UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549








**FORM 10-Q**





(Mark One)


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





For the quarterly period ended **December 30, 2004**





OR





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





For the transition period from ____________ to ____________





Commission file number: **0-17619**








**American Tax Credit Properties L.P.**


(Exact name of Registrant as specified in its charter)





**Delaware**

**13-3458875**(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)**Richman Tax Credit Properties L.P.**
**599 West Putnam Avenue, 3rd Floor**
**Greenwich, Connecticut**

**06830**(Address of principal executive offices)

(Zip Code)





Registrant's telephone number, including area code: **(203) 869-0900**





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 filing requirements for the past 90 days.





Yes x No o





Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).





Yes o No x











**AMERICAN TAX CREDIT PROPERTIES L.P.**





**PART I -** **FINANCIAL INFORMATION**











**Item 1.** **Financial Statements**


**Table of Contents**
**Page****Balance Sheets**
**3****Statements of Operations**
**4****Statements of Cash Flows**
**5****Notes to Financial Statements**
**7**


2





**AMERICAN TAX CREDIT PROPERTIES L.P.**


**BALANCE SHEETS**


**(UNAUDITED)**











**December 30,**

**March 30,****Notes**

**2004**

**2004****ASSETS**Cash and cash equivalents




$
769,639

$
76,527Marketable equity security


2


109,438


45,876Investments in bonds


2


124,163


651,218Investment in local partnerships


3


434,287


693,644Interest receivable





227


5,097$
1,437,754

$
1,472,362**LIABILITIES AND PARTNERS' EQUITY (DEFICIT)**LiabilitiesAccounts payable and accrued expenses




$
60,985

$
92,142Payable to general partner and affiliates








78,96960,985


171,111Commitments and contingencies


3,4Partners' equity (deficit)General partner





(352,778
)

(353,127
)Limited partners (41,286 units of limited partnership
interest outstanding)





1,645,029


1,610,443Accumulated other comprehensive income, net


2


84,518


43,9351,376,769


1,301,251$
1,437,754

$
1,472,362





See Notes to Financial Statements.


3





**AMERICAN TAX CREDIT PROPERTIES L.P.**


**STATEMENTS OF OPERATIONS**


**(UNAUDITED)**








**Notes**

**Three Months Ended December 30, 2004**

**Nine Months Ended December 30, 2004**

**Three Months Ended December 30, 2003**

**Nine Months Ended December 30, 2003****REVENUE**Interest




$
3,440

$
24,838

$
20,009

$
55,658Other income from local partnerships


3





7,500


5,000


11,250TOTAL REVENUE





3,440


32,338


25,009


66,908**EXPENSES**Administration fees





45,930


137,792


45,930


137,792Management fee





43,877


131,611


43,877


131,611Professional fees





16,002


57,033


23,032


54,990State of New Jersey filing fee





14,943


45,740


19,605


45,803Printing, postage and other





24,099


39,402


13,502


30,883TOTAL EXPENSES





144,851


411,578


145,946


401,079(141,411
)

(379,240
)

(120,937
)

(334,171
)Loss on conversion of bond to marketable equity security


2











(66,150
)Equity in income (loss) of investment in local partnerships


3


40,635


(464,470
)

76,431


(235,762
)Loss prior to gain on sale of local partnership property





(100,776
)

(843,710
)

(44,506
)

(636,083
)Gain on sale of local partnership****property


3


5,593


878,645**NET INCOME (LOSS)**





(95,183
)

34,935


(44,506
)

(636,083
)Other comprehensive income (loss)


2


12,020


40,583


(19,029
)

38,688**COMPREHENSIVE INCOME (LOSS)**




$
(83,163
)
$
75,518

$
(63,535
)
$
(597,395
)**NET INCOME (LOSS) ATTRIBUTABLE TO**General partner




$
(952
)
$
349

$
(445
)
$
(6,361
)Limited partners





(94,231
)

34,586


(44,061
)

(629,722
)$
(95,183
)
$
34,935

$
(44,506
)
$
(636,083
)**NET INCOME (LOSS)**per unit of limited partnership interest (41,286 units of limited partnership interest)




$
(2.28
)
$
.84

$
(1.06
)
$
(15.25
)





See Notes to Financial Statements.







4


**AMERICAN TAX CREDIT PROPERTIES L.P.**


**STATEMENTS OF CASH FLOWS**


**NINE MONTHS ENDED DECEMBER 30, 2004 AND 2003**


**(UNAUDITED)**











**2004**

**2003****CASH FLOWS FROM OPERATING ACTIVITIES**Interest received

$
13,534

$
67,046Cash paid foradministration fees


(172,906
)

(172,935
)management fee


(175,466
)

(175,472
)professional fees


(72,944
)

(64,772
)State of New Jersey filing fee


(60,986
)

(93,056
)printing, postage and other expenses


(39,402
)

(35,774
)Net cash used in operating activities


(508,170
)

(474,963
)**CASH FLOWS FROM INVESTING ACTIVITIES**Advances to local partnerships


(339,478
)

(73,077
)Cash distributions from local partnerships


18,607


13,750Proceeds in connection with sale of local partnership property


1,001,903Investments in bonds





(242,786
)Proceeds from maturities/redemptions and sales of bonds


520,250


728,809Net cash provided by investing activities


1,201,282


426,696Net increase (decrease) in cash and cash equivalents


693,112


(48,267
)Cash and cash equivalents at beginning of period


76,527


112,459**CASH AND CASH EQUIVALENTS AT END OF PERIOD**

$
769,639

$
64,192**SIGNIFICANT NON-CASH INVESTING ACTIVITIES**Investment in marketable equity security




$
29,850Unrealized gain on investments in bonds and marketable equity security, net

$
40,583

$
38,688








See reconciliation of net loss to net cash used in operating activities on page 6.













See Notes to Financial Statements.





5


**AMERICAN TAX CREDIT PROPERTIES L.P.**


**STATEMENTS OF CASH FLOWS - (Continued)**


**NINE MONTHS ENDED DECEMBER 30, 2004 AND 2003**


**(UNAUDITED)**











**2004**

**2003****RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES**Net income (loss)

$
34,935

$
(636,083
)Adjustments to reconcile net income (loss) to net cash used in operating activitiesEquity in loss of investment in local partnerships


464,470


235,762Gain on sale of local partnership property


(878,645
)Gain on redemption and sale of bonds


(9,984
)

(7,809
)Distributions from local partnerships classified as other income


(7,500
)

(11,250
)Loss on conversion of bond to marketable equity security





66,150Amortization of net premium on investments in bonds


1,960


4,216Accretion of zero coupon bonds


(8,150
)

(12,265
)Decrease in interest receivable


4,870


27,246Decrease in accounts payable and accrued expenses


(31,157
)

(61,926
)Decrease in payable to general partner and affiliates


(78,969
)

(79,004
)**NET CASH USED IN OPERATING ACTIVITIES**

$
(508,170
)
$
(474,963
)





See Notes to Financial Statements.


6





**AMERICAN TAX CREDIT PROPERTIES L.P.**


**NOTES TO FINANCIAL STATEMENTS**


**DECEMBER 30, 2004**


**(UNAUDITED)**








**1.** **Basis of Presentation**





The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. They do not include all information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The results of operations are impacted significantly by the combined results of operations of the Local Partnerships, which are provided by the Local Partnerships on an unaudited basis during interim periods. Accordingly, the accompanying financial statements are dependent on such unaudited information. In the opinion of the General Partner, the financial statements include all adjustments necessary to present fairly the financial position as of December
30, 2004 and the results of operations and cash flows for the interim periods presented. All adjustments are of a normal recurring nature. The results of operations for the three and nine month periods ended December 30, 2004 are not necessarily indicative of the results that may be expected for the entire year.





Certain prior period Local Partnership amounts reflected in Note 3 have been reclassified to conform to the current period presentation.








**2.** **Investments in Bonds and Marketable Equity Security**





As of December 30, 2004, certain information concerning investments in bonds and marketable equity security is as follows: ****





Description and maturity

Amortized
cost

Gross unrealized gains

Gross
unrealized losses

Estimated
fair valueCorporate debt securitiesAfter one year through five years

$
22,564

$
1,219

$
--

$
23,783U.S. government and agency securitiesAfter one year through five years


96,669


3,711


--


100,380$
119,233

$
4,930

$
--

$
124,163Marketable equity security

$
29,850

$
79,588

$
--

$
109,438





7


**NOTES TO FINANCIAL STATEMENTS - (Continued)**


**DECEMBER 30, 2004**


**(UNAUDITED)**








**3.** **Investment in Local Partnerships**





The Partnership acquired limited partnership interests in Local Partnerships representing capital contributions in the aggregate amount of $35,595,392, which includes advances made to certain Local Partnerships. As of September 30, 2004, the Partnership holds an interest in fifteen Local Partnerships that have outstanding mortgage loans payable totaling approximately $65,215,000 and accrued interest payable on such loans totaling approximately $7,808,000, which are secured by security interests and liens common to mortgage loans on the Local Partnerships' real property and other assets.





For the nine months ended December 30, 2004 , the investment in local partnerships activity consists of the following:





Investment in local partnerships as of March 30, 2004

$
693,644Equity in loss of investment in local partnerships


(464,470
)*Cash distributions received from Local Partnerships


(18,607
)Cash distributions from Local Partnerships classified asother income


7,500Gain on sale of local partnership property


878,645
**Cash distribution in connection with sale of local partnership property


(1,001,903
)Advances to Local Partnerships


339,478Investment in local partnerships as ofDecember 30, 2004

$
434,287





*Equity in investment in local partnerships is limited to the Partnerships investment balance in each Local Partnership; any excess is applied to other partners' capital in any such Local Partnership. The amount of such excess losses applied to other partners' capital was $2,297,668 for the nine months ended September 30, 2004 as reflected in the combined statement of operations of the Local Partnerships reflected herein Note 3. Such amount includes income from Blue Hill Housing Limited Partnership (Blue Hill) for the period January 1, 2004 through August 31, 2004 (see discussion below).





**Blue Hill sold its underlying Property on August 31, 2004, in connection with which Blue Hill recognized a gain of $1,851,658 and the Partnership received a distribution of $1,001,903. In connection with the sale of the Blue Hill Property, the Partnership recognized a gain of $878,645 for the nine months ended December 30, 2004. In the event that additional proceeds are distributed to the Partnership in connection with the final settlement of the sale of Blue Hill, additional gain will be recognized at such time. The remaining accounts of Blue Hill as of and for the three and nine month periods ended September 30, 2004 are included in the combined balance sheet and combined statements of operations of the Local Partnerships for such periods as reflected herein Note 3.





The combined unaudited balance sheets of the Local Partnerships as of September 30, 2004 and December 31, 2003 and the combined unaudited statements of operations of the Local Partnerships for the three and nine month periods ended September 30, 2004 and 2003 are reflected on pages 9 and 10, respectively.











8


**AMERICAN TAX CREDIT PROPERTIES L.P.**


**NOTES TO FINANCIAL STATEMENTS - (Continued)**


**DECEMBER 30, 2004**


**(UNAUDITED)**








**3.** **Investment in Local Partnerships (continued)**





The combined balance sheets of the Local Partnerships as of September 30, 2004 and December 31, 2003 are as follows:





**September 30,**

**December 31,****2004**

**2003****ASSETS**Cash and cash equivalents

$
780,252

$
1,070,668Rents receivable


260,169


239,201Escrow deposits and reserves


3,428,963


3,044,006Land


3,738,736


3,850,061Buildings and improvements (net of accumulated depreciation of $53,406,601 and $56,056,615)


45,008,526


53,115,262Intangible assets (net of accumulated amortization of $711,675 and $897,456)


1,229,753


1,553,094Other assets


831,005


876,877$
55,277,404

$
63,749,169**LIABILITIES AND PARTNERS EQUITY (DEFICIT)**LiabilitiesAccounts payable and accrued expenses

$
1,309,420

$
1,393,893Due to related parties


6,504,973


6,236,425Mortgage loans


65,215,154


72,005,181Notes payable


942,467


927,021Accrued interest


7,807,684


6,781,074Other liabilities


345,115


562,45382,124,813


87,906,047Partners' equity (deficit)American Tax Credit Properties L.P.Capital contributions, net of distributions


33,143,312


34,059,163Cumulative loss


(31,082,308
)

(32,450,979
)2,061,004


1,608,184General partners and other limited partnersCapital contributions, net of distributions


(195,871
)

599,824Cumulative loss


(28,712,542
)

(26,364,886
)(28,908,413
)

(25,765,062
)(26,847,409
)

(24,156,878
)$
55,277,404

$
63,749,169





****


9


**AMERICAN TAX CREDIT PROPERTIES L.P.**


**NOTES TO FINANCIAL STATEMENTS - (Continued)**


**DECEMBER 30, 2004**


**(UNAUDITED)**





**3.**  **Investment in Local Partnerships (continued)**





The combined statements of operations of the Local Partnerships for the three and nine month periods ended September 30, 2004 and 2003 are as follows:





**Three Months**
**Ended**
**September 30,****2004**

**Nine Months**
**Ended**
**September 30,****2004**

**Three Months**
**Ended**
**September 30,****2003**

**Nine****Months**
**Ended**
**September 30,****2003****REVENUE**Rental

$
3,590,976

$
11,187,999

$
3,853,619

$
11,576,058Interest and other


167,362


299,721


94,476


247,616TOTAL REVENUE


3,758,338


11,487,720


3,948,095


11,823,674**EXPENSES**Administrative


752,548


2,163,636


755,948


2,237,079Utilities


293,809


1,222,948


261,090


1,182,196Operating and maintenance


924,328


2,654,214


933,814


2,909,811Taxes and insurance


344,760


1,126,338


343,715


1,112,672Financial


1,511,389


4,313,538


1,470,243


4,254,087Depreciation and amortization


924,183


2,837,689


960,930


2,950,445TOTAL EXPENSES


4,751,017


14,318,363


4,725,740


14,646,290Loss from operations before gain on sale of property


(992,679
)

(2,830,643
)

(777,645
)

(2,822,616
)Gain on sale of property


1,851,658


1,851,658**NET EARNINGS (LOSS)**

$
858,979

$
(978,985
)
$
(777,645
)
$
(2,822,616
)**NET EARNINGS (LOSS)**
**ATTRIBUTABLE TO**American Tax Credit Properties L.P.*

$
1,824,776

$
1,368,671

$
76,431

$
(235,762
)General partners and other limited partners, which includes $960,576, $2,297,668, $829,170 and $2,513,705 of Partnership loss in excess of investment


(965,797
)

(2,347,656
)

(854,076
)

(2,586,854
)$
858,979

$
(978,985
)
$
(777,645
)
$
(2,822,616
)





*2004 amounts include an allocation on the gain on sale of property of $1,833,141. The net earnings (loss) allocations from operations for the three and nine month periods ended September 30, 2004 are $40,635 and $(464,470), respectively.





The combined results of operations of the Local Partnerships for the three and nine month periods ended September 30, 2004 are not necessarily indicative of the results that may be expected for an entire operating period.


10
 
 ****
 **AMERICAN TAX CREDIT PROPERTIES L.P.**


**NOTES TO FINANCIAL STATEMENTS - (Continued)**


**DECEMBER 30, 2004**


**(UNAUDITED)**








**3.** **Investment in Local Partnerships (continued)**





Cobbet Hill Associates Limited Partnership (Cobbet) was originally financed with a first mortgage with mandatory monthly payment terms with the Massachusetts Housing Finance Agency (MHFA) and a second mortgage with MHFA under the State Housing Assistance for Rental Production Program (the SHARP Operating Loan) whereby proceeds would be advanced monthly as an operating subsidy (the Operating Subsidy Payments). The terms of the SHARP Operating Loan called for declining Operating Subsidy Payments over its term (not more than 15 years). However, due to the economic condition of the Northeast region in the early 1990s, MHFA instituted an operating deficit loan (the ODL) program that supplemented the scheduled reduction in the Operating Subsidy
Payments. Effective October 1, 1997, MHFA announced its intention to eliminate the ODL program, such that Cobbet no longer receives the ODL, without which Cobbet is unable to make the full mandatory debt service payments on its first mortgage. MHFA issued a formal notice of default dated February 2, 2004. The Local General Partners are currently negotiating with MHFA to transfer the ownership of the Property to the unaffiliated management agent, which will redevelop and recapitalize the Property. The Partnership does not believe that it will receive any proceeds from such a transfer. Since the date MHFA ceased funding the ODL through December 31, 2003, Cobbet has accumulated approximately $2,117,000 of principal and interest arrearages. The Partnership had provided collateral for a standby letter of credit in the amount of $242,829 issued in connection with Cobbet under the terms of the financing documents whereby the lender had required security for future operating deficits, if any, of Cobbet. The
letter of credit was secured by investments in bonds of the Partnership of approximately $244,000. The lender drew on the letter of credit in full in June 2004. The $242,829 has been recorded as investment in local partnerships and has been offset by additional equity in loss of investment in local partnerships in the accompanying financial statements. The Partnerships investment balance in Cobbet, after cumulative equity losses, became zero during the year ended March 30, 1994. The Compliance Period in connection with Cobbet expired on December 31, 2003.





The Partnership advanced $96,649 to 4611 South Drexel Limited Partnership (South Drexel) during the nine months ended December 30, 2004 to fund operating deficits, which includes making necessary capital improvements to the property. Cumulative advances as of December 30, 2004 are $636,064. Such advances have been recorded as investment in local partnerships and have been offset by additional equity in loss of investment in local partnerships.








**4.** **Additional Information**





Additional information, including the audited March 30, 2004 Financial Statements and the Organization, Purpose and Summary of Significant Accounting Policies, is included in the Partnership's Annual Report on Form 10-K for the fiscal year ended March 30, 2004 on file with the Securities and Exchange Commission.





11


**AMERICAN TAX CREDIT PROPERTIES L.P.**








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





Material Changes in Financial Condition





As of December 30, 2004, American Tax Credit Properties L.P. (the Registrant) has experienced a significant change in financial condition as compared to March 30, 2004 as a result of the sale of the Property owned by Blue Hill Associates Limited Partnership (Blue Hill) (see Local Partnership Matters below). Principal changes in assets are comprised of periodic transactions and adjustments and equity in loss from operations of the local partnerships (the Local Partnerships), which own low-income multifamily residential complexes (the Properties) that qualify for the low-income tax credit in
accordance with Section 42 of the Internal Revenue Code (the Low-income Tax Credit), a reduction in investments in bonds which were utilized to pay for Registrants operating expenses and advances to certain Local Partnerships and proceeds in connection with the sale of the Property owned by Blue Hill. During the nine months ended December 30, 2004, Registrant received cash from interest revenue, distributions from Local Partnerships and maturities/redemptions and sales of bonds and utilized cash for operating expenses and advances to Local Partnerships ( see Local Partnership Matters below), which advances have been recorded as investment in local
partnerships. Cash and cash equivalents, marketable equity security and investments in bonds increased, in the aggregate, by approximately $230,000 during the nine months ended December 30, 2004 (which includes a net unrealized gain on investments in bonds and marketable equity security of approximately $41,000, accretion of zero coupon bonds of approximately $8,000 and amortization of net premium on investments in bonds of approximately $2,000). Notwithstanding circumstances that may arise in connection with the Properties, Registrant does not expect to realize significant gains or losses on its investments in bonds, if any. During the nine months ended December 30, 2004 , the investment in local partnerships decreased as a result of proceeds received in connection with the sale of the Blue Hill Property of $1,001,903, Registrants
equity in the Local Partnerships net loss for the nine months ended September 30, 2004 of $464,470 and cash distributions received from Local Partnerships of $11,107 (exclusive of distributions from Local Partnerships of $7,500 classified as other income) , partially offset by Registrant's gain in connection with the sale of the Blue Hill Property of $878,645 and advances made to Local Partnerships of $339,478 (see discussion below under Local Partnership Matters ).





Results of Operations





Registrants operating results are dependent upon the operating results of the Local Partnerships and are significantly impacted by the Local Partnerships policies. In addition, the operating results herein are not necessarily the same for tax reporting. Registrant accounts for its investment in local partnerships in accordance with the equity method of accounting. Accordingly, the investment is carried at cost and is adjusted for Registrants share of each Local Partnerships results of operations and by cash distributions received. Equity in loss of each investment in Local Partnership allocated to Registrant is recognized to the extent of Registrants investment balance in each Local Partnership. Equity in loss in excess of Registrants investment balance in a Local Partnership
is allocated to other partners capital in any such Local Partnership. As a result, the reported equity in loss of investment in local partnerships is expected to decrease as Registrants investment balances in the respective Local Partnerships become zero. The combined statements of operations of the Local Partnerships reflected in Note 3 to Registrants financial statements include the operating results of all Local Partnerships, irrespective of Registrants investment balances.





Cumulative losses and cash distributions in excess of investment in local partnerships may result from a variety of circumstances, including a Local Partnership's accounting policies, subsidy structure, debt structure and operating deficits, among other things. In addition, the book value of Registrants investment in each Local Partnership (the Local Partnership Carrying Value) may be reduced if the Local Partnership Carrying Value is considered to exceed the estimated value derived by management. Accordingly, cumulative losses and cash distributions in excess of the investment or an adjustment to a Local Partnerships Carrying Value are not necessarily indicative of adverse operating results of a Local Partnership. See discussion below under Local Partnership Matters regarding certain Local Partnerships currently operating below economic break even levels.





12


**AMERICAN TAX CREDIT PROPERTIES L.P.**








**Item 2.** **Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)**





Registrants operations for the three months ended December 30, 2004 and 2003 resulted in a net loss of $95,183 and $44,506, respectively. The increase in net loss from fiscal 2003 to 2004 is primarily attributable to (i) a decrease in equity in income of investment in local partnerships of approximately $36,000 and (ii) a decrease in interest revenue of approximately $17,000. Based on additional information provided by the management of Blue Hill, the gain in connection with the sale of the Blue Hill Property increased by $5,593 as compared to the reported gain for the six months ended September 29, 2004 (see discussion above under Material Changes in Financial Condition).Other comprehensive income (loss) for the nine months ended December 30, 2004 and 2003 resulted from a net unrealized gain (loss) on investments
in bonds and marketable equity security of $12,020 and $(19,029), respectively.





The Local Partnerships' loss from operations of approximately $993,000 for the three months ended September 30, 2004 was attributable to rental and other revenue of approximately $3,758,000, exceeded by operating and interest expenses (including interest on non-mandatory debt) of approximately $3,827,000 and approximately $924,000 of depreciation and amortization expense. The Local Partnerships' loss from operations of approximately $778,000 for the three months ended September 30, 2003 was attributable to rental and other revenue of approximately $3,948,000, exceeded by operating and interest expenses (including interest on non-mandatory debt) of approximately $3,765,000 and approximately $961,000 of depreciation and amortization expense. The results of operations of the Local Partnerships for the three months
ended September 30, 2004 are not necessarily indicative of the results that may be expected in future periods.





Registrants operations for the nine months ended December 30, 2004 and 2003 resulted in net income (loss) of $34,935 and $(636,083), respectively. The decrease in net loss from fiscal 2003 to 2004 is primarily attributable to (i) a gain of approximately $879,000 recorded in fiscal 2004 upon the sale of the Property owned by Blue Hill (see above under Material Changes in Financial Condition), and (ii) a loss recognized in fiscal 2003 of approximately $66,000 on the conversion of an investment in bonds to a marketable equity security resulting from the corporate restructuring of the bond issuers debt, partially offset by (i) an increase in equity in loss of investment in local partnerships of approximately $229,000, which increase is primarily the result of greater advances being made to certain Local Partnerships during the nine months ended December 30, 2004, which were charged to equity in loss of investment in local partnerships (see discussion below under Local
Partnership Matters) and (ii) a decrease in interest revenue of approximately $31,000. Other comprehensive income for the nine months ended December 30, 2004 and 2003 resulted from a net unrealized gain on investments in bonds of $40,583 and $38,688 respectively.





The Local Partnerships' loss from operations of approximately $2,831,000 for the nine months ended September 30, 2004 was attributable to rental and other revenue of approximately $11,488,000, exceeded by operating and interest expenses (including interest on non-mandatory debt) of approximately $11,481,000 and approximately $2,838,000 of depreciation and amortization expense. The Local Partnerships' loss from operations of approximately $2,823,000 for the nine months ended September 30, 2003 was attributable to rental and other revenue of approximately $11,823,000, exceeded by operating and interest expenses (including interest on non-mandatory debt) of approximately $11,696,000 and approximately $2,950,000 of depreciation and amortization expense. The results of operations of the Local Partnerships for the
nine months ended September 30, 2004 are not necessarily indicative of the results that may be expected in future periods.





Local Partnership Matters





Registrant's primary objective is to provide Low-income Tax Credits to limited partners generally over a ten year period. The relevant state tax credit agencies have allocated each of Registrants Local Partnerships an amount of Low-income Tax Credits, which are generally available for a ten year period from the year the Property is placed in service (the Ten Year Credit Period). The Ten Year Credit Period was fully exhausted by all of the Properties as of December 31, 2001. The required holding period of each Property, in order to avoid Low-income Tax Credit recapture, is fifteen years from the year in which the Low-income Tax Credits commence on the last building of the Property (the "Compliance Period"). The Properties must satisfy various requirements including rent restrictions and tenant
income limitations (the "Low-income Tax Credit Requirements") in order to maintain eligibility for the recognition of the Low-income Tax Credit at all times during the Compliance Period. A Local Partnership may lose such eligibility and suffer an event of recapture if its Property fails to remain in compliance with the Low-income Tax Credit Requirements. As of December 31, 2004, the Compliance Period of virtually all of the Local Partnerships has expired.





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**AMERICAN TAX CREDIT PROPERTIES L.P.**








**Item 2.** **Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)**





The Properties are principally comprised of subsidized and leveraged low-income multifamily residential complexes located throughout the United States and Puerto Rico. Many of the Local Partnerships receive rental subsidy payments, including payments under Section 8 of Title II of the Housing and Community Development Act of 1974 ("Section 8). The subsidy agreements expire at various times during and after the Compliance Periods of the Local Partnerships. The United States Department of Housing and Urban Development (HUD) has issued a series of directives related to project based Section 8 contracts that define owners notification responsibilities, advise owners of project based Section 8 properties of what their options are regarding the renewal of Section 8 contracts, provide guidance
and procedures to owners, management agents, contract administrators and HUD staff concerning renewal of Section 8 contracts, provide policies and procedures on setting renewal rents and handling renewal rent adjustments and provide the requirements and procedures for opting-out of a Section 8 project based contract. Registrant cannot reasonably predict legislative initiatives and governmental budget negotiations, the outcome of which could result in a reduction in funds available for the various federal and state administered housing programs including the Section 8 program. Such changes could adversely affect the future net operating income before debt service (NOI) and debt structure of any or all Local Partnerships currently receiving such subsidy or similar subsidies. Four Local Partnerships Section 8 contracts are currently subject to renewal under applicable HUD guidelines. In addition, two Local Partnerships entered into restructuring agreements in 2001, resulting in both a
lower rent subsidy (resulting in lower NOI) and lower mandatory debt service.





The Local Partnerships have various financing structures which include (i) required debt service payments ("Mandatory Debt Service") and (ii) debt service payments that are payable only from available cash flow subject to the terms and conditions of the notes, which may be subject to specific laws, regulations and agreements with appropriate federal and state agencies ("Non-Mandatory Debt Service or Interest"). During the nine months ended September 30, 2004, revenue from operations of the Local Partnerships has generally been sufficient to cover operating expenses and Mandatory Debt Service. Most of the Local Partnerships are effectively operating at or above break even levels, although certain Local Partnerships' operating information reflects operating deficits that do not represent cash deficits due to their
mortgage and financing structure and the required deferral of property management fees. However, as discussed below, certain Local Partnerships' operating information indicates below break even operations after taking into account their mortgage and financing structure and any required deferral of property management fees.





Cobbet Hill Associates Limited Partnership (Cobbet) was originally financed with a first mortgage with mandatory monthly payment terms with the Massachusetts Housing Finance Agency (MHFA) and a second mortgage with MHFA under the State Housing Assistance for Rental Production Program (the SHARP Operating Loan) whereby proceeds would be advanced monthly as an operating subsidy (the Operating Subsidy Payments). The terms of the SHARP Operating Loan called for declining Operating Subsidy Payments over its term (not more than 15 years). However, due to the economic condition of the Northeast region in the early 1990s, MHFA instituted an operating deficit loan (the ODL) program that supplemented the scheduled reduction in the Operating Subsidy
Payments. Effective October 1, 1997, MHFA announced its intention to eliminate the ODL program, such that Cobbet no longer receives the ODL, without which Cobbet is unable to make the full mandatory debt service payments on its first mortgage. MHFA issued a formal notice of default dated February 2, 2004. The Local General Partners are currently negotiating with MHFA to transfer the ownership of the Property to the unaffiliated management agent, which will redevelop and recapitalize the Property. Registrant does not believe that it will receive any proceeds from such a transfer. Since the date MHFA ceased funding the ODL through December 31, 2003, Cobbet has accumulated approximately $2,117,000 of principal and interest arrearages. In addition, Registrant had provided collateral for a standby letter of credit in the amount of $242,829 issued in connection with Cobbet under the terms of the financing documents whereby the lender had required security for future operating deficits, if any, of Cobbet.
The letter of credit was secured by investments in bonds of approximately $244,000. The lender drew on the letter of credit in full in June 2004. The $242,829 has been recorded as additional investment in local partnerships and has been offset by additional equity in loss of investment in local partnerships. Registrants investment balance in Cobbet, after cumulative equity losses, became zero during the year ended March 30, 1994. The Compliance Period in connection with Cobbet expired on December 31, 2003.





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**AMERICAN TAX CREDIT PROPERTIES L.P.**








**Item 2.** **Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)**





Blue Hill sold its underlying Property on August 31, 2004, in connection with which Blue Hill recognized a gain of $1,851,658 and Registrant received proceeds of $1,001,903. In connection with the sale, Registrant recorded a gain of $878,645 for the nine months ended December 30, 2004. In the event that additional proceeds are distributed to Registrant in connection with the final settlement of the sale of Blue Hill, additional gain will be recorded at such time. The Compliance Period in connection with Blue Hill expired on December 31, 2003.





4611 South Drexel Limited Partnership (South Drexel) reported an operating deficit of approximately $111,000 for the nine months ended September 30, 2004 due to vacancies resulting from deferred unit maintenance and associated required capital improvements. As of September 30, 2004, Registrant has advanced $636,064, of which $96,649 was advanced during the nine months then ended. The Local General Partner represents that payments on the mortgage and real estate taxes are current. Registrants investment balance in South Drexel, after cumulative equity losses, became zero during the year ended March 30, 1996 and advances made by Registrant have been offset by additional equity in loss of investment in local
partnerships. The Compliance Period in connection with South Drexel expired on December 31, 2004.





The terms of the partnership agreement of Hilltop North Associates, L.P. (Hilltop) require the Local General Partner to cause the management agent to defer property management fees in order to avoid a default under the mortgage. Hilltop reported an operating deficit of approximately $147,000 for the nine months ended September 30, 2004, which includes property management fees of approximately $41,000. The Local General Partner represents that payments on the mortgage and real estate taxes are current. Registrants investment balance in Hilltop, after cumulative equity losses, became zero during the year ended March 30, 1999. The Compliance Period in connection with Hilltop expired on December 31,
2002.





Critical Accounting Policies and Estimates





The financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, which requires Registrant to make certain estimates and assumptions. The following section is a summary of certain aspects of those accounting policies that may require subjective or complex judgments and are most important to the portrayal of Registrants financial condition and results of operations. Registrant believes that there is a low probability that the use of different estimates or assumptions in making these judgments would result in materially different amounts being reported in the financial statements.





·
Registrant accounts for its investment in local partnerships in accordance with the equity method of accounting since Registrant does not control the operations of a Local Partnership.





·
If the book value of Registrants investment in a Local Partnership exceeds the estimated value derived by management, Registrant reduces its investment in any such Local Partnership and includes such reduction in equity in loss of investment in local partnerships.








**Item 3.** **Quantitative and Qualitative Disclosure about Market Risk**





Registrant has invested a portion of its working capital reserves in corporate bonds and U.S. government and agency securities. The market value of such investments is subject to fluctuation based upon changes in interest rates relative to each investments maturity date and the associated bond rating. Since Registrants investments in bonds have various maturity dates through 2007, the value of such investments may be adversely impacted in an environment of rising interest rates in the event Registrant decides to liquidate any such investment prior to its maturity. Although Registrant may utilize reserves to assist an under performing Property, it otherwise intends to hold such investments to their respective maturities. Therefore, Registrant does not anticipate any material adverse impact in
connection with such investments.





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**AMERICAN TAX CREDIT PROPERTIES L.P.**








**Item 4.** **Controls and Procedures**





As of December 30, 2004, under the direction of the Chief Executive Officer and Chief Financial Officer, Registrant evaluated the effectiveness of its disclosure controls and procedures and internal controls over financial reporting and concluded that (i) Registrants disclosure controls and procedures were effective as of December 30, 2004, and (ii) no changes occurred during the quarter ended December 30, 2004 that materially affected, or are reasonably likely to materially affect, such internal controls.










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**AMERICAN TAX CREDIT PROPERTIES L.P.**





**Part II -** **OTHER INFORMATION**








**Item 1.**  **Legal Proceedings**





Registrant is not aware of any material legal proceedings.





**Item 2.**
**Unregistered Sales of Equity Securities and Use of Proceeds**





None





**Item 3.**  **Defaults Upon Senior Securities**





None; see Item 5 regarding the mortgage default of a Local Partnership.





**Item 4.**  **Submission of Matters to a Vote of Security Holders**





None





**Item 5.** **Other Information**





As discussed in Part I, Item 2 - Managements Discussion and Analysis of Financial Condition and Results of Operations, Cobbet Hill Associates Limited Partnership (Cobbet) has received a formal notice of default from the lender. The Local General Partners are negotiating with the lender to transfer the ownership of the Property to the unaffiliated management agent.





**Item 6.**  **Exhibits and Reports on Form 8-K**





a.  Exhibits





Exhibit 31.1 Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer


Exhibit 31.2 Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer


Exhibit 32.1 Section 1350 Certification of Chief Executive Officer


Exhibit 32.2 Section 1350 Certification of Chief Financial Officer





b.  Reports on Form 8-K





None





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**SIGNATURES**








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





**AMERICAN TAX CREDIT PROPERTIES L.P.**(a Delaware limited partnership)By:Richman Tax Credit Properties L.P.,General Partnerby:Richman Tax Credit Properties Inc.,general partnerDated: February 14, 2005

/s/David Salzmanby:David SalzmanChief Executive OfficerDated: February 14, 2005

/s/Neal Ludekeby:Neal LudekeChief Financial Officer










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