gateway 2 March 97 10K [10K]

10-K/A 1 g2-32005kamend.htm GATEWAY 2 - AMENDED 10K FOR 3/31/2005 gateway 2 March 97 10K [10K]

AMENDED FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

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

For the fiscal year ended              March 31, 2005

Commission File Number                    0-19022

                          Gateway Tax Credit Fund II Ltd.
           (Exact name of Registrant as specified in its charter)

          Florida                                  65-0142704
(State or other jurisdiction of               (I.R.S. Employer No.)
incorporation or organization)

     880 Carillon Parkway,   St. Petersburg,   Florida    33716
    (Address of principal executive offices)            (Zip Code)

Registrant's Telephone No., Including Area Code:   (727)567-4830

Securities registered pursuant to Section 12(b) of the Act:   None

Securities registered pursuant to Section 12(g) of the Act:
Title of Each Class:   Beneficial Assignee Certificates

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 if disclosure of delinquent filers pursuant to item 405 of Regulation S-K (Sec. 229.405 of this chapter) is not contained herein, and will be contained to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   X

                                                   Number of Units
  Title of Each Class                               March 31, 2005
Beneficial Assignee Certificates                        2,258
General Partner Interest                                    2

DOCUMENTS INCORPORATED BY REFERENCE

Parts III and IV - Form S-11 Registration Statement and
all amendments and supplements thereto.
File No. 33-31821

EXPLANATORY NOTE

   This document amends the Form 10-K for the annual period ended March 31, 2005 to reflect the correction of an error in the Report of Independent Registered Public Accounting Firm. The auditor's opinion as originally filed incorrectly referenced reliance on the reports of other auditors. The revised Report of Independent Registered Public Accounting Firm deletes the incorrect reference.

PART I
Item 1.  Business

   Gateway Tax Credit Fund II Ltd. ("Gateway") is a Florida Limited Partnership. The general partners are Raymond James Tax Credit Funds, Inc., the Managing General Partner, and Raymond James Partners, Inc., both sponsors of Gateway Tax Credit Fund II Ltd. and wholly-owned subsidiaries of Raymond James Financial, Inc.

   Pursuant to the Securities Act of 1933, Gateway filed a Form S-11 Registration Statement with the Securities and Exchange Commission, effective September 12, 1989, which covered the offering (the "Public Offering") of Gateway's Beneficial Assignee Certificates ("BACs") representing assignments of units for the beneficial interest of the limited partnership interest of the Assignor Limited Partner. The Assignor Limited Partner was formed for the purpose of serving in that capacity for the Fund and will not engage in any other business.

   Gateway is engaged in only one industry segment, to acquire limited partnership interests in unaffiliated limited partnerships ("Project Partnerships"), each of which owns and operates one or more apartment complexes eligible for Low-Income Housing Tax Credits under Section 42 of the Internal Revenue Code ("Tax Credits"), received over a ten year period. Subject to certain limitations, Tax Credits may be used by Gateway's investors to reduce their income tax liability generated from other income sources. Gateway will terminate on December 31, 2040, or sooner, in accordance with the terms of its Limited Partnership Agreement. As of March 31, 2005, Gateway had received capital contributions of $1,000 from the General Partners and $37,228,000 from Assignees.

   Gateway offered BACs in five series. BACs in the amounts of $6,136,000, $5,456,000, $6,915,000, $8,616,000 and $10,105,000 for Series 2, 3, 4, 5, and 6, respectively had been issued as of March 31, 2005. Each series is treated as a separate partnership, investing in a separate and distinct pool of Project Partnerships. Net proceeds from each series were used to acquire Project Partnerships which are specifically allocated to such series. Income or loss and all tax items from the Project Partnerships acquired by each series are specifically allocated among the Assignees of such series.

   Operating profits and losses, cash distributions from operations and Tax Credits are allocated 99% to the Assignees and 1% to the General Partners. Profit or loss and cash distributions from sales of property will be allocated as described in the Limited Partnership Agreement.

   As of March 31, 2005, Gateway had invested in 22 Project Partnerships for Series 2, 23 Project Partnerships for Series 3, 29 Project Partnerships for Series 4, 35 Project Partnerships for Series 5 and 38 Project Partnerships for Series 6. Gateway acquired its interests in these properties by becoming a limited partner in the Project Partnerships that own the properties. As of March 31, 2005 each series was fully invested in Project Partnerships and management plans no new investments in the future.

   The primary source of funds from the inception of each series has been the capital contributions from Assignees. Gateway's operating costs are funded using the reserves, established for this purpose, the interest earned on these reserves and distributions received from Project Partnerships.

   All but two of the Project Partnerships are government subsidized with mortgage loans from the Farmers Home Administration (now called United States Department of Agriculture - Rural Development) ("USDA-RD") under Section 515 of the Housing Act of 1949. These mortgage loans are made at low interest rates for multi-family housing in rural and suburban areas, with the requirement that the interest savings be passed on to low income tenants in the form of lower rents. A significant portion of the project partnerships also receive rental assistance from USDA-RD to subsidize certain qualifying tenants.

   The General Partners do not believe the Project Partnerships are subject to the risks generally associated with conventionally financed nonsubsidized apartment properties. Risks related to the operations of Gateway are described in detail on pages 23 through 34 of the Prospectus, as supplemented, under the Caption "Risk Factors" which is incorporated herein by reference. The investment objectives of Gateway are to:

   1)  Provide tax benefits to Assignees in the form of Tax Credits during the        period in which each Project is eligible to claim tax credits;
   2)  Preserve and protect the capital contribution of Investors;
   3)  Participate in any capital appreciation in the value of the Projects; and
   4)  Provide passive losses to i) individual investors to offset passive income        from other passive activities, and ii) corporate investors to offset business        income.

   The investment objectives and policies of Gateway are described in detail on pages 34 through 40 of the Prospectus, as supplemented, under the caption "Investment Objectives and Policies" which is incorporated herein by reference.

   Gateway's goal was to invest in a diversified portfolio of Project Partnerships located in rural and suburban locations with a high demand for low income housing. As of March 31, 2005 the investor capital contributions were successfully invested in Project Partnerships, which met the investment criteria. Management anticipates that competition for tenants will only be with other low income housing projects and not with conventionally financed housing. With significant number of rural American households living below the poverty level in substandard housing, management believes there will be a continuing demand for affordable low income housing for the foreseeable future.

   Gateway has no direct employees. Services are performed by the Managing General Partner and its affiliates and by agents retained by it. The Managing General Partner has full and exclusive discretion in management and control of Gateway.

Exit Strategy

   The IRS compliance period for low-income housing tax credit properties is generally 15 years from occupancy following construction or rehabilitation completion. With that in mind, the Partnership is continuing to review the Partnership's holdings, with special emphasis on the properties that are at or very near the satisfaction of the IRS compliance period requirements. The Partnership's review considers many factors including extended use low-income housing regulation requirements on the property (such as those due to mortgage restrictions or state compliance agreements), the condition of the property, and the tax consequences to the investors from the sale of the property.

   Upon identifying those properties with the highest potential for a successful sale, refinancing or syndication, the Partnership expects to proceed with efforts to liquidate those properties. The Partnership's objective is to maximize the investor's return wherever possible and ultimately, to wind down those funds that no longer provide tax benefits to investors. As of March 31, 2005, one project partnership, Highland View Apartments has been sold.

   Gateway has no direct employees. The General Partners have full and exclusive discretion in management and control of Gateway.

Item 2. Properties

Gateway owns a majority interest in properties through its limited partnership investments in Project Partnerships. The largest single investment in a Project Partnership in Series 2 is 8.7% of the Series' total assets, Series 3 is 0%, Series 4 is 0%, Series 5 is 12.6% and Series 6 is 26.3%. The following table provides certain summary information regarding the Project Partnerships in which Gateway had an interest as of December 31, 2004:

Item 2 - Properties (continued):

SERIES 2

PARTNERSHIP -----------	LOCATION OF PROPERTY -----------	# OF UNIT ----	DATE ACQUIRED --------	PROPERTY COST -----------	OCCU-PANCY RATE -----
Claxton Elderly Deerfield II Hartwell Family Cherrytree Apts. Springwood Apts. Lakeshore Apts. Lewiston Charleston Sallisaw II Pocola Inverness Club Pearson Elderly Richland Elderly Lake Park Woodland Terrace Mt. Vernon Elderly Lakeland Elderly Prairie Apartments Sylacauga Heritage Manchester Housing Durango C.W.W. Columbus Seniors	Claxton, GA Douglas, GA Hartwell, GA Albion, PA Westfield, NY Tuskegee, AL Lewiston, NY Charleston, AR Sallisaw, OK Pocola, OK Inverness, FL Pearson, GA Richland, GA Lake Park, GA Waynesboro, GA Mt. Vernon, GA Lakeland, GA Eagle Butte, SD Sylacauga, AL Manchester, GA Durango, CO Columbus, KS	24 24 24 33 32 34 25 32 47 36 72 25 33 48 30 21 29 21 44 49 24 16 ---- 723	9/90 9/90 9/90 9/90 9/90 9/90 10/90 9/90 9/90 10/90 9/90 9/90 9/90 9/90 9/90 9/90 9/90 10/90 12/90 1/91 1/91 5/92	$ 799,538 854,562 859,698 1,458,066 1,564,010 1,293,889 1,233,935 1,076,098 1,517,589 1,245,870 3,496,824 781,460 1,057,871 1,794,542 1,081,582 700,935 955,815 1,320,641 1,782,517 1,781,614 1,337,891 532,889 ----------- $28,527,836		100% 88% 75% 85% 81% 82% 92% 80% 91% 94% 97% 100% 97% 96% 97% 90% 100% 100% 100% 98% 96% 100%
		====		===========

The aggregate average effective rental per unit is $3,768 per year ($314 per month).

Inverness Club Ltd.'s fixed asset total is 12.3% of the Series 2 total Project Partnership fixed assets. Inverness Club was placed in service in October 1991, is located on Florida's West Coast and operates as a low-income 72 unit apartment facility for the elderly. It also offers an optional congregate services package to all tenants. The property competes for tenants with six other apartment properties in the area. The market study estimated a demand for 100 elderly units.

Inverness Club's occupancy rate was 97% and its average effective annual rental per unit was $5,333 ($444 per month) on December 31, 2004. The land cost was $205,500 and the building cost was $3,291,324. The building is depreciated using the straight line method over 27.5 years. Management believes the property insurance coverage is adequate. For the year ended December 31, 2004 the real estate taxes were $58,925.

Item 2 - Properties (continued): SERIES 3 PARTNERSHIP -----------	LOCATION OF PROPERTY -----------	# OF UNIT ----	DATE ACQUIRED --------	PROPERTY COST -----------	OCCU-PANCY RATE -----
Poteau II Sallisaw Nowata Properties Waldron Properties Roland II Stilwell Birchwood Apts. Hornellsville Sunchase II CE McKinley II Weston Apartments Countrywood Apts. Wildwood Apts. Hancock Hopkins Elkhart Apts. Bryan Senior Brubaker Square Southwood Villa Allegra Belmont Senior Heritage Villas Logansport Seniors	Poteau, OK Sallisaw, OK Oolagah, OK Waldron, AR Roland, OK Stilwell, OK Pierre, SD Arkport, NY Watertown, SD Rising Sun, MD Weston, AL Centreville, AL Pineville, LA Hawesville, KY Madisonville, KY Elkhart, TX Bryan, OH New Carlisle, OH Savannah, TN Celina, OH Cynthiana, KY Helena, GA Logansport, LA	52 52 32 24 52 48 24 24 41 16 10 40 28 12 24 54 40 38 44 32 24 25 32 ---- 768	8/90 8/90 8/90 9/90 10/90 10/90 9/90 9/90 9/90 9/90 11/90 11/90 11/90 12/90 12/90 1/91 1/91 1/91 1/91 1/91 1/91 3/91 3/91	$ 1,789,148 1,744,103 1,148,484 860,273 1,804,010 1,597,701 1,082,336 1,163,452 1,411,023 828,883 347,577 1,590,987 1,096,579 440,425 927,256 1,671,047 1,188,292 1,459,016 1,805,582 1,150,622 935,143 824,759 1,384,751 ----------- $28,251,449		81% 98% 94% 79% 94% 83% 79% 88% 98% 94% 100% 100% 96% 100% 96% 94% 98% 95% 98% 94% 100% 88% 100%
		====		===========

The average effective rental per unit is $3,540 per year ($295 per month).

Item 2 - Properties (continued):

SERIES 4

PARTNERSHIP -----------	LOCATION OF PROPERTY -----------	# OF UNIT ----	DATE ACQUIRED --------	PROPERTY COST --------	OCCU- PANCY RATE ------
Alsace Seneca Apartments Eudora Senior Westville Wellsville Senior Stilwell II Spring Hill Sr. Smithfield Tarpon Heights Oaks Apartments Wynnwood Common Chestnut Apts. St. George Williston Brackettville Sr. Sonora Seniors Ozona Seniors Fredericksburg Sr. St. Joseph Courtyard Rural Development Jasper Villas Edmonton Senior Jonesville Manor Norton Green Owingsville Senior Timpson Seniors Piedmont S.F. Arkansas City	Soda Springs, ID Seneca, MO Eudora, KS Westville, OK Wellsville, KS Stilwell, OK Spring Hill, KS Smithfield, UT Galliano, LA Oakdale, LA Fairchance, PA Howard, SD St. George, SC Williston, SC Brackettville, TX Sonora, TX Ozona, TX Fredericksburg, TX St. Joseph, IL Huron, SD Ashland, ME Jasper, AR Edmonton, KY Jonesville, VA Norton, VA Owingsville, KY Timpson, TX Barnesville, GA Arkansas City, KS	24 24 36 36 24 52 24 40 48 32 34 24 24 24 32 32 24 48 24 21 25 25 24 40 40 22 28 36 12 ---- 879	12/90 2/91 3/91 3/91 3/91 3/91 3/91 4/91 4/91 4/91 4/91 5/91 6/91 6/91 6/91 6/91 6/91 6/91 6/91 6/91 6/91 6/91 6/91 6/91 6/91 8/91 8/91 8/91 8/91	$ 835,758 756,628 1,280,033 1,101,686 810,970 1,657,974 1,036,369 1,892,651 2,263,014 1,532,159 1,725,462 1,074,298 939,018 998,739 1,042,263 1,047,032 802,089 1,444,252 976,883 876,457 1,429,003 1,109,739 906,714 1,753,599 1,796,019 853,294 815,916 1,289,047 412,028 ---------- $34,459,094		96% 88% 92% 86% 100% 81% 96% 93% 96% 94% 100% 29% 100% 100% 97% 100% 100% 98% 100% 95% 92% 88% 96% 98% 100% 100% 82% 92% 100%
		====		==========

The average effective rental per unit is $3,770 per year ($314 per month).

Item 2 - Properties (continued):

SERIES 5

PARTNERSHIP -----------	LOCATION OF PROPERTY -----------	# OF UNIT ----	DATEE ACQUIREDD --------	PROPERTY COST --------	OCCU-PANCY RATE -----
Seymour Effingham S.F. Winfield S.F.Medicine Lodge S.F. Ottawa S.F. Concordia Carrollton Club Scarlett Oaks Brooks Hill Greensboro Greensboro II Pine Terrace Shellman Blackshear Crisp Properties Crawford Yorkshire Woodcrest Fox Ridge Redmont II Clayton Alma Pemberton Village Magic Circle Spring Hill Menard Retirement Wallis Housing Zapata Housing Mill Creek Portland II Georgetown Cloverdale So. Timber Ridge Pineville Ravenwood	Seymour, IN Effingham, IL Winfield, KS Medicine Lodge,KS Ottawa, KS Concordia, KS Carrollton, GA Lexington, SC Ellijay, GA Greensboro, GA Greensboro, GA Wrightsville, GA Shellman, GA Cordele, GA Cordele, GA Crawford, GA Wagoner, OK South Boston, VA Russellville, AL Red Bay, AL Clayton, OK Alma, AR Hiawatha, KS Eureka, KS Spring Hill, KS Menard, TX Wallis, TX Zapata, TX Grove, OK Portland, IN Georgetown, OH Cloverdale, IN Chandler, TX Pineville, MO Americus, GA	37 24 12 16 24 20 78 40 44 24 33 25 27 46 31 25 60 40 24 24 24 24 24 24 36 24 24 40 60 20 24 24 44 12 24 ----- 1,082	8/91 8/91 8/91 8/91 8/91 8/91 9/91 9/91 9/91 9/91 9/91 9/91 9/91 9/91 9/91 9/91 9/91 9/91 9/91 9/91 9/91 9/91 9/91 9/91 9/91 9/91 9/91 9/91 11/91 11/91 11/91 1/92 1/92 5/92 1/94	$ 1,517,702 980,617 402,402 572,924 732,342 695,908 3,217,901 1,684,973 1,760,233 866,259 1,088,664 886,334 901,648 1,602,433 1,128,784 907,712 2,615,086 1,608,556 889,941 840,596 871,530 957,710 776,725 823,643 1,449,378 759,136 578,333 1,242,852 1,741,669 805,070 981,296 1,015,712 1,328,429 414,054 900,996 ---------- $39,547,548		89% 100% 67% 81% 96% 100% 99% 100% 98% 100% 100% 63% 96% 100% 100% 100% 93% 100% 92% 100% 92% 96% 92% 88% 97% 92% 92% 100% 100% 95% 96% 100% 95% 100% 96%
		=====		============

The average effective rental per unit is $3,765 per year ($314 per month).

Item 2 - Properties (continued):

SERIES 6

PARTNERSHIP -----------	LOCATION OF PROPERTY -----------	# OF UNIT -----	DATE ACQUIRED --------	PROPERTY COST --------	OCCU-PANCY RATE -----
Spruce Shannon Carthage Mountain Crest Coal City Blacksburg Terrace Frazer Place Ehrhardt Sinton Frankston Flagler Beach Oak Ridge Monett Arma Southwest City Meadowcrest Parsons Newport Village Goodwater Falls Northfield Station Pleasant Hill Winter Park Cornell Heritage Drive So. Brodhead Mt. Village Hazlehurst Sunrise Stony Creek Logan Place Haines Maple Wood Summerhill Dorchester Lancaster Autumn Village Hardy Dawson	Pierre, SD O'Neill, NE Carthage, MO Enterprise, OR Coal City, IL Blacksburg, SC Smyrna, DE Ehrhardt, SC Sinton, TX Frankston, TX Flagler Beach, FL Williamsburg, KY Monett, MO Arma, KS Southwest City, MO Luverne, AL Parsons, KS Newport, TN Jenkins, KY Corbin, KY Somerset, KY Mitchell, SD Watertown, SD Jacksonville, TX Brodhead, KY Mt. Vernon, KY Hazlehurst, MS Yankton, SD Hooversville, PA Logan, OH Haines, AK Barbourville, KY Gassville, AR St. George, SC Mountain View, AR Harrison, AR Hardy, AR Dawson, GA	24 16 24 39 24 32 30 16 32 24 43 24 32 28 12 32 48 40 36 24 24 24 24 40 24 24 32 33 32 40 32 24 28 12 33 16 24 40 ----- 1,086	11/91 11/91 1/92 3/92 3/92 4/92 4/92 4/92 4/92 4/92 5/92 5/92 5/92 5/92 5/92 6/92 7/92 7/92 7/92 7/92 7/92 7/92 7/92 1/92 7/92 7/92 8/92 8/92 8/92 9/92 8/92 8/92 9/92 9/92 9/92 7/92 7/92 11/93	$ 1,153,047 691,211 754,057 1,256,339 1,301,992 1,372,973 1,676,842 702,776 1,053,059 676,931 1,653,116 1,037,966 983,114 891,180 424,118 1,220,862 1,532,968 1,645,171 1,414,978 1,022,561 961,926 1,307,741 1,128,263 1,212,316 973,069 952,276 1,228,639 1,438,507 1,649,283 1,526,912 3,053,569 1,039,790 844,240 561,008 1,389,193 616,082 931,989 1,474,973 ----------- $44,755,037	96% 100% 96% 100% 100% 100% 100% 100% 100% 96% 95% 96% 97% 100% 100% 100% 96% 95% 100% 92% 92% 100% 83% 95% 100% 92% 100% 97% 97% 100% 100% 100% 86% 100% 100% 100% 100% 98%
		=====		===========

The average effective rental per unit is $4,172 per year ($348 per month).

Item 2 - Properties (continued):

A summary of the cost of the properties at December 31, 2004, 2003 and 2002 is as follows:
12/31/04

SERIES 2

SERIES 3

SERIES 4

Land Land Improvements Buildings Furniture and Fixtures Construction in Progress Properties, at Cost Less: Accum.Depreciation Properties, Net	$ 1,012,180 136,496 26,404,542 936,014 38,604 ----------- 28,527,836 12,747,926 ----------- $ 15,779,910	$ 985,546 123,414 25,586,168 1,556,321 0 ----------- 28,251,449 15,378,450 ----------- $ 12,872,999	$ 1,188,112 222,427 31,289,900 1,758,655 0 ----------- 34,459,094 14,409,096 ----------- $ 20,049,998
	============	============	============

	SERIES 5	SERIES 6	TOTAL
Land Land Improvements Buildings Furniture and Fixtures Construction in Progress Properties, at Cost Less: Accum.Depreciation Properties, Net	$ 1,451,551 159,501 36,164,853 1,771,643 0 ----------- 39,547,548 16,798,175 ----------- $ 22,749,373	$ 1,774,305 536,092 40,018,159 2,426,481 0 ----------- 44,755,037 17,672,479 ----------- $ 27,082,558	$ 6,411,694 1,177,930 159,463,622 8,449,114 38,604 ----------- 175,540,964 77,006,126 ----------- $ 98,534,838
	============	============	============

12/31/03

	SERIES 2	SERIES 3	SERIES 4
Land Land Improvements Buildings Furniture and Fixtures Construction in Progress Properties, at Cost Less: Accum.Depreciation Properties, Net	$ 1,012,180 127,098 26,395,217 901,769 38,604 ----------- 28,474,868 11,882,795 ----------- $ 16,592,073	$ 985,546 120,660 25,582,402 1,511,965 0 ----------- 28,200,573 14,415,659 ----------- $ 13,784,914	$ 1,188,112 183,610 31,227,211 1,769,135 15,667 ----------- 34,383,735 13,360,202 ----------- $ 21,023,533
	===========	===========	===========

	SERIES 5	SERIES 6	TOTAL
Land Land Improvements Buildings Furniture and Fixtures Construction in Progress Properties, at Cost Less: Accum.Depreciation Properties, Net	$ 1,456,671 140,401 36,930,190 1,853,071 0 ----------- 40,380,333 15,887,639 ----------- $ 24,492,694	$ 1,774,305 527,948 39,965,083 2,358,221 0 ----------- 44,625,557 16,310,634 ----------- $ 28,314,923	$ 6,416,814 1,099,717 160,100,103 8,394,161 54,271 ----------- 176,065,066 71,856,929 ----------- $104,208,137
	===========	===========	============

12/31/02

	SERIES 2	SERIES 3	SERIES 4
Land Land Improvements Buildings Furniture and Fixtures Construction in Progress Properties, at Cost Less: Accum.Depreciation Properties, Net	$ 1,012,180 125,464 26,377,933 890,839 0 ----------- 28,406,416 11,017,194 ----------- $ 17,389,222	$ 985,546 253,348 25,412,059 1,467,505 0 ----------- 28,118,458 13,441,035 ----------- $ 14,677,423	$ 1,188,112 169,332 31,332,798 1,596,797 0 ----------- 34,287,039 12,319,974 ----------- $ 21,967,065
	===========	===========	===========

	SERIES 5	SERIES 6	TOTAL
Land Land Improvements Buildings Furniture and Fixtures Construction in Progress Properties, at Cost Less: Accum.Depreciation Properties, Net	$ 1,456,671 150,142 36,867,774 1,814,370 0 ----------- 40,288,957 14,615,269 ----------- $ 25,673,688	$ 1,779,755 536,545 39,884,445 2,279,339 0 ----------- 44,480,084 14,953,588 ----------- $ 29,526,496	$ 6,422,264 1,234,831 159,875,009 8,048,850 0 ----------- 175,580,954 66,347,060 ----------- $109,233,894
	===========	===========	============

Item 3. Legal Proceedings

  Gateway is not a party to any material pending legal proceedings.

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

  As of March 31, 2005, no matters were submitted to a vote of security holders, through the solicitation of proxies or otherwise.

PART II

Item 5. Market for the Registrant's Securities and Related Security Holder Matters

(a)  Gateway's Limited Partnership interests (BACs) are not publicly traded. There is no market for Gateway's Limited Partnership interests and it is unlikely that any will develop. No transfers of Limited Partnership Interest or BAC Units are permitted without the prior written consent of the Managing General Partner. There have been several transfers from inception to date with most being from individuals to their trusts or heirs. The Managing General Partner is not aware of the price at which the units are transferred. The conditions under which investors may transfer units is found under ARTICLE XII - "Issuance of BAC'S" on pages A-29 and A-30 of the Limited Partnership Agreement within the Prospectus, which is incorporated herein by reference.

     There have been no distributions to Assignees from inception to date.

(b)  Approximate Number of Equity Security Holders:

Title of Class                                    Number of Holders
                                                as of March 31, 2005
Beneficial Assignee Certificates                        2,258
General Partner Interest                                    2

Item 6. Selected Financial Data

FOR THE YEARS ENDED MARCH 31,:

SERIES 2	2005 ----	2004 ----	2003 ----	2002 ----	2001 ----
Total Revenues	$ 13,938	$ 12,820	$ 12,665	$ 10,860	$ 8,982
Net Loss	(97,520)	(92,200)	(85,230)	(99,198)	(123,576)
Equity in Losses of Project Partnerships	(10,911)	(8,484)	(17,624)	(43,931)	(76,493)
Total Assets	394,306	445,532	523,794	575,947	634,752
Investments In Project Partnerships	34,391	47,597	58,381	78,301	124,529
Per BAC: (A) Tax Credits Portfolio Income Passive Loss	.14 4.18 (142.06)	.14 5.18 (157.55)	2.79 7.31 (146.95)	64.12 11.87 (148.48)	162.60 14.10 (127.50)
Net Loss	(15.73)	(14.88)	(13.75)	(16.00)	(19.94)

FOR THE YEARS ENDED MARCH 31,:

SERIES 3	2005 ----	2004 ----	2003 ----	2002 ----	2001 ----
Total Revenues	$ 18,781	$ 22,801	$ 21,167	$ 19,990	$ 22,840
Net Loss	(77,647)	(77,243)	(82,729)	(80,062)	(58,677)
Equity in Losses of Project Partnerships	0	(5,137)	(25,505)	(34,441)	(26,094)
Total Assets	329,653	344,724	405,777	465,530	512,301
Investments In Project Partnerships	0	0	6,633	34,601	71,138
Per BAC: (A) Tax Credits Portfolio Income Passive Loss	0 5.78 (147.47)	.17 6.54 (159.39)	1.38 7.92 (137.28)	6.22 13.83 (154.72)	44.70 14.00 (156.40)
Net Loss	(14.09)	(14.02)	(15.01)	(14.53)	(10.65)

Item 6. Selected Financial Data

FOR THE YEARS ENDED MARCH 31,:

SERIES 4	2005 ----	2004 ----	2003 ----	2002 ----	2001 ----
Total Revenues	$ 16,181	$ 27,960	$ 14,116	$ 15,207	$ 12,170
Net Loss	(102,967)	(98,159)	(160,313)	(185,366)	(311,663)
Equity in Losses of Project Partnerships	0	(8,763)	(77,657)	(118,314)	(254,163)
Total Assets	445,208	472,775	536,633	663,983	807,069
Investments In Project Partnerships	0	0	12,279	96,741	223,689
Per BAC: (A) Tax Credits Portfolio Income Passive Loss	.21 5.11 (140.52)	1.22 4.16 (134.34)	2.98 8.48 (147.73)	82.68 12.51 (149.99)	165.70 15.00 (160.40)
Net Loss	(14.74)	(14.05)	(22.95)	(26.54)	(44.62)

FOR THE YEARS ENDED MARCH 31,:

SERIES 5	2005 ----	2004 ----	2003 ----	2002 ----	2001 ----
Total Revenues	$ 27,663	$ 16,981	$ 20,909	$ 21,532	$ 13,899
Net Income (Loss)	15,153	(265,039)	(261,993)	(268,277)	(248,131)
Equity in Losses of Project Partnerships	157,352	(133,705)	(159,492)	(189,327)	(179,765)
Total Assets	773,331	827,194	1,073,840	1,298,281	1,519,231
Investments In Project Partnerships	202,405	229,630	376,275	550,146	752,227
Per BAC: (A) Tax Credits Portfolio Income Passive Loss	2.33 5.39 (151.09)	8.66 4.81 (148.50)	54.70 6.71 (136.53)	153.83 12.75 (145.76)	164.60 15.60 (140.30)
Net Income (Loss)	(6.71)	(30.45)	(30.10)	(30.83)	(28.51)

Item 6. Selected Financial Data

FOR THE YEARS ENDED MARCH 31,:

SERIES 6	2005 ----	2004 ----	2003 ----		2002 ----	2001 ---
Total Revenues	$ 32,039	$ 21,129	$ 16,919	$ 17,654		$ 8,932
Net Loss	(198,709)	(294,767)	(334,594)	(407,763)		(481,031)
Equity in Losses of Project Partnerships	(65,236)	(148,498)	(209,950)	(306,042)		(384,730)
Total Assets	1,374,037	1,467,978	1,731,924	2,016,612		2,364,264
Investments In Project Partnerships	781,147	858,488	1,024,672	1,257,026		1,584,877
Per BAC: (A) Tax Credits Portfolio Income Passive Loss	3.81 5.34 (99.58)	15.16 5.41 (109.10)	129.74 7.48 (115.70)	167.27 11.24 (127.50)		165.60 13.80 (127.30)
Net Loss	(19.47)	(28.88)	(32.78)	(39.95)		(47.13)

(A) The per BAC tax information is as of December 31, the year end for tax purposes.

The above selected financial data should be read in conjunction with the financial statements and related notes appearing elsewhere in this report. This statement is not covered by the auditor's opinion included elsewhere in this report.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations, Liquidity and Capital Resources

  Operations commenced on September 14, 1990, with the first admission of Assignees in Series 2. The proceeds from Assignees' capital contributions available for investment were used to acquire interests in Project Partnerships.

  As disclosed on the statement of operations for each Series, interest income is comparable for the years ended March 31, 2005, March 31, 2004 and March 31, 2003. The General and Administrative expenses - General Partner and General and Administrative expenses - Other for the years ended March 31, 2005 and 2004 have increased as compared to March 31, 2003 due to a change in the method of allocation.

  The capital resources of each Series are used to pay General and Administrative operating costs including personnel, supplies, data processing, travel and legal and accounting associated with the administration and monitoring of Gateway and the Project Partnerships. The capital resources are also used to pay the Asset Management Fee due to the Managing General Partner, but only to the extent that Gateway's remaining resources are sufficient to fund Gateway's ongoing needs. (Payment of any Asset Management Fee unpaid at the time Gateway sells its interests in the Project Partnerships is subordinated to the return of the investors' original capital contributions).

  The sources of funds to pay the operating costs of each Series are short-term investments and interest earned thereon, the maturity of U.S. Treasury Security Strips ("Zero Coupon Treasuries"), which were purchased with funds set aside for
this purpose and cash distributed to the Series from the operations of the Project Partnerships.

  From inception, no Series has paid distributions. The distribution from the sale of Highland View, LP, in Series 5 will occur during fiscal year 2006. Future distributions may be made as a result of the sale of other properties.

  In 2003, a General Partner of one Project Partnership in Series 3 and seven Project Partnerships in Series 4 plead guilty to fraud and conspiracy charges relating to these project partnerships and other partnerships not related to Gateway Tax Credit Fund II, LTD. In February 2004, the Partnership substituted a new General Partner and does not feel that this situation will have a material impact on the financial statements.

  Series 2 - Gateway closed this series on September 14, 1990 after receiving $6,136,000 from 375 Assignees. As of March 31, 2005, the series had invested $4,524,678 in 22 Project Partnerships located in 10 states containing 723 apartment units. Average occupancy of the Project Partnerships was 93% at December 31, 2004.

  Equity in Losses of Project Partnerships decreased from $17,624 for the year ended March 31, 2003 to $8,484 for the year ended March 31, 2004 and to $10,911 for the year ended March 31, 2005. As presented in Note 5, Gateway's share of net loss increased from $696,894 for the year ended March 31, 2003 to $747,194 for the year ended March 31, 2004 and decreased to $679,662 for the year ended March 31,2005. Suspended Losses were $679,270 for the year ended March 31, 2003, $738,710 for the year ended March 31, 2004 and $668,751 for the year ended March 31, 2005. These losses would reduce the investment in Project Partnerships below zero. In general, it is common in the real estate industry to experience losses for financial and tax reporting purposes because of the non-cash expenses of depreciation and amortization. (These Project Partnerships reported depreciation and amortization of $864,473, $865,601 and $869,716 for the years ended December 31, 2002, 2003, and 2004 respectively.) As a result, management expects that this Series, as well as those described below, will report its equity in Project Partnerships as a loss for tax and financial reporting purposes. Overall, management believes the Project Partnerships are operating as expected and are generating tax credits that meet projections.

  At March 31, 2005, the Series had $235,004 of short-term investments (Cash and Cash Equivalents). It also had $124,911 in Zero Coupon Treasuries with annual maturities providing $63,506 in fiscal year 2006 increasing to $66,285 in fiscal year 2007. Management believes the sources of funds are sufficient to meet current and ongoing operating costs for the foreseeable future, and to pay part of the Asset Management Fee.

  As disclosed on the statement of cash flows, the Series had a net loss of $97,520 for the year ending March 31, 2005. However, after adjusting for Equity in Losses of Project Partnerships of $10,911 and the changes in operating assets and liabilities, net cash used in operating activities was $24,833. Cash provided by investing activities totaled $38,753, consisting of $15,038 in cash distributions from the Project Partnerships and $23,715 from matured Zero Coupon Treasuries. There were no unusual events or trends to describe.

  Series 3 - Gateway closed this series on December 13, 1990 after receiving $5,456,000 from 398 Assignees. As of March 31, 2005 the series had invested $3,888,713 in 23 Project Partnerships located in 12 states containing 768 apartment units. Average occupancy of the Project Partnerships was 93% as of December 31, 2004.

  Equity in Losses of Project Partnerships decreased from $25,505 for the year ended March 31, 2003 to $5,137 for the year ended March 31, 2004 and to $0 for the year ended March 31, 2005. As presented in Note 5, Gateway's share of net loss increased from $608,873 for the year ended March 31, 2003 to $704,663 for the year ended March 31, 2004 and to $727,644 for the year ended March 31, 2005. Suspended Losses increased from $583,368 for the year ended March 31, 2003 to $699,526 for the year ended March 31, 2004 and increased to $727,644 for the year ended March 31, 2005. These losses would reduce the investment in Project Partnerships below zero. (These Project Partnerships reported depreciation and amortization of $961,550, $983,259 and $973,367 for the years ended December 31, 2002, 2003 and 2004, respectively.) Overall, management believes these Project Partnerships are operating as expected and are generating tax credits which meet projections.

  At March 31, 2005, the Series had $218,547 of short-term investments (Cash and Cash Equivalents). It also had $111,106 in Zero Coupon Treasuries with annual maturities providing $56,469 in fiscal year 2006 decreasing to $58,940 in fiscal year 2007. Management believes these sources of funds are sufficient to meet the Series' current and ongoing operating costs for the foreseeable future, and to pay part of the Asset Management Fee.

  As disclosed on the statement of cash flows, the Series had a net loss of $77,647 for the year ended March 31, 2005. However, after adjusting the changes in operating assets and liabilities, net cash used in operating activities was $8,746. Cash provided by investing activities totaled $39,874, consisting of $18,781 in cash distributions received from the Project Partnerships and $21,093 from matured Zero Coupon Treasuries. There were no unusual events or trends to describe.

  Series 4 - Gateway closed this series on May 31, 1991 after receiving $6,915,000 from 465 Assignees. As of March 31, 2005, the series had invested $4,952,519 in 29 Project Partnerships located in 16 states containing 879 apartment units. Average occupancy of the Project Partnerships was 93% at December 31, 2004.

  Equity in Losses of Project Partnerships decreased from $77,657 for the year ended March 31, 2003 to $8,763 for the year ended March 31, 2004 and to $0 for the year ended March 31, 2005. As presented in Note 5, Gateway's share of net loss increased from $695,800 for the year ended March 31, 2003 to $732,427 for the year ended March 31, 2004 and increased to $806,547 for the year ended March 31, 2005. Suspended Losses increased from $618,143 for the year ended March 31, 2003 to $723,664 for the year ended March 31, 2004 and increased to $806,547 for the year ended March 31, 2005. These losses would reduce the investment in Project Partnerships below zero. (These Project Partnerships reported depreciation and amortization of $1,044,807, $1,045,416 and $1,045,249 for the years ended December 31, 2002, 2003 and 2004, respectively.) Overall, management believes these Project Partnerships are operating as expected and are generating tax credits which meet projections.

  At March 31, 2005, the Series had $304,447 of short-term investments (Cash and Cash Equivalents). It also had $140,761 in Zero Coupon Treasuries with annual maturities providing $71,568 in fiscal year 2006 increasing to $74,700 in fiscal year 2007. Management believes these sources of funds are sufficient to meet the Series' current and ongoing operating costs for the foreseeable future, and to pay part of the Asset Management Fee.

  As disclosed on the statement of cash flows, the Series had a net loss of $102,967 for the year ended March 31, 2005. However, after adjusting for the changes in operating assets and liabilities, net cash used in operating activities was $11,934. Cash provided by investing activities totaled $42,896, consisting of $16,173 in cash distributions from the Project Partnerships and $26,723 from matured Zero Coupon Treasuries. There were no unusual events or trends to describe.

  Series 5 - Gateway closed this series on October 11, 1991 after receiving $8,616,000 from 535 Assignees. As of March 31, 2005, the series had invested $6,010,273 in 35 Project Partnerships located in 12 states containing 1,082 apartment units. Average occupancy of the Project Partnerships was 96% as of December 31, 2004.

  One of the Project Partnerships, Highland View, LP, sold its property in December 2004. The sale of the property resulted in a gain allocated to Gateway of $227,407. Gateway received sale proceeds totaling $157,127, which will be distributed to the Limited Partners at $18.24 per limited partnership unit during fiscal year 2006. Gateway had previously suspended losses reported by this Project Partnership in conformity with its policy to not record losses which reduce the investment below zero. As a result of the net increase in the investment from the sale transaction, Gateway was able to recognize $43,945 in suspended losses. Gateway's ending investment in these Project Partnerships, after adjusting for the gain on sale, cash proceeds received and suspended losses, was $21,574, which is reported as a loss on disposition in the Combined Statements of Operations.

  Equity in Losses of Project Partnerships were $159,492 for the year ended March 31, 2003, $133,705 for the year ended March 31, 2004 and $70,055 for the year ended March 31, 2005. (These Project Partnerships reported depreciation and amortization of $1,280,622, $1,276,928 and $1,247,246 for the years ended December 31, 2002, 2003 and 2004, respectively.) Overall, management believes these Project Partnerships are operating as expected and are generating tax credits which meet projections.

  At March 31, 2005, the Series had $238,360 of short-term investments (Cash and Cash Equivalents). It also had $175,440 in Zero Coupon Treasuries with annual maturities providing $89,173 in fiscal year 2006 increasing to $93,075 in fiscal year 2007. Management believes these sources of funds are sufficient to meet the Series' current and ongoing operating costs for the foreseeable future, and to pay part of the Asset Management Fee.

  As disclosed on the statement of cash flows, the Series had net income of $15,153 for the year ended March 31, 2005. However, after adjusting for Equity in Losses of Project Partnerships of $70,055 and the changes in operating assets and liabilities, net cash used in operating activities was $175,056. Cash provided by investing activities totaled $64,242 consisting of $30,934 in cash distributions from the Project Partnerships and $33,308 from matured Zero Coupon Treasuries.

  Series 6 - Gateway closed this series on March 11, 1992 after receiving $10,105,000 from 625 Assignees. As of March 31, 2005, the series had invested $7,462,215 in 38 Project Partnerships located in 19 states containing 1,086 apartment units. Average occupancy of the Project Partnerships was 97% as of December 31, 2004.

  Equity in Losses of Project Partnerships decreased from $209,950 for the year ended March 31, 2003 to $148,498 for the year ended March 31, 2004 and to $65,236 for the year ended March 31, 2005. These decreases were due to increases in rental income for the years ended March 31, 2003, 2004 and 2005. (These Project Partnerships reported depreciation and amortization of $1,361,813, $1,357,379, and $1,367,028 for the years ended December 31, 2002, 2003 and 2004, respectively.) Overall, management believes these Project Partnerships are operating as expected and are generating tax credits which meet projections.

  At March 31, 2005, the Series had $444,751 of short-term investments (Cash and Cash Equivalents). It also had $147,439 in Zero Coupon Treasuries with annual maturities providing $79,000 in fiscal year 2006 increasing to $83,000 in fiscal year 2007. Management believes these sources of funds are sufficient to meet the Series' current and ongoing operating costs for the foreseeable future, and to pay part of the Asset Management Fee.

  As disclosed on the statement of cash flows, the Series had a net loss of $198,709 for the year ended March 31, 2005. However, after adjusting for Equity in Losses of Project Partnerships of $65,236 and the changes in operating assets and liabilities, net cash used in operating activities was $25,627. Cash provided by investing activities totaled $68,843 of which $38,038 was received in cash distributions from the Project Partnerships and $30,805 from matured Zero Coupon Treasuries. There were no unusual events or trends to describe.

Disclosure of Contractual Obligations

		Payment due by period
Contractual Obligations	Total	Less than 1 year	1-3 years	3-5 years	More than 5 years

Long-Term Debt Obligations
Capital Lease Obligations
Operating Lease Obligations
Purchase Obligations
Other Long-Term Liabilities Reflected on the Registrant's Balance Sheet under GAAP	2,687,637 (1)	115,927	0	0	2,571,710

(1) The Other Long-Term Liabilities represent the asset management fees owed to the General Partners as of 03/31/2005. It is unsecured, due on demand and, in accordance with the limited partnership agreement, non-interest bearing. As referred to in Note 4, the Managing General Partner does not intend to demand payment of the portion of this balance reflected as due in greater than one year within the next twelve months.

Item 8. Financial Statements and Supplementary Data

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners of Gateway Tax Credit Fund II Ltd.

We have audited the accompanying balance sheets of each of the five Series (Series 2 through 6) constituting Gateway Tax Credit Fund II Ltd. (a Florida Limited Partnership) as of March 31, 2005 and 2004 and the related statements of operations, partners' equity (deficit), and cash flows of each of the five Series for each of the three years in the period ended March 31, 2005. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We did not audit the financial statements of certain Project Partnerships for which investments included on the balance sheets as of March 31, 2005 and 2004 and net losses included on the statements of operations for each of the three years in the period ended March 31, 2005 are:

	Investments March 31, --------			Partnership Loss Year Ended March 31, --------------------
		2005 ----	2004 ----		2005 ----	2004 ----	2003 ----
Series 2		$ 0	$ 0		$ 0	$ 0	$ 0
Series 3		0	0		0	0	12,361
Series 4		0	0		0	0	71,223
Series 5		0	0		0	0	68,984
Series 6		4,200	0		5,938	3,291	130,246

   Those statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for such underlying partnerships, is based solely on the reports of the other auditors.

    We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting. Accordingly we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the reports of other auditors provide a reasonable basis for our opinion.

    In our opinion, based on our audits and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the financial position of each of the five Series (Series 2 through 6) constituting Gateway Tax Credit Fund II Ltd. as of March 31, 2005 and 2004, and the results of their operations and their cash flows for each of the three years in the period ended March 31, 2005, in conformity with accounting principles generally accepted in the United States of America.

    Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedules listed under Item 14(a)(2) in the index are presented for purposes of complying with the Securities and Exchange Commission's rules and are not part of the basic financial statements. These schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, based on our audits and the reports of other auditors, fairly state in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole.

                                         /s/ Spence, Marston, Bunch, Morris & Co.
                                         SPENCE, MARSTON, BUNCH, MORRIS & CO.
                                         Certified Public Accountants
Clearwater, Florida
September 8, 2005

PART I - Financial Information
Item 1. Financial Statements

GATEWAY TAX CREDIT FUND II LTD.
(A Florida Limited Partnership)
BALANCE SHEET
MARCH 31, 2005 AND 2004

SERIES 2	2005 ----	2004 ----
ASSETS Current Assets: Cash and Cash Equivalents Investments in Securities Total Current Assets Investments in Securities Investments in Project Partnerships, Net Total Assets LIABILITIES AND PARTNERS' EQUITY (Deficit) Current Liabilities: Payable to General Partners Total Current Liabilities Long-Term Liabilities: Payable to General Partners Partners' Equity (Deficit): Assignor Limited Partner Units of limited partnership interest consisting of 40,000 authorized BAC's, of which Series 2 had 6,136 at March 31, 2005 and 2004 issued to the assignees Assignees Units of beneficial interest of the limited partnership interest of the assignor limited partner, $1,000 stated value per BAC, Series 2 had 6,136 at March 31, 2005 and 2004, issued and outstanding General Partners Total Partners' Equity (Deficit) Total Liabilities and Partners' Equity (Deficit)	$ 235,004 63,596 ---------- 298,600 61,315 34,391 ---------- $ 394,306 ========== $ 45,045 ---------- 45,045 ---------- 531,644 ---------- (126,760) (55,623) ---------- (182,383) ---------- $ 394,306 ==========	$ 221,084 61,300 ---------- 282,384 115,551 47,597 ---------- $ 445,532 ========== $ 63,359 ---------- 63,359 ---------- 467,036 ---------- (30,215) (54,648) ---------- (84,863) ---------- $ 445,532 ==========