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, 1996 

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, 1996
Units of Limited Partnership 
Interest:  $1,000 per unit                                    33,799

                                DOCUMENTS INCORPORATED BY REFERENCE

                          Parts I and II, 1995 Form 10-K, filed with the
                        Securities and Exchange Commission on June 27, 1996
                        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
                                               DECEMBER 31,        MARCH 31,
                                                   1996              1996   
                                                 -----------     -----------
SERIES 7                                         (Unaudited)       (Audited)
ASSETS
Current Assets:
   Cash and Cash Equivalents                     $  221,213      $  259,782 
   Investments in Securities                         43,827          42,189 
   Receivable from Project Partnerships                   0               0 
                                                 -----------     ---------- 
     Total Current Assets                           265,040         301,971 

   Investments in Securities                        459,013         436,329 
   Investments in Project
          Partnerships, Net                       4,756,650       5,464,982 
                                                 -----------     ---------- 
       Total Assets                              $5,480,703      $6,203,282 
                                                 ===========     ========== 

LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
   Payable to General Partners                   $   49,460      $   53,005 
   Payable to Project Partnerships                        0               0 
                                                  ----------     ---------- 
     Total Current Liabilities                       49,460          53,005 

Long-Term Liabilities:
   Payable to General Partners                      162,238         139,289 

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, 1996 and
   March 31, 1996)                                5,307,593       6,042,156 
General Partners                                    (38,588)        (31,168)
                                                 -----------     ---------- 
     Total Partners' Equity                       5,269,005       6,010,988 
                                                 -----------     ---------- 
       Total Liabilities and
          Partners Equity                        $5,480,703      $6,203,282 
                                                 ===========     ========== 
                          See accompanying notes to financial statements.
<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                          BALANCE SHEETS
                                                DECEMBER 31,       MARCH 31,
                                                    1996             1996   
                                                 -----------      ----------
SERIES 8                                         (Unaudited)       (Audited)
ASSETS
Current Assets:
   Cash and Cash Equivalents                     $  354,016      $  295,021 
   Investments in Securities                         38,839          37,407 
   Receivable from Project Partnerships                 453          76,027 
                                                 -----------     ---------- 
     Total Current Assets                           393,308         408,455 

   Investments in Securities                        434,024         413,585 
   Investments in Project
          Partnerships, Net                       4,834,391       5,658,160 
                                                 -----------     ---------- 
       Total Assets                              $5,661,723      $6,480,200 
                                                 ===========     ========== 

LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
   Payable to General Partners                   $   39,844      $   43,617 
   Payable to Project Partnerships                        0               0 
                                                 -----------     ---------- 
     Total Current Liabilities                       39,844          43,617 

Long-Term Liabilities:
   Payable to General Partners                      194,934         155,249 

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, 1996 and
   March 31, 1996)                                5,460,301       6,306,146 
   General Partners                                 (33,356)        (24,812)
                                                  ----------     ---------- 
     Total Partners' Equity                       5,426,945       6,281,334 
                                                 -----------     ---------- 
       Total Liabilities and
          Partners Equity                        $5,661,723      $6,480,200 
                                                 ===========     ========== 
                          See accompanying notes to financial statements.
<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                          BALANCE SHEETS
                                                DECEMBER 31,       MARCH 31,
                                                    1996             1996   
                                                 -----------      ----------
SERIES 9                                         (Unaudited)       (Audited)
ASSETS
Current Assets:
   Cash and Cash Equivalents                     $  127,295      $  112,252 
   Investments in Securities                         26,895          25,978 
   Receivable from Project Partnerships                   0           8,545 
                                                 -----------     ---------- 
     Total Current Assets                           154,190         146,775 

   Investments in Securities                        293,126         280,586 
   Investments in Project
          Partnerships, Net                       4,025,723       4,397,301 
                                                 -----------     ---------- 
       Total Assets                              $4,473,039      $4,824,662 
                                                 ===========     ========== 

LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
   Payable to General Partners                   $   22,775      $   25,016 
   Payable to Project Partnerships                        0               0 
                                                 -----------     ---------- 
     Total Current Liabilities                       22,775          25,016 

Long-Term Liabilities:
   Payable to General Partners                      106,546          78,117 

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, 1996 and
   March 31, 1996)                                4,355,118       4,729,151 
   General Partners                                 (11,400)         (7,622)
                                                 -----------     ---------- 
     Total Partners' Equity                       4,343,718       4,721,529 
                                                 -----------     ---------- 
       Total Liabilities and
          Partners Equity                        $4,473,039      $4,824,662 
                                                 ===========     ========== 
                          See accompanying notes to financial statements.
<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                          BALANCE SHEETS
                                                DECEMBER 31,       MARCH 31,
                                                    1996             1996   
                                                 -----------      ----------
SERIES 10                                        (Unaudited)       (Audited)
ASSETS
Current Assets:
   Cash and Cash Equivalents                     $  163,586      $  162,576 
   Investments in Securities                         19,913          19,125 
   Receivable from Project Partnerships                   0          13,059 
                                                 -----------     ---------- 
     Total Current Assets                           183,499         194,760 

   Investments in Securities                        231,774         220,599 
   Investments in Project
          Partnerships, Net                       3,632,462       3,788,041 
                                                 -----------     ---------- 
       Total Assets                              $4,047,735      $4,203,400 
                                                 ===========     ========== 

LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
   Payable to General Partners                   $   26,878      $   28,549 
   Payable to Project Partnerships                    7,712           7,713 
                                                 -----------     ---------- 
     Total Current Liabilities                       34,590          36,262 

Long-Term Liabilities:
   Payable to General Partners                       29,847          18,327 

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, 1996 and
   March 31, 1996)                                3,987,645       4,151,503 
   General Partners                                  (4,347)         (2,692)
                                                 -----------     ---------- 
     Total Partners' Equity                       3,983,298       4,148,811 
                                                 -----------     ---------- 
       Total Liabilities and
          Partners Equity                        $4,047,735      $4,203,400 
                                                 ===========     ========== 
                          See accompanying notes to financial statements.
<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                          BALANCE SHEETS
                                                DECEMBER 31,       MARCH 31,
                                                    1996             1996   
                                                 -----------      ----------
SERIES 11                                        (Unaudited)       (Audited)
ASSETS
Current Assets:
   Cash and Cash Equivalents                     $  130,013      $  365,027 
   Investments in Securities                         19,904          18,995 
   Receivable from Project Partnerships                   0           8,250 
                                                 -----------     ---------- 
     Total Current Assets                           149,917         392,272 

   Investments in Securities                        242,966         230,179 
   Investments in Project
          Partnerships, Net                       4,348,650       4,340,316 
                                                 -----------     ---------- 
       Total Assets                              $4,741,533      $4,962,767 
                                                 ===========     ========== 


LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
   Payable to General Partners                   $   28,565      $   32,148 
   Payable to Project Partnerships                        0         279,887 
                                                 -----------     ---------- 
     Total Current Liabilities                       28,565         312,035 

Long-Term Liabilities:
   Payable to General Partners                            0           3,707 

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, 1996 and
   March 31, 1996)                                4,711,830       4,646,546 
   General Partners                                   1,138             479 
                                                 -----------     ---------- 
     Total Partners' Equity                       4,712,968       4,647,025 
                                                 -----------      --------- 
       Total Liabilities and
          Partners Equity                        $4,741,533      $4,962,767 
                                                 ===========      ========= 
                          See accompanying notes to financial statements.
<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                          BALANCE SHEETS
                                                DECEMBER 31,       MARCH 31,
                                                    1996             1996   
                                                 -----------      ----------
TOTAL SERIES 7 - 11                              (Unaudited)       (Audited)
ASSETS
Current Assets:
   Cash and Cash Equivalents                    $   996,123     $ 1,194,658 
   Investments in Securities                        149,378         143,694 
   Receivable from Project Partnerships                 453         105,881 
                                                ------------    ----------- 
     Total Current Assets                         1,145,954       1,444,233 

   Investments in Securities                      1,660,903       1,581,278 
   Investments in Project
          Partnerships, Net                      21,597,876      23,648,800 
                                                ------------    ----------- 
       Total Assets                             $24,404,733     $26,674,311 
                                                ============    =========== 

LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
   Payable to General Partners                  $   167,522     $   182,335 
   Payable to Project Partnerships                    7,712         287,600 
                                                ------------    ----------- 
     Total Current Liabilities                      175,234         469,935 

Long-Term Liabilities:
   Payable to General Partners                      493,565         394,689 
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, 1996 and
   March 31, 1996)                               23,822,487      25,875,502 
   General Partners                                 (86,553)        (65,815)
                                                ------------    ----------- 
     Total Partners' Equity                      23,735,934      25,809,687 
                                                ------------    ----------- 
       Total Liabilities and
          Partners Equity                       $24,404,733     $26,674,311 
                                                ============    =========== 
                          See accompanying notes to financial statements.
<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                     STATEMENTS OF OPERATIONS
                                            (Unaudited)

                      FOR THE THREE MONTHS ENDED DECEMBER 31, 1996 AND 1995:


                                                     1996            1995   
SERIES 7                                         -----------      ----------
Revenues:
   Interest Income                               $   10,938      $   10,880 
                                                 -----------     -----------
Expenses:
   Asset Management Fee-
     General Partner                                 19,500          19,500 
   General and Administrative-
     General Partner                                  2,954           3,000 
   General and Administrative-
     Other                                            2,160           1,545 
   Amortization                                       5,486           5,392 
                                                 -----------     -----------
     Total Expenses                                  30,100          29,437 

Loss Before Equity in Losses of
 Project Partnerships                               (19,162)        (18,557)
Equity in Income (Losses) of Project
 Partnerships                                      (248,641)       (181,622)
                                                 -----------     -----------
Net Loss                                         $ (267,803)     $ (200,179)
                                                 ===========     ===========
Allocation of Net Loss:
   Limited Partners                              $ (265,125)     $ (198,177)
   General Partners                                  (2,678)         (2,002)
                                                 -----------     -----------
                                                 $ (267,803)     $ (200,179)
                                                 ===========     ===========
Net Loss Per Limited
 Partnership Unit                                $   (25.51)     $   (19.06)
   
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
                                            (Unaudited)

                      FOR THE THREE MONTHS ENDED DECEMBER 31, 1996 AND 1995:


                                                      1996            1995  
SERIES 8                                         -----------      ----------
Revenues:
   Interest Income                               $    11,669     $   10,401 
                                                 -----------     ---------- 
Expenses:
   Asset Management Fee-
     General Partner                                 21,500          21,500 
   General and Administrative-
     General Partner                                  3,257           3,208 
   General and Administrative-
     Other                                            2,246           1,943 
   Amortization                                       3,745           3,911 
                                                 -----------     -----------
     Total Expenses                                  30,748          30,562 
                                                 -----------     -----------
Loss Before Equity in Losses of
 Project Partnerships                               (19,079)        (20,161)
Equity in Income (Losses) of Project
 Partnerships                                      (372,161)       (238,153)
                                                 -----------     -----------
Net Loss                                         $ (391,240)     $ (258,314)
                                                 ===========     ===========
Allocation of Net Loss:
   Limited Partners                              $ (387,327)     $ (255,731)
   General Partners                                  (3,913)         (2,583)
                                                 -----------     -----------
                                                 $ (391,240)     $ (258,314)
                                                 ===========     ===========
Net Loss Per Limited
 Partnership Unit                                $   (38.81)     $   (25.62)
   
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
                                            (Unaudited)

                      FOR THE THREE MONTHS ENDED DECEMBER 31, 1996 AND 1995:


                                                      1996            1995  
SERIES 9                                         -----------      ----------
Revenues:
   Interest Income                               $    8,436      $    6,095 
                                                 -----------     -----------
Expenses:
   Asset Management Fee-
     General Partner                                 12,000          12,000 
   General and Administrative-
     General Partner                                  1,818           1,847 
   General and Administrative-
     Other                                            1,373           1,078 
   Amortization                                       1,779           1,762 
                                                 -----------     -----------
     Total Expenses                                  16,970          16,687 
                                                 -----------     -----------
Loss Before Equity in Losses of
 Project Partnerships                                (8,534)        (10,592)
Equity in Income (Losses) of Project
 Partnerships                                      (116,661)          4,026 
                                                 -----------     -----------
Net Loss                                         $ (125,195)     $   (6,566)
                                                 ===========     ===========
Allocation of Net Loss:
   Limited Partners                              $ (123,943)     $   (6,500)
   General Partners                                  (1,252)            (66)
                                                 -----------     -----------
                                                 $ (125,195)     $   (6,566)
                                                 ===========     ===========
Net Loss Per Limited
 Partnership Unit                                $   (19.82)     $    (1.04)
   
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
                                            (Unaudited)

                      FOR THE THREE MONTHS ENDED DECEMBER 31, 1996 AND 1995:


                                                      1996            1995  
SERIES 10                                        -----------      ----------
Revenues:
   Interest Income                               $    6,032      $    6,633 
                                                 -----------     -----------
Expenses:
   Asset Management Fee-
     General Partner                                  7,500           7,500 
   General and Administrative-
     General Partner                                  1,136           1,154 
   General and Administrative-
     Other                                            1,101             992 
   Amortization                                       1,476           1,454 
                                                 -----------     -----------
     Total Expenses                                  11,213          11,100 
                                                 -----------     -----------
Loss Before Equity in Losses of
 Project Partnerships                                (5,181)         (4,467)
Equity in Income (Losses) of Project
 Partnerships                                       (43,529)         35,237 
                                                 -----------     -----------
Net Income (Loss)                                $  (48,710)     $   30,770 
                                                 ===========     ===========
Allocation of Net Income (Loss):
   Limited Partners                              $  (48,223)     $   30,462 
   General Partners                                    (487)            308 
                                                 -----------     -----------
                                                 $  (48,710)     $   30,770 
                                                 ===========     ===========
Net Income (Loss) Per Limited
 Partnership Unit                                $    (9.56)     $     6.04 
   
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
                                            (Unaudited)

                      FOR THE THREE MONTHS ENDED DECEMBER 31, 1996 AND 1995:


                                                      1996            1995  
SERIES 11                                        -----------      ----------
Revenues:
   Interest Income                               $    7,451      $   14,265 
                                                 -----------     -----------
Expenses:
   Asset Management Fee-
     General Partner                                  6,000           5,233 
   General and Administrative-
     General Partner                                    908             923 
   General and Administrative-
     Other                                            1,081             795 
   Amortization                                       1,663           1,585 
                                                 -----------     -----------
     Total Expenses                                   9,652           8,536 
                                                 -----------     -----------
Income (Loss) Before Equity in Income
 (Losses) of Project Partnerships                    (2,201)          5,729 
Equity in Income (Losses) of Project
 Partnerships                                        30,198          99,594 
                                                 -----------     -----------
Net Income (Loss)                                $   27,997      $  105,323 
                                                 ===========     ===========
Allocation of Net Income (Loss):
   Limited Partners                              $   27,717        $104,270 
   General Partners                                     280           1,053 
                                                 -----------     -----------
                                                 $   27,997      $  105,323 
                                                 ===========     ===========
Net Income (Loss) Per Limited
 Partnership Unit                                $     5.41      $    20.34 
   
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
                                            (Unaudited)

                      FOR THE THREE MONTHS ENDED DECEMBER 31, 1996 AND 1995:


                                                     1996            1995   
TOTAL SERIES 7 - 11                              -----------      ----------
Revenues:
   Interest Income                               $   44,526      $   48,274 
                                                 -----------     -----------
Expenses:
   Asset Management Fee-
     General Partner                                 66,500          65,733 
   General and Administrative-
     General Partner                                 10,073          10,132 
   General and Administrative-
     Other                                            7,961           6,353 
   Amortization                                      14,149          14,104 
                                                 -----------     -----------
     Total Expenses                                  98,683          96,322 
                                                 -----------     -----------
Loss Before Equity in Losses of
 Project Partnerships                               (54,157)        (48,048)
Equity in Income (Losses) of Project
 Partnerships                                      (750,794)       (280,918)
                                                 -----------     -----------
Net Loss                                         $ (804,951)     $ (328,966)
                                                 ===========     ===========
Allocation of Net Loss:
   Limited Partners                              $ (796,901)     $ (325,675)
   General Partners                                  (8,050)         (3,290)
                                                 -----------     -----------
                                                 $ (804,951)     $ (328,965)
                                                 ===========     ===========






                          See accompanying notes to financial statements.

<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                     STATEMENTS OF OPERATIONS
                                            (Unaudited)

                       FOR THE NINE MONTHS ENDED DECEMBER 31, 1996 AND 1995:


                                                     1996            1995   
SERIES 7                                         -----------      ----------
Revenues:
   Interest Income                               $   32,878      $   43,767 
                                                 -----------     -----------
Expenses:
   Asset Management Fee-
     General Partner                                 58,500          58,000 
   General and Administrative-
     General Partner                                  8,874           8,650 
   General and Administrative-
     Other                                           14,476          14,980 
   Amortization                                      16,432          16,418 
                                                 -----------     -----------
     Total Expenses                                  98,282          97,958 

Loss Before Equity in Losses of
 Project Partnerships                               (65,404)        (54,191)
Equity in Income (Losses) of Project
 Partnerships                                      (676,579)       (697,657)
                                                 -----------     -----------
Net Loss                                         $ (741,983)     $ (751,848)
                                                 ===========     ===========
Allocation of Net Loss:
   Limited Partners                              $ (734,563)     $ (744,330)
   General Partners                                  (7,420)         (7,518)
                                                 -----------     -----------
                                                 $ (741,983)     $ (751,848)
                                                 ===========     ===========
Net Loss Per Limited
 Partnership Unit                                $   (70.67)     $   (71.60)
   
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
                                            (Unaudited)

                       FOR THE NINE MONTHS ENDED DECEMBER 31, 1996 AND 1995:


                                                      1996            1995  
SERIES 8                                         -----------      ----------
Revenues:
   Interest Income                               $    37,445     $   35,743 
                                                 -----------     ---------- 
Expenses:
   Asset Management Fee-
     General Partner                                 64,500          64,500 
   General and Administrative-
     General Partner                                  9,785           9,513 
   General and Administrative-
     Other                                           15,637          16,288 
   Amortization                                       9,805          10,248 
                                                 -----------     -----------
     Total Expenses                                  99,727         100,549 
                                                 -----------     -----------
Loss Before Equity in Losses of
 Project Partnerships                               (62,282)        (64,806)
Equity in Income (Losses) of Project
 Partnerships                                      (792,107)       (651,504)
                                                 -----------     -----------
Net Loss                                         $ (854,389)     $ (716,310)
                                                 ===========     ===========
Allocation of Net Loss:
   Limited Partners                              $ (845,845)     $ (709,147)
   General Partners                                  (8,544)         (7,163)
                                                 -----------     -----------
                                                 $ (854,389)     $ (716,310)
                                                 ===========     ===========
Net Loss Per Limited
 Partnership Unit                                $   (84.75)     $   (71.06)
   
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
                                            (Unaudited)

                       FOR THE NINE MONTHS ENDED DECEMBER 31, 1996 AND 1995:


                                                      1996            1995  
SERIES 9                                         -----------     -----------
Revenues:
   Interest Income                               $   19,885      $   23,570 
                                                 -----------     -----------
Expenses:
   Asset Management Fee-
     General Partner                                 36,000          36,000 
   General and Administrative-
     General Partner                                  5,462           5,366 
   General and Administrative-
     Other                                            8,892           9,306 
   Amortization                                       5,337           4,835 
                                                 -----------     -----------
     Total Expenses                                  55,691          55,507 
                                                 -----------     -----------
Loss Before Equity in Losses of
 Project Partnerships                               (35,806)        (31,937)
Equity in Income (Losses) of Project
 Partnerships                                      (342,005)        (51,915)
                                                 -----------     -----------
Net Loss                                         $ (377,811)     $  (83,852)
                                                 ===========     ===========
Allocation of Net Loss:
   Limited Partners                              $ (374,033)     $  (83,013)
   General Partners                                  (3,778)           (839)
                                                 -----------     -----------
                                                 $ (377,811)     $  (83,852)
                                                 ===========     ===========
Net Loss Per Limited
 Partnership Unit                                $   (59.81)     $   (13.27)
   
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
                                            (Unaudited)

                       FOR THE NINE MONTHS ENDED DECEMBER 31, 1996 AND 1995:


                                                      1996            1995  
SERIES 10                                        -----------     -----------
Revenues:
   Interest Income                               $   19,065      $   21,050 
                                                 -----------     -----------
Expenses:
   Asset Management Fee-
     General Partner                                 22,500          22,500 
   General and Administrative-
     General Partner                                  3,412           3,352 
   General and Administrative-
     Other                                            6,158           5,602 
   Amortization                                       4,412           4,302 
                                                 -----------     -----------
     Total Expenses                                  36,482          35,756 
                                                 -----------     -----------
Loss Before Equity in Losses of
 Project Partnerships                               (17,417)        (14,706)
Equity in Income (Losses) of Project
 Partnerships                                      (148,096)          9,468 
                                                 -----------     -----------
Net Loss                                         $ (165,513)     $   (5,238)
                                                 ===========     ===========
Allocation of Net Loss:
   Limited Partners                              $ (163,858)     $   (5,186)
   General Partners                                  (1,655)            (52)
                                                 -----------     -----------
                                                 $ (165,513)     $   (5,238)
                                                 ===========     ===========
Net Loss Per Limited
 Partnership Unit                                $   (32.49)     $    (1.03)
   
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
                                            (Unaudited)

                       FOR THE NINE MONTHS ENDED DECEMBER 31, 1996 AND 1995:


                                                      1996            1995  
SERIES 11                                        -----------     -----------
Revenues:
   Interest Income                               $   23,447      $   59,354 
                                                 -----------     -----------
Expenses:
   Asset Management Fee-
     General Partner                                 18,000          14,888 
   General and Administrative-
     General Partner                                  2,728           2,622 
   General and Administrative-
     Other                                            5,357           5,337 
   Amortization                                       5,188           3,437 
                                                 -----------     -----------
     Total Expenses                                  31,273          26,284 
                                                 -----------     -----------
Income (Loss) Before Equity in Income
 (Losses) of Project Partnerships                    (7,826)         33,070 
Equity in Income (Losses) of Project
 Partnerships                                        73,769          70,106 
                                                 -----------     -----------
Net Income (Loss)                                $   65,943      $  103,176 
                                                 ===========     ===========
Allocation of Net Income (Loss):
   Limited Partners                              $   65,284      $  102,144 
   General Partners                                     659           1,032 
                                                 -----------     -----------
                                                 $   65,943      $  103,176 
                                                 ===========     ===========
Net Income (Loss) Per Limited
 Partnership Unit                                $    12.73      $    19.92 
   
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
                                            (Unaudited)

                       FOR THE NINE MONTHS ENDED DECEMBER 31, 1996 AND 1995:


                                                     1996            1995   
TOTAL SERIES 7 - 11                              -----------    ------------
Revenues:
   Interest Income                              $   132,720     $   183,484 
                                                ------------    ------------
Expenses:
   Asset Management Fee-
     General Partner                                199,500         195,888 
   General and Administrative-
     General Partner                                 30,261          29,413 
   General and Administrative-
     Other                                           50,520          51,513 
   Amortization                                      41,174          39,240 
                                                ------------    ------------
     Total Expenses                                 321,455         316,054 
                                                ------------    ------------
Loss Before Equity in Losses of
 Project Partnerships                              (188,735)       (132,570)
Equity in Income (Losses) of Project
 Partnerships                                    (1,885,018)     (1,321,502)
                                                ------------    ------------
Net Loss                                        $(2,073,753)    $(1,454,072)
                                                ============    ============
Allocation of Net Loss:
   Limited Partners                             $(2,053,015)    $(1,439,532)
   General Partners                                 (20,738)        (14,540)
                                                ------------    ------------
                                                $(2,073,753)    $(1,454,072)
                                                ============    ============






                          See accompanying notes to financial statements.

<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                  STATEMENTS OF PARTNERS' EQUITY
                                            (Unaudited)

                       FOR THE NINE MONTHS ENDED DECEMBER 31, 1996 AND 1995:

                                                    General 
                                 Limited           Partners'            Total  
                                 Partners'           Equity           Partners'
                                  Equity          (Deficit)            Equity  
SERIES 7                       -----------       -----------        -----------

Balance at
 March 31, 1995               $ 7,046,659         $ (21,021)       $ 7,025,638 

Distributions                           0                 0                  0 

Net Loss                         (744,330)           (7,518)          (751,848)
                               -----------        ----------        -----------
Balance at
 December 31, 1995            $ 6,302,329         $ (28,539)       $ 6,273,790 
                               ===========        ==========        ===========

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 
                               ===========        ==========        ===========




                          See accompanying notes to financial statements.





<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                  STATEMENTS OF PARTNERS' EQUITY
                                            (Unaudited)

                       FOR THE NINE MONTHS ENDED DECEMBER 31, 1996 AND 1995:

                                                    General 
                                 Limited           Partners'            Total  
                                 Partners'           Equity           Partners'
                                  Equity          (Deficit)            Equity  
SERIES 8                       -----------       -----------        -----------

Balance at
 March 31, 1995               $ 7,495,677         $ (12,797)       $ 7,482,880 

Distributions                           0                 0                  0 

Net Loss                         (709,147)           (7,163)          (716,310)
                               -----------        ----------        -----------
Balance at
 December 31, 1995            $ 6,786,530         $ (19,960)       $ 6,766,570 
                               ===========        ==========        ===========

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 
                               ===========        ==========        ===========




                          See accompanying notes to financial statements.





<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                  STATEMENTS OF PARTNERS' EQUITY
                                            (Unaudited)

                       FOR THE NINE MONTHS ENDED DECEMBER 31, 1996 AND 1995:

                                                    General 
                                 Limited           Partners'            Total  
                                 Partners'           Equity           Partners'
                                  Equity          (Deficit)            Equity  
SERIES 9                       -----------       -----------        -----------

Balance at
 March 31, 1995               $ 5,228,817          $ (2,575)       $ 5,226,242 

Distributions                           0                 0                  0 

Net Loss                          (83,013)             (839)           (83,852)
                               -----------        ----------        -----------
Balance at
 December 31, 1995            $ 5,145,804          $ (3,414)       $ 5,142,390 
                               ===========        ==========        ===========

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 
                               ===========        ==========        ===========




                          See accompanying notes to financial statements.





<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                  STATEMENTS OF PARTNERS' EQUITY
                                            (Unaudited)

                       FOR THE NINE MONTHS ENDED DECEMBER 31, 1996 AND 1995:

                                                    General 
                                 Limited           Partners'            Total  
                                 Partners'           Equity           Partners'
                                  Equity          (Deficit)            Equity  
SERIES 10                      -----------       -----------        -----------

Balance at
 March 31, 1995               $ 4,338,647         $    (802)       $ 4,337,845 

Distributions                           0                 0                  0 

Net Loss                           (5,186)              (52)            (5,238)
                               -----------        ----------        -----------
Balance at
 December 31, 1995            $ 4,333,461         $    (854)       $ 4,332,607 
                               ===========        ==========        ===========

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 
                               ===========        ==========        ===========




                          See accompanying notes to financial statements.





<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                  STATEMENTS OF PARTNERS' EQUITY
                                            (Unaudited)

                       FOR THE NINE MONTHS ENDED DECEMBER 31, 1996 AND 1995:

                                                    General 
                                 Limited           Partners'            Total  
                                 Partners'           Equity           Partners'
                                  Equity          (Deficit)            Equity  
SERIES 11                      -----------       -----------        -----------

Balance at
 March 31, 1995               $ 4,800,616         $   1,564        $ 4,802,180 

Distributions                     (46,690)                0            (46,690)

Net Income (Loss)                 102,144             1,032            103,176 
                               -----------        ----------        -----------
Balance at
 December 31, 1995            $ 4,856,070         $   2,596        $ 4,858,666 
                               ===========        ==========        ===========

Balance at
 March 31, 1996               $ 4,646,546         $     479        $ 4,647,025 

Net Income (Loss)                  65,284               659             65,943 
                               -----------        ----------        -----------
Balance at
 December 31, 1996            $ 4,711,830         $   1,138        $ 4,712,968 
                               ===========        ==========        ===========




                          See accompanying notes to financial statements.





<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

                                  STATEMENTS OF PARTNERS' EQUITY
                                            (Unaudited)

                       FOR THE NINE MONTHS ENDED DECEMBER 31, 1996 AND 1995:

                                                    General 
                                 Limited           Partners'            Total  
                                 Partners'           Equity           Partners'
                                  Equity          (Deficit)            Equity  
TOTAL SERIES 7-11              -----------       -----------        -----------

Balance at
 March 31, 1995               $28,910,416        $  (35,631)       $28,874,785 

Distributions                     (46,690)                0            (46,690)

Net Loss                       (1,439,532)          (14,540)        (1,454,072)
                               -----------        ----------        -----------
Balance at
 December 31, 1995            $27,424,194        $  (50,171)       $27,374,023 
                               ===========        ==========        ===========
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 
                               ===========        ==========        ===========




                          See accompanying notes to financial statements.





<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)
                                     STATEMENTS OF CASH FLOWS
                                            (Unaudited)
                       FOR THE NINE MONTHS ENDED DECEMBER 31, 1996 AND 1995:
                                                           1996          1995  
SERIES 7                                              -----------     ---------
Cash Flows from Operating Activities:
   Net Income (Loss)                                  $ (741,983)   $ (751,848)
   Adjustments to Reconcile Net Income
    (Loss) to Net Cash Provided by (Used in)
    Operating Activities:
     Amortization                                         16,432        16,418 
     Accreted Interest Income
      on Investments in Securities                       (24,321)      (24,116)
     Equity in (Income)/Losses of
      Project Partnerships                               676,579       697,657 
     Payment of Asset Management Fee                      35,551        27,680 
      Changes in Operating Assets and Liabilities:
       Increase in Payable to
         General Partners                                (16,147)         (823)
                                                      -----------   -----------
         Net Cash Provided by (Used in)
         Operating Activities                            (53,889)      (35,032)
                                                      -----------   -----------
Cash Flows from Investing Activities:
   Investments in Project Partnerships                    (3,333)     (421,182)
   Increase in Accounts Receivable                             0             0 
   (Increase) Decrease in Receivable
     from Project Partnerships                                 0             0 
   Acquisition Fees and Expenses                            (272)       (2,142)
   Distributions Received from
     Project Partnerships                                 18,925        18,941 
   Increase (Decrease) in Payable -
     General Partners - Acquisition Fees                       0             0 
     Project Partnerships                                      0             0 
                                                      -----------   -----------
         Net Cash Provided by (Used in)
         Investing Activities                             15,320      (404,383)
                                                      -----------   -----------
Cash Flows from Financing Activities:
   Distributions                                               0             0 
                                                      -----------   -----------
         Net Cash Provided by (Used in)
         Investing Activities                                  0             0 
                                                      -----------   -----------
Increase (Decrease) in Cash and 
 Cash Equivalents                                        (38,569)     (439,415)
Cash and Cash Equivalents at
 Beginning of Year                                       259,782       656,686 
                                                      -----------   -----------
Cash and Cash Equivalents at
 End of Year                                          $  221,213    $  217,271 
                                                      ===========   ===========
                          See accompanying notes to financial statements.
<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)
                                     STATEMENTS OF CASH FLOWS
                                            (Unaudited)
                       FOR THE NINE MONTHS ENDED DECEMBER 31, 1996 AND 1995:
                                                           1996          1995  
SERIES 8                                              -----------     ---------
Cash Flows from Operating Activities:
   Net Income (Loss)                                  $ (854,389)   $ (716,310)
   Adjustments to Reconcile Net Income
    (Loss) to Net Cash Provided by (Used in)
    Operating Activities:
     Amortization                                          9,805        10,248 
     Accreted Interest Income
      on Investments in Securities                       (21,871)      (21,737)
     Equity in (Income)/Losses of
      Project Partnerships                               792,107       651,504 
     Payment of Asset Management Fee                      24,813        16,236 
      Changes in Operating Assets and Liabilities:
       Increase in Payable to
         General Partners                                 11,100        27,325 
                                                      -----------   -----------
         Net Cash Provided by (Used in)
         Operating Activities                            (38,435)      (32,734)
                                                      -----------   -----------
Cash Flows from Investing Activities:
   Investments in Project Partnerships                       453        28,554 
   Increase in Accounts Receivable                             0             0 
   (Increase) Decrease in Receivable
     from Project Partnerships                            75,574       133,482 
   Acquisition Fees and Expenses                               0             0 
   Distributions Received from
     Project Partnerships                                 21,403        11,337 
   Increase (Decrease) in Payable -
     General Partners - Acquisition Fees                       0             0 
     Project Partnerships                                      0      (241,400)
                                                      -----------   -----------
         Net Cash Provided by (Used in)
         Investing Activities                             97,430       (68,027)
                                                      -----------   -----------
Cash Flows from Financing Activities:
   Distributions                                               0             0 
                                                      -----------   -----------
         Net Cash Provided by (Used in)
         Investing Activities                                  0             0 
                                                      -----------   -----------
Increase (Decrease) in Cash and 
 Cash Equivalents                                         58,995      (100,761)
Cash and Cash Equivalents at
 Beginning of Year                                       295,021       343,908 
                                                      -----------   -----------
Cash and Cash Equivalents at
 End of Year                                          $  354,016    $  243,147 
                                                      ===========   ===========
                          See accompanying notes to financial statements.
<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)
                                     STATEMENTS OF CASH FLOWS
                                            (Unaudited)
                       FOR THE NINE MONTHS ENDED DECEMBER 31, 1996 AND 1995:
                                                           1996          1995  
SERIES 9                                              -----------   -----------
Cash Flows from Operating Activities:
   Net Income (Loss)                                  $ (377,811)   $  (83,852)
   Adjustments to Reconcile Net Income
    (Loss) to Net Cash Provided by (Used in)
    Operating Activities:
     Amortization                                          5,337         4,835 
     Accreted Interest Income
      on Investments in Securities                       (13,457)      (13,481)
     Equity in (Income)/Losses of
      Project Partnerships                               342,005        51,915 
     Payment of Asset Management Fee                       7,570             0 
      Changes in Operating Assets and Liabilities:
       Increase in Payable to
         General Partners                                 18,618        26,976 
                                                      -----------   -----------
         Net Cash Provided by (Used in)
         Operating Activities                            (17,738)      (13,607)
                                                      -----------   -----------
Cash Flows from Investing Activities:
   Investments in Project Partnerships                    18,076        21,192 
   Increase in Accounts Receivable                             0             0 
   (Increase) Decrease in Receivable
     from Project Partnerships                             8,545        14,382 
   Acquisition Fees and Expenses                               0        (5,124)
   Distributions Received from
     Project Partnerships                                  6,160         6,034 
   Increase (Decrease) in Payable -
     General Partners - Acquisition Fees                       0         5,124 
     Project Partnerships                                      0      (333,006)
                                                      -----------   -----------
         Net Cash Provided by (Used in)
         Investing Activities                             32,781      (291,398)
                                                      -----------   -----------
Cash Flows from Financing Activities:
   Distributions                                               0             0 
                                                      -----------   -----------
         Net Cash Provided by (Used in)
         Investing Activities                                  0             0 
                                                      -----------   -----------
Increase (Decrease) in Cash and 
 Cash Equivalents                                         15,043      (305,005)
Cash and Cash Equivalents at
 Beginning of Year                                       112,252       386,116 
                                                      -----------   -----------
Cash and Cash Equivalents at
 End of Year                                          $  127,295    $   81,111 
                                                      ===========   ===========
                          See accompanying notes to financial statements.
<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)
                                     STATEMENTS OF CASH FLOWS
                                            (Unaudited)
                       FOR THE NINE MONTHS ENDED DECEMBER 31, 1996 AND 1995:
                                                           1996          1995  
SERIES 10                                             -----------     ---------
Cash Flows from Operating Activities:
   Net Income (Loss)                                  $ (165,513)   $   (5,238)
   Adjustments to Reconcile Net Income
    (Loss) to Net Cash Provided by (Used in)
    Operating Activities:
     Amortization                                          4,412         4,302 
     Accreted Interest Income
      on Investments in Securities                       (11,963)      (11,859)
     Equity in (Income)/Losses of
      Project Partnerships                               148,096        (9.468)
     Payment of Asset Management Fee                      10,981        17,050 
      Changes in Operating Assets and Liabilities: 
       Increase in Payable to
         General Partners                                 (1,132)      (14,791)
                                                      -----------   -----------
         Net Cash Provided by (Used in)
         Operating Activities                            (15,119)      (20,004)
                                                      -----------   -----------
Cash Flows from Investing Activities:
   Investments in Project Partnerships                         0       (13,737)
   Increase in Accounts Receivable                             0             0 
   (Increase) Decrease in Receivable
     from Project Partnerships                            13,059       (13,059)
   Acquisition Fees and Expenses                               0           (96)
   Distributions Received from
     Project Partnerships                                  3,070         1,823 
   Increase (Decrease) in Payable -
     General Partners - Acquisition Fees                       0             0 
     Project Partnerships                                      0       (61,812)
                                                      -----------   -----------
         Net Cash Provided by (Used in)
         Investing Activities                             16,129       (86,881)
                                                      -----------   -----------
Cash Flows from Financing Activities:
   Distributions                                               0             0 
                                                      -----------   -----------
         Net Cash Provided by (Used in)
         Investing Activities                                  0             0 
                                                      -----------   -----------
Increase (Decrease) in Cash and 
 Cash Equivalents                                          1,010      (106,885)
Cash and Cash Equivalents at
 Beginning of Year                                       162,576       318,131 
                                                      -----------   -----------
Cash and Cash Equivalents at
 End of Year                                          $  163,586    $  211,246 
                                                      ===========   ===========
                          See accompanying notes to financial statements.
<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)
                                     STATEMENTS OF CASH FLOWS
                                            (Unaudited)
                       FOR THE NINE MONTHS ENDED DECEMBER 31, 1996 AND 1995:
                                                           1996          1995  
SERIES 11                                             -----------     ---------
Cash Flows from Operating Activities:
   Net Income (Loss)                                  $   65,943    $  103,176 
   Adjustments to Reconcile Net Income
    (Loss) to Net Cash Provided by (Used in)
    Operating Activities:
     Amortization                                          5,188         3,437 
     Accreted Interest Income
      on Investments in Securities                       (13,697)      (13,512)
     Equity in (Income)/Losses of
      Project Partnerships                               (73,769)      (70,106)
     Payment of Asset Management Fee                      19,785             0 
      Changes in Operating Assets and Liabilities:
       Increase in Payable to
         General Partners                                (27,074)      (44,969)
                                                      -----------   -----------
         Net Cash Provided by (Used in)
         Operating Activities                            (23,624)      (21,974)
                                                      -----------   -----------
Cash Flows from Investing Activities:
   Investments in Project Partnerships                    58,925      (617,714)
   Increase in Accounts Receivable                             0        (2,395)
   (Increase) Decrease in Receivable
     from Project Partnerships                             8,250             0 
   Acquisition Fees and Expenses                            (178)     (105,176)
   Distributions Received from
     Project Partnerships                                  1,500             0 
   Increase (Decrease) in Payable -
     General Partners - Acquisition Fees                       0             0 
     Project Partnerships                               (279,887)      (67,522)
                                                      -----------   -----------
         Net Cash Provided by (Used in)
         Investing Activities                           (211,390)     (792,807)
                                                      -----------   -----------
Cash Flows from Financing Activities:
   Distributions                                               0       (46,690)
                                                      -----------   -----------
         Net Cash Provided by (Used in)
         Investing Activities                                  0       (46,690)
                                                      -----------   -----------
Increase (Decrease) in Cash and 
 Cash Equivalents                                       (235,014)     (861,471)
Cash and Cash Equivalents at
 Beginning of Year                                       365,027     1,598,884 
                                                      -----------   -----------
Cash and Cash Equivalents at
 End of Year                                          $  130,013    $  737,413 
                                                      ===========   ===========
                          See accompanying notes to financial statements.
<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)
                                     STATEMENTS OF CASH FLOWS
                                            (Unaudited)
                       FOR THE NINE MONTHS ENDED DECEMBER 31, 1996 AND 1995:
                                                           1996          1995  
TOTAL SERIES 7 - 11                                   -----------     ---------
Cash Flows from Operating Activities:
   Net Income (Loss)                                 $(2,073,753)  $(1,454,072)
   Adjustments to Reconcile Net Income
    (Loss) to Net Cash Provided by (Used in)
    Operating Activities:
     Amortization                                         41,174        39,240 
     Accreted Interest Income
      on Investments in Securities                       (85,309)      (84,705)
     Equity in (Income)/Losses of
      Project Partnerships                             1,885,018     1,321,502 
     Payment of Asset Management Fee                      98,700        60,966 
      Changes in Operating Assets and Liabilities:
       Increase in Payable to
         General Partners                                (14,635)       (6,282)
                                                     ------------  ------------
         Net Cash Provided by (Used in)
         Operating Activities                           (148,805)     (123,351)
                                                     ------------  ------------
Cash Flows from Investing Activities:
   Investments in Project Partnerships                    74,122    (1,002,887)
   Increase in Accounts Receivable                             0        (2,395)
   (Increase) Decrease in Receivable
     from Project Partnerships                           105,428       134,805 
   Acquisition Fees and Expenses                            (450)     (112,538)
   Distributions Received from
     Project Partnerships                                 51,058        38,135 
   Increase (Decrease) in Payable -
     General Partners - Acquisition Fees                       0         5,124 
     Project Partnerships                               (279,888)     (703,740)
                                                     ------------  ------------
         Net Cash Provided by (Used in)
         Investing Activities                            (49,730)   (1,643,496)
                                                     ------------  ------------
Cash Flows from Financing Activities:
   Distributions                                               0       (46,690)
                                                     ------------  ------------
         Net Cash Provided by (Used in)
         Investing Activities                                  0       (46,690)
                                                     ------------  ------------
Increase (Decrease) in Cash and 
 Cash Equivalents                                       (198,535)   (1,813,537)
Cash and Cash Equivalents at
 Beginning of Year                                     1,194,658     3,303,725 
                                                     ------------  ------------
Cash and Cash Equivalents at
 End of Year                                         $   996,123   $ 1,490,188 
                                                     ============  ============
                          See accompanying notes to financial statements.
<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)              

                                   NOTES TO FINANCIAL STATEMENTS
                                            (Unaudited)
                                         December 31, 1996

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, December 31,
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.  Gateway 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. f/k/a RJ Credit Partners, 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 is 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 are  specifically allocated among the
limited partners of such Series.

   Operating profits and losses, cash distributions from operations
and Tax Credits from each Series are 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.
<PAGE>
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.

Fair Value of Financial Instruments

     The fair value of investment securities is discussed in Note 3. 
The fair value of current assets and current liabilities is assumed
to be equal to their reported carrying amounts due to their short
term nature.  It is not practicable to estimate the fair value of
the long term payable to the general partner because it is
attributable to a related party transaction for which there would
be no fair market equivalent.

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, 1996.  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, 1996 Balance Sheet includes Investment in
Securities consisting of U.S. Treasury Security Strips which
represents their cost, plus accreted interest income of $122,623
for Series 7, $99,797 for Series 8, $51,596 for Series 9, $41,803
for Series 10 and $44,149 for Series 11.  

                               Estimated        Cost Plus      Gross Unrealized
                                 Market          Accreted           Gains and  
                                  Value    Accreted Interest           (Losses)
                               ----------- -----------------    ---------------
Series 7                         $ 521,129          $502,840          $ 18,289 
Series 8                           480,508           472,863             7,645 
Series 9                           313,294           320,021            (6,727)
Series 10                          257,214           251,687             5,527 
Series 11                          278,423           262,870            15,553 
<PAGE>
   As of December 31, 1996 the cost and accreted interest of debt
securities by contractual maturities is as follows:

                                  Series 7          Series 8           Series 9
                                ----------        ----------         ----------
Due within 1 year                $  43,827         $  38,839         $   26,895
After 1 year
 through 5 years                   176,364           161,816            104,475
After 5 years
 through 10 years                  206,546           196,630            121,692
After 10 years                      76,103            75,578             66,959
                                ----------        ----------         ----------
  Total Amount Carried on
    Balance Sheet                $ 502,840         $ 472,863          $ 320,021
                                ==========        ==========         ==========

                                 Series 10         Series 11              Total
                                ----------        ----------         ----------
Due within 1 year                $  19,913         $  19,904         $  149,378
After 1 year
 through 5 years                    81,196            78,816            602,667
After 5 years
 through 10 years                   87,827            95,622            708,317
After 10 years                      62,751            68,528            349,919
                                ----------        ----------         ----------
  Total Amount Carried on
    Balance Sheet                $ 251,687         $ 262,870         $1,810,281
                                ==========        ==========         ==========

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 twelve 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 periods ended December 31, 1996 and 1995 the General
Partners and affiliates are entitled to compensation and
reimbursement for costs and expenses incurred by Gateway as
follows: 

  Acquisition Fees - Acquisition fees are paid for services
rendered by the Managing General Partner in selecting properties
for acquisition and providing other services in connection with the
acquisition of interests in Project Partnerships.  The acquisition
fees paid or payable to the General Partners will not exceed the
amount that is equal to 8% of the gross proceeds.  For Series 11
the fees will not exceed an amount that is equal to 5% of the gross
proceeds.  The fees paid are included in Investments in Project
Partnerships on the Balance Sheet. 

                                       December 31,     December 31,
                                             1996             1995  
                                          -----------    -----------
  Series 7                                $        0      $        0
  Series 8                                         0               0
  Series 9                                         0           5,124
  Series 10                                        0           1,496
  Series 11                                        0          86,984
                                           ----------     ----------

  Total                                   $        0      $   93,604
                                           ==========     ==========

  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. 

                                       December 31,     December 31,
                                             1996             1995  
                                           ----------     ----------
  Series 7                                 $     272      $   2,142 
  Series 8                                         0              0 
  Series 9                                         0              0 
  Series 10                                        0         (1,400)
  Series 11                                      178         18,192 
                                           ----------     --------- 
 
  Total                                    $     450      $  18,934 
                                           ==========     ==========

  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. 
<PAGE>
                                       December 31,     December 31,
                                             1996             1995  
                                           ----------     ----------

  Series 7                                 $   58,500     $   58,000
  Series 8                                     64,500         64,500
  Series 9                                     36,000         36,000
  Series 10                                    22,500         22,500
  Series 11                                    18,000         14,888
                                           ----------     ----------

  Total                                    $  199,500     $  195,888
                                           ==========     ==========

  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.

                                       December 31,     December 31,
                                             1996             1995  
                                           ----------     ----------

  Series 7                                 $    8,874     $    8,560
  Series 8                                      9,785          9,513
  Series 9                                      5,462          5,366
  Series 10                                     3,412          3,352
  Series 11                                     2,728          2,622
                                           ----------     ----------

  Total                                    $   30,261     $   29,413
                                           ==========     ==========
<PAGE>
NOTE 5 - INVESTMENTS IN PROJECT PARTNERSHIPS:

   As of December 31, 1996, 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:

                                                     DECEMBER 31,     MARCH 31,
                                                           1996         1996   
SERIES 7                                               ----------    ----------
   
Capital Contributions to Project
Partnerships (purchase price paid
for limited partner interests in
Project Partnerships)                                $ 7,732,089   $ 7,728,757 

Accumulated amortization of excess
of purchase price of Project
Partnerships over book value
of underlying assets (1)                                   1,208           644 

Cumulative equity in losses of
Project Partnerships                                  (3,613,330)   (2,936,751)

Cumulative distributions received
from Project Partnerships                                (58,951)      (40,026)

Excess of investment cost over the
underlying assets acquired:
   Acquisition fees and expenses                         793,335       793,063 
   Accumulated amortization of
   acquisition fees and expenses                      (97,701)         (80,705)
                                                     ------------  ------------

Investments in
 Project Partnerships                                $ 4,756,650   $ 5,464,982 
                                                     ============  ============

(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, 1996 these excess costs were
$21,129 and March 31, 1996 these excess costs were $28,498.



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

   As of December 31, 1996, 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:


                                                     DECEMBER 31,     MARCH 31,
                                                           1996         1996   
SERIES 8                                               ----------    ----------

Capital Contributions to Project
Partnerships (purchase price paid
for limited partner interests in
Project Partnerships)                                $ 7,586,105   $ 7,586,558 

Accumulated amortization of excess
of purchase price of Project
Partnerships over book value
of underlying assets (1)                                   2,146         1,607 

Cumulative equity in losses of
Project Partnerships                                  (3,200,908)   (2,408,801)

Cumulative distributions received
from Project Partnerships                                (49,339)      (27,936)

Excess of investment cost over the
underlying assets acquired:
   Acquisition fees and expenses                         549,773       549,773 
   Accumulated amortization of
   acquisition fees and expenses                         (53,386)      (43,041)
                                                     ------------  ------------

Investments in
 Project Partnerships                                $ 4,834,391   $ 5,658,160 
                                                     ============  ============

(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, 1996 these excess costs were
$12,416 and March 31, 1996 these excess costs were $24,830.


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

   As of December 31, 1996, 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:

                                                     DECEMBER 31,     MARCH 31,
                                                           1996         1996   
SERIES 9                                               ----------    ----------

Capital Contributions to Project
Partnerships (purchase price paid
for limited partner interests in
Project Partnerships)                                $ 4,914,116   $ 4,932,192 

Accumulated amortization of excess
of purchase price of Project
Partnerships over book value
of underlying assets (1)                                     763           871 

Cumulative equity in losses of
Project Partnerships                                  (1,087,428)     (745,423)

Cumulative distributions received
from Project Partnerships                                (24,569)      (18,409)

Excess of investment cost over the
underlying assets acquired:
   Acquisition fees and expenses                         244,087       244,087 
   Accumulated amortization of
   acquisition fees and expenses                         (21,246)      (16,017)
                                                     ------------  ------------
Investments in
 Project Partnerships                                $ 4,025,723   $ 4,397,301 
                                                     ============  ============

(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, 1996 these excess costs were
($9,618) and March 31, 1996 these excess costs were ($5,076).



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

   As of December 31, 1996, 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:

                                                     DECEMBER 31,     MARCH 31,
                                                           1996         1996   
SERIES 10                                              ----------    ----------
   
Capital Contributions to Project
Partnerships (purchase price paid
for limited partner interests in
Project Partnerships)                                $ 3,914,672   $ 3,914,673 

Accumulated amortization of excess
of purchase price of Project
Partnerships over book value
of underlying assets (1)                                    (476)         (282)

Cumulative equity in losses of
Project Partnerships                                    (438,024)     (289,928)

Cumulative distributions received
from Project Partnerships                                (24,082)      (21,012)

Excess of investment cost over the
underlying assets acquired:
   Acquisition fees and expenses                         196,738       196,738 
   Accumulated amortization of
   acquisition fees and expenses                         (16,366)      (12,148)
                                                     ------------  ------------

Investments in
 Project Partnerships                                $ 3,632,462   $ 3,788,041 
                                                     ============  ============

(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, 1996 these excess costs were
($14,400) and March 31, 1996 these excess costs were ($9,822).



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

   As of December 31, 1996, 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:

                                                     DECEMBER 31,     MARCH 31,
                                                           1996         1996   
SERIES 11                                              ----------    ----------

Capital Contributions to Project
Partnerships (purchase price paid
for limited partner interests in
Project Partnerships)                                $ 4,144,542   $ 4,203,467 

Accumulated amortization of excess
of purchase price of Project
Partnerships over book value
of underlying assets (1)                                   1,790           758 

Cumulative equity in losses of
Project Partnerships                                     (70,425)     (144,194)

Cumulative distributions received
from Project Partnerships                                 (1,500)            0 

Excess of investment cost over the
underlying assets acquired:
   Acquisition fees and expenses                         290,335       290,157 
   Accumulated amortization of
   acquisition fees and expenses                         (16,092)       (9,872)
                                                     ------------  ------------

Investments in
 Project Partnerships                                $ 4,348,650   $ 4,340,316 
                                                     ============  ============

(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, 1996 these excess costs were
$2656167,589 and March 31, 1996 these excess costs were $29,433.



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

   The following is a summary of Investments in Project
Partnerships:


                                                     DECEMBER 31,     MARCH 31,
                                                           1996         1996   
TOTAL SERIES 7 - 11                                    ----------    ----------

Capital Contributions to Project
Partnerships (purchase price paid
for limited partner interests in
Project Partnerships)                               $ 28,291,524  $ 28,365,647 

Accumulated amortization of excess
of purchase price of Project
Partnerships over book value
of underlying assets                                       5,431         3,598 

Cumulative equity in losses of
Project Partnerships                                  (8,410,115)   (6,525,097)

Cumulative distributions received
from Project Partnerships                               (158,441)     (107,383)

Excess of investment cost over the
underlying assets acquired:
   Acquisition fees and expenses                       2,074,268     2,073,818 
   Accumulated amortization of
   acquisition fees and expenses                        (204,791)     (161,783)
                                                    ------------- -------------

Investments in
 Project Partnerships                               $ 21,597,876  $ 23,648,800 
                                                    ============= =============



<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:

                                                           1996          1995  
SERIES 7                                               ----------    ----------
SUMMARIZED BALANCE SHEETS
Assets:
   Current assets                                   $  2,525,608  $  2,146,286 
   Investment properties, net                         39,752,979    41,260,573 
   Other assets                                          110,200       107,952 
                                                    ------------- -------------
     Total assets                                   $ 42,388,787  $ 43,514,811 
                                                    ============= =============
Liabilities and Partners' Equity
   Current liabilities                              $  1,131,625  $  1,441,361 
   Long-term debt                                     37,169,871    37,093,205 
                                                    ------------- -------------
     Total liabilities                                38,301,496    38,534,566 

Partners' Equity
   Limited Partner                                     4,036,157     5,003,988 
   General Partners                                       51,134       (23,743)
                                                    ------------- -------------
                                                       4,087,291     4,980,245 
     Total liabilities and
     partners' equity                               $ 42,388,787  $ 43,514,811 
                                                    ============= =============
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income                             $  3,186,339  $  3,128,703 
Expenses:
   Operating expenses                                  1,693,521     1,568,583 
   Interest expense                                      972,680     1,039,712 
   Depreciation and amortization                       1,203,551     1,225,112 
                                                    ------------- -------------
     Total expenses                                    3,869,752     3,833,407 

       Net loss                                     $   (683,413) $   (704,704)
                                                    ============= =============
   Other partners' share
    of net loss                                     $     (6,834) $     (7,047)
   Partnership's share of net loss                  $   (676,579) $   (697,657)
                                                    ------------- -------------
   Equity in Loss of
      Project Partnerships                          $   (683,413) $   (704,704)
                                                    ============= =============


<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:


                                                           1996          1995  
SERIES 8                                              -----------    ----------
SUMMARIZED BALANCE SHEETS
Assets:
   Current assets                                   $  2,013,830  $  2,262,104 
   Investment properties, net                         42,827,854    41,930,288 
   Other assets                                          121,676        75,722 
                                                    ------------- -------------
     Total assets                                   $ 44,963,360  $ 44,268,114 
                                                    ============= =============
Liabilities and Partners' Equity
   Current liabilities                              $  1,507,955  $  1,722,923 
   Long-term debt                                     39,134,012    36,772,507 
                                                    ------------- -------------
     Total liabilities                                40,641,967    38,495,430 

Partners' Equity
   Limited Partner                                     4,361,451     5,727,913 
   General Partners                                      (40,058)       44,771 
                                                    ------------- -------------
                                                       4,321,393     5,772,684 
     Total liabilities and
     partners' equity                               $ 44,963,360  $ 44,268,114 
                                                    ============= =============
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income                             $  2,995,784  $  2,843,444 
Expenses:
   Operating expenses                                  1,777,253     1,524,065 
   Interest expense                                      854,717     1,015,837 
   Depreciation and amortization                       1,163,922       961,627 
                                                    ------------- -------------
     Total expenses                                    3,795,892     3,501,529 

       Net loss                                     $   (800,108) $   (658,085)
                                                    ============= =============
   Other partners' share
    of net loss                                     $     (8,001) $     (6,581)

   Partnership's share of net loss                  $   (792,107) $   (651,504)
                                                    ------------- -------------
   Equity in Loss of
      Project Partnerships                          $   (800,108) $   (658,085)
                                                    ============= =============


<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:


                                                           1996          1995  
SERIES 9                                              -----------    ----------
SUMMARIZED BALANCE SHEETS
Assets:
   Current assets                                   $  1,424,022  $  2,054,515 
   Investment properties, net                         23,745,7979   24,013,184 
   Other assets                                           10,982        39,568 
                                                    ------------- -------------
     Total assets                                   $ 25,180,801  $ 26,107,267 
                                                    ============= =============
Liabilities and Partners' Equity
   Current liabilities                              $    673,224  $  1,281,797 
   Long-term debt                                     20,706,474    20,198,118 
                                                    ------------- -------------
     Total liabilities                                21,379,474    21,479,915 

Partners' Equity
   Limited Partner                                     3,792,392     4,580,129 
   General Partners                                        8,711        47,223 
                                                    ------------- ------------ 
                                                       3,801,103     4,627,352 
     Total liabilities and
     partners' equity                               $ 25,180,801  $ 26,107,267 
                                                    ============= =============
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income                             $  1,658,806  $  1,497,672 
Expenses:
   Operating expenses                                    855,326       712,206 
   Interest expense                                      488,828       498,295 
   Depreciation and amortization                         660,112       339,610 
                                                    ------------- -------------
     Total expenses                                    2,004,266     1,550,111 

       Net loss                                     $   (345,460) $    (52,439)
                                                    ============= =============
   Other partners' share
    of net loss                                     $     (3,455) $       (524)

   Partnership's share of net loss                  $   (342,005) $    (51,915)
                                                    ------------- -------------
   Equity in Loss of
      Project Partnerships                          $   (345,460) $    (52,439)
                                                    ============= =============


<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:


                                                           1996          1995  
SERIES 10                                             -----------    ----------
SUMMARIZED BALANCE SHEETS
Assets:
   Current assets                                   $  1,105,234  $  1,411,828 
   Investment properties, net                         16,325,794    16,644,033 
   Other assets                                           14,927        19,356 
                                                    ------------- -------------
     Total assets                                   $ 17,445,955  $ 18,075,217 
                                                    ============= =============
Liabilities and Partners' Equity
   Current liabilities                              $    345,100  $    778,560 
   Long-term debt                                     13,606,421    13,442,031 
                                                    ------------- -------------
     Total liabilities                                13,951,521    14,220,591 

Partners' Equity
   Limited Partner                                     3,455,342     3,798,021 
   General Partners                                       39,092        56,605 
                                                    ------------- -------------
                                                       3,494,434     3,854,626 
     Total liabilities and
     partners' equity                               $ 17,445,955  $ 18,075,217 
                                                    ============= =============
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income                             $  1,043,912  $    968,611 
Expenses:
   Operating expenses                                    590,576       510,232 
   Interest expense                                      224,633       230,432 
   Depreciation and amortization                         378,295       218,383 
                                                    ------------- -------------
     Total expenses                                    1,193,504       959,047 

       Net income (loss)                            $   (149,592) $      9,564 
                                                    ============= =============
   Other partners' share
    of net income (loss)                            $     (1,496) $         96 

   Partnership's share of
    net income (loss)                               $   (148,096) $      9,468 
                                                    ------------- -------------
   Equity in Income (Losses) of
      Project Partnerships                          $   (149,592) $      9,564 
                                                    ============= =============


<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:


                                                           1996          1995  
SERIES 11                                             -----------    ----------
SUMMARIZED BALANCE SHEETS
Assets:
   Current assets                                   $  1,644,880  $  3,421,354 
   Investment properties, net                         14,591,975    12,087,187 
   Other assets                                          131,613         7,830 
                                                    ------------- -------------
     Total assets                                   $ 16,368,468  $ 15,516,371 
                                                    ============= =============
Liabilities and Partners' Equity
   Current liabilities                              $  1,125,960  $  2,353,588 
   Long-term debt                                     11,011,134     8,724,936 
                                                    ------------- -------------
     Total liabilities                                12,137,094   11,078, 524 

Partners' Equity
   Limited Partner                                     4,061,928     4,219,772 
   General Partners                                      169,446       218,075 
                                                    ------------- -------------
                                                       4,231,374     4,437,847 
     Total liabilities and
     partners' equity                               $ 16,368,468  $ 15,516,371 
                                                    ============= =============
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income                             $  1,063,736  $    385,369 
Expenses:
   Operating expenses                                    528,581       202,379 
   Interest expense                                      299,725        87,000 
   Depreciation and amortization                         160,916        25,176 
                                                    ------------- -------------
     Total expenses                                      989,222       314,555 

       Net income (loss)                            $     74,514  $     70,814 
                                                    ============= =============
   Other partners' share
    of net income (loss)                            $        745  $        708 

   Partnership's share of
    net income (loss)                               $     73,769  $     70,106 
                                                    ------------- -------------
   Equity in Income (Losses) of
      Project Partnerships                          $     74,514  $     70,814 
                                                    ============= =============


<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 Project
Partnerships as of September 30 of each year:


                                                           1996          1995  
TOTAL SERIES 7 - 11                                   -----------    ----------
SUMMARIZED BALANCE SHEETS
Assets:
   Current assets                                   $  8,713,574  $ 11,296,087 
   Investment properties, net                        137,244,399   135,935,265 
   Other assets                                          389,398       250,428 
                                                    ------------- -------------
     Total assets                                   $146,347,371  $147,481,780 
                                                    ============= =============
Liabilities and Partners' Equity
   Current liabilities                              $  4,783,864  $  7,578,229 
   Long-term debt                                    121,627,912   116,230,797 
                                                    ------------- -------------
     Total liabilities                               126,411,776   123,809,026 

Partners' Equity
   Limited Partner                                    19,707,270    23,329,823 
   General Partners                                      228,325       342,931 
                                                    ------------- -------------
                                                      19,935,595    23,672,754 
     Total liabilities and
     partners' equity                               $146,347,371  $147,481,780 
                                                    ============= =============
SUMMARIZED STATEMENTS OF OPERATIONS:
Rental and other income                             $  9,948,577  $  8,823,799 
Expenses:
   Operating expenses                                  5,445,257     4,517,465 
   Interest expense                                    2,840,583     2,871,276 
   Depreciation and amortization                       3,566,796     2,769,908 
                                                    ------------- -------------
     Total expenses                                   11,852,636    10,158,649 

       Net loss                                     $ (1,904,059) $ (1,334,850)
                                                    ============= =============
   Other partners' share
    of net loss                                     $    (19,041) $    (13,348)

   Partnership's share of net loss                  $ (1,885,018) $ (1,321,502)
                                                    ------------- ------------ 
   Equity in Loss of
      Project Partnerships                          $ (1,904,059) $ (1,334,850)
                                                    ============= =============


<PAGE>
                                 GATEWAY TAX CREDIT FUND III LTD.
                                  (A Florida Limited Partnership)

Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                         December 31, 1996


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.  Project Partnership acquisitions and the status of
project operations are shown on the following table:


                                      As of December 31, 1995
          Under                    Recently            Fully
          Construction            Completed        Operating             Totals

Series 7      1                     -                 38                   39
Series 8      4                     1                 38                   43
Series 9      2                     1                 21                   24
Series 10     1                     3                 11                   15
Series 11     9                     1                  2                   12


                                      As of December 31, 1996

          Under                    Recently            Fully
          Construction            Completed        Operating             Totals

Series 7      -                     -                 39                   39
Series 8      -                     -                 43                   43
Series 9      -                     -                 24                   24
Series 10     -                     -                 15                   15
Series 11     -                     -                 12                   12


     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. 

     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 31,1996 to the nine months ended December 31,
1995.  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 the Series
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, 1996, the Series had $221,213 of short-term
investments (Cash and Cash Equivalents).  It also had $502,840 in
Zero Coupon Treasuries.  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 $741,983 for the nine months ending December 31, 1996. 
However, after adjusting for Equity in Losses of Project
Partnerships of $676,579 and the changes in operating assets and
liabilities, net cash used in operating activities was $53,889.
Cash provided by investing activities totaled $15,320 primarily
consisting of cash distributions from the Project Partnerships of
$18,925.  There were no unusual events or trends to describe.

     Expenses for the three and nine months ended December 31, 1996
were comparable to the three and nine months ended December 31,
1995.   Interest income decreased for the three and nine months
ended December 31, 1996 as compared to December 31, 1995 due to
lower interest rates and a decrease in the average balance of cash
available for investment.  There were no unusual variations in the
operating results between these two periods.

     Series 8 - Gateway closed this Series on June 28, 1993 after
receiving $9,980,000 from 664 Limited Partner investors.  Equity in
losses of Project Partnerships were comparable for the three and
nine months ended December 31, 1996 to the three and nine months
ended December 31, 1995.

     At December 31, 1996, the Series had $354,016 of short-term
investments (Cash and Cash Equivalents).  It also had $472,863 in
Zero Coupon Treasuries.  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 $854,389 for the nine months ended December 31, 1996. 
However, after adjusting for Equity in Losses of Project
Partnerships of $792,107  and the changes in operating assets and
liabilities, net cash used in operating activities was $38,435. 
Cash provided by investing activities totaled $97,430 and was
primarily due to the reduction of a receivable from the Project
Partnerships and cash distributions from the Project Partnerships
of $21,403.

     Income and expenses for the three and nine months ended December
31, 1996 were comparable to the three and nine months ended
December 31, 1995.  There were no unusual variations in the
operating results between these two periods.

     Series 9 - Gateway closed this Series on December 31, 1993 after
receiving $6,254,000 from 406 Limited Partner investors.  Equity in
losses of Project Partnerships increased from $51,915 for the nine
ended December 31, 1995 to $342,005 for the nine months ended
December 31, 1996.  This increase was due to 3 properties moving
from the construction and rent-up phases to fully operating in
1996.

     At December 31, 1996, the Series had $127,295 of short-term
investments (Cash and Cash Equivalents).  It also had $320,021 in
Zero Coupon Treasuries.  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 $377,811 for the nine months ended December 31, 1996. 
After adjusting for Equity in Losses of Project Partnerships of
$342,005 and the changes in operating assets and liabilities, net
cash used in operating activities was $17,738.  Cash provided by
investing activities totaled $32,781 and was primarily due to the
reduction of a receivable from the Project Partnerships and cash
distributions from the Project Partnerships of $6,160.  There were
no unusual events or trends to describe.

     Interest income and expenses for the three and nine months ended
December 31, 1996 were comparable to the three and nine months
ended December 31, 1995.  There were no unusual variations in the
operating results between these two periods.

     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 decreased from income of $9,468 for
the nine months ended December 31, 1995 to losses of $148,096 for
the nine months ended December 31, 1996 as 4 properties moved from
the construction and rent-up phases to fully operating in 1996.   

     At December 31, 1996, the Series had $163,586 of short-term
investments (Cash and Cash Equivalents).  It also had $251,687 in
Zero Coupon Treasuries.  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 $165,513 for the nine months ending December 31, 1996. 
After adjusting for Equity in Losses of Project Partnerships of
$148,096 and the changes in operating assets and liabilities, net
cash used in operating activities was $15,119.  Cash provided by
investing activities totaled $16,129 and was due to a reduction of
receivables from Project Partnerships of $13,059 and cash
distributions from Project Partnerships of $3,070.  There were no
unusual events or trends to describe.

     Interest income and expenses for the three and nine months ended
December 31, 1996 were comparable to the three and nine months
ended December 31, 1995.  There were no unusual variations in the
operating results between these two periods.

     Series 11 - Gateway closed this Series on April 29, 1994 after
receiving $5,127,000 from 330 Limited investors.  Equity in Income
of Project Partnerships were comparable for the nine months ended
December 31, 1996 to nine months ended December 31, 1995.

     At December 31, 1996, the Series had $130,013 of short-term
investments (Cash and Cash Equivalents).  It also had $262,870 in
Zero Coupon Treasuries.  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 net
income of $65,943 for the nine months ending December 31, 1996. 
After adjusting for Equity in Income of Project Partnerships of
$73,769 and the changes in operating assets and liabilities, net
cash used in operating activities was $23,624.  Cash used in
investing activities totaled $211,390 and was used for the purchase
of Investments in Project Partnerships.  There were no unusual
events or trends to describe.

     Expenses for the three months and nine months ended December 31,
1996 were comparable to the three and nine months ended December
31, 1995.  Interest income decreased for the three and nine months
ended December 31, 1996 as compared to December 31, 1995 due to a
decrease in the average balance of cash available for investment. 
<PAGE>
                                    PART II.  OTHER INFORMATION

ITEM 6 - EXHIBIT AND REPORTS ON FORM 8-K

   a.  Exhibits - NONE

   b.  Reports filed on Form 8-K - NONE

<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. f/k/a
                                          RJ Credit Partners, Inc.
                                          Managing General Partner




Date:  February 11, 1997                  By:/s/ Ronald M. Diner 
                                          Ronald M. Diner
                                          President



Date:  February 11, 1997                  By:/s/ Sandra L. Furey  
                                          Sandra L. Furey
                                          Secretary and Treasurer


<PAGE>