UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





______________





FORM
10-Q





______________


(Mark
One)





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





For
the quarterly period ended September 30, 2009





OR





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








Commission
File Number 0-17015











INDEPENDENCE
TAX CREDIT PLUS L.P. IV


(Exact
name of registrant as specified in its charter)











Delaware
            
            13-3809869(State
      or other jurisdiction of incorporation or organization)
            
            (I.R.S.
      Employer Identification No.)625
      Madison Avenue, New York, New York
            
            10022(Address
      of principal executive offices)
            
            (Zip
      Code)








Registrant’s
telephone number, including area code (212) 317-5700








Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.  Yes  þNo  








Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such
files).  Yes     No  








Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting
company.  See the definitions of “large accelerated filer”,
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.








Large
      accelerated filer  
            
            Accelerated
      filer  Non-accelerated
      filer    (Do not check if a smaller reporting
      company)
            
            Smaller
      reporting company  þ








Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange
Act).  Yes    No  þ











PART I –
FINANCIAL INFORMATION





Item 1.
Financial Statements





INDEPENDENCE
TAX CREDIT PLUS L.P. IV


AND
SUBSIDIARIES


Condensed
Consolidated Balance Sheets














September
      30,
              2009
            
            March
      31,
              2009*(Unaudited)ASSETSOperating
      assetsProperty
      and equipment - (at cost, net of accumulated depreciation of $22,114,706
      and $21,255,167, respectively)
            
            $
            32,675,112
            
            $
            33,534,651Cash
      and cash equivalents
            
            
            1,130,808
            
            
            1,221,135Cash
      held in escrow
            
            
            2,330,067
            
            
            2,384,087Deferred
      costs (net of accumulated amortization of $712,798 and $700,294,
      respectively)
            
            
            305,878
            
            
            318,382Due
      from local general partners and affiliates (Note 2)
            
            
            393,985
            
            
            381,072Other
      assets
            
            
            463,821
            
            
            381,288Total
      operating assets
            
            $
            37,299,671
            
            $
            38,220,615LIABILITIES
      AND PARTNERS’ CAPITAL (DEFICIT)Operating
      liabilitiesMortgage
      notes payable
            
            $
            24,929,297
            
            $
            25,188,479Accounts
      payable and other liabilities
            
            
            544,681
            
            
            450,137Accrued
      interest payable
            
            
            6,645,428
            
            
            6,301,218Security
      deposit payable
            
            
            319,854
            
            
            313,722Due
      to local general partners and affiliates (Note 2)
            
            
            1,797,941
            
            
            1,814,971Due
      to general partners and affiliates (Note 2)
            
            
            2,341,173
            
            
            2,183,287Total
      operating liabilities
            
            
            36,578,374
            
            
            36,251,814Commitments
      and contingencies (Note 6)Partners’
      capital (deficit):Limited
      partners – 45,844 Beneficial Assignment Certificates (“BACs”) issued and
      outstanding
            
            
            (44,055
            )
            
            1,060,866General
      partners
            
            
            (407,097
            )
            
            (395,936
            )Independence
      Tax Credit Plus L.P. IV total
            
            
            (451,152
            )
            
            664,930Noncontrolling
      interests
            
            
            1,172,449
            
            
            1,303,871Total
      partners’ capital (deficit)
            
            
            721,297
            
            
            1,968,801Total
      liabilities and partners’ capital (deficit)
            
            $
            37,299,671
            
            $
            38,220,615*Reclassified
      for comparative purposes.
              
              The
      accompanying notes are an integral part of these condensed consolidated
      financial statements.











- 2
-





INDEPENDENCE
TAX CREDIT PLUS L.P. IV
 AND
SUBSIDIARIES
 Condensed
Consolidated Statements of Operations
 (Unaudited)
 
 
 
 
 Three
      Months Ended
                September
      30,
              
              Six
      Months Ended
                September
      30,2009
              
              2008*
              
              2009
              
              2008*Operations:RevenuesRental
      income
              
              $
              1,233,891
              
              $
              1,198,939
              
              $
              2,484,810
              
              $
              2,386,777Other
              
              
              55,510
              
              
              63,530
              
              
              121,538
              
              
              137,947Total
      revenues
              
              
              1,289,401
              
              
              1,262,469
              
              
              2,606,348
              
              
              2,524,724ExpensesGeneral
      and administrative
              
              
              342,204
              
              
              292,568
              
              
              735,314
              
              
              653,348General
      and administrative-related parties (Note 2)
              
              
              167,479
              
              
              152,025
              
              
              326,613
              
              
              348,233Repairs
      and maintenance
              
              
              261,584
              
              
              279,699
              
              
              486,069
              
              
              460,999Operating
      and other
              
              
              183,920
              
              
              186,088
              
              
              405,266
              
              
              379,468Real
      estate taxes
              
              
              32,846
              
              
              32,951
              
              
              66,378
              
              
              64,258Insurance
              
              
              66,598
              
              
              77,590
              
              
              129,419
              
              
              149,866Interest
              
              
              349,149
              
              
              353,970
              
              
              694,075
              
              
              704,793Depreciation
      and amortization
              
              
              445,583
              
              
              524,601
              
              
              872,043
              
              
              1,048,613Total
      expenses
              
              
              1,849,363
              
              
              1,899,492
              
              
              3,715,177
              
              
              3,809,578Loss
      from operations
              
              
              (559,962
              )
              
              (637,023
              )
              
              (1,108,829
              )
              
              (1,284,854
              )Loss
      from discontinued operations
              
              
              -
              
              
              (5,300
              )
              
              -
              
              
              (65,703
              )Net
      loss
              
              
              (559,962
              )
              
              (642,323
              )
              
              (1,108,829
              )
              
              (1,350,557
              )Net
      income attributable to noncontrolling interests from
      operations
              
              
              (1,610
              )
              
              (3,359
              )
              
              (7,253
              )
              
              (12,792
              )Net
      loss attributable to noncontrolling interests from discontinued
      operations
              
              
              -
              
              
              48
              
              
              -
              
              
              304Net
      income attributable to noncontrolling interests
              
              
              (1,610
              )
              
              (3,311
              )
              
              (7,253
              )
              
              (12,488
              )Net
      loss attributable to Independence Tax Credit Plus L.P. IV
              
              $
              (561,572
              )
              $
              (645,634
              )
              $
              (1,116,082
              )
              $
              (1,363,045
              )Loss
      from continuing operations – limited partners
              
              $
              (555,956
              )
              $
              (633,978
              )
              $
              (1,104,921
              )
              $
              (1,284,670
              )Loss
      from discontinued operations – limited partners
              
              
              -
              
              
              (5,200
              )
              
              -
              
              
              (64,745
              )Net
      loss – limited partners
              
              $
              (555,956
              )
              $
              (639,178
              )
              $
              (1,104,921
              )
              $
              (1,349,415
              )Number
      of BACs outstanding
              
              
              45,844
              
              
              45,844
              
              
              45,844
              
              
              45,844Loss
      from continuing operations per weighted average BAC
              
              $
              (12.13
              )
              $
              (13.83
              )
              $
              (24.10
              )
              $
              (28.02
              )Loss
      from discontinued operations per weighted average BAC
              
              
              -
              
              
              (0.11
              )
              
              -
              
              
              (1.41
              )Net
      loss per weighted average BAC
              
              $
              (12.13
              )
              $
              (13.94
              )
              $
              (24.10
              )
              $
              (29.43
              )
 
 *  
      Reclassified for comparative purposes.
                
                The
      accompanying notes are an integral part of these condensed consolidated
      financial statements.










- 3
-





INDEPENDENCE
TAX CREDIT PLUS L.P. IV


AND
SUBSIDIARIES


Condensed
Consolidated Statement of Changes in Partners’ Capital (Deficit)


(Unaudited)














Total
            
            Limited
              Partners
            
            General
              Partner
            
            Noncontrolling
      InterestsPartners’
      capital (deficit) – April 1, 2009
            
            $
            1,968,801
            
            $
            1,060,866
            
            $
            (395,936
            )
            $
            1,303,871Net
      income (loss)
            
            
            (1,108,829
            )
            
            (1,104,921
            )
            
            (11,161
            )
            
            7,253Distributions
            
            
            (138,675
            )
            
            0
            
            
            0
            
            
            (138,675
            )Partners’
      capital (deficit) – September 30, 2009
            
            $
            721,297
            
            $
            (44,055
            )
            $
            (407,097
            )
            $
            1,172,449The
      accompanying notes are an integral part of these condensed consolidated
      financial statements.














- 4
-





INDEPENDENCE
TAX CREDIT PLUS L.P. IV


AND
SUBSIDIARIES


Condensed
Consolidated Statements of Cash Flows


(Unaudited)














Six
      Months Ended
              September
      30,2009
            
            2008*Cash
      flows from operating activities:Net
      loss
            
            $
            (1,108,829
            )
            $
            (1,350,557
            )Adjustments
      to reconcile net loss to net cash provided by (used in) operating
      activities:Depreciation
      and amortization
            
            
            872,043
            
            
            1,106,698Loss
      on sale of property
            
            
            0
            
            
            34,242Decrease
      (increase) in cash held in escrow
            
            
            54,997
            
            
            (72,545
            )Increase
      in other assets
            
            
            (82,533
            )
            
            (229,836
            )Increase
      (decrease) in accounts payable
            
            
            94,544
            
            
            (193,009
            )Increase
      in accrued interest payable
            
            
            344,210
            
            
            288,908Increase
      in security deposit payable
            
            
            6,132
            
            
            8,746Increase
      in due from general partner and affiliates
            
            
            (12,913
            )
            
            0Decrease
      in due to local general partners and affiliates
            
            
            (17,812
            )
            
            0Increase
      in due to general partner and affiliates
            
            
            157,886
            
            
            176,548Total
      adjustments
            
            
            1,416,554
            
            
            1,119,752Net
      cash provided by (used in) operating activities
            
            
            307,725
            
            
            (230,805
            )Cash
      flows from investing activities:Increase
      in cash held in escrow
            
            
            (977
            )
            
            (26,065
            )Proceeds
      from sale of property
            
            
            0
            
            
            303,289Increase
      in due from local general partners and affiliates
            
            
            0
            
            
            (18,000
            )Net
      payments from local general partners and affiliates
            
            
            782
            
            
            2,648Net
      cash (used in) provided by investing activities
            
            
            (195
            )
            
            261,872Cash
      flows from financing activities:Repayments
      of mortgage notes
            
            
            (259,182
            )
            
            (205,995
            )Decrease
      in capitalization of consolidated subsidiaries attributable to
      noncontrolling interests
            
            
            (138,675
            )
            
            (29,079
            )Net
      cash used in financing activities
            
            
            (397,857
            )
            
            (235,074
            )Net
      decrease in cash and cash equivalents
            
            
            (90,327
            )
            
            (204,007
            )Cash
      and cash equivalents at beginning of period
            
            
            1,221,135
            
            
            2,668,101Cash
      and cash equivalents at end of period
            
            $
            1,130,808
            
            $
            2,464,094*  
      Reclassified for comparative purposes.Summarized
      below are the components of the loss on sale of property:Proceeds
      from sale of investment – net
            
            $
            0
            
            $
            (303,289
            )Decrease
      in other assets
            
            
            0
            
            
            54,000Increase
      in mortgage notes payable
            
            
            0
            
            
            (216,891
            )Increase
      in accounts payable and other liabilities
            
            
            0
            
            
            436,508Decrease
      in due from local general partner and affiliates
            
            
            0
            
            
            63,914*  
      Reclassified for comparative purposes.
              
              The
      accompanying notes are an integral part of these condensed consolidated
      financial statements.











- 5
-


INDEPENDENCE
TAX CREDIT PLUS L.P. IV
 AND
SUBSIDIARIES
 Notes to
Condensed Consolidated Financial Statements
 September
30, 2009
 (Unaudited)


NOTE 1 –
General




The
condensed consolidated financial statements, as of September 30, 2009, include
the accounts of Independence Tax Credit Plus L.P. IV (the “Partnership”) and
twelve other limited partnerships (“subsidiary partnerships”, “subsidiaries” or
“Local Partnerships”) owning affordable apartment complexes (“Properties”) that
are eligible for the low-income housing tax credits.  Some of the
Properties may also be eligible for the historic rehabilitation tax
credits.  The general partner of the Partnership is Related
Independence L.L.C., a Delaware limited liability company (the “General
Partner”).  Through the rights of the Partnership and/or an affiliate
of the General Partner, which affiliate has a contractual obligation to act on
behalf of the Partnership to remove the general partner of the subsidiary
partnerships (“Local General Partners”) and to approve certain major operating
and financial decisions, the Partnership has a controlling financial interest in
the subsidiary partnerships.  The Partnership is currently in the
process of disposing of its investments.




For
financial reporting purposes, the Partnership’s second fiscal quarter ends
September 30.  The second quarter for all subsidiaries ends June
30.  Accounts of the subsidiaries have been adjusted for intercompany
transactions from July 1 through September 30.  The Partnership’s
fiscal quarter ends three months after the subsidiaries in order to allow
adequate time for the subsidiaries’ financial statements to be prepared and
consolidated.




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




The
Partnership has adopted FASB Accounting Standards Codification (“ASC”) Topic
810, Consolidation
(“ASC 810”), which is effective for fiscal year ends beginning after December
15, 2008, to determine the accounting of its noncontrolling interests in its
consolidated financial statements.  In accordance with ASC 810, losses
attributable to minority interests amounted to approximately $1,000 and $7,000
for the three and six months ended September 30, 2009,
respectively.  Prior to the adoption of ASC 810, losses attributable
to minority interests which exceeded the minority interests’ investment in a
subsidiary partnership were charged to the Partnership.  There were no
such losses for three and six months ended September 30, 2008.  The
Partnership’s investment in each subsidiary is equal to the respective
subsidiary’s partners’ equity less minority interest capital, if
any.  The weighted average loss per BAC is calculated on the limited
partnership interests.




Certain
information and note disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America (“GAAP”) have been omitted or condensed. These
condensed consolidated financial statements should be read in conjunction with
the consolidated financial statements and notes thereto included in the
Partnership’s Annual Report on Form 10-K for the year ended March 31,
2009.




The books
and records of the Partnership are maintained on the accrual basis of accounting
in accordance with GAAP.  In the opinion of the General Partner of the
Partnership, the accompanying unaudited condensed consolidated financial
statements contain all adjustments (consisting only of normal recurring
adjustments) necessary to present fairly the consolidated financial position of
the Partnership as of September 30, 2009, the results of its operations for the
three and six months ended September 30, 2009 and 2008 and its cash flows for
the six months ended September 30, 2009 and 2008.  However, the
operating results for the six months ended September 30, 2009 may not be
indicative of the results for the entire year.




Recent Accounting
Pronouncements




In June
2009, the FASB issued under ASC Topic 810, Consolidation, SFAS No. 167,
an amendment to FASB Interpretation 46(R), “Consolidation of Variable Interest
Entities.”  The statement requires an entity to perform an analysis to
determine whether the entity’s variable interest give it a controlling financial
interest in a variable interest entity by rationalizing characteristics that
would give it power to direct the activities of a variable interest entity and
the obligation to absorb losses or the right to receive benefits from the entity
that could potentially be significant to the variable interest
entity.  The statement is effective for years beginning after November
15, 2009 and is not expected to have a material effect on the Partnership’s
consolidated financial statements.




In June
2009, the FASB issued under ASC Topic 860, Transfers and Servicing, SFAS
No. 166, “Accounting for Transfers of Financial Assets”, an amendment to SFAS
No. 140, “Accounting for Transfers and Servicing of Financial Assets and
Extinguishment of Liabilities.”  The statement defines the term
“participating interest” to establish specific conditions for reporting a
transfer of financial assets as a sale and improves financial reporting by
eliminating (a) the exception for qualifying special-purpose entities from
consolidation guidance and (b) the exception that permitted sale accounting for
certain mortgage securitizations when a transferor has not surrendered control
over the transferred financial assets.  The statement is effective for
annual reports for years beginning after November 15, 2009 and is not expected
to have a material effect on the Partnership’s consolidated financial
statements.




On July
1, 2009, the FASB Accounting Standards Codification became the single source of
authoritative accounting principles recognized by the FASB to be applied by
nongovernmental entities in the preparation of financial statements in
conformity with GAAP rules and interpretive releases of the SEC under authority
of federal securities laws are also sources of authoritative GAAP for SEC
registrants. This statement is effective for financial statements issued for
interim and annual periods ending after September 15, 2009. On the effective
date of this statement, all then existing non-SEC accounting and reporting
standards are superseded.  The adoption did not have a significant
impact on the reporting of our financial position, results of operations or cash
flows.








- 6
-


INDEPENDENCE
TAX CREDIT PLUS L.P. IV


AND
SUBSIDIARIES


Notes to
Condensed Consolidated Financial Statements


September
30, 2009


(Unaudited)










On August
26, 2009, the FASB issued Accounting Standard Update (“ASU”) 2009-05, Measuring Liabilities at Fair
Value, to clarify how entities should estimate the fair value of
liabilities under the ASC Topic 820, Fair Value Measurements and
Disclosures.  The amendments in ASU 2009-05 reduce potential
ambiguity in financial reporting when measuring the fair value of
liabilities.  Therefore, preparers, investors, and other users of
financial statements will have a better understanding of how the fair value of
liabilities was measured, helping to improve consistency in the application of
Topic 820.  The FASB issued ASU 2009-05 as a result of expressed
concern that there may be a lack of observable market information to measure the
fair value of a liability.  For example, in the hypothetical transfer
of an asset subject to a restriction there will be no observable data available
to measure the liability because it is restricted from being
transferred.  This guidance is effective for the first reporting
period (including interim periods) beginning after issuance.  The
adoption of this accounting standard is not expected to have a material effect
on the Partnership’s consolidated financial statements.




Property and
Equipment/Valuation of Long-Lived Assets




Property
and equipment to be held and used are carried at cost which includes the
purchase price, acquisition fees and expenses, construction period interest and
any other costs incurred in acquiring the properties.  The cost of
property and equipment is depreciated over their estimated useful lives using
accelerated and straight-line methods. Expenditures for repairs and maintenance
are charged to expense as incurred; major renewals and betterments are
capitalized. At the time property and equipment are retired or otherwise
disposed of, the cost and accumulated depreciation are eliminated from the
assets and accumulated depreciation accounts and the profit or loss on such
disposition is reflected in earnings.  The Partnership complies with
ASC Topic 360, Property,
Plant, and Equipment (“ASC 360”).  The determination of asset
impairment is a two-step process.  First, management estimates amounts
recoverable through future operations and sale of the property on an
undiscounted basis.  If such estimates are below depreciated cost,
property investments are reduced to estimated fair value (using estimated future
discounted net cash flows) when the property is considered to be impaired and
the depreciated cost exceeds estimated fair value.  Through September
30, 2009, the Partnership recorded approximately $12,033,000 as a loss on
impairment of assets, all of which was recorded during the year ended March 31,
2009.




In
accordance with ASC 360, the results of discontinued operations are reported as
a separate component of income before extraordinary items on the consolidated
statements of operations.  Discontinued operations include the results
of operations and any gain or loss recognized for Local Partnerships that have
been disposed of or are held for sale.  A gain or loss recognized on
the disposal is disclosed in the notes to the consolidated financial
statements.  Adjustments to amounts previously reported in operations
that are directly related to the disposal of a Local Partnership are
reclassified in the current period as discontinued operations for comparability
purposes.  Assets and liabilities of a Local Partnership that are
classified as held for sale are presented separately in the asset and liability
sections, respectively, of the consolidated balance sheets.  See Note
5 to the consolidated financial statements regarding discontinued
operations.




At the
time management commits to a plan to dispose of assets, said assets are adjusted
to the lower of carrying amount or fair value less costs to sell. These assets
are classified as property and equipment-held for sale and are not depreciated.
There are no assets classified as property and equipment-held for sale at
September 30, 2009.




Subsequent
Events




The
Partnership has evaluated and disclosed, as applicable, subsequent events
through November 12, 2009, the issuance date of these financial
statements.






NOTE 2 –
Related Party Transactions




A)
            Related
      Party Expenses




An
affiliate of the General Partner has a .01% interest as a special limited
partner in each of the Local Partnerships.




The costs
incurred to related parties from operations for the three and six months ended
September 30, 2009 and 2008 were as follows:




Three
      Months Ended
              September
      30,
            
            Six
      months ended
              September
      30,2009
            
            2008*
            
            2009
            
            2008*Partnership
      management fees (a)
            
            $
            74,750
            
            $
            67,050
            
            $
            149,500
            
            $
            144,800Expense
      reimbursement (b)
            
            
            35,461
            
            
            22,692
            
            
            72,554
            
            
            50,450Local
      administrative fee (c)
            
            
            9,500
            
            
            17,750
            
            
            19,000
            
            
            35,500Total
      general and administrative-General Partners
            
            
            119,711
            
            
            107,492
            
            
            241,054
            
            
            230,750Property
      management fees incurred to affiliates of the subsidiary partnerships’
      general partners
            
            
            47,768
            
            
            44,533
            
            
            85,559
            
            
            117,483Total
      general and administrative-related parties
            
            $
            167,479
            
            $
            152,025
            
            $
            326,613
            
            $
            348,233*  
      Reclassified for comparative
purposes.








- 7
-


INDEPENDENCE
TAX CREDIT PLUS L.P. IV
 AND
SUBSIDIARIES
 Notes to
Condensed Consolidated Financial Statements
 September
30, 2009
 (Unaudited)


The costs
incurred to related parties from discontinued operations for the three and six
months ended September 30, 2009 and 2008 were as follows:




Three
      Months Ended
              September
      30,
            
            Six
      Months EndedSeptember
      30,2009
            
            2008
            
            2009
            
            2008Local
      administrative fee (c)
            
            $
            0
            
            $
            1,250
            
            $
            0
            
            $
            2,500Total
      general and administrative-related parties
            
            $
            0
            
            $
            1,250
            
            $
            0
            
            $
            2,500







(a)           The
General Partner is entitled to receive a partnership management fee, after
payment of all Partnership expenses, which together with the annual local
administrative fees will not exceed a maximum of 0.5% per annum of invested
assets (as defined in the Partnership Agreement), for administering the affairs
of the Partnership. Subject to the foregoing limitation, the partnership
management fee will be determined by the General Partner in its sole discretion
based upon its review of the Partnership’s investments.  Unpaid
partnership management fees for any year will be accrued without interest and
will be payable only to the extent of available funds after payments on all
Partnership liabilities have been made other than those owed to the General
Partner.  Partnership management fees owed to the General Partner
amounting to approximately $1,787,000 and $1,638,000 were accrued and unpaid as
of September 30, 2009 and March 31, 2009, respectively and are included in due
to general partners and affiliates on the consolidated balance
sheets.  Without the General Partner’s advances and continued accrual
without payment of certain fees and expense reimbursements, the Partnership
would not be in a position to meet its obligations.




(b)           The
Partnership reimburses the General Partner and its affiliates for actual
Partnership operating expenses incurred by the General Partner and its
affiliates on the Partnership’s behalf. The amount of reimbursement from the
Partnership is limited by the provisions of the Partnership Agreement. Another
affiliate of the General Partner performs asset monitoring for the Partnership.
These services include site visits and evaluations of the subsidiary
partnerships’ performance.




(c)           Independence
SLP IV L.P., a special limited partner of the subsidiary partnerships, is
entitled to receive a local administrative fee up to $5,000 per year from each
subsidiary partnership.




B)
            Due
      to Local General Partners and
Affiliates




The
amounts due to Local General Partners and affiliates from operating liabilities
consist of the following:




September
      30,
              2009
            
            March
      31,
              2009Development
      fee payable
            
            $
            1,587,066
            
            $
            1,586,284Construction
      costs payable
            
            
            50,000
            
            
            50,000Operating
      advances
            
            
            46,000
            
            
            46,000Management
      and other fees
            
            
            114,875
            
            
            132,687$
            1,797,941
            
            $
            1,814,971







Due from
Local General Partners and affiliates from operating liabilities consists of the
following:




September
      30,
              2009
            
            March
      31,
              2009Local
      general partner loan receivable
            
            $
            393,985
            
            $
            381,072









NOTE 3 –
Fair Value Measurements




The
Partnership has categorized its financial assets and liabilities based upon the
fair value hierarchy specified by ASC Topic 820, Fair Value Measurements and
Disclosures (“ASC 820”). This standard defines fair value, provides guidance for
measuring fair value and requires certain disclosures.  This standard
does not require any new fair value measurements, but discusses valuation
techniques, such as the market approach (comparable market prices), the income
approach (present value of future income or cash flow), and the cost approach
(cost to replace the service capacity of an asset or replacement
cost).  This standard provides for a fair value hierarchy that
prioritizes the inputs to valuation techniques used to measure fair value into
three broad levels.  The following is a brief description of those
three levels:







Level
      1:
              Observable
      inputs such as quoted prices (unadjusted) in active markets for identical
      assets or liabilities.
    - 8
-
 INDEPENDENCE
TAX CREDIT PLUS L.P. IV
 AND
SUBSIDIARIES
 Notes to
Condensed Consolidated Financial Statements
 September
30, 2009
 (Unaudited)
 
 
   Level
      2:
              Inputs
      other than quoted prices that are observable for the asset or liability,
      either directly or indirectly.  These include quoted prices for
      similar assets or liabilities in active markets and quoted prices for
      identical or similar assets or liabilities in markets that are not
      active.
  Level
      3:
              Unobservable
      inputs that reflect the Partnership’s own
  assumptions.





The
estimated fair value of financial instruments has been determined using
available market information or other appropriate valuation
methodologies.  However, considerable judgment is required in
interpreting market data to develop estimates of fair
value.  Consequently, the estimates are not necessarily indicative of
the amounts that could be realized or would be paid in a current market
exchange.  The following are financial instruments for which the
Partnership’s estimate of fair value differs from the carrying
amounts:




At
      September 30, 2009
            
            At
      March 31, 2009Carrying
      Amount
            
            Fair
      Estimated Value
            
            Carrying
      Amount
            
            Fair
      Estimated ValueLIABILITIES:Mortgage
      notes
            
            $
            24,929,297
            
            $
            16,028,248
            
            $
            25,188,479
            
            $
            15,101,746







Fair
value has been estimated using Level 3 inputs.




For the
mortgage notes, fair value is calculated using present value cash flow models
based on a discount rate. It was determined that the Tender Option Bond market,
through which these bonds have been securitized in the past, continued to see a
dramatic slowdown with limited liquidity and significantly reduced transaction
levels.  To assist in valuing these notes, the Partnership held
separate discussions with various third party investment banks who are leaders
in the municipal bond business.  The discussions produced assumptions
that were based on market conditions as well as the credit quality of the
underlying partnerships, which held the mortgage notes, to determine what
discount rates to utilize.






NOTE 4 –
Sale of Properties




As of
September 30, 2009, the Partnership’s limited partnership interest in one Local
Partnership and the property and the related assets and liabilities of one Local
Partnership have been sold.  There can be no assurance as to when the
Partnership will dispose of its remaining investments or the amount of proceeds
which may be received.  However, based on the historical operating
results of the Local Partnerships and the current economic conditions, including
changes in tax laws, it is unlikely that the proceeds from such sales received
by the Partnership will be sufficient to return to the limited partners their
original investments.  All gains and losses on sales are included in
discontinued operations.




On
December 31, 2008, the Partnership sold its limited partnership interest in
BX-8A Team Associates, L.P. (“BX-8A”) to an unaffiliated third party purchaser
for a sales price of $100,000.  The Partnership received $40,000 from
this sale after the repayment of other liabilities of approximately
$60,000.  The sale resulted in a gain of approximately $102,000
resulting from the write-off of the deficit basis in the Local Partnership of
approximately $62,000 at the date of the sale and the $40,000 cash received from
the sale, which was recorded during the year ended March 31,
2009.  The sale also resulted in a write-off of operating advances of
approximately $902,000 owed to the Partnership.  In addition, the sale
resulted in a non-cash contribution to the Local Partnership from the General
Partner of approximately $5,000 as a result of the write-off of fees owed by the
Local Partnership to an affiliate of the General Partner.




On
September 5, 2007, the property and the related assets and liabilities of
Westminster Park Plaza, a California L.P. (“Westminster”) were sold to an
affiliate of the Local General Partner for a sales price of
$14,070,228.  The Partnership received $2,816,891 as a distribution
from this sale after the repayment of mortgages, other liabilities and closing
costs of approximately $11,253,000.  The sale resulted in a gain of
approximately $5,032,000 resulting from the write-off of the deficit basis in
the property at the date of sale, which was recorded during the year ended March
31, 2008.  An adjustment reducing the gain by approximately $34,000
was recorded during the year ended March 31, 2009, resulting in an overall gain
of approximately $4,998,000.




NOTE 5 –
Discontinued Operations




The
following table summarizes the results of operations of the Local Partnerships
that are classified as discontinued operations.  For the three and six
months ended September 30, 2009, there were no properties classified as
discontinued operations on the condensed consolidated financial
statements.  For the three and six months ended September 30, 2008,
BX-8A, which was sold during the year ended March 31, 2009, and Westminster,
which was sold during the year ended March 31, 2008, were classified as
discontinued operations on the condensed consolidated statement of
operations.











- 9
-


INDEPENDENCE
TAX CREDIT PLUS L.P. IV
 AND
SUBSIDIARIES
 Notes to
Condensed Consolidated Financial Statements
 September
30, 2009
 (Unaudited)


Consolidated
Statements of Discontinued Operations:




Three
      Months
              Ended
              September
      30, 2008*
            
            Six
      Months
              Ended
              September
      30, 2008*RevenuesRental
      income
            
            $
            80,229
            
            $
            161,042Other
            
            
            3,312
            
            
            3,412Loss
      on sale of property (Note 4)
            
            
            0
            
            
            (34,242
            )Total
      revenues
            
            
            83,541
            
            
            130,212ExpensesGeneral
      and administrative
            
            
            21,317
            
            
            46,977General
      and administrative-related parties (Note 2)
            
            
            1,250
            
            
            2,500Repairs
      and maintenance
            
            
            2,367
            
            
            10,865Operating
      and other
            
            
            17,803
            
            
            45,469Insurance
            
            
            9,000
            
            
            17,000Interest
            
            
            7,961
            
            
            15,019Depreciation
      and amortization
            
            
            29,143
            
            
            58,085Total
      expenses
            
            
            88,841
            
            
            195,915Loss
      before noncontrolling interests
            
            
            (5,300
            )
            
            (65,703
            )Noncontrolling
      interests in loss of subsidiaries from discontinued
    operations
            
            
            48
            
            
            304Net
      loss from discontinued operations
            
            $
            (5,252
            )
            $
            (65,399
            )Net
      loss – limited partners from discontinued operations
            
            $
            (5,200
            )
            $
            (64,745
            )Number
      of BACs outstanding
            
            
            45,844
            
            
            45,844Net
      loss from discontinued operations per weighted average BAC
            
            $
            (0.11
            )
            $
            (1.41
            )







Cash
Flows from Discontinued Operations:




Six
      Months
              Ended
              September
      30,
              2008*Net
      cash used in operating activities
            
            $
            (67,975
            )Net
      cash used in investing activities
            
            $
            (377,127
            )Net
      cash provided by financing activities
            
            $
            8,577*  
      Reclassified for comparative purposes.







NOTE 6 –
Commitments and Contingencies




There
have been no material changes and/or additions to the disclosures regarding the
subsidiary partnerships which were included in the Partnership’s Annual Report
on Form 10-K for the fiscal year ended March 31, 2009.








- 10
-


INDEPENDENCE
TAX CREDIT PLUS L.P. IV


AND
SUBSIDIARIES


Notes to
Condensed Consolidated Financial Statements


September
30, 2009


(Unaudited)










Property Management
Fees




Property
management fees incurred by the Local Partnerships amounted to $87,398 and
$88,436 and $164,357 and $201,266 for the three and six months ended September
30, 2009 and 2008, respectively.




Other




The
Partnership is subject to risks incident to potential losses arising from the
management and ownership of real estate. The Partnership can also be affected by
poor economic conditions generally; however no more than 25% of the properties
are located in any single state. The properties are concentrated in New Jersey
(25%), Kentucky (17%) and California (17%). There are also substantial risks
associated with owning properties receiving government assistance, for example
the possibility that Congress may not appropriate funds to enable the U.S.
Department of Housing and Urban Development (“HUD”) to make rental assistance
payments. HUD also restricts annual cash distributions to partners based on
operating results and a percentage of the owners’ equity
contribution.  As of September 30, 2009, there were three Local
Partnerships subsidized by HUD.  The Partnership cannot sell or
substantially liquidate its investments in subsidiary partnerships during the
period that the subsidy agreements are in existence without HUD’s approval.
Furthermore there may not be market demand for apartments at full market rents
when the rental assistance contract expires.




Except as
described above, management is not aware of any trends or events, commitments or
uncertainties, which have not otherwise been disclosed, that will or are likely
to impact liquidity in a material way.  Management believes the only
impact would be from laws that have not yet been adopted.  The
portfolio is diversified by the location of the properties around the United
States so that if one area of the country is experiencing downturns in the
economy, the remaining properties in the portfolio may not be affected. However,
the geographic diversification of the portfolio may not protect against a
general downturn in the national economy.











- 11
-





Item
2.  Management’s Discussion and Analysis of Financial Condition and
Results of Operations




Liquidity and Capital
Resources




The
Partnership originally invested approximately $37,555,000 (not including
acquisition fees of approximately $1,771,000) of net proceeds in fourteen Local
Partnerships of which, as of September 30, 2009, approximately $796,000 remains
to be paid to the Local Partnerships (including approximately $341,000 being
held in escrow) as certain benchmarks, such as occupancy level, must be attained
prior to the release of the funds.  During the six months ended
September 30, 2009, payments of approximately $25,000 were made to the Local
Partnerships.  As of September 30, 2009, the Partnership’s limited
partnership interest in one Local Partnership and the property and the related
assets and liabilities of another Local Partnership have been sold (see Item 1,
Note 4).




Short-Term




The
Partnership’s primary sources of funds include:  (i) working capital
reserves, exclusive of Local Partnerships’ working capital; (ii) interest earned
on the working capital reserves; (iii) cash distributions from operations of the
Local Partnerships; and (iv) sales proceeds and distributions.  Such
funds, although minimal (other than possible sales proceeds and sales
distributions), are available to meet the obligations of the
Partnership.  The Partnership does not anticipate providing cash
distributions to BAC holders in circumstances other than refinancing or
sales.  During the six months ended September 30, 2009 and 2008,
distributions from operations of the Local Partnerships amounted to
approximately $2,000 and $9,000, respectively.  Additionally, during
the six months ended September 30, 2009 and 2008, the Partnership received
approximately $0 and $303,000, respectively, of distributions from the sale of
Local Partnerships.




For the
six months ended September 30, 2009, cash and cash equivalents of the
Partnership and its consolidated Local Partnerships decreased approximately
$90,000 due to distributions to noncontrolling interests of approximately
$139,000, repayments of mortgage notes of approximately $259,000 and an increase
of cash held in escrow of approximately $1,000.  Such outflows
exceeded net payments from local general partners and affiliates of
approximately $1,000 and net cash provided by operating activities of
approximately $308,000.  Included in the adjustments to reconcile the
net loss to net cash provided by operating activities is depreciation and
amortization of approximately $872,000.




Total
expenses for the three and six months ended September 30, 2009 and 2008,
excluding depreciation and amortization, interest and general and
administrative-related parties, totaled $887,152 and $1,822,446 and $868,896 and
$1,707,939, respectively.




Accounts
payable totaled $544,681 and $450,137 as of September 30, 2009 and March 31,
2009, respectively.  Accounts payable are short term liabilities which
are expected to be paid from operating cash flows, working capital balances at
the Local Partnership level, Local General Partner advances and, in certain
circumstances, advances from the Partnership.  In addition, there were
no accounts payable from discontinued operations as of September 30, 2009 and
March 31, 2009, respectively.  The Partnership believes it (and the
applicable Local Partnerships) has sufficient liquidity and ability to generate
cash and to meet existing and known or reasonably likely future cash
requirements over both the short and long term.




Security
deposits payable are offset by cash held in security deposits, which are
included in “Cash held in escrow” on the financial statements.




A working
capital reserve at the Partnership level of approximately $251,000, exclusive of
the Local Partnership’s working capital, remained unused at September 30,
2009.  The General Partner believes that these reserves, plus any cash
distributions received from the operations of the Local Partnerships, will be
sufficient to fund the Partnership’s ongoing operations for the foreseeable
future not including fees owed to the General Partner.




Long-Term




Partnership
management fees owed to the General Partner amounting to approximately
$1,787,000 and $1,638,000 were accrued and unpaid as of September 30, 2009 and
March 31, 2009, respectively.  Unpaid partnership management fees for
any year will be accrued without interest and will be payable only to the extent
of available funds after payments on all Partnership liabilities have been made
other than those owed to the General Partner.  Without the General
Partner’s advances and continued accrual without payment of certain fees and
expense reimbursement, the Partnership would not be in a position to meet its
obligations.




Accrued
interest payable totaled $6,645,428 and $6,301,218 as of September 30, 2009 and
March 31, 2009, respectively. Accrued interest payable represents the accrued
interest on all mortgage loans, which include primary and secondary loans.
Certain secondary loans have provisions such that interest is accrued but not
payable until a future date.  In addition, there was no accrued
interest payable from discontinued operations as of September 30, 2009 and March
31, 2009, respectively.  The Partnership anticipates the payment of
accrued interest on the secondary loans (which make up the majority of the
accrued interest payable amount and which have been accumulating since the
Partnership’s investment in the respective Local Partnership) will be made from
future refinancing or sales proceeds of the respective Local
Partnerships.  Furthermore, each Local Partnership’s mortgage notes
are collateralized by the land and buildings of the respective Local
Partnership, and are without further recourse to the Partnership.




The Local
Partnerships are impacted by inflation in several ways.  Inflation
allows for increases in rental rates generally to reflect the impact of higher
operating and replacement costs. Furthermore, inflation generally does not
impact the fixed long-term financing under which real property investments were
purchased. Inflation also affects the Local Partnerships adversely by increasing
operating costs, such as fuel, utilities, and labor.  However, the
Partnership’s investment in Local Partnerships may not be protected against a
general downturn in the national economy.




The
Partnership’s investment in Local Partnerships is diversified by the location of
the Properties around the United States so that if one area of the country is
experiencing downturns in the economy, the remaining Properties in the portfolio
may be experiencing upswings. However, the geographic diversification of the
portfolio may not protect against a general downturn in the national
economy.  Management is not aware of any trends or events, commitments
or uncertainties, which have not otherwise been disclosed that will or are
likely to impact liquidity in a material way. Management believes the only
impact would be from laws that have not yet been adopted.










- 12
-




Tax
Credits are attached to the Property for a period of ten years, and are
transferable with the Property during the remainder of such ten-year period. If
trends in the real estate market warranted the sale of a Property, the remaining
tax credits would transfer to the new owner, thereby adding value to the
Property on the market.  However, such value declines each year and is
not included in the financial statement carrying amount.  The Credit
Periods are scheduled to expire, and have expired, at various times from
December 31, 2001 through December 31, 2010 with respect to the Local
Partnerships depending upon when the Credit Period
commenced.  However, each Local Partnership must continue to comply
with the Tax Credit requirements until the end of the Compliance Period in order
to avoid recapture of the Tax Credits.  The Compliance Periods will
continue through December 31, 2014 with respect to the Properties depending upon
when the Compliance Period commenced.




Off-Balance Sheet
Arrangements


The
Partnership has no off-balance sheet arrangements.




Tabular Disclosure of
Contractual Obligations


The
Partnership disclosed in Item 7 of the Partnership’s Annual Report on Form 10-K
for the year ended March 31, 2009, the Partnership’s commitments to make future
payments under its debt agreements and other contractual
obligations.  There are no material changes to such disclosure or
amounts as of September 30, 2009.




Critical Accounting Policies
and Estimates




In
preparing the condensed consolidated financial statements, management has made
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting periods. Actual results could differ
from those estimates. Set forth below is a summary of the accounting policies
that management believes are critical to the preparation of the condensed
consolidated financial statements. The summary should be read in conjunction
with the more complete discussion of the Partnership’s accounting policies
included in Item 8, Note 2 to the consolidated financial statements which are
included in the Partnership’s Annual Report on Form 10-K for the year ended
March 31, 2009.




Fair Value
Measurements




The
Partnership has categorized its financial assets and liabilities based upon the
fair value hierarchy specified by FASB Accounting Standards Codification (“ASC”)
Topic 820, Fair Value Measurements and Disclosures (“ASC 820”). This standard
defines fair value, provides guidance for measuring fair value and requires
certain disclosures.  This standard does not require any new fair
value measurements, but discusses valuation techniques, such as the market
approach (comparable market prices), the income approach (present value of
future income or cash flow), and the cost approach (cost to replace the service
capacity of an asset or replacement cost).  This standard provides for
a fair value hierarchy that prioritizes the inputs to valuation techniques used
to measure fair value into three broad levels.  The following is a
brief description of those three levels:





Level
      1:
                Observable
      inputs such as quoted prices (unadjusted) in active markets for identical
      assets or liabilities.
  Level
      2:
                Inputs
      other than quoted prices that are observable for the asset or liability,
      either directly or indirectly.  These include quoted prices for
      similar assets or liabilities in active markets and quoted prices for
      identical or similar assets or liabilities in markets that are not
      active.
  Level
      3:
                Unobservable
      inputs that reflect the Partnership’s own
  assumptions.


The
estimated fair value of financial instruments has been determined using
available market information or other appropriate valuation
methodologies.  However, considerable judgment is required in
interpreting market data to develop estimates of fair
value.  Consequently, the estimates are not necessarily indicative of
the amounts that could be realized or would be paid in a current market
exchange.  The following are financial instruments for which the
Partnership’s estimate of fair value differs from the carrying
amounts:




At
      September 30, 2009
            
            At
      March 31, 2009Carrying
      Amount
            
            Fair
      Estimated Value
            
            Carrying
      Amount
            
            Fair
      Estimated ValueLIABILITIES:Mortgage
      notes
            
            $
            24,929,297
            
            $
            16,028,248
            
            $
            25,188,479
            
            $
            15,101,746










Fair
value has been estimated using Level 3 inputs.




For the
mortgage notes, fair value is calculated using present value cash flow models
based on a discount rate. It was determined that the Tender Option Bond market,
through which these bonds have been securitized in the past, continued to
see  a dramatic slowdown with limited liquidity and significantly
reduced transaction levels,  To assist in valuing these notes the
partnership held separate discussions with various third party investment banks
who are leaders in the municipal bond business.  The discussions
produced assumptions that were based on market conditions as well as the credit
quality of the underlying partnerships, which held the mortgage notes, to
determine what discount rates to utilize.




Property and
Equipment/Valuation of Long-Lived Assets




Property
and equipment to be held and used are carried at cost which includes the
purchase price, acquisition fees and expenses, construction period interest and
any other costs incurred in acquiring the properties.  The cost of
property and equipment is depreciated over their estimated useful lives using
accelerated and straight-line methods. Expenditures for repairs and maintenance
are charged to expense as incurred; major renewals and betterments are
capitalized. At the time property and equipment are retired or otherwise
disposed of, the cost and accumulated depreciation are eliminated from the
assets and accumulated depreciation accounts and the profit or loss on such
disposition is reflected in earnings.  The Partnership complies with
ASC Topic 360, Property,
Plant, and Equipment (“ASC 360”).  The determination of asset
impairment is a two-step process.  First, management estimates amounts
recoverable through future operations and sale of the property on an
undiscounted basis.  If such estimates are below depreciated cost,
property investments are reduced to estimated fair value (using estimated future
discounted net cash flows) when the property is considered to be impaired and
the depreciated cost exceeds estimated fair value.








- 13
-




In
accordance with ASC 360, the results of discontinued operations are reported as
a separate component of income before extraordinary items on the consolidated
statements of operations.  Discontinued operations include the results
of operations and any gain or loss recognized for Local Partnerships that have
been disposed of or are held for sale.  A gain or loss recognized on
the disposal is disclosed in the notes to the consolidated financial
statements.  Adjustments to amounts previously reported in operations
that are directly related to the disposal of a Local Partnership are
reclassified in the current period as discontinued operations for comparability
purposes.  Assets and liabilities of a Local Partnership that are
classified as held for sale are presented separately in the asset and liability
sections, respectively, of the consolidated balance sheets.  See Note
5 to the consolidated financial statements regarding discontinued
operations.




At the
time management commits to a plan to dispose of assets, said assets are adjusted
to the lower of carrying amount or fair value less costs to sell. These assets
are classified as property and equipment-held for sale and are not depreciated.
There are no assets classified as property and equipment-held for sale at
September 30, 2009.




Revenue
Recognition




Rental
income is earned under standard residential operating leases and is typically
due the first day of each month, but can vary by Property due to the terms of
the tenant leases. Rental income is recognized when earned and charged to
tenants’ accounts receivable if not received by the due date. Rental payments
received in advance of the due date are deferred until earned. Rental subsidies
are recognized as rental income during the month in which it is
earned.




Other
revenues are recorded when earned and consist of the following
items:  Interest income earned on cash and cash equivalent balances
and cash held in escrow balances, income from forfeited security deposits, late
charges, laundry and vending income and other rental related items.




Results of
Operations




The
results of operations for the three and six months ended September 30, 2009 and
2008 continued to be primarily in the form of rental income with corresponding
expenses divided among operations, depreciation and mortgage interest, excluding
the results of its discontinued operations which are not reflected in the
following discussion (see Item 1, Note 5).




Rental
income increased approximately 3% and 4% for the three and six months ended
September 30, 2009, as compared to the corresponding periods in 2008, primarily
due to increases in rental rates at the Local Partnerships.




Other
income decreased approximately $8,000 and $16,000 for the three and six months
ended September 30, 2009 as compared to the corresponding periods in 2008,
primarily due to lower interest earned on a lower cash balance being invested at
the Partnership level.




Total
expenses, excluding general and administrative and general and
administrative-related parties, insurance, and depreciation and amortization
remained fairly consistent, with a decrease of approximately 3% and an increase
of approximately 3% for the three and six months ended September 30, 2009 as
compared to the corresponding periods in 2008.




General
and administrative expenses increased approximately $50,000 and $82,000 for the
three and six months ended September 30, 2009, as compared to the corresponding
periods in 2008, primarily due to an increase in maintenance, security and
office salaries at one Local Partnership, increase in loss on collection of
receivables at a second Local Partnership and an increase in printing fees at
the Partnership level.




General
and administrative-related parties expenses increased approximately $15,000 for
the three months ended September 30, 2009 as compared to the corresponding
period in 2008, primarily due to an increase in expense reimbursements at the
Partnership level.




Insurance
decreased approximately $11,000 and $20,000 for the three and six months ended
September 30, 2009 as compared to the corresponding periods in 2008, primarily
due to a change in insurance providers at one Local Partnership.




Depreciation
and amortization decreased approximately $79,000 and $177,000 for the three and
six months ended September 30, 2009 as compared to the corresponding periods in
2008, primarily due to the impairment of assets during the year ended March 31,
2009 at five Local Partnerships.




Item
3.  Quantitative and Qualitative Disclosures about Market
Risk




The
Partnership has mortgage notes that are payable in aggregate monthly
installments including principal and interest at rates varying from 0% to 8.46%
per annum. The Partnership does not believe there is a material risk associated
with the various interest rates associated with the mortgage notes as the
majority of the Local Partnership mortgage notes have fixed
rates.  The Partnership disclosed in Item 8, Note 3 to the
consolidated financial statements in the Partnership’s Annual Report on Form
10-K for the year ended March 31, 2009, as well as in Item 2, the fair value of
the mortgage notes payable.  There are no material changes to such
disclosure amounts as of September 30, 2009.




The
Partnership does not have any other market risk sensitive
instruments.




Item
4T.  Controls and Procedures




(a)           Evaluation of Disclosure Controls
and Procedures.The Chief Executive Officer and Chief
Financial Officer of Related Independence L.L.C, the general partner of the
Partnership, have evaluated the effectiveness of the Partnership’s disclosure
controls and procedures (as such term is defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”)
as of the end of the period covered by this report.  Based on such
evaluation, such officers have concluded that, as of the end of such period, the
Partnership’s disclosure controls and procedures are effective.










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(b)           Management’s Annual Report on
Internal Control over Financial Reporting.Our management is
responsible for establishing and maintaining adequate internal control over
financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and
15d-15(f).  In evaluating the Partnership’s internal control over
financial reporting, management has adopted the framework in Internal
Control-Integrated Framework issued by the Committee of Sponsoring organizations
of the Treadway Commission (the “COSO Framework”).  Under the
supervision and with the participation of our management, including the Chief
Executive Officer and Chief Financial Officer of the General Partner, the
Partnership conducted an evaluation of the effectiveness of its internal control
over financial reporting as of March 31, 2009.  The Partnership’s
internal control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external reporting purposes in
accordance with generally accepted accounting principles.  Internal
control over financial reporting includes those policies and procedures that (1)
pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the Company;
(2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the Company are
being made only in accordance with authorizations of management and directors of
the Company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial
statements.  However, because of inherent limitations, internal
control over financial reporting may not prevent or detect
misstatements.  Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.




Based on
management’s evaluation under the COSO Framework, it has concluded that the
Partnership’s internal control over financial reporting, was, as of March 31,
2009, (1) effective at the Partnership level, in that they provide reasonable
assurance that information required to be disclosed by the Partnership in the
reports it files or submits under the Securities Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
SEC's rules and forms and (2) ineffective at the subsidiary level due to certain
control deficiencies noted in the audit reports for such
subsidiaries.  The General Partner does not have control over the
internal controls at the subsidiary level.  Management believes they
have sufficient controls at the Partnership level to mitigate these
deficiencies, and such deficiencies do not have a material impact on the
consolidated financial statements.




(c)           Changes in Internal Controls over Financial
Reporting.Except as noted in (b) above, during the period
ended September 30, 2009, there were no changes in the Partnership’s internal
control over financial reporting that have materially affected, or are
reasonably likely to materially affect, the Partnership’s internal control over
financial reporting.













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PART II.
OTHER INFORMATION











Item
      1.
            Legal
      Proceedings – NoneItem
      1A.
            Risk
      Factors – No changesItem
      2.
            Unregistered
      Sales of Equity Securities and Use of Proceeds – NoneItem
      3.
            Defaults
      upon Senior Securities - NoneItem
      4.
            Submission
      of Matters to a Vote of Security Holders – NoneItem
      5.
            Other
      Information – NoneItem
      6.
            Exhibits(4)
            Form
      of Amended and Restated Agreement of Limited Partnership of the
      Partnership (attached to the Prospectus as Exhibit A)*(10A)
            Form
      of Subscription Agreement (attached to the Prospectus as Exhibit
      B)*(10B)
            Form
      of Escrow Agreement between the Partnership and the Escrow
      Agent**(10C)
            Form
      of Purchase and Sales Agreement pertaining to the Partnership’s
      acquisition of Local Partnership Interests**(10D)
            Form
      of Amended and Restated Agreement of Limited Partnership of Local
      Partnerships**(31.1)
            Certification Pursuant to Rule 13a-14(a) or Rule
      15d-14(a).(31.2)
            Certification Pursuant to Rule 13a-14(a) or Rule
      15d-14(a).(32.1)
            Certification Pursuant to Rule 13a-14(b) or Rule
      15d-14(b) and Section 1350 of Title 18 of the United States Code (18
      U.S.C. 1350).*
            Incorporated
      herein by reference to the final Prospectus as filed pursuant to Rule 424
      under the Securities Act of 1933.**
            Filed
      as an exhibit to the Registration Statement on Form S-11 of the
      Partnership (File No. 33-89968) and incorporated herein by reference
      thereto.










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SIGNATURES











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











INDEPENDENCE TAX CREDIT PLUS
L.P. IV


(Registrant)











By:
            RELATED
      INDEPENDENCE L.L.C.,a
      General PartnerDate:
            November 12, 2009
            
            
            
            By:
            /s/ Robert L. LevyRobert
      L. LevyChief
      Financial Officer, Principal Accounting Officer and
    DirectorDate:
            November 12, 2009
            
            
            
            By:
            /s/ Andrew J. WeilAndrew
      J. WeilPresident
      and Chief Executive Officer











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