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 June 15, 2006


                                       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 or 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>
                                                                            June 15,       March 15,
                                                                              2006            2006
                                                                          ------------    ------------
                                                                          (Unaudited)      (Audited)
<S>                                                                       <C>             <C>
                                     ASSETS

Operating Assets

  Property and equipment, at cost, net of accumulated depreciation
    of $67,747,577 and $66,711,988, respectively                          $ 55,409,286    $ 56,381,985
  Cash and cash equivalents                                                  3,835,096       3,760,882
  Cash held in escrow                                                        5,612,986       5,774,684
  Accounts receivable - tenants                                                182,656         277,088
  Deferred costs, net of accumulated amortization of $840,221 and
    $823,279, respectively                                                   1,169,157       1,186,099
  Other assets                                                                 832,586         735,984
                                                                          ------------    ------------

Total operating assets                                                      67,041,767      68,116,722
                                                                          ------------    ------------

Assets from discontinued operations (Note 5)

  Property and equipment held for sale, net of accumulated depreciation
     of $17,757,030 and $17,769,300, respectively                           10,241,131      10,392,625
  Net assets held for sale                                                   4,749,674       4,968,693
                                                                          ------------    ------------
Total assets from discontinued operations                                   14,990,805      15,361,318
                                                                          ------------    ------------

Total assets                                                              $ 82,032,572    $ 83,478,040
                                                                          ============    ============

                        LIABILITIES AND PARTNERS' DEFICIT

Operating Liabilities

  Mortgage notes payable                                                  $ 60,448,227    $ 60,626,619
  Accounts payable                                                           2,229,310       2,115,469
  Accrued interest payable                                                   6,264,296       5,963,620
  Security deposits payable                                                    358,725         363,306
  Due to local general partners and affiliates                              20,450,355      20,258,730
  Due to general partners and affiliates                                     8,090,198       7,839,189
                                                                          ------------    ------------

Total operating liabilities                                                 97,841,111      97,166,933
                                                                          ------------    ------------

Liabilities from discontinued operations (Note 5)

  Mortgage notes payable of assets held for sale                            15,848,743      16,677,628
  Net liabilities held for sale (including minority interest)                5,143,024       4,339,358
                                                                          ------------    ------------
Total liabilities from discontinued operations                              20,991,767      21,016,986
                                                                          ------------    ------------

Minority interests                                                            (701,139)       (692,096)
                                                                          ------------    ------------

Commitments and contingencies (Note 6)

Partners' deficit:

  Limited partners (15,987.5 BACs issued and outstanding)                  (35,055,356)    (32,990,826)
  General partners                                                          (1,043,811)     (1,022,957)
                                                                          ------------    ------------

Total partners' deficit                                                    (36,099,167)    (34,013,783)
                                                                          ------------    ------------

Total liabilities and partners' deficit                                   $ 82,032,572    $ 83,478,040
                                                                          ============    ============
</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
                                                                     June 15,
                                                            --------------------------
                                                               2006           2005*
                                                            -----------    -----------
<S>                                                         <C>            <C>
Operations:

Revenues

Rental income                                               $ 4,492,289    $ 4,516,011
Other                                                           117,143         83,805
                                                            -----------    -----------
                                                              4,609,432      4,599,816
                                                            -----------    -----------

Expenses

General and administrative                                      966,008        838,267
General and administrative-related parties (Note 2)             372,736        448,170
Repairs and maintenance                                       1,259,207      1,331,505
Operating and other                                           1,031,187        748,979
Taxes                                                           205,242        209,732
Insurance                                                       259,402        264,507
Financial                                                     1,193,959      1,223,076
Depreciation and amortization                                 1,052,530      1,055,677
                                                            -----------    -----------

Total expenses from operations                                6,340,271      6,119,913
                                                            -----------    -----------

Loss from operations before minority interest                (1,730,839)    (1,520,097)

Minority interest in loss of subsidiaries from operations         1,751          3,018
                                                            -----------    -----------

Loss from operations                                         (1,729,088)    (1,517,079)

Discontinued Operations:

(Loss) income from discontinued operations (including
  (loss) gain on sale of properties) (Note 5)                  (356,296)     1,871,286
                                                            -----------    -----------
Net (loss) income                                           $(2,085,384)   $   354,207
                                                            ===========    ===========

Loss from operations - limited partners                     $(1,711,797)   $(1,501,908)
(Loss) income from discontinued operations (including
  (loss) gain on sale of properties) - limited partners        (352,733)     1,852,573
                                                            -----------    -----------
Net (loss) income - limited partners                        $(2,064,530)   $   350,665
                                                            ===========    ===========

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

Loss from operations per BAC                                $   (107.07)   $    (93.94)
(Loss) income from discontinued operations per BAC               (22.06)        115.88
                                                            -----------    -----------

Net (loss) income per BAC                                   $   (129.13)   $     21.94
                                                            ===========    ===========
</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
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                            Limited          General
                                              Total         Partners         Partner
                                          ------------    ------------    ------------


<S>                                       <C>             <C>             <C>
Partners' deficit - March 16, 2006        $(34,013,783)   $(32,990,826)   $ (1,022,957)

Net loss                                    (2,085,384)     (2,064,530)        (20,854)
                                          ------------    ------------    ------------

Partners' deficit - June 15, 2006         $(36,099,167)   $(35,055,356)   $ (1,043,811)
                                          ============    ============    ============
</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>
                                                                               Three Months Ended
                                                                                    June 15,
                                                                           --------------------------
                                                                               2006           2005*
                                                                           -----------    -----------
<S>                                                                        <C>            <C>
Net (loss) income                                                          $(2,085,384)   $   354,207

Adjustments to reconcile net income to net cash provided by
  operating activities:
  Loss (gain) on sale of properties                                             11,000     (4,544,188)
  Loss on impairment of fixed assets                                                 0      1,860,000
  Depreciation and amortization                                              1,099,261      1,762,233
  Minority interest in income of subsidiaries                                   (4,001)      (179,122)
  Decrease (increase) in accounts receivable - tenants                         147,531        (30,421)
  Increase in other assets                                                     (20,965)    (1,028,452)
  Increase in accounts payable                                                 972,955      1,627,451
  Increase in accrued interest payable                                         380,361        323,558
  Decrease in security deposits payable                                        (23,521)       (24,901)
  Increase in due to general partners and affiliates                           251,009        295,168
  Decrease (increase) in cash held in escrow                                    52,337       (118,694)
                                                                           -----------    -----------

Net cash provided by operating activities                                      780,583        296,839
                                                                           -----------    -----------

Cash flows from investing activities:

  Decrease (increase) in cash held in escrow                                    93,877        (31,831)
  Proceeds from sale of investments                                                  0      7,090,050
  Costs paid relating to sale of properties                                    (11,000)      (222,016)
  Improvements to property and equipment                                       (62,891)       (98,958)
                                                                           -----------    -----------

Net cash provided by investing activities                                       19,986      6,737,245
                                                                           -----------    -----------

Cash flows from financing activities:

  Repayments of mortgage notes                                              (1,007,277)    (3,363,177)
  Increase in due to local general partners and affiliates                     250,698        414,712
  Decrease in due to local general partners and affiliates                     (62,632)      (266,519)
  (Decrease) increase in capitalization of consolidated subsidiaries
    attributable to minority interest                                           (7,291)       (89,376)
  Distribution                                                                       0     (1,938,121)
                                                                           -----------    -----------

  Net cash used in financing activities                                       (826,502)    (5,242,481)
                                                                           -----------    -----------

  Net (decrease) increase in cash and cash equivalents                         (25,933)     1,791,603

  Cash and cash equivalents at beginning of period                           4,006,542      4,779,438
                                                                           -----------    -----------

  Cash and cash equivalents at end of period**                             $ 3,980,609    $ 6,571,041
                                                                           ===========    ===========

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

  Decrease in property and equipment, net of accumulated depreciation      $         0    $ 9,191,744
  Decrease in mortgage notes payable                                                 0     (7,430,942)
  Decrease in due to general partners and affiliates                                 0        (49,500)
  Decrease in due to local general partner and affiliates                            0       (661,550)
  Decrease in cash held in escrow                                                    0      1,668,858
  Decrease in rents receivable                                                       0         16,400
  Decrease in other assets                                                           0         17,730
  Increase in accounts payable                                                       0        245,871
  Decrease in accrued interest payable                                               0       (703,741)
  Decrease in security deposits payable                                              0        (37,274)
  Decrease in deferred cost                                                                    66,250
</TABLE>

*  Reclassified for comparative purposes.
** Cash and cash equivalents,  end of period, includes cash and cash equivalents
   from discontinued operations of $145,513 and $444,267, respectively.

           See accompanying notes to consolidated financial statements


                                       5
<PAGE>

                          LIBERTY TAX CREDIT PLUS L.P.
                                AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                  June 15, 2006
                                   (Unaudited)


Note 1 - General

The consolidated  financial  statements for the three months ended June 15, 2006
and  2005,   include  the  accounts  of  Liberty  Tax  Credit  Plus  L.P.   (the
"Partnership")  and  16 and  23  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 June
15. All subsidiary  partnerships  have fiscal quarters ending March 31. Accounts
of the subsidiary partnerships have been adjusted for intercompany  transactions
from April 1 through June 15. The Partnership's quarter ends on June 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 June 15, 2006 and March 15, 2006,  the results of  operations
and cash flows for the three months ended June 15, 2006 and 2005.  However,  the
operating  results and cash flows for the three  months  ended June 15, 2006 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, 2006.

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.  Such losses aggregate  approximately $95,000 and $0 for the
three  months ended June 15, 2006 and 2005.  In  consolidation,  all  subsidiary
partnership losses are included in the Partnership's  capital account except for
losses allocated to minority interest capital.

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.

The costs incurred to related parties from operations for the three months ended
June 15, 2006 and 2005 were as follows:
<TABLE>
<CAPTION>
                                                          Three Months Ended
                                                              June 15,
                                                         -------------------
                                                           2006       2005*
                                                         --------   --------
<S>                                                      <C>        <C>
Partnership management fees (a)                          $154,500   $225,250
Expense reimbursement (b)                                  59,965     69,293
Local administrative fee (d)                                3,750      3,969
                                                         --------   --------
Total general and administrative-General Partners         218,215    298,512
                                                         --------   --------
Property management fees incurred to affiliates of the
  local general partners (c)                              154,521    149,658
                                                         --------   --------
Total general and administrative-related parties         $372,736   $448,170
                                                         ========   ========
</TABLE>

* Reclassified for comparative purpose.

                                       6
<PAGE>

                          LIBERTY TAX CREDIT PLUS L.P.
                                AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                  June 15, 2006
                                   (Unaudited)


The costs incurred to related parties from discontinued operations for the three
months ended June 15, 2006 and 2005 were as follows:
<TABLE>
<CAPTION>
                                                      Three Months Ended
                                                           June 15,
                                                     -------------------
                                                       2006       2005*
                                                     --------   --------
<S>                                                  <C>        <C>
Local administrative fee (d)                         $  2,693   $  8,031
                                                     --------   --------
Total general and administrative-General Partners       2,693      8,031
                                                     --------   --------
Property management fees incurred to affiliates of
  the local general partners (c)                       13,141     98,294
                                                     --------   --------
Total general and administrative-related parties     $ 15,834   $106,325
                                                     ========   ========
</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. Partnership management
fees owed to the General  Partners  amounting to  approximately  $7,852,000  and
$7,697,000  were  accrued  and  unpaid as of June 15,  2006 and March 15,  2006,
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 Related Credit Properties L.P., a General Partner, amounting to approximately
$115,000 and $111,000  were accrued and unpaid as of June 15, 2006 and March 15,
2006, respectively.

The General Partners have allowed for the accrual without payment of the amounts
set forth in (a) and (b) but are under no obligation to continue to do so.

(c)  Property  management  fees  incurred  by  the  subsidiary  partnerships  in
operations amounted to $342,743 and $390,157 for the three months ended June 15,
2006 and 2005, respectively.  Of these fees, $167,662 and $247,952 were incurred
to affiliates of the local general  partners,  which include $13,141 and $98,294
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.  As
of  June  15,  2006,  the  Partnership  had  disposed  of 19 of its 31  original
investments  and has  entered  into a purchase  and sale  agreement  to sell the
property and the related assets and  liabilities of one Local  Partnership  (see
Note 4).  Subsequently,  on June  26,  2006,  the  Partnership  entered  into an
assignment and assumption  agreement to sell its limited partnership interest in
one Local Partnership (see Note 7).

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.  The
Partnership  received  $31,346  as a  distribution  from  this  sale  after  the
repayment of mortgages,  other  liabilities  and closing costs of  approximately
$4,769,000.  The sale resulted in a gain of approximately  $2,180,000  resulting
from the  write-off  of the  deficit  basis  in the  property  of  approximately
$2,180,000 at March 31, 2006, which will be recognized on the Partnership's Form
10-Q  dated  September  15,  2006.  The  sale  resulted  in the  liquidation  of
Willoughby.

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  $647,073  as a  distribution  from  this  sale  after the
repayment of mortgages,  other  liabilities  and closing costs of  approximately
$4,290,000.  The sale resulted in a gain of approximately  $1,284,000  resulting
from the  write-off  of the  deficit  basis  in the  property  of  approximately
$1,284,000 at March 31, 2006, which will be recognized on the Partnership's Form
10-Q dated  September 15, 2006.  The sale resulted in the  liquidation  of Grand
Concourse.

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

                                       7
<PAGE>

                          LIBERTY TAX CREDIT PLUS L.P.
                                AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                  June 15, 2006
                                   (Unaudited)


unaffiliated  third  party  purchaser  for a  sales  price  of  $1,797,500.  The
Partnership  received  $265,106  as a  distribution  from  this  sale  after the
repayment of mortgages,  other  liabilities  and closing costs of  approximately
$1,532,000. The sale resulted in a gain of approximately $606,000 resulting from
the write-off of the deficit basis in the property of approximately  $606,000 at
March 31, 2006,  which will be recognized on the  Partnership's  Form 10-Q dated
September 15, 2006. The sale resulted in the liquidation of Concourse Artists.

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
$1,746,029  as a  distribution  from this sale after the repayment of mortgages,
other  liabilities  and  closing  costs of  approximately  $5,519,000.  The sale
resulted in a gain of approximately  $2,698,000  resulting from the write-off of
the deficit basis in the property of approximately $2,698,000 at March 31, 2006,
which will be  recognized  on the  Partnership's  Form 10-Q dated  September 15,
2006. The sale resulted in the liquidation of Robin Housing.

On June 8, 2005, the Partnership  sold its limited  partnership  interest in Fox
Glenn  Investors,  L.P.  ("Fox Glenn") to the Local General  Partner for a sales
price of $1,400,000.  The Partnership  received  proceeds of $200,000 and a note
receivable for $1,200,000  that was received on February 9, 2006 from this sale.
Because Fox Glenn was sold to a related party of the Local Partnership, the sale
resulted  in a non-cash  contribution  to the Local  Partnership  from the Local
General Partner of approximately  $3,126,000.  Such  contribution  flows through
minority  interest  as a result of the  write-off  of the  deficit  basis in the
property of  approximately  $1,726,000 and the $1,400,000 cash received from the
sale,  which was  recognized  during the quarter ended March 31, 2006.  The sale
resulted in the liquidation of Fox Glenn.

On June 2, 2005,  the  Partnership  sold its  limited  partnership  interest  in
Lancaster  Towers  Associates,  LTD  ("Lancaster")  to an affiliate of the Local
General Partner for a sales price of $449,750. The Partnership received proceeds
of $445,500 from this sale after the payment of closing  costs of  approximately
$4,000  from the sales  price.  During  the  quarter  ended  June 15,  2005,  in
accordance with Statement of Financial  Accounting Standards No. 144 "Accounting
for the  Impairment  of Disposal of  Long-Lived  Asset"  ("SFAS No.  144"),  the
Partnership  deemed the  building  impaired  and wrote it down to its fair value
which resulted in a loss on impairment of $1,860,000. Because Lancaster was sold
to a related  party of the Local  Partnership,  the sale  resulted in a non-cash
distribution  to the  Local  Partnership  from  the  Local  General  Partner  of
approximately  $271,000.  Such distribution flows through minority interest as a
result  of  the  write-off  of  the  basis  in  the  property  of  approximately
($271,000), which was recognized during the quarter ended September 30, 2005.

On March 29, 2005, the property and the related assets and liabilities of Regent
Street  Associates,  L.P. ("Regent  Street") were sold to an unaffiliated  third
party  purchaser for the  assumption of the  outstanding  debt plus an incentive
payment of $100,000.  The Partnership  received  $100,000 from this transaction.
The sale originally  resulted in a gain of approximately  $1,436,000,  resulting
from the  write-off  of the  deficit  basis  in the  property  of  approximately
$1,336,000  and the $100,000  cash  received from the sale. An adjustment to the
gain of approximately $206,000 was recognized during the quarter ended March 31,
2006,  resulting  in an overall  gain of  $1,230,000.  The sale  resulted in the
liquidation of Regent Street.

On February 17, 2005, the Partnership's  limited partnership interest in Redwood
Villa  Associates  ("Redwood") was sold to the Local General Partner for a sales
price of $60,000. The Partnership received proceeds of $59,400 from this sale. A
gain of approximately $1,763,000 was originally recognized on the sale resulting
from the  write-off  of the  deficit  basis  in the  property  of  approximately
$1,704,000  and the $59,400 cash  received  from the sale.  However,  during the
quarter  ended  March  31,  2006,  a  determination  was made  that the sale was
actually to a related party of the Local Partnership, and a reclassification was
made from gain on sale to a contribution to the Local Partnership from the Local
General  Partner of  approximately  $1,789,000  including an  adjustment  to the
original gain of approximately $26,000 recognized during the quarter ended March
31, 2006. Such contribution flows through minority  interest.  The sale resulted
in the liquidation of Redwood.

On January 5, 2005, the property and the related assets and  liabilities of Lund
Hill  Associates,  L.P. ("Lund Hill") were sold to an unaffiliated  thirty party
purchaser for $6,500,000. The Partnership received approximately $3,369,000 as a
distribution from this sale after the repayment of mortgages,  other liabilities
and closing costs of  approximately  $3,131,000.  The sale resulted in a gain of
approximately  $1,345,000  resulting  from the write-off of the deficit basis in
the property of approximately  $1,345,000.  The sale resulted in the liquidation
of Lund Hill.

Note 4 - Assets Held for Sale

On March 15, 2006,  United-Pennsylvanian,  L.P.  ("United  Penn") entered into a
purchase and sale  agreement  to sell the  property  and the related  assets and
liabilities  to an affiliate of the Local  General  Partner for a sales price of
$500,000 plus 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 by September  2006.  No  assurance  can be given that the sale
will actually  occur.  United Penn is being held as an asset held for sale as of
June 15, 2006. As of March 31, 2006, United Penn had property and equipment,  at
cost, of  approximately  $5,966,000,  accumulated  depreciation of approximately
$4,332,000 and mortgage debt of approximately $3,120,000.

                                       8
<PAGE>

                          LIBERTY TAX CREDIT PLUS L.P.
                                AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                  June 15, 2006
                                   (Unaudited)


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 June 15,  2006,
Concourse Artists,  Grand Concourse,  Robin Housing , Willoughby and United Penn
were  classified  as  discontinued  operations  in  the  consolidated  financial
statements. As of March 15, 2006, Bayridge Associates,  L.P. ("Bayridge"),  2108
Bolton Drive Associated,  L.P. ("Bolton"),  Concourse Artists,  Grand Concourse,
Fox Glenn,  Lancaster,  Lund Hill, Penn Alto Associates ("Penn Alto"),  Redwood,
Regent Street,  Robin Housing,  United Penn and  Willoughby  were  classified as
discontinued operations on the consolidated balance sheets.

Consolidated Balance Sheets of Discontinued Operations:
<TABLE>
<CAPTION>
                                                      June 15,      March 15,
                                                        2006          2006
                                                    -----------   -----------
<S>                                                 <C>           <C>
Assets

  Property and equipment, net of
    accumulated depreciation of $17,757,030 and
    $17,796,300, respectively                       $10,241,131   $10,392,625
  Cash and cash equivalents                             145,513       245,660
  Cash held in escrow                                 4,136,903     4,121,419
  Deferred costs, net of accumulated amortization
    of $488,228 and $482,608, respectively              303,518       309,138
  Other assets                                          163,740       292,476
                                                    -----------   -----------
Total assets                                        $14,990,805   $15,361,318
                                                    ===========   ===========

Liabilities

  Mortgage notes payable                            $15,848,743   $16,677,628
  Accounts payable and other liabilities              4,177,265     3,367,790
  Due to local general partners and affiliates          723,035       726,594
  Due to general partners and affiliates                183,595       183,595
  Minority interest                                      59,129        61,379
                                                    -----------   -----------
Total liabilities                                   $20,991,767   $21,016,986
                                                    ===========   ===========
</TABLE>

The  following  table   summarizes  the  results  of  operations  of  the  Local
Partnerships  that are  classified  as  discontinued  operations.  For the three
months ended June 15, 2006,  Concourse Artists,  Grand Concourse,  Robin Housing
and  Willoughby  which were sold during the period,  and United Penn,  which was
classified  as an asset  held for  sale,  were all  classified  as  discontinued
operations on the consolidated financial statements.  For the three months ended
June 15, 2005 and in order to present  comparable  results for the three  months
ended  June  15,  2006,  Concourse  Artists,  Grand  Concourse,  Robin  Housing,
Willoughby and United Penn were all classified as  discontinued  operations.  In
addition,  Bolton,  Lund Hill,  Regent Street,  Redwood,  Lancaster,  Penn Alto,
Bayridge  and Fox Glenn,  which were sold during the year ended March 15,  2006,
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
                                  June 15, 2006
                                   (Unaudited)


Consolidated Statements of Discontinued Operations:
<TABLE>
<CAPTION>

                                                            Three Months Ended
                                                                 June 15,
                                                        --------------------------
                                                           2006           2005*
                                                        -----------    -----------
<S>                                                     <C>            <C>
Revenues:

Rental income                                           $   941,535    $ 2,213,532
Other                                                        12,575         21,549
(Loss) gain on sale of properties                           (11,000)     4,544,188
                                                        -----------    -----------
Total revenue                                               943,110      6,779,269
                                                        -----------    -----------

Expenses:

General and administrative                                  200,930        451,463
General and administrative-related parties (Note 2)          15,834        106,325
Repairs and maintenance                                     274,876        527,593
Operating                                                   413,272        522,885
Taxes                                                        25,258        111,811
Insurance                                                    66,059        148,949
Interest                                                    258,696        648,505
Depreciation and amortization                                46,731        706,556
Loss on impairment of fixed assets                                0      1,860,000
                                                        -----------    -----------

Total expenses                                            1,301,656      5,084,087
                                                        -----------    -----------

(Loss) income before minority interest                     (358,546)     1,695,182
Minority interest in loss of subsidiaries from
  discontinued operations                                     2,250        176,104
                                                        -----------    -----------
Net (loss) income from discontinued operations
  (including (loss) gain on sale of properties)         $  (356,296)   $ 1,871,286
                                                        ===========    ===========

(Loss) income - limited partners from discontinued
  operations (including (loss) gain on sale of
  properties)                                           $  (352,733)   $ 1,852,573
                                                        ===========    ===========

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

(Loss) income from discontinued operations (including
  (loss) gain on sale of properties) per BAC            $    (22.06)   $    115.88
                                                        ===========    ===========

* Reclassified for comparative purposes

<CAPTION>
Cash flows from Discontinued Operations:
                                                            Three Months Ended
                                                                 June 15,
                                                        --------------------------
                                                           2006           2005
                                                        -----------    -----------
<S>                                                     <C>            <C>
Net cash provided by operating activities               $  (865,591)   $(1,245,095)
                                                        -----------    -----------
Net cash provided by investing activities               $   (23,655)   $(6,212,201)
                                                        -----------    -----------
Net cash used in financing activities                   $   832,444    $ 5,080,338
                                                        -----------    -----------
</TABLE>


Note 6 - Commitments and Contingencies

a)  Subsidiary Partnerships - Going Concern

Magnolia Arms Associates, LTD ("Magnolia Arms")
-----------------------------------------------
Magnolia Arms made the first seven monthly payments on its mortgage in 2005, but
defaulted on its last five payments due to operating deficits. The mortgagee can
take possession of the Property, collect the rents directly from the tenants and
foreclose on the Property.  There can be no assurance that Magnolia Arms will be
able to cure the  default.  The  mortgage  payable is a current  liability as of
March 31,  2006.  Because of these  circumstances,  there is  substantial  doubt
regarding  whether the Local  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 $46,000 and $47,000 at
June 15,  2006 and March 15,  2006,  respectively.  The net loss after  minority
interest for Magnolia  Arms amounted to  approximately  $36,000 and $115,000 for
the quarters ended June 15, 2006 and 2005, respectively.

                                       10
<PAGE>

                          LIBERTY TAX CREDIT PLUS L.P.
                                AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                  June 15, 2006
                                   (Unaudited)


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 December 31, 2005 was $424,800.

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
$2,126,426 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). As of December 31, 2005, Quality Hill has not been granted such an
extension  by either  lender.  Subsequent  to December  31,  2005,  Quality Hill
Received a one year extension on the Foundation note.

The total of these three notes,  $3,286,266,  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 June 15, 2006 and March 15, 2006. The net loss after minority  interest for
Quality  Hill  amounted to  approximately  $86,000 and $91,000 for the  quarters
ended June 15, 2006 and 2005, respectively.

Willoughby
----------
The financial  statements of Willoughby have been prepared assuming that it will
continue as a going  concern.  Willoughby  has had  operating  losses and equity
deficiencies  that raise  substantial  doubt  about its ability to continue as a
going concern. The Partnership's  investment in Willoughby has been written down
to  zero  by  prior  years'  losses  and  the  minority   interest  balance  was
approximately  $256,000  and  $257,000  at June 15,  2006 and  March  31,  2006,
respectively.  The net loss after minority  interest for Willoughby  amounted to
approximately  $57,000 and  $100,000  for the  quarters  ended June 15, 2006 and
2005, respectively.

b) 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 up to $100,000.

c) Cash Distributions

Cash distributions from the Local Partnerships to the Partnership are restricted
by the provisions of the respective Local Partnership agreements and/or the U.S.
Department of Housing and Urban Development ("HUD"). Such cash distributions are
typically made from surplus cash flow.

d) Tax Credits

A portion of the low income housing tax credits ("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")  commencing  at the  beginning of the period that entitles
qualified  BAC  holders  to Tax  Credits,  generally  ten years from the date of
investment  or, if later,  the date the property is leased to qualified  tenants
("Tax Credit  Period").  As of December 31, 2003, the Tax Credit Period for each
Local Partnership had expired. The Compliance Periods began to end on January 1,
2004 and will continue  through December 31, 2008 with respect to the properties
depending upon when the Tax Credit Periods commenced.

e) 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.

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.

                                       11
<PAGE>

                          LIBERTY TAX CREDIT PLUS L.P.
                                AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                  June 15, 2006
                                   (Unaudited)


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.  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 June 26, 2006,  the  Partnership  entered into an assignment  and  assumption
agreement  to sell its  limited  partnership  interest in Shiloh  Grove  Limited
Partnership  ("Shiloh")  to an  affiliate  of the Local  General  Partner  for a
purchase  price of $150,000 to be  received in  installments  over the course of
eighteen  months from the closing date.  The sales  documents have been executed
and the initial deposit funds are being held in escrow.  The closing is expected
to occur by the end of  2006.  No  assurance  can be  given  that the sale  will
actually  occur.  As of March 31, 2006,  Shiloh had property and  equipment,  at
cost, of approximately  $19,552,000,  accumulated  depreciation of approximately
$10,590,000 and mortgage debt of approximately $9,624,000.

                                       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 31 Local Partnerships.  As
of June 15, 2006,  the  properties  and the related  assets and  liabilities  of
thirteen Local  Partnerships and the limited  partnership  interest in six Local
Partnerships   were  sold.  For  a  discussion  of  these  sales  of  the  Local
Partnerships  see Note 3. In addition,  as of June 15, 2006, the Partnership has
entered into a purchase and sale  agreement to sell the property and the related
assets and liabilities of one Local Partnership (see Note 4).  Subsequently,  on
June 26,  2006,  the  Partnership  entered  into an  assignment  and  assumption
agreement to sell its limited partnership interest in one Local Partnership (see
Note 7).

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

Tabular disclosure of Contractual Obligations
---------------------------------------------
The Partnership  discloses in Item 2 in the Partnership's  Annual Report on Form
10-K for the year ended March 15, 2006,  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 June 15, 2006.

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,  although  minimal,  are  available to meet the
obligations of the Partnership.  During the three months ended June 15, 2006 and
2005,  distributions  from  operations  of the Local  Partnerships  amounted  to
approximately $17,000 and $13,000, respectively.  Additionally, during the three
months  ended June 15, 2006 and 2005,  the  Partnership  received  approximately
$2,690,000 and $531,000 distributions of proceeds from sales.

For the three  months  ended June 15,  2006,  cash and cash  equivalents  of the
Partnership and its  consolidated  Local  Partnerships  decreased  approximately
$26,000. This decrease is attributable to improvements to property and equipment
($63,000),  costs paid relating to sale of properties  ($11,000),  repayments of
mortgage notes  ($1,007,000)  and a decrease in  capitalization  of consolidated
subsidiaries  attributable to minority interest ($7,000) which exceeded net cash
provided by operating activities  ($781,000),  a decrease in cash held in escrow
relating to investing  activities  ($94,000)  and a net increase in due to local
general  partners and  affiliates  ($188,000).  Included in the  adjustments  to
reconcile  net  income  to  net  cash   provided  by  operating   activities  is
depreciation and  amortization of approximately  ($1,099,000) and a loss on sale
of properties ($11,000).

Total  expenses  for the three  months  ended June 15, 2006 and 2005,  excluding
depreciation and amortization,  interest and general and  administrative-related
parties, totaled $3,721,046 and $3,392,990, respectively.

Accounts  payable as of June 15, 2006 and March 15, 2006,  were  $2,229,310  and
$2,115,469,  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.  Because the  provisions  of the
secondary  loans defer the payment of accrued  interest of the respective  Local
Partnerships,   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.  Included in accounts payable as of June 15, 2006 and March
15, 2006 are $110,385 and $0 of deferred  revenue from sales,  respectively.  In
addition, accounts payable from discontinued operations, as of June 15, 2006 and
March 15, 2006, totaled $1,031,358 and $282,628, respectively.

Accrued  interest  payable as of June 15, 2006 and March 15, 2006 was $6,264,296
and $5,963,620,  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 June  15,  2006 and  March  31,  2006,  totaled
$2,990,177 and $2,910,492, respectively.

Partnership  management  fees and  expense  reimbursements  owed to the  General
Partners  amounting to approximately  $7,967,000 and $7,808,000 were accrued and
unpaid as of June 15, 2006 and March 15, 2006, respectively. Without the General
Partners' continued accrual without payment of the partnership  management fees,
the Partnership will not be in a position to meet its  obligations.  The General
Partners  have  allowed  for the  accrual  without  payment  of a portion of the
partnership management fees but are under no obligation to continue to do so.

A working capital reserve of  approximately  $5,023,000  remained unused at June
15, 2006.

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

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

For a discussion of contingencies affecting certain Local Partnerships, see 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.

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

                                       13
<PAGE>

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
----------------------------

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 Note 2
to the consolidated financial statements in the annual report on Form 10-K.

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 of 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 three months ended June 15, 2006,  the  Partnership  has not recorded
any 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 June 15,  2006 and  March  15,  2006,  the  Partnership  has
recorded  property and equipment net of accumulated  depreciation of $10,241,131
and $10,392,625, 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.

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

The results of  operations  for the three  months  ended June 15, 2006 and 2005,
consisted  primarily  of the  results  of the  Partnership's  investment  in the
consolidated Local Partnerships.

Rental income decreased less than 1% for the three months ended June 15, 2006 as
compared to the  corresponding  period in 2005,  primarily due to an increase in
vacancies at three Local  Partnerships  offset by an increase in rental rates at
several Local Partnerships.

Other income increased approximately $33,000 for the three months ended June 15,
2006 as  compared  to the  corresponding  period  in 2005,  primarily  due to an
increase in interest income earned at the  Partnership  level due to higher cash
balances  resulting from sales and an increase in interest  income due to higher
replacement reserve balances at one Local Partnership.

Total   expenses,   excluding   general   and   administrative,    general   and
administrative-related  parties and operating, remained fairly consistent with a
decrease  of  approximately  3% for the  three  months  ended  June 15,  2006 as
compared to the corresponding period in 2005.

General and  administrative  expenses increased  approximately  $128,000 for the
three  months  ended June 15, 2006 as compared  to the  corresponding  period in
2005,  primarily  due to an  increase  in  administrative  salaries at one Local
Partnership  and  a  tax  reimbursement  received  in  2005  at a  second  Local
Partnership.

                                       14
<PAGE>

General and  administrative - related parties expenses  decreased  approximately
$75,000  for  the  three   months  ended  June  15,  2006  as  compared  to  the
corresponding  period  in  2005,  primarily  due to a  decrease  in  partnership
management fees resulting from sold properties at the Partnership level.

Operating  and other  expenses  increased  approximately  $282,000 for the three
months  ended June 15,  2006 as compared  to the  corresponding  period in 2005,
primarily due to an increase in gas costs at several Local Partnerships.

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 currently discloses 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, 2006,
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,  has
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 officer has
concluded  that,  as of the end of such  period,  the  Partnership's  disclosure
controls and procedures are effective.

(b) 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)

         (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: Related Credit Properties Inc.,
                                     its General Partner

Date: July 27, 2006
      -------------
                                 By: /s/ Alan P. Hirmes
                                     ------------------
                                     Alan P. Hirmes,
                                     President and Chief Executive Officer
                                     (Principal Executive and Financial Officer)


Date: July 27, 2006
      -------------

                                 By: /s/ Glenn F. Hopps
                                     ------------------
                                     Glenn F. Hopps,
                                     Treasurer
                                     (Principal Accounting Officer)


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

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

                                 By: Related Credit Properties Inc.,
                                     its General Partner

Date: July 27, 2006
      -------------

                                     By: /s/ Alan P. Hirmes
                                         ------------------
                                         Alan P. Hirmes,
                                         President and Chief Executive Officer
                                         (Principal Executive and Financial
                                          Officer)

Date: July 27, 2006
      -------------

                                     By: /s/ Glenn F. Hopps
                                         ------------------
                                         Glenn F. Hopps,
                                         Treasurer
                                         (Principal Accounting Officer)


<PAGE>

                                                                    Exhibit 31.1

                         CERTIFICATION PURSUANT TO RULE
                           13a-14(a) OR RULE 15d-14(a)

I, Alan P. Hirmes,  Principal  Executive Officer and Principal Financial Officer
of Related Credit Properties L.P. and Liberty Associates III, L.P. (the "General
Partners"),  each of which is a general  partner of Liberty Tax Credit Plus L.P.
(the "Partnership"), certify that:

     1.  I have  reviewed  this  quarterly  report on Form  10-Q for the  period
         ending June 15, 2006 of the Partnership;

     2.  Based  on my  knowledge,  this  report  does  not  contain  any  untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances  under which
         such  statements  were made, not misleading  with respect to the period
         covered by this report;

     3.  Based on my knowledge,  the financial  statements,  and other financial
         information  included in this  report,  fairly  present in all material
         respects the financial condition,  results of operations and cash flows
         of the  Partnership  as of,  and for,  the  periods  presented  in this
         report;

     4.  I am responsible for establishing and maintaining  disclosure  controls
         and  procedures  (as  defined  in  Exchange  Act  Rules  13a-15(e)  and
         15d-15(e)) and internal control over financial reporting (as defined in
         Exchange Act Rules  13a-15(f) and  15d-15(f)) for the  Partnership  and
         have:

         a) designed such  disclosure  controls and  procedures,  or caused such
         disclosure controls and procedures to be designed under my supervision,
         to  ensure  that  material  information  relating  to the  Partnership,
         including its consolidated subsidiaries,  is made known to me by others
         within  those  entities,  particularly  during the period in which this
         report is being prepared;

         b) designed such internal control over financial  reporting,  or caused
         such internal control over financial  reporting to be designed under my
         supervision,  to provide reasonable assurance regarding the reliability
         of financial reporting and the preparation of financial  statements for
         external  purposes in accordance  with  generally  accepted  accounting
         principles;

         c) evaluated the effectiveness of the Partnership's disclosure controls
         and procedures  and presented in this report my  conclusions  about the
         effectiveness of the disclosure controls and procedures,  as of the end
         of the period covered by this report based on such evaluation; and

         d)  disclosed in this report any change in the  Partnership's  internal
         control over financial reporting that occurred during the Partnership's
         most  recent  fiscal  quarter  that  has  materially  affected,  or  is
         reasonably  likely to materially  affect,  the  Partnership's  internal
         control over financial reporting; and

     5.  I have  disclosed,  based  on my most  recent  evaluation  of  internal
         control over financial reporting,  to the Partnership's auditors and to
         the controlling entities of the General Partners:

         a) all significant  deficiencies and material  weaknesses in the design
         or operation of internal  control over  financial  reporting  which are
         reasonably  likely to  adversely  affect the  Partnership's  ability to
         record, process, summarize and report financial information; and

         b) any fraud,  whether or not  material,  that  involves  management or
         other  employees  who  have a  significant  role  in the  Partnership's
         internal control over financial reporting.

         Date: July 27, 2006
               -------------

                                          By:  /s/ Alan P. Hirmes
                                               ------------------
                                               Alan P. Hirmes
                                               Principal Executive Officer and
                                               Principal Financial Officer


<PAGE>

                                                                    Exhibit 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")

In  connection  with the  Quarterly  Report of Liberty Tax Credit Plus L.P. (the
"Partnership")  on Form 10-Q for the period  ending  June 15, 2006 as filed with
the  Securities  and  Exchange  Commission  ("SEC")  on  the  date  hereof  (the
"Report"),  I,  Alan  P.  Hirmes,  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,  certify,  pursuant to 18 U.S.C.
Section 1350, as adopted  pursuant to Section 906 of the  Sarbanes-Oxley  Act of
2002, that:

       (1) The Report fully complies with the  requirements  of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

       (2) The  information  contained  in the Report  fairly  presents,  in all
material  respects,  the  financial  condition  and result of  operations of the
Partnership.

A signed  original of this  written  statement  required by Section 906 has been
provided  to the  Partnership  and  will  be  retained  by the  Partnership  and
furnished to the SEC or its staff upon request.

By:  /s/ Alan P. Hirmes
     ------------------
     Alan P. Hirmes
     Principal Executive Officer and Principal Financial Officer
     July 27, 2006