates
   Limited Partnership               122,700   --         (58,785)        (1,596)       62,319      --
 Christian Street Commons
   Associates                        452,959   --         (52,726)         --          400,233      --
 Country View Apartments             212,279   --         (26,668)         --          185,611      --
 Desarrollos de Belen Limited       
    Partnership                      219,370   --         (58,397)         --          160,973      --
 Desarrollos de Emaus Limited 
    Partnership                      326,694   --         (84,054)         --          242,640      --
 Ellinwood Heights Apartments,L.P.    64,847   --         (24,830)         --           40,017      --
 Fulton Street Houses Limited    
   Partnership                    1,068,793   --         (218,233)        --          850,560      --
 Hayes Run Limited Partnership         --      --           --     (2)     --           --          --
 Howard L. Miller Sallisaw 
     Apartments II, L.P.             56,318   --         (20,055)         --           36,263      --
 Hurlock Meadow Limited  Partnership 44,006   --         (33,759)        (1,500)        8,747      84,433
 Ivy Family, L.P.                     50,887   --         (16,414)         --           34,473      --
 Justin Associates                 1,276,798   --         (145,782)        --        1,131,016      --
 LaBelle Commons, Ltd.               131,459   --         (26,654)         --          104,805      --
 Lawrence Road Properties, Ltd.       11,618   --         (8,291)          --            3,327      --
 Loma Del Norte Limited Partnership  187,621   --         (34,564)        (4,000)      149,057      --
 Long Reach Associates Limited 
   Partnership                       257,434   --         (37,287)         --          220,147      --
 Mirador del Toa Limited Partnership  36,843   --         (36,843) (1)     --           --          --
 Moore Haven Commons, Ltd.             --      --           --     (2)     --           --          --
 NP-89 Limited Dividend Housing
   Association Limited Partnership 1,752,636   --         (97,949)       (10,000)    1,644,687      --
 Nash Hill Associates, Limited 
   Partnership                       217,456   --         (24,790)         --          192,666      --
 North Calhoun City, L.P.             96,558   --         (14,396)         --           82,162      --
 Orange City Plaza, Limited  
    Partnership                      400,715   --         (7,036)         (2,574)      391,105      --
 Puerta del Mar Limited Partnership   75,079   --         (75,079) (1)     --           --          --
  Purvis Heights Properties, L.P.     77,168   --         (5,806)          --           71,362      --
 Queen Lane Investors                327,426   --         (53,661)        (5,648)      268,117      --
 Somerset Manor, Ltd.                 25,927   --         (25,927) (1)     --           --          --
 Sugar Cane Villas, Ltd.              81,185   --         (77,898) (1)    (3,287)       --          --
 Summerfield Apartments Limited
    Partnership                      776,800   --         (55,412)        (5,000)      716,388      --
 Sydney Engel Associates L.P.          --      206,881    (206,881) (1)    --           --       1,224,775
 Union Valley Associates Limited 
   Partnership                       145,809   --         (27,239)         --          118,570      --
 Walnut Grove Family, L.P.            65,309   --         (25,741)         --           39,568      --
 Waynesboro Apartments Limited  
   Partnership                       114,774   --         (17,797)         --           96,977      --
 West Calhoun City, L.P.             142,592   --         (22,649)         --          119,943      --
 Westminster Apartments Limited   
    Partnership                      848,644   -          (34,147)         --          814,4        --
                                   ------------------------------------- ---------------------------------------
   
                                   $ 13,241,594$  206,881 $ (2,509,806)  $  (33,605)$ 10,905,064$ 1,309,208
                                   ====================== ============   =========== =======================
</TABLE>

(1) The Partnership's  equity in loss of an investment in a Local Partnership is
limited to the remaining  investment  balance.  
(2) Additional equity in loss of investment is not allocated to the Partnership
until equity in income is earned.

<PAGE>
<TABLE>
<CAPTION>
                                  AMERICAN TAX CREDIT PROPERTIES III L.P.
                                NOTES TO FINANCIAL STATEMENTS - (Continued)
                                       MARCH 30, 1997, 1996 AND 1995


5.    Investment in Local Partnerships (continued)

      Investment  and capital  contribution  activity with respect to each Local
      Partnership for the year ended March 30, 1996 is as follows:


                                       
                                       Investment    Partnership's       Cash      Investment
                                         in Local      equity in     distributions  in Local      Capital
                                       Partnership   income (loss)     received   Partnership  contributions
                                       balance as       for the       during the   balance as    payable as
                                           of         year ended      year ended       of            of
                                        March 30,     December 31,    March 30,     March 30,     March 30,
 Name of Local Partnership                1995            1995           1996         1996          1996
 ------------------------------------ ------------- --------------- ------------- ------------- ------------
 <S>                                  <C>           <C>             <C>           <C>           <C>
 April Gardens Apartments II
   Limited Partnership            $      94,893   $ (81,784)  $       (960) $         12,149   $   --
 Ashland Park Apartments, L.P.           90,769     (12,610)            --            78,159       --
 Auburn Family, L.P.                     64,934        (54)             --            64,880       --
 Batesville Family, L.P.                 75,902     (45,134)            --            30,768       --
 Bay Springs Elderly, L.P.              131,619     (14,935)            --           116,684       --
 Brisas del Mar Apartments Limited 
   Partnership                          204,786     (115,378)         (1,320)         88,088       --
 Bruce Housing Associates, L.P.          88,553     (18,388)            (494)         69,671       --
 Carrington Limited Dividend
   Housing Association Limited
    Partnership                       1,437,903     (145,610)           --         1,292,293       --
 Chestnut Park Associates, L.P.       2,275,680     (455,482)           --         1,820,198       --
 Chowan Senior Manor Associates
   Limited Partnership                  158,212     (32,320)          (3,192)        122,700       --
 Christian Street Commons Associates    495,654     (42,695)            --           452,959       --
 Country View Apartments                237,968     (25,689)            --           212,279       --
 Desarrollos de Belen Limited
   Partnership                          280,598     (61,228)            --           219,370       --
 Desarrollos de Emaus Limited
   Partnership                          409,544     (82,850)            --           326,694       --
 Ellinwood Heights Apartments, L.P.      91,892     (27,045)            --            64,847       --
 Fulton Street Houses Limited 
   Partnership                        1,309,739     (240,946)           --         1,068,793       --
 Hayes Run Limited Partnership              787         (787) (1)       --             --          --
 Howard L. Miller Sallisaw
   Apartments II, L.P.                   80,166     (23,848)            --            56,318       --
 Hurlock Meadow Limited Partnership      82,243     (36,737)          (1,500)         44,006       84,433
 Ivy Family, L.P.                        64,924     (13,642)            (395)         50,887       --
 Justin Associates                    1,406,098     (129,300)           --         1,276,798       --
 LaBelle Commons, Ltd.                  164,057     (30,098)          (2,500)        131,459       --
 Lawrence Road Properties, Ltd.          42,826     (31,208)            --            11,618       --
 Loma Del Norte Limited Partnership     208,564     (20,943)            --           187,621       --
 Long Reach Associates Limited 
   Partnership                          309,437     (52,003)            --           257,434       --
 Mirador del Toa Limited Partnership     82,874     (45,459)            (572)         36,843       --
 Moore Haven Commons, Ltd.                --            --    (2)       --             --          --
 NP-89 Limited Dividend Housing
   Association Limited Partnership    1,918,484     (165,848)           --         1,752,636       --
 Nash Hill Associates, Limited  
   Partnership                          244,677     (27,221)            --           217,456       --
 North Calhoun City, L.P.               102,770     (6,212)             --            96,558       --
 Orange City Plaza, Limited Partnership 411,967     (8,777)           (2,475)        400,715       --
 Puerta del Mar Limited Partnership     246,717     (170,318)         (1,320)         75,079       --
 Purvis Heights Properties, L.P.         98,771     (21,603)            --            77,168       --
 Queen Lane Investors                   379,427     (49,547)          (2,454)        327,426       --
 Somerset Manor, Ltd.                    56,116     (30,189)            --            25,927       --
 Sugar Cane Villas, Ltd.                192,018     (110,833)           --            81,185       --
 Summerfield Apartments Limited
    Partnership                         839,752     (52,952)         (10,000)        776,800       --
 Sydney Engel Associates L.P.           686,429     (683,929) (1)     (2,500)          --       1,017,894
 Union Valley Associates Limited 
   Partnership                          182,431     (36,622)            --           145,809       --
 Walnut Grove Family, L.P.              102,516     (37,207)            --            65,309       --
 Waynesboro Apartments Limited  
   Partnership                          156,758     (41,984)            --           114,774       --
 West Calhoun City, L.P.                162,903     (20,311)            --           142,592       --
 Westminster Apartments Limited  
   Partnership                           848,113        531            --            848,644            --
                                      ------------------------------------------------------------------------
 
                                      $ 16,520,471  $ (3,249,195)   $  (29,682)   $ 13,241,594  $ 1,102,327
                                      ============  ============    ==========    ============  ===========
</TABLE>

(1)      The  Partnership's  equity  in loss of an  investment  in a Local
         Partnership  is  limited  to the remaining investment balance.
(2)      Additional  equity in loss of investment is not allocated to the 
         Partnership until equity in income is earned.

<PAGE>
<TABLE>
<CAPTION>

                                  AMERICAN TAX CREDIT PROPERTIES III L.P.
                                NOTES TO FINANCIAL STATEMENTS - (Continued)
                                       MARCH 30, 1997, 1996 AND 1995

5.    Investment in Local Partnerships (continued)

      Investment  and capital  contribution  activity with respect to each Local
      Partnership for the year ended March 30, 1995 is as follows:

                                                 Capital                                            Investment                
                                   Investment contributions                                Cash      in Local                  
                                   in Local       paid                    Partnership's distribution Partnership
                                   balance      the year   contributions  loss for the  during the    balance
                                     as of       ended       payable as    year ended   year ended    as of
                                    March 30,   March 30,   of March 30,    December     March 30,  March 30,
Name of Local Partnership            1994         1995         1995         31, 1994       1995       1995
---------------------------------- ---------- ----------- -------------- ------------- ----------- ----------
<S>                                <C>        <C>         <C>            <C>           <C>         <C>
April Gardens Apartments II
  Limited Partnership              $206,359    $  --    $       --  $    (109,546)$    (1,920)$    94,893
Ashland Park Apartments, L.P.       137,112       --            --       (44,903)       (1,440)      90,769
Auburn Family, L.P.                  78,132       --            --       (13,198)           --       64,934
Batesville Family, L.P.             118,397       --            --       (42,061)         (434)      75,902
Bay Springs Elderly, L.P.           146,391       --            --       (14,292)         (480)     131,619
Brisas del Mar Apartments 
   Limited Partnership              310,154       --            --       (102,728)      (2,640)     204,786
Bruce Housing Associates, L.P.      118,275       --            --       (29,322)         (400)      88,553
Carrington Limited Dividend
Housing Association Limited 
  Partnership                      1,583,809      --            --       (145,906)          --     1,437,903
Chestnut Park Associates, L.P.     2,433,244      --        300,000      (457,564)          --     2,275,680
Chowan Senior Manor Associates
  Limited Partnership               195,096       --            --       (36,884)           --      158,212
Christian Street Commons
  Associates                       539,898        --            --       (44,244)           --      495,654
Country View Apartments             258,281       --            --       (20,313)           --      237,968
Desarrollos de Belen Limited 
  Partnership                       200,854     125,439         --       (45,695)           --      280,598
Desarrollos de Emaus Limited  
  Partnership                       139,548     362,758         --       (92,762)           --      409,544
Ellinwood Heights Apartments,L.P.   111,009       --            --       (18,157)         (960)      91,892
Fulton Street Houses Limited      
  Partnership                     1,520,074      --            --       (210,335)          --     1,309,739
Hayes Run Limited Partnership        64,221       --            --       (63,434)           --          787
Howard L. Miller Sallisaw 
  Apartments II, L.P.               91,805       --            --       (11,159)         (480)      80,166
Hurlock Meadow Limited Partnership  34,695       --         84,433      (35,385)       (1,500)      82,243
Ivy Family, L.P.                     81,247       --            --       (16,003)         (320)      64,924
Justin Associates                  1,534,352      --            --       (128,254)          --     1,406,098
LaBelle Commons, Ltd.               196,646       --            --       (30,089)       (2,500)     164,057
Lawrence Road Properties, Ltd.       65,530       --            --       (22,487)         (217)      42,826
Loma Del Norte Limited
  Partnership                       240,942       --            --       (28,378)       (4,000)     208,564
Long Reach Associates Limited 
  Partnership                       334,477       --            --       (25,040)           --      309,437
Mirador del Toa Limited Partnership 134,731       --            --       (50,713)       (1,144)      82,874
Moore Haven Commons, Ltd.            44,720       --            --       (44,720) (1)       --        --
NP-89 Limited Dividend Housing
  Association Limited Partnership  1,964,431      --            --       (35,947)      (10,000)    1,918,484
Nash Hill Associates, Limited 
  Partnership                       269,465       --            --       (24,788)           --      244,677
North Calhoun City, L.P.            116,370       --            --       (13,240)         (360)     102,770
Orange City Plaza, Limited 
  Partnership                       424,677       --            --       (10,185)       (2,525)     411,967
Puerta del Mar LimitedPartnership   333,689       --            --       (84,332)       (2,640)     246,717
Purvis Heights Properties, L.P.     129,483       --            --       (30,350)         (362)      98,771
Queen Lane Investors                435,742       --            --       (56,315)           --      379,427
Somerset Manor, Ltd.                 90,330       --            --       (34,214)           --       56,116
Sugar Cane Villas, Ltd.             298,348       --            --       (93,622)      (12,708)     192,018
Summerfield Apartments Limited 
  Partnership                       897,111       --            --       (52,359)       (5,000)     839,752
Sydney Engel Associates L.P.        473,258       --      1,017,894      (802,223)      (2,500)     686,429
Union Valley Associates Limited
  Partnership                       232,808       --            --       (50,377)           --      182,431
Walnut Grove Family, L.P.           126,360       --            --       (23,364)         (480)     102,516
Waynesboro Apartments Limited
  Partnership                       213,649       --            --       (56,891)           --      156,758
West Calhoun City, L.P.             184,334       --            --       (20,871)         (560)     162,903
Westminster Apartments Limited
  Partnership                       971,735       --            --      (123,622)                    848,113
                                   -------------------------------------------------------------------------------
 
                                $ 18,081,789  $ 488,197   $ 1,402,327    $ (3,396,272)  $  (55,570) $ 16,520,471
                                  ======================   ===========    ============  =========== ============

</TABLE>

(1)   The  Partnership's  equity in loss of an investment in a Local Partnership
      is limited to the remaining investment balance.

<PAGE>
<TABLE>
<CAPTION>
                                  AMERICAN TAX CREDIT PROPERTIES III L.P.
                                NOTES TO FINANCIAL STATEMENTS - (Continued)
                                       MARCH 30, 1997, 1996 AND 1995


5.    Investment in Local Partnerships (continued)

      Property information for each Local Partnership as of December 31, 1996 is
as follows:

                                               Mortgage &
                                              construction                Buildings   Accumulated
                                                 loans         Land          and      depreciation
       Name of Local Partnership                payable                  improvements
       -------------------------------------- ------------- ------------ ------------ ------------
       <S>                                    <C>           <C>          <C>          <C>
       April Gardens Apartments II Limited
         Partnership                          $2,008,084      $39,984   $2,469,537    $(603,482)
       Ashland Park Apartments, L.P.           1,044,903       50,160    1,247,739     (275,608)
       Auburn Family, L.P.                       474,003       20,000      557,595     (114,723)
       Batesville Family, L.P.                 1,446,124       52,000    1,792,091     (430,084)
       Bay Springs Elderly, L.P.                 680,053       38,000      841,698     (168,886)
       Brisas del Mar Apartments Limited
         Partnership                           2,670,432      100,280    3,227,091     (809,838)
       Bruce Housing Associates, L.P.          1,115,155       16,000    1,418,598     (354,315)
       Carrington Limited Dividend Housing
         Association Limited Partnership       3,487,158      200,000    6,359,188    (1,571,765)
       Chestnut Park Associates, L.P.          5,284,761      781,700    8,654,778    (1,806,605)
       Chowan Senior Manor Associates
         Limited Partnership                   1,271,652       86,101    1,495,884     (312,327)
       Christian Street Commons Associates       633,184       54,477    1,159,293     (181,117)
       Country View Apartments                   943,663       35,698    1,213,947     (148,618)
      Desarrollos de Belen Limited Partnership  1,892,733       96,190    2,494,877     (349,038)
       Desarrollos de Emaus LimitedPartnership  3,217,134      214,000    4,030,443     (498,543)
       Ellinwood Heights Apartments, L.P.        692,502       10,000      848,072     (183,547)
       Fulton Street Houses Limited Partnership 3,869,930            2    5,945,597    (1,040,785)
       Hayes Run Limited Partnership           1,434,682       85,060    1,474,537     (235,260)
       Howard L. Miller Sallisaw Apartments
         II, L.P.                                619,235       39,000      719,572     (162,101)
       Hurlock Meadow Limited Partnership      1,279,669       49,525    1,559,298     (321,304)
       Ivy Family, L.P.                          805,507       11,000    1,034,698     (264,504)
       Justin Associates                       2,511,407       27,472    4,342,929     (784,957)
       LaBelle Commons, Ltd.                   1,020,357       98,947    1,184,937     (200,178)
       Lawrence Road Properties, Ltd.            763,628       50,000      928,273     (214,369)
       Loma Del Norte Limited Partnership      1,446,530       84,874    1,757,151     (259,644)
       Long Reach Associates Limited
         Partnership                           1,487,788      118,446    1,868,040     (308,488)
       Mirador del Toa Limited Partnership     1,896,098      105,000    2,327,341     (586,192)
       Moore Haven Commons, Ltd.                 934,175       73,645    1,197,000     (281,595)
       NP-89 Limited Dividend Housing
         Association Limited Partnership       4,375,085      150,000    7,303,939    (1,458,692)
       Nash Hill Associates, Limited 
         Partnership                           1,478,728      123,876    1,676,137     (263,530)
       North Calhoun City, L.P.                  498,050       12,000      624,675     (128,202)
       Orange City Plaza, Limited Partnership    549,795       53,904    1,039,150     (172,506)
       Puerta del Mar Limited Partnership      2,542,593      115,000    3,046,045     (775,703)
       Purvis Heights Properties, L.P.         1,156,152       47,000    1,439,927     (329,168)
       Queen Lane Investors                    1,587,345       60,301    2,731,943     (570,265)
       Somerset Manor, Ltd.                      903,396       53,383    1,085,401     (240,659)
       Sugar Cane Villas, Ltd.                 3,329,461       58,500    4,059,461     (930,713)
       Summerfield Apartments Limited 
         Partnership                           1,827,382      195,411    2,683,173     (345,735)
       Sydney Engel Associates L.P.           17,939,501      284,305    19,436,525   (4,281,622)
       Union Valley Associates Limited 
         Partnership                           1,456,431       97,800    1,745,528     (272,610)
       Walnut Grove Family, L.P.                 851,857       30,000    1,006,847     (204,670)
       Waynesboro Apartments Limited 
         Partnership                           1,493,131       76,000    1,785,244     (304,922)
       West Calhoun City, L.P.                   789,306       18,000    1,012,925     (198,963)
       Westminster Apartments Limited
         Partnership                           1,642,683       51,651    2,828,618     (266,531)
                                              -------------------------------------------------------- 
                                             $ 87,351,443  $ 3,964,692 $115,655,742  $(23,212,364)
                                              ============  ===========  ========================== 
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                                  AMERICAN TAX CREDIT PROPERTIES III L.P.
                                NOTES TO FINANCIAL STATEMENTS - (Continued)
                                       MARCH 30, 1997, 1996 AND 1995

5.    Investment in Local Partnerships (continued)

      Property information for each Local Partnership as of December 31, 1995 is
as follows:

                                               
                                                Mortgage &                
                                               construction               Buildings   
                                                  loans                      and      Accumulated 
       Name of Local Partnership                 payable       Land      improvements depreciation
       -------------------------------------- ------------- ------------ ------------ -------------
       <S>                                    <C>           <C>          <C>          <C>
       April Gardens Apartments II Limited
         Partnership                       $  2,011,696  $     39,984 $   2,469,537$    (500,030)
       Ashland Park Apartments, L.P.          1,046,857       50,160     1,247,733      (230,040)
       Auburn Family, L.P.                      475,510       20,000       554,165       (93,769)
       Batesville Family, L.P.                1,448,254       52,000     1,792,091      (363,175)
       Bay Springs Elderly, L.P.                681,207       38,000       841,698      (137,141)
       Brisas del Mar Apartments Limited 
         Partnership                          2,675,534      100,280     3,227,091      (673,675)
       Bruce Housing Associates, L.P.         1,117,405       16,000     1,409,439      (300,301)
       Carrington Limited Dividend Housing
         Association Limited Partnership      3,507,348      200,000     6,357,704    (1,340,249)
       Chestnut Park Associates, L.P.         5,326,466      781,700     8,654,778    (1,491,425)
       Chowan Senior Manor Associates
         Limited Partnership                  1,275,291       86,101     1,495,884      (249,386)
       Christian Street Commons Associates      638,632       54,477     1,159,293      (138,813)
       Country View Apartments                  945,462       35,698     1,213,947      (114,719)
       Desarrollos de Belen Limited 
         Partnership                          1,894,869       96,190     2,494,877      (263,979)
       Desarrollos de Emaus Limited
         Partnership                          3,225,618      214,000     4,029,937      (362,161)
       Ellinwood Heights Apartments, L.P.       693,749       10,000       842,926      (152,145)
       Fulton Street Houses Limited 
         Partnership                           3,869,930            2     5,930,917      (824,592)
       Hayes Run Limited Partnership          1,437,247       85,060     1,469,712      (197,842)
       Howard L. Miller Sallisaw 
         Apartments II, L.P.                    620,236       39,000       716,694      (135,647)
       Hurlock Meadow Limited Partnership     1,282,212       49,525     1,559,298      (261,281)
       Ivy Family, L.P.                         808,796       11,000     1,027,124      (224,639)
       Justin Associates                      2,537,085       27,472     4,341,812      (625,475)
       LaBelle Commons, Ltd.                  1,022,423       98,947     1,184,937      (156,911)
       Lawrence Road Properties, Ltd.           764,960       50,000       925,919      (188,714)
       Loma Del Norte Limited Partnership     1,448,996       84,874     1,753,927      (209,162)
       Long Reach Associates Limited 
         Partnership                          1,490,305      118,446     1,827,653      (257,337)
       Mirador del Toa Limited Partnership    1,900,249      105,000     2,325,318      (488,000)
       Moore Haven Commons, Ltd.                935,631       73,645     1,197,000      (235,632)
       NP-89 Limited Dividend Housing
         Association Limited Partnership      4,438,053      150,000     7,303,939    (1,193,094)
       Nash Hill Associates, Limited 
         Partnership                          1,481,372      123,876     1,676,137      (216,503)
       North Calhoun City, L.P.                 500,448       12,000       623,327      (104,664)
       Orange City Plaza, Limited Partnership   567,879       53,904     1,039,150      (139,491)
       Puerta del Mar Limited Partnership     2,547,500      115,000     3,046,045      (646,193)
       Purvis Heights Properties, L.P.        1,158,111       47,000     1,437,402      (286,677)
       Queen Lane Investors                   1,593,985       60,301     2,731,343      (470,548)
       Somerset Manor, Ltd.                     904,953       53,383     1,073,491      (198,974)
       Sugar Cane Villas, Ltd.                3,334,953       58,500     4,059,461      (777,074)
       Summerfield Apartments Limited
         Partnership                          1,846,496      195,411     2,683,173      (274,204)
       Sydney Engel Associates L.P.          17,939,501      284,305    19,429,689    (3,572,025)
       Union Valley Associates Limited 
         Partnership                          1,458,958       97,800     1,745,528      (225,582)
       Walnut Grove Family, L.P.                853,182       30,000     1,004,476      (166,513)
       Waynesboro Apartments Limited
         Partnership                          1,495,860       76,000     1,785,244      (256,318)
       West Calhoun City, L.P.                  794,783       18,000       991,775      (160,867)
       Westminster Apartments Limited
         Partnership                          1,658,299       51,651     2,828,618      (195,803)
                                              -------------------------------------------------------- 
                                             $ 87,656,301   $ 3,964,692 $ 115,510,209  $(19,100,770)
                                              ============  ===========  ========================== 
</TABLE>

      The summary of property  activity  during the year ended December 31, 1996
is as follows:

<TABLE>
<CAPTION>

                                                      Net change during  
                                                       the year ended 
                                 Balance as of          December            Balance as of
                               December 31, 1995         31, 1996          December 31, 1996
                               -----------------    --------------------- -----------------
                                                     
                                                     
       <S>                    <C>                  <C>                  <C>
       Land                   $        3,964,692    $             -      $       3,964,692
       Buildings and                 115,510,209                145,533        115,655,742
                              ------------------   -------------------- ------------------
       improvements                   119,474,901              145,533        119,620,434
       Accumulated                    (19,100,770)          (4,111,594)       (23,212,364)
                              -------------------  -------------------  ------------------- 
       depreciation
                              $      100,374,131   $       (3,966,061)  $       96,408,070
                              ==================   ==================   ==================
</TABLE>
<PAGE>


                                  AMERICAN TAX CREDIT PROPERTIES III L.P.
                                NOTES TO FINANCIAL STATEMENTS - (Continued)
                                       MARCH 30, 1997, 1996 AND 1995


5.   Investment in Local Partnerships (continued)

    On April 18, 1997 Sydney Engel  Associates  L.P.  (formerly  known as Sydney
    Engel  Associates)  (the  "Sydney  Engel Local  Partnership")  closed on its
    permanent mortgages with the City of New York. Upon closing, Registrant paid
    the Sydney Engel Local Partnership its outstanding  capital  contribution of
    $1,224,775,  which includes an additional capital  contribution of $206,881,
    which was paid  from  reserves,  resulting  from the  delay in  closing  the
    mortgages.

6.  Transactions with General Partner and Affiliates

    For the years ended March 30,  1997,  1996 and 1995,  the  Partnership  paid
    and/or  incurred  the  following  amounts  to  the  General  Partner  and/or
    affiliates in connection with services provided to the Partnership:

<TABLE>
<CAPTION>
                                                        Years Ended March 30,
                                                  
                                           1997                 1996                  1995
                                      --------------       --------------        ---------
                                           Paid/                Paid/                Paid/
                                         incurred             incurred              incurred
      <S>                           <C>                  <C>                  <C>
      Management fees (see Note 8)      $100,000/            $100,000/             $125,000/
                                         230,571              230,571               230,571
</TABLE>


    For the years ended December 31, 1996, 1995 and 1994, the Local Partnerships
    paid and/or  incurred the following  amounts to the General  Partner  and/or
    affiliates in connection with services provided to the Local Partnerships:

<TABLE>
<CAPTION>
                                                       Years Ended December 31,
                                                   
                                           1996                  1995                 1994
                                      --------------        --------------       ---------
                                           Paid/                Paid/                 Paid/
                                         incurred              incurred             incurred

      <S>                           <C>                  <C>                  <C>
      Property development           $   --     /             $150,000/         $   --     /
      fees
                                         --                    --                   --

      Property management fees             3,599/               35,817/              35,132/
                                          35,785                35,884               33,958

      Insurance                           35,943/               37,140/              24,242/
                                          34,316                34,779               24,242
</TABLE>

    The property development fees were capitalized by the Local Partnerships.






<PAGE>
                                  AMERICAN TAX CREDIT PROPERTIES III L.P.
                                NOTES TO FINANCIAL STATEMENTS - (Continued)
                                       MARCH 30, 1997, 1996 AND 1995


7.    Taxable Loss

      A  reconciliation  of the financial  statement net loss of the Partnership
      for the years  ended March 30,  1997,  1996 and 1995 to the tax return net
      loss for the years ended December 31, 1996, 1995 and 1994 is as follows:

      <TABLE>
      <CAPTION>
                                                        1997                1996                 1995
                                                 ------------------  ------------------   -----------
       <S>                                       <C>                 <C>                  <C>
       Financial  statement  net  loss  for the
         years ended March 30,  1997,  1996 and   
         1995                                     $ (2,718,536)        $ (3,443,977)       $ (3,611,978)
         

       Add (less) net transactions occurring between:
          January 1, 1994 and March 30, 1994            --                   --                 (54,554)
          
          January 1, 1995 and March 30, 1995            --                  (52,556)             52,556
          
          January 1, 1996 and March 30, 1996           (49,819)              49,819                   --
          
          January 1, 1997 and March 30, 1997            58,090                  --                   --
                                                 ---------------     -------------------  ---------------
          
       Adjusted financial statement net loss for
         the years ended December 31, 1996, 1995    
         and 1994                                   (2,710,265)          (3,446,714)         (3,613,976)
         
       Adjustment to management fee
         pursuant to Internal Revenue Code             
         Section 267                                   130,571              130,571             130,571
         
       Differences arising from equity in
         loss of investment in Local                  
         Partnerships                                 (514,969)            (200,215)            (87,585)
         

       Other differences                                  (107)             (14,250)                3,683
                                                 ---------------     --------------       ---------------

       Tax return net loss for the years
         ended December 31, 1996, 1995 and 1994   $ (3,094,770)        $ (3,530,608)       $ (3,567,307)
                                                  ============         ============        ============ 
         
      </TABLE>


      The differences between the equity in the investment in Local Partnerships
      for tax return and  financial  reporting  purposes as of December 31, 1996
      and 1995 are as follows:

      <TABLE>
      <CAPTION>
                                                             1996               1995
                                                       ----------------   ----------
       <S>                                             <C>                <C>
       Investment in Local Partnerships - financial           
       reporting                                       $  10,915,160       $ 13,253,862
       Investment in Local Partnerships - tax             10,581,161         13,641,713
                                                       -------------      -------------
                                                       $      333,999     $    (387,851)
                                                       ==============     ============= 
</TABLE>






<PAGE>

8.    Commitments and Contingencies

      Pursuant to the Partnership Agreement,  the Partnership is required to pay
      the General  Partner an annual  management fee  ("Management  Fee") and an
      annual  additional  management fee  ("Additional  Management Fee") for its
      services  in  connection  with  the  management  of  the  affairs  of  the
      Partnership,  subject to certain provisions of the Partnership  Agreement.
      The annual  Management Fee is equal to .14% of all proceeds as of December
      31 of any year, invested or committed for investment in Local Partnerships
      plus  all  debts  of the  Local  Partnerships  related  to the  Properties
      ("Invested Assets"). The Partnership incurred a Management Fee of $161,400
      for each of the three years ended March 30,  1997.  The annual  Additional
      Management  Fee is  equal  to .06% of  Invested  Assets.  The  Partnership
      incurred  an  Additional  Management  Fee of $69,171 for each of the three
      years ended March 30, 1997.  Such  amounts are  aggregated  and  reflected
      under  the  caption   management  fees  in  the   accompanying   financial
      statements.  Unpaid Management Fees in the amount of $800,043 and $669,472
      are  recorded as payable to general  partner in the  accompanying  balance
      sheets as of March 30, 1997 and 1996, respectively.

      In addition,  pursuant to the  Partnership  Agreement,  the Partnership is
      required to pay ML Fund  Administrators  Inc., an affiliate of the Selling
      Agent, an annual  administration fee ("Administration  Fee") and an annual
      additional  administration fee ("Additional  Administration  Fee") for its
      administrative   services   provided  to  the   Partnership.   The  annual
      Administration  Fee is equal to .14% of Invested  Assets.  The Partnership
      incurred an  Administration  Fee of  $161,400  for each of the three years
      ended March 30, 1997. The annual Additional  Administration Fee is subject
      to certain provisions of the Partnership Agreement and is equal to .06% of
      Invested Assets. The Partnership incurred an Additional Administration Fee
      of $69,171 for each of the three years ended March 30, 1997.  Such amounts
      are aggregated and reflected under the caption  administration fees in the
      accompanying  financial  statements.  Unpaid  Administration  Fees  in the
      amount of $800,054  and  $669,483  are  included  in accounts  payable and
      accrued expenses in the  accompanying  balance sheets as of March 30, 1997
      and 1996, respectively.

      The  rents  of the  Properties,  many  of  which  receive  rental  subsidy
      payments,  including  payments  under Section 8 of Title II of the Housing
      and  Community  Development  Act of 1974  ("Section  8"),  are  subject to
      specific laws, regulations and agreements with federal and state agencies.
      The  subsidy  agreements  expire at  various  times  during  and after the
      Compliance Periods of the Local Partnerships. The United States Department
      of  Housing  and  Urban  Development  ("HUD")  has  issued  notices  which
      implement  provisions to renew  certain  project based Section 8 contracts
      expiring during HUD's fiscal year 1997,  where requested by an owner,  for
      an  additional  one year term  generally at or below  current rent levels,
      subject to certain  guidelines.  HUD has an additional  program which,  in
      general, provides for restructuring rents and/or mortgages where rents may
      be adjusted to market levels and mortgage  terms may be adjusted  based on
      the  reduction  in rents,  although  there may be  instances in which only
      rents,  but  not  mortgages,  are  restructured.  The  Partnership  cannot
      reasonably  predict   legislative   initiatives  and  governmental  budget
      negotiations,  the outcome of which could  result in a reduction  in funds
      available for the various federal and state administered  housing programs
      including the Section 8 program.  Such changes could adversely  affect the
      future  net  operating  income  and  debt  structure  of any or all  Local
      Partnerships  currently  receiving such subsidy or similar subsidies.  One
      Local Partnership's Section 8 contract, which covers certain rental units,
      is scheduled to expire in 1997.

9.    Fair Value of Financial Instruments

      The  following  disclosure  of  the  estimated  fair  value  of  financial
      instruments is made in accordance  with the  requirements of SFAS No. 107,
      "Disclosures  about Fair Value of Financial  Instruments."  The  estimated
      fair  value  amounts  have  been   determined   using   available   market
      information, assumptions, estimates and valuation methodologies.





<PAGE>


      Cash and Cash Equivalents and Restricted Cash

      The carrying amounts approximate fair value.

      Investments in Bonds Available-For-Sale

      Fair value is estimated  based on market quotes provided by an independent
      service as of the balance sheet dates.

      Interest Receivable

      The  carrying  amount  approximates  fair  value  due to the  terms of the
      underlying investments.






<PAGE>

                                  AMERICAN TAX CREDIT PROPERTIES III L.P.
                                NOTES TO FINANCIAL STATEMENTS - (Continued)
                                       MARCH 30, 1997, 1996 AND 1995


9.    Fair Value of Financial Instruments (continued)

      Capital Contributions Payable

      The carrying amount  approximates  fair value in accordance with the Local
      Partnerships' partnership agreements.

      Accounts Payable and Accrued Expenses and Payable to General Partner

      The carrying  amounts  approximate  fair value due to the payment terms 
      in connection with the obligations.

      The estimated  fair values of the  Partnership's  financial  instruments 
      as of March 30, 1997 and 1996 are disclosed elsewhere in the financial 
      statements.






<PAGE>

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

         None

                                                  PART III

Item 10. Directors and Executive Officers of the Registrant

Registrant  has  no  officers  or  directors.   The  General   Partner   manages
Registrant's affairs and has general responsibility and authority in all matters
affecting  its  business.  The  responsibilities  of  the  General  Partner  are
currently carried out by Richman Housing.  The executive  officers and directors
of Richman Housing are:

                                 Served in present
Name                             capacity since 1                Position held

Richard Paul Richman             September 21, 1989              President and 
                                                                 Director
Eric P. Richelson                September 21, 1989              Vice President
Neal Ludeke                      September 21, 1989              Vice President 
                                                                 and Treasurer
David A. Salzman                 September 21, 1989              Vice President
Gina S. Scotti                   September 21, 1989              Secretary

---------------------------------------------------
1Director  holds office until his successor is elected and qualified.  All 
officers serve at the pleasure of the Director.

Richard Paul  Richman,  age 49, is the sole Director and President of Richman  
Housing.  Mr.  Richman is the President and sole  stockholder of Richman 
Group.  Mr.  Richman is the Director,  President,  and principal shareholder of
WRC. Mr.  Richman is involved in the  syndication  and  management of 
residential  property. Mr. Richman is also a director of Wilder Richman  
Resources  Corp.,  an affiliate of Richman Housing and the general partner of 
Secured Income L.P., a director of Wilder Richman Historic  Corporation,  an 
affiliate of Richman  Housing and the general  partner of Wilder  Richman  
Historic  Properties  II,  L.P., a director of Richman Tax Credit  Properties 
Inc., an affiliate of Richman Housing and the general partner of the general
partner of American  Tax Credit  Properties  L.P., a director of Richman Tax 
Credits  Inc.,  an affiliate of Richman  Housing and the general  partner of 
the general  partner of American Tax Credit  Properties II L.P.and a director 
of Richman  American  Credit  Corp.,  an  affiliate  of Richman  Housing  and 
the manager of American Tax Credit Trust, a Delaware statutory business trust.

Eric P.  Richelson,  age 45, is a Vice President of Richman  Housing.  Mr. 
Richelson is President of Wilder Richman  Management  Corporation  ("WRMC") 
with  responsibility for all of WRMC's operating  activities.  In addition, 
Mr.  Richelson is a Vice  President  of R.G.  Housing  Advisors  Inc.  
("RGHA"),  an affiliate of Richman Group. Mr. Richelson's  responsibilities  in
connection with RGHA include advisory services provided to a small business 
investment company.

Neal  Ludeke,  age 39, is a Vice  President  and the  Treasurer  of  Richman 
Housing.  Mr.  Ludeke,  a Vice President and Treasurer of Richman Group, 
is engaged  primarily in the  syndication,  asset  management and finance  
operations of Richman  Group.  In addition,  Mr. Ludeke is a Vice  President 
and Treasurer of RGHA. Mr.  Ludeke's  responsibilities  in  connection  with 
RGHA  include  advisory  services  provided to a small business investment 
company and various partnership management functions.

David A.  Salzman,  age 36, is a Vice  President of Richman  Housing.  Mr.  
Salzman is  responsible  for the acquisition and  development of residential  
real estate for syndication as a Vice President of acquisitions of Richman 
Group.

Gina S. Scotti,  age 41, is the Secretary of Richman Housing.  Ms. Scotti is 
the Secretary of WRC and a Vice President  and the  Secretary  of Richman  
Group.  As the  Director  of  Investor  Services,  Ms.  Scotti is responsible
for all communications with investors .





<PAGE>

Item 11. Executive Compensation

Registrant has no officers or directors. Registrant does not pay the officers or
director of Richman  Housing any  remuneration.  During the year ended March 30,
1997,  Richman  Housing did not pay any  remuneration  to any of its officers of
director.

Item 12. Security Ownership of Certain Beneficial Owners and Management

As of May 20,  1997,  no  person or entity  was  known by  Registrant  to be the
beneficial owner of more than five percent of the Units.

Richman Housing is wholly-owned by Richard Paul Richman.

Item 13. Certain Relationships and Related Transactions

The  General  Partner  and  certain of its  affiliates  are  entitled to receive
certain   compensation,   fees,   and   reimbursement   of  expenses   and  have
received/earned fees for services provided to Registrant as described in Notes 6
and 8 to the  audited  financial  statements  included  in  Item 8 -  "Financial
Statements and Supplementary Data" herein.

Transactions with General Partner and Affiliates

The tax losses and  Low-income  Tax Credits  generated by Registrant  during the
year ended December 31, 1996  allocated to the General  Partner were $30,948 and
$55,414,  respectively.  The tax losses and Low-income Tax Credits  generated by
the General Partner during the year ended December 31, 1996 (from the allocation
of Registrant discussed above) and allocated to Richman Housing were $25,099 and
$44,601, respectively.

Indebtedness of Management.

No officer or director of the General  Partner or any affiliate of the foregoing
was indebted to Registrant at any time during the year ended March 30, 1997.






<PAGE>

                                                  PART IV

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

   (a) Financial Statements, Financial Statement Schedules and Exhibits

          (1)  Financial Statements

          See Item 8 - "Financial Statements and Supplementary Data."

          (2)  Financial Statement Schedules

          No financial  statement  schedules are included because of the absence
          of the  conditions  under  which  they are  required  or  because  the
          information  is  included  in the  financial  statements  or the notes
          thereto.

          (3)   Exhibits

     <TABLE>
     <CAPTION>
                                                         Incorporated by
                              Exhibit                    Reference to
      <S>      <C>                                       <C>
      10.1     April Gardens Apartments II Limited       Exhibit 10.1 to Form 
               Partnership (A Delaware Limited           10-Q Report dated                              
               Partnership) Amended and Restated         December 30, 1990                                           
               Agreement of Limited Partnership          (File No. 33-31390)
               
      10.2     Ashland Park Apartments, L.P. Second      Exhibit 10.2 to Form 
               Amended and Restated Agreement of         10-K Report dated                                 
               Limited Partnership                       March 30, 1991
                                                         (File No. 33-31390)                                       
               
      10.3     Auburn Family, L.P. Amended and           Exhibit 10.1 to Form 
               Restated Limited Partnership Agreement    10-Q Report dated                                   
               and Certificate of Limited Partnership     December 31, 1991                                     
                                                         (File No. 0-19217)

      10.4     Amended No. 2 to the Batesville Family,   Exhibit 10.2 to Form 
               L.P. Amended and Restated Agreement of    10-Q Report
               Limited Partnership                       dated December 30, 1990
                                                         (File No. 33-31390)

      10.5     Batesville Family, L.P. Amendment No. 3   Exhibit 10.2 to Form 
               to the Amended and Restated Agreement     10-Q Report 
               of Limited Partnership                    dated December 31, 1991
                                                         (File No. 0-19217)                                         
               
      10.6     Bay Springs Elderly, L.P. (A              Exhibit 10.1 to Form
               Mississippi Limited Partnership)          10-Q Report
               Amended and Restated Limited              dated September 29,1991
               Partnership Agreement and Certificate     (File No. 0-19217)
               of Limited Partnership                                             
               
               
      10.7     Brisas del Mar Apartments Limited         Exhibit 10.3 to Form 
                                                         10-Q Report
               Partnership (A Delaware Limited           dated December 30, 1990
               Partnership) Amended and Restated         (File No. 33-31390)
               Agreement of Limited Partnership


      10.8     Amendment No. 1 to the Bruce Housing      Exhibit 10.8 to Form 
                                                         10-K Report
               Associates, L.P. Amended and Restated     dated March 30, 1992
               Agreement of Limited Partnership          (File No. 33-31390)
     </TABLE>


<PAGE>


     <TABLE>
     <CAPTION>

                                                         Incorporated by
               Exhibit                                   Reference to
               -------                                   ------------
      <S>      <C>                                       <C>
      10.9     Amendment No. 2 to the Bruce Housing      Exhibit 10.4 to Form 
                                                         10-Q Report
               Associates, L.P. Amended and Restated     dated December 30, 1990
               Agreement of Limited Partnership          (File No. 33-31390)
      10.10    Bruce Housing Associates, L.P.            Exhibit 10.3 to Form 
                                                         10-Q Report
               Amendment No. 3 to the Amended and        dated December 31, 1991
               Restated Agreement of Limited             (File No. 0-19217)
               Partnership
      10.11    Carrington Limited Dividend Housing       Exhibit 10.1 to Form 
                                                         10-Q Report
               Association Limited Partnership Amended   dated September 29,1990
               and Restated Agreement of Limited         (File No. 33-31390)
               Partnership
      10.12    Carrington Limited Dividend Housing       Exhibit 10.2 to Form 
                                                         10-Q Report
               Association Limited Partnership Second    dated September 29,1990
               Amended and Restated Agreement of         (File No. 33-31390)
               Limited Partnership
      10.13    Carrington Limited Dividend Housing       Exhibit 10.5 to Form 
                                                         10-Q Report
               Association Limited Partnership           dated December 30, 1990
               Amendment No. 1 to the Second Amended     (File No. 33-31390)
               and Restated Agreement of Limited
               Partnership
      10.14    Chestnut Park Associates, L.P. Amended    Exhibit 10.3 to Form 
                                                         10-Q Report
               and Restated Agreement of Limited         dated September 29,1990
               Partnership                               (File No. 33-31390)
      10.15    Chowan Senior Manor Associates Limited    Exhibit 10.15 to Form 
                                                         10-K Report
               Partnership Amended and Restated          dated March 30, 1992
               Agreement of Limited Partnership          (File No. 33-31390)
      10.16    Christian Street Commons Associates       Exhibit 10.16 to Form 
                                                         10-K Report
               Amended and Restated Limited              dated March 30, 1992
               Partnership Agreement and Certificate     (File No. 33-31390)
               of Limited Partnership
      10.17    Country View Apartments Second Amended    Exhibit 10.17 to Form 
                                                         10-K Report
               and Restated Limited Partnership          dated March 30, 1992
               Agreement and Certificate of Limited      (File No. 33-31390)
               Partnership
      10.18    Desarrollos de Belen Limited              Exhibit 10.18 to Form 
                                                         10-K Report
               Partnership Amended and Restated          dated March 30, 1992
               Agreement of Limited Partnership          (File No. 33-31390)
      10.19    Desarrollos de Emaus Limited              Exhibit 10.19 to Form 
                                                         10-K Report
               Partnership Amended and Restated          dated March 30, 1992
               Agreement of Limited Partnership          (File No. 33-31390)
      10.20    Ellinwood Heights Apartments, L.P.        Exhibit 10.1 to Form 
                                                         10-Q Report
               Amended and Restated Agreement of         dated June 29, 1991
               Limited Partnership                       (File No. 0-19217)
     </TABLE>



<PAGE>


     <TABLE>
     <CAPTION>

                                                         Incorporated by
                              Exhibit                    Reference to
      <S>      <C>                                       <C>
      10.21    Fulton Street Houses Limited              Exhibit 10.21 to Form 
                                                         10-K Report
               Partnership Amended and Restated          dated March 30, 1992
               Agreement of Limited Partnership          (File No. 33-31390)
      10.22    Hayes Run Limited Partnership Amended     Exhibit 10.2 to Form 
                                                         10-Q Report
               and Restated Agreement of Limited         dated June 29, 1991
               Partnership                               (File No. 0-19217)
      10.23    Howard L. Miller Sallisaw Apartments      Exhibit 10.10 to Form 
                                                         10-K Report
               II, L.P. Third Amended and Restated       dated March 30, 1991
               Agreement and Certificate of Limited      (File No. 33-31390)
               Partnership
      10.24    Hurlock Meadow Limited Partnership        Exhibit 10.24 to Form 
                                                         10-K Report
               Amended and Restated Limited              dated March 30, 1992
               Partnership Agreement                     (File No. 33-31390)
      10.25    Amendment No. 1 to the Ivy Family, L.P.   Exhibit 10.6 to Form 
                                                         10-Q Report
               Amended and Restated Agreement of         dated December 30, 1990
               Limited Partnership                       (File No. 33-31390)
      10.26    Ivy Family, L.P. Amendment No. 3 to the   Exhibit 10.4 to Form 
                                                         10-Q Report
               Amended and Restated Agreement of         dated December 31, 1991
               Limited Partnership                       (File No. 0-19217)
      10.27    Justin Associates Amended and Restated    Exhibit 10.7 to Form 
                                                         10-Q Report
               Agreement and Certificate of Limited      dated December 30, 1990
               Partnership                               (File No. 33-31390)
      10.28    LaBelle Commons, Ltd. Amended and         Exhibit 10.13 to Form 
                                                         10-K Report
               Restated Agreement of Limited             dated March 30, 1991
               Partnership                               (File No. 33-31390)
      10.29    LaBelle Commons, Ltd. Amendment No. 1     Exhibit 10.29 to Form 
                                                         10-K Report
               to Amended and Restated Agreement of      dated March 30, 1992
               Limited Partnership                       (File No. 33-31390)
      10.30    Amendment No. 2 to the Lawrence Road      Exhibit 10.8 to Form 
                                                         10-Q Report
               Properties, Ltd. Amended and Restated     dated December 30, 1990
               Agreement of Limited Partnership          (File No. 33-31390)
      10.31    Lawrence Road Properties, Ltd.            Exhibit 10.5 to Form 
                                                         10-Q Report
               Amendment No. 3 to the Amended and        dated December 31, 1991
               Restated Agreement of Limited             (File No. 0-19217)
               Partnership
      10.32    Loma Del Norte Limited Partnership        Exhibit 10.2 to Form 
                                                         10-Q Report
               Amended and Restated Limited              dated September 29,1991
               Partnership Agreement                     (File No. 0-19217)
      10.33    Long Reach Associates Limited             Exhibit 10.15 to Form 
                                                         10-K Report
               Partnership Sixth Amended and Restated    dated March 30, 1991
               Agreement of Limited Partnership          (File No. 33-31390)
     </TABLE>



<PAGE>


     <TABLE>
     <CAPTION>

                                                         Incorporated by
                              Exhibit                    Reference to
     <S>       <C>                                       <C>
     10.34     Mirador del Toa Limited Partnership       Exhibit 10.16 to Form 
                                                         10-K Report
               Amended and Restated Agreement of         dated March 30, 1991
               Limited Partnership                       (File No. 33-31390)
     10.35     Amendment No. 1 to the Mirador del Toa    Exhibit 10.17 to Form 
                                                         10-K Report
               Limited Partnership Amended and           dated March 30, 1991
               Restated Agreement of Limited             (File No. 33-31390)
               Partnership
     10.36     Moore Haven Commons, Ltd. Amended and     Exhibit 10.9 to Form 
                                                         10-Q Report
               Restated Agreement of Limited             dated December 30, 1990
               Partnership                               (File No. 33-31390)
     10.37     NP-89 Limited Dividend Housing            Exhibit 10.3 to Form 
                                                         10-Q Report
               Association Limited Partnership Second    dated June 29, 1991
               Restated and Amended Agreement of         (File No. 0-19217)
               Limited Partnership
     10.38     Nash Hill Associates, Limited             Exhibit 10.37 to Form 
                                                         10-K Report
               Partnership Amended and Restated          dated March 30, 1992
               Agreement of Limited Partnership          (File No. 33-31390)
     10.39     North Calhoun City, L.P. (A Mississippi   Exhibit 10.3 to Form 
                                                         10-Q Report
               Limited Partnership) Amended and          dated September 29,1991
               Restated Limited Partnership Agreement    (File No. 0-19217)
               and Certificate of Limited Partnership
     10.40     Orange City Plaza, Limited Partnership    Exhibit 10.40 to Form 
                                                         10-K Report
               Amended and Restated Partnership          dated March 30, 1992
               Agreement                                 (File No. 33-31390)
     10.41     Puerta del Mar Limited Partnership (A     Exhibit 10.10 to Form 
                                                         10-Q Report
               Delaware Limited Partnership) Amended     dated December 30, 1990
               and Restated Agreement of Limited         (File No. 33-31390)
               Partnership
     10.42     Amendment No. 2 to the Purvis Heights     Exhibit 10.11 to Form 
                                                         10-Q Report
               Properties, L.P. Amended and Restated     dated December 30, 1990
               Agreement of Limited Partnership          (File No. 33-31390)
     10.43     Purvis Heights Properties, L.P.           Exhibit 10.6 to Form 
                                                         10-Q Report
               Amendment No. 3 to the Amended and        dated December 31, 1991
               Restated Agreement of Limited             (File No. 0-19217)
               Partnership
     10.44     Queen Lane Investors Amendment No. 1 to   Exhibit 10.12 to Form 
                                                         10-Q Report
               Amended and Restated Agreement and        dated December 30, 1990
               Certificate of Limited Partnership        (File No. 33-31390)
     10.45     Somerset Manor, Ltd. Amended and          Exhibit 10.13 to Form 
                                                         10-Q Report
               Restated Agreement and Certificate of     dated December 30, 1990
               Limited Partnership                       (File No. 33-31390)
     10.46     Sugar Cane Villas, Ltd. Amended and       Exhibit 10.23 to Form 
                                                         10-K Report
               Restated Agreement of Limited             dated March 30, 1991
               Partnership                               (File No. 33-31390)
     </TABLE>


<PAGE>


     <TABLE>
     <CAPTION>

                                                         Incorporated by
                              Exhibit                    Reference to
      <S>      <C>                                       <C>
      10.47    Summerfield Apartments Limited            Exhibit 10.47 to Form 
                                                         10-K Report
               Partnership Amended and Restated          dated March 30, 1992
               Agreement of Limited Partnership          (File No. 33-31390)
      10.48    Sydney Engel Associates Second Amended    Exhibit 10.4 to Form
                                                         10-Q Report
               and Restated Agreement of Limited         dated September 29,1990
               Partnership                               (File No. 33-31390)
      10.49    First Amendment to Second Amended and
               Restated Agreement of Limited
               Partnership of Sydney Engel Associates
      10.50    Second Amendment to Second Amended and
               Restated Agreement of Limited
               Partnership of Sydney Engel Associates
               L.P.
      10.51    Third Amendment to Second Amended and
               Restated Agreement of Limited
               Partnership of Sydney Engel Associates
               L.P.
      10.52    Fourth Amendment to Second Amended and
               Restated Agreement of Limited
               Partnership of Sydney Engel Associates
               L.P.
      10.53    Union Valley Associates Limited           Exhibit 10.14 to Form 
                                                         10-Q Report
               Partnership Amended and Restated          dated December 30, 1990
               Agreement and Certificate of Limited      (File No. 33-31390)
               Partnership
      10.54    Walnut Grove Family, L.P. (A              Exhibit 10.4 to Form 
                                                         10-Q Report
               Mississippi Limited Partnership)          dated September 29, 1991
               Amended and Restated Limited              (File No. 0-19217)
               Partnership Agreement and Certificate
               of Limited Partnership
      10.55    Waynesboro Apartments Limited             Exhibit 10.15 to Form
                                                         10-Q Report
               Partnership Amended and Restated          dated December 30, 1990
               Agreement and Certificate of Limited      (File No. 33-31390)
               Partnership
      10.56    West Calhoun City, L.P. (A Mississippi    Exhibit 10.5 to Form 
                                                         10-Q Report
               Limited Partnership) Amended and          dated September 29,1991
               Restated Limited Partnership Agreement    (File No. 0-19217)
               and Certificate of Limited Partnership
      10.57    Westminster Apartments Limited            Exhibit 10.53 to Form 
                                                         10-K Report
               Partnership Second Amended and Restated   dated March 30, 1992
               Agreement of Limited Partnership          (File No. 33-31390)
      27       Financial Data Schedule
      28.0     Pages 20 through 31, 44 through 71 and    Exhibit 28.0 to Form 
                                                         10-K Report
               78 through 80 of Prospectus filed         dated March 30, 1990
               pursuant to Rule 424(b)(3) under          (File No. 33-31390)
               Securities Act of 1933
     </TABLE>



<PAGE>


     <TABLE>
     <CAPTION>

                                                         Incorporated by
                              Exhibit                    Reference to
      <S>      <C>                                       <C>
      28.1     Pages 14 through 19 of Prospectus filed   Exhibit 28.1 to Form 
                                                         10-K Report
               pursuant to Rule 424(b)(3) under          dated March 30, 1991
               Securities Act of 1933                    (File No. 33-31390)
      28.2     Supplement No. 1 dated June 6, 1990 to    Exhibit 28.2 to Form 
                                                         10-K Report
               Prospectus                                dated March 30, 1991
                                                         (File No. 33-31390)
      28.3     Supplement No. 2 dated November 21,       Exhibit 28.3 to Form 
                                                         10-K Report
               1990 to Prospectus                        dated March 30, 1991
                                                         (File No. 33-31390)
      28.4     Supplement No. 3 dated December 20,       Exhibit 28.4 to Form 
                                                         10-K Report
               1990 to Prospectus                        dated March 30, 1991
                                                         (File No. 33-31390)
      28.5     Supplement No. 4 dated October 30, 1991   Exhibit 28.5 to Form 
                                                         10-K Report
               to Prospectus                             dated March 30, 1992
                                                         (File No. 33-31390)
      28.6     Supplement No. 5 dated December 26,       Exhibit 28.6 to Form 
                                                         10-K Report
               1991 to Prospectus                        dated March 30, 1992
                                                         (File No. 33-31390)
      28.7     Supplement No. 6 dated January 15, 1992   Exhibit 28.7 to Form 
                                                         10-K Report
               to Prospectus                             dated March 30, 1990
                                                         (File No. 33-31390)
     </TABLE>

   (b) Reports on Form 8-K

   No reports on Form 8-K were filed by  Registrant  during the last  quarter of
   the period covered by this report.

   (c) Exhibits

   See (a)(3) above.

   (d)   Financial Statement Schedules

   See (a)(2) above.






<PAGE>
                                                 SIGNATURES


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


                                   AMERICAN TAX CREDIT PROPERTIES III L.P.
                                   (a Delaware limited partnership)

                                   By:  Richman Tax Credit Properties III L.P.,
                                   General Partner

                                        by:   Richman Housing Credits Inc.,
                                              general partner

Dated:  June 30, 1997                       /s/    Richard Paul Richman
        -------------                       ---------------------------
                                            by:   Richard Paul Richman
                                                  President

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 in
the capacities and on the dates indicated.

Signature                             Title                                Date

/s/ Richard Paul Richman           President, 
                                   Chief Executive             June 30, 1997
   ------------------------        Officer                         ---------
                                   and Director of the general
                                   partner of the
                                   General Partner

/s/ Neal Ludeke                   Vice President and       June 30, 1997
------------------------          Treasurer of              -------------
                                  the general partner of the  
                                  General Partner
                                  (Principal Financial
                                  and Accounting Officer of
                                  Registrant)
                                        






-----------------------------------------------------------------

<PAGE>