<PAGE>

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

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

For The Quarterly Period Ended             December 31, 1997

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                      December 31, 1997
Units of Limited Partnership
Interest:  $1,000 per unit                            36,799

DOCUMENTS INCORPORATED BY REFERENCE

               Parts I and II, 1995 Form 10-K, filed with the
             Securities and Exchange Commission on June 25, 1997
             Parts III and IV - Form S-11 Registration Statement
                 and all amendments and supplements thereto
                              File No. 33-44238
<PAGE>
PART I - Financial Information
 Item 1.  Financial Statements
                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                              BALANCE SHEETS
                                     
SERIES 7                                    DECEMBER 31,      MARCH 31,
                                                1997            1997
                                               -------         -------
ASSETS                                                                    
Current Assets:                                                           
 Cash and Cash Equivalents                     $   228,200     $   267,980
 Investments in Securities                          46,830          44,933
 Receivable from Project Partnerships                    0               0
                                               ------------    ------------
  Total Current Assets                         $   275,030     $   312,913
                                                                          
 Investments in Securities                         444,227         421,843
 Investments in Project Partnerships, Net        3,794,242       4,483,546
                                               -----------     -----------
    Total Assets                               $ 4,513,499     $ 5,218,302
                                               ===========     ===========
LIABILITIES AND PARTNERS' EQUITY                                          
Current Liabilities:                                                      
 Payable to General Partners                   $    51,749     $    54,499
 Payable to Project Partnerships                         0               0
                                               -----------     -----------
  Total Current Liabilities                         51,749          54,499
                                               -----------     -----------
Long-Term Liabilities:                                                    
 Payable to General Partners                       199,165         179,733
                                               -----------     -----------
Partners' Equity:                                                         
Limited Partners (10,395 units for Series                                 
7, 9,980 for Series 8, 6,254 for Series 9,                                
5,043 for Series 10 and 5,127 for Series                                  
11 at December 31, 1997 and March 31,1997)       4,311,237       5,025,507
General Partners                                  (48,652)        (41,437)
                                               -----------     -----------
  Total Partners' Equity                       $ 4,262,585     $ 4,984,070
                                               -----------     -----------
    Total Liabilities and Partners' Equity     $ 4,513,499     $ 5,218,302
                                               ===========     ===========
                                                                          
                                                                          

              See accompanying notes to financial statements.
<PAGE>
                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                              BALANCE SHEETS
                                     
SERIES 8                                     DECEMBER 31,     MARCH 31,
                                                 1997            1997
                                                -------        -------
ASSETS                                                                    
Current Assets:                                                           
 Cash and Cash Equivalents                      $   357,576    $   396,038
 Investments in Securities                           41,838         40,189
 Receivable from Project Partnerships                     0            453
                                                ------------    ------------
  Total Current Assets                          $   399,414    $   436,680
                                                                          
 Investments in Securities                          420,981        400,823
 Investments in Project Partnerships, Net         3,721,176      4,614,122
                                                -----------    -----------
    Total Assets                                $ 4,541,571    $ 5,451,625
                                                ===========    ===========
LIABILITIES AND PARTNERS' EQUITY                                          
Current Liabilities:                                                      
 Payable to General Partners                    $    42,332    $    42,185
 Payable to Project Partnerships                          0              0
                                                -----------    -----------
  Total Current Liabilities                          42,332         42,185
                                                -----------    -----------
Long-Term Liabilities:                                                    
 Payable to General Partners                        243,855        217,295
                                                -----------    -----------
Partners' Equity:                                                         
Limited Partners (10,395 units for Series                                 
7, 9,980 for Series 8, 6,254 for Series 9,                                
5,043 for Series 10 and 5,127 for Series 11                               
at December 31, 1997 and March 31, 1997)          4,300,456      5,227,849
General Partners                                   (45,072)       (35,704)
                                                -----------    -----------
  Total Partners' Equity                        $ 4,255,384    $ 5,192,145
                                                -----------    -----------
    Total Liabilities and Partners' Equity      $ 4,541,571    $ 5,451,625
                                                ===========    ===========
                                                                          
                                                                          

              See accompanying notes to financial statements.
<PAGE>
                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                              BALANCE SHEETS
                                     
SERIES 9                                       DECEMBER        MARCH 31,
                                                31,1997          1997
                                                -------         -------
ASSETS                                                                    
Current Assets:                                                           
 Cash and Cash Equivalents                      $   143,905    $   161,813
 Investments in Securities                           27,898         26,879
 Receivable from Project Partnerships                     0              0
                                                ------------    ------------
  Total Current Assets                          $   171,803    $   188,692
                                                                          
 Investments in Securities                          282,798        270,520
 Investments in Project Partnerships, Net         3,520,419      3,848,367
                                                -----------    -----------
    Total Assets                                $ 3,975,020    $ 4,307,579
                                                ===========    ===========
LIABILITIES AND PARTNERS' EQUITY                                          
Current Liabilities:                                                      
 Payable to General Partners                    $    24,171    $    24,250
 Payable to Project Partnerships                          0              0
                                                -----------    -----------
  Total Current Liabilities                          24,171         24,250
                                                -----------    -----------
Long-Term Liabilities:                                                    
 Payable to General Partners                        138,530        119,002
                                                -----------    -----------
Partners' Equity:                                                         
Limited Partners (10,395 units for Series                                 
7, 9,980 for Series 8, 6,254 for Series 9,                                
5,043 for Series 10 and 5,127 for Series 11                               
at December 31, 1997 and March 31, 1997)          3,829,033      4,177,521
General Partners                                   (16,714)       (13,194)
                                                -----------    -----------
  Total Partners' Equity                        $ 3,812,319    $ 4,164,327
                                                -----------    -----------
    Total Liabilities and Partners' Equity      $ 3,975,020    $ 4,307,579
                                                ===========    ===========
                                                                          
                                                                          

              See accompanying notes to financial statements.
<PAGE>
                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                              BALANCE SHEETS
                                     
SERIES 10                                    DECEMBER 31,      MARCH 31,
                                                 1997            1997
                                                -------         -------
ASSETS                                                                    
Current Assets:                                                           
 Cash and Cash Equivalents                      $   166,262    $   199,743
 Investments in Securities                           21,913         20,995
 Receivable from Project Partnerships                     0              0
                                                 ------------   ------------
  Total Current Assets                          $   188,175    $   220,738
                                                                          
 Investments in Securities                          225,620        214,600
 Investments in Project Partnerships, Net         3,391,101      3,571,518
                                                -----------    -----------
    Total Assets                                $ 3,804,896    $ 4,006,856
                                                ===========    ===========
LIABILITIES AND PARTNERS' EQUITY                                          
Current Liabilities:                                                      
 Payable to General Partners                    $    27,839    $    28,072
 Payable to Project Partnerships                          0          7,712
                                                -----------    -----------
  Total Current Liabilities                          27,839         35,784
                                                -----------    -----------
Long-Term Liabilities:                                                    
 Payable to General Partners                         34,356         37,184
                                                -----------    -----------
Partners' Equity:                                                         
Limited Partners (10,395 units for Series                                 
7, 9,980 for Series 8, 6,254 for Series 9,                                
5,043 for Series 10 and 5,127 for Series 11                               
at December 31, 1997 and March 31, 1997)          3,749,454      3,938,729
General Partners                                    (6,753)        (4,841)
                                                -----------    -----------
  Total Partners' Equity                        $ 3,742,701    $ 3,933,888
                                                -----------    -----------
    Total Liabilities and Partners' Equity      $ 3,804,896    $ 4,006,856
                                                ===========    ===========
                                                                          
                                                                          

              See accompanying notes to financial statements.
<PAGE>
                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                              BALANCE SHEETS
                                     
SERIES 11                                    DECEMBER 31,      MARCH 31,
                                                 1997            1997
                                                -------         -------
ASSETS                                                                    
Current Assets:                                                           
 Cash and Cash Equivalents                      $   152,984    $   169,385
 Investments in Securities                           20,910         19,915
 Receivable from Project Partnerships                     0              0
                                                 ------------   ------------
  Total Current Assets                          $   173,894    $   189,300
                                                                          
 Investments in Securities                          240,187        227,438
 Investments in Project Partnerships, Net         3,880,253      4,070,301
                                                -----------    -----------
    Total Assets                                $ 4,294,334    $ 4,487,039
                                                ===========    ===========
LIABILITIES AND PARTNERS' EQUITY                                          
Current Liabilities:                                                      
 Payable to General Partners                    $    27,481    $    27,882
 Payable to Project Partnerships                          0              0
                                                -----------    -----------
  Total Current Liabilities                          27,481         27,882
                                                -----------    -----------
Long-Term Liabilities:                                                    
 Payable to General Partners                          8,899          8,161
                                                -----------    -----------
Partners' Equity:                                                         
Limited Partners (10,395 units for Series                                 
7, 9,980 for Series 8, 6,254 for Series 9,                                
5,043 for Series 10 and 5,127 for Series 11                               
at December 31, 1997 and March 31, 1997)          4,261,365      4,452,477
General Partners                                    (3,411)        (1,481)
                                                -----------    -----------
  Total Partners' Equity                        $ 4,257,954    $ 4,450,996
                                                -----------    -----------
    Total Liabilities and Partners' Equity      $ 4,294,334    $ 4,487,039
                                                ===========    ===========
                                                                          
                                                                          

              See accompanying notes to financial statements.
<PAGE>
                     GATEWAY TAX CREDIT FUND III LTD.
                      (A Florida Limited Partnership)
                              BALANCE SHEETS
                                     
TOTAL SERIES 7 - 11                          DECEMBER 31,      MARCH 31,
                                                 1997            1997
                                                -------         -------
ASSETS                                                                    
Current Assets:                                                           
 Cash and Cash Equivalents                      $ 1,048,927    $ 1,194,959
 Investments in Securities                          159,389        152,911
 Receivable from Project Partnerships                     0            453
                                                 ------------   ------------
  Total Current Assets                          $ 1,208,316    $ 1,348,323
                                                                          
 Investments in Securities                        1,613,813      1,535,224
 Investments in Project Partnerships, Net        18,307,191     20,587,854
                                                -----------    -----------
    Total Assets                                $21,129,320    $23,471,401
                                                ===========    ===========
LIABILITIES AND PARTNERS' EQUITY                                          
Current Liabilities:                                                      
 Payable to General Partners                    $   173,572    $   176,888
 Payable to Project Partnerships                          0          7,712
                                                -----------    -----------
  Total Current Liabilities                         173,572        184,600
                                                -----------    -----------
Long-Term Liabilities:                                                    
 Payable to General Partners                        624,805        561,375
                                                -----------    -----------
Partners' Equity:                                                         
Limited Partners (10,395 units for Series                                 
7, 9,980 for Series 8, 6,254 for Series 9,                                
5,043 for Series 10 and 5,127 for Series 11                               
at December 31, 1997 and March 31, 1997)         20,451,545     22,822,083
General Partners                                  (120,602)       (96,657)
                                                -----------    -----------
  Total Partners' Equity                        $20,330,943    $22,725,426
                                                -----------    -----------
    Total Liabilities and Partners' Equity      $21,129,320    $23,471,401
                                                ===========    ===========
                                                                          
                                                                          

              See accompanying notes to financial statements.
<PAGE>

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

SERIES 7                                        1997            1996
                                                ----            ----
Revenues:                                                                
 Interest Income                                $    33,835   $    32,878
                                                -----------   -----------
Expenses:                                                                
 Asset Management Fee-General Partner                59,796        58,500
 General and Administrative:                                             
  General Partner                                    11,059         8,874
  Other                                              16,681        14,476
 Amortization                                        16,298        16,432
                                                -----------   -----------
  Total Expenses                                    103,834        98,282
                                                -----------   -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                           (69,999)      (65,404)
Equity in Losses of Project                                              
 Partnerships                                     (651,486)     (676,579)
                                                 ----------    ----------
Net Loss                                       $  (721,485)  $  (741,983)
                                                ===========   ===========
Allocation of Net Loss:                                                  
 Limited Partners                              $  (714,270)  $  (734,563)
 General Partners                                   (7,215)       (7,420)
                                                -----------   -----------
                                               $  (721,485)  $  (741,983)
                                                ===========   ===========
Net Loss Per Number of Limited                                           
Partnership Units                              $    (68.71)  $    (70.67)
                                               ============  ============
Number of Limited Partnership Units                                      
Outstanding                                          10,395        10,395
                                               ============  ============
                                                                         
                                                                         


              See accompanying notes to financial statements.
<PAGE>


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

SERIES 8                                        1997           1996
                                                ----           ----
Revenues:                                                                
 Interest Income                              $    35,614     $    37,445
                                              -----------     -----------
Expenses:                                                                
 Asset Management Fee-General Partner              65,928          64,500
 General and Administrative:                                             
  General Partner                                  12,192           9,785
  Other                                            17,276          15,637
 Amortization                                       9,664           9,805
                                              -----------     -----------
  Total Expenses                                  105,060          99,727
                                              -----------     -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                         (69,446)        (62,282)
Equity in Losses of Project                                              
 Partnerships                                   (867,315)       (792,107)
                                               ----------      ----------
Net Loss                                     $  (936,761)    $  (854,389)
                                              ===========     ===========
Allocation of Net Loss:                                                  
 Limited Partners                            $  (927,393)    $  (845,845)
 General Partners                                 (9,368)         (8,544)
                                              -----------     -----------
                                             $  (936,761)    $  (854,389)
                                              ===========     ===========
Net Loss Per Number of Limited                                           
Partnership Units                            $    (92.93)    $    (84.75)
                                             ============    ============
Number of Limited Partnership Units                                      
Outstanding                                         9,980           9,980
                                             ============    ============
                                                                         
                                                                         


              See accompanying notes to financial statements.
<PAGE>


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

SERIES 9                                        1997            1996
                                                ----            ----
Revenues:                                                                
 Interest Income                                $    19,081   $    19,885
                                                -----------   -----------
Expenses:                                                                
 Asset Management Fee-General Partner                36,797        36,000
 General and Administrative:                                             
  General Partner                                     6,805         5,462
  Other                                               9,636         8,892
 Amortization                                         5,337         5,337
                                                -----------   -----------
  Total Expenses                                     58,575        55,691
                                                -----------   -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                           (39,494)      (35,806)
Equity in Losses of Project                                              
 Partnerships                                     (312,514)     (342,005)
                                                 ----------    ----------
Net Loss                                       $  (352,008)  $  (377,811)
                                                ===========   ===========
Allocation of Net Loss:                                                  
 Limited Partners                              $  (348,488)  $  (374,033)
 General Partners                                   (3,520)       (3,778)
                                                -----------   -----------
                                               $  (352,008)  $  (377,811)
                                                ===========   ===========
Net Loss Per Number of Limited                                           
Partnership Units                              $    (55.72)  $    (59.81)
                                               ============  ============
Number of Limited Partnership Units                                      
Outstanding                                           6,254         6,254
                                               ============  ============
                                                                         
                                                                         


              See accompanying notes to financial statements.
<PAGE>


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

SERIES 10                                       1997            1996
                                                ----            ----
Revenues:                                                                
 Interest Income                               $    18,967    $    19,065
                                               -----------    -----------
Expenses:                                                                
 Asset Management Fee-General Partner               22,999         22,500
 General and Administrative:                                             
  General Partner                                    4,253          3,412
  Other                                              6,290          6,158
 Amortization                                        4,380          4,412
                                               -----------    -----------
  Total Expenses                                    37,922         36,482
                                               -----------    -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                          (18,955)       (17,417)
Equity in Losses of Project                                              
 Partnerships                                    (172,232)      (148,096)
                                                ----------     ----------
Net Loss                                      $  (191,187)   $  (165,513)
                                               ===========    ===========
Allocation of Net Loss:                                                  
 Limited Partners                             $  (189,275)   $  (163,858)
 General Partners                                  (1,912)        (1,655)
                                               -----------    -----------
                                              $  (191,187)   $  (165,513)
                                               ===========    ===========
Net Loss Per Number of Limited                                           
Partnership Units                             $    (37.53)   $    (32.49)
                                              ============   ============
Number of Limited Partnership Units                                      
Outstanding                                          5,043          5,043
                                              ============   ============
                                                                         
                                                                         


              See accompanying notes to financial statements.
<PAGE>


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

SERIES 11                                       1997            1996
                                                ----            ----
Revenues:                                                                
 Interest Income                               $    19,858    $    23,447
                                               -----------    -----------
Expenses:                                                                
 Asset Management Fee-General Partner               18,399         18,000
 General and Administrative:                                             
  General Partner                                    3,402          2,728
  Other                                              6,030          5,357
 Amortization                                        5,391          5,188
                                               -----------    -----------
  Total Expenses                                    33,222         31,273
                                               -----------    -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                          (13,364)        (7,826)
Equity in Losses of Project                                              
 Partnerships                                    (179,678)         73,769
                                                ----------     ----------
Net Loss                                      $  (193,042)    $    65,943
                                              ============   ============
                                                                         
Allocation of Net Loss:                                                  
 Limited Partners                             $  (191,112)    $    65,284
 General Partners                                  (1,930)            659
                                               -----------    -----------
                                              $  (193,042)    $    65,943
                                               ===========    ===========
Net Loss Per Number of Limited                                           
Partnership Units                             $    (37.28)    $     12.73
                                              ============   ============
Number of Limited Partnership Units                                      
Outstanding                                          5,127          5,127
                                              ============   ============
                                                                         
                                                                         


              See accompanying notes to financial statements.
<PAGE>


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

TOTAL SERIES 7 - 11                             1997            1996
                                                ----            ----
Revenues:                                                                
 Interest Income                                $   127,355   $   132,720
                                                -----------   -----------
Expenses:                                                                
 Asset Management Fee-General Partner               203,919       199,500
 General and Administrative:                                             
  General Partner                                    37,711        30,261
  Other                                              55,913        50,520
 Amortization                                        41,070        41,174
                                                -----------   -----------
  Total Expenses                                    338,613       321,455
                                                -----------   -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                          (211,258)     (188,735)
Equity in Losses of Project                                              
 Partnerships                                   (2,183,225)   (1,885,018)
                                                 ----------    ----------
Net Loss                                       $(2,394,483)  $(2,073,753)
                                                ===========   ===========
Allocation of Net Loss:                                                  
 Limited Partners                              $(2,370,538)  $(2,053,015)
 General Partners                                  (23,945)      (20,738)
                                                -----------   -----------
                                               $(2,394,483)  $(2,073,753)
                                                ===========   ===========
                                                                         
                                                                         


              See accompanying notes to financial statements.
<PAGE>


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

SERIES 7                                        1997            1996
                                                ----            ----
Revenues:                                                                
 Interest Income                               $    11,190    $    10,938
                                               -----------    -----------
Expenses:                                                                
 Asset Management Fee-General Partner               20,148         19,500
 General and Administrative:                                             
  General Partner                                    3,587          2,954
  Other                                              2,382          2,160
 Amortization                                        5,419          5,486
                                               -----------    -----------
  Total Expenses                                    31,536         30,100
                                               -----------    -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                          (20,346)       (19,162)
Equity in Losses of Project                                              
 Partnerships                                    (215,527)      (248,641)
                                                ----------     ----------
Net Loss                                      $  (235,873)   $  (267,803)
                                               ===========    ===========
Allocation of Net Loss:                                                  
 Limited Partners                             $  (233,514)   $  (265,125)
 General Partners                                  (2,359)        (2,678)
                                               -----------    -----------
                                              $  (235,873)   $  (267,803)
                                               ===========    ===========
Net Loss Per Number of Limited                                           
Partnership Units                             $    (22.46)   $    (25.51)
                                              ============   ============
Number of Limited Partnership Units                                      
Outstanding                                         10,395         10,395
                                              ============   ============
                                                                         
                                                                         


              See accompanying notes to financial statements.
<PAGE>


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

SERIES 8                                        1997            1996
                                                ----            ----
Revenues:                                                                
 Interest Income                               $    11,993    $    11,669
                                               -----------    -----------
Expenses:                                                                
 Asset Management Fee-General Partner               22,214         21,500
 General and Administrative:                                             
  General Partner                                    3,952          3,257
  Other                                              2,325          2,246
 Amortization                                        3,675          3,745
                                               -----------    -----------
  Total Expenses                                    32,166         30,748
                                               -----------    -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                          (20,173)       (19,079)
Equity in Losses of Project                                              
 Partnerships                                    (277,623)      (372,161)
                                                ----------     ----------
Net Loss                                      $  (297,796)   $  (391,240)
                                               ===========    ===========
Allocation of Net Loss:                                                  
 Limited Partners                             $  (294,818)   $  (387,327)
 General Partners                                  (2,978)        (3,913)
                                               -----------    -----------
                                              $  (297,796)   $  (391,240)
                                               ===========    ===========
Net Loss Per Number of Limited                                           
Partnership Units                             $    (29.54)   $    (38.81)
                                              ============   ============
Number of Limited Partnership Units                                      
Outstanding                                          9,980          9,980
                                              ============   ============
                                                                         
                                                                         


              See accompanying notes to financial statements.
<PAGE>


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

SERIES 9                                        1997            1996
                                                ----            ----
Revenues:                                                                
 Interest Income                                $     6,356   $     8,436
                                                -----------   -----------
Expenses:                                                                
 Asset Management Fee-General Partner                12,398        12,000
 General and Administrative:                                             
  General Partner                                     2,206         1,818
  Other                                               1,580         1,373
 Amortization                                         1,779         1,779
                                                -----------   -----------
  Total Expenses                                     17,963        16,970
                                                -----------   -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                           (11,607)       (8,534)
Equity in Losses of Project                                              
 Partnerships                                      (98,139)     (116,661)
                                                 ----------    ----------
Net Loss                                       $  (109,746)  $  (125,195)
                                                ===========   ===========
Allocation of Net Loss:                                                  
 Limited Partners                              $  (108,649)  $  (123,943)
 General Partners                                   (1,097)       (1,252)
                                                -----------   -----------
                                               $  (109,746)  $  (125,195)
                                                ===========   ===========
Net Loss Per Number of Limited                                           
Partnership Units                              $    (17.37)  $    (19.82)
                                               ============  ============
Number of Limited Partnership Units                                      
Outstanding                                           6,254         6,254
                                               ============  ============
                                                                         
                                                                         


              See accompanying notes to financial statements.
<PAGE>


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

SERIES 10                                       1997            1996
                                                ----            ----
Revenues:                                                                
 Interest Income                               $     6,191    $     6,032
                                               -----------    -----------
Expenses:                                                                
 Asset Management Fee-General Partner                7,749          7,500
 General and Administrative:                                             
  General Partner                                    1,378          1,136
  Other                                              1,129          1,101
 Amortization                                        1,460          1,476
                                               -----------    -----------
  Total Expenses                                    11,716         11,213
                                               -----------    -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                           (5,525)        (5,181)
Equity in Losses of Project                                              
 Partnerships                                     (61,786)       (43,529)
                                                ----------     ----------
Net Loss                                      $   (67,311)   $   (48,710)
                                               ===========    ===========
Allocation of Net Loss:                                                  
 Limited Partners                             $   (66,638)   $   (48,223)
 General Partners                                    (673)          (487)
                                               -----------    -----------
                                              $   (67,311)   $   (48,710)
                                               ===========    ===========
Net Loss Per Number of Limited                                           
Partnership Units                             $    (13.21)   $     (9.56)
                                              ============   ============
Number of Limited Partnership Units                                      
Outstanding                                          5,043          5,043
                                              ============   ============
                                                                         
                                                                         


              See accompanying notes to financial statements.
<PAGE>


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

SERIES 11                                       1997            1996
                                                ----            ----
Revenues:                                                                
 Interest Income                                $     6,639   $     7,451
                                                -----------   -----------
Expenses:                                                                
 Asset Management Fee-General Partner                 6,199         6,000
 General and Administrative:                                             
  General Partner                                     1,102           908
  Other                                               1,284         1,081
 Amortization                                         1,797         1,663
                                                -----------   -----------
  Total Expenses                                     10,382         9,652
                                                -----------   -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                            (3,743)       (2,201)
Equity in Losses of Project                                              
 Partnerships                                      (41,995)        30,198
                                                 ----------    ----------
Net Loss                                       $   (45,738)   $    27,997
                                                ===========   ===========
Allocation of Net Loss:                                                  
 Limited Partners                              $   (45,281)   $    27,717
 General Partners                                     (457)           280
                                                -----------   -----------
                                               $   (45,738)   $    27,997
                                                ===========   ===========
Net Loss Per Number of Limited                                           
Partnership Units                              $     (8.83)   $      5.41
                                               ============  ============
Number of Limited Partnership Units                                      
Outstanding                                           5,127         5,127
                                               ============  ============
                                                                         
                                                                         


              See accompanying notes to financial statements.
<PAGE>


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

TOTAL SERIES 7 - 11                             1997            1996
                                                ----            ----
Revenues:                                                                
 Interest Income                                $    42,369   $    44,526
                                                -----------   -----------
Expenses:                                                                
 Asset Management Fee-General Partner                68,708        66,500
 General and Administrative:                                             
  General Partner                                    12,225        10,073
  Other                                               8,700         7,961
 Amortization                                        14,130        14,149
                                                -----------   -----------
  Total Expenses                                    103,763        98,683
                                                -----------   -----------
Loss Before Equity in Losses                                             
 of Project Partnerships                           (61,394)      (54,157)
Equity in Losses of Project                                              
 Partnerships                                     (695,070)     (750,794)
                                                 ----------    ----------
Net Loss                                       $  (756,464)  $  (804,951)
                                                ===========   ===========
Allocation of Net Loss:                                                  
 Limited Partners                              $  (748,899)  $  (796,901)
 General Partners                                   (7,565)       (8,050)
                                                -----------   -----------
                                               $  (756,464)  $  (804,951)
                                                ===========   ===========
                                                                         
                                                                         


              See accompanying notes to financial statements.
<PAGE>

                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                                     
                      STATEMENTS OF PARTNERS' EQUITY
                                     
           FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996:



                                Limited         General            
SERIES 7                        Partners        Partners         Total
                               ---------        --------         -----
                                                                           
                                                                           
Balance at March 31, 1996       $ 6,042,156    $   (31,168)     $ 6,010,988
                                                                           
Net Loss                          (734,563)         (7,420)       (741,983)
                                -----------     -----------     -----------
                                                                           
Balance at December 31, 1996    $ 5,307,593    $   (38,588)     $ 5,269,005
                               ============    ============    ============
                                                                           
                                                                           
Balance at March 31, 1997       $ 5,025,507    $   (41,437)     $ 4,984,070
                                                                           
Net Loss                          (714,270)         (7,215)       (721,485)
                                -----------     -----------     -----------
                                                                           
Balance at December 31, 1997    $ 4,311,237    $   (48,652)     $ 4,262,585
                               ============    ============    ============
                                                                           

              See accompanying notes to financial statements.

<PAGE>



                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                                     
                      STATEMENTS OF PARTNERS' EQUITY
                                     
           FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996:



                                Limited         General            
SERIES 8                        Partners        Partners         Total
                               ---------        --------         -----
                                                                           
                                                                           
Balance at March 31, 1996       $ 6,306,146    $   (24,812)     $ 6,281,334
                                                                           
Net Loss                          (845,845)         (8,544)       (854,389)
                                -----------     -----------     -----------
                                                                           
Balance at December 31, 1996    $ 5,460,301    $   (33,356)     $ 5,426,945
                               ============    ============    ============
                                                                           
                                                                           
Balance at March 31, 1997       $ 5,227,849    $   (35,704)     $ 5,192,145
                                                                           
Net Loss                          (927,393)         (9,368)       (936,761)
                                -----------     -----------     -----------
                                                                           
Balance at December 31, 1997    $ 4,300,456    $   (45,072)     $ 4,255,384
                               ============    ============    ============
                                                                           

              See accompanying notes to financial statements.

<PAGE>



                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                                     
                      STATEMENTS OF PARTNERS' EQUITY
                                     
           FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996:



                                Limited         General            
SERIES 9                        Partners        Partners         Total
                               ---------        --------         -----
                                                                           
                                                                           
Balance at March 31, 1996       $ 4,729,151    $    (7,622)     $ 4,721,529
                                                                           
Net Loss                          (374,033)         (3,778)       (377,811)
                                -----------     -----------     -----------
                                                                           
Balance at December 31, 1996    $ 4,355,118    $   (11,400)     $ 4,343,718
                               ============    ============    ============
                                                                           
                                                                           
Balance at March 31, 1997       $ 4,177,521    $   (13,194)     $ 4,164,327
                                                                           
Net Loss                          (348,488)         (3,520)       (352,008)
                                -----------     -----------     -----------
                                                                           
Balance at December 31, 1997    $ 3,829,033    $   (16,714)     $ 3,812,319
                               ============    ============    ============
                                                                           

              See accompanying notes to financial statements.

<PAGE>



                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                                     
                      STATEMENTS OF PARTNERS' EQUITY
                                     
           FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996:



                                Limited         General            
SERIES 10                       Partners        Partners         Total
                               ---------        --------         -----
                                                                           
                                                                           
Balance at March 31, 1996       $ 4,151,503    $    (2,692)     $ 4,148,811
                                                                           
Net Loss                          (163,858)         (1,655)       (165,513)
                                -----------     -----------     -----------
                                                                           
Balance at December 31, 1996    $ 3,987,645    $    (4,347)     $ 3,983,298
                               ============    ============    ============
                                                                           
                                                                           
Balance at March 31, 1997       $ 3,938,729    $    (4,841)     $ 3,933,888
                                                                           
Net Loss                          (189,275)         (1,912)       (191,187)
                                -----------     -----------     -----------
                                                                           
Balance at December 31, 1997    $ 3,749,454    $    (6,753)     $ 3,742,701
                               ============    ============    ============
                                                                           

              See accompanying notes to financial statements.

<PAGE>



                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                                     
                      STATEMENTS OF PARTNERS' EQUITY
                                     
           FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996:



                                Limited         General            
SERIES 11                       Partners        Partners         Total
                               ---------        --------         -----
                                                                           
                                                                           
Balance at March 31, 1996       $ 4,646,546     $       479     $ 4,647,025
                                                                           
Net Loss                             65,284             659          65,943
                                -----------     -----------     -----------
                                                                           
Balance at December 31, 1996    $ 4,711,830     $     1,138     $ 4,712,968
                               ============    ============    ============
                                                                           
                                                                           
Balance at March 31, 1997       $ 4,452,477    $    (1,481)     $ 4,450,996
                                                                           
Net Loss                          (191,112)         (1,930)       (193,042)
                                -----------     -----------     -----------
                                                                           
Balance at December 31, 1997    $ 4,261,365    $    (3,411)     $ 4,257,954
                               ============    ============    ============
                                                                           

              See accompanying notes to financial statements.

<PAGE>



                                     
                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                                     
                      STATEMENTS OF PARTNERS' EQUITY
                                     
           FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996:



                                Limited         General            
TOTAL SERIES 7 - 11             Partners        Partners         Total
                               ---------        --------         -----
                                                                           
                                                                           
Balance at March 31, 1996       $25,875,502    $   (65,815)     $25,809,687
                                                                           
Net Loss                        (2,053,015)        (20,738)     (2,073,753)
                                -----------     -----------     -----------
                                                                           
Balance at December 31, 1996    $23,822,487    $   (86,553)     $23,735,934
                               ============    ============    ============
                                                                           
                                                                           
Balance at March 31, 1997       $22,822,083    $   (96,657)     $22,725,426
                                                                           
Net Loss                        (2,370,538)        (23,945)     (2,394,483)
                                -----------     -----------     -----------
                                                                           
Balance at December 31, 1997    $20,451,545    $  (120,602)     $20,330,943
                               ============    ============    ============
                                                                           

              See accompanying notes to financial statements.

<PAGE>



                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                         STATEMENTS OF CASH FLOWS
           FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996:
SERIES 7                                         1997           1996
--------                                         ----           ----
Cash Flows from Operating Activities:                                    
  Net Loss                                     $  (721,485)  $  (741,983)
  Adjustments to Reconcile Net Loss to Net                               
Cash Provided by (Used in) Operating                                     
Activities:                                                              
   Amortization                                      16,298        16,432
   Accreted Interest Income on Investments                               
in Securities                                      (24,281)      (24,321)
   Equity in Losses of Project Partnerships         651,486       676,579
   Payment of Asset Management Fee                 (40,364)      (40,146)
Changes in Operating Assets and                                          
Liabilities:                                                             
    Increase in Payable to General Partners          57,046        59,550
                                                -----------   -----------
     Net Cash Used in Operating Activities         (61,300)      (53,889)
                                                -----------   -----------
Cash Flows from Investing Activities:                                    
  Investments in Project Partnerships                     0       (3,333)
  (Increase) Decrease in Receivable from                                 
Project Partnerships                                      0             0
  Acquisition Fees and Expenses                           0         (272)
  Distributions Received from Project                                    
Partnerships                                         21,520        18,925
  Increase (Decrease) in Payable to Project                              
Partnerships - Capital Contributions                      0             0
                                                -----------   -----------
     Net Cash Provided by (Used in)                                      
Investing Activities                                 21,520        15,320
                                                -----------   -----------
Increase (Decrease) in Cash and Cash                                     
Equivalents                                        (39,780)      (38,569)
Cash and Cash Equivalents at Beginning of                                
Year                                                267,980       259,782
                                                -----------   -----------
Cash and Cash Equivalents at End of Year        $   228,200   $   221,213
                                                ===========   ===========
                                                                         
                                                                         







              See accompanying notes to financial statements.
<PAGE>
                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                         STATEMENTS OF CASH FLOWS
           FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996:
SERIES 8                                         1997           1996
--------                                         ----           ----
Cash Flows from Operating Activities:                                    
  Net Loss                                     $  (936,761)  $  (854,389)
  Adjustments to Reconcile Net Loss to Net                               
Cash Provided by (Used in) Operating                                     
Activities:                                                              
   Amortization                                       9,664         9,805
   Accreted Interest Income on Investments                               
in Securities                                      (21,807)      (21,871)
   Equity in Losses of Project Partnerships         867,315       792,107
   Payment of Asset Management Fee                 (39,368)      (26,810)
Changes in Operating Assets and                                          
Liabilities:                                                             
    Increase in Payable to General Partners          66,075        62,723
                                                -----------   -----------
     Net Cash Used in Operating Activities         (54,882)      (38,435)
                                                -----------   -----------
Cash Flows from Investing Activities:                                    
  Investments in Project Partnerships                     0           453
  (Increase) Decrease in Receivable from                                 
Project Partnerships                                    453        75,574
  Acquisition Fees and Expenses                           0             0
  Distributions Received from Project                                    
Partnerships                                         15,967        21,403
  Increase (Decrease) in Payable to Project                              
Partnerships - Capital Contributions                      0             0
                                                -----------   -----------
     Net Cash Provided by (Used in)                                      
Investing Activities                                 16,420        97,430
                                                -----------   -----------
Increase (Decrease) in Cash and Cash                                     
Equivalents                                        (38,462)        58,995
Cash and Cash Equivalents at Beginning of                                
Year                                                396,038       295,021
                                                -----------   -----------
Cash and Cash Equivalents at End of Year        $   357,576   $   354,016
                                                ===========   ===========
                                                                         
                                                                         





              See accompanying notes to financial statements.
<PAGE>
                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                         STATEMENTS OF CASH FLOWS
           FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996:
SERIES 9                                         1997           1996
--------                                         ----           ----
Cash Flows from Operating Activities:                                    
  Net Loss                                     $  (352,008)  $  (377,811)
  Adjustments to Reconcile Net Loss to Net                               
Cash Provided by (Used in) Operating                                     
Activities:                                                              
   Amortization                                       5,337         5,337
   Accreted Interest Income on Investments                               
in Securities                                      (13,297)      (13,457)
   Equity in Losses of Project Partnerships         312,514       342,005
   Payment of Asset Management Fee                 (17,269)       (8,709)
Changes in Operating Assets and                                          
Liabilities:                                                             
    Increase in Payable to General Partners          36,718        34,897
                                                -----------   -----------
     Net Cash Used in Operating Activities         (28,005)      (17,738)
                                                -----------   -----------
Cash Flows from Investing Activities:                                    
  Investments in Project Partnerships                     0        18,076
  (Increase) Decrease in Receivable from                                 
Project Partnerships                                      0         8,545
  Acquisition Fees and Expenses                           0             0
  Distributions Received from Project                                    
Partnerships                                         10,097         6,160
  Increase (Decrease) in Payable to Project                              
Partnerships - Capital Contributions                      0             0
                                                -----------   -----------
     Net Cash Provided by (Used in)                                      
Investing Activities                                 10,097        32,781
                                                -----------   -----------
Increase (Decrease) in Cash and Cash                                     
Equivalents                                        (17,908)        15,043
Cash and Cash Equivalents at Beginning of                                
Year                                                161,813       112,252
                                                -----------   -----------
Cash and Cash Equivalents at End of Year        $   143,905   $   127,295
                                                ===========   ===========
                                                                         
                                                                         





              See accompanying notes to financial statements.
<PAGE>
                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                         STATEMENTS OF CASH FLOWS
           FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996:
SERIES 10                                        1997           1996
--------                                         ----           ----
Cash Flows from Operating Activities:                                    
  Net Loss                                     $  (191,187)  $  (165,513)
  Adjustments to Reconcile Net Loss to Net                               
Cash Provided by (Used in) Operating                                     
Activities:                                                              
   Amortization                                       4,380         4,412
   Accreted Interest Income on Investments                               
in Securities                                      (11,938)      (11,963)
   Equity in Losses of Project Partnerships         172,232       148,096
   Payment of Asset Management Fee                 (25,826)      (12,141)
Changes in Operating Assets and                                          
Liabilities:                                                             
    Increase in Payable to General Partners          22,765        21,990
                                                -----------   -----------
     Net Cash Used in Operating Activities         (29,574)      (15,119)
                                                -----------   -----------
Cash Flows from Investing Activities:                                    
  Investments in Project Partnerships                     0             0
  (Increase) Decrease in Receivable from                                 
Project Partnerships                                      0        13,059
  Acquisition Fees and Expenses                           0             0
  Distributions Received from Project                                    
Partnerships                                          3,805         3,070
  Increase (Decrease) in Payable to Project                              
Partnerships - Capital Contributions                (7,712)             0
                                                -----------   -----------
     Net Cash Provided by (Used in)                                      
Investing Activities                                (3,907)        16,129
                                                -----------   -----------
Increase (Decrease) in Cash and Cash                                     
Equivalents                                        (33,481)         1,010
Cash and Cash Equivalents at Beginning of                                
Year                                                199,743       162,576
                                                -----------   -----------
Cash and Cash Equivalents at End of Year        $   166,262   $   163,586
                                                ===========   ===========
                                                                         
                                                                         





              See accompanying notes to financial statements.
<PAGE>
                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                         STATEMENTS OF CASH FLOWS
           FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996:
SERIES 11                                        1997           1996
--------                                         ----           ----
Cash Flows from Operating Activities:                                    
  Net Loss                                     $  (193,042)    $   65,943
  Adjustments to Reconcile Net Loss to Net                               
Cash Provided by (Used in) Operating                                     
Activities:                                                              
   Amortization                                       5,391         5,188
   Accreted Interest Income on Investments                               
in Securities                                      (13,744)      (13,697)
   Equity in Losses of Project Partnerships         179,678      (73,769)
   Payment of Asset Management Fee                 (17,661)      (20,342)
Changes in Operating Assets and                                          
Liabilities:                                                             
    Increase in Payable to General Partners          17,998        13,053
                                                -----------   -----------
     Net Cash Used in Operating Activities         (21,380)      (23,624)
                                                -----------   -----------
Cash Flows from Investing Activities:                                    
  Investments in Project Partnerships                     0        58,925
  (Increase) Decrease in Receivable from                                 
Project Partnerships                                      0         8,250
  Acquisition Fees and Expenses                           0         (178)
  Distributions Received from Project                                    
Partnerships                                          4,979         1,500
  Increase (Decrease) in Payable to Project                              
Partnerships - Capital Contributions                      0     (279,887)
                                                -----------   -----------
     Net Cash Provided by (Used in)                                      
Investing Activities                                  4,979     (211,390)
                                                -----------   -----------
Increase (Decrease) in Cash and Cash                                     
Equivalents                                        (16,401)     (235,014)
Cash and Cash Equivalents at Beginning of                                
Year                                                169,385       365,027
                                                -----------   -----------
Cash and Cash Equivalents at End of Year        $   152,984   $   130,013
                                                ===========   ===========
                                                                         
                                                                         





              See accompanying notes to financial statements.
<PAGE>
                                     
                      GATEWAY TAX CREDIT FUND II LTD.
                      (A Florida Limited Partnership)
                         STATEMENTS OF CASH FLOWS
           FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996:
TOTAL SERIES 7 - 11                              1997           1996
-------------------                              ----           ----
Cash Flows from Operating Activities:                                    
  Net Loss                                     $(2,394,483)  $(2,073,753)
  Adjustments to Reconcile Net Loss to Net                               
Cash Provided by (Used in) Operating                                     
Activities:                                                              
   Amortization                                      41,070        41,174
   Accreted Interest Income on Investments                               
in Securities                                      (85,067)      (85,309)
   Equity in Losses of Project Partnerships       2,183,225     1,885,018
   Payment of Asset Management Fee                (140,488)     (108,148)
Changes in Operating Assets and                                          
Liabilities:                                                             
    Increase in Payable to General Partners         200,602       192,213
                                                -----------   -----------
     Net Cash Used in Operating Activities        (195,141)     (148,805)
                                                -----------   -----------
Cash Flows from Investing Activities:                                    
  Investments in Project Partnerships                     0        74,121
  (Increase) Decrease in Receivable from                                 
Project Partnerships                                    453       105,428
  Acquisition Fees and Expenses                           0         (450)
  Distributions Received from Project                                    
Partnerships                                         56,368        51,058
  Increase (Decrease) in Payable to Project                              
Partnerships - Capital Contributions                (7,712)     (279,887)
                                                -----------   -----------
     Net Cash Provided by (Used in)                                      
Investing Activities                                 49,109      (49,730)
                                                -----------   -----------
Increase (Decrease) in Cash and Cash                                     
Equivalents                                       (146,032)     (198,535)
Cash and Cash Equivalents at Beginning of                                
Year                                              1,194,959     1,194,658
                                                -----------   -----------
Cash and Cash Equivalents at End of Year        $ 1,048,927   $   996,123
                                                ===========   ===========
                                                                         
                                                                         




              See accompanying notes to financial statements.
<PAGE>
                      GATEWAY TAX CREDIT FUND III LTD.
                       (A Florida Limited Partnership)
                                      
                        NOTES TO FINANCIAL STATEMENTS
                                      
                              DECEMBER 31, 1997

NOTE 1 - ORGANIZATION:

   Gateway  Tax  Credit  Fund  III  Ltd.  ("Gateway"),  a  Florida  Limited
Partnership, was formed October 17, 1991 under the laws of Florida.  Gateway
offered its limited partnership interests in Series.  The first Series  for
Gateway  is Series 7.  Operations commenced on July 16, 1992 for Series  7,
January 4, 1993 for Series 8, September 30, 1993 for Series 9, January  21,
1994 for Series 10 and April 29, 1994 for Series 11.  Each Series invests, as
a  limited partner, in other limited partnerships ("Project Partnerships"),
each of which owns and operates apartment complexes eligible for Low-Income
Housing  Tax  Credits ("Tax Credits"), provided for in Section  42  of  the
Internal Revenue Code of 1986.  Gateway will terminate on December 31, 2040
or sooner, in accordance with the terms of the Limited Partnership Agreement.
As of December 31, 1997, 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 incurred.

   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,
  3)  Decreased for the amortization of the acquisition fees and expenses,
  4)   In  certain  Project  Partnerships, where Gateway's  investment  was
  greater than Gateway's pro-rata share of the book value of the underlying
  assets, decreased for the amortization of the difference; and
  5)   In certain Project Partnerships, where Gateway's investment was less
  than Gateway's pro-rata share of the book value of the underlying assets,
  increased for the accretion of the difference.

  Amortization and accretion is calculated on a straight line basis over 35
years, as this is the average estimated useful life of the underlying assets.
The  net amortization and accretion 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.

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, 1997.  In the opinion of management these
financial statements include adjustments, consisting only of normal recurring
adjustments,  necessary  to  fairly summarize the  Partnership's  financial
position  and  results of operations.  The results of  operations  for  the
periods may not be indicative of the results to be expected for the year.


NOTE 3 - INVESTMENT IN SECURITIES:

   The  December  31, 1997 Balance Sheet includes Investment in  Securities
consisting of U.S. Treasury Security Strips which represents their cost, plus
accreted  interest income of $146,183 for Series 7, $121,931 for Series  8,
$65,603 for Series 9, $54,774 for Series 10 and $59,327 for Series 11.

                                                          Gross Unrealized
                   Estimated Market       Cost Plus          Gains and
                         Value        Accreted Interest       (Losses)
                   -----------------  -----------------   ----------------
Series 2                  $  523,038         $  491,057           $  31,981
Series 3                     484,183            462,818              21,365
Series 4                     314,744            310,696               4,048
Series 5                     261,688            247,533              14,155
Series 6                     285,609            261,097              24,512

  As  of December 31, 1997, the cost and accreted interest of debt securities
by contractual maturities is as follows:

                                  Series 7       Series 8       Series 9
                                  --------       --------       --------
Due with 1 year                    $   46,830     $   41,838     $   27,898
After 1 year through 5 years          186,296        172,193        109,199
After 5 years through 10 years        217,363        208,505        126,647
Over 10 years                          40,568         40,282         46,952
                                   ----------     ----------     ----------
  Total Amount Carried on                                                  
Balance Sheet                      $  491,057     $  462,818     $  310,696
                                   ==========     ==========     ==========


                                 Series 10      Series 11        Total
                                  --------       --------       --------
Due with 1 year                    $   21,913     $   20,910     $  159,389
After 1 year through 5 years           84,379         84,443        636,510
After 5 years through 10 years         90,949        101,156        744,620
Over 10 years                          50,292         54,588        232,682
                                   ----------     ----------     ----------
  Total Amount Carried on                                                  
Balance Sheet                      $  247,533     $  261,097     $1,773,201
                                   ==========     ==========     ==========


NOTE 4 - RELATED PARTY TRANSACTIONS:

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

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

  For  the  nine months ended December 31, 1997 and 1996 the General Partners
and  affiliates are entitled to compensation and reimbursement for costs  and
expenses incurred by Gateway as follows:

 Acquisition Expenses - Affiliates of the General Partners are reimbursed for
acquisition  expenses  incurred on behalf of  Gateway.   These  expenses  are
included in Investments in Project Partnerships on the Balance Sheet.

 Series 7            $      0       $    272
 Series 8                   0              0
 Series 9                   0              0
 Series 10                  0              0
 Series 11                  0            178
                     --------       --------
 Total               $      0       $    450
                     ========       ========

  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.

 Series 7            $ 59,796       $ 58,500
 Series 8              65,928         64,500
 Series 9              36,797         36,000
 Series 10             22,999         22,500
 Series 11             18,399         18,000
                     --------       --------
 Total               $203,919       $199,500
                     ========       ========

  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.

 Series 7           $  11,059      $   8,874
 Series 8              12,192          9,785
 Series 9               6,805          5,462
 Series 10              4,253          3,412
 Series 11              3,402          2,728
                     --------       --------
 Total               $ 37,711       $ 30,261
                     ========       ========
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS:

   As  of December 31, 1997, the Partnership had acquired an interest  in  39
Project Partnerships for the Series which own and operate government assisted
multi-family  housing  complexes.  The Partnership, as the  Investor  Limited
Partner pursuant to the Project Partnership Agreements has generally acquired
an ownership interest of 99% in these Project Partnerships.

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

SERIES 7                                      DECEMBER 31,  
                                                  1997      MARCH 31, 1997
                                             -------------- --------------
Capital Contributions to Project Partner-                                  
ships and purchase price paid for limited                                  
partner interests in Project Partnerships       $ 7,732,089     $ 7,732,089
                                                                           
Accumulated accretion/(amortization) of the                                
excess of the book value of the underlying                                 
assets of Project Partnerships over the               1,640           1,172
purchase price (1)                                                         
                                                                           
Cumulative equity in losses of Project                                     
Partnerships (2)                                (4,524,421)     (3,872,935)
                                                                           
Cumulative distributions received from                                     
Project Partnerships                               (88,727)        (67,207)
                                                                           
Excess of investment cost over the                                         
underlying assets acquired:                                                
 Acquisition fees and expenses                      793,335         793,335
 Accumulated amortization of acquisition                                   
fees and expenses                                 (119,674)       (102,908)
                                               ------------    ------------
                                                                           
Investments in Project Partnerships             $ 3,794,242     $ 4,483,546
                                               ============    ============
                                                                           

(1) Includes amounts representing accumulated accretion or (amortization)  of
the difference between the book value of the underlying assets of the Project
Partnerships  over  or under the purchase price.  At December  31,  1997  and
March 31, 1997 these excess costs were $18,470.
(2)  In  accordance  with the Partnership's accounting policy  to  not  carry
Investments  in Project Partnerships below zero, cumulative suspended  losses
of  $70,487  for the period ended December 31, 1997 and cumulative  suspended
losses of $40,687 for the year ended March 31, 1997 are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   As  of December 31, 1997, the Partnership had acquired an interest  in  43
Project Partnerships for the Series which own and operate government assisted
multi-family  housing  complexes.  The Partnership, as the  Investor  Limited
Partner pursuant to the Project Partnership Agreements has generally acquired
an ownership interest of 99% in these Project Partnerships.

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

SERIES 8                                      DECEMBER 31,  
                                                  1997      MARCH 31, 1997
                                             -------------- --------------
Capital Contributions to Project Partner-                                  
ships and purchase price paid for limited                                  
partner interests in Project Partnerships       $ 7,586,105     $ 7,586,105
                                                                           
Accumulated accretion/(amortization) of the                                
excess of the book value of the underlying                                 
assets of Project Partnerships over the               2,851           2,317
purchase price (1)                                                         
                                                                           
Cumulative equity in losses of Project                                     
Partnerships (2)                                (4,275,949)     (3,408,634)
                                                                           
Cumulative distributions received from                                     
Project Partnerships                               (72,953)        (56,986)
                                                                           
Excess of investment cost over the                                         
underlying assets acquired:                                                
 Acquisition fees and expenses                      549,773         549,773
 Accumulated amortization of acquisition                                   
fees and expenses                                  (68,651)        (58,453)
                                               ------------    ------------
                                                                           
Investments in Project Partnerships             $ 3,721,176     $ 4,614,122
                                               ============    ============
                                                                           

(1) Includes amounts representing accumulated accretion or (amortization)  of
the difference between the book value of the underlying assets of the Project
Partnerships  over  or under the purchase price.  At December  31,  1997  and
March 31, 1997 these excess costs were $24,830.
(2)  In  accordance  with the Partnership's accounting policy  to  not  carry
Investments  in Project Partnerships below zero, cumulative suspended  losses
of  $31,695  for the period ended December 31, 1997 and cumulative  suspended
losses of $24,072 for the year ended March 31, 1997 are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   As  of December 31, 1997, the Partnership had acquired an interest  in  24
Project Partnerships for the Series which own and operate government assisted
multi-family  housing  complexes.  The Partnership, as the  Investor  Limited
Partner pursuant to the Project Partnership Agreements has generally acquired
an ownership interest of 99% in these Project Partnerships.

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

SERIES 9                                      DECEMBER 31,  
                                                  1997      MARCH 31, 1997
                                             -------------- --------------
Capital Contributions to Project Partner-                                  
ships and purchase price paid for limited                                  
partner interests in Project Partnerships       $ 4,914,116     $ 4,914,116
                                                                           
Accumulated accretion/(amortization) of the                                
excess of the book value of the underlying                                 
assets of Project Partnerships over the                 619             727
purchase price (1)                                                         
                                                                           
Cumulative equity in losses of Project                                     
Partnerships (2)                                (1,564,744)     (1,252,230)
                                                                           
Cumulative distributions received from                                     
Project Partnerships                               (45,440)        (35,343)
                                                                           
Excess of investment cost over the                                         
underlying assets acquired:                                                
 Acquisition fees and expenses                      244,087         244,087
 Accumulated amortization of acquisition                                   
fees and expenses                                  (28,219)        (22,990)
                                               ------------    ------------
                                                                           
Investments in Project Partnerships             $ 3,520,419     $ 3,848,367
                                               ============    ============
                                                           

(1) Includes amounts representing accumulated accretion or (amortization)  of
the difference between the book value of the underlying assets of the Project
Partnerships  over  or under the purchase price.  At December  31,  1997  and
March 31, 1997 these excess costs were ($5,076).
(2)  In  accordance  with the Partnership's accounting policy  to  not  carry
Investments  in Project Partnerships below zero, cumulative suspended  losses
of  $0 for the period ended December 31, 1997 and cumulative suspended losses
of $0 for the year ended March 31, 1997 are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   As  of December 31, 1997, the Partnership had acquired an interest  in  15
Project Partnerships for the Series which own and operate government assisted
multi-family  housing  complexes.  The Partnership, as the  Investor  Limited
Partner pursuant to the Project Partnership Agreements has generally acquired
an ownership interest of 99% in these Project Partnerships.

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

SERIES 10                                     DECEMBER 31,  
                                                  1997      MARCH 31, 1997
                                             -------------- --------------
Capital Contributions to Project Partner-                                  
ships and purchase price paid for limited                                  
partner interests in Project Partnerships       $ 3,914,672     $ 3,914,672
                                                                           
Accumulated accretion/(amortization) of the                                
excess of the book value of the underlying                                 
assets of Project Partnerships over the               (659)           (497)
purchase price (1)                                                         
                                                                           
Cumulative equity in losses of Project                                     
Partnerships (2)                                  (652,351)       (480,119)
                                                                           
Cumulative distributions received from                                     
Project Partnerships                               (45,311)        (41,506)
                                                                           
Excess of investment cost over the                                         
underlying assets acquired:                                                
 Acquisition fees and expenses                      196,738         196,738
 Accumulated amortization of acquisition                                   
fees and expenses                                  (21,988)        (17,770)
                                              -------------    ------------
                                                                           
Investments in Project Partnerships             $ 3,391,101     $ 3,571,518
                                              =============    ============

(1) Includes amounts representing accumulated accretion or (amortization)  of
the difference between the book value of the underlying assets of the Project
Partnerships  over  or under the purchase price.  At December  31,  1997  and
March 31, 1997 these excess costs were ($7,486).
(2)  In  accordance  with the Partnership's accounting policy  to  not  carry
Investments  in Project Partnerships below zero, cumulative suspended  losses
of  $0 for the period ended December 31, 1997 and cumulative suspended losses
of $0 for the year ended March 31, 1997 are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   As  of December 31, 1997, the Partnership had acquired an interest  in  12
Project Partnerships for the Series which own and operate government assisted
multi-family  housing  complexes.  The Partnership, as the  Investor  Limited
Partner pursuant to the Project Partnership Agreements has generally acquired
an ownership interest of 99% in these Project Partnerships.

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

SERIES 11                                     DECEMBER 31,  
                                                  1997      MARCH 31, 1997
                                             -------------- --------------
Capital Contributions to Project Partner-                                  
ships and purchase price paid for limited                                  
partner interests in Project Partnerships       $ 4,128,042     $ 4,128,042
                                                                           
Accumulated accretion/(amortization) of the                                
excess of the book value of the underlying                                 
assets of Project Partnerships over the               2,695           1,864
purchase price (1)                                                         
                                                                           
Cumulative equity in losses of Project                                     
Partnerships (2)                                  (506,357)       (326,679)
                                                                           
Cumulative distributions received from                                     
Project Partnerships                               (10,074)         (5,095)
                                                                           
Excess of investment cost over the                                         
underlying assets acquired:                                                
 Acquisition fees and expenses                      290,335         290,335
 Accumulated amortization of acquisition                                   
fees and expenses                                  (24,388)        (18,166)
                                               ------------     -----------
                                                                           
Investments in Project Partnerships             $ 3,880,253     $ 4,070,301
                                              =============   =============

(1) Includes amounts representing accumulated accretion or (amortization)  of
the difference between the book value of the underlying assets of the Project
Partnerships  over  or under the purchase price.  At December  31,  1997  and
March 31, 1997 these excess costs were $38,728.
(2)   In  accordance with the Partnership's accounting policy  to  not  carry
Investments  in Project Partnerships below zero, cumulative suspended  losses
of  $0 for the period December 31, 1997 and cumulative suspended losses of $0
for the year ended March 31, 1997 are not included.
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):



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

TOTAL SERIES 7 - 11                           DECEMBER 31,  
                                                  1997      MARCH 31, 1997
                                             -------------- --------------
Capital Contributions to Project Partner-                                  
ships and purchase price paid for limited                                  
partner interests in Project Partnerships       $28,275,024     $28,275,024
                                                                           
Accumulated accretion/(amortization) of the                                
excess of the book value of the underlying                                 
assets of Project Partnerships over the               7,146           5,583
purchase price (1)                                                         
                                                                           
Cumulative equity in losses of Project                                     
Partnerships (2)                               (11,523,822)     (9,340,597)
                                                                           
Cumulative distributions received from                                     
Project Partnerships                              (262,505)       (206,137)
                                                                           
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                                 (262,920)       (220,287)
                                               ------------    ------------
                                                                           
Investments in Project Partnerships             $18,307,191     $20,587,854
                                               ============   =============
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   In  accordance with the Partnership's policy of presenting  the  financial
information  of the Project Partnerships on a three month lag, below  is  the
summarized financial information for the Series' Project Partnerships  as  of
September 30 of each year:
                                                  1997          1996
SERIES 7                                          ----          ----
SUMMARIZED BALANCE SHEETS                                                
Assets:                                                                  
  Current assets                                $ 2,686,219   $ 2,525,608
  Investment properties, net                     38,308,568    39,752,979
  Other assets                                       90,325       110,200
                                               ------------  ------------
    Total assets                                $41,085,112   $42,388,787
                                               ============  ============
Liabilities and Partners' Equity:                                        
  Current liabilities                           $ 1,128,853   $ 1,131,625
  Long-term debt                                 36,925,139    37,169,871
                                               ------------  ------------
    Total liabilities                            38,053,992    38,301,496
                                               ------------  ------------
Partners' equity                                                         
  Limited Partner                                 3,029,581     4,036,157
  General Partners                                    1,539        51,134
                                                -----------   -----------
    Total Partners' equity                        3,031,120     4,087,291
                                                -----------   -----------
    Total liabilities and partners' equity      $41,085,112   $42,388,787
                                               ============  ============
SUMMARIZED STATEMENTS OF OPERATIONS                                      
Rental and other income                         $ 3,245,082   $ 3,186,339
Expenses:                                      ------------  ------------
  Operating expenses                              1,798,319     1,693,521
  Interest expense                                  945,805       972,680
  Depreciation and amortization                   1,189,126     1,203,551
                                               ------------  ------------
    Total expenses                                3,933,250     3,869,752
                                               ------------  ------------
      Net loss                                 $  (688,168)  $  (683,413)
                                               ============  ============
Other partners' share of net loss              $    (6,882)  $    (6,834)
                                               ============  ============
Partnerships' share of net loss                $  (681,286)  $  (676,579)
Suspended losses                                     29,800             0
                                               ------------  ------------
Equity in Losses of Project Partnerships       $  (651,486)  $  (676,579)
                                               ============  ============
                                                                         
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   In  accordance with the Partnership's policy of presenting  the  financial
information  of the Project Partnerships on a three month lag, below  is  the
summarized financial information for the Series' Project Partnerships  as  of
September 30 of each year:
                                                  1997          1996
SERIES 8                                          ----          ----
SUMMARIZED BALANCE SHEETS                                                
Assets:                                                                  
  Current assets                                $ 2,281,379   $ 2,013,830
  Investment properties, net                     41,162,473    42,827,854
  Other assets                                       60,924       121,676
                                               ------------  ------------
    Total assets                                $43,504,776   $44,963,360
                                               ============  ============
Liabilities and Partners' Equity:                                        
  Current liabilities                           $ 1,303,061   $ 1,507,955
  Long-term debt                                 39,022,328    39,134,012
                                               ------------  ------------
    Total liabilities                            40,325,389    40,641,967
                                               ------------  ------------
Partners' equity                                                         
  Limited Partner                                 3,237,839     4,361,451
  General Partners                                 (58,452)      (40,058)
                                                -----------   -----------
    Total Partners' equity                        3,179,387     4,321,393
                                                -----------   -----------
    Total liabilities and partners' equity      $43,504,776   $44,963,360
                                               ============  ============
SUMMARIZED STATEMENTS OF OPERATIONS                                      
Rental and other income                         $ 3,064,262   $ 2,995,784
Expenses:                                      ------------  ------------
  Operating expenses                              1,875,622     1,777,253
  Interest expense                                  843,794       854,717
  Depreciation and amortization                   1,228,622     1,163,922
                                               ------------  ------------
    Total expenses                                3,948,038     3,795,892
                                               ------------  ------------
      Net loss                                 $  (883,776)  $  (800,108)
                                               ============  ============
Other partners' share of net loss              $    (8,838)  $    (8,001)
                                               ============  ============
Partnerships' share of net loss                $  (874,938)  $  (792,107)
Suspended losses                                      7,623             0
                                               ------------  ------------
Equity in Losses of Project Partnerships       $  (867,315)  $  (792,107)
                                               ============  ============
                                                                         
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   In  accordance with the Partnership's policy of presenting  the  financial
information  of the Project Partnerships on a three month lag, below  is  the
summarized financial information for the Series' Project Partnerships  as  of
September 30 of each year:
                                                  1997          1996
SERIES 9                                          ----          ----
SUMMARIZED BALANCE SHEETS                                                
Assets:                                                                  
  Current assets                                $ 1,504,001   $ 1,424,022
  Investment properties, net                     22,877,452    23,745,797
  Other assets                                        8,094        10,982
                                               ------------  ------------
    Total assets                                $24,389,547   $25,180,801
                                               ============  ============
Liabilities and Partners' Equity:                                        
  Current liabilities                           $   482,877   $   673,224
  Long-term debt                                 20,643,135    20,706,474
                                               ------------  ------------
    Total liabilities                            21,126,012    21,379,698
                                               ------------  ------------
Partners' equity                                                         
  Limited Partner                                 3,298,749     3,792,392
  General Partners                                 (35,214)         8,711
                                                -----------   -----------
    Total Partners' equity                        3,263,535     3,801,103
                                                -----------   -----------
    Total liabilities and partners' equity      $24,389,547   $25,180,801
                                               ============  ============
SUMMARIZED STATEMENTS OF OPERATIONS                                      
Rental and other income                         $ 1,679,490   $ 1,658,806
Expenses:                                      ------------  ------------
  Operating expenses                                870,225       855,326
  Interest expense                                  473,440       488,828
  Depreciation and amortization                     651,496       660,112
                                               ------------  ------------
    Total expenses                                1,995,161     2,004,266
                                               ------------  ------------
      Net loss                                 $  (315,671)  $  (345,460)
                                               ============  ============
Other partners' share of net loss              $    (3,157)  $    (3,455)
                                               ============  ============
Partnerships' share of net loss                $  (312,514)  $  (342,005)
Suspended losses                                          0             0
                                               ------------  ------------
Equity in Losses of Project Partnerships       $  (312,514)  $  (342,005)
                                               ============  ============
                                                                         
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   In  accordance with the Partnership's policy of presenting  the  financial
information  of the Project Partnerships on a three month lag, below  is  the
summarized financial information for the Series' Project Partnerships  as  of
September 30 of each year:
                                                  1997          1996
SERIES 10                                         ----          ----
SUMMARIZED BALANCE SHEETS                                                
Assets:                                                                  
  Current assets                                $ 1,150,150   $ 1,105,234
  Investment properties, net                     15,823,792    16,325,794
  Other assets                                       16,808        14,927
                                               ------------  ------------
    Total assets                                $16,990,750   $17,445,955
                                               ============  ============
Liabilities and Partners' Equity:                                        
  Current liabilities                           $   254,926   $   345,100
  Long-term debt                                 13,537,580    13,606,421
                                               ------------  ------------
    Total liabilities                            13,792,506    13,951,521
                                               ------------  ------------
Partners' equity                                                         
  Limited Partner                                 3,224,137     3,455,342
  General Partners                                 (25,893)        39,092
                                                -----------   -----------
    Total Partners' equity                        3,198,244     3,494,434
                                                -----------   -----------
    Total liabilities and partners' equity      $16,990,750   $17,445,955
                                               ============  ============
SUMMARIZED STATEMENTS OF OPERATIONS                                      
Rental and other income                         $ 1,031,627   $ 1,043,912
Expenses:                                      ------------  ------------
  Operating expenses                                602,548       590,576
  Interest expense                                  218,730       224,633
  Depreciation and amortization                     384,321       378,295
                                               ------------  ------------
    Total expenses                                1,205,599     1,193,504
                                               ------------  ------------
      Net loss                                 $  (173,972)  $  (149,592)
                                               ============  ============
Other partners' share of net loss              $    (1,740)  $    (1,496)
                                               ============  ============
Partnerships' share of net loss                $  (172,232)  $  (148,096)
Suspended losses                                          0             0
                                               ------------  ------------
Equity in Losses of Project Partnerships       $  (172,232)  $  (148,096)
                                               ============  ============
                                                                         
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   In  accordance with the Partnership's policy of presenting  the  financial
information  of the Project Partnerships on a three month lag, below  is  the
summarized financial information for the Series' Project Partnerships  as  of
September 30 of each year:
                                                  1997          1996
SERIES 11                                         ----          ----
SUMMARIZED BALANCE SHEETS                                                
Assets:                                                                  
  Current assets                                $   839,203   $ 1,644,880
  Investment properties, net                     14,105,776    14,591,975
  Other assets                                       43,818       131,613
                                               ------------  ------------
    Total assets                                $14,988,797   $16,368,468
                                               ============  ============
Liabilities and Partners' Equity:                                        
  Current liabilities                           $   340,223   $ 1,125,960
  Long-term debt                                 10,918,135    11,011,134
                                               ------------  ------------
    Total liabilities                            11,258,358    12,137,094
                                               ------------  ------------
Partners' equity                                                         
  Limited Partner                                 3,624,208     4,061,928
  General Partners                                  106,231       169,446
                                                -----------   -----------
    Total Partners' equity                        3,730,439     4,231,374
                                                -----------   -----------
    Total liabilities and partners' equity      $14,988,797   $16,368,468
                                               ============  ============
SUMMARIZED STATEMENTS OF OPERATIONS                                      
Rental and other income                         $ 1,093,944   $ 1,063,736
Expenses:                                      ------------  ------------
  Operating expenses                                524,330       528,581
  Interest expense                                  356,593       299,725
  Depreciation and amortization                     394,514       160,916
                                               ------------  ------------
    Total expenses                                1,275,437       989,222
                                               ------------  ------------
      Net loss                                 $  (181,493)   $    74,514
                                               ============  ============
Other partners' share of net loss              $    (1,815)   $       745
                                               ============  ============
Partnerships' share of net loss                $  (179,678)   $    73,769
Suspended losses                                          0             0
                                               ------------  ------------
Equity in Losses of Project Partnerships       $  (179,678)   $    73,769
                                               ============  ============
                                                                         
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS (continued):

   In  accordance with the Partnership's policy of presenting  the  financial
information  of the Project Partnerships on a three month lag, below  is  the
summarized financial information for the Series' Project Partnerships  as  of
September 30 of each year:
                                                1997            1996
TOTAL SERIES 7 - 11                             ----            ----
SUMMARIZED BALANCE SHEETS                                                
Assets:                                                                  
  Current assets                              $  8,460,952   $  8,713,574
  Investment properties, net                   132,278,061    137,244,399
  Other assets                                     219,969        389,398
                                              ------------   ------------
    Total assets                              $140,958,982   $146,347,371
                                              ============   ============
Liabilities and Partners' Equity:                                        
  Current liabilities                         $  3,509,940   $  4,783,864
  Long-term debt                               121,046,317    121,627,912
                                              ------------   ------------
    Total liabilities                          124,556,257    126,411,776
                                              ------------   ------------
Partners' equity                                                         
  Limited Partner                               16,414,514     19,707,270
  General Partners                                (11,789)        228,325
                                               -----------    -----------
    Total Partners' equity                      16,402,725     19,935,595
                                               -----------    -----------
    Total liabilities and partners' equity    $140,958,982   $146,347,371
                                              ============   ============
SUMMARIZED STATEMENTS OF OPERATIONS                                      
Rental and other income                       $ 10,114,405   $  9,948,577
Expenses:                                     ------------   ------------
  Operating expenses                             5,671,044      5,445,257
  Interest expense                               2,838,362      2,840,583
  Depreciation and amortization                  3,848,079      3,566,796
                                              ------------   ------------
    Total expenses                              12,357,485     11,852,636
                                              ------------   ------------
      Net loss                               $ (2,243,080)  $ (1,904,059)
                                              ============   ============
Other partners' share of net loss            $    (22,432)  $    (19,041)
                                              ============   ============
Partnerships' share of net loss              $ (2,220,648)  $ (1,885,018)
Suspended losses                                    37,423              0
                                              ------------   ------------
Equity in Losses of Project Partnerships     $ (2,183,225)  $ (1,885,018)
                                              ============   ============
                                                                         
<PAGE>
  Item  7.   Management's Discussion and Analysis of Financial Condition  and
Results of Operations

Results of Operations, Liquidity and Capital Resources

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

  As  disclosed  on  the statement of operations for each Series,  except  as
described below, interest income is comparable for the nine and three  months
ended   December   31,  1997  and  December  31,  1996.   The   General   and
Administrative  expenses  -  General Partner and General  and  Administrative
expenses  - Other for the three and nine months ended December 31,  1997  are
comparable  to  December 31, 1996.  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 nine months ended December 31, 1997  and
December  31, 1996.  In general, it is common in the real estate industry  to
experience losses for financial and tax reporting purposes because of the non-
cash  expenses  of  depreciation and amortization. As  a  result,  management
expects  that this Series, as well as those described below, will report  its
equity  in  Project  Partnerships as a loss for tax and  financial  reporting
purposes.    Overall,  management  believes  the  Project  Partnerships   are
operating as expected and are generating tax credits which meet projections.

  At  December  31,  1997, the Series had $228,200 of short-term  investments
(Cash  and Cash Equivalents).  It also had $491,057 in Zero Coupon Treasuries
with  annual  maturities providing $50,000 in fiscal year 1999 increasing  to
$80,000  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
$721,485  for  the  nine  months ended December  31,  1997.   However,  after
adjusting  for Equity in Losses of Project Partnerships of $651,486  and  the
changes  in  operating  assets and liabilities, net cash  used  in  operating
activities  was $61,300, primarily due to the payment of the Asset Management
Fee  of  $40,364.   Cash  provided by investing activities  totaled  $21,520,
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 nine months ended December 31, 1997  and
December  31, 1996.  At December 31, 1997, the Series had $357,576 of  short-
term  investments (Cash and Cash Equivalents).  It also had $462,819 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
$936,761  for  the  nine  months ended December  31,  1997.   However,  after
adjusting  for Equity in Losses of Project Partnerships of $867,315  and  the
changes  in  operating  assets and liabilities, net cash  used  in  operating
activities  was $54,882, primarily due to the payment of the Asset Management
Fee  of  $39,368.   Cash  provided by investing activities  totaled  $16,420,
consisting  primarily  of  cash distributions of  $15,967  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 nine months ended December 31, 1997  and
December  31, 1996.  At December 31, 1997, the Series had $143,905 of  short-
term  investments (Cash and Cash Equivalents).  It also had $310,696 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
$352,008  for  the  nine  months ended December  31,  1997.   However,  after
adjusting  for Equity in Losses of Project Partnerships of $312,514  and  the
changes  in  operating  assets and liabilities, net cash  used  in  operating
activities  was $28,005, primarily due to the payment of the Asset Management
Fee  of  $17,269.   Cash  provided by investing activities  totaled  $10,097,
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 nine months ended December 31, 1997  and
December  31, 1996.  At December 31, 1997, the Series had $166,262 of  short-
term  investments (Cash and Cash Equivalents).  It also had $247,533 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
$191,187  for  the  nine  months ended December  31,  1997.   However,  after
adjusting  for Equity in Losses of Project Partnerships of $172,232  and  the
changes  in  operating  assets and liabilities, net cash  used  in  operating
activities  was $29,574, primarily due to the payment of the Asset Management
Fee of $25,826.  Cash used in investing activities totaled $3,907, consisting
of  $3,805 of cash distributions from the Project Partnerships and a decrease
in  Payable  to  the Project Partnerships of $7,712.  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  increased  from income of $73,769 for  the  nine  months  ended
December  31,  1996 to losses of $179,678 for the nine months ended  December
31,  1997  due  to the number of properties moving from the construction  and
rent-up  phases to fully operational.  At December 31, 1997, the  Series  had
$152,984 of short-term investments (Cash and Cash Equivalents).  It also  had
$261,097  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
$193,042  for  the  nine  months ended December  31,  1997.   However,  after
adjusting  for Equity in Losses of Project Partnerships of $179,678  and  the
changes  in  operating  assets and liabilities, net cash  used  in  operating
activities  was $21,380, primarily due to the payment of the Asset Management
Fee  of  $17,661.   Cash  provided by investing  activities  totaled  $4,979,
consisting  of cash distributions from the Project Partnerships.  There  were
no unusual events or trends to describe.

<PAGE>

                           SIGNATURES


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


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





Date:  February 11, 1998   By:/s/ Ronald M. Diner
                           Ronald M. Diner
                           President



Date:  February 11, 1998   By:/s/ Sandra L. Furey
                           Sandra L. Furey
                           Secretary and Treasurer
<PAGE>