GTWY2

                               UNITED STATES
                    SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, DC  20549
                                     
                                 FORM 10-Q

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

For The Quarterly Period Ended              December 31, 1998

Commission File Number              0-21762

                       Gateway Tax Credit Fund III Ltd.
      (Exact name of Registrant as specified in its charter)

            Florida                              59-3090386
(State or other jurisdiction of            ( I.R.S. Employer No.)
incorporation or organization)

     880 Carillon Parkway, St. Petersburg, Florida   33716
       (Address of principal executive offices)  (Zip Code)

Registrant's Telephone Number, Including Area Code: (727)573-3800

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

                      YES     X         NO

                                                 Number of Units
      Title of Each Class                      December 31, 1998
Units of Limited Partnership
Interest:  $1,000 per unit                            36,799

DOCUMENTS INCORPORATED BY REFERENCE

              Parts I and II, 1998 Form 10-K, filed with the
            Securities and Exchange Commission on July 13, 1998
            Parts III and IV - Form S-11 Registration Statement
                and all amendments and supplements thereto
                             File No. 33-44238
<PAGE>
PART I - Financial Information
 Item 1.  Financial Statements
                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                              BALANCE SHEETS
                                     
SERIES 7                                    DECEMBER 31,      MARCH 31,
                                                1998            1998
                                               -------         -------
                                             (Unaudited)      (Audited)
ASSETS                                                                    
Current Assets:                                                           
 Cash and Cash Equivalents                     $   242,996     $   286,106
 Investments in Securities                          49,844          47,675
 Receivable from Project Partnerships                    0               0
                                               ------------    ------------
  Total Current Assets                         $   292,840     $   333,781
                                                                          
 Investments in Securities                         425,635         404,220
 Investments in Project Partnerships, Net        2,775,287       3,517,852
                                               -----------     -----------
    Total Assets                               $ 3,493,762     $ 4,255,853
                                               ===========     ===========
LIABILITIES AND PARTNERS' EQUITY                                          
Current Liabilities:                                                      
 Payable to General Partners                   $    52,018     $    55,760
 Payable to Project Partnerships                         0               0
                                               -----------     -----------
  Total Current Liabilities                         52,018          55,760
                                               -----------     -----------
Long-Term Liabilities:                                                    
 Payable to General Partners                       248,416         226,886
                                               -----------     -----------
Partners' Equity:                                                         
Limited Partners (10,395 units for Series                                 
7, 9,980 for Series 8, 6,254 for Series 9,                                
5,043 for Series 10 and 5,127 for Series                                  
11 at December 31,1998 and March 31,1998)        3,252,673       4,024,753
General Partners                                   (59,345)        (51,546)
                                               -----------     -----------
  Total Partners' Equity                       $ 3,193,328     $ 3,973,207
                                               -----------     -----------
    Total Liabilities and Partners' Equity     $ 3,493,762     $ 4,255,853
                                               ===========     ===========
                                                                          
                                                                          

              See accompanying notes to financial statements.
<PAGE>
                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                              BALANCE SHEETS
                                     
SERIES 8                                     DECEMBER 31,     MARCH 31,
                                                 1998            1998
                                                -------        -------
                                              (Unaudited)     (Audited)
ASSETS                                                                    
Current Assets:                                                           
 Cash and Cash Equivalents                      $   361,164    $   410,727
 Investments in Securities                           44,811         42,967
 Receivable from Project Partnerships                     0              0
                                                ------------    ------------
  Total Current Assets                          $   405,975    $   453,694
                                                                          
 Investments in Securities                          404,190        384,906
 Investments in Project Partnerships, Net         2,800,088      3,608,229
                                                -----------    -----------
    Total Assets                                $ 3,610,253    $ 4,446,829
                                                ===========    ===========
LIABILITIES AND PARTNERS' EQUITY                                          
Current Liabilities:                                                      
 Payable to General Partners                    $    42,558    $    46,515
 Payable to Project Partnerships                          0              0
                                                -----------    -----------
  Total Current Liabilities                          42,558         46,515
                                                -----------    -----------
Long-Term Liabilities:                                                    
 Payable to General Partners                        295,064        269,107
                                                -----------    -----------
Partners' Equity:                                                         
Limited Partners (10,395 units for Series                                 
7, 9,980 for Series 8, 6,254 for Series 9,                                
5,043 for Series 10 and 5,127 for Series 11                               
at December 31,1998 and March 31,1998)            3,327,530      4,177,520
General Partners                                    (54,899)       (46,313)
                                                -----------    -----------
  Total Partners' Equity                        $ 3,272,631    $ 4,131,207
                                                -----------    -----------
    Total Liabilities and Partners' Equity      $ 3,610,253    $ 4,446,829
                                                ===========    ===========
                                                                          
                                                                          

              See accompanying notes to financial statements.
<PAGE>
                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                              BALANCE SHEETS
                                     
SERIES 9                                     DECEMBER 31,      MARCH 31,
                                                 1998            1998
                                                -------         -------
                                              (Unaudited)      (Audited)
ASSETS                                                                    
Current Assets:                                                           
 Cash and Cash Equivalents                      $   161,270    $   180,104
 Investments in Securities                           28,884         27,803
 Receivable from Project Partnerships                     0              0
                                                ------------    ------------
  Total Current Assets                          $   190,154    $   207,907
                                                                          
 Investments in Securities                          270,888        259,181
 Investments in Project Partnerships, Net         2,919,488      3,363,377
                                                -----------    -----------
    Total Assets                                $ 3,380,530    $ 3,830,465
                                                ===========    ===========
LIABILITIES AND PARTNERS' EQUITY                                          
Current Liabilities:                                                      
 Payable to General Partners                    $    24,487    $    26,911
 Payable to Project Partnerships                          0              0
                                                -----------    -----------
  Total Current Liabilities                          24,487         26,911
                                                -----------    -----------
Long-Term Liabilities:                                                    
 Payable to General Partners                        171,342        151,733
                                                -----------    -----------
Partners' Equity:                                                         
Limited Partners (10,395 units for Series                                 
7, 9,980 for Series 8, 6,254 for Series 9,                                
5,043 for Series 10 and 5,127 for Series 11                               
at December 31,1998 and March 31,1998)            3,207,691      3,670,140
General Partners                                    (22,990)       (18,319)
                                                -----------    -----------
  Total Partners' Equity                        $ 3,184,701    $ 3,651,821
                                                -----------    -----------
    Total Liabilities and Partners' Equity      $ 3,380,530    $ 3,830,465
                                                ===========    ===========
                                                                          
                                                                          

              See accompanying notes to financial statements.
<PAGE>
                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                              BALANCE SHEETS
                                     
SERIES 10                                    DECEMBER 31,      MARCH 31,
                                                 1998            1998
                                                -------         -------
                                              (Unaudited)      (Audited)
ASSETS                                                                    
Current Assets:                                                           
 Cash and Cash Equivalents                      $   177,013    $   202,435
 Investments in Securities                           23,916         22,865
 Receivable from Project Partnerships                     0              0
                                                 ------------   ------------
  Total Current Assets                          $   200,929    $   225,300
                                                                          
 Investments in Securities                          217,257        206,525
 Investments in Project Partnerships, Net         3,065,010      3,352,669
                                                -----------    -----------
    Total Assets                                $ 3,483,196    $ 3,784,494
                                                ===========    ===========
LIABILITIES AND PARTNERS' EQUITY                                          
Current Liabilities:                                                      
 Payable to General Partners                    $    28,034    $    30,279
 Payable to Project Partnerships                          0              0
                                                -----------    -----------
  Total Current Liabilities                          28,034         30,279
                                                -----------    -----------
Long-Term Liabilities:                                                    
 Payable to General Partners                         43,223         45,106
                                                -----------    -----------
Partners' Equity:                                                         
Limited Partners (10,395 units for Series                                 
7, 9,980 for Series 8, 6,254 for Series 9,                                
5,043 for Series 10 and 5,127 for Series 11                               
at December 31,1998 and March 31,1998)            3,422,000      3,716,198
General Partners                                    (10,061)        (7,089)
                                                -----------    -----------
  Total Partners' Equity                        $ 3,411,939    $ 3,709,109
                                                -----------    -----------
    Total Liabilities and Partners' Equity      $ 3,483,196    $ 3,784,494
                                                ===========    ===========
                                                                          
                                                                          

              See accompanying notes to financial statements.
<PAGE>
                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                              BALANCE SHEETS
                                     
SERIES 11                                    DECEMBER 31,      MARCH 31,
                                                 1998            1998
                                                -------         -------
                                              (Unaudited)      (Audited)
ASSETS                                                                    
Current Assets:                                                           
 Cash and Cash Equivalents                      $   186,863    $   208,198
 Investments in Securities                           22,896         21,794
 Receivable from Project Partnerships                     0              0
                                                 ------------   ------------
  Total Current Assets                          $   209,759    $   229,992
                                                                          
 Investments in Securities                          235,122        222,768
 Investments in Project Partnerships, Net         3,773,987      3,861,731
                                                -----------    -----------
    Total Assets                                $ 4,218,868    $ 4,314,491
                                                ===========    ===========
LIABILITIES AND PARTNERS' EQUITY                                          
Current Liabilities:                                                      
 Payable to General Partners                    $    27,863    $    29,179
 Payable to Project Partnerships                          0              0
                                                -----------    -----------
  Total Current Liabilities                          27,863         29,179
                                                -----------    -----------
Long-Term Liabilities:                                                    
 Payable to General Partners                         13,791         17,499
                                                -----------    -----------
Partners' Equity:                                                         
Limited Partners (10,395 units for Series                                 
7, 9,980 for Series 8, 6,254 for Series 9,                                
5,043 for Series 10 and 5,127 for Series 11                               
at December 31,1998 and March 31,1998)            4,181,433      4,271,126
General Partners                                     (4,219)        (3,313)
                                                -----------    -----------
  Total Partners' Equity                        $ 4,177,214    $ 4,267,813
                                                -----------    -----------
    Total Liabilities and Partners' Equity      $ 4,218,868    $ 4,314,491
                                                ===========    ===========
                                                                          
                                                                          

              See accompanying notes to financial statements.
<PAGE>
                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                              BALANCE SHEETS
                                     
TOTAL SERIES 7 - 11                          DECEMBER 31,      MARCH 31,
                                                 1998            1998
                                                -------         -------
                                              (Unaudited)      (Audited)
ASSETS                                                                    
Current Assets:                                                           
 Cash and Cash Equivalents                      $ 1,129,306    $ 1,287,570
 Investments in Securities                          170,351        163,104
 Receivable from Project Partnerships                     0              0
                                                 ------------   ------------
  Total Current Assets                          $ 1,299,657    $ 1,450,674
                                                                          
 Investments in Securities                        1,553,092      1,477,600
 Investments in Project Partnerships, Net        15,333,860     17,703,858
                                                -----------    -----------
    Total Assets                                $18,186,609    $20,632,132
                                                ===========    ===========
LIABILITIES AND PARTNERS' EQUITY                                          
Current Liabilities:                                                      
 Payable to General Partners                    $   174,960    $   188,644
 Payable to Project Partnerships                          0              0
                                                -----------    -----------
  Total Current Liabilities                         174,960        188,644
                                                -----------    -----------
Long-Term Liabilities:                                                    
 Payable to General Partners                        771,836        710,331
                                                -----------    -----------
Partners' Equity:                                                         
Limited Partners (10,395 units for Series                                 
7, 9,980 for Series 8, 6,254 for Series 9,                                
5,043 for Series 10 and 5,127 for Series 11                               
at December 31,1998 and March 31,1998)           17,391,326     19,859,737
General Partners                                   (151,513)      (126,580)
                                                -----------    -----------
  Total Partners' Equity                        $17,239,813    $19,733,157
                                                -----------    -----------
    Total Liabilities and Partners' Equity      $18,186,609    $20,632,132
                                                ===========    ===========
                                                                          
                                                                          

              See accompanying notes to financial statements.
<PAGE>

                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                                     
                         STATEMENTS OF OPERATIONS
                  FOR THE THREE MONTHS ENDED DECEMBER 31,
                                (Unaudited)

SERIES 7                                        1998            1997
                                                ----            ----
Revenues:                                                                
 Interest Income                               $    10,900    $    11,190
                                               -----------    -----------
Expenses:                                                                
 Asset Management Fee-General Partner               22,108         20,148
 General and Administrative:                                             
  General Partner                                    2,328          3,587
  Other                                              2,197          2,382
 Amortization                                        5,551          5,419
                                               -----------    -----------
  Total Expenses                                    32,184         31,536
                                               -----------    -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                           (21,284)       (20,346)
Equity in Losses of Project                                              
 Partnerships                                     (213,811)      (215,527)
                                                ----------     ----------
Net Loss                                       $  (235,095)   $  (235,873)
                                               ===========    ===========
Allocation of Net Loss:                                                  
 Limited Partners                              $  (232,744)   $  (233,514)
 General Partners                                   (2,351)        (2,359)
                                               -----------    -----------
                                               $  (235,095)   $  (235,873)
                                               ===========    ===========
Net Loss Per Number of Limited                                           
Partnership Units                              $    (22.39)   $    (22.46)
                                              ============   ============
Number of Limited Partnership Units                                      
Outstanding                                         10,395         10,395
                                              ============   ============
                                                                         
                                                                         


              See accompanying notes to financial statements.
<PAGE>


                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                                     
                         STATEMENTS OF OPERATIONS
                  FOR THE THREE MONTHS ENDED DECEMBER 31,
                                (Unaudited)
SERIES 8                                        1998            1997
                                                ----            ----
Revenues:                                                                
 Interest Income                               $    11,469    $    11,993
                                               -----------    -----------
Expenses:                                                                
 Asset Management Fee-General Partner               23,047         22,214
 General and Administrative:                                             
  General Partner                                    2,567          3,952
  Other                                              2,311          2,325
 Amortization                                        3,853          3,675
                                               -----------    -----------
  Total Expenses                                    31,778         32,166
                                               -----------    -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                           (20,309)       (20,173)
Equity in Losses of Project                                              
 Partnerships                                     (257,130)      (277,623)
                                                ----------     ----------
Net Loss                                       $  (277,439)   $  (297,796)
                                               ===========    ===========
Allocation of Net Loss:                                                  
 Limited Partners                              $  (274,665)   $  (294,818)
 General Partners                                   (2,774)        (2,978)
                                               -----------    -----------
                                               $  (277,439)   $  (297,796)
                                               ===========    ===========
Net Loss Per Number of Limited                                           
Partnership Units                              $    (27.52)   $    (29.54)
                                              ============   ============
Number of Limited Partnership Units                                      
Outstanding                                          9,980          9,980
                                              ============   ============
                                                                         
                                                                         


              See accompanying notes to financial statements.
<PAGE>


                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                                     
                         STATEMENTS OF OPERATIONS
                  FOR THE THREE MONTHS ENDED DECEMBER 31,
                                (Unaudited)

SERIES 9                                        1998            1997
                                                ----            ----
Revenues:                                                                
 Interest Income                                $     6,235   $     6,356
                                                -----------   -----------
Expenses:                                                                
 Asset Management Fee-General Partner                12,648        12,398
 General and Administrative:                                             
  General Partner                                     1,433         2,206
  Other                                               1,490         1,580
 Amortization                                         1,743         1,779
                                                -----------   -----------
  Total Expenses                                     17,314        17,963
                                                -----------   -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                            (11,079)      (11,607)
Equity in Losses of Project                                              
 Partnerships                                      (169,947)      (98,139)
                                                 ----------    ----------
Net Loss                                        $  (181,026)  $  (109,746)
                                                ===========   ===========
Allocation of Net Loss:                                                  
 Limited Partners                               $  (179,216)  $  (108,649)
 General Partners                                    (1,810)       (1,097)
                                                -----------   -----------
                                                $  (181,026)  $  (109,746)
                                                ===========   ===========
Net Loss Per Number of Limited                                           
Partnership Units                               $    (28.66)  $    (17.37)
                                               ============  ============
Number of Limited Partnership Units                                      
Outstanding                                           6,254         6,254
                                               ============  ============
                                                                         
                                                                         


              See accompanying notes to financial statements.
<PAGE>


                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                                     
                         STATEMENTS OF OPERATIONS
                  FOR THE THREE MONTHS ENDED DECEMBER 31,
                                (Unaudited)
SERIES 10                                       1998            1997
                                                ----            ----
Revenues:                                                                
 Interest Income                               $     6,119    $     6,191
                                               -----------    -----------
Expenses:                                                                
 Asset Management Fee-General Partner                8,525          7,749
 General and Administrative:                                             
  General Partner                                      896          1,378
  Other                                              1,021          1,129
 Amortization                                        1,406          1,460
                                               -----------    -----------
  Total Expenses                                    11,848         11,716
                                               -----------    -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                            (5,729)        (5,525)
Equity in Losses of Project                                              
 Partnerships                                     (155,972)       (61,786)
                                                ----------     ----------
Net Loss                                       $  (161,701)   $   (67,311)
                                               ===========    ===========
Allocation of Net Loss:                                                  
 Limited Partners                              $  (160,084)   $   (66,638)
 General Partners                                   (1,617)          (673)
                                               -----------    -----------
                                               $  (161,701)   $   (67,311)
                                               ===========    ===========
Net Loss Per Number of Limited                                           
Partnership Units                              $    (31.74)   $    (13.21)
                                              ============   ============
Number of Limited Partnership Units                                      
Outstanding                                          5,043          5,043
                                              ============   ============
                                                                         
                                                                         


              See accompanying notes to financial statements.
<PAGE>


                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                                     
                         STATEMENTS OF OPERATIONS
                  FOR THE THREE MONTHS ENDED DECEMBER 31,
                                (Unaudited)
SERIES 11                                       1998            1997
                                                ----            ----
Revenues:                                                                
 Interest Income                                $     6,778   $     6,639
                                                -----------   -----------
Expenses:                                                                
 Asset Management Fee-General Partner                 6,820         6,199
 General and Administrative:                                             
  General Partner                                       717         1,102
  Other                                               1,116         1,284
 Amortization                                         2,074         1,797
                                                -----------   -----------
  Total Expenses                                     10,727        10,382
                                                -----------   -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                             (3,949)       (3,743)
Equity in Losses of Project                                              
 Partnerships                                       (33,849)      (41,995)
                                                 ----------    ----------
Net Loss                                        $   (37,798)  $   (45,738)
                                                ===========   ===========
Allocation of Net Loss:                                                  
 Limited Partners                               $   (37,420)  $   (45,281)
 General Partners                                      (378)         (457)
                                                -----------   -----------
                                                $   (37,798)  $   (45,738)
                                                ===========   ===========
Net Loss Per Number of Limited                                           
Partnership Units                               $     (7.30)  $     (8.83)
                                               ============  ============
Number of Limited Partnership Units                                      
Outstanding                                           5,127         5,127
                                               ============  ============
                                                                         
                                                                         


              See accompanying notes to financial statements.
<PAGE>


                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                                     
                         STATEMENTS OF OPERATIONS
                  FOR THE THREE MONTHS ENDED DECEMBER 31,
                                (Unaudited)

TOTAL SERIES 7 - 11                             1998            1997
                                                ----            ----
Revenues:                                                                
 Interest Income                                $    41,501   $    42,369
                                                -----------   -----------
Expenses:                                                                
 Asset Management Fee-General Partner                73,148        68,708
 General and Administrative:                                             
  General Partner                                     7,941        12,225
  Other                                               8,135         8,700
 Amortization                                        14,627        14,130
                                                -----------   -----------
  Total Expenses                                    103,851       103,763
                                                -----------   -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                            (62,350)      (61,394)
Equity in Losses of Project                                              
 Partnerships                                      (830,709)     (695,070)
                                                 ----------    ----------
Net Loss                                        $  (893,059)  $  (756,464)
                                                ===========   ===========
Allocation of Net Loss:                                                  
 Limited Partners                               $  (884,128)  $  (748,899)
 General Partners                                    (8,931)       (7,565)
                                                -----------   -----------
                                                $  (893,059)  $  (756,464)
                                                ===========   ===========
                                                                         
                                                                         


              See accompanying notes to financial statements.
<PAGE>


                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                                     
                         STATEMENTS OF OPERATIONS
                  FOR THE NINE MONTHS ENDED DECEMBER 31,
                                (Unaudited)

SERIES 7                                        1998            1997
                                                ----            ----
Revenues:                                                                
 Interest Income                               $    33,471    $    33,835
                                               -----------    -----------
Expenses:                                                                
 Asset Management Fee-General Partner               66,324         59,796
 General and Administrative:                                             
  General Partner                                   10,344         11,059
  Other                                             13,717         16,681
 Amortization                                       16,653         16,298
                                               -----------    -----------
  Total Expenses                                   107,038        103,834
                                               -----------    -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                           (73,567)       (69,999)
Equity in Losses of Project                                              
 Partnerships                                     (706,312)      (651,486)
                                                ----------     ----------
Net Loss                                       $  (779,879)   $  (721,485)
                                               ===========    ===========
Allocation of Net Loss:                                                  
 Limited Partners                              $  (772,080)   $  (714,270)
 General Partners                                   (7,799)        (7,215)
                                               -----------    -----------
                                               $  (779,879)   $  (721,485)
                                               ===========    ===========
Net Loss Per Number of Limited                                           
Partnership Units                              $    (74.27)   $    (68.71)
                                              ============   ============
Number of Limited Partnership Units                                      
Outstanding                                         10,395         10,395
                                              ============   ============
                                                                         
                                                                         


              See accompanying notes to financial statements.
<PAGE>


                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                                     
                         STATEMENTS OF OPERATIONS
                  FOR THE NINE MONTHS ENDED DECEMBER 31,
                                (Unaudited)
SERIES 8                                        1998            1997
                                                ----            ----
Revenues:                                                                
 Interest Income                               $    35,311    $    35,614
                                               -----------    -----------
Expenses:                                                                
 Asset Management Fee-General Partner               69,141         65,928
 General and Administrative:                                             
  General Partner                                   11,405         12,192
  Other                                             15,280         17,276
 Amortization                                       10,198          9,664
                                               -----------    -----------
  Total Expenses                                   106,024        105,060
                                               -----------    -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                           (70,713)       (69,446)
Equity in Losses of Project                                              
 Partnerships                                     (787,863)      (867,315)
                                                ----------     ----------
Net Loss                                       $  (858,576)   $  (936,761)
                                               ===========    ===========
Allocation of Net Loss:                                                  
 Limited Partners                              $  (849,990)   $  (927,393)
 General Partners                                   (8,586)        (9,368)
                                               -----------    -----------
                                               $  (858,576)   $  (936,761)
                                               ===========    ===========
Net Loss Per Number of Limited                                           
Partnership Units                              $    (85.17)   $    (92.93)
                                              ============   ============
Number of Limited Partnership Units                                      
Outstanding                                          9,980          9,980
                                              ============   ============
                                                                         
                                                                         


              See accompanying notes to financial statements.
<PAGE>


                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                                     
                         STATEMENTS OF OPERATIONS
                  FOR THE NINE MONTHS ENDED DECEMBER 31,
                                (Unaudited)

SERIES 9                                        1998            1997
                                                ----            ----
Revenues:                                                                
 Interest Income                                $    19,061   $    19,081
                                                -----------   -----------
Expenses:                                                                
 Asset Management Fee-General Partner                37,944        36,797
 General and Administrative:                                             
  General Partner                                     6,366         6,805
  Other                                               8,611         9,636
 Amortization                                         5,229         5,337
                                                -----------   -----------
  Total Expenses                                     58,150        58,575
                                                -----------   -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                            (39,089)      (39,494)
Equity in Losses of Project                                              
 Partnerships                                      (428,031)     (312,514)
                                                 ----------    ----------
Net Loss                                        $  (467,120)  $  (352,008)
                                                ===========   ===========
Allocation of Net Loss:                                                  
 Limited Partners                               $  (462,449)  $  (348,488)
 General Partners                                    (4,671)       (3,520)
                                                -----------   -----------
                                                $  (467,120)  $  (352,008)
                                                ===========   ===========
Net Loss Per Number of Limited                                           
Partnership Units                               $    (73.94)  $    (55.72)
                                               ============  ============
Number of Limited Partnership Units                                      
Outstanding                                           6,254         6,254
                                               ============  ============
                                                                         
                                                                         


              See accompanying notes to financial statements.
<PAGE>


                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                                     
                         STATEMENTS OF OPERATIONS
                  FOR THE NINE MONTHS ENDED DECEMBER 31,
                                (Unaudited)
SERIES 10                                       1998            1997
                                                ----            ----
Revenues:                                                                
 Interest Income                               $    18,821    $    18,967
                                               -----------    -----------
Expenses:                                                                
 Asset Management Fee-General Partner               25,575         22,999
 General and Administrative:                                             
  General Partner                                    3,979          4,253
  Other                                              5,995          6,290
 Amortization                                        4,218          4,380
                                               -----------    -----------
  Total Expenses                                    39,767         37,922
                                               -----------    -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                           (20,946)       (18,955)
Equity in Losses of Project                                              
 Partnerships                                     (276,224)      (172,232)
                                                ----------     ----------
Net Loss                                       $  (297,170)   $  (191,187)
                                               ===========    ===========
Allocation of Net Loss:                                                  
 Limited Partners                              $  (294,198)   $  (189,275)
 General Partners                                   (2,972)        (1,912)
                                               -----------    -----------
                                               $  (297,170)   $  (191,187)
                                               ===========    ===========
Net Loss Per Number of Limited                                           
Partnership Units                              $    (58.34)   $    (37.53)
                                              ============   ============
Number of Limited Partnership Units                                      
Outstanding                                          5,043          5,043
                                              ============   ============
                                                                         
                                                                         


              See accompanying notes to financial statements.
<PAGE>


                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                                     
                         STATEMENTS OF OPERATIONS
                  FOR THE NINE MONTHS ENDED DECEMBER 31,
                                (Unaudited)
SERIES 11                                       1998            1997
                                                ----            ----
Revenues:                                                                
 Interest Income                                $    20,682   $    19,858
                                                -----------   -----------
Expenses:                                                                
 Asset Management Fee-General Partner                20,460        18,399
 General and Administrative:                                             
  General Partner                                     3,183         3,402
  Other                                               5,481         6,030
 Amortization                                         6,222         5,391
                                                -----------   -----------
  Total Expenses                                     35,346        33,222
                                                -----------   -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                            (14,664)      (13,364)
Equity in Losses of Project                                              
 Partnerships                                       (75,935)     (179,678)
                                                 ----------    ----------
Net Loss                                        $   (90,599)  $  (193,042)
                                                ===========   ===========
Allocation of Net Loss:                                                  
 Limited Partners                               $   (89,693)  $  (191,112)
 General Partners                                      (906)       (1,930)
                                                -----------   -----------
                                                $   (90,599)  $  (193,042)
                                                ===========   ===========
Net Loss Per Number of Limited                                           
Partnership Units                              $     (17.49)  $    (37.28)
                                               ============  ============
Number of Limited Partnership Units                                      
Outstanding                                           5,127         5,127
                                               ============  ============
                                                                         
                                                                         


              See accompanying notes to financial statements.
<PAGE>


                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                                     
                         STATEMENTS OF OPERATIONS
                  FOR THE NINE MONTHS ENDED DECEMBER 31,
                                (Unaudited)

TOTAL SERIES 7 - 11                             1998            1997
                                                ----            ----
Revenues:                                                                
 Interest Income                                $   127,346   $   127,355
                                                -----------   -----------
Expenses:                                                                
 Asset Management Fee-General Partner               219,444       203,919
 General and Administrative:                                             
  General Partner                                    35,277        37,711
  Other                                              49,084        55,913
 Amortization                                        42,520        41,070
                                                -----------   -----------
  Total Expenses                                    346,325       338,613
                                                -----------   -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                           (218,979)     (211,258)
Equity in Losses of Project                                              
 Partnerships                                    (2,274,365)   (2,183,225)
                                                 ----------    ----------
Net Loss                                        $(2,493,344)  $(2,394,483)
                                                ===========   ===========
Allocation of Net Loss:                                                  
 Limited Partners                               $(2,468,411)  $(2,370,538)
 General Partners                                   (24,933)      (23,945)
                                                -----------   -----------
                                                $(2,493,344)  $(2,394,483)
                                                ===========   ===========
                                                                         
                                                                         


              See accompanying notes to financial statements.
<PAGE>

                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                                     
                      STATEMENTS OF PARTNERS' EQUITY
                                     
           FOR THE NINE MONTHS ENDED DECEMBER 31, 1998 AND 1997:



                                Limited         General            
SERIES 7                        Partners        Partners         Total
                               ---------        --------         -----
                                                                           
                                                                           
Balance at March 31, 1997       $ 5,025,507    $   (41,437)     $ 4,984,070
                                                                           
Net Loss                           (714,270)        (7,215)        (721,485)
                                -----------     -----------     -----------
                                                                           
Balance at December 31,1997     $ 4,311,237    $   (48,652)     $ 4,262,585
                               ============    ============    ============
                                                                           
                                                                           
Balance at March 31, 1998       $ 4,024,753    $   (51,546)     $ 3,973,207
                                                                           
Net Loss                           (772,080)        (7,799)        (779,879)
                                -----------     -----------     -----------
                                                                           
Balance at December 31,1998     $ 3,252,673    $   (59,345)     $ 3,193,328
                               ============    ============    ============
                                                                           

              See accompanying notes to financial statements.

<PAGE>



                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                                     
                      STATEMENTS OF PARTNERS' EQUITY
                                     
           FOR THE NINE MONTHS ENDED DECEMBER 31, 1998 AND 1997:



                                Limited         General            
SERIES 8                        Partners        Partners         Total
                               ---------        --------         -----
                                                                           
                                                                           
Balance at March 31, 1997       $ 5,227,849    $   (35,704)     $ 5,192,145
                                                                           
Net Loss                           (927,393)        (9,368)        (936,761)
                                -----------     -----------     -----------
                                                                           
Balance at December 31,1997     $ 4,300,456    $   (45,072)     $ 4,255,384
                               ============    ============    ============
                                                                           
                                                                           
Balance at March 31, 1998       $ 4,177,520    $   (46,313)     $ 4,131,207
                                                                           
Net Loss                           (849,990)        (8,586)        (858,576)
                                -----------     -----------     -----------
                                                                           
Balance at December 31,1998     $ 3,327,530    $   (54,899)     $ 3,272,631
                               ============    ============    ============
                                                                           

              See accompanying notes to financial statements.

<PAGE>
                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                                     
                      STATEMENTS OF PARTNERS' EQUITY
                                     
           FOR THE NINE MONTHS ENDED DECEMBER 31, 1998 AND 1997:



                                Limited         General            
SERIES 9                        Partners        Partners         Total
                               ---------        --------         -----
                                                                           
                                                                           
Balance at March 31, 1997       $ 4,177,521    $   (13,194)     $ 4,164,327
                                                                           
Net Loss                           (348,488)        (3,520)        (352,008)
                                -----------     -----------     -----------
                                                                           
Balance at December 31,1997     $ 3,829,033    $   (16,714)     $ 3,812,319
                               ============    ============    ============
                                                                           
                                                                           
Balance at March 31, 1998       $ 3,670,140    $   (18,319)     $ 3,651,821
                                                                           
Net Loss                           (462,449)        (4,671)        (467,120)
                                -----------     -----------     -----------
                                                                           
Balance at December 31,1998     $ 3,207,691    $   (22,990)     $ 3,184,701
                               ============    ============    ============
                                                                           

              See accompanying notes to financial statements.

<PAGE>
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                                     
                      STATEMENTS OF PARTNERS' EQUITY
                                     
           FOR THE NINE MONTHS ENDED DECEMBER 31, 1998 AND 1997:



                                Limited         General            
SERIES 10                       Partners        Partners         Total
                               ---------        --------         -----
                                                                           
                                                                           
Balance at March 31, 1997       $ 3,938,729    $    (4,841)     $ 3,933,888
                                                                           
Net Loss                           (189,275)        (1,912)        (191,187)
                                -----------     -----------     -----------
                                                                           
Balance at December 31,1997     $ 3,749,454    $    (6,753)     $ 3,742,701
                               ============    ============    ============
                                                                           
                                                                           
Balance at March 31, 1998       $ 3,716,198    $    (7,089)     $ 3,709,109
                                                                           
Net Loss                           (294,198)        (2,972)        (297,170)
                                -----------     -----------     -----------
                                                                           
Balance at December 31,1998     $ 3,422,000    $   (10,061)     $ 3,411,939
                               ============    ============    ============
                                                                           

              See accompanying notes to financial statements.
<PAGE>

                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                                     
                      STATEMENTS OF PARTNERS' EQUITY
                                     
           FOR THE NINE MONTHS ENDED DECEMBER 31, 1998 AND 1997:



                                Limited         General            
SERIES 11                       Partners        Partners         Total
                               ---------        --------         -----
                                                                           
                                                                           
Balance at March 31, 1997       $ 4,452,477    $    (1,481)     $ 4,450,996
                                                                           
Net Loss                           (191,112)        (1,930)        (193,042)
                                -----------     -----------     -----------
                                                                           
Balance at December 31,1997     $ 4,261,365    $    (3,411)     $ 4,257,954
                               ============    ============    ============
                                                                           
                                                                           
Balance at March 31, 1998       $ 4,271,126    $    (3,313)     $ 4,267,813
                                                                           
Net Loss                            (89,693)          (906)         (90,599)
                                -----------     -----------     -----------
                                                                           
Balance at December 31,1998     $ 4,181,433    $    (4,219)     $ 4,177,214
                               ============    ============    ============
                                                                           

              See accompanying notes to financial statements.
<PAGE>

                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                                     
                      STATEMENTS OF PARTNERS' EQUITY
                                     
           FOR THE NINE MONTHS ENDED DECEMBER 31, 1998 AND 1997:



                                Limited         General            
TOTAL SERIES 7 - 11             Partners        Partners         Total
                               ---------        --------         -----
                                                                           
                                                                           
Balance at March 31, 1997       $22,822,083    $   (96,657)     $22,725,426
                                                                           
Net Loss                         (2,370,538)       (23,945)      (2,394,483)
                                -----------     -----------     -----------
                                                                           
Balance at December 31,1997     $20,451,545    $  (120,602)     $20,330,943
                               ============    ============    ============
                                                                           
                                                                           
Balance at March 31, 1998       $19,859,737    $  (126,580)     $19,733,157
                                                                           
Net Loss                         (2,468,411)       (24,933)      (2,493,344)
                                -----------     -----------     -----------
                                                                           
Balance at December 31,1998     $17,391,326    $  (151,513)     $17,239,813
                               ============    ============    ============
                                                                           

              See accompanying notes to financial statements.
<PAGE>
                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                         STATEMENTS OF CASH FLOWS
                  FOR THE NINE MONTHS ENDED DECEMBER 31,
                                (Unaudited)
                                     
SERIES 7                                         1998           1997
--------                                         ----           ----
Cash Flows from Operating Activities:                                    
  Net Loss                                      $  (779,879)  $  (721,485)
  Adjustments to Reconcile Net Loss to Net                               
  Cash Provided by (Used in) Operating                                     
  Activities:                                                              
   Amortization                                      16,653        16,298
   Accreted Interest Income on Investments                               
   in Securities                                    (23,584)      (24,281)
   Equity in Losses of Project Partnerships         706,312       651,486
Changes in Operating Assets and                                          
Liabilities:                                                             
    Increase in Payable to General Partners          17,788        16,682
                                                -----------   -----------
     Net Cash Used in Operating Activities          (62,710)      (61,300)
                                                -----------   -----------
Cash Flows from Investing Activities:                                    
Distributions Received from Project                                      
Partnerships                                         19,600        21,520
                                                -----------   -----------
     Net Cash Provided by (Used in)                                      
     Investing Activities                            19,600        21,520
                                                -----------   -----------
Increase (Decrease) in Cash and Cash                                     
Equivalents                                         (43,110)      (39,780)
Cash and Cash Equivalents at Beginning of                                
Year                                                286,106       267,980
                                                -----------   -----------
Cash and Cash Equivalents at End of Year        $   242,996   $   228,200
                                                ===========   ===========
                                                                         


              See accompanying notes to financial statements.
<PAGE>
                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                         STATEMENTS OF CASH FLOWS
                  FOR THE NINE MONTHS ENDED DECEMBER 31,
                                (Unaudited)
SERIES 8                                         1998           1997
--------                                         ----           ----
Cash Flows from Operating Activities:                                    
  Net Loss                                      $  (858,576)  $  (936,761)
  Adjustments to Reconcile Net Loss to Net                               
  Cash Provided by (Used in) Operating                                     
  Activities:                                                              
   Amortization                                      10,198         9,664
   Accreted Interest Income on Investments                               
   in Securities                                    (21,128)      (21,807)
   Equity in Losses of Project Partnership          787,863       867,315
Changes in Operating Assets and                                          
Liabilities:                                                             
    Increase in Payable to General Partners          22,000        26,707
                                                -----------   -----------
     Net Cash Used in Operating Activities          (59,643)      (54,882)
                                                -----------   -----------
Cash Flows from Investing Activities:                                    
  Decrease of Receivable from
  Project Partnerships                                    0           453
  Distributions Received from Project                                    
  Partnerships                                       10,080        15,967
                                                -----------   -----------
     Net Cash Provided by (Used in)                                      
     Investing Activities                            10,080        16,420
                                                -----------   -----------
Increase (Decrease) in Cash and Cash                                     
Equivalents                                         (49,563)      (38,462)
Cash and Cash Equivalents at Beginning of                                
Year                                                410,727       396,038
                                                -----------   -----------
Cash and Cash Equivalents at End of Year        $   361,164   $   357,576
                                                ===========   ===========
                                                                         


              See accompanying notes to financial statements.
<PAGE>
                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                                     
                         STATEMENTS OF CASH FLOWS
                  FOR THE NINE MONTHS ENDED DECEMBER 31,
                                (Unaudited)
SERIES 9                                         1998           1997
--------                                         ----           ----
Cash Flows from Operating Activities:                                    
  Net Loss                                      $  (467,120)  $  (352,008)
  Adjustments to Reconcile Net Loss to Net                               
  Cash Provided by (Used in) Operating                                     
  Activities:                                                              
   Amortization                                       5,229         5,337
   Accreted Interest Income on Investments                               
   in Securities                                    (12,788)      (13,297)
   Equity in Losses of Project Partnerships         428,031       312,514
Changes in Operating Assets and                                          
Liabilities:                                                             
    Increase in Payable to General Partners          17,185        19,449
                                                -----------   -----------
     Net Cash Used in Operating Activities          (29,463)      (28,005)
                                                -----------   -----------
Cash Flows from Investing Activities:                                    
  Distributions Received from Project                                    
  Partnerships                                       10,629        10,097
                                                -----------   -----------
     Net Cash Provided by (Used in)                                      
     Investing Activities                            10,629        10,097
                                                -----------   -----------
Increase (Decrease) in Cash and Cash                                     
Equivalents                                         (18,834)      (17,908)
Cash and Cash Equivalents at Beginning of                                
Year                                                180,104       161,813
                                                -----------   -----------
Cash and Cash Equivalents at End of Year        $   161,270   $   143,905
                                                ===========   ===========
                                                                         

              See accompanying notes to financial statements.
<PAGE>
                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                         STATEMENTS OF CASH FLOWS
                  FOR THE NINE MONTHS ENDED DECEMBER 31,
                                (Unaudited)
SERIES 10                                        1998           1997
--------                                         ----           ----
Cash Flows from Operating Activities:                                    
  Net Loss                                      $  (297,170)  $  (191,187)
  Adjustments to Reconcile Net Loss to Net                               
  Cash Provided by (Used in) Operating                                     
  Activities:                                                              
   Amortization                                       4,218         4,380
   Accreted Interest Income on Investments                               
   in Securities                                    (11,783)      (11,938)
   Equity in Losses of Project Partnerships         276,224       172,232
Changes in Operating Assets and                                          
Liabilities:                                                             
    Increase in Payable to General Partners          (4,128)       (3,061)
                                                -----------   -----------
     Net Cash Used in Operating Activities          (32,639)      (29,574)
                                                -----------   -----------
Cash Flows from Investing Activities:                                    
  Distributions Received from Project                                    
  Partnerships                                        7,217         3,805
  Increase (Decrease) in Payable -                                       
     Project Partnerships                                 0        (7,712)
                                                -----------   -----------
     Net Cash Provided by (Used in)                                      
     Investing Activities                             7,217        (3,907)
                                                -----------   -----------
Increase (Decrease) in Cash and Cash                                     
Equivalents                                         (25,422)      (33,481)
Cash and Cash Equivalents at Beginning of                                
Year                                                202,435       199,743
                                                -----------   -----------
Cash and Cash Equivalents at End of Year        $   177,013   $   166,262
                                                ===========   ===========
                                                                         

              See accompanying notes to financial statements.
<PAGE>
                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                         STATEMENTS OF CASH FLOWS
                  FOR THE NINE MONTHS ENDED DECEMBER 31,
                                (Unaudited)
SERIES 11                                        1998           1997
--------                                         ----           ----
Cash Flows from Operating Activities:                                    
  Net Loss                                      $  (90,599)   $ (193,042)
  Adjustments to Reconcile Net Loss to Net                     
  Cash Provided by (Used in) Operating                                     
  Activities:                                                              
   Amortization                                       6,222        5,391      
   Accreted Interest Income on Investments                         
   in Securities                                    (13,456)     (13,744)      
   Equity in Losses of Project Partnerships          75,935      179,678
Changes in Operating Assets and                                
Liabilities:                                                             
    Increase in Payable to General Partners          (5,024)         337    
                                                -----------   ----------        
     Net Cash Used in Operating Activities          (26,922)     (21,380)
                                                -----------   ----------   
Cash Flows from Investing Activities:                        
  Distributions Received from Project                               
  Partnerships                                        5,587        4,979     
                                                -----------   ----------       
     Net Cash Provided by (Used in)                          
     Investing Activities                             5,587        4,979      
                                                -----------   ----------    
Increase (Decrease) in Cash and Cash                          
Equivalents                                         (21,335)     (16,401)      
Cash and Cash Equivalents at Beginning of                        
Year                                                208,198      169,385        
                                                -----------   ----------   
Cash and Cash Equivalents at End of Year        $   186,863   $  152,984
                                                ===========   ==========

              See accompanying notes to financial statements.
<PAGE>
                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                         STATEMENTS OF CASH FLOWS
                  FOR THE NINE MONTHS ENDED DECEMBER 31,
                                (Unaudited)
TOTAL SERIES 7 - 11                              1998           1997
-------------------                              ----           ----
Cash Flows from Operating Activities:                                    
  Net Loss                                      $(2,493,344)  $(2,394,483)
  Adjustments to Reconcile Net Loss to Net                               
  Cash Provided by (Used in) Operating                                     
  Activities:                                                              
   Amortization                                      42,520        41,070
   Accreted Interest Income on Investments                               
   in Securities                                    (82,739)      (85,067)
   Equity in Losses of Project Partnerships       2,274,365     2,183,225
Changes in Operating Assets and                                          
Liabilities:                                                             
    Increase in Payable to General Partners          47,821        60,114
                                                -----------   -----------
     Net Cash Used in Operating Activities         (211,377)     (195,141)
                                                -----------   -----------
Cash Flows from Investing Activities:                                    
  (Increase) Decrease in Receivable from                                 
  Project Partnerships                                    0           453
Distributions Received from Project                                      
Partnerships                                         53,113        56,368
  Increase (Decrease in Payable -                                        
     Project Partnerships                                 0        (7,712)
                                                -----------   -----------
     Net Cash Provided by (Used in)                                      
     Investing Activities                            53,113        49,109
                                                -----------   -----------
Increase (Decrease) in Cash and Cash                                     
Equivalents                                        (158,264)     (146,032)
Cash and Cash Equivalents at Beginning of                                
Year                                              1,287,570     1,194,959
                                                -----------   -----------
Cash and Cash Equivalents at End of Year        $ 1,129,306   $ 1,048,927
                                                ===========   ===========

              See accompanying notes to financial statements.
<PAGE>
                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                                     
                       NOTES TO FINANCIAL STATEMENTS
                                     
                             DECEMBER 31, 1998

NOTE 1 - ORGANIZATION:

   Gateway  Tax  Credit  Fund  III  Ltd.  ("Gateway"),  a  Florida  Limited
Partnership,  was  formed  October 17, 1991  under  the  laws  of  Florida.
Gateway  offered  its limited partnership interests in Series.   The  first
Series for Gateway is Series 7.  Operations commenced on July 16, 1992  for
Series  7,  January 4, 1993 for Series 8, September 30, 1993 for Series  9,
January  21,  1994 for Series 10 and April 29, 1994 for  Series  11.   Each
Series  invests,  as  a  limited  partner, in  other  limited  partnerships
("Project  Partnerships"),  each  of  which  owns  and  operates  apartment
complexes  eligible  for  Low-Income Housing Tax Credits  ("Tax  Credits"),
provided  for in Section 42 of the Internal Revenue Code of 1986.   Gateway
will terminate on December 31, 2040 or sooner, in accordance with the terms
of the Limited Partnership Agreement.  As of December 31, 1998, Gateway had
received  capital  contributions of $1,000 from the  General  Partners  and
$36,799,000 from the investor Limited Partners.

   Raymond  James Partners, Inc. and Raymond James Tax Credit Funds,  Inc.,
wholly-owned subsidiaries of Raymond James Financial, Inc., are the General
Partner  and Managing General Partner, respectively.  The Managing  General
Partner manages and controls the business of Gateway.

   Gateway  received  capital  contributions  of  $10,395,000,  $9,980,000,
$6,254,000, $5,043,000 and $5,127,000 from the investor Limited Partners in
Series  7,  8, 9, 10 and 11, respectively.  Each Series will be treated  as
though it were a separate partnership, investing in a separate and distinct
pool  of  Project Partnerships.  Income or loss and all tax items from  the
Project Partnerships acquired by each Series will be specifically allocated
among the limited partners of such Series.

   Operating profits and losses, cash distributions from operations and Tax
Credits  from  each  Series  are generally allocated  99%  to  the  Limited
Partners in that Series and 1% to the General Partners.  Profit or loss and
cash  distributions from sales of property by each Series are allocated  as
formulated in the Limited Partnership Agreement.


NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:

Basis of Accounting

   Gateway  utilizes  an accrual basis of accounting whereby  revenues  are
recognized  as  earned and expenses are recognized as  obligations  are  in
curred.

   Gateway  accounts for its investments as the limited partner in  Project
Partnerships  ("Investments  in  Project Partnerships")  using  the  equity
method  of  accounting  and reports the equity in  losses  of  the  Project
Partnerships  on a 3-month lag in the Statement of Operations.   Under  the
equity method, the Investments in Project Partnerships initially include:

  1)  Gateway's capital contribution,
  2)  Acquisition fees paid to the General Partner for services rendered in
selecting properties for acquisition, and
    3)   Acquisition  expenses  including  legal  fees,  travel  and  other
miscellaneous costs relating to acquiring properties.

Quarterly  the  Investments  in  Project  Partnerships  are  increased   or
decreased as follows:

  1)   Increased for equity in income or decreased for equity in losses  of
  the Project Partnerships,
  2)   Decreased   for  cash  distributions  received  from   the   Project
  Partnerships, and
  3)  Decreased for the amortization of the acquisition fees and expenses.

   Amortization is calculated on a straight line basis over  35  years,  as
this  is  the average estimated useful life of the underlying assets.   The
amortization  is  shown  as  amortization  expense  on  the  Statements  of
Operations.

    Pursuant  to  the  limited  partnership  agreements  for  the   Project
Partnerships,  cash  losses  generated  by  the  Project  Partnerships  are
allocated  to  the general partners of those partnerships.   In  subsequent
years, cash profits, if any, are first allocated to the general partners to
the extent of the allocation of prior years' cash losses.

   Since  Gateway  invests  as  a limited partner,  and  therefore  is  not
obligated to fund losses or make additional capital contributions, it  does
not  recognize  losses from individual Project Partnerships to  the  extent
that these losses would reduce the investment in those Project Partnerships
below zero.  The suspended losses will be used to offset future income from
the individual Project Partnerships.

  Gateway  recognizes a decline in the carrying value of its investment  in
the  Project Partnerships when there is evidence of a non-temporary decline
in  the recoverable amount of the investment.  There is a possibility  that
the  estimates relating to reserves for non-temporary declines in  carrying
value of the investments in Project Partnerships may be subject to material
near term adjustments.

  Gateway, as a limited partner in the Project Partnerships, is subject  to
risks  inherent in the ownership of property which are beyond its  control,
such  as fluctuations in occupancy rates and operating expenses, variations
in  rental schedules, proper maintenance and continued eligibility  of  tax
credits.   If  the cost of operating a property exceeds the  rental  income
earned  thereon,  Gateway may deem it in its best interest  to  voluntarily
provide funds in order to protect its investment.

Cash and Cash Equivalents

    It  is  Gateway's  policy  to include short-term  investments  with  an
original  maturity  of three months or less in Cash and  Cash  Equivalents.
Short-term investments are comprised of money market mutual funds.

Concentrations of Credit Risk

     Financial   instruments   which   potentially   subject   Gateway   to
concentrations of credit risk consist of cash investments in a money market
mutual  fund that is a wholly-owned subsidiary of Raymond James  Financial,
Inc.

Use of Estimates in the Preparation of Financial Statements

    The  preparation of financial statements in conformity  with  generally
accepted  accounting principles requires the use of estimates  that  affect
certain  reported amounts and disclosures.  These estimates  are  based  on
management's  knowledge and experience.  Accordingly, actual results  could
differ from these estimates.

Investment in Securities

    Effective  April  1,  1994,  Gateway  adopted  Statement  of  Financial
Accounting  Standards No. 115, Accounting for Certain Investments  in  Debt
and  Equity Securities ("FAS 115").  Under FAS 115, Gateway is required  to
categorize  its debt securities as held-to-maturity, available-for-sale  or
trading  securities,  dependent  upon  Gateway's  intent  in  holding   the
securities.  Gateway's intent is to hold all of its debt securities (U.  S.
Treasury Security Strips) until maturity and to use these reserves to  fund
Gateway's ongoing operations.  Interest income is recognized ratably on the
U.S. Treasury Strips using the effective yield to maturity.

Receivable from Project Partnerships

    Receivable  from Project Partnerships represents amounts due  from  the
Project  Partnerships due to a change in the amount Gateway agreed  to  pay
the  Project  Partnerships and is secured with cash  in  restricted  escrow
accounts.

Offering and Commission Costs

    Offering  and  commission costs are charged against  Limited  Partners'
Equity upon admission of Limited Partners.

Income Taxes

    No  provision  for  income  taxes has  been  made  in  these  financial
statements, as income taxes are a liability of the partners rather than  of
Gateway.

Basis of Preparation

  The unaudited financial statements presented herein have been prepared in
accordance with the instructions to Form 10-Q and do not include all of the
information and note disclosures required by generally accepted  accounting
principles.   These  statements  should be read  in  conjunction  with  the
financial statements and notes thereto included with the Partnership's Form
10-K  for  the  year ended March 31, 1998.  In the opinion  of  management,
these  financial statements include adjustments, consisting only of  normal
recurring  adjustments,  necessary to fairly  summarize  the  Partnership's
financial  position and results of operations.  The results  of  operations
for the periods may not be indicative of the results to be expected for the
year.


NOTE 3 - INVESTMENT IN SECURITIES:

  The  December  31, 1998 Balance Sheet includes Investment  in  Securities
consisting  of U.S. Treasury Security Strips which represents  their  cost,
plus accreted interest income of $165,693 for Series 7, $140,532 for Series
8, $77,476 for Series 9, $66,060 for Series 10 and $72,822 for Series 11.

                                                          Gross Unrealized
                   Estimated Market       Cost Plus          Gains and
                         Value        Accreted Interest       (Losses)
                   -----------------  -----------------   ----------------
Series 7                  $  528,881         $  475,479           $  53,402
Series 8                     491,458            449,001              42,457
Series 9                     319,531            299,772              19,759
Series 10                    267,848            241,173              26,675
Series 11                    296,215            258,018              38,197

 As of December 31, 1998, the cost and accreted interest of debt securities
by contractual maturities is as follows:

                                  Series 7       Series 8       Series 9
                                  --------       --------       --------
Due with 1 year                    $   49,844     $   44,811     $   28,884
After 1 year through 5 years          196,935        183,305        113,988
After 5 years through 10 years        228,700        220,885        132,222
Over 10 years                               0              0         24,678
                                   ----------     ----------     ----------
  Total Amount Carried on                                                  
Balance Sheet                      $  475,479     $  449,001     $  299,772
                                   ==========     ==========     ==========


                                 Series 10      Series 11        Total
                                  --------       --------       --------
Due with 1 year                    $   23,916     $   22,896     $  170,351
After 1 year through 5 years           86,568         89,921        670,717
After 5 years through 10 years         94,726        106,574        783,107
Over 10 years                          35,963         38,627         99,268
                                   ----------     ----------     ----------
  Total Amount Carried on                                                  
Balance Sheet                      $  241,173     $  258,018     $1,723,443
                                   ==========     ==========     ==========


NOTE 4 - RELATED PARTY TRANSACTIONS:

  The Payable to General Partners primarily represents the asset management
fees  owed  to  the  General Partners at the end  of  the  period.   It  is
unsecured,  due  on demand and, in accordance with the limited  partnership
agreement,  non-interest bearing.  Within the next 12 months, the  Managing
General  Partner does not intend to demand payment on the portion of  Asset
Management Fees payable classified as long-term on the Balance Sheet.

   The   Payable   to  Project  Partnerships  represents   unpaid   capital
contributions  to the Project Partnerships and will be paid  after  certain
performance  criteria are met.  Such contributions are in turn  payable  to
the general partners of the Project Partnerships.

  For  the nine months ended December 31 1998 and 1997 the General Partners
and affiliates are entitled to compensation and reimbursement for costs and
expenses incurred by Gateway as follows:

 Asset Management Fee - The Managing General Partner is entitled to receive
an  annual asset management fee equal to the greater of (i) $2,000 for each
limited  partnership in which Gateway invests, or (ii) 0.275% of  Gateway's
gross  proceeds from the sale of limited partnership interests.  In  either
event  (i) or (ii), the maximum amount may not exceed 0.2% of the aggregate
cost   (Gateway's  capital  contribution  plus  Gateway's  share   of   the
Properties'  mortgage)  of Gateway's interest in properties  owned  by  the
Project Partnerships.  The asset management fee will be paid only after all
other  expenses of Gateway have been paid.  These fees are included in  the
Statement of Operations.

                         1998           1997
                        -----          -----
 Series 7            $ 66,324       $ 59,796
 Series 8              69,141         65,928
 Series 9              37,944         36,797
 Series 10             25,575         22,999
 Series 11             20,460         18,399
                     --------       --------
 Total               $219,444       $203,919
                     ========       ========

  General  and Administrative Expenses -  The Managing General  Partner  is
reimbursed  for  general  and administrative  expenses  of  Gateway  on  an
accountable   basis.   This  expense  is  included  in  the  Statement   of
Operations.

                         1998           1997
                        -----          -----
 Series 7           $  10,344      $  11,059
 Series 8              11,405         12,192
 Series 9               6,366          6,805
 Series 10              3,979          4,253
 Series 11              3,183          3,402
                     --------       --------
 Total               $ 35,277       $ 37,711
                     ========       ========
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS:

   As  of  December  31,  1998, the Partnership had  acquired  an  interest
(generally  99%)  in  133  Project  Partnerships  which  own  and   operate
government assisted multi-family housing complexes (Series 7-39,  Series  8-
43,  Series 9-24,  Series 10-15  and  Series 11-12).

  The following is a summary of Investments in Project Partnerships as of:

SERIES 7                                      DECEMBER 31,     MARCH 31,
                                                  1998           1998
                                             --------------   -----------
Capital Contributions to Project Partner-                                  
ships and purchase price paid for limited                                  
partner interests in Project Partnerships       $ 7,732,089     $ 7,732,089
                                                                           
Cumulative equity in losses of Project                                     
Partnerships (1)                                 (5,489,238)     (4,782,926)
                                                                           
Cumulative distributions received from                                     
Project Partnerships                               (120,864)       (101,264)
                                                -----------     -----------
Investment in Project Partnerships before                                  
adjustment                                        2,121,987       2,847,899
                                                                           
                                                                           
Excess of investment cost over the                                         
underlying assets acquired:                                                
 Acquisition fees and expenses                      793,335         793,335
 Accumulated amortization of acquisition                                   
fees and expenses                                  (140,035)       (123,382)
                                               ------------    ------------
                                                                           
Investments in Project Partnerships             $ 2,775,287     $ 3,517,852
                                               ============    ============
                                                                           

(1)  In  accordance with the Partnership's accounting policy to  not  carry
Investments in Project Partnerships below zero, cumulative suspended losses
of  $113,211  for the period ended September 30, 1998 and $82,376  for  the
year ended March 31, 1998 are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   As  of  December  31,  1998, the Partnership had  acquired  an  interest
(generally  99%)  in  133  Project  Partnerships  which  own  and   operate
government assisted multi-family housing complexes (Series 7-39,  Series 8-
43,  Series 9-24,  Series 10-15  and  Series 11-12).

  The following is a summary of Investments in Project Partnerships as of:

SERIES 8                                      DECEMBER 31,     MARCH 31,
                                                  1998           1998
                                             --------------   -----------
Capital Contributions to Project Partner-                                  
ships and purchase price paid for limited                                  
partner interests in Project Partnerships       $ 7,586,105     $ 7,586,105
                                                                           
Cumulative equity in losses of Project                                     
Partnerships (1)                                 (5,159,952)     (4,372,089)
                                                                           
Cumulative distributions received from                                     
Project Partnerships                                (94,802)        (84,722)
                                                -----------     -----------
Investment in Project Partnerships before                                  
adjustment                                        2,331,351       3,129,294
                                                                           
                                                                           
Excess of investment cost over the                                         
underlying assets acquired:                                                
 Acquisition fees and expenses                      549,773         549,773
 Accumulated amortization of acquisition                                   
fees and expenses                                   (81,036)        (70,838)
                                               ------------    ------------
                                                                           
Investments in Project Partnerships             $ 2,800,088     $ 3,608,229
                                               ============    ============
                                                                           

(1)  In  accordance with the Partnership's accounting policy to  not  carry
Investments in Project Partnerships below zero, cumulative suspended losses
of $122,624 for the period ended December 31, 1998 and $79,383 for the year
ended March 31, 1998 are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   As  of  December  31,  1998, the Partnership had  acquired  an  interest
(generally  99%)  in  133  Project  Partnerships  which  own  and   operate
government assisted multi-family housing complexes (Series 7-39,  Series 8-
43,  Series  9-24,  Series 10-15  and  Series 11-12).

  The following is a summary of Investments in Project Partnerships as of:

SERIES 9                                      DECEMBER 31,     MARCH 31,
                                                  1998           1998
                                             --------------   -----------
Capital Contributions to Project Partner-                                  
ships and purchase price paid for limited                                  
partner interests in Project Partnerships       $ 4,914,116     $ 4,914,116
                                                                           
Cumulative equity in losses of Project                                     
Partnerships                                     (2,139,890)     (1,711,859)
                                                                           
Cumulative distributions received from                                     
Project Partnerships                                (65,263)        (54,634)
                                                -----------      ----------
Investment in Project Partnerships before                                  
adjustment                                        2,708,963       3,147,623
                                                                           
Excess of investment cost over the                                         
underlying assets acquired:                                                
 Acquisition fees and expenses                      244,087         244,087
 Accumulated amortization of acquisition                                   
fees and expenses                                   (33,562)        (28,333)
                                               ------------    ------------
                                                                           
Investments in Project Partnerships             $ 2,919,488     $ 3,363,377
                                               ============    ============
<PAGE>
                                                           

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   As  of  December  31,  1998, the Partnership had  acquired  an  interest
(generally  99%)  in  133  Project  Partnerships  which  own  and   operate
government assisted multi-family housing complexes (Series 7-39,  Series 8-
43,  Series 9-24,  Series 10-15  and  Series 11-12).

  The following is a summary of Investments in Project Partnerships as of:

SERIES 10                                     DECEMBER 31,     MARCH 31,
                                                  1998           1998
                                             --------------   -----------
Capital Contributions to Project Partner-                                  
ships and purchase price paid for limited                                  
partner interests in Project Partnerships       $ 3,914,672     $ 3,914,672
                                                                           
Cumulative equity in losses of Project                                     
Partnerships                                       (951,526)       (675,302)
                                                                           
Cumulative distributions received from                                     
Project Partnerships                                (66,571)        (59,354)
                                                -----------      ----------
Investment in Project Partnerships before                                  
adjustment                                        2,896,575       3,180,016
                                                                           
                                                                           
Excess of investment cost over the                                         
underlying assets acquired:                                                
 Acquisition fees and expenses                      196,738         196,738
 Accumulated amortization of acquisition                                   
fees and expenses                                   (28,303)        (24,085)
                                              -------------    ------------
                                                                           
Investments in Project Partnerships             $ 3,065,010     $ 3,352,669
                                              =============    ============

<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   As  of  December  31,  1998, the Partnership had  acquired  an  interest
(generally  99%)  in  133  Project  Partnerships  which  own  and   operate
government assisted multi-family housing complexes (Series 7-39,  Series 8-
43,  Series 9-24,  Series 10-15  and  Series 11-12).

  The following is a summary of Investments in Project Partnerships as of:

SERIES 11                                     DECEMBER 31,     MARCH 31,
                                                  1998           1998
                                             --------------   -----------
Capital Contributions to Project Partner-                                  
ships and purchase price paid for limited                                  
partner interests in Project Partnerships       $ 4,128,042     $ 4,128,042
                                                                           
Cumulative equity in losses of Project                                     
Partnerships                                       (565,978)       (490,043)
                                                                           
Cumulative distributions received from                                     
Project Partnerships                                (49,396)        (43,809)
                                                -----------     -----------
Investment in Project Partnerships before                                  
adjustment                                        3,512,668       3,594,190
                                                                           
Excess of investment cost over the                                         
underlying assets acquired:                                                
 Acquisition fees and expenses                      290,335         290,335
 Accumulated amortization of acquisition                                   
fees and expenses                                   (29,016)        (22,794)
                                               ------------     -----------
                                                                           
Investments in Project Partnerships             $ 3,773,987     $ 3,861,731
                                              =============   =============
<PAGE>

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):



  The following is a summary of Investments in Project Partnerships as of:

TOTAL SERIES 7 - 11                           DECEMBER 31,     MARCH 31,
                                                  1998           1998
                                             --------------   -----------
Capital Contributions to Project Partner-                                  
ships and purchase price paid for limited                                  
partner interests in Project Partnerships       $28,275,024     $28,275,024
                                                                           
Cumulative equity in losses of Project                                     
Partnerships (1)                                (14,306,584)    (12,032,219)
                                                                           
Cumulative distributions received from                                     
Project Partnerships                               (396,896)       (343,783)
                                               ------------     -----------
Investment in Project Partnerships before                                  
adjustment                                       13,571,544      15,899,022
                                                                           
Excess of investment cost over the                                         
underlying assets acquired:                                                
 Acquisition fees and expenses                    2,074,268       2,074,268
 Accumulated amortization of acquisition                                   
fees and expenses                                  (311,952)       (269,432)
                                               ------------    ------------
                                                                           
Investments in Project Partnerships             $15,333,860     $17,703,858
                                               ============   =============
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   In  accordance with the Partnership's policy of presenting the financial
information of the Project Partnerships on a three month lag, below is  the
summarized financial information for the Series' Project Partnerships as of
September 30, of each year:
                                                  1998          1997
SERIES 7                                          ----          ----
SUMMARIZED BALANCE SHEETS                                                
Assets:                                                                  
  Current assets                                $ 2,995,833   $ 2,686,219
  Investment properties, net                     36,860,307    38,308,568
  Other assets                                        6,884        90,325
                                               ------------  ------------
    Total assets                                $39,863,024   $41,085,112
                                               ============  ============
Liabilities and Partners' Equity:                                        
  Current liabilities                           $ 1,032,783   $ 1,128,853
  Long-term debt                                 36,833,524    36,925,139
                                               ------------  ------------
    Total liabilities                            37,866,307    38,053,992
                                               ------------  ------------
Partners' equity                                                         
  Limited Partner                                 1,974,116     3,029,581
  General Partners                                   22,601         1,539
                                                -----------   -----------
    Total Partners' equity                        1,996,717     3,031,120
                                                -----------   -----------
    Total liabilities and partners' equity      $39,863,024   $41,085,112
                                               ============  ============
SUMMARIZED STATEMENTS OF OPERATIONS                                      
Rental and other income                         $ 2,960,608   $ 3,245,082
Expenses:                                      ------------  ------------
  Operating expenses                              1,851,193     1,798,319
  Interest expense                                  683,784       945,805
  Depreciation and amortization                   1,170,224     1,189,126
                                               ------------  ------------
    Total expenses                                3,705,201     3,933,250
                                               ------------  ------------
      Net loss                                  $  (744,593)  $  (688,168)
                                               ============  ============
Other partners' share of net loss               $    (7,446)  $    (6,882)
                                               ============  ============
Partnerships' share of net loss                 $  (737,147)  $  (681,286)
Suspended loss                                       30,835        29,800
                                               ------------  ------------
Equity in Losses of Project Partnerships        $  (706,312)  $  (651,486)
                                               ============  ============
<PAGE>
                                                                         

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   In  accordance with the Partnership's policy of presenting the financial
information of the Project Partnerships on a three month lag, below is  the
summarized financial information for the Series' Project Partnerships as of
September 30, of each year:
                                                  1998          1997
SERIES 8                                          ----          ----
SUMMARIZED BALANCE SHEETS                                                
Assets:                                                                  
  Current assets                                $ 2,543,207   $ 2,281,379
  Investment properties, net                     39,606,503    41,162,473
  Other assets                                       49,859        60,924
                                               ------------  ------------
    Total assets                                $42,199,569   $43,504,776
                                               ============  ============
Liabilities and Partners' Equity:                                        
  Current liabilities                           $ 1,210,173   $ 1,303,061
  Long-term debt                                 38,844,252    39,022,328
                                               ------------  ------------
    Total liabilities                            40,054,425    40,325,389
                                               ------------  ------------
Partners' equity                                                         
  Limited Partner                                 2,258,796     3,237,839
  General Partners                                 (113,652)      (58,452)
                                                -----------   -----------
    Total Partners' equity                        2,145,144     3,179,387
                                                -----------   -----------
    Total liabilities and partners' equity      $42,199,569   $43,504,776
                                               ============  ============
SUMMARIZED STATEMENTS OF OPERATIONS                                      
Rental and other income                         $ 3,027,162   $ 3,064,262
Expenses:                                      ------------  ------------
  Operating expenses                              1,909,969     1,875,622
  Interest expense                                  736,831       843,794
  Depreciation and amortization                   1,219,861     1,228,622
                                               ------------  ------------
    Total expenses                                3,866,661     3,948,038
                                               ------------  ------------
      Net loss                                  $  (839,499)  $  (883,776)
                                               ============  ============
Other partners' share of net loss               $    (8,395)  $    (8,838)
                                               ============  ============
Partnerships' share of net loss                 $  (831,104)  $  (874,938)
Suspended loss                                       43,241         7,623
                                               ------------  ------------
Equity in Losses of Project Partnerships        $  (787,863)  $  (867,315)
                                               ============  ============
<PAGE>
                                                                         

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   In  accordance with the Partnership's policy of presenting the financial
information of the Project Partnerships on a three month lag, below is  the
summarized financial information for the Series' Project Partnerships as of
September 30, of each year:
                                                  1998          1997
SERIES 9                                          ----          ----
SUMMARIZED BALANCE SHEETS                                                
Assets:                                                                  
  Current assets                                $ 1,622,538   $ 1,504,001
  Investment properties, net                     21,987,585    22,877,452
  Other assets                                        8,552         8,094
                                               ------------  ------------
    Total assets                                $23,618,675   $24,389,547
                                               ============  ============
Liabilities and Partners' Equity:                                        
  Current liabilities                           $   418,611   $   482,877
  Long-term debt                                 20,575,863    20,643,135
                                               ------------  ------------
    Total liabilities                            20,994,474    21,126,012
                                               ------------  ------------
Partners' equity                                                         
  Limited Partner                                 2,710,554     3,298,749
  General Partners                                  (86,353)      (35,214)
                                                -----------   -----------
    Total Partners' equity                        2,624,201     3,263,535
                                                -----------   -----------
    Total liabilities and partners' equity      $23,618,675   $24,389,547
                                               ============  ============
SUMMARIZED STATEMENTS OF OPERATIONS                                      
Rental and other income                         $ 1,588,594   $ 1,679,490
Expenses:                                      ------------  ------------
  Operating expenses                                961,715       870,225
  Interest expense                                  383,094       473,440
  Depreciation and amortization                     676,140       651,496
                                               ------------  ------------
    Total expenses                                2,020,949     1,995,161
                                               ------------  ------------
      Net loss                                  $  (432,355)  $  (315,671)
                                               ============  ============
Other partners' share of net loss               $    (4,324)  $    (3,157)
                                               ============  ============
Partnerships' share of net loss                 $  (428,031)  $  (312,514)
Suspended loss                                            0             0
                                               ------------  ------------
Equity in Losses of Project Partnerships        $  (428,031)  $  (312,514)
                                               ============  ============
<PAGE>
                                                                         

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   In  accordance with the Partnership's policy of presenting the financial
information of the Project Partnerships on a three month lag, below is  the
summarized financial information for the Series' Project Partnerships as of
September 30, of each year:
                                                  1998          1997
SERIES 10                                         ----          ----
SUMMARIZED BALANCE SHEETS                                                
Assets:                                                                  
  Current assets                                $ 1,261,888   $ 1,150,150
  Investment properties, net                     15,345,920    15,823,792
  Other assets                                       13,962        16,808
                                               ------------  ------------
    Total assets                                $16,621,770   $16,990,750
                                               ============  ============
Liabilities and Partners' Equity:                                        
  Current liabilities                           $   325,022   $   254,926
  Long-term debt                                 13,477,037    13,537,580
                                               ------------  ------------
    Total liabilities                            13,802,059    13,792,506
                                               ------------  ------------
Partners' equity                                                         
  Limited Partner                                 2,904,977     3,224,137
  General Partners                                  (85,266)      (25,893)
                                                -----------   -----------
    Total Partners' equity                        2,819,711     3,198,244
                                                -----------   -----------
    Total liabilities and partners' equity      $16,621,770   $16,990,750
                                               ============  ============
SUMMARIZED STATEMENTS OF OPERATIONS                                      
Rental and other income                         $ 1,063,786   $ 1,031,627
Expenses:                                      ------------  ------------
  Operating expenses                                692,735       602,548
  Interest expense                                  270,405       218,730
  Depreciation and amortization                     379,660       384,321
                                               ------------  ------------
    Total expenses                                1,342,800     1,205,599
                                               ------------  ------------
      Net loss                                  $  (279,014)  $  (173,972)
                                               ============  ============
Other partners' share of net loss               $    (2,790)  $    (1,740)
                                               ============  ============
Partnerships' share of net loss                 $  (276,224)  $  (172,232)
Suspended loss                                            0             0
                                               ------------  ------------
Equity in Losses of Project Partnerships        $  (276,224)  $  (172,232)
                                               ============  ============
<PAGE>
                                                                         

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   In  accordance with the Partnership's policy of presenting the financial
information of the Project Partnerships on a three month lag, below is  the
summarized financial information for the Series' Project Partnerships as of
September 30, of each year:
                                                  1998          1997
SERIES 11                                         ----          ----
SUMMARIZED BALANCE SHEETS                                                
Assets:                                                                  
  Current assets                                $ 1,078,922   $   839,203
  Investment properties, net                     13,622,732    14,105,776
  Other assets                                        9,899        43,818
                                               ------------  ------------
    Total assets                                $14,711,553   $14,988,797
                                               ============  ============
Liabilities and Partners' Equity:                                        
  Current liabilities                           $   303,521   $   340,223
  Long-term debt                                 10,808,677    10,918,135
                                               ------------  ------------
    Total liabilities                            11,112,198    11,258,358
                                               ------------  ------------
Partners' equity                                                         
  Limited Partner                                 3,527,740     3,624,208
  General Partners                                   71,615       106,231
                                                -----------   -----------
    Total Partners' equity                        3,599,355     3,730,439
                                                -----------   -----------
    Total liabilities and partners' equity      $14,711,553   $14,988,797
                                               ============  ============
SUMMARIZED STATEMENTS OF OPERATIONS                                      
Rental and other income                         $ 1,102,782   $ 1,093,944
Expenses:                                      ------------  ------------
  Operating expenses                                548,853       524,330
  Interest expense                                  252,526       356,593
  Depreciation and amortization                     378,105       394,514
                                               ------------  ------------
    Total expenses                                1,179,484     1,275,437
                                               ------------  ------------
      Net loss                                  $   (76,702)  $  (181,493)
                                               ============  ============
Other partners' share of net loss               $      (767)  $    (1,815)
                                               ============  ============
Partnerships' share of net loss                 $   (75,935)  $  (179,678)
Suspended loss                                            0             0
                                               ------------  ------------
Equity in Losses of Project Partnerships        $   (75,935)  $  (179,678)
                                               ============  ============
                                                                         
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   In  accordance with the Partnership's policy of presenting the financial
information of the Project Partnerships on a three month lag, below is  the
summarized financial information for the Series' Project Partnerships as of
September 30, of each year:
                                                1998            1997
TOTAL SERIES 7 - 11                             ----            ----
SUMMARIZED BALANCE SHEETS                                                
Assets:                                                                  
  Current assets                              $  9,502,388   $  8,460,952
  Investment properties, net                   127,423,047    132,278,061
  Other assets                                      89,156        219,969
                                              ------------   ------------
    Total assets                              $137,014,591   $140,958,982
                                              ============   ============
Liabilities and Partners' Equity:                                        
  Current liabilities                         $  3,290,110   $  3,509,940
  Long-term debt                               120,539,353    121,046,317
                                              ------------   ------------
    Total liabilities                          123,829,463    124,556,257
                                              ------------   ------------
Partners' equity                                                         
  Limited Partner                               13,376,183     16,414,514
  General Partners                                (191,055)       (11,789)
                                               -----------    -----------
    Total Partners' equity                      13,185,128     16,402,725
                                               -----------    -----------
    Total liabilities and partners' equity    $137,014,591   $140,958,982
                                              ============   ============
SUMMARIZED STATEMENTS OF OPERATIONS                                      
Rental and other income                       $  9,742,932   $ 10,114,405
Expenses:                                     ------------   ------------
  Operating expenses                             5,964,465      5,671,044
  Interest expense                               2,326,640      2,838,362
  Depreciation and amortization                  3,823,990      3,848,079
                                              ------------   ------------
    Total expenses                              12,115,095     12,357,485
                                              ------------   ------------
      Net loss                                $ (2,372,163)  $ (2,243,080)
                                              ============   ============
Other partners' share of net loss             $    (23,722)  $    (22,432)
                                              ============   ============
Partnerships' share of net loss               $ (2,348,441)  $ (2,220,648)
Suspended losses                                    74,076         37,423
                                              ------------   ------------
Equity in Losses of Project Partnerships      $ (2,274,365)  $ (2,183,225)
                                              ============   ============
                                                                         
<PAGE>
  Item 7.  Management's Discussion and Analysis of Financial Condition  and
Results of Operations

Results of Operations, Liquidity and Capital Resources

   The  proceeds  from  Limited  Partner investors'  capital  contributions
available  for  investment  are  used  to  acquire  interests  in   Project
Partnerships.

  As  disclosed on the statement of operations for each Series,  except  as
described  below,  interest income is comparable for  the  nine  and  three
months  ended  December 31, 1998 and December 31, 1997.   The  General  and
Administrative  expenses - General Partner and General  and  Administrative
expenses - Other for the nine and three months ended December 31, 1998  are
comparable to December 31, 1997.  There were no unusual variations  in  the
operating results between these two periods.

   The  capital  resources  of each Series are  used  to  pay  General  and
Administrative   operating  costs  including  personnel,   supplies,   data
processing,   travel   and  legal  and  accounting  associated   with   the
administration and monitoring of Gateway and the Project Partnerships.  The
capital  resources are also used to pay the Asset Management  Fee  due  the
Managing  General Partner, but only to the extent that Gateway's  remaining
resources are sufficient to fund Gateway's ongoing needs.  (Payment of  any
Asset Management Fee unpaid at the time Gateway sells its interests in  the
Project  Partnerships  is subordinated to the investors'  return  of  their
original capital contribution.)

  The sources of funds to pay the operating costs of each Series are short-
term investments and interest earned thereon, the maturity of U.S. Treasury
Security Strips ("Zero Coupon Treasuries") which were purchased with  funds
set  aside  for this purpose, and cash distributed to the Series  from  the
operations of the Project Partnerships.

  Series 7 - Gateway closed this series on October 16, 1992 after receiving
$10,395,000  from  635  Limited Partner investors.   Equity  in  Losses  of
Project  Partnerships  increased from $651,486 for the  nine  months  ended
December 31, 1997 to $706,312 for the nine months ended December 31,  1998.
In  general, it is common in the real estate industry to experience  losses
for  financial and tax reporting purposes because of the non-cash  expenses
of depreciation and amortization. As a result, management expects that this
Series, as well as those described below, will report its equity in Project
Partnerships as a loss for tax and financial reporting purposes.   Overall,
management believes the Project Partnerships are operating as expected  and
are generating tax credits which meet projections.

  At  December 31, 1998, the Series had $242,996 of short-term  investments
(Cash  and  Cash  Equivalents).   It  also  had  $475,479  in  Zero  Coupon
Treasuries  with  annual maturities providing $50,000 in fiscal  year  1999
increasing to $86,000 in fiscal year 2008.  Management believes the sources
of funds are sufficient to meet current and ongoing operating costs for the
foreseeable future, and to pay part of the Asset Management Fee.

  As disclosed on the statement of cash flows, the Series had a net loss of
$779,879  for  the  nine months ended December 31,  1998.   However,  after
adjusting for Equity in Losses of Project Partnerships of $706,312 and  the
changes  in  operating assets and liabilities, net cash used  in  operating
activities  was  $62,710  as a result of paying Asset  Management  Fees  of
$41,000.  Cash provided by investing activities totaled $19,610, consisting
of cash distributions from the Project Partnerships.

  Series  8  -  Gateway  closed this Series on  September  28,  1993  after
receiving $9,980,000 from 664 Limited Partner investors.  Equity in  Losses
of  Project Partnerships decreased from $867,315 for the nine months  ended
December 31, 1997 to $787,863 for the nine months ended December 31,  1998.
At  December  31,  1998, the Series had $361,164 of short-term  investments
(Cash  and  Cash  Equivalents).   It  also  had  $449,001  in  Zero  Coupon
Treasuries  with  annual maturities providing $45,000 in fiscal  year  1999
increasing to $82,000 in fiscal year 2008.  Management believes the sources
of funds are sufficient to meet current and ongoing operating costs for the
foreseeable future, and to pay part of the Asset Management Fee.

  As disclosed on the statement of cash flows, the Series had a net loss of
$858,576  for  the  nine months ended December 31,  1998.   However,  after
adjusting for Equity in Losses of Project Partnerships of $787,863 and  the
changes  in  operating assets and liabilities, net cash used  in  operating
activities  was  $59,643  as a result of paying Asset  Management  Fees  of
$39,000.  Cash provided by investing activities totaled $10,080, consisting
of cash distributions from the Project Partnerships.  There were no unusual
events or trends to describe.

 Series 9 - Gateway closed this Series on December 31, 1993 after receiving
$6,254,000 from 406 Limited Partner investors.  Equity in Losses of Project
Partnerships increased from $312,514 for the nine months ended December 31,
1997  to $428,031 for the nine months ended December 31, 1998.  At December
31,  1998, the Series had $161,270 of short-term investments (Cash and Cash
Equivalents).  It also had $299,772 in Zero Coupon Treasuries  with  annual
maturities  providing $29,000 in fiscal year 1999 increasing to $47,000  in
fiscal  year 2009.  Management believes the sources of funds are sufficient
to meet current and ongoing operating costs for the foreseeable future, and
to pay part of the Asset Management Fee.

  As disclosed on the statement of cash flows, the Series had a net loss of
$467,120  for  the  nine months ended December 31,  1998.   However,  after
adjusting for Equity in Losses of Project Partnerships of $428,031 and  the
changes  in  operating assets and liabilities, net cash used  in  operating
activities  was  $29,463  as a result of paying Asset  Management  Fees  of
$16,000.  Cash provided by investing activities totaled $10,629, consisting
of cash distributions from the Project Partnerships.  There were no unusual
events or trends to describe.

 Series 10 - Gateway closed this Series on January 21, 1994 after receiving
$5,043,000 from 325 Limited Partner investors.  Equity in Losses of Project
Partnerships increased from $172,232 for the nine months ended December 31,
1997  to $276,224 for the nine months ended December 31, 1998.  At December
31,  1998, the Series had $177,013 of short-term investments (Cash and Cash
Equivalents).  It also had $241,173 in Zero Coupon Treasuries  with  annual
maturities  providing $24,000 in fiscal year 1999 increasing to $40,000  in
fiscal  year 2010.  Management believes the sources of funds are sufficient
to meet current and ongoing operating costs for the foreseeable future, and
to pay part of the Asset Management Fee.

  As disclosed on the statement of cash flows, the Series had a net loss of
$291,170  for  the  nine months ended December 31,  1998.   However,  after
adjusting for Equity in Losses of Project Partnerships of $276,224 and  the
changes  in  operating assets and liabilities, net cash used  in  operating
activities  was  $32,639  as a result of paying Asset  Management  Fees  of
$26,000.   Cash provided by investing activities totaled $7,217, consisting
of cash distributions from the Project Partnerships.  There were no unusual
events or trends to describe.

  Series  11 - Gateway closed this Series on April 29, 1994 after receiving
$5,127,000  from  330  Limited  investors.  Equity  in  losses  of  Project
Partnerships decreased from $179,678 for the nine months ended December 31,
1997  to  $75,935 for the nine months ended December 31, 1998.  At December
31,  1998, the Series had $186,863 of short-term investments (Cash and Cash
Equivalents).  It also had $258,018 in Zero Coupon Treasuries  with  annual
maturities  providing $23,000 in fiscal year 1999 increasing to $44,000  in
fiscal  year 2010.  Management believes the sources of funds are sufficient
to meet current and ongoing operating costs for the foreseeable future, and
to pay part of the Asset Management Fee.

  As disclosed on the statement of cash flows, the Series had a net loss of
$90,599  for  the  nine  months ended December 31,  1998.   However,  after
adjusting for Equity in Losses of Project Partnerships of $75,935  and  the
changes  in  operating assets and liabilities, net cash used  in  operating
activities  was  $26,922  as a result of paying Asset  Management  Fees  of
$23,000.   Cash provided by investing activities totaled $5,587, consisting
of cash distributions from the Project Partnerships.  There were no unusual
events or trends to describe.

<PAGE>

                           SIGNATURES


  Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated.


                           GATEWAY TAX CREDIT FUND III LTD.
                           (A Florida Limited Partnership)
                           By:  Raymond James Tax Credit Funds,Inc.





Date: February 10, 1999    By:/s/ Ronald M. Diner
                           Ronald M. Diner
                           President



Date: February 10, 1999    By:/s/ Sandra L. Furey
                           Sandra L. Furey
                           Secretary and Treasurer
<PAGE>