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, 2004
                                             --------------

                                       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 or other 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.


                                       1

<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 in accordance with Section 42 of the
Internal Revenue Code (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 general
partner of Registrant. The general partner of the General Partner is Richman
Housing Credits Inc. ("Richman Housing"), a Delaware corporation that is wholly
owned by Richard Paul Richman. Richman Housing is an affiliate of The Richman
Group, Inc. ("Richman Group"), a Delaware corporation founded by Richard Paul
Richman in 1988.

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 and 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 to investors. 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.

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, Uruguay Round Agreements Act, Tax and Trade Relief
Extension Act of 1998, Tax and Trade Relief Extension Act of 1999, Community
Renewal Tax Relief Act of 2000, Economic Growth and Tax Relief Reconciliation
Act of 2001, Job Creation and Worker Assistance Act of 2002 and Jobs and Growth
Tax Relief Reconciliation Act of 2003 (collectively the "Tax Acts")

Registrant is organized as a limited partnership and is a "pass through" tax
entity that 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.


                                       2
<PAGE>

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. The relevant state tax credit agency
has allocated each of Registrant's Local Partnerships an amount of Low-income
Tax Credits, which are generally available for a ten year period from the year
the Property is placed in service (the "Ten Year Credit Period"). The Ten Year
Credit Period was substantially fully exhausted by the Local Partnerships as of
December 31, 2003. 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, 2003, 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, own a
99% Local Partnership Interest in the following Local Partnerships:


                                               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. Since October 1997, the United States Department of
Housing and Urban Development ("HUD") has issued a series of directives related
to project based Section 8 contracts that define owners' notification
responsibilities, advise owners of project based Section 8 properties of what
their options are regarding the renewal of Section 8 contracts, provide guidance
and procedures to owners, management agents, contract administrators and HUD
staff concerning renewal of Section 8 contracts, provide policies and procedures
on setting renewal rents and handling renewal rent adjustments and provide the
requirements and procedures for opting-out of a Section 8 project based
contract. 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 before debt service and debt structure of
any or all Local Partnerships currently receiving such subsidy or similar
subsidies. One Local Partnership's Section 8 contracts are currently subject to
renewal under applicable HUD guidelines.


                                       3

<PAGE>

Item 2.     Properties (continued)

<TABLE>
<CAPTION>

                                                                                    Mortgage
Name of Local Partnership                              Number                   loans payable as of    Subsidy
Name of apartment complex                            of rental      Capital        December 31,         (see
Apartment complex location                             Units     contribution         2003            footnotes)
--------------------------                           ---------   ------------   -------------------   ----------

<S>                                                    <C>      <C>               <C>                  <C>
April Gardens Apartments II
  Limited Partnership
April Gardens Apartments
Las Piedras, Puerto Rico                                 48     $   485,581        $ 1,973,815           (1b&d)

Ashland Park Apartments, L.P.
Ashland Park Apartments
Ashland, Nebraska                                        24         235,732          1,025,226           (1b&d)

Auburn Family, L.P.
Auburn Apartments
Louisville, Mississippi                                  16          95,412            458,699           (1b&d)

Batesville Family, L.P.
Westridge Apartments
Batesville, Mississippi                                  48         239,716(2)       1,423,964           (1b)

Bay Springs Elderly, L.P.
Bay Springs Manor
Bay Springs, Mississippi                                 24         208,820            668,431           (1b&d)

Brisas del Mar Apartments
  Limited Partnership
Brisas del Mar Apartments
Hatillo, Puerto Rico                                     66         668,172          2,620,029           (1b&d)

Bruce Housing Associates, L.P.
Bruce Family Apartments
Bruce, Mississippi                                       40         183,155(2)        1,092,492           (1b&d)

Carrington Limited Dividend
  Housing Association Limited
  Partnership
Carrington Place
Farmington Hills, Michigan                              100       2,174,720(2)        3,272,459           (1c)

Chestnut Park Associates, L.P.
Chestnut Park Apartments
East Orange, New Jersey                                  59       4,204,576          4,858,207            (1a)

Chowan Senior Manor Associates
  Limited Partnership
Azalea Garden Senior Manor
  Apartments
Murfreesboro, North Carolina                             33         278,405          1,235,772           (1b&d)

Christian Street Commons
  Associates
Christian Street Commons
  Apartments
Philadelphia, Pennsylvania                               18         581,645            581,261           (1a&b)


                                       4
<PAGE>

<CAPTION>

Item 2. Properties (continued)

                                                                                    Mortgage
Name of Local Partnership                              Number                   loans payable as of    Subsidy
Name of apartment complex                            of rental      Capital        December 31,         (see
Apartment complex location                             Units     contribution         2003            footnotes)
--------------------------                           ---------   ------------   -------------------   ----------

<S>                                                    <C>      <C>               <C>                  <C>
Country View Apartments
Country View Apartments
Pembroke, Maine                                          16     $   279,183        $   926,215           (1b&d)

Desarrollos de Belen Limited
  Partnership
Vista de Jagueyes II Apartments
Aguas Buenas, Puerto Rico                                41         422,929          1,857,433           (1b&d)

Desarrollos de Emaus Limited
  Partnership
Hucares II Apartments
Naguabo, Puerto Rico                                     72         631,404          3,157,278           (1b&d)

Ellinwood Heights Apartments, L.P.
Ellinwood Heights Apartments
Ellinwood, Kansas                                        24         156,261            679,943           (1b&d)

Fulton Street Houses Limited
  Partnership
Fulton Street Townhouse
  Apartments
New York, New York                                       35       1,948,081          3,869,930           (1a&b)

Hayes Run Limited Partnership
Mashburn Gap Apartments
Marshall, North Carolina                                 34         322,074          1,409,261           (1b&d)

Howard L. Miller Sallisaw
  Apartments II, L.P.
Sallisaw II Apartments
Sallisaw, Oklahoma                                       24         130,158            608,937           (1b&d)

Hurlock Meadow Limited
  Partnership
Hurlock Meadow Apartments
Hurlock, Maryland                                        30         284,218          1,254,600           (1b&d)

Ivy Family, L.P.
Ivy Apartments
Louisville, Mississippi                                  32         135,528(2)         772,383           (1b&d)

Justin Associates
Locust Tower Apartments
Philadelphia, Pennsylvania                               40       1,809,723          2,270,290           (1b&e)

LaBelle Commons, Ltd.
LaBelle Commons
LaBelle, Florida                                         32         253,580          1,000,922           (1b&d)

Lawrence Road Properties, Ltd.
Hillcrest Apartments
Newton, Mississippi                                      24         123,799(2)         750,067           (1b&d)



                                       5

<PAGE>

<CAPTION>

Item 2. Properties (continued)

                                                                                    Mortgage
Name of Local Partnership                              Number                   loans payable as of    Subsidy
Name of apartment complex                            of rental      Capital        December 31,         (see
Apartment complex location                             Units     contribution         2003            footnotes)
--------------------------                           ---------   ------------   -------------------   ----------

<S>                                                    <C>      <C>               <C>                  <C>
Loma Del Norte Limited
  Partnership
Loma Del Norte Apartments
Anthony, New Mexico                                      40     $   314,865        $ 1,421,608           (1b&d)

Long Reach Associates Limited
  Partnership
Oak Ridge Apartments
Bath, Maine                                              30         448,922          1,462,159           (1b&d)

Mirador del Toa Limited
  Partnership
Mirador del Toa Apartments
Toa Alta, Puerto Rico                                    48         284,847(2)       1,857,814           (1b&d)

Moore Haven Commons, Ltd.
Moore Haven Commons
Moore Haven, Florida                                     28         213,402            917,231           (1b&d)

NP-89 Limited Dividend Housing
  Association Limited Partnership
Newport Apartments
Clinton Township, Michigan                              168       2,372,292          3,767,077           (1a,b&g)

Nash Hill Associates, Limited
  Partnership
Nash Hill Place
Williamsburg, Massachusetts                              28         302,575          1,451,870           (1b,d&f)

North Calhoun City, L.P.
North Calhoun City Apartments
Calhoun City, Mississippi                                18         146,565            475,003           (1b&d)

Orange City Plaza, Limited
  Partnership
Orange City Plaza Apartments
Orange City, Iowa                                        32         456,090            417,935           (1a)

Puerta del Mar Limited Partnership
Puerta del Mar Apartments
Hatillo, Puerto Rico                                     66         630,570          2,493,105           (1b&d)

Purvis Heights Properties, L.P.
Pineview Apartments
Purvis, Mississippi                                      40         191,512(2)       1,135,775           (1b)

Queen Lane Investors
Queen's Row
Philadelphia, Pennsylvania                               29         597,050(2)       1,524,745           (1b&e)

Somerset Manor, Ltd.
Somerset Manor
Central City, Pennsylvania                               24         208,465            887,724           (1b&d)

Sugar Cane Villas, Ltd.
Sugar Cane Villas
Pahokee, Florida                                         87         751,560          3,270,912           (1b&d)


                                       6

<PAGE>

<CAPTION>

Item 2. Properties (continued)

                                                                                    Mortgage
Name of Local Partnership                              Number                   loans payable as of    Subsidy
Name of apartment complex                            of rental      Capital        December 31,         (see
Apartment complex location                             Units     contribution         2003            footnotes)
--------------------------                           ---------   ------------   -------------------   ----------

<S>                                                    <C>      <C>               <C>                  <C>
Summerfield Apartments Limited
  Partnership
Summerfield Apartments
Charlotte, North Carolina                                52     $  1,088,66       $  1,644,932           (1b)

Sydney Engel Associates L.P.
(formerly known as Sydney Engel
  Associates) The Castle
New York, New York                                      224       3,201,874         16,394,250           (1b)

Union Valley Associates Limited
  Partnership
Union Valley Apartments
Union Township, Pennsylvania                             36         371,589          1,430,974           (1b)

Walnut Grove Family, L.P.
Walnut Grove Apartments
Walnut Grove, Mississippi                                24         191,695            838,360           (1b&d)

Waynesboro Apartments Limited
  Partnership
Waynesboro Apartments
Waynesboro, Pennsylvania                                 36         360,859          1,465,594           (1b)

West Calhoun City, L.P.
West Calhoun City Apartments
Calhoun City, Mississippi                                28         230,212            735,596           (1b&d)

Westminster Apartments Limited
  Partnership
Westminster Apartments
Philadelphia, Pennsylvania                               42       1,047,993          1,607,972           (1b&e)
                                                              -------------      -------------
                                                              $  29,264,476      $  82,968,250
                                                              =============      =============
</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.

       (g)    The Local Partnership's Section 8 contracts are currently subject
              to renewal under applicable HUD guidelines.

   (2) Reflects amount attributable to Registrant only.


                                       7

<PAGE>

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.





                                       8
<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.
Accordingly, accurate information as to the market value of a Unit at any given
date is not available. The number of owners of Units as of May 31, 2004 was
approximately 1,511, holding 35,883 Units.

Merrill Lynch follows internal guidelines for providing estimated values of
limited partnerships and other direct investments reported on client account
statements. Pursuant to such guidelines, estimated values for limited
partnership interests reported on Merrill Lynch client account statements (such
as Registrant's Units) are provided to Merrill Lynch by independent valuation
services. These estimated values are based on financial and other information
available to the independent services (i) 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 (ii) on March 31st for
reporting on June month-end and subsequent client account statements through the
November month-end client account statements of the same year. In addition,
Registrant may provide an estimate of 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.

Distributions
-------------

Registrant owns a limited partnership interest in Local Partnerships that are
the owners of Properties that are leveraged and receive government assistance in
various forms of rental and debt service subsidies. The distribution of 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 cash
distributions to its partners. There were no cash distributions to the partners
during the years ended March 30, 2004 and 2003.

Low-income Tax Credits, which are subject to various limitations, may be used by
partners 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, 2003 and 2002 and the cumulative Low-income Tax
Credits allocated from inception through December 31, 2003 are as follows:


                                                      Low-income
                                                      Tax Credits
                                                      -----------
               Tax year ended December 31, 2003        $    3.67
               Tax year ended December 31, 2002        $   21.61

               Cumulative totals                       $1,558.89


Reistrant generated total Tax Credits from investments in Local Partnerships of
approximately $1,559 per Unit through December 31, 2003, notwithstanding future
circumstances which may give rise to recapture or loss of future benefits (see
Part I, Item 2 - Properties, herein). The Ten Year Credit Period for all of the
Properties was substantially fully exhausted as of December 31, 2003.



                                       9

<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,
                                        ------------------------------------------------------------------------------
                                            2004             2003            2002             2001            2000
                                        -------------    ------------    -------------    -------------    -----------

<S>                                     <C>              <C>             <C>              <C>              <C>
Interest and other revenue              $     193,706    $    224,254    $     215,927    $     235,418    $   247,106
                                        =============    ============    =============    =============    ===========

Equity in loss of investment in local
   partnerships                         $    (215,731)   $   (536,158)   $  (1,193,807)   $  (1,228,135)   $(1,764,816)
                                        =============    ============    =============    =============    ===========

Net loss                                $    (611,662)   $   (875,199)   $  (1,509,355)   $  (1,519,430)   $(2,035,647)
                                        =============    ============    =============    =============    ===========

Net loss per unit of limited
   partnership interest                 $      (16.88)   $     (24.15)   $      (41.64)   $      (41.92)   $    (56.16)
                                        =============    ============    =============    =============    ===========


                                                                         As of March 30,
                                        ------------------------------------------------------------------------------
                                            2004             2003            2002             2001            2000
                                        -------------    ------------    -------------    -------------    -----------

Total assets                            $   3,766,895    $  4,153,964    $   4,744,278    $   6,512,494    $ 7,579,955
                                        =============    ============    =============    =============    ===========
</TABLE>

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

Capital Resources and Liquidity
-------------------------------

Registrant admitted limited partners in four closings with aggregate limited
partners' capital contributions of $35,883,000. In connection with the offering
of the sale of units, Registrant incurred organization and offering costs of
approximately $4,419,000 and established a working capital reserve of
approximately $2,153,000. The remaining net proceeds of approximately
$29,311,000 (the "Net Proceeds") were available to be applied to the acquisition
of limited partnership interests in local partnerships (the "Local
Partnerships") that own low-income multifamily residential complexes (the
"Property" or "Properties") that qualify for the low-income tax credit in
accordance with Section 42 of the Internal Revenue Code (the "Low-income Tax
Credit"). The Net Proceeds were utilized in acquiring an interest in forty-three
Local Partnerships.

As of March 30, 2004, Registrant has cash and cash equivalents and investments
in bonds totaling $2,738,400, which is available for operating expenses of
Registrant and circumstances which may arise in connection with the Local
Partnerships. As of March 30, 2004, Registrant's investments in bonds represent
corporate bonds of $978,873 and U.S. Treasury debt securities of $1,656,285 with
various maturity dates ranging from 2004 to 2008. Registrant acquired such
investments in bonds with the intention of utilizing proceeds generated by such
investments to meet its annual obligations. Future sources of Registrant funds
are expected to be primarily from interest earned on working capital and limited
cash distributions from Local Partnerships.

During the year ended March 30, 2004, Registrant received cash from interest
revenue, maturity/redemption and sale of bonds and distributions from Local
Partnerships and utilized cash for operating expenses. Cash and cash equivalents
and investments in bonds decreased, in the aggregate, by approximately $158,000
during the year ended March 30, 2004 (which includes a net unrealized loss on
investments in bonds of approximately $35,000, the amortization of net premium
on investments in bonds of approximately $4,000 and the accretion of zero coupon
bonds of approximately $86,000). Notwithstanding circumstances that may arise in
connection with the Properties, Registrant does not expect to realize
significant gains or losses on its investments in bonds, if any.

During the year ended March 30, 2004, 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, 2003 of $215,731 and cash distributions received
from Local Partnerships of $10,960 (exclusive of distributions from Local
Partnerships of $33,360 classified as other income). Payable to general partner
and affiliates in the accompanying balance sheet as of March 30, 2004 represents
deferred management and administration fees.


                                       10

<PAGE>

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

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. Accordingly, the investment
is carried at cost, and is adjusted for Registrant's share of each Local
Partnership's results of operations and by 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. Equity in loss in excess of Registrant's investment balance in a
Local Partnership is allocated to other partners' capital in any such Local
Partnership. As a result, the reported equity in loss of investment in local
partnerships is expected to decrease as Registrant's investment balances in the
respective Local Partnerships become zero. 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, irrespective
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. In addition, the book value of
Registrant's investment in each Local Partnership (the "Local Partnership
Carrying Value") may be reduced if the Local Partnership Carrying Value is
considered to exceed the estimated value derived by management. Accordingly,
cumulative losses and cash distributions in excess of the investment or an
adjustment to a Local Partnership's Carrying Value are not necessarily
indicative of adverse operating results of a Local Partnership. See discussion
below under Local Partnership Matters regarding certain Local Partnerships
currently operating below economic break even levels.

Registrant's operations for the years ended March 30, 2004, 2003, and 2002
resulted in net losses of $611,662, $875,199 and $1,509,355, respectively. The
decrease in net loss from fiscal 2003 to fiscal 2004 is primarily attributable
to a decrease in equity in loss of investment in local partnerships of
approximately $320,000, partially offset by a decrease in interest revenue of
approximately $42,000 resulting from the maturity of certain investments in
bonds at higher than current interest rates and a reduction in money market
rates. The decrease in net loss from fiscal 2002 to fiscal 2003 is primarily
attributable to a decrease in equity in loss of investment in local partnerships
of approximately $658,000. Equity in loss of investment in local partnerships
has fluctuated over the last three years as a result of (i) Registrant adjusting
the Local Partnership Carrying Value in connection with its investments in
certain Local Partnerships during the years ended March 30, 2003 and 2002 as
reflected in Note 5 to the financial statements, changes in the nonrecognition
of losses in accordance with the equity method of accounting and (ii) changes in
the net operating losses of those Local Partnerships in which Registrant
continues to have an investment balance.

The Local Partnerships' net loss of approximately $2,933,000 for the year ended
December 31, 2003 includes depreciation and amortization expense of
approximately $4,045,000 and interest on non-mandatory debt of approximately
$377,000, and does not include required principal payments on permanent
mortgages of approximately $818,000. The Local Partnerships' net loss of
approximately $3,253,000 for the year ended December 31, 2002 includes
depreciation and amortization expense of approximately $4,100,000 and interest
on non-mandatory debt of approximately $361,000, and does not include principal
payments on permanent mortgages of approximately $754,000. The Local
Partnerships' net loss of approximately $3,262,000 for the year ended December
31, 2001 includes depreciation and amortization expense of approximately
$4,125,000 and interest on non-mandatory debt of approximately $356,000, and
does not include principal payments on permanent mortgages of approximately
$722,000. The results of operations of the Local Partnerships for the year ended
December 31, 2003 are not necessarily indicative of the results that may be
expected in future periods.

Local Partnership Matters
-------------------------

Registrant's primary objective is to provide Low-income Tax Credits to limited
partners generally over a ten year period. The relevant state tax credit agency
has allocated each of Registrant's Local Partnerships an amount of Low-income
Tax Credits, which are generally available for a ten year period from the year
the Property is placed in service (the "Ten Year Credit Period"). The Ten Year
Credit Period was substantially fully exhausted by the Local Partnerships as of
December 31, 2003. 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-

                                       11

<PAGE>

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

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, 2003, none of the Local Partnerships have
suffered an event of recapture of Low-income Tax Credits.

The Properties are principally comprised of subsidized and leveraged low-income
multifamily residential complexes located throughout the United States and
Puerto Rico. 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"). The subsidy agreements expire at various
times during and after the Compliance Periods of the Local Partnerships. Since
October 1997, the United States Department of Housing and Urban Development
("HUD") has issued a series of directives related to project based Section 8
contracts that define owners' notification responsibilities, advise owners of
project based Section 8 properties of what their options are regarding the
renewal of Section 8 contracts, provide guidance and procedures to owners,
management agents, contract administrators and HUD staff concerning renewal of
Section 8 contracts, provide policies and procedures on setting renewal rents
and handling renewal rent adjustments and provide the requirements and
procedures for opting-out of a Section 8 project based contract. 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 before debt service and debt structure of any or all Local
Partnerships currently receiving such subsidy or similar subsidies. One Local
Partnership's Section 8 contracts are currently subject to renewal under
applicable HUD guidelines.

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 general
partners of the Local Partnerships (the "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, 2003, revenue from operations
of the Local Partnerships have generally been sufficient to cover operating
expenses and Mandatory Debt Service. Substantially all of the Local Partnerships
are effectively operating at or above break even levels, although certain Local
Partnerships' operating 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 an operating deficit
after taking into account their mortgage and financing structure and any
required deferral of property management fees.

The terms of the partnership agreement of Westminster Apartments Limited
Partnership ("Westminster") require the Local General Partner to advance funds
to cover operating deficits through the Compliance Period. As of December 31,
2003, Westminster was in default under the terms of its first mortgage; payments
of principal, interest and replacement reserve deposits are approximately five
years in arrears, representing an arrearage of approximately $487,000. Although
Westminster has been involved in negotiating a restructuring of its mortgage
debt, a final resolution has not been reached and documented. There can be no
assurance that the issues will be resolved and the mortgage remains in default
without a formal forbearance as of June 2004. Westminster incurred an operating
deficit of approximately $83,000 for the year ended December 31, 2003, which
amount includes a provision for replacement reserve deposits of $1,184 per month
and debt service payments of $6,245 per month. Registrant's investment balance
in Westminster, after cumulative equity losses, became zero during the year
ended March 30, 1999. Westminster generated approximately $6.3 per Unit per year
to the limited partners upon the expiration of its Low-income Tax Credit
allocation in 2003.

The terms of the partnership agreement of Queen Lane Investors ("Queen Lane")
require the management agent to defer property management fees in order to avoid
a default under the mortgage. During the year ended December 31, 2003, Queen
Lane incurred an operating deficit of approximately $60,000, which includes
property management fees of approximately $13,000. The Local General Partner
represents that payments on the mortgage and real estate taxes are current.
Registrant's investment balance in Queen Lane, after cumulative equity losses,
became zero during the year ended March 30, 2001. Queen Lane generated
approximately $2.9 per Unit per year to the limited partners upon the expiration
of its Low-income Tax Credit allocation in 2001.

Fulton Street Houses Limited Partnership ("Fulton Street") has an escrow of
approximately $320,000 as of December 31, 2003 to cover operating deficits and
there are no Mandatory Debt Service payments or real estate taxes required
during the Compliance Period. During the year ended December 31, 2003, Fulton
Street incurred an operating deficit of approximately $109,000. Registrant's
investment balance in Fulton Street, after cumulative equity losses, became zero
during the year ended March 30, 2002. Fulton Street generated approximately
$11.7 per Unit per year to the limited partners upon the expiration of its
Low-income Tax Credit allocation in 2001.


                                       12

<PAGE>

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

The terms of the partnership agreement of Christian Street Commons Associates
("Christian Street") require the Local General Partner to advance funds to cover
all operating deficits through the Compliance Period and to cause the management
agent to defer property management fees in order to avoid a default under the
mortgage. During the year ended December 31, 2003, Christian Street incurred an
operating deficit of approximately $10,000, which includes property management
fees of approximately $5,000. As of December 31, 2003, the Local General Partner
has advanced approximately $107,000 under its Deficit Guarantee obligation and
it represents that payments on the mortgage and real estate taxes are current.
Registrant's investment balance in the Christian Street, after cumulative equity
losses, became zero during the year ended March 30, 1998. Christian Street
generated approximately $3.2 per Unit per year to the limited partners upon the
expiration of its Low-income Tax Credit allocation in 2002.

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.

Contractual Obligations

As of March 30, 2004, Registrant has the following contractual obligations
(payments due by period):

<TABLE>
<CAPTION>

                                    Total          < 1 year       1 - 3 years     3 - 5 years    > 5 years
                                  ----------      ----------      -----------     -----------    ---------

<S>                             <C>             <C>             <C>             <C>             <C>
Other Long Term Liabilities:
Accounts Payable and
 Accrued Expenses (1)             $  788,673      $  232,000      $  556,673      $     --        $   --

Payable to General Partner
 and Affiliates (2)                1,944,316         232,000       1,712,316            --
                                  ----------      ----------      ----------      ----------      --------

                                  $2,732,989      $  464,000      $2,268,989      $     --        $   --
                                  ==========      ==========      ==========      ==========      ========
</TABLE>

(1)   Represents Administration Fees payable to a third-party former service
      provider. Of such amount, $232,000 is due in fiscal 2005, $116,000 is due
      in fiscal 2006 and the remainder is payable from available reserves or
      sale or refinancing proceeds from the Local Partnerships to the extent
      such amounts are available.

(2)   Represents Administration and Management Fees payable to an affiliate of
      the General Partner. Of such amount, $232,000 is due in fiscal 2005,
      $116,000 is due in fiscal 2006 and the remainder is payable from available
      reserves or sale or refinancing proceeds from the Local Partnerships to
      the extent such amounts are available.

Critical Accounting Policies and Estimates
------------------------------------------

The financial statements are prepared in accordance with accounting principles
generally accepted in the United States of America, which requires Registrant to
make certain estimates and assumptions. A summary of significant accounting
policies is provided in Note 1 to the financial statements. The following
section is a summary of certain aspects of those accounting policies that may
require subjective or complex judgments and are most important to the portrayal
of Registrant's financial condition and results of operations. Registrant
believes that there is a low probability that the use of different estimates or
assumptions in making these judgments would result in materially different
amounts being reported in the financial statements.

     o    Registrant accounts for its investment in local partnerships in
          accordance with the equity method of accounting since Registrant does
          not control the operations of a Local Partnership.

     o    If the book value of Registrant's investment in a Local Partnership
          exceeds the estimated value derived by management, Registrant reduces
          its investment in any such Local Partnership and includes such
          reduction in equity in loss of investment in local partnerships.


                                       13

<PAGE>

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

Recently Issued Accounting Standards
------------------------------------

In January 2003, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46").
FIN 46 is applicable immediately for variable interest entities created after
January 31, 2003. For variable interest entities created before February 1,
2003, the provisions of FIN 46 are applicable no later than December 15, 2003.
The Registrant has not created any variable interest entities after January 31,
2003. In December 2003, the FASB redeliberated certain proposed modifications
and revised FIN 46 ("FIN 46 (R)"). The revised provisions are applicable no
later than the first reporting period ending after March 15, 2004. The adoption
of FIN 46 (R) is not expected to have a material impact on the Registrant's
financial reporting and disclosure.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." SFAS No. 150
changes the accounting for certain financial instruments that, under previous
guidance, could be classified as equity or "mezzanine" equity, by now requiring
those instruments to be classified as liabilities (or assets in some
circumstances) in the balance sheets. Further, SFAS No. 150 requires disclosure
regarding the terms of those instruments and settlement alternatives. The
guidance in SFAS No. 150 generally was effective for all financial instruments
entered into or modified after May 31, 2003, and was otherwise effective at the
beginning of the first interim period beginning after June 15, 2003. The
Registrant has evaluated SFAS No. 150 and determined that it does not have an
impact on the Registrant's financial reporting and disclosures.


Item 7a.  Quantitative and Qualitative Disclosure About Market Risk

Registrant has invested a significant portion of its working capital reserves in
corporate bonds and U.S. Treasury instruments. The market value of such
investments is subject to fluctuation based upon changes in interest rates
relative to each investment's maturity date and the associated bond rating.
Since Registrant's investments in bonds have various maturity dates through
2008, the value of such investments may be adversely impacted in an environment
of rising interest rates in the event Registrant decides to liquidate any such
investment prior to its maturity. Although Registrant may utilize reserves to
assist an under performing Property, it otherwise intends to hold such
investments to their respective maturities. Therefore, Registrant does not
anticipate any material adverse impact in connection with such investments.




                                       14

<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.


Item 8.     Financial Statements and Supplementary Data


                                Table of Contents
                                -----------------

                                                                            Page
                                                                            ----

Report of Independent Registered Public Accounting Firm......................16

Balance Sheets...............................................................17

Statements of Operations.....................................................18

Statements of Changes in Partners' Equity (Deficit)..........................19

Statements of Cash Flows.....................................................20

Notes to Financial Statements................................................22



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.






                                       15

<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


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, 2004 and 2003, and the related statements of
operations, partners' equity (deficit) and cash flows for each of the three
years in the period ended March 30, 2004. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

      We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. 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, 2004 and 2003, and the results of its
operations, changes in partners' equity (deficit) and its cash flows for each of
the three years in the period ended March 30, 2004, in conformity with
accounting principles generally accepted in the United States of America.


/s/ Reznick Fedder & Silverman

Bethesda, Maryland
June 24, 2004






                                       16

<PAGE>

<TABLE>
<CAPTION>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                                 BALANCE SHEETS
                             MARCH 30, 2004 AND 2003


                                                         Notes             2004                  2003
                                                         -----          -----------           -----------
ASSETS

<S>                                                       <C>           <C>                   <C>
Cash and cash equivalents                                 3,9           $   103,242           $   109,550
Investments in bonds                                      4,9             2,635,158             2,786,558
Investment in local partnerships                          5,8             1,008,882             1,235,573
Interest receivable                                        9                 19,613                22,283
                                                                        -----------           -----------

                                                                        $ 3,766,895           $ 4,153,964
                                                                        ===========           ===========

LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities

  Accounts payable and accrued expenses                    8            $   862,952           $   864,971
  Payable to general partner and affiliates               6,8             1,944,316             1,683,190
                                                                        -----------           -----------

                                                                          2,807,268             2,548,161
                                                                        -----------           -----------

Commitments and contingencies                              8

Partners' equity (deficit)                                2,4

  General partner                                                          (307,932)             (301,815)
  Limited partners (35,883 units of limited
   partnership interest outstanding)                                      1,044,413             1,649,958
  Accumulated other comprehensive income, net                               223,146               257,660
                                                                        -----------           -----------

                                                                            959,627             1,605,803
                                                                        -----------           -----------

                                                                        $ 3,766,895           $ 4,153,964
                                                                        ===========           ===========
</TABLE>


                       See Notes to Financial Statements.



                                       17

<PAGE>

<TABLE>
<CAPTION>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                            STATEMENTS OF OPERATIONS
                    YEARS ENDED MARCH 30, 2004, 2003 AND 2002


                                                   Notes         2004                2003               2002
                                                   -----       -----------        -----------        -----------

REVENUE

<S>                                                <C>          <C>               <C>               <C>
Interest                                                       $   160,346        $   202,541        $   204,436
Other income from local partnerships                                33,360             21,713             11,491
                                                               -----------        -----------        -----------

TOTAL REVENUE                                                      193,706            224,254            215,927
                                                               -----------        -----------        -----------

EXPENSES

Administration fees                                 6,8            230,571            230,571            230,571
Management fees                                     6,8            230,571            230,571            230,571
Professional fees                                                   82,681             53,730             53,037
State of New Jersey filing fees                                     21,428             30,000
Printing, postage and other                                         24,386             18,423             17,296
                                                               -----------        -----------        -----------

TOTAL EXPENSES                                                     589,637            563,295            531,475
                                                               -----------        -----------        -----------

Loss from operations                                              (395,931)          (339,041)          (315,548)

Equity in loss of investment in
  local partnerships                                  5           (215,731)          (536,158)        (1,193,807)
                                                               -----------        -----------        -----------

NET LOSS                                                          (611,662)          (875,199)        (1,509,355)

Other comprehensive income (loss), net                4            (34,514)           225,741            (55,166)
                                                               -----------        -----------        -----------

COMPREHENSIVE LOSS                                             $  (646,176)       $  (649,458)       $(1,564,521)
                                                               ===========        ===========        ===========

NET LOSS ATTRIBUTABLE TO                              2

  General partner                                              $    (6,117)       $    (8,752)       $   (15,094)
  Limited partners                                                (605,545)          (866,447)        (1,494,261)
                                                               -----------        -----------        -----------
                                                               $  (611,662)       $  (875,199)       $(1,509,355)
                                                               ===========        ===========        ===========

NET LOSS per unit of limited
  partnership Interest (35,883
  units of limited partnership interest)                       $    (16.88)       $    (24.15)       $    (41.64)
                                                               ===========        ===========        ===========
</TABLE>


                       See Notes to Financial Statements.



                                       18

<PAGE>

<TABLE>
<CAPTION>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
               STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIT)
                    YEARS ENDED MARCH 30, 2004, 2003 AND 2002


                                                                                        Accumulated
                                                                                           Other
                                                      General           Limited         Comprehensive
                                                      Partner           Partners      Income (Loss), Net       Total
                                                   -----------        -----------     ------------------    -----------

<S>                                              <C>                <C>                <C>                <C>
Partners' equity (deficit), March 30, 2001         $  (227,969)       $ 4,010,666        $    87,085        $ 3,819,782

Net loss                                               (15,094)        (1,494,261)                           (1,509,355)

Other comprehensive income, net                                                              (55,166)           (55,166)
                                                   -----------        -----------        -----------        -----------

Partners' equity (deficit), March 30, 2002            (293,063)         2,516,405             31,919          2,255,261

Net loss                                                (8,752)          (866,447)                             (875,199)

Other comprehensive loss, net                                                                225,741            225,741
                                                   -----------        -----------        -----------        -----------

Partners' equity (deficit), March 30, 2003            (301,815)         1,649,958            257,660          1,605,803

Net loss                                                (6,117)          (605,545)                             (611,662)
                                                   -----------        -----------        -----------        -----------

Other comprehensive income, net                                                              (34,514)           (34,514)
                                                   -----------        -----------        -----------        -----------

Partners' equity (deficit), March 30, 2004         $  (307,932)       $ 1,044,413        $   223,146        $   959,627
                                                   ===========        ===========        ===========        ===========
</TABLE>


                       See Notes to Financial Statements.



                                       19

<PAGE>

<TABLE>
<CAPTION>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                            STATEMENTS OF CASH FLOWS
                    YEARS ENDED MARCH 30, 2004, 2003 AND 2002


                                                              2004                 2003                  2002
                                                            ----------           ---------            ----------

CASH FLOWS FROM OPERATING ACTIVITIES

<S>                                                         <C>                  <C>                  <C>
Interest received                                           $  75,402            $ 105,058            $ 125,328
Cash used for local partnerships for
  deferred expenses                                                                                      (2,200)

Cash paid for
   administration fees                                        (16,353)            (132,195)            (388,645)
   management fees                                           (183,663)            (299,800)            (274,000)
   professional fees                                          (66,380)             (53,730)             (53,037)
   State of New Jersey filing fees                            (38,634)
   printing, postage and other expenses                       (25,500)             (18,426)             (17,288)
                                                            ---------            ---------            ---------
Net cash used in operating activities                        (255,128)            (399,093)            (609,842)
                                                            ---------            ---------            ---------

CASH FLOWS FROM INVESTING ACTIVITIES

Cash distributions from local partnerships                     44,320               37,352               18,020
Maturity/redemption and sale of bonds                         204,500              419,395              100,000
                                                            ---------            ---------            ---------

Net cash provided by investing activities                     248,820              456,747              118,020
                                                            ---------            ---------            ---------

Net increase (decrease) in cash and cash
  equivalents                                                  (6,308)              57,654             (491,822)

Cash and cash equivalents at beginning of year                109,550               51,896              543,718
                                                            ---------            ---------            ---------

CASH AND CASH EQUIVALENTS AT END OF YEAR                    $ 103,242            $ 109,550            $  51,896
                                                            =========            =========            =========

Significant Non-Cash Investing Activities

Unrealized gain (loss) on investments in
  bonds, net                                                $ (34,514)           $ 225,741            $ (55,166)
                                                            =========            =========            =========
</TABLE>

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


                       See Notes to Financial Statements.


                                       20

<PAGE>

<TABLE>
<CAPTION>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                     STATEMENTS OF CASH FLOWS - (Continued)
                    YEARS ENDED MARCH 30, 2004, 2003 AND 2002


                                                         2004               2003               2002
                                                     ------------       -----------        -----------

RECONCILIATION OF NET LOSS TO NET CASH USED IN
   OPERATING ACTIVITIES

<S>                                                  <C>                <C>                <C>
Net loss                                             $  (611,662)       $  (875,199)       $(1,509,355)

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

   Equity in loss of investment in local
     partnerships                                        215,731            536,158          1,193,807
   Distributions from local partnerships
     classified as other income                          (33,360)           (21,713)           (11,491)
   Gain on redemption and sale of bonds                   (4,792)           (19,434)
   Amortization of net premium on investments
     in bonds                                              3,669              2,986              5,747
   Accretion of zero coupon bonds                        (86,491)           (86,491)           (86,491)
   Decrease in interest receivable                         2,670              5,456              1,636
   Increase in payable to general partner and
     affiliates                                          261,126            145,147             30,497
   Decrease in accounts payable and accrued
     expenses                                             (2,019)           (86,003)          (231,992)
   Decrease in other liabilities                                                                (2,200)
                                                     -----------        -----------        -----------

NET CASH USED IN OPERATING ACTIVITIES                $  (255,128)       $  (399,093)       $  (609,842)
                                                     ===========        ===========        ===========
</TABLE>



                       See Notes to Financial Statements.



                                       21

<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                          NOTES TO FINANCIAL STATEMENTS
                          MARCH 30, 2004, 2003 AND 2002


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 in
     accordance with Section 42 of the Internal Revenue Code (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 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.

     Investment in Local Partnerships
     --------------------------------

     The Partnership accounts for its investment in local partnerships in
     accordance with the equity method of accounting, under which the investment
     is carried at cost and is adjusted for the Partnership's share of each
     Local Partnership's results of operations and by 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. Equity in loss in excess of
     the Partnership's investment balance in a Local Partnership is allocated to
     other partners' capital in any 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
     or additional investment is made by the Partnership. Distributions received
     subsequent to the elimination of an investment balance for any such
     investment in a Local Partnership are recorded as other income from local
     partnerships.

     The Partnership regularly assesses the carrying value of its investments in
     local partnerships. If the carrying value of an investment in a Local
     Partnership exceeds the estimated value derived by management, the
     Partnership reduces its investment in any such Local Partnership and
     includes such reduction in equity in loss of investment in local
     partnerships.

     Use of Estimates
     ----------------

     The preparation of financial statements in conformity with accounting
     principles generally accepted in the United States of America requires
     management to make estimates and assumptions that affect the reported
     amounts of assets and liabilities and disclosure of contingent assets and
     liabilities as of 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.

     Cash and Cash Equivalents
     -------------------------

     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.

     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 Statement of Financial Accounting Standard
     ("SFAS") No. 109, "Accounting for Income Taxes," the Partnership has
     included in Note 7 disclosures related to differences in the book and tax
     bases of accounting.

                                       22

<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2004, 2003 AND 2002


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

   Reclassifications
   -----------------

   Certain prior year balances have been reclassified to conform to the current
   year presentation.

   Investments in Bonds
   --------------------

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

   Premiums and discounts on investments in bonds are amortized (accreted) using
   the effective yield 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. Realized gain (loss) on
   redemption or sale of investments in bonds are included in, or offset
   against, interest revenue on the basis of the adjusted cost of each specific
   investment redeemed or sold.

   Recently Issued Accounting Standards
   ------------------------------------

   In January 2003, the Financial Accounting Standards Board ("FASB") issued
   FASB Interpretation No. 46, "Consolidation of Variable Interest Entities"
   ("FIN 46"). FIN 46 is applicable immediately for variable interest entities
   created after January 31, 2003. For variable interest entities created before
   February 1, 2003, the provisions of FIN 46 are applicable no later than
   December 15, 2003. The Partnership has not created any variable interest
   entities after January 31, 2003. In December 2003, the FASB redeliberated
   certain proposed modifications and revised FIN 46 ("FIN 46 (R)"). The revised
   provisions are applicable no later than the first reporting period ending
   after March 15, 2004. The adoption of FIN 46 (R) is not expected to have a
   material impact on the Partnership's financial reporting and disclosure.

   In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
   Instruments with Characteristics of both Liabilities and Equity." SFAS No.
   150 changes the accounting for certain financial instruments that, under
   previous guidance, could be classified as equity or "mezzanine" equity, by
   now requiring those instruments to be classified as liabilities (or assets in
   some circumstances) in the balance sheets. Further, SFAS No. 150 requires
   disclosure regarding the terms of those instruments and settlement
   alternatives. The guidance in SFAS No. 150 generally was effective for all
   financial instruments entered into or modified after May 31, 2003, and was
   otherwise effective at the beginning of the first interim period beginning
   after June 15, 2003. The Partnership has evaluated SFAS No. 150 and
   determined that it does not have an impact on the Partnership's financial
   reporting and disclosures.


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
   organization and offering 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 as syndication costs. 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.

                                       23

<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2004, 2003 AND 2002


3. Cash and Cash Equivalents

   As of March 30, 2004, the Partnership has cash and cash equivalents of
   $103,242 that are deposited in interest bearing accounts with an institution
   that is not insured by the Federal Deposit Insurance Corporation.


4. Investments in Bonds

   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 the providing of operating advances
   resulting from circumstances that may arise in connection with the Local
   Partnerships. Investments in bonds are reflected in the accompanying balance
   sheets at estimated fair value.

   As of March 30, 2004, certain information concerning investments in bonds is
   as follows:

<TABLE>
<CAPTION>

                                                                       Gross              Gross
                                                   Amortized         unrealized         unrealized         Estimated
    Description and maturity                         cost              gains              losses           fair value
    ------------------------                      ----------         ----------         ----------         ----------

<S>                                              <C>                <C>                <C>                <C>
Corporate debt securities
   Within one year                                $  399,999         $    7,189         $     --           $  407,188
   After one year through five years                 504,756             66,929               --              571,685
                                                  ----------         ----------         ----------         ----------

                                                     904,755             74,118               --              978,873
                                                  ----------         ----------         ----------         ----------

U.S. Treasury debt securities
   After one year through five years               1,507,257            149,028               --            1,656,285
                                                  ----------         ----------         ----------         ----------

                                                  $2,412,012         $  223,146         $     --           $2,635,158
                                                  ==========         ==========         ==========         ==========

<CAPTION>

      As of March 30, 2003, certain information concerning investments in bonds
is as follows:

                                                                       Gross              Gross
                                                   Amortized         unrealized         unrealized         Estimated
    Description and maturity                         cost              gains              losses           fair value
    ------------------------                      ----------         ----------         ----------         ----------

<S>                                              <C>                <C>                <C>                <C>
Corporate debt securities
   After one year through five years              $  784,039         $   47,212         $     --           $  831,251
   After five years through ten years                319,549             47,259               --              366,808
                                                  ----------         ----------         ----------         ----------

                                                   1,103,588             94,471               --            1,198,059
                                                  ----------         ----------         ----------         ----------

U.S. Treasury debt securities
   After one year through five years                 752,158             85,427               --              837,585
   After five years through ten years                673,152             77,762               --              750,914
                                                  ----------         ----------         ----------         ----------

                                                   1,425,310            163,189               --            1,588,499
                                                  ----------         ----------         ----------         ----------

                                                  $2,528,898         $  257,660         $     --           $2,786,558
                                                  ==========         ==========         ==========         ==========
</TABLE>


                                       24

<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2004, 2003 AND 2002


5. Investment in Local Partnerships

   As of March 30, 2004, the Partnership owns a limited partnership interest in
   the following Local Partnerships:

   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 ("Country View");
  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 ("Justin");
  22. LaBelle Commons, Ltd.;
  23. Lawrence Road Properties, Ltd.;
  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. ("North Calhoun");
  31. Orange City Plaza, Limited Partnership ("Orange City");
  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 ("Summerfield");
  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. ("West Calhoun"); and
  43. Westminster Apartments Limited Partnership ("Westminster").

  * An affiliate of the General Partner is a general partner of and/or provides
    services to the Local Partnership.


                                       25

<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2004, 2003 AND 2002

5. Investment in Local Partnerships (continued)

   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, own a 99% Local
   Partnership Interest in the following Local Partnerships:

                                                    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


   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. Under the terms of each of the Local Partnership's partnership
   agreements, the Partnership committed to make capital contribution payments
   in the aggregate amount of $29,264,476, all of which has been paid as of
   March 30, 2004. As of December 31, 2003, the Local Partnerships have
   outstanding mortgage loans payable totaling approximately $82,968,000 and
   accrued interest payable on such loans totaling $4,414,000, which are secured
   by security interests and liens common to mortgage 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
   $2,462,019, $2,586,565, and $2,440,940 for the years ended December 31, 2003,
   2002 and 2001, respectively, as reflected in the combined statements of
   operations of the Local Partnerships reflected herein Note 5.

   As of December 31, 2003, Westminster was in default under the terms of its
   first mortgage; payments of principal, interest and replacement reserve
   deposits are approximately five years in arrears, representing an arrearage
   of approximately $487,000. Although Westminster has been involved in
   negotiating a restructuring of its mortgage debt, a final resolution has not
   been reached and documented. There can be no assurance that the issues will
   be resolved and the mortgage remains in default without a formal forbearance.

   As a result of management's assessment of the carrying value of the
   investment in local partnerships under applicable accounting guidelines (see
   Note 1), the Partnership reduced its investment in Country View, North
   Calhoun and West Calhoun by $34,787, $29,765 and $38,511 respectively for the
   year ended March 31, 2003. The partnership reduced the investment in Justin,
   Orange City, and Summerfield by $234,362, $194,862, and $205,205
   respectively, for the year ended March 31, 2002. Such losses are included in
   the equity in loss of investment in local partnerships in the accompanying
   statements of operations of the Partnership for the years indicated.

   The combined balance sheets of the Local Partnerships as of December 31, 2003
   and 2002 and the combined statements of operations of the Local Partnerships
   for the years ended December 31, 2003, 2002 and 2001 are reflected on pages
   27 and 28, respectively.


                                       26

<PAGE>

<TABLE>
<CAPTION>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2004, 2003 AND 2002


5. Investment in Local Partnerships (continued)

   The combined balance sheets of the Local Partnerships as of December 31, 2003
   and 2002 are as follows:

                                                              2003               2002
                                                          ------------       ------------
    ASSETS

<S>                                                       <C>                <C>
Cash and cash equivalents                                 $  1,204,402       $  1,339,340
Rents receivable                                               420,753            481,854
Escrow deposits and reserves                                 5,673,980          5,297,817
Land                                                         3,910,215          3,910,215
Buildings and improvements (net of
  accumulated depreciation of $51,152,480
  and $47,186,840)                                          63,830,791         67,320,566
Intangible assets (net of accumulated
  amortization of $527,467 and $503,495)                       525,341            545,454
Other assets                                                 1,236,568          1,024,189
                                                          ------------       ------------

                                                          $ 76,802,050       $ 79,919,435
                                                          ============       ============

LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities

  Accounts payable and accrued expenses                   $  1,113,199       $  1,045,598
  Due to related parties                                     5,292,379          5,092,769
  Mortgage loans                                            82,968,250         83,716,219
  Accrued interest                                           4,414,472          4,026,656
  Other liabilities                                            696,805            691,048
                                                          ------------       ------------

                                                            94,485,105         94,572,290
                                                          ------------       ------------

Partners' equity (deficit)

  American Tax Credit Properties III L.P.
   Capital contributions, net of distributions              28,812,656         28,866,952
   Cumulative loss                                         (26,380,621)       (26,164,890)
                                                          ------------       ------------

                                                             2,432,035          2,702,062
                                                          ------------       ------------

  General partners and other limited partners
   Capital contributions, net of distributions                (310,121)          (267,633)
   Cumulative loss                                         (19,804,969)       (17,087,284)
                                                          ------------       ------------

                                                          (20,115,090)        (17,354,917)
                                                          ------------       ------------

                                                          (17,683,055)        (14,652,855)
                                                          ------------       ------------

                                                          $ 76,802,050       $ 79,919,435
                                                          ============       ============
</TABLE>


                                       27

<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2004, 2003 AND 2002


5. Investment in Local Partnerships (continued)

   The combined statements of operations of the Local Partnerships for the years
   ended December 31, 2003, 2002 and 2001 are as follows:

<TABLE>
<CAPTION>

                                                       2003                   2002                   2001
                                                   ------------           ------------           ------------

REVENUE

<S>                                                <C>                    <C>                    <C>
Rental                                             $ 11,365,730           $ 11,188,578           $ 10,917,485
Interest and other                                      278,912                343,487                376,528
                                                   ------------           ------------           ------------

Total Revenue
                                                     11,644,642             11,532,065             11,294,013
                                                   ------------           ------------           ------------

EXPENSES

Administrative                                        2,275,935              2,295,834              2,305,944
Utilities                                             1,261,598              1,184,078              1,223,442
Operating and maintenance                             2,543,295              2,671,075              2,511,755
Taxes and insurance                                   1,603,756              1,461,674              1,273,886
Financial                                             2,848,664              3,072,036              3,115,247
Depreciation and amortization                         4,044,810              4,100,221              4,125,260
                                                   ------------           ------------           ------------

Total Expenses                                       14,578,058             14,784,918             14,555,534
                                                   ------------           ------------           ------------

NET LOSS                                           $ (2,933,416)          $ (3,252,853)          $ (3,261,521)
                                                   ============           ============           ============
NET LOSS ATTRIBUTABLE TO

  American Tax Credit
  Properties III L.P.
  General partners and other
   limited partners, which
   includes $2,462,019,
   $2,586,565 and $2,444,940 of                    $   (215,731)          $   (433,095)          $   (559,378)

   Partnership loss in excess of investment          (2,717,685)            (2,819,758)            (2,702,143)
                                                   ------------           ------------           ------------

                                                   $ (2,933,416)          $ (3,252,853)          $ (3,261,521)
                                                   ============           ============           ============
</TABLE>



                                       28

<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2004, 2003 AND 2002


5. Investment in Local Partnerships (continued)

   Investment activity with respect to each Local Partnership for the year ended
   March 30, 2004 is as follows:

<TABLE>
<CAPTION>

Investment activity with respect to each Local Partnership for the year ended
March 30, 2004 is as follows:

                                                                                                               Cash      Investment
                                                         Partnership's        Adjustment       Cash        distributions  in Local
                                            Investment     equity in         to carrying   distributions   classified as   Partner-
                                             in Local     income (loss)         value         received     other income      ship
                                            Partnership     for the           during the     during the     during the     balance
                                            balance as     year ended         year ended     year ended     year ended      as of
                                            of March 30,  December 31,         March 30,     March 30,       March 30,    March 30,
Name of Local Partnership                      2003          2003                2004           2004           2004          2004

<S>                                         <C>           <C>        <C>      <C>             <C>          <C>            <C>
April Gardens Apartments II Limited         $     --      $   --     (2)      $       --      $   (960)    $     960      $      --
  Partnership
Ashland Park Apartments, L.P.                     --          --     (2)              --            --            --             --
Auburn Family, L.P.                               --          --     (2)              --            --            --             --
Batesville Family, L.P.                           --          --     (2)              --            --            --             --
Bay Springs Elderly, L.P.                         --          --     (2)              --            --            --             --
Brisas del Mar Apartments Limited
  Partnership                                     --          --     (2)              --         (1,320)        1,320            --
Bruce Housing Associates, L.P.                    --          --     (2)              --            --            --             --
Carrington Limited Dividend Housing
  Association Limited Partnership              336,795      (129,106)                 --            --            --        207,689
Chestnut Park Associates, L.P.                    --          --     (2)              --            --            --             --
Chowan Senior Manor Associates Limited            --          --     (2)              --            --            --             --
  Partnership
Christian Street Commons Associates               --          --     (2)              --            --            --             --
Country View Apartments                           --          --     (2)              --        (1,500)        1,500             --
Desarrollos de Belen Limited Partnership          --          --     (2)              --        (2,000)        2,000             --
Desarrollos de Emaus Limited Partnership          --          --     (2)              --        (3,000)        3,000             --
Ellinwood Heights Apartments, L.P.              25,885        10,113                  --          (480)           --          35,518
Fulton Street Houses Limited Partnership          --          --     (2)              --            --            --             --
Hayes Run Limited Partnership                     --          --     (2)              --        (1,785)        1,785             --
Howard L. Miller Sallisaw Apartments II,         1,203          (723)(1)              --          (480)           --             --
  L.P.
Hurlock Meadow Limited Partnership                --          --     (2)              --            --            --             --
Ivy Family, L.P.                                  --          --     (2)              --            --            --             --
Justin Associates                                 --          --     (2)              --            --            --             --
LaBelle Commons, Ltd.                             --          --     (2)              --        (2,320)        2,320             --
Lawrence Road Properties, Ltd.                    --          --     (2)              --            --            --             --
Loma Del Norte Limited Partnership                --          --     (2)              --            --            --             --
Long Reach Associates Limited Partnership         --          --     (2)              --            --            --             --
Mirador del Toa Limited Partnership               --          --     (2)              --          (572)          572             --
Moore Haven Commons, Ltd.                         --          --     (2)              --            --            --             --
NP-89 Limited Dividend Housing
  Association Limited Partnership              860,503       (84,828)                 --       (10,000)           --        765,675
Nash Hill Associates, Limited Partnership        2,179        (2,179)(1)              --            --            --             --
North Calhoun City, L.P.                          --          --     (2)              --            --            --             --
Orange City Plaza, Limited Partnership            --          --     (2)              --        (2,500)        2,500             --
Puerta del Mar Limited Partnership                --          --     (2)              --        (1,320)        1,320             --
Purvis Heights Properties, L.P.                  9,008        (9,008)(1)              --            --            --             --
Queen Lane Investors                              --          --     (2)              --            --            --             --
Somerset Manor, Ltd.                              --          --     (2)              --            --            --             --
Sugar Cane Villas, Ltd.                           --          --     (2)              --       (11,083)       11,083             --
Summerfield Apartments Limited Partnership        --          --     (2)              --        (5,000)        5,000             --
Sydney Engel Associates L.P.                      --          --     (2)              --            --            --             --
Union Valley Associates Limited                   --          --     (2)              --            --            --             --
  Partnership
Walnut Grove Family, L.P.                         --          --     (2)              --            --            --             --
Waynesboro Apartments Limited Partnership         --          --     (2)              --            --            --             --
West Calhoun City, L.P.                           --          --     (2)              --            --            --             --
Westminster Apartments Limited Partnership        --          --     (2)              --            --            --             --
                                             --------     ----------           ---------      --------     ---------     ----------

                                             1,235,573    $ (215,731)          $      --      $(44,320)    $  33,360     $1,008,882
                                            ==========    ==========           =========      ========     =========     ==========
</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 or additional investment is
      made by the Partnership.
(3)   The Partnership has adjusted the investment's carrying value in accordance
      with applicable accounting guidelines.


                                       29

<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2004, 2003 AND 2002


5. Investment in Local Partnerships (continued)

Investment activity with respect to each Local Partnership for the year ended
March 30, 2003 is as follows:

<TABLE>
<CAPTION>

                                                                                                               Cash      Investment
                                                         Partnership's        Adjustment       Cash        distributions  in Local
                                            Investment     equity in         to carrying   distributions   classified as   Partner-
                                             in Local     income (loss)         value         received     other income      ship
                                            Partnership     for the           during the     during the     during the     balance
                                            balance as     year ended         year ended     year ended     year ended      as of
                                            of March 30,  December 31,         March 30,     March 30,       March 30,    March 30,
Name of Local Partnership                      2002          2002                2003          2003            2003          2003
<S>                                         <C>           <C>       <C>     <C>                <C>           <C>          <C>
April Gardens Apartments II Limited         $      --     $    --   (2)     $    --            $   (960)     $    960     $     --
  Partnership
Ashland Park Apartments, L.P.                      --          --   (2)          --                  --            --           --
Auburn Family, L.P.                                --          --   (2)          --                  --            --           --
Batesville Family, L.P.                            --          --   (2)          --                  --            --           --
Bay Springs Elderly, L.P.                          --          --   (2)          --                  --            --           --
Brisas del Mar Apartments Limited                  --          --   (2)          --              (1,320)        1,320           --
  Partnership
Bruce Housing Associates, L.P.                     --          --   (2)          --                  --            --           --
Carrington Limited Dividend Housing
  Association Limited Partnership             461,757      (124,962)             --                  --            --       336,795
Chestnut Park Associates, L.P.                     --          --   (2)          --                  --            --           --
Chowan Senior Manor Associates Limited             --          --   (2)          --              (1,580)        1,580           --
  Partnership
Christian Street Commons Associates                --          --   (2)          --                  --            --           --
Country View Apartments                        47,058       (11,521)          (34,787) (3)         (750)           --           --
Desarrollos de Belen Limited Partnership           --          --   (2)          --                  --            --           --
Desarrollos de Emaus Limited Partnership           --          --   (2)          --                  --            --           --
Ellinwood Heights Apartments, L.P.             20,606         5,279              --                  --            --        25,885
Fulton Street Houses Limited Partnership           --          --   (2)          --                  --            --           --
Hayes Run Limited Partnership                      --          --   (2)          --              (1,785)        1,785           --
Howard L. Miller Sallisaw Apartments II,        4,115        (2,912)             --                  --            --         1,203
  L.P.
Hurlock Meadow Limited Partnership                 --          --   (2)          --              (3,176)        3,176           --
Ivy Family, L.P.                                   --          --   (2)          --                  --            --           --
Justin Associates                                  --          --                --                  --            --           --
LaBelle Commons, Ltd.                              --          --   (2)          --                  --            --           --
Lawrence Road Properties, Ltd.                     --          --   (2)          --                  --            --           --
Loma Del Norte Limited Partnership              9,220        (5,220)(1)          --              (4,000)           --           --
Long Reach Associates Limited Partnership          --          --   (2)          --                  --            --           --
Mirador del Toa Limited Partnership                --          --   (2)          --                (572)          572           --
Moore Haven Commons, Ltd.                          --          --   (2)          --                  --            --           --
NP-89 Limited Dividend Housing
  Association Limited Partnership           1,082,233      (212,730)             --             (10,000)           --       860,503
Nash Hill Associates, Limited Partnership      42,781       (40,602)             --                  --            --         2,179
North Calhoun City, L.P.                       37,012        (7,247)          (29,765) (3)           --            --           --
Orange City Plaza, Limited Partnership             --          --   (2)          --                  --            --           --
Puerta del Mar Limited Partnership                 --          --   (2)          --              (1,320)          1,320         --
Purvis Heights Properties, L.P.                32,896       (22,999)             --                (889)           --         9,008
Queen Lane Investors                               --          --   (2)          --                  --            --           --
Somerset Manor, Ltd.                               --          --   (2)          --                  --            --           --
Sugar Cane Villas, Ltd.                            --          --   (2)          --                  --            --           --
Summerfield Apartments Limited Partnership         --          --   (2)          --             (10,000)         10,000         --
Sydney Engel Associates L.P.                       --          --   (2)          --              (1,000)          1,000         --
Union Valley Associates Limited                    --          --   (2)          --                  --            --           --
  Partnership
Walnut Grove Family, L.P.                          --          --   (2)          --                  --            --           --
Waynesboro Apartments Limited Partnership          --          --   (2)          --                  --            --           --
West Calhoun City, L.P.                        48,692       (10,181)          (38,511) (3)           --            --           --
Westminster Apartments Limited Partnership         --          --   (2)          --                  --            --           --
                                           ----------     ---------        ----------         ---------       ---------  ----------

                                           $1,787,370     $(433,095)       $ (103,063)        $ (37,352)      $  21,713  $1,235,573
                                           ==========     ==========       ==========         =========       =========  ==========
</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 or additional investment is
      made by the Partnership.
(3)   The Partnership has adjusted the investment's carrying value in accordance
      with applicable accounting guidelines.


                                       30

<PAGE>

                   AMERICAN TAX CREDIT PROPERTIES III L.P.
                 NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2004, 2003 AND 2002


5. Investment in Local Partnerships (continued)

   Property information for each Local Partnership as of December 31, 2003 is as
   follows:

<TABLE>
<CAPTION>

                                                             Mortgage                           Buildings and       Accumulated
     Name of Local Partnership                            loans payable        Land             improvements        depreciation
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>                <C>                <C>                 <C>

April Gardens Apartments II Limited
  Partnership                                            $   1,973,815      $      39,984      $   2,491,962       $  (1,303,642)
Ashland Park Apartments, L.P.                                1,025,226             50,160          1,246,492            (592,754)
Auburn Family, L.P.                                            458,699             20,000            580,872            (252,444)
Batesville Family, L.P.                                      1,423,964             52,000          1,843,095            (752,388)
Bay Springs Elderly, L.P.                                      668,431             38,000            852,608            (373,554)
Brisas del Mar Apartments Limited
  Partnership                                                2,620,029            100,280          3,372,029          (1,754,661)
Bruce Housing Associates, L.P.                               1,092,492             16,000          1,482,081            (720,761)
Carrington Limited Dividend Housing
  Association Limited Partnership                            3,272,459            200,000          6,590,677          (3,243,210)
Chestnut Park Associates, L.P.                               4,858,207            781,700          8,654,778          (4,006,230)
Chowan Senior Manor Associates Limited
  Partnership                                                1,235,772             86,101          1,530,162            (737,455)
Christian Street Commons Associates                            581,261               --                7,545              (1,359)
Country View Apartments                                        926,215             35,698          1,240,915            (381,875)
Desarrollos de Belen Limited Partnership                     1,857,433             96,190          2,532,279            (961,575)
Desarrollos de Emaus Limited Partnership                     3,157,278            214,000          4,050,973          (1,456,740)
Ellinwood Heights Apartments, L.P.                             679,943             10,000            952,966            (296,761)
Fulton Street Houses Limited Partnership                     3,869,930                  2          6,036,470          (2,628,521)
Hayes Run Limited Partnership                                1,409,261             85,060          1,627,418            (520,875)
Howard L. Miller Sallisaw Apartments
  II, L.P.                                                     608,937             39,000            728,036            (245,795)
Hurlock Meadow Limited Partnership                           1,254,600             49,525          1,594,074            (731,586)
Ivy Family, L.P.                                               772,383             11,000          1,076,150            (535,782)
Justin Associates                                            2,270,290             27,472          4,374,667          (1,910,828)
LaBelle Commons, Ltd.                                        1,000,922             98,947          1,184,937            (501,946)
Lawrence Road Properties, Ltd.                                 750,067             50,000            959,446            (383,812)
Loma Del Norte Limited Partnership                           1,421,608             84,874          1,853,991            (617,901)
Long Reach Associates Limited Partnership                    1,462,159            118,446          1,914,965            (670,896)
Mirador del Toa Limited Partnership                          1,857,814            105,000          2,343,423          (1,241,742)
Moore Haven Commons, Ltd.                                      917,231             73,645          1,197,000            (581,421)
NP-89 Limited Dividend Housing Association
  Limited Partnership                                        3,767,077            150,000          7,573,732          (3,429,706)
Nash Hill Associates, Limited Partnership                    1,451,870            123,876          1,696,415            (587,562)
North Calhoun City, L.P.                                       475,003             12,000            663,302            (284,365)
Orange City Plaza, Limited Partnership                         417,935             53,904          1,051,852            (405,494)
Puerta del Mar Limited Partnership                           2,493,105            115,000          3,212,170          (1,680,289)
Purvis Heights Properties, L.P.                              1,135,775             47,000          1,507,912            (580,547)
Queen Lane Investors                                         1,524,745             60,301          2,781,755          (1,294,242)
Somerset Manor, Ltd.                                           887,724             53,383          1,117,435            (532,469)
Sugar Cane Villas, Ltd.                                      3,270,912             58,500          4,088,461          (1,964,750)
Summerfield Apartments Limited Partnership                   1,644,932            195,411          2,710,360            (838,625)
Sydney Engel Associates L.P.                                16,394,250            284,305         19,443,725          (9,249,275)
Union Valley Associates Limited Partnership                  1,430,974             97,800          1,758,877            (583,772)
Walnut Grove Family, L.P.                                      838,360             30,000          1,053,700            (471,254)
Waynesboro Apartments Limited Partnership                    1,465,594             76,000          1,792,999            (613,786)
West Calhoun City, L.P.                                        735,596             18,000          1,066,765            (459,494)
Westminster Apartments Limited Partnership                   1,607,972             51,651          1,143,800            (770,336)
                                                         -------------      -------------      -------------       -------------
                                                         $  82,968,250      $   3,910,215      $ 114,983,271       $ (51,152,480)
                                                         =============      =============      =============       =============
</TABLE>


                                       31

<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2004, 2003 AND 2002


5.    Investment in Local Partnerships (continued)

      Property information for each Local Partnership as of December 31, 2002 is
as follows:

<TABLE>
<CAPTION>

                                                             Mortgage                           Buildings and       Accumulated
     Name of Local Partnership                            loans payable        Land             improvements        depreciation
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>                <C>                <C>                 <C>
April Gardens Apartments II Limited
  Partnership                                            $   1,980,296      $      39,984      $   2,484,604       $  (1,198,472)
Ashland Park Apartments, L.P.                                1,028,823             50,160          1,247,739            (547,591)
Auburn Family, L.P.                                            461,511             20,000            564,799            (239,518)
Batesville Family, L.P.                                      1,428,095             52,000          1,820,751            (705,028)
Bay Springs Elderly, L.P.                                      670,554             38,000            847,593            (354,876)
Brisas del Mar Apartments Limited
  Partnership                                                2,629,597            100,280          3,362,895          (1,623,278)
Bruce Housing Associates, L.P.                               1,096,634             16,000          1,460,299            (675,664)
Carrington Limited Dividend Housing
  Association Limited Partnership                            3,313,001            200,000          6,576,478          (2,992,681)
Chestnut Park Associates, L.P.                               4,936,911            781,700          8,654,778          (3,692,202)
Chowan Senior Manor Associates Limited
  Partnership                                                1,242,244             86,101          1,530,162            (675,850)
Christian Street Commons Associates                            590,264               --                7,545              (1,085)
Country View Apartments                                        929,391             35,698          1,238,033            (348,450)
Desarrollos de Belen Limited Partnership                     1,863,565             96,190          2,534,399            (872,191)
Desarrollos de Emaus Limited Partnership                     3,167,700            214,000          4,050,973          (1,318,784)
Ellinwood Heights Apartments, L.P.                             682,238             10,000            892,848            (278,602)
Fulton Street Houses Limited Partnership                     3,869,930                  2          6,023,119          (2,402,631)
Hayes Run Limited Partnership                                1,413,949             85,060          1,566,104            (475,651)
Howard L. Miller Sallisaw Apartments
  II, L.P.                                                     610,844             39,000            735,346            (240,073)
Hurlock Meadow Limited Partnership                           1,259,122             49,525          1,587,778            (671,775)
Ivy Family, L.P.                                               778,437             11,000          1,075,733            (501,620)
Justin Associates                                            2,312,477             27,472          4,369,992          (1,750,111)
LaBelle Commons, Ltd.                                        1,004,428             98,947          1,184,937            (458,923)
Lawrence Road Properties, Ltd.                                 752,561             50,000            947,764            (358,996)
Loma Del Norte Limited Partnership                           1,426,203             84,874          1,814,082            (568,731)
Long Reach Associates Limited Partnership                    1,466,875            118,446          1,878,410            (623,154)
Mirador del Toa Limited Partnership                          1,864,895            105,000          2,341,013          (1,155,272)
Moore Haven Commons, Ltd.                                      920,328             73,645          1,197,000            (539,431)
NP-89 Limited Dividend Housing Association
  Limited Partnership                                        3,850,171            150,000          7,536,598          (3,128,386)
Nash Hill Associates, Limited Partnership                    1,456,772            123,876          1,695,582            (542,552)
North Calhoun City, L.P.                                       479,097             12,000            645,767            (270,259)
Orange City Plaza, Limited Partnership                         425,929             53,904          1,045,306            (373,561)
Puerta del Mar Limited Partnership                           2,502,210            115,000          3,201,130          (1,553,840)
Purvis Heights Properties, L.P.                              1,136,111             47,000          1,506,005            (541,865)
Queen Lane Investors                                         1,532,919             60,301          2,781,754          (1,188,295)
Somerset Manor, Ltd.                                           890,588             53,383          1,107,954            (491,700)
Sugar Cane Villas, Ltd.                                      3,281,591             58,500          4,088,461          (1,819,665)
Summerfield Apartments Limited Partnership                   1,677,183            195,411          2,708,470            (771,346)
Sydney Engel Associates L.P.                                16,682,455            284,305         19,443,724          (8,540,801)
Union Valley Associates Limited Partnership                  1,435,626             97,800          1,758,877            (540,318)
Walnut Grove Family, L.P.                                      840,843             30,000          1,041,805            (445,539)
Waynesboro Apartments Limited Partnership                    1,470,625             76,000          1,790,894            (575,728)
West Calhoun City, L.P.                                        745,254             18,000          1,030,716            (435,562)
Westminster Apartments Limited Partnership                   1,607,972             51,651          1,129,209            (696,783)
                                                         -------------      -------------      -------------       -------------
                                                         $  83,716,219      $   3,910,215      $ 114,507,406       $ (47,186,840)
                                                         =============      =============      =============       =============
</TABLE>


                                       32

<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2004, 2003 AND 2002


5. Investment in Local Partnerships (continued)

   The summary of property activity during the year ended December 31, 2003 is
     as follows:

<TABLE>
<CAPTION>

                                                         Net change
                                                         during the
                                  Balance as of          year ended             Balance as
                                 December 31, 2002    December 31, 2003      December 31, 2003
                                 -----------------    -----------------      -----------------

<S>                               <C>                   <C>                    <C>
Land                              $   3,910,215         $        --            $   3,910,215
Buildings and improvements          114,507,406               475,865            114,983,271
                                  -------------         -------------          -------------
                                    118,417,621               475,865            118,893,486
Accumulated depreciation            (47,186,840)           (3,965,640)           (51,152,480)
                                  -------------         -------------          -------------
                                  $  71,230,781         $  (3,489,775)         $  67,741,006
                                  =============         =============          =============
</TABLE>

6. Transactions with General Partner and Affiliates

   For the years ended March 30, 2004, 2003 and 20012 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>

                                             2004                        2003                        2002
                                     ----------------------      ----------------------      ----------------------
                                       Paid        Incurred        Paid        Incurred        Paid        Incurred
                                     --------      --------      --------      --------      --------      --------

<S>                                 <C>           <C>           <C>           <C>           <C>           <C>
Management fees (see Note 8)         $183,663      $230,571      $299,800      $230,571      $274,000      $230,571

Administration fees (see Note 8)       16,353       230,571        16,195       230,571       156,645       230,571
</TABLE>


   For the years ended December 31, 2003, 2002 and 2001, 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>

                                          2004                         2003                        2002
                                  -----------------------      ----------------------      ----------------------
                                   Paid          Incurred        Paid        Incurred        Paid        Incurred
                                  --------       --------      --------      --------      --------      --------

<S>                                 <C>           <C>           <C>           <C>           <C>          <C>
Property management fees          $43,159        $38,873        $32,851        $37,800      $30,585       $32,020

Insurance and other services       37,269         35,870         35,297         34,231       17,267        17,267
</TABLE>


                                       33

<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2004, 2003 AND 2002


7. Taxable Loss

   A reconciliation of the financial statement net loss of the Partnership for
   the years ended March 30, 2004, 2003 and 2002 to the tax return net loss for
   the years ended December 31, 2003, 2002 and 2001 is as follows:

<TABLE>
<CAPTION>

                                                           2004              2003               2002
                                                       -----------        -----------        -----------

<S>         <C>                                        <C>                <C>                <C>
Financial statement net loss for
  the years ended March 30, 2004,
  2003, and 2002                                       $  (611,662)       $  (875,199)       $(1,509,355)

Add (less) net transactions occurring between
  January 1, 2001 and March 30, 2001                          --                 --              (73,432)
  January 1, 2002 and March 30, 2002                          --              (72,489)            72,489
  January 1, 2003 and March 30, 2003                       (59,193)            59,193               --
  January 1, 2004 and March 30, 2004                        95,397               --                 --
                                                       -----------        -----------         ----------
Adjusted financial statement net
  loss for the years ended December
  31, 2003, 2002 and 2001                                 (575,458)          (888,495)        (1,510,298)

Adjustment to management and
  administration fees pursuant
  to Internal Revenue Code
  Section 267                                              146,259            145,147            143,797

Differences arising from equity
  in loss of investment in local
  partnerships                                          (2,720,797)        (2,773,921)        (2,112,608)

Other income from local partnerships                       (33,286)           (13,537)           (16,877)

Other differences                                           (5,904)            (9,961)            11,184
                                                       -----------        -----------         ----------

Tax return net loss for the
  years ended December 31, 2003,
  2002 and 2001                                        $(3,189,186)       $(3,540,767)       $(3,484,802)
                                                       ===========        ===========        ===========
</TABLE>

     The differences between the investment in local partnerships for tax and
     financial reporting purposes as of December 31, 2003 and 2002 are as
     follows:

                                                     2003              2002
                                                 ------------      ------------

Investment in local partnerships -
  financial reporting                            $  1,008,882      $  1,237,573
Investment in local partnerships - tax            (11,954,080)       (8,971,306)
                                                 ------------      ------------

                                                 $ 12,962,962      $ 10,208,879
                                                 ============      ============

     Payable to general partner and affiliate in the accompanying balance sheets
     represents accrued management and administrative fees not deductible for
     tax purposes pursuant to Internal Revenue Code Section 267.


                                       34

<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2004, 2003 AND 2002


8. Commitments and Contingencies

   Pursuant to the Partnership Agreement, the Partnership incurs an annual
   management fee ("Management Fee") and an annual additional management fee
   ("Additional Management Fee") payable to the General Partner for its services
   in connection with the management of the affairs of the Partnership. 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, 2004. 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, 2004.
   Such amounts are aggregated and reflected under the caption management fees
   in the accompanying financial statements. Unpaid Management Fees and
   Additional Management Fees in the amount of $1,256,577 and $1,209,669 are
   included in payable to general partner and affiliates in the accompanying
   balance sheets as of March 30, 2004 and 2003, respectively.

   In addition, pursuant to the Partnership Agreement, the Partnership is
   authorized to contract for administrative services provided to the
   Partnership. From the inception of the Partnership through November 23, 1999,
   such administrative services were provided by ML Fund Administrators Inc.
   ("MLFA"), an affiliate of the Selling Agent, pursuant to an Administrative
   Services Agreement. MLFA resigned the performance of its basic services under
   the Administrative Services Agreement effective November 23, 1999, with
   certain transitional services continued through April 30, 2000. The General
   Partner transitioned the administrative services to an affiliate of the
   General Partner without any changes to the terms of the Administrative
   Services Agreement. Pursuant to such agreement, the Partnership incurs an
   annual administration fee ("Administration Fee") and an annual additional
   administration fee ("Additional Administration Fee") for 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, 2004. 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, 2004. Such amounts are aggregated and
   reflected under the caption administration fees in the accompanying financial
   statements. Unpaid Administration Fees and Additional Administration Fees due
   to MLFA in the amount of $788,673 are included in accounts payable and
   accrued expenses in the accompanying balance sheets as of March 30, 2004 and
   2003. Unpaid Administration Fees and Additional Administration Fees due to an
   affiliate of the General Partner in the cumulative amount of $687,739 and
   $473,521 are included in due to general partner and affiliates in the
   accompanying balance sheets as of March 30, 2004 and 2003, 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. Since October 1997, the United States Department of
   Housing and Urban Development ("HUD") has issued a series of directives
   related to project based Section 8 contracts that define owners' notification
   responsibilities, advise owners of project based Section 8 properties of what
   their options are regarding the renewal of Section 8 contracts, provide
   guidance and procedures to owners, management agents, contract administrators
   and HUD staff concerning renewal of Section 8 contracts, provide policies and
   procedures on setting renewal rents and handling renewal rent adjustments and
   provide the requirements and procedures for opting-out of a Section 8 project
   based contract. 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 before debt service
   and debt structure of any or all Local Partnerships currently receiving such
   subsidy or similar subsidies. One Local Partnership's Section 8 contracts are
   currently subject to renewal under applicable HUD guidelines.


                                       35

<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2004, 2003 AND 2002


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.

   Cash and Cash Equivalents
   -------------------------

   The carrying amount approximates fair value.

   Investments in Bonds
   --------------------

   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.


   The estimated fair value of the Partnership's financial instruments as of
   March 30, 2004 and 2003 are disclosed elsewhere in the financial statements.

10. Quarterly Financial Information - Unaudited

   The following is a summary of results of operations for each of the four
   quarters for the years indicated:

<TABLE>
<CAPTION>

                                                First           Second            Third            Fourth
                                               Quarter          Quarter           Quarter          Quarter
                                            -----------------------------------------------------------------

2004
----

<S>                                          <C>               <C>               <C>              <C>
Total revenue                                $  44,897         $  58,432         $  46,115        $  44,262

Loss from operations                           (94,092)          (91,004)         (115,438)         (95,397)

Equity in loss of investment
  in local partnerships                        (61,546)          (25,744)          (38,902)         (89,539)

Net loss                                      (155,638)         (116,748)         (154,340)        (184,936)

2003
----

Total revenue                                $  57,556         $  48,609         $  48,056        $  70,033

Loss from operations                           (83,360)          (79,110)          (87,378)         (89,193)

Equity in loss of investment
  in local partnerships                       (103,853)         (138,879)         (135,450)        (157,976)

Net loss                                      (187,213)         (217,989)         (222,828)        (247,169)
</TABLE>


                                       36

<PAGE>

                     AMERICAN TAX CREDIT PROPERTIES III L.P.
                   NOTES TO FINANCIAL STATEMENTS - (Continued)
                          MARCH 30, 2004, 2003 AND 2002


10.   Quarterly Financial Information - Unaudited (continued)

<TABLE>
<CAPTION>

                                        First           Second             Third            Fourth
                                       Quarter          Quarter            Quarter          Quarter
                                     ------------------------------------------------------------------

<S>                                   <C>            <C>               <C>              <C>
2002
----

Total revenue                        $  62,265         $  54,341         $  52,769         $  46,552

Loss from operations                   (70,677)          (79,684)          (92,698)          (72,489)

Equity in loss of investment
  in local partnerships               (192,982)         (156,563)         (138,744)         (705,518)

Net loss                              (263,659)         (236,247)         (231,442)         (778,007)
</TABLE>




                                       37

<PAGE>

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

None

Item 9A.    Controls and Procedures

As of March 30, 2004, under the direction of the Chief Executive Officer and
Chief Financial Officer, Registrant evaluated the effectiveness of its
disclosure controls and procedures and internal controls over financial
reporting and concluded that (i) Registrant's disclosure controls and procedures
were effective as of March 30, 2004, and (ii) no changes occurred during the
quarter ended March 30, 2004, that materially affected, or are reasonably likely
to materially affect, such internal controls.

                                    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        Director
David A. Salzman          February 1, 2001          President
Neal Ludeke               September 21, 1989        Vice President and Treasurer
Gina S. Dodge             September 21, 1989        Secretary

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

Richard Paul Richman, age 56, is the sole Director of Richman Housing. Mr.
Richman is the Chairman and a stockholder of Richman Group. Mr. Richman is
involved in the syndication, development 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.

David A. Salzman, age 43, is the President of Richman Housing and is a
stockholder and the President of Richman Group. Mr. Salzman is responsible for
the acquisition and development of residential real estate for syndication for
Richman Group.

Neal Ludeke, age 46, is a Vice President and the Treasurer of Richman Housing.
Mr. Ludeke, a Vice President and the 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 the Treasurer of Richman
Asset Management, Inc. ("RAM"), an affiliate of Richman Housing. Mr. Ludeke's
responsibilities in connection with RAM include various partnership management
functions.

Gina S. Dodge, age 48, is the Secretary of Richman Housing. Ms. Dodge is a Vice
President and the Secretary of Richman Group. As the Director of Investor
Services, Ms. Dodge is responsible for communications with investors.

The Board of Directors of the General Partner acts as the audit committee of the
Registrant. Mr. Richman is a member of the Board of Directors of the General
Partner and is deemed to be an audit committee financial expert. Mr. Richman is
not independent of the Registrant.

The Board of Directors of the General Partner has adopted a code of ethics for
senior financial officers of the Registrant, applicable to the Registrant's
principal financial officer and comptroller or principal accounting officer, or
persons performing similar functions. The Registrant will provide to any person
without charge a copy of such code of ethics upon written request to the General
Partner at 599 W. Putnam Avenue, Greenwich, Connecticut 06830, Attention:
Secretary.

                                       38
<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,
2004, Richman Housing did not pay any remuneration to any of its officers or its
director.


Item 12.    Security Ownership of Certain Beneficial Owners and Management

Affiliates of Everest Properties, Inc., having the mailing address 155 N. Lake
Avenue, Suite 1000, Pasadena, California 91101 are the owners of 3,162 Units,
representing approximately 8.8% of all such Units. As of May 31, 2004, no person
or entity, other than affiliates of Everest Properties, Inc., 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 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 net tax losses and Low-income Tax Credits generated by Registrant during the
year ended December 31, 2003 allocated to the General Partner were $31,892 and
$1,331, respectively. The net tax losses and Low-income Tax Credits generated by
the General Partner during the year ended December 31, 2003 (from the allocation
of Registrant discussed above) and allocated to Richman Housing were $25,778 and
$1,076, 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, 2004.


Item 14.  Principal Accountant Fees and Services

The annual audit fees for Registrant for the years ended March 30, 2004 and 2003
were $42,873 and $41,333, respectively.

The annual tax preparation fees for Registrant for each of the years ended March
30, 2004 and 2003 were $10,000.



                                       39

<PAGE>

                                     PART IV

Item 15.    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>                                                         <C>
     10.1            April Gardens Apartments II Limited Partnership (A          Exhibit 10.1 to Form 10-Q Report
                     Delaware Limited Partnership) Amended and Restated          dated December 30, 1990
                     Agreement of Limited Partnership                            (File No. 33-31390)

     10.2            Ashland Park Apartments, L.P. Second Amended and Restated   Exhibit 10.2 to Form 10-K Report
                     Agreement of Limited Partnership                            dated March 30, 1991
                                                                                 (File No. 33-31390)

     10.3            Auburn Family, L.P. Amended and Restated Limited            Exhibit 10.1 to Form 10-Q Report
                     Partnership Agreement and Certificate of Limited            dated December 31, 1991
                     Partnership                                                 (File No. 0-19217)

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

     10.5            Batesville Family, L.P. Amendment No. 3 to the Amended      Exhibit 10.2 to Form 10-Q Report
                     and Restated Agreement of Limited Partnership               dated December 31, 1991
                                                                                 (File No. 0-19217)

     10.6            Bay Springs Elderly, L.P. (A Mississippi Limited            Exhibit 10.1 to Form 10-Q Report
                     Partnership) Amended and Restated Limited Partnership       dated September 29, 1991
                     Agreement and Certificate of Limited Partnership            (File No. 0-19217)

     10.7            Brisas del Mar Apartments Limited Partnership (A Delaware   Exhibit 10.3 to Form 10-Q Report
                     Limited Partnership) Amended and Restated Agreement of      dated December 30, 1990
                     Limited Partnership                                         (File No. 33-31390)

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

                                       40

<PAGE>

<CAPTION>

                                                                                 Incorporated by
                                     Exhibit                                     Reference to
                                     -------                                     ------------

<S>  <C>             <C>                                                        <C>
     10.9            Amendment No. 2 to the Bruce Housing Associates, L.P.       Exhibit 10.4 to Form 10-Q Report
                     Amended and Restated Agreement of Limited Partnership       dated December 30, 1990
                                                                                 (File No. 33-31390)

     10.10           Bruce Housing Associates, L.P. Amendment No. 3 to the       Exhibit 10.3 to Form 10-Q Report
                     Amended and Restated Agreement of Limited Partnership       dated December 31, 1991
                                                                                 (File No. 0-19217)

     10.11           Carrington Limited Dividend Housing Association Limited     Exhibit 10.1 to Form 10-Q Report
                     Partnership Amended and Restated Agreement of Limited       dated September 29, 1990
                     Partnership                                                 (File No. 33-31390)

     10.12           Carrington Limited Dividend Housing Association Limited     Exhibit 10.2 to Form 10-Q Report
                     Partnership Second Amended and Restated Agreement of        dated September 29, 1990
                     Limited Partnership                                         (File No. 33-31390)

     10.13           Carrington Limited Dividend Housing Association Limited     Exhibit 10.5 to Form 10-Q Report
                     Partnership Amendment No. 1 to the Second Amended and       dated December 30, 1990
                     Restated Agreement of Limited Partnership                   (File No. 33-31390)

     10.14           Chestnut Park Associates, L.P. Amended and Restated         Exhibit 10.3 to Form 10-Q Report
                     Agreement of Limited Partnership                            dated September 29, 1990
                                                                                 (File No. 33-31390)

     10.15           Chowan Senior Manor Associates Limited Partnership          Exhibit 10.15 to Form 10-K Report
                     Amended and Restated Agreement of Limited Partnership       dated March 30, 1992
                                                                                 (File No. 33-31390)

     10.16           Christian Street Commons Associates Amended and Restated    Exhibit 10.16 to Form 10-K Report
                     Limited Partnership Agreement and Certificate of Limited    dated March 30, 1992
                     Partnership                                                 (File No. 33-31390)

     10.17           Country View Apartments Second Amended and Restated         Exhibit 10.17 to Form 10-K Report
                     Limited Partnership Agreement and Certificate of Limited    dated March 30, 1992
                     Partnership                                                 (File No. 33-31390)

     10.18           Desarrollos de Belen Limited Partnership Amended and        Exhibit 10.18 to Form 10-K Report
                     Restated Agreement of Limited Partnership                   dated March 30, 1992
                                                                                 (File No. 33-31390)

     10.19           Desarrollos de Emaus Limited Partnership Amended and        Exhibit 10.19 to Form 10-K Report
                     Restated Agreement of Limited Partnership                   dated March 30, 1992
                                                                                 (File No. 33-31390)

     10.20           Ellinwood Heights Apartments, L.P. Amended and Restated     Exhibit 10.1 to Form 10-Q Report
                     Agreement of Limited Partnership                            dated June 29, 1991
                                                                                 (File No. 0-19217)


                                       41
<PAGE>

<CAPTION>

                                                                                 Incorporated by
                                     Exhibit                                     Reference to

<S>  <C>              <C>                                                        <C>
     10.21           Fulton Street Houses Limited Partnership Amended and        Exhibit 10.21 to Form 10-K Report
                     Restated Agreement of Limited Partnership                   dated March 30, 1992
                                                                                 (File No. 33-31390)

     10.22           Hayes Run Limited Partnership Amended and Restated          Exhibit 10.2 to Form 10-Q Report
                     Agreement of Limited Partnership                            dated June 29, 1991
                                                                                 (File No. 0-19217)

     10.23           Howard L. Miller Sallisaw Apartments II, L.P. Third         Exhibit 10.10 to Form 10-K Report
                     Amended and Restated Agreement and Certificate of Limited   dated March 30, 1991
                     Partnership                                                 (File No. 33-31390)

     10.24           Hurlock Meadow Limited Partnership Amended and Restated     Exhibit 10.24 to Form 10-K Report
                     Limited Partnership Agreement                               dated March 30, 1992
                                                                                 (File No. 33-31390)

     10.25           Amendment No. 1 to the Ivy Family, L.P. Amended and         Exhibit 10.6 to Form 10-Q Report
                     Restated Agreement of Limited Partnership                   dated December 30, 1990
                                                                                 (File No. 33-31390)

     10.26           Ivy Family, L.P. Amendment No. 3 to the Amended and         Exhibit 10.4 to Form 10-Q Report
                     Restated Agreement of Limited Partnership                   dated December 31, 1991
                                                                                 (File No. 0-19217)

     10.27           Justin Associates Amended and Restated Agreement and        Exhibit 10.7 to Form 10-Q Report
                     Certificate of Limited Partnership                          dated December 30, 1990
                                                                                 (File No. 33-31390)

     10.28           LaBelle Commons, Ltd. Amended and Restated Agreement of     Exhibit 10.13 to Form 10-K Report
                     Limited Partnership                                         dated March 30, 1991
                                                                                 (File No. 33-31390)

     10.29           LaBelle Commons, Ltd. Amendment No. 1 to Amended and        Exhibit 10.29 to Form 10-K Report
                     Restated Agreement of Limited Partnership                   dated March 30, 1992
                                                                                 (File No. 33-31390)

     10.30           Amendment No. 2 to the Lawrence Road Properties, Ltd.       Exhibit 10.8 to Form 10-Q Report
                     Amended and Restated Agreement of Limited Partnership       dated December 30, 1990
                                                                                 (File No. 33-31390)

     10.31           Lawrence Road Properties, Ltd. Amendment No. 3 to the       Exhibit 10.5 to Form 10-Q Report
                     Amended and Restated Agreement of Limited Partnership       dated December 31, 1991
                                                                                 (File No. 0-19217)

     10.32           Loma Del Norte Limited Partnership Amended and Restated     Exhibit 10.2 to Form 10-Q Report
                     Limited Partnership Agreement                               dated September 29, 1991
                                                                                 (File No. 0-19217)

     10.33           Long Reach Associates Limited Partnership Sixth Amended     Exhibit 10.15 to Form 10-K Report
                     and Restated Agreement of Limited Partnership               dated March 30, 1991
                                                                                 (File No. 33-31390)


                                       42
<PAGE>

<CAPTION>

                                                                                 Incorporated by
                                     Exhibit                                     Reference to
                                     -------                                     ------------

<S>  <C>              <C>                                                       <C>
     10.34           Mirador del Toa Limited Partnership Amended and Restated    Exhibit 10.16 to Form 10-K Report
                     Agreement of Limited Partnership                            dated March 30, 1991
                                                                                 (File No. 33-31390)

     10.35           Amendment No. 1 to the Mirador del Toa Limited              Exhibit 10.17 to Form 10-K Report
                     Partnership Amended and Restated Agreement of Limited       dated March 30, 1991
                     Partnership                                                 (File No. 33-31390)

     10.36           Moore Haven Commons, Ltd. Amended and Restated Agreement    Exhibit 10.9 to Form 10-Q Report
                     of Limited Partnership                                      dated December 30, 1990
                                                                                 (File No. 33-31390)

     10.37           NP-89 Limited Dividend Housing Association Limited          Exhibit 10.3 to Form 10-Q Report
                     Partnership Second Restated and Amended Agreement of        dated June 29, 1991
                     Limited Partnership                                         (File No. 0-19217)

     10.38           Nash Hill Associates, Limited Partnership Amended and       Exhibit 10.37 to Form 10-K Report
                     Restated Agreement of Limited Partnership                   dated March 30, 1992
                                                                                 (File No. 33-31390)

     10.39           North Calhoun City, L.P. (A Mississippi Limited             Exhibit 10.3 to Form 10-Q Report
                     Partnership) Amended and Restated Limited Partnership       dated September 29, 1991
                     Agreement and Certificate of Limited Partnership            (File No. 0-19217)

     10.40           Orange City Plaza, Limited Partnership Amended and          Exhibit 10.40 to Form 10-K Report
                     Restated Partnership Agreement                              dated March 30, 1992
                                                                                 (File No. 33-31390)

     10.41           Puerta del Mar Limited Partnership (A Delaware Limited      Exhibit 10.10 to Form 10-Q Report
                     Partnership) Amended and Restated Agreement of Limited      dated December 30, 1990
                     Partnership                                                 (File No. 33-31390)

     10.42           Amendment No. 2 to the Purvis Heights Properties, L.P.      Exhibit 10.11 to Form 10-Q Report
                     Amended and Restated Agreement of Limited Partnership       dated December 30, 1990
                                                                                 (File No. 33-31390)

     10.43           Purvis Heights Properties, L.P. Amendment No. 3 to the      Exhibit 10.6 to Form 10-Q Report
                     Amended and Restated Agreement of Limited Partnership       dated December 31, 1991
                                                                                 (File No. 0-19217)

     10.44           Queen Lane Investors Amendment No. 1 to Amended and         Exhibit 10.12 to Form 10-Q Report
                     Restated Agreement and Certificate of Limited Partnership   dated December 30, 1990
                                                                                 (File No. 33-31390)

     10.45           Somerset Manor, Ltd. Amended and Restated Agreement and     Exhibit 10.13 to Form 10-Q Report
                     Certificate of Limited Partnership                          dated December 30, 1990
                                                                                 (File No. 33-31390)

     10.46           Sugar Cane Villas, Ltd. Amended and Restated Agreement of   Exhibit 10.23 to Form 10-K Report
                     Limited Partnership                                         dated March 30, 1991
                                                                                 (File No. 33-31390)


                                       43
<PAGE>

<CAPTION>

                                                                                 Incorporated by
                                       Exhibit                                   Reference to
                                       -------                                   ------------

<S>  <C>              <C>                                                       <C>
     10.47           Summerfield Apartments Limited Partnership Amended and      Exhibit 10.47 to Form 10-K Report
                     Restated Agreement of Limited Partnership                   dated March 30, 1992
                                                                                 (File No. 33-31390)

     10.48           Amendment No.1 to the Summerfield Apartments Limited        Exhibit 10.48 to Form 10-K Report
                     Partnership Amended and Restated Agreement of Limited       dated March 30, 1999
                     Partnership                                                 (File No. 0-19217)

     10.49           Sydney Engel Associates Second Amended and Restated         Exhibit 10.4 to Form 10-Q Report
                     Agreement of Limited Partnership                            dated September 29, 1990
                                                                                 (File No. 33-31390)

     10.50           First Amendment to Second Amended and Restated Agreement    Exhibit 10.49 to Form 10-K Report
                     of Limited Partnership of Sydney Engel Associates           dated March 30, 1997
                                                                                 (File No. 0-19217)

     10.51           Second Amendment to Second Amended and Restated Agreement   Exhibit 10.50 to Form 10-K Report
                     of Limited Partnership of Sydney Engel Associates L.P.      dated March 30, 1997
                                                                                 (File No. 0-19217)

     10.52           Third Amendment to Second Amended and Restated Agreement    Exhibit 10.51 to Form 10-K Report
                     of Limited Partnership of Sydney Engel Associates L.P.      dated March 30, 1997
                                                                                 (File No. 0-19217)

     10.53           Fourth Amendment to Second Amended and Restated Agreement   Exhibit 10.52 to Form 10-K Report
                     of Limited Partnership of Sydney Engel Associates L.P.      dated March 30, 1997
                                                                                 (File No. 0-19217)

     10.54           Union Valley Associates Limited Partnership Amended and     Exhibit 10.14 to Form 10-Q Report
                     Restated Agreement and Certificate of Limited Partnership   dated December 30, 1990
                                                                                 (File No. 33-31390)

     10.55           Walnut Grove Family, L.P. (A Mississippi Limited            Exhibit 10.4 to Form 10-Q Report
                     Partnership) Amended and Restated Limited Partnership       dated September 29, 1991
                     Agreement and Certificate of Limited Partnership            (File No. 0-19217)

     10.56           Waynesboro Apartments Limited Partnership Amended and       Exhibit 10.15 to Form 10-Q Report
                     Restated Agreement and Certificate of Limited Partnership   dated December 30, 1990
                                                                                 (File No. 33-31390)

     10.57           West Calhoun City, L.P. (A Mississippi Limited              Exhibit 10.5 to Form 10-Q Report
                     Partnership) Amended and Restated Limited Partnership       dated September 29, 1991
                     Agreement and Certificate of Limited Partnership            (File No. 0-19217)

     10.58           Westminster Apartments Limited Partnership Second Amended   Exhibit 10.53 to Form 10-K Report
                     and Restated Agreement of Limited Partnership               dated March 30, 1992
                                                                                 (File No. 33-31390)


                                       44
<PAGE>

<CAPTION>

                                                                                 Incorporated by
                                     Exhibit                                     Reference to
                                     -------                                     ---------------

<S>  <C>              <C>                                                       <C>
     28.0            Pages 20 through 31, 44 through 71 and 78 through 80 of     Exhibit 28.0 to Form 10-K Report
                     Prospectus filed pursuant to Rule 424(b)(3) under           dated March 30, 1990
                     Securities Act of 1933                                      (File No. 33-31390)

     28.1            Pages 14 through 19 of Prospectus filed pursuant to Rule    Exhibit 28.1 to Form 10-K Report
                     424(b)(3) under Securities Act of 1933                      dated March 30, 1991
                                                                                 (File No. 33-31390)

     28.2            Supplement No. 1 dated June 6, 1990 to Prospectus           Exhibit 28.2 to Form 10-K Report
                                                                                 dated March 30, 1991
                                                                                 (File No. 33-31390)

     28.3            Supplement No. 2 dated November 21, 1990 to Prospectus      Exhibit 28.3 to Form 10-K Report
                                                                                 dated March 30, 1991
                                                                                 (File No. 33-31390)

     28.4            Supplement No. 3 dated December 20, 1990 to Prospectus      Exhibit 28.4 to Form 10-K Report
                                                                                 dated March 30, 1991
                                                                                 (File No. 33-31390)

     28.5            Supplement No. 4 dated October 30, 1991 to Prospectus       Exhibit 28.5 to Form 10-K Report
                                                                                 dated March 30, 1992
                                                                                 (File No. 33-31390)

     28.6            Supplement No. 5 dated December 26, 1991 to Prospectus      Exhibit 28.6 to Form 10-K Report
                                                                                 dated March 30, 1992
                                                                                 (File No. 33-31390)

     28.7            Supplement No. 6 dated January 15, 1992 to Prospectus       Exhibit 28.7 to Form 10-K Report
                                                                                 dated March 30, 1990
                                                                                 (File No. 33-31390)

     31.1            Rule 13a-14/15d-14(a) Certification of Chief Executive
                     Officer

     31.2            Rule 13a-14/15d-14(a) Certification of Chief Financial
                     Officer.

     32.1            Section 1350 Certification of Chief Executive Officer.

     32.2            Section 1350 Certification of Chief Financial
                     Officer.
</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.


                                       45

<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:  July 13, 2004               /s/ David Salzman
        -------------               ------------------------------
                                    by:  David Salzman
                                         Chief Executive Officer


Dated:  July 13, 2004               /s/ Neal Ludeke
        -------------               ------------------------------
                                    by: Neal Ludeke
                                        Chief Financial Officer


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/ David Salzman              Chief Executive Officer of          July 13, 2004
-----------------------------  the general partner of the          -------------
(David Salzman)                General Partner

/s/ Neal Ludeke                Chief Financial Officer of          July 13, 2004
-----------------------------  the general partner of the          -------------
(Neal Ludeke)                  General Partner





                                       47