5. Investment in Local Partnerships

12 Months Ended

Mar. 30, 2018

Notes

5. Investment in Local Partnerships

5.     Investment in Local Partnerships

The Partnership initially acquired a Local Partnership Interest in forty-three Local Partnerships. As of March 30, 2018, the Partnership owns a 99% Local Partnership Interest in one Local Partnership, Fulton Street Houses Limited Partnership (“Fulton Street Houses”).  In connection with the initial purchase of forty-three Local Partnership Interests, under the terms of the partnership agreement of each Local Partnership, as of March 30, 2018 the Partnership is committed to make capital contributions in the aggregate of $29,384,966, which includes Advances to a certain Local Partnership and all of which has been paid.

Fulton Street Houses owns a 36 unit subsidized and leveraged low-income multifamily residential complex located in Brooklyn, New York. The required holding period of each Property, in order to avoid Low-income Housing Tax Credit recapture, is fifteen years from the year in which the Low-income Housing Tax Credits commence on the last building of the Property (the “Compliance Period”). The Compliance Periods of all the Local Partnerships expired in a prior year. The rents of Fulton Street Houses are subject to specific laws, regulations and agreements with federal and state agencies.

During the year ended March 30, 2017, Summerfield Apartments Limited Partnership (“Summerfield Apartments”) sold its underlying Property to an unaffiliated third party, in connection with which Summerfield Apartments recognized a gain of $711,374; such amount is reflected as gain on sale of property in the combined statement of operations of the Local Partnerships for the year ended December 31, 2016 herein Note 5. The Partnership received $857,937 in connection with the sale; such amount is included in gain on sale of limited partner interests/local partnership properties in the accompanying statement of operations and comprehensive income (loss) of the Partnership for the year ended March 30, 2017. Summerfield Apartments has since been dissolved.

During the year ended March 30, 2017, the Partnership sold its Local Partnership Interest in Hurlock Meadow Limited Partnership (“Hurlock Meadow”) to an unaffiliated third party. The Partnership received $15,000 in connection with the sale; such amount is included in gain on sale of limited partner interests/local partnership properties in the accompanying statement of operations and comprehensive income (loss) of the Partnership for the year ended March 30, 2017.

During the year ended March 30, 2017, the Partnership sold its Local Partnership Interest in Country View Apartments (“Country View”) to one of the Local General Partners of Country View. The Partnership received $7,000 in connection with the sale; such amount is included in gain on sale of limited partner interests/local partnership properties in the accompanying statement of operations and comprehensive income (loss) of the Partnership for the year ended March 30, 2017.

Equity in loss of 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 (see Note 1). The amount of such excess losses applied to other partners' capital was $228,448 and $217,171 for the years ended December 31, 2017 and 2016, respectively, as reflected in the combined statements of operations of the Local Partnerships herein Note 5.

The combined balance sheets of the Local Partnerships as of December 31, 2017 and 2016 and the combined statements of operations of the Local Partnerships for the years then ended are reflected on pages 24 and 25, respectively. The combined balance sheet of the Local Partnerships as of December 31, 2016 does not include any balances in connection with the Local Partnerships in which the Partnership no longer owns an interest as of such date, while the combined statement of operations of the Local Partnerships for the year then ended includes the results of operations of such Local Partnerships for the period prior to the sales or other dispositions (see discussion above herein Note 5). Accordingly, the combined balance sheets of the Local Partnerships as of December 31, 2017 and 2016 and the combined statement of operations of the Local Partnerships for the year ended December 31, 2017 only include balances for Fulton Street Houses.

The combined balance sheets of the Local Partnerships as of December 31, 2017 and 2016 are as follows:

	2017	2016
ASSETS
Cash and cash equivalents	$   134,233	$    91,918
Rents receivable	10,959	7,448
Escrow deposits and reserves	4,879	57,171
Land	2	2
Buildings and improvements (net of accumulated depreciation of $5,692,901 and $5,443,697)	462,758	631,253
Other assets	109,294	113,959
	$   722,125	$   901,751
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Liabilities
Accounts payable and accrued expenses	$    37,617	$      34,374
Due to related parties	657,410	657,403
Mortgage loans	3,869,930	3,869,930
Accrued interest	1,146,641	1,099,278
Other liabilities	41,394	40,877
	5,752,992	5,701,862
Partners' equity (deficit)
American Tax Credit Properties III L.P.
Capital contributions, net of distributions	1,948,081	1,948,081
Cumulative loss	(1,948,081)	(1,948,081)
	--	--
General partner
Capital contributions, net of distributions	100	100
Cumulative loss	(5,030,967)	(4,800,211)
	(5,030,867)	(4,800,111)
	(5,030,867)	(4,800,111)
	$   722,125	$   901,751

The combined statements of operations of the Local Partnerships for the years ended December 31, 2017 and 2016 are as follows:

	2017	2016
REVENUE
Rental	$         429,155	$         981,398
Interest and other	2,734	13,908
Total Revenue	431,889	995,306
EXPENSES
Administrative	55,049	120,345
Payroll	73,709	113,930
Utilities	80,754	134,945
Operating and maintenance	79,768	166,953
Taxes and insurance	76,798	149,389
Financial	47,363	151,177
Depreciation and amortization	249,204	380,435
Total Expenses	662,645	1,217,174
LOSS BEFORE GAIN ON SALE OF PROPERTY	(230,756)	(221,868)
GAIN ON SALE OF PROPERTY	--	711,374
NET INCOME (LOSS)	$       (230,756)	$         489,506
NET INCOME (LOSS) ATTRIBUTABLE TO
American Tax Credit Properties III L.P.	$                  --	$                  --
General partners and other limited partners (includes $228,448 and $217,171 of Partnership losses in excess of investment and specially allocated income of $702,870 in 2016)	(230,756)	489,506
	$    (230,756)	$     489,506