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             September 30, 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: (813)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                      September 30, 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                                    SEPTEMBER 30,     MARCH 31,
                                                1998            1998
                                               -------         -------
                                             (Unaudited)      (Audited)
ASSETS                                                                    
Current Assets:                                                           
 Cash and Cash Equivalents                     $   244,472     $   286,106
 Investments in Securities                          48,382          47,675
 Receivable from Project Partnerships                    0               0
                                               ------------    ------------
  Total Current Assets                         $   292,854     $   333,781
                                                                          
 Investments in Securities                         419,098         404,220
 Investments in Project Partnerships, Net        2,997,230       3,517,852
                                               -----------     -----------
    Total Assets                               $ 3,709,182     $ 4,255,853
                                               ===========     ===========
LIABILITIES AND PARTNERS' EQUITY                                          
Current Liabilities:                                                      
 Payable to General Partners                   $    53,203     $    55,760
 Payable to Project Partnerships                         0               0
                                               -----------     -----------
  Total Current Liabilities                         53,203          55,760
                                               -----------     -----------
Long-Term Liabilities:                                                    
 Payable to General Partners                       227,556         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 September 30,1998 and March 31,1998)       3,485,417       4,024,753
General Partners                                   (56,994)        (51,546)
                                               -----------     -----------
  Total Partners' Equity                       $ 3,428,423     $ 3,973,207
                                               -----------     -----------
    Total Liabilities and Partners' Equity     $ 3,709,182     $ 4,255,853
                                               ===========     ===========
                                                                          
                                                                          

              See accompanying notes to financial statements.
<PAGE>
                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                              BALANCE SHEETS
                                     
SERIES 8                                     SEPTEMBER 30,    MARCH 31,
                                                 1998            1998
                                                -------        -------
                                              (Unaudited)     (Audited)
ASSETS                                                                    
Current Assets:                                                           
 Cash and Cash Equivalents                      $   362,703    $   410,727
 Investments in Securities                           43,573         42,967
 Receivable from Project Partnerships                     0              0
                                                ------------    ------------
  Total Current Assets                          $   406,276    $   453,694
                                                                          
 Investments in Securities                          398,271        384,906
 Investments in Project Partnerships, Net         3,063,013      3,608,229
                                                -----------    -----------
    Total Assets                                $ 3,867,560    $ 4,446,829
                                                ===========    ===========
LIABILITIES AND PARTNERS' EQUITY                                          
Current Liabilities:                                                      
 Payable to General Partners                    $    44,094    $    46,515
 Payable to Project Partnerships                          0              0
                                                -----------    -----------
  Total Current Liabilities                          44,094         46,515
                                                -----------    -----------
Long-Term Liabilities:                                                    
 Payable to General Partners                        273,396        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 September 30,1998 and March 31,1998)           3,602,194      4,177,520
General Partners                                    (52,124)       (46,313)
                                                -----------    -----------
  Total Partners' Equity                        $ 3,550,070    $ 4,131,207
                                                -----------    -----------
    Total Liabilities and Partners' Equity      $ 3,867,560    $ 4,446,829
                                                ===========    ===========
                                                                          
                                                                          

              See accompanying notes to financial statements.
<PAGE>
                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                              BALANCE SHEETS
                                     
SERIES 9                                     SEPTEMBER 30,     MARCH 31,
                                                 1998            1998
                                                -------         -------
                                              (Unaudited)      (Audited)
ASSETS                                                                    
Current Assets:                                                           
 Cash and Cash Equivalents                      $   160,398    $   180,104
 Investments in Securities                           28,159         27,803
 Receivable from Project Partnerships                     0              0
                                                ------------    ------------
  Total Current Assets                          $   188,557    $   207,907
                                                                          
 Investments in Securities                          267,288        259,181
 Investments in Project Partnerships, Net         3,094,443      3,363,377
                                                -----------    -----------
    Total Assets                                $ 3,550,288    $ 3,830,465
                                                ===========    ===========
LIABILITIES AND PARTNERS' EQUITY                                          
Current Liabilities:                                                      
 Payable to General Partners                    $    25,099    $    26,911
 Payable to Project Partnerships                          0              0
                                                -----------    -----------
  Total Current Liabilities                          25,099         26,911
                                                -----------    -----------
Long-Term Liabilities:                                                    
 Payable to General Partners                        159,462        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 September 30,1998 and March 31,1998)           3,386,907      3,670,140
General Partners                                    (21,180)       (18,319)
                                                -----------    -----------
  Total Partners' Equity                        $ 3,365,727    $ 3,651,821
                                                -----------    -----------
    Total Liabilities and Partners' Equity      $ 3,550,288    $ 3,830,465
                                                ===========    ===========
                                                                          
                                                                          

              See accompanying notes to financial statements.
<PAGE>
                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                              BALANCE SHEETS
                                     
SERIES 10                                    SEPTEMBER 30,     MARCH 31,
                                                 1998            1998
                                                -------         -------
                                              (Unaudited)      (Audited)
ASSETS                                                                    
Current Assets:                                                           
 Cash and Cash Equivalents                      $   177,017    $   202,435
 Investments in Securities                           23,207         22,865
 Receivable from Project Partnerships                     0              0
                                                 ------------   ------------
  Total Current Assets                          $   200,224    $   225,300
                                                                          
 Investments in Securities                          213,958        206,525
 Investments in Project Partnerships, Net         3,223,060      3,352,669
                                                -----------    -----------
    Total Assets                                $ 3,637,242    $ 3,784,494
                                                ===========    ===========
LIABILITIES AND PARTNERS' EQUITY                                          
Current Liabilities:                                                      
 Payable to General Partners                    $    28,424    $    30,279
 Payable to Project Partnerships                          0              0
                                                -----------    -----------
  Total Current Liabilities                          28,424         30,279
                                                -----------    -----------
Long-Term Liabilities:                                                    
 Payable to General Partners                         35,178         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 September 30,1998 and March 31,1998)           3,582,084      3,716,198
General Partners                                     (8,444)        (7,089)
                                                -----------    -----------
  Total Partners' Equity                        $ 3,573,640    $ 3,709,109
                                                -----------    -----------
    Total Liabilities and Partners' Equity      $ 3,637,242    $ 3,784,494
                                                ===========    ===========
                                                                          
                                                                          

              See accompanying notes to financial statements.
<PAGE>
                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                              BALANCE SHEETS
                                     
SERIES 11                                    SEPTEMBER 30,     MARCH 31,
                                                 1998            1998
                                                -------         -------
                                              (Unaudited)      (Audited)
ASSETS                                                                    
Current Assets:                                                           
 Cash and Cash Equivalents                      $   183,678    $   208,198
 Investments in Securities                           22,155         21,794
 Receivable from Project Partnerships                     0              0
                                                 ------------   ------------
  Total Current Assets                          $   205,833    $   229,992
                                                                          
 Investments in Securities                          231,297        222,768
 Investments in Project Partnerships, Net         3,813,315      3,861,731
                                                -----------    -----------
    Total Assets                                $ 4,250,445    $ 4,314,491
                                                ===========    ===========
LIABILITIES AND PARTNERS' EQUITY                                          
Current Liabilities:                                                      
 Payable to General Partners                    $    28,078    $    29,179
 Payable to Project Partnerships                          0              0
                                                -----------    -----------
  Total Current Liabilities                          28,078         29,179
                                                -----------    -----------
Long-Term Liabilities:                                                    
 Payable to General Partners                          7,355         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 September 30,1998 and March 31,1998)           4,218,853      4,271,126
General Partners                                     (3,841)        (3,313)
                                                -----------    -----------
  Total Partners' Equity                        $ 4,215,012    $ 4,267,813
                                                -----------    -----------
    Total Liabilities and Partners' Equity      $ 4,250,445    $ 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                          SEPTEMBER 30,     MARCH 31,
                                                 1998            1998
                                                -------         -------
                                              (Unaudited)      (Audited)
ASSETS                                                                    
Current Assets:                                                           
 Cash and Cash Equivalents                      $ 1,128,268    $ 1,287,570
 Investments in Securities                          165,476        163,104
 Receivable from Project Partnerships                     0              0
                                                 ------------   ------------
  Total Current Assets                          $ 1,293,744    $ 1,450,674
                                                                          
 Investments in Securities                        1,529,912      1,477,600
 Investments in Project Partnerships, Net        16,191,061     17,703,858
                                                -----------    -----------
    Total Assets                                $19,014,717    $20,632,132
                                                ===========    ===========
LIABILITIES AND PARTNERS' EQUITY                                          
Current Liabilities:                                                      
 Payable to General Partners                    $   178,898    $   188,644
 Payable to Project Partnerships                          0              0
                                                -----------    -----------
  Total Current Liabilities                         178,898        188,644
                                                -----------    -----------
Long-Term Liabilities:                                                    
 Payable to General Partners                        702,947        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 September 30,1998 and March 31,1998)          18,275,455     19,859,737
General Partners                                   (142,583)      (126,580)
                                                -----------    -----------
  Total Partners' Equity                        $18,132,872    $19,733,157
                                                -----------    -----------
    Total Liabilities and Partners' Equity      $19,014,717    $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 SEPTEMBER 30,
                                (Unaudited)

SERIES 7                                        1998            1997
                                                ----            ----
Revenues:                                                                
 Interest Income                               $    11,391    $    11,482
                                               -----------    -----------
Expenses:                                                                
 Asset Management Fee-General Partner               22,108         20,148
 General and Administrative:                                             
  General Partner                                    4,734          4,154
  Other                                              8,693         11,926
 Amortization                                        5,551          5,743
                                               -----------    -----------
  Total Expenses                                    41,086         41,971
                                               -----------    -----------
Loss Before Equity in Losses                                              
 of Project Partnerships                           (29,695)       (30,489)
Equity in Losses of Project                                              
 Partnerships                                     (274,517)      (193,446)
                                                ----------     ----------
Net Loss                                       $  (304,212)   $  (223,935)
                                               ===========    ===========
Allocation of Net Loss:                                                  
 Limited Partners                              $  (301,170)   $  (221,696)
 General Partners                                   (3,042)        (2,239)
                                               -----------    -----------
                                               $  (304,212)   $  (223,935)
                                               ===========    ===========
Net Loss Per Number of Limited                                           
Partnership Units                              $    (28.97)   $    (21.33)
                                              ============   ============
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 SEPTEMBER 30,
                                (Unaudited)
SERIES 8                                        1998            1997
                                                ----            ----
Revenues:                                                                
 Interest Income                               $    11,954    $    11,697
                                               -----------    -----------
Expenses:                                                                
 Asset Management Fee-General Partner               23,047         22,214
 General and Administrative:                                             
  General Partner                                    5,220          4,581
  Other                                              9,650         12,357
 Amortization                                        3,853          3,675
                                               -----------    -----------
  Total Expenses                                    41,770         42,827
                                               -----------    -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                           (29,816)       (31,130)
Equity in Losses of Project                                              
 Partnerships                                     (264,536)      (324,149)
                                                ----------     ----------
Net Loss                                       $  (294,352)   $  (355,279)
                                               ===========    ===========
Allocation of Net Loss:                                                  
 Limited Partners                              $  (291,408)   $  (351,726)
 General Partners                                   (2,944)        (3,553)
                                               -----------    -----------
                                               $  (294,352)   $  (355,279)
                                               ===========    ===========
Net Loss Per Number of Limited                                           
Partnership Units                              $    (29.20)   $    (35.24)
                                              ============   ============
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 SEPTEMBER 30,
                                (Unaudited)

SERIES 9                                        1998            1997
                                                ----            ----
Revenues:                                                                
 Interest Income                                $     6,438   $     6,419
                                                -----------   -----------
Expenses:                                                                
 Asset Management Fee-General Partner                12,648        12,399
 General and Administrative:                                             
  General Partner                                     2,913         2,557
  Other                                               5,219         6,669
 Amortization                                         1,743         1,779
                                                -----------   -----------
  Total Expenses                                     22,523        23,404
                                                -----------   -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                            (16,085)      (16,985)
Equity in Losses of Project                                              
 Partnerships                                      (124,372)     (118,377)
                                                 ----------    ----------
Net Loss                                        $  (140,457)  $  (135,362)
                                                ===========   ===========
Allocation of Net Loss:                                                  
 Limited Partners                               $  (139,052)  $  (134,008)
 General Partners                                    (1,405)       (1,354)
                                                -----------   -----------
                                                $  (140,457)  $  (135,362)
                                                ===========   ===========
Net Loss Per Number of Limited                                           
Partnership Units                               $    (22.23)  $    (21.43)
                                               ============  ============
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 SEPTEMBER 30,
                                (Unaudited)
SERIES 10                                       1998            1997
                                                ----            ----
Revenues:                                                                
 Interest Income                               $     6,407    $     6,449
                                               -----------    -----------
Expenses:                                                                
 Asset Management Fee-General Partner                8,525          7,750
 General and Administrative:                                             
  General Partner                                    1,821          1,599
  Other                                              3,529          4,198
 Amortization                                        1,406          1,460
                                               -----------    -----------
  Total Expenses                                    15,281         15,007
                                               -----------    -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                            (8,874)        (8,558)
Equity in Losses of Project                                              
 Partnerships                                      (64,109)       (72,667)
                                                ----------     ----------
Net Loss                                       $   (72,983)   $   (81,225)
                                               ===========    ===========
Allocation of Net Loss:                                                  
 Limited Partners                              $   (72,253)   $   (80,413)
 General Partners                                     (730)          (812)
                                               -----------    -----------
                                               $   (72,983)   $   (81,225)
                                               ===========    ===========
Net Loss Per Number of Limited                                           
Partnership Units                              $    (14.33)   $    (15.95)
                                              ============   ============
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 SEPTEMBER 30,
                                (Unaudited)
SERIES 11                                       1998            1997
                                                ----            ----
Revenues:                                                                
 Interest Income                                $     6,990   $     6,689
                                                -----------   -----------
Expenses:                                                                
 Asset Management Fee-General Partner                 6,820         6,200
 General and Administrative:                                             
  General Partner                                     1,456         1,279
  Other                                               3,192         3,875
 Amortization                                         2,074         1,797
                                                -----------   -----------
  Total Expenses                                     13,542        13,151
                                                -----------   -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                             (6,552)       (6,462)
Equity in Losses of Project                                              
 Partnerships                                        17,656       (91,316)
                                                 ----------    ----------
Net Loss                                        $    11,104   $   (97,778)
                                                ===========   ===========
Allocation of Net Loss:                                                  
 Limited Partners                               $    10,993   $   (96,800)
 General Partners                                       111          (978)
                                                -----------   -----------
                                                $    11,104   $   (97,778)
                                                ===========   ===========
Net Loss Per Number of Limited                                           
Partnership Units                               $      2.14   $    (18.88)
                                               ============  ============
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 SEPTEMBER 30,
                                (Unaudited)

TOTAL SERIES 7 - 11                             1998            1997
                                                ----            ----
Revenues:                                                                
 Interest Income                                $    43,180   $    42,736
                                                -----------   -----------
Expenses:                                                                
 Asset Management Fee-General Partner                73,148        68,711
 General and Administrative:                                             
  General Partner                                    16,144        14,170
  Other                                              30,283        39,025
 Amortization                                        14,627        14,454
                                                -----------   -----------
  Total Expenses                                    134,202       136,360
                                                -----------   -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                            (91,022)      (93,624)
Equity in Losses of Project                                              
 Partnerships                                      (709,878)     (799,955)
                                                 ----------    ----------
Net Loss                                        $  (800,900)  $  (893,579)
                                                ===========   ===========
Allocation of Net Loss:                                                  
 Limited Partners                               $  (792,891)  $  (884,643)
 General Partners                                    (8,009)       (8,936)
                                                -----------   -----------
                                                $  (800,900)  $  (893,579)
                                                ===========   ===========
                                                                         
                                                                         


              See accompanying notes to financial statements.
<PAGE>


                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                                     
                         STATEMENTS OF OPERATIONS
                  FOR THE SIX MONTHS ENDED SEPTEMBER 30,
                                (Unaudited)

SERIES 7                                        1998            1997
                                                ----            ----
Revenues:                                                                
 Interest Income                               $    22,571    $    22,645
                                               -----------    -----------
Expenses:                                                                
 Asset Management Fee-General Partner               44,216         39,648
 General and Administrative:                                             
  General Partner                                    8,016          7,472
  Other                                             11,520         14,299
 Amortization                                       11,102         10,879
                                               -----------    -----------
  Total Expenses                                    74,854         72,298
                                               -----------    -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                           (52,283)       (49,653)
Equity in Losses of Project                                              
 Partnerships                                     (492,501)      (435,959)
                                                ----------     ----------
Net Loss                                       $  (544,784)   $  (485,612)
                                               ===========    ===========
Allocation of Net Loss:                                                  
 Limited Partners                              $  (539,336)   $  (480,756)
 General Partners                                   (5,448)        (4,856)
                                               -----------    -----------
                                               $  (544,784)   $  (485,612)
                                               ===========    ===========
Net Loss Per Number of Limited                                           
Partnership Units                              $    (51.88)   $    (46.25)
                                              ============   ============
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 SIX MONTHS ENDED SEPTEMBER 30,
                                (Unaudited)
SERIES 8                                        1998            1997
                                                ----            ----
Revenues:                                                                
 Interest Income                               $    23,842    $    23,621
                                               -----------    -----------
Expenses:                                                                
 Asset Management Fee-General Partner               46,094         43,714
 General and Administrative:                                             
  General Partner                                    8,838          8,240
  Other                                             12,969         14,951
 Amortization                                        6,345          5,989
                                               -----------    -----------
  Total Expenses                                    74,246         72,894
                                               -----------    -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                           (50,404)       (49,273)
Equity in Losses of Project                                              
 Partnerships                                     (530,733)      (589,692)
                                                ----------     ----------
Net Loss                                       $  (581,137)   $  (638,965)
                                               ===========    ===========
Allocation of Net Loss:                                                  
 Limited Partners                              $  (575,326)   $  (632,575)
 General Partners                                   (5,811)        (6,390)
                                               -----------    -----------
                                               $  (581,137)   $  (638,965)
                                               ===========    ===========
Net Loss Per Number of Limited                                           
Partnership Units                              $    (57.65)   $    (63.38)
                                              ============   ============
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 SIX MONTHS ENDED SEPTEMBER 30,
                                (Unaudited)

SERIES 9                                        1998            1997
                                                ----            ----
Revenues:                                                                
 Interest Income                                $    12,826   $    12,725
                                                -----------   -----------
Expenses:                                                                
 Asset Management Fee-General Partner                25,296        24,399
 General and Administrative:                                             
  General Partner                                     4,933         4,599
  Other                                               7,121         8,056
 Amortization                                         3,486         3,558
                                                -----------   -----------
  Total Expenses                                     40,836        40,612
                                                -----------   -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                            (28,010)      (27,887)
Equity in Losses of Project                                              
 Partnerships                                      (258,084)     (214,375)
                                                 ----------    ----------
Net Loss                                        $  (286,094)  $  (242,262)
                                                ===========   ===========
Allocation of Net Loss:                                                  
 Limited Partners                               $  (283,233)  $  (239,839)
 General Partners                                    (2,861)       (2,423)
                                                -----------   -----------
                                                $  (286,094)  $  (242,262)
                                                ===========   ===========
Net Loss Per Number of Limited                                           
Partnership Units                               $    (45.29)  $    (38.35)
                                               ============  ============
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 SIX MONTHS ENDED SEPTEMBER 30,
                                (Unaudited)
SERIES 10                                       1998            1997
                                                ----            ----
Revenues:                                                                
 Interest Income                               $    12,702    $    12,776
                                               -----------    -----------
Expenses:                                                                
 Asset Management Fee-General Partner               17,050         15,250
 General and Administrative:                                             
  General Partner                                    3,083          2,875
  Other                                              4,974          5,161
 Amortization                                        2,812          2,920
                                               -----------    -----------
  Total Expenses                                    27,919         26,206
                                               -----------    -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                           (15,217)       (13,430)
Equity in Losses of Project                                              
 Partnerships                                     (120,252)      (110,446)
                                                ----------     ----------
Net Loss                                       $  (135,469)   $  (123,876)
                                               ===========    ===========
Allocation of Net Loss:                                                  
 Limited Partners                              $  (134,114)   $  (122,637)
 General Partners                                   (1,355)        (1,239)
                                               -----------    -----------
                                               $  (135,469)   $  (123,876)
                                               ===========    ===========
Net Loss Per Number of Limited                                           
Partnership Units                              $    (26.59)   $    (24.32)
                                              ============   ============
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 SIX MONTHS ENDED SEPTEMBER 30,
                                (Unaudited)
SERIES 11                                       1998            1997
                                                ----            ----
Revenues:                                                                
 Interest Income                                $    13,904   $    13,219
                                                -----------   -----------
Expenses:                                                                
 Asset Management Fee-General Partner                13,640        12,200
 General and Administrative:                                             
  General Partner                                     2,466         2,300
  Other                                               4,365         4,746
 Amortization                                         4,148         3,594
                                                -----------   -----------
  Total Expenses                                     24,619        22,840
                                                -----------   -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                            (10,715)       (9,621)
Equity in Losses of Project                                              
 Partnerships                                       (42,086)     (137,683)
                                                 ----------    ----------
Net Loss                                        $   (52,801)  $  (147,304)
                                                ===========   ===========
Allocation of Net Loss:                                                  
 Limited Partners                               $   (52,273)  $  (145,831)
 General Partners                                      (528)       (1,473)
                                                -----------   -----------
                                                $   (52,801)  $  (147,304)
                                                ===========   ===========
Net Loss Per Number of Limited                                           
Partnership Units                              $     (10.20)  $    (28.44)
                                               ============  ============
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 SIX MONTHS ENDED SEPTEMBER 30,
                                (Unaudited)

TOTAL SERIES 7 - 11                             1998            1997
                                                ----            ----
Revenues:                                                                
 Interest Income                                $    85,845   $    84,986
                                                -----------   -----------
Expenses:                                                                
 Asset Management Fee-General Partner               146,296       135,211
 General and Administrative:                                             
  General Partner                                    27,336        25,486
  Other                                              40,949        47,213
 Amortization                                        27,893        26,940
                                                -----------   -----------
  Total Expenses                                    242,474       234,850
                                                -----------   -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                           (156,629)     (149,864)
Equity in Losses of Project                                              
 Partnerships                                    (1,443,656)   (1,488,155)
                                                 ----------    ----------
Net Loss                                        $(1,600,285)  $(1,638,019)
                                                ===========   ===========
Allocation of Net Loss:                                                  
 Limited Partners                               $(1,584,282)  $(1,621,639)
 General Partners                                   (16,003)      (16,380)
                                                -----------   -----------
                                                $(1,600,285)  $(1,638,019)
                                                ===========   ===========
                                                                         
                                                                         


              See accompanying notes to financial statements.
<PAGE>

                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                                     
                      STATEMENTS OF PARTNERS' EQUITY
                                     
           FOR THE SIX MONTHS ENDED SEPTEMBER 30, 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                           (480,756)        (4,856)        (485,612)
                                -----------     -----------     -----------
                                                                           
Balance at September 30,1997    $ 4,544,751    $   (46,293)     $ 4,498,458
                               ============    ============    ============
                                                                           
                                                                           
Balance at March 31, 1998       $ 4,024,753    $   (51,546)     $ 3,973,207
                                                                           
Net Loss                           (539,336)        (5,448)        (544,784)
                                -----------     -----------     -----------
                                                                           
Balance at September 30,1998    $ 3,485,417    $   (56,994)     $ 3,428,423
                               ============    ============    ============
                                                                           

              See accompanying notes to financial statements.

<PAGE>



                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                                     
                      STATEMENTS OF PARTNERS' EQUITY
                                     
           FOR THE SIX MONTHS ENDED SEPTEMBER 30, 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                           (632,575)        (6,390)        (638,965)
                                -----------     -----------     -----------
                                                                           
Balance at September 30,1997    $ 4,595,274    $   (42,094)     $ 4,553,180
                               ============    ============    ============
                                                                           
                                                                           
Balance at March 31, 1998       $ 4,177,520    $   (46,313)     $ 4,131,207
                                                                           
Net Loss                           (575,326)        (5,811)        (581,137)
                                -----------     -----------     -----------
                                                                           
Balance at September 30,1998    $ 3,602,194    $   (52,124)     $ 3,550,070
                               ============    ============    ============
                                                                           

              See accompanying notes to financial statements.

<PAGE>



                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                                     
                      STATEMENTS OF PARTNERS' EQUITY
                                     
           FOR THE SIX MONTHS ENDED SEPTEMBER 30, 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                           (239,839)        (2,423)        (242,262)
                                -----------     -----------     -----------
                                                                           
Balance at September 30,1997    $ 3,937,682    $   (15,617)     $ 3,922,065
                               ============    ============    ============
                                                                           
                                                                           
Balance at March 31, 1998       $ 3,670,140    $   (18,319)     $ 3,651,821
                                                                           
Net Loss                           (283,233)        (2,861)        (286,094)
                                -----------     -----------     -----------
                                                                           
Balance at September 30,1998    $ 3,386,907    $   (21,180)     $ 3,365,727
                               ============    ============    ============
                                                                           

              See accompanying notes to financial statements.

<PAGE>
                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                                     
                      STATEMENTS OF PARTNERS' EQUITY
                                     
           FOR THE SIX MONTHS ENDED SEPTEMBER 30, 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                           (122,637)        (1,239)        (123,876)
                                -----------     -----------     -----------
                                                                           
Balance at September 30,1997    $ 3,816,092    $    (6,080)     $ 3,810,012
                               ============    ============    ============
                                                                           
                                                                           
Balance at March 31, 1998       $ 3,716,198    $    (7,089)     $ 3,709,109
                                                                           
Net Loss                           (134,114)        (1,355)        (135,469)
                                -----------     -----------     -----------
                                                                           
Balance at September 30,1998    $ 3,582,084    $    (8,444)     $ 3,573,640
                               ============    ============    ============
                                                                           

              See accompanying notes to financial statements.

<PAGE>

                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                                     
                      STATEMENTS OF PARTNERS' EQUITY
                                     
           FOR THE SIX MONTHS ENDED SEPTEMBER 30, 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                           (145,831)        (1,473)        (147,304)
                                -----------     -----------     -----------
                                                                           
Balance at September 30,1997    $ 4,306,646    $    (2,954)     $ 4,303,692
                               ============    ============    ============
                                                                           
                                                                           
Balance at March 31, 1998       $ 4,271,126    $    (3,313)     $ 4,267,813
                                                                           
Net Loss                            (52,273)          (528)         (52,801)
                                -----------     -----------     -----------
                                                                           
Balance at September 30,1998    $ 4,218,853    $    (3,841)     $ 4,215,012
                               ============    ============    ============
                                                                           

              See accompanying notes to financial statements.
<PAGE>
                                     
                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                                     
                      STATEMENTS OF PARTNERS' EQUITY
                                     
           FOR THE SIX MONTHS ENDED SEPTEMBER 30, 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                         (1,621,638)       (16,381)      (1,638,019)
                                -----------     -----------     -----------
                                                                           
Balance at September 30,1997    $21,200,445    $  (113,038)     $21,087,407
                               ============    ============    ============
                                                                           
                                                                           
Balance at March 31, 1998       $19,859,737    $  (126,580)     $19,733,157
                                                                           
Net Loss                         (1,584,282)       (16,003)      (1,600,285)
                                -----------     -----------     -----------
                                                                           
Balance at September 30,1998    $18,275,455    $  (142,583)     $18,132,872
                               ============    ============    ============
                                                                           

              See accompanying notes to financial statements.
<PAGE>
                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                         STATEMENTS OF CASH FLOWS
                  FOR THE SIX MONTHS ENDED SEPTEMBER 30,
                                (Unaudited)
                                     
SERIES 7                                         1998           1997
--------                                         ----           ----
Cash Flows from Operating Activities:                                    
  Net Loss                                      $  (544,784)  $  (485,612)
  Adjustments to Reconcile Net Loss to Net                               
  Cash Provided by (Used in) Operating                                     
  Activities:                                                              
   Amortization                                      11,102        10,879
   Accreted Interest Income on Investments                               
   in Securities                                    (15,586)      (16,020)
   Equity in Losses of Project Partnerships         492,501       435,959
   Changes in Operating Assets and                                          
   Liabilities:                                                             
    Increase in Payable to General Partners          (1,886)       (4,456)
                                                -----------   -----------
     Net Cash Used in Operating Activities          (58,653)      (59,250)
                                                -----------   -----------
Cash Flows from Investing Activities:                                    
  Increase in Receivable from Other Series                0             0
  (Increase) Decrease in Receivable from                                 
  Project Partnerships                                    0             0
  Acquisition Fees and Expenses                           0             0
  Distributions Received from Project                                    
  Partnerships                                       17,019        18,280
  Increase (Decrease) in Payable to Project                              
  Partnerships - Capital Contributions                    0             0
                                                -----------   -----------
     Net Cash Provided by (Used in)                                      
     Investing Activities                            17,019        18,280
                                                -----------   -----------
Increase (Decrease) in Cash and Cash                                     
Equivalents                                         (41,634)      (40,970)
Cash and Cash Equivalents at Beginning of                                
Year                                                286,106       267,980
                                                -----------   -----------
Cash and Cash Equivalents at End of Year        $   244,472   $   227,010
                                                ===========   ===========
                                                                         


              See accompanying notes to financial statements.
<PAGE>
                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                         STATEMENTS OF CASH FLOWS
                  FOR THE SIX MONTHS ENDED SEPTEMBER 30,
                                (Unaudited)
SERIES 8                                         1998           1997
--------                                         ----           ----
Cash Flows from Operating Activities:                                    
  Net Loss                                      $  (581,137)  $  (638,965)
  Adjustments to Reconcile Net Loss to Net                               
  Cash Provided by (Used in) Operating                                     
  Activities:                                                              
   Amortization                                       6,345         5,989
   Accreted Interest Income on Investments                               
   in Securities                                    (13,971)      (14,394)
   Equity in Losses of Project Partnership          530,733       589,692
   Changes in Operating Assets and                                          
   Liabilities:                                                             
    Increase in Payable to General Partners           1,868         3,369
                                                -----------   -----------
     Net Cash Used in Operating Activities          (56,162)      (54,309)
                                                -----------   -----------
Cash Flows from Investing Activities:                                    
  Increase in Receivable from Other Series                0             0
  (Increase) Decrease in Receivable from                                 
  Project Partnerships                                    0           453
  Acquisition Fees and Expenses                           0             0
  Distributions Received from Project                                    
  Partnerships                                        8,138        13,241
  Increase (Decrease) in Payable to Project                              
  Partnerships - Capital Contributions                    0             0
                                                -----------   -----------
     Net Cash Provided by (Used in)                                      
     Investing Activities                             8,138        13,694
                                                -----------   -----------
Increase (Decrease) in Cash and Cash                                     
Equivalents                                         (48,024)      (40,615)
Cash and Cash Equivalents at Beginning of                                
Year                                                410,727       396,038
                                                -----------   -----------
Cash and Cash Equivalents at End of Year        $   362,703   $   355,423
                                                ===========   ===========
                                                                         



              See accompanying notes to financial statements.
<PAGE>
                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                                     
                         STATEMENTS OF CASH FLOWS
                  FOR THE SIX MONTHS ENDED SEPTEMBER 30,
                                (Unaudited)
SERIES 9                                         1998           1997
--------                                         ----           ----
Cash Flows from Operating Activities:                                    
  Net Loss                                      $  (286,094)  $  (242,262)
  Adjustments to Reconcile Net Loss to Net                               
  Cash Provided by (Used in) Operating                                     
  Activities:                                                              
   Amortization                                       3,486         3,558
   Accreted Interest Income on Investments                               
   in Securities                                     (8,463)       (8,783)
   Equity in Losses of Project Partnerships         258,084       214,375
   Changes in Operating Assets and                                          
   Liabilities:                                                             
    Increase in Payable to General Partners           5,917         5,908
                                                -----------   -----------
     Net Cash Used in Operating Activities          (27,070)      (27,204)
                                                -----------   -----------
Cash Flows from Investing Activities:                                    
  Increase in Receivable from Other Series           (2,208)            0
  (Increase) Decrease in Receivable from                                 
  Project Partnerships                                2,208             0
  Acquisition Fees and Expenses                           0             0
  Distributions Received from Project                                    
  Partnerships                                        7,364         7,173
  Increase (Decrease) in Payable -                                       
    Other Series                                      1,003             0
    Project Partnerships - Capital                                       
    Contributions                                    (1,003)            0
                                                -----------   -----------
     Net Cash Provided by (Used in)                                      
     Investing Activities                             7,364         7,173
                                                -----------   -----------
Increase (Decrease) in Cash and Cash                                     
Equivalents                                         (19,706)      (20,031)
Cash and Cash Equivalents at Beginning of                                
Year                                                180,104       161,813
                                                -----------   -----------
Cash and Cash Equivalents at End of Year        $   160,398   $   141,782
                                                ===========   ===========
                                                                         


              See accompanying notes to financial statements.
<PAGE>
                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                         STATEMENTS OF CASH FLOWS
                  FOR THE SIX MONTHS ENDED SEPTEMBER 30,
                                (Unaudited)
SERIES 10                                        1998           1997
--------                                         ----           ----
Cash Flows from Operating Activities:                                    
  Net Loss                                      $  (135,469)  $  (123,876)
  Adjustments to Reconcile Net Loss to Net                               
  Cash Provided by (Used in) Operating                                     
  Activities:                                                              
   Amortization                                       2,812         2,920
   Accreted Interest Income on Investments                               
   in Securities                                     (7,775)       (7,878)
   Equity in Losses of Project Partnerships         120,252       110,446
   Changes in Operating Assets and                                          
   Liabilities:                                                             
    Increase in Payable to General Partners         (11,783)      (11,623)
                                                -----------   -----------
     Net Cash Used in Operating Activities          (31,963)      (30,011)
                                                -----------   -----------
Cash Flows from Investing Activities:                                    
  Increase in Receivable from Other Series           (1,003)            0
  (Increase) Decrease in Receivable from                                 
  Project Partnerships                                1,003             0
  Acquisition Fees and Expenses                           0             0
  Distributions Received from Project                                    
  Partnerships                                        6,545         3,805
  Increase (Decrease) in Payable -                                       
    Other Series                                      2,208             0
    Project Partnerships - Capital                                       
    Contributions                                    (2,208)       (7,712)
                                                -----------   -----------
     Net Cash Provided by (Used in)                                      
     Investing Activities                             6,545        (3,907)
                                                -----------   -----------
Increase (Decrease) in Cash and Cash                                     
Equivalents                                         (25,418)      (33,918)
Cash and Cash Equivalents at Beginning of                                
Year                                                202,435       199,743
                                                -----------   -----------
Cash and Cash Equivalents at End of Year        $   177,017   $   165,825
                                                ===========   ===========
                                                                         




              See accompanying notes to financial statements.
<PAGE>
                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                         STATEMENTS OF CASH FLOWS
                  FOR THE SIX MONTHS ENDED SEPTEMBER 30,
                                (Unaudited)
SERIES 11                                        1998           1997
--------                                         ----           ----
Cash Flows from Operating Activities:                                    
  Net Loss                                       $  (52,801)   $ (147,304)
  Adjustments to Reconcile Net Loss to Net                      
  Cash Provided by (Used in) Operating                                     
  Activities:                                                              
   Amortization                                       4,148         3,594      
   Accreted Interest Income on Investments                         
   in Securities                                     (8,891)       (9,063)      
   Equity in Losses of Project Partnerships          42,086       137,683
   Changes in Operating Assets and                                 
   Liabilities:                                                             
    Increase in Payable to General Partners         (11,244)       (6,612) 
                                                 -----------   ---------- 
     Net Cash Used in Operating Activities          (26,702)      (21,702)
                                                -----------  ----------   
Cash Flows from Investing Activities:                        
  Increase in Receivable from Other Series                0             0  
  (Increase) Decrease in Receivable from                                
  Project Partnerships                                    0             0  
  Acquisition Fees and Expenses                           0             0
  Distributions Received from Project                                 
  Partnerships                                        2,182         4,669     
  Increase (Decrease) in Payable to Project                        
  Partnerships - Capital Contributions                    0             0 
                                                -----------   -----------      
     Net Cash Provided by (Used in)                        
     Investing Activities                             2,182         4,669     
                                                -----------   -----------     
Increase (Decrease) in Cash and Cash                          
Equivalents                                         (24,520)      (17,033)      
Cash and Cash Equivalents at Beginning of                       
 Year                                               208,198       169,385       
                                                -----------    ----------   
Cash and Cash Equivalents at End of Year        $   183,678   $   152,352
                                                ===========   ===========
                                                             

              See accompanying notes to financial statements.
<PAGE>
                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                         STATEMENTS OF CASH FLOWS
                  FOR THE SIX MONTHS ENDED SEPTEMBER 30,
                                (Unaudited)
TOTAL SERIES 7 - 11                              1998           1997
-------------------                              ----           ----
Cash Flows from Operating Activities:                                    
  Net Loss                                      $(1,600,285)  $(1,638,019)
  Adjustments to Reconcile Net Loss to Net                               
  Cash Provided by (Used in) Operating                                     
  Activities:                                                              
   Amortization                                      27,893        26,940
   Accreted Interest Income on Investments                               
   in Securities                                    (54,686)      (56,138)
   Equity in Losses of Project Partnerships       1,443,656     1,488,155
   Changes in Operating Assets and                                          
   Liabilities:                                                             
    Increase in Payable to General Partners         (17,128)      (13,414)
                                                -----------   -----------
     Net Cash Used in Operating Activities         (200,550)     (192,476)
                                                -----------   -----------
Cash Flows from Investing Activities:                                    
  Increase in Receivable from Other Series           (3,211)            0
  (Increase) Decrease in Receivable from                                 
  Project Partnerships                                3,211           453
  Acquisition Fees and Expenses                           0             0
  Distributions Received from Project                                    
  Partnerships                                       41,248        47,168
  Increase (Decrease) in Payable -                                       
    Other Series                                      3,211             0
    Project Partnerships - Capital                                       
    Contributions                                    (3,211)       (7,712)
                                                -----------   -----------
     Net Cash Provided by (Used in)                                      
     Investing Activities                            41,248        39,909
                                                -----------   -----------
Increase (Decrease) in Cash and Cash                                     
Equivalents                                        (159,302)     (152,567)
Cash and Cash Equivalents at Beginning of                                
Year                                              1,287,570     1,194,959
                                                -----------   -----------
Cash and Cash Equivalents at End of Year        $ 1,128,268   $ 1,042,392
                                                ===========   ===========
                                                                         


              See accompanying notes to financial statements.
<PAGE>
                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                                     
                       NOTES TO FINANCIAL STATEMENTS
                                     
                            SEPTEMBER 30, 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 September 30, 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  September 30, 1998 Balance Sheet includes Investment  in  Securities
consisting  of U.S. Treasury Security Strips which represents  their  cost,
plus accreted interest income of $157,694 for Series 7, $133,373 for Series
8, $73,151 for Series 9, $62,052 for Series 10 and $68,256 for Series 11.

                                                          Gross Unrealized
                   Estimated Market       Cost Plus          Gains and
                         Value        Accreted Interest       (Losses)
                   -----------------  -----------------   ----------------
Series 7                  $  529,412         $  467,480           $  61,932
Series 8                     492,001            441,843              50,158
Series 9                     319,989            295,447              24,542
Series 10                    268,493            237,165              31,328
Series 11                    297,057            253,452              43,605

  As  of  September  30,  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                    $   49,107     $   44,188     $   28,519
After 1 year through 5 years          193,769        180,505        112,420
After 5 years through 10 years        224,604        217,150        130,218
Over 10 years                               0              0         24,290
                                   ----------     ----------     ----------
  Total Amount Carried on                                                  
Balance Sheet                      $  467,480     $  441,843     $  295,447
                                   ==========     ==========     ==========


                                 Series 10      Series 11        Total
                                  --------       --------       --------
Due with 1 year                    $   23,559     $   22,522     $  167,895
After 1 year through 5 years           85,191         88,383        660,268
After 5 years through 10 years         93,094        104,641        769,707
Over 10 years                          35,321         37,906         97,517
                                   ----------     ----------     ----------
  Total Amount Carried on                                                  
Balance Sheet                      $  237,165     $  253,452     $1,695,387
                                   ==========     ==========     ==========


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 six months ended September 30 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            $ 44,216       $ 39,648
 Series 8              46,094         43,714
 Series 9              25,296         24,399
 Series 10             17,050         15,250
 Series 11             13,640         12,200
                     --------       --------
 Total               $146,296       $135,211
                     ========       ========

  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           $   8,016      $   7,472
 Series 8               8,838          8,240
 Series 9               4,933          4,599
 Series 10              3,083          2,875
 Series 11              2,466          2,300
                     --------       --------
 Total               $ 27,336       $ 25,486
                     ========       ========
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS:

   As  of  September  30,  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                                     SEPTEMBER 30,     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)                                 (5,275,427)     (4,782,926)
                                                                           
Cumulative distributions received from                                     
Project Partnerships                               (118,283)       (101,264)
                                                -----------     -----------
Investment in Project Partnerships before                                  
adjustment                                        2,338,379       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                                  (134,484)       (123,382)
                                               ------------    ------------
                                                                           
Investments in Project Partnerships             $ 2,997,230     $ 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  $102,777  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  September  30,  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                                     SEPTEMBER 30,     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)                                 (4,902,822)     (4,372,089)
                                                                           
Cumulative distributions received from                                     
Project Partnerships                                (92,860)        (84,722)
                                                -----------     -----------
Investment in Project Partnerships before                                  
adjustment                                        2,590,423       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                                   (77,183)        (70,838)
                                               ------------    ------------
                                                                           
Investments in Project Partnerships             $ 3,063,013     $ 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  $108,921  for the period ended September 30, 1998 and $79,383  for  the
year ended March 31, 1998 are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   As  of  September  30,  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                                     SEPTEMBER 30,     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                                     (1,969,943)     (1,711,859)
                                                                           
Cumulative distributions received from                                     
Project Partnerships                                (61,998)        (54,634)
                                                -----------      ----------
Investment in Project Partnerships before                                  
adjustment                                        2,882,175       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                                   (31,819)        (28,333)
                                               ------------    ------------
                                                                           
Investments in Project Partnerships             $ 3,094,443     $ 3,363,377
                                               ============    ============
<PAGE>
                                                           

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   As  of  September  30,  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                                    SEPTEMBER 30,     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                                       (795,554)       (675,302)
                                                                           
Cumulative distributions received from                                     
Project Partnerships                                (65,899)        (59,354)
                                                -----------      ----------
Investment in Project Partnerships before                                  
adjustment                                        3,053,219       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                                   (26,897)        (24,085)
                                              -------------    ------------
                                                                           
Investments in Project Partnerships             $ 3,223,060     $ 3,352,669
                                              =============    ============
<PAGE>

NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   As  of  September  30,  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                                    SEPTEMBER 30,     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                                       (532,129)       (490,043)
                                                                           
Cumulative distributions received from                                     
Project Partnerships                                (45,991)        (43,809)
                                                -----------     -----------
Investment in Project Partnerships before                                  
adjustment                                        3,549,922       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                                   (26,942)        (22,794)
                                               ------------     -----------
                                                                           
Investments in Project Partnerships             $ 3,813,315     $ 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                          SEPTEMBER 30,     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)                                (13,475,875)    (12,032,219)
                                                                           
Cumulative distributions received from                                     
Project Partnerships                               (385,031)       (343,783)
                                               ------------     -----------
Investment in Project Partnerships before                                  
adjustment                                       14,414,118      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                                  (297,325)       (269,432)
                                               ------------    ------------
                                                                           
Investments in Project Partnerships             $16,191,061     $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
June 30, of each year:
                                                  1998          1997
SERIES 7                                          ----          ----
SUMMARIZED BALANCE SHEETS                                                
Assets:                                                                  
  Current assets                                $ 2,745,205   $ 2,553,915
  Investment properties, net                     37,221,049    38,684,533
  Other assets                                       61,340        90,231
                                               ------------  ------------
    Total assets                                $40,027,594   $41,328,679
                                               ============  ============
Liabilities and Partners' Equity:                                        
  Current liabilities                           $   976,252   $ 1,134,296
  Long-term debt                                 36,837,474    36,935,137
                                               ------------  ------------
    Total liabilities                            37,813,726    38,069,433
                                               ------------  ------------
Partners' equity                                                         
  Limited Partner                                 2,209,833     3,254,344
  General Partners                                    4,035         4,902
                                                -----------   -----------
    Total Partners' equity                        2,213,868     3,259,246
                                                -----------   -----------
    Total liabilities and partners' equity      $40,027,594   $41,328,679
                                               ============  ============
SUMMARIZED STATEMENTS OF OPERATIONS                                      
Rental and other income                         $ 2,092,878   $ 2,158,653
Expenses:                                      ------------  ------------
  Operating expenses                              1,298,459     1,197,337
  Interest expense                                  531,994       630,765
  Depreciation and amortization                     780,508       792,801
                                               ------------  ------------
    Total expenses                                2,610,961     2,620,903
                                               ------------  ------------
      Net loss                                  $  (518,083)  $  (462,250)
                                               ============  ============
Other partners' share of net loss               $    (5,181)  $    (4,623)
                                               ============  ============
Partnerships' share of net loss                 $  (512,902)  $  (457,627)
Suspended loss                                       20,401        21,668
                                               ------------  ------------
Equity in Losses of Project Partnerships        $  (492,501)  $  (435,959)
                                               ============  ============
<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
June 30, of each year:
                                                  1998          1997
SERIES 8                                          ----          ----
SUMMARIZED BALANCE SHEETS                                                
Assets:                                                                  
  Current assets                                $ 2,396,895   $ 2,152,244
  Investment properties, net                     40,001,426    41,562,416
  Other assets                                       48,690        58,329
                                               ------------  ------------
    Total assets                                $42,447,011   $43,772,989
                                               ============  ============
Liabilities and Partners' Equity:                                        
  Current liabilities                           $ 1,187,110   $ 1,280,837
  Long-term debt                                 38,850,768    39,029,977
                                               ------------  ------------
    Total liabilities                            40,037,878    40,310,814
                                               ------------  ------------
Partners' equity                                                         
  Limited Partner                                 2,533,962     3,517,799
  General Partners                                 (124,829)      (55,624)
                                                -----------   -----------
    Total Partners' equity                        2,409,133     3,462,175
                                                -----------   -----------
    Total liabilities and partners' equity      $42,447,011   $43,772,989
                                               ============  ============
SUMMARIZED STATEMENTS OF OPERATIONS                                      
Rental and other income                         $ 2,008,626   $ 2,021,757
Expenses:                                      ------------  ------------
  Operating expenses                              1,270,406     1,255,152
  Interest expense                                  490,747       551,530
  Depreciation and amortization                     813,403       816,063
                                               ------------  ------------
    Total expenses                                2,574,556     2,622,745
                                               ------------  ------------
      Net loss                                  $  (565,930)  $  (600,988)
                                               ============  ============
Other partners' share of net loss               $    (5,659)  $    (6,010)
                                               ============  ============
Partnerships' share of net loss                 $  (560,271)  $  (594,978)
Suspended loss                                       29,538         5,286
                                               ------------  ------------
Equity in Losses of Project Partnerships        $  (530,733)  $  (589,692)
                                               ============  ============
<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
June 30, of each year:
                                                  1998          1997
SERIES 9                                          ----          ----
SUMMARIZED BALANCE SHEETS                                                
Assets:                                                                  
  Current assets                                $ 1,479,412   $ 1,426,611
  Investment properties, net                     22,202,473    23,091,859
  Other assets                                       82,523         8,778
                                               ------------  ------------
    Total assets                                $23,764,408   $24,527,248
                                               ============  ============
Liabilities and Partners' Equity:                                        
  Current liabilities                           $   392,488   $   508,592
  Long-term debt                                 20,576,103    20,645,826
                                               ------------  ------------
    Total liabilities                            20,968,591    21,154,418
                                               ------------  ------------
Partners' equity                                                         
  Limited Partner                                 2,875,492     3,401,970
  General Partners                                  (79,675)      (29,140)
                                                -----------   -----------
    Total Partners' equity                        2,795,817     3,372,830
                                                -----------   -----------
    Total liabilities and partners' equity      $23,764,408   $24,527,248
                                               ============  ============
SUMMARIZED STATEMENTS OF OPERATIONS                                      
Rental and other income                         $ 1,063,142   $ 1,114,021
Expenses:                                      ------------  ------------
  Operating expenses                                624,728       577,980
  Interest expense                                  248,345       318,207
  Depreciation and amortization                     450,760       434,374
                                               ------------  ------------
    Total expenses                                1,323,833     1,330,561
                                               ------------  ------------
      Net loss                                  $  (260,691)  $  (216,540)
                                               ============  ============
Other partners' share of net loss               $    (2,607)  $    (2,165)
                                               ============  ============
Partnerships' share of net loss                 $  (258,084)  $  (214,375)
Suspended loss                                            0             0
                                               ------------  ------------
Equity in Losses of Project Partnerships        $  (258,084)  $  (214,375)
                                               ============  ============
<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
June 30, of each year:
                                                  1998          1997
SERIES 10                                         ----          ----
SUMMARIZED BALANCE SHEETS                                                
Assets:                                                                  
  Current assets                                $ 1,217,315   $ 1,097,193
  Investment properties, net                     15,467,235    15,949,744
  Other assets                                       22,594        18,305
                                               ------------  ------------
    Total assets                                $16,707,144   $17,065,242
                                               ============  ============
Liabilities and Partners' Equity:                                        
  Current liabilities                           $   240,542   $   263,890
  Long-term debt                                 13,486,584    13,538,658
                                               ------------  ------------
    Total liabilities                            13,727,126    13,802,548
                                               ------------  ------------
Partners' equity                                                         
  Limited Partner                                 3,062,329     3,286,943
  General Partners                                  (82,311)      (24,249)
                                                -----------   -----------
    Total Partners' equity                        2,980,018     3,262,694
                                                -----------   -----------
    Total liabilities and partners' equity      $16,707,144   $17,065,242
                                               ============  ============
SUMMARIZED STATEMENTS OF OPERATIONS                                      
Rental and other income                         $   699,651   $   688,913
Expenses:                                      ------------  ------------
  Operating expenses                                423,532       398,430
  Interest expense                                  142,440       145,835
  Depreciation and amortization                     255,146       256,210
                                               ------------  ------------
    Total expenses                                  821,118       800,475
                                               ------------  ------------
      Net loss                                  $  (121,467)  $  (111,562)
                                               ============  ============
Other partners' share of net loss               $    (1,215)  $    (1,116)
                                               ============  ============
Partnerships' share of net loss                 $  (120,252)  $  (110,446)
Suspended loss                                            0             0
                                               ------------  ------------
Equity in Losses of Project Partnerships        $  (120,252)  $  (110,446)
                                               ============  ============
<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
June 30, of each year:
                                                  1998          1997
SERIES 11                                         ----          ----
SUMMARIZED BALANCE SHEETS                                                
Assets:                                                                  
  Current assets                                $ 1,026,381   $   672,719
  Investment properties, net                     13,743,508    14,234,970
  Other assets                                       11,223        28,811
                                               ------------  ------------
    Total assets                                $14,781,112   $14,936,500
                                               ============  ============
Liabilities and Partners' Equity:                                        
  Current liabilities                           $   345,386   $   231,985
  Long-term debt                                 10,802,181    10,919,656
                                               ------------  ------------
    Total liabilities                            11,147,567    11,151,641
                                               ------------  ------------
Partners' equity                                                         
  Limited Partner                                 3,561,589     3,666,203
  General Partners                                   71,956       118,656
                                                -----------   -----------
    Total Partners' equity                        3,633,545     3,784,859
                                                -----------   -----------
    Total liabilities and partners' equity      $14,781,112   $14,936,500
                                               ============  ============
SUMMARIZED STATEMENTS OF OPERATIONS                                      
Rental and other income                         $   732,320   $   722,192
Expenses:                                      ------------  ------------
  Operating expenses                                365,963       350,042
  Interest expense                                  156,798       248,214
  Depreciation and amortization                     252,070       263,010
                                               ------------  ------------
    Total expenses                                  774,831       861,266
                                               ------------  ------------
      Net loss                                  $   (42,511)  $  (139,074)
                                               ============  ============
Other partners' share of net loss               $      (425)  $    (1,391)
                                               ============  ============
Partnerships' share of net loss                 $   (42,086)  $  (137,683)
Suspended loss                                            0             0
                                               ------------  ------------
Equity in Losses of Project Partnerships        $   (42,086)  $  (137,683)
                                               ============  ============
<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
June 30, of each year:
                                                1998            1997
TOTAL SERIES 7 - 11                             ----            ----
SUMMARIZED BALANCE SHEETS                                                
Assets:                                                                  
  Current assets                              $  8,865,208   $  7,902,682
  Investment properties, net                   128,635,691    133,523,522
  Other assets                                     226,370        204,454
                                              ------------   ------------
    Total assets                              $137,727,269   $141,630,658
                                              ============   ============
Liabilities and Partners' Equity:                                        
  Current liabilities                         $  3,141,778   $  3,419,600
  Long-term debt                               120,553,110    121,069,254
                                              ------------   ------------
    Total liabilities                          123,694,888    124,488,854
                                              ------------   ------------
Partners' equity                                                         
  Limited Partner                               14,243,205     17,127,259
  General Partners                                (210,824)        14,545
                                               -----------    -----------
    Total Partners' equity                      14,032,381     17,141,804
                                               -----------    -----------
    Total liabilities and partners' equity    $137,727,269   $141,630,658
                                              ============   ============
SUMMARIZED STATEMENTS OF OPERATIONS                                      
Rental and other income                       $  6,596,617   $  6,705,536
Expenses:                                     ------------   ------------
  Operating expenses                             3,983,088      3,778,941
  Interest expense                               1,570,324      1,894,551
  Depreciation and amortization                  2,551,887      2,562,458
                                              ------------   ------------
    Total expenses                               8,105,299      8,235,950
                                              ------------   ------------
      Net loss                                $ (1,508,682)  $ (1,530,414)
                                              ============   ============
Other partners' share of net loss             $    (15,087)  $    (15,305)
                                              ============   ============
Partnerships' share of net loss               $ (1,493,595)  $ (1,515,109)
Suspended losses                                    49,939         26,954
                                              ------------   ------------
Equity in Losses of Project Partnerships      $ (1,443,656)  $ (1,488,155)
                                              ============   ============
<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 six and three months
ended  September  30,  1998  and  September  30,  1997.   The  General  and
Administrative  expenses - General Partner and General  and  Administrative
expenses - Other for the three and six months ended September 30, 1998  are
comparable to September 30, 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 were comparable for the six months ended September 30,
1998  and September 30, 1997.  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  September 30, 1998, the Series had $244,472 of short-term investments
(Cash  and  Cash  Equivalents).   It  also  had  $467,480  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
$544,784  for  the  six  months ended September 30, 1998.   However,  after
adjusting for Equity in Losses of Project Partnerships of $492,501 and  the
changes  in  operating assets and liabilities, net cash used  in  operating
activities  was  $58,653  as a result of paying Asset  Management  Fees  of
$41,000.  Cash provided by investing activities totaled $17,019, 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 were comparable for the six months ended September
30,  1998  and September 30, 1997.  At September 30, 1998, the  Series  had
$362,703  of short-term investments (Cash and Cash Equivalents).   It  also
had  $441,844  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
$581,137  for  the  six  months ended September 30, 1998.   However,  after
adjusting for Equity in Losses of Project Partnerships of $530,733 and  the
changes  in  operating assets and liabilities, net cash used  in  operating
activities  was  $56,162  as a result of paying Asset  Management  Fees  of
$39,000.   Cash provided by investing activities totaled $8,138, 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  were comparable for the six months ended September  30,  1998
and September 30, 1997.  At September 30, 1998, the Series had $160,398  of
short-term  investments (Cash and Cash Equivalents).  It also had  $295,447
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
$286,094  for  the  six  months ended September 30, 1998.   However,  after
adjusting for Equity in Losses of Project Partnerships of $258,084 and  the
changes  in  operating assets and liabilities, net cash used  in  operating
activities  was  $27,070  as a result of paying Asset  Management  Fees  of
$16,000.   Cash provided by investing activities totaled $7,364, 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  were comparable for the six months ended September  30,  1998
and September 30, 1998.  At September 30, 1998, the Series had $177,017  of
short-term  investments (Cash and Cash Equivalents).  It also had  $237,165
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
$135,469  for  the  six  months ended September 30, 1998.   However,  after
adjusting for Equity in Losses of Project Partnerships of $120,252 and  the
changes  in  operating assets and liabilities, net cash used  in  operating
activities  was  $31,963  as a result of paying Asset  Management  Fees  of
$26,000.   Cash provided by investing activities totaled $6,545, 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 $137,683 for the six months ended September 30,
1997  to $42,086 for the six months ended September 30, 1998.  At September
30,  1998, the Series had $183,678 of short-term investments (Cash and Cash
Equivalents).  It also had $253,452 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
$52,801  for  the  six  months ended September 30,  1998.   However,  after
adjusting for Equity in Losses of Project Partnerships of $42,086  and  the
changes  in  operating assets and liabilities, net cash used  in  operating
activities  was  $26,702  as a result of paying Asset  Management  Fees  of
$23,000.   Cash provided by investing activities totaled $2,182, 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:  November 13, 1998   By:/s/ Ronald M. Diner
                           Ronald M. Diner
                           President



Date:  November 13, 1998   By:/s/ Sandra L. Furey
                           Sandra L. Furey
                           Secretary and Treasurer
<PAGE>