Discontinued Operations

3 Months Ended

Mar. 31, 2014

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

(7)  Discontinued Operations –

During the three months ended March 31, 2013, the Partnership sold its remaining 29.864% interest in the Jared Jewelry store in Sugar Land, Texas, in five separate transactions, to unrelated third parties. The Partnership received total net sale proceeds of $1,494,782, which resulted in a net gain of $602,041. The cost and related accumulated depreciation of the interests sold was $1,145,259 and $252,518, respectively. For the three months ended March 31, 2013, the Partnership recognized a net gain of $576,841.

In June 2013, the Partnership entered into an agreement to sell its 38% interest in the Applebee’s restaurant in Johnstown, Pennsylvania to an unrelated third party. On August 23, 2013, the sale closed with the Partnership receiving net sale proceeds of $1,200,499, which resulted in a net gain of $377,578. At the time of sale, the cost and related accumulated depreciation was $1,031,187 and $208,266, respectively.

During the first three months of 2014 and 2013, the Partnership distributed net sale proceeds of $50,505 and $20,202, respectively. The Limited Partners received distributions of $50,000 and $20,000 and the General Partners received distributions of $505 and $202 for the periods, respectively. The Limited Partners’ distributions represented $3.23 and $1.28 per Unit for the periods, respectively.

In September 2013, the Partnership decided to sell its 50% interest in the Johnny Carino’s restaurant in Longmont, Colorado and classified it as Real Estate Held for Sale. In November 2013, the Partnership entered into a non-binding letter of intent to sell the property to an unrelated third party.  If the sale was completed, the Partnership expected to receive net proceeds of approximately $625,000. Based on its long-lived asset valuation analysis, the Partnership determined the Johnny Carino’s restaurant was impaired.  As a result, in the third quarter of 2013, a charge to discontinued operations for real estate impairment of $382,526 was recognized, which was the difference between the carrying value at September 30, 2013 of $1,007,526 and the estimated fair value of $625,000.  The buyer subsequently withdrew the offer. The Partnership continues to seek a buyer for the property. Based on its long-lived asset valuation analysis, in the fourth quarter of 2013, the Partnership recognized an additional real estate impairment of $75,000 to decrease the carrying value to the estimated fair value of $550,000 as of December 31, 2013. The charges were recorded against the cost of the land and building. At March 31, 2014 and December 31, 2013, the property was classified as Real Estate Held for Sale.

After experiencing financial difficulties, the tenant of the Johnny Carino’s restaurant in Longmont, Colorado filed for Chapter 11 bankruptcy reorganization on March 27, 2014. Shortly thereafter, the tenant closed the restaurant, filed a motion with the bankruptcy court to reject the lease and returned possession of the property to the Partnership. The tenant is behind on the rent, having paid rent through October 2013.  As of the date of the bankruptcy filing, the tenant owed $31,212 of past due rent, which was not accrued for financial reporting purposes. While the property is vacant, the Partnership is responsible for its 50% share of real estate taxes and other costs associated with maintaining the property. 

The financial results for these properties are reflected as Discontinued Operations in the accompanying financial statements. The following are the results of discontinued operations for the three months ended March 31:

		2014		2013
Rental Income	$	0	$	50,927
Property Management Expenses		(6,036)		0
Depreciation		0		(14,996)
Gain on Disposal of Real Estate		0		576,841
Income (Loss) from Discontinued Operations	$	(6,036)	$	612,772

		2014		2013
Cash Flows from Discontinued Operations:
Operating Activities	$	(6,036)	$	35,931
Investing Activities	$	0	$	1,469,582