8-K

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

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) March 10, 2006

AMERICAN COMMUNITY PROPERTIES TRUST
(Exact name of registrant as specified in its charter)

MARYLAND
(State or other jurisdiction
of incorporation) 1-14369
(Commission
File Number) 52-2058165
(I.R.S. Employer
Identification No.)

222 Smallwood Village Center
St. Charles, Maryland 20602
(Address of principal executive offices)(Zip Code)

(301) 843-8600
(Registrant's telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01 Other Events.

On March 10, 2006, the Company announced that it had entered into a settlement agreement with the Internal Revenue Service, whereby the Company was able to successfully maintain its Publicly Traded Partnership tax status. For further details regarding additional terms of the settlement, please refer to the attached press release dated March 10, 2006.

Item 9.01 Financial Statements and Exhibits.

(c ) Exhibits.

99.1 The Company's Press Release dated March 10, 2006

SIGNATURES

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

	AMERICAN COMMUNITY PROPERTIES TRUST
	(Registrant)
Dated: March 10, 2006	By: /s/ Cynthia L. Hedrick
	Cynthia L. Hedrick Senior Vice President and Chief Financial Officer

EX-99.1

Exhibit 99.1

News Release

FOR IMMEDIATE RELEASE	CONTACT
Date: March 10, 2006	Craig Renner
	301-843-8600

ACPT MAINTAINS PTP TAX STATUS - DECLARES DIVIDEND

ST. CHARLES, MD.- American Community Properties Trust, a diversified real estate organization, today announced that it had entered into a closing agreement with the United States Internal Revenue Service ("IRS") by which ACPT will maintain its publicly traded partnership ("PTP") status for U.S. federal income tax purposes.

"I believe the resolution of this matter is favorable to ACPT's shareholders. By maintaining our PTP status, the double taxation of a significant portion of the Puerto Rico source income is eliminated," said J. Michael Wilson, Chairman and Chief Executive Officer.

Cynthia L. Hedrick, Executive Vice President and Chief Financial Officer, noted that the details of the closing agreement with the IRS require ACPT to report approximately $5.0 million to shareholders as taxable income on March 29, 2006. Under the terms of ACPT's governing documents, it is required to make minimum annual distributions to the shareholders equal to at least 45% of net taxable income allocated to shareholders. Accordingly, the Board of Trustees has declared a dividend of $0.43 per share, or approximately $2.2 million in the aggregate. The dividend will be payable on April 12, 2006 to shareholders of record on March 29, 2006.

In addition to reporting this income to shareholders, ACPT is required to pay an assessment to the IRS of approximately $975,000, related to the time delay in reporting the income to the IRS. "However, the IRS did not require us to pay any penalties as part of this settlement." Ms. Hedrick added.

As of September 30, 2005, the Company had accrued $4,814,000 million as an estimate for corporate income taxes and assessments related to the matters included in the closing agreement. As a result of ACPT retaining its PTP status, the accrued liability for corporate taxes will no longer be necessary. The effects of the Closing Agreement will be reflected in the Company's 2005 financial results.

ACPT (AMEX, PSE:APO) is a diversified real estate organization with operations in Maryland and Puerto Rico that specializes in community development, investment apartment properties, and asset management services. ACPT is currently listed on the American and Pacific stock exchanges under the symbol AmCmntyProp (APO).

When filed, ACPT's form 10-K will be available via the Internet at www.acptrust.com.

This press release contains forward-looking statements. Investors are cautioned that all forward-looking statements involve risks, uncertainties, and other factors that could cause actual results to differ materially from those in the forward-looking statement. Although the Company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it gives no assurances that its expectations will be attained. For more information, please refer to the Company's 10-K form.