**FORM      10-K**

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

**March      30, 2006**

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

**0-19217**

**American      Tax Credit Properties III L.P.**

| **Delaware**                                                                                                                             | **13-3545006**                                             |
|------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|
| (State                or other jurisdiction of organization)                                                                             | (I.R.S.                Employer Identification No.)        |
|                                                                                                                                     |                                                       |
| **Richman                Tax Credit Properties III L.P.****340                Pemberwick Road****Greenwich,                Connecticut** |   **06831**                                      |
| (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)                                                                                                          |

----

**PART      I**

**Item          1. **
**Business**

----

**Item          1. **
**Business          (continued)**

**Item      1A. **
**Risk      Factors**

***Properties      owned by the Local Partnerships are subject to certain risks relating to the      real estate industry in general that are outside of the control of the Local      Partnerships or Registrant and that may have an adverse affect on Registrant’s      investment in such Local Partnerships.***

***The      modification or elimination of government rental subsidies on which the Local      Partnerships rely would require the Local Partnerships to use existing funds      or      obtain additional funds to continue to operate the respective Properties.      Because Registrant’s investments in the Local Partnerships are highly leveraged,      it would be highly difficult to obtain such additional      funds.***

----

**Item      1A. **
**Risk      Factors (continued)**

***There      is no guarantee that it will be possible to sell the Properties or, if possible,      that Registrant would receive any proceeds from any such      sale.***

***Failure      to remain in compliance with various requirements may result in such Local      Partnership losing its eligibility for Low-income Tax Credits, which would      result in additional tax liability to holders of the Units of Limited      Partnership Interest of the Registrant.***

*by      unit holders at the time of the recapture event*

***The      Local Partnerships may be required to continue to maintain the low-income nature      of the Properties beyond the Compliance Period under agreements with state      tax      credit agencies.***

***Limited      partners may not be able to use all of the anticipated or carried forward      Low-income Tax Credits.***

----

**Item      1A. **
**Risk      Factors (continued)**

***There      is no existing market for the Units.***

***Under      certain circumstances, limited partners of Registrant may incur out-of-pocket      tax costs.***

***Limited      partners of Registrant may not receive a return of any portion of their original      capital investment in Registrant.***

**Item      1B. **
**Unresolved      Staff Comments**

----

**Item      2.**
**Properties**

|                                                                                              |   | 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 |   |

----

**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 |   | 2005                               |   | footnotes) |      |
| April                Gardens Apartments IILimited                PartnershipApril                Gardens ApartmentsLas                Piedras, Puerto Rico                                 |   |                     | 48     |         | $      | 485,581                            |   | $          | 1,958,867 |   |   | (1b&d | ) |
| Ashland                Park Apartments, L.P.Ashland                Park ApartmentsAshland,                Nebraska                                                                         |   |                     | 24     |         |   | 235,732                            |   |       | 1,017,021 |   |   | (1b&d | ) |
| Auburn                Family, L.P.Auburn                ApartmentsLouisville,                Mississippi                                                                                   |   |                     | 16     |         |   | 95,412                             |   |       | 452,267   |   |   | (1b&d | ) |
| Batesville                Family, L.P.Westridge                ApartmentsBatesville,                Mississippi                                                                            |   |                     | 48     |         |   | 239,716                            | (2)    |       | 1,414,432 |   |   | (1b | ) |
| Bay                Springs Elderly, L.P.Bay                Springs ManorBay                Springs, Mississippi                                                                            |   |                     | 24     |         |   | 208,820                            |   |       | 663,582   |   |   | (1b&d | ) |
| Brisas                del Mar ApartmentsLimited                PartnershipBrisas                del Mar ApartmentsHatillo,                Puerto Rico                                      |   |                     | 66     |         |   | 668,172                            |   |       | 2,598,116 |   |   | (1b&d | ) |
| Bruce                Housing Associates, L.P.Bruce                Family ApartmentsBruce,                Mississippi                                                                       |   |                     | 40     |         |   | 183,155                            | (2)    |       | 1,083,041 |   |   | (1b&d | ) |
| Carrington                Limited DividendHousing                Association LimitedPartnership                (3)Carrington                PlaceFarmington                Hills, Michigan |   |                     | 100    |         |   | 2,174,720                          | (2)    |       | 3,178,196 |   |   | (1c | ) |
| Chestnut                Park Associates, L.P.Chestnut                Park ApartmentsEast                Orange, New Jersey                                                                 |   |                     | 59     |         |   | 4,204,576                          |   |       | 4,677,658 |   |   | (1a | ) |
| Chowan                Senior Manor AssociatesLimited                PartnershipAzalea                Garden Senior ManorApartmentsMurfreesboro,                North Carolina              |   |                     | 33     |         |   | 278,405                            |   |       | 1,220,453 |   |   | (1b&d | ) |
| Christian                Street CommonsAssociatesChristian                Street CommonsApartmentsPhiladelphia,                Pennsylvania                                                |   |                     | 18     |         |   | 581,645                            |   |       | 559,787   |   |   | (1b | ) |

----

**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 |   | 2005                               |   | footnotes) |      |
| Country                View ApartmentsCountry                View ApartmentsPembroke,                Maine                                       |   |                     | 16     |         | $      | 279,183                            |   | $          | 919,026   |   |   | (1b&d | ) |
| Desarrollos                de Belen LimitedPartnershipVista                de Jagueyes II ApartmentsAguas                Buenas, Puerto Rico     |   |                     | 41     |         |   | 422,929                            |   |       | 1,843,443 |   |   | (1b&d | ) |
| Desarrollos                de Emaus LimitedPartnershipHucares                II ApartmentsNaguabo,                Puerto Rico                    |   |                     | 72     |         |   | 631,404                            |   |       | 3,133,501 |   |   | (1b&d | ) |
| Ellinwood                Heights Apartments, L.P.Ellinwood                Heights ApartmentsEllinwood,                Kansas                     |   |                     | 24     |         |   | 156,261                            |   |       | 674,705   |   |   | (1b&d | ) |
| Fulton                Street Houses LimitedPartnershipFulton                Street TownhouseApartmentsNew                York, New York          |   |                     | 35     |         |   | 1,948,081                          |   |       | 3,869,930 |   |   | (1b | ) |
| Hayes                Run Limited PartnershipMashburn                Gap ApartmentsMarshall,                North Carolina                        |   |                     | 34     |         |   | 322,074                            |   |       | 1,398,569 |   |   | (1b&d | ) |
| Howard                L. Miller SallisawApartments                II, L.P.Sallisaw                II ApartmentsSallisaw,                Oklahoma |   |                     | 24     |         |   | 130,158                            |   |       | 604,552   |   |   | (1b&d | ) |
| Hurlock                Meadow LimitedPartnershipHurlock                Meadow ApartmentsHurlock,                Maryland                         |   |                     | 30     |         |   | 284,218                            |   |       | 1,244,361 |   |   | (1b&d | ) |
| Ivy                Family, L.P.Ivy                ApartmentsLouisville,                Mississippi                                               |   |                     | 32     |         |   | 135,528                            | (2)    |       | 758,570   |   |   | (1b&d | ) |
| Justin                AssociatesLocust                Tower ApartmentsPhiladelphia,                Pennsylvania                                  |   |                     | 40     |         |   | 1,809,723                          |   |       | 2,170,491 |   |   | (1b&e | ) |
| LaBelle                Commons, Ltd.LaBelle                CommonsLaBelle,                Florida                                                |   |                     | 32     |         |   | 253,580                            |   |       | 992,984   |   |   | (1b&d | ) |
| Lawrence                Road Properties, Ltd.Hillcrest                ApartmentsNewton,                Mississippi                               |   |                     | 24     |         |   | 123,799                            | (2)    |       | 744,352   |   |   | (1b&d | ) |

----

**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 |   | 2005                               |   | footnotes) |      |
| Loma                Del Norte LimitedPartnershipLoma                Del Norte ApartmentsAnthony,                New Mexico                                            |   |                     | 40     |         | $      | 314,865                            |   | $          | 1,411,220 |   |   | (1b&d | ) |
| Long                Reach Associates LimitedPartnershipOak                Ridge ApartmentsBath,                Maine                                                  |   |                     | 30     |         |   | 448,922                            |   |       | 1,451,360 |   |   | (1b&d | ) |
| Mirador                del Toa LimitedPartnership                Mirador                del Toa ApartmentsToa                Alta, Puerto Rico                        |   |                     | 48     |         |   | 284,847                            | (2)    |       | 1,841,657 |   |   | (1b&d | ) |
| Moore                Haven Commons, Ltd.Moore                Haven CommonsMoore                Haven, Florida                                                         |   |                     | 28     |         |   | 213,402                            |   |       | 910,164   |   |   | (1b&d | ) |
| NP-89                Limited Dividend HousingAssociation                Limited PartnershipNewport                ApartmentsClinton                Township, Michigan |   |                     | 168    |         |   | 2,372,292                          |   |       | 3,456,300 |   |   | (1a,b&h | ) |
| Nash                Hill Associates, LimitedPartnershipNash                Hill PlaceWilliamsburg,                Massachusetts                                       |   |                     | 28     |         |   | 302,575                            |   |       | 1,440,685 |   |   | (1b,d&f | ) |
| North                Calhoun City, L.P.North                Calhoun City ApartmentsCalhoun                City, Mississippi                                           |   |                     | 18     |         |   | 146,565                            |   |       | 465,815   |   |   | (1b&d | ) |
| Orange                City Plaza, LimitedPartnershipOrange                City Plaza ApartmentsOrange                City, Iowa                                       |   |                     | 32     |         |   | 456,090                            |   |       | 402,140   |   |   | (1g | ) |
| Puerta                del Mar Limited PartnershipPuerta                del Mar ApartmentsHatillo,                Puerto Rico                                          |   |                     | 66     |         |   | 630,570                            |   |       | 2,472,254 |   |   | (1b&d | ) |
| Purvis                Heights Properties, L.P.Pineview                ApartmentsPurvis,                Mississippi                                                    |   |                     | 40     |         |   | 191,512                            | (2)    |       | 1,127,010 |   |   | (1b | ) |
| Queen                Lane InvestorsQueen's                RowPhiladelphia,                Pennsylvania                                                                |   |                     | 29     |         |   | 597,050                            | (2)    |       | 1,513,915 |   |   | (1b&e | ) |
| Somerset                Manor, Ltd.Somerset                ManorCentral                City, Pennsylvania                                                             |   |                     | 24     |         |   | 208,465                            |   |       | 881,188   |   |   | (1b&d | ) |
| Sugar                Cane Villas, Ltd.Sugar                Cane VillasPahokee,                Florida                                                                 |   |                     | 87     |         |   | 751,560                            |   |       | 3,246,477 |   |   | (1b&d | ) |

----

**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 |   | 2005                               |   | footnotes) |       |
| Summerfield                Apartments LimitedPartnershipSummerfield                ApartmentsCharlotte,                North Carolina                          |   |                     | 52     |         | $      | 1,088,667                          |   | $          | 1,572,707  |   |   | (1b | ) |
| Sydney                Engel Associates L.P.(formerly                known as Sydney EngelAssociates)The                CastleNew                York, New York |   |                     | 224    |         |   | 3,201,874                          |   |       | 15,816,870 |   |   | (1b | ) |
| Union                Valley Associates LimitedPartnershipUnion                Valley ApartmentsUnion                Township, Pennsylvania                     |   |                     | 36     |         |   | 371,589                            |   |       | 1,420,359  |   |   | (1b | ) |
| Walnut                Grove Family, L.P.Walnut                Grove ApartmentsWalnut                Grove, Mississippi                                         |   |                     | 24     |         |   | 191,695                            |   |       | 832,673    |   |   | (1b&d | ) |
| Waynesboro                Apartments LimitedPartnershipWaynesboro                ApartmentsWaynesboro,                Pennsylvania                             |   |                     | 36     |         |   | 360,859                            |   |       | 1,453,591  |   |   | (1b | ) |
| West                Calhoun City, L.P.West                Calhoun City ApartmentsCalhoun                City, Mississippi                                      |   |                     | 28     |         |   | 230,212                            |   |       | 713,767    |   |   | (1b&d | ) |
| Westminster                Apartments LimitedPartnershipWestminster                ApartmentsPhiladelphia,                Pennsylvania                         |   |                     | 42     |         |   | 1,047,993                          |   |       | 1,607,973  |   |   | (1b&e | ) |
|                                                                                                                                                           |   |                     |   |         | $      | 29,264,476                         |   | $          | 81,216,029 |   |   |   |   |

|   | (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                Northwest Regional Housing Authority provides qualified tenants with                a                rental subsidy. |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------|

|  | (h) | The                Local Partnership’s Section 8 contracts are currently subject to renewal                under applicable HUD guidelines. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Item      2.**
**Properties      (continued)**

|   | (2) | Reflects                amount attributable to Registrant                only. |
|--------|-----|--------------------------------------------------------------------------------|

|   | (3) | Registrant                assigned its limited partner interest to one of the Local General                Partners                subsequent to March 30, 2006 (see Part II, Item 7 - Management’s                Discussion and Analysis of Financial Condition and Results of Operations,                herein). |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Item          3. **
**Legal          Proceedings**

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

----

**PART      II**

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

----

**Item      6.**
**Selected      Financial Data**

|                                                                |   | Years                  Ended March 30, |     |
|---------------------------------------------------------------------|--------|----------------------------------------|----------|
|                                                                |   | 2006                                   |     | 2005 |   | 2004 |   | 2003 |   | 2002 |   |
|                                                                |   |                                   |     |   |   |   |   |   |   |   |   |
| Interest                  and other revenue                         |   | $                                      | 142,837  |   | $ | 176,110 |   | $ | 193,706 |   | $ | 224,254 |   | $ | 215,927 |   |
|                                                                |   |                                   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity                  in loss of investment in local partnerships |   | $                                      | (162,367 | ) | $ | (247,207 | ) | $ | (215,731 | ) | $ | (536,158 | ) | $ | (1,193,807 | ) |
|                                                                |   |                                   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  loss                                           |   | $                                      | (620,078 | ) | $ | (640,259 | ) | $ | (611,662 | ) | $ | (875,199 | ) | $ | (1,509,355 | ) |
|                                                                |   |                                   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  loss per unit of limited partnership interest  |   | $                                      | (11.44   | ) | $ | (17.66 | ) | $ | (16.88 | ) | $ | (24.15 | ) | $ | (41.64 | ) |

|                            |   | As                    of March 30, |      |
|---------------------------------|--------|------------------------------------|-----------|
|                            |   | 2006                               |      | 2005 |   | 2004 |   | 2003 |   | 2002 |   |
|                            |   |                               |      |   |   |   |   |   |   |   |   |
| Total                    assets |   | $                                  | 2,109,756 |   | $ | 2,747,749 |   | $ | 3,766,895 |   | $ | 4,153,964 |   | $ | 4,744,278 |   |

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

----

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

----

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

----

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

|                                          |   | Total  |      | <                  1 year |   | 1                  -                  3 years |   | 3                  -                  5 years |      | >                  5 years |   |
|-----------------------------------------------|--------|--------|-----------|------------------------------|--------|-----------------------------------------------|--------|-----------------------------------------------|-----------|-------------------------------|--------|
|                                          |   |   |      |                         |   |                                          |   |                                          |      |                          |   |
| Other                  Long Term Liabilities: |   |   |      |                         |   |                                          |   |                                          |      |                          |   |
| Accounts                  Payable and         |   |   |      |                         |   |                                          |   |                                          |      |                          |   |
| Accrued                  Expenses (1)         |   | $      | 440,673   |                         | $      | —                                       |   | $                                             | 440,673   |                          | $      | — |   | $ | — |   |
|                                          |   |   |      |                         |   |                                          |   |                                          |      |                          |   |   |   |   |   |   |
| Payable                  to General Partner   |   |   |      |                         |   |                                          |   |                                          |      |                          |   |   |   |   |   |   |
| and                  Affiliates (2)           |   |   | 2,111,993 |                         |   | 175,000                                       |   |                                          | 1,936,993 |                          |   | — |   |   | — |   |
|                                          |   |   |      |                         |   |                                          |   |                                          |      |                          |   |   |   |   |   |   |
|                                          |   | $      | 2,552,666 |                         | $      | 175,000                                       |   | $                                             | 2,377,666 |                          | $      | — |   | $ | — |   |

| (1) | Represents                Administration Fees payable to a third-party former service provider;                such                amount 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, $175,000 is currently due and the remainder                is                payable from available reserves or sale or refinancing proceeds from                the                Local Partnerships to the extent such amounts are                available. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

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

|   | · | 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. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | 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. Registrant makes                such                assessment at least annually in the fourth quarter of its fiscal                year or                whenever there are indications that a permanent impairment may have                occurred. A loss in value of an investment in a Local Partnership                other                than a temporary decline would be recorded as an impairment loss.                Impairment is measured by comparing the investment carrying amount                to the                sum of the total amount of the remaining tax credits to be allocated                to                Registrant and the estimated residual value of the                investment. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Registrant                does not consolidate the accounts and activities of the Local                Partnerships, which are considered Variable Interest Entities under                Financial Accounting Standards Board Interpretation No. 46 - Revised,                “Consolidation of Variable Interest Entities,” because Registrant is not                considered the primary beneficiary. Registrant’s balance in investment in                local partnerships, plus the risk of recapture of tax credits previously                recognized on such investments, represents the maximum exposure to                loss in                connection with such investments. Registrant's exposure to loss on                the                Local Partnerships is mitigated by the condition and financial performance                of the underlying Properties as well as the strength of the Local                General                Partners and their guarantees against credit                recapture. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Item      7a. **
**Quantitative      and Qualitative Disclosure About Market Risk**

----

**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 |   |     | 19     |   |
|                                                                     |   |     |   |   |
| Balance                  Sheets                                          |   |     | 20     |   |
|                                                                     |   |     |   |   |
| Statements                  of Operations                                |   |     | 21     |   |
|                                                                     |   |     |   |   |
| Statements                  of Changes in Partners' Equity (Deficit)     |   |     | 22     |   |
|                                                                     |   |     |   |   |
| Statements                  of Cash Flows                                |   |     | 23     |   |
|                                                                     |   |     |   |   |
| Notes                  to Financial Statements                           |   |     | 25     |   |

----

----

**AMERICAN      TAX CREDIT PROPERTIES III L.P.**

**BALANCE      SHEETS**

**MARCH      30, 2006 AND 2005**

|                                                                                                          |   | **Notes** |   | **2006** |   | **2005**  |   |
|---------------------------------------------------------------------------------------------------------------|--------|-----------|--------|----------|--------|-----------|--------|
| **ASSETS**                                                                                                    |   |      |   |     |   |      |   |
|                                                                                                          |   |      |   |     |   |      |   |
| Cash                  and cash equivalents                                                                    |   |      | 3,9    |     | $      | 151,370   |   | $ | 58,001 |   |
| Investments                  in bonds                                                                         |   |      | 4,9    |     |   | 1,377,915 |   |   | 1,936,474 |   |
| Investment                  in local partnerships                                                             |   |      | 5,8    |     |   | 578,827   |   |   | 751,675 |   |
| Interest                  receivable                                                                          |   |      | 9      |     |   | 1,644     |   |   | 1,599 |   |
|                                                                                                          |   |      |   |     |   |      |   |   |   |   |
|                                                                                                          |   |      |   |     | $      | 2,109,756 |   | $ | 2,747,749 |   |
|                                                                                                          |   |      |   |     |   |      |   |   |   |   |
| **LIABILITIES                  AND PARTNERS' EQUITY (DEFICIT)**                                               |   |      |   |     |   |      |   |   |   |   |
|                                                                                                          |   |      |   |     |   |      |   |   |   |   |
| Liabilities                                                                                                   |   |      |   |     |   |      |   |   |   |   |
|                                                                                                          |   |      |   |     |   |      |   |   |   |   |
| Accounts                  payable and accrued expenses                                                        |   |      | 8      |     | $      | 518,027   |   | $ | 622,126 |   |
| Payable                  to general partner and affiliates                                                    |   |      | 6,8    |     |   | 2,111,993 |   |   | 1,973,908 |   |
|                                                                                                          |   |      |   |     |   |      |   |   |   |   |
|                                                                                                          |   |      |   |     |   | 2,630,020 |   |   | 2,596,034 |   |
|                                                                                                          |   |      |   |     |   |      |   |   |   |   |
| Commitments                  and contingencies                                                                |   |      | 8      |     |   |      |   |   |   |   |
|                                                                                                          |   |      |   |     |   |      |   |   |   |   |
| Partners'                  equity (deficit)                                                                   |   |      | 2,4    |     |   |      |   |   |   |   |
|                                                                                                          |   |      |   |     |   |      |   |   |   |   |
| General                  partner                                                                              |   |      |   |     |   | (523,856  | )      |   | (314,335 | ) |
| Limited                  partners (35,883 units of limited partnership interest                  outstanding) |   |      |   |     |   |      |   |   | 410,557 |   |
| Accumulated                  other comprehensive income, net                                                  |   |      |   |     |   | 3,592     |   |   | 55,493 |   |
|                                                                                                          |   |      |   |     |   |      |   |   |   |   |
|                                                                                                          |   |      |   |     |   | (520,264  | )      |   | 151,715 |   |
|                                                                                                          |   |      |   |     |   |      |   |   |   |   |
|                                                                                                          |   |      |   |     | $      | 2,109,756 |   | $ | 2,747,749 |   |

----

**AMERICAN      TAX CREDIT PROPERTIES III L.P.**

**STATEMENTS      OF OPERATIONS**

**YEARS      ENDED MARCH 30, 2006, 2005 AND 2004**

|                                                                          |   | **Notes** |   | **2006** |   | **2005** |   | **2004** |     |
|-------------------------------------------------------------------------------|--------|-----------|--------|----------|--------|----------|--------|----------|----------|
|                                                                          |   |      |   |     |   |     |   |     |     |
| **REVENUE**                                                                   |   |      |   |     |   |     |   |     |     |
|                                                                          |   |      |   |     |   |     |   |     |     |
| Interest                                                                      |   |      |   |     | $      | 97,334   |   | $        | 141,566  |   | $ | 160,346 |   |
| Other                  income from local partnerships                         |   |      |   |     |   | 45,503   |   |     | 34,544   |   |   | 33,360 |   |
|                                                                          |   |      |   |     |   |     |   |     |     |   |   |   |   |
| TOTAL                  REVENUE                                                |   |      |   |     |   | 142,837  |   |     | 176,110  |   |   | 193,706 |   |
|                                                                          |   |      |   |     |   |     |   |     |     |   |   |   |   |
|                                                                          |   |      |   |     |   |     |   |     |     |   |   |   |   |
| **EXPENSES**                                                                  |   |      |   |     |   |     |   |     |     |   |   |   |   |
|                                                                          |   |      |   |     |   |     |   |     |     |   |   |   |   |
| Administration                  fees - affiliate                              |   |      | 6,8    |     |   | 230,571  |   |     | 230,571  |   |   | 230,571 |   |
| Management                  fees - affiliate                                  |   |      | 6,8    |     |   | 230,571  |   |     | 230,571  |   |   | 230,571 |   |
| Professional                  fees                                            |   |      |   |     |   | 78,597   |   |     | 68,253   |   |   | 82,681 |   |
| State                  of New Jersey filing fees                              |   |      |   |     |   | 34,337   |   |     | 20,145   |   |   | 21,428 |   |
| Printing,                  postage and other                                  |   |      |   |     |   | 26,472   |   |     | 19,622   |   |   | 24,386 |   |
|                                                                          |   |      |   |     |   |     |   |     |     |   |   |   |   |
| TOTAL                  EXPENSES                                               |   |      |   |     |   | 600,548  |   |     | 569,162  |   |   | 589,637 |   |
|                                                                          |   |      |   |     |   |     |   |     |     |   |   |   |   |
|                                                                          |   |      |   |     |   | (457,711 | )      |     | (393,052 | ) |   | (395,931 | ) |
|                                                                          |   |      |   |     |   |     |   |     |     |   |   |   |   |
| Equity                  in loss of investment in local partnerships           |   |      | 5      |     |   | (162,367 | )      |     | (247,207 | ) |   | (215,731 | ) |
|                                                                          |   |      |   |     |   |     |   |     |     |   |   |   |   |
| **NET                  LOSS**                                                 |   |      |   |     |   | (620,078 | )      |     | (640,259 | ) |   | (611,662 | ) |
|                                                                          |   |      |   |     |   |     |   |     |     |   |   |   |   |
| Other                  comprehensive loss, net                                |   |      | 4      |     |   | (51,901  | )      |     | (167,653 | ) |   | (34,514 | ) |
|                                                                          |   |      |   |     |   |     |   |     |     |   |   |   |   |
| **COMPREHENSIVE                  LOSS**                                       |   |      |   |     | $      | (671,979 | )      | $        | (807,912 | ) | $ | (646,176 | ) |
|                                                                          |   |      |   |     |   |     |   |     |     |   |   |   |   |
| **NET                  LOSS ATTRIBUTABLE TO**                                 |   |      | 2      |     |   |     |   |     |     |   |   |   |   |
|                                                                          |   |      |   |     |   |     |   |     |     |   |   |   |   |
| General                  partner                                              |   |      |   |     | $      | (209,521 | )      | $        | (6,403   | ) | $ | (6,117 | ) |
| Limited                  partners                                             |   |      |   |     |   | (410,557 | )      |     | (633,856 | ) |   | (605,545 | ) |
|                                                                          |   |      |   |     |   |     |   |     |     |   |   |   |   |
|                                                                          |   |      |   |     | $      | (620,078 | )      | $        | (640,259 | ) | $ | (611,662 | ) |
|                                                                          |   |      |   |     |   |     |   |     |     |   |   |   |   |
| **NET                  LOSS**per                  unit of limited partnership |   |      |   |     |   |     |   |     |     |   |   |   |   |
| interest                  (35,883 units of limited partnership interest)      |        |      |   |     | $      | (11.44   | )      | $        | (17.66   | ) | $ | (16.88 | ) |

----

**AMERICAN      TAX CREDIT PROPERTIES III L.P.**

**STATEMENTS      OF CHANGES IN PARTNERS' EQUITY (DEFICIT)**

**YEARS      ENDED MARCH 30, 2006, 2005 AND 2004**

|                                                          |   |  **General****Partner** |     |  **Limited****Partners** |   | **Accumulated                    Other****Comprehensive****Income                    (Loss), Net** |   | **Total** |     |
|---------------------------------------------------------------|--------|------------------------------|----------|-------------------------------|--------|----------------------------------------------------------------------------------------------------|--------|-----------|----------|
|                                                          |   |                         |     |                          |   |                                                                                               |   |      |     |
| 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 loss, net              |   |                         |          |                          |   |                                                                                                    |   |      | (34,514  | ) |   | (34,514 | ) |
|                                                          |   |                         |          |                          |   |                                                                                                    |   |      |          |   |   |  |   |
| Partners'                    equity (deficit), March 30, 2004 |   |                         | (307,932 | )                             |   | 1,044,413                                                                                          |   |      | 223,146  |   |   | 959,627 |   |
|                                                          |   |                         |          |                          |   |                                                                                                    |   |      |          |   |   |  |   |
| Net                    loss                                   |   |                         | (6,403   | )                             |   | (633,856                                                                                           | )      |      |          |   |   | (640,259 | ) |
|                                                          |   |                         |          |                          |   |                                                                                                    |   |      |          |   |   |  |   |
| Other                    comprehensive loss, net              |   |                         |          |                          |   |                                                                                                    |   |      | (167,653 | ) |   | (167,653 | ) |
| Partners'                    equity (deficit), March 30, 2005 |   |                         | (314,335 | )                             |   | 410,557                                                                                            |   |      | 55,493   |   |   | 151,715 |   |
|                                                          |   |                         |          |                          |   |                                                                                                    |   |      |          |   |   |  |   |
| Net                    loss                                   |   |                         | (209,521 | )                             |   | (410,557                                                                                           | )      |      |          |   |   | (620,078 | ) |
|                                                          |   |                         |          |                          |   |                                                                                                    |   |      |          |   |   |  |   |
| Other                    comprehensive loss, net              |   |                         |     |                          |   |                                                                                               |   |      | (51,901  | ) |   | (51,901 | ) |
|                                                          |   |                         |          |                          |   |                                                                                                    |   |      |          |   |   |  |   |
| Partners'                    equity (deficit), March 30, 2006 |   | $                            | (523,856 | )                             | $      | —                                                                                            |   | $         | 3,592    |   | $ | (520,264 | ) |

----

**AMERICAN      TAX CREDIT PROPERTIES III L.P.**

**STATEMENTS      OF CASH FLOWS**

**YEARS      ENDED MARCH 30, 2006, 2005 AND 2004**

|                                                                |   | **2006** |     | **2005** |   | **2004** |   |
|---------------------------------------------------------------------|--------|----------|----------|----------|--------|----------|--------|
|                                                                |   |     |     |     |   |     |   |
| **CASH                FLOWS FROM OPERATING ACTIVITIES**             |   |     |     |     |   |     |   |
|                                                                |   |     |     |     |   |     |   |
| Interest                received                                    |   | $        | 18,179   |     | $      | 60,168   |   | $ | 75,402 |   |
| Cash                paid for                                        |   |     |     |     |   |     |   |   |   |   |
| administration                fees                                  |   |     | (248,578 | )        |   | (301,769 | )      |   | (16,353 | ) |
| management                fees                                      |   |     | (190,479 | )        |   | (361,781 | )      |   | (183,663 | ) |
| professional                fees                                    |   |     | (75,873  | )        |   | (70,779  | )      |   | (66,380 | ) |
| State                of New Jersey filing fees                      |   |     | (27,171  | )        |   | (24,445  | )      |   | (38,634 | ) |
| printing,                postage and other expenses                 |   |     | (24,461  | )        |   | (21,622  | )      |   | (25,500 | ) |
|                                                                |   |     |     |     |   |     |   |   |   |   |
| Net                cash used in operating activities                |   |     | (548,383 | )        |   | (720,228 | )      |   | (255,128 | ) |
|                                                                |   |     |     |     |   |     |   |   |   |   |
|                                                                |   |     |     |     |   |     |   |   |   |   |
| **CASH                FLOWS FROM INVESTING ACTIVITIES**             |   |     |     |     |   |     |   |   |   |   |
|                                                                |   |     |     |     |   |     |   |   |   |   |
| Cash                distributions from local partnerships           |   |     | 55,984   |     |   | 44,544   |   |   | 44,320 |   |
| Maturities/redemptions                and sales of bonds            |   |     | 585,768  |     |   | 630,443  |   |   | 204,500 |   |
|                                                                |   |     |     |     |   |     |   |   |   |   |
| Net                cash provided by investing activities            |   |     | 641,752  |     |   | 674,987  |   |   | 248,820 |   |
|                                                                |   |     |     |     |   |     |   |   |   |   |
| Net                increase (decrease) in cash and cash equivalents |   |     | 93,369   |     |   | (45,241  | )      |   | (6,308 | ) |
|                                                                |   |     |     |     |   |     |   |   |   |   |
| Cash                and cash equivalents at beginning of year       |   |     | 58,001   |     |   | 103,242  |   |   | 109,550 |   |
|                                                                |   |     |     |     |   |     |   |   |   |   |
| **CASH                AND CASH EQUIVALENTS AT END OF YEAR**         |   | $        | 151,370  |     | $      | 58,001   |   | $ | 103,242 |   |
|                                                                |   |     |     |     |   |     |   |   |   |   |
|                                                                |   |     |     |     |   |     |   |   |   |   |
| **SIGNIFICANT                NON-CASH INVESTING ACTIVITIES**        |   |     |     |     |   |     |   |   |   |   |
|                                                                |   |     |     |     |   |     |   |   |   |   |
| Unrealized                loss on investments in bonds, net         |   | $        | (51,901  | )        | $      | (167,653 | )      | $ | (34,514 | ) |

----

**AMERICAN      TAX CREDIT PROPERTIES III L.P.**

**STATEMENTS      OF CASH FLOWS - (Continued)**

**YEARS      ENDED MARCH 30, 2006, 2005 AND 2004**

|                                                                                                     |   | **2006** |     | **2005** |   | **2004** |   |
|----------------------------------------------------------------------------------------------------------|--------|----------|----------|----------|--------|----------|--------|
|                                                                                                     |   |     |     |     |   |     |   |
| **RECONCILIATION                OF NET LOSS TO NET CASH USED IN OPERATING                ACTIVITIES**    |   |     |     |     |   |     |   |
|                                                                                                     |   |     |     |     |   |     |   |
| Net                loss                                                                                  |   | $        | (620,078 | )        | $      | (640,259 | )      | $ | (611,662 | ) |
|                                                                                                     |   |     |     |     |   |     |   |   |   |   |
| Adjustments                to reconcile net loss to net cash used in operating                activities |   |     |     |     |   |     |   |   |   |   |
|                                                                                                     |   |     |     |     |   |     |   |   |   |   |
| Equity                in loss of investment in local partnerships                                        |   |     | 162,367  |     |   | 247,207  |   |   | 215,731 |   |
| Distributions                from local partnerships classified as other income                          |   |     | (45,503  | )        |   | (34,544  | )      |   | (33,360 | ) |
| Gain                on redemptions and sales of bonds                                                    |   |     |     |     |   | (17,753  | )      |   | (4,792 | ) |
| Amortization                of net premium on investments in bonds                                       |   |     | 1,423    |     |   | 4,832    |   |   | 3,669 |   |
| Accretion                of zero coupon bonds                                                            |   |     | (80,533  | )        |   | (86,491  | )      |   | (86,491 | ) |
| Decrease                (increase) in interest receivable                                                |   |     | (45      | )        |   | 18,014   |   |   | 2,670 |   |
| Increase                in payable to general partner and affiliates                                     |   |     | 138,085  |     |   | 29,592   |   |   | 261,126 |   |
| Decrease                in accounts payable and accrued expenses                                         |   |     | (104,099 | )        |   | (240,826 | )      |   | (2,019 | ) |
|                                                                                                     |   |     |     |     |   |     |   |   |   |   |
| **NET                CASH USED IN OPERATING ACTIVITIES**                                                 |   | $        | (548,383 | )        | $      | (720,228 | )      | $ | (255,128 | ) |

----

**AMERICAN      TAX CREDIT PROPERTIES III L.P.**

**NOTES      TO FINANCIAL STATEMENTS**

**MARCH      30, 2006, 2005 AND 2004**

| **1.** | **Organization,                Purpose and Summary of Significant Accounting                Policies** |
|--------|--------------------------------------------------------------------------------------------------------|

----

**AMERICAN      TAX CREDIT PROPERTIES III L.P.**

**NOTES      TO FINANCIAL STATEMENTS - (Continued)**

**MARCH      30, 2006, 2005 AND 2004**

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

----

**AMERICAN      TAX CREDIT PROPERTIES III L.P.**

**NOTES      TO FINANCIAL STATEMENTS - (Continued)**

**MARCH      30, 2006, 2005 AND 2004**

| **2.** | **Capital                Contributions** |
|--------|------------------------------------------|

| **3.** | **Cash                and Cash Equivalents** |
|--------|----------------------------------------------|

----

**AMERICAN      TAX CREDIT PROPERTIES III L.P.**

**NOTES      TO FINANCIAL STATEMENTS - (Continued)**

**MARCH      30, 2006, 2005 AND 2004**

| **4.** | **Investments                in Bonds** |
|--------|-----------------------------------------|

|  Description                and maturity    |   |  Amortizedcost |      | Gross                unrealized gains |   | Gross                unrealized                losses |   | Estimatedfairvalue |    |
|--------------------------------------------------|--------|---------------------|-----------|---------------------------------------|--------|-------------------------------------------------------|--------|--------------------|---------|
|                                             |   |                |      |                                  |   |                                                  |   |               |    |
| Corporate                debt securities         |   |                |      |                                  |   |                                                  |   |               |    |
| After                one year through five years |   | $                   | 202,419   |                                  | $      | 6,510                                                 |   | $                  | — |   | $ | 208,929 |   |
|                                             |   |                |      |                                  |   |                                                  |   |               |    |   |   |   |   |
| U.S.                Treasury debt securities     |   |                |      |                                  |   |                                                  |   |               |    |   |   |   |   |
| After                one year through five years |   |                | 1,171,904 |                                  |   | —                                               |   |               | (2,918  | ) |   | 1,168,986 |   |
|                                             |   |                |      |                                  |   |                                                  |   |               |    |   |   |   |   |
|                                             |   | $                   | 1,374,323 |                                  | $      | 6,510                                                 |   | $                  | (2,918  | ) | $ | 1,377,915 |   |

|   Description                and maturity |   |  Amortizedcost |      | Gross                unrealized gains |   | Gross                unrealized                losses |   | Estimatedfairvalue |    |
|-----------------------------------------------------|--------|---------------------|-----------|---------------------------------------|--------|-------------------------------------------------------|--------|--------------------|---------|
|                                                |   |                |      |                                  |   |                                                  |   |               |    |
| Corporate                debt securities            |   |                |      |                                  |   |                                                  |   |               |    |
| After                one year through five years    |   | $                   | 292,251   |                                  | $      | 14,776                                                |   | $                  | (346    | ) | $ | 306,681 |   |
|                                                |   |                |      |                                  |   |                                                  |   |               |    |   |   |   |   |
| U.S.                Treasury debt securities        |   |                |      |                                  |   |                                                  |   |               |    |   |   |   |   |
| After                one year through five years    |   |                | 1,588,730 |                                  |   | 41,063                                                |   |               | — |   |   | 1,629,793 |   |
|                                                |   |                |      |                                  |   |                                                  |   |               |    |   |   |   |   |
|                                                |   | $                   | 1,880,981 |                                  | $      | 55,839                                                |   | $                  | (346    | ) | $ | 1,936,474 |   |

----

**AMERICAN      TAX CREDIT PROPERTIES III L.P.**

**NOTES      TO FINANCIAL STATEMENTS - (Continued)**

**MARCH      30, 2006, 2005 AND 2004**

| **5.** | **Investment                in 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                (“Carrington”); |
|   |                                                                                                                                |
| 9.     |  Chestnut                Park Associates, L.P.*;                                                                               |
|   |                                                                                                                                |
| 10.    |  Chowan                Senior Manor Associates Limited Partnership;                                                            |
|   |                                                                                                                                |
| 11.    |  Christian                Street Commons Associates;                                                                           |
|   |                                                                                                                                |
| 12.    |  Country                View Apartments;                                                                                       |
|   |                                                                                                                                |
| 13.    |  Desarrollos                de Belen Limited Partnership;                                                                      |
|   |                                                                                                                                |
| 14.    |  Desarrollos                de Emaus Limited Partnership;                                                                      |
|   |                                                                                                                                |
| 15.    |  Ellinwood                Heights Apartments, L.P.;                                                                            |
|   |                                                                                                                                |
| 16.    |  Fulton                Street Houses Limited Partnership;                                                                      |
|   |                                                                                                                                |
| 17.    |  Hayes                Run Limited Partnership;                                                                                 |
|   |                                                                                                                                |
| 18.    |  Howard                L. Miller Sallisaw Apartments II, L.P.;                                                                 |
|   |                                                                                                                                |
| 19.    |  Hurlock                Meadow Limited Partnership;                                                                            |
|   |                                                                                                                                |
| 20.    |  Ivy                Family, L.P.;                                                                                              |
|   |                                                                                                                                |
| 21.    |  Justin                Associates;                                                                                             |
|   |                                                                                                                                |
| 22.    |  LaBelle                Commons, Ltd.;                                                                                         |
|   |                                                                                                                                |
| 23.    |  Lawrence                Road Properties, Ltd.;                                                                                |
|   |                                                                                                                                |
| 24.    |  Loma                Del Norte Limited Partnership;                                                                            |
|   |                                                                                                                                |
| 25.    |  Long                Reach Associates Limited Partnership;                                                                     |
|   |                                                                                                                                |
| 26.    |  Mirador                del Toa Limited Partnership;                                                                           |
|   |                                                                                                                                |
| 27.    |  Moore                Haven Commons, Ltd.;                                                                                     |
|   |                                                                                                                                |
| 28.    |  NP-89                Limited Dividend Housing Association Limited                Partnership;                                 |
|   |                                                                                                                                |
| 29.    |  Nash                Hill Associates, Limited Partnership;                                                                     |
|   |                                                                                                                                |
| 30.    |  North                Calhoun City, L.P.;                                                                                      |
|   |                                                                                                                                |
| 31.    |  Orange                City Plaza, Limited Partnership;                                                                        |
|   |                                                                                                                                |
| 32.    |  Puerta                del Mar Limited Partnership;                                                                            |
|   |                                                                                                                                |
| 33.    |  Purvis                Heights Properties, L.P.;                                                                               |
|   |                                                                                                                                |
| 34.    | Queen                  Lane Investors (“Queen Lane”);                                                                   |
|   |                                                                                                                                |
| 35.    |  Somerset                Manor, Ltd.;                                                                                          |
|   |                                                                                                                                |
| 36.    |  Sugar                Cane Villas, Ltd.;                                                                                       |
|   |                                                                                                                                |
| 37.    |  Summerfield                Apartments Limited Partnership;                                                                    |
|   |                                                                                                                                |
| 38.    |  Sydney                Engel Associates L.P. (formerly known as Sydney Engel                Associates)*;                      |
|   |                                                                                                                                |
| 39.    |  Union                Valley Associates Limited Partnership;                                                                   |
|   |                                                                                                                                |
| 40.    |  Walnut                Grove Family, L.P.;                                                                                     |
|   |                                                                                                                                |
| 41.    |  Waynesboro                Apartments Limited Partnership;                                                                     |
|   |                                                                                                                                |
| 42.    |  West                Calhoun City, L.P.; and                                                                                   |
|   |                                                                                                                                |
| 43.    |  Westminster                Apartments Limited Partnership                (“Westminster”).                         |

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

----

**AMERICAN      TAX CREDIT PROPERTIES III L.P.**

**NOTES      TO FINANCIAL STATEMENTS - (Continued)**

**MARCH      30, 2006, 2005 AND 2004**

| **5.** | **Investment                in Local Partnerships (continued)**  |
|--------|-----------------------------------------------------------------------|

|                                                                                              |   | ThePartnership |   |  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 |   |

----

----

**AMERICAN      TAX CREDIT PROPERTIES III L.P.**

**NOTES      TO FINANCIAL STATEMENTS - (Continued)**

**MARCH      30, 2006, 2005 AND 2004**

| **5.** | **Investment                in Local Partnerships (continued)** |
|--------|-----------------------------------------------------------------|

|                                                                                                                                     |   | **2005** |        | **2004** |   |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|-------------|----------|--------|
| **ASSETS**                                                                                                                               |   |     |        |     |   |
|                                                                                                                                     |   |     |        |     |   |
| Cash                and cash equivalents                                                                                                 |   | $        | 1,309,842   |     | $      | 1,420,670 |   |
| Rents                receivable                                                                                                          |   |     | 557,433     |     |   | 431,307 |   |
| Escrow                deposits and reserves                                                                                              |   |     | 5,633,503   |     |   | 5,491,520 |   |
| Land                                                                                                                                     |   |     | 3,910,215   |     |   | 3,910,215 |   |
| Buildings                and improvements (net of accumulated depreciation of $59,020,313                and                $55,018,504) |   |     | 57,047,815  |     |   | 60,312,727 |   |
| Intangible                assets (net of accumulated amortization of  $584,157                and $594,230)                         |   |     | 454,845     |     |   | 488,609 |   |
| Other                assets                                                                                                              |   |     | 1,187,479   |     |   | 1,131,804 |   |
|                                                                                                                                     |   |     |        |     |   |   |   |
|                                                                                                                                     |   | $        | 70,101,132  |     | $      | 73,186,852 |   |
|                                                                                                                                     |   |     |        |     |   |   |   |
| **LIABILITIES                AND PARTNERS' EQUITY (DEFICIT)**                                                                            |   |     |        |     |   |   |   |
|                                                                                                                                     |   |     |        |     |   |   |   |
| Liabilities                                                                                                                              |   |     |        |     |   |   |   |
|                                                                                                                                     |   |     |        |     |   |   |   |
| Accounts                payable and accrued expenses                                                                                     |   | $        | 1,543,673   |     | $      | 1,520,547 |   |
| Due                to related parties                                                                                                    |   |     | 5,276,278   |     |   | 5,281,845 |   |
| Mortgage                loans                                                                                                            |   |     | 81,216,029  |     |   | 82,069,326 |   |
| Accrued                interest                                                                                                          |   |     | 5,234,491   |     |   | 4,510,931 |   |
| Other                liabilities                                                                                                         |   |     | 801,690     |     |   | 886,655 |   |
|                                                                                                                                     |   |     |        |     |   |   |   |
|                                                                                                                                     |   |     | 94,072,161  |     |   | 94,269,304 |   |
| Partners'                equity (deficit)                                                                                                |   |     |        |     |   |   |   |
|                                                                                                                                     |   |     |        |     |   |   |   |
| American                Tax Credit Properties III L.P.                                                                                   |   |     |        |     |   |   |   |
| Capital                contributions, net of distributions                                                                               |   |     | 28,718,103  |     |   | 28,769,504 |   |
| Cumulative                loss                                                                                                           |   |     | (26,784,065 | )        |   | (26,627,828 | ) |
|                                                                                                                                     |   |     |        |     |   |   |   |
|                                                                                                                                     |   |     | 1,934,038   |     |   | 2,141,676 |   |
|                                                                                                                                     |   |     |        |     |   |   |   |
| General                partners and other limited partners                                                                               |   |     |        |     |   |   |   |
| Capital                contributions, net of distributions                                                                               |   |     | (416,813    | )        |   | (332,555 | ) |
| Cumulative                loss                                                                                                           |   |     | (25,488,254 | )        |   | (22,891,573 | ) |
|                                                                                                                                     |   |     |        |     |   |   |   |
|                                                                                                                                     |   |     | (25,905,067 | )        |   | (23,224,128 | ) |
|                                                                                                                                     |   |     |        |     |   |   |   |
|                                                                                                                                     |   |     | (23,971,029 | )        |   | (21,082,452 | ) |
|                                                                                                                                     |   |     |        |     |   |   |   |
|                                                                                                                                     |   | $        | 70,101,132  |     | $      | 73,186,852 |   |

----

**AMERICAN      TAX CREDIT PROPERTIES III L.P.**

**NOTES      TO FINANCIAL STATEMENTS - (Continued)**

**MARCH      30, 2006, 2005 AND 2004**

| **5.** | **Investment                in Local Partnerships (continued)** |
|--------|-----------------------------------------------------------------|

|                                                                                                                                                                        |   | **2005** |       | **2004** |   | **2003**   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|------------|----------|--------|------------|--------|
|                                                                                                                                                                        |   |     |       |     |   |       |   |
| **REVENUE**                                                                                                                                                                 |   |     |       |     |   |       |   |
|                                                                                                                                                                        |   |     |       |     |   |       |   |
| Rental                                                                                                                                                                      |   | $        | 11,969,192 |     | $      | 11,668,579 |   | $ | 11,365,730 |   |
| Interest                and other                                                                                                                                           |   |     | 681,809    |     |   | 336,144    |   |   | 278,912 |   |
|                                                                                                                                                                        |   |     |       |     |   |       |   |   |   |   |
| TOTAL                REVENUE                                                                                                                                                |   |     | 12,651,001 |     |   | 12,004,723 |   |   | 11,644,642 |   |
|                                                                                                                                                                        |   |     |       |     |   |       |   |   |   |   |
|                                                                                                                                                                        |   |     |       |     |   |       |   |   |   |   |
| **EXPENSES**                                                                                                                                                                |   |     |       |     |   |       |   |   |   |   |
|                                                                                                                                                                        |   |     |       |     |   |       |   |   |   |   |
| Administrative                                                                                                                                                              |   |     | 2,720,218  |     |   | 2,898,828  |   |   | 2,678,068 |   |
| Utilities                                                                                                                                                                   |   |     | 1,581,055  |     |   | 1,380,506  |   |   | 1,261,598 |   |
| Operating                and maintenance                                                                                                                                    |   |     | 3,031,326  |     |   | 3,033,442  |   |   | 2,543,295 |   |
| Taxes                and insurance                                                                                                                                          |   |     | 1,269,953  |     |   | 1,267,542  |   |   | 1,201,623 |   |
| Financial                                                                                                                                                                   |   |     | 2,677,462  |     |   | 2,708,549  |   |   | 2,848,664 |   |
| Depreciation                and amortization                                                                                                                                |   |     | 4,123,905  |     |   | 4,049,667  |   |   | 4,044,810 |   |
|                                                                                                                                                                        |   |     |       |     |   |       |   |   |   |   |
| TOTAL                EXPENSES                                                                                                                                               |   |     | 15,403,919 |     |   | 15,338,534 |   |   | 14,578,058 |   |
|                                                                                                                                                                        |   |     |       |     |   |       |   |   |   |   |
| **NET                LOSS**                                                                                                                                                 |   | $        | (2,752,918 | )        | $      | (3,333,811 | )      | $ | (2,933,416 | ) |
|                                                                                                                                                                        |   |     |       |     |   |       |   |   |   |   |
| **NET                LOSS ATTRIBUTABLE TO**                                                                                                                                 |   |     |       |     |   |       |   |   |   |   |
|                                                                                                                                                                        |   |     |       |     |   |       |   |   |   |   |
| American                Tax Credit Properties III L.P.                                                                                                                      |   | $        | (156,237   | )        | $      | (247,207   | )      | $ | (215,731 | ) |
| General                partners and other limited partners, which includes $2,360,295, $2,726,948                and $2,462,019 of Partnership loss in excess of investment |   |     | (2,596,681 | )        |   | (3,086,604 | )      |   | (2,717,685 | ) |
|                                                                                                                                                                        |   |     |       |     |   |       |   |   |   |   |
|                                                                                                                                                                        |   | $        | (2,752,918 | )        | $      | (3,333,811 | )      | $ | (2,933,416 | ) |

----

**AMERICAN      TAX CREDIT PROPERTIES III L.P.**

**NOTES      TO FINANCIAL STATEMENTS - (Continued)**

**MARCH      30, 2006, 2005 AND 2004**

| **5.** | **Investment                in Local Partnerships (continued)** |
|--------|-----------------------------------------------------------------|

| Name                of Local Partnership                                           |   |   | Investmentin                Local Partnershipbalance                as of March                30, 2005 |   |   | Partnership'sequity                inloss                for theyear                endedDecember                31, 2005 |   |   | Adjustment                to carrying value during theyear                endedMarch                30, 2006 |   |   | Cashdistributionsreceived                during theyear                endedMarch                30, 2006 |   |   | Cash                distributions classified as other income during the year                endedMarch                30, 2006 |   |   | Investmentin                LocalPartnershipbalance                as ofMarch                30, 2006 |   |
|------------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------------------------------------------|--------|--------|-----------------------------------------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------------------------------------------------------------------------------------------------------|--------|
| April                Gardens Apartments II Limited Partnership                     |   | $      | —                                                                                                 |   | $      | —(1                                                                                                                 | )      | $      | —                                                                                                      |   | $      | (1,920                                                                                                    | )      | $      | 1,920                                                                                                                          |   | $      | —                                                                                                    |   |
| Ashland                Park Apartments, L.P.                                       |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | —                                                                                                   |   |   | —                                                                                                                        |   |   | —                                                                                                    |   |
| Auburn                Family, L.P.                                                 |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | —                                                                                                   |   |   | —                                                                                                                        |   |   | —                                                                                                    |   |
| Batesville                Family, L.P.                                             |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | —                                                                                                   |   |   | —                                                                                                                        |   |   | —                                                                                                    |   |
| Bay                Springs Elderly, L.P.                                           |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | —                                                                                                   |   |   | —                                                                                                                        |   |   | —                                                                                                    |   |
| Brisas                del Mar Apartments Limited Partnership                       |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | (2,640                                                                                                    | )      |   | 2,640                                                                                                                          |   |   | —                                                                                                    |   |
| Bruce                Housing Associates, L.P.                                      |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | —                                                                                                   |   |   | —                                                                                                                        |   |   | —                                                                                                    |   |
| Carrington                Limited Dividend Housing Association Limited Partnership |   |   | 83,073                                                                                                  |   |   | (83,073)                (2                                                                                                | )      |   | —                                                                                                      |   |   | —                                                                                                   |   |   | —                                                                                                                        |   |   | —                                                                                                    |   |
| Chestnut                Park Associates, L.P.                                      |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | —                                                                                                   |   |   | —                                                                                                                        |   |   | —                                                                                                    |   |
| Chowan                Senior Manor Associates Limited Partnership                  |   |   | —                                                                                                 |   |   | —                (1                                                                                                 | )      |   | —                                                                                                      |   |   | (3,160                                                                                                    | )      |   | 3,160                                                                                                                          |   |   | —                                                                                                    |   |
| Christian                Street Commons Associates                                 |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | —                                                                                                   |   |   | —                                                                                                                        |   |   | —                                                                                                    |   |
| Country                View Apartments                                             |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | (750                                                                                                      | )      |   | 750                                                                                                                            |   |   | —                                                                                                    |   |
| Desarrollos                de Belen Limited Partnership                            |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | (2,000                                                                                                    | )      |   | 2,000                                                                                                                          |   |   | —                                                                                                    |   |
| Desarrollos                de Emaus Limited Partnership                            |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | (3,000                                                                                                    | )      |   | 3,000                                                                                                                          |   |   | —                                                                                                    |   |
| Ellinwood                Heights Apartments, L.P.                                  |   |   | 36,742                                                                                                  |   |   | (30,131                                                                                                                   | )      |   | (6,130)                (3                                                                                    | )      |   | (481                                                                                                      | )      |   | —                                                                                                                        |   |   | —                                                                                                    |   |
| Fulton                Street Houses Limited Partnership                            |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | —                                                                                                   |   |   | —                                                                                                                        |   |   | —                                                                                                    |   |
| Hayes                Run Limited Partnership                                       |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | (1,785                                                                                                    | )      |   | 1,785                                                                                                                          |   |   | —                                                                                                    |   |
| Howard                L. Miller Sallisaw Apartments II, L.P.                       |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | —                                                                                                   |   |   | —                                                                                                                        |   |   | —                                                                                                    |   |
| Hurlock                Meadow Limited Partnership                                  |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | (1,587                                                                                                    | )      |   | 1,587                                                                                                                          |   |   | —                                                                                                    |   |
| Ivy                Family, L.P.                                                    |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | —                                                                                                   |   |   | —                                                                                                                        |   |   | —                                                                                                    |   |
| Justin                Associates                                                   |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | —                                                                                                   |   |   | —                                                                                                                        |   |   | —                                                                                                    |   |
| Lawrence                Road Properties, Ltd.                                      |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | —                                                                                                   |   |   | —                                                                                                                        |   |   | —                                                                                                    |   |
| Labelle                Commons, Ltd.                                               |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | —                                                                                                   |   |   | —                                                                                                                        |   |   | —                                                                                                    |   |
| Loma                Del Norte Limited Partnership                                  |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | (4,000                                                                                                    | )      |   | 4,000                                                                                                                          |   |   | —                                                                                                    |   |
| Long                Reach Associates Limited Partnership                           |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | (3,675                                                                                                    | )      |   | 3,675                                                                                                                          |   |   | —                                                                                                    |   |
| Mirador                del Toa Limited Partnership                                 |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | (960                                                                                                      | )      |   | 960                                                                                                                            |   |   | —                                                                                                    |   |
| Moore                Haven Commons, Ltd.                                           |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | —                                                                                                   |   |   | —                                                                                                                        |   |   | —                                                                                                    |   |
| NP-89                Limited Dividend Housing Association Limited Partnership      |   |   | 631,860                                                                                                 |   |   | (43,033                                                                                                                   | )      |   | —                                                                                                      |   |   | (10,000                                                                                                   | )      |   | —                                                                                                                        |   |   | 578,827                                                                                                    |   |
| Nash                Hill Associates, Limited Partnership                           |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | —                                                                                                   |   |   | —                                                                                                                        |   |   | —                                                                                                    |   |
| North                Calhoun City, L.P.                                            |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | —                                                                                                   |   |   | —                                                                                                                        |   |   | —                                                                                                    |   |
| Orange                City Plaza, Limited Partnership                              |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | —                                                                                                   |   |   | —                                                                                                                        |   |   | —                                                                                                    |   |
| Puerta                del Mar Limited Partnership                                  |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | (2,640                                                                                                    | )      |   | 2,640                                                                                                                          |   |   | —                                                                                                    |   |
| Purvis                Heights Properties, L.P.                                     |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | —                                                                                                   |   |   | —                                                                                                                        |   |   | —                                                                                                    |   |
| Queen                Lane Investors                                                |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | —                                                                                                   |   |   | —                                                                                                                        |   |   | —                                                                                                    |   |
| Somerset                Manor, Ltd.                                                |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | —                                                                                                   |   |   | —                                                                                                                        |   |   | —                                                                                                    |   |
| Sugar                Cane Villas, Ltd.                                             |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | (8,636                                                                                                    | )      |   | 8,636                                                                                                                          |   |   | —                                                                                                    |   |
| Summerfield                Apartments Limited Partnership                          |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | (5,000                                                                                                    | )      |   | 5,000                                                                                                                          |   |   | —                                                                                                    |   |
| Sydney                Engel Associates L.P.                                        |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | —                                                                                                   |   |   | —                                                                                                                        |   |   | —                                                                                                    |   |
| Union                Valley Associates Limited Partnership                         |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | —                                                                                                   |   |   | —                                                                                                                        |   |   | —                                                                                                    |   |
| Walnut                Grove Family, L.P.                                           |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | —                                                                                                   |   |   | —                                                                                                                        |   |   | —                                                                                                    |   |
| Waynesboro                Apartments Limited Partnership                           |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | (3,750                                                                                                    | )      |   | 3,750                                                                                                                          |   |   | —                                                                                                    |   |
| West                Calhoun City, L.P.                                             |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | —                                                                                                   |   |   | —                                                                                                                        |   |   | —                                                                                                    |   |
| Westminster                Apartments Limited Partnership                          |   |   | —                                                                                                 |   |   | —(1                                                                                                                 | )      |   | —                                                                                                      |   |   | —                                                                                                   |   |   | —                                                                                                                        |   |   | —                                                                                                    |   |
|                                                                               |   | $      | 751,675                                                                                                 |   | $      | (156,237                                                                                                                  | )      | $      | (6,130                                                                                                       | )      | $      | (55,984                                                                                                   | )      | $      | 45,503                                                                                                                         |   | $      | 578,827                                                                                                    |   |

| (1) | 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. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | The                Partnership’s equity in loss of an investment in a Local Partnership is                limited to the remaining investment                balance. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | The                Partnership has adjusted the investment’s carrying value in accordance                with applicable accounting                guidelines. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**AMERICAN      TAX CREDIT PROPERTIES III L.P.**

**NOTES      TO FINANCIAL STATEMENTS - (Continued)**

**MARCH      30, 2006, 2005 AND 2004**

| **5.** | **Investment                in Local Partnerships (continued)** |
|--------|-----------------------------------------------------------------|

| Name              of Local Partnership                                             |   |   | Investmentin                Local Partnershipbalance                as of March                30, 2004 |   |   | Partnership'sequity                inincome                (loss)for                theyear                endedDecember                31,2004 |   |   | Adjustmentto                carryingvalue                during theyear                endedMarch                30,2005 |   |   | Cashdistributionsreceived                during theyear                endedMarch                30, 2005 |   |   | Cashdistributions                classified                as other                incomeduring                the year                ended March                30, 2005 |   |   | Investmentin                LocalPartnershipbalance                as ofMarch                30, 2005 |   |
|------------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------------|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------------------------------------------------------------------------------------------------------|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------------------------------------------------------------------------------------------------|--------|
| April                Gardens Apartments II Limited Partnership                     |   | $      | —                                                                                                 |   | $      | —(1                                                                                                                                       | )      | $      | —                                                                                                                  |   | $      | (960                                                                                                      | )      | $      | 960                                                                                                                                                                        |   | $      | —                                                                                               |   |
| Ashland                Park Apartments, L.P.                                       |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | (720                                                                                                      | )      |   | 720                                                                                                                                                                        |   |   | —                                                                                               |   |
| Auburn                Family, L.P.                                                 |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | —                                                                                                   |   |   | —                                                                                                                                                                    |   |   | —                                                                                               |   |
| Batesville                Family, L.P.                                             |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | —                                                                                                   |   |   | —                                                                                                                                                                    |   |   | —                                                                                               |   |
| Bay                Springs Elderly, L.P.                                           |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | —                                                                                                   |   |   | —                                                                                                                                                                    |   |   | —                                                                                               |   |
| Brisas                del Mar Apartments Limited Partnership                       |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | (1,320                                                                                                    | )      |   | 1,320                                                                                                                                                                      |   |   | —                                                                                               |   |
| Bruce                Housing Associates, L.P.                                      |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | —                                                                                                   |   |   | —                                                                                                                                                                    |   |   | —                                                                                               |   |
| Carrington                Limited Dividend Housing Association Limited Partnership |   |   | 207,689                                                                                                 |   |   | (124,616                                                                                                                                        | )      |   | —                                                                                                                  |   |   | —                                                                                                   |   |   | —                                                                                                                                                                    |   |   | 83,073                                                                                                |   |
| Chestnut                Park Associates, L.P.                                      |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | —                                                                                                   |   |   | —                                                                                                                                                                    |   |   | —                                                                                               |   |
| Chowan                Senior Manor Associates Limited Partnership                  |   |   | —                                                                                                 |   |   | —                (1                                                                                                                       | )      |   | —                                                                                                                  |   |   | —                                                                                                   |   |   | —                                                                                                                                                                    |   |   | —                                                                                               |   |
| Christian                Street Commons Associates                                 |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | —                                                                                                   |   |   | —                                                                                                                                                                    |   |   | —                                                                                               |   |
| Country                View Apartments                                             |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | —                                                                                                   |   |   | —                                                                                                                                                                    |   |   | —                                                                                               |   |
| Desarrollos                de Belen Limited Partnership                            |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | (2,000                                                                                                    | )      |   | 2,000                                                                                                                                                                      |   |   | —                                                                                               |   |
| Desarrollos                de Emaus Limited Partnership                            |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | (3,000                                                                                                    | )      |   | 3,000                                                                                                                                                                      |   |   | —                                                                                               |   |
| Ellinwood                Heights Apartments, L.P.                                  |   |   | 35,518                                                                                                  |   |   | 1,224                                                                                                                                           |   |   | —                                                                                                                  |   |   | —                                                                                                   |   |   | —                                                                                                                                                                    |   |   | 36,742                                                                                                |   |
| Fulton                Street Houses Limited Partnership                            |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | —                                                                                                   |   |   | —                                                                                                                                                                    |   |   | —                                                                                               |   |
| Hayes                Run Limited Partnership                                       |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | (1,785                                                                                                    | )      |   | 1,785                                                                                                                                                                      |   |   | —                                                                                               |   |
| Howard                L. Miller Sallisaw Apartments II, L.P.                       |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | —                                                                                                   |   |   | —                                                                                                                                                                    |   |   | —                                                                                               |   |
| Hurlock                Meadow Limited Partnership                                  |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | (3,176                                                                                                    | )      |   | 3,176                                                                                                                                                                      |   |   | —                                                                                               |   |
| Ivy                Family, L.P.                                                    |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | —                                                                                                   |   |   | —                                                                                                                                                                    |   |   | —                                                                                               |   |
| Justin                Associates                                                   |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | —                                                                                                   |   |   | —                                                                                                                                                                    |   |   | —                                                                                               |   |
| Lawrence                Road Properties, Ltd.                                      |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | —                                                                                                   |   |   | —                                                                                                                                                                    |   |   | —                                                                                               |   |
| Labelle                Commons, Ltd.                                               |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | —                                                                                                   |   |   | —                                                                                                                                                                    |   |   | —                                                                                               |   |
| Loma                Del Norte Limited Partnership                                  |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | (2,000                                                                                                    | )      |   | 2,000                                                                                                                                                                      |   |   | —                                                                                               |   |
| Long                Reach Associates Limited Partnership                           |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | —                                                                                                   |   |   | —                                                                                                                                                                    |   |   | —                                                                                               |   |
| Mirador                del Toa Limited Partnership                                 |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | (572                                                                                                      | )      |   | 572                                                                                                                                                                        |   |   | —                                                                                               |   |
| Moore                Haven Commons, Ltd.                                           |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | (2,320                                                                                                    | )      |   | 2,320                                                                                                                                                                      |   |   | —                                                                                               |   |
| NP-89                Limited Dividend Housing Association Limited Partnership      |   |   | 765,675                                                                                                 |   |   | (123,815                                                                                                                                        | )      |   | —                                                                                                                  |   |   | (10,000                                                                                                   | )      |   | —                                                                                                                                                                    |   |   | 631,860                                                                                               |   |
| Nash                Hill Associates, Limited Partnership                           |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | (1,819                                                                                                    | )      |   | 1,819                                                                                                                                                                      |   |   | —                                                                                               |   |
| North                Calhoun City, L.P.                                            |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | —                                                                                                   |   |   | —                                                                                                                                                                    |   |   | —                                                                                               |   |
| Orange                City Plaza, Limited Partnership                              |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | (1,580                                                                                                    | )      |   | 1,580                                                                                                                                                                      |   |   | —                                                                                               |   |
| Puerta                del Mar Limited Partnership                                  |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | (1,320                                                                                                    | )      |   | 1,320                                                                                                                                                                      |   |   | —                                                                                               |   |
| Purvis                Heights Properties, L.P.                                     |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | (889                                                                                                      | )      |   | 889                                                                                                                                                                        |   |   | —                                                                                               |   |
| Queen                Lane Investors                                                |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | —                                                                                                   |   |   | —                                                                                                                                                                    |   |   | —                                                                                               |   |
| Somerset                Manor, Ltd.                                                |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | —                                                                                                   |   |   | —                                                                                                                                                                    |   |   | —                                                                                               |   |
| Sugar                Cane Villas, Ltd.                                             |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | (11,083                                                                                                   | )      |   | 11,083                                                                                                                                                                     |   |   | —                                                                                               |   |
| Summerfield                Apartments Limited Partnership                          |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | —                                                                                                   |   |   | —                                                                                                                                                                    |   |   | —                                                                                               |   |
| Sydney                Engel Associates L.P.                                        |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | —                                                                                                   |   |   | —                                                                                                                                                                    |   |   | —                                                                                               |   |
| Union                Valley Associates Limited Partnership                         |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | —                                                                                                   |   |   | —                                                                                                                                                                    |   |   | —                                                                                               |   |
| Walnut                Grove Family, L.P.                                           |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | —                                                                                                   |   |   | —                                                                                                                                                                    |   |   | —                                                                                               |   |
| Waynesboro                Apartments Limited Partnership                           |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | —                                                                                                   |   |   | —                                                                                                                                                                    |   |   | —                                                                                               |   |
| West                Calhoun City, L.P.                                             |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | —                                                                                                   |   |   | —                                                                                                                                                                    |   |   | —                                                                                               |   |
| Westminster                Apartments Limited Partnership                          |   |   | —                                                                                                 |   |   | —(1                                                                                                                                       | )      |   | —                                                                                                                  |   |   | —                                                                                                   |   |   | —                                                                                                                                                                    |   |   | —                                                                                               |   |
|                                                                               |   | $      | 1,008,882                                                                                               |   | $      | (247,207                                                                                                                                        | )      | $      | —                                                                                                                  |   | $      | (44,544                                                                                                   | )      | $      | 34,544                                                                                                                                                                     |   | $      | 751,675                                                                                               |   |

----

**AMERICAN      TAX CREDIT PROPERTIES III L.P.**

**NOTES      TO FINANCIAL STATEMENTS - (Continued)**

**MARCH      30, 2006, 2005 AND 2004**

| **5.** | **Investment                in Local Partner ships (continued)** |
|--------|------------------------------------------------------------------|

|  Name                of Local Partnership                                     |   | Mortgage                loans                payable |       |  Land |   | Buildings                and improvements |   | Accumulated                depreciation |        |
|------------------------------------------------------------------------------------|--------|------------------------------------------------------|------------|------------|--------|-------------------------------------------|--------|-----------------------------------------|-------------|
|                                                                               |   |                                                 |       |       |   |                                      |   |                                    |        |
| April                Gardens Apartments II Limited Partnership                     |   | $                                                    | 1,958,867  |       | $      | 39,984                                    |   | $                                       | 2,509,656   |   | $ | (1,510,956 | ) |
| Ashland                Park Apartments, L.P.                                       |   |                                                 | 1,017,021  |       |   | 50,160                                    |   |                                    | 1,258,565   |   |   | (685,600 | ) |
| Auburn                Family, L.P.                                                 |   |                                                 | 452,267    |       |   | 20,000                                    |   |                                    | 588,988     |   |   | (278,942 | ) |
| Batesville                Family, L.P.                                             |   |                                                 | 1,414,432  |       |   | 52,000                                    |   |                                    | 1,849,449   |   |   | (846,743 | ) |
| Bay                Springs Elderly, L.P.                                           |   |                                                 | 663,582    |       |   | 38,000                                    |   |                                    | 880,135     |   |   | (408,762 | ) |
| Brisas                del Mar Apartments Limited Partnership                       |   |                                                 | 2,598,116  |       |   | 100,280                                   |   |                                    | 3,397,603   |   |   | (2,024,156 | ) |
| Bruce                Housing Associates, L.P.                                      |   |                                                 | 1,083,041  |       |   | 16,000                                    |   |                                    | 1,501,937   |   |   | (811,723 | ) |
| Carrington                Limited Dividend Housing Association Limited Partnership |   |                                                 | 3,178,196  |       |   | 200,000                                   |   |                                    | 6,612,228   |   |   | (3,744,697 | ) |
| Chestnut                Park Associates, L.P.                                      |   |                                                 | 4,677,658  |       |   | 781,700                                   |   |                                    | 8,654,778   |   |   | (4,634,267 | ) |
| Chowan                Senior Manor Associates Limited Partnership                  |   |                                                 | 1,220,453  |       |   | 86,101                                    |   |                                    | 1,530,162   |   |   | (857,071 | ) |
| Christian                Street Commons Associates                                 |   |                                                 | 559,787    |       |   | —                                   |   |                                    | 7,545       |   |   | (1,907 | ) |
| Country                View Apartments                                             |   |                                                 | 919,026    |       |   | 35,698                                    |   |                                    | 1,273,646   |   |   | (450,710 | ) |
| Desarrollos                de Belen Limited Partnership                            |   |                                                 | 1,843,443  |       |   | 96,190                                    |   |                                    | 2,519,166   |   |   | (1,124,187 | ) |
| Desarrollos                de Emaus Limited Partnership                            |   |                                                 | 3,133,501  |       |   | 214,000                                   |   |                                    | 4,046,102   |   |   | (1,724,295 | ) |
| Ellinwood                Heights Apartments, L.P.                                  |   |                                                 | 674,705    |       |   | 10,000                                    |   |                                    | 989,302     |   |   | (351,395 | ) |
| Fulton                Street Houses Limited Partnership                            |   |                                                 | 3,869,930  |       |   | 2                                         |   |                                    | 5,964,514   |   |   | (3,008,642 | ) |
| Hayes                Run Limited Partnership                                       |   |                                                 | 1,398,569  |       |   | 85,060                                    |   |                                    | 1,647,734   |   |   | (602,230 | ) |
| Howard                L. Miller Sallisaw Apartments II, L.P.                       |   |                                                 | 604,552    |       |   | 39,000                                    |   |                                    | 734,163     |   |   | (274,457 | ) |
| Hurlock                Meadow Limited Partnership                                  |   |                                                 | 1,244,361  |       |   | 49,525                                    |   |                                    | 1,616,742   |   |   | (854,529 | ) |
| Ivy                Family, L.P.                                                    |   |                                                 | 758,570    |       |   | 11,000                                    |   |                                    | 1,103,816   |   |   | (604,642 | ) |
| Justin                Associates                                                   |   |                                                 | 2,170,491  |       |   | 27,472                                    |   |                                    | 4,369,992   |   |   | (2,229,451 | ) |
| LaBelle                Commons, Ltd.                                               |   |                                                 | 992,984    |       |   | 98,947                                    |   |                                    | 1,263,737   |   |   | (587,992 | ) |
| Lawrence                Road Properties, Ltd.                                      |   |                                                 | 744,352    |       |   | 50,000                                    |   |                                    | 973,606     |   |   | (434,723 | ) |
| Loma                Del Norte Limited Partnership                                  |   |                                                 | 1,411,220  |       |   | 84,874                                    |   |                                    | 1,917,493   |   |   | (722,027 | ) |
| Long                Reach Associates Limited Partnership                           |   |                                                 | 1,451,360  |       |   | 118,446                                   |   |                                    | 1,922,789   |   |   | (767,339 | ) |
| Mirador                del Toa Limited Partnership                                 |   |                                                 | 1,841,657  |       |   | 105,000                                   |   |                                    | 2,357,697   |   |   | (1,417,533 | ) |
| Moore                Haven Commons, Ltd.                                           |   |                                                 | 910,164    |       |   | 73,645                                    |   |                                    | 1,197,000   |   |   | (665,392 | ) |
| NP-89                Limited Dividend Housing Association Limited Partnership      |   |                                                 | 3,456,300  |       |   | 150,000                                   |   |                                    | 7,737,233   |   |   | (4,043,278 | ) |
| Nash                Hill Associates, Limited Partnership                           |   |                                                 | 1,440,685  |       |   | 123,876                                   |   |                                    | 1,762,654   |   |   | (679,722 | ) |
| North                Calhoun City, L.P.                                            |   |                                                 | 465,815    |       |   | 12,000                                    |   |                                    | 668,703     |   |   | (313,626 | ) |
| Orange                City Plaza, Limited Partnership                              |   |                                                 | 402,140    |       |   | 53,904                                    |   |                                    | 1,051,852   |   |   | (453,921 | ) |
| Puerta                del Mar Limited Partnership                                  |   |                                                 | 2,472,254  |       |   | 115,000                                   |   |                                    | 3,145,351   |   |   | (1,858,712 | ) |
| Purvis                Heights Properties, L.P.                                     |   |                                                 | 1,127,010  |       |   | 47,000                                    |   |                                    | 1,566,011   |   |   | (654,922 | ) |
| Queen                Lane Investors                                                |   |                                                 | 1,513,915  |       |   | 60,301                                    |   |                                    | 2,837,184   |   |   | (1,515,094 | ) |
| Somerset                Manor, Ltd.                                                |   |                                                 | 881,188    |       |   | 53,383                                    |   |                                    | 1,123,979   |   |   | (614,199 | ) |
| Sugar                Cane Villas, Ltd.                                             |   |                                                 | 3,246,477  |       |   | 58,500                                    |   |                                    | 4,093,772   |   |   | (2,256,232 | ) |
| Summerfield                Apartments Limited Partnership                          |   |                                                 | 1,572,707  |       |   | 195,411                                   |   |                                    | 2,733,958   |   |   | (974,109 | ) |
| Sydney                Engel Associates L.P.                                        |   |                                                 | 15,816,870 |       |   | 284,305                                   |   |                                    | 19,708,396  |   |   | (10,698,532 | ) |
| Union                Valley Associates Limited Partnership                         |   |                                                 | 1,420,359  |       |   | 97,800                                    |   |                                    | 1,758,877   |   |   | (670,680 | ) |
| Walnut                Grove Family, L.P.                                           |   |                                                 | 832,673    |       |   | 30,000                                    |   |                                    | 1,069,358   |   |   | (525,517 | ) |
| Waynesboro                Apartments Limited Partnership                           |   |                                                 | 1,453,591  |       |   | 76,000                                    |   |                                    | 1,794,917   |   |   | (706,391 | ) |
| West                Calhoun City, L.P.                                             |   |                                                 | 713,767    |       |   | 18,000                                    |   |                                    | 1,100,764   |   |   | (511,224 | ) |
| Westminster                Apartments Limited Partnership                          |   |                                                 | 1,607,973  |       |   | 51,651                                    |   |                                    | 1,226,574   |   |   | (919,786 | ) |
|                                                                               |   | $                                                    | 81,216,029 |       | $      | 3,910,215                                 |   | $                                       | 116,068,128 |   | $ | (59,020,313 | ) |

----

**AMERICAN      TAX CREDIT PROPERTIES III L.P.**

**NOTES      TO FINANCIAL STATEMENTS - (Continued)**

**MARCH      30, 2006, 2005 AND 2004**

| **5.** | **Investment                in Local Partnerships (continued)** |
|--------|-----------------------------------------------------------------|

|  Name                of Local Partnership                                     |   | Mortgage                loans                payable |       |  Land |   | Buildings                and improvements |   | Accumulated                depreciation |        |
|------------------------------------------------------------------------------------|--------|------------------------------------------------------|------------|------------|--------|-------------------------------------------|--------|-----------------------------------------|-------------|
|                                                                               |   |                                                 |       |       |   |                                      |   |                                    |        |
| April                Gardens Apartments II Limited Partnership                     |   | $                                                    | 1,966,069  |       | $      | 39,984                                    |   | $                                       | 2,507,318   |   | $ | (1,405,156 | ) |
| Ashland                Park Apartments, L.P.                                       |   |                                                 | 1,021,302  |       |   | 50,160                                    |   |                                    | 1,250,352   |   |   | (638,438 | ) |
| Auburn                Family, L.P.                                                 |   |                                                 | 456,347    |       |   | 20,000                                    |   |                                    | 588,988     |   |   | (265,782 | ) |
| Batesville                Family, L.P.                                             |   |                                                 | 1,419,819  |       |   | 52,000                                    |   |                                    | 1,843,095   |   |   | (799,675 | ) |
| Bay                Springs Elderly, L.P.                                           |   |                                                 | 666,111    |       |   | 38,000                                    |   |                                    | 852,608     |   |   | (390,757 | ) |
| Brisas                del Mar Apartments Limited Partnership                       |   |                                                 | 2,609,564  |       |   | 100,280                                   |   |                                    | 3,396,314   |   |   | (1,886,606 | ) |
| Bruce                Housing Associates, L.P.                                      |   |                                                 | 1,087,973  |       |   | 16,000                                    |   |                                    | 1,482,575   |   |   | (766,007 | ) |
| Carrington                Limited Dividend Housing Association Limited Partnership |   |                                                 | 3,227,672  |       |   | 200,000                                   |   |                                    | 6,595,168   |   |   | (3,493,697 | ) |
| Chestnut                Park Associates, L.P.                                      |   |                                                 | 4,772,026  |       |   | 781,700                                   |   |                                    | 8,654,778   |   |   | (4,320,239 | ) |
| Chowan                Senior Manor Associates Limited Partnership                  |   |                                                 | 1,228,746  |       |   | 86,101                                    |   |                                    | 1,530,162   |   |   | (798,037 | ) |
| Christian                Street Commons Associates                                 |   |                                                 | 571,021    |       |   | —                                   |   |                                    | 7,545       |   |   | (1,633 | ) |
| Country                View Apartments                                             |   |                                                 | 922,768    |       |   | 35,698                                    |   |                                    | 1,273,646   |   |   | (415,604 | ) |
| Desarrollos                de Belen Limited Partnership                            |   |                                                 | 1,850,743  |       |   | 96,190                                    |   |                                    | 2,519,166   |   |   | (1,039,189 | ) |
| Desarrollos                de Emaus Limited Partnership                            |   |                                                 | 3,144,915  |       |   | 214,000                                   |   |                                    | 4,046,102   |   |   | (1,588,654 | ) |
| Ellinwood                Heights Apartments, L.P.                                  |   |                                                 | 677,438    |       |   | 10,000                                    |   |                                    | 970,915     |   |   | (317,263 | ) |
| Fulton                Street Houses Limited Partnership                            |   |                                                 | 3,869,930  |       |   | 2                                         |   |                                    | 5,964,514   |   |   | (2,780,365 | ) |
| Hayes                Run Limited Partnership                                       |   |                                                 | 1,404,148  |       |   | 85,060                                    |   |                                    | 1,632,566   |   |   | (543,889 | ) |
| Howard                L. Miller Sallisaw Apartments II, L.P.                       |   |                                                 | 606,846    |       |   | 39,000                                    |   |                                    | 728,404     |   |   | (259,038 | ) |
| Hurlock                Meadow Limited Partnership                                  |   |                                                 | 1,249,691  |       |   | 49,525                                    |   |                                    | 1,605,842   |   |   | (791,411 | ) |
| Ivy                Family, L.P.                                                    |   |                                                 | 765,777    |       |   | 11,000                                    |   |                                    | 1,082,310   |   |   | (570,128 | ) |
| Justin                Associates                                                   |   |                                                 | 2,222,874  |       |   | 27,472                                    |   |                                    | 4,369,992   |   |   | (2,070,109 | ) |
| LaBelle                Commons, Ltd.                                               |   |                                                 | 997,116    |       |   | 98,947                                    |   |                                    | 1,184,937   |   |   | (544,969 | ) |
| Lawrence                Road Properties, Ltd.                                      |   |                                                 | 747,337    |       |   | 50,000                                    |   |                                    | 962,687     |   |   | (409,117 | ) |
| Loma                Del Norte Limited Partnership                                  |   |                                                 | 1,416,640  |       |   | 84,874                                    |   |                                    | 1,886,307   |   |   | (669,674 | ) |
| Long                Reach Associates Limited Partnership                           |   |                                                 | 1,457,002  |       |   | 118,446                                   |   |                                    | 1,912,539   |   |   | (717,968 | ) |
| Mirador                del Toa Limited Partnership                                 |   |                                                 | 1,850,088  |       |   | 105,000                                   |   |                                    | 2,346,694   |   |   | (1,322,198 | ) |
| Moore                Haven Commons, Ltd.                                           |   |                                                 | 913,852    |       |   | 73,645                                    |   |                                    | 1,197,000   |   |   | (623,407 | ) |
| NP-89                Limited Dividend Housing Association Limited Partnership      |   |                                                 | 3,617,394  |       |   | 150,000                                   |   |                                    | 7,651,003   |   |   | (3,735,280 | ) |
| Nash                Hill Associates, Limited Partnership                           |   |                                                 | 1,446,521  |       |   | 123,876                                   |   |                                    | 1,747,132   |   |   | (629,964 | ) |
| North                Calhoun City, L.P.                                            |   |                                                 | 470,584    |       |   | 12,000                                    |   |                                    | 667,464     |   |   | (298,897 | ) |
| Orange                City Plaza, Limited Partnership                              |   |                                                 | 409,846    |       |   | 53,904                                    |   |                                    | 1,051,852   |   |   | (429,740 | ) |
| Puerta                del Mar Limited Partnership                                  |   |                                                 | 2,483,146  |       |   | 115,000                                   |   |                                    | 3,227,357   |   |   | (1,810,328 | ) |
| Purvis                Heights Properties, L.P.                                     |   |                                                 | 1,131,600  |       |   | 47,000                                    |   |                                    | 1,538,559   |   |   | (618,784 | ) |
| Queen                Lane Investors                                                |   |                                                 | 1,524,745  |       |   | 60,301                                    |   |                                    | 2,811,636   |   |   | (1,403,877 | ) |
| Somerset                Manor, Ltd.                                                |   |                                                 | 884,599    |       |   | 53,383                                    |   |                                    | 1,118,389   |   |   | (574,144 | ) |
| Sugar                Cane Villas, Ltd.                                             |   |                                                 | 3,259,238  |       |   | 58,500                                    |   |                                    | 4,091,671   |   |   | (2,110,249 | ) |
| Summerfield                Apartments Limited Partnership                          |   |                                                 | 1,610,169  |       |   | 195,411                                   |   |                                    | 2,723,225   |   |   | (906,061 | ) |
| Sydney                Engel Associates L.P.                                        |   |                                                 | 16,052,928 |       |   | 284,305                                   |   |                                    | 19,443,725  |   |   | (9,957,055 | ) |
| Union                Valley Associates Limited Partnership                         |   |                                                 | 1,425,898  |       |   | 97,800                                    |   |                                    | 1,758,877   |   |   | (627,226 | ) |
| Walnut                Grove Family, L.P.                                           |   |                                                 | 835,644    |       |   | 30,000                                    |   |                                    | 1,065,150   |   |   | (497,980 | ) |
| Waynesboro                Apartments Limited Partnership                           |   |                                                 | 1,460,104  |       |   | 76,000                                    |   |                                    | 1,794,917   |   |   | (660,565 | ) |
| West                Calhoun City, L.P.                                             |   |                                                 | 725,123    |       |   | 18,000                                    |   |                                    | 1,071,865   |   |   | (484,784 | ) |
| Westminster                Apartments Limited Partnership                          |   |                                                 | 1,607,972  |       |   | 51,651                                    |   |                                    | 1,175,886   |   |   | (844,560 | ) |
|                                                                               |   | $                                                    | 82,069,326 |       | $      | 3,910,215                                 |   | $                                       | 115,331,231 |   | $ | (55,018,504 | ) |

----

**AMERICAN      TAX CREDIT PROPERTIES III L.P.**

**NOTES      TO FINANCIAL STATEMENTS - (Continued)**

**MARCH      30, 2006, 2005 AND 2004**

| **5.** | **Investment                in Local Partnerships (continued)** |
|--------|-----------------------------------------------------------------|

|                                      |   |   Balance                as ofDecember                31, 2004 |        | Net                changeduring                the year endedDecember                31, 2005 |   |   Balance                as ofDecember                31, 2005 |   |
|-------------------------------------------|--------|--------------------------------------------------------------------------|-------------|-----------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------|--------|
|                                      |   |                                                                     |        |                                                                                          |   |                                                                     |   |
| Land                                      |   | $                                                                        | 3,910,215   |                                                                                          | $      | —                                                                  |   | $ | 3,910,215 |   |
| Buildings                and improvements |   |                                                                     | 115,331,231 |                                                                                          |   | 736,897                                                                  |   |   | 116,068,128 |   |
|                                      |   |                                                                     | 119,241,446 |                                                                                          |   | 736,897                                                                  |   |   | 119,978,343 |   |
| Accumulated                depreciation   |   |                                                                     | (55,018,504 | )                                                                                             |   | (4,001,809                                                               | )      |   | (59,020,313 | ) |
|                                      |   | $                                                                        | 64,222,942  |                                                                                          | $      | (3,264,912                                                               | )      | $ | 60,958,030 |   |

| **6.** | **Transactions                with General Partner and                Affiliates** |
|--------|------------------------------------------------------------------------------------|

|                                            |   | 2006   |    | 2005     |   | 2004    |   |
|-------------------------------------------------|--------|--------|---------|----------|--------|---------|--------|
|                                            |   | Paid   |    | Incurred |   | Paid    |   | Incurred |   | Paid |   | Incurred |   |
|                                            |   |   |    |     |   |    |   |   |   |   |   |   |   |
| Management                fees (see Note 8)     |   | $      | 190,479 |     | $      | 230,571 |   | $ | 361,781 |   | $ | 230,571 |   | $ | 183,663 |   | $ | 230,571 |   |
|                                            |   |   |    |     |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Administration                fees (see Note 8) |   |   | 132,578 |     |   | 230,571 |   |   | 69,769 |   |   | 230,571 |   |   | 16,353 |   |   | 230,571 |   |

|                                                 |   | 2005   |    | 2004     |   | 2003    |   |
|------------------------------------------------------|--------|--------|---------|----------|--------|---------|--------|
|                                                 |   | Paid   |    | Incurred |   | Paid    |   | Incurred |   | Paid |   | Incurred |   |
|                                                 |   |   |    |     |   |    |   |   |   |   |   |   |   |
| Property                management fees              |   | $      | 39,220  |     | $      | 40,010  |   | $ | 35,211 |   | $ | 40,010 |   | $ | 43,159 |   | $ | 38,873 |   |
|                                                 |   |   |    |     |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Insurance                premiums and other services |   |   | — |     |   | — |   |   | — |   |   | 17,040 |   |   | 37,269 |   |   | 35,870 |   |

----

**AMERICAN      TAX CREDIT PROPERTIES III L.P.**

**NOTES      TO FINANCIAL STATEMENTS - (Continued)**

**MARCH      30, 2006, 2005 AND 2004**

| **7.** | **Taxable                Loss** |
|--------|---------------------------------|

|                                                                                                                                        |   | 2006   |       | 2005   |   | 2004       |   |
|---------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|------------|--------|
| Financial                statement net loss for the years ended March 30, 2006, 2005, and                2004                               |   | $      | (620,078   | )      | $      | (640,259   | )      | $ | (611,662 | ) |
|                                                                                                                                        |   |   |       |   |   |       |   |   |   |   |
| Add                (less) net transactions occurring between                                                                                |   |   |       |   |   |       |   |   |   |   |
| January                1, 2003 and March 30, 2003                                                                                           |   |   | —    |   |   | —    |   |   | (59,193 | ) |
| January                1, 2004 and March 30, 2004                                                                                           |   |   | —    |   |   | (95,397    | )      |   | 95,397 |   |
| January                1, 2005 and March 30, 2005                                                                                           |   |   | (90,683    | )      |   | 90,683     |   |   | — |   |
| January                1, 2006 and March 30, 2006                                                                                           |   |   | 124,512    |   |   | —    |   |   | — |   |
|                                                                                                                                        |   |   |       |   |   |       |   |   |   |   |
| Adjusted                financial statement net loss for the years ended December 31, 2005,                2004                and 2003     |   |   | (586,249   | )      |   | (644,973   | )      |   | (575,458 | ) |
|                                                                                                                                        |   |   |       |   |   |       |   |   |   |   |
| Adjustment                to management and administration fees pursuant to Internal Revenue                Code                Section 267 |   |   | 139,790    |   |   | 139,961    |   |   | 146,259 |   |
|                                                                                                                                        |   |   |       |   |   |       |   |   |   |   |
| Differences                arising from equity in loss of investment in local                partnerships                                   |   |   | (2,621,397 | )      |   | (3,438,649 | )      |   | (2,720,797 | ) |
|                                                                                                                                        |   |   |       |   |   |       |   |   |   |   |
| Other                income from local partnerships                                                                                         |   |   | (39,332    | )      |   | (41,205    | )      |   | (33,286 | ) |
|                                                                                                                                        |   |   |       |   |   |       |   |   |   |   |
| Other                differences                                                                                                            |   |   | (144       | )      |   | 127        |   |   | (5,904 | ) |
|                                                                                                                                        |   |   |       |   |   |       |   |   |   |   |
| Tax                return net loss for the years ended December 31, 2005, 2004 and                2003                                      |   | $      | (3,107,332 | )      | $      | (3,894,739 | )      | $ | (3,189,186 | ) |

|                                                                  |   | 2005   |        | 2004   |   |
|-----------------------------------------------------------------------|--------|--------|-------------|--------|--------|
|                                                                  |   |   |        |   |   |
| Investment                in local partnerships - financial reporting |   | $      | 578,827     |   | $      | 751,675 |   |
| Investment                in local partnerships - tax                 |   |   | (18,434,718 | )      |   | (15,601,141 | ) |
|                                                                  |   |   |        |   |   |   |   |
|                                                                  |   | $      | 19,013,545  |   | $      | 16,352,816 |   |

----

**AMERICAN      TAX CREDIT PROPERTIES III L.P.**

**NOTES      TO FINANCIAL STATEMENTS - (Continued)**

**MARCH      30, 2006, 2005 AND 2004**

| **8.** | **Commitments                and Contingencies** |
|--------|--------------------------------------------------|

----

**AMERICAN      TAX CREDIT PROPERTIES III L.P.**

**NOTES      TO FINANCIAL STATEMENTS - (Continued)**

**MARCH      30, 2006, 2005 AND 2004**

| **9.** | **Fair                Value of Financial                Instruments** |
|--------|-----------------------------------------------------------------------|

| **10.** | **Quarterly                Financial Information -                Unaudited** |
|---------|-------------------------------------------------------------------------------|

|                                              |   | First   |     | Second  |   | Third    |   | Fourth  |     |
|---------------------------------------------------|--------|---------|----------|---------|--------|----------|--------|---------|----------|
|                                              |   | Quarter |     | Quarter |   | Quarter  |   | Quarter |     |
|                                              |   |    |     |    |   |     |   |    |     |
| 2006                                              |   |    |     |    |   |     |   |    |     |
|                                              |   |    |     |    |   |     |   |    |     |
| Total                  revenue                    |   | $       | 40,796   |    | $      | 46,049   |   | $       | 25,465   |   | $ | 30,527 |   |
|                                              |   |    |     |    |   |     |   |    |     |   |   |   |   |
| Total                  expenses                   |   |    | (141,937 | )       |   | (155,920 | )      |    | (147,652 | ) |   | (155,039 | ) |
|                                              |   |    |     |    |   |     |   |    |     |   |   |   |   |
| Equity                  in income (loss) of       |   |    |     |    |   |     |   |    |     |   |   |   |   |
| investment                  in local partnerships |   |    | (48,566  | )       |   | (64,488  | )      |    | (60,678  | ) |   | 11,365 |   |
|                                              |   |    |     |    |   |     |   |    |     |   |   |   |   |
| Net                  loss                         |   |    | (149,707 | )       |   | (174,359 | )      |    | (182,865 | ) |   | (113,147 | ) |
|                                              |   |    |     |    |   |     |   |    |     |   |   |   |   |
| Net                  income (loss) per unit of    |   |    |     |    |   |     |   |    |     |   |   |   |   |
| limited                  partnership interest     |   |    | (4.13    | )       |   | (4.81    | )      |    | (5.05    | ) |   | 2.55 |   |
|                                              |   |    |     |    |   |     |   |    |     |   |   |   |   |
| 2005                                              |   |    |     |    |   |     |   |    |     |   |   |   |   |
|                                              |   |    |     |    |   |     |   |    |     |   |   |   |   |
| Total                  revenue                    |   | $       | 41,486   |    | $      | 50,841   |   | $       | 37,166   |   | $ | 46,617 |   |
|                                              |   |    |     |    |   |     |   |    |     |   |   |   |   |
| Total                  expenses                   |   |    | (142,864 | )       |   | (146,959 | )      |    | (142,039 | ) |   | (137,300 | ) |
|                                              |   |    |     |    |   |     |   |    |     |   |   |   |   |
| Equity                  in loss of investment     |   |    |     |    |   |     |   |    |     |   |   |   |   |
| in                  local partnerships            |   |    | (55,008  | )       |   | (150,147 | )      |    | (34,410  | ) |   | (7,642 | ) |
|                                              |   |    |     |    |   |     |   |    |     |   |   |   |   |
| Net                  loss                         |   |    | (156,386 | )       |   | (246,265 | )      |    | (139,283 | ) |   | (98,325 | ) |
|                                              |   |    |     |    |   |     |   |    |     |   |   |   |   |
| Net                  loss per unit of             |   |    |     |    |   |     |   |    |     |   |   |   |   |
| limited                  partnership interest     |   |    | (4.31    | )       |   | (6.80    | )      |    | (3.84    | ) |   | (2.71 | ) |

----

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

**Item      9A. **
**Controls      and Procedures**

**Item      9B. **
**Other      Information**

**PART      III**

**Item      10.**
**Directors      and Executive Officers of the Registrant**

|                                |   | Served                in present           |   |                                        |
|-------------------------------------|--------|--------------------------------------------|--------|---------------------------------------------|
| Name                                |   | capacity                since1   |   | 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                K. Dodge        |   | September                21, 1989          |   | Secretary                                   |

**Richard      Paul Richman**

**David      A. Salzman, **

**Neal      Ludeke**

**Gina      K. Dodge**

----

**Item      10.**
**Directors      and Executive Officers of the Registrant (continued)**

**Item      11.**
**Executive      Compensation**

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

**Item      13. **
**Certain      Relationships and Related Transactions**

----

**Item      14. **
**Principal      Accountant Fees and Services**

|                                |   | 2006   |    | 2005   |   |
|-------------------------------------|--------|--------|---------|--------|--------|
|                                |   |   |    |   |   |
| Audit                  Fees         |   | $      | 47,182  |   | $      | 44,459 |   |
| Audit-Related                  Fees |   |   | — |   |   | — |   |
| Tax                  Fees           |   | $      | 10,893  |   | $      | 10,000 |   |
| All                  Other Fees     |   |   | — |   |   | — |   |

----

**PART      IV**

**Item      15.**
**Exhibits      and Financial Statement Schedules**

**(a)      **
**Financial      Statements, Financial Statement Schedules and Exhibits**

**(1)      **
**Financial      Statements**

**(2)      **
**Financial      Statement Schedules**

**(3)      **
**Exhibits**

|   |                                                                                                                                                                                                                |   | Incorporated                by                                                                                          |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------|
|   | Exhibit                                                                                                                                                                                                             |   | Reference                to                                                                                        |
| 10.1   | April                Gardens Apartments II Limited Partnership (A Delaware Limited Partnership)                Amended and Restated Agreement of Limited Partnership                                                |   | Exhibit                10.1 to Form 10-Q Reportdated                December 30, 1990(File                No. 33-31390) |
|   |                                                                                                                                                                                                                |   |                                                                                                                    |
| 10.2   | Ashland                Park Apartments, L.P. Second Amended and Restated Agreement of Limited                Partnership                                                                                            |   | Exhibit                10.2 to Form 10-K Reportdated                March 30, 1991(File                No. 33-31390)    |
|   |                                                                                                                                                                                                                |   |                                                                                                                    |
| 10.3   | Auburn                Family, L.P. Amended and Restated Limited Partnership Agreement and                Certificate of Limited Partnership                                                                         |   | Exhibit                10.1 to Form 10-Q Reportdated                December 31, 1991(File                No. 0-19217)  |
|   |                                                                                                                                                                                                                |   |                                                                                                                    |
| 10.4   | Amended                No. 2 to the Batesville Family, L.P. Amended and Restated Agreement                of                Limited Partnership                                                                     |   | Exhibit                10.2 to Form 10-Q Reportdated                December 30, 1990(File                No. 33-31390) |
|   |                                                                                                                                                                                                                |   |                                                                                                                    |
| 10.5   | Batesville                Family, L.P. Amendment No. 3 to the Amended and Restated Agreement                of                Limited Partnership                                                                   |   | Exhibit                10.2 to Form 10-Q Reportdated                December 31, 1991(File                No. 0-19217)  |
|   |                                                                                                                                                                                                                |   |                                                                                                                    |
| 10.6   | Bay                Springs Elderly, L.P. (A Mississippi Limited Partnership) Amended                and                Restated Limited Partnership Agreement and Certificate of Limited                Partnership |   | Exhibit                10.1 to Form 10-Q Reportdated                September 29, 1991(File                No. 0-19217) |
|   |                                                                                                                                                                                                                |   |                                                                                                                    |
| 10.7   | Brisas                del Mar Apartments Limited Partnership (A Delaware Limited Partnership)                Amended and Restated Agreement of Limited Partnership                                                  |   | Exhibit                10.3 to Form 10-Q Reportdated                December 30, 1990(File                No. 33-31390) |
|   |                                                                                                                                                                                                                |   |                                                                                                                    |
| 10.8   | Amendment                No. 1 to the Bruce Housing Associates, L.P. Amended and Restated                Agreement                of Limited Partnership                                                            |   | Exhibit                10.8 to Form 10-K Reportdated                March 30, 1992(File                No. 33-31390)    |

----

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

----

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

----

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

----

|   |                                                                                                                                                                                                 |   | Incorporated                by                                                                                           |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------|
|   | Exhibit                                                                                                                                                                                              |   | Reference                to                                                                                              |
| 10.47  | Summerfield                Apartments Limited Partnership Amended and Restated Agreement of                Limited                Partnership                                                        |   | Exhibit                10.47 to Form 10-K Reportdated                March 30, 1992(File                No. 33-31390)    |
|   |                                                                                                                                                                                                 |   |                                                                                                                     |
| 10.48  | Amendment                No.1 to the Summerfield Apartments Limited Partnership Amended and                Restated Agreement of Limited Partnership                                                 |   | Exhibit                10.48 to Form 10-K Report dated                March 30, 1999(File                No. 0-19217)    |
|   |                                                                                                                                                                                                 |   |                                                                                                                     |
| 10.49  | Sydney                Engel Associates Second Amended and Restated Agreement of Limited                Partnership                                                                                   |   | Exhibit                10.4 to Form 10-Q Reportdated                September 29, 1990(File                No. 33-31390) |
|   |                                                                                                                                                                                                 |   |                                                                                                                     |
| 10.50  | First                Amendment to Second Amended and Restated Agreement of Limited Partnership                of Sydney Engel Associates                                                             |   | Exhibit                10.49 to Form 10-K Reportdated                March 30, 1997(File                No. 0-19217)     |
|   |                                                                                                                                                                                                 |   |                                                                                                                     |
| 10.51  | Second                Amendment to Second Amended and Restated Agreement of Limited Partnership                of Sydney Engel Associates L.P.                                                       |   | Exhibit                10.50 to Form 10-K Reportdated                March 30, 1997(File                No. 0-19217)     |
|   |                                                                                                                                                                                                 |   |                                                                                                                     |
| 10.52  | Third                Amendment to Second Amended and Restated Agreement of Limited Partnership                of Sydney Engel Associates L.P.                                                        |   | Exhibit                10.51 to Form 10-K Reportdated                March 30, 1997(File                No. 0-19217)     |
|   |                                                                                                                                                                                                 |   |                                                                                                                     |
| 10.53  | Fourth                Amendment to Second Amended and Restated Agreement of Limited Partnership                of Sydney Engel Associates L.P.                                                       |   | Exhibit                10.52 to Form 10-K Reportdated                March 30, 1997(File                No. 0-19217)     |
|   |                                                                                                                                                                                                 |   |                                                                                                                     |
| 10.54  | Union                Valley Associates Limited Partnership Amended and Restated Agreement                and                Certificate of Limited Partnership                                       |   | Exhibit                10.14 to Form 10-Q Reportdated                December 30, 1990(File                No. 33-31390) |
|   |                                                                                                                                                                                                 |   |                                                                                                                     |
| 10.55  | Walnut                Grove Family, L.P. (A Mississippi Limited Partnership) Amended and                Restated Limited Partnership Agreement and Certificate of Limited                Partnership |   | Exhibit                10.4 to Form 10-Q Reportdated                September 29, 1991(File                No. 0-19217)  |
|   |                                                                                                                                                                                                 |   |                                                                                                                     |
| 10.56  | Waynesboro                Apartments Limited Partnership Amended and Restated Agreement and                Certificate of Limited Partnership                                                        |   | Exhibit                10.15 to Form 10-Q Reportdated                December 30, 1990(File                No. 33-31390) |
|   |                                                                                                                                                                                                 |   |                                                                                                                     |
| 10.57  | West                Calhoun City, L.P. (A Mississippi Limited Partnership) Amended and                Restated Limited Partnership Agreement and Certificate of Limited                Partnership   |   | Exhibit                10.5 to Form 10-Q Reportdated                September 29, 1991(File                No. 0-19217)  |
|   |                                                                                                                                                                                                 |   |                                                                                                                     |
| 10.58  | Westminster                Apartments Limited Partnership Second Amended and Restated Agreement                of                Limited Partnership                                                 |   | Exhibit                10.53 to Form 10-K Reportdated                March 30, 1992(File                No. 33-31390)    |

----

|       |                                                                                                                                                                                           |   | Incorporated                by                                                                                        |
|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------|
|       | Exhibit                                                                                                                                                                                        |   | Reference                to                                                                                           |
| *31.1      | Rule                13a-14(a)/15d-14(a) Certification of Chief Executive                Officer                                                                                                |   |                                                                                                                  |
|       |                                                                                                                                                                                           |   |                                                                                                                  |
| *31.2      | Rule                13a-14(a)/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.                                                                                                                          |   |                                                                                                                  |
|       |                                                                                                                                                                                           |   |                                                                                                                  |
| 99.1       | Pages                20 through 31, 44 through 71 and 78 through 80 of Prospectus filed                pursuant to Rule 424(b)(3) under Securities Act of 1933                                 |   | Exhibit                28.0 to Form 10-K Reportdated                March 30, 1990(File                No. 33-31390)  |
|       |                                                                                                                                                                                           |   |                                                                                                                  |
| 99.2       | Pages                14 through 19 of Prospectus filed pursuant to Rule 424(b)(3) under                Securities Act of 1933                                                                  |   | Exhibit                28.1 to Form 10-K Reportdated                March 30, 1991(File                No. 33-31390)  |
|       |                                                                                                                                                                                           |   |                                                                                                                  |
| 99.3       | Supplement                No. 1 dated June 6, 1990 to Prospectus                                                                                                                               |   | Exhibit                28.2 to Form 10-K Reportdated                March 30, 1991(File                No. 33-31390)  |
|       |                                                                                                                                                                                           |   |                                                                                                                  |
| 99.4       | Supplement                No. 2 dated November 21, 1990 to Prospectus                                                                                                                          |   | Exhibit                28.3 to Form 10-K Reportdated                March 30, 1991(File                No. 33-31390)  |
|       |                                                                                                                                                                                           |   |                                                                                                                  |
| 99.5       | Supplement                No. 3 dated December 20, 1990 to Prospectus                                                                                                                          |   | Exhibit                28.4 to Form 10-K Reportdated                March 30, 1991(File                No. 33-31390)  |
|       |                                                                                                                                                                                           |   |                                                                                                                  |
| 99.6       | Supplement                No. 4 dated October 30, 1991 to Prospectus                                                                                                                           |   | Exhibit                28.5 to Form 10-K Reportdated                March 30, 1992(File                No. 33-31390)  |
|       |                                                                                                                                                                                           |   |                                                                                                                  |
| 99.7       | Supplement                No. 5 dated December 26, 1991 to Prospectus                                                                                                                          |   | Exhibit                28.6 to Form 10-K Reportdated                March 30, 1992(File                No. 33-31390)  |
|       |                                                                                                                                                                                           |   |                                                                                                                  |
| 99.8       | Supplement                No. 6 dated January 15, 1992 to Prospectus                                                                                                                           |   | Exhibit                28.7 to Form 10-K Reportdated                March 30, 1990(File                No. 33-31390)  |
|       |                                                                                                                                                                                           |   |                                                                                                                  |
| 99.9  | Report                of Independent Registered Public Accounting Firm of Carrington L.D.H.A.                Limited Partnership as of and for the year ended December 31,                2004 |   | Exhibit                99.9 to Form 10-K Reportdated                March 30, 2005(File                No. 33-31390)  |
|       |                                                                                                                                                                                           |   |                                                                                                                  |
| 99.10      | Independent                Auditor’s Report of Ellinwood Heights Apartments L.P. as of and for the                years ended December 31, 2004 and 2003                                 |   | Exhibit                99.10 to Form 10-K Reportdated                March 30, 2005(File                No. 33-31390) |
|       |                                                                                                                                                                                           |   |                                                                                                                  |
| 99.11      | Independent                Auditors’ Report of NP-89 Limited Dividend Housing Association Limited                Partnership as of and for the year ended December 31, 2004              |   | Exhibit                99.11 to Form 10-K Reportdated                March 30, 2005(File                No. 33-31390) |
|       |                                                                                                                                                                                           |   |                                                                                                                  |

----

|   |                                                                                                                                                                                                                                 |   | Incorporated                by |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|
|   | Exhibit                                                                                                                                                                                                                              |   | Reference                to    |
|   |                                                                                                                                                                                                                                 |   |                           |
| *99.12 | Audited                Financial Statements of NP-89 Limited Dividend Housing Association                Limited                Partnership as of and for the year ended December 31, 2005                                           |   |                           |
|   |                                                                                                                                                                                                                                 |   |                           |
| *99.13 | Report                of Independent Registered Public Accounting Firm of NP-89 Limited                Dividend                Housing Association Limited Partnership as of and for the year ended                December 31, 2005 |   |                           |

**(b)      **
**Exhibits**

**(c)      **
**Financial      Statement Schedules**

----

**SIGNATURES**

|                               |                                                                                       |                                            |
|------------------------------------|--------------------------------------------------------------------------------------------|-------------------------------------------------|
|                               | **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: March              14, 2008 |                                                                                            | /s/ David              Salzman   |
|                               | David                SalzmanChief                Executive Officer                         |

|                                            |                                                             |                                           |
|-------------------------------------------------|------------------------------------------------------------------|------------------------------------------------|
| Dated:              March              14, 2008 |                                                                  | /s/              Neal Ludeke    |
|                                            | Neal                LudekeChief                Financial Officer |

| Signature                                     |   | Title                                                 |   | Date                          |
|-----------------------------------------------|--------|-------------------------------------------------------|--------|-------------------------------|
|                                          |   |                                                  |   |                          |
|                                          |   |                                                  |   |                          |
| /s/                David Salzman         |   | Chief                Executive Officer of the general |   | March                14, 2008 |
| (David                Salzman)                |   | partner                of the General Partner         |   |                          |
|                                          |   |                                                  |   |                          |
| /s/                Neal Ludeke           |   | Chief                Financial Officer of the general |   | March                14, 2008 |
| (Neal                Ludeke)                  |   | partner                of the General Partner         |   |                          |
|                                          |   |                                                  |   |                          |
| /s/                Richard Paul Richman  |   | Director                of the general partner of the |   | March                14, 2008 |
| (Richard                Paul Richman)         |   | General                Partner                        |   |                          |

----