UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q


(Mark One)


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


For the quarterly period ended December 15, 2007


                                       OR


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



                         COMMISSION FILE NUMBER 0-17015

                          LIBERTY TAX CREDIT PLUS L.P.
             (Exact name of registrant as specified in its charter)



                    Delaware                                      13-3446500
------------------------------------------------             -------------------
(State or other jurisdiction of incorporation or              (I.R.S. Employer
                 organization)                               Identification No.)

     625 Madison Avenue, New York, New York                         10022
------------------------------------------------             -------------------
    (Address of principal executive offices)                      (Zip Code)



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


     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]


     Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large  accelerated  filer" in Rule 12b-2 of the Exchange  Act.  (Check
one):

Large accelerated filer [ ]   Accelerated filer [ ]    Non-accelerated filer [X]

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

<PAGE>

                         PART I - Financial Information

Item 1. Financial Statements

                          LIBERTY TAX CREDIT PLUS L.P.
                                AND SUBSIDIARIES
                           Consolidated Balance Sheets
<TABLE>
<CAPTION>
                                                                                 December 15,     March 15,
                                                                                     2007            2007
                                                                                 ------------    ------------
                                                                                 (Unaudited)      (Audited)
<S>                                                                              <C>             <C>
                                     ASSETS

Operating assets

   Property and equipment, at cost, net of accumulated depreciation of
     $37,037,612 and $42,785,507, respectively                                   $ 20,826,810    $ 29,093,468
   Cash and cash equivalents                                                        6,242,937       6,046,635
   Cash held in escrow                                                              2,409,380       2,940,919
   Accounts receivable - tenants                                                      206,200         208,079
   Deferred costs, net of accumulated amortization of $390,185 and
     $426,439, respectively                                                           673,707         727,459
   Other assets                                                                     1,721,947       2,176,261
                                                                                 ------------    ------------

Total operating assets                                                             32,080,981      41,192,821
                                                                                 ------------    ------------

Assets from discontinued operations (Note 5)
   Property and equipment held for sale, net of accumulated depreciation
     of $11,448,809 and $9,605,003, respectively                                    9,151,257       5,252,734
   Net assets held for sale                                                         1,936,083       1,210,221
                                                                                 ------------    ------------
Total assets from discontinued operations                                          11,087,340       6,462,955
                                                                                 ------------    ------------

Total assets                                                                     $ 43,168,321    $ 47,655,776
                                                                                 ============    ============

                   LIABILITIES AND PARTNERS' (DEFICIT) EQUITY

Operating liabilities

   Mortgage notes payable                                                        $ 30,835,521    $ 38,047,957
   Accounts payable                                                                 2,408,318       4,890,335
   Accrued interest payable                                                         5,308,448       6,616,457
   Security deposits payable                                                          138,801         194,026
   Due to local general partners and affiliates                                    16,590,264      16,096,222
   Due to general partners and affiliates                                           2,897,591       2,724,952
                                                                                 ------------    ------------

Total operating liabilities                                                        58,178,943      68,569,949
                                                                                 ------------    ------------

Liabilities from discontinued operations (Note 5)
   Mortgage notes payable of assets held for sale                                  11,431,532       4,507,279
   Net liabilities held for sale (including minority interest)                      2,560,400          84,174
                                                                                 ------------    ------------
Total liabilities from discontinued operations                                     13,991,932       4,591,453
                                                                                 ------------    ------------

Total liabilities                                                                  72,170,875      73,161,402
                                                                                 ------------    ------------

Minority interests                                                                   (562,906)       (548,799)
                                                                                 ------------    ------------

Commitments and contingencies (Note 6)

Partners' (deficit) equity
   Limited partners (15,987.5 BACs issued and outstanding)                        (32,671,345)    (29,223,352)
   General partners                                                                 4,231,697       4,266,525
                                                                                 ------------    ------------

Total partners' (deficit) equity                                                  (28,439,648)    (24,956,827)
                                                                                 ------------    ------------

Total liabilities and partners' (deficit) equity                                 $ 43,168,321    $ 47,655,776
                                                                                 ============    ============
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       2
<PAGE>

                          LIBERTY TAX CREDIT PLUS L.P.
                                AND SUBSIDIARIES
                      Consolidated Statements of Operations
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                      Three Months Ended               Nine Months Ended
                                                          December 15,                    December 15,
                                                 ----------------------------    ----------------------------
                                                     2007            2006*           2007            2006*
                                                 ------------    ------------    ------------    ------------
<S>                                              <C>             <C>             <C>             <C>
Operations:

Revenues
Rental income                                    $  2,233,043    $  2,490,339    $  7,058,800    $  7,634,473
Other                                                 100,062          76,976         271,021         250,100
                                                 ------------    ------------    ------------    ------------

Total revenues                                      2,333,105       2,567,315       7,329,821       7,884,573
                                                 ------------    ------------    ------------    ------------

Expenses
General and administrative                            538,476         502,114       1,565,491       1,369,481
General and administrative - related parties
  (Note 2)                                            225,272         247,130         705,555         776,201
Repairs and maintenance                               728,644       1,170,859       1,945,545       2,646,139
Operating and other                                   376,737         245,990       1,353,237       1,325,549
Taxes                                                 138,724         138,856         400,596         405,298
Insurance                                             146,107         146,875         451,231         447,379
Financial                                             897,022         837,351       2,380,801       2,490,569
Depreciation and amortization                         540,126         539,058       1,587,314       1,616,894
                                                 ------------    ------------    ------------    ------------

Total expenses from operations                      3,591,108       3,828,233      10,389,770      11,077,510
                                                 ------------    ------------    ------------    ------------

Loss from operations before minority interest      (1,258,003)     (1,260,918)     (3,059,949)     (3,192,937)

Minority interest in loss of subsidiaries from
  operations                                            5,870           5,785          18,323           9,602
                                                 ------------    ------------    ------------    ------------

Loss from operations                               (1,252,133)     (1,255,133)     (3,041,626)     (3,183,335)

Discontinued Operations:
(Loss) income from discontinued operations
  (including gain on sale of properties)
  (Note 5)                                            (22,976)      2,665,784        (441,195)      8,542,347
                                                 ------------    ------------    ------------    ------------
Net (loss) income                                $ (1,275,109)   $  1,410,651    $ (3,482,821)   $  5,359,012
                                                 ============    ============    ============    ============

Loss from operations - limited partners          $ (1,239,612)   $ (1,242,582)   $ (3,011,210)   $ (3,151,502)
(Loss) income from discontinued operations
  (including gain on sale of properties) -
  limited partners                                    (22,746)      2,639,126        (436,783)      8,456,924
                                                 ------------    ------------    ------------    ------------
Net (loss) income - limited partners             $ (1,262,358)   $  1,396,544    $ (3,447,993)   $  5,305,422
                                                 ============    ============    ============    ============

Number of BACs outstanding                           15,987.5        15,987.5        15,987.5        15,987.5
                                                 ============    ============    ============    ============

Loss from operations per BAC                     $     (77.54)   $     (77.72)   $    (188.35)   $    (197.12)
(Loss) income from discontinued operations
  per BAC                                               (1.42)         165.08          (27.32)         528.97
                                                 ------------    ------------    ------------    ------------

Net (loss) income per BAC                        $     (78.96)   $      87.36    $    (215.67)   $     331.85
                                                 ============    ============    ============    ============
</TABLE>

 *  Reclassified for comparative purposes

          See accompanying notes to consolidated financial statements.

                                       3
<PAGE>

                          LIBERTY TAX CREDIT PLUS L.P.
                                AND SUBSIDIARIES
         Consolidated Statement of Changes in Partners' (Deficit) Equity
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                   Limited         General
                                                    Total          Partners        Partner
                                                 ------------    ------------    ------------
<S>                                              <C>             <C>             <C>
Partners' (deficit) equity - March 16, 2007      $(24,956,827)   $(29,223,352)   $  4,266,525

Net loss                                           (3,482,821)     (3,447,993)        (34,828)
                                                 ------------    ------------    ------------

Partners' (deficit) equity - December 15, 2007   $(28,439,648)   $(32,671,345)   $  4,231,697
                                                 ============    ============    ============
</TABLE>

           See accompanying notes to consolidated financial statements

                                       4
<PAGE>

                          LIBERTY TAX CREDIT PLUS L.P.
                                AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                Increase (decrease) in Cash and Cash Equivalents
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                              Nine months Ended
                                                                                 December 15,
                                                                         ----------------------------
                                                                             2007            2006
                                                                         ------------    ------------
<S>                                                                      <C>             <C>
Net (loss) income                                                        $ (3,482,821)   $  5,359,012

Adjustments  to reconcile  net (loss)  income to net cash (used in)
  provided by operating activities:
  Gain on sale of properties                                                  (84,827)    (10,925,090)
  Depreciation and amortization                                             1,865,027       2,947,224
  Minority interest in loss of subsidiaries                                   302,332       1,102,905
  Increase in accounts receivable - tenants                                   (16,056)       (311,030)
  Decrease (increase) in other assets                                         202,699        (330,759)
  Increase in accounts payable                                                209,878       1,384,247
  Increase in accrued interest payable                                        846,786       1,015,260
  Decrease in security deposits payable                                       (10,449)        (31,052)
  Increase in due to general partners and affiliates                          205,786          75,340
  (Increase) decrease in cash held in escrow                                 (167,686)        267,236
                                                                         ------------    ------------

Net cash (used in) provided by operating activities                          (129,331)        553,293
                                                                         ------------    ------------

Cash flows from investing activities:

  Decrease in cash held in escrow                                             286,817         249,481
  Proceeds from sale of investments                                         3,435,000      18,942,480
  Costs paid relating to sale of properties                                  (438,161)     (2,237,891)
  Improvements to property and equipment                                      (59,318)       (428,090)
                                                                         ------------    ------------

Net cash provided by investing activities                                   3,224,338      16,525,980
                                                                         ------------    ------------

Cash flows from financing activities:

  Repayments of mortgage notes                                               (288,183)    (14,332,892)
  Increase in due to local general partners and affiliates                    534,067         779,473
  Decrease in due to local general partners and affiliates                    (41,445)       (418,711)
  Increase in deferred costs                                                   (3,834)              0
  Decrease in capitalization of consolidated subsidiaries
    attributable to minority interest                                        (212,161)     (1,233,355)
  Distribution                                                             (2,777,970)              0
                                                                         ------------    ------------

  Net cash used in financing activities                                    (2,789,526)    (15,205,485)
                                                                         ------------    ------------

  Net increase in cash and cash equivalents                                   305,481       1,873,788

  Cash and cash equivalents at beginning of period                          6,390,501       4,006,542
                                                                         ------------    ------------

  Cash and cash equivalents at end of period*                            $  6,695,982    $  5,880,330
                                                                         ============    ============

Summarized below are the components of the gain on sale of properties:

  Proceeds from sale of investments - net                                $ (2,996,839)   $(16,704,589)
  Decrease in property and equipment, net of accumulated depreciation       2,605,211      27,554,006
  Decrease in mortgage notes payable                                                0     (17,797,548)
  Decrease in due to general partners and affiliates                                0          (7,500)
  Decrease in due to local general partner and affiliates                           0      (4,604,506)
  Decrease in cash held in escrow                                              18,663       3,294,032
  Decrease in rents receivable                                                 14,532         322,446
  Decrease (increase) in other assets                                          38,109      (1,785,807)
  Increase (decrease) in accounts payable                                     254,160      (1,304,762)
  Decrease in accrued interest payable                                              0        (270,072)
  Decrease in security deposits payable                                       (18,663)       (247,688)
  Decrease in deferred cost                                                         0         574,529
  Decrease in capitalization of consolidated subsidiaries
    attributable to minority interest                                               0          52,369
</TABLE>

*  Cash and cash equivalents,  end of period, includes cash and cash equivalents
   from discontinued operations of $453,045 and $143,220, respectively.

           See accompanying notes to consolidated financial statements


                                       5
<PAGE>

                          LIBERTY TAX CREDIT PLUS L.P.
                                AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                December 15, 2007
                                   (Unaudited)


Note 1 - General

The  consolidated  financial  statements  for the nine months ended December 15,
2007 and 2006,  include  the  accounts  of  Liberty  Tax Credit  Plus L.P.  (the
"Partnership") and nine and sixteen subsidiary  partnerships (each a "subsidiary
partnership" or "Local Partnership"),  respectively, in which the Partnership is
a  limited  partner.  Through  the  rights of the  Partnership  and/or a general
partner of the  Partnership (a "General  Partner"),  which General Partner has a
contractual  obligation  to act on behalf  of the  Partnership,  to  remove  the
general partners of each subsidiary  partnership (the "Local General  Partners")
and to approve certain major operating and financial decisions,  the Partnership
has a  controlling  financial  interest  in  the  subsidiary  partnerships.  All
intercompany  accounts and transactions  with the subsidiary  partnerships  have
been eliminated in consolidation.

For financial  reporting  purposes,  the  Partnership's  fiscal  quarter ends on
December 15. All subsidiary  partnerships  have fiscal quarters ending September
30. Accounts of the subsidiary  partnerships have been adjusted for intercompany
transactions from October 1 through December 15. The Partnership's  quarter ends
on December 15 in order to allow adequate time for the subsidiary  partnerships'
financial  statements to be prepared and consolidated.  The books and records of
the Partnership are maintained on the accrual basis of accounting, in accordance
with accounting  principles  generally  accepted in the United States of America
("GAAP").

In the opinion of the General  Partners,  the accompanying  unaudited  financial
statements  contain  all  adjustments   (consisting  only  of  normal  recurring
adjustments)   necessary  to  present  fairly  the  financial  position  of  the
Partnership  as of  December  15,  2007 and  March  15,  2007,  the  results  of
operations  for the three and nine months  ended  December 15, 2007 and 2006 and
cash flows for the nine months ended  December 15, 2007 and 2006.  However,  the
operating results and cash flows for the nine months ended December 15, 2007 may
not be indicative of the results for the year.

Certain  information  and  note  disclosures  which  are  normally  included  in
financial  statements  prepared  in  accordance  with GAAP have been  omitted or
condensed. These consolidated financial statements should be read in conjunction
with the financial  statements and notes thereto  included in the  Partnership's
Annual Report on Form 10-K for the period ended March 15, 2007.

Increases  (decreases)  in  the  capitalization  of  consolidated   subsidiaries
attributable  to  minority  interest  arise  from  cash  contributions  and cash
distributions to the minority interest partners.

The  Partnership's  investment in each  subsidiary  partnership  is equal to the
respective  subsidiary  partnership's  partners'  equity less minority  interest
capital,  if any.  Losses  attributable  to minority  interests which exceed the
minority interests' investments in the subsidiary partnerships have been charged
to the  Partnership.  There were no such  losses  for the three and nine  months
ended December 15, 2007 and 2006. In consolidation,  all subsidiary  partnership
losses are  included  in the  Partnership's  capital  account  except for losses
allocated to minority interest capital.

New Accounting Pronouncements
-----------------------------

In September 2006, the FASB issued SFAS No. 157, FAIR VALUE MEASUREMENTS,  which
established a framework  for measuring the fair value of assets and  liabilities
as required by numerous other accounting pronouncements,  and expands disclosure
requirements  of  the  fair  values  of  certain  assets  and  liabilities.  The
provisions of this statement do not have a material  impact on the  consolidated
financial statements.

In  February  2007 the FASB  issued  SFAS No.  159,  THE FAIR  VALUE  OPTION FOR
FINANCIAL ASSETS AND FINANCIAL  LIABILITIES.  This statement was issued with the
intent to provide an  alternative  measurement  treatment for certain  financial
assets and liabilities.  The alternative  measurement would permit fair value to
be used for both initial and subsequent measurement,  with changes in fair value
recognized in earnings as those changes occur. This "Fair Value Option" would be
available on a contract by contract  basis.  The provisions of this statement do
not have a material impact on the consolidated financial statements.

In December  2007,  the FASB issued SFAS No. 160,  NONCONTROLLING  INTERESTS  IN
CONSOLIDATED FINANCIAL STATEMENTS.  This statement was issued with the intent to
improve  the  relevance,   comparability,  and  transparency  of  the  financial
information  that a  reporting  entity  provides in its  consolidated  financial
statements for those entities that have outstanding  noncontrolling  interest in
one or more  subsidiaries.  The effective  date for this provision is for fiscal
year ends  beginning  after  December 15,  2008.  The  Partnership  is currently
evaluating the impact of the  provisions of this  statement on the  consolidated
financial statements.


Note 2 - Related Party Transactions

An affiliate of the General  Partners  has a 1% interest,  as a special  limited
partner,  in each of the  subsidiary  partnerships.  An affiliate of the General
Partners also has a minority interest in certain subsidiary partnerships.

                                       6
<PAGE>

                          LIBERTY TAX CREDIT PLUS L.P.
                                AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                December 15, 2007
                                   (Unaudited)


The costs  incurred to related  parties from  operations  for the three and nine
months ended December 15, 2007 and 2006 were as follows:
<TABLE>
<CAPTION>
                                                         Three Months Ended     Nine months Ended
                                                             December 15,          December 15,
                                                         -------------------   -------------------
                                                           2007       2006*      2007       2006*
                                                         --------   --------   --------   --------
<S>                                                      <C>        <C>        <C>        <C>
Partnership management fees (a)                          $ 77,125   $153,935   $305,125   $424,574
Expense reimbursement (b)                                  70,816     15,749    166,792    118,611
Local administrative fee (d)                                1,875      1,875      5,625      5,625
                                                         --------   --------   --------   --------
Total general and administrative-General Partners         149,816    171,559    477,542    548,810
                                                         --------   --------   --------   --------
Property management fees incurred to affiliates of the
  local general partners (c)                               75,456     75,571    228,013    227,391
                                                         --------   --------   --------   --------
Total general and administrative-related parties         $225,272   $247,130   $705,555   $776,201
                                                         ========   ========   ========   ========
</TABLE>
* Reclassified for comparative purpose.


The costs incurred to related parties from discontinued operations for the three
and nine months ended December 15, 2007 and 2006 were as follows:
<TABLE>
<CAPTION>
                                                         Three Months Ended     Nine months Ended
                                                             December 15,          December 15,
                                                         -------------------   -------------------
                                                           2007       2006*      2007       2006*
                                                         --------   --------   --------   --------
<S>                                                      <C>        <C>        <C>        <C>
Local administrative fee (d)                             $  1,250   $  4,567   $  3,750   $ 13,703
                                                         --------   --------   --------   --------
Total general and administrative-General Partners           1,250      4,567      3,750     13,703
                                                         --------   --------   --------   --------
Property management fees incurred to affiliates of the
  local general partners (c)                               85,523     81,555    198,293    263,050
                                                         --------   --------   --------   --------
Total general and administrative-related parties         $ 86,773   $ 86,122   $202,043   $276,753
                                                         ========   ========   ========   ========
</TABLE>

* Reclassified for comparative purposes.


(a) The General  Partners are entitled to receive a partnership  management fee,
after payment of all Partnership expenses,  which together with the local annual
administrative  fees  will not  exceed a maximum  of 0.5% per annum of  invested
assets (as  defined in the  Partnership's  Amended  and  Restated  Agreement  of
Limited Partnership ("Partnership Agreement")), for administering the affairs of
the  Partnership.  The  partnership  management  fee,  subject to the  foregoing
limitation,  will be determined by the General Partners in their sole discretion
based upon their review of the  Partnership's  investments.  Unpaid  partnership
management  fees for any  year  will be  accrued  without  interest  and will be
payable from working capital  reserves or to the extent of available funds after
the Partnership has made  distributions to the limited partners and BACs holders
of sale or refinancing  proceeds equal to their original  capital  contributions
plus a 10% priority  return thereon (to the extent not  theretofore  paid out of
cash flow).  Partnership  management fees owed to the General Partners amounting
to  approximately  $2,697,000  and  $2,574,000  were  accrued  and  unpaid as of
December 15, 2007 and March 15, 2007, respectively.

(b) The  Partnership  reimburses the General  Partners and their  affiliates for
actual Partnership operating expenses incurred by the General Partners and their
affiliates on the  Partnership's  behalf.  The amount of reimbursement  from the
Partnership is limited by the provisions of the Partnership  Agreement.  Another
affiliate of the General Partners performs asset monitoring for the Partnership.
These   services   include  site  visits  and   evaluations  of  the  subsidiary
partnerships' performance. Expense reimbursements and asset monitoring fees owed
to affiliates of the General  Partners  amounting to  approximately  $48,000 and
$35,000  were  accrued  and unpaid as of December  15, 2007 and March 15,  2007,
respectively.

(c)  Property  management  fees  incurred  by  the  subsidiary  partnerships  in
operations  amounted to $224,792  and $257,303 and $617,747 and $833,960 for the
three and nine months ended December 15, 2007 and 2006,  respectively.  Of these
fees,  $160,979  and  $157,126  and  $426,306  and  $490,441  were  incurred  to
affiliates of the local general partners,  which include $85,523 and $81,555 and
$198,293 and $263,050 of fees relating to discontinued operations.

(d) Liberty  Associates  III L.P.,  a General  Partner  and the special  limited
partner  of  the  subsidiary  partnerships,  is  entitled  to  receive  a  local
administrative fee of up to $2,500 per year from each subsidiary partnership.


Note 3 - Sale of Properties

The Partnership is currently in the process of disposing of its investments.  It
is anticipated that this process will take a number of years. As of December 15,
2007,  the  property and the related  assets and  liabilities  of fifteen  Local
Partnerships and the limited  partnership  interest in eight Local  Partnerships
were sold. In addition,  as of December 15, 2007,  the  Partnership  has entered
into  an  agreement  to sell  its  limited  partnership  interest  in one  Local
Partnership  and two Local  Partnerships  have entered into  agreements  to sell
their   property  and  the  related  assets  and   liabilities   (see  Note  4).

                                       7
<PAGE>

                          LIBERTY TAX CREDIT PLUS L.P.
                                AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                December 15, 2007
                                   (Unaudited)


Subsequently, the Partnership sold its limited partnership interest in one Local
Partnership  (see Note 7). There can be no assurance as to when the  Partnership
will dispose of its remaining eight  investments or the amount of proceeds which
may be received. However, based on the historical operating results of the Local
Partnerships and the current economic conditions, including changes in tax laws,
it is unlikely  that the proceeds  from such sales  received by the  Partnership
will be sufficient to return to the limited partners their original investment.

On May 11, 2007, the property and the related assets and  liabilities of Charles
Drew Court Associates,  L.P. ("Charles Drew") were sold to an unaffiliated third
party  purchaser  for a sales  price of  $3,435,000.  The  Partnership  received
$2,765,000  as a  distribution  from this  sale  after  the  repayment  of other
liabilities,   closing  costs  and   distributions   to  minority   interest  of
approximately  $670,000.  The sale resulted in a loss of approximately  $24,000,
resulting  from the  write-off  of the basis in the  property at the date of the
sale,  which was recorded  during the quarter ended June 15, 2007.  The loss was
adjusted by approximately  $88,000 in gain which was recorded during the quarter
ended September 15, 2007, resulting in overall gain of approximately $64,000.

On December 29, 2006,  the property and the related  assets and  liabilities  of
United-Pennsylvanian,  L.P.  ("United Penn") were sold to an unaffiliated  third
party  purchaser  for a sales  price  of  $500,000  plus the  assumption  of the
mortgage debt. The  Partnership  received  $217,227 as a distribution  from this
sale after the  repayment of  mortgages,  other  liabilities,  closing costs and
distributions to minority interest of approximately  $283,000. The sale resulted
in a gain of  approximately  $2,225,000,  resulting  from the  write-off  of the
deficit basis in the property at the date of the sale, which was recorded during
the quarter ended March 15, 2007.  An  adjustment  to the gain of  approximately
$21,000 was recorded during the quarter ended September 15, 2007 resulting in an
overall gain of approximately $2,246,000.

On October 1, 2006, the  Partnership  sold its limited  partnership  interest in
Shiloh Grove Limited  Partnership  ("Shiloh Grove") to the Local General Partner
for a sales price of $149,990.  The Partnership  received proceeds of $49,990 on
October 3, 2006 and additional  payments of proceeds  totaling  $50,000  through
December 15, 2007.  The remaining  $50,000 is to be paid in guaranteed  payments
payable on certain  dates  through April 1, 2008 and is included in other assets
at December 15, 2007. The sale resulted in a gain of approximately $2,859,000 as
a result of the write-off of the deficit basis in the property of  approximately
$2,709,000  at the  time of the  sale,  and the  $149,990  cash  and  guaranteed
payments receivable from the sale.

On August 31, 2006, the  Partnership  sold its limited  partnership  interest in
Alameda Towers Associates,  L.P. ("Alameda Towers") to the Local General Partner
for a sales price of $2,092,490. The Partnership received proceeds of $92,490 on
September 5, 2006 and additional  payments of proceeds totaling $820,000 through
December 15, 2007. The remaining $1,180,000 is to be paid in guaranteed payments
payable on certain dates through  December 31, 2008,  which is included in other
assets at  December  15,  2007.  The sale  resulted  in a loss of  approximately
$7,000,   resulting  from  the  write-off  of  the  basis  in  the  property  of
approximately  $2,099,000  and  the  $2,092,490  cash  and  guaranteed  payments
receivable  from the sale,  which was recorded during the quarter ended December
15, 2006. An adjustment to the loss of approximately $26,000 was recorded during
the quarter ended March 15, 2007  resulting in an overall loss of  approximately
$33,000.

On June 5,  2006,  the  property  and the  related  assets  and  liabilities  of
Willoughby/Wycoff  Housing  Associates,  L.P.  ("Willoughby")  were  sold  to an
unaffiliated  third party purchaser for a sales price of $4,800,000.  There were
no  distributions  from  this sale  after  the  repayment  of  mortgages,  other
liabilities and closing costs of approximately $4,800,000.  The sale resulted in
a gain of approximately $2,785,000,  resulting from the write-off of the deficit
basis in the  property  at the date of the sale  which was  recorded  during the
quarter  ended  September  15,  2006.  The gain was  adjusted  by  approximately
$756,000 in loss,  which was recorded  during the quarter  ended March 15, 2007,
resulting in an overall gain of approximately $2,029,000.

On May 1, 2006,  the property and the related  assets and  liabilities  of Grand
Concourse  Housing  Associates,   L.P.  ("Grand  Concourse")  were  sold  to  an
unaffiliated  third  party  purchaser  for a  sales  price  of  $4,937,500.  The
Partnership  received  $797,203  as a  distribution  from  this  sale  after the
repayment of mortgages,  other  liabilities,  closing costs and distributions to
minority  interest of approximately  $4,140,000.  The sale resulted in a gain of
approximately  $2,104,000,  resulting from the write-off of the deficit basis in
the property at the date of the sale which was recorded during the quarter ended
September  15, 2006. An  adjustment  to the gain of  approximately  $383,000 was
recorded  during the quarter ended March 15, 2007,  resulting in an overall gain
of approximately $2,487,000.

On May 1, 2006, the property and the related assets and liabilities of Concourse
Artists  Housing  Associates,   L.P.  ("Concourse  Artists")  were  sold  to  an
unaffiliated  third  party  purchaser  for a  sales  price  of  $1,797,500.  The
Partnership  received  $278,553  as a  distribution  from  this  sale  after the
repayment of mortgages,  other  liabilities,  closing costs and distributions to
minority  interest of approximately  $1,519,000.  The sale resulted in a gain of
approximately $672,000, resulting from the write-off of the deficit basis in the
property at the date of the sale which was  recorded  during the  quarter  ended
September  15, 2006.  An  adjustment  to the gain of  approximately  $28,000 was
recorded  during the quarter ended March 15, 2007,  resulting in an overall gain
of approximately $700,000.

On May 1, 2006,  the property and the related  assets and  liabilities  of Robin
Housing  Associates,  L.P. ("Robin Housing") were sold to an unaffiliated  third
party  purchaser  for a sales  price of  $7,265,000.  The  Partnership  received
$1,743,907  as a  distribution  from this sale after the repayment of mortgages,
other  liabilities,  closing  costs and  distributions  to minority  interest of
approximately  $5,521,000.   The  sale  resulted  in  a  gain  of  approximately
$3,115,000, resulting from the write-off of the deficit basis in the property at
the date of the sale which was recorded  during the quarter ended  September 15,
2006. An adjustment to the gain of  approximately  $219,000 was recorded  during
the quarter ended March 15, 2007,  resulting in an overall gain of approximately
$3,334,000.

                                       8
<PAGE>

                          LIBERTY TAX CREDIT PLUS L.P.
                                AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                December 15, 2007
                                   (Unaudited)


Note 4 - Assets Held for Sale

On April 26, 2007, the Partnership entered into an agreement to sell its limited
partnership  interest  in West Kinney  Associates,  L.P.  ("West  Kinney") to an
affiliate  of the Local  General  Partner for a sales price of $600,000  and the
assumption of the  outstanding  mortgages  and related  accrued  interest  which
amounted to approximately  $4,475,000 on September 30, 2007. The sales documents
have been executed and the initial  deposit funds are being held in escrow.  The
closing is expected to occur in January 2008. No assurance can be given that the
sale will actually  occur.  West Kinney has been classified as an asset held for
sale as of the quarter  ended June 15,  2007.  As of September  30,  2007,  West
Kinney  had  property  and  equipment,  at cost,  of  approximately  $7,187,000,
accumulated  depreciation  of  approximately  $4,465,000  and  mortgage  debt of
approximately $3,070,000.

On April 18, 2007,  Quality Hill Historic District Phase II - A, L.P.  ("Quality
Hill")  entered into a purchase and sale  agreement to sell the property and the
related assets and  liabilities to an  unaffiliated  third party purchaser for a
sales  price of  $3,275,000.  The sales  documents  have been  executed  and the
initial deposit funds are being held in escrow. The closing is expected to occur
in February  2008. No assurance can be given that the sale will actually  occur.
Quality  Hill has been  classified  as an asset held for sale as of the  quarter
ended December 15, 2007. As of September 30, 2007, Quality Hill had property and
equipment,  at cost, of approximately  $6,781,000,  accumulated  depreciation of
approximately $2,994,000 and mortgage debt of approximately $3,871,000.

On September 28, 2006, Greenleaf Associates,  L.P.  ("Greenleaf") entered into a
purchase and sale  agreement  to sell the  property  and the related  assets and
liabilities  to an  unaffiliated  third  party  purchaser  for a sales  price of
$5,264,177  including the assumption of the mortgage  debt. The sales  documents
have been executed and the initial  deposit funds are being held in escrow.  The
closing is expected to occur in January 2008. No assurance can be given that the
sale will actually  occur.  Greenleaf  has been  classified as an asset held for
sale as of the quarter  ended  December  15,  2006.  As of  September  30, 2007,
Greenleaf  had property and  equipment,  at cost, of  approximately  $6,479,000,
accumulated  depreciation  of  approximately  $3,923,000  and  mortgage  debt of
approximately $4,491,000.

Note 5 - Discontinued Operations

The following table summarizes the financial  position of the Local Partnerships
that are classified as  discontinued  operations  because the  respective  Local
Partnerships  were  classified as assets held for sale. As of December 15, 2007,
Charles Drew,  Concourse  Artists,  Grand Concourse,  Greenleaf,  Robin Housing,
United  Penn,  Quality  Hill,  Willoughby  and West  Kinney were  classified  as
discontinued  operations on the  consolidated  balance  sheets.  As of March 15,
2007,  Alameda  Towers,   Concourse  Artists,  Charles  Drew,  Grand  Concourse,
Greenleaf,  Robin  Housing,  Shiloh  Grove,  United  Penn  and  Willoughby  were
classified as discontinued operations on the consolidated balance sheets.

Consolidated Balance Sheets of Discontinued Operations:
<TABLE>
<CAPTION>
                                                  December 15,     March 15,
                                                      2007            2007
                                                  ------------    ------------
<S>                                               <C>             <C>
Assets
  Property and equipment, net of accumulated
    depreciation of $11,448,809 and $9,605,003,
    respectively                                  $  9,151,257    $  5,252,734
  Cash and cash equivalents                            453,045         343,866
  Cash held in escrow                                1,116,079         722,334
  Deferred costs, net of accumulated
    amortization of $85,380 and $6,341,
    respectively                                        57,246          42,445
  Due from general partners and affiliates               8,772           8,772
  Other assets                                         300,941          92,804
                                                  ------------    ------------
Total assets                                      $ 11,087,340    $  6,462,955
                                                  ============    ============

Liabilities
  Mortgage notes payable                          $ 11,431,532    $  4,507,279
  Accounts payable and other liabilities             2,541,292         192,298
  Due to local general partners and affiliates         120,938         122,358
  Due to general partners and affiliates                24,375               0
  Minority interest                                   (126,205)       (230,482)
                                                  ------------    ------------
Total liabilities                                 $ 13,991,932    $  4,591,453
                                                  ============    ============
</TABLE>


The  following  table   summarizes  the  results  of  operations  of  the  Local
Partnerships that are classified as discontinued  operations.  For the three and
nine months ended  December 15, 2007,  Charles  Drew,  which was sold during the
current year, and Greenleaf, Quality Hill and West Kinney, which were classified
as assets held for sale, were all classified as  discontinued  operations on the
consolidated financial statements.  For the three and nine months ended December
15, 2006,  Alameda Towers,  Concourse Artists,  Grand Concourse,  Robin Housing,
Shiloh  Grove and  Willoughby,  which  were sold  during the nine  months  ended
December 15, 2006,  and  Greenleaf  and United Penn,  which were  classified  as
assets held for sale at December 15, 2006,  and, in order to present  comparable
results for the three and nine months ended  December 15,  2007,  Charles  Drew,
Quality Hill and West Kinney, were all classified as discontinued  operations on
the consolidated financial statements.

                                       9
<PAGE>

                          LIBERTY TAX CREDIT PLUS L.P.
                                AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                December 15, 2007
                                   (Unaudited)


Consolidated Statements of Discontinued Operations:
<TABLE>
<CAPTION>
                                                                    Three Months Ended               Nine months Ended
                                                                        December 15,                    December 15,
                                                                ----------------------------    ----------------------------
                                                                    2007            2006*           2007            2006*
                                                                ------------    ------------    ------------    ------------
<S>                                                             <C>             <C>             <C>             <C>
Revenues:

Rental income                                                   $    695,994    $  2,074,172    $  2,268,159    $  7,322,729
Other                                                                 14,514          43,663          34,317         133,384
Gain on sale of properties                                                 0       2,259,485          84,827      10,925,090
                                                                ------------    ------------    ------------    ------------
Total revenue                                                        710,508       4,377,320       2,387,303      18,381,203
                                                                ------------    ------------    ------------    ------------

Expenses:

General and administrative                                            90,440         367,991         435,915       1,299,108
General and administrative-related parties (Note 2)                   86,773          86,122         202,043         276,753
Repairs and maintenance                                              228,592         745,007         571,333       2,392,792
Operating                                                             69,282         191,445         307,287       1,040,504
Taxes                                                                 30,253         116,893          97,379         314,361
Insurance                                                             13,947         127,583          90,470         452,803
Interest                                                             170,894         438,760         525,703       1,619,698
Depreciation and amortization                                         42,565         304,653         277,713       1,330,330
                                                                ------------    ------------    ------------    ------------

Total expenses                                                       732,746       2,378,454       2,507,843       8,726,349
                                                                ------------    ------------    ------------    ------------

(Loss) income before minority interest                               (22,238)      1,998,866        (120,540)      9,654,854
Minority interest in (income) loss of subsidiaries
  from discontinued operations                                          (738)        666,918        (320,655)     (1,112,507)
                                                                ------------    ------------    ------------    ------------
Net (loss) income from discontinued operations                  $    (22,976)   $  2,665,784    $   (441,195)   $  8,542,347
                                                                ============    ============    ============    ============

(Loss) income - limited partners from discontinued operations   $    (22,746)   $  2,639,126    $   (436,783)   $  8,456,924
                                                                ============    ============    ============    ============

Number of BACs outstanding                                          15,987.5        15,987.5        15,987.5        15,987.5
                                                                ============    ============    ============    ============

(Loss) income from discontinued operations per BAC              $      (1.42)   $     165.08    $     (27.32)   $     528.97
                                                                ============    ============    ============    ============
<CAPTION>

Cash flows from Discontinued Operations:

                                                                                                     Nine months Ended
                                                                                                        December 15,
                                                                                                ----------------------------
                                                                                                    2007            2006*
                                                                                                ------------    ------------
<S>                                                                                             <C>             <C>
Net cash (used in) provided by operating activities                                             $   (698,398)   $  5,477,343
                                                                                                ------------    ------------
Net cash provided by investing activities                                                       $  3,097,165    $ 16,503,514
                                                                                                ------------    ------------
Net cash used in financing activities                                                           $   (186,831)   $(16,586,735)
                                                                                                ------------    ------------
</TABLE>

* Reclassified for comparative purposes.


Note 6 - Commitments and Contingencies

a)  Subsidiary Partnerships - Going Concern

Magnolia Arms Associates, LTD ("Magnolia Arms")
-----------------------------------------------
Magnolia  Arms has not made  its  mortgage  payments  since  August  2005 due to
operating  deficits  and  is  currently  in  default.  The  mortgagee  can  take
possession of the Property and other  collateralized  assets,  collect the rents
directly from the tenants and foreclose on the Property and other collateralized
assets.  There can be no assurance  that  Magnolia Arms will be able to cure the
default.  The  mortgage  payable  was due as of June  30,  2007.  Magnolia  Arms
received  a  material  portion  of its  revenue  from the  City of  Jacksonville
Department  of Housing  and Urban  Development  ("Jacksonville  HUD")  under the
federal  government's  Section 8 rent subsidy  program.  As of June 5, 2007, the
contract between  Jacksonville HUD and Magnolia Arms was terminated.  Because of
these  circumstances,  there is substantial  doubt  regarding  whether the Local

                                       10
<PAGE>

                          LIBERTY TAX CREDIT PLUS L.P.
                                AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                December 15, 2007
                                   (Unaudited)


Partnership  can continue as a going concern.  The  Partnership's  investment in
Magnolia  Arms was written down to zero by prior years'  losses and the minority
interest  was  approximately  $17,000 and $33,000 at December 15, 2007 and March
15, 2007,  respectively.  The net loss after minority interest for Magnolia Arms
amounted to  approximately  $772,000  and  $246,000  for the nine  months  ended
December 15, 2007 and 2006, respectively. Magnolia Arms' Compliance Period ended
as of December 31, 2003.

Quality Hill Historic District-Phase II-A, L.P. ("Quality Hill")
----------------------------------------------------------------
The financial  statements  of Quality Hill have been  prepared  assuming it will
continue  as a going  concern.  Quality  Hill has had  negative  cash flows from
operating  activities  for the past  several  years.  Quality  Hill is trying to
obtain  extensions for its mortgage  notes payable,  and is not expected to have
operating  cash flow to meet the  financial  obligations  of its mortgage  notes
coming  due.  This  situation  raises  substantial  doubt  about its  ability to
continue as a going concern.

During  2005,  Quality  Hill  entered  into a  Modification  Agreement  with the
Missouri  Housing  Development  Commission  ("MHDC") which extended the maturity
date of the permanent  nonrecourse  financing for the Quality Hill-Cordova Hotel
Apartments,  which is one of the two  projects  included  in  Quality  Hill,  to
December  2006.  The balance of this note as of September 30, 2007 was $405,076.
Quality Hill was granted an extension  which expired on December 31, 2007. As of
the filing date of this report, no additional extension has been granted.

During 2005,  Quality Hill entered into  negotiations  with both the Hall Family
Foundation  of  Kansas   ("Foundation")   and  Kansas  City  Downtown   Minority
Development  Corporation  ("DMDC")  to extend  the  maturity  dates of each note
payable to  December  2006.  The  combined  balance of the  Foundation  notes is
$2,339,108 and was due in full in December 2005 and the combined  balance of the
DMDC notes was $735,000  ($225,000 was due in December 2005 and $510,000 was due
in May 2005).  In February  2006,  Quality Hill Received a one year extension on
the  Foundation  note to December  31, 2006.  In 2007,  Quality Hill was granted
another  extension  which expired on December 31, 2007. As of the filing date of
this report, no additional extension has been granted.

The total of these three notes,  $3,479,184,  is included as a current liability
in mortgage notes payable.

These items raise  substantial doubt about Quality Hill's ability to continue as
a going concern.  The Partnership's  investment in Quality Hill has been written
down to zero by prior years' losses and the minority  interest balance was $0 at
both December 15, 2007 and March 15, 2007. The net loss after minority  interest
for Quality Hill  amounted to  approximately  $235,000 and $223,000 for the nine
months ended December 15, 2007 and 2006, respectively. Quality Hill's Compliance
Period ended as of December 31, 2004.

b)  Lease Commitment

None

c)  Uninsured Cash and Cash Equivalents

The  Partnership  maintains  its cash and cash  equivalents  in  various  banks.
Accounts  at  each  bank  are  guaranteed  by  the  Federal  Deposit   Insurance
Corporation (FDIC) up to $100,000.

d)  Cash Distributions

Cash distributions from the Local Partnerships to the Partnership are restricted
by the provisions of the respective  Local  Partnership  agreements  and/or HUD.
Such cash distributions are typically made from surplus cash flow.

e)  Tax Credits

A portion of the Tax Credits  could be subject to  recapture  in future years if
(i) a Local Partnership ceases to meet qualification requirements, (ii) there is
a decrease in the  qualified  basis of the Local  Partnership  property or (iii)
there is a reduction  in the Local  Partnership  interest in the property at any
time during the 15-year  period (the  "Compliance  Period")  that began with the
first  tax year of the  period  of the  Partnership's  entitlement  to claim Tax
Credits (for each Property,  ten years from the date of investment or, if later,
the date the  Property  is placed in service is  referred  to herein as the "Tax
Credit  Period").  As of December 31, 2003, the Tax Credit Period for each Local
Partnership has expired.  The Compliance  Periods  continue through December 31,
2008 with respect to the  Properties  depending upon when the Tax Credit Periods
commenced.

f)  Other

Greenleaf Associates, L.P. ("Greenleaf")
----------------------------------------
A former tenant brought suit against  Greenleaf's on-site manager for damages of
$100,000. An amended complaint does not specify an amount of damages. The former
tenant claims  violation of the 14th  Amendment,  false arrest,  obstruction  of
justice  and civil  conspiracy.  Management  intends to  vigorously  contest the
matter.  An evaluation of the likelihood of an unfavorable  outcome and estimate
of the  amount  of  possible  loss  cannot  be made at this  early  stage of the
proceedings.

                                       11
<PAGE>

                          LIBERTY TAX CREDIT PLUS L.P.
                                AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                December 15, 2007
                                   (Unaudited)


State Street 86 Associates, L.P. ("State Street")
-------------------------------------------------
The Camden  Redevelopment  Agency has  designated  the  Cramer  Hill  Waterfront
Redevelopment  Agency as a  possible  future  redevelopment  project.  This area
includes Centennial Village, a 200-unit apartment project that State Street owns
and operates.  There have been various lawsuits involving this redevelopment and
at this time there is no further  information  as to whether or not the Property
will be purchased or acquired by eminent domain.

The  Partnership  is subject to the risks  incident to potential  losses arising
from the management and ownership of improved real estate.  The  Partnership can
also be affected by poor economic  conditions  generally;  however, no more than
25%  of the  properties  are  located  in  any  single  state.  There  are  also
substantial  risks  associated  with  owning  properties   receiving  government
assistance,  for example the possibility that Congress may not appropriate funds
to enable HUD to make rental assistance payments. HUD also restricts annual cash
distributions  to partners  based on operating  results and a percentage  of the
owners'  equity  contribution.  As of December 15,  2007,  there are seven Local
Partnerships  subsidized by HUD. The  Partnership  cannot sell or  substantially
liquidate its investments in subsidiary  partnerships during the period that the
subsidy agreements are in existence, without HUD's approval.  Furthermore, there
may not be market  demand for  apartments  at full market  rents when the rental
assistance contracts expire.


Note 7 - Subsequent Event

On December 27, 2007, the Partnership sold its limited  partnership  interest in
Sartain  School  Venture  ("Sartain")  to the Local General  Partner for a sales
price  of  $14,600.  The sale  resulted  in a gain of  approximately  $3,568,000
resulting  from the write-off of the deficit basis in the Local  Partnership  of
approximately  $3,553,000  at the date of the sale and the $14,600 cash received
from the sale,  which will be  recognized  during the quarter  ending  March 15,
2008.

                                       12
<PAGE>

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

Liquidity and Capital Resources
-------------------------------

The   Partnership's   capital  was  originally   invested  in  thirty-one  Local
Partnerships. As of December 15, 2007, the properties and the related assets and
liabilities of fifteen Local Partnerships and the limited  partnership  interest
in eight Local  Partnerships  were sold.  For a discussion of these sales of the
Local  Partnerships  see Note 3. In  addition,  as of  December  15,  2007,  the
Partnership  has  entered  into an  agreement  to sell its  limited  partnership
interest in one Local  Partnership and two Local  Partnerships have entered into
agreements to sell their  property and the related assets and  liabilities  (see
Item 1, Note 4).  Subsequently,  the  Partnership  sold its limited  partnership
interest in one Local Partnership (see Item 1, Note 7).

Off-Balance Sheet Arrangements
------------------------------
The Partnership has no off-balance sheet arrangements.

Tabular Disclosure of Contractual Obligations
---------------------------------------------
The  Partnership  disclosed  in  Item  7 to  the  financial  statements  in  the
Partnership's  Annual Report on Form 10-K for the year ended March 15, 2007, the
Partnership's  commitments to make future payments under its debt agreements and
other contractual obligations.  There are no material changes to such disclosure
or amounts as of December 15, 2007.

Short-Term
----------

The  Partnership's  primary  sources  of funds  included:  (i)  working  capital
reserves;  (ii)  interest  earned on the working  capital  reserves;  (iii) cash
distributions from operations of the Local Partnerships; and (iv) sales proceeds
and  distributions.  Such funds are  available  to meet the  obligations  of the
Partnership.   During  the  nine  months  ended  December  15,  2007  and  2006,
distributions   from   operations   of  the  Local   Partnerships   amounted  to
approximately $60,000 and $18,000, respectively.  Additionally,  during the nine
months ended December 15, 2007 and 2006, the Partnership received  approximately
$2,765,000 and $2,832,000 distributions of proceeds from sales, respectively.

For the nine months ended  December 15, 2007,  cash and cash  equivalents of the
Partnership and its  consolidated  Local  Partnerships  increased  approximately
$305,000.  This  increase is  attributable  to a decrease in cash held in escrow
relating to investing activities  ($287,000),  proceeds from sale of investments
($3,435,000)  and a net increase in due to local general partners and affiliates
relating  to  finance  activities  ($493,000)  which  exceeded  net cash used in
operating  activities   ($129,000),   improvements  to  property  and  equipment
($59,000),  costs paid relating to sale of properties ($438,000),  repayments of
mortgage notes ($288,000),  an increase in deferred cost ($4,000), a decrease in
capitalization  of consolidated  subsidiaries  attributable to minority interest
($212,000)  and  distributions  ($2,778,000).  Included  in the  adjustments  to
reconcile net loss to net cash used in operating activities are depreciation and
amortization  of  approximately  ($1,865,000)  and a gain on sale of  properties
($85,000).

Total  expenses for the three and nine months ended  December 15, 2007 and 2006,
excluding   depreciation   and   amortization,    interest   and   general   and
administrative-related parties, totaled $1,928,688,  $2,204,694,  $5,716,100 and
$6,193,846, respectively.

Accounts payable as of December 15, 2007 and March 15, 2007, were $2,408,318 and
$4,890,335,  respectively. Accounts payable are short term liabilities which are
expected to be paid from operating cash flows,  working capital  balances at the
Local  Partnership   level,  Local  General  Partner  advances  and  in  certain
circumstances  advances from the Partnership.  The Partnership  believes it (and
the  applicable  Local  Partnerships)  has  sufficient  liquidity and ability to
generate cash and to meet  existing and known or  reasonably  likely future cash
requirements  over both the short and long term. In addition,  accounts  payable
from  discontinued  operations,  as of  December  15,  2007 and March 15,  2007,
totaled $263,754 and $95,669, respectively.

Accrued  interest  payable  as of  December  15,  2007 and  March  15,  2007 was
$5,308,448 and $6,616,457, respectively. Accrued interest payable represents the
accrued  interest on all mortgage  loans,  which  include  primary and secondary
loans. Certain secondary loans have provisions such that interest is accrued but
not payable  until a future date.  The  Partnership  anticipates  the payment of
accrued  interest on the  secondary  loans  (which  make up the  majority of the
accrued  interest  payable  amount  and which have been  accumulating  since the
Partnership's  investment in the respective Local Partnership) will be made from
future  refinancings  or sales  proceeds of the respective  Local  Partnerships.
Furthermore,  each Local Partnership's  mortgage notes are collateralized by the
land and buildings of the respective Local Partnership,  and are without further
recourse  to  the  Partnership.  In  addition,  accrued  interest  payable  from
discontinued  operations,  as of December 15, 2007 and March 15,  2007,  totaled
$2,211,328 and $56,532, respectively.

A  working  capital  reserve  of  approximately  $5,597,000  remained  unused at
December 15, 2007.

The  Partnership  is not  expected  to have  access  to  additional  sources  of
financing.

Long-Term
---------

Partnership   management  fees  owed  to  the  General  Partners   amounting  to
approximately  $2,697,000 and $2,574,000  were accrued and unpaid as of December
15, 2007 and March 15, 2007,  respectively.  Unpaid partnership  management fees
for any year will be accrued  without  interest and will be payable from working
capital  reserves or to the extent of available  funds after the Partnership has
made  distributions  to the  limited  partners  and  BACs  holders  of  sale  or
refinancing  proceeds equal to their original capital  contributions  plus a 10%
priority return thereon (to the extent not theretofore paid out of cash flow).

For a discussion of contingencies affecting certain Local Partnerships, see Item
1, Note 6 to the financial  statements.  Since the maximum loss the  Partnership
would be liable for is its net investment in the respective Local  Partnerships,
the resolution of the existing contingencies is not anticipated to impact future
results of  operations,  liquidity  or financial  condition  in a material  way.
However,  the  Partnership's  loss of its investment in a Local  Partnership may
result  in  recapture  of Tax  Credits  if the  investment  is lost  before  the
expiration of the applicable compliance period, during which the Properties must
comply with various rent and other restrictions. The compliance periods continue
through December 31, 2008 with respect to the Properties depending upon when the
Tax Credit Periods commenced.

                                       13
<PAGE>

The Local  Partnerships  are impacted by inflation  in several  ways.  Inflation
allows for  increases in rental rates  generally to reflect the impact of higher
operating and  replacement  costs.  Furthermore,  inflation  generally  does not
impact the fixed long-term financing under which real property  investments were
purchased. Inflation also affects the Local Partnerships adversely by increasing
operating costs,  such as fuel,  utilities,  and labor.  Since revenues from the
sales of assets are driven by market conditions, inflation has little impact.

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

Critical Accounting Policies and Estimates
------------------------------------------

In  preparing  the  consolidated  financial  statements,   management  has  made
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities at the date of the financial  statements and the reported amounts of
revenues and expenses during the reporting periods.  Actual results could differ
from those  estimates.  Set forth below is a summary of the accounting  policies
that  management  believes are critical to the  preparation of the  consolidated
financial  statements.  The summary should be read in conjunction  with the more
complete discussion of the Partnership's accounting policies included in Item 8,
Note 2 to the  consolidated  financial  statements in the  Partnership's  Annual
Report on Form 10-K for the year ended March 15, 2007.

Property and Equipment
----------------------

Property and  equipment  to be held and used are carried at cost which  includes
the purchase price,  acquisition fees and expenses, and any other costs incurred
in acquiring the  properties.  The cost of property and equipment is depreciated
over their estimated useful lives using accelerated and  straight-line  methods.
Expenditures  for repairs and  maintenance  are charged to expense as  incurred;
major  renewals  and  betterments  are  capitalized.  At the time  property  and
equipment  are  retired  or  otherwise  disposed  of,  the cost and  accumulated
depreciation  are  eliminated  from  the  assets  and  accumulated  depreciation
accounts and the profit or loss on such disposition is reflected in earnings.

In  accordance  with  Statement  of  Financial  Accounting  Standards  No.  144,
"Accounting for the Impairment or Disposal of Long-Lived Assets", the results of
discontinued  operations  are reported as a separate  component of income before
extraordinary items on the consolidated  statements of operations.  Discontinued
operations include the results of operations and any gain or loss recognized for
Local  Partnerships  that have been  disposed of or are held for sale. A gain or
loss  recognized  on the  disposal is  disclosed  in the notes to the  financial
statements.  Adjustments to amounts  previously  reported in operations that are
directly related to the disposal of a Local  Partnership are reclassified in the
current period as discontinued operations for comparability purposes. Assets and
liabilities  of a Local  Partnership  that are  classified  as held for sale are
presented separately in the asset and liability sections,  respectively,  of the
consolidated balance sheets.

A loss on  impairment of assets is recorded when  management  estimates  amounts
recoverable   through  future   operations  and  sale  of  the  property  on  an
undiscounted basis are below depreciated cost. At that time property investments
themselves are reduced to estimated fair value  (generally using discounted cash
flows).

During the nine months ended December 15, 2007, the Partnership has not recorded
any loss on impairment of assets or reduction to estimated  fair value.  Through
December 15, 2007, the Partnership has recorded  approximately  $2,710,000 as an
aggregate loss on impairment of assets or reduction to estimated fair value.

At the time management  commits to a plan to dispose of assets,  said assets are
adjusted to the lower of carrying amount or fair value less costs to sell. These
assets  are  classified  as  property  and  equipment-held  for sale and are not
depreciated.  As of December 15, 2007 and March 15, 2007,  the  Partnership  has
recorded  property and equipment net of accumulated  depreciation  of $9,151,257
and $5,252,734, respectively, as held for sale.

Revenue Recognition
-------------------

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

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

Income Taxes
------------

The  Partnership  is not  required to provide  for, or pay,  any federal  income
taxes.  Net income or loss generated by the Partnership is passed through to the
partners and is required to be reported by them. The  Partnership may be subject
to state and local taxes in jurisdictions  in which it operates.  For income tax
purposes, the Partnership has a fiscal year ending December 31.

                                       14
<PAGE>

Results of Operations
---------------------

The results of operations  for the three and nine months ended December 15, 2007
and 2006 consisted  primarily of the results of the Partnership's  investment in
the consolidated Local  Partnerships,  excluding the results of its discontinued
operations which are not reflected in the following discussion (see Note 5).

Rental income decreased  approximately  10% and 7% for the three and nine months
ended  December  15,  2007 as  compared  to the  corresponding  periods in 2006,
primarily due to an increase in vacancies due to the cancellation of a Section 8
contract  at one  Local  Partnership  (see Item 1,  Note 6a) and a  decrease  in
occupancy rates at two other Local Partnerships.

Other income increased  approximately $23,000 and $21,000 for the three and nine
months ended December 15, 2007 as compared to the corresponding periods in 2006,
primarily  due to an increase in interest  income earned on higher cash balances
due to sales at the Partnership level, increases in early lease termination fees
and bad  debt  recovery  at a  second  Local  Partnership  partially  offset  by
decreases in interest income and tenants' charges at a third Local Partnership.

Total expenses,  excluding general and  administrative,  repairs and maintenance
and operating,  remained fairly  consistent with an increase of approximately 2%
and a decrease of  approximately 3% for the three and nine months ended December
15, 2007 as compared to the corresponding periods in 2006.

General and administrative expenses increased approximately $36,000 and $196,000
for the three  and nine  months  ended  December  15,  2007 as  compared  to the
corresponding  periods in 2006,  primarily due to an increase in office  payroll
and  expenses  resulting  from a  change  in  management  company  at one  Local
Partnership,  increases in office  salaries and payroll  taxes at a second Local
Partnership and increases in selling and renting  expenses and employee  benefit
expenses at a third Local Partnership.

Repairs and maintenance expenses decreased  approximately  $442,000 and $701,000
for the three  and nine  months  ended  December  15,  2007 as  compared  to the
corresponding  periods in 2006,  primarily due to the receipt of a special grant
in 2007 for labor and  supplies  needed for  repairs to the  property as well as
decreases in major apartment repairs and boiler repairs at one Local Partnership
and decreases in security,  decorating  and floor and  carpeting  contracts at a
second Local Partnership.

Operating expenses increased  approximately  $131,000 for the three months ended
December 15, 2007 as compared to the corresponding period in 2006, primarily due
to the timing of invoices received from vendors at one Local Partnership.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

The  Partnership  has  mortgage  notes  that are  payable in  aggregate  monthly
installments  including  principal  and interest at rates varying from 1% to 12%
per annum.  The Partnership does not believe there is a material risk associated
with the  various  interest  rates  associated  with the  mortgage  notes as the
majority  of  the  Local  Partnership  mortgage  notes  have  fixed  rates.  The
Partnership  disclosed  in Item 8,  Note 3 to the  financial  statements  in the
Partnership's  Annual Report on Form 10-K for the year ended March 15, 2007, the
fair value of the mortgage notes payable.

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

Item 4.  Controls and Procedures

(a) EVALUATION OF DISCLOSURE  CONTROLS AND PROCEDURES.  The Principal  Executive
Officer and Principal  Financial  Officer of Related Credit  Properties L.P. and
Liberty  Associates  III, L.P., the general  partners of the  Partnership,  have
evaluated  the  effectiveness  of  the  Partnership's  disclosure  controls  and
procedures (as such term is defined in Rules  13a-15(e) and 15d-15(e)  under the
Securities  Exchange Act of 1934, as amended  ("Exchange Act")) as of the end of
the period covered by this report. Based on such evaluation,  such officers have
concluded  that,  as of the end of such  period,  the  Partnership's  disclosure
controls and procedures are effective.

(b) CHANGES IN INTERNAL  CONTROL OVER FINANCIAL  REPORTING.  There have not been
any changes in the  Partnership's  internal  control  over  financial  reporting
during the fiscal  quarter to which this  report  relates  that have  materially
affected,  or are  reasonably  likely to materially  affect,  the  Partnership's
internal control over financial reporting.

                                       15
<PAGE>

                           PART II. OTHER INFORMATION


Item 1.  Legal Proceedings - None

Item 1A. Risk Factors - No changes

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds - None

Item 3.  Defaults upon Senior Securities - None

Item 4.  Submission of Matters to a Vote of Security Holders - None

Item 5.  Other Information - None

Item 6.  Exhibits

         (31.1) Certification  Pursuant  to Rule  13a-14(a)  or  Rule  15d-14(a)
         (31.2) Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a)
         (32.1) Certification  Pursuant to Rule  13a-14(b) or Rule 15d-14(b) and
               Section  1350 of Title 18 of the  United  States  Code (18 U.S.C.
               1350)

                                       16
<PAGE>

                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                          LIBERTY TAX CREDIT PLUS L.P.
                          ----------------------------
                                  (Registrant)


                          By:  RELATED CREDIT PROPERTIES L.P.,
                               a General Partner


                               By:  Credit Properties GP LLC,
                                    its General Partner


Date: January 29, 2008
      ----------------
                                    By:  /s/ Robert L. Levy
                                         ------------------
                                         Robert L. Levy
                                         Chief Financial Officer



Date: January 29, 2008
      ----------------
                                    By:  /s/ Andrew J. Weil
                                         ------------------
                                         Andrew J. Weil
                                         President, Chief Executive Officer


                          By:  LIBERTY ASSOCIATES III, L.P.,
                               a General Partner


                               By:  Related Credit Properties L.P.,
                                    its General Partner


                                    By:  Credit Properties GP LLC,
                                         its General Partner


Date: January 29, 2008
      ----------------
                                         By:  /s/ Robert L. Levy
                                              ------------------
                                              Robert L. Levy
                                              Chief Financial Officer



Date: January 29, 2008
      ----------------
                                         By:  /s/ Andrew J. Weil
                                              ------------------
                                              Andrew J. Weil
                                              President, Chief Executive Officer

                                       17